City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-00687 4/2/2024 Consent Item 2.
Rescind Resolution 1987-0322, Which Provides Water System Development Fee Waivers to Infill Properties
File ID: 2024-00687
Location: Citywide
Recommendation: Adopt a Resolution rescinding Resolution No. 1987-0322, which provides Water System Development Fee waivers to infill properties.
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: None.
Attachments:
1-Description/Analysis
2-Resolution
Description/Analysis
Issue Detail: On April 28, 1987, Council adopted Resolution No. 1987-0322, which granted waivers of Water System Development Fees for residential infill lots meeting specific conditions. The waived development impact fees from this program were supplemented by alternative funding sources in order for the City to remain compliant with Proposition 218 and the Mitigation Fee Act. The Department of Utilities does not have a sustainable funding source to continue to supplement the waivers thus resulting in the need to rescind the program to meet legal requirements associated with development impact fees.
Policy Considerations: The proposed resolution has been guided by the City’s goals and policies as established in the General Plan.
PFS-3.3 Development Impacts. Through the development review process, including through development impact fees and offsite improvements constructed by new development, the City shall ensure that adequate public utilities and services are available to serve new
File ID: 2024-00687 4/2/2024 Consent Item 2.
development.
Economic Impacts: The Water System Development Fees collected will fund infrastructure necessary to support development.
Environmental Considerations: The Community Development Department, Environmental Services Manager has determined that the proposed activity is not a project pursuant to the California Environmental Quality Act (CEQA). CEQA Guidelines Section 15378(b). The activity is a continuing administrative activity and is not subject to CEQA. CEQA Guidelines Section 15060(c)(3).
Sustainability: The Infill Water Fee Waiver Program is no longer a sustainable program. The continuation of the program will undermine the Department of Utilities ability to build the necessary infrastructure needed to support the new residential and non-residential development growth projections outlined in the General Plan.
Commission/Committee Action: City Council adopted Resolution No. 1987-0322 to provide Water System Development Fee waivers to infill property on April 28, 1987.
Rationale for Recommendation: The use of utility rates and development impact fees are regulated by Proposition 218 and the Mitigation Fee Act. To remain compliant with these regulations, the Department of Utilities must supplement the fees waived by the Infill Water Fee Waiver Program by an alternative funding source. The Department does not have a sustainable alternative funding source for this program.
Financial Considerations: The waived development fees from this program were supplemented in the past by alternative funding sources in order for the City to remain compliant with Proposition 218 and the Mitigation Fee Act. With reductions in available grant funding, the Department can no longer supplement this program.
Rescinding the Infill Water Fee Waiver Program will not have an impact on the General Fund.
Local Business Enterprise (LBE): Not applicable.
Background: Through the recent efforts to ensure that adequate funding exists to build and maintain the City’s drinking water infrastructure, it has been determined that the Department of Utilities can no longer sustain the Infill Water Fee Waiver Program.
In 1987 the City adopted Resolution No. 1987-0322 to waive Water System Development Fees for residential projects within specific infill areas of the city. When the program was created it helped the City meet its infill housing goals. However, with support of other City programs such as the Zero- Dollar Rate Program and the Development Impact Fee Deferral Program, the necessity of the Infill
File ID: 2024-00687 4/2/2024 Consent Item 2.
Water Fee Waiver Program to reach infill development goals has decreased.
Over the last three months, the Department of Utilities has coordinated and communicated this proposal with internal stakeholders and within the last month sent information on this item to external stakeholders and housing groups. At this time no concerns or opposition has been raised.
The proposed Resolution will take effect 60 days after adoption.
RESOLUTION NO. 2024-
Adopted by the Sacramento City Council
April 2, 2024
RESCIND RESOLUTION 1987-0322 WHICH PROVIDES WATER SYSTEM DEVELOPMENT
FEE WAIVERS TO INFILL PROPERTIES
BACKGROUND
A. On April 28, 1987, City Council adopted Resolution No. 1987-0322 to waive Water System Development Fees for residential projects within specific infill areas of the city.
B. The waiver was established to help fulfill the 1993 Infill Incentive Program section of the General Plan Growth Policy. Infill development goals continue to be a focus in the 2040 General Plan Land Use and Placemaking section.
C. Since the establishment of the Infill Water Fee Waiver Program several additional programs including the Zero-Dollar Rate Program for Affordable Dwelling Units and the Development Impact Fee Deferral Program have been established to also facilitate the City’s housing and infill goals.
D. Use of utility rates and development impact fees are regulated by Proposition 218 and the Mitigation Fee Act. To remain compliant with these regulations, the Department of Utilities must supplement the fees waived by the Infill Water Fee Waiver Program by an alternative funding source.
E. The Department of Utilities does not have a sustainable alternative funding source to continue to supplement the Infill Water Fee Waiver Program.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The Council hereby rescinds, in full, Resolution No. 1987-0322. The program granted in the Infill Water Fee Waiver Program resolution shall no longer be effective, from and after the effective date of this Resolution.
Section 2. This Resolution takes effect 60 days after adoption.
Adopted by the City of Sacramento City Council on April 2, 2024, 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.