Draft Report
City of Merced Public Facilities
Financing Plan and Impact Fee
Update
Prepared fo
r:
City of Merced
Prepared by:
Economic & Planning Systems, Inc. (EPS)
December 1, 2021
EPS #182170
ATTACHMENT 2--Page 1
ATTACHMENT 2--Page 2
Table of Contents
1. Background, Context, and Summary of Maximum Fees ................................ 1 Report Background and Legal Context .............................................................. 2 Overview of Methodology and Key Assumptions ................................................. 2 Overview of Fee Program ............................................................................... 4 Fee Implementation ...................................................................................... 7
2. Demographic and Land Use Assumptions ................................................... 9 Purpose of Assumptions ................................................................................. 9 Population and Employment Growth ................................................................ 9 Land Use and Service Population Calculations .................................................. 10 Land Use Categories and Density Assumptions ................................................ 11
3. Transportation Fee ................................................................................. 13
4. Fire Facilities Fee ................................................................................... 19
5. Police Facilities Fee ................................................................................ 25
6. Park Facilities Fee .................................................................................. 31
7. Public Works Fee ................................................................................... 37
8. Information Technology Fee .................................................................... 41
9. Summary of Nexus Findings and Maximum Fee .......................................... 45 Overview of Nexus Findings .......................................................................... 45 Summary of Fees ........................................................................................ 46
10. Fee Program Implementation and Administration ....................................... 47 Administration Fee Component ..................................................................... 47 Fee Amount ............................................................................................... 47 Fee Program Updates .................................................................................. 48 Fee Program to Replace Quimby Act Fees ....................................................... 49
ATTACHMENT 2--Page 3
List of Tables
Table 1 Summary of Preliminary Maximum Justified
Development Impact Fee .................................................................. 5 Table 2 Fee Comparison by Land Use Type ..................................................... 6 Table 3 Summary of Total PFFP Facility Cost Allocation ..................................... 6 Table 4 Land Use and Service Population Summary ........................................ 10 Table 5 Service Population Factors Based on Resident to Employee Equivalencies .................................................................. 11 Table 6 Transportation and Road Projects (2 pages) ....................................... 14 Table 7 Estimated Vehicle Trip Growth ......................................................... 15 Table 8 Cost Allocation for Transportation Projects ......................................... 16 Table 9 Transportation Fee Amounts ............................................................ 17 Table 10 Fire Facility Costs ........................................................................... 20 Table 11 Fire Department Cost Allocation ....................................................... 22 Table 12 Fire Department Fee Calculation ....................................................... 23 Table 13 Police Facility Costs ........................................................................ 26 Table 14 Police Department Cost Allocation .................................................... 28 Table 15 Police Department Fee Calculation .................................................... 29 Table 16 Developed Park Requirements & Facility Costs .................................... 32 Table 17 Park Facilities Cost Allocation ........................................................... 34 Table 18 Park Facilities Fee Calculation .......................................................... 35 Table 19 Public Works Facility Costs .............................................................. 38 Table 20 Public Works Cost Allocation ............................................................ 38 Table 21 Public Works Fee Calculation ............................................................ 40 Table 22 Information Technology Costs .......................................................... 42 Table 23 Information Technology Cost Allocation ............................................. 42 Table 24 Information Technology Fee Calculation............................................. 43 Table 25 Summary of Maximum Justified Fees ................................................ 46 ATTACHMENT 2--Page 4
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 1 Economic & Planning Systems, Inc. (EPS)
1. Background, Context, and Summary of
Maximum Fees
This Nexus Report is designed to provide the City of Merced (City) with the necessary technical documentation to support an update of its Development Impact Fee (DIF) program. It has been prepared by Economic & Planning Systems, Inc. (EPS), with support City staff and input received at two public meetings. The Report serves as an update to the City’s 2012 Public Facilities Finance Plan which EPS reviewed as part of this analysis.
Impact fees are one-time charges on new development, collected and used by jurisdictions to fund the cost of public facilities necessary to serve new growth. Impact fees are collected as a condition of development. This Report contains technical documentation to assess potential updates to five (5) existing and two (2) new fee categories, as summarized below:
Existing Fee Categories Proposed New Fee Categories
1. Roadways, Bridges, and
Railway Crossings
1. Public Works
2. Traffic Signals 2. Information Technology
3. Fire
4. Police
5. Parks, Recreation, and Bikeways
The City initially established these fees in 1998. In 2009, the City approved a fee reduction to stimulate development during the recession. A further fee reduction was adopted in 2010 based on the removal of three (3) roadway projects from the fee program. Lastly, in 2011, the City extended the 2009 fee reduction and suspended annual cost increases based on the Construction Cost Index until January 2014. In October 2012, the City adopted a comprehensive update of the Public Facilities Financing Plan and Impact Fee Program.
This Report provides the technical calculations required to determine the maximum fees the City can charge for each fee category based on the nexus between the impacts of new development and the costs of constructing the public facilities necessary to serve that development. The City may elect to reduce the fees based on economic or policy considerations. For example, the City may choose to phase-in fee increases or adopt fees that are lower than the maximum justified amount to encourage new development.
ATTACHMENT 2--Page 5
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 2 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Report Background and Legal Context
The fee program described in this Report is consistent with the most recent state legislation and relevant case law, as well as the principles of the Mitigation Fee Act (Government Code Section 66000 et seq). The City’s Municipal Code currently authorizes the collection of fees for roadways, bridges and railway crossings, traffic signals, fire, police, parks, recreation, and bikeways facilities. This Report is designed to provide the necessary technical analysis supporting an updated schedule of fees to be adopted. Below are the key requirements of the Mitigation Fee Act that determine the structure, scope, and amount of the City’s proposed impact fee program:
Collected for Capital Facility and Infrastructure Improvements. Development impact fee revenue can only be collected and used to cover the costs of capital facilities and infrastructure. Impact fee revenue cannot be used to cover the operation and maintenance costs of these or any other facilities. Used to Fund Facility Needs Created by New Development Rather than Existing Deficiencies. Impact fee revenue can only be used to pay for new or expanded capital facilities needed to accommodate growth. Impact fee revenue cannot be collected or used to cover the cost of existing deficiencies in the City’s capital facilities or infrastructure. In other words, the cost of capital projects or facilities that are designed to meet the needs of the City’s existing population must be funded through other sources. The costs associated with improvements that serve the needs of both new development and the existing population and employment are split on a “fair-share” basis according to the proportion attributable to each. Fee Amount Must Be Based on a Reasonable Relationship. An impact fee amount must be based on a reasonable nexus, or connection, between new development and the need for and corresponding costs of the capital facilities and improvements included in the fee program. As such, an impact fee must be supported by specific findings that explain or demonstrate this nexus or relationship. In addition, the impact fee amount must be structured such that the revenue generated does not exceed the cost of providing the facility or improvement for which the fee is imposed.
Overview of Methodology and Key
Assumptions
The results of the analysis contained in this Report are based on a variety of assumptions regarding population and employment growth in the City, service standards and facility demand, and corresponding costs. These key issues may warrant consideration in conjunction with this Report:
Socioeconomic Data and Projections. The impact fee calculations are based on projections related to population and employment in the City through 2040. Baseline population and growth projections were developed based on projections from the ATTACHMENT 2--Page 6
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 3 Economic & Planning Systems, Inc. (EPS) Merced County Association of Governments. The estimates of development and population should be periodically reviewed and updated. Capital Facility Service Standards and Future Needs. The main source of information on future capital facilities needs are the various City departments responsible for maintaining and improving the City’s infrastructure. EPS worked with these Departments and collected information to determine existing levels of service and service standards relative to future growth projections. Both the existing level of service and the service standard relate capital facility or infrastructure requirements to the land use categories that represent the primary source of demand for the capital facility or infrastructure improvement in question.
EPS worked to transform the analysis of existing levels of service and articulated service standards into estimates of the type and amount of new or expanded capital facilities and infrastructure that will be necessary to serve new development over the next 20 years.
Cost Allocation Between New and Existing Development. This analysis allocates the cost of future capital improvements and facilities between new and existing development, as required by the Mitigation Fee Act, based on a variety of methodologies:
‒ In cases where new or expanded facilities or infrastructure improvements are determined to be needed entirely to accommodate new growth (e.g., there are no existing deficiencies), 100 percent of the costs are attributed to future development.
‒ In cases where new or expanded facilities are determined to serve or benefit both existing and new residents or employees in a relatively proportional manner, the costs are allocated as such.
‒ Finally, in cases where there is an existing level of service to be preserved as new development occurs, the average cost of providing the current level of service is charged to new development, ensuring that new development does not create deficiencies in the level of service.
Cost Allocation to Land Use Categories. The cost allocations to various land use categories (e.g., residential, commercial, industrial, etc.) are based on the relative demand or fair share contribution of each land use category to the need for the facilities included. All fees in the program will be charged to both residential and nonresidential development as both residents and employees create demand on these facilities.
The fee calculations also use assumptions related to population and employment densities by land use type. Specifically, fee programs’ cost estimates per resident or per service population are converted to fee rates per unit or square foot based on average persons-per-household and square-feet-per-employee factors. This ensures that fees charged by land use are proportional to one another.
ATTACHMENT 2--Page 7
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 4 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Facility Cost Estimates. The fee calculations include facility cost assumptions that have been developed based on City staff estimates, records of prior expenditures, as well as additional research.
Overview of Fee Program
The existing City fee program has the five capital improvement categories described below:
1. Roadways, Bridges, and Railroad Crossings. The Roadways, Bridges, and Railroad Crossings fee is a one-time charge the City imposes on new residential and nonresidential development. This fee is charged to fund improvements and expansions of roadways, bridges, and railroad crossings to meet the transportation demand of new development.
2. Traffic Signals. The Traffic Signals fee is a one-time charge the City imposes on new residential and nonresidential development. The purpose of this fee is to cover the costs of new traffic signals to provide safe and reliable traffic control services to meet the transportation demand of new development.
3. Fire. The Fire fee is a one-time charge the City charges to new residential and nonresidential development. The purpose of the fee is to fund facilities and equipment necessary for the Fire Department to provide fire and emergency response services to new residential and nonresidential growth in the City.
4. Police. The Police fee is a one-time charge the City charges to new residential and nonresidential development. The purpose of the fee is to fund facilities and equipment necessary for the Police Department to provide law enforcement and emergency response services to new residential and nonresidential growth in the City.
5. Parks, Recreation, and Bikeways. The Parks, Recreation, and Bikeways fee is a one-time charge the City charges to new residential and nonresidential development.
The purpose of the fee is to fund new and expanded parks, recreational facilities, and bikeways necessary to meet the demands of new development.
This update to the fee program includes two new fee categories, as described below:
6. Public Works Fee: The Public Works fee is a one-time charge the City charges to new residential and nonresidential development. The purpose of the fee is to fund a portion of the new corporation yard necessary to meet the demands of new development.
7. Information Technology Fee: The Information Technology fee is a one-time charge the City charges to new residential and nonresidential development. The purpose of the fee is to fund fiberoptic connectivity to City facilities necessary to meet the demands of new development.
ATTACHMENT 2--Page 8
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 5 Economic & Planning Systems, Inc. (EPS) Summary of Maximum Allowable Fees and Their Relationship to Existing Programs
A summary of the maximum allowable impact fees calculated in this analysis by land use and fee category is provided in Table 1. The maximum allowable impact fee represents the highest fee the City may charge based on the requirements of the Mitigation Fee Act and this nexus analysis.
To simplify the fee program, the Roadways, Bridges, and Railroad Crossings and Traffic Signal fee categories were combined into one fee component for this Report, which is called the Transportation fee. Also, this Report identifies two (2) new fee programs: (1) a Public Works facilities fee to fund a portion of the costs for the City’s new corporation yard and (2) an Information Technology fee to fund fiber optic cable installation and associated connectivity equipment for some new City facilities.
Table 2 compares the maximum allowable fee with the existing fees by land use category. The City has reduced fees previously justified. As noted, EPS has reviewed the assumptions and methodology contained in the existing fee program. The updated fee amounts are justified based on increased costs and additional capital facility requirements.
Table 3 provides a summary of the facilities funded by each fee category.
Table 1 Summary of Preliminary Maximum Justified Development Impact Fee Source
Item
Fee Component per room
Transportation Fee Table 9 $3,171 $1,794 $7.14 $4.77 $2.40 $1,922 Fire Department Fee Table 12 $1,658 $1,316 $1.30 $1.48 $0.58 $259 Police Department Fee Table 15 $1,263 $1,003 $0.99 $1.13 $0.44 $197 Parks Fee Table 18 $4,902 $3,891 $3.83 $4.38 $1.70 $766 Public Works Fee Table 21 $190 $151 $0.15 $0.17 $0.07 $30 Information Technology Fee Table 24 $147 $117 $0.12 $0.13 $0.05 $23 Subtotal PFFP Fee $11,331 $8,272 $13.53 $12.06 $5.24 $3,197 Administration (3 Percent) $340 $248 $0.41 $0.36 $0.16 $96 Total Maximum Justified Fee $11,671 $8,520 $13.94 $12.42 $5.40 $3,293 max fee
Nonresidential Fee perResidential Fee per
fee per unit
Retail Bldg.
Sq. Ft.
Lodging
(Per Room)
Office Bldg.
Sq. Ft.
Industrial
Bldg. Sq. Ft.
Multifamily
Unit
Single-Family
Unit
fee per bldg. sq. ft.
ATTACHMENT 2--Page 9
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 6 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Table 2 Fee Comparison by Land Use Type
Table 3 Summary of Total PFFP Facility Cost Allocation
Land Use Type Proposed Fee Existing Fee Change
Residential
Single-Family Unit $11,671 $5,533 111%
MultifamilyUnit $8,520 $3,827 123%
Nonres idential
Retail Bldg. Sq. Ft. $14 $11 25%
Office Bldg. Sq. Ft. $12 $7 71%
Industrial Bldg. Sq. Ft. $5 $2 159%
Lodging(Per Room) $3,293 n/a
fee comp
PFFP Fee Component $ %
Transportation Facilities
Existing Highway 59 Improvements $7,240,140 $1,949,738 27% $5,290,402 Major Arterials $157,298, 990 $42,359,935 27% $114,939,055 Railroad Crossings $17,564, 000 $4,729,909 27% $12,834,091 Bridges $17,773,000 $4,786,192 27% $12,986,808
Other Transportation Projects $28,400,000 $7,647,997 27% $20,752,003
Subtotal Transportation $228,276,130 $61,473,771 27% $166,802,359 Fire Department
Facilities [1] $17,473,679 $17,473,679 100% N/A
Subtotal Fire Department $17,473,679 $17,473,679 100% $0 Police Department
Facilities $48,165,000 $11,841,809 25% $36,323,191
Equipment $1,469,308 $1,469,308 100% N/A
Subtotal Police Department $49,634,308 $13,311,117 27% $36,323,191 Parks & Recreation
Neighborhood & Community Parks $51,660,794 $51,660,794 100% $0 Community Center $3,638,191 $894,483 25% $2,743,708
Bikeways $9,440,000 $2,320,911 25%
$7,119,089
Subtotal Parks & Recreation $64,738,985 $54,876,188 85% $9,862,797 Public Works $22,400,000 $2,000,000 9% $20,400,000
Information Technology $1,552,300 $1,552,300 100% $0
Total $384,075,402 $150,687,054 39% $233,388,347
total cost
[1] Fire facilities costs include equipment costs.
Total PFFP Facility Costs
PFFP Costs Allocated to New
Development
PFFP Costs
Allocated to
Existing
ATTACHMENT 2--Page 10
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 7 Economic & Planning Systems, Inc. (EPS) Fee Implementation
This Report develops the nexus between the maximum justified fee for each category of facilities and the benefit to each land use category included in the analysis. While the Report derives the maximum justified fee, in enacting the fee program, the City Council may choose to implement fees at less than the maximum justified fee. Options available to the City Council are shown below but certainly do not exclude other potential options:
Approve maximum allowable fees for all categories
Phase in any fee increases over a specified period.
Phase in fees by fee category.
Approve a fee less than the maximum justified fee.
Approve a fee at a lesser rate for land uses within a fee category.
Residential Fee Based on Residential Unit Size
Assembly Bill (AB) 602 states that a “nexus study adopted after July 1, 2022, shall calculate a fee imposed on a housing project proportionately to the square footage of proposed units of the development. A local jurisdiction that imposes a fee proportionately to the square footage of the proposed units of the development shall be deemed to have used a valid method to establish a reasonable relationship between the fee charged and the burden posed by the development.”
This nexus study allocates facility costs to residential units based on the average persons per household shown in Census data or other available resources. Currently, average persons per household data are shown for household types (single-family and multifamily) but not by home size or range of home sizes. A fee program that allocates costs per building square footage would also have to demonstrate a direct correlation between increased home sizes and a corresponding increase in the average number of persons per household. Definitive resources that establish the relationship between building square footage and persons per household have not been identified at the time of this Report.
An alternative to establishing a fee program for residential uses that is based on building square footage would be to implement lower fee rates for residential units based on ranges of building square footage. The City Council could adopt the maximum justified fee for residential uses and implement a lesser fee for residential units that fit within a lower range of home sizes (by building square foot).
Ramifications of Implementing a Lower Fee for Certain Categories The maximum justified fee establishes the amount of the fee, by category, that is required to fully fund all items included in the fee program. By implementing the fee at less than the maximum justified fee, the fee program, or fee categories, may become underfunded. Any reduction in the fee amount to be collected cannot be applied to other fee categories or land use categories.
ATTACHMENT 2--Page 11
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 8 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Existing Quimby Act Fees
The City has historically collected fees or accepted dedication of land under the Quimby Act to acquire parkland and open space to serve new development. Most often, developers opted to dedicate land to fulfill their obligations under the Quimby Act.
This Nexus Report Update assumes the City will incorporate the cost of land acquisition into the fee program, in addition to costs of developing parks. This change will allow the City to coordinate the acquisition and development of parkland under fee program. If this Update is approved, the City will no longer use the Quimby Act as a source for funding park acquisition or dedication of land. Accordingly, the City will need to eliminate the existing Quimby Act requirements as part of the approval of the new fees calculated in this Update.
ATTACHMENT 2--Page 12
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 9 Economic & Planning Systems, Inc. (EPS)
2. Demographic and Land Use
Assumptions
This chapter describes the demographic and land use assumptions used for the technical calculations in this nexus study. The estimates are based principally on projections provided by Merced County Association of Governments.
Purpose of Assumptions
The assumptions detailed in this chapter are used to calculate the following metrics, which will be necessary to calculate maximum justifiable fees:
Service Standards. Estimates of existing population and employment levels are used to formulate current levels of service standards for each type of capital facility, so estimated demand from future growth is proportional to current demand from existing development. The approach to estimating the level of service varies among the fee categories.
Future Capital Needs. Estimates of future population and employment growth in the City are used to determine the future demand for capital facilities. These capital facilities are intended to be funded by the fee.
Allocation of Costs
. Estimat
es related to population and employment density
(e.g., persons per household or employees per square foot) are used to allocate costs between residential and commercial land use categories. Additionally, for facilities that will serve both new and existing residents, the growth in employment and residents relative to current levels is used to determine the proportion of costs that should be paid by new development through the fee program.
Population and Employment Growth
Table 4 provides the future residential population and employment projections used in this fee program update, reflecting a 21-year time horizon (from 2019 to 2040). These projections, based on data from the Merced County Association of Governments, show the combined number of residents and employees in Merced growing from 120,715 in 2019 to 160,791 in 2040, an increase of 40,076 people.
ATTACHMENT 2--Page 13
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 10 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Table 4
Land Use and Service Population Summary
Land Use and Service Population
Calculations
Some of the fee categories are also based on calculations that translate the population and employment projections into estimates of existing and future “service populations.” Service population is a term that represents a combined weighting of population (residents) and jobs (employees). The weighted service population is derived from assumptions that compare residents and employees based on the relative service demands or typical service profiles of each, allowing for allocations of demand for facilities across residential and nonresidential land uses.
To accurately assess future employees’ and residents’ impact on public services, this Report analyzes the current service population’s employment and residence status to determine the typical employee’s and resident’s demand for public services. This service population calculation weights residents’ impact on public services and facilities based on whether they work inside the City or commute elsewhere and, similarly, weights workers’ impact based on whether they also live in the City or elsewhere. Residents of Merced who are not in the labor force are weighted at 100 percent.
Because residents who work outside of the City have lower demand on public services than other residents, these residents are weighted at 67 percent of a non-working resident. Those who are employed in Merced but live elsewhere are weighted at 33 percent (i.e., 1 – 67%). The residents of Merced who also work in the City are weighted at 50 percent under the calculation of residential service population and are again weighted at 50 percent under the calculation of weighted employee service population. This adjustment ensures that this population’s demand for public services is allocated to both residential and nonresidential portions of the service population.
Item 2019 2040 Amount
%
Change
Avg. Annual
% Change
Population 88,600 116,864 28,264 32% 1.33%
Households 28,630 38,561 9,931 35% 1.43%
Employment 32,115 43,927 11,812 37% 1.50%
growth summ
Source: Merced County Association of Governments; EPS.
[1] See Table A-1 for details.
Estimated Growth
ATTACHMENT 2--Page 14
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 11 Economic & Planning Systems, Inc. (EPS) These relative weights for each employment and residences status are then multiplied by the share of their population within the residents’ and employees’ groups to determine a weighted average for the average resident and average employee. These weighted averages are applied to the current estimates and future (year 2040) projections of total residential and employment population to determine a weighted service population for each period.
As shown in Table 5, the weighted service population is estimated to grow from 103,447 in 2019 to 137,172 in 2040. The growth of 33,725 in the service population represents 24.6 percent of the total service population in 2040. This is the percentage of demand on public facilities attributable to new growth, so this is the fair-share percentage of new public facilities that new growth is expected to pay for through the development impact fee program.
Table 5 Service Population Factors Based on Resident to Employee Equivalencies Land Use Categories and Density
Assumptions
As shown in Appendix A, Table A-1, this analysis uses data from the U.S. Census Bureau on the current number of persons living in multifamily and single-family housing, divided by the total number of multifamily and single-family units, to estimate the number of persons per newly developed single-family and multifamily dwelling unit. This Report also uses assumptions from the 2012 City Public Facilities Financing Plan for the number of employees per 1,000 square feet of various types of nonresidential land uses to calculate the number of employees that is generated by a newly developed nonresidential project.
Item Amount Percentage Amount Percenta ge Amount Percentage Employment Status of Merced Residents [1] Formula: a = b * 88,600 b [1] c = b * c
Not in Labor Force 53,743 60.7% 100% 60.7%
Employed in the City 11,846 13.4% 50% 6.7%
Employed Outside of the City 23,011
26.0% 67% 17.4%
Total Residents [3] 88,600 100.0% 84.8% 116,864 28,264
Residence Status of Merced Employees [1] Formula: a = b * 32,115 b [1] c = b * c
Live in the City 11,846 36.9% 50% 18.4%
Live Outside the City 20,269 63.1% 33% 20.8%
Total Jobs [3] 32,115 100.0% 39.2% 43,927 11,812
Employee to Resident Equivalency Factor [4] (39.2% / 84.8%) = 46.2% Service Population Calculation
Amount Attributable to Residents (@ 100%) 88,600 85.6% 116,864 85.2% 28,264 83.8% Amount Attributable to Employees (@ 46.2%) 14,847
14.4% 20,308 14.8% 5,461 16.2%
Total Service Population 103,447 100.0% 137,172 100.0% 33,725 100.0% Service Population Growth as % Build-out Service Population (33,725 / 137,172) = 24.6% service factors
Source: U.S. Census Bureau, LEHD OnTheMap (2017); Merced County Association of Governments; EPS. [2] Repr esents EPS estimate of how various types of residents and employees relate to each other in terms of demand for City Services. [3] See T able 4 and Table A-1 for growth assumptions.
[4] Equals w eighted average of residents divided by weighted average of employees.
GrowthExisting (2019) Weight [2] Weighted
Average
Build-out (2040)
[1] Dis tribution based on data from U.S. Census OnTheMap (2017). Total Merced residents and workers are based on 2019 estimates interpolated from MCAG projections. See Table A-1 for details.
From Table 4
From Table 4
ATTACHMENT 2--Page 15
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 12 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Based on the U.S. Census Bureau’s American Community Survey, single-family units average 3.20 persons per household and multifamily units average 2.54 units per household. For employment uses, the 2012 City Public Facilities Financing Plan estimated that, for every 1,000 square feet of floor area, retail/service commercial uses would have
2.50 employees, office uses would have 2.86 employees, and industrial uses would have
1.11 employees. Lodging and hotels are assumed to have 0.50 employees per guest room, based on previous similar studies conducted by EPS.
ATTACHMENT 2--Page 16
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 13 Economic & Planning Systems, Inc. (EPS)
3. Transportation Fee
The City’s transportation fee category is designed to fund improvements to major arterials, bridges, and railway crossings needed to accommodate increased transportation demand generated by new growth. The City’s roadways provide safe and reliable transportation routes for people and goods. Because of Merced’s extensive creek system and legacy railway infrastructure, connecting all of the City’s neighborhoods and districts requires numerous bridges and railroad crossings.
Methodology
The City’s transportation facilities serves both residents and businesses and thus the transportation impact fee is charged to residential and nonresidential development. The fee is designed to cover costs associated with new and improved roadways, interchanges, bridges, and traffic signals necessary to serve new development.
The cost allocation to new development was established using a buildout level-of-service approach where new development is allocated its pro rata share of the total based on the share of automobile trips generated by new development versus existing development over the fee program’s timeframe. The calculation results in approximately 26.9 percent of the transportation facilities’ total cost being allocated to future development.
Transportation Improvements and Cost Allocation
The two main components of the transportation fee, as shown on Table 6, include roadway widening and extensions, construction of new bridges and railroad crossings, and the construction of new traffic signals. Roadway improvements include improvements to increase the capacity of existing roadways, such as Yosemite Avenue, G Street, and Childs Avenue. For these improvements, it is assumed that improvements to minor arterial roadways will cost approximately $1,053 per linear foot, major arterials will cost $1,371 per linear foot, and divided arterials will cost $1,268 per linear foot. The category also includes six roadway bridges over creeks, and one grade-separated railroad crossing over the Santa Fe Railroad tracks. Lastly, the fee category also includes costs for the installation of 45 traffic signals and the Parsons Avenue Corridor project, a long-standing priority of the City to complete a north-south arterial in the eastern portion of Merced.
Because new and improved transportation facilities will benefit both existing and new residences and employees, only 26.9 percent, or the fair share cost of improvements, is allocated to the fee category. As shown in Table 7, this fair share is calculated based on the share of total afternoon peak hour trips that new residences and employees will account for in 2040.
ATTACHMENT 2--Page 17
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 14 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Table 6 Transportation and Road Projects (2 pages)
Total
Arterial
Arterial Costs
Project Project Category Quantity Cost/LF (2020$s) [1]
Transportation
Existing Highway 59 Improvements
North 59 - Childs to Mission Major Arterial 5,280 $1,371.24 $7,240,140 Existing Highway 59 Improvements Subtotal $7,240,140
Major Arterials
Yosemite Ave (Lake Road to Campus Parkway) Minor Arterial 2,640 $1,052.86 $2,779,540 G Street (Mercy to Bellevue) Major Arterial 13,200 $1,371.24 $18,100,350 R Street (Lehigh to Bellevue) Major Arterial 13,200 $1,371.24 $18,100,350 Childs Ave (Hwy 59 to Kibby) Minor Arterial 23,760 $1,052.86 $25,015,860 Bellevue Rd (Hwy 59 to Lake) Major Arterial 21,120 $1 ,371.24 $28,960,560 Cardella Rd (Hwy 59 to Lake) Divided Arterial 21,120 $1 ,268.24 $26,785,200 Gardner Rd (Yosemite to Bellevue) Minor Arterial 10,560 $1,052.86 $11,118,160 Mission Ave (South Hwy 59 to Hwy 99) Major Arterial 13,200 $1,371.24 $18,100,350 Thornton Rd (Hwy 140 to Mission) Minor Arterial 7,920 $1,052.86 $8,338,620 Major Arterial Subtotal $157,298,990
Railroad Crossings
Santa Fe RR & R St or Parsons Ave Railroad Crossing $17,564,000 Bridges
Divided Arterial Bridge $3,000,000
Major Arterial Bridge $2,250,000
Minor Arterial Bridge $2,000,000
Minor Arterial Bridge $2,000,000
Major Arterial Bridge $2,250,000
Cardella/Fahrens Creek
G St/Cottonwood Creek
Gardner/Cottonwood Creek
M St/Fahrens Creek
Bellevue/Fahrens Creek
Parsons/Bear Creek
Minor Arterial Bridge $6,273,000
Bridges Subtotal $17,773,000
Other Transportation Projects Unit Cost
Parsons Ave Corridor (Hwy 140 to Yosemite) Minor Arterial - $10,052,000 Traffic Signals 45 $325,000 $18,348,000
Other Transportation Projects Subtotal $28,400,000
Total Transportation Costs $228,276,130
transp costs
Source: City of Merced and EPS.
[1] Railroad Crossings, Bridges, and Other Transportation Projects : EPS used ENR-CCI for San Francisco for the period of January 2012 to January 2020, rounded to the nearest $1,000.
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Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 15 Economic & Planning Systems, Inc. (EPS) Table 6
Transportation and Road Projects
Table 7 Estimated Vehicle Trip Growth
Project Project Category Facility Type Notes
Transportation
Existing Highway 59 Improvements
North 59 - Childs to Mission Major Arterial Road widening 2 to 4 through lanes Major Arterials
Yosemite Ave (Lake Road to Campus Parkway) Minor Arterial - Lake Road is Campus Parkway G Street (Mercy to Bellevue) Major Arterial - Road segment looks new or recently widened R Street (Lehigh to Bellevue) Major Arterial New road/extension Childs Ave (Hwy 59 to Kibby) Minor Arterial Road widening 2 to 4 through lanes Bellevue Rd (Hwy 59 to Lake) Major Arterial Road widening 2 to 6 through lanes Cardella Rd (Hwy 59 to Lake) [1] Divided Arterial New road/extension [1] Gardner Rd (Yosemite to Bellevue) [2] Minor Arterial Road widening & new road/extension [2] Mission Ave (South Hwy 59 to Hwy 99) Major Arterial Road widening [3] Thornton Rd (Hwy 140 to Mission) Minor Arterial Road widening 2 to 4 through lanes Railroad Crossings
Santa Fe RR & R St or Parsons Ave Railroad Crossing -
Bridges
Cardella/Fahrens Creek Divided Arterial Bridge - Connect Cardella to Hwy 59 G St/Cottonwood Creek Major Arterial Bridge - Facility already constructed Gardner/Cottonwood Creek Minor Arterial Bridge - Facility already constructed M St/Fahrens Creek Minor Arterial Bridge - Connect M Street to Old Lake Road? Bellevue/Fahrens Creek Major Arterial Bridge - Needed to expand Bellevue Parsons/Bear Creek Minor Arterial Bridge - Connect two existing neighborhoods Other Transportation Projects
Parsons Ave Corridor (Hwy 140 to Yosemite) Minor Arterial - - Traffic Signals - -
transp projects
Source: City of Merced and EPS.
[1] Portions of this segment of Cardella Road are already built to the General Plan 2030 design standards. See notes for details.
Hwy 59 to Freemark Avenue: New road/extension (4 through lanes). Appears bridge would be needed to cross Fahrens Creek.
Freemark Avenue to G Street: Built to General Plan 2030 design standards.
G Street to Lake Road: New road/extension (4 through lanes). [2] Yosemite Avenue to Cardella Road : Road widening (2 to 4 through lanes).
Cardella Road to Bellevue Road: New road/extension (4 through lanes). [3] Hwy 59 to Henry Street: Road widening (2 to 4 through lanes).
Henry Street to Hwy 99: Road widening (4 to 6 through lanes).
Item Existing Buildout Growth Existing Buildout Growth Existing Buildout Growth Residentia 28,630 38,561 9,931 0.75 0.75 0.75 21,473 28,921 7,448 Nonreside 32,115 43,927 11,812 0.95 0.96 0.99 30,603 42,346 11,744 Total 52,075 71,267 19,192
Share of New Trips (Buildout) [3] (11,744 / 42,346) = 26.9% trip growth
Source: City of Merced 2030 General Plan; Merced County Association of Governments; Institute of Transportation Engineers; EPS. [1] S ee Table 4.
[2] B ased on a weighted trip weight for each land use type based on the growth indicated in the City 2030 General Plan. [3] B ased on ITE's Trip Generation, 9th Edition.
employees
Amount [1] TripsWeighted PM Peak Trip Rate [2]
dwelling units
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Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 16 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Transportation Fee Calculation
The transportation impact fee is calculated in two steps. First, the total cost of transportation improvements is multiplied by the fair share percentage to determine the cost of improvements allocated to the fee category, as seen in Table 8. Secondly, the total allocated cost is divided by the number of afternoon peak hour trips generated by new development, yielding a per trip cost of $3,203. Lastly, the cost per trip is multiplied by the afternoon peak hour trip generation for each type of land use specified in the fee category, as shown in Table 9.
Table 8 Cost Allocation for Transportation Projects
Estimated % Allocated Allocated
Name Project Cost to Growth [1] Fee Cost
Existing Highway 59 Improvements
North 59 - Childs to Mission $7,240,140 26.9% $1,949,738 Major Arterials $157,298,990 26.9% $42,359,935
Railroad Crossings $17,564,000 26.9% $4,729,909
Bridges $17,773,000 26.9% $4,786,192
Other Transportation Projects $28,400,000 26.9% $7,647,997 Totals $228,276,130 $61,473,771
New Trips [1] 19,192
Cost per Trip $3,203.11
transp alloc
Source: City of Merced 2030 General Plan; Merced County Association of Governments; Institute of Transportation Engineers; EPS.
[1] Se e Table 7.
ATTACHMENT 2--Page 20
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 17 Economic & Planning Systems, Inc. (EPS) Table 9
Transportation Fee Amounts
Residential Per Unit
Single-Family (per unit) 0.99 $3,203 $3,171
Multifamily (per unit) 0.56 $3,203 $1,794
Nonresidential Per Bldg. Sq. Ft.
Retail (per Sq. Ft.) 2.23 $3,203 $7.14
Office (per Sq. Ft.) 1.49 $3,203 $4.77
Industrial (per Sq. Ft.) 0.75 $3,203 $2.40
Per Room
Lodging (per Room) 0.60 $3,203 $1,922
transp fee calc
Source: Institute of Transportation Engineers; EPS.
[1] Trip rates represents averages based on ITE’s Trip Generation, 9th Edition (P.M. peak hour). The retail trips rates include a 40 percent discount for "pass-by" trips. [2] Se e Table 8.
[3] Fee per unit and room rounded to the nearest dollar; fee per building sq. ft. rounded to the nearest cent.
Land Use Category
Trip
Rate [1]
Cost per
Trip [2] Fee Rate [3]
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Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
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4. Fire Facilities Fee
The City of Merced Fire department provides a full range of fire protection, first responder, and emergency response services to local residents and businesses from its 5 stations located throughout the city, responding to over 11,000 calls for service during 2020. The City first established the fire fee category in 1998.
Methodology
The fire facility fee is designed to cover new development’s portion of the costs of a new firefighter training facility, as well as the cost of constructing and outfitting new fire stations needed to serve new growth and maintain existing levels of fire department service. Because the fire department serves both residents and businesses in the city, both residential and non-residential development will pay the fire facilities fee.
Fire Improvements and Cost Allocation
Currently, the City has 5 fire stations for a service population of 120,715 residents and employees, or 1 fire station for every 24,143 persons served. With the addition of 40,076 persons served by 2040, the City will need 1.66 additional fire stations to maintain the current level of service. Additionally, the City needs to construct a new training facility, the Hawk Training Facility, in order to train fire department staff serving at existing and new stations.
The two main components of the fire fee category, as shown in Table 10, are the new Hawk Training Facility and approximately 1.66 new fire stations. The cost of the Hawk Training Facility includes the cost of acquiring the 16.41 acres of land needed to develop the training facility. Because the Hawk Training Facility would serve both existing and new development, only 24.59 percent, or new growth’s fair share based on weighted service population growth, of the facility’s land cost is allocated to the fee category. This percentage of the land cost amounts to $564,837.
Table 10 also lists the major cost items of a new fire station, which include the costs of constructing and furnishing the station, as well as vehicles and equipment needed to operate the station. The total cost of a new fire station is estimated at $11,461,400, which includes the cost of construction, vehicles, and protective equipment. In addition, each new fire station needs furnishings, including wellness equipment, kitchen supplies, office furniture, and furnishings for sleeping and personal hygiene. The costs of station furnishings are estimated at $500,000 per new station. Because the fire department needs 1.66 new fire stations to maintain the current level of service with new growth, the total amount allocated to the fee category for new fire stations is $19,025,269. Combined with the land cost for the Hawk Training Facility, the total fire facilities costs allocated to the fee category is $19,590,106.
ATTACHMENT 2--Page 23
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 20 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Table 10 Fire Facility Costs (2019$)
Item Source Formula Amount
Current Level of Service Standards [1]
Current Population Estimate Table A-1 a 88,600
Cuurent Employment Estimate Table A-1 b 32,115
Current Total Service Population c=a+b 120,715
Total Service Population in 2040 d 160,791
Total New Service Population from New Growth e=d-c 40,076 Current Number of Stations Fire Department f 5
Level of Service Standard for Fire Stations g=c/f 24,143 New Fire Stations Required Based on Current LOS h=e/g 1.66 Fire Facilities for New Growth [2]
Hawk Training Facility Fire Department i=(16.41 acres)*$140,000 $2,297,400 Allocation to New Growth Table 4 j 24.59%
Fire Facilities for New Growth Subtotal k=i*j $564,837
New Fire Station Costs [3]
Fire Station (8,000 bldg. sf.) Fire Department l $8,000,000 Station Furnishings [4] Fire Department m $500,000
Ladder Truck [5] Fire Department n $425,000
Engine Fire Department o $875,000
Auxiliary Engine/Off-Road Type 6 Fire Department p $350,000 Protective Equipment [6] Fire Department q=(13 * $2,800) $36,400 New Fire StationSubtotal r=l+m+n+o+p+q $10,186,400
New Fire Stations Required h 1.66
New Fire Stations Costs for New Growth s=r*h $16,908,842 Fire Totals t=k+s $17,473,679
[1] Service standards for fire services is based upon the current service population (incorporated population plus number of current employees) divided by the current number of fire stations serving the incorporated area of the City.
[2] Fire facilities for new growth includes a new training facilities, to be located on 16.41 acres of land. The assumed cost of acquisition is 16.41 acres at the estimated sales price of $140,000 per acre.
[3] These are the costs of constructing and furnishing a fire station. It also includes the cost of three trucks, and protective gear for 13 personnel operating the station. [4] Station furnishings includes including wellness equipment, kitchen supplies, office furniture, and furnishings for sleeping and personal hygiene.
[5] Ladder truck costs assigned at 25-percent of a new truck. [6] Each station has a total of 13 personnel required to provide 24/7 operations. Assumes protective gear costs approximately $2,800 each.
Source: City of Merced.
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Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 21 Economic & Planning Systems, Inc. (EPS) Table 11 shows how the total fire facility costs are allocated to residential and employment growth. First, the total fire facilities costs attributable to new growth are allocated to residential and non-residential land uses based on the relative residential and employment growth in weighted service population calculated in Table 5. Next, the total costs allocated to residential development are divided by the weighted growth in residents to determine a fire facilities cost per new resident and the total costs allocated to non-residential development are divided by the weighted growth in employees to determine a fire facilities cost per new employee. This results in a per resident and per employee cost of $581.
Fire Fee Calculation
The fire facilities impact fee is calculated using the per resident and per employee fire facilities cost of $580.88 shown in Table 12. For residential land uses, this per resident cost is multiplied by the number of persons per household for single-family and multifamily units, yielding a per unit fee of $1,859 for single-family units and $1,475 for multifamily units. For non-residential land uses, this per employee cost is multiplied by the estimated number of employees per 1,000 square feet (or per guest room for lodging uses) to determine a fee per square foot. This results in a maximum per-square-foot impact fee of $1.45 for retail/service commercial uses, $1.66 for office uses, and $0.64 for industrials uses. The maximum impact fee for lodging uses would be $290 per room.
Service Population
The fire facilities fee will be charged to new residential and non-residential development.
As shown on Table 5, the total weighted service population is expected to grow from 103,447 to 137,172, and addition of 33,725 people. This growth represents
24.59 percent of the projected 2040 service population. For the Hawk Training Facility land costs, which is needed to serve current and future populations, this percentage represents the fair share allocation of costs related to the investments needed to serve new growth. The construction of 1.66 additional fire stations to maintain the current level of 24,143 persons served per station is only needed to serve new growth. As such, 100 percent of costs related to new fire stations are allocated to the fee category.
ATTACHMENT 2--Page 25
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 22 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Table 11 Fire Department Cost Allocation
Cost Allocation Factor Formula Amount
Facility Costs Allocated to Fee Program [1] a $17,473,679 Cost Allocation to Land Use [2]
Residential Development b 84%
Nonresidential Development c 16%
Allocated Costs by Land Use
Residential Development d = a*b $14,644,212
Nonresidential Development e = a*c $2,829,467
Service Population Growth [1]
Residents f 28,264
Employees g 5,461
Facilities Cost per Resident [3] h = d/f $518.12
Facilities Cost per Employee [3] I = e/g $518.12
fire alloc
[1] See Table 10 for details.
Per City Fire Department, all costs should be allocated to new growth. [2] See Table 5 for details.
[3] Rounded to 2 decimal places.
ATTACHMENT 2--Page 26
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 23 Economic & Planning Systems, Inc. (EPS) Table 12 Fire Department Fee Calculation
Total Fee
per Unit [1]/ Total Fee
Assumption/ 1,000 Sq. Ft./ Per Bldg.
Land Use Source Room Sq. Ft. [2]
Facilities Cost per Resident Table 11 $518.12 -
Facilities Cost per Employee Table 11 $518.12 -
Residential Persons/Household [3] Per Unit
Single-Family 3.20 $1,658 -
Multifamily 2.54 $1,316 -
Nonresidential Employees/1,000 SF [3] Per 1k Bldg. Sq. Ft. Per Bldg. Sq. Ft.
Retail/Service Commercial 2.50 $1,295 $1.30
Office 2.86 $1,482 $1.48
Industrial 1.11 $575 $0.58
Employees/Room [3] Per Room
Lodging 0.50 $259 -
fire fee calc
[1] Fee per unit and room rounded to the nearest dollar. [2] Fee per building sq. ft. rounded to the nearest cent. [3] See Table A-2.
ATTACHMENT 2--Page 27
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
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5. Police Facilities Fee
The City of Merced Police Department provides a full range of criminal investigation, animal control, code enforcement, and general patrol services to local residents and businesses from its 2 stations, the Main Station at 611 W. 22nd Street and the South Area Station at 470 W. 11th Street. The City first established the police fee category in 1998.
Methodology
The police facility fee is designed to cover new development’s portion of the costs of a new police facility, as well as the cost of vehicles and equipment needed to serve new growth and maintain existing levels of police department service. Because the police department serves both residents and businesses in the city, both residential and non- residential development will pay the police facilities fee.
Police Improvements and Cost Allocation
Currently, the Police Department has 98 sworn officers for a service population of 120,715 residents and employees, or 0.81 sworn officers for every 1,000 persons served.
With the addition of 40,076 persons served by 2040, the City will need 33 additional sworn officers to maintain the current level of service. Additionally, the City needs to construct a new Main Police Station to replace the current headquarters, which was constructed in 1959.
The two main components of the police fee category, as shown in Table 13, are the new police facility and equipment and vehicles to outfit 33 new sworn officers. The cost of the outfitting a new officer includes officer equipment, a vehicle, and vehicle equipment. The total equipment cost per officer is $45,161 and the total equipment cost for 33 new sworn officers is $1,469,308. Because equipment for new sworn officers is only needed to maintain current levels of service with service population group, 100 percent of the cost of this equipment is allocated to the fee category.
The cost of the new police facility includes the cost of acquiring the 4.5 acres of land needed to develop the facility and constructing the approximately 66,000 square-foot facility. Because the new police facility would serve both existing and new development, only 24.59 percent, or new growth’s fair share based on weighted service population growth, of the facility’s cost is allocated to the fee category. This percentage of the cost amounts to $11,841,809. The total police department costs allocated to new growth through the fee category is $13,311,117.
ATTACHMENT 2--Page 29
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 26 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Table 13 Police Facility Costs (2019$)
Item Source Formula Amount
Level of Service Standards
Current Population Estimate Table A-1 a 88,600
Current Employment Estimate Table A-1 b 32,115
Current Total Service Population c=a+b 120,715
Total Service Population in 2040 d 160,791
Total New Service Population from New Growth e=d-c 40,076 Current Number of Sworn Officers f 98
Level of Service Standard (Officers/1,000 Service Population) [1] City g=(f*1,000)/c 0.81 Required Additional Police Officers based on Current LOS [2] h=e*g 33 Equipment Costs per Police Officer
Officer Equipment Police Dept. i $7,190
Vehicle [3] Police Dept. j $22,192
Vehicle Equipment [3] Police Dept. k $4,197
Vehicle Communications [3] Police Dept. l $11,583
Total Estimated Equipment Costs per Police Officer Police Dept. m=i+j+k+l $45,161 Total Estimated Equipment Costs n=h*m $1,469,308
Police Facilities Development Costs
Police Facility Sq. Ft. Police Dept. o 66,000
Police Facility Construction Costs per Sq. Ft. Police Dept. p $725 Estimated Police Facility Construction Costs q=o*p $47,850,000 Required Acres Police Dept. r 4.50
Land Acquisition Costs per Acre City s $70,000
Total Estimated Land Acquisition Costs t=r*s $315,000
Total Estimated Police Facilities Development Costs u=q+t $48,165,000 Total Estimated Police Facilities Development Costs
- New Development [3] Table 5 v = u * 24.6% $11,841,809 Total Police Costs t = k+s $13,311,117
police costs
Source: City of Merced; Merced County Association of Governments; EPS. [1] Based on the current level of service standard per population served. [2] Rounded to the nearest whole number.
[3] One vehicle serves two police officers. These vehicle costs represent 50% of a new vehicle's cost. [4] Based on the percentage growth of service population. See Table 5 for details.
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Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 27 Economic & Planning Systems, Inc. (EPS) Table 14 shows how the total police department costs are allocated to residential and employment growth. First, the total police department costs attributable to new growth are allocated to residential and non-residential land uses based on the relative residential and employment growth in weighted service population calculated in Table 5. Next, the total costs allocated to residential development are divided by the weighted growth in residents to determine a police department cost per new resident and the total costs allocated to non-residential development are divided by the weighted growth in employees to determine a cost per new employee. This results in a per resident and per employee cost of $395.
Police Fee Calculation
The police department impact fee is calculated using cost of $395 per new employee or resident shown in Table 15. For residential land uses, this per resident cost is multiplied by the number of persons per household for single-family and multifamily units, yielding a per unit fee of $1,263 for single-family units and $1,003 for multifamily units. For non-residential land uses, this per employee cost is multiplied by the estimated number of employees per 1,000 square feet (or per guest room for lodging uses) to determine a fee per square foot. This results in a maximum per-square-foot impact fee of $0.99 for retail/service commercial uses, $1.13 for office uses, and $0.44 for industrial uses. The maximum impact fee for lodging uses would be $197 per room.
Service Population
The fire facilities fee will be charged to new residential and non-residential development.
As shown on Table 5, the total weighted service population is expected to grow from 103,447 to 137,172, and addition of 33,725 people. This growth represents
24.59 percent of the projected 2040 service population. For the new police facility, which is needed to serve current and future populations, this percentage represents the fair share allocation of costs related to the investments needed to serve new growth. The addition of 33 sworn officers to maintain the current service level of 0.81 officer per 1,000 persons served is only needed to serve new growth. As such, 100 percent of costs related providing equipment and vehicles for new officers are allocated to the fee category.
ATTACHMENT 2--Page 31
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 28 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Table 14 Police Department Cost Allocation
Cost Allocation Factor Formula Amount
Facility Costs Allocated to Fee Program [1] a $13,311,117 Cost Allocation to Land Use [2]
Residential Development b 84%
Nonresidential Development c 16%
Allocated Costs by Land Use
Residential Development d = a*b $11,155,683
Nonresidential Development e = a*c $2,155,434
Service Population Growth [1]
Residents f 28,264
Employees g 5,461
Facilities Cost per Resident [3] h = d/f $394.70
Facilities Cost per Employee [3] I = e/g $394.70
police alloc
[1] See Table 13 for details.
[2] See Table 5 for details.
[3] Rounded to 2 decimal places.
ATTACHMENT 2--Page 32
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 29 Economic & Planning Systems, Inc. (EPS) Table 15 Police Department Fee Calculation
Total Fee
per Unit/ Total Fee
Assumption/ 1,000 Sq. Ft./ Per Bldg.
Land Use Source Room [1] Sq. Ft. [2]
Facilities Cost per Resident Table 14 $394.70 -
Facilities Cost per Employee Table 14 $394.70 -
Residential Persons/Household [3] Per Unit
Single-Family 3.20 $1,263 -
Multifamily 2.54 $1,003 -
Nonresidential Employees/1,000 SF [3] Per 1k Bldg. Sq. Ft. Per Bldg. Sq. Ft.
Retail/Service Commercial 2.50 $987 $0.99
Office 2.86 $1,129 $1.13
Industrial 1.11 $438 $0.44
Employees/Room [3] Per Room
Lodging 0.50 $197 -
police fee calc
[1] Fee per unit and room rounded to the nearest dollar. [2] Fee per building sq. ft. rounded to the nearest cent. [3] See Table A-2.
ATTACHMENT 2--Page 33
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
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6. Park Facilities Fee
The City of Merced Parks and Community Services Department is responsible for the development and operation of municipal parks, open spaces, and bikeways in the City of Merced. Currently, the City has over 300 acres of parkland and open space and approximately 17 miles of bikeways. The City first established the parks fee category in 1998. The City has previously implemented the collection of a Quimby Act fee to fund the cost of purchasing new parkland. This Report incorporates the cost of purchasing required parkland, thus replacing the Quimby Fee category.
Methodology
The parks facility fee is designed to cover the cost of acquiring and developing new parkland to serve population growth, as well as the new development’s share of the costs for developing bikeways in the City’s Active Transportation Plan and the cost of developing a new community center. Because the parks facilities serves both residents and businesses in the city, both residential and nonresidential development will pay the parks facilities fee.
Park Improvements and Cost Allocation
The City of Merced’s General Plan dictates that the City provide 5 acres of developed parkland per 1,000 residents. As shown in Table 16, the City expects 28,264 new residents by 2040. These 28,264 residents would require 141.32 acres of parkland to meet the standard in the General Plan. The City currently has ownership of 54.90 acres of undeveloped parkland, meaning that the City needs to acquire an additional 86.42 acres to meet the standard in the general plan. The cost of acquiring those 86.42 acres and developing all 141.32 acres needed to serve future population growth is $42,396,000.
Because these additional park areas are only needed to serve new development, 100 percent of these costs are allocated to the fee category. Under the State’s Quimby Act (California Government Code Section 66477), local jurisdictions may charge fees (or receive land dedications in lieu of fees) to residential development for neighborhood and community parks. Previously, the City collected fees for neighborhood parks (Quimby Fees) and collected a separate fee charged to both residential and non-residential development for citywide improvements to parks facilities and bikeways. This update eliminates the Quimby Fee program, and the costs of acquiring land for neighborhood parks are included in this citywide Public Facilities Financing Program.
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Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 32 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Table 16 Developed Park Requirements & Facility Costs (2020$)
Item Source Formula Amount
Current Population Estimate Table 4 a 88,600
Estimated Population in 2040 Table 4 b 116,864
Estimated New Population Growth c=b-a 28,264
Developed Park Standards - 5 Acres/1,000 Population
Required Additional Developed Parks (Acres) d=(c/1000)*5 141.32 Current Total of Developed Park Acreage Table C-1 e 305.16 Total Required Developed Park for City f=(a/1000)*5 443.00 Total Park Acreage Requirement g=d 141.32
Current Undeveloped Park Acreage (Owned by City) Table C-1 h 54.90 Park Acreage to be Acquired i=g-h 86.42
Land Acquisition Costs
Estimated Cost of Land per Acre [1] City j $70,000
Estimated Land Acquisition Cost for New Parks k=i*j $6,049,400 Park Facility Development Costs
Park Development Costs per Acre [2] Table C-3 l $300,000 Estimated Park Facility Development Costs m=g*l $42,396,000 Class I Bike Paths
Total Estimated Costs [3] n $9,440,000
New Development Share of Costs Table 5 o = n * 24.6% $2,320,911 Community Center
Total Estimated Costs Table E-5 p $3,638,191
New Development Share of Costs q = p * 24.6% $894,483
Total Park Development Costs r = k+m+o+q $51,660,794
park cost
Source: City of Merced; Merced County Association of Governments; CoStar; Various jurisdictions; EPS. [3] City of Merced Active Transportation and Safe Routes to School Plan (July 2019). [1] Assumption based on a park site appraisal report prepared by Tiffany K.V. Mach, MAI on February 4, 2020.
[2] Assumption based on a conservative estimate based on EPS's research of park improvement costs in the Central Valley. See Table C-3 for details.
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Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 33 Economic & Planning Systems, Inc. (EPS) In addition to the additional park lands and facilities, the parks fee also supports the implementation of the City’s Active Transportation and Safe-Routes-to-School plan by funding the development of 16 miles of off-street bikeways identified in that Plan at a total cost of $9,440,000. Lastly, the parks fee will fund the development of a new community center. Because the bikeways and community center would serve both existing and new development, only 24.59 percent, of new growth’s fair share based on weighted service population growth, of these facilities’ cost is allocated to the fee category. In total, $51,660,794, which includes the costs of parks needed to serve new development as well as a portion of the costs to develop bikeways and a community center, is allocated to the parks fee category.
Table 17 shows how the total parks facilities costs are allocated to residential and employment growth. First, the total parks facilities costs to be paid by new growth are allocated to residential and non-residential land uses based on the relative residential and employment growth in weighted service population calculated in Table 5. Next, the total costs allocated to residential development are divided by the weighted growth in residents to determine a cost per new resident and the total costs allocated to non- residential development are divided by the weighted growth in employees to determine a cost per new employee. This results in a per resident and per employee cost of $1,532.
For further information on the calculation of parks costs, see Appendix E.
Park Facility Fee Calculation
The park facilities impact fee is calculated using cost of $395 per new employee or resident shown in Table 18. For residential land uses, this per resident cost is multiplied by the number of persons per household for single-family and multifamily units, yielding a per unit fee of $4,902 for single-family units and $3,891 for multifamily units. For non-residential land uses, this per employee cost is multiplied by the estimated number of employees per 1,000 square feet (or per guest room for lodging uses) to determine a fee per square foot. This results in a maximum per-square-foot impact fee of $3.83 for retail/service commercial uses, $4.38 for office uses, and $1.70 for industrial uses. The maximum impact fee for lodging uses would be $766 per room.
Service Population
The parks facilities fee will be charged to new residential and non-residential development. As shown on Table 5, the total weighted service population is expected to grow from 103,447 to 137,172, and addition of 33,725 people. This growth represents
24.59 percent of the projected 2040 service population. For the new bikeways and community center, which are needed to serve current and future populations, this percentage represents the fair share allocation of costs related to the investments needed to serve new growth. The addition of 141.82 acres of developed parkland to meet the standard of 5 acres of parkland per 1,000 residents is only needed to serve new growth.
As such, 100 percent of costs related to developing this new parkland (except for the cost of land already owned by the City) is allocated to the fee category.
ATTACHMENT 2--Page 37
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 34 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Table 17 Park Facilities Cost Allocation
Cost Allocation Factor Formula Amount
Facility Costs Allocated to Fee Program [1] a $51,660,794 Cost Allocation to Land Use [2]
Residential Development b 84%
Nonresidential Development c 16%
Allocated Costs by Land Use
Residential Development d = a*b $43,295,498
Nonresidential Development e = a*c $8,365,296
Service Population Growth [1]
Residents f 28,264
Employees g 5,461
Facilities Cost per Resident [3] h = d/f $1,531.82
Facilities Cost per Employee [3] I = e/g $1,531.82
park alloc
[1] See Table 16 for details.
[2] See Table 5 for details.
[3] Rounded to 2 decimal places.
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Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 35 Economic & Planning Systems, Inc. (EPS) Table 18 Park Facilities Fee Calculation
Total Fee
per Unit/ Total Fee
Assumption/ 1,000 Sq. Ft./ Per Bldg.
Land Use Source Room [1] Sq. Ft. [2]
Facilities Cost per Resident Table 17 $1,531.82 -
Facilities Cost per Employee Table 17 $1,531.82 -
Residential Persons/Household [3] Per Unit
Single-Family 3.20 $4,902 -
Multifamily 2.54 $3,891 -
Nonresidential Employees/1,000 SF [3] Per 1k Bldg. Sq. Ft. Per Bldg. Sq. Ft.
Retail/Service Commercial 2.50 $3,830 $3.83
Office 2.86 $4,381 $4.38
Industrial 1.11 $1,700 $1.70
Employees/Room [3] Per Room
Lodging 0.50 $766 -
park fee calc
[1] Fee per unit and room rounded to the nearest dollar. [2] Fee per building sq. ft. rounded to the nearest cent. [3] See Table A-2.
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Economic & Planning Systems, Inc. (EPS) 36 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx
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7. Public Works Fee
The City of Merced Public Works Department is responsible for the development, maintenance, and operation of a variety of public facilities and services, including solid waste, street lighting, water, and wastewater. In addition, the Public Works Department provides maintenance for City-owned vehicles, buildings, and parks.
Methodology
The public works facility fee is designed to cover a portion of the cost of expanding the City’s Corporation Yard at 1776 Grogan Avenue. Because the Public Works Departments’ services and facilities serve both residents and businesses, the public works facility fee is charged to both residential and non-residential development.
Public Works Improvements and Cost Allocation
The City of Merced’s Corporation Yard contains Department of Public Works administrative offices and provides a storage yard for City-owned heavy vehicles such as trash trucks and materials needed for the repair and maintenance of City-owned facilities.
Additionally, the corporation yard contains a facility for performing maintenance and repair of City-owned vehicles.
The City is planning for an expansion and update to the corporation yard including an improved parking lot, fleet shop, and new offices. The City expects that much of this project will be funded by ratepayers who receive solid waste, water, wastewater, and other public services from the City’s Public Works Department. However, a portion of the cost of this project is attributable to general fund services impacted by new growth. This portion of the project cost, totaling $2,000,000, is allocated to the public works facilities fee category, as shown in Table 19.
Table 20 shows how the public works facilities costs are allocated to residential and employment growth. First, the total public facilities costs to be paid by new growth are allocated to residential and non-residential land uses based on the relative residential and employment growth in weighted service population calculated in Table 5. Next, the total costs allocated to residential development are divided by the weighted growth in residents to determine a cost per new resident and the total costs allocated to non- residential development are divided by the weighted growth in employees to determine a cost per new employee. This results in a per resident and per employee cost of $59.
ATTACHMENT 2--Page 41
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 38 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Table 19 Public Works Facility Costs
Table 20 Public Works Cost Allocation
Item Costs
New Corp Yard $22,400,000
Cost allocated to PFFP [1] $2,000,000
pw costs
Source: City of Merced
[1] Based on discussions with the Public Works Director, required corporation yard expansions costs for Phase 1 of the overall expansion is attributable to general fund services impacted by new growth. The overall corporation yard expansions costs will be funded primarily with enterprise funds. It is expected that the fee study will be updated in 5 years and will assign remaining costs for general fund services for the fee program at that time.
Cost Allocation Factor Formula Amount
Facility Costs Allocated to Fee Program [1] a $2,000,000 Cost Allocation to Land Use [2]
Residential Development b 84%
Nonresidential Development c 16%
Allocated Costs by Land Use
Residential Development d = a*b $1,676,145
Nonresidential Development e = a*c $323,855
Service Population Growth [1]
Residents f 28,264
Employees g 5,461
Facilities Cost per Resident [3] h = d/f $59.30
Facilities Cost per Employee [3] I = e/g $59.30
pw alloc
[1] See Table 19 for details.
[2] See Table 5 for details.
[3] Rounded to 2 decimal places.
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Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 39 Economic & Planning Systems, Inc. (EPS) Public Works Fee Calculation
The public works facilities impact fee is calculated using cost of $59.30 per new employee or resident shown in Table 21. For residential land uses, this per resident cost is multiplied by the number of persons per household for single-family and multifamily units, yielding a per unit fee of $190 for single-family units and $151 for multifamily units. For non-residential land uses, this per employee cost is multiplied by the estimated number of employees per 1,000 square feet (or per guest room for lodging uses) to determine a fee per square foot. This results in a maximum per-square-foot impact fee of $0.15 for retail/service commercial uses, $0.17 for office uses, and $0.07 for industrial uses. The maximum impact fee for lodging uses would be $30 per room.
Service Population
The public works facilities fee will be charged to new residential and non-residential development. As shown on Table 5 the total weighted service population is expected to grow from 103,447 to 137,172, an addition of 33,725 people. The weighted growth in service population is expected to be composed of 84 percent residential growth and 16 percent employment growth. As such, those are the proportions of public works facilities costs assigned to residential land uses and non-residential land uses. As these new facilities are only needed to serve new development, 100 percent of the costs shown in Table 19 are allocated to new growth.
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Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 40 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Table 21 Public Works Fee Calculation
Total Fee
per Unit/ Total Fee
Assumption/ 1,000 Sq. Ft./ Per Bldg.
Land Use Source Room [1] Sq. Ft. [2]
Facilities Cost per Resident Table 20 $59.30 -
Facilities Cost per Employee Table 20 $59.30 -
Residential Persons/Household [3] Per Unit
Single-Family 3.20 $190 -
Multifamily 2.54 $151 -
Nonresidential Employees/1,000 SF [3] Per 1k Bldg. Sq. Ft. Per Bldg. Sq. Ft.
Retail/Service Commercial 2.50 $148 $0.15
Office 2.86 $170 $0.17
Industrial 1.11 $66 $0.07
Employees/Room [3] Per Room
Lodging 0.50 $30 -
pw fee calc
[1] Fee per unit and room rounded to the nearest dollar. [2] Fee per building sq. ft. rounded to the nearest cent. [3] See Table A-2.
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8. Information Technology Fee
The City of Merced Information Technology Department is responsible for the development, implementation, and maintenance, of computer and network services for the City, coordinating information flow between City agencies and between the City and the general public.
Methodology
The information technology fee is designed to cover the cost of expanding the City’s communication infrastructure to future City facilities and modernizing communication infrastructure at existing City facilities. Because these facilities serve both residents and businesses, the information technology fee is charged to both residential and non- residential development.
Information Technology Improvements and Cost Allocation Secure, fast, and reliable communication and transfer of information between City agencies and facilities is key to the functioning of City departments. New City facilities require connections to Smart City Technology Infrastructure via existing fiber optic networks to connect to the internet and facilitate voice, video, and data communications.
In addition, connection to fiber optic networks allows the use of Supervisory Control and Data Acquisition (SCADA), which allows for automated computer monitoring and control of City utilities and facilities, such as wastewater treatment and traffic signals. Lastly, each new City facility listed in Table 22 needs to be equipped with the ability to communicate on public safety radio to enable communication during emergencies.
The cost to install fiber optic cable to connect City facilities depends on the facility’s distance to the nearest fiber optic conduit, which is why the cost of connecting each facility differs, as seen in Table 22. The total cost of connecting all of these facilities is $1,552,300. Because these facilities and associated information technology infrastructure are needed to serve new growth, 100 percent of the cost of the technology infrastructure is allocated to the fee category.
Table 23 shows how the information technology costs are allocated to residential and employment growth. First, the total information technology costs to be paid by new growth are allocated to residential and non-residential land uses based on the relative residential and employment growth in weighted service population calculated in Table 5.
Next, the total costs allocated to residential development are divided by the weighted growth in residents to determine a cost per new resident and the total costs allocated to non-residential development are divided by the weighted growth in employees to determine a cost per new employee. This results in a per resident and per employee cost of $46.
ATTACHMENT 2--Page 45
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 42 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Table 22 Information Technology Costs
Table 23 Information Technology Cost Allocation
Item Cost
Smart City Technology Infrastructure
Connecting Central Police Station $442,500
Connecting Fire Station 56 $167,500
Connecting Fire Station 57 $580,000
Connecting Fire Station 58 $310,500
Connecting Public Works $51,800
Total $1,552,300
it cost
Source: City of Merced.
Cost Allocation Factor Formula Amount
Facility Costs Allocated to Fee Program [1] a $1,552,300 Cost Allocation to Land Use [2]
Residential Development b 84%
Nonresidential Development c 16%
Allocated Costs by Land Use
Residential Development d = a*b $1,300,940
Nonresidential Development e = a*c $251,360
Service Population Growth [1]
Residents f 28,264
Employees g 5,461
Facilities Cost per Resident [3] h = d/f $46.03
Facilities Cost per Employee [3] I = e/g $46.03
it alloc
[1] See Table 22 for details.
Costs allocated to new growth based on discussions with the City. [2] See Table 5 for details.
[3] Rounded to 2 decimal places.
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Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx 43 Economic & Planning Systems, Inc. (EPS) Information Technology Fee Calculation
The public works facilities impact fee is calculated using cost of $46 per new employee or resident shown in Table 24. For residential land uses, this per resident cost is multiplied by the number of persons per household for single-family and multifamily units, yielding a per unit fee of $147 for single-family units and $117 for multifamily units. For non- residential land uses, this per employee cost is multiplied by the estimated number of employees per 1,000 square feet (or per guest room for lodging uses) to determine a fee per square foot. This results in a maximum per-square-foot impact fee of $0.12 for retail/service commercial uses, $0.13 for office uses, and $0.05 for industrial uses. The maximum impact fee for lodging uses would be $23 per room.
Table 24 Information Technology Fee Calculation
Total Fee
per Unit/ Total Fee
Assumption/ 1,000 Sq. Ft./ Per Bldg.
Land Use Source Room [1] Sq. Ft. [2]
Facilities Cost per Resident Table 23 $46.03 -
Facilities Cost per Employee Table 23 $46.03 -
Residential Persons/Household [3] Per Unit
Single-Family 3.20 $147 -
Multifamily 2.54 $117 -
Nonresidential Employees/1,000 SF [3] Per 1k Bldg. Sq. Ft. Per Bldg. Sq. Ft.
Retail/Service Commercial 2.50 $115 $0.12
Office 2.86 $132 $0.13
Industrial 1.11 $51 $0.05
Employees/Room [3] Per Room
Lodging 0.50 $23 -
it fee calc
[1] Fee per unit and room rounded to the nearest dollar. [2] Fee per building sq. ft. rounded to the nearest cent. [3] See Table A-2.
ATTACHMENT 2--Page 47
Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 44 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Service Population
The information technology fee will be charged to new residential and non-residential development. As shown on Table 5 the total weighted service population is expected to grow from 103,447 to 137,172, an addition of 33,725 people. The weighted growth in service population is expected to be composed of 84 percent residential growth and 16 percent employment growth. As such, those are the proportions of information technology cost assigned to residential land uses and non-residential land uses. As these new facilities and associated information technology infrastructure are only needed to serve new development, 100 percent of the information technology costs shown in Table 22 are allocated to new growth.
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9. Summary of Nexus Findings and
Maximum Fee
This chapter summarized the nexus findings based on the fee calculations provided in previous chapters and present a maximum allowable fee by facility category and land use.
Overview of Nexus Findings
The technical calculations detailed in previous chapter establish the following updated nexus findings, consistent with the requirements of the Mitigation Fee Act.
Purpose
The updated fee will help maintain adequate levels of service in the City.
Use of Fee
Fee revenue will be used to fund City infrastructure and capital facility improvements, including roadways and police and fire facilities and equipment, as well as the reimbursement of upfront investments from other City funds for improvements required to serve future growth.
Relationship
New development in the City will increase demands for and impacts on City infrastructure (e.g., the transportation network, park facilities, public safety building and vehicles). The Impact Fee Program will be used to fund additional capacity necessary to accommodate growth. New development will benefit from the increased capacity.
Need
Each new development project will add to the incremental need for infrastructure capacity and improvements. The improvements considered in this study are considered necessary to meet the City’s future capital facility needs. The capital facilities needs are determined based on existing level of service standards and, in some cases, new level of service standards as identified in this study for each fee category.
Proportionality
The fee levels are tied to fair share cost allocations to new Citywide development based on growth and facility demand metrics or factors calculated in this study for each fee category.
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Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 46 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx Summary of Fees
Table 25 calculates the updated maximum allowable impact fee by facility category and land use type. The City would be justified in implementing the fees up to the amounts shown in Table 25. City Council may choose to implement fees at lower rates than shown in the table.
Table 25 Summary of Maximum Justified Fees
Source
Item
Fee Component per room
Transportation Fee Table 9 $3,171 $1,794 $7.14 $4.77 $2.40 $1,922 Fire Department Fee Table 12 $1,658 $1,316 $1.30 $1.48 $0.58 $259 Police Department Fee Table 15 $1,263 $1,003 $0.99 $1.13 $0.44 $197 Parks Fee Table 18 $4,902 $3,891 $3.83 $4.38 $1.70 $766 Public Works Fee Table 21 $190 $151 $0.15 $0.17 $0.07 $30 Information Technology Fee Table 24 $147 $117 $0.12 $0.13 $0.05 $23 Subtotal PFFP Fee $11,331 $8,272 $13.53 $12.06 $5.24 $3,197 Administration (3 Percent) $340 $248 $0.41 $0.36 $0.16 $96 Total Maximum Justified Fee $11,671 $8,520 $13.94 $12.42 $5.40 $3,293 max fee
Nonresidential Fee perResidential Fee per
fee per unit
Retail Bldg.
Sq. Ft.
Lodging
(Per Room)
Office Bldg.
Sq. Ft.
Industrial
Bldg. Sq. Ft.
Multifamily
Unit
Single-Family
Unit
fee per bldg. sq. ft.
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10. Fee Program Implementation and
Administration
The fee program presented in this Report is based on the best facility improvement cost estimates, existing facility cost or value estimates, administrative cost estimates, and land use information available at this time. If costs change significantly, if the type or amount of new development changes, if other assumptions significantly change, or if other funding becomes available (as a result of legislative action on state and local government finance, for example), the fee program should be updated accordingly.
After the fees presented in this Report are established, the City should conduct periodic reviews of facility improvement costs and other assumptions used as the basis of this Report. Based on these reviews, the City may make necessary adjustments to the fee program through subsequent fee program updates.
The cost estimates presented in this Report are in constant 2019 dollars, except where stated. The City automatically may adjust the costs and fees for inflation each year as outlined in this chapter.
The fee program will be implemented in accordance with Government Code Section 66000. City ordinances and resolutions required for implementation of this Nexus Study are an integral and controlling part of the policies and procedures authorized for this Nexus Study. If there are any inconsistencies or contradictions between the implementing ordinance and resolution(s) and the Nexus Study, the ordinance/resolution(s) shall prevail.
Administration Fee Component
An administrative fee will be collected to fund the administration, oversight, implementation, and updates of the fee program, including administration of any credit and reimbursement agreements. The administration fee will include adequate funding to cover all City costs.
Fee Amount
This Report identifies fee rates for the major land use categories, which are detailed in Table 25. The fee rates have been calculated for single-family and multifamily unit dwellings and a few nonresidential land use categories. For projects that do not fit the land use categories identified in Table 25, the Director of Development Services or designee may compute the required fee based on usage factors determined for the specific development project.
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Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
Economic & Planning Systems, Inc. (EPS) 48 Z:\Shared\Projects\SAC\182000\182170 Merced PFFP and DIF Program Update\Reports\182170 dr04.docx The fee rates for a development project are those fees in effect as of the date of acceptance of a complete building permit application. Any adjustments to the fees that occur after that time (e.g., automatic inflation adjustment) would not apply.
The Director of Development Services or designee shall determine and calculate the required fees for each development project in accordance with this Report. Fees shall be computed based on the primary use or uses of the development project, defined as the principal functions of a building or structure, based on the rates specified for that primary use by this Report. In some cases, a development project may include ancillary uses that are different from the primary use, but which exist only to support the primary activities or operation of the primary use, such as office space for management or accounting functions in a retail enterprise. These ancillary uses would not exist absent the operations associated with the primary use. In these cases, the ancillary use would not be charged a different fee rate, and the area associated with ancillary uses would be included in the commercial building area of the primary use.
For projects with multiple primary uses that are operationally separate (i.e., mixed-use projects such as office over retail), fees shall be computed based on applying the applicable fee rate to the total residential units or total commercial building area for each primary use.
Fee Program Updates
The fees presented in this Report are based on the best available cost estimates and land use information at this time. If costs or land uses change significantly in either direction, or if other funding becomes available, the fees will need to be updated accordingly.
Updates to the fee program, other than the automatic annual adjustments described below, must be adopted by a City Council Resolution.
Annual Inflation Adjustment
The fee program may be escalated annually. The annual adjustments, effective January 1 of each year, consider the potential for inflation of public facility design, construction, installation, and acquisition costs. The proposed adjustment procedure is described below.
The fee program will be escalated annually using the percentage change in the Engineering News-Record Construction Cost Index (ENR-CCI) for the 20-city CCI as published by ENR/McGraw-Hill Construction Weekly. The percentage change in the ENR- CCI is the year-over-year change as of each March. The City shall carry out the percentage change calculation to 2 decimal places.
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The proposed fee program is subject to periodic update based on changes in developable land, cost estimates, or outside funding sources. The City will review the costs and the fee programs periodically to determine if any updates to the fees are warranted. During the periodic reviews, the City will analyze these items:
Changes to the required facilities listed in this Report. Changes in the cost to update or administer the fee.
Changes in costs greater than inflation.
Changes in assumed land uses.
Changes in other funding sources.
Other issues as warranted.
Any changes to the fee based on the periodic update will be presented to the City Council for approval before an increase or decrease in the fee.
Based on facility level of service evaluations, the location of approved new development that will add significant housing or jobs, or other considerations, the City has the ability to spend the fee revenues on any of the projects identified in the fee program, regardless of project location and the location of collected fees.
Fee Program to Replace Quimby Act Fees
Under the State’s Quimby Act (California Government Code Section 66477), local jurisdictions may charge fees (or receive land dedications in lieu of fees) to residential development for neighborhood and community parks. Previously, the City collected fees for neighborhood parks (Quimby Fees) and collected a separate fee charged to both residential and non-residential development for citywide improvements to parks facilities and bikeways. This update eliminates the Quimby Fee program, and the costs of acquiring land for neighborhood parks are included in this citywide Public Facilities Financing Program.
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Report: City of Merced Public Facilities Financing Plan and Impact Fee Update December 1, 2021
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APPENDIX A:
Growth and Density Assumptions
Table A-1 Population, Household, and
Employment Growth Projections
Table A-2 Land Use Density Assumptions
Table A-3 Estimated Population per Household
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Table A-1
Population, Household, and Employment Growth Projections [1] City of Merced Public Facilities Financing Plan & Impact Fee Program Update; #182170 Item 2015 2019 [2] 2020 2025 2030 2035 2040 Amount
Average
Annual
Amount
Average
Annual
Percentage
Population Projections 84,125 88,600 89,719 95,670 102,952 109,986 116,864 28,264 1,346 1.33% Household Projections 26,790 28,630 29,090 31,178 33,729 36,147 38,561 9,931 473 1.43% Employment Projections [3] 29,693 32,115 32,720 35,049 37,871 40,723 43,927 11,812 562 1.50% projections
Source: Merced County Association of Governments; EPS.
[1] MCAG projections based on analysis prepared by the University of the Pacific Eberhardt School of Business Center for Business & Policy Research, dated July 7, 2016. [2] MCAG: 2019 estimates based on straight line interpolation.
Change (2019-2040)
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Table A-2
Land Use Density Assumptions
City of Merced Public Facilities Financing Plan & Impact Fee Program Update; #182170 Employees
Persons per Sq. Ft. per per 1,000
Land Use Fee Categories Household [1] Employee [2] Sq. Ft./Room [3] Residential
Single-Family 3.20 - -
Multifamily 2.54 - -
Nonresidential per 1,000 sq. ft.
Retail/Service Commercial - 400 2.50
Office - 350 2.86
Industrial - 900 1.11
per room
Lodging - 1,000 0.50
density assumps
Source: U.S. Census Bureau; City of Merced; EPS.
[2] Based on the following assumptions:
Retail/Service Commercial: 2012 Merced PFFP.
Office: 2012 Merced PFFP.
Industrial: 2012 Merced PFFP.
Lodging: EPS, based on similar studies.
[3] Retail/Service Commercial, Office, and Industrial: Equal to 1,000 sq. ft. / sq. ft. per employee.
Lodging: Assumes 500 gross sq. ft. per hotel room.
[1] Based on U.S. Bureau American Community Survey data.
See Table A-3 for details.
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Table A-3
Estimated Population per Household
City of Merced Public Facilities Financing Plan & Impact Fee Program Update; #182170 Single-Family Multifamily
Item Residential Residential
Population [1] 59,398 19,725
No. of Units [1] 18,590 7,754
Population per Household [2] 3.20 2.54
pph
Source: U.S. Census Bureau, 2013-2017 American Community Survey, Table B25033, Table B25024.
[1] Based on the following population by unit type and number of units in structure:
Single-Family Residential: Attached or detached single-unit dwelling by structure.
Multifamily Residential: 2 or more dwelling units by units in structure.
Note: Assumptions do not include population and units for mobile home, boat, RV, van, etc.
[2] Rounded to two decimal places.
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