Agenda Report
Fullerton City Council
MEETING DATE: JANUARY 16, 2024
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: daisy perez, deputy city manager
PREPARED BY: DAISY PEREZ, DEPUTY CITY MANAGER
SUBJECT: PARK DWELLING FEE ALLOCATION AND PROXIMITY REQUIREMENTS FOR FUND EXPENDITURE
SUMMARY
City Council requested a review Park Dwelling Fees and Fund administration and use to consider requiring fees used within a certain distance from the new home construction initiating the fee. Staff presented this item to City Council on October 17, 2023. City Council voted to continue the item to a future meeting.
RECOMMENDATION
Direct staff to proceed with one of the following options:
Option 1: Make no changes to the Park Dwelling Fee ordinance to allow the use of funds throughout the City.
Option 2: Direct staff to prepare an ordinance amending Fullerton Municipal Code Section 21.12.040 to require the City use 50% of fees collected from housing development projects with more than 20 dwelling units within two miles of that housing development project.
Option 3: Direct staff to prepare an ordinance amending Fullerton Municipal Code Section 21.12.040 to require the City allocate 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 parks most impacted by the development project while ensuring flexibility to redirect funds to the next closest park if needed.
CITY MANAGER REMARKS
None.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statements:
Fiscal and Organizational Stability
Infrastructure and City Assets.
FISCAL IMPACT
None. This item does not change the Park Dwelling Fee amount.
DISCUSSION
City Council directed staff to review Park Dwelling Fees with an option to change the use of funds from anywhere in the City to within a certain distance of the dwelling unit / residential development where the City collected the fee(s). Currently, the City can use Park Dwelling Fee funds for any park or park facility project throughout the City. The City can only use Park Dwelling Funds on park improvements and park acquisition. The City cannot use the fees for maintenance. The City must spend Park Dwelling Funds within five years of collection and included them in a plan for use of funds. The City includes the Park Dwelling Funds use each year in the Five-Year Capital Improvement Plan, approved by City Council through the annual budget process.
Purpose and Intent of Park Dwelling Fee
City Council determined 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 Park Dwelling Fee collection from any person or developer establishing a dwelling unit in the City. The fee creates open space, park facilities and improves existing parks and facilities as identified in the City General Plan.
The Mitigation Fee Act (California Government Code Section 66000 et. seq.) authorized the Park Dwelling Fee. The Mitigation Fee Act defrays all, or portions of, the cost to provide 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 created the Park Dwelling Fee recognizing that each new dwelling unit would add population and impact the park system. The fee is a one-time fee to offset impacts to parks from increased population by funding new parks and improving existing parks. Staff will prepare a revised ordinance for Planning Commission consideration should City Council desire to amend the Park Dwelling Fee ordinance to restrict the use of the funds.
Collection of Fees
The City collects all Park Dwelling Fees when the developer pays for building permits the new dwelling project. The City created the fee based on a formula typical for many cities.
Park Dwelling Fee Formula (adopted 1995 per Resolution No. 8685):
(cost / acre for land acquisition + cost / acre for land development) x parkland to population need x residents per dwelling unit 1,000
The current fee totals $12,020 per dwelling unit. The City has not increased the fee since 2019.
The City has approximately $924,000 in Park Dwelling Funds not encumbered to a park improvement project this fiscal year. Staff projects additional revenue in the next two fiscal years when new housing developments start construction. The funding for capital projects totaled about $40.4 million from Fiscal Year 2021-22 to 2023-24 with $6.2 million in Park Dwelling Funds, $32.7 million in grant funds and the remaining $1.58 million in other funds (Brea Dam, ARPA, donations). Most of the grant funding acquired West Coyote Hills. The following lists Park Dwelling Funds encumbered this year and the estimated fund balance:
$ 2,959,054.00
FY 23-24 Park Dwelling Fund Balance
FY 23-24 Projects (Funds Encumbered)
Budget
Project
Status
$ 450,000.00
Acacia Park Playground Project
Complete
$ 80,000.00
Emery Playground Design and Engineering Consultant Services Complete
$ 400,000.00
Amerige Park Netting Project
Complete
$ 50,000.00
Independence Park Design Consultant Services
Complete
$ 30,000.00
Bastanchury Greenbelt Design Consultant Services
Complete
$ 175,000.00
Citywide Park Facility Improvements
In Progress
$ 150,000.00
Chapman Restroom Design / Construction
In Progress
$ 50,000.00
Pooch Park Design Consultant Services
In Progress
$ 300,000.00
Independence Park Pool Fence Project
In Progress
$ 100,000.00
Valencia Park Improvements
In Progress
$ 350,000.00
Urban Greening Matching Grant Funds
On Hold
$ 924,054.00
Remaining Fund Balance if all projects are completed
CIP Approved Projects Currently On-Hold
Budget
Project
$ 400,000.00
Playground and Safety Surfacing Replacement
$ 100,000.00
Hillcrest Park Exercise Equipment
$ 500,000.00
Total
Current Development Projects
Estimated Future Park Dwelling Fees
Project Status
The Hub
$5,048,400
Under Construction,
Completion Set for 2025
(Fees Deferred Until Final Completion)
Streetlights
$3,945,580
Plan check completed and ready for building permit issuance. Estimated 24-month construction timeline. (Fees Deferred Until Final Completion)
Tracks at Fullerton
$1,682,800
Building Plans have not submitted
Pointe Common
$745,240
Plan Check Pending
Pines at Sunrise Village
$1,358,260
Building Plans have not submitted
245 N State College
$300,500
Building Plans have not submitted
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 Avenue. Many areas south of Commonwealth are considered disadvantaged communities and park poor with 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 6 acres of park land per 1,000 people and 29 of the 30 miles of trails north of Commonwealth.
Restricting Park Dwelling Funds use to a certain distance from the dwellings and/or development projects generating the fees may impact the ability to make improvements to most parks. City parks, other than Pearl Park in North-East Fullerton, 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. The cost to replace a typical playground ranges from $500,000 to $600,000 depending on the size.
Staff regularly applies for park improvement and acquisition grants. Most grants focus on two categories: 1) providing park and open space and improvements to disadvantaged communities and 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, finds very few grants available for improvements in North Fullerton, which requires Park Dwelling Funds for improvements.
The City recently acquired (2019) and developed (2020) Pearl Park, a 0.41-acre park located in the northeast section of Fullerton, 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 equaled $1.04 million or $58 per square foot, since the property was vacant land with no costs to demolish buildings or other infrastructure.
Options for Park Dwelling Fund Use
The follow present three options for Park Dwelling Funds use that ensure 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 Make no changes to the ordinance which would allow use of funds throughout the City. Staff would continue to monitor parks and amenity conditions to determine which parks and amenities would need improvements using Park Dwelling Funds.
Option 2 Amend the Park Dwelling Fee ordinance to require the City use 50% of fees collected from housing development projects with more than 20 dwelling units within two miles of that housing development project. In addition to larger housing developments, there are many smaller developments that include one house, duplexes, lot splits, etc. These would be very difficult to track and separate the use of funds.
Option 3 Amend the Park Dwelling Fee ordinance to require the City allocate 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. cc: City Manager Eric J. Levitt
Options to Change Use of Park Dwelling Fees
January 16, 2024 - Page 2