CITY COUNCIL
Darrell Steinberg, Mayor
Lisa Kaplan, District 1
Sean Loloee, District 2
Karina Talamantes, District 3
Katie Valenzuela, District 4
Caity Maple, District 5
Eric Guerra, Vice Mayor, District 6
Rick Jennings, II, District 7
Mai Vang, Mayor Pro Tem, District 8
CHARTER OFFICERS
Mindy Cuppy, City Clerk
Susana Alcala Wood, City Attorney
Jorge Oseguera, City Auditor
Howard Chan, City Manager
John Colville, City Treasurer
City Council
Financing Authority
Housing Authority
Public Financing Authority
Redevelopment Agency
Successor Agency
915 I Street, 1st Floor, Sacramento
Published by the Office of the City Clerk
(916) 808-7200
SUPPLEMENTAL MATERIAL
Description: Attached is supplemental material received after publishing the agenda, the replacement of attachments 2 and 3. In addition, the published date has been updated on the staff report.
For the Meeting of: Tuesday, October 24, 2023, at 5:00 p.m.
Agenda Item: Public Hearing Item 20
20. Proposed Storm Drainage Development Fee Ordinance and Resolution Establishing Water, Sewer, Combined Sewer Development Fees and Adopting Nexus Studies (Noticed 10/02/2023 & 10/10/2023; Pass for Publication 10/17/2023; Continued from 10/17/2023; Published XX/XX/2023 10/19/2023)
File ID: 2023-01248
Location: Citywide
Recommendation: Conduct a public hearing and upon conclusion, 1) Adopt Ordinance adding section 13.16.125 to and amending section 18.52.010 of the City Code relating to a Storm Drainage Development Fee; and 2) adopt a Resolution adopting proposed Water, Sewer, Combined Sewer, and Storm Drainage Development Fees, associated Nexus Studies, and establishing the Storm Drainage Development Fee Fund. and 3) Continue a Resolution adopting a proposed Storm Drainage Development Fee, adopting a Nexus Study, and establishing the Storm Drainage Development Fee Fund to November 14, 2023.
Contact: Kelly Sherfey, Project Manager, (916) 808-1466, [email protected]; Sherill Huun, Engineering & Water Resources Division Manager, (916) 808-1455, [email protected], Pravani Vandeyar, Director, (916) 808-3765, [email protected]; Department of Utilities City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-01248 10/24/2023 Consent Public Hearing Item 20.
Proposed Storm Drainage Development Fee Ordinance, Resolution Establishing Water System, Sewer, and Combined Sewer Development Fees and Adopting Nexus Studies and Resolution Establishing Storm Drainage Development Fee, Adopting Nexus Study and Establishing the Storm Drainage Development Fee Fund (Noticed 10/02/2023 & 10/10/2023; Pass for Publication 10/17/2023; Continued from 10/17/2023; Published XX/ XX/2023 10/19/2023 )
File ID: 2023-01248
Location: Citywide
Recommendation: Conduct a public hearing and upon conclusion, 1) Adopt Ordinance adding section 13.16.125 to and amending section 18.52.010 of the City Code relating to a Storm Drainage Development Fee; 2) adopt a Resolution adopting proposed Water System, Sewer, and Combined Sewer Development Fees, and associated Nexus Studies, and 3) Continue a Resolution adopting a proposed Storm Drainage Development Fee, adopting a Nexus Study, and establishing the Storm Drainage Development Fee Fund to November 14, 2023.
Contact: Kelly Sherfey, Project Manager, (916) 808-1466, [email protected]; Sherill Huun, Engineering & Water Resources Division Manager, (916) 808-1455, [email protected], Pravani Vandeyar, Director, (916) 808-3765, [email protected]; Department of Utilities Presenter: Pravani Vandeyar, Director, (916) 808-3765, [email protected] Department of Utilities
Attachments:
1-Description/Analysis
2-Resolution relating to the Water System, Sewer, and Combined Sewer Development Fees 3-Resolution relating to the Storm Drainage Development Fee 4-Exhibit A of Resolution: Department of Utilities Development Fees Nexus Studies 5-Ordinance, Clean
6-Ordinance, Redline
Description/Analysis
Issue Detail: In April 2015, Council adopted the 2035 General Plan (General Plan), including policies
File ID: 2023-01248 10/24/2023 Consent Public Hearing Item 20. and implementation measures to prepare and adopt citywide development impact fee programs.
These programs would ensure new development pays its fair share of needed infrastructure improvements to support projected growth and development. The Water System, Sewer, and Combined Sewer Development Fees are outdated and underfunded thus requiring necessary fee adjustments aligned with recently updated Nexus Studies. Additionally, the proposed ordinance adding section 13.16.125 of the City Code would establish a citywide Storm Drainage Development Fee. The ordinance would also amend the City Code relating to fee deferrals to add a reference to the new Storm Drainage Development Fee.
Policy Considerations: The proposed ordinance has been guided by the City’s goals and policies as established in the General Plan, including the policies that promote a complete and adequate infrastructure system to support future development.
U 1.1.5 Growth and Level of Service. The City shall require new development to provide adequate facilities or pay its fair share of the cost for facilities needed to provide services to accommodate growth without adversely impacting current service levels.
U 1.1.6 Infrastructure Finance. The City shall develop and implement a financing strategy and assess fees to construct needed water, wastewater, stormwater drainage, and solid waste facilities to maintain established service levels and to mitigate development impacts to these systems (e.g., pay capital costs associated with existing infrastructure that has inadequate capacity to serve new development). The City shall also assist developers in identifying funding mechanisms to cover the cost of providing utility services in infill areas.
Economic Impacts: The Water System, Sewer, Combined Sewer, and Storm Drainage Development Fees (Utility Development Fees) will fund infrastructure necessary to support development.
Environmental Considerations: It has been determined that the proposed activities are not a project pursuant to the California Environmental Quality Act (CEQA) Guidelines Section 15378(b).
The activities described in this report are the creation of government funding mechanisms or other government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. As a result the proposed activities are not subject to CEQA pursuant to CEQA Guidelines Section 15060(c)(3).
Sustainability: The proposed ordinance and fees support new residential and non-residential development needed to meet the population growth projections outlined in the General Plan. The proposed development fee framework ensures that existing ratepayers are not paying the full cost of infrastructure to support new development, but rather that new growth pays its fair share of infrastructure costs, thereby allowing the City to develop in a sustainable manner.
File ID: 2023-01248 10/24/2023 Consent Public Hearing Item 20.
Commission/Committee Action: The Law and Legislation Committee reviewed the Storm Drainage Development Fee Ordinance on September 19, 2023, and forwarded a recommendation of approval to the City Council by a vote of four to zero.
Rationale for Recommendation: The proposed development fee adjustments are needed to ensure new development within the city pays its fair share of the cost for facilities needed to provide services to accommodate growth without adversely impacting current service levels. The establishment of a Storm Drainage Development Fee and the fee adjustments of the Water System, Sewer, and Combined Sewer Development Fees will provide the financial capacity to fund major infrastructure projects necessary to meet future development demands.
Financial Considerations: Development fees provide a mechanism to ensure that new development pays for the public infrastructure needs caused by new growth. The Utility Development Fees framework also includes administrative fees to recoup staff time required to administer the program. Revenues derived from the Utility Development Fees will be deposited in separate funds.
Staff is recommending that City Council authorizes a new accounting fund to be known as the Storm Drainage Development Fee Fund.
The Utility Development Fees will not have an impact on the General Fund.
Local Business Enterprise (LBE): Not applicable.
Background: As the Department of Utilities plans for the future development needs of the City, it has identified a need for new critical infrastructure that will be needed to sustain the growing population of Sacramento. For several decades the City has utilized existing infrastructure capacity to support new development. When capacity is no longer available, the City has relied on individual proposed developments to fund new infrastructure required by that project. In-depth analysis showed that the City’s development impact fee system is outdated, difficult to navigate, and is insufficient to fund infrastructure required to support the build out of the 2035 and draft 2040 General Plans.
To avoid impeding the City’s rapidly paced development, critical infrastructure must be constructed to support the expanding population. In addition, the City operates its water system, sewer system, and combined sewer system pursuant to state permits that require the City to maintain adequate resources to assure capacity for new growth. Today’s Utility Development Fees are significantly deficient and will not allow the Department of Utilities to begin design and construction of long-term infrastructure projects. To meet these future demands, the Department of Utilities retained Economic & Planning Systems (EPS) to update the Water, Storm Drainage, Sewer, and Combined Sewer Nexus Studies to determine the appropriate development impact fees to fund necessary infrastructure projects in coordination with the growth trends of the City. The Utility Development Fees Nexus Studies were updated using best practices, current data, and methodology calculated to meet all statutory and regulatory guidelines.
File ID: 2023-01248 10/24/2023 Consent Public Hearing Item 20.
The recommended adjustments to the current Water System, Sewer, and Combined Sewer Development Fees, as well as the establishment of the Storm Drainage Development Fee, were based on findings in the Nexus Studies. Without adjustment of the Utility Development Fees, the City’s financial capacity to fund major water system, sewer system, combined sewer system, and storm drainage system infrastructure projects will continue to erode.
Because of the impact these fee adjustments would have on the development community, the Department of Utilities conducted extensive outreach, developed an informational webpage on the proposed adjustments, and requested and responded to public comment.
In addition to DOU’s outreach efforts, consideration for development projects currently in the pipeline was taken into account. The new and increased fees will contain exemptions related to building permits, grading permits, and preliminary applications submitted under the Housing Accountability Act (SB 330). Additionally, for projects that do not qualify for those exemptions, the adjusted fees will be phased in automatically over four years in 25% increments. This implementation approach allows for the development community to prepare for the increases as they plan for upcoming projects.
The Utilities Department requests an Effective Date of January 22, 2024, 90 days after adoption.
RESOLUTION NO. 2023-
Adopted by the Sacramento City Council
October 24, 2023
ADOPTING THE UPDATED UTILITY DEVELOPMENT FEES NEXUS STUDIES RELATING
TO THE WATER SYSTEM, SEWER, AND COMBINED SEWER DEVELOPMENT FEES,
AND ESTABLISHING THE AMOUNT OF WATER SYSTEM, SEWER, AND COMBINED
SEWER DEVELOPMENT FEES
BACKGROUND
A. Established in 1979, by ordinance 4268, the City’s Water System Development Fee imposes a fee on residential and non-residential development projects. The purpose of the fee is to fund capital capacity requirements to accommodate projected new residential and non-residential development. The Water System Development Fee is used to fund water facilities needed to secure, treat, store and transmit water for demand generated by development in the service area.
B. Established in 1984, by ordinance 84-051, the City’s Sewer Development Fee imposes a fee on residential and non-residential development projects. The purpose of the fee is to fund capacity improvements to accommodate projected new residential and non- residential development. The Sewer Development Fee is used to fund separated sewer facilities needed to convey sanitary sewage generated by development in the service area to trunk lines for the regional treatment facility owned and operated by the Sacramento Regional County Sanitation District.
C. Established in 2005, by ordinance 2005-0020, the City’s Combined Sewer Development Fee imposes a fee on residential and non-residential development projects. The purpose of the fee is to fund capacity improvements to accommodate projected new residential and non-residential development. The Combined Sewer Development Fee is used to fund sewer pipe capacity or equivalent improvements to convey and store sanitary sewage and drainage runoff generated by development in the service area to mitigate the risk of river, roadway, and property contamination during storm events.
Release of this combined storage is timed to coincide with available capacity for discharge to trunk lines connected to the regional treatment facility, which is owned and operated by the Sacramento Regional County Sanitation District.
D. New and improved utility infrastructure will be required to support the City of Sacramento’s General Plan and accommodate projected development and growth through 2040.
E. The City prepared the Development Impact Fee Program and Nexus Studies (Nexus Studies), attached as Exhibit A, which demonstrate that the capital cost portions of the Water System, Sewer, and Combined Sewer Fees, which are capacity charges, do not exceed the reasonable cost of providing the service for which the fees are imposed.
F. As demonstrated by the Nexus Studies, there is a reasonable relationship between the need for public facilities and the type of development projects on which the fee is imposed (new dwelling units, buildings, and structures; additions to the commercial building area and residential building area of buildings and structures; and changes in use of buildings and structures). These development projects accommodate population growth, which in turn stresses the capacity of the existing water system, combined sewer system, and separated sewer system, and triggers demand for new and improved facilities.
G. There is also a reasonable relationship between using fee revenues to fund public facilities and the type of development projects on which the fee is imposed. As explained above, these development projects increase the demand for capacity provided by public facilities. Using fee revenues to satisfy this demand will ensure consistent levels of service for residents and mitigate public safety hazards associated with strained public facilities.
H. The Nexus Studies also establish that the amount of the water system, sewer, and combined sewer development fees are of proportional benefit to the cost of public facilities attributable to particular development projects, taking into account anticipated growth and the costs of designing, constructing, installing, improving, and acquiring public facilities.
I. The Nexus Studies set out the proposed maximum amount of the development fees, attached as Exhibit B, and these amounts have been determined and calculated in a manner consistent with section 66013 of the Mitigation Fee Act.
J. On October 24, 2023, the City Council held a public hearing in the manner required by Government Code section 66016 to consider the adoption of this resolution. The public hearing was also noticed pursuant to and in compliance with Government Code sections 66018, 66019, and 6062a, and was held as part of a regularly scheduled meeting of the City Council.
K. Imposing the increased Water System Development Fee upon new housing development projects is necessary to mitigate or avoid specific, adverse impacts upon the public health or safety and there is no feasible alternative method to satisfactorily mitigate or avoid the adverse impact.
a. The City’s Urban Water Management Plan, Water Master Plan, and 2040 General Plan Update demonstrate that the City does not currently have water treatment capacity for projected growth through 2040. The forecasted capacity necessary to serve new growth is 42 million gallons a day. Projected demands of water use in the Water Master Plan and the Urban Water Management Plan for existing customers show a range of future customer water consumption, which will result in the need for 7 to 22 million gallons a day of new treatment capacity to serve new growth. DOU must construct or acquire additional capacity via acquisition or construction of new water sources, treatment, and storage and conveyance facilities. The Nexus Studies identify projects, RiverArc and the Sacramento River Water Treatment Plant, designed to meet the retail capacity requirements both in terms of quality and quantity for future customers.
Additional storage and conveyance of drinking water for operational, fire suppression support, and emergency supply projects necessary to serve new growth are also identified within the Nexus Studies.
b. The Nexus Studies calculated the required contribution from new development to fully fund water treatment capacity for new growth through 2040.
c. In order to fund the water treatment capacity projects, the City must collect the proportionate share of the cost from new development.
d. California Health & Safety Code section 116525 requires the City to obtain a permit from the Division of Drinking Water in order to operate its public water system. The City’s Domestic Water Supply Permit Number 01-09-06-PER-003 (Water Supply Permit) is a written public health and safety requirement that requires the City to maintain adequate financial capacity to reliably operate the City’s water system and comply with all statutory and regulatory drinking water requirements and conditions set forth in the Water Supply Permit. The Water Supply Permit also contains findings that the City has demonstrated enough capacity to serve new growth for a ten-year period.
e. If the City charges new development less than its proportionate share of the cost of water treatment capacity, the City will not maintain adequate financial capacity to pay for the new water treatment capacity required to service projected new growth, which will violate the terms of the Water Supply Permit. The City has received applications pursuant to the Housing Accountability Act (SB 330) covering 5,965 units in housing development projects and an unknown number may be covered by SB 330 applications submitted prior to the Effective Date.
Government Code section 65589.5(o)(2)(D) would exempt housing development projects from increased fees until final approval plus two and a half years, or three and a half years for affordable housing, which does not provide a certain date to the City.
f. The alternative to requiring individual development projects to pay for incremental water treatment capacity increases is not feasible because water treatment capacity is planned, designed, and constructed by means of complex, expensive projects. The Nexus Studies identify RiverArc (estimated $214 million) and the Sacramento River Treatment Plant (estimated $489 million) as examples of water treatment capacity projects that the City is considering.
L. Imposing the increased Sewer Development Fee upon new housing development projects is necessary to mitigate or avoid specific, adverse impacts upon the public health or safety and there is no feasible alternative method to satisfactorily mitigate or avoid the adverse impact.
a. The City’s 2040 General Plan Update, 2018-2019 Sewer System Management Plan, Technical Memorandum: Preliminary Hydraulic Analysis Separated Sewer Basins located in Appendix C-1 of the Nexus Studies, and Nexus Studies demonstrate that the City does not currently have separated sewer capacity for projected growth through 2040. The City’s Sewer System Management Plan identifies 12 of 15 sewer basins in the City as having potential capacity deficiencies when future infill and redevelopment land use conditions are considered. Also, two additional basins have been identified as potentially having capacity deficiencies when considering future land use conditions. Table 3-3 in the Nexus Studies identifies the City’s current modelling for improvements necessary to expand sewer capacity to serve projected growth.
b. The Nexus Studies also calculated the required contribution from new development to fully fund separated sewer capacity for new growth through 2040 in Table 3-3. Procedures for identifying capacity improvement costs associated with growth were derived from the methods noted in a Technical Memorandum, included in part in Appendix C of the Nexus Study, and some basins were then studied further utilizing improved hydraulic analysis and formalized in a master plan for those basins. Identified capacity improvements are incorporated into the City’s wastewater 30-Year Capital Improvement Program list and are awaiting funding.
c. Water Code section 12263 authorizes the California State Water Resources Control Board to prescribe waste discharge requirements. The City’s Sanitary Sewer System Permit (WQO 2022-0103-DWQ) (SSS Permit) is a written public health and safety requirement that prohibits discharge of wastewater that has the potential to affect surface waters of the state or create a nuisance. The SSS Permit requires the City to take a proactive approach to avoid wastewater spills caused by insufficient capacity due to population increase and/or new connections from industrial, commercial, and other system users and to facilitate adequate local funding and management of its sanitary sewer system. The SSS Permit also requires the City to establish and maintain a means to manage all necessary revenues and expenditures related to the sanitary sewer system and allocate the necessary resources to comply with the SSS Permit.
d. If the City charges new development less than its proportionate share of the cost of new sanitary sewer capacity, then the City will not be able to allocate the necessary resources to pay for new capacity to meet projected new growth, which will contribute to the likelihood of sewage spills and violate the resource allocation terms of the SSS Permit. The City has received applications pursuant to SB 330 covering 5,965 units in housing development projects and an unknown number may be covered by SB 330 applications submitted prior to the Effective Date. Government Code section 65589.5(o)(2)(D) would exempt housing development projects from increased fees until final approval plus two and a half years, or three and a half years for affordable housing, which does not provide a certain date to the City.
e. The alternative to requiring individual development projects to pay for incremental capacity increases is not feasible because the Nexus Studies identify sewer basins where capacity increases necessary to serve new growth cost millions of dollars. Preventing the City’s ability to collect new growth’s proportionate share of costs on a systemwide basis would create significant barriers to new development in specific sewer basins in the City.
M. Imposing the increased Combined Sewer Development Fee upon new housing development projects is necessary to mitigate or avoid specific, adverse impacts upon the public health or safety and there is no feasible alternative method to satisfactorily mitigate or avoid the adverse impact.
a. The City’s 2040 General Plan Update and Nexus Studies demonstrate that the City does not currently have combined sewer system (CSS) capacity for projected growth through 2040. Section 9.4.3 of the City’s Design and Procedure Manual and the City’s Combined Sewer System Implementation Plan (CSSIP) confirm that the CSS does not contain additional capacity for development.
b. The Nexus Studies calculated the required contribution from new development to fully fund CSS capacity for projected new growth through 2040.
c. Water Code section 12263 authorizes the California Regional Water Resources Control Board Central Valley Region to prescribe waste discharge requirements.
The City’s Combined Sewer System Permit (NPDES CA0079111) (CSS Permit) is a written public health and safety standard that prohibits the discharge of wastewater sewage that has the potential to affect the surface waters of the state or create a nuisance. The CSS Permit requires the City to continue to implement its Long Term Control Plan (LTCP) to manage the flow capacity of the CSS to minimize CSS overflows and CSS outflows as new development and redevelopment projects are implemented throughout the CSS service area that have the potential to increase CSS flows. The City’s permit also requires implementation measures to the maximum extent practicable to ensure that new flows from growth within the CSS service area do not result in an increase in CSS overflows or CSS outflows or reduce the overall percentage of flow routed to the Sacramento Regional Wastewater Treatment Plant.
d. If the City charges new development less than its proportionate share of the cost of new CSS capacity, the City will not be able to allocate the necessary resources to fully implement its LTCP or ensure that new flows from growth do not result in CSS overflows or CSS outflows, which will contribute to the likelihood of unpermitted discharges and violate the terms of the CSS Permit.
The City has received applications pursuant to SB 330 covering 5,965 units in housing development projects and an unknown number may be covered by SB 330 applications submitted prior to the Effective Date. Government Code section 65589.5(o)(2)(D) would exempt housing development projects from increased fees until final approval plus two and a half years, or three and a half years for affordable housing, which does not provide a certain date to the City.
e. The alternative to requiring individual development projects to pay for necessary capacity increases is not feasible because, as the Nexus Studies note, there is no existing CSS capacity for new development to utilize. The capital improvements required by the demands of new growth are typically incremental enlargements of piping to provide the storage capacity required or periodic areawide storage facilities. On a per-project basis, the cost of in-line storage per foot of pipe translates to costly pipeline enlargement and replacement projects for those development projects that trigger the need for increased capacity.
Preventing the City’s ability to collect new growth’s proportionate share of costs on a systemwide basis would create significant barriers to new development for projects that triggered capacity increases.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. Findings
A. The recitals set forth above are true and correct and are incorporated herein by reference as findings.
B. The Nexus Studies do all of the following:
a. Identify the purpose of the fees.
b. Identify how the fees are to be used.
c. Determine how a reasonable relationship exists between the fees’ use and the type of development project on which the fees are imposed.
d. Determine how a reasonable relationship exists between the need for the facility and the type of development project on which the fees are imposed.
e. Demonstrate that the fees for existing and new public facilities are of proportional benefit to the development projects being charged and do not exceed the reasonable cost of providing the service.
C. The Water System, Sewer, and Combined Sewer Development Fee Schedule, attached as Exhibit B, has been determined and calculated in a manner consistent with the Nexus Studies.
Section 2. Adoption of the Nexus Studies and Establishment of the Fee Amounts
The Nexus Studies relating to the Water System, Sewer System, and Combined Sewer System and other supporting data referred to in the Nexus Studies are hereby approved and adopted. The amount of the Water System, Sewer, and Combined Sewer Development Fees as shown in Exhibit B are hereby established pursuant to the Nexus Studies.
Section 3. Exemptions
A. Projects with a building permit application that has been accepted for processing by the City and has paid application fees prior to January 22, 2024, are not subject to the adjusted fee amounts shown in Exhibit B, provided that this exemption does not apply to building permits that have expired.
B. Housing development projects that are covered by valid SB 330 applications submitted prior to January 22, 2024, are not subject to the adjusted fee amounts shown in Exhibit B for five years after January 22, 2024.
C. Projects with submitted grading permit applications or subdivision improvement plan applications that have been accepted for processing by the City and have paid application fees prior to January 22, 2024, or grading permit applications or subdivision improvement plans approved prior to January 22, 2024, are not subject to the adjusted fee amounts shown in Exhibit B for five years after January 22, 2024.
Section 4. Authorization of Phased Adjustment
The City Council hereby authorizes and directs that, subject to the exemptions set forth in Section 3, the percentage of the increase in the adjusted fee amounts shown in Exhibit B above the Water System, Sewer and Combined Sewer Development Fees currently in effect and as adjusted annually (Existing Fee) will be automatically imposed on a development project as follows:
A. Implemented at 25% of increase plus Existing Fee, on January 22, 2024; and B. 50% of increase plus Existing Fee, imposed on January 22, 2025; and C. 75% of increase plus Existing Fee, imposed on January 22, 2026; and D. 100% of increase plus Existing Fee, imposed on January 22, 2027.
Phased Adjustment
Year 1 25% of increase plus
Existing Fee
Year 2 50% of increase plus
Existing Fee
Year 3 75% of increase plus
Existing Fee
Year 4 100% of adjusted fee.
Section 5. Coordination of Standard Cost Annual Adjustments
Notwithstanding the provisions of Section 3 and Section 4, the standard cost annual adjustment shall apply as follows:
A. For fees subject to Section 3, annual adjustments shall occur as provided: for the Water System Development Fee by Sacramento City Code section 13.04.820; for the Sewer Development Fee by Sacramento City Code section 13.08.500; and for the Combined Sewer Development Fee by Sacramento City Code section 13.08.500.
B. For fees subject to Section 4, annual adjustments shall occur in accordance with the Nexus Studies and applicable City Codes on July 1 of each year.
Section 6. Effective Date
The resolution takes effect January 22, 2024.
Section 7.
Exhibit A and B are part of this resolution.
Table of Contents:
Exhibit A – Development Impact Fee Program and Nexus Studies Exhibit B – Water System, Sewer, and Combined Sewer Development Fee Schedule
Adopted by the City of Sacramento City Council on October 24, 2023, by the following vote:
Ayes:
Noes:
Abstain:
Absent:
Attest:
The presence of an electronic signature certifies that the foregoing is a true and correct copy as approved by the Sacramento City Council.
EXHIBIT A
DEVELOPMENT IMPACT FEE PROGRAM AND NEXUS STUDIES
EXHIBIT B
WATER SYSTEM, SEWER, AND COMBINED SEWER
DEVELOPMENT FEE SCHEDULE
1. Water System Development Fee*:
Meter Size (Inches) Base Fee Administrative Fee
1 $12,534 $376
1 ¼ $18,800 $564
1 ½ $25,067 $752
2 $40,107 $1,203
3 $87,735 $2,632
4 $157,923 $4,738
6 $325,872 $9,776
8 $701,879 $21,056
10 $1,052,819 $31,585
* Water Development Fee credit is given for existing water service connections. No Water Development Fee for fire service connections.
2. Sewer Development Fee: Either A or B
A. Combined Sewer Service Area
Fee Component Base Fee Administrative Fee
Sewer $7,413 per each ESD $222 per each ESD
Storm Drainage $5.22 per sq. ft. of increased
imperviousness (Offset by sewer
portion of the fee)
$0.16 per sq. ft. of increased
imperviousness
(Offset by sewer portion of the fee)
B. Separated Sewer Development Fee Service Area
Base Fee Administrative Fee
$3,461 per ESD $104 per ESD
RESOLUTION NO. 2023-
Adopted by the Sacramento City Council
November 14, 2023
ADOPTING THE UPDATED UTILITY DEVELOPMENT FEES NEXUS STUDY RELATING TO
THE STORM DRAINAGE DEVELOPMENT FEE, ESTABLISHING THE AMOUNT OF THE
STORM DRAINAGE DEVELOPMENT FEE AND ESTABLISHING THE STORM DRAINAGE
DEVELOPMENT FEE FUND
BACKGROUND
A. The Storm Drainage Development Fee was established by City Council on October 24, 2023. The purpose of the fee is to provide a minimum 100-year event protection to structures, a minimum 10-year event protection to streets, control urban runoff pollutants, and avoid public safety hazards. A new accounting fund must be created for the Storm Drainage Development Fee in accordance with Article IX, section 114, of the City Charter and with Government Code Section 66006.
B. New and improved utility infrastructure will be required to support the City of Sacramento’s General Plan and accommodate projected development and growth through 2040.
C. The City prepared the Development Impact Fee Program and Nexus Studies, including the nexus study related to the storm drainage development fee (Nexus Study), attached as Exhibit A, which demonstrate a reasonable basis to establish the Storm Drainage Development Fee by establishing the relationship between new development, the needed utility infrastructure to serve that new development, the estimated cost of the additional infrastructure, and the amount of the development impact fee.
D. As demonstrated by the Nexus Study, there is a reasonable relationship between the need for public facilities and the type of development projects on which the fee is imposed (new dwelling units, buildings, and structures; additions to the commercial building area and residential building area of buildings and structures; and changes in use of buildings and structures). These development projects accommodate population growth, which in turn stresses the existing drainage system and triggers demand for new and improved facilities.
E. There is also a reasonable relationship between using fee revenues to fund public facilities and the type of development projects on which the fee is imposed. As explained above, these development projects increase the demand for public facilities.
Using fee revenues to satisfy this demand will ensure consistent levels of service for residents and mitigate public safety hazards associated with strained public facilities.
F. The Nexus Study also establishes the basis for determining a reasonable relationship between the amount of the Storm Drainage Development Fee and the cost of refurbishing or constructing public facilities attributable to particular development projects, taking into account anticipated growth and the costs of designing, constructing, installing, improving, and acquiring public facilities.
G. The Nexus Study set out the proposed maximum amount of the Storm Drainage Development Fee, attached as Exhibit B, and these amounts have been determined and calculated in a manner consistent with the Mitigation Fee Act.
H. On October 24, 2023, the City Council held a public hearing in the manner required by Government Code section 66018 to consider the adoption of this resolution. The public hearing was also noticed pursuant to and in compliance with Government Code sections 66016, 66016.5, 66019, and 6062a, and was held as part of a regularly scheduled meeting of the City Council.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. Findings
A. The recitals set forth above are true and correct and are incorporated herein by reference as findings.
B. The Nexus Study does all of the following:
a. Identify the purpose of the fees.
b. Identify how the fees are to be used.
c. Determine how a reasonable relationship exists between the fees’ use and the type of development project on which the fees are imposed.
d. Determine how a reasonable relationship exists between the need for the facility and the type of development project on which the fees are imposed.
e. Demonstrate a reasonable relationship between the amount of the fee and the cost of the facility or portion of the facility attributable to the development on which the fee is imposed.
C. The Storm Drainage Development Fee Schedule, attached as Exhibit B, has been determined and calculated in a manner consistent with the Nexus Study.
Section 2. Adoption of the Nexus Study and Establishment of the Fee Amounts
The Nexus Study and other supporting data referred to in the Nexus Study is hereby approved and adopted. The amount of the Storm Drainage Development Fee as shown in Exhibit B is hereby established pursuant to the Nexus Study.
Section 3. Fund Establishment
The City Manager, or the City Manager’s designee, is hereby authorized and directed to create a new accounting fund to be known as Storm Drainage Development Fee Fund.
Section 4. Zero-Dollar Impact Fees for Affordable Housing
The fee set forth in Exhibit B are hereby added to Exhibit A of Resolution 2019-0185 as follows:
Code
Section
Fee Name Dept. Fee Rate for Affordable
Dwelling Units*
Fee for All Other
Projects
Ch.
13.16.125
Storm drainage
development fee
DOU
$0.00
Per Resolution
2023-
*These fees may be reduced to a zero- dollar rate when incurred in connection with the development of affordable housing as set forth in Resolution 2019-0185.
Section 5. Exemptions
A. Projects with a building permit application that has been accepted for processing by the City and has paid application fees prior to January 22, 2024 are not subject to the adjusted fee amounts shown in Exhibit B, provided that this exemption does not apply to building permits that have expired.
B. Projects with submitted grading permit applications or subdivision improvement plan applications that have been accepted for processing by the City and have paid application fees prior to January 22, 2024, or grading permit applications or subdivision improvement plans approved prior to January 22, 2024, are not subject to the adjusted fee amounts shown in Exhibit B for five years after January 22, 2024.
Section 6. Authorization of Phased Adjustment
The City Council hereby authorizes and directs that, subject to the exemptions set forth in Section 5 and the annual cost adjustment set forth in Section 7, the percentage of the approved Fee as shown in Exhibit B will be automatically imposed on a development project as follows:
A. Implemented at 25%, on January 22, 2024; and
B. 50%, imposed on January 22, 2025; and
C. 75%, imposed on January 22, 2026; and
D. 100%, imposed on January 22, 2027.
Phased Adjustment
Year 1 25%
Year 2 50%
Year 3 75%
Year 4 100%
Section 7. Coordination of Standard Cost Annual Adjustments
A. N otwithstanding the provisions of Section 6, the standard cost annual adjustment as provided for in the Nexus Study and City Code shall apply to the Storm Drainage Development Fee for the fee in effect on July 1 of each year.
Section 8. Effective Date
The resolution takes effect January 22, 2024.
Section 9.
Exhibit A and B are part of this resolution.
Table of Contents:
Exhibit A – Development Impact Fee Program and Nexus Studies Exhibit B – Storm Drainage Development Fee Schedule
Adopted by the City of Sacramento City Council on November 14, 2023, by the following vote:
Ayes:
Noes:
Abstain:
Absent:
Attest:
The presence of an electronic signature certifies that the foregoing is a true and correct copy as approved by the Sacramento City Council.
EXHIBIT A
DEVELOPMENT IMPACT FEE PROGRAM AND NEXUS STUDIES
EXHIBIT B
STORM DRAINAGE
DEVELOPMENT FEE SCHEDULE
1. Drainage Development Fee*:
Drainage Basin Type Base Fee Administrative Fee
Pumped Basin
$0.2287 per sq. ft. of additional
imperviousness
(Equivalent to $10,293 per acre
of additional imperviousness)
$0.0147 per sq. ft. of additional
imperviousness
(Equivalent to $309 per acre of
additional imperviousness)
Gravity Basin
$0.1372 per sq. ft. of additional
imperviousness
(Equivalent to $6,307 per acre
of additional imperviousness)
$0.0119 per sq. ft. of additional
imperviousness
(Equivalent to $189 per acre of
additional imperviousness)
*Also applies to areas of the Combined Sewer System, with separated City drainage basins.