ATTACHMENT 2
8/2022
SJCOG, Inc.
STAFF REPORT
SUBJECT: 2023 SJMSCP Development Fee Annual
Adjustment
RECOMMENDED ACTION: Motion to Approve the 2023 SJMSCP
Development Fees as Adjusted Pursuant to the
Financial Analysis Model
SUMMARY:
Using the adopted five-year financial analysis model to the San Joaquin County Multi-Species Habitat Conservation and Open Space Plan (SJMSCP) the SJCOG Inc. staff, HTAC Financial Subcommittee members (Table 1) and consultants undertook the annual analysis in summer 2022. The goal of the annual analysis is to establish the next year’s habitat plan fees paid by the development project. The fees are for impacts under the countywide SJMSCP permits as defined in the three fee model categories (Category A – Acquisition; Category B - Assessment and Enhancement; and Category C - Land Management and Administration).
Table 1 – HTAC Financial Subcommittee Members:
John Beckman, BIA Matt Diaz, Stockton Zachery Kearns, CDFW Dan Gifford, Conservation Alisa Goulart, SJ County
The proposed 2023 SJMSCP development fees were adjusted using the recommended 2020 SJMSCP Five-Year Financial Model Update for the respective categories and are compared to the 2022 SJMSCP Development fees (Table 2) in the most common habitat categories under the plan. The change is an overall decrease of 1.6% in the most impacted categories of Agricultural and Natural habitat classifications from the prior year. The decrease is due primarily to a dip in the land acquisition component (Category A) for agricultural land price values of comparable sales even though there was an unusually robust rise in the reported Consumer Price Index (CPI) for Categories B and C.
Table 2- Compared 2023 & 2022 SJMSCP Development Fees – Most Common Fee Habitat Types 2023 Fee -
Proposed
2022 Fee -
Adopted Difference
Percent
Change
Agricultural/Natural $19,255 $19,561 $306 1.6%
2023 SJMSCP
Fees
Cat C
Cat A Cat B
1.6%
ATTACHMENT 2
Table 3 illustrates the history of the SJMSCP development fees over the years since the funding shortfall was noted by the permitting agencies in 2006. The fees can fluctuate primarily based on the Category A – acquisition component of the fee formula over time.
Table 3- History and Annual Percentage Change for SJMSCP Development Fees Projects participating under the SJMSCP benefit from a predetermined, streamlined processing of the project rather than navigating through a potentially very long, cumbersome, and expensive regulatory process outside the habitat plan. By voluntarily opting for participation, the project proponent can choose any number of ways to provide mitigation for the impacts of the project through the plan and even control much of the mitigation costs if desired. The options are:
1. Pay the applicable fee.
2. Redesign the project to avoid/minimize impacts.
3. Provide land in lieu of the SJMSCP fee, which the project proponent will negotiate directly with the seller on the easement/fee title costs (Category A component).
4. Any combination of the above options.
And if those options are not sufficient, the project proponent can choose to not participate in the plan (opt out) and fulfill mitigation requirements on their own with state and federal permitting agencies independently.
RECOMMENDATION:
The HTAC Financial Subcommittee and the HTAC make the recommendation to SJCOG, Inc.
Board to Approve the 2023 SJMSCP Development Fees as Adjusted Pursuant to the Financial Analysis Model.
FISCAL IMPACT:
Development fees provide funding for SJCOG Inc. to mitigate project impacts covered under the SJMSCP permits for the subsequent calendar year beginning January 1.
BACKGROUND:
2007
Financial
Update#
Agriculture/Natural
$69,858 $71,125 $78,353 $77,720 $81,989 $78,311 $80,972 $85,631 $90,273 $109,737 $116,871 $101,033 $100,788 $161,286 $174,040 (wetted) (wetted) (wetted) (wetted) (wetted) (wetted) (wetted) (wetted) (wetted) (wetted) (wetted) (wetted) (wetted) (wetted) (wetted) $34,958 $35,143 $40,565 $38,328 $41,534 $37,087 $39,047 $42,784 $46,869 $66,437 $72,523 $54,576 $52,833 $71,544 $80,453 (upland) (upland) (upland) (upland) (upland) (upland) (upland) (upland) (upland) (upland) (upland) (upland) (upland) (upland) (upland) -5.3% 14.4% 3.6% -9.3% 8.4% -11.6% 4.6% 9.4% 7.2% 14.2% 8.9% -30.9% -4.3% 35.4% 12.7% Fee Category 2008 2009 2010 2011
$7,195 $6,364 $6,656 $7,281
2012 2013 2014 2015
$6,511 $6,165 $7,052 $7,307 $6,631
$19,400
$7,807 $8,905 $9,701
2016 2017 2018 2019
$14,104 $14,615 $13,262 $14,372 $17,808
Percentage of
Change Yearly
2020
$6,412
$12,822
Multi-Purpose
Open Space
Vernal Pools
$80,760
(wetted)
$42,071
(upland)
$12,711 $13,295 $14,543 $15,596 $13,399
$6,700
$13,022 $12,329
2022
$9,781
$19,561
2021
$8,682
$17,363
ATTACHMENT 2
Annually, the SJMSCP development fees are reviewed and calculated using a formula method adopted under the habitat. The three components of the formula are adjusted using a specific mechanism, which relates to the individual component in the fee based on the most current data.
The development fees established must be adopted by each of the jurisdictions and would become effective on January 1 of the subsequent year for projects using the SJMSCP.
Category A (Acquisition) – Comparable Land Sales
This category is directly related to land valuation based on comparable land sales in San Joaquin County in specific zones of the plan area (Central Zone, Central Southwest Transition Zone and Delta Zone) over an established two-year period meeting the established criteria used for comparable land sales (Attachment 1). Cost estimates for this category will continue to be evaluated on a yearly basis by taking all qualified fee title comparable sales in each zone to set a weighted cost per acre. Also, during the third year of the five-year cycle, the HTAC Financial Subcommittee reviewed the percentage of easement value to fee title value percentage used in the fee model for this category which was part of the 2020 model update. The percentage rose slightly from 56% to 58% which was incorporated into going forward until next 5-Year Review process.
The fee model update results in a 6.5% decrease in the Agricultural/Natural Habitat types of Category A (Acquisition) component to be $12,716. The reason for the decrease is the small dip in overall comparable fee title land sale values from prior year jumps.
Category B (Assessment and Enhancement) – Refined Cost Factors with Consumer Price Index and Model Data Update
The Category B component of the fee is adjusted using several factors including the California Consumer Price Index (CPI), as reported by the California Department of Finance for the Cat A Cat B Cat C Fee
ATTACHMENT 2
preceding 12-month fiscal year (June 2021 – June 2022) and from the updated model numbers based on the SJMSCP Annual Report.
The unit cost factors (per acre or per year for some items) are adjusted only by the CPI (the California CPI calculation was an increase of 8.3%). But the total cost for Category B is also a function of the SJMSCP Annual Report data updated annually (acres remaining to be acquired and the number of years remaining in the permit term; the fee per acre is a function of those total calculated costs and the land conversion acres remaining). These factors all feed into the fee model.
The fee model update results in a 9.8% increase in the Agricultural/Natural Habitat types of Category B (Assessment and Enhancement) component to be $5,769.
Category C (Management, Monitoring and Administration) – Refined Cost Factors/Long Term Investment with Consumer Price Index
Annual cost updates use the California Consumer Price Index (CPI), as reported by the California Department of Finance, for the preceding 12-month fiscal year (June 2021 – June 2022) to keep up with inflation on an annual basis.
The fee model update results in an 8.3% increase in the Agricultural/Natural Habitat types of Category C (Management, Monitoring and Administration) component from prior years to be $769.97.
In summary, the SJMSCP fees is calculated using the SJMSCP Financial Analysis formula model shown in the final proposed fee table 4 below and Attachment 2 (SJMSCP Cost and Fee Analysis 2023 Update). The overall result in the fee analysis is a 1.6% decrease in the most impacted Agricultural and Natural Habitat Classifications fees for 2023.
Table 4 - 2023 SJMSCP Development Fees - Proposed
Habitat Type Category A Category B Category C Total Fee Rounded Fee Other Open Space $6,358.00 $2,885.00 $385.55 $9,628.55 $9,629 Natural/Ag Lands $12,716.00 $5,769.00 $769.97 $19,254.97 $19,255 Vernal Pool Grasslands $58,927.00 $14,491.00 $1,901.76 $75,319.76 $75,320 Vernal Pool Wetted $57,912.00 $117,102.00 $1,864.45 $176,878.45 $176,878 COMMITTEE ACTIONS:
• HTAC FINANICAL SUBCOMMITTEE: Recommended Approval to HTAC • HTAC: Recommended Approval
• Management and Finance: Information
• Executive Committee: Information
• SJCOG Inc. Board: August 25, 2022
Prepared by: Steven Mayo, Program Manager
ATTACHMENT 2
Attachment 1 – 2023 Fee Study Property List - Props 24 Month ATTACHMENT 2
Attachment 2 – SJMSCP Cost and Fee Analysis 2023 Update