Cultural Heritage Board
Memorandum
Community & Economic Development Department Planning Division 3900 Main Street, Riverside, CA 92522 | Phone: (951) 826-5371 | RiversideCA.gov
July 19, 2023
CULTURAL HERITAGE BOARD MEETING DATE: JULY 19, 2023
AGENDA ITEM NO.: 6
DISCUSSION ITEM
RECOMMENDATION
Staff recommends that the Cultural Heritage Board provide input regarding City Council’s consideration of Mills Act fee adjustment.
BACKGROUND
Enacted by the State of California in 1976, the Mills Act grants local governments the ability to provide property tax abatements to the owners of qualified historical properties.
To receive the property tax abatement, property owners must enter into an agreement that commits them to making capital improvements to rehabilitate, restore, preserve, or maintain their qualified historical property. State Law governing the local jurisdiction of the Mills Act Program is found in the California Government Code, Article 12, Section 50280 through 50290 (Historic Property Contra cts). Section 50281.1 allows legislative bodies to require a fee not exceed the reas onable cost of implementing the Mills act program.
In 2004, City Council adopted Resolution No. 20825 (2004 Resolution - Attachment 20) to implement the Mills Act Program (Program ) in Riverside. The Program encourages preservation of designated historic districts and individual properties throughout the City.
This, in turn, preserves property values and ensures preservation of the City’s tangible links to the past for future generations.
Periodically, the City Finance Department unde rtakes an update of the City's User Fees and Charges to present the City Counc il with recommendations for appropriate adjustments to the City's user fees and charge s. City Council then adopts, by resolution, the City’s User Fees and Charges Schedule. The following table outlines the user fees associated with the Mills Act:
Case Numbers Not Applicable
Request To provide input regarding City Council’s consideration of Mills Act fees adjustment.
Project Location Citywide
Ward All
Staff Planner
Scott Watson, Historic Preservation Officer
951-826-5507
[email protected]
Mills Act Fees
July 19, 2023
Resolution
No.
Approval
Date Fee Type Fee Amount Cost
Recovery
Maximum
Contracts
Allowed
Number of
Contracts
Awarded
21001 August 9,
2005
Application Fee
$53
($42 base fee + $11
document
imaging)
100%
7 2005 – 6
2006 – 8
2007 – 7
2008 – 6
2009 – 4
2010 – 9
Average – 6.7
Contract/Review
Initiation Fee $572 100%
21960 July 12,
2010
Application Fee
$114
($73 base fee + $41
document
imaging)
70% 10
2011 – 1
Contract/Review
Initiation Fee $418 70%
22227 June 21,
2011
Application Fee
$137
($86 base fee + $51
document
imaging)
80%
10 2012 – 2
2013 – 5
2014 – 4
2015 – 5
Average - 4
Contract/Review
Initiation Fee $489 80%
22904 September
8, 2015
Application Fee
$404
($189 base fee +
$189 document
imaging + 14% City
Surcharge [$26])
90%
10 until
2021
20 in 2022
2016 – 1
2017 – 5
2018 – 6
2019 – 7
2020 -11
2021 – 7
2022 – 18
Average – 7.9
Contract/Review
Initiation Fee
$3,274
($2,872 base fee +
14% City Surcharge
[$402])
90%
As part of the adoption of the user fees and charges in 2010, City Council implemented a plan to increase fees to a 90% cost reco very. The plan began in 2010 with a 70% cost recovery in 2010 and increase the cost reco very percentage during the following user fee adoptions. In 2015, the City Council approved a 4% Technology recovery cost surcharge to cover the cost of updating the City’s permitting and project tracking system to a web-based system. Mills Act fees were al so added to the list of fees subject to the City’s 10% General Plan Maintenance Su rcharge. The General Plan Maintenance Surcharge is intended to aid in covering the cost of the State required update of the General Plan. The Technology Recovery fee and General Plan Maintenance Surcharge total a 14% City Surcharge.
At the May 10, 2023, the Financial Performance and Budget Committee (FPBC) considered adjustments to the City’s User Fees and Charges Schedule for the Fiscal Year 2023-2024. As part of the review, the FPBC co nsidered adjustments to the Mills Act fees.
Mills Act Fees
July 19, 2023
Following discussion, the FPBC recommended removal of the Mills Act fees and referred them to the Cultural Heritage Board for review and comment (Exhibit 1).
DISCUSSION
State law regarding Mills Act contract implementation provides flexibility allowing each jurisdiction to develop a program that best fits the needs of that jurisdiction. Jurisdictions also have varying approaches to fees. Each jurisdiction makes the determination of how to set the fees, based off their costs to admi nister the program. The table below outlines the various approaches to Mills Act fees in other Southern California jurisdictions:
Jurisdiction Fee Type Fee
Amount
Approximate
Cost
Recovery
Fee Goal
Maximum
Contracts
Allowed
Number of
Contracts
Awarded
(Last 5
years)
Anaheim None $0 0% Encourage
preservation No Max
2018 – 10
2019 – 6
2020 – 8
2021 – 9
2022 – 12
Corona Processing Fee $2,138 100% Full cost
recovery No Max
2018 - 3
2019 - 1
2020 - 0
2021 – 1
2022 – 0
Glendale
Application fee –
Property valuation
up to $750,000
$1,333.75
Unknown*
Tiered
Incentive
program for
varying
property
valuations
No Max
2018 - 2
2019 - 9
2020 - 1
2021 - 4
2022 - 5
Application fee –
Property valuation
$750,000 to
$1,000,000
$2,134
Unknown*
Application fee –
Property valuation
$1,000,001 to
$1,400,000
$3,201
Unknown*
Application fee –
Property valuation
$1,400,001 or
above
$3,734.50
Unknown*
Mills Act Fees
July 19, 2023
* No fee study completed by jurisdiction, unable to determine cost recovery.
The City is currently completing a fee study that will be presented to the City Council at a future date. Any input regarding Mills Act fees by the Cultural Heritage Board will be provided to the City Council for consideration as part of the fee study review.
STRATEGIC PLAN
This item contributes to the Envision Riverside 2025 City Council Strategic Priority 1 – Arts, Culture and Recreation (Goal 2.3 – Strengthen Riverside’s portfolio of arts, culture, recreation, senior, and lifelong learning programs and amenities through expanded community partnerships, shared use opportunities, and fund development).
This item aligns with the following Cross-Cutting Threads:
1. Community Trust: The Mills Act Program aligns with the Community Trust Cross- Cutting Thread as the annual contracts are reviewed at a public meeting by the City Council, allowing for public comment.
2. Equity: The Mills Act Program aligns with the Equity Cross-Cutting Thread as it is available to all historically designated properties throughout the City.
Long
Beach
Pre-application
eligibility
determination
$237.60 12%
Incentivize
the program
12 SFR
3 Duplex/Triplex
4 MFR
1 Non-
residential
2018 – 19
2019 – 11
2020 – 13
2021/22 –
Program on
hold
Application $2,700 43%
Ontario
Application Fee -
Homeowner $214 3% Encourage
landmark
designation
and
adaptive
reuse
No Max
2018 – 1
2019 - 4
2020 - 1
2021 - 4
2022 - 1
Application Fee –
Non-homeowner $703 10%
Pasadena
Contract Signing
Fee - SFR $1,298.50 Unknown* Partial Cost
recovery,
adjusted
annually
based in CPI
20 SFR
6 MFR
2018 – 22
2019 – 23
2020 – 21
2021 – 15
2022 – 15
Contract Signing
Fee - MFR $2,597 Unknown*
Pomona Application Fee
1% of
property
value
5-7%
Incentivize
program,
low-income
community.
No Max
2018 – 1
2019 – 0
2020 – 4
2021 – 5
2022 – 11
Redlands Application Fee $480 100% Full Cost
Recovery 7
2018 – 1
2019 – 1
2020 – 0
2021 – 0
2022 - 1
Mills Act Fees
July 19, 2023
3. Fiscal Responsibility: The Mills Act Program aligns with the Fiscal Responsibility Cross-Cutting Thread as it provides opportunity for property owners to reinvest back into the community through rehabilitation of the historic property.
4. Innovation: The Mills Act Program aligns with the Innovation Cross-Cutting Thread as it responds to the high financial de mands of historic property maintenance and helps the property owners through reduced property taxes.
5. Sustainability and Resiliency: The Mills Act Program aligns with the Sustainability & Resiliency Cross-Cutting Thread as it assists with the rehabilitation and maintenance of historic properties so that they can continue to contribute to the character of the City for generations to come.
EXHIBITS LIST
1. FPBC Minutes May 10, 20023
Prepared by: Scott Watson, Hi storic Preservation Officer Reviewed by: David Murray, Principal Planner
Approved by: Maribeth Tinio, City Planner