Attachment 3
Finance and Administrative Services Department
DATE: November 7, 2023
TO: City Council
FROM: Elliot Young, Senior Financial Analyst
Grace Zheng, Assistant Finance and Administrative
Services Director
Derek Rampone, Finance and Administrative Services Director
VIA: Kimbra McCarthy, City Manager
SUBJECT: Fiscal Year 2022-23 Informational Reporting of Park Land Dedication Fees
BACKGROUND
As defined in CGC Section 66000(b), “fee” does not include fees specified in CGC Section 66477 (the Quimby Act), which governs the City’s Park Land Dedication (PLD) Fee and does not require annual reporting. The Park Land Dedication Fund is included in this report to verify compliance with CGC Section 66477(a)(6)(A) regarding commitment of Park Land Dedication fees within five years after receipt or issuance of the building permit, whichever occurs later.
ANALYSIS
PLD fees are collected as a condition of approval for new residential development and used for parks o r recreational purposes. The PLD Fee discussed below is not subject to CGC Sections 66006 or 66013’s annual reporting requirements but is subject to CGC Section 66477(a)(6)(A) to report the commitment of PLD fees within five years after receipt or issuance of the building permit, whichever occurs later. The PLD fees are included along with the City’s annual compliance reports for informational purposes.
In 1997, the City adopted a Park Land Dedication Ordinance, Chapter 41 of the City Code, which requires park land dedication or payments of in -lieu fees for residential development. On November 28, 2006, the City Council amended the City Council Policy for prioritizing the use of PLD In-Lieu Fees to establish objectives for use of PLD In-Lieu fees as detailed below:
• Priority No. 1—Acquisition
• Priority No. 2—Development
• Priority No. 3—Rehabilitation
Fiscal Year 2022-23 Informational Reporting of Park Land Dedication Fees November 7, 2023
Within each priority, first consideration goes to pr ojects that are located within the same parks and open space area as the development generating the fee. Next, prioritization goes to projects within one mile of the development generating the fee. Last, consideration is for projects that provide a commu nitywide asset, which can be located anywhere in the City. The Parks and Recreation Commission reviews projects and forwards a recommendation to the City Council regarding commitment of both the available in -lieu fees received and the available investment earnings generated each fiscal year.
Subsequent amendments to the Park Land Dedication Ordinance were enacted, including amendments adopted on October 13, 2015 and April 13, 2021 to exclude affordable housing units from the PLD requirement, modify the process of establishing a fair-market range for land values, and provide for a privately owned/publicly accessible open space credit.
The beginning balance, revenues, expenditures, and available balance of the PLD Fund for Fiscal Year 2022-23 are as follows:
Beginning Balance, July 1, 2022 $64,915,797
Unaudited Revenues:
Park Land Dedication Fees $16,234,560
Investment Earnings 2,536,957
Capital Projects Refunds 630,374
Total Unaudited Revenues 19,401,891
Total Available 84,317,688
Unaudited Expenditures:
Fiscal Year 2022-23 Adopted Capital Improvement
Projects (CIPs) (3,850,000)
Fiscal Year 2022-23 Midyear CIPs (26,787,310)
Total Unaudited Expenditures (30,637,310)
Unexpended Ending Balance 53,680,378
Total Committed by City Council for Specific Future
Projects
(5,592,547)
Available Balance, June 30, 2023 $48,087,831
PLD fees, investment earnings, and capital project refunds total $ 19.4 million, and expenditures total $30.6 million. After deducting $5.6 million in funds committed for future projects, there is an available balance of $48.1 million as of June 30, 2023. This $48.1 million is comprised of fees, investment earnings, and capital project refunds deposited in the PLD Fund. As required by CGC Section 66477(6)(A), all PLD fees have been committed within five years after deposit of the fees or the issuance of building permits, whichever occurs later.
Fiscal Year 2022-23 Informational Reporting of Park Land Dedication Fees November 7, 2023
The Fiscal Year 2023-24 Adopted CIP includes appropriations for projects and commitments for future projects which utilized a portion of the committed and available PLD funds indicated above.
CONCLUSION
The PLD Fund is in compliance with CGC Section 66477(a)(6)(A) regarding the commitment of fees within five years of receipt.
EY-GZ-DR/4/FIN
541-11-07-23M ATT 3
cc: SMA—Wong