Agenda Report
Fullerton City Council
MEETING DATE: OCTOBER 17, 2023
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: daisy perez, deputy city manager
PREPARED BY: alice loya, deputy director of parks & recreation SUBJECT: PARK DWELLING FEE ALLOCATION AND PROXIMITY REQUIREMENTS FOR EXPENDITURE OF FUNDS
SUMMARY
City Council requested a review of the administration and use of Park Dwelling Fees and the Park Dwelling Fee Fund to consider requiring fees used within a certain distance from the new home construction initiating the fee.
RECOMMENDATION
Direct staff to move forward with one of the following options:
Option 1: Direct staff to prepare an ordinance amending Fullerton Municipal Code Section 21.12.040 to require the City to use of 50% of fees collected from housing development projects with more than 20 dwelling units within two miles of the development project. This option would prioritize funding for parks most impacted by the development project while ensuring flexibility to redirect funds to the next closest park if needed.
Option 2: Make no changes to the Park Dwelling Fee ordinance to allow the use of funds throughout the City.
Option 3: Direct staff to prepare an ordinance amending Fullerton Municipal Code Section 21.12.040 to require the City to allocate 50% of fees collected from housing developments with more than 20 dwelling units to the park(s) located closest to the development project generating the park dwelling fees. This option would prioritize funding for the nearest parks while ensuring flexibility to redirect funds to the next closest park if needed.
Option 4: Direct staff to prepare an ordinance amending Fullerton Municipal Code Section 21.12.040 to require the City to allocate some other percentage of fees collected from housing development to the park(s) located closest to the development project generating the park dwelling fees.
CITY MANAGER REMARKS
The allocation of a percentage of park dwelling fees to an area within the region of the development be brought forward for City Council review. We have brought a couple of options seeking direction. One element that should be considered is that grants are sometimes only eligible in certain areas and the restriction of a percentage of park dwelling fees could impact flexibility for the City Council.
For instance, City staff regularly apply for grants for park improvements and acquisition. Most of the grants are focused on two categories: 1. providing park and open space and improvements to disadvantaged communities, or 2. protecting habitat and open space. This focus provides more opportunities to use grant funds in South Fullerton reducing the need for Park Dwelling funds to a required match percentage. The City received a significant amount of grant funds ($26 million) to protect the habitat and open space in West Coyote Hills in North Fullerton but, very few grants are available for improvements in North Fullerton, requiring the use of Park Dwelling funds for improvements.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statements:
Fiscal and Organizational Stability
Infrastructure and City Assets.
FISCAL IMPACT
None as this item proposes no change in the amount of the Park Dwelling Fee.
DISCUSSION
City Council directed staff to review the Park Dwelling Fee with an option to change the use of funds from anywhere in the City to within a certain distance from development generating the fees. Currently, the City may use funds from Park Dwelling fees for any park or park facility project throughout the City. The City may use Park Dwelling funds for park improvements and park acquisition but not maintenance. The City must spend Park Dwelling funds within five years of collection and develop a plan for use of funds. The City includes use of Park Dwelling funds in the City’s five-year capital improvement plan approved by City Council through the annual budget process.
Purpose and Intent of Park Dwelling Fees
City Council determined that the need for open park space and facilities increased in proportion to the increase in the number of dwelling units and population in the City in 1978 and enacted the collection of park dwelling fees from any person or developer who establishes a dwelling unit in the City. The fee would create open space, park facilities and improve existing parks and facilities identified in the Fullerton General Plan.
The Mitigation Fee Act (Government Code Section 66000 et. seq.) authorizes the City to collect a park dwelling fee. The Mitigation Fee Act defrays all, or portions of, the cost of providing public park facilities related to the construction project.
The park dwelling fee ordinance states that the City collects a fee on every “new dwelling unit” constructed, regardless of size or type (house, apartment, condo, etc.). City Council recognized that each new dwelling unit would add population and, therefore, impact the park system and created the one-time fee to offset impacts to parks from increased population by funding new parks and improving existing parks. Staff would prepare a revised ordinance and present it to the Planning Commission for consideration, should City Council desire to amend the park dwelling fee ordinance to restrict the use of the funds.
Fee Collection
The City collects all Park Dwelling Fees at the time the developer pays for building permits for the new dwelling project. The City created the fee based on a typical formula for many cities:
Park Dwelling Fee Formula (adopted 1995 per Resolution No. 8685):
(cost per acre for land acquisition + cost per acre for land development) x parkland to population need x residents per dwelling unit 1,000
The current fee is $12,020 per dwelling unit and has not increased since 2019.
The City has approximately $343,000 in unallocated Park Dwelling funds and projects additional revenue in the next two fiscal years when new housing developments start construction. Funding for capital projects from Fiscal Year 2021-22 to 2023-24 totaled approximately $40.4 million. Of that, $6.2 million came from Park Dwelling Funds and $32.7 million came from grant funds with the remaining $1.58 million in other funds (Brea Dam, ARPA, donations). The City used most of the grant funding for the acquisition of West Coyote Hills. The following table lists projects with their funding sources:
Project
Fund
FY 2022 Budget
FY 2023 Budget
FY 2024 Budget
Total All Funds
Rolling Hills Park
Park Dwelling
56,141
56,141
UP Park Construct.
Park Dwelling
9,751
32,767
42,518
Woodcrest Park Improv.
Park Dwelling
7,728
Grant
224,068
231,796
Pearl Lot Acquisition
Grant
740,277
730,735
1,471,012
Pacific Drive Park
Park Dwelling
950,640
110,799
CDBG
250,000
1,311,439
West Coyote Hills Acquisition
Park Dwelling
59,858
Grant
18,016,872
9,101,656
27,178,386
FCC Pool Acid Room
Park Dwelling
4,000
4,000
Acacia and Greenbelt
Park Dwelling
100,000
464,943
Grant
266,093
831,036
Citywide Trail Improvement
Park Dwelling
1,091
1,091
Park Lighting Improvement
Park Dwelling
53,701
53,701
Laguna Lake ADA
Developer
2,945
10,703
13,648
Juanita Cooke Trail
Developer
363,862
363,862
Emery Play Area
Park Dwelling
500,000
500,000
Bastanchury Greenbelt
Park Dwelling
100,000
100,000
Muckenthaler Stage Repair
Park Dwelling
29,450
Facilities Fund
29,450
58,900
Independence Pool Fence
Park Dwelling
300,000
300,000
Amerige Netting
Park Dwelling
450,000
450,000
Fullerton Golf RR
Brea Dam
500,000
500,000
Gilbert Access. Improvements
CDBG
250,000
250,000
FCC Generator
ARPA
600,000
600,000
Chapman RR
Park Dwelling
100,000
100,000
Fullerton Community Center
Park Dwelling
619,656
619,656
UP Trail II
Grant
1,780,000
1,780,000
Playgrounds Replacement
Park Dwelling
400,000
400,000
800,000
Pooch Park Relocation
Park Dwelling
150,000
Grant
266,093
416,093
Park Facilities Improvements
Park Dwelling
335,079
175,000
175,000
685,079
Developer
18,040
18,040
Grant
22,750
22,750
Hillcrest Park Rehabilitation
Developer
50,000
Park Dwelling
62,899
246,596
359,495
Valencia Park Improvements
CDBG
350,000
Park Dwelling
100,000
450,000
Hillcrest Exercise Equip
Park Dwelling
100,000
100,000
Indy Park Improvements
Park Dwelling
60,000
60,000
Total
24,470,444
14,073,199
1,185,000
39,728,643
Total by Funding Source
Total Park Dwelling Fund (PD)
2,439,994
2,880,105
835,000
6,155,099
Total Grant Funds (25,32)
21,300,060
10,082,391
350,000
32,661,476
Total Developer/User Funds
434,847
10,703
0 445,550
Total Other City Funds
29,450
1,100,000
0 1,129,450
Total
24,204,351
14,073,199
1,185,000
40,391,575
The City has 53 parks, including nature preserves and open space, 13 park facilities and 30 miles of trails. Most parks and trails are north of Commonwealth. Many areas south of Commonwealth are considered disadvantaged communities and park poor. There are only 15 parks and one trail south of Commonwealth with an average of 1.3-acres of park land per 1,000 people as opposed to over six-acres of park land per 1,000 people and 29 of the 30 miles of trails north of Commonwealth.
Restricting use of Park Dwelling funds to a certain distance from the project generating fees could impact the ability to make improvements to most parks. Other than Pearl Park in North-East Fullerton, all City parks are over 20 years old with the majority over 50 years old. These aging parks require significant improvements to amenities such as playgrounds, picnic shelters, irrigation, lighting, hardscape and meeting continuously changing ADA (Americans with Disabilities Act) requirements. Replacing a typical playground costs $500,000 to $600,000 depending on the size.
City staff regularly applies for grants for park improvements and acquisition. Most grants focus on two categories: providing park and open space and improvements to disadvantaged communities and protecting habitat and open space. This focus provides more opportunities to use grant funds in South Fullerton reducing the need for Park Dwelling funds to a required match percentage. The City received a significant amount of grant funds ($26 million) to protect the habitat and open space in West Coyote Hills in North Fullerton but, has very few grants available for improvements in North Fullerton, requiring the use of Park Dwelling funds for improvements.
The City acquired Pearl Park, a 0.41-acre park located in the northeast section of Fullerton, in 2019 and developed in 2020. The park is in a disadvantaged community with no park land within one mile. The cost to acquire and develop Pearl Park totaled $2.12 million. The City received a $1.57 million grant and used $550,300 Park Dwelling funds for the remaining costs. The cost per to purchase this property equaled $1.1 million or $61 per square foot. The cost to develop the vacant land into a park totaled $1.04 million or $58 per square foot, since the property was vacant land with no costs to demolish buildings or other infrastructure.
Park Dwelling Fee Use Options
Staff presents four options for City Council consideration for the use of Park Dwelling Funds. The options seek to ensure that communities benefit from nearby parks and open spaces, promote equitable access to recreational facilities while efficiently allocating resources and enhance the accessibility and quality of parks and open spaces for residents of new development projects, prioritizing funding for the nearest parks while ensuring flexibility to redirect funds to the next closest park if needed.
Option 1: Direct staff to prepare an ordinance amending Fullerton Municipal Code Section 21.12.040 to require the City to use 50% of fees collected from housing development projects with more than 20 dwelling units within two miles from the development project. This option would prioritize funding for the parks most impacted by the development project while ensuring flexibility to redirect funds to the next closest park if needed.
Option 2: Make no changes to the Park Dwelling Fee ordinance to allow the use of funds throughout the City. Staff would continue to monitor the conditions of parks and amenities to determine which parks and amenities would need improvements using Park Dwelling funds.
Option 3: Direct staff to prepare an ordinance amending Fullerton Municipal Code Section 21.12.040 to require the City to allocated 50% of fees collected from housing development with more than 20 dwelling units to the park(s) located closest to the development project generating the park dwelling fees. This option would prioritize funding for the nearest parks while ensuring flexibility to redirect funds to the next closest park if needed.
Option 4: Direct staff to prepare an ordinance amending Fullerton Municipal Code Section 21.12.040 to require the City to allocate some other % of fees collected from housing development to the park(s) located closest to the development project generating the park dwelling fees. cc: City Manager Eric J. Levitt
Park Dwelling Fees Allocation
October 17, 2023 - Page 2