City Council Agenda Report
TO: Mayor Clauzel and Members of the City Council
FROM: Ken Irwin, City Manager
BY: Mike Willett, Public Works Director
MEETING DATE: April 18, 2023
ITEM NO: 6.5
SUBJECT: Approve Resolution No. 2023-11 Approving Water, Sewer and Storm Drainage Impact Fee Increases, Per Ordinance No. 608
RECOMMENDATION
Motion to Approve Resolution No. 2023-11 Approving Water, Sewer, and Storm Drainage impact fee increases, per Ordinance No. 608
BACKGROUND
The city develops water, sewer and storm drainage impact fees that are designed to equitably recover the costs of infrastructure and assets benefiting new development. The purpose of the City’s impact fee program is to provide a funding source for the City to address new development. These fees are only charged to and collected from new development in the City limits based on projects or facilities on the City’s Capital Improvement Plan or appropriate Master Plan. All developers are required to pay the fees as a condition of approval of their development permit unless the City Council waives any or all fees as established by the development agreement(s).
In June 2019, the city updated its water, sewer, and storm drainage impact fees. The city’s current impact fees are based on a fee study completed by Bartle Wells and Associates in 2019.
Previously the city had not updated fees since 2006.
As part of the 2019 impact fee update, the city adopted a Resolution allowing for annual fee increases. The increases would be effective every January 1st and updated based on the San Francisco-Bay Area Construction Cost Index (CCI). These Construction Cost Index (CCI) in California are developed based upon Building Cost Index (BCI) cost indices average for San Francisco and Los Angeles areas and are produced by Engineering News Record (ENR) and reported through the Department of General Services via their website www.dgs.ca.gov <http://www.dgs.ca.gov>.
The adopted fees were based solely on future capital projects and land benefiting new customers as identified in the City’s 2018 Water Master Plan, 2018 Storm Drainage Master Plan and 2016 Wastewater Master Plan and 2018 cost update as well as the 2015 Urban Water Management Plan.
ANALYSIS
The 2019 adopted fees and impact fee study report were distributed to the various stakeholders through stakeholder meetings and were advertised as required by law. No concerns or objections to the proposed fees were received.
Per the City Ordinance No. 608 (M.C. Section 3.64) impact fees are established as follows:
3.64.020 Establishment of development impact fees.
A Public Facilities Development Impact Fee is hereby established as a condition of any new development for which discretionary approval is required from the City of Patterson, including issuance of building permits and/or certificates of occupancy. Said fees are established to pay for public facilities as identified in the City of Patterson Development fees Studies and the City of Patterson Development fees Studies Addendum. The city council shall, from time to time, by resolution, set forth the amount of the fee, list the specific public improvements to be financed with said fees, describe the estimated cost of the facilities, describe the reasonable relationship between the fee and the type of development upon which the fee is being levied, and set forth the time of payment of the fee. Said resolution shall provide for a method of adjusting the amount of the fees to account for changes in construction costs or other considerations affecting the reasonable relationship between the fees and the cost of the identified public facilities. (Ord. 608 § 2 (part), 2000).
The City Council adopted Resolution No. 2019- 33, which approved the impact fees and annual increases. Since fees were adopted in late 2019 and due to availability of CCI annual % information not being available until after the end of every year, the first increase would not be applied until January 1, 2022 (using % from 2021) and the second January 1, 2023 (using % from 2022), see attached. The next scheduled increase would be in 2024 (using % from 2023) once the information is published through DGS.
FISCAL IMPACT
All impact fees are collected at the time a building permit is issued and therefore the fiscal impact is unknown at this time. All fees collected are reflected in the City’s budget. The fees collected are one-time payments received from development are meant to help offset the financial impact that development placed on public infrastructure, in this case water, sewer and storm drainage system.