CALL TO ORDER
CITY OF FAIRFIELD
FAIRFIELD CITY COUNCIL
REGULAR CONCURRENT MEETING
TUESDAY, JUNE 21, 2022; 6:00 PM
COUNCIL CHAMBER, 1000 WEBSTER STREET, FAIRFIELD,
CA 94533
MINUTES
Mayor Harry T. Price called the meeting to order at 6:02 p.m.
ROLL CALL
On roll call were Councilmembers Pam Bertani, Cat Moy, Doriss Panduro, Chuck Timm, and Scott Tonnesen; Vice -Mayor Rick Vaccaro, and Mayor Price.
INVOCATION
Worship Pastor Mark LeCheminant, Church of Jesus Christ of Latter-day Saints, gave an invocation.
PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by Boy Scouts Troup 100, who also performed a flag ceremony.
COUNCIL REPORTS
Councilmember Panduro thanked everyone who participated in her two community meetings and said the cleanup of North Texas Street was a great event. She thanked Public Works for their assistance with trash removal.
Councilmember Tonnesen did not have a report.
Councilmember Timm gave kudos to Councilmember Bertani for her coordination of the first Juneteenth event in Fairfield. He said he had fun and can't wait for next year's event.
Councilmember Moy thanked Boy Scout Troop 100 for leading the Pledge and performing the flag ceremony. She invited the community to attend her upcoming town hall meetings: 1) June 30, 6 p.m. via Zoom, "Fentanyl — One Pill Can Kill!"; and 2) July 14, 6 p.m., Council Chamber, "Clean Streets Make Safe Streets." She also thanked Councilmember Bertani for coordinating the first Juneteenth event in Fairfield on June 18.
Councilmember Bertani thanked everyone who participated in the Juneteenth event and especially those that helped her coordinate a successful event. Next, she thanked the community members who attended her two town hall meetings and invited everyone to attend the third meeting on June 25 at Dunnell Center.
Vice Mayor Vaccaro thanked Councilmember Bertani for taking the leadership role in the Juneteenth event and said it was inspiring to see it happening in Fairfield. He reported he and Councilmember Panduro continue to attend the 2 x 2 Solano Homeless Subcommittee meetings. The next meeting is in
July, and they will be discussing CAP Solano's restructuring. CAP Solano is one of the funding sources.
Mayor Price reported that Willow Hall was the recent site of many graduation events. He stated that California has 1,000 charter school students and Fairfield has 26 of those, who just graduated. He was impressed with their goals of continuing their education in medicine, engineering, and teaching. He congratulated all Fairfield graduates and wished them future success.
CITY MANAGER REPORT
Interim City Manager David Gassaway congratulated the Marketing and Outreach Division (MOD) for winning a Gold Telly Award for its documentary on the 50th Anniversary of Civic Center Complex. He reported that they also won several silver and bronze medals. He invited the community to attend the July 4 parade starting at 10 a.m. and to stay for the family fun activities following the parade. Lastly, he reported that staff requested Item 15 be pulled from the Consent Calendar and brought back at a future council meeting.
CITY ATTORNEY REPORT
City Attorney David Lim reported on recent closed sessions: 1) confirmation of a settlement previously approved by Council on a 7-0 vote in the matter of Jeffrey Drevdahl vs. City of Fairfield, et al., (United States District Court Eastern District Case No. 2:20-cv-00859-DB) a $100,000 payment to Mr. Drevdahl was finalized. 2) Public Employee Appointment of Interim City Manager David Gassaway. Council will vote on extending his contract to December 31, 2022, this evening, as it is Item 11 on Consent Calendar; and 3) Hansaben Investments, LLC, Case #22-30258, U.S. Bankruptcy Courts, Northern District of California, San Francisco Division — Council voted 7-0 for the retention of outside legal counsel to protect the assets of the City of Fairfield.
CITY CLERK REPORT
City Clerk Karen Rees reported that she and her husband enjoyed volunteering at Fairview Elementary for their school carnival. And she congratulated the Golden State Warriors on their seventh NBA Finals Championship and said she enjoyed attending the parade in San Francisco in their honor.
PRESENTATIONS
2. Poet Laureate Bonnie DiMichele read an original poem entitled "Juneteenth." Mayor Price presented her with a plaque commemorating her two-year term as Fairfield's poet laureate.
3. Councilmember Bertani read a proclamation declaring Juneteenth National Independence Day.
She asked the following individuals to join her at the podium: Pastors Gilmore, Trotter, Stetins, and Reed; Jeff Trager, Police Chief Cantrell, Fire Chief Matt Luckenbach, Tamuri Richardson, and Interim City Manager Gassaway. She thanked everyone for their efforts in making the Juneteenth event so successful.
4. Vice Mayor Vaccaro presented a proclamation declaring June as LGBTQ Pride Month to Solano Pride Center Board Member Bernardo Ortega.
5. Police Chief Deanna Cantrell gave a presentation on the relocation of Investigations Division. She also introduced the new Police Public Information Officer, Jennifer Brantley, who just joined the department.
PUBLIC COMMENTS
Bryan Lynch spoke about snakes and vacant lots.
Jeff Trager spoke about upcoming events at Downtown Theatre and in the community.
Tony Wade spike about his new book, "Lost Restaurants of Fairfield." Michael Pechner spoke about climate change and "fire weather." Nora Dizon thanked Chief of Police Cantrell for opening a new office in Cordelia.
Convened meeting of the Successor Agency to the Fairfield Redevelopment Agency at 7:04 p.m.
SUCCESSOR AGENCY CONSENT CALENDAR
6. Resolution SA2022-01 of the Successor Agency to the Fairfield Redevelopment Agency of the City of Fairfield Authorizing Execution of the Consent Agreement for the First Restated Declaration of Covenants, Conditions, and Restrictions of Southbridge
Member Bertani made a motion to approve the SA Consent Calendar as presented. Vice Chair Vaccaro seconded the motion. The motion carried unanimously.
Convened a joint meeting of the City Council and Housing Authority at 7:06 p.m.
City Clerk read the following statement: The holding of a joint meeting of the City Council and Housing Authority entitles the councilmembers to receive additional compensation of $35 for attending this joint meeting.
ROLL CALL
On roll call were Commissioners Pam Bertani, Cat Moy, Doriss Panduro, Chuck Timm, and Scott Tonnesen; Vice Chair Rick Vaccaro, and Chair Price.
JOINT CITY COUNCIL AND HOUSING AUTHORITY PUBLIC HEARINGS
7. Budget Manager Ashley Doyle recommended to Council that it open the joint public hearing of the City Council of the City of Fairfield and Housing Authority adopting Resolutions approving the Mid -Cycle Update to Fiscal Year 2021-22 and 2022-23 Budget and Financial Plan:
Resolution 2022-120 of the City Council of the City of Fairfield Appropriating the Fiscal Year 2022-23 Budget and Updating the Financial Plan for the City of Fairfield; and Resolution HA2022-07 of the City of Fairfield Housing Authority Appropriating the Fiscal Year 2022-23 Budget and Updating the Financial Plan; and
Resolution 2022-121 of the City Council of the City of Fairfield Approving the Fiscal Year 2022- 23 General Obligation Bond Property Tax Rates; and
Resolution 2022-122 of the City Council of the City of Fairfield Establishing the Fiscal Year 2022-23 Appropriations Limit; and
Resolution 2022-123 of the City Council of the City of Fairfield Making Certain Findings Related to Development Impact Fees; and
Resolution 2022-124 of the City Council of the City of Fairfield Approving Vehicle a nd Equipment Purchases for the Fiscal Year 2022-23
Chairman Price opened the public hearing. There were no requests to speak Chairman Price closed the public hearing.
Councilmember Timm made a motion to approve Resolutions 2022-120, 2022-121, 2022-122, 2022-123, and 2022-124. Councilmember Bertani seconded the motion. The motion carried unanimously.
Vice Chair Vaccaro made a motion to approve Resolution HA 2022-07 Commissioner Panduro seconded the motion. The motion carried unanimously.
Reconvened meeting of the City Council at 7:24 p.m.
CONSENT CALENDAR
8. Resolution 2022-125 of the City Council of the City of Fairfield Reconsidering and Authorizing Public Meetings to be Held Via Teleconferencing Pursuant to Government Code Section 54953(e) and Making Findings and Determinations Regarding the Same
9. Resolution 2022-126 of the City Council of the City of Fairfield Calling and Providing for a General Municipal Election to be Held in the City of Fairfield on Tuesday, November 8, 2022, to Elect City Officers and to Request the Solano County Board of Supervisors to Consolidate the General Municipal Election with the Statewide Election on that Date; and
Resolution 2022-127 of the City Council of the City of Fairfield Requesting the Solano County Board of Supervisors to Permit the County Registrar of Voters to Render Services in Connection with the General Municipal Election to be Held on Tuesday, November 8, 2022, and Authorizing the Solano County Board of Supervisors to Canvass the Returns of the Election; Determining Charges for Candidates' Statements; and Authorize the City Clerk to Publish the Notice of Election Adopt resolutions.
10. Minute Action Approving Mayor's Appointments to Council Legislative Review and Honors Committee and 2022 League of California Cities Voting Delegate and Alternate
11. Resolution 2022-128 of the City Council of the City of Fairfield Approving an Extension to the Interim City Manager Employment Agreement Between the City of Fairfield and David Gassaway
12. Resolution 2022-129 of the City Council of the City of Fairfield Appointing Dawn La Bar and Sullina Sanchez as the Primary and Alternate Representatives to the Community Action Partnership of Solano, Joint Powers Authority
13. Resolution 2022-130 of the City Council of the City of Fairfield Approving $175,000 of Homeless Services Project Construction Funds to Cover Pallet Shelter Costs and Authorizing the City Manager to Execute all Construction Agreements Including, but not Limited to, Agreements with Architects, Modular Bathroom Builders, Pallet Shelters Providers, and General Contractors to Complete Construction Activities for the Mission Samoa Pallet Shelter Project Up to an Amount not to Exceed $530,000 Councilmember Timm requested Item 14 be pulled for discussion.
14. Resolution 2022-131 of the City Council of the City of Fairfield Authorizing the City Manager to Execute a Memorandum of Understanding Between the City of Fairfield and SHELTER Solano, Inc. for the Provision of Emergency Shelter Beds
Interim City Manager David Gassaway requested this item be pulled. It will return at a future meeting.
15. Resolution 2022-132 of the City Council of the City of Fairfield Authorizing the City Manager to Execute a Four (4) Year Lease Agreement with PNC Equipment, LLC Finance for Replacement of Golf Carts at Rancho Solano and Paradise Valley Golf Courses
16. Resolution 2022-133 of the City Council of the City of Fairfield Approving the Second Amendment to the Services Contract for a Cyber Security Program Assessment from Presidio Networked Solutions Group LLC
17. Resolution 2022-134 of the City Council of the City of Fairfield Authorizing the City Manager to Execute and Approve the Purchase of Ten Unmanned Aerial Vehicles and Associated Equipment Adopt resolution.
18. Resolution 2022-135 of the City Council of the City of Fairfield Authorizing the Seventh Amendment to the 1965 Agreement between the City of Fairfield, City of Suisun City, and Fairfield -Suisun Sewer District Regarding Collection System Rehabilitation and Replacement Funding
19. Resolution 2022-136 of the City Council of the City of Fairfield Accepting the Heart of Fairfield - CDBG Downtown Sidewalk Gap Closure Project as Complete
20. Resolution 2022-137 of the City Council of the City of Fairfield Accepting the Subdivision Improvements for the Enclave at Red Top Unit 2 Subdivision as Complete
21. Resolution 2022-138 of the City Council of the City of Fairfield Accepting the Gateway Boulevard Median Island Modification Project as Complete
22. Resolution 2022-139 of the City of Fairfield Authorizing the Levy of Special Taxes within Community Facilities District No. 1 for Fiscal Year 2022-2023
23. Resolution 2022-140 of the City Council of the City of Fairfield Incorporating a List of Projects Funded by SB 1: The Road Repair and Accountability Act for Fiscal Year 2022-23
24. Resolution 2022-141 of the City Council of the City of Fairfield Accepting the Laurel Creek Community Park Ball Field Lighting Improvements Project as Complete
25. Resolution 2022-142 of the City Council of the City of Fairfield Granting Preliminary Approval of Fiscal Year 2022-2023 Engineer's Report, Declaring Intention to Order the Levy and Collection of Assessments, and Providing Notice of a Hearing for the Smith Ranch Assessment District
26. Resolution 2022-143 of the City Council of the City of Fairfield Approving the Execution of the Development Loan Agreement with 212 E Tabor Fairfield EAH, LLC to Support the Creation of New Affordable Housing in the City of Fairfield, California, and Authorizing Certain Related Actions
27. Resolution 2022-144 of the City Council of the City of Fairfield Authorizing the Approval of Lending and Mortgage Revenue Bond Policies for Development Activities Sponsored by the City of Fairfield
Councilmember Timm made a motion to approve the Consent Calendar as presented, excluding Item
15. Vice Mayor Vaccaro seconded the motion. The motion carried unanimously.
Councilmember Timm made a motion to approve Item 14. Councilmember Tonnesen seconded the motion. The motion carried unanimously.
NEW BUSINESS
28. Director of Parks and Recreation Kristina Chamberlin opened the discussion seeking City Council direction on contract renewals with KemperSports for Golf Course Management and with SRI for Food/Beverage/Banquet Services. Dan Bieber and George Marshall of Sports Restaurants Inc. (SRI) gave a presentation.
Vice Mayor Vaccaro made a motion to go out to RFP/RFQ bid with two options, one for single operator and one for dual operator, and provide a one-year extension to the agreements with Kemper Sports for golf course operations and SRI for restaurant operations extending them to December 31, 2023.
Councilmember Moy seconded the motion. The motion carried 5-2 with Councilmembers Timm and Tonnesen voting no.
29. Interim City Manager David Gassaway recommended to Council that it approve the Fairfield Fiscal Year 2022-23 Strategic Goals and Priorities.
Vice Mayor Vaccaro made a motion to approve the COF FY 2022-23 Strategic Goals and Priorities Councilmember Panduro seconded the motion. The motion carried unanimously.
30. Homeless Services Management Analyst Sullina Sanchez recommended to Council that it approve Resolution 2022-145 of the City Council of the City of Fairfield authorizing the City Manager to execute a Memorandum of Understanding between the City of Fairfield and SHELTER Solano, Inc. to support the Kitchen Build -out Completion Project at 310 Beck Avenue in Fairfield and Authorizing an Update to the Fiscal Year 2022-2023 Budget.
Homeless Services Manager Dawn La Bar was available online and Shelter Inc.'s Executive Director John Eckstrom was at the meeting and they both answered the Council's questions.
Vice Mayor Vaccaro made a motion to approve Resolution 2022-145. Councilmember Panduro seconded the motion. The motion carried 6-0, as Councilmember Moy stepped away from the dais.
PUBLIC HEARINGS
31. Planning Manager Dave Feinstein recommended to Council that it open the public hearing; and approve Resolution 2022-146 of the City Council of the City of Fairfield Adopting Updated Nexus Studies for the Citywide AB1600 Traffic Impact Fee and for the Northeast Area Development Fees.
Mayor Price opened the public hearing.
Zachary Wright of Seeno Homes spoke on Item 31 via Zoom.
Mayor Price closed the public hearing.
After a lengthy discussion, Councilmember Timm made a motion to approve Resolution 2022-146. Vice Mayor Vaccaro seconded the motion. The motion carried 6-0, with Councilmember Moy abstaining.
ADJOURNED MEETING AT 9:27 P.M. TO TUESDAY, JULY 5, 2022, 6:00 P.M., ., COUNCIL CHAMBER.
City Jerk
Mayor
•
SF SHARTSIS FRIESE LLP
One Maritime Plaza • Eighteenth Floor
San Francisco,California 94111-3598
Paul P."Skip"Spaulding,III
[email protected]
June 21, 2022
VIA EMAIL
Mayor Harry Price
Members of the City Council
City of Fairfield
Fairfield City Hall
1000 Webster Street
Fairfield, California 94533
Re: Fairfield City Council Meeting -- June 21,2022,Agenda Item No.32 Nexus Study-Citywide AB1600 Traffic Development Impact Fee Dear Mayor Price and Members of the City Council:
We represent Discovery Builders, Inc. and Albert D. Seeno Construction Co. (collectively"Discovery Builders/Seeno")and submit these comments on their behalf with regard to the proposed adoption by the City of Fairfield ("City"or"Fairfield")of an updated development impact fee nexus study entitled"Citywide Transportation Impact Fee Update, Revised Report,"dated June 10, 2022, that is noticed as Agenda Item No. 32 at your June 21, 2022 City Council meeting. In particular,you are considering approval of Resolution No. 2022- 146, which supposedly determines that this nexus study complies with California's Mitigation Fee Act.
For the reasons summarized below, Discovery Builders/Seeno urge the City Council to reject approval of this new nexus study that supposedly provides the requisite factual and legal basis to support the new Citywide transportation development impact fees. The revised June 10, 2022 Report prepared by Economic& Planning Systems, Inc. is fatally flawed and fails to factually, financially or legally support the proposed fees. Moreover, contrary to the text of the proposed resolution to adopt this nexus study, the"maximum"transportation fees identified for the three City areas fail to meet the important"nexus"and other legal requirements of the Mitigation Fee Act, the United States and California Constitutions, and other federal and state law.
Mayor Harry Price
Members of the City Council
June 21, 2022
I. INTRODUCTION
The City of Fairfield is in the middle of a process to revise its current Citywide transportation development impact fees. The City engaged Economic & Planning Systems, Inc. ("EPS")to prepare an update report addressing these fees, and EPS produced an initial report dated April 8, 2022 and now a revised report entitled"Citywide Transportation Impact Fee Update, Revised Report"dated June 10,2022("Final EPS Report"). The City apparently intends that the Final EPS Report serve as a nexus study for purposes of the Mitigation Fee Act, California Government Code §§ 66000-25 ("MFA").
The City is bifurcating approval of the new transportation development impact fees into two parts: (1)consideration of the Final EPS Report at the June 21 City Council meeting, and (2) consideration of a proposed fee slate at a future July City Council meeting. We are concerned that this unusual bifurcation process is being done for an improper reason, specifically to evade complying with new development fee nexus study provisions for housing development projects that go into effect on July 1, 2022. See Govt. Code § 66016.5(a)(5). Indeed, the Agenda Report for this matter discloses: "Staff recommends that the nexus studies be adopted before July 1, 2022, to avoid needing to revise the documents to comply with a State law that goes into effect on July 1." Agenda Report, at 2 (emphasis added).
Equally importantly, this bifurcation process clearly is not in the public interest and frustrates the ability of interested parties to comment on and evaluate these inextricably intertwined matters. These problems are illustrated by the contents of the Final EPS Report, which not only provides development impact fee calculations, but also recommends particular impact fees, which is supposed to be the purpose of the second part of this bifurcation. Thus, if the City Council were to approve the Final EPS Study as the nexus study underlying the fee slate, it would essentially be approving the very fees that it says it will not consider until a later time. For these reasons, we strongly request that the City Council defer action on the nexus study for these fees until both the study and the proposed fees for this important development update can be considered together at a future City Council meeting.
In 2021, Governor Gavin Newsom signed into law a new set of provisions intended to bring greater focus, rigor and transparency to the imposition of development impact fees, especially for housing developments. Although these provisions are often colloquially referred to as AB602, they are also codified in the California Government Code. These provisions focus in large part on nexus studies, such as the EPS Final Study at issue here. Among other requirements,these provisions require that, on and after January 1, 2022, "an impact fee nexus study" be adopted before an associated development fee is adopted. Govt. Code § 66016.5(a)(1).
The nexus study"shall identify the existing level of service for each public facility, identify the proposed new level of service, and include an explanation of why the new level of service is appropriate." Id., § 66016.5(a)(2). The study must also include"information that supports the local agency's actions,"as required by MFA Section 66001. Id., § 66016.5(a)(3). Moreover, "[i]f a nexus study supports the increase of an existing fee [which is the case here],the local
Mayor Harry Price
Members of the City Council
June 21, 2022
agency shall review the assumptions of the nexus study supporting the original fee and evaluate the amount of fees collected under the original fee."'
This comment letter,with the enclosed DTA Memorandum and its associated attachments, summarizes the significant factual,economic and legal deficiencies in the assumptions, projections, calculations, nexus tests, and fair share assessments on which these proposed transportation development impact fees are based. Discovery Builders/Seeno engaged the public finance consulting firm of DTA,which has a national reputation and extensive experience in assessing the financial and legal validity of development impact fees, to evaluate the EPS Final Report. In the enclosed Memorandum, DTA has identified fundamental factual, financial and legal deficiencies in this document and in the resulting fee slate. These flaws wholly undercut the validity of the new proposed transportation development impact fees.
Discovery Builders and Albert D. Seeno Construction Co., and their affiliated companies, are major residential home developers in the City of Fairfield, particularly within the area identified as the"Rest of City"or"ROC" in the EPS Final Report. Since they may be required to pay these new transportation development impact fees,they have an important interest in ensuring that the fees imposed by Fairfield are fair, reasonable and in full conformance with all applicable legal requirements.
II. LEGAL FRAMEWORK
There are well-developed sets of legal standards—constitutional, statutory and case law— governing the imposition of development impact fees. These standards are embodied in a series of U.S. Supreme Court,California Supreme Court and California Court of Appeal decisions which discuss the key nexus, relationship and proportionality standards required by law. It is absolutely essential for any city that is considering the imposition of development fees, including these transportation fees,to scrupulously observe these standards.
A. Mitigation Fee Act
Many of these applicable standards are set forth in the Mitigation Fee Act("MFA").
Under the MFA, a government agency issuing development permits has important responsibilities when establishing, increasing or imposing mitigation fees for development projects. For example, the agency must identify the purpose of the fee and the use to which the fee is put. Id., § 66001(a). It must establish "a reasonable relationship"between "the fee's use and the type of development project on which the fee is imposed"and also between"the need for the public facility and the type of development project on which the fee is imposed." Id.
There are also important requirements in the MFA relating to the use, amount, fair share allocation and timing of the development impact fees, including the following:
I AB602 also imposed a new set of transparency requirements for all jurisdictions that authorize development projects that are codified at Government Code Section 65940.1(a).
Mayor Harry Price
Members of the City Council
June 21, 2022
• The agency must"[i]dentify the use to which the fee is to be put." Id., § 66001(a)(2). Normally the use is identified by a general or specific plan, but in this case the City--as reflected in the EPS Final Report--proposes that the EPS Final Study itself be deemed to identify the transportation facilities needed. • The agency must determine that there is "a reasonable relationship between the amount of the fee and the cost of the public facility or portion of the public facility attributable to the development on which the fee is imposed." Id, § 66001(b).
• The fee must properly allocate the fee between existing and future development: "A fee shall not include the costs attributable to existing deficiencies in public facilities, but may include the costs attributable to the increased demand for public facilities reasonably related to the development project . . . ." Id., § 66001(g). This requires that agency-imposed fees have a "reasonable relationship between the fee charged and the burden of new development." Boatworks, LLC v. City of Alameda, 35 Cal. App. 5th 290, 304 (2019). One court invalidated a fire protection impact fee that did not meet this standard. Home Builders Assn. of Tulare/Kings Counties, Inc. v. City of Lemoore, 185 Cal. App. 4th 554, 571-72 (2010).
• The agency must also ensure that any fees or exactions on proposed development "shall not exceed the estimated reasonable cost of providing the service or facility for which the fee or exaction is imposed." Id., § 66005(a). • The agency must also closely heed the Legislature's finding that"untimely or improper allocation of development fees hinders economic growth and is, therefore, a matter of statewide interest and concern." Id., § 66006(e).
B. Federal and California Constitutions
The Fifth Amendment to the United States Constitution provides, in part, that"nor shall private property be taken for public use,without just compensation." The California Constitution contains parallel language stating"[p]rivate property may be taken or damaged for a public use and only when just compensation, ascertained by a jury unless waived, has first been paid to, or into court for, the owner." Cal. Const. Art. I, § 19. These limitations particularly come into play when a public agency imposes a development condition or fee on a particular project.
It is undisputed that the prohibition of takings in these constitutional provisions applies to development exactions. The key decisions relating to such exactions are the U.S. Supreme Court cases of Nollan v. California Coastal Commission,483 U.S. 825 (1987)and Dolan v. City of Tigard, 512 U.S. 374(1994). In brief,these cases collectively require both (1)that an "essential nexus" exist between the burden of the development in question and the permit condition; and
Mayor Harry Price
Members of the City Council
June 21, 2022
(2)that there must be a "rough proportionality" between the magnitude of the exaction and the nature and extent of the project impact which the exaction purports to address. These federal constitutional tests apply to monetary exactions imposed in California. Ehrlich v. City of Culver City, 12 Cal. 4th 854 (1996).
One key aspect of the Nollan/Dolan tests is the heightened level of scrutiny that is applied to such exactions. Thus, Fairfield must be able to make and carefully document the required nexus findings,which include, among other things, an individualized determination rather than generalized or conclusory findings regarding the amount of the fee and the impact of the proposed development. It is clear from a more recent U.S. Supreme Court case described below, that these heightened scrutiny principles are now applicable to city development impact fees that are established by a resolution or ordinance(or an amendment to an ordinance)of general applicability,which, as we understand, is how Fairfield would likely be establishing these transportation development impact fees.
In Koontz v. St. Johns River Water Management District,570 U.S. 595 (2013),the Court held that all monetary exactions in development permits issued by local government agencies are subject to the heightened and strict scrutiny standards articulated in the Court's famous Nollan and Dolan decisions. The Court stated that this type of exaction "implicates the central concern of Nollan and Dolan: the risk that the government may use its substantial power and discretion in land-use permitting to pursue governmental ends that lack an essential nexus and rough proportionality to the effects of the proposed new use of the specific property at issue,thereby diminishing without justification the value of the property." Id. at 614.
The Court expressly made this holding applicable to all land use permit monetary exactions that are not taxes. As the dissent points out, the Court did not adopt the view in California's Ehrlich case that monetary exactions that are made ad hoc for a particular property are evaluated under heightened scrutiny,while exactions that are based on an ordinance of general applicability are evaluated under a lower standard. Rather, this higher level of scrutiny directly applies to both sets of mitigation fees. Dissenting Justice Kagan stated:
By applying Nollan and Dolan to permit conditions requiring monetary payments —with no express limitation except as to taxes—the majority extends the Taking Clause,with its notoriously"difficult"and "perplexing" standards, into the very heart of local land-use regulation and service delivery. [Citation omitted.] Cities and towns across the nation impose many kinds of permitting fees every day. . . .
All now must meet Nollan and Dolan's nexus and proportionality tests. Id. at 626-27 (emphasis added).
Thus, the Nollan/Dolan standards and burdens of proof will apply to Fairfield's proposed new citywide transportation development fees. These heightened scrutiny tests require both an "essential nexus"between the development condition and its impacts and a"rough proportionality"based on an "individualized determination"regarding the relationship of the exaction to its impacts, and it puts the burden of proof on the government agency to demonstrate
Mayor Harry Price
Members of the City Council
June 21, 2022
compliance with these requirements. Nollan v. California Coastal Commission, 483 U.S. 825 (1987);Dolan v. City of Tigard, 512 U.S. 374(1994). The Koontz case further demonstrates that this scrutiny will necessarily involve a close evaluation of the amount of the monetary fee imposed.
In this case, for the reasons below, the Final EPS Report, including the transportation development impact fees that it proposes, are not factually justified or legally sufficient and should therefore be rejected by Fairfield. This insufficient record fails to establish the requisite nexus, proportionality and reasonable relationship requirements that are embodied in the federal and state Constitutions and the Mitigation Fee Act. Moreover,there is absolutely no evidence in the record to analyze the financial feasibility and cost burden on development projects and therefore determine whether the State policy against such fees hindering economic development has been satisfied.
HI. THE DEVELOPMENT IMPACT FEE ANALYSIS IN THE FINAL EPS STUDY
IS LEGALLY DEFICIENT AND CANNOT FORM THE BASIS FOR THE
IMPOSITION OF THE PROPOSED NEW TRANSPORTATION
DEVELOPMENT FEES.
The DTA Memorandum identifies a series of factual, analytical and fair share allocation deficiencies reflected in the Final EPS Study. We will briefly summarize these issues and explain why they violate applicable MFA and other legal requirements.
The DTA Memorandum addresses a series of issues that undermine the accuracy and credibility of the EPS Final Study. These deficiencies include: (1)the Study's unsupported and skewed proposed allocation of the Northeast Area transportation improvements to the rest of the City; (2)the wholly unjustified proposed allocation of costs between residential and non- residential development; (3)the failure to properly allocate a fair share of transportation costs between existing development and future new development; (4)the unreasonably understated calculation of new residential development in the Northeast Area; and (5)the many errors made in calculating the true cost of significant transportation projects. These errors have unreasonably and improperly inflated both the amount and allocation of costs to new development, particularly in the Rest of City("ROC")area.
Most of the development planned by Discovery Builders/Seeno in Fairfield will take place in the ROC area. The proposed new transportation impact fees recommended in the EPS Final Study for the ROC area would immediately increase the current fees by 86%, from $8,112 per single-family unit at the present time to $15,079 per unit. This dramatic almost-doubling of impact fees would have a huge financial impact on the residential projects that Discovery Builders/Seeno would like to build. For this reason, over the past 45 days Discovery Builders/Seeno raised its serious concerns with City Staff and discussed its specific objections regarding the individual issues above. However, no significant changes have been made in the Final EPS Report and very few of the issues raised have been addressed.
Mayor Harry Price
Members of the City Council
June 21, 2022
One prominent issue raised in the DTA Memorandum (pages 4-5) is the cost allocation of Northeast Area improvements. For the first time, instead of assessing 100%of Northeast Area fees to new and existing development in the Northeast Area,the EPS Final Study proposes to assess 33.3%of such cost to the ROC (and no portion of this to the Heart of City area). EPS provides no technical or financial justification for this decision. EPS generally refers to a traffic model/study as providing the underlying support, but in fact the traffic study does not provide data to support this allocation --rather it discloses that the ROC should at most be allocated about half this amount. Indeed, it appears that many improvements are intended to provide an increased level of service to existing development, for which existing development must pay its fair share. Accordingly, this 33.3%allocation to the ROC Area is arbitrary and capricious and invalid under the MFA.
A second related issue is the EPS Final Report's proposed allocation of these fees between residential and non-residential properties. As DTA states in its Memorandum (page 5), the overallocation of Northeast Area transportation fees is"exacerbated by the [EPA Final Report's] recommendation to impose as low as 13%of the maximum fee allowable on non- residential property and 47%of the maximum allowable fees on Heart of Fairfield residential, leaving the fee program underfunded by over$40 million." However, in so doing, EPS provides no legal nexus or factual basis. This appears to be no more than a policy decision made by EPS which is beyond its authority as a consultant and is not allowed under the MFA.
The third deficiency in the EPS Final Report is the overall allocation of anticipated transportation project costs between new and existing development in the ROC Area. The EPS Final Report purports to calculate that only 7%of new transportation costs should be attributed to existing development,with the remainder being paid by new development. To make matters worse, for some key new projects(such as the"General, Intelligence Transportation Systems" and"Citywide Traffic Signal Improvements"), EPS assigns 100%of these costs to new development, even though such improvements serve both new and existing residents and likely result in an increased"level of service"for existing residents. This calculation also violates the new level of service requirement in AB602 that is codified at Govt. Code Section 66016.5(a)(2).
Similarly, for the Northeast Area, the 100%allocation to new(vs. existing)development for projects in that area is an overstatement of new development's fair share.
The fourth issue addressed in the DTA Memorandum (pages 2-3) is the incorrect calculation of Northeast Area residential totals. There is a fatal disconnect between the single- family and multi-family residential totals and approved project totals. Since the EPS Final Report uses figures for the Transportation Improvement Projects based on the "maximum density total"and uses growth forecasts based on the "minimum unit total,"DTA finds that"the ROC could be imposed with additional fees to construct excess roadways for units that were eliminated in the Fee study-there is simply more money being collected within the ROC than is necessary"due to these conflicting numbers.
Finally,there are a large number of analytical errors and transportation improvement cost problems that fundamentally undermine the integrity of the fee calculations. As set forth in the
Mayor Harry Price
Members of the City Council
June 21, 2022
DTA Memorandum (pages 3-4), several projects used to calculate the future development impact fee amounts were previously funded and completed, and other projects have new"scope of work"costs that are not justified or demonstrated in an approved facilities plan. Many other projects identified in the Memorandum have overstated costs for a variety of reasons. These serious problems are further documented in the attachments enclosed with the DTA Memorandum.
IV. THE PROPOSED TRANSPORTATION FACILITY DEVELOPMENT IMPACT
FEES IN THE EPS FINAL REPORT ARE INVALID BECAUSE THEY FAIL TO MEET ALL LEGAL REQUIREMENTS.
We explained the legal framework applicable to Fairfield's adoption of these proposed new transportation development impact fees in Section II herein and summarized the factual, financial and other deficiencies in the underlying EPS Final Study and proposed fee slate as analyzed by DTA in Section III herein. In this section,we will apply the law to the facts and explain why the fees proposed in the EPS Final Study are legally invalid and should be rejected by the Fairfield City Council,
A. These Proposed Transportation Impact Fees Fail To Comply With The Key Requirements Of The Mitigation Fee Act.
1. There Is No Reasonable Relationship Between The Use Of The Transportation Impact Fees And The Types Of Projects On Which The Fees Are Being Imposed.
One of the most critical nexus findings under the MFA is the one between the use of the mitigation fees and the type of development project on which it is imposed. Gov't Code § 66001(a)(3). This is sometimes referred to as the"benefit"nexus test because it examines the extent to which benefit of the fees is related to the development which caused particular impacts.
Indeed, as the DTA Memorandum covers in great detail,the"fair share"allocation between future development and existing development is not"fair"at all because new development, pursuant to this fee slate, is being greatly overcharged for the costs of the infrastructure facilities. These impact fee allocation errors are magnified greatly here because of the thoroughly faulty allocations of impact fees between residential and non-residential development,the allocation of 33%of Northeast project fees to new development in the ROC Area, and the disparate treatment of fees for the ROC and Heart of City areas. The result of these arbitrary fee allocation decisions recommended by EPS is a completely unsupported fee slate which is dramatically skewed to overcharge new residential development in the ROC area.
Mayor Harry Price
Members of the City Council
June 21, 2022
2. There Is No Reasonable Relationship Between The Amount Of The Transportation Impact Fees Which Will Be Imposed on Future Development Projects And The Cost Of The Transportation Facilities.
One critical MFA nexus test with respect to a specific future development is the requirement that the agency show that there is a"reasonable relationship between the amount of the fee and the cost of the public facility or portion of the public facility that is attributable to the development project on which the fee is imposed." Govt. Code § 66001(b). This is no such relationship, reasonable or otherwise, between the amount of the transportation development impact fees and the future development on which they would be imposed.
DTA has identified a host of construction cost calculation errors, over-estimation of future population and facility needs, and improper allocation of transportation project costs between existing and future development, all of which have resulted in an inflated overall cost for future facilities and an unsupportable high allocation of those costs to future development in the ROC area. These major analytical and computational errors have resulted in a future development impact fee slate that does not have a reasonable relationship to the true cost of the underlying facilities or to the share which future development can be obligated to pay.
3. The Transportation Impact Fees On Proposed Future Developments Exceed The Reasonable Cost Of Providing The Facilities For Which The Fees Are Imposed.
MFA Section 66005(a) provides that an agency must ensure that any fees on proposed development"shall not exceed the reasonable cost of providing the service or facility for which the fee or exaction is imposed." For all of the reasons in Section IV(A)(2) herein and in other parts of this letter, the proposed transportation development fees greatly exceed the estimated reasonable cost of the facilities.
4. The Proposed Transportation Impact Fees Do Not Properly Allocate The Fees Between Existing And Future Development.
In 2006,the California Legislature amended the MFA to add Section 66001(g). This section provides:
A fee shall not include the costs attributable to existing deficiencies in public facilities, but may include the costs attributable to the increased demand for public facilities reasonably related to the development project in order to (1) refurbish existing facilities to maintain the existing level of service, or(2) achieve an adopted level of service that is consistent with the general plan.
The proposed transportation development impact fees here completely fail to meet this standard. The general rule, as applied to this situation, is that a fee"shall not" include the costs attributable to existing deficiencies in public facilities. The only two limited exceptions are to
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Members of the City Council
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"refurbish existing facilities to maintain the existing level of service"or"to achieve an adopted level of service that is consistent with the general plan." Neither exception applies here.
This new section of the MFA was adopted to remedy serious legal issues addressed by courts in a series of cases that include Bixel v. City of Los Angeles, 216 Cal. App. 3d 1208 (1989) and Shapell Industries, Inc. v. Governing Board, 1 Cal. App.4th 218 (1991). 2006 Cal. Stat. ch. 194, § 2. The lesson of these cases is that the amount of a development fee must not exceed the cost of the public facility attributable to the development project upon which the fee is imposed. Id
In Bixel, a developer challenged the City of Los Angeles' fire hydrant development fee.
The City had been using funds raised by the fees to make installations and repairs to existing water main deficiencies, as well as to make installations and repairs necessitated by new development. Bixel, 214 Cal. App. 4th at 1219-20. The Court of Appeal struck down the ordinances imposing the fire hydrant development fee, finding that they violated the California Constitution by failing to contain language that limited the use of fees"to solely those installations and repairs necessitated by new development"as"mandated by the California Constitution." Id. at 1219-20. Similarly, in Shape!!Industries, the Court of Appeal concluded that development fees imposed by a school district were unjustified and "insupportable"where the amount of the fee exceeded the school district's increased costs that could be attributed to new development. Shapell Industries, Inc., 1 Cal. App. 4th at 237. Because the fees proposed in the EPS Final Study for Fairfield exceed the costs necessitated by new development, as explained in this letter,the fees are similarly unjustified and legally improper.
In the Home Builders case cited above, a court invalidated a fire protection fee adopted by the City of Lemoor under this section. It found that the east side facilities did not meet the requirements of this section. Although it found that the fees for the west side fire facilities were valid, it found that the potential annexation on which the west side facilities that was factored into the fee was allowable because these "fire protection facilities would be required with our without the annexation." Id. at 572-73
B. The Transportation Impact Fees That Would Be Imposed On New Developments Will Be Void As An Unconstitutional "Taking"Under Federal And California Law.
Based on the requirements of the U.S. and California Constitutions and the interpretive case law of these provisions explained in Section II(B)herein, it is highly likely that a court would invalidate these transportation impact fees when applying the heightened scrutiny requiring both an "essential nexus"between the development exaction and its impacts and a "rough proportionality"based on an "individualized determination"regarding the relationship of the exaction to its impacts. Moreover, the burden of proof is on the government entity (the City of Fairfield, in this case)to demonstrate that it has complied with these requirements. This determination, under the Koontz decision, will also include a careful evaluation of the monetary fee involved.
Mayor Harry Price
Members of the City Council
June 21, 2022
None of these constitutional tests can be met to support EPS's schedule of proposed transportation impact fees. There is no"essential nexus"between the burden of a particular future development project and the nature and amount of the fees being imposed due to the litany of fee calculation errors, improper future development allocations, and erroneous methodology being used here. Similarly,the"rough proportionality"test is failed by these fees because they are nowhere in the ballpark of the impacts of a future development project and the fees it is being required to pay. Accordingly, Fairfield will not be able to demonstrate that these tests have been met.
V. CONCLUSION
The expert analysis prepared by DTA, combined with the legal requirements of the MFA and other applicable federal and state law summarized in this letter, compel the conclusion that the EPS Final Study is wholly inadequate and fails to support the proposed fee slate that the Fairfield City Council will be asked to adopt. The proposed transportation development impact fees fail many important nexus tests and would constitute a punitive and legally deficient exaction that will hinder such development contrary to clear state policies. Accordingly, Fairfield should reject the EPS Final Study and resulting fee slate as unacceptable and deficient.
Instead, Fairfield should obtain a legally adequate nexus report that remedies the legal, economic and factual deficiencies in the EPS Final Study.
Please feel free to contact me if you have any questions.
Very truly yours,
Paul P. "Skip" Spaulding, III
PPS:wgc
Enclosures
cc: Mr. Louis Parsons ([email protected]) David Young, Esq. ([email protected])
Mr.Zachary Wright([email protected])
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