Agenda — Finance Committee, July 26, 2022

City Council Chambers City of Menifee
29844 Haun Road Finance Committee
Menifee, CA 92586 Meeting Agenda
L
esa Sobek, Committee Member Tuesday, July 26, 2022
Dean Deines, Committee Member 3:00 PM Regular Meeting AGENDA

1. CA

LL TO ORDER

2. R

OLL CALL

3. P
RESENTATIONS – None

4. P

UBLIC COMMENTS

5. A

PPROVAL OF MEETING MINUTES

5. 1 February 22, 2022 Minutes

5.2 March 18, 2022 Minutes

5.3 April 27, 2022 Minutes

5.4 June 21, 2022 Minutes

6. DI

SCUSSION ITEMS

6.1 D
raft FY 2022-2023 Investment Policy
Recommended Action:

Review and provide comment on the FY 2022- 2023 Investment Policy and recommend submittal to the City Council for approval at a future City Council Meeting.

6.2 Draft Developer Impact Fees (DIF) Study
Recommended Action:

Receive a presentation from The Matrix Consulting Group Inc. regarding the recently completed Draft DIF Study. Review and provide comment on the Draft DIF Study and recommend submittal to the City Council for approval at a future City Council meeting.

7. S

TAFF COMMENTS

8. C

OMMITTEE REPORTS/COMMENTS ON COMMITTEE ACTIVITIES

9. F

UTURE AGENDA ITEMS

9. 1 Next Meeting Dates: September 13, 2022 at 1:30 p.m.

November 29, 2022 at 3:00 p.m.

10. ADJOURNMENT
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Decorum Policy Notes
Please use a speaker request form when you wish to address the Committee . The Committee anticipates and encourages public participation at its Committee meetings, both on agenda items and during the public comments period. Please use respect by not having your cell phones on, refrain from talking in the audience or outbursts that may be disruptive. While we encourage participation, we ask there be a mutual respect for the proceedings.

Agenda Materials
Materials related to an item on this Agenda, including those submitted to the Committee after distribution of the agenda packet, are available for public inspection by contacting the City Clerk, at (951) 672-6777 during normal business hours.

Compliance with the Americans with Disabilities Act
If you need special assistance to participate in this meeting, you should contact Sarah Manwarin g, City Clerk, at (951) 672-6777. Notification 72 hours prior to the meeting will enable the City to make reasonable arrangements to assure accessibility to this meeting.

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City Council Chambers City of Menifee Via Zoom Finance Committee Menifee, CA 92586 Special Meeting Minutes

Lesa Sobek, Committee Member Tuesday, February 22, 2022 Dean Deines, Committee Member 2:00 PM Regular Meeting

MINUTES

1. CALL TO ORDER: The Meeting was called to order at 2:04 p.m.

2. ROLL CALL: All Committee Members Deines and Sobek were present.

3. FLAG SALUTE: Committee Members requested to remove flag salute from the agenda.

4. PRESENTATIONS: None.

5. PUBLIC COMMENTS: None.

6. APPROVAL OF MEETING MINUTES: None.

7. DISCUSSION ITEMS

7.1 Proposed Formation of Community Facilities District No. 2022-1 (Quartz Ranch)

Recommended Action:

Review the proposed Community Facilities District No. 2022-1 (Quartz Ranch) by Lennar Homes to finance the costs of certain public improvements for the development of a residential tract containing 379 units located North of Holland Road, South of La Piedra Road and West of Bradley Road and recommend submittal to the City Council for approval at the April 6, 2022 City Council Meeting.

Rochelle introduced the item and Consultant Shane Spicer. Mr. Spicer provided a report on CFD 2022-1, Quartz Ranch. The Committee Members asked several questions about the Cap and school district increase of 17%. The Committee discussed the Holland and Evans Road property road widening. Committee members approved and recommended submittal to the City Council for approval at the April 6, 2022 City Council Meeting.

8. STAFF COMMENTS: None.

9. COMMITTEE REPORTS/COMMENTS ON COMMITTEE ACTIVITIES: None.

10. FUTURE AGENDA ITEMS: None.

11. ADJOURNMENT: The meeting adjourned at 2:30 p.m.

______________ ___________
Stephanie Roseen, Acting City Clerk

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City Council Chambers City of Menifee Via Zoom Finance Committee Menifee, CA 92586 Special Meeting Minutes

Lesa Sobek, Committee Member Friday, March 18, 2022 Dean Deines, Committee Member 9:30 AM Regular Meeting

MINUTES

1. CALL TO ORDER: The Meeting was called to order at 9:38 a.m.

2. ROLL CALL: All Committee Members Deines and Sobek were present.

3. PRESENTATIONS: None.

4. PUBLIC COMMENTS: None.

5. APPROVAL OF MEETING MINUTES: None.

6. DISCUSSION ITEMS

6.1 Proposed Construction Financing by BLC Fleming LLC for the Legado Residential Development

Recommended Action:

1. Review and discuss the proposed construction financing plan for the Legado Master Planned Community development utilizing bond issuance financing, as it relates to the requirement for the City’s approval to proceed with bond issuance; and

2. Recommend submittal to City Council at its meeting on April 6, 2022 for review.

The Committee inquired about the bonds and deed of trust. There were discussions about the impact on CFD with this type of financing and questions about when the bonds will be repaid.

Consultants discussed what would happen those defaulted on the bonds and the liability to the City. This is the first time this type of financing would be done in California and there were concerns from the Committee. The Committee recommended submittal to the City Council at its meeting on April 6, 2022 for review and provided the consultant with various questions for them to answer at the City Council meeting.

7. STAFF COMMENTS: None.

8. COMMITTEE REPORTS/COMMENTS ON COMMITTEE ACTIVITIES: None.

9. FUTURE AGENDA ITEMS: None.

10. ADJOURNMENT: The meeting adjourned at 10:20 a.m.

______________ ___________
Stephanie Roseen, Acting City Clerk
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City Council Chambers City of Menifee Via Zoom Finance Committee Menifee, CA 92586 Special Meeting Minutes

Lesa Sobek, Committee Member Thursday, April 27, 2022 Dean Deines, Committee Member 2:00 PM Regular Meeting

MINUTES

1. CALL TO ORDER: The Meeting was called to order at 2:06 p.m.

2. ROLL CALL: All Committee Members Deines and Sobek were present.

3. PRESENTATIONS: None.

4. PUBLIC COMMENTS: None.

5. APPROVAL OF MEETING MINUTES: None.

6. DISCUSSION ITEMS

6.1 Proposed Construction Financing by BLC Fleming LLC for the Legado Residential Development

Recommended Action:

2. Recommend submittal to City Council at its meeting on May 4, 2022 for review.

The Committee inquired about the financing and discussed that California, Colorado and Texas has not implemented this type of financing. Brian Forbath, Stradling Yocca Carlson & Rauth, and Shane Spicer, Spicer Consulting Group both answered questions from the Committee members.

Committee members had legal and CFD conflict concerns.

6.2 Proposed Formation of Community Facilities District No. 2022-3 (Legado)

Recommended Action:

Review the proposed Community Facilities District No. 2022 -3 (Legado) by BLC Fleming LLC to finance the costs of certain public improvements for the development of a residential tract containing 1,022 units located North of Chambers Avenue, South of Rouse Road and East of Encanto Drive and West of Antelope Road and recommend submit tal to the City Council for approval at the June 15, 2022.

The Committee members asked questions about the location of Legado and discussed some of the street improvements. The Committee recommended submittal to the City Council at its meeting on June 15, 2022.

6.3 Proposed Formation of Community Facilities District No. 2022- 2 (McLaughlin Village)

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Recommended Action:

Review the proposed Community Facilities District No. 2022 -2 (McLaughlin Village) by Century Communities to finance the costs of certain public improvements for the development of a residential tract containing 126 units located South of McLaughlin Road, East of Barnet Road/Sunset Boulevard and West of Encanto Drive and recommend submittal to the City Council for approval at the June 15, 2022 City Council Meeting, contingent on grading approved by the City.

The Committee members asked questions about the HOA fees and annual cost of taxes. The Committee recommended submittal to the City Council at its meeting on June 15, 2022.

7. STAFF COMMENTS: None.

8. COMMITTEE REPORTS/COMMENTS ON COMMITTEE ACTIVITIES: None.

9. FUTURE AGENDA ITEMS: None.

10. ADJOURNMENT: The meeting adjourned at 3:52 p.m.

______________ ___________
Stephanie Roseen, Acting City Clerk

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City Council Chambers City of Menifee Via Zoom Finance Committee Menifee, CA 92586 Special Meeting Minutes

Lesa Sobek, Committee Member Tuesday, June 21, 2022 Dean Deines, Committee Member 2:00 PM Regular Meeting

MINUTES

1. CALL TO ORDER: The Meeting was called to order at 2:04 p.m.

2. ROLL CALL: All Committee Members Deines and Sobek were present.

3. PRESENTATIONS: None.

4. PUBLIC COMMENTS: None.

5. APPROVAL OF MEETING MINUTES: The following minutes were approved 2-0.

5.1 April 8, 2021 Finance Committee Minutes

5.2 June 22, 2021 Finance Committee Minutes

5.3 August 5, 2021 Finance Committee Minutes

5.3 August 16, 2021 Finance Committee Minutes

6. DISCUSSION ITEMS

6.1 Proposed Finance Committee Meeting Dates for 2022

Recommended Action:

1. Staff Recommend setting the following Finance Committee Meeting Dates for 2022.

• Tuesday, July 26, 2022 3:00 p.m.
• Tuesday, September 27, 2022 3:00 p.m.
• Tuesday, November 29, 2022 3:00 p.m.

Staff recommend setting the calendar dates every other month for 2022. September will need to be scheduled to September 13 th at 1:30 p.m. and the November date will work . Committee members approved.

6.2 Proposed Bond Issue for Community Facilities District No. 2021-1 (Banner Park)

Recommended Action:

1. Review the proposed Series 1 bond issue request for Community Facilities District No. 2021 -1 (Banner Park) by Pulte Homes to finance the costs of certain public improvements for the development of a residential tract containing 256 units within the City; and

2. Recommend the finance team to proceed with preparation of the Official Statement and other legal documents related to the transaction for presentation to the City Council at a future City Council meeting.

Shane Spicer (Consultant from Spicer Consulting Group, LLC) discussed the Banner Park CFD.

The intent is to take advantage of the interest rate. Committee members asked several questions.

Committee members approved.

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6.3 Proposed Bond Issue for Community Facilities District No. 2020-2 (Del Oro) Recommended Action:

1. Review the proposed bond issue request for Community Facilities District No. 2022-2 (Del Oro) by D.R. Horton to finance the costs of certain public improvements for the development of a residential tract containing 68 units within the City; and

Shane Spicer discussed the Del Oro CFD. The tax rate is below 2%. Committee members asked several questions. Recommendation is to move forward with financing to take advantage of the interest rate. Committee members approved.

6.4 Comprehensive Cost of Services (User Fee) Study - Draft Recommended Action:

1. It is recommended that the Finance Committee receive a presentation from staff regarding the recently completed Comprehensive Cost of Services (User Fee) Study – Draft and provide staff with input on cost recovery objectives and the recommended fee proposals.

2. Recommend the finance team to proceed with preparation of the staff report and presentation to the City Council at a future City Council meeting.

Khushboo Ingle (Consultant from The Matrix Consulting Group Inc.) presented the Comprehensive Cost of Services PowerPoint presentation to the Finance Committee. Khushboo explained the process the City of Menifee took to develop the Comprehensive Cost of Services Study. There was a recommendation to add in partnership language for the park rentals. The Committee prefers not to subsidize non-resident fees. The Committee asked questions about the volume of citations for police. An option for fee 5.04 would be to only charge non -residents. The Committee members asked to include a note on page 77 of the report to include the cost of construction for a home is about $300,000 to clarify that it is the cost of construction not the cost to purchase a home. Committee Member Sobek discussed inflation and wanted to know if we could do a phasing of the costs due to the economic environment. The Finance Committee recommended having a workshop for the User Fees. All Committee members approved.

7. STAFF COMMENTS: None.

8. COMMITTEE REPORTS/COMMENTS ON COMMITTEE ACTIVITIES: None.

9. FUTURE AGENDA ITEMS: None.

10. ADJOURNMENT: The meeting adjourned at 3:28 p.m.

______________ ___________
Stephanie Roseen, Acting City Clerk

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CITY OF MENIFEE

SUBJECT: Draft FY 2022-2023 Investment Policy
MEETING DATE: Ju ly 26, 2022
TO: Finance Committee
PREPARED BY: Jizelle Sandoval, Financial Analyst
REVIEWED BY: Margarita Cornejo, Deputy Finance Director

RECOMMENDED ACTION
Review and provide comment on the Draft FY 2022- 2023 Investment Policy and recommend submittal to the City Council for approval at a future City Council Meeting.

DISCUSSION

The Meni fee City Council is responsible for the management of the City of Menifee’ s funds, including the administration of this investment policy . Management responsibility for the cash management of the City of Menifee’s funds has been delegated to the Treasurer. The Treasurer will be responsible for all transactions undertaken and will establish a system of procedures and controls to regulate the activities of subordinate officials and employees.

This investment policy was last endorsed and adopted by the Menifee City Council and became effective on May 5, 2021 (Policy Number CC-11).

The pur pose of the investment policy is to identify various policies and procedures that will foster a prudent and systematic investment program designed to seek the City of Menifee’s objectives of safety, liquidity and return on investment through a diversified investment portfolio.

This policy also serves to organize and formalize the City of Menifee’s investment -related activities, while complying with all applicable stat utes governing the investment of public funds.

This policy is written to incorporate indust ry best practices and recommendations from sources such as the Government Finance Officers Association (GFOA), California Municipal Treasurers Association (CMTA), Ca lifornia Debt and Investment Advisory Commission (CDIAC) and the Association of Public Treasurers (APT).

On July 5, 2022, t he California Municipal Treasurers Association (CMTA) Investment Policy Certification was granted to the City of Menifee. This Investment Policy Certification recognizes that CMTA has validated that the City of Menifee’s Investment Policy adheres with the State of California Government Code and meets specific requirements deemed to be best practices for municipal agency investment policies.

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City of Menifee Staff Report
Investment Policy
July 26, 2022

Page 2 of 2 ends

In accordance with the investment policy, this policy shall be reviewed and adopted at least annually within 120 days of the end of the fiscal year, to ensure its consistency with the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends.

Any recommended modifications or amendments shall be present ed by Staff to the Governing Body for their consideration and adoption. The Draft FY 2022-2023 Investment Policy Revisions consist of:

• Changing the monthly and quarterly transaction reports (T reasurer) due to the Governing Body from 30 days to 60 days. This change will ensure compliance with the policy to allow sufficient time to close month end, to reconcile bank /trust acc ounts, to prepare and review the report(s), to approve staff reports, and to allow for Holidays.

• Updating Permitted Investments (Appendix A) to align with the Local Agency Investment Guidelines to comply with applicable statues governing the investment of public funds.

ATTACHMENTS

1. D raft FY 2022-2023 Investment Policy
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California Municipal
Treasurers Association
Investment Policy Certification
Issued on 07/5/2022
City of Menifee
The
California Municipal Treasurers Association certifies that the investment p
olicy of the City of Menifee complies with the current State s
tatutes governing the investment practices of local government entities l
ocated within the State of California.

President Date
07/05/2022
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T

HIS PAGE LEFT

BLANK INTENTIONALLY
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CITY OF MENIFEE
Finance Policy
Policy Number: CC-11
Approving Authority:

City Council
Subject
Investment Po licy (FY 2020-2021 2022-2023)
Effective Date: 10/1/2008
Last Modified: 3/ 06/19
05/05/2021

Page 1 of 21 ends

CITY OF MENIFEE

INVESTMENT POLICY
ADOPTED MAY 5, 2021 TBD

CONTENTS
I. INTRODUCTION ................................................................................................................... 1 II. SCOPE ................................................................................................................................. 1 III. PRUDENCE .......................................................................................................................... 1 IV. OBJECTIVES ........................................................................................................................ 2 V. DELEGATION OF AUTHORITY ............................................................................................... 2 VI. ETHICS AND CONFLICTS OF INTEREST .................................................................................. 3 VII. INTERNAL CONTROLS .......................................................................................................... 3 VIII. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS .................. 4 IX. AUTHORIZED INVESTMENTS................................................................................................ 5 X. PROHIBITED INVESTMENT VEHICLES AND PRACTICES .......................................................... 9 XI. INVESTMENT POOLS/MUTUAL FUNDS................................................................................ 10 XII. COLLATERALIZATION ....................................................................................................... 10 XIII. DELIVERY, SAFEKEEPING AND CUSTODY ........................................................................... 11 XIV. MAXIMUM MATURITY ...................................................................................................... 11 XV. RISK MANAGEMENT AND DIVERSIFICATION ....................................................................... 11 XVI. REVIEW OF INVESTMENT PORTFOLIO ................................................................................. 13 XVII. PERFORMANCE EVALUATION ............................................................................................ 13 XVIII. REPORTING ....................................................................................................................... 13 XIX. REVIEW OF INVESTMENT POLICY ....................................................................................... 14 XX. APPENDIX A: PERMITTED INVESTMENTS ............................................................................ 15 XXI. GLOSSARY OF INVESTMENT TERMS .................................................................................... 17 A-13
1 INTRODUCTION

The purpose of this investment policy is to identify various policies and procedures that will foster a prudent and systematic investment program designed to seek the City of Menifee’s objectives of safety, liquidity and return on investment through a diversified investment portfolio. This policy also serves to organize and formalize the City of Menifee’s investment -related activities, while complying with all applicable statutes governing the investment of public funds. This policy is written to incorporate industry best practices and recommendations from sources such as the Government Finance Officers Association (GFOA), California Municipal Treasurers Association (CMTA), California Debt and Investment Advisory Commission (CDIAC) and the Association of Public Treasurers (APT).

This investment policy was endorsed and adopted by the City of Menifee’s Governing Body and is effective as of the TBD 5th day of May, 2021, and replaces any previous versions.

I. SCOPE

This policy covers all funds and investment activities under the direct authority of the City of Menifee, as set forth in the State Government Code, Sections 53600 et seq ., with the following exceptions:

• Proceeds of debt issuance shall be invested in accordance with the City of Menifee’s general investment philosophy as set forth in this policy; however, such proceeds are to be invested pursuant to the permitted investment provisions of their specific bond indentures.

• Any other funds specifically exempted by the Governing Body.

POOLING OF FUNDS
Except for cash in certain restricted and special funds, the City of Menifee will consolidate cash and reserve balances from all funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping and administration. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles.

II. PRUDENCE

Pursuant to California Government Code, Section 53600.3, all persons authorized to make investment decisions on behalf of the City of Menifee are trustees and therefore fiduciaries subject to the Prudent Investor Standard:

“…all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, A-14
2 or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the City of Menifee, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the City of Menifee. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law.” The Treasurer and other authorized persons responsible for managing City of Menifee funds acting in accordance with written procedures and this investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes provided that the Treasurer or other authorized persons acted in good faith. Deviations from expectations of a security’s credit or market risk should be reported to the governing body in a timely fashion and appropriate action should be taken to control adverse developments.

III. OBJECTIVES
T
he City of Menifee’s overall investment program shall be designed and managed with a degree of professionalism worthy of the public trust. The overriding objectives of the program are to preserve principal, provide sufficient liquidity, and manage investment risks, while seeking a market-rate of return.
• SAFETY. Safety of principal is the foremost objective of the investment program.

Investments will be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the City of Menifee will diversify its investments by investing funds among a variety of securities with independent returns.
• LIQUIDITY. The investment portfolio will remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. • RETURN ON INVESTMENTS. The investment portfolio will be designed with the objective of attaining a market rate of return th roughout budgetary and economic cycles, taking into account the investment risk constraints for safety and liquidity needs.

IV. DELEGATION OF AUTHORITY
A
uthority to manage the City of Menifee’s investment program is derived from California Government Code, Sections 41006 and 53600 et seq.

T
he Governing Body is responsible for the management of the City of Menifee’s funds, including the administration of this investment policy. Management respons ibility for the cash management of the City of Menifee’s funds is hereby delegated to the Treasurer.

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3 The Treasurer will be responsible for all transactions undertaken and will establish a system of procedures and controls to regulate the activities of subordinate officials and employees.

Such procedures will include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Treasurer.

The City of Menifee may engage the services of one or more external investment advisers, who are registered under the Investment Advisers Act of 1940, to assist in the management of the City of Menifee’s investment portfolio in a manner consistent with the City of Menifee’s objectives. External investment advisers may be granted discretion to purchase and sell investment securities in accordance with this investment policy.

The City of Menifee's overall investment program shall be designed and managed with a degree of professionalism that is worthy of the public trust. The City of Menifee recognizes that in a diversified portfolio, occasional measured losses may be inevitable and must be considered within the context of the overall portfolio’s return and the cash flow requirements of the City of Menifee.

V. ETHICS AND CONFLICTS OF INTEREST

All participants in the investment process shall act as custodians of the public trust.

Investment officials shall recognize that the investment portfolio is subject to public review and evaluation. Thus employees and officials involved in the investment process shall refrain from personal business activity that could create a conflict of interest or the appearance of a conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions.

Employees and investment officials shall disclose to the City Manager any material interests in financial institutions with which they conduct business, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking any personal investment transactions with the same individual with whom business is conducted on behalf of the City of Menifee.

VI. INTERNAL CONTROLS

The Treasurer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the entity are protected from loss, theft or misuse. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management.

Periodically, as deemed appropriate by the City of Menifee and/or the Governing Body, an independent analysis by an external auditor shall be conducted to review internal controls, account activity and compliance with policies and procedures.

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4 VII. AUTHORIZED FINANCIAL INSTITUTIONS, DEPOSITORIES, AND BROKER/DEALERS

To the extent practicable, the Treasurer shall endeavor to complete investment transactions using a competitive bid process whenever possible. The City of Menifee’s Treasurer will determine which financial institutions are authorized to provide investment services to the City of Menifee. It shall be the City of Menifee’s policy to purchase securities only from authorized institutions and firms.

The Treasurer shall maintain procedures for establishing a list of authorized broker/dealers and financial institutions which are approved for investment purposes that are selected through a process of due diligence as determined by the City of Menifee. Due inquiry shall determine whether such authorized broker/dealers, and the individuals covering the City of Menifee are reputable and trustworthy, knowledgeable and experienced in Public City of Menifee investing and able to meet all of their financial obligations. These institutions may include "primary" dealers or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 15c3-1 (uniform net capital rule).

In accordance with Section 53601.5, institutions eligible to transact investment business with the City of Menifee include:

• Primary government dealers as designated by the Federal Reserve Bank and non- primary government dealers.
• Nationally or state-chartered banks.
• The Federal Reserve Bank.
• Direct issuers of securities eligible for purchase.

Selection of financial institutions and broker/dealers authorized to engage in transactions will be at the sole discretion of the City of Menifee, except where the City of Menifee utilizes an external investment adviser in which case the City of Menifee may rely on the adviser for selection.

All financial institutions which desire to become qualified bidders for investment transactions (and which are not dealing only with the investment adviser) must supply the Treasurer with audited financials and a statement certifying that the institution has reviewed the California Government Code, Section 53600 et seq. and the City of Menifee’s investment policy. The Treasurer will conduct an annual review of the financial condition and registrations of such qualified bidders.

Public deposits will be made only in qualified public depositories as established by State law. Deposits will be insured by the Federal Deposit Insurance Corporation, or, to the extent the amount exceeds the insured maximum, will be collateralized in accordance with State law.

S
election of broker/dealers used by an external investment adviser retained by the City of Menifee will be at the sole discretion of the adviser. Where possible, transactions wi th broker/dealers shall be selected on a competitive basis and their bid or offering prices shall be recorded. If there is no other readily available competitive offering, best efforts will be made to document quotations for comparable or alternative securities. When purchasing A-17
5 original issue instrumentality securities, no competitive offerings will be required as all dealers in the selling group offer those securities at the same original issue price.

VIII. AUTHORIZED INVESTMENTS

The City of Menifee’s investments are governed by California Government Code, Sections 53600 et seq. Within the investments permitted by the Code, the City of Menifee seeks to further restrict eligible investments to the guidelines listed below. In the event a discrepancy is found between this policy and the Code, the more restrictive parameters will take precedence. Percentage holding limits li sted in this section apply at the time the security is purchased.

Any investment currently held at the time the policy is adopted which does not meet the new policy guidelines can be held until maturity, and shall be exempt from the current policy. At the time of the investment’s maturity or liquidation, such funds shall be reinvested only as provided in the current policy.

An appropriate risk level shall be maintained by primarily purchasing securities that are of high quality, liquid, and marketable. The portfolio shall be diversified by security type and institution to avoid incurring unreasonable and avoidable risks regarding specific security types or individual issuers.

1. M
UNICIPAL SECURITIES include obligations of the City of Menifee, the State of California and any local City of Menifee within the State of California, provided that:

• The securities are rated in a rating category of “A” or its equivalent or better by at least one nationally recognized statistical rating organization (“NRSRO”). • No more than 5% of the portfolio may be invested in any single issuer. • No more than 30% of the portfolio may be in Municipal Securities. • The maximum maturity does not exceed five (5) years.

2. MUNICIPAL SECURITIES (REGISTERED TREASURY NOTES OR BONDS) of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, City of Menifee, or authority of any of the other 49 states, in addition to California.
• The securities are rated in a rating category of “A” or its equivalent or better by at least one nationally recognized statistical rating organization (“NRSRO”). • No m
ore than 5% of the portfolio may be invested in any single issuer. • No more than 30% of the portfolio may be in Municipal Securities. • The maximum maturity does not exceed five (5) years.

3. U.S. TREASURIES and other government obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest. There are no limits on the dollar amount or percentage that the City of Menifee may invest in U.S.

Treasuries, provided that:

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6 • The maximum maturity is five (5) years.

4. FEDERAL AGENCIES or United States Government -Sponsored Enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government -sponsored enterprises. There are no limits on the dollar amount or percentage that the City of Menifee may invest in Federal City of Menifee or Government-Sponsored Enterprises (GSEs), provided that:

• No more than 25% of the portfolio may be invested in any single City of Menifee/GSE issuer.
• The maximum maturity does not exceed five (5) years.
• The maximum percent of City of Menifee callable securities in the portfolio will be 20%.

5. BANKER’S ACCEPTANCES, provided that:

• They are issued by institutions which have short-term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long- term debt obligations which are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
• No more than 40% of the portfolio may be invested in Banker’s Acceptances. • No more than 5% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed 180 days.

6. COMMERCIAL PAPER, provided that:

• The issuer is a corporation organized and operating in the United States with assets in excess of $500 million.
• Th e securities are rated “A-1” or its equivalent or better by at least one NRSRO. • They are issued by corporations which have long-term obligations rated in a rating category of “A” or its equivalent or better by at least one NRSRO. • City of Menifee may purchase no more than 10% of the outstanding commercial paper of any single issuer.
• No more than 25% of the portfolio may be invested in Commercial Paper. • No more than 5% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed 270 days.

7. NEGOTIABLE CERTIFICATES OF DEPOSIT (NCDS), issued by a nationally or state - chartered bank, a savings association or a federal association, a state or federal credit union, or by a federally licensed or state -licensed branch of a foreign bank, provided that:

• The amount of the NCD insured up to the FDIC limit does not require any credit ratings.
• Any amount above the FDIC insured limit must be issued by institutions which have short-term debt obligations rated “A-1” or its equivalent or better by at least A-19
7 one NRSRO; or long- term obligations rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
• No more than 30% of the total portfolio may be invested in NCDs (combined with CDARS).
• No more than 5% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed five (5) years.

8. FEDERALLY INSURED TIME DEPOSITS (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions, provided that:

• The amount per institution is limited to the maximum covered under federal insurance.
• No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
• The maximum maturity does not exceed five (5) years.

9. COLLATERALIZED TIME DEPOSITS (Non-Negotiable Certificates of Deposit) in state or federally chartered banks, savings and loans, or credit unions in excess of insured amounts which are fully collateralized with securities in accordance with California law, provided that:

• No more than 20% of the portfolio will be invested in a combination of federally insured and collateralized time deposits.
• The maximum maturity does not exceed five (5) years.

10. CERTIFICATE OF DEPOSIT PLACEMENT SERVICE (CDARS), provided that:

• No more than 30% of the total portfolio may be invested in a combination of Certificates of Deposit, including CDARS.
• The maximum maturity does not exceed five (5) years.

11. COLLATERALIZED BANK DEPOSITS. City of Menifee’ s deposits with financial institutions will be collateralized with pledged securities per California Government Code, Section 53651. There are no limits on the dollar amount or percentage that the City of Menifee may invest in collateralized bank deposits.

12. R
EPURCHASE AGREEMENTS collateralized with securities authorized under California Government Code, maintained at a level of at least 102% of the market value of the Repurchase Agreement. There are no limits on the dollar amount or percentage that the City of Menifee may invest, provided that:

• Securities used as collateral for Repurchase Agreements will be delivered to an acceptable third party custodian.
• Repurchase Agreements are subject to a Master Repurchase Agreement between the City of Menifee and the provider of the repurchase agreement. The Master Repurchase Agreement will be substantially in the form developed by the Securities Industry and Financial Markets Association (SIFMA).
• The maximum maturity does not exceed one (1) year.

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8 13. STATE OF CALIFORNIA LOCAL CITY OF MENIFEE INVESTMENT FUND (LAIF), provided that:

• The City of Menifee may invest up to the maximum amount permitted by LAIF. • LAIF’s investments in instruments prohibited by or not specified in the City of Menifee’s policy do not exclude the investment in LAIF itself from the City of Menifee’s list of allowable investments, provided LAIF’s reports allow the Treasurer to adequately judge the risk inherent in LAIF’s portfolio.

14. LOCAL GOVERNMENT INVESTMENT POOLS

• Other LGIPs permitted by client.
• There is no issuer limitation for Local Government Investment Pools

15. CORPORATE MEDIUM TERM NOTES (MTNS), provided that:

• The issuer is a corporation organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States.
• The securities are rated in a rating category of “A” or its equivalent or better by at least one NRSRO.
• No more than 30% of the total portfolio may be invested in MTNs. • No more than 5% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed five (5) years.

16. A

SSET-BACKED, MORTGAGE-BACKED, MORTGAGE PASS-THROUGH SECURITIES,

AND COLLATERALIZED MORTGAGE OBLIGATIONS FROM ISSUERS NOT DEFINED IN SECTIONS 3 AND 4 OF THE AUTHORIZED INVESTMENTS SECTION OF THIS POLICY, provided that:

• The securities are rated in a rating category of “AA” or its equivalent or better by a NRSRO.
• No more than 20% of the total portfolio may be invested in these securities. • No m ore than 5% of the portfolio may be invested in any single Asset-Backed or Commercial Mortgage security issuer.
• The maximum legal final maturity does not exceed five (5) years.

17. MUTUAL FUNDS AND MONEY MARKET MUTUAL FUNDS that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, provided that:

a. M
UTUAL FUNDS that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) inclusive and that meet either of the following criteria:

(i) Attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
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9 (ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience investing in the securities and obligations authorized by California Government Code, Section 53601 and with assets under management in excess of $500 million.

• No more than 10% of the total portfolio may be invested in shares of any one mutual fund.

b. MONEY MARKET MUTUAL FUNDS registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and issued by diversified management companies and meet either of the following criteria:

(i) Have attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
(ii) Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience managing money market m utual funds with assets under management in excess of $500 million.

• No more than 20% of the total portfolio may be invested in the shares of any one Money Market Mutual Fund.

c. No more than 20% of the total portfolio may be invested in these securities.

18. SUPRANATIONALS, provided that:

• Issues are US dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Developme nt, International Finance Corporation, or Inter -American Development Bank.
• The securities are rated in a rating category of “AA” or its equivalent or better by a NRSRO.
• No more than 30% of the total portfolio may be invested in these securities. • No m
ore than 10% of the portfolio may be invested in any single issuer. • The maximum maturity does not exceed five (5) years.

IX. PROHIBITED INVESTMENT VEHICLES AND PRACTICES

• State law notwithstanding, any investments not specifically described herein are prohibited, including, but not limited to futures and options. • In accordance with Government Code, Section 53601.6, investment in inverse floaters, range notes, or mortgage derived interest-only strips is prohibited. • Investment in any security that could result in a zero interest accrual if held to maturity is prohibited.
• Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.

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10 • Purchasing or selling securities on margin is prohibited. • The use of reverse repurchase agreements, securities lending or any other form of borrowing or leverage is prohibited.
• The purchase of foreign currency denominated securities is prohibited.

X. INVESTMENT POOLS/MUTUAL FUNDS

The City of Menifee shall conduct a thorough investigation of any pool or mutual fund prior to making an investment, and on a continual basis thereafter. The Treasurer shall develop a questionnaire which will answer the following general questions:

• A description of eligible investment securities, and a written statement of investment policy and objectives.
• A description of interest calculations and how it is distributed, and how gains and losses are treated.
• A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited. • A description of who may invest in the program, how often, what size deposit and withdrawal are allowed.
• A schedule for receiving statements and portfolio listings. • Are reserves, retained earnings, etc. utilized by the pool/fund? • A fee schedule, and when and how is it assessed.
• Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds?

XI. COLLATERALIZATION

CERTIFICATES OF DEPOSIT (CDS). The City of Menifee shall require any commercial bank or savings and loan association to deposit eligible securities with an City of Menifee of a depository approved by the State Banking Department to secure any uninsured portion of a Non- Negotiable Certificate of Deposit. The value of eligible securities as defined pursuant to California Government Code, Section 53651, pledged against a Certificate of Deposit shall be equal to 150% of the face value of the CD if the securities are classified as mortgages and 110% of the face value of the CD for all other classes of security.

C
OLLATERALIZATION OF BANK DEPOSITS. This is the process by which a bank or financial institution pled ges securities, or other deposits for the purpose of securing repayment of deposited funds. The City of Menifee shall require any bank or financial institution to comply with the collateralization criteria defined in California Government Code, Section 53651.

R
EPURCHASE AGREEMENTS. The City of Menifee requires that Repurchase Agreements be collateralized only by securities authorized in accordance with California Government Code:

• The securities which collateralize the repurchase agreement shall be priced at Market Value, including any Accrued Interest plus a margin. The Market Value of A-23
11 the securities that underlie a repurchase agreement shall be valued at 102% or greater of the funds borrowed against those securities. • Financial institutions shall mark the value of the collateral to market at least monthly and increase or decrease the collateral to satisfy the ratio requirement described above.
• The City of Menifee shall receive monthly statements of collateral.

XII. DELIVERY, SAFEKEEPING AND CUSTODY

DELIVERY-VERSUS-PAYMENT (DVP). All investment transactions shall be conducted on a delivery-versus-payment basis.

SAFEKEEPING AND CUSTODY. To protect against potential losses due to failure of individual securities dealers, and to enhance access to securities, interest payments and maturity proceeds, all cash and securities in the City of Menifee’s portfolio shall be held in safekeeping in the City of Menifee’s name by a third party custodian, acting as agent for the City of Menifee under the terms of a custody agreement executed by the bank and the City of Menifee. All investment transactions will require a safekeeping receipt or acknowledgment generated from the trade. A monthly report will be received by the City of Menifee from the custodian listing all securities held in safekeeping with current market data and other information.

The only exceptions to the foregoing shall be depository accounts and securities purchases made with: (i) local government investment pools; (ii) time certificates of deposit, and, (iii) money mutual funds, since the purchased securities are not deliverable.

XIII. MAXIMUM MATURITY

To the extent possible, investments shall be matched with anticipated cash flow requirements and known future liabilities.

The City of Menifee will not invest in securities maturing more than five (5) years from the date of trade settlement, unless the Governing Body has by resolution granted authority to make such an investment.

XIV. R

ISK MANAGEMENT AND DIVERSIFICATION

MITIGATING CREDIT RISK IN THE PORTFOLIO
Credit risk is the risk that a security or a portfolio will lose some or all its value due to a real or perceived change in the ability of the issuer to repay its debt. The City of Menifee will mitigate credit risk by adopting the following strategies:

• The diversification requirements included in the “Authorized Investments” section of this policy are designed to mitigate credit risk in the portfolio.

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12 • No more than 5% of the total portfolio may be deposited with or invested in securities issued by any single issuer unless otherwise specified in this policy.

• The City of Menifee may elect to sell a security prior to its maturity and record a capital gain or loss in order to manage the quality, liquidity or yield of the portfolio in response to market conditions or City of Menifee’s risk preferences.

• If the credit ratings of any security owned by the City of Menifee are downgraded to a level below the quality required by this investment policy, it will be the City of Menifee’s policy to review the credit situation and make a determination as to whether to sell or retain such securities in the portfolio.

• If a security is downgraded, the Trea surer will use discretion in determining whether to sell or hold the security based on its current maturity, the economic outlook for the issuer, and other relevant factors.

• If a decision is made to retain a downgraded security in the portfolio, its pre sence in the portfolio will be monitored and reported monthly to the Governing Body.

MITIGATING MARKET RISK IN THE PORTFOLIO
Market risk is the risk that the portfolio value will fluctuate due to changes in the general level of interest rates. The City of Menifee recognizes that, over time, longer -term portfolios have the potential to achieve higher returns. On the other hand, l onger-term portfolios have higher volatility of return. The City of Menifee will mitigate market risk by providing adequate liquidity for short -term cash needs, and by making longer -term investments only with funds that are not needed for current cash flow purposes.

The City of Menifee further recognizes that certain types of securities, including variable rate securities, securities with principal paydowns prior to maturity, and securities with embedded options, will affect the market risk profile of the portfolio differently in different interest rate environments. The City of Menifee, therefore, adopts the following strategies to control and mitigate its exposure to market risk:

• The City of Menifee will maintain a minimum of six months of budgeted operating expenditures in short term investments to provide sufficient liquidity for expected disbursements.

• The maximum stated final maturity of individual securities in the portfolio will be five (5) years, except as otherwise stated in this policy.

• The duration of the portfolio will generally be approximately equal to the duration (typically, plus or minus 20%) of a Market Benchmark, an index selected by the City of Menifee based on the City of Menifee’s investment objectives, constraints and risk tolerances.

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13 XV. REVIEW OF INVESTMENT PORTFOLIO

The Treasurer shall periodically, but no less than quarterly, review the portfolio to identify investments that do not comply with this investment policy and establish protocols for reporting major and critical incidences of noncompliance to the Governing Body.

XVI. PERFORMANCE EVALUATION

The investment portfolio shall be designed to attain a market -average rate of return throughout budgetary and economic cycles, taking into account the City of Menifee’s risk constraints, the cash flow characteristics of the portfolio, and state and local laws, ordinances or resolutions that restrict investments.

The Treasurer shall monitor and evaluate the portfolio’s performance relative to the chosen market benchmark(s ), which will be included in the Treasurer’s quarterly report. The Treasurer shall select an appropriate, readily available index to use as a market benchmark.

XVII. REPORTING

MONTHLY REPORTS
Monthly transaction reports will be submitted by the Treasurer to the Governing Body w
ithin 30 60 days of the end of the reporting period in accordance with California Government Code Section 53607.

QUARTERLY REPORTS
The Treasurer will submit a quarterly investment report to the Governing Body which provides full disclosure of the City of Menifee’s investment activities within 30 60 days after the end of the quarter. These reports will disclose, at a minimum, the following information about the City of Menifee’s portfolio:

1. An asset listing showing par value, cost and independent third-party fair market value of each security as of the date of the report, the source of the valuation, type of investment, issuer, maturity date and interest rate.

2. Transactions for the period.

3. A description of the funds, investments and programs (including lending programs) managed by contracted parties (i.e. LAIF; investment pools, outside money managers and securities lending agents)

4. A one-page summary report that shows:
a. Average maturity of the portfolio and modified duration of the portfolio; b. Maturity distribution of the portfolio;
c. Percentage of the portfolio represented by each investment category; d. Average portfolio credit quality; and,
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14 e. Time-weighted total rate of return for the portfolio for the prior one month, three months, twelve months and since inception compared to the City of Menifee’s market benchmark returns for the same periods;

5. A statement of compliance with investment policy, including a schedule of any transactions or holdings which do not comply with this policy or with the California Government Code, including a justification for their presence in the portfolio and a timetable for resolution.

6. A statement that the City of Menifee has adequate funds to meet its cash flow requirements for the next six months.

ANNUAL REPORTS
A comprehensive annual report will be presented to the Governing Board. This report will include comparisons of the City of Menifee’s return to the market benchmark return, suggest policies and improvements that might enhance the investment program, and will include an investment plan for the coming year.

XVIII. REVIEW OF INVESTMENT POLICY

The investment policy will be reviewed and adopted at least annually within 120 days of the end of the fiscal year, to ensure its consistency with the overall objectives of preservation of principal, liquidity and return, and its relevance to current law and financial and economic trends.

Any recommended modifications or amendments shall be presented by Staff to the Governing Body for their consideration and adoption.

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15 APPENDIX A

PERMITTED INVESTMENTS

ALLOWABLE INVESTMENT INSTRUMENTS PER STATE GOVERNMENT CODE (AS OF JANUARY 1, 2021 2022)A APPLICABLE TO ALL LOCAL AGENCIESB See "Table of Notes" on the next page for footnotes related to this table.

INVESTMENT TYPE

MAXIMUM

REMAINING

MATURITY

MAXIMUM SPECIFIED
% OF PORTFOLIO
City of Menifee Policy
Maximums

MINIMUM QUALITY

REQUIREMENTS

GOVERNMENT

CODE SECTIONS
Local Agency Bonds 5 years None None None 5 3601(a)
U.S. Treasury Obligations 5 years None None None 5 3601(b) State Obligations: CA and Others 5 years None None None 53601(c) 53601(d)
CA Local Agency Obligations 5 years None None None 5 3601(e) U.S. Agency Obligations 5 years None None None 5 3601(f) Bankers' Acceptance 180 days 40%E 40%E None 53601(g)
Commercial Paper: Non-pooled FundsF
(under $100,000,000 of investments)
270 days or less 25% of the agency's
moneyG
25% of the agency's
moneyG
Highest letter and number
rating by an NRSROH 53601(h)(2)(c)
Commercial Paper: Non-pooled FundsF
(min. $100,000,000 of investments)
270 days or less 40% of the agency's
moneyG
25% of the agency's
moneyG
Highest le tter and number
rating by an NRSROH 53601(h)(2)(c)
Commercial Paper: Pooled FundsI 270 days or less 40% of the agency's moneyG
25% of the agency's
moneyG
Highest letter and number
rating by an NRSROH 53635(a)(1)
Negotiable Certificates of Deposit 5 years 30%J 20%J None 53601(i) Non-negotiable Certificates of Deposit 5 years None None None 5 3630 et seq.

Placement Service Deposits 5 years 30 50%K 30%K None 53601.8 and 53635.8
Placement Service Certificates of Deposit 5 years 30 50%K 30%K None 53601.8 and 53635.8
Repurchase Agreements 1 year None None None 5 3601(j)
Reverse Repurchase Agreements and
Securities Lending Agreements 92 daysL 20% of the base value of the portfolio
20% of the base value
of the portfolio NoneM 53601(j)
Medium Term NotesN 5 years or less 30% 30% "A" rating category or its equivalent or better 53601(k)
Mutual Funds and Money Market Mutual
Funds N/A 20%O 20%O MultipleP,Q 53601(l) and
53601.6(b)
Collateralized Bank DepositsR 5 years None 20% None 53630 et seq. and 53601(n)
Mortgage Pass-through and Asset-Backed
Securities 5 years or less 20% 20% "AA" rating category or its equivalent or better 53601(o)
County Pooled Investment Funds N/A None None None 2 7133 Joint Powers Authority Pool N/A None None MultipleS 53601(p) Local Agency Investment Fund (LAIF) N/A None None None 1 6429.1 Voluntary Investment Program FundT N/A None None None 1 6340 Supranational ObligationsU 5 years or less 30% 30% "AA" rating category or its equivalent or better 53601(q)
Public Bank Obligations 5 years None None None 53601(r), 53635(c), and 57603
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16 TABLE OF NOTES FOR APPENDIX A

A Sources: Sections 16340, 16429.1, 27133, 53601, 53601.6, 53601.8, 53630 et seq., 53635, 53635.8, and 57603.

L Reverse repurchase agreements or securities lending agreements may exceed the 92-day term if the agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase a greement or securities lending agreement and the final maturity dates of the same security.

B Municipal Utilities Districts have the a uthority under the Public Utilities Code Section 12871 to invest in certain securities not addressed here.

C Section 53601 provides that the maximum term of any invest ment authorized under this section, unless otherwise stated, is five years. However, the legislative body may grant express authority to make investments either specifically or as a part of an investment program approved by the legislative body that exceed s this five-year remaining maturity limit. Such approval must be issued no less than three months prior to the purchase of any security exceeding the five -year maturity limit.

M Reverse repurchase agreements must be made with primary dealers of the Federa l Reserve Bank of New York or with a nationally or state -chartered bank that has a significant relationship with the local agency. The local agency must have held the securities used for the agreements for at least 30 days.

N “Medium-term notes” are defined in Section 53601as “all corporate and depository institution debt securities with a maximum remaining maturity of five years or less, issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States.”

D Percentages apply to all portfol io investments regardless of source of funds. For instance, cash from a reverse repur -chase agreement would be subject to the restrictions.

E No more than 30 percent of the agency’s money may be in bankers’ acceptances of any one commercial bank.

O No more than 10 percent invested in any one mutual fund. This limitation does not apply to money market mutual funds.

F Includes agencies defined as a city, a district, or other local agency that do not pool money in deposits or investment with other local agencies, other than local agencies that have the same governing body.

P A mutual fund must receive the highest ranking by not less than two nationally recognized rating agencies, or the fund must retain an investment advisor who is registered with the SEC (or exempt from registration), has assets under management in excess of $500 million, and has at least
five years' experience investing in instruments authorized by Sections 53601 and 53635.

G Local agencies, other than counties or a city and county, may pur chase no more than 10 percent of the outstanding commercial paper and medium -term notes of any single issuer.

Q A money market mutual fund must receive the highest ranking by not less than two nationally recognized statistical rating organizations or retain an investment advisor registered with the SEC or exempt from registration and who has not less than five years' experience investing in money market instruments with assets under management in excess of $500 million.

H Issuing corporation must be organized and operating within the U.S., have assets in excess of $500million, and debt other than commercial paper m ust be in a rating category of "A" or its equivalent or higher by a nationally recognized statistical rating organization, or the issuing corporation must be organized within the U.S. as a special purpose corporation, trust, or LLC, have program wide credi t enhancements, and have commercial paper that is rated “A -1” or higher, or the equivalent, by a nationally recognized statistical rating agency.

R Investments in notes, bonds, or other obligations under Section 53601(n) require that collateral be placed into the custody of a trust company or the trust department of a bank that is not affiliated with the issuer of the secured obligation, among other specific collateral requirements.

S A joint powers authority pool must retain an investment advisor who is registered with the SEC (or exempt from registration), has assets under management in excess of $500 million, and has at least five years' experience investing in instruments authorized by Section 53601, subdivisions (a) to (o).

I Includes agencies defined as a county, a city and county, or other local agency that pools money in deposits or investments with other local agencies, including local agencies that have the same governing body. Local agencies that pool exclusively with other local agencies that have the same governing body must adhere to the limits set forth in Section 53601(h)(2)(C).

T Local entities can deposit between $200 million and $10 billion into the Voluntary Investment Program Fund, upon approval by their governing bodies. Deposits in the fund will be invested in the Pooled Money Investment Account .

J No more than 30 percent of the agency’ s money may be in negotiable certificates of deposit that are authorized under Section 53601(i).

U Only those o bligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), and Inter-
American Development Bank (IADB), with a maximum remaining maturity of five years or less.

K Effective January 1, 2020, no more than 50 percent of the agency’s money may be invested in deposits, including certificates of deposit, through a placement service as authorized under 53601.8 (excludes negotiable certificates of deposit authorized under Section 53601(i)). On January 1, 2026, the maximum percentage of the portfolio reverts back to 30 percent. Investments made pursuant to 53635.8 remain subject to a maximum of 30 percent of the portfolio.

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17 XXI. GLOSSARY OF INVESTMENT TERMS

AGENCIES. Shorthand market terminology for any obligation issued by a government -sponsored entity (GSE), or a federally related institution. Most obligations of GSEs are not guaranteed by the full faith and credit of the US government. Examples are:

FFCB. The Federal Farm Credit Bank System provides credit and liquidity in the agricultural industry. FFCB issues discount notes and bonds.

FHLB. The Federal Home Loan Bank provides credit and liquidity in the housing market.

FHLB issues discount notes and bonds.

FHLMC. Like FHLB, the Federal Home Loan Mortgage Corporation provides credit and liquidity in the housing market. FHLMC, also called “FreddieMac” issues discount notes, bonds and mortgage pass-through securities.

FNMA. Like FHLB and FreddieMac, the Federal National Mortgage Association was established to provide credit and liquidity in the housing market. FNMA, also known as “FannieMae,” issues discount notes, bonds and mortgage pass-through securities.

GNMA. The Government National Mortgage Association, known as “GinnieMae,” issues mortgage pass-through securities, which are guaranteed by the full faith and credit of the US Government.

PEFCO. The Private Export Funding Corporation assists exporters. Obligations of PEFCO are not guaranteed by the full faith and credit of the US government.

TVA. The Tennessee Valley Authority provides flood control and power and promotes development in portions of the Tennessee, Ohio, and Mississippi River valleys. TVA currently issues discount notes and bonds.

A
SSET BACKED SECURITIES. Securities supported by pools of installment loans or leases or by pools of revolving lines of credit.

AVERAGE LIFE. In mortgage-related investments, including CMOs, the average time to expected receipt of principal payments, weighted by the amount of principal expected.

BANKER’S ACCEPTANCE. A money market instrument created to facilitate international trade transactions. It is highly liquid and safe because the risk of the trade transaction is transferred to the bank which “accepts” the obligation to pay the investor.

B
ENCHMARK. A comparison security or portfolio. A performance benchmark is a partial market index, which reflects the mix of securities allowed under a specific investment policy.

BROKER. A broker brings buyers and sellers together for a transaction for which the broker receives a commission. A broker does not sell securities from his own position.

CALLABLE. A callable security gives the issuer the option to call it from the investor prior to its maturity. The main cause of a call is a decline in interest rates. If interest rates decline, the issuer will likely call its current securities and reissue them at a lower rate of interest.

C
ERTIFICATE OF DEPOSIT (CD). A time deposit with a specific maturity evidenced by a certificate.

CERTIFICATE OF DEPOSIT ACCOUNT REGISTRY SYSTEM (CDARS). A private placement service that allows local agencies to purchase more than $250,000 in CDs from a single financial institution (must be a participating institution of CDARS) while still maintaining FDIC insurance coverage. CDARS is currently the only entity providing this service. CDARS facilitates the trading of deposits between the California institution and other participating institutions in amounts that are less than $250,000 each, so that FDIC coverage is maintained.

COLLATERAL. Securities or cash pledged by a borrower to secure repayment of a loan or repurchase agreement. Also, securities pledged by a financial institution to secure deposits of public monies.

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18 COLLATERALIZED BANK DEPOSIT. A bank deposit that is collateralized at least 100% (principal plus interest to maturity). The deposit is collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.

COLLATERALIZED MORTGAGE OBLIGATIONS (CMO). Classes of bonds that redistribute the cash flows of mortgage securities (and whole loans) to create securities that have different levels of prepayment risk, as compared to the underlying mortgage securities.

C
OLLATERALIZED TIME DEPOSIT. Time deposits that are collateralized at least 100% (principal plus interest to maturity). These instruments are collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.

C
OMMERCIAL PAPER. The short-term unsecured debt of corporations.

COUPON. The rate of return at which interest is paid on a bond.

CREDIT RISK. The risk that principal and/or interest on an investment will not be paid in a timely manner due to changes in the condition of the issuer.

DEALER. A dealer acts as a principal in security transactions, selling securities from and buying securities for his own position.

DEBENTURE. A bond secured only by the general credit of the issuer.

DELIVERY VS. PAYMENT (DVP). A securities industry procedure whereby payment for a security must be made at the time the security is delivered to the purchaser’s agent.

DERIVATIVE. Any security that has principal and/or interest payments which are s ubject to uncertainty (but not for reasons of default or credit risk) as to timing and/or amount, or any security which represents a component of another security which has been separated from other components (“Stripped” coupons and principal). A derivative is also defined as a financial instrument the value of which is totally or partially derived from the value of another instrument, interest rate, or index.

DISCOUNT. The difference between the par value of a bond and t he cost of the bond, when the cost is below par. Some short-term securities, such as T-bills and banker’s acceptances, are known as discount securities. They sell at a discount from par and return the par value to the investor at maturity without additional interest. Other securities, which have fixed coupons, trade at a discount when the coupon rate is lower than the current market rate for securities of that maturity and/or quality.

D
IVERSIFICATION. Dividing investment funds among a variety of investments to avoid excessive exposure to any one source of risk.

DURATION. The weighted average time to matu rity of a bond where the weights are the present values of the future cash flows. Duration measures the price sensitivity of a security to changes interest rates.

F
EDERAL DEPOSIT INSURANCE CORPORATION (FDIC). The Federal Deposit Insurance Corporation (FDIC) is an independent federal City of Menifee insuring deposits in U.S. banks and thrifts in the event of bank failures. The FDIC was created in 1933 to maintain public confidence and encourage stability in the financial system through the promotion of sound banking practices.

FEDERALLY INSURED TIME DEPOSIT. A time deposit is an interest -bearing bank deposit account that has a specified date of maturity, such as a certificate of deposit (CD). These deposits are limited to funds insured in accordance with FDIC insurance deposit limits.

LEVERAGE. Borrowing funds in order to invest in securities that have the potential to pay earnings at a rate higher than the cost of borrowing.

LIQUIDITY. The speed and ease with which an asset can be converted to cash.

LOCAL CITY OF MENIFEE INVESTMENT FUND (LAIF). A voluntary investment fund open to government entities and certain non-profit organizations in California that is managed by the State Treasurer’s Office.

LOCAL GOVERNMENT INVESTMENT POOL. Investment pools that range from the State Treasurer’s Office Local City of Menifee Investment Fund (LAIF) to county pools, to Joint Powers A-31
19 Authorities (JPAs). These funds are not subject to the same SEC rules applicable to money market mutual funds.

MAKE WHOLE CALL. A type of call provision on a bond that allows the issuer to pay off the remaining debt early. Unlike a call option, with a make whole call provision, the issuer makes a lump sum payment that equals the net present value (NPV) of future coupon payments that will not be paid because of the call. With this type of call, an investor is compensated, or "made whole."
M
ARGIN. The difference between the market value of a security and the loan a broker makes using that security as collateral.

MARKET RISK. The risk that the value of securities will fluctuate with changes in overall market conditions or interest rates.

MARKET VALUE. The price at which a security can be traded.

MATURITY. The final date upon which the principal of a security becomes due and payable.

MEDIUM TERM NOTES. Unsecured, investment-grade senior debt securities of major corporations which are sold in relatively small amounts on either a continuous or an intermittent basis.

MTNs are highly flexible debt instruments that can be structured to respond to market opportunities or to investor preferences.

M
ODIFIED DURATION. The percent change in price for a 100-basis point change in yields. Modified duration is the best single measure of a portfolio’s or security’s exposure to market risk.

MONEY MARKET. The market in which short -term debt instruments (T- bills, discount notes, commercial paper, and banker’s acceptances) are issued and traded.

MONEY MARKET MUTUAL FUND. A mutual fund that invests exclusively in short- term securities.

Examples of investments in money market funds are certificates of deposit and U.S.

Treasury securities. Money market funds attempt to keep their net asset values at $1 per share.

M
ORTGAGE PASS-THROUGH SECURITIES. A securitized participation in the interest and principal cash flows from a specified pool of mortgages. Principal and interest payments made on the mortgages are passed through to the holder of the security.

M
UNICIPAL SECURITIES. Securities issued by state and local agencies to finance capital and operating expenses.

MUTUAL FUND. An entity which pools the funds of investors and invests those funds in a set of securities which is specifically defined in the fund’s prospectus. Mutual funds can be invested in various types of domestic and/or international stocks, bonds, and money market instruments, as set forth in the individual fund’s prospectus. For most large, institutional investors, the costs associated with investing in mutual funds are higher than the investor can obtain through an individually managed portfolio.

N
ATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION (NRSRO).

A credit rating City of Menifee that the Securities and Exchange Commission in the United States uses for regulatory purposes. Credit rating agencies provide assessments of an investment's risk. The issuers of investments, especially debt securities, pay credit rating agencies to provide them with ratings. The three most prominent NRSROs are Fitch, S&P, and Moody's.

NEGOTIABLE CERTIFICATE OF DEPOSIT (CD). A short-term debt instrument that pays interest and is issued by a bank, savings or federal association, state or federal credit union, or state- licensed branch of a foreign bank. Negotiable CDs are traded in a secondary market and are payable upon order to the bearer or initial depositor (investor).

PRIMARY DEALER. A financial institution (1) that is a trading counterparty with the Federal Reserve in its execution of market operations to carry out U.S. monetary policy, and (2) that participates for statistical reporting purposes in compiling data on activity in the U.S.

Government securities market.

P
RUDENT PERSON (PRUDENT INVESTOR) RULE. A standard of responsibility which applies to fiduciaries. In California, the rule is stated as “Investments shall be managed with the care, skill, prudence and diligence, under the circumstances then prevailing, that a prudent A-32
20 person, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of like character and with like aims to accomplish similar purposes.” REPURCHASE AGREEMENT. Short-term purchases of securities with a simultaneous agreement to sell the securities back at a higher price. From the seller’s point of view, the same transaction is a reverse repurchase agreement.

SAFEKEEPING. A service to bank customers whereby securities are held by the bank in the customer’s name.

SECURITIES AND EXCHANGE COMMISSION (SEC). The U.S. Securities and Exchange Commission (SEC) is an independent federal government City of Menifee responsible for protecting investors, maintaining fair and orderly functioning of securities markets and facilitating capital formation. It was created by Congress in 1934 as the first federal regulator of securities markets. The SEC promotes full public disclosure, protects investors against fraudulent and manipulative practices in the market, and monitors corporate takeover actions in the United States.

S
ECURITIES AND EXCHANGE COMMISSION SEC) RULE 15C3-1. An SEC rule setting capital requirements for brokers and dealers. Under Rule 15c3 -1, a broker or dealer must have sufficient liquidity in order to cover the most pressing obligations. This is defined as having a certain amount of liquidity as a percentage of the broker/dealer's total obligations. If the percentage falls below a certain point, the broker or dealer may not be allowed to take on new clients and may have restrictions placed on dealings with current client.

STRUCTURED NOTE. A complex, fixed income instrument, which pays interest, based on a formula tied to other interest rates, commodities or indices. Examples include inverse floating rate notes which have coupons that increase when other interest rates are falling, and which fall when other interest rates are rising, and "dual index floaters," which pay interest based on the relationship between two other interest rates - for example, the yield on the ten- year Treasury note minus the Libor rate. Issuers of such notes lock in a reduced cost of borrowing by purchasing interest rate swap agreements.

S
UPRANATIONAL. A Supranational is a multi- national organization whereby member states transcend national boundaries or interests to share in the decision making to promote economic development in the member countries.

T
OTAL RATE OF RETURN. A measure of a portfolio’s performance over time. It is the internal rate of return, which equates the beginning value of the portfolio with the ending value; it includes interest earnings, realized and unrealized gains, and losses in the portfolio.

U.S. TREASURY OBLIGATIONS. Securities issued by the U.S. Treasury and backed by the full faith and credit of the United States. Treasuries are considered to have no credit risk and are the benchmark for interest rates on all other securities in the US and overseas. The Treasury issues both discounted securities and fixed coupon notes and bonds.

T
REASURY BILLS. All securities issued with initial maturities of one year or less are issued as discounted instruments and are called Treasury bills. The Treasury currently issues three- and six-month T-bills at regular weekly auctions. It also issues “cash management” bills as needed to smooth out cash flows.

TREASURY NOTES. All securities issu ed with initial maturities of two to ten years are called Treasury notes and pay interest semi-annually.

TREASURY BONDS. All securities issued with initial maturities greater than ten years are called Treasury bonds. Like Treasury notes, they pay interest semi-annually.

YIELD TO MATURITY. The annualized internal rate of return on an investment which equates the expected cash flows from the investment to its cost.

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21 Revision History

Revision No. Date Approved Approved By: Comments
0 10/01/2008 City Council 2008-2009 Investment Policy; Resolution No. 08-18 1 08/04/2009 City Council 2009-2010 Investment Policy; Resolution No. 09-110 2 11/15/2011 City Council 2011-2012 Investment Policy; Resolution No. 11-240 3 12/04/2012 City Council 2012-2013 Investment Policy; Resolution No. 12-299 4 11/06/2013 City Council 2013-2014 Investment Policy; Resolution No. 13-345 5 03/06/2019 City Council 2018-2019 Investment Policy; Resolution No. 19-775 6 05/05/2021 City Council 2020-2021 Investment Policy; Resolution No. 21-1018 7 A-34

CITY OF MENIFEE

SUBJECT: Draft Development Impact Fees (DIF) Study
MEETING DATE: Ju ly 26, 2022
TO: Finance Committee
PREPARED BY: Jizelle Sandoval, Financial Analyst
REVIEWED BY: Cheryl Kitzerow, Community Development Director

RECOMMENDED ACTION
Receive a presentation from The Matrix Consulting Group Inc. regarding the recently completed Draft Development Impact Fees ( DIF) Study. Review and provide comment on the Draft DIF Study and recommend submittal to the City Council for approval at a future C ity C ouncil meeting.

DISC USSION

The primary policy objective and establishment of the Development Impact Fee (DIF) program is to ensure that new development pays capital cost associated with growth. The DIF program is designed to support and fund improv ements to public facilities and the purchase of equipment related to the provision of essential services based on the demands created by new growth and development.

The City engaged the Matrix Consulting Group Inc. to update its Impact Fees. The City ’s last comprehensive impact fee update was completed in 2017, and per the Mitigation Fee Act, impact fees must be reevaluated every five years . Therefore, the City is reevaluating the nexus for these impact fees to ensure that they are still appropriate and updated to incorporate any completed projects and any new project s. The results of t his study allow the City to ensure that there is still a nexus between future development and its proportionate impact on City infrastructure as well as update the fee amounts to be more reflective of that impact.

Methodology
There are two typical methodologies utilized to calculate impact fees – service level standards and specific facility pro jections. For the purposes of this analysis the project team has utilized the more commonly accepted and recognized service level standards approach.

The service level standard approach is based on the creation and recognition of existing service level standards provided by the jurisdiction to the users of its services (residents, employees, students, etc.). As there is new development and growth in the community, there is the potential for the service level standard to decline if appropr iate measures are n ot taken to retain that service level standard. Therefore, the service level st andard calculates the impact of each individual on the city’s infrastructure and applies it to future individuals and growth. If there is an A-35
City of Menifee Staff Report
DIF Fee Study
July 26, 2022

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increase in the service population, there would be a corresponding impact on infrastructure, and thereby a nexus for collection of impact fees.

However, if there is no increased population or use of those services, impact fees would not be justifiable or applicable. For the purposes of calculating impact fees, the project team reviewed a variety of data elements from the s tate, regional organizations, county, and city staff. The following points highlight the data reviewed through the course of this analysis:

• Ordinances: The project team revie wed the City’s ordinances to ensure that there was the legal authority to as sess and increase current impact fees.

• General Plan, Facilities Assessment, Department Master Plans, and CIP Plans:

Data was reviewed from a variety of city specific documents regarding the potential growth in the community, the goals for the city and the departments, as well as future capital projects.

• Growth and Projection Data: Population, household, dwelling units, and employment information for current a nd future years was obtained from the U.S. Census Bureau, the Southern California Association of Governments (SCAG) and internal City General Plan projection documents.

• Service Level Standards: Information such as police facilities, fire equipment, general equipment, park needs, and transportation projects were collected, reviewed, and applied for calculation regarding future impacts.

• Revenues and Expenses: Revenue collected for impact fees was reviewed to ensure compliance with reporting practices as wel l as to calculate an administrative overhead percentage. Expense information was reviewed for cos t estimates for infrastructure as well as overhead allocation to the impact fees.

The above elements were utilized to develop and calculate updated impact fees for the City.

Results of Study
Based upon the results of this analysis, the project team has c alculated updated or new impact fees for Animal Shelter, General Government, Fire, Police, Parks and Recreation, Transportation and Storm Drain. Based on the analysis , the fees associated with Library and Master Planning were eliminate d. P roportional costs associated with future infrastructure impacts, along with administrative overhead, were used t o calculate the full cost of the impact fees presented. The following tables show the results of the updated impact fees calculated for the City:

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Impact Fee Services Reviewed

Impact Fees Service Area/Description
Animal Shelter JPA Debt Service
General Government City Hall, PW Corp Yard, and General Vehicles Fire Fire Facilities and Equipment
Law Enforcement Police Facilities and Equipment
Parks Park Amenities and Facilities
Circulation (Transportation) Signals, Street Improvements, At Grade Separations, etc.

Storm Drainage Storm Drain Infrastructure by Watershed and Sub-Basin

Land Use Animal
Shelter
General
Govt. Fire Law Enf. Parks
& Rec
Transportation
Impact Fees
Single Family Unit $ 94 $1,176 $ 647 1, 390$ 1,723$ 7,090$ Multi-Family Unit $ 73 $ 920 $ 506 1,088$ 1,348$ 3,582$ Commercial / Retail $ - $ 0.68 $ 0.85 0.68$ - $ 17.28$ Commercial / Service / Office $ - $ 1.87 $ 2.36 $ 1.86 -$ $ 8.24 Industrial / Business Park $ - $ 0.25 $ 0.32 0.25$ - $ 4.66$ Recommended Fee Structure
Residential Fee Per Dwelling Unit
Nonresidential Fee Per Sq. Ft.

Storm Drain Impact Fee A_A A_B A_C B_A B_B F_A F_C F_E
Single Family Unit $ 9,995 $ 260 $ 4,694 723$ 1,906$ 139$ $ 2,029 $ 474 Multi-Family Unit $ 3,621 $ 95 $ 1,700 262$ 691$ 50$ $ 735 $ 172 Commercial / Retail $ 8.36 $ 0.22 $ 3.93 TBD TBD 0.11$ TBD $ 0.40 Commercial / Service / Office TBD $ 0.14 $ 2.61 TBD TBD 0.08$ TBD $ 0.27 Industrial TBD TBD TBD $ 0.34 TBD TBD TBD TBD Residential Fee Per Dwelling Unit
Nonresidential Fee Per Sq. Ft.

Through this analysis the majority of the City’s impact fees have been validated and shown to be under-recovering. The only fees which the City will need to reduce are relate d to the Animal Shelter, and the Single- Family Fire Impact Fee. Overall, this report details the calculations for each of the impact fees, as well as validates the nexus tha t exists be tween the full cost identified and the proportionate impact of new development.

Following this Finance Committee meeting, S taff will seek feedback from the Buildi ng Industry Association (BIA), as well as the Developer Stakeholder Group.

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ATTACHMENTS

1. Development Impact Fee Report - Draft
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Development Impact Fee Study

CITY OF MENIFEE, CALIFORNIA

DRAFT REPORT
July 2022
DRAFT
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Table of Contents

1. Introduction and Executive Summary 1

2. Legal Framework 11

3. Projected Growth and Development 14

4. Animal Shelter 18

5. General Government 23

6. Fire 30

7. Police 37

8. Parks and Recreation 44

9. Transportation 50

10. Storm Drain 56
Appendix: Storm Drain Projects & Map 64
Appendix: Transportation Project Listings 66

DRAFT
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Matrix Consulting Group 1

1. Introduction and Executive Summary

The draft report, which follows, presents the results of the Development Impact Fee Study conducted by the Matrix Consulting Group for the City of Menifee. 1 Project Background and Scope of Work

The Matrix Consulting Group was retained by the City of Menifee to update its Impact Fees. Impact fees within the state of California are governed by the Mitigation Fee Act (AB1600) (Gov. Code §66000 et seq.) and AB602 which requires demonstrating the reasonable relationship that exists between the development activity and the proposed benefit. The City’s last comprehensive impact fee update was done in 2017 and as such the City is reevaluating the nexus for these impact fees to ensure that they are still appropriate and updated to incorporate any completed projects and any new projects.

The results of this study allow the City to ensure that there is still a nexus between future development and its proportionate impact on City infrastructure as well as update the fee amounts to be more reflective of that impact.
2 General Project Approach and Methodology

There are two typical methodologies utilized to calculate impact fees – service level standards and specific facility projections. For the purposes of this analysis the project team has utilized the more commonly accepted and recognized service level standards approach.

The service level standard approach is based on the creation and recognition of existing service level standards provided by the jurisdiction to the users of its services (residents, employees, students, etc.). As there is new development and growth in the community, there is the potential for the service level standard to decline if appropriate measures are not taken to retain that service level standard. Therefore, the service level standard calculates the impact of each individual on the City’s infrastructure and applies it to future individuals and growth. If there is an increase in the service population, there would be a corresponding impact on infrastructure, and thereby a nexus for collection of impact fees.

However, if there is no increased population or use of those services, impact fees would not be justifiable or applicable.

For the purposes of calculating impact fees, the project team reviewed a variety of data elements from the state, regional organizations, county, and City staff. The following points highlight the data reviewed through the course of this analysis:

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Matrix Consulting Group 2

• Ordinances: The project team reviewed the City’s ordinances to ensure that there was the legal authority to assess and increase current impact fees.

• General Plan, Facilities Assessment, Department Master Plans, and CIP Plans:

Data was reviewed from a variety of City specific documents regarding the potential growth in the community, the goals for the City and the departments, as well as future capital projects.

• Growth and Projection Data: Population, household, dwelling units, and employment information for current and future years was obtained from the U.S.

Census Bureau, the Southern California Association of Governments (SCAG) and internal City General Plan projection documents.

• Revenues and Expenses: Revenue collected for impact fees was reviewed to ensure compliance with reporting practices as well as to calculate an administrative overhead percentage. Expense information was reviewed for cost estimates for infrastructure as well as overhead allocation to the impact fees.

The elements were utilized to develop and calculate updated impact fees for the City. 3 Summary of Results

Based upon the results of this analysis, the project team has calculated updated or new impact fees for Animal Shelter, General Government, Fire, Police, Parks and Recreation, Transportation and Storm Drain. The fees associated with Library and Master Planning were eliminated and will be discussed further. As outlined in the Mitigation Fee Act, proportional costs associated with future infrastructure impacts, along with administrative overhead, were used to calculate the full cost of the impact fees presented. The following subsections show the results of the updated impact fees calculated for the City.
1 Animal Shelter Impact Fees
The Animal Shelter Impact Fee for the City of Menifee was developed to help mitigate the impact of new development upon the need for a brand new or future Animal Shelter Facility. The City has recently joined a JPA through which it receives Animal Sheltering services and the impact fee will be used to offset the debt service costs associated with

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the Animal Shelter facility. Throug h the course of this analysis, the impact fees were evaluated based upon the current projected impacts between 2021 and 2045. While this fee has traditionally been assessed on both residential and non-residential, based upon the current arrangement for the City of utilizing a JPA to provide Animal Shelter services it was determined that there was only a nexus for residential users for this service. Any non-residential or employee users would receive benefit through their potential membership from their residential city that is part of the regional JPA. The following table compares the City’s current fees to the full cost fee calculated through this study, the resulting surplus / (deficit), and the cost recovery:

Table 1: Animal Shelter Impact Fees – Current vs. Full Cost

Category Current Fee Full Cost Fee Surplus / (Deficit) Cost Recovery % Single-Family $160 $94 $66 171%
Multi-Family $118 $74 $44 159%

The full cost fee calculated through this study represents the maximum fee that the City can charge and is inclusive of the administrative fee allowable under the Mitigation Fee Act. As the City’s full cost is lower than its current fee, the fee will need to be reduced to comply with the Mitigation Fee Act.
2 General Government Impact Fees
The General Government Impact fee is meant to offset impacts upon City Hall, the Corporation Yard, and Public Works equipment and vehicles. It also includes costs associated with implementing IT Fiber Optic infrastructure throughout the City. Through the course of this analysis, the impact fees were evaluated based upon the current projected impacts between 2021 and 2045. The following table compares the City’s current fees to the full cost fee calculated through this study, the resulting surplus / (deficit), and the cost recovery:

Table 2: General Government Impact Fees – Current vs. Full Cost

Category Current Fee Full Cost Fee Surplus / (Deficit) Cost Recovery % Residential (per dwelling unit)
Single-Family $1,106 $1,176 ($70) 94%
Multi-Family $815 $920 ($105) 89%
Commercial / Non-Residential (per square foot)
Commercial / Retail $0.28 $0.68 ($0.40) 42%
Office $0.37 $1.87 ($1.50) 20%
Industrial $0.14 $0.25 ($0.11) 55%

The full cost fee calculated through this study represents the maximum fee that the City can charge and is inclusive of the administrative fee allowable under the Mitigation Fee

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Act. The City is currently under-recovering for all of its categories for General Government, with a much lower cost recovery for non-residential projects. 3 Fire Impact Fees
While the City of Menifee contracts for Fire services, it owns the Fire infrastructure.

Therefore, the Fire Impact fee is meant to offset the cost associated with Fire Stations and vehicles. Through the course of this analysis the impact fees were evaluated based upon the current projected impacts between 2021 and 2045. The following table compares the City’s current fees to the full cost fee calculated through this study, the resulting surplus / (deficit), and the cost recovery:

Table 3: Fire Impact Fees – Current vs. Full Cost

Category Current Fee Full Cost Fee Surplus / (Deficit) Cost Recovery % Residential (per dwelling unit)
Single-Family $665 $647 $18 103%
Multi-Family $490 $506 ($16) 97%
Commercial / Non-Residential (per square foot)
Commercial / Retail $0.46 $0.85 ($0.39) 54%
Office $0.61 $2.36 ($1.75) 26%
Industrial $0.23 $0.32 ($0.09) 71%

The City is currently under-recovering for all but one of its Fire Impact fee categories. The fee for Single-Family homes will need to be reduced in order to comply with the Mitigation Fee Act. Non-residential projects have a much lower cost recovery , providing the opportunity to increase those fees to help recover their proportional share. 4 Police Impact Fees
The City of Menifee used to contract for Police services; however, recently the City has transitioned to in-house services. In-house services allow the City to capture costs associated with City-owned Police facilities and vehicles. The Police Impact Fee is meant to offset the proportional impact of facility and equipment / vehicle costs. Through the course of this analysis, the impact fees were evaluated based upon the current projected impacts between 2021 and 2045. The following table compares the City’s current fees to the full cost fee calculated through this study, the resulting surplus / (deficit), and the cost recovery:

Table 4: Police Impact Fees – Current vs. Full Cost

Category Current Fee Full Cost Fee Surplus / (Deficit) Cost Recovery % Residential (per dwelling unit)
Single-Family $250 $1,390 ($1,140) 18%
Multi-Family $183 $1,088 ($905) 17%

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Category Current Fee Full Cost Fee Surplus / (Deficit) Cost Recovery % Commercial / Non-Residential (per square foot)
Commercial / Retail $0.06 $0.68 ($0.62) 9%
Office $0.08 $1.86 ($1.78) 4%
Industrial $0.03 $0.25 ($0.22) 12%

The City is significantly under-recovering for its Police impact fees. The primary reason for the change in costs is due to the previous study being conducted when services were outsourced. Therefore, the previous analysis did not take into account any in-house vehicles or equipment.
5 Parks and Recreation Impact Fees
The City of Menifee currently assesses three different Parks-related impact fees. It was determined that for streamlining purposes those three fees should be combined into a singular fee to mitigate the impacts associated with recreational facilities, parks, and land development. Through the course of this analysis, the impact fees were evaluated based upon the current projected impacts between 2021 and 2045. The following table compares the City’s current fees to the full cost fee calculated through this study, the resulting surplus / (deficit), and the cost recovery:

Table 5: Parks and Recreation Impact Fees – Current vs. Full Cost

Category Current Fee1 Full Cost Fee Surplus / (Deficit) Cost Recovery % Single-Family $1,116 $1,723 ($607) 65%
Multi-Family $822 $1,348 ($526) 61%

The City is under-recovering for all its parks-related fees. The under-recovery is due to increased park demands and improvements needed due to future anticipated growth. It is important to note that these fees do not reflect the cost of land acquisition a s that is covered through the City’s Quimby Fee.
6 Transportation Impact Fees
The Transportation Impact fee is meant to offset impacts associated with traffic signals, transportation projects, grade separations, interchanges, and other circulation-related projects that are due to the anticipated growth within the community. Through the course of this analysis, the impact fees were evaluated based upon the current projected impacts between 2021 and 2045. The following table compares the City’s current fees to the full cost fee calculated through this study, the resulting surplus / (deficit), and the cost recovery:

1 This current fee is representative of all three current Parks -related fees charged by the City.

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Table 6: Transportation Impact Fees – Current vs. Full Cost

Category Current Fee Full Cost Fee Surplus / (Deficit) Cost Recovery % Residential (per dwelling unit)
Single-Family $5,060 $7,090 ($2,030) 71%
Multi-Family $3,534 $3,582 ($48) 99%
Commercial / Non-Residential (per square foot)
Commercial / Retail $8.38 $17.28 ($8.89) 49%
Office $6.44 $8.24 ($1.79) 78%
Industrial $4.27 $4.66 ($0.39) 92%

The full cost fee calculated through this study represents the maximum fee that the City can charge and is inclusive of the administrative fee allowable under the Mitigation Fee Act. The City is under-recovering for all its transportation fees. The lowest cost recovery is associated with the retail land use type, as this type generates a significant amount of trips and has a much larger impact on the overall transportation infrastructure, compared to other land uses, which generate fewer trips.
7 Storm Drain Impact Fees
The City of Menifee currently charges Storm Drain Fees based on geographic location:

Encanto and MDP South Region. Since the previous analysis, the City completed a Master Drainage Plan that broke the City into Sub-Basins and Watershed (the A_A represents Basin A with Sub-Basin or Watershed as A_B). Discussions with Public Works staff revealed that the fairest nexus would be by utilizing the growth projections anticipated in each sub-basin and watershed. Therefore, a structural change was proposed to charge based upon sub-basin and watershed. The following table shows by sub-basin / watershed and land use the full cost fee calculated:

Table 7: Storm Drain Impact Fees Total Cost

Category Full Cost Impact Fee
A_A
Single-Family $9,995 per dwelling unit
Multi-Family $3,621 per dwelling unit
Retail $8.36 per sq. ft.

A_B
Single-Family $260 per dwelling unit
Multi-Family $95 per dwelling unit
Retail $0.22 per sq. ft.

Commercial / Office $0.14 per sq. ft.

A_C
Single-Family $4,694 per dwelling unit
Multi-Family $1,700 per dwelling unit
Retail $3.93 per sq. ft.

Commercial / Office $2.61 per sq. ft.

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Category Full Cost Impact Fee
B_A
Single-Family $723 per dwelling unit
Multi-Family $262 per dwelling unit
Industrial $0.34 per sq. ft.

B_B
Single-Family $1,906 per dwelling unit
Multi-Family $691 per dwelling unit
F_A
Single-Family $139 per dwelling unit
Multi-Family $50 per dwelling unit
Retail $0.11 per sq. ft.

Commercial / Office $0.08 per sq. ft.

F_C
Single-Family $2,029 per dwelling unit
Multi-Family $735 per dwelling unit
F_E
Single-Family $474 per dwelling unit
Multi-Family $172 per dwelling unit
Retail $0.40 per sq. ft.

Commercial / Office $0.27 per sq. ft.

The full cost fee calculated through this study represents the maximum fee that the City can charge and is inclusive of the administrative fee allowable under the Mitigation Fee Act.
8 Library Facilities and Master Planning
Through this study the Library Facilities and Master Planning and Nexus Analysis Impact fees are being recommended to be eliminated. The Library Facilities fee is being eliminated due to the City utilizing the County’s library facilities. The Master Planning and Nexus Analysis is being eliminated as this component has been built into each individual fee category. This ensures that if fees are not studied together, there is still the ability to cover the costs associated with a nexus analysis for a specific fee. 9 Summary
Through this analysis the majority of the City’s impact fees have been validated and shown to be under-recovering. The only fees which the City will need to reduce are related to the Animal Shelter, and the Single-Family Fire Impact Fee. The results of this analysis identify the City’s infrastructure needs for current and future growth, and the proportion that would be paid by future development. The following table shows by fee category, the total infrastructure cost needed, the portion to be borne by new development and the resulting gap:

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Table 8: Infrastructure Cost Analysis

Fee Category Total Infrastructure Cost Borne By New Development Gap Animal Shelter $3,207,926 $1,379,408 $1,828,518
General Government $55,306,008 $22,675,463 $32,630,545
Fire $38,127,912 $16,395,022 $21,732,890
Police $64,498,152 $25,799,261 $38,698,891
Parks $58,798,000 $25,283,140 $33,514,860
Transportation $516,823,346 $201,561,105 $315,262,241
Storm Drain $41,122,000 $26,390,700 $14,731,300
Total $777,883,344 $319,484,099 $458,399,245

Based upon the analysis, the City has a need of approximately $777. 9 million in infrastructure, and if all impact fees were adopted at full cost, then new development would cover $319.5 million. The remaining $458.4 million gap would need to be recovered through other funding means.

Overall, this report details the calculations for each of the impact fees, as well as validates the nexus that exists between the full cost identified and the proportionate impact of new development.
4 Implementation

The impact fees calculated through this study are representa tive of the full cost associated with the proportionate share and impact of new development within the City.

City staff, management, and Council can utilize the information in this report to determine if new development should bear the full cost of their proportionate impact, or if this share should be reduced for development incentivization or other policy considerations and factors. The following subsections discuss the key aspects for impact fee implementation and updates, which include: collection of fees, annual reporting requirements, refunds / credits / appeals, and annual updates. 1 Collection of Impact Fees
Section 66007 of the California Government Code outlines when impact fees should be paid for residential and multi-family. Impact fees for Residential projects should be generally assessed and paid upon the date of final inspection or issuance of certificate of occupancy, which occurs first . For Multi-family projects, fees can be paid in phases based upon the dwelling units, at the completion of each unit’s final inspections, as long as it is at the final inspection or certificate of occupancy, whichever occurs last. There is no specific provision in the section regarding commercial, office, or industrial uses.

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2 Annual Impact Fee Reporting Requirements
Section 66006 of the California Government Code dictates that once per year, within 180 days of the close of the fiscal year, the City must make available to the public detailed information regarding impact fees. This detailed information, should at a mini mum include:
• Impact Fee Description and Fund Number
• Impact Fee Amount
• Beginning and Ending balance of the account or fund.
• Amount of fees collected in the fiscal year being reported on and the total interest earned.
• Identification of project(s) on which the funds are being earmarked for. • Identification of the approximate date on which the projects would commence. • Identification of any interfund loans or transfers related to capital projects, and the amount of the transfer.
• Amount of any refunds or allocations made on behalf of the impact fee funds.

The above reports must be submitted and reviewed by City Council within 15 days of being posted publicly. Additionally, AB602 requires that the nexus analysis be made available publicly, along with the actual impact fee amount charged. 3 Refunds / Credits / Appeals / Waivers
Section 66001 of the California Government Code requires that every five years the City must make findings regarding the utilization of the impact fee revenue and / or proposed utilization of it within five years of collection. If such findings are not made within five years of impact fee collection, the City must refund the monies to the current record owner or owner of the lots or units.

As part of the adoption of the impact fee resolution, the City may choose to also identify circumstances or instances in which a developer could obtain credits, exemptions, or appeal fees. Fee credits are typically obtained in the case of redevelopment, for example, if a developer was to redevelop an existing 10 multi-unit complex into a 15 multi-unit complex, the developer retains credit for the 10 existing units and only pays impact fees on the 5 new units being added. This credit is only provided if the existing facility had already paid into impact fees. If the existing development had not paid any impact fees, there would be no credit applicable.

Impact fee resolution may also include a discussion regarding fee exemptions. If a development project is determined to have no documented impact on the facil ities for which the impact fees are being imposed, then the project may be exempt from impact

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fees. The exemptions must not be granted by right and should be reviewed by City staff and Council to ensure that they are warranted and appropriate.

Any reductions in impact fees, or waivers or appeals regarding impact fees, would have to be determined by City staff and Council and would be granted depending upon the nature and proportion of the impact of the future / proposed development on future infrastructure needs. Depending upon the nature of the project and its documented impacts, there might be a more in-depth process necessary to ensure that all impact fees collected are fair, proportionate, and in compliance with the Mitigation Fee Act. 4 Annual Increases
The City’s current ordinances governing the impact fees provide the City with the ability to increase impact fees annually based upon the Construction Cost Index (CCI). This is considered a best practice and ensures that increases in construction costs are included in the impact fees and proportionate share is passed onto new development.

The annual increase is not meant to be an infinite increase in fees. Per the Mitigation Fee Act and Assembly Bill 602 the nexus for the impact fees should be reevaluated every eight years to ensure that there is still an appropriate correlation between the current fee being charged and proposed development within the City.

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2. Legal Framework

Impact Fees are a mechanism for new development to pay for their proportionate share of impact upon City owned facilities and infrastructure. The following subsections discuss the State’s requirements for impact fees and the City’s legal authority for assessing these fees.
1 State Legal Authority – AB1600

Development Impact Fees are governed by the Mitigation Fee Act, which includes AB1600 and the recently enacted AB602.

AB1600 specifies that there needs to be a nexus between the collection of fees and the new residential and non-residential development within a City’s service area. It also states that this revenue can only be used to expand current or purchase of new facilities, infrastructure, and equipment. It does not allow for revenue to be used for staffing, maintenance, or other operational costs.

AB1600 under the Mitigation Fee Act requires that there be certain findings that have to be met in order for there to be a reasonable relationship or nexus between new development and the need for new facilities or infrastructure. The following points highlight each of the key finding requirements:
• Purpose of Fee: The specific types of facilities, infrastructure, equipment, and projects for which the impact fee will be utilized. It is important to note it cannot be utilized for operational purposes.

• Use of Fee Revenue: The revenue collected from the impact fees can only be used to fund specific facility expansions, infrastructure improvements, or to purchase new equipment.

• Benefit Relationship: The benefit relationship requires that the use of the impact fee revenue and the type of development project upon which it is imposed is reasonable.

• Impact Relationship: In order to establish an impact relationship there needs to be a clear and reasonable relationship between the need for the public facility or infrastructure and the type of development project upon which the fee is imposed.

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• Proportionality: The proportionality requirement states that the impact fee established must be directly related to the proportionate impact of the type of development project.

For each of the impact fees evaluated through this study, the individual chapter will discuss how the fee is able to meet the nexus criteria identified. 2 State Legal Authority – AB602

In January of 2022, Assembly Bill 602 (AB602) went into effect. This Bill is applicable to all impact fees that will be adopted / implemented January 1, 2022 or later. The bill has three main criteria:

1. Prior to the adoption of new impact fees a nexus study should be adopted.

2. The nexus study should highlight existing service levels, the new service level, and an explanation of why the new service level is appropriate.

3. A fee levied on housing development must be proportionate to the square footage of proposed units or make findings on why square footage is not the appropriate metric.

Along with these three criteria, some other key provisions of the bill include:
• Impact fees must be posted online – along with the nexus analysis. • All impact fees must be collected at time of final inspection or certificate of occupancy, whichever occurs later2.
• A member of the public and / or developer can submit evidence citing the inability of the impact fee to comply with AB602 and AB1600 (Mitigation Fee Act)3. • Impact fees nexus studies must be updated every 8 years .

AB602 also provides for a template to be developed by the State’s Department of Housing and Community Development prior to January 2024; however, at the time of this analysis, this template had not yet been created or made available to local jurisdictions. As such it was not utilized for the development of these impact fees. This report will serve as the City’s nexus analysis for its existing impact fees and will ensure that all criteria per AB602 are met and clearly outlined.

2 Section 65940.1.(3)
3 Section 66019(d)(1).

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2 City Legal Authority for Impact Fees

The City of Menifee has the legal authority to charge for the impact fees identified as these fees are referenced in the municipal code and were adopted via resolution. The City’s current impact fees are governed by Menifee Municipal Code Chapter 8.02 – Development Impact Fees. This code states that the impact fees are to be set by Council resolution and to be in compliance with the state’s Mitigation Fee Act. The City’s most recent impact fee resolution was adopted on June 15, 2022. This resolution provided a list of all current impact fees based upon a 2017 Nexus Analysis study, with updated fee amounts. In accordance with the City’s Municipal Code, fees were updated annually based upon the Engineering Construction Cost Index (CCI) as adopted in the resolution.

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3. Projected Growth and Development

The primary criteria for determining the projected impact of new development for impact fees is the amount of projected increase to the City’s population (residential and commercial). These projections then form the basis of impact fee calculations. In order to calculate the projected growth and development, as well as density requirements, the project team reviewed the following sources of data:
• Southern California of Governments (SCAG): Data from SCAG was utilized for 2045 Estimates regarding total number of residential and employment population within the City.

• California Department of Finance: Data from Department of Finance was used to estimate the current population for the City of Menifee.

• US Census Bureau: The Census Bureau’s ‘On the map, Population, and American Community Survey’ (ACS) information was used to calculate residential densities and employment information.

The information from these sources was utilized to calculate the projected increase in population as well as resulting population densities. The following subsections discuss the population projections calculated and the population densities used to calculate the impact fees.
1 Population Projections

The basis for impact fees is predicated on sufficient population growth that results in a meaningful impact on city infrastructure. The following table shows data for the 2021 residential and employment population, 2045 estimates, and associated increases for the City of Menifee:

Table 9: Population Growth Projection through 2045

Category 2021 Estimates 2045 Estimates Total Projected Increase Residential Population 103,6174 147,9725 44,355
Employment Population 14,2006 29,2007 15,000

4 The 2021 residential population estimate is based upon the California Department of Finance for Menifee . 5 The 2045 estimate is based upon taking the 2022 population for Menifee from the California Department of Finance, which represents a 14% increase from SCAG 2020 estimates, so then the 2045 SCAG estimate is increased by 14% to arrive at 147,972. 6 The 2021 employment information is based on US Census Data “On the Map for All Jobs ’ for Menifee for 2019 (most recent information available). This amount was lower than SCAG’s projection of 16,200 as such this number was chosen. 7 Represents SCAG’s 2045 projection of employment in Menifee. Based upon discussion with City planning staff it was determined that the 2045 estimate for SCAG was appropriate and should be utilized.

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As the table indicates, based upon population projections, the overall population is expected to increase by approximately 44,000 for residents and 15,000 for employment.

The numbers noted in this table were used as the basis for all of the proportionate impact calculations throughout this study, with employment information utilized for calculations associated with non-residential projected growth.
2 Population Densities

In addition to the population projection information, the other set of data that is consistently utilized in the calculations is the density associated with residential and non- residential categories. The following subsections discuss the population densit y assumptions utilized in the calculation of all impact fees in this report. 1 Residential Population Density
Residential development can be extremely diverse ranging from single family to multi- family. The City of Menifee captures this diversity by splitting it into two different categories: single family and multi-family. The project team utilized information from the American Community Survey (ACS)8 regarding the total population per dwelling unit type and the total number of dwelling units to come up with the resulting average population density per unit for Menifee. The following table shows this calculation:

Table 10: Residential Population Density

Category Total Population Total # of Units Population / Unit (Avg. Density) Single-Family 79,554 27,075 2.94
2-4 Units 722 337 2.14
5+ Units 3,345 1,428 2.34
Mobile Home 6,217 2,181 2.85
Multi-Family Composite 4,067 1,765 2.30

The total population for each density category was divided by the associated number of dwelling units in order to determine the average population per density type. The average density per unit is multiplied by the cost per capita calculation to derive the base impact fee. For all fee categories, the Single Family and Multi-Family Densities are used.

Under AB602, there is a mandate to shift all density factors per dwelling unit to be based upon the square footage of the unit, rather than it being an ADU, Single-Family, or Multi- Family housing unit. However, the bill also states that if there is a stronger nexus that exists to utilize an alternative methodology, that methodology should be clearly explained and the stronger nexus must be demonstrated. Additionally, the bill also states that there

8 ACS 5-Year Tables B25033 and B25032 were utilized to allow for smoothing across multiple years .

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must be other policies in the fee structure that support smaller developments, or otherwise ensure that small developments are not charged disproportionate fees.

The type of dwelling unit is utilized in the table above because the housing density factor determines the fee levied per unit. Based on regional and state estimates, the project team determined the average density for a single-family unit compared to multi-family unit. It is the people residing in the housing development that generate the impact on local government infrastructure and services, not the size of the development. If a single- family home is 1,500 sq. ft. or 2, 200 sq. ft. but has 3 residents, its impact on roadways, or need for police and fire services, and / or use of parks services will be the same.

Therefore, having a larger housing development does not generate the need for additional impact; it is the population density associated with the type of dwelling unit that creates further impacts. Thus, determining fees based on the density rather than the size of a dwelling allows the City to show the strongest nexus between the fee and the impact.

Moreover, utilizing the density factor of the dwelling unit does, in fact, take into account the sizing (square footage) of the housing development. The multi-family unit has a lower population density (2.30) compared to the single-family population density (2.94).

Therefore, when calculating impact fees, the largest fee would be for single-family and the lowest fees would be for multi-family. ADU projects would pay their proportionate share of single-family projects as dictated by state legislation and would ensure that smaller square footage developments (e.g., ADUs) would pay a lower fee than larger square footage developments (e.g., single-family home).

Lastly, under the Mitigation Fee Act, the proportionality for impact fees for residential development is based on residential population growth. The population growth is tied most directly to the individuals residing within a housing development (i.e., the average residential density) rather than the size of the housing developments.

Therefore, based upon these reasons, the project team has calculated all housing development impact fees based upon the type of dwelling unit (e.g., Single Family, Multi- Family, ADU) rather than the proportionate square footage. The per-dwelling unit fee for each type of dwelling unit is based on the average residential density within each type of dwelling unit. This will ensure that the City is able to meet the nexus and proportionality criteria of AB 1600 (Mitigation Fee Act) and AB 602 as well as allow for fair and defensible application of impact fees. Each chapter will continue to demonstrate how the use of per unit still results in a fair and equitable assessment of fees, and that larger projects such as single family homes pay more than the ADUs.

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2 Non-Residential / Commercial Density
Similar to the residential density calculation, a calculation was performed for non- residential development within the City. The City utilizes three main commercial categories – Commercial / Retail, Office, and Industrial. The previous study utilized the 2001 Natelson Group report for employment densities for SCAG. The City currently contracts with the Natelson Group for other long-range planning efforts and the City contacted the group for updated employment densities. The following table shows the updated employment density associated with each non-residential category type:

Table 11: Non-Residential Population Density

Category Density (Sq. Ft. Per Employee)
Commercial / Retail9 550
Office 200
Industrial 1,500

The density (square footage per employee) is multiplied by the cost per capita calculation to derive the base impact fee.

It is important to note that the nex us analysis utilizes standard generic land use categories such as Commercial / Retail, Office, and Industrial. However, there are many projects that don’t necessarily fit one of these categories specifically. Along with this nexus study, the City will adopt a resolution, which will typically define the detailed types associated with each larger use type. For example, convenience stores associated with a gas station would be considered retail. Medical offices or business offices or banks would be considered office. Similarly, the resolution would also identify projects that are considered exempt such as residential accessory structures or buildings within HOA parks.

The following chapters utilize the assumptions included in this section to help project the proportionate impact of new development on the City’s existing and proposed infrastructure.

9 This is meant to be a catch-all land use category that can cover any type of commercial use that is not office or industrial in nature.

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4. Animal Shelter

The City of Menifee is part of a Joint Powers Authority (JPA) with Southwest Communities Financing Authority (SCFA) through which it receives Animal Sheltering services. The JPA members are the owners of the facility and have issued a bond for the purchase of the Animal Shelter facility. Therefore, Menifee as a member organization contributes to the shelter infrastructure cost through an annual debt service payment.

The proposed Animal Shelter impact fee would be used to offset the debt service payment associated with future development utilizing the Animal Shelter facility . The following subsections discuss the growth assumptions utilized, cost components included, resulting impact fee calculation s, ability to meet the nexus criteria, and a comparative analysis of Animal Shelter Impact fees.
1 Growth Assumptions
The City of Menifee’s Animal Sheltering services are provided through the JPA, which has a contract with Animal Friends of the Valley. The Animal Shelter is located in the City of Wildomar and serves all member agency residents. The member agencies for the JPA are nearby Riverside County cities. Due to the nature of the Animal Shelter and it serving multiple communities, for simplicity purposes it is being assumed that only residents within the City of Menifee benefit from the Animal Shelter. While non-residents, or employees that don’t live within Menifee could utilize the Shelter, the assumption is that those employees or non-residents are likely residents of other JPA member agencies and as such receive the benefit of the facility through their residential area. Therefore, the primary beneficiary of animal sheltering services is the residential population. The shelter will provide service to both existing and future population. The following table shows the current population, the future population, and the projected increase:

Table 12: Future Population Increase

Category Existing Population 2045 Population Population Increase Residential 103,617 147,972 44,355

As the table indicates, the projected increase in the residential population is approximately 44,000, which reflects a 43% increase compared to the existing population.

Therefore, future development should bear approximately 43% of the costs.

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2 Cost Components and Assumptions
The only infrastructure cost for the Animal Shelter is the annual debt service made by the City of Menifee. This debt service payment changes every year based upon the proportion of animals serviced by each member agency. However, the project team worked with City staff to identify the most recent debt service amount. The following table shows by category, the quantity, the unit cost, the total cost, the lifecycle, and the average annual cost:

Table 13: Animal Shelter Cost Components

Item Quantity Unit Cost Total Cost Lifecycle Avg Annual Cost Bond Payment 1 $185,878 $185,878 1 $185,878
Nexus Analysis 1 $10,000 $10,000 5 $2,000

The average annual cost for the Animal Shelter is multiplied against the 24-year planning horizon to calculate the total cost associated with City infrastructure. The following table shows this calculation for the 24-year planning period:

Table 14: Total Projected Animal Shelter Infrastructure Cost – 24 years

Category Average Annual Cost Planning Horizon Total Cost Bond Payment $185,878 1710 $3,159,926
Nexus Analysis $2,000 24 $48,000
TOTAL $3,207,926

Overall, in the next 24 years, Animal Shelter infrastructure will require approximately $3.2 million to meet the needs of the existing and future populations of the City.

In addition to the $3.2 million in costs, the other cost component to be considered is an administrative fee. For purposes of this study, the project team calculated the administrative fee based upon the total indirect costs allocated to all Impact Fee funds from the FY 2022 Citywide Cost Allocation Plan and the average of the revenue collected by impact fee funds over the last three years. The following table shows this calculation:

Table 15: Impact Fee – Admin Fee Calculation

Category Impact Fee Funds
Citywide Overhead $165,243
Impact Fee Revenue – 3 year average $5,877,779
ADMIN FEE RATE 2.80%

10 The bond payment schedule is only for 17 remaining years, as such even though the horizon is 24 years, the overall payment wo uld only need to happen for 17 years.

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The proposed administrative fee for all impact fees would be 2.80%, which is higher than the current 2.50% administrative fee. This 2.80% accounts for support provided by City staff in the monitoring and reporting of impact fee funds. 3 Impact Fee Calculations
As the previous section calculated, the total infrastructure needs for the Animal Shelter are approximately $3.2 million. However, not all of this cost should be borne by the future population. Based upon the growth assumptions analysis, 43% of these costs should be borne by the future population. The following table shows the calculation for costs to be borne by future residential populations:

Table 16: Projected Cost Calculation Between Existing and Future Population

Category Infrastructure Costs Proportion Total Cost to Be Borne Current Population $3,207,926 57% $1,828,518
Future Population $3,207,926 43% $1,379,408

Of the $3.2 million, $1.4 million should be borne by the future population. This $1.4 million is divided by the total projected population increase, to calculate the cost per capita, as shown in the following table:

Table 17: Projected Cost for New Development – Per Capita

Category Infrastructure Costs Projected Population Increase Cost / Capita Residential $1,379,408 44,355 $31

The cost per capita ($31) was then converted into a cost per dwelling unit based upon the density factors discussed in the projected growth and development chapter. The following table shows this calculation:

Table 18: Animal Shelter Impact Fee Calculation

Category Cost Per Capita Density / Unit Impact Fee
Single-Family $31 2.94 $91 per dwelling unit
Multi-Family $31 2.30 $71 per dwelling unit

As the table indicates, the cost per dwelling unit varies from a low of $71 for multi-family to a high of $ 91 for single-family homes. To calculate the full allowable fee, the 2.80% administrative fee is applied to the impact fee. The following table shows this calculation:

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Table 19: Animal Shelter Impact Fee Calculation Including Administrative Fee

Category Impact Fee Admin Fee Total Impact Fee
Single-Family $91 $3 $94 per dwelling unit
Multi-Family $71 $2 $73 per dwelling unit

The addition of the administrative fee captures the full cost associated with the proportionate impact of future development. The following table compares the current Animal Shelter Impact Fees to the full cost impact fee, and the associated surplus / (deficit).

Table 20: Animal Shelter Impact Fee – Current vs. Full Cost

Category Current Fee Full Cost Fee Surplus / (Deficit)
Single-Family $160 $94 $66
Multi-Family $118 $73 $45

As the table indicates, all impact fees are currently over-recovering compared to the full cost. This is due to the prior nexus analysis assuming that the City would build its own animal shelter facility and equipment (as it was not a member agency of the JPA).

However, due to the change, this results in a slightly more cost-effective approach for the City as it relates to infrastructure and results in fees needing to be reduced. 4 Nexus Criteria
As discussed in the legal framework section, in order for an impact fee to be implemented it must meet all five of the nexus criteria as established per the Mitigation Fee Act. The following table outlines each criterion point, and how the proposed Animal Shelter Impact fee meets the Mitigation Fee Act criteria.

Table 21: Animal Shelter Impact Fees Nexus Criteria

Criteria Meet Don’t Meet
Purpose of Fee

The purpose of the fee would be to fund the debt service associated with the existing Animal Shelter, including any expansions needed to serve the increased population for the City.

Use of Fee Revenue

The City has a debt service payment plan, which outlines that the revenue can only be used to offset facility payment costs.

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Criteria Meet Don’t Meet
Benefit Relationship

The use of the impact fee revenue would be to expand or improve the existing Animal Shelter facility, which would be directly proportional to the increased wear and tear and use of the facility as there is new residential growth in the City.

The increase in residential population is related to the number of dwelling units and the impact fee would be
applicable to dwelling units.

Impact Relationship

Based upon the addition of new residents there would be a need for expanded facilities.

Proportionality

The proposed impact fee would be a flat fee per dwelling unit depending upon the density of the housing units to capture the residential impacts as the primary mechanism for addition of residential population to the City is through increased dwelling units.

As the table demonstrates, the City is able to meet all five of the criteria necessary to impose an Animal Shelter Development Impact Fee.
5 Comparative Survey
As part of this impact fee analysis, the project team conducted a comparative survey of surrounding jurisdictions who charge an Animal Shelter Impact Fee. The following table compares the City’s current fee and full cost for Animal Shelter to other surveyed jurisdictions in the region, which charge an Animal Shelter impact fee:

Table 22: Animal Shelter Development Impact Fee Comparative Survey

Jurisdiction Single-Family Multi-Family
Menifee – Current $160 $118
Menifee – Full Cost $94 $73
Lake Elsinore $348 $299

There is only one other jurisdiction that charges an Animal Shelter impact fee and that is Lake Elsinore, which is also part of the JPA. Menifee’s current and full cost fees are less than Lake Elsinore’s fees.

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5. General Government

General Government refers to City Hall and other governmental infrastructure that is not covered through other impact fees (i.e. Police, Fire, Parks, Traffic, Storm Drain, etc.). The following subsections discuss the growth assumptions utilized, cost components included, resulting impact fee calculation, ability to meet the nexus criteria, and a comparative analysis of General Government fees.
1 Growth Assumptions
General Government consists of City Hall, Public Works facilities, Internet infrastructure, and Public Works and City vehicles. Staff located within these facilities and using that equipment provide services to current and future residents and employees. These services benefit both existing and future development. To determine the proportionate share of existing and future development, the project team calculated the future service population for the City. An employee working within the City does not have the same tendency to use City services as a resident, as such their impact and weight should be proportionately less. The following table shows the current population for each category, the proportionate weight and the equivalent residential population:

Table 23: Future Weighted Service Population Increase

Category Existing Population
Projected
Increase Weight Factor
Weighted Population
Increase
Residential 103,617 44,355 1.00 44,355 Commercial 14,200 15,000 0.2411 3,600 TOTAL 117,817 59,375 47,955

As the table indicates, the projected increase in the service population is approximately 47,955 which reflects a 41% increase compared to the existing population. Therefore, future development should bear approximately 41% of the costs. 2 Cost Components and Assumptions
Due to the projected increase in residential and non-residential population there will be an impact on the City’s infrastructure. The planning horizon for the impact fee is 24 years (2021 through 2045) and while the department intends to purchase some additional equipment and relocate facilities, it will also need to replace existing equipment and upgrade its facilities during that span. A proportionate share of those upgrades should

11 To calculate the employee weight factor, the study assumes that employees are only in the City 40 hours out of the whole week or 40 hours out of 168 possible hours in a week.

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be borne by future development as future development will benefit from that equipment and the facilities. The following table provides information regarding general government equipment, vehicle, and facility costs based upon existing and planned facilities. All quantity, cost per unit calculations and life cycle information was discussed with the City of Menifee Staff:

Table 24: General Government Equipment Costs

Item Quantity Unit Cost Total Cost Lifecycle
Avg Annual
Cost

PUBLIC FACILITIES
City Hall 1 $48,750,000 $48,750,000 50 $975,000
Public Works Corporation Yard 1 $12,000,000 $12,000,000 50 $240,000 Broadband Infrastructure 1 $14,000,000 $14,000,000 30 $466,667 Paloma Wash Pedestrian Bridge 1 $500,000 $500,000 50 $10,000 Rouse/I215 Pedestrian/NEV Bridge 1 $5,000,000 $5,000,000 50 $100,000 Subtotal $1,791,667

VEHICLES
F-450 Gas 4X2 Dually Flatbed 1 $75,000 $75,000 8 $9,375 F-250 Gas 4X4 Supercab Service Body 12 $55,000 $660,000 8 $82,500 F-250 Gas 4X4 Regular Cab 1 $45,000 $45,000 8 $5,625
F-250 Gas 4X4 Supercab Service Body 5 $55,000 $275,000 8 $34,375 F-250 Gas 4X4 Regular Cab 1 $45,000 $45,000 8 $5,625
Gas 4X4 Supercab Pick-up 4 $40,000 $160,000 8 $20,000
Hybryd SUV 1 $50,000 $50,000 8 $6,250
Hybryd Compact 1 $35,000 $35,000 8 $4,375
F-250 Gas 4X4 Supercab Service Body 2 $55,000 $110,000 8 $13,750 Subtotal $181,875

EQUIPMENT
Road Motor Grader 1 $300,000 $300,000 12 $25,000
Asphalt Patch Truck 1 $250,000 $250,000 8 $31,250
Asphalt Roller (Small) 1 $55,000 $55,000 12 $4,583
Asphalt Roller (Large) 1 $100,000 $100,000 12 $8,333
Asphalt Crack Sealer 1 $100,000 $100,000 12 $8,333
Water Truck 1 $120,000 $120,000 8 $15,000
Water Buffalo Trailer 1 $10,000 $10,000 12 $833
Deisel Dump Truck (5-7 CY) 1 $200,000 $200,000 12 $16,667 Deisel Dump Truck (3-4 CY) 1 $120,000 $120,000 12 $10,000 Skip Loader 1 $140,000 $140,000 12 $11,667
Backhoe 1 $140,000 $140,000 12 $11,667
Skid Steer + Skid Steer Track 1 $75,000 $75,000 12 $6,250 Skid Steer Attachments 1 $10,000 $10,000 12 $833
Mini Excavator 1 $55,000 $55,000 8 $6,875
Towable Air Compressor + Tools 1 $30,000 $30,000 12 $2,500 Towable Light Towers 2 $20,000 $40,000 12 $3,333
Cement Bullet Mixer 1 $40,000 $40,000 12 $3,333
Street Sweeper 2 $285,000 $570,000 8 $71,250
Bucket Truck 1 $140,000 $140,000 10 $14,000
Woodchipper and Box Truck 1 $80,000 $80,000 10 $8,000
Herbicide Spray Trailer 1 $15,000 $15,000 12 $1,250
Stencil Legend Truck 1 $150,000 $150,000 10 $15,000

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Item Quantity Unit Cost Total Cost Lifecycle
Avg Annual
Cost
Pressure Washer 1 $20,000 $20,000 12 $1,667
Trailer- Tilt Heavy Equipment 1 $10,000 $10,000 12 $833 Trailer - Heavy Equipment 1 $45,000 $45,000 12 $3,750
Trailer - Equipment 1 $10,000 $10,000 12 $833
Trailer - Emergency Road Closure 1 $10,000 $10,000 12 $833 Trailer - Dump 1 $20,000 $20,000 12 $1,667
Trailer - Vactor 1 $200,000 $200,000 12 $16,667
Boom Mower 1 $200,000 $200,000 12 $16,667
Message Board Trailer 4 $25,000 $100,000 12 $8,333
Arrow Board Trailer 2 $10,000 $20,000 12 $1,667
Subtotal $328,875
NEXUS ANALYSIS 1 $10,000 $10,000 5 $2,000

The average annual cost for City equipment is multiplied against the 24-year planning horizon to calculate the total cost associated with City equipment based upon the three categories: Existing, Planned, and Nexus Analysis. The following table shows this calculation for the 24-year planning period:

Table 25: Total Projected Infrastructure Cost – 24 years

Category Average Annual Cost Planning Horizon Total Cost Public Facilities $1,791,667 24 $43,000,008
Vehicles $181,875 24 $4,365,000
Equipment $328,875 24 $7,893,000
Nexus Analysis $2,000 24 $48,000
TOTAL $2,304,417 24 $55,306,008

Overall, in the next 24 years General Governmental infrastructure will require approximately $55.3 million to meet the needs of the existing and future populations of the City.

In addition to the $55.3 million in costs, the other cost component to be considered is the administrative fee. For purposes of this study, the project team calculated the administrative fee based upon the total indirect costs allocated to all Impact Fee funds from the FY 2022 Citywide Cost Allocation Plan and the average of the revenue collected by impact fee funds over the last three years. The following table shows this calculation:

Table 26: Impact Fee – Admin Fee Calculation

Category Impact Fee Funds
Citywide Overhead $165,243
Impact Fee Revenue – 3 year average $5,877,779
ADMIN FEE RATE 2.80%

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The proposed administrative fee for all impact fees would be 2.80%, which is higher than the current 2.50% administrative fee. This 2.80% accounts for support provided by City staff in the monitoring and reporting of impact fee funds. 3 Impact Fee Calculations
As the previous section calculated, the total infrastructure needs for General Government Facilities are approximately $55.3 million. However, not all of this cost should be borne by future populations. Based upon the growth assumptions analysis, 41% of these costs should be borne by the future population. The following table shows th e calculation for costs to be borne by future residential and non-residential populations:

Table 27: Projected Cost Calculation Between Existing and Future Population

Category Infrastructure Costs Proportion Total Cost to Be Borne Current Population $55,306,008 59% $32,630,545
Future Population $55,306,008 41% $22,675,463

Of the $55.3 million, $22.7 million should be borne by the future population. This $ 22.7 million is split between residential and commercial based upon the proportion of residential and commercial use of the services. The following table shows the future infrastructure cost and the proportion between residential and commercial.

Table 28: Projected Cost for New Development – Residential and Commercial

Category Infrastructure Costs Proportion of Use Total Cost to Be Borne Residential $22,675,463 76% $17,233,352
Commercial $22,675,463 24% $5,442,111

Approximately $17.2 million of the $22.7 million is residential, and the remaining $ 5.5 million is commercial-related. The $ 17.2 and $ 5.5 million are divided by the total projected population increases, to calculate the cost per capita, as shown in the following table:

Table 29: Projected Cost for New Development – Per Capita

Category Infrastructure Costs Projected Population Increase Cost / Capita Residential $17,233,352 44,355 $389
Commercial $5,442,111 15,000 $363

The cost per capita from this table was converted into a cost per dwelling unit and cost per sq. ft. based upon the density factors discussed in the projected growth and development chapter. The following table shows this calculation:

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Table 30: General Government Impact Fee Calculation

Category Cost Per Capita Density Impact Fee
Residential
Single-Family $389 2.94 $1,144 per dwelling unit
Multi-Family $389 2.30 $895 per dwelling unit
Non-Residential
Commercial / Retail $363 550 $0.66 per sq. ft.

Office $363 200 $1.82 per sq. ft.

Industrial $363 1,500 $0.24 per sq. ft.

As the table above indicates, the cost per dwelling unit varies from a low of $895 for multi- family to a high of $ 1,144 for single-family homes. The fees for commercial and non- residential vary from $0.24 per square foot for industrial to a high of $1.82 per square foot for office properties. To calculate the full allowable fee, the 2.80% administrative fee is applied to the impact fee. The following table shows this calculation:

Table 31: General Government Impact Fee Calculation Including Administrative Fee

Category Impact Fee Admin Fee Total Impact Fee
Residential
Single-Family $1,144 $32 $1,176 per dwelling unit
Multi-Family $895 $25 $920 per dwelling unit
Commercial / Non-Residential
Commercial / Retail $0.66 $0.02 $0.68 per sq. ft.

Office $1.81 $0.05 $1.87 per sq. ft.

Industrial $0.24 $0.01 $0.25 per sq. ft.

The addition of the administrative fee captures the full cost associated with the proportionate impact of future development. The following table compares the current General Government Impact Fee to the full cost impact fee, and the associated surplus / (deficit).

Table 32: General Government Impact Fee – Current vs. Full Cost

Category Current Fee Full Cost Fee Surplus / (Deficit)
Residential (per dwelling unit)
Single-Family $1,106 $1,176 ($70)
Multi-Family $815 $920 ($105)
Commercial / Non-Residential (per square foot)
Retail $0.28 $0.68 ($0.40)
Commercial / Office $0.37 $1.87 ($1.50)
Industrial $0.14 $0.25 ($0.11)

As the table indicates, all current impact fees are under-recovering compared to the full cost. These fees have not been updated in five years, and as such some of the projected increases in fees would be expected due to cost factor increases. Furthermore, other

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projected increases have to do with increased costs associated with facility, equipment acquisition, and replacement.
4 Nexus Criteria
As discussed in the legal framework section, in order for an impact fee to be implemented it must meet all five of the nexus criteria as established per the Mitigation Fee Act. The following table outlines each criterion point, and how the proposed General Government Impact fee meets the Mitigation Fee Act criteria.

Table 33: General Government Impact Fees Nexus Criteria

Criteria Meet Don’t Meet
Purpose of Fee

The purpose of the fee would be to upgrade existing City Hall, Public Works Facilities, City vehicles and equipment.

Use of Fee Revenue

The Public Works Department has detailed capital
improvement plans that outline the utilization of this fee revenue for current and future years to help ensure that there is appropriate expansion of City facilities and
equipment to meet the needs of the City.

Benefit Relationship

The use of the impact fee revenue would be to rehabilitate existing facilities and equipment due to new development.

New residents and employees receive benefits from
improved equipment and access to infrastructure.

Impact Relationship

The addition of new residents and employees would have
an impact on the ability of the City to meet all the needs.

Therefore, the cost associated with adding additional
equipment or expanding facilities to accommodate
additional staff to allow for appropriate handling of the new growth would be borne by new residents or employees.

Proportionality

The proposed impact fee is calculated based upon
proportionality of projected growth with the greatest
impact by residential areas, followed by commercial areas.

The fees are calculated on a per dwelling unit for
residential properties and on a per sq. ft. basis for
commercial properties as the impact is more space based rather than unit based.

As the table demonstrates, the City is able to meet all five of the criteria necessary to impose a General Government Impact Fee.

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5 Comparative Survey
As part of this impact fee analysis, the project team conducted a comparative survey of surrounding jurisdictions who charge a General Government Impact Fee. The following table compares the City’s current fee and full cost for General Government to other surveyed jurisdictions in the region, which charge a General Government impact fee:

Table 34: General Government Impact Fee Comparative Survey

Residential Non-Residential
Jurisdiction Single-Family
Multi-
Family
Retail – Per
Sq. Ft
Office –
Per Sq. Ft
Industrial –
Per Sq. Ft
Menifee – Current $1,106 $815 $0.28 $0.37 $0.14
Menifee – Full Cost $1,176 $920 $0.68 $1.87 $0.25
Eastvale $942 $650 $0.15 $0.15 $0.16
Hemet $780 $660 $0.12 $0.12 $0.12
Lake Elsinore $809 $696 $0.018 $0.018 $0.004
Murrieta $241 $168 $0.05 $0.07 $0.02
Perris $576 $522 $0.162 $0.162 $0.162
Temecula $728 $390 $0.71 $0.26 $0.24

The majority of the surveyed jurisdictions charge fees similar to Menifee, per dwelling unit for residential and per square foot for non-residential. Among the surveyed jurisdictions no City as a higher fee than Menifee’s current fee and full cost for residential.

As it relates to non-residential only commercial / retail category for Temecula has a higher fee than Menifee’s current fee.

All of the surveyed jurisdictions similar to Menifee, adopted a nexus analysis, and have been applying a cost factor to increase fees . The following table shows by jurisdiction, when the original nexus was adopted, and when the last fee amount was updated:

Table 35: Comparative Survey Information

Jurisdiction Date of Original Nexus Last Fee Update
Eastvale 2012 2022
Hemet 2006 2021
Lake Elsinore 2016 2016
Murrieta N / A 2019
Perris 2006 2022
Temecula 2003 2022

As the table indicates, while the majority of the jurisdictions have updated fees, the nexus for those fees has not been reevaluated in a substantial time. The only jurisdiction that has done an analysis within the last 10 years is Lake Elsinore.

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6. Fire

The City of Menifee contracts for Fire Prevention and Fire Suppression services with the County of Riverside. However, all infrastructure – Fire Stations and Vehicles / Equipment are owned by the City of Menifee. Therefore, the City of Menifee assesses an impact fee to recover the costs associated with Fire Infrastructure. The following subsections discuss the growth assumptions utilized, cost components included, resulting impact fee calculation, ability to meet the nexus criteria, and a comparative analysis of Fire fees. 1 Growth Assumptions
The Fire Department serves both residential and commercial populations (employees).

Future increased development would result in the need for expanded or relocated Fire stations, additional equipment and vehicles. The primary goal of the Fire Department is to provide fire prevention and suppression services within the City. These services benefit both existing and future development to determine the proportionate share of existing and future development, the project team calculated the future service population for the City. An employee working within the City does not have the same tendency to use fire services as a resident, as such their impact and weight should be proportionately less.

The following table shows the current population for each category, the proportionate weight and the equivalent residential population:

Table 36: Future Weighted Service Population Increase

Category Existing Population
Projected
Increase Weight Factor
Weighted Population
Increase
Residential 103,617 44,355 1.00 44,375 Commercial 14,200 15,000 0.4212 6,300 TOTAL 117,817 59,375 50,655

As the table indicates, the projected increase in the service population is approximately 50,655, which reflects a 43% increase compared to the existing population. Therefore, future development should bear approximately 43% of the costs. 2 Cost Components and Assumptions
Due to the projected increase in residential and non-residential population there will be an impact on the department’s infrastructure. The planning horizon for the impact fee is 24 years (2021 through 2045) and while the department intends to purchase some

12 To calculate the employee weight factor, the project team utilized a 3 year average (FY19-FY21) of proportion of fire calls for service that are commercial relative to residential calls for service.

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additional equipment and relocate facilities, it will also need to replace existing equipment and upgrade its facilities during that span. A proportionate share of those upgrades should be borne by future development as future development will benefit from that equipment and the facilities. The following table provides information regarding fire equipment, vehicle, and facility costs based upon existing and planned facilities. All quantity, cost per unit calculations and life cycle information was discussed with the City of Menifee Staff:

Table 37: Fire Equipment Costs

Item Quantity Unit Cost Total Cost Lifecycle Avg Annual Cost

EXISTING FACILITIES
Sun City Fire Station - Building 1 $1,720,389 $1,720,389 20 $86,019 Menifee Fire Station - Building 1 $1,348,966 $1,348,966 20 $67,448 Menifee Lakes / HQ - Building 1 $3,036,287 $3,036,287 20 $151,814 Quail Valley Fire Station 1 $8,000,000 $8,000,000 50 $160,000 Inspector Vehicles 5 $28,000 $140,000 7 $20,000
Paramedic Squads 2 $300,000 $600,000 15 $40,000
Medic Patrol 1 $400,000 $400,000 15 $26,667
Ladder Truck 1 $1,800,000 $1,800,000 15 $120,000
Engines 4 $900,000 $3,600,000 15 $240,000
EMS Specialist Vehicle 1 $28,000 $28,000 7 $4,000
Subtotal $915,949

PLANNED FACILITIES AND EQUIPMENT
Northeast Fire Station 1 $8,000,000 $8,000,000 50 $160,000 Southeast Fire Station 1 $8,000,000 $8,000,000 50 $160,000 Shared Costs of the Northwest
Station 1 $3,750,000 $3,750,000 50 $75,000
Engine 3 $900,000 $2,700,000 15 $180,000
Medic Squad 2 $300,000 $600,000 15 $40,000
Utility Vehicle 1 $45,000 $45,000 7 $6,429
Battalion Chief Vehicle 1 $75,000 $75,000 7 $10,714
Light / Air Bottling / Canteen 1 $200,000 $200,000 7 $28,571 Inspector Vehicles 1 $28,000 $28,000 7 $4,000
Subtotal $670,714
NEXUS ANALYSIS 1 $10,000 $10,000 5 $2,000

The average annual cost for Fire equipment is multiplied against the 24-year planning horizon to calculate the total cost associated with Fire equipment based upon the three categories: Existing, Planned, and Nexus Analysis. The following table shows this calculation for the 24-year planning period:

Table 38: Total Projected Infrastructure Cost – 24 years

Category Average Annual Cost Planning Horizon Total Cost Existing Facilities $915,949 24 $21,982,776
Planned Facilities and Equipment $670,714 24 $16,097,136 Nexus Analysis $2,000 24 $48,000
TOTAL $1,584,663 24 $38,127,912

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Overall, in the next 24 years the Fire Department will require approximately $ 38.1 million to meet the needs of existing and future populations of the City.

In addition to the $38.1 million in costs, the other cost component to be considered is the administrative fee. For purposes of this study, the project team calculated the administrative fee based upon the total indirect costs allocated to all Impact Fee funds from the FY 2022 Citywide Cost Allocation Plan and the average of the revenue collected by impact fee funds over the last three years. The following table shows this calculation:

Table 39: Impact Fee – Admin Fee Calculation

Category Impact Fee Funds
Citywide Overhead $165,243
Impact Fee Revenue – 3 year average $5,877,779
ADMIN FEE RATE 2.80%

The proposed administrative fee for all impact fees would be 2.80%, which is higher than the current 2.50% administrative fee. This 2.80% accounts for support provided by City staff in the monitoring and reporting of impact fee funds. 3 Impact Fee Calculations
As the previous section calculated, the total infrastructure needs for the Fire Department are approximately $38.1 million. However, not all o f this cost should be borne by the future population. Based upon the growth assumptions analysis, 43% of these costs should be borne by the future population. The following table shows the calculation for costs to be borne by future residential and non-residential populations:

Table 40: Projected Cost Calculation Between Existing and Future Population

Category Infrastructure Costs Proportion Total Cost to Be Borne Current Population $38,127,912 57% $21,732,190
Future Population $38,127,912 43% $16,395,022

Of the $38.1 million, $16.4 million should be borne by the future population. This $ 16.4 million is split between residential and commercial based upon the proportion of calls for service for residential and commercial. The following table shows by future population cost, the proportion between residential and commercial to show the total cost:

Table 41: Projected Cost for New Development – Residential and Commercial

Category Infrastructure Costs Proportion of Calls for Service Total Cost to Be Borne Residential $16,395,022 58% $9,509,101
Commercial $16,395,022 42% $6,885,901

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Approximately $9.5 million of the $ 16.4 million is residential and the remaining $ 6.9 million is commercial-related. The $9.5 and $6.9 million is divided by the total projected population increase, to calculate the cost per capita, as shown in the following table:

Table 42: Projected Cost for New Development – Per Capita

Category Infrastructure Costs Projected Population Increase Cost / Capita Residential $9,509,101 44,355 $214
Commercial $6,885,901 15,000 $459

Table 43: Fire Impact Fee Calculation

Category Cost Per Capita Density / Unit Impact Fee
Residential
Single-Family $214 2.94 $629 per dwelling unit
Multi-Family $214 2.30 $492 per dwelling unit
Non-Residential
Commercial / Retail $459 550 $0.83 per sq. ft.

Office $459 200 $2.30 per sq. ft.

Industrial $459 1,500 $0.31 per sq. ft.

As the table above indicates, the cost per dwelling unit varies from a low of $492 for multi- family to a high of $ 629 for single-family homes. The fees for commercial and non- residential vary from a low of $0.31 per square foot for to a high of $2.30 per square foot for office properties. To calculate the full allowable fee, the 2.80% administrative fee is applied to the impact fee. The following table shows this calculation:

Table 44: Fire Impact Fee Calculation Including Administrative Fee

Category Impact Fee Admin Fee Total Impact Fee
Residential
Single-Family $629 $18 $647 per dwelling unit
Multi-Family $492 $14 $506 per dwelling unit
Commercial / Non-Residential
Commercial / Retail $0.83 $0.02 $0.85 per sq. ft.

Office $2.30 $0.06 $2.36 per sq. ft.

Industrial $0.31 $0.01 $0.32 per sq. ft.

The addition of the administrative fee captures the full cost associated with the proportionate impact of future development. The following table compares the current Fire Impact Fee to the full cost impact fee, and the associated surplus / (deficit).

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Table 45: Fire Impact Fee – Current vs. Full Cost

Category Current
Fee
Full Cost Fee Surplus /
(Deficit)
Residential (per dwelling unit)
Single-Family $665 $647 $18
Multi-Family $490 $506 ($16)
Commercial / Non-Residential (per square foot)
Commercial / Retail $0.46 $0.85 ($0.39)
Office $0.61 $2.36 ($1.75)
Industrial $0.23 $0.32 ($0.09)

As the table indicates, all but the single-family current impact fees are under-recovering compared to the full cost. The single-family impact fee is over-recovering by approximately $18 and will need to be reduced to comply with the Mitigation Fee Act. 4 Nexus Criteria
As discussed in the legal framework section, in order for an impact fee to be implemented it must meet all five of the nexus criteria as established per the Mitigation Fee Act. The following table outlines each criterion point, and how the proposed Fire Impact fee meets the Mitigation Fee Act criteria.

Table 46: Fire Impact Fees Nexus Criteria

Criteria Meet Don’t Meet
Purpose of Fee

The purpose of the fee would be to upgrade existing Fire stations; relocate and reconstruct existing fire stations; and replace outdated fire equipment.

Use of Fee Revenue

The Fire Department has detailed capital improvement
plans that outline the utilization of this fee revenue for current and future years to help ensure that there is
appropriate expansion of fire facilities and equipment to meet the public safety goals of the City.

Benefit Relationship

The use of the impact fee revenue would be to rehabilitate existing fire stations to accommodate the appropriate
number of ambulances and engines, as well as ensure that stations are located in appropriate locations to allow for the most efficient response for service. New residents and employees receive benefits from increased equipment and more efficient response times.

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Criteria Meet Don’t Meet
Impact Relationship

The addition of new residents and employees would have
an impact on the ability of the fire stations to respond adequately, including in an efficient manner. Therefore, the cost associated with adding additional equipment or
expanding facilities to accommodate additional staff to allow for responses would be borne by new residents or
employees.

Proportionality

The proposed impact fee is calculated based upon
proportionality of projected growth with the greatest
impact by residential areas, followed by commercial areas.

The fees are calculated on a per dwelling unit for
residential properties and on a per sq. ft. basis for
commercial properties as the impact is more space based rather than unit based.

As the table demonstrates, the City is able to meet all five of the criteria necessary to impose a Fire Development Impact Fee.
5 Comparative Survey
As part of this impact fee analysis, the project team conducted a comparative survey of surrounding jurisdictions who charge a Fire Impact Fee. The following table compares the City’s current fee and full cost for Fire to other surveyed jurisdictions in the region, which charge a fire impact fee:

Table 47: Fire Impact Fee Comparative Survey

Residential Non-Residential
Jurisdiction
Single-Family
Multi-
Family
Retail – Per
Sq. Ft
Office –
Per Sq. Ft
Industrial –
Per Sq. Ft
Menifee – Current $665 $490 $0.46 $0.61 $0.23
Menifee – Full Cost $647 $506 $0.85 $2.36 $0.32
Corona $349 $466 $0.16 $0.16 $0.02
Eastvale $481 $332 $0.132 $0.137 $0.137
Hemet $560 $480 $0.24 $0.24 $0.056
Lake Elsinore $751 $612 $0.489 $0.337 $0.159
Murrieta $634 $444 $0.31 $0.40 $0.15
Perris $362 $328 $0.102 $0.102 $0.102
Temecula $920 $427 $0.24 $0.15 $0.15

The majority of the surveyed jurisdictions charge fees similar to Menifee, per dwelling unit for residential and per square foot for non-residential. Among the surveyed jurisdictions Lake Elsinore and Murietta have a higher fee than Menifee’s current and full cost for residential (single-family) and no jurisdiction has higher fees for non-residential projects.

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Table 48: Comparative Survey Information

Jurisdiction Date of Original Nexus Last Fee Update
Eastvale 2012 2022
Hemet 2006 2021
Lake Elsinore 2016 2016
Murrieta N / A 2019
Perris 2006 2022
Temecula 2003 2022

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7. Police

The City of Menifee used to contract with Riverside County for Law Enforcement services until 2019. In 2019, the City formed its own Police department and therefore owns all police-related infrastructure. Hence, the City of Menifee assesses an impact fee to recover the costs associated with Police Infrastructure. The following subsections discuss the growth assumptions utilized, cost components included, resulting impact fee calculation, ability to meet the nexus criteria, and a comparative analysis of Police fees. 1 Growth Assumptions
The Police Department serves both residential and commercial populations (employees).

Future increased development would result in the need for expanded or relocated Police stations, additional equipment, and vehicles. The primary goal of the Police Department is to provide law enforcement services. These services benefit both existing and future development, therefore, to determine the proportionate share of existing and future development, the project team calculated the future service population for the City. An employee working within the City does not have the same tendency to use police services as a resident, as such their impact and weight should be proportionately less. The following table shows the current population for each category, the proportionate weight, and the equivalent residential population:

Table 49: Future Weighted Service Population Increase

Category Existing Population
Projected
Increase Weight Factor
Weighted Population
Increase
Residential 103,617 44,355 1.00 44,355 Commercial 14,200 15,000 0.2113 3,150 TOTAL 117,817 59,375 47,505

As the table indicates, the projected increase in the service population is approximately 47,505, which reflects a 40% increase compared to the existing population. Therefore, future development should bear approximately 40% of the costs. 2 Cost Components and Assumptions
Due to the projected increase in residential and non-residential population there will be an impact on the department’s infrastructure. The planning horizon for the impact fee is 24 years (2021 through 2045). A proportionate share of those upgrades should be borne

13 To calculate the employee weight factor, the project team utilized the 2021 YTD (Jan – Nov 30) proportion of police calls for service that are commercial relative to residential calls for service.

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by future development as future development will benefit from that equipment and facilities. The following table provides information regarding police equipment, vehicle, and facility costs based upon existing and planned facilities. All quantity, cost per unit calculations, and life cycle information was discussed with the City of Menifee Staff:

Table 50: Police Equipment Costs

Item Quantity Unit Cost Total Cost Lifecycle Avg Annual Cost

EXISTING FLEET
Bearcat 1 $228,379 $228,379 15 $15,225
Patrol Tahoe 30 $54,687 $1,640,603 5 $328,121
HLO / POP Trucks 3 $64,393 $193,179 5 $38,636
DUI Trailer 1 $33,646 $33,646 15 $2,243
CSI Van 1 $74,961 $74,961 10 $7,496
Motorcycles 5 $32,995 $164,975 5 $32,995
Traffic cars 2 $49,936 $99,873 5 $19,975
Community Service Truck 4 $42,946 $171,783 7 $24,540
Community service jail transport 1 $45,513 $45,513 5 $9,103 Undercover cars (Owned) 3 $61,516 $184,548 7 $26,364
Patrol K9 Vehicle 2 $71,230 $142,460 5 $28,492
Code Enforcement 5 $24,000 $120,000 7 $17,143
Miscellaneous vehicles 9 $35,000 $315,000 7 $45,000
Subtotal $595,332

PLANNED FLEET
Commercial Enforcement Vehicle 1 $105,096 $105,096 10 $10,510 Mobile Command Post 1 $600,000 $600,000 20 $30,000
SWAT Equipment Truck 1 $300,000 $300,000 15 $20,000
Patrol Tahoe 30 $69,139 $2,074,185 5 $414,837
HLO / POP Trucks 2 $64,393 $128,786 5 $25,757
Motorcycles 2 $32,995 $65,990 5 $13,198
Traffic cars 2 $72,512 $145,023 5 $29,005
Community service jail transport 8 $60,789 $486,309 5 $97,262 Undercover cars (Owned) 4 $61,516 $246,065 7 $35,152
Patrol K9 Vehicle 2 $71,230 $142,460 5 $28,492
Miscellaneous vehicles 5 $40,000 $200,000 7 $28,571
Subtotal $732,784

RADIOS / CAMERAS - CURRENT
In Car Dash Cameras 40 $13,093 $523,734 5 $104,747
Portable Radios 116 $6,798 $788,603 5 $157,721
Mobile Radios 62 $7,590 $470,611 5 $94,122
Subtotal $356,589
RADIOS / CAMERAS – PLANNED
In Car Dash Cameras 20 $13,093 $261,867 5 $52,373
Portable Radios 50 $6,798 $339,915 5 $67,983
Mobile Radios 20 $7,590 $151,810 5 $30,362
Subtotal $150,718

FACILITY
Facility / EOC 1 $42,500,000 $42,500,000 50 $850,0000
Subtotal $850,000
NEXUS ANALYSIS 1 $10,000 $10,000 5 $2,000

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The average annual cost for Police equipment is multiplied against the 24-year planning horizon to calculate the total cost associated with Police equipment based upon the categories of fleet, radios / cameras, facilities, and nexus analysis . The following table shows this calculation for the 24-year planning period:

Table 51: Total Projected Infrastructure Cost – 24 years

Category Average Annual Cost Planning Horizon Total Cost Current Fleet $595,332 24 $14,287,968
Fleet Needed $732,784 24 $17,586,816
Radios / Cameras – Current $356,589 24 $8,558,136
Radios / Cameras - Planned $150,718 24 $3,617,232
Facility Cost $850,000 24 $20,400,000
Nexus Analysis $2,000 24 $48,000
TOTAL $2,687,423 24 $64,498,152

Overall, in the next 24 years the Police Department will require approximately $64.5 million to meet the needs of existing and future populations of the City.

In addition to the $64.5 million in costs, the other cost component to be considered is the administrative fee. For purposes of this study, the project team calculated the administrative fee based upon the total indirect costs allocated to the all Impact Fee funds from the FY 2022 Citywide Cost Allocation Plan and the average of the revenue collected by impact fee funds over the last three years. The following table shows this calculation:

Table 52: Impact Fee – Admin Fee Calculation

Category Impact Fee Funds
Citywide Overhead $165,243
Impact Fee Revenue – 3 year average $5,877,779
ADMIN FEE RATE 2.80%

The proposed administrative fee for all impact fees would be 2.80%, which is higher than the current 2 .50% administrative fee. This 2.80% accounts for support provided by City staff in the monitoring and reporting of impact fee funds. 3 Impact Fee Calculations
As the previous section calculated, the total infrastructure needs for the Police Department are approximately $64.5 million. However, not all of this cost should be borne by the future population. Based upon the growth assumptions analysis, 40% of these costs should be borne by the future population. The following table shows the calculation for costs to be borne by future residential and non-residential populations:

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Table 53: Projected Cost Calculation Between Existing and Future Population

Category Infrastructure Costs Proportion Total Cost to Be Borne Current Population $64,498,152 60% $38,698,891
Future Population $64,498,152 40% $25,799,261

Of the $64.5 million, $25.8 million should be borne by the future population. This $ 25.8 million is split between residential and commercial based upon the proportion of calls for service for residential and commercial. The following table shows by future population cost, the proportion between residential and commercial to show the total cost:

Table 54: Projected Cost for New Development – Residential and Commercial

Category Infrastructure Costs Proportion of Calls for Service Total Cost to Be Borne Residential $25,799,261 79% $20,381,416
Commercial $25,799,261 21% $5,417,845

Approximately $20.4 million of the $ 25.8 million is residential and the remaining $5.4 million is commercial-related. The $20.4 and $5.4 million is divided by the total projected population increase, to calculate the cost per capita, as shown in the following table:

Table 55: Projected Cost for New Development – Per Capita

Category Infrastructure Costs Projected Population Increase Cost / Capita Residential $20,381,416 44,355 $460
Commercial $5,417,845 15,000 $361

Table 56: Police Impact Fee Calculation

Category Cost Per Capita Density Impact Fee
Residential
Single-Family $460 2.94 $1,352 per dwelling unit
Multi-Family $460 2.30 $1,058 per dwelling unit
Non-Residential
Commercial / Retail $361 550 $0.66 per sq. ft.

Office $361 200 $1.81 per sq. ft.

Industrial $361 1,500 $0.24 per sq. ft.

As the table above indicates, the cost per dwelling unit varies from a low of $1, 058 for multi-family to a high of $1,352 for single-family homes. The fees for commercial and non-residential vary from a low of $0.24 per square foot for industrial to a high of $1.81

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per square foot for office properties. To calculate the full allowable fee, the 2.80% administrative fee is applied to the impact fee. The following table shows this calculation:

Table 57: Police Impact Fee Calculation Including Administrative Fee

Category Impact Fee Admin Fee Total Impact Fee
Residential
Single-Family $1,352 $38 $1,390 per dwelling unit
Multi-Family $1,058 $30 $1,088 per dwelling unit
Commercial / Non-Residential
Commercial / Retail $0.66 $0.02 $0.68 per sq. ft.

Office $1.81 $0.05 $1.86 per sq. ft.

Industrial $0.24 $0.01 $0.25 per sq. ft.

The addition of the administrative fee captures the full cost associated with the proportionate impact of future development. The following table compares the current Police Impact Fee to the fire full cost impact fee, and the associated surplus / (deficit).

Table 58: Police Impact Fee – Current vs. Full Cost

Category Current Fee Full Cost Fee Surplus / (Deficit)
Residential (per dwelling unit)
Single-Family $250 $1,390 ($1,140)
Multi-Family $183 $1,088 ($905)
Commercial / Non-Residential (per square foot)
Commercial / Retail $0.06 $0.68 ($0.62)
Office $0.08 $1.86 ($1.78)
Industrial $0.03 $0.25 ($0.22)

As the table indicates, all current impact fees are under-recovering compared to the full cost. The primary reason for the significant difference in impact fees is due to the current fees being based on the analysis when infrastructure was not owned, but contracted out, as such there was minimal cost included in the previous analysis. The current analysi s considers all equipment and facility needs.
4 Nexus Criteria
As discussed in the legal framework section, in order for an impact fee to be implemented it must meet all five of the nexus criteria as established per the Mitigation Fee Act. The following table outlines each criterion point, and how the proposed Police Impact fee meets the Mitigation Fee Act criteria.

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Table 59: Police Impact Fees Nexus Criteria

Criteria Meet Don’t Meet
Purpose of Fee

The purpose of the fee would be to upgrade existing Police headquarters, as well as purchase and replace police
vehicles and equipment.

Use of Fee Revenue

The Police Department has detailed capital improvement
plans that outline the utilization of this fee revenue for current and future years to help ensure that there is
appropriate expansion of police facilities and equipment to meet the public safety goals of the City.

Benefit Relationship

The use of the impact fee revenue would be to build a new EOC facility and headquarters as well as to accommodate the appropriate number of vehicles that are needed to
provide public safety services. New residents and
employees receive benefits from increased equipment and more efficient response times.

Impact Relationship

The addition of new residents and employees would have
an impact on the ability of the Police department to
respond adequately, including in an efficient manner.

Therefore, the cost associated with adding additional
equipment or expanding facilities to accommodate
additional staff to allow for responses should be borne by new residents or employees.

Proportionality

The proposed impact fee is calculated based upon
proportionality of projected growth with the greatest
impact by residential areas, followed by commercial areas.

The fees are calculated on a per dwelling unit for
residential properties and on a per sq. ft. basis for
commercial properties as the impact is more space based rather than unit based.

As the table demonstrates, the City is able to meet all five of the criteria necessary to impose a Police Development Impact Fee.
5 Comparative Survey
As part of this impact fee analysis, the project team conducted a comparative survey of surrounding jurisdictions who charge a Police Impact Fee. The following table compares the City’s current fee and full cost to other surveyed jurisdictions in the region, which charge a police impact fee:

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Table 60: Police Impact Fee Comparative Survey

Residential Non-Residential
Jurisdiction
Single-
Family
Multi-
Family
Retail – Per
Sq. Ft
Office –
Per Sq. Ft
Industrial –
Per Sq. Ft
Menifee – Current $250 $183 $0.06 $0.08 $0.03
Menifee – Full Cost $1,390 $1,088 $0.68 $1.86 $0.25
Corona $212 $366 $0.18 $0.18 $0.01
Hemet $471 $404 $0.223 $0.223 $0.013
Indio $930 $565
$2,959 per
acre
$807 per
acre
$4,303 per
acre
Murietta $597 $417 $0.13 $0.17 $0.06
Perris $59 $54 $0.017 $0.017 $0.017
Temecula $686 $388 $0.39 $0.09 $0.07

The majority of the surveyed jurisdictions charge fees similar to Menifee, per dwelling unit for residential and per square foot for non-residential. Among the surveyed jurisdictions Menifee’s current fee is in line with Corona but lower than Hemet and Indio.

Its full cost fee is higher than all other surveyed jurisdictions. Other than City of Perris, all other surveyed jurisdictions have in-house police departments.

Table 61: Comparative Survey Information

Jurisdiction Date of Original Nexus Last Fee Update
Eastvale 2012 2022
Hemet 2006 2021
Lake Elsinore 2016 2016
Murrieta N / A 2019
Perris 2006 2022
Temecula 2003 2022

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8. Parks and Recreation

The City of Menifee provides Parks and Recreation services through its many parks and recreation centers. The City currently assess three different types of Parks and Recreation fees:

1. Public Use Facilities: This is in relation to the recreation center (s) that are to be built and rehabilitated within the City of Menifee.

2. Parks – Land Improvements: This is in relation to developing any land or land acquisitions (outside of the Quimby process) for parks.

3. Parks – Improvements: This is in relation to any park facility improvements such as playground equipment, benches, etc.

Through this study it was proposed that these three fees should be consolidated into a singular Parks and Recreation Impact Fee, which would cover all infrastructure.

Additionally, any land acquisition costs were removed as those are intended to be funded through the Quimby fee. The following subsections discuss the growth assumptions utilized, cost components included, resulting impact fee calculation, abil ity to meet the nexus criteria, and a comparative analysis of Parks and Recreation Impact fees. 1 Growth Assumptions
The Community Services Department or Parks and Recreation primarily serves the residential population within the City of Menifee. While non-residents may utilize park facilities, for the strongest nexus, only residential population growth has been factored into this analysis. Future increased development would result in the need for expanded facilities, newer equipment, and new parks. The current recreation facilities benefit both existing and future development and to determine the proportionate share of existing and future development, the project team calculated the future service population for the City.

The following table shows the current population, the future population, and the projected increase:

Table 62: Future Population Increase

Category Existing Population 2045 Population Population Increase Residential 103,617 147,972 44,355

As the table indicates, the projected increase in the residential population is approximately 44,000, which reflects approximately a 43% increase compared to the

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existing population. Therefore, future development should bear approximately 43% of the costs.
2 Cost Components and Assumptions
Due to the projected increase in residential population there will be an impact on the department’s infrastructure. The City of Menifee last completed a Parks Master Plan in 2016 and is currently in the process of updating this Master Plan. The project team worked with City staff to identify projects from the Master Plan that had been completed and others that had been identified to be done based upon population growth. Additional projects beyond the master plan were also identified. The following table shows by project type, the proposed amount:

Table 63: Parks Identified Projects

Item Total Cost
Community Center 2.18 Acres (Juanita / Goetz) $1,500,000 Evans Park $13,200,000
Utility Corridor Trail $5,000,000
Regional Park Acquisition
Future Sun City Park Development $7,000,000
Future Park Development as identified in Section 5.5 of the Parks, Trails, Recreation and Open Space Master Plan Approved in 2016
$15,000,000
Menifee Community Center
(Menifee/La Piedra)
$11,500,000
Salt Creek Trail Maintenance & Connectivity - Feasibility $250,000 Salt Creek Trail Parking & Future Improvements $2,000,000 Faith Lutheran Church
(Portsmouth/Hartwick) 2 Acres
$2,060,000
Energy Efficient Lighting $250,000
Shade Sails $365,000
EL Pete Peterson Dog Park Expansion $350,000
Park Amenity Enhancements - includes replacement and addition of playgrounds, exercise equipment, benches, picnic tables and other amenities at existing park sites. $275,000
Nexus Analysis $48,00014
TOTAL COST $58,798,000

Overall, the Community Services Department will require approximately $58.8 million to meet the needs of existing and future populations of the City. This need is for the projection of the Master Plan which is approximately 25 years.

In addition to the $58.8 million in costs, the other cost component to be considered is the administrative fee. For purposes of this study, the project team calculated the administrative fee based upon the total indirect costs allocated to all Impact Fee funds

14 Represents an average cost of $10,000 for every 5 years, which is $2,000 per year. The $2,000 per year is multiplied by 24 years (the planning horizon) to come up with the $48,000 nexus amount.

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from the FY 2022 Citywide Cost Allocation Plan and the average of the revenue collected by impact fee funds over the last three years. The following table shows this calculation:

Table 64: Impact Fee – Admin Fee Calculation

Category Impact Fee Funds
Citywide Overhead $165,243
Impact Fee Revenue – 3 year average $5,877,779
ADMIN FEE RATE 2.80%

The proposed administrative fee for all impact fees would be 2.80%, which is higher than the current 2.50% administrative fee. This 2.80% accounts for support provided by City staff in the monitoring and reporting of impact fee funds. 3 Impact Fee Calculations
As the previous section calculated, the total infrastructure needs for Parks and Recreation are approximately $58.8 million. However, not all of this cost should be borne by the future population. Based upon the growth assumptions analysis, 43% of these costs should be borne by the future population. The following table shows the calculation for costs to be borne by future residential populations:

Table 65: Projected Cost Calculation Between Existing and Future Population

Category Infrastructure Costs Proportion Total Cost to Be Borne Current Population $58,798,000 57% $33,514,860
Future Population $58,798,000 43% $25,283,140

Of the $58.8 million, $25.3 million should be borne by the future population. This $ 25.3 million is divided by the total projected population increase, to calculate the cost per capita, as shown in the following table:

Table 66: Projected Cost for New Development – Per Capita

Category Infrastructure Costs Projected Population Increase Cost / Capita Residential $25,283,140 44,355 $570

The cost per capita from this table was converted into a cost per dwelling unit based upon the density factors discussed in the projected growth and development chapter. The following table shows this calculation:

Table 67: Parks and Recreation Impact Fee Calculation

Category Cost Per Capita Density / Unit Impact Fee
Single-Family $570 2.94 $1,676 per dwelling unit
Multi-Family $570 2.30 $1,311 per dwelling unit

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As the table indicates, the cost per dwelling unit varies from a low of $ 1,311 for multi- family to a high of $1,676 for single-family homes. To calculate the full allowable fee, the

2.80% administrative fee is applied to the impact fee. The following table shows this calculation:

Table 68: Parks and Recreation Impact Fee Calculation Including Administrative Fee

Category Impact Fee Admin Fee Total Impact Fee
Single-Family $1,676 $47 $1,723 per dwelling unit
Multi-Family $1,311 $37 $1,348 per dwelling unit

The addition of the administrative fee captures the full cost associated with the proportionate impact of future development. The following table compares the current Parks and Recreation Impact Fees to the full cost impact fees, and the associated surplus / (deficit).

Table 69: Parks and Recreation Impact Fee – Current vs. Full Cost

Category Current Fee15 Full Cost Fee Surplus / (Deficit) Single-Family $1,116 $1,723 ($607)
Multi-Family $822 $1,348 ($526)

As the table indicates, all impact fees are under-recovering compared to the full cost. 4 Nexus Criteria
As discussed in the legal framework section, in order for an impact fee to be implemented it must meet all five of the nexus criteria as established per the Mitigation Fee Act. The following table outlines each criterion point, and how the proposed Parks and Recreation Impact fee meets the Mitigation Fee Act criteria.

Table 70: Parks and Recreation Impact Fees Nexus Criteria

Criteria Meet Don’t Meet
Purpose of Fee

The purpose of the fee would be to fund the development of new parks and recreation facilities and improving
existing playground areas.

Use of Fee Revenue

The City has capital improvement plans that outline the utilization of this fee revenue for current and future years to help ensure that there is appropriate expansion and
development of parks and recreation facilities and areas to meet current and future resident needs.

15 The current fee includes all three Parks and Recreat ion Impact Fees – Public Use, Parks – Land Improvements, and Parks – Improvements.

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Criteria Meet Don’t Meet
Benefit Relationship

The use of the impact fee revenue would be to develop new facilities or expand or improve existing facilities, which would be directly proportional to the increased wear and tear and use of parks and recreation facilities as there is new residential growth in the City. The increase in
residential population is related to the number of dwelling units and the impact fee would be applicable to dwelling units.

Impact Relationship

Based upon the current and proposed parks and recreation facility needs in the City, the addition of new residents would require the need for new and expanded facilities.

Proportionality

As the table demonstrates, the City is able to meet all five of the criteria necessary to impose a Parks and Recreation Development Impact Fee.
5 Comparative Survey
As part of this impact fee analysis, the project team conducted a comparative survey of surrounding jurisdictions who charge a Parks and Recreation Impact Fee. The following table compares the City’s current fee and full cost for Parks and Recreation to other surveyed jurisdictions in the region, which charge a parks and recreation impact fee:

Table 71: Parks and Recreation Impact Fee Comparative Survey

Jurisdiction Single-Family Multi-Family
Menifee – Current $1,116 $822
Menifee – Full Cost $1,723 $1,348
Corona $311 $218
Hemet $1,453 $1,247
Indio $4,227 $2,774
Lake Elsinore $545 $469
Murrieta $5,127 $3,582
Perris $8,348 $7,383
Temecula $4,426 $3,171

The fees charged by the surrounding jurisdictions vary quite dramatically from lows of $311 to a high of $8,348. Menifee’s current fee is on the lower end of the average for the surrounding jurisdictions, and its full cost fee is higher than Hemet’s but lower than Indio and Perris’ fees. It is important to note that many jurisd ictions may include land

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acquisition costs in their Parks Impact Fees, hence the high dollar value associated with those fees. The City of Menifee utilizes the Quimby Fee (not evaluated in this analysis) for the purposes of land acquisition.

Table 72: Comparative Survey Information

Jurisdiction Date of Original Nexus Last Fee Update
Eastvale 2012 2022
Hemet 2006 2021
Lake Elsinore 2016 2016
Murrieta N / A 2019
Perris 2006 2022
Temecula 2003 2022

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9. Transportation

The City of Menifee currently assesses a transportation impact fee on new residential and commercial development projects within the City. The impact fee accounts for transportation-related improvements – roadways, traffic signals, transportation master plans, etc. The following subsections discuss the growth assumptions and standards utilized, cost assumptions and components, impact fee calculation, ability to meet the nexus criteria, and a comparative survey of transportation impact fees. 1 Growth Projections
The Transportation Impact Fee is based upon the future demand on transportation infrastructure due to new residents and employees moving into the City. The future demand is based upon the projected growth for the City. The projected growth section of this report discusses the residential and employment growth anticipated. The residential and employment growth is converted into number of dwelling units or total KSF (Thousand Square Feet) based upon density factors. The following table shows the calculation for current and future projected growth:

Table 73: Projected Residential and Commercial Growth

Category
Avg
Density
Current Population
(2021)
Current
(2021)
Projected
Population
Projected
Growth (2045)
Single-Family 2.94 91,815 29,988 131,118 44,598
Multi-Family 2.24 11,802 5,059 16,854 7,524
Comm. / Retail 550 4,268 3,857,000 7,300 4,015,000
Office 200 8,827 1,126,000 5,840 1,168,000
Industrial 1,500 1,105 2,337,000 16,060 24,090,000

The current and projected growth calculations were multiplied against the average trip rate (based upon ITE Land Use Categories) to estimate the number of current and projected trips.

Table 74: Projected Residential and Commercial Growth

Category Trip Rate Current
(2021)
Current
Trips
Projected
Growth (2045)
Projected
Trips
Increase in
Trips
Single-Family 0.99 31,223 30,917 44,598 44,152 13,235
Multi-Family 0.50 5,269 2,634 7,524 3,762 1,128
Comm. / Retail 2.41 3,857,000 9,303 4,015,000 9,686 382 Office 1.15 1,126,000 1,295 1,168,000 1,343 48
Industrial 0.65 2,337,000 1,519 24,090,000 15,659 14,139 TOTAL 45,671 74,602 28,931

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Based upon the average trip rate, the expected growth the number of trips is 28,932.

However, to determine the proportion borne by new development, the 28,931 trips were divided by the total future trips (74,602) to arrive at 39% to represent the proportionate impact associated with new development.
2 Cost Components and Assumptions
The Transportation Impact Fee is used to fund transportation related improvements. City staff developed a comprehensive listing of transportation improvement projects that would benefit both existing and new development within the City. The detailed project listing is included as an appendix to this report. The following table lists by major project category, the total costs associated with the project:

Table 75: Transportation Improvement Costs

Category Total Project Cost
Signals $46,912,500
Traffic Project List $282,612,846
Intersection Realignment $5,000,000
Grade Separation $16,000,000
Bridge $15,000,000
Interchange $151,250,000
Nexus Analysis $48,000
TOTAL $516,823,346

The total cost of Transportation Improvement infrastructure costs is approximately $516 million. It is important to note that not all $516 million should be borne by new development as these proposed projects will also benefit existing residents.

In addition to the $516 million in costs, the other cost component to be considered is the administrative fee. For purposes of this study, the project team calculated the administrative fee based upon the total indirect costs allocated to all Impact Fee funds from the FY 2022 Citywide Cost Allocation Plan and the average of the revenue collected by impact fee funds over the last three years. The following table shows this calculation:

Table 76: Impact Fee – Admin Fee Calculation

Category Impact Fee Funds
Citywide Overhead $165,243
Impact Fee Revenue – 3 year average $5,877,779
ADMIN FEE RATE 2.80%

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3 Impact Fee Calculation
While the Transportation Impact Fee is based upon the total transportation improvements within the City, the full $516 million is not intended to be borne by new development. Therefore, the project team utilized the 39% growth projection, which correlates to overall projected growth in estimated number of trips, to determine the proportional amount associated with new development. The following table multiplies the total project cost by new growth proportional amount to determine the cost to be borne by new development:

Table 77: Transportation Impact Costs to be Borne by New Development

Category Total Project Cost New Growth New Development Cost Signals $46,912,500 39% $18,295,875
Traffic Project List $282,612,846 39% $110,219,010
Intersection Realignment $5,000,000 39% $1,950,000
Grade Separation $16,000,000 39% $6,240,000
Bridge $15,000,000 39% $5,850,000
Interchange $151,250,000 39% $58,987,500
Nexus Analysis $48,000 39% $18,720
TOTAL $516,823,346 $201,561,105

Of the $516 million, only $201.6 million is associated with new development. The total allocated costs to new development is then converted into a cost per trip by taking the total new development cost and dividing it by the projected number of trips. The following table shows the cost for new development, the total projected trips and the cost per trip:

Table 78: Transportation Cost Per Trip

Total Allocated Cost Projected Trips Cost Per Trip
$201,561,105 28,931 $6,967

The cost per trip is $6,967. The cost per trip is converted into the impact fee by multiplying it against the ITE established trip rate. The following table shows by land use type, the cost per trip, the trip rate, and the resulting impact fee:

Table 79: Transportation Impact Fee Calculation

Category Cost Per Trip Trip Rate Impact Fee
Residential
Single-Family $6,967 0.99 $6,897 per dwelling unit
Multi-Family $6,967 0.5 $3,484 per dwelling unit
Non-Residential
Commercial / Retail $6,967 2.41 $16,807 per 1,000 sq. ft.

Office $6,967 1.15 $8,012 per 1,000 sq. ft.

Industrial $6,967 0.65 $4,529 per 1,000 sq. ft.

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As the ITE trip rates are based upon 1,000 sq. ft. for commercial / non-residential, the fees were calculated on a per 1,000 sq. ft. basis. However, for simplicity purposes, the fees were converted to per sq. ft. by taking the dollar amount and dividing it by 1,000 (e.g., $16,807 divided by 1,000 = $16.8116). The admin fee of 2.80% was then multiplied by the Transportation Impact Fee (TIF) to determine the administrative fee component. The administrative fee component was then added to the baseline TIF to arrive at the full cost TIF by category. The following table shows by category, the TIF, the admin fee, and the resulting full cost TIF:

Table 80: Transportation Impact Fee Calculation Including Administrative Fee

Category Impact Fee Admin Fee Total Impact Fee
Residential (per dwelling unit)
Single-Family $6,897 $193 $7,090 per dwelling unit
Multi-Family $3,484 $98 $3,582 per dwelling unit
Commercial / Non-Residential (per sq. ft.)
Retail $16.81 $0.47 $17.28 per sq. ft.

Commercial / Office $8.01 $0.22 $8.23 per sq. ft.

Industrial $4.53 $0.13 $4.66 per sq. ft.

The addition of the administrative fee captures the full cost associated with the proportionate impact of future development. The following table compares the current Traffic Impact Fee to the full cost impact fee, and the associated surplus / (deficit).

Table 81: Transportation Impact Fee – Current vs. Full Cost

Category Current Fee Full Cost Fee Surplus / (Deficit)
Residential (per dwelling unit)
Single-Family $5,060 $7,090 ($2,030)
Multi-Family $3,534 $3,582 ($48)
Commercial / Non-Residential (per square foot)
Retail $8.38 $17.28 ($8.89)
Commercial / Office $6.44 $8.24 ($1.79)
Industrial $4.27 $4.66 ($0.39)

As the table indicates, all current impact fees are under-recovering compared to the full cost. The increase in the impact fees is due to increased transportation projects and needs due to the anticipated growth within the City.
4 Nexus Criteria
As discussed in the legal framework section, in order for an impact fee to be implemented it must meet all five of the nexus criteria as established per the Mitigation Fee Act. The

16 It equals $16.807, but it was rounded to two decimals to $16.81.

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following table outlines each criterion point, and how the proposed Transportation Impact fee meets the Mitigation Fee Act criteria.

Table 82: Transportation Impact Fees Nexus Criteria

Criteria Meet Don’t Meet
Purpose of Fee

The fee would be used to fund the development of new
transportation improvement measures and improve
existing transportation-related needs.

Use of Fee Revenue

The City has capital improvement plans and transportation specific plans that outline the utilization of this fee revenue for current and future years to help ensure that there is appropriate expansion and development of transportation- related measures to meet current and future resident and employee needs.

Benefit Relationship

The use of the impact fee revenue would be to enhance
existing roadways or add new traffic measures, which
would be directly proportional to the increased wear and tear and use of City infrastructure as there is new
residential and commercial growth in the City. The increase in residential population is related to the number of
dwelling units and the impact fee would be applicable to dwelling units. The increase in employment is related to non-residential space and is applicable to square footage.

Impact Relationship

Based upon the current transportation needs in the City, the addition of new residents and employees would require the need for upgraded roadways and facilities.

Proportionality

The proposed impact fee would be a flat fee per dwelling unit depending upon the density of the housing units to capture the residential impacts, as the primary mechanism for addition of residential population to the City is through increased dwelling units. For employees the fee is based upon non-residential square footage as that is the primary mechanism associated with increases in employment
within the City.

As the table demonstrates, the City is able to meet all five of the criteria necessary to impose a Transportation Development Impact Fee.
5 Comparative Survey
As part of this impact fee analysis, the project team conducted a comparative survey of surrounding jurisdictions who charge a Transportation Impact Fee. The following table compares the City’s current fee and full cost to other surveyed jurisdictions in the region, which charge a transportation impact fee:

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Table 83: Transportation Impact Fee Comparative Survey

Residential Non-Residential
Jurisdiction Single-
Family
Multi-
Family
Retail –
Per Sq. Ft
Office –
Per Sq. Ft
Industrial –
Per Sq. Ft
Menifee – Current $5,060 $3,534 $8.38 $6.44 $4.27
Menifee – Full Cost $7,090 $3,582 $17.28 $8.24 $4.66
Eastvale $693 $487 $1.685 $0.373 $0.352
Indio $1,636 $1,005 $4.798 $1.906 $1.254
Lake Elsinore $1,369 $959 $3.84 $1.45 $0.81
Murietta $6,532 $4,539 $9.09 $6.93 $0.99
Perris $18,096 $12,688 $23.40 $12.65 $12.81
Temecula $3,062 $2,143 $11.71 $7.02 $4.21

The majority of the surveyed jurisdictions charge fees similar to Menifee, per dwelling unit for residential and per square foot for non-residential. Among the surveyed jurisdictions Menifee’s current fee is higher than all other surveyed jurisdictions wit h the exception of Murietta and Perris.

Table 84: Comparative Survey Information

Jurisdiction Date of Original Nexus Last Fee Update
Eastvale 2012 2022
Hemet 2006 2021
Lake Elsinore 2016 2016
Murrieta N / A 2019
Perris 2006 2022
Temecula 2003 2022

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10. Storm Drain

The City of Menifee currently assesses two different Storm Drain Impact Fees depending upon the region of the City. The City recently went through a Master Drainage Plan, and the plan identified sub-basins and watersheds for the City. It was determined through this study, that the information from the Master Drainage Plan should be utilized as the basis of assessing the fee, and that the most accurate impact would be based upon the sub- basin and watershed. Appendix A of this report shows the Map from the Master Drainage Plan. The impact fee accounts for upgrades and acquisition of new storm drain facilities.

The following subsections discuss the growth assumptions and standards utilized, cost assumptions and components, impact fee calculation, ability to meet the nexus criteria, and a comparative survey of Storm Drain impact fees.
1 Growth Projections
The project team worked with staff in Public Works and the City’s GIS staff to determine the current population by sub-basin and watershed, and the projected population.

Information from the City’s current land use element showing the built-out projections for the City were used as the baseline for current and future growth. The projections were based upon acreage of development, which was converted into dwelling units or square feet based upon the City’s current density for those land use types. The dwelling units and square feet were converted into equivalent dwelling units (EDUs) based upon the impervious coefficient per acre. The following table shows the EDU Demand Factor Calculation:

Table 85: EDU Demand Factor Calculation

Major Land
Use
Impervious
Coeff. Per Acre17
DU or KSF
per acre18
Impervious Factor
per DU or KSF19
EDU Demand
Factor20
Single-Family 0.50 4.64 0.11 1.00
Multi-Family 0.65 16.67 0.04 0.36
Retail 0.90 9.99 0.09 0.84
Office 0.90 15.04 0.06 0.56
Industrial 0.90 17.67 0.05 0.47

17 The same coefficient from the previous study was utilized as it was determined to be appropriate per the most recent Master Drainage Plan.
18 This information comes from the City’s Land Use Element and incorporates the averages across all the different types of potential categories within that major land use category.
19 This is calculated by taking the Impervious Coefficient and dividing it by the DU or KSF per acre. For example, 0.50 divided by 4.64 = 0.11.
20 This is used to determine proportionality between Single -Family and all other land use categories.

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The EDU Demand factor is used to calculate the current and built-out projected growth by major land use type. The following table shows the calculation for current and future projected growth based upon Sub-Basin and Watershed:

Table 86: Projected Residential and Commercial Growth – by Sub-Basin and Watershed and Land Use

Sub-Basin Land Use Type Current EDU Growth Built-out EDU Growth Difference A_A Retail 297.73 361.01 63.28 A_A Single Family 806.92 1,092.52 285.60 A_B Multi-Family 9.65 86.06 76.41 A_B Office 29.33 34.61 5.28 A_B Retail 221.19 491.87 270.68 A_B Single Family 1,525.14 3,016.88 1,491.74 A_C Multi-Family 45.07 242.78 197.71 A_C Office 136.96 620.65 483.68 A_C Retail 206.09 933.91 727.82 A_C Single Family 1,398.26 1,499.95 101.69 B_A Multi-Family 30.30 304.19 273.90 B_A Single Family 2,729.08 3,613.86 884.79 B_A Industrial 6,428.81 24,187.14 17,758.33 B_B Multi-Family 56.20 186.86 130.66 B_B Single Family 1,635.26 1,987.95 352.69 F_A Multi-Family 203.01 428.00 224.99 F_A Office 633.71 1,273.63 639.93 F_A Retail 1,580.87 2,688.12 1,107.25 F_A Single Family 2,375.99 3,384.67 1,008.69 F_C Multi-Family - 76.36 76.36 F_C Single Family 1,499.02 1,643.06 144.04 F_E Multi-Family 668.22 723.46 55.23 F_E Office 652.21 889.98 237.77 F_E Retail 1,200.02 1,797.81 597.79 F_E Single Family 1,760.63 2,172.42 411.78 Grand Total

26,129.66 53,737.76 27,608.10

As the table indicates overall there is expected to be a growth of approximately 27,608 EDUs between current and built-out Menifee by Sub-Basin and Watershed. This represents a 106% increase.

However, as the Master Drainage Plan is specific to the sub-basin and watershed, the project team calculated the specific growth percentage for each sub-basin and watershed. The following table shows this calculation:

Table 87: Projected Residential and Commercial Growth – by Sub-Basin and Watershed and Land Use

Sub-Basin Current EDU Growth Built-out EDU Growth Difference % Growth A_A 1,104.65 1,453.53 348.88 32% A_B 1,785.31 3,629.42 1,844.11 103% A_C 1,786.38 3,297.28 1,510.90 85% B_A 9,188.18 28,105.20 18,917.02 206%

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Sub-Basin Current EDU Growth Built-out EDU Growth Difference % Growth B_B 1,691.47 2,174.81 483.35 29% F_A 4,793.57 7,774.42 2,980.85 62% F_C 1,499.02 1,719.42 220.40 15% F_E 4,281.08 5,583.66 1,302.58 30%

Based upon the consolidated sub-basin and watershed, the projected growth varies from a low of 10% for Sub-Basin A and Watershed A_C to a high of 206% for B_A. These specific growth percentages were utilized to attribute the cost to new development. 2 Cost Components and Assumptions
The Storm Drain Impact Fee is used to fund storm drain facility improvements. The Master Drainage Plan identified the top 25 projects for the City for storm drain facilities at the Sub-Basin and Watershed level. The detail of these projects has been provided as an appendix. The following table lists by Sub-Basin, the total project cost:

Table 88: Storm Drain Improvement Costs

Sub-Basin and Watershed Total Project Cost
A_A $10,600,000
A_B $466,000
A_C $8,116,000
B_A $13,300,000
B_B $3,090,000
F_A $650,000
F_C $2,900,000
F_E $2,000,000
TOTAL $41,122,000

The total cost of Storm Drain Improvement infrastructure costs is approximately $ 41.1 million. It is important to note that not all $ 41.1 million should be borne by new development as these proposed projects will also benefit existing residents.

In addition to the $41.1 million in costs, the other cost component to be considered is the administrative fee. For purposes of this study, the project team calculated the administrative fee based upon the total indirect costs allocated to all Impact Fee funds from the FY 2022 Citywide Cost Allocation Plan and the average of the revenue collected by impact fee funds over the last three years. The following table shows this calculation:

Table 89: Impact Fee – Admin Fee Calculation

Category Impact Fee Funds
Citywide Overhead $165,243
Impact Fee Revenue – 3 year average $5,877,779
ADMIN FEE RATE 2.80%

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Therefore, the project team utilized the specific growth projection percentages for each sub-basin and watershed, to determine the proportional amount associated with new development. The following table multiplies the total project cost by new growth proportional amount to determine the cost to be borne by new development:

Table 90: Transportation Impact Costs to be Borne by New Development

Sub-Basin / Watershed Total Project Cost New Growth New Development Cost A_A $10,600,000 32% $3,392,000
A_B $466,000 100%21 $466,000
A_C $8,116,000 10% $6,898,600
B_A $13,300,000 100%22 $13,300,000
B_B $3,090,000 29% $896,100
F_A $650,000 48% $403,000
F_C $2,900,000 15% $435,000
F_E $2,000,000 36% $600,000
TOTAL $41,122,000 $26,390,700

Of the $41.1 million, only $ 26.4 million is associated with new development. The total allocated costs to new development is then converted into a cost per EDU by taking the total new development cost and dividing it by the projected number of EDU’s expected to increase for that sub-basin and watershed. The following table shows by sub-basin and watershed the cost for new development, the total projected EDUs and the cost per trip:

Table 91: Transportation Cost Per Trip

Sub-Basin / Watershed Total Allocated Cost Projected EDU’s Cost per EDU A_A $3,392,000 348.88 $9,723
A_B $466,000 1,844.11 $253
A_C $6,898,600 1,510.90 $4,566
B_A $13,300,000 18,917.02 $703
B_B $896,100 483.35 $1,854
F_A $403,000 2,980.85 $135
F_C $435,000 220.40 $1,974
F_E $600,000 1,302.58 $461

21 It is anticipated that there is 103% growth in this sub -basin / watershed, so all of the need for that sub -basin / watershed would be due to the new development in that area.
22 It is anticipated that there is 206% growth in this sub -basin / watershed, so all of the need for that sub -basin / watershed would be due to the new development in that area.

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As the table indicates the cost per EDU varies from a low of $ 135 for Sub-Basin and Watershed F_A to a high of $9,723 for Sub-Basin and Watershed A_A. The cost per EDU is then multiplied by the EDU Demand Factor for each land use type to determine the cost per dwelling unit or cost per 1,000 square feet. The following table shows by sub-basin and watershed, land use type, the cost per EDU, the EDU Demand factor, and the resulting impact fee:

Table 92: Storm Drain Impact Fee Calculation

Category Cost Per EDU EDU Factor Impact Fee
A_A
Single-Family $9,723 1.00 $9,723 per dwelling unit
Multi-Family $9,723 0.36 $3,522 per dwelling unit
Comm. / Retail $9,723 0.84 $8,134 per 1,000 sq. ft.

A_B
Single-Family $253 1.00 $253 per dwelling unit
Multi-Family $253 0.36 $92 per dwelling unit
Comm. / Retail $253 0.84 $212 per 1,000 sq. ft.

Office $253 0.56 $141 per 1,000 sq. ft.

A_C
Single-Family $4,566 1.00 $4,566 per dwelling unit
Multi-Family $4,566 0.36 $1,654 per dwelling unit
Comm. / Retail $4,566 0.84 $3,820 per 1,000 sq. ft.

Office $4,566 0.56 $2,539 per 1,000 sq. ft.

B_A
Single-Family $703 1.00 $703 per dwelling unit
Multi-Family $703 0.36 $255 per dwelling unit
Industrial $703 0.47 $333 per 1,000 sq. ft.

B_B
Single-Family $1,854 1.00 $1,854 per dwelling unit
Multi-Family $1,854 0.36 $672 per dwelling unit
F_A
Single-Family $135 1.00 $135 per dwelling unit
Multi-Family $135 0.36 $49 per dwelling unit
Comm. / Retail $135 0.84 $113 per 1,000 sq. ft.

Office $135 0.56 $75 per 1,000 sq. ft.

F_C
Single-Family $1,974 1.00 $1,974 per dwelling unit
Multi-Family $1,974 0.36 $715 per dwelling unit
F_E
Single-Family $461 1.00 $461 per dwelling unit
Multi-Family $461 0.36 $167 per dwelling unit
Comm. / Retail $461 0.84 $386 per 1,000 sq. ft.

Office $461 0.56 $256 per 1,000 sq. ft.

As the EDU demand factor is based upon 1,000 sq. ft. for commercial / non-residential, the fees were calculated on a per 1,000 sq. ft. basis. The admin fee of 2.80% was then multiplied by the Storm Drain Impact Fee to determine the administrative fee component.

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The administrative fee component was then added to the baseline Storm Drain Impact Fee. The following table shows by sub-basin and watershed, land use category, the Storm Drain Impact Fee, the admin fee, and the resulting full cost Storm Drain Fee:

Table 93: Storm Drain Impact Fee Calculation Including Administrative Fee

Category Impact Fee Admin Fee Full Cost Impact Fee
A_A
Single-Family $9,723 $272 $9,995 per dwelling unit
Multi-Family $3,522 $99 $3,621 per dwelling unit
Retail $8.13 $0.23 $8.36 per sq. ft.

A_B
Single-Family $253 $7 $260 per dwelling unit
Multi-Family $92 $3 $95 per dwelling unit
Retail $0.21 $0.01 $0.22 per sq. ft.

Commercial / Office $0.14 $0.00 $0.14 per sq. ft.

A_C
Single-Family $4,566 $128 $4,694 per dwelling unit
Multi-Family $1,654 $46 $1,700 per dwelling unit
Retail $3.82 $0.11 $3.93 per sq. ft.

Commercial / Office $2.54 $0.07 $2.61 per sq. ft.

B_A
Single-Family $703 $20 $723 per dwelling unit
Multi-Family $255 $7 $262 per dwelling unit
Industrial $0.33 $0.01 $0.34 per sq. ft.

B_B
Single-Family $1,854 $52 $1,906 per dwelling unit
Multi-Family $672 $19 $691 per dwelling unit
F_A
Single-Family $135 $4 $139 per dwelling unit
Multi-Family $49 $1 $50 per dwelling unit
Retail $0.11 $0.00 $0.11 per sq. ft.

Commercial / Office $0.08 $0.00 $0.08 per sq. ft.

F_C
Single-Family $1,974 $55 $2,029 per dwelling unit
Multi-Family $715 $20 $735 per dwelling unit
F_E
Single-Family $461 $13 $474 per dwelling unit
Multi-Family $167 $5 $172 per dwelling unit
Retail $0.39 $0.01 $0.40 per sq. ft.

Commercial / Office $0.26 $0.01 $0.27 per sq. ft.

The addition of the administrative fee captures the full cost associated with the proportionate impact of future development. Due to the nature of the modification of the proposed Storm Drain Impact Fee to be sub-basin and watershed based, there is no ability to compare it against to the City’s current Storm Drain Impact Fee. In some instances the fee will decrease, for example, the City’s current fee in the MDP South Benefit Area is $2,316 per Single-Family home. This current fee is lower than the fees in Sub-basin and

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Watershed A_A, A_C, and B_A, but higher than the fees in the other sub-basins and watershed such as Sub-Basin A_B.

The proposed modification to the Storm Drain fee is tied to the City’s Master Drainage Plan and ensures that new development only within that area is contributing towards the storm drain impact to that region of the City.
4 Nexus Criteria
As discussed in the legal framework section, in order for an impact fee to be implemented it must meet all five of the nexus criteria as established per the Mitigation Fee Act. The following table outlines each criterion point, and how the proposed Storm Drain Impact fee meets the Mitigation Fee Act criteria.

Table 94: Storm Drain Impact Fees Nexus Criteria

Criteria Meet Don’t Meet
Purpose of Fee

The fee would be used to fund improvements identified in the Storm Drain Master Drainage Plan for each sub-basin and watershed.

Use of Fee Revenue

The City has a Master Drainage Plan that outlines the
utilization of this fee revenue for future years to help ensure that there is appropriate expansion and development of
storm drain-related facilities to meet current and future resident and employee needs.

Benefit Relationship

The use of the impact fee revenue would be to enhance
existing facilities, which would be directly proportional to the increased wear and tear and use of City infrastructure as there is new residential and commercial growth in the City. The increase in residential population is related to the number of dwelling units and the impact fee would be
applicable to dwelling units. The increase in employment is related to non-residential space and is applicable to square footage.

Impact Relationship

Based upon the current storm drain needs in the City, the addition of new residents and employees would require the need for upgraded use of storm drain facilities.

Proportionality

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As the table demonstrates, the City is able to meet all five of the criteria necessary to impose a Storm Drain Impact Fee.
5 Comparative Survey
As part of this impact fee analysis, the project team conducted a comparative survey of surrounding jurisdictions who charge a Storm Drain Impact Fee. Due to the nature of how storm drainage fees are assessed in these jurisdictions, it is difficult to provide an appropriate comparison, as many jurisdictions are also regional specific or calculated based upon the specific development type. Therefore, no comparable comparative information could be provided.

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Appendix: Storm Drain Projects & Map

As discussed in the Storm Drain Impact Fee Chapter, this appendix lists out the detailed projects and cost assumptions utilized for the City of Menifee to calculate its Storm Drain Impact Fee.

Table 95: Storm Drain Project Listing

Basin ID Sub-Basin Project Name Project Type Cost23
A A_A Murrieta and Craig & Craig and
Hawthorn
CIP $10,600,000
A A_B Murrietta and Garbani CIP $466,000
A A_C Lazy Creek and Murietta CIP $1,516,000
A A_C Dorval and Gifhorn CIP $2,200,000
A A_C Lazy Creek and Sun Country CIP $4,400,000
B B_A Paloma Valley Channel Upstream
Improvements 1
Land
Development
$4,200,000
B B_A Paloma Valley Channel Upstream
Improvements 2
Land
Development
$4,600,000
B B_A Paloma Valley Channel Upstream
Improvements 3
Land
Development
$1,200,000
B B_A Paloma Valley Channel Upstream
Improvements 4
Land
Development
$1,900,000
B B_A Paloma Valley Channel Upstream
Improvements 5
Land
Development
$1,400,000
B B_B La Piedra and Spring Deep CIP $2,100,000
B B_B Holland and Bell Mountain CIP $990,000
F F_A Chambers and Murrieta Land
Development
$650,000
F F_C Potomac and Piping Rock CIP $2,900,000
F F_E McCall and Encanto CIP $2,000,000

The following pages shows from the Master Drainage Plan, the watershed and sub-basins for the City of Menifee.

23 This cost does not match the estimated cost in the master drainage plan as the City worked with the Master Drainage Consultant to modify estimates to reflect current cost assumptions and contingencies.

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Figure 3-2: Major Subwatershed
Drainage Areas

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Appendix: Transportation Project Listings

As discussed in the Transportation Impact Fee Chapter, this appendix lists out the detailed projects and cost assumptions utilized for the City of Menifee to calculate its Transportation Impact Fee.

Table 96: Traffic Signal Project Listing

Street Name Classification Street Name Classification Estimated Cost Antelope Road Secondary Mclaughlin Road Collector $450,000 Antelope Road Major Watson Road Secondary $450,000
Antelope Road Major Wickerd Road Collector $450,000
Antelope Road Major Albion Lane Collector $450,000
Antelope Road Major Chambers Ave Secondary $450,000
Bradley Road Major Garbani Road Major $450,000
Bradley Road Major Rim Creek Path Collector $450,000
Bradley Road Secondary Lazy Creek Road Collector $450,000 Bradley Road Secondary Rio Vista Drive Collector $450,000 Bradley Road Secondary Pebble Beach Drive Collector $450,000 Bradley Road Secondary Cherry Hills Blvd Secondary $450,000 Briggs Road Major Watson Road Secondary $450,000
Briggs Road Major Simpson Road Secondary $450,000
Briggs Road Major Tres Lagos Drive Secondary $450,000
Briggs Road Major Old Newport Road Collector $450,000
Briggs Road Major Grand Ave Collector $450,000
Briggs Road Major Mclaughlin Road Collector $450,000
Bundy Canyon Road Urban Arterial Murrieta Road Arterial $450,000 Bundy Canyon Road Urban Arterial Sunset Ave $450,000
Chambers Ave Secondary Gross Pointe Drive Collector $450,000 Cherry Hills Blvd Secondary Pebble Beach Drive Collector $450,000 Encanto Drive Major Chambers Ave Secondary $450,000
Encanto Drive Major Rouse Road Secondary $450,000
Ethanac Road Expressway Sherman Road Major $450,000
Ethanac Road Expressway Malaga Road Collector $450,000
Ethanac Road Expressway Murrieta Road Arterial $450,000 Ethanac Road Expressway Byers Road Collector $450,000
Ethanac Road Expressway Evans Road Collector $450,000
Evans Road Secondary Craig Ave Collector $450,000
Evans Road Secondary Rim Creek Path Collector $450,000
Garbani Road Major Haun Road Major $450,000
Garbani Road Major Palomar Road Collector $450,000
Garbani Road Major Briggs Road Major $450,000
Garbani Road Major Sherman Road Collector $450,000
Garbani Road Collector Evans Road Secondary $450,000
Goetz Road Arterial Mclaughlin Road Secondary $450,000
Goetz Road Major Ave Roble Collector $450,000
Goetz Road Major Vista Way Collector $450,000
Goetz Road Major Unnamed Road Collector $450,000
Goetz Road Major Juanita Drive Collector $450,000
Goetz Road Major Paseo La Plaza Collector $450,000

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Street Name Classification Street Name Classification Estimated Cost Goetz Road Major Kabian Park Collector $450,000
Haun Road Major Wickerd Road Collector $450,000
Haun Road Major Craig Ave Collector $450,000
Holland Road Major Evans Road Secondary $450,000
Holland Road Major Pleasant Valley
Blvd
Collector $450,000
Holland Road Major Sherman Road Collector $450,000
Holland Road Major Palomar Road Collector $450,000
Holland Road Major Briggs Road Major $450,000
Honeyrun Road Secondary La Ladera Road Collector $450,000 Keller Road Major Zeiders Road Major $450,000
Mapes Road Major Trumble Road Major $112,500
Mapes Road Major Antelope Road Major $450,000
Mapes Road Major Briggs Road Major $450,000
Mapes Road Major Sherman Road Collector $450,000
Mapes Road Major Palomar Road Collector $450,000
Mapes Road Major Malaga Road Collector $450,000
Matthews Road Major Antelope Road Major $450,000
McCall Blvd Urban Arterial Antelope Road Major $450,000 McCall Blvd Major Gross Pointe Drive Collector $450,000 McCall Blvd Major Pebble Beach Drive Collector $450,000 Mclaughlin Road Secondary Byers Road Collector $450,000 Mclaughlin Road Secondary Murrieta Road Secondary $450,000 Mclaughlin Road Secondary Evans Road Collector $450,000 Mclaughlin Road Secondary Barnett Road Secondary $450,000 Menifee Road Urban Arterial Mclaughlin Road Collector $450,000 Menifee Road Urban Arterial Watson Road Secondary $450,000 Menifee Road Urban Arterial Mapes Road Major $450,000
Menifee Road Arterial Wickerd Road Collector $450,000
Menifee Road Arterial Craig Ave Collector $450,000
Murrieta Road Arterial Lazy Creek Road Collector $450,000 Murrieta Road Secondary Chambers Ave Secondary $450,000 Murrieta Road Arterial La Piedra Road Secondary $450,000 Murrieta Road Arterial Holland Road Major $450,000
Murrieta Road Secondary Thornton Ave Collector $450,000 Newport Road Urban Arterial Briggs Road Major $450,000
Rouse Road Major Presley Street Collector $450,000
Rouse Road Major Barnett Road Secondary $450,000
Rouse Road Major Palomar Road Collector $450,000
Rouse Road Major Byers Road Collector $450,000
Rouse Road Secondary Trumble Road Collector $450,000
Scott Road Urban Arterial Howard Way Collector $450,000 Scott Road Urban Arterial Haleblain Road Collector $450,000 Scott Road Urban Arterial Palomar Road Collector $450,000 Scott Road Urban Arterial Meritt Road Collector $450,000 Sherman Road Major Chambers Ave Secondary $450,000
Sherman Road Major Mclaughlin Road Collector $450,000
Sherman Road Major Rouse Road Secondary $450,000
SR 74 Major Watson Road Collector $450,000
Sun City Blvd Secondary Chambers Ave Secondary $450,000 Sun City Blvd Secondary Presley Street Collector $450,000 Tres Lagos Drive Secondary Laguna Vista Drive Collector $450,000

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Street Name Classification Street Name Classification Estimated Cost Valley Blvd Arterial Honeyrun Road Secondary $450,000
Valley Blvd Arterial Ridgemoor Road Collector $450,000
Valley Blvd Arterial Sun City Blvd Collector $450,000
Valley Blvd Arterial Mccall Blvd Major $450,000
Valley Blvd Arterial Chambers Ave Secondary $450,000
Valley Blvd Arterial Rouse Road Major $450,000
Valley Blvd Arterial Goetz Road Major $450,000
Valley Blvd Arterial Murrieta Road Arterial $450,000
Valley Blvd Arterial Cherry Hills Blvd Collector $450,000 Valley Blvd Arterial Thorton Ave Collector $450,000
Watson Road Secondary Palomar Road Collector $450,000
Watson Road Secondary Malaga Road Collector $450,000
Watson Road Secondary Sherman Road Collector $450,000
TOTAL $46,912,500

In addition to the Traffic Signal Listing, this appendix also includes the detailed traffic project list. The following table shows the segment, the from: to, the segment length, the curb to curb length, and the total project cost included 24:

Table 97: Transportation Project Listing

Segment From: To
Segment
Length (FT)
Curb
(FT) Project Cost
Antelope Road Craig Ave to Scott Rd 6,600 76 $9,924,149 Antelope Road Mapes Rd to Watson Rd 2,680 50 $3,073,747 Antelope Road Ethanac Rd to McLaughlin Rd 2,592 32 $1,713,581 Antelope Road McLaughlin Rd to Rouse Rd 2,900 72 $4,131,105 Antelope Road Rouse Rd to McCall Blvd 4,200 76 $6,315,368 Antelope Road Aldergate Dr to Palm Villa Dr 2,200 14 $715,669 Antelope Road La Piedra Rd to Albion Ln 1,712 5 $360,964 Antelope Road Holland Rd to Craig Ave 2,627 12 $1,118,033 Bamett Road Ethanac Rd to Patricia Ln 625 44 $544,087
Bamett Road Patricia Ln to McLaughlin Rd 1,939 72 $2,762,142 Bamett Road McLaughlin Rd to Plum Dr 1,370 43 $1,304,882 Bamett Road Plum Dr to Phyllis Rd 740 41 $666,136
Bamett Road Phyllis Rd to Rouse Rd 567 12 $173,586
Bradley Road Rio Vista Dr to Park Ave 1,258 8 $279,089 Bradley Road Park Ave to Newport Rd 1,006 28 $621,256
Bradley Road Holland Rd to Coroson Ave 1,324 49 $641,785 Bradley Road Coroson Ave to Craig Ave 1,270 40 $1,111,686 Bradley Road Craig Ave to Tupelo Rd 1,343 56 $1,549,463 Bradley Road Tupelo Rd to Garbani Rd 698 76 $1,049,554 Briggs Road Mapes Rd to Alicante Dr 1,300 23 $651,074
Briggs Road Alicante Dr to Watson Rd 1,325 41 $1,088,296 Briggs Road Watson Rd to School South 1,415 21 $587,911 Briggs Road School South to Hwy 74 1,215 42 $1,009,628 Briggs Road Hwy 74 to McLaughlin Rd 1,215 22 $528,853
Briggs Road McLaughlin to Meadow Oaks St 1,825 76 $2,744,178

24 The total project cost is inclusive of right -of-way costs, construction costs, design, project management, and construction management.

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Segment From: To
Segment
Length (FT)
Curb
(FT) Project Cost
Briggs Road Meadow Oaks St to Matthews Rd 3,345 43 $2,845,773 Briggs Road Simpson Rd to N. Olive Ave 2,142 76 $3,220,837 Briggs Road N. Olive Ave to S. Olive Ave 572 76 $860,093 Briggs Road S. Olive Ave to Domenigoni Pkwy 2,357 76 $3,544,124 Briggs Road Domenigoni Pkwy to Angler Ln 2,080 76 $3,127,611 Briggs Road Angler Ln to Old Newport Rd 1,314 52 $1,351,869 Briggs Road Scott Rd to Golden J. Ln 2,643 52 $2,783,027 Byers Road Ethanac Rd to Resue Rd 5,368 44 $4,673,055
Chambers Avenue Valley Bl to Connie Way 750 8 $156,853 Chambers Avenue Connie Way to Munieta Or 1,404 44 $1,257,964 Chambers Avenue I215 to School 1,525 72 $2,172,391
Chambers Avenue School to Sherman Rd 1,035 34 $696,234 Chambers Avenue Sherman Rd to Chatham Ln 1,968 40 $1,582,521 Chambers Avenue Chatham Ln to Antelope Rd 646 72 $920,239 Craig Ave Evans Rd to Bradley Rd 2,639 12 $626,551
Craig Ave Bradley Rd to Linda Lee Dr 2,639 44 $2,297,353 Craig Ave Linda Lee Dr lo Pleasant Valley Rd 745 44 $648,552 Craig Ave Pleasant Valley Rd to Haun Rd 2,316 44 $2,016,169 Encanto Drive Mccall to Mclaughlin $3,688,410
Evans Road Ethanac Rd to Mclaughlin Rd 2,648 44 $2,305,188 Evans Road McLaughlin Rd to Nova Ln 651 12 $154,560
Evans Road Now ln to Rouse Rd 1,930 44 $1,680,141
Evans Road La Piedra Rd to Holland Rd 2,373 72 $3,380,384 Evans Road Holland Rd to Craig Ave 2,610 39 $2,027,200 Evans Road Garbani Rd to Wickerd Rd 2,680 44 $2,333,046 Garbani Rd School East Ori\eWay to Evans Rd 1,136 20 $449,515 Garbani Rd Daniel Rd to Country Haven Ln 1,799 8 $284,746 Garbani Rd Country Haven ln to Bradley Rd 670 44 $583,261 Garbani Rd Menifee Rd to Briggs Rd 5,267 52 $5,633,090 Garbani Road 1-215 to Menifee 6,013 38 $3,570,219
Garbani Road 1-215 to Bradley 7,473 38 $4,437,094
Goetz Rd Ethanac Rd to Goldenrod A 2,667 30 $1,677,972 Haun Road Holland Rd to Scott Rd $8,031,604
Haun Road La Piedra Rd to Holland Rd 2,617 26 $1,346,210 Haun Road Scott Rd to Shopping Center 1,161 7 $267,084 Haun Road Shopping Center to Annie Cir 2,711 76 $4,166,055 Haun Road Annie Cir to Keller Rd 1,394 44 $1,316,359
Heritage Lake Drive Palomar St to Menifee Rd 2,664 76 $4,005,747 Holland Road Anna ln to Murrieta Rd 2,942 52 $3,565,426 Holland Road Hanover Ln to Palomar Rd 1,336 36 $951,579 Holland Road Southshore Dr to Briggs Rd 2,664 40 $2,108,288 Howartl Way Wickerd Rd lo Scott Rd 2,652 44 $2,740,320 Howard Way Scott Rd to Ciccotti St 2,641 44 $2,406,657 Keller Road Zeiders Rd 1o 1215 1,288 44 $1,121,255
La Piedra Rd Stem Or to Sherman Rd 1,340 72 $1,908,855 Leon Road Scott Rd to Keller Rd 5,287 46 $5,188,218
Lindenberger Road Camino De Los Gaballos to Obsidian 2,633 28 $1,458,628 Lindenberger Road Obsidian Ct to Scott Rd 2,072 11 $482,598 Lindenberger Road Chaparral Or to Cresta Dr 2,343 31 $1,645,620 Lindenberger Road Cresta Dr to Silver Summit Rd 353 8 $55,873 Lindenberger Road Silwr Summit Rd to Trailhead Or 1,674 38 $1,258,563

DRAFT
A-109

DRAFT Development Impact Fee Study MENIFEE, CA

Matrix Consulting Group 70

Segment From: To
Segment
Length (FT)
Curb
(FT) Project Cost
Lindenberger Road Trailhead Or to Simpson Rd 600 2 $23,742 Malaga Road Mapes Rd to Citation Ave 2 44 $1,758
Malaga Road Citation Ave to Varela Ln 1,970 44 $1,714,963 Malaga Road Varela Ln to Sr 74 1,339 44 $1,165,652
Mapes Road Trumble Rd to Shem,an Rd 1,310 26 $860,459
Mapes Road Shem,an Rd to Dawson Rd 1,305 28 $862,355
Mapes Road Davidson Rd to Menifee Rd 6,680 26 $4,183,665 Mapes Road Menifee Rd to Briggs Rd 5,358 26 $2,956,075 McCall Blvd Valley Blvd to Radford Or 825 44 $823,088 McLaughlin Rd Goetz Rd to Byers Rd 2,520 72 $3,589,788 McLaughlin Rd Byers Rd to Murrieta Rd 2,600 72 $3,716,972 McLaughlin Rd Murrieta Rd to Hull Rd 1,308 40 $1,041,825 McLaughlin Rd Hull Rd to Evans Rd 1,326 39 $1,023,161
McLaughlin Rd Evans Rd to Barnett Rd 1,330 72 $1,894,610 McLaughlin Rd Encanto Dr to Alta Ave 736 11 $160,179
McLaughlin Rd Alta Ave to Trumble Rd 510 11 $110,994
McLaughlin Rd Trumble Rd to Sherman Rd 1,330 44 $1,157,817 McLaughlin Rd Sherman Rd to Antelope Rd 2,596 44 $2,259,920 McLaughlin Rd Antelope Rd to Matthews Rd 2,728 44 $2,374,831 McLaughlin Rd Matthews Rd to Menifee Rd 1,255 44 $1,139,671 McLaughlin Rd Menifee Rd to Briggs Rd 5,334 44 $4,643,457 Menifee Rd Mapes Rd to Watson Rd 2,620 86 $4,524,576
Menifee Rd Watson Rd to SR 74 2,640 86 $4,559,115
Normandy Road La Ladera Rd to Berea Rd 2,595 14 $718,789 Palomar Rd Mapes Rd to Watson Rd 2,640 18 $940,183
Palomar Rd Cider St to SR 74 1,503 14 $416,316
Palomar Rd Matthews Rd to Rouse Rd 3,556 44 $3,095,638 Palomar Rd Rouse Rd to Heritage Lake Dr 1,352 44 $1,176,969 Palomar Rd Holland Rd to Overland Ct 699 12 $180,196
Palomar Rd Craig Ave to Tupelo Rd 1,325 7 $244,153
Palomar Rd Garbani Rd to Scott Rd 5,280 44 $4,596,448
Rouse Road Valley Blvd to Byers Rd 700 76 $1,052,561
Rouse Road Byers Rd to Geary St 1,335 37 $1,051,976
Rouse Road Hull Rd to Barnett Rd 1,425 47 $1,426,559
Rouse Road Encanto Dr to Myles Ct 719 43 $695,797
Rouse Road Myles Ct to Dawson Rd 3,128 40 $2,475,497
Rouse Road Dawson Rd to Antelope Rd 1,539 72 $2,192,335 Rouse Road Palomar Rd to Menifee Rd 2,600 38 $1,954,757 Sherman Road Sr 74 to Jackson Ave 280 2 $48,205
Sherman Road Jackson Ave to Harrison Ave, 744 22 $339,733 Sherman Road Harrison Ave to Ethanac Rd 1,100 57 $1,402,753 Shennan Road Ethanac Rd to Mclaughlin Rd 2,626 76 $4,376,062 Shennan Road Mclaughlin Rd to Airstream Way 1,010 76 $1,570,061 Shennan Road Airstream Way to Vanilla Ct 1,214 43 $1,292,187 Shennan Road Rouse Rd to Chambers Ave 2,692 76 $4,047,850 Shennan Road Shadel Rd to McCall Blvd 672 24 $407,965
Shennan Road McCall Blvd to Alta Vista Way 774 12 $203,470 Sherman Road El Molina Viejo to Holland Rd 1,315 10 $260,173 Shennan Road Craig Ave to Tupelo St 1,312 44 $1,142,148 Shennan Road Garbani Rd to Diego Way 1,330 44 $1,157,817 Shemian Road Diego Way to Wickerd Rd 1,289 44 $1,122,125

DRAFT
A-110

DRAFT Development Impact Fee Study MENIFEE, CA

Matrix Consulting Group 71

Segment From: To
Segment
Length (FT)
Curb
(FT) Project Cost
Simpson Road Lindenberger Rd to Briggs Rd 1,980 14 $548,440 Tres Lagos Drive South Shore Dr to Briggs Rd 2,596 72 $4,358,176 Trumble Road Watson Rd to lllionis Ave 1,335 4 $105,652 Trumble Road lllionis Ave to Ethanac Rd 1,341 4 $106,127 Trumble Road Ethanac Rd to Mclaughlin Rd 2,658 44 $2,313,894 Trumble Road Mclaughlin Rd to Almaden Ln 2,195 12 $744,399 Valley Blvd Goldenrod Ave to Troy Ln 2,357 86
Valley Blvd Troy Ln to Thornton Ave 2,500 86 $4,253,772 Valley Blvd Thornton Ave to Chambers Ave 1,320 54 $1,497,557 Valley Blvd Missing Link 1 $2,479,134
Valley Blvd Missing Link 2 $6,478,530
Watson Road SR 74 to Shennan Rd 600 72 $854,711
Watson Road Sherman Rd to Antelope Rd 2,623 48 $2,837,854 Watson Road Antelope Rd to Palomar Rd 2,693 27 $1,739,914 Watson Road Palomar Rd to Menifee Rd 2,690 43 $2,534,805 Watson Road Menifee Rd to Cumming Ave 1,333 48 $1,515,427 Walson Road Cumming Ave to Briggs Rd 4,014 50 $4,346,477 Wickerd Road Ascot Way to Howard Rd 1,300 44 $1,131,701 Wickerd Road Howard Rd to Haun Rd 1,318 14 $365,073
Wickerd Road Antelope Rd to Haleblain Rd 3,685 44 $3,207,938 Wickerd Road Haleblain Rd to Menifee Rd 1,308 44 $1,138,666 TOTAL

$282,612,846

The final set of information for Transportation is some of the specific traffic projects. The following table lists by project name, the project type, and total estimated project cost:

Table 98: Traffic Project Listing

Project Name Project Type
Estimated
Cost
Holland and Murrieta Intersection Realignment $5,000,000 Railway Grade Separation - Briggs Rd at Matthews Rd At Grade Separation $3,000,000 Railway Grade Separation - Menifee Rd/S of Matthews R - At Grade Separation $3,000,000 Railway Grade Separation - Sherman Rd/SW of Hwy 74 At Grade Separation $10,000,000 At Grade Separation Subtotal $16,000,000
Murrieta Bridge over Salt Creek Bridge $15,000,000
Garbani Interchange Interchange $65,000,000
Keller Interchange (West side) Interchange $16,250,000
Scott Road/I-215 (West side) Interchange Interchange $35,000,000 McCall Boulevard/I-215 Interchange Interchange $35,000,000 Interchange Subtotal $151,250,000

DRAFT
A-111

Finance CommitteeJuly 26, 2022

Finance Committee
July 26, 2022