City Council and Authorities Concurrent
March 22, 2022

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Background about the PHD Specific Plan Road Connector

Since the early days of this planning effort, City staff has unilaterally proposed to locate a four-lane public roadway plus 2 sidewalks across the O2Micro Property to Mission College Boulevard (the “Road Connector”). Staff stated in writing that this is a condition of O2Micro’s right to develop its property with residential uses under the City’s PHD Specific Plan. The final Environmental Impact Report (“EIR”) estimates that the average daily traffic on the Road Connector could range between 19,340 to 29,840 vehicle trips, not including the Levi’s Stadium cut-through traffic (Chapter 13, Pages 13-42 and 13-42A). No other stakeholder in the PHD Plan Area has been expected to bear the sole burden of a major public roadway on its property.

Various drafts of the PHD Specific Plan and EIR stated that the City could only require the Road Connector if the West Valley-Mission Community College District Board of Trustees (the “Board of Trustees”) approved it. The documents noted this specifically even as the Planning Department consistently ignored O2Micro’s concerns1, which are incorporated herein by reference.

In fact, O2Micro is not the only stakeholder to express concerns about the Road Connector. At the City Council April 20, 2021 study session, council members Suds Jain, Karen Hardy and Kevin Park expressed concerns regarding the Road Connector’s traffic and pedestrian safety impacts. On December 21, 2021, the Board of Trustees unanimously rejected the Road Connector (the “Board’s Rejection”) due to concerns over safety, traffic, noise, pollution, maintenance, expenses, etc. O2Micro agrees with the Board of Trustees’ concerns.

We appreciate and respect the Planning Commission’s recent confirmation in its January 26, 2022 recommendation to approve the PHD Specific Plan while acknowledging that the proposed PHD Specific Plan does not include the Road Connector on the O2Micro Property.

Instead, the final PHD Specific Plan designates open space along both sides of the property line shared by O2Micro and Summerhill. However, the Board’s Rejection is not accurately reflected in the Final EIR and PHD Specific Plan recently released in January and February, 2022. Staff seems to be unilaterally ignoring the Planning Commission’s and the Board of Trustees’ “no road connector” scenario. The PHD Specific Plan now designates O2Micro’s open space so it is the same size as the Road Connector and 72% larger than the adjacent Summerhill’s open space just in case the open space area is needed for the Roadway Connector. This is simply a guise to reserve sufficient area on the O2Micro Property for the Road Connector in the future if staff is able to convince the Board of Trustees to change its mind. But such an approach is inconsistent with the Specific Plan’s provisions stating the Road Connector option depends on the Board of Trustees’ approval of the Road Connector. As the Council is aware, the Board of Trustees

1 Letters from O2Micro or Buchalter on O2Micro’s behalf dated 3/1/2021, 3/31/2021, 9/13/2021, 12/22/2021 , and 1/24/2022.

Mayor Gillmor and Members of the City Council
March 16, 2022

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already rejected the Road Connector. That decision is final.

Planning staff’s attempts to interpret the Planning Commission’s recommendations at its hearing by insisting that the Road Connector remain in the PHD Specific Plan in case the Trustees some day in the future change their minds has further confused the issue. While we appreciate staff suggesting that this option could be reflected in the EIR since the City studied it, the City no longer should identify the Road Connector as an option in the Specific Plan because the Specific Plan said the decision was up to the Board of Trustees. The Board of Trustees already rejected the Road Connector. Insisting the Road Connector remain in the Specific Plan does not reflect the Board’s Rejection of the Road Connector. Moreover, the future conversion from open space to a Road Connector will cause new potential impacts on the plan area as well as on O2Micro’s development plan. The environmental impacts of converting open space to a road have not been evaluated in the EIR, so if the City were to carry forward such an option in the Specific Plan when the EIR has not studied the consequences of that action, the City will be in violation of CEQA.

O2Micro is the sole stakeholder to be burdened with the significant future uncertainty of whether or not it will be required to install a public road. This does not make sense when the Board of Trustees already made a decision to reject the Road Connector. It is no longer an option. To keep the Road Connector in the Final Specific Plan is to keep open the possibility of replacing open space with the Road Connector, indefinitely.

Thus, we respectfully request that the City Council certify the Final EIR and adopt the Specific Plan without the Road Connector as the preferred option. That decision was within the Board of Trustees’ discretion, and it was already made. Secondly, O2Micro requests that the open space on the O2Micro and Summerhill properties along the same property line be equal in size. There is no equitable reason for the open space designated on the O2Micro property to be 72% larger than the size designated for Summerhill’s open space.

The Final PHD Specific Plan Should Eliminate the Road Connector Option based on the Board’s Rejection.

After the Board’s Rejection last year, the City released for public review the Final EIR and PHD Specific Plan in January, 2022. The PHD Specific Plan acknowledged the Board’s Rejection but failed to accurately and consistently depict the circulation network. At the Planning Commission public hearing on January 26, 2022, Commissioner Lance Saleme strongly recommended that the Road Connector be removed from the official documents to avoid confusion and Chairperson Nancy Biagini supported Commissioner Saleme’s recommendation (please see Attachment I).

The Final Specific Plan released in February, 2022 presents open space on both sides of the property line shared by O2Micro and Summerhill as the preferred option (please see

Mayor Gillmor and Members of the City Council
March 16, 2022

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Attachment II), and the Road Connector as the alternative option for “Potential future vehicle connection subject to the approval of the Mission College Board of Trustees” (please see Attachment III). The City also included language stating that the “roadway connection is shown in this PHD Specific Plan as a future alternative, subject to reconsideration by the Board of Trustees” (see page 88), only the Trustees have not reconsidered their decision, and the property owner O2Micro does not support it.

Given the Board’s Rejection, the City’s only option is to eliminate the Road Connector in its entirety from the Specific Plan. It is not an option, nor a part of the Plan. If the City is to respect the public input process and the Board’s Rejection, it cannot carry the Road Connector forward as if it is a feasible option. There is no evidence that the Board of Trustees may reconsider its unanimous rejection of the Road Connector. Even if the Board of Trustees were open some day in the future to consider a new road through its campus, the impacts of that change at that later date would need to be evaluated through a separate public review process in accordance with CEQA.

We respectfully request that the City Council change the Final PHD Specific Plan to remove the Road Connector in its entirety from the O2Micro Property. This includes, but is not limited to, removal of references to the Road Connector or “potential future vehicle connection” from the text on page 88 and from the exhibits in the Final PHD Specific Plan as listed in Attachment III.

The Final PHD Specific Plan No Road Connector Option Should be Revised so that the Open Space on the O2Micro Property Equals the Open Space on the Summerhill Property.

We agree with the Planning Commission’s recommendation that the Road Connector option be replaced with the No Road Connector option as the preferred land plan consistent with the Board’s Rejection. Currently, the Final Specific Plan shows that the open space on the O2Micro Property is noticeably larger than that on the adjacent Summerhill Property (please see Attachment II). While the Final Specific Plan fails to specify the exact size, the City staff showed in its presentation at the Planning Commission Hearing that the open space on the O2Micro and the adjacent Summerhill Properties are 15,800 sq. ft. and 9,200 sq. ft. respectively.

The size of open space specified for O2Micro is exactly the same size as that of the Road Connector. This is simply a guise by staff to some day try to replace the open space with the Road Connector.

O2Micro agrees to provide open space. That has never been in question. O2Micro, however, respectfully requests that the City size the proposed open space depicted along the eastern boundary of the O2Micro Property to equal the open space on the Summerhill property along the same property line. This would be a fair and equitable distribution of open space and

Mayor Gillmor and Members of the City Council
March 16, 2022

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public amenities consistent with the Specific Plan open space requirements and the amount of development contemplated on both properties.

O2 Micro agrees with the comments provided during the public input process, the decision from the Board of Trustees and the City of Santa Clara Planning Commission. O2Micro will accept the open space scenario in the Specific Plan with the understanding that the Road Connector is completely removed from the Final Specific Plan.

My client welcomes an open collaborative discussion with the City of Santa Clara, and hopes to work with the City on a mutually acceptable plan that meets the community’s interests without imposing greater impacts on O2Micro. We look forward to the City’s certification of the Final EIR and approval of the Final PHD Specific Plan with the revisions O2Micro has requested.

Sincerely,

BUCHALTER
A Professional Corporation
By
Alicia Guerra
AG:nj

cc: Hossam Haggag, City Clerk
Xander Abbe, City Attorney
Andrew Crabtree, Director of Community Development
Reena Brilliot, Assistant Director of Community Development Lynn Lin
Yimin Zimmerer
Jane Zhang

Attachment I-1
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Attachment I - Related Discussions at Planning Commission Hearing The Road Connector was discussed in several occasions during the Planning Commission Hearing on January 26, 2022 (e.g. 0:30:20, 0:49:00, 0:50:30, 1:26:00, and 2:32:35 of the recording at Planning Commission on 2022-01-26 6:00 PM - Jan 26th, 2022 (granicus.com)). One reason that the staff wanted to keep the Road Connector in the Final EIR and PHD Specific Plan is in case the Board of Trustees changes its mind in the future. Another reason, as shown below, is that staff claimed to not know what specific pages need to be modified. To address the latter issue, we prepared the corresponding exhibits in Attachments II and III.

Lance Saleme: “I think this is the point where we have to mention the proposed road. Is it possible to request that it move to an appendix or addendum to not lose the context of the fact that this investigation and the information is available, but to remove it from the official document and maybe move it to an investigated option’s appendix?”

Nancy Biagini: “I will accept that as a further part of my motion.”

Xander Abbe: “I apologize here. I have more legal concerns. You are suggesting modifying the specific without specifically identifying the pages and exactly what.”

Lance Saleme:“Oh boy.”

Nancy Biagini: “Oh lord. Are you talking about Lance’s modification of my motion?”

Xander Abbe: “Yes.”

Lance Saleme:“We can go through and then identify [the] specific pages where it’s still present.

The objective is to remove the mention of that proposed road from all of the official documents in order to meet the request of both the lawyer and the other commissioners, but to maintain Staff’s work by having it available as an appendix or other addendum items within the same document.”

Xander Abbe: “Okay, my legal opinion, in contrast to the others who we were just talking about, I am thinking of much more liberal view of this. I do not believe that edit is necessary from the perspective of protecting the City. That’s why we turn on everything tonight. It’s all about how I can best protect the City. I do not believe that edit is necessary from the legal protection standpoint. I disagree with the attorney for O2Micro Systems. I do not believe the document is internally inconsistent.”

Lance Saleme: “Is there a way to alternately at least diminish its level of visible importance by greying it or doing something to hide the fact that this is not what we consider a built-in piece of the document? Do you understand what I am saying? We have to diminish its importance in the document to avoid confusion.”

Xander Abbe: “I understand where you are coming from. Planning Commission is required under State Law to review the Specific Plan and make a recommendation on the Specific Plan

Attachment I-2
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before it goes to the City Council. You are talking about a number of edits. We can take a 5- minute recess right now and I can page through and find the specific pages and then see if it reaches the conclusions.”

Nancy Biagini: “Xander, let me try this. You talked about, I don’t remember where it was, Trustees did not approve. What if you just simply, I am assuming that somewhere in the bazilian pages we have, what if that was just highlighted or bolded, so in other words, it is very clear that the trustee did not approve? Does that help if it’s in the document that I think it’s in? And does that meet with what you are talking about? Because I’m with you on this Commissioner Saleme, but I’m struggling. I don’t want to make this an unwilled motion, but I want to get our thoughts in there.”

Attachment II-1
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Attachment II – Open Space as the Preferred Option in Final PHD Specific Plan The following figures in the Final PHD Specific Plan showing the No Road Connector option (which is the project) should be revised to illustrate equal size of the open space on the O2Micro and Summerhill Properties rather than open space 72% larger on the O2Micro Property compared to the open space on the Summerhill Property:

o Figure 4.2 (Urban Design Framework);
o Figure 4.3A (Land Use Plan);
o Figure 4.3B (Ground Floor Activation)
o Figure 4.3C (Building Height);
o Figure 4.5 (Parks and Greenways);
o Figure 4.6.2 (Circulation);
o Figure 4.6.2.1B (Vehicular Network);
o Figure 4.6.2.2 (Pedestrian and Bicycle Network);

Figure 4.5 below serves as an example of a typical layout for the figures above regarding the open space option.

Attachment III-1
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Attachment III - Road Connector as the Alternative Option in Final PHD Specific Plan References to the Road Connector or “potential future vehicle connection” in the text on page 88, as well as the following figures in the Final Specific Plan showing the Road Connector should be removed:

o Figure 4.2-ALT (Urban Design Framework);
o Figure 4.3A-ALT (Land Use Plan);
o Figure 4.3B-ALT (Ground Floor Activation);
o Figure 4.3C-ALT (Building Height);
o Figure 4.5-ALT (Parks and Greenways);
o Figure 4.6.2-ALT (Circulation);
o Figure 4.6.2.1A-ALT (Street Types and Existing Easements); o Figure 4.6.2.1B-ALT (Vehicular Network);
o Figure 4.6.2.2-ALT (Pedestrian and Bicycle Network);
o Key map on page 127; and
o Key map on page 132;
Figure 4.2-ALT serves as an example of a typical layout for the figures above. The Road Connector is marked with purple asterisk stating “Potential future vehicle connection subject to the approval of the Mission College Board of Trustees”.

1 Melissa Meslo
From: Mary Grizzle <[email protected]>
Sent: Tuesday, March 15, 2022 7:52 PM
To: Mayor and Council <[email protected]>; Nora Pimentel <[email protected]>; [email protected]
Cc: Dan Meyberg <[email protected]>; Yimin Wang <[email protected]> Subject: Patrick Henry specific Plan
Mayor Gillmor and Members of the City Council
City of Santa Clara
1500 Warburton Avenue
Santa Clara, CA 95050
March 15, 2022
Dear Mayor Gillmor and Members of the City Council,
As a long-time resident of the city of Santa Clara, I am extremely proud of how our neighborhood has emerged.

Recently I have been following the City’s discussions regarding the Patrick Henry Drive Specific Plan. I attended the West Valley Mission Community College Board of Trustees Meeting in December last year, and was pleased that the trustees listened to my concerns and rejected the proposed roadway connecting Patrick Henry Drive and Mission College Boulevard on campus. Nevertheless, as of now, the roadway remains in the final Patrick
Henry Drive Specific Plan as aviable option. It means
that the proposed open space between Patrick Henry Drive and Mission College may not be implemented in the future. Instead, it may be replaced by the roadway. I’m sincerely concerned with this possibility, and would like to urge you to prevent it from happening.

People in our city want to live in a living environment that is safe and serene, and certainly not one surrounded by a maze of traffic. Orienting our residents and families to live in a healthy and sustainable way remain a high priority for the city of Santa Clara. We do not need more traffic, pollution and noise. Please eliminate this roadway from the final Specific Plan and make the open space stay in our community.

Correspondence No. 2
2 Thank you for allowing me to share my thoughts and concerns.

Respectfully submitted,
Mary Grizzle
[email protected].

City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
22-90 Agenda Date: 3/22/2022

REPORT TO COUNCIL

SUBJECT
Public Hearing: Action to Waive First Reading and Introduce an Ordinance Amending Chapter 17.15 “Property Developments” of Title 17 “Development” of the Santa Clara City Code to Add Section

17.15.360 “Patrick Henry Drive Infrastructure Improvement Fee”; and Approve a Resolution Approving the Findings from the Patrick Henry Drive Specific Plan Infrastructure Impact Fee Nexus Study, Adopting the Nexus Study, Setting the Rates for the Infrastructure Impact Fee, and Establishing the Patrick Henry Drive Infrastructure Improvement Fund

COUNCIL PILLAR
Promote and Enhance Economic, Housing and Transportation Development

BACKGROUND
On March 22, 2022, the City Council is scheduled to consider approval of the Patrick Henry Drive Specific Plan (Specific Plan) to guide the transition of an approximately 74-acre industrial area bounded by Mission College to the south, Great America Parkway to the east, the Hetch-Hetchy right -of-way to the north, and Calabazas Creek to the west into a transit-oriented neighborhood. The Specific Plan contemplates two unique land use scenarios per Table 1 below related to proposed residential units and office uses. The Specific Plan also incorporates approximately 310,000 square feet of neighborhood-oriented convenience retail and up to 14 acres of open space which will include a diverse network of public parks, publicly accessible green infrastructure, and private recreational spaces.

Table 1: Patrick Henry Drive Specific Plan Land Use Plan Scenarios Residential Units Office (SF) Non-Residential (SF)
Scenario A 12,000 - 310,000
Scenario B 10,300 785,000 310,000
Included with the Specific Plan and the accompanying Environmental Impact Report (EIR) are analyses of various infrastructure impacts and requirements to support the proposed development within the Specific Plan. Based on discussions with the prospective developers and properties owners of the Specific Plan, the City initiated the process of creating a Patrick Henry Drive Specific Plan Infrastructure Impact Fee (Fee) to facilitate development. The purpose of the Fee is to create an equitable distribution of area-wide and common infrastructure costs for all developers within the Specific Plan. Infrastructure that provides common benefits to development within the Specific Plan was analyzed and calculated for probable construction costs.

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Impact fees are governed by State law (Assembly Bill 1600 (1987) Government Code Section 66000 et seq.) and allow a City to charge one-time fees to new developments to finance capital facility and infrastructure costs needed to serve those developments. Impact fees are established based on a reasonable relationship (i.e. nexus) between the impacts caused by new development and the improvements to mitigate those impacts that will be funded by the fee. These fees cannot be used to pay for the cost of existing deficiencies and are distinct from taxes and special assessments.

DISCUSSION
The City’s Specific Plan consultant, MIG, contracted with municipal financial consultant Economic & Planning Systems, Inc. (EPS Consultants), to prepare a nexus study to justify the creation of the Fee.

Cost estimates (in FY 2021-2022 dollars) were prepared for the Specific Plan’s area-wide infrastructure items including on-site roadway facilities (e.g., traffic signals, traffic safety devices, pavement rehabilitation), sanitary sewer facilities and structures, storm drainage facilities, potable and recycled water facilities, emergency response vehicle and tiller aerial ladder apparatus, entry monuments and signs, the formation of a Transportation Management Association, and administrative costs. The specific infrastructure items are included in Table 2.

Table 2: Patrick Henry Drive Specific Plan Infrastructure Improvements Item
#
Description Category Total Costs
1 Sanitary Sewer Upgrades Sanitary
Sewer
$9,570,000
2 Water Line Replacement Potable Water $5,220,000
3 New Recycled Water Line Non-potable
Water
$4,060,000
4 Stormwater Treatment Facilities Storm
Drainage
$4,142,800
5 Public Access Roadways (includes
land acquisition costs)
Roadway $52,945,240
6 Pavement Repair Roadway $2,973,000
7 Traffic Improvements Roadway $9,773,000
8 Traffic Fair Share Payments Roadway $11,520,000
9 EMS Response Vehicle or Ambulance
(2 each) and Tiller Aerial Ladder
Apparatus
Fire $3,120,000
10 Entry Monument & Signs Roadway $334,000

IMPROVEMENTS

SUBTOTAL
$103,658,040
11 Transportation Management
Association Formation
Roadway $150,000
2% Administrative Cost $2,076,161
TOTAL COST $105,884,201
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Costs for the various infrastructure items include land acquisition, design, bid/award, construction, construction support, and project contingencies. The improvement subtotal equals $103,658,040. In addition to improvement costs, also included is $150,000 for the future formation of a Transportation Management Association (TMA) as proposed by the Specific Plan. As is typical with the creation of impact fees, the City also included a 2 percent administrative fee for administration of the Fee program moving forward. This 2 percent fee equates to an average of $69,205.36 over the estimated 30-year life of the Fee and totals $2,076,161. After combining the improvements costs, TMA formation costs, and the 2 percent administrative fee, the total common infrastructure costs equates to $105,884,201.

As noted above, the Specific Plan includes up to 12,000 multifamily residential units as well as up to 310,000 square feet of supporting, neighborhood-serving commercial services. As the commercial development (e.g., clustered ground-floor retail) is expected to be ancillary to and supportive of the Specific Plan housing, the Fee is structured to apply only to new residential and office development.

Additionally, upon further discussion with the Specific Plan developers and properties, in coordination with the Community Development Department, a determination was made to apply the total infrastructure costs to a maximum of 11,000 residential units for the purpose of calculating the Fee.

This determination was based on recent information from the developers, property owners, and the Community Development Department that there is only interest in a maximum of 11,000 residential units at this time. If any additional residential units beyond 11,000 are proposed at a future date, the Fee can be modified at that time.

Table 3 provides the methodology by which the Fee will be calculated per unit. In summary, the total common infrastructure costs of $105,884,201 are divided by the new multifamily unit count of 11,000, which equates to a proposed Fee of $9,626 per new residential unit.

Table 3: Fee Methodology and Calculation
Fee Calculation Amount
Total Common Infrastructure Cost a $105,884,201
Number of New Multi-family Residential Units b 11,000
Fee per New Multi-family Residential Unit c = a / b $9,626 As noted earlier, the Specific Plan includes two land use scenarios. For land use Scenario B, which includes residential units and office uses, the nexus study calculates a fee equivalency from residential units to office uses. The fee equivalency results in a Fee of $21.00 per square foot of new office uses. In Scenario B, the nexus study also assumes a total of 9,300 multi-family residential units in the fee calculation.

The City is required to identify a reasonable relationship (nexus) between an impact fee and new development, and to make findings regarding the following: the purpose of the fee; the projects the fee will be used to fund; the nexus between the needed projects and the type of development that will be charged a fee; and the nexus between the amount of the fee and the cost of the needed improvements. The nexus study is designed to support these findings.

On September 28, 2021, Governor Newsom approved Assembly Bill (AB) 602 (Grayson). AB 602 modifies the California Government Code related to Impact Fee creation, collection, and City of Santa Clara Printed on 3/17/2022Page 3 of 6
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administration. While AB 602 includes several provisions related to Impact Fees, the notable and pertinent provisions that apply to creation of a Patrick Henry Drive Specific Plan Infrastructure Impact Fee include the following: 1) when applicable, the nexus study must include the existing and proposed level of service for the facility that is being improved, and an explanation of why the new level of service is appropriate; and 2) approve a capital improvement plan as a part of the nexus study. The attached Ordinance (Attachment 1), Resolution (Attachment 2), and Patrick Henry Drive Specific Plan Infrastructure Impact Fee Nexus Study
(Attachment 3) include information that
addresses the requirements of AB 602.

As development is approved and constructed within the Specific Plan, the City will coordinate with developers to include the subject infrastructure improvements with the scope of the approved development projects as much as possible. Inclusion of these improvements with the development projects will reduce construction impacts and provide the needed infrastructure as development occurs. In situations where improvements are included with development projects, the cost of these improvements will be credited towards any required Fee payments. In situations where the included improvements exceed the required Fee payments, the City will enter into a reimbursement agreement with developers subject to the availability of Fee funds for reimbursement and City Council approval.

Staff also recommends that Fee levels be adjusted annually, subject to Council approval, in line with the latest Construction Cost Index for San Francisco, published by Engineering News Record (ENR) or equivalent. The automatic Fee adjustment will occur when the City conducts its annual update of the Municipal Fee Schedule. Indexing the fees will allow fee revenue to keep up with construction costs and inflation.

Staff has closely coordinated the development of the Fee, including cost elements, calculation methodology, and escalation with the Patrick Henry Drive Specific Plan developer team and property owners. Consequently, the Patrick Henry Drive Specific Plan developer team and property owners support the creation of the Fee as outlined in this report.

ENVIRONMENTAL REVIEW
The action being considered is subject to a statutory exemption from the California Environmental Quality Act (“CEQA”) pursuant to Public Resources Code section 21080(b)(8)(D) as the purpose of the Fee is to collect revenue to fund capital projects (i.e. infrastructure) necessary to support the proposed development within the Specific Plan. Environmental analysis for the infrastructure improvements is included within the EIR prepared for the Specific Plan.

FISCAL IMPACT
The nexus study identifies a list of infrastructure items that would cost approximately $105,884,201 to complete with the full cost of these improvements to be funded by the proposed Fee of $9,626 per residential unit and $21.00 per square foot of new office uses. Additionally, staff recommends that Fee levels be adjusted annually, subject to Council approval, to keep up with construction costs and inflation. Typical improvements such as public roadways, sanitary, storm, traffic, and water facilities will be operated and maintained by the City. Non-standard improvements such as the public access roadways and entry monument and signs will be maintained privately.

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The recommended actions include the establishment of the Patrick Henry Drive Infrastructure Improvement Fund (Fund 542) to account for the impact fee revenues and project expenditures. It is anticipated that impact fee revenue will begin in FY 2022/23 and reach approximately $3 to $4 million. Budget actions will be included in the FY 2022/23 and FY 2023/24 Proposed Capital Improvement Program budget to recognize fee revenue and to appropriate those funds to support Fee Administration. Additional budget actions will be brought forward as necessary to recognize additional fee revenue and to appropriate the funding to support various projects as needed.

COORDINATION
This report has been coordinated with the Community Development Department, Water & Sewer Utilities Department, Silicon Valley Power, Fire Department, Finance Department and City Attorney’s Office.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]>.

Public Notices for this agenda item were advertised twice in the Santa Clara Weekly more than 10 days prior to this meeting, once on 3/9/22 and once on 3/16/22. In addition, staff notified members of the City’s development community by electronic mail on March 7, 2022. The City received minor comments related to the email and addressed the comments. Additionally, on March 7, 2022, staff posted the draft nexus study on the City’s web page, placed it on file at the City Clerk’s office and notified the development community that it was available.

ALTERNATIVES

1. Waive First Reading and Approve the Introduction of an Ordinance Amending Chapter 17.15 “Property Development” of Title 17 “Development” of the Santa Clara City Code to Add Section

17.15.360 “Patrick Henry Drive Infrastructure Improvement Fee”

2. Adopt a Resolution Approving the Findings from the Patrick Henry Drive Specific Plan Infrastructure Impact Fee Nexus Study, Adopting the Nexus Study, and Setting the Rates for the Infrastructure Impact Fee.

3. Approve the Patrick Henry Drive Specific Plan Infrastructure Impact Fees; and adjust fees annually in line with the latest Construction Cost Index for San Francisco, as published by Engineering News Record or equivalent, to keep up with construction costs and inflation.

4. Approve the establishment of the Patrick Henry Drive Infrastructure Improvement Fund (Fund 542) to account for the impact fee revenues and project expenditures.

5. Do not waive first reading and Introduce an Ordinance Amending Chapter 17.15 “Property Development” of Title 17 “Development” of the Santa Clara City Code to Add Section 17.15.360 “Patrick Henry Drive Infrastructure Improvement Fee”, do not adopt a Resolution Approving the Findings from the Patrick Henry Drive Specific Plan Infrastructure Impact Fee Nexus Study and Setting the Rates for the Infrastructure Impact Fee, do not approve the Patrick Henry Drive Specific Plan Infrastructure Impact Fee and adjust fees annually in line with the latest Construction Cost Index for San Francisco, as published by Engineering News Record or equivalent, in order to keep up with construction costs and inflation, do not establish the Patrick Henry Drive City of Santa Clara Printed on 3/17/2022Page 5 of 6
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Infrastructure Improvement Fund and related budget amendments, and provide direction to staff for next steps.

RECOMMENDATION
Alternatives 1, 2, 3, and 4:

1. Waive First Reading and Approve the Introduction of an Ordinance Amending Chapter 17.15 “Property Development” of Title 17 “Development” of the Santa Clara City Code to Add Section

17.15.360 “Patrick Henry Drive Infrastructure Improvement Fee”;

2. Adopt a Resolution Approving the Findings from the Patrick Henry Drive Specific Plan Infrastructure Impact Fee Nexus Study, Adopting the Nexus Study, and Setting the Rates for the Infrastructure Impact Fee;

3. Approve the Patrick Henry Drive Specific Plan Infrastructure Impact Fee; and adjust fees annually in line with the latest Construction Cost Index for San Francisco, as published by Engineering News Record or equivalent, to keep up with construction costs and inflation; and

4. Approve the establishment of the Patrick Henry Drive Infrastructure Improvement Fund (Fund 542) to account for the impact fee revenues and project expenditures.

Reviewed by: Craig Mobeck, Director of Public Works
Approved by: City Manager’s Office

ATTACHMENTS

1. Ordinance

2. Resolution

3. Patrick Henry Drive Specific Plan Infrastructure Impact Fee Nexus Study City of Santa Clara Printed on 3/17/2022Page 6 of 6
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Ordinance/Patrick Henry Drive Specific Plan Infrastructure Impact Fee Page 1 of 10 Rev: 09/2019
ORDINANCE NO. _____

AN ORDINANCE OF THE CITY OF SANTA CLARA,
CALIFORNIA, AMENDING CHAPTER 17.15 “PROPERTY
DEVELOPMENTS” OF TITLE 17 “DEVELOPMENT” TO
ADD SECTION 17.15.360 (“PATRICK HENRY DRIVE
SPECIFIC PLAN INFRASTRUCTURE IMPACT FEE”) TO

ESTABLISH A DEVELOPMENT IMPACT FEE FOR THE

PATRICK HENRY DRIVE SPECIFIC PLAN AREA

BE IT ORDAINED BY THE CITY OF SANTA CLARA AS FOLLOWS:

WHEREAS, on March 22, 2022 , the City Council adopted the Patrick Henry Drive Specific Plan (the “Project”), a specific plan for a high-density mixed-use community of up to 12,000 residential units with supportive retail uses, located on approximately 7 4 acres of land bounded by Mission College to the south, Great America Parkway to the east, the Hetch-Hetchy right-of-way to the north, and Calabazas Creek to the west that are currently developed with industrial uses;
WHEREAS, on March 22, 2022 , the City Council adopted and certified the Environmental Impact Report (“EIR”) for the Project (SCH # 2019120515), as well as a set of CEQA Findings and a Statement of Overriding Considerations, in accordance with the requirements of CEQA;
WHEREAS, the Project and EIR specified that certain improvements to public facilities are necessary to support the Project and include sanitary sewer facility upgrades, potable water facility upgrades, non-potable water facility upgrades, storm water facility upgrades, public and private street improvements and expansions, traffic signal installations, traffic safety device installations, traffic signal mitigations, fair -share traffic payments, emergency response vehicle and til ler aerial ladder apparatus purchases, entry monument and signs, and formation of a transportation management association; Ordinance/Patrick Henry Drive Specific Plan Infrastructure Impact Fee Page 2 of 10 Rev: 09/2019
WHEREAS, in 2021, the Project Consultant, MIG, contracted with Economic & Planning Systems, Inc. (EPS Consultants), to prepare a nexus study to justify the creation of an infrastructure impact fee (“ Infrastructure Impact Fee ”) to apply to new residential and office development within the Project area;
WHEREAS, the intent of the of the Infrastructure Impact Fee is to create an equitable distribution of area -wide and common infrastructure costs for all new residential and office development within the Project area;
WHEREAS, the Department of Public Works has prepared a report entitled “ Patrick Henry Drive Specific Plan Infrastructure Impact Fee Nexus Study ” (the “Study”), which provides the purpose, nexus, improvements, cost estimates, and justification for the creation of an Infrastructure Impact Fee , and is on file in the Office of the City Clerk, available for public inspection, and incorporated herein by this reference; WHEREAS, the Study proposes that the fee applies to new residential and office uses within the Project area; and
WHEREAS, the Study recommends fee levels be adjusted annually to keep up with construction costs and inflation.

NOW THEREFORE, BE IT FURTHER ORDAINED BY THE CITY OF SANTA CLARA, AS FOLLOWS:

SECTION 1: Intent and Purpose. The City Council of the City of Santa Clara does hereby find and declare:
(a) The City, pursuant to the home rule provisions of Article 11, Section 5, of the California Constitution, may make and enforce all ordinances and regulations with respect to municipal affairs.

Ordinance/Patrick Henry Drive Specific Plan Infrastructure Impact Fee Page 3 of 10 Rev: 09/2019
(b) The City, pursuant to Article 11, Section 7, of the California Constitution, may make and enforce all local ordinances not in conflict with general laws. (c) The purpose of this section is to implement the necessary improvements required to support the completion of the proposed development within the Patrick Henry Drive Specific Plan which was adopted by the City Council on March 22, 2022. (d) The Patrick Henry Drive Specific Plan identified that certain improvements are necessary to support completion of the Specific Plan. These improvements include sanitary sewer facility upgrades, potable water facility upgrades, non-potable water facility upgrades, storm water facility upgrades, public and private street improvements and expansions, traffic signal installations, traffic safety device installations, traffic signal mitigations, fair-share traffic payments, emergency response vehicle and tiller aerial ladder apparatus purchases, entry monument and signs, and formation of a transportation management association.
(e) In order to provide equitable distribution of costs to complete such improvements, the intent of this fee is to distribute costs to new residential and office development within the Patrick Henry Drive Specific Plan area.

SECTION 2: That a new section 17.15.360 (entitled “Patrick Henry Drive Specific Plan Infrastructure Impact Fee” is hereby added to Title 17 (entitled “Development”) of “The Code of the City of Santa Clara, California” (“SCCC”) to read as follows:
“Section 17.15.360 Patrick Henry Drive Specific Plan Infrastructure Impact Fee (a) Definitions. When used in this section, the following words and phrases will be defined as set forth below. When examples are given, they are illustrative only, Ordinance/Patrick Henry Drive Specific Plan Infrastructure Impact Fee Page 4 of 10 Rev: 09/2019
and they are not intended to be an exhaustive itemization of all potentially includable items.
(1) “Building” means any structure used or intended for supporting or sheltering any use or occupancy.
(2) “Building permit” means the permit issued or required for the construction or improvement of any structure in connection with the development of land pursuant to the California Building Code.
(3) “Costs” means amounts spent or authorized to be spent in connection with the planning, financing, acquisition and completion of the improvements identified in the Patrick Henry Drive Specific Plan Infrastructure Impact Fee Nexus Study including, without limitation, the costs of land, construction, engineering, administration, financing costs, legal and financial consulting fees, and incidental expenses.
(4) “Multifamily Residential Use” means a building or portion thereof used and designed as a residence for two or more families living independently of each other, including apartment houses, apartment hotels, and flats, but not including automobile courts, motels, hotels, or boarding houses. Each unit in the structure is separated from other units by one or more common, fire-resistant walls. (5) “Office/R&D use,” in general, means any structure or portion thereof intended for occupancy by a business entity which will primarily provide clerical, professional or business services, and/or research and development activities for the business itself, or which will primarily provide clerical, professional or business services, and/or research and development activities to the public or other business entities. The Ordinance/Patrick Henry Drive Specific Plan Infrastructure Impact Fee Page 5 of 10 Rev: 09/2019
structure or portion thereof may also include light fabrication areas in the manner of conducting business.
(6) “Person” means any individual, domestic stock company, partnership of any kind, joint venture, club, business or common law trust, society, legal entity, or any other manner of owning property or conducting business. (7) “Patrick Henry Drive Specific Plan Area” refers to the approximately 74 acres of land within the City of Santa Clara generally bounded by Mission College to the south, Great America Parkway to the east, the Hetch-Hetchy right-of-way to the north, and Calabazas Creek to the west.
(8) “Patrick Henry Drive Specific Plan Area Infrastructure Impact Fee Schedule” refers to the document, as amended from time to time, on file in the City’s Public Works Department used to determine applicability of the fees to particular land uses. If a proposed building use, or use within a portion of the building, does not fall under a use listed in such schedule, but, in the Director of Public Works or City Engineer’s opinion, closely corresponds to a use listed in such schedule, the Infrastructure Impact fees will be imposed.
(b) Imposition of Patrick Henry Drive Specific Plan Infrastructure Impact Fees. (1) Imposition of Fee. The Patrick Henry Drive Specific Plan Infrastructure Impact Fee is hereby imposed upon every person (person having equitable or legal title, or other interest as owner, lessee, or otherwise) who causes the development of new Multifamily Residential Use Buildings or Office Buildings within the Patrick Henry Drive Specific Plan area, as each is defined herein, on or after June 4, 2022.

Ordinance/Patrick Henry Drive Specific Plan Infrastructure Impact Fee Page 6 of 10 Rev: 09/2019
(2) Exceptions. There are no exceptions for the payment of the Patrick Henry Drive Specific Plan Infrastructure Impact Fee.
(3) Amount of Fee. The amount of the Patrick Henry Drive Specific Plan Infrastructure Impact Fee shall be established by resolution of the City Council. (4) Fee Adjustments and Escalation.
(A) Periodic Adjustments to Patrick Henry Drive Specific Plan Infrastructure Impact Fee. The Patrick Henry Drive Specific Plan Infrastructure Impact Fee shall be adjusted periodically to reflect the current status of cost and scope of the improvements identified in the Patrick Henry Drive Specific Plan Infrastructure Impact Fee Nexus Study. The Director of Public Works or City Engineer shall make a periodic review of the improvements within the Patrick Henry Drive Specific Plan Infrastructure Impact Fee Nexus Study and make recommendations for amendment, if any, in a report to the City Council. After receiving such report and making it available for public distribution and review, the City Council shall give notice and, no less than ten days after public notice has been given, conduct a public hearing in which it shall consider these reports, receive testimony and information from any interested members of the public, and receive such other evidence as it may deem necessary. At the conclusion of that hearing, the City Council shall determine what changes, if any, are to be made to the Patrick Henry Drive Specific Plan Infrastructure Impact Fee. (B) Annual Adjustments for Inflation. Unless otherwise modified by the City Council, Patrick Henry Drive Specific Plan Infrastructure Impact Fees will automatically adjust for inflation annually at the start of each fiscal year, using the latest Construction Cost Index for San Francisco, published by Engineering News Record Ordinance/Patrick Henry Drive Specific Plan Infrastructure Impact Fee Page 7 of 10 Rev: 09/2019
(ENR). If this index ceases to exist, the Director of Public Works shall substitute another construction cost index, which in his or her judgment is as nearly equivalent to the original index as possible. The automatic fee adjustment will occur when the City conducts its annual update of the municipal fee schedule unless it is otherwise modified by the City Council during its approval of the municipal fee schedule. (5) Time of Payment of Fee. Any Infrastructure Impact Fees imposed under this section shall be due and payable prior to issuance of any building permit for a Multifamily Residential Use or Office Use project.
(6) Use of the Proceeds from the Patrick Henry Drive Specific Plan Infrastructure Impact Fee. The sums derived from the collection of the Patrick Henry Drive Specific Plan Infrastructure Impact Fee, and any interest thereon, shall be held by the City’s Director of Finance and shall be distributed according to the fiscal and budgetary policies of the City. Such funds are to be used for the projects identified in the Patrick Henry Drive Specific Plan Infrastructure Impact Fee Nexus Study, as amended from time to time. In no case shall any of the moneys be used for maintenance. (7) Provisions of Section Are Not Exclusive. The provisions of this section are intended to establish an alternative method for spreading the costs of certain public improvements against the land that will be primarily benefited thereby; the provisions of this section shall not be construed to limit the powers of the City Council to utilize any other method for accomplishing this purpose. This shall be in addition to any other requirements which the City Council is authorized to impose as a condition to approving development pursuant to State and local law.

Ordinance/Patrick Henry Drive Specific Plan Infrastructure Impact Fee Page 8 of 10 Rev: 09/2019
(8) Developer Construction of Facilities. Patrick Henry Drive Specific Plan Infrastructure Impact Fees are the minimum to be paid by new residential or office development. Patrick Henry Drive Specific Plan Infrastructure Impact Fees are to be initially paid in all circumstances. However, if because of special conditions caused by a particular new development, a development is required (pursuant to SCCC 17.15.090 and/or 17.15.310) to construct the improvements included within the Patrick Henry Drive Specific Plan Infrastructure Impact Fee Nexus Study, the development will be reimbursed for such construction costs as determined by the Director of Public Works or City Engineer and based on the availability of fees paid to the City. To be entitled to such reimbursement, the new development must prove its claimed construction costs to the satisfaction of the Director of Public Works or City Engineer, or designee. (9) Appeal from Decisions of City Staff. An appeal from a City staff decision shall be made within seven calendar days of the decision to the City Council.

Written application for the appeal shall be filed with the City Clerk’s office. The application shall state the factual basis of the appeal. The City Council will hear the appeal application at a public hearing to be conducted within thirty (30) calendar days of filing of the application. The decision of the City Council shall be final.” SECTION 2: Ordinances Repealed. With exception of the provisions protected by the savings clause, all ordinances (or parts of ordinances) in conflict with or inconsistent with this ordinance are hereby repealed.

SECTION 3: Savings clause. The changes provided for in this ordinance shall not affect any offense or act committed or done or any penalty or forfeiture incurred or any right established or accruing before the effec tive date of this ordinance; nor shall it affect any Ordinance/Patrick Henry Drive Specific Plan Infrastructure Impact Fee Page 9 of 10 Rev: 09/2019
prosecution, suit or proceeding pending or any judgment rendered prior to the effective date of this ordinance. All fee schedules shall remain in force until superseded by the fee schedules adopted by the City Council.

SECTION 4 : Constitutionality, severability. If any section, subsection, sentence, clause, phrase, or word of this ordinance is for any reason held by a court of competent jurisdiction to be unconstitutional or invalid for any reason, such decision shall not affect the validity of the remaining portions of the ordinance. The City Council hereby declares that it would have passed this ordinance and each section, subsection, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more section(s), subsection(s), sentence(s), clause(s), phrase(s), or word(s) be declared invalid. ///
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Ordinance/Patrick Henry Drive Specific Plan Infrastructure Impact Fee Page 10 of 10 Rev: 09/2019
SECTION 5: Effective date. This ordinance shall take effect thirty (30) days after its final adoption; however, prior to its final adoption it shall be published in accordance with the requirements of Section 808 and 812 of “The Charter of the City of Santa Clara, California.”
PASSED FOR THE PURPOSE OF PUBLICATION this XX day of XXXXXX, 2022, by the following vote:

AYES: COUNCILORS:

NOES: COUNCILORS:

ABSENT: COUNCILORS:

ABSTAINED: COUNCILORS:

ATTEST:
___________________________

NORA PIMENTEL, MMC

ASSISTANT CITY CLERK

CITY OF SANTA CLARA

Attachments incorporated by reference:

1. Patrick Henry Drive Specific Plan Infrastructure Impact Fee Nexus Study Resolution/Approving Nexus Study and Patrick Henry Drive Specific Plan Infrastructure Impact Fee Page 1 of 6 Rev: 11/22/17
RESOLUTION NO. _____

A RESOLUTION OF THE CITY OF SANTA CLARA, CALIFORNIA

APPROVING THE FINDINGS OF THE PATRICK HENRY DRIVE

SPECIFIC PLAN INFRASTRUCTURE IMPACT FEE NEXUS

STUDY, ADOPTING THE NEXUS STUDY, AND SETTING THE
IMPACT FEES FOR FISCAL YEAR 2021-2022

BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

WHEREAS, on March 22, 2022, the City Council adopted the Patrick Henry Drive Specific Plan (the “Project”), a specific plan for a transit-oriented neighborhood of up to 12,000 residential units with supportive retail uses, located on approximately 74-acres of land bounded by Mission College to the south, Great America Parkway to t he East, the Hetch -Hetchy right-of-way to the north, and Calabazas Creek to the west that are currently developed with industrial uses; WHEREAS, on March 22, 2022, the City Council adopted and certified the Environmental Impact Report (“EIR”) for the Project (SCH # 2019120515), as well as a set of CEQA Findings and a Statement of Overriding Considerations, in accordance with the requirements of CEQA; WHEREAS, the Pro ject and EIR specified that certain public improvements are necessary to support the Project and new level of service which include sanitary sewer facility upgrades, potable water facility upgrades, non-potable water facility upgrades, storm water facility upgrades, public and private street improvements and expansions, traffic signal installations, traffic safety device installations, traffic signal mitigations , fair-share traffic payments , emergency response vehicle and tiller aerial ladder apparatus purchases, entry monument and signs, and formation of a transportation management association, collectively the capital improvement plan; WHEREAS, in 2021, the Project consultant, MIG, contracted with Economic & Planning Systems, Inc. (EPS Consultants), to prepare a nexus study to justify the creation of an infrastructure impact fee (“Infrastructure Impact Fee”) to apply to new residential and office development within the Project area;
WHEREAS, the intent of the of the Infrastructure Impact Fee is to create an equitable distribution of area-wide and common infrastructure costs for all new residential and office development within Resolution/Approving Nexus Study and Patrick Henry Drive Specific Plan Infrastructure Impact Fee Page 2 of 6 Rev: 11/22/17
the Project area;
WHEREAS, the Department of Public Works has prepared a report entitled “Patrick Henry Drive Specific Plan Infrastructure Impact Fee Nexus Study“ (the “Study”), which provides the purpose, nexus, improvements, cost estimates, and justification for the creation of an Infrastructure Impact Fee, and is on file in the Office of the City Clerk, available for public inspection, attached hereto and incorporated herein by this reference;
WHEREAS, the Study proposes that the fee applies to new residential and office uses within the Project area;
WHEREAS, the Study recommends fee levels be adjusted annually in order to keep up with construction costs and inflation;
WHEREAS, the Study provides an evaluation of the need for an infrastructure impact fee and establishes the nexus between the imposition of such impact fee and the estimated reasonable cost of providing the improvements for which the fees are charged; WHEREAS, The Mitigation Fee Act, California Government Code section 66000 et seq., requires that, in any action establishing a fee as a condition of approval of a development project, a local agency shall make the following findings:
1) Under Government Code Section 66001(a)(1), identify the purpose of the fee. 2) Under Government Code Section 66001(a)(2), identify the use to which the fee is to be put.
3) Under Government Code Section 66001(a)(3), determine how there is a reasonable relationship between the fee’s use and the type of development project on which the fee is imposed.
4) Under Government Code Section 66001(a)(4), determine how there is a reasonable relationship between the need for the public facility and the type of development project on which the fee is imposed.
5) Under Government Code Section 66001(b), Determine how there is a reasonable Resolution/Approving Nexus Study and Patrick Henry Drive Specific Plan Infrastructure Impact Fee Page 3 of 6 Rev: 11/22/17
relationship between the amount of the fee and the cost of the public facility or portion of the public facility attributable to the development on which the fee is imposed; WHEREAS, the City wishes to adopt this proposed Infrastructure Impact Fee in accordance with the calculations and recommendations contained in the Study; WHEREAS, pursuant to Sections 6062a and 66018 of the California Government Code, notice of a public hearing to be held on March 22, 2022 was published in the Weekly, a newspaper of general circulation in the City, on March 9, 2022 and March 16, 2022; WHEREAS, on March 7, 2022, a notice of the public hearing to be held on March 22, 2022 was emailed to persons who requested notice of new and increased fees in accordance with Government Code Section 66019;
WHEREAS, on March 22, 2022, the City Council held a public hearing with respect to the Study and the proposed Infrastructure Impact Fee;
WHEREAS, the Study was made available for public inspection at least ten days before the public hearing by placing the data on file with the City Clerk’s Office on March 7, 2022 in accordance with Government Code 66016;
WHEREAS, on March 22, 202 2 the City Council introduced an ordinance to add Section

17.15.360, “Patrick Henry Drive Specific Plan Infrastructure Impact Fee ,” to Chapter 17.15 (“Property Developments”) of Title 17 (“Development”) establishing an infrastructure impact fee for the Project area.

WHEREAS, the City Council adopts a Master Fee Schedule as part of its budget, fixing and establishing fees, rates, and charges for good and services provided by the City; and, WHEREAS, pursuant to the Mitigation Fee Act (California Government Code Section 66000 et seq.), the City Council now desires to approve the Study and proposed Infrastructure Impact Fee.

NOW THEREFORE, BE IT FURTHER RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

Resolution/Approving Nexus Study and Patrick Henry Drive Specific Plan Infrastructure Impact Fee Page 4 of 6 Rev: 11/22/17

1. That in accordance with the Mitigation Fee Act and the Report, and based on the facts and substantial evidence in the record, the Infrastructure Impact Fee is hereby adopted by the City Council based on the following findings:

A. Development projects in the Project area will create the need for improvements to support increased residential and office uses in the Project area.

B. The Project provides the analysis and justification for the need for the required improvements with new residential and office development within the Project.

C. The Study estimates the cost of each infrastructure improvement necessary to support the anticipated new residential and office development in the Project and substantiates an Infrastructure Impact Fee rate that will charge each new development project only for the portion of the costs of the improvements necessary to support that development project.

D. There is a reasonable relationship between the need for the identified improvements and the development projects on which the Infrastructure Impact Fee will be imposed.

E. The Infrastructure Impact Fee does not exceed the estimated reasonable cost of providing the facilities for which the Infrastructure Impact Fee is imposed. The Infrastructure Impact Fee is not levied, collected, or imposed for general government purposes.

F. As the purpose of this Resolution is to begin collection of an impact fee to fund improvements identified within and necessary to support development within the Project for which an EIR was adopted by the City Council, the setting and imposition of the Infrastructure Fee is exempt from environmental review under the California Environmental Quality Act (CEQA) pursuant to Section 21080(b)(8)(D) of the California Public Resources Code.

2. That the Fee is hereby imposed upon every person or entity having equitable or legal title, or other interest as owner, lessee, or otherwise who causes the development of new Multifamily Residential Use Buildings or Office Buildings within the Project area on or after June 4, 2022 at the following rate:

Resolution/Approving Nexus Study and Patrick Henry Drive Specific Plan Infrastructure Impact Fee Page 5 of 6 Rev: 11/22/17
Multi-Family Residential $9,626 per dwelling unit
Office $21.00 per square foot

3. That unless otherwise modified by the City Council, the Infrastructure Impact Fee shall automatically adjust for inflation annually at the start of each fiscal year, based on the latest Engineering News Record Construction Cost Index. If this index ceases to exist, the Director of Public Works shall substitute another construction cost index, which in his or her judgment is as nearly equivalent to the original index as possible.

4. That the Study is hereby approved, confirmed, and adopted.

5. Effective date. This resolution shall become effective 60 days following the date of its passage and adoption.

I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION PASSED

AND ADOPTED BY THE CITY OF SANTA CLARA, CALIFORNIA, AT A REGULAR MEETING THEREOF HELD ON THE ___ DAY OF _________, 2022, BY THE FOLLOWING VOTE:

AYES: COUNCILORS:

NOES: COUNCILORS:

ABSENT: COUNCILORS:

ABSTAINED: COUNCILORS:

ATTEST: ______________________________

NORA PIMENTEL, MMC

ASSISTANT CITY CLERK

CITY OF SANTA CLARA
Attachments incorporated by reference:

1. Patrick Henry Drive Specific Plan Infrastructure Impact Fee Nexus Study

Final Report
Patrick Henry Drive Specific Plan Area
Infrastructure Impact Fee Nexus Study

Prepared for:

City of Santa Clara

Prepared by:

Economic & Planning Systems, Inc. (EPS)

March 2022

EPS #171093
TIii' frnrromics of land Use
Economic & Planning Systems, Inc.
1330 Broadway
Suite450
Oakland, CA 94612
510 841 9190 tel
Oakland
Sacramento
Denver
Los Angeles
www.e psys.com

Table of Contents

1. INTRODUCTION AND FEE OVERVIEW .............................................................................. 1 Introduction ........................................................................................................... 1 Legal Context ......................................................................................................... 1 PHDSP Area Infrastructure Impact Fee ....................................................................... 3

2. PHDSP LAND USE AND INFRASTRUCTURE ASSUMPTIONS ..................................................... 5 Existing and Planned Development ............................................................................ 5 Plan Area Capital Improvements and Costs ................................................................. 8

3. PLAN AREA INFRASTRUCTURE FEE CALCULATION AND NEXUS FINDINGS .................................. 10 Nexus Findings ..................................................................................................... 10 PHDSP Area Infrastructure Impact Fee Calculation ..................................................... 11

4. PHDSP AREA INFRASTRUCTURE IMPACT FEE IMPLEMENTATION AND ADMINISTRATION ................. 13 Credits and Reimbursement.................................................................................... 13 Periodic Program Updates and Fee Adjustments ........................................................ 14 Annual Reporting and Fund Management .................................................................. 14

Appendix A: PHDSP Capital Improvements and Construction Cost Estimates

List of Tables
Table 1 Proposed PHDSP Area Infrastructure Impact Fee (FY$21-22) ................................. 3 Table 2 PHDSP Buildout Scenarios ................................................................................ 7 Table 3 PHDSP Area Long-Term Capital Improvement Plan (FY$21-22) .............................. 9 Table 4 Plan Area Infrastructure Impact Fee Calculation (FY$21-22) ................................ 12

List of Figures
Figure 1 PHDSP Area Boundaries ................................................................................... 5 Figure 2 City of Santa Clara Focus Areas ......................................................................... 6

Economic & Planning Systems, Inc. 1

1. INTRODUCTION AND FEE OVERVIEW
Introd uction
This Nexus Report provides analysis and technical documentation to support the adoption of a development impact fee program for the Patrick Henry Drive Specific Plan (PHDSP) area (Plan Area) in the City of Santa Clara (City). Development impact fees are one-time charges on new development collected and used by the City to cover the cost of capital facilities and improvements required to serve real estate development. The PHDSP Area Infrastructure Impact Fee would be applicable to future development in the PHDSP only and will not replace or exempt development from other City-wide impact fees.

This Nexus Report has been prepared by Economic & Planning Systems, Inc. (EPS), with direction and input from City staff. It provides a legal basis for requiring payment of a PHDSP area-wide development impact fee consistent with Mitigation Fee Act (AB 1600/ Government Code Section 66000 et seq.) and subsequent related legislation. The PHDSP Area Infrastructure Impact Fee Program must be approved by the City Council and will be effective 60 days following the City’s final action on the ordinance authorizing collection of the fee.

The PHDSP, to be adopted by the Santa Clara City Council before the approval of the PHDSP Infrastructure Area Impact Fee, provides the land use and regulatory framework for the development of a high-density, mixed-use neighborhood. This PHDSP Area Infrastructure Impact Fee is based on the land use program and level of service standards/requirements described in the PHDSP (and supporting environmental documents) as well as current estimates of the infrastructure and improvement costs needed to accommodate these land uses and standards.

Legal Context
This Nexus Study is designed to provide the necessary technical analysis to support a PHDSP Area Infrastructure Impact Fee to be established by a City Ordinance and Resolution. The Mitigation Fee Act allows the City to adopt, by resolution, the PHDSP Area Infrastructure Impact Fee consistent with the supporting technical analysis and findings provided in this Nexus Report.

The Resolution approach to setting the fee allows periodic adjustments of the fee amount that may be necessary over time, without amending the enabling ordinance.

Impact fee revenue are used to cover the cost of constructing capital and infrastructure improvements required to serve new development and growth in the City. As such, impact fees must be based on a reasonable nexus, or connection, between new development and the need for specific capital facilities and improvements. Impact fee revenue cannot be used to cover the operation and maintenance costs of these or any other facilities and infrastructure. In addition, impact fee revenue cannot be collected or used to cover the cost of pre-existing infrastructure needs or deficiencies.

Patrick Henry Drive Specific Plan Area Infrastructure Impact Fee Final Nexus Report, March 2022

Economic & Planning Systems, Inc. 2
In establishing, increasing, or imposing a fee as a condition for the approval of a development project, Government Code 66001(a) and (b) state that the local agency must:

1. Identify the purpose of the fee;

2. Identify how the fee is to be used;

3. Determine how a reasonable relationship exists between the fee use and type of development project for which the fee is being used;

4. Determine how the need for the public facility relates to the type of development project for which the fee is imposed; and

5. Show the relationship between the amount of the fee and the cost of the public facility.

In September 2021, the State of California adopted Assembly Bill (AB) 602, which includes several new requirements related to the development and implementation of impact fee programs. The key provisions related to the calculations documented in this Nexus Report are summarized below.
• Capital Improvement Plan: AB 602 requires that jurisdictions adopt a capital improvement plan as part of the nexus study process. This adoption can occur at the same time as the fee ordinance adoption. Accordingly, this Nexus Report relies on a PHDSP Area Long-Term Capital Improvement Plan to be approved by the City Council in conjunction with the PHDSP Area Infrastructure Impact Fee Program.
• Explanation of Level of Service and Fee Increase: AB 602 requires that the nexus study provide explanations if the fee calculation is based on a change in existing levels of service.

Since the PHDSP Area Infrastructure Impact Fee will be new to the City and only apply to a defined area, existing or city-wide service standards are not used as a basis for the fee calculation. This Nexus Report is based on service standards that have been developed for, and are unique to, the PHDSP area, as documented in the Plan and referenced as appropriate in this document.

All State statutory requirements have been followed in establishing this PHDSP Area Infrastructure Impact Fee, as documented in subsequent chapters. Chapter 3 summarizes the specific findings that explain or demonstrate this nexus.

If the PHDSP Area Infrastructure Impact Fee is adopted, this Nexus Report and the technical information it contains should be maintained and reviewed periodically by the City to ensure Impact Fee accuracy and to enable the adequate programming of funding sources. To the extent that infrastructure requirements, costs, and development potential changes over time, the PHDSP Infrastructure Impact Fee Program (Fee Program) will need to be updated. Further information on the implementation and administration of the Fee program is provided in Chapter 4.

Patrick Henry Drive Specific Plan Area Infrastructure Impact Fee Final Nexus Report, March 2022

Economic & Planning Systems, Inc. 3
PH DSP Area Infrastru cture Impact Fee
Table 1 shows the PHDSP Area Infrastructure Impact Fee supported by the nexus findings and analysis contained in this Nexus Report. As currently calculated, the fee would be applied to all new multifamily residential and office development projects within the PHDSP area (retail uses will be exempt and PHDSP does not include single-family development). The PHDSP Area Infrastructure Impact Fee Program will be independent and separate from all other City, Santa Clara County, other agency, or regional development impact fees that may also be applicable to the PHDSP development.

Table 1 Proposed PHDSP Area Infrastructure Impact Fee (FY$21-22)

Use Meas ure Fee1
Multi-family Residential 2 per Unit $9,626
Office per Square Foot $21
[2] Single family residential use is not permitted in the PHDSP area. [1] Fee is set to cover full costs of required PHDSP infrastructure facilities and includes
a two (2) percent administrative fee to cover City costs of reporting, managing, and updating fee program.

Source: BKF; City of Santa Clara; Hexagon Transportation Consultants; Economic & Planning Systems, Inc.

Patrick Henry Drive Specific Plan Area Infrastructure Impact Fee Final Nexus Report, March 2022

Economic & Planning Systems, Inc. 4
The calculated PHDSP Area Infrastructure Impact Fee amounts of $9,626 per multifamily residential unit and $21.00 per office square foot includes a program administration fee equal to 2 percent of the program costs, consistent with other Mitigation Fee Act program administrative costs in many other California jurisdictions.1 It covers the cost of infrastructure needed to serve build-out of the Plan Area, as specified in more detail in Appendix A for the PHDSP Area Long- Term Capital Improvement Plan. In particular, the PHDSP Area Infrastructure Impact Fee covers the following infrastructure items:
— On-Site and Off-Site Roadway Facilities
(i.e., traffic signals, traffic safety devices,
pavement).
— Non-potable Water Facilities
(i.e., Recycled Water).
— Sanitary Sewer Facilities and associated
structures.
— Storm Drainage Facilities.
— Potable Water Facilities. — Emergency Response
Apparatus/Equipment.
— Monuments and Signage.
— Formation of a Transportation
Management Association.
— All land right of way acquisition costs
needed to support on-site public
infrastructure.

1 The 2 percent administration cost is designed to cover expenses for preparing subsequent updates to the impact fee technical report as well as the required reporting, auditing, collection and other annual administrative costs involved in overseeing the program. Development impact fee programs throughout California have applied similar administrative charges. The cost of preparing this Nexus Report has been paid directly by the developers in the Specific Plan area outside of this fee.

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2. PHDSP LAND USE AND INFRASTRUCTURE ASSUMPTIONS
This chapter documents the land use growth projections and infrastructure improvement costs used to calculate the PHDSP Area Infrastructure Impact fee. The assumptions are based on information from the PHDSP and cost analysis developed by City of Santa Clara staff, with support from transportation and civil engineering consultant firms Hexagon and BKF, respectively.

Existing and Planned Development
The PHDSP covers an approximately 74-acre area in the City of Santa Clara bounded by Mission College to the south, Great America Parkway to the East, the Hetch-Hetchy right-of-way to the north, and Calabazas Creek to the west (see Figure 1). Before approval of the PHDSP, the area is primarily zoned as “Light Industrial” (or ML), which allows for manufacturing, processing, repair, and storage uses. Consistent with this zoning, existing uses include electrical supply stores and several office and warehouse buildings housing R&D labs and software training institutes. A nine-acre section of the Plan Area is currently zoned as “Planned Development” (PD). The existing street, utilities and related infrastructure is sufficient to accommodate this level of development.

Figure 1 PHDSP Area Boundaries

Source: City of Santa Clara

Patrick Henry Drive Specific Plan Area Infrastructure Impact Fee Final Nexus Report, March 2022

Economic & Planning Systems, Inc. 6
With expected adoption in 2022, the PHDSP is designated by the City’s 2010-2035 General Plan as one of nine Focus Areas in the City with potential to contribute to the City’s Regional Housing Needs Allocation (RHNA) goals (see Figure 2). The PHDSP Plan Area provides an opportunity to develop higher-density residential homes supported by local amenities and accessible jobs, cultivating a vibrant and diverse mixed-use neighborhood.

Figure 2 City of Santa Clara Focus Areas

Source: City of Santa Clara

(Includes
Patrick Henry
Drive)
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Central Ex
Lawrence
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El Camino Real i
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r ••••••••••••• -1 . ......... 1,:.,.

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City Boundary
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MILPITAS
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Downtown
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Patrick Henry Drive Specific Plan Area Infrastructure Impact Fee Final Nexus Report, March 2022

Economic & Planning Systems, Inc. 7
Implementation of the PHDSP involves updating the zoning from ML to Residential, Flex, and Mixed-Use designations, which would allow for a high-density, residential mixed-use neighborhood. As summarized in Table 2, the PHDSP considers two development scenarios for the Plan Area. Scenario A allows for up to 12,000 residential units at full build-out, along with 310,000 square feet of neighborhood-serving commercial and community space (e.g., retail, fitness, and public uses such as a library). Scenario B would include 785,000 square feet of office in place of 1,700 residential units, reducing the number of units to 10,300. The current level of public infrastructure (e.g., streets, utilities, storm drainage, and the like) is not sufficient to serve this level of development.

Table 2 PHDSP Buildout Scenarios

While the PHSDP designates the maximum allowable development that can occur within the PHDSP Plan Area, actual development may be less and will likely unfold over many years. To be conservative, the impact fee calculation assumes that the amount of development that is likely to occur in the Plan Area will be less than the maximum allowable. In particular, the fee calculation assumes slightly more than 90 percent of the total allowable residential development will be achieved within the Plan Area, or 1,000 less units than what is permitted. This assumption is designed to ensure that adequate fee revenue is generated to cover the full cost of required infrastructure needed to serve new development in the Plan Area.

Scenario A
Maximum Allowable 12,000 - 310,000
Amount Assumed in Fee Calculation1
11,000 - -
Scenario B
Maximum Allowable 10,300 785,000 310,000
Amount Assumed in Fee Calculation1
9,300 785,000 -
Difference (Scenario B - Scenario A) 1,700 785,000 - PHD Specific Plan Alternative
[1] As a conservative assumption, the impact fee is calculated based on 1,000 units less than the maximum development allowed under the PHDSP. This assumption is designed to assure that new development will cover the total cost of required infrastructure even if the maximum build-out potential is not achieved.

Office
Square Feet
Other Commercial /
Community-Serving
Square Feet
Multi-Family
Residential
Units
Patrick Henry Drive Specific Plan Area Infrastructure Impact Fee Final Nexus Report, March 2022

Economic & Planning Systems, Inc. 8
Given that the Plan Area consists of multiple property owners and existing uses, the timing of future development, and thus generation of fee revenue, will depend on economics and a variety of other factors. Existing property owners may wish to continue to operate under the current light industrial zoning for the foreseeable future while others may seek to pursue residential development in the short-term. For the initial set of property owners who are interested in residential development, funding for any required up-front infrastructure may need to come from sources other the Plan Area Infrastructure Impact Fee. Consequently, infrastructure phasing will likely require a process for developer credits and reimbursements, as described further in Chapter 4.

Plan Area Capital Improvements and Costs
Development impact fees are derived from a list of specific capital improvement projects and associated costs that are needed in part or in full to accommodate new growth. These infrastructure improvements, in turn, are based on the amount of new growth and corresponding public level of service standards/requirements defined in the PHDSP. The capital improvements included in the fee program need to be described in sufficient detail to generate cost estimates.

The cost of capital improvements included in the PHDSP Area Infrastructure Impact fee are based on information provided by City staff, working in consultation with civil engineers (BKF and Hexagon) and input from local property owners/developers. None of the capital projects included in the PHDSP Area Infrastructure Impact Fee address existing deficiencies (e.g., these improvements are not required by existing land uses in the area). The specific infrastructure and improvement categories include:
• On-Site Roadway
• Sanitary Sewer
• Potable Water
• Non-potable Water
• Emergency Response
• Monuments & Signage
• Transportation Management Association Formation
Table 3 summarizes the costs defined in the PHDSP Area Long-Term Capital Improvement Plan to be approved by the City Council in conjunction with the PHDSP Area Infrastructure Impact Fee Program. As shown, the estimated infrastructure hard and soft costs amount to a total of $105.9 million (additional cost detail is provided in Appendix A Table A-2). A 2 percent administrative charge is included to account for program administration.

The infrastructure items shown in Table 3 represent improvements that will be needed to address new development in the PHDSP Plan Area. Moreover, the infrastructure analysis underlying the fee program suggests that these improvements will be needed regardless of whether Scenario A or Scenario B is ultimately developed. This means that the 785,000 square feet of office is expected to generate the same demand for infrastructure, and associated costs, as 1,700 multifamily residential units. In addition, the analysis finds that the PHDSP Plan Area is likely to require a similar level of infrastructure even if full build-out does not occur. Specifically, a level of development representing about 90 percent maximum allowable development is Patrick Henry Drive Specific Plan Area Infrastructure Impact Fee Final Nexus Report, March 2022
Economic & Planning Systems, Inc. 9
expected to require the full array of transportation, utilities and related infrastructure items defined in the PHDSP Area Long-Term Capital Improvement Plan.

Table 3 PHDSP Area Long-Term Capital Improvement Plan (FY$21-22) Item Description Category Total Costs1,2
1 Sanitary Sewer Upgrades $9,570,000
2 Water Line Replacement $5,220,000
3 New Recycled Water Line $4,060,000
4 Stormwater Treatment Facilities
Sanitary Sewer
Water
Water
Storm Water
$4,142,800
5 New Roadways Improvement Cost Roadway $21,914,000
6 Roadway Pavement Treatment Roadway $2,973,000
7 Specific Plan Traffic Improvements Roadway $1,305,000 8 Non-Specific Plan Traffic Improvements Roadway $8,468,000 9 Traffic Fair Share Payments Roadway $11,520,000
10 EMS Response Vehicle or Ambulance (2 each)
and Tiller Aerial Ladder Apparatus Emergency Response $3,120,000 11 Entry Monument & Signs Monuments & Signage $334,000
12 Transportation Management Association Formation Roadway $150,000 Subtotal $72,776,800
Real Estate (Land) Cost3 $31,031,240
2% Administrative Cost4 $2,076,161
Total Infrastructure Cost $105,884,201
[1] Includes a 15 percent contingency cost when applicable. [2] Delivery costs are calculated as a percentage of construction costs. 20 percent is for Design, 10 percent for Administration and Permitting, 5 percent to Construction Management, and 10 percent to Inspection. [4] The 2 percent administration cost is designed to cover expenses for subsequent updates to the development impact fee technical report and as well as the required reporting, auditing, collection and other annual administrative costs involved in overseeing the program. Development impact fee programs throughout California have applied similar administrative charges.

Source: BKF; City of Santa Clara; Hexagon Transportation Consultants; Economic & Planning Systems, Inc. [3] Real estate costs and market land values are assumed at $155/SF and includes a 1 percent administrative cost.

Economic & Planning Systems, Inc. 10

3. PLAN AREA INFRASTRUCTURE FEE CALCULATION AND NEXUS

FINDINGS
This chapter documents the PHDSP Area Infrastructure Impact Fee calculation and methodology as well as required nexus findings. Specifically, it demonstrates "nexus" between new development in the PHDSP and the infrastructure improvements needed to serve it, as required under Government Code Section 66000 (also referred to as AB1600/the Mitigation Fee Act).

Nexus Finding s
The development impact fee to be collected for new residential and office land uses in the Plan Area is calculated based on the proportionate share of the total facility use that these land use represents. As the commercial development is expected to be ancillary to and supportive of PHDSP housing and/or office (e.g., clustered ground-floor retail), the PHDSP Area Infrastructure Impact Fee is limited to residential and office development. However, retail development will be subject to other applicable City-wide fees, including the existing City-wide traffic impact fee.

With this context, the following findings are made regarding the Fee Program.

Purpose of Fee
The purpose of the Fee Program is to provide a funding mechanism to help the City provide adequate infrastructure necessary to support development as described in the PHDSP Area Long- Term Capital Improvement Program (CIP).

Use of Fees
The fee charged to residential and office development will be used to fund additions and improvements to infrastructure necessary to accommodate growth consistent with the PHDSP and level of service requirements described therein. Infrastructure additions and improvements include transportation, utilities, storm drainage, and other facilities. The list of eligible capital projects and costs are summarized in Chapter 2 and further detailed in Appendix A.

Relationship between Use of Fees and Type of Development Development of new residential units and office space in the Plan Area will require additional infrastructure capacity consistent with the level of public services and facilities defined therein.

This infrastructure in not currently required by existing land uses in the area.

Relationship between Need for Facility and Type of Project The specific infrastructure improvements identified in this study are designed to accommodate residential and office development. In addition, the infrastructure is based on the land use and urban design goals and level of service standards and associated facilities described in the PHDSP.

Patrick Henry Drive Specific Plan Area Infrastructure Impact Fee Final Nexus Report, March 2022
Economic & Planning Systems, Inc. 11
Relationship between Amount of Fees and Cost of or Portion of Facility Attributed to Development on which Fee is Imposed
The fee levels calculated in this Nexus Report are based on a fair share cost allocation to new PHDSP development. In particular, 100 percent of the costs are allocated to the planned residential and office development because (1) the identified infrastructure is not required by existing land uses in the area, and (2) all new commercial development is assumed to be ancillary or supporting the residential or office development (e.g., ground floor retail). New commercial development will, however, be responsible for paying all applicable citywide fees.

PHDSP Area Infrastructure Impact Fee Calculation
The following steps describe the methodology for calculating the Plan Area Infrastructure Impact Fee level. The specific calculations are shown in Table 4:

1. Determine the total amount of land uses that will benefit from the infrastructure improvements. In this case, the Fee Program applies to the 11,000 residential units (Scenario A) or 9,300 residential units and 785,000 square feet of office (Scenario B), representing the bulk of permissible growth under the PHDSP (discussed in Chapter 2).

2. Determine the infrastructure needed to serve new development (identified by the City and shown on Table 3).

3. Determine the cost of infrastructure to be funded by the Fee Program (also estimated in Table 3).

4. Divide the allocated cost by the number of residential units to determine the justifiable fee per unit for residential development (Scenario A).

5. Determine a dwelling unit equivalency factor between office and residential units. This is derived by dividing the amount of proposed office square footage that could be developed instead of residential development (as detailed under Scenario B and shown in Table 4).

6. Use the dwelling unit equivalency factor to convert the residential fee to an equivalent fee per square foot for office development.

Patrick Henry Drive Specific Plan Area Infrastructure Impact Fee Final Nexus Report, March 2022
Economic & Planning Systems, Inc. 12
Table 4 Plan Area Infrastructure Impact Fee Calculation (FY$21-22) Scenario A Scenario B
Total Infrastructure Cost1 a $105,884,201 $105,884,201
Number of Multi-family Residential Units2 b 11,000 9,300 Square Footage of Office2 c - 785,000
Dwelling Unit Equivalency Factor3 d = 785,000 / 1,700 462 Fee per Multi-family Residential Unit 4 e = $105.9M / 11,000 $9,626 $9,626 Fee per Office Square Foot 4 f = e / d - $21
[1] See Table 3 for PHDSP capital improvements and cost estimates.

Source: BKF; City of Santa Clara; Hexagon Transportation Consultants; Economic & Planning Systems, Inc.

Amount
[4] Fee is set to cover full costs of required PHDSP infrastructure facilities. Includes a 2 percent administrative fee to cover City costs of reporting, managing, and updating fee program.

Fee Calculation
[2] As a conservative assumption, the impact fee is calculated based on 1,000 units less than the maximum development allowed under the PHDSP Specific Plan. This assumption is designed to assure that new development will cover the total cost of required infrastructure even if the maximum build-out potential is not achieved.
[3] The fee calculation assumes infrastructure cost equivalency between 785,000 sq. ft. of office and 1,700 residential units.

Economic & Planning Systems, Inc. 13

4. PHDSP AREA INFRASTRUCTURE IMPACT FEE

IMPLEMENTATION AND ADMINISTRATION
The proposed PHDSP Fee Program is anticipated to be adopted by the City through an ordinance establishing and authorizing collection of the fee. The City will also adopt a resolution approving the PHDSP Area Long-Term Capital Improvement Program and establishing the fee amount. This chapter describes the additional implementation and administrative issues and procedures to be addressed in the Fee Program.

Credits and Reimbursement
As is typical with development impact fee programs, some of the required infrastructure and facilities may be needed upfront before adequate revenue from the fee collection would be available to fund such improvements. Consequently, private funding may be necessary to pay for infrastructure facilities when needed. This private funding may be in the form of land-secured bonds, developer equity, or another form of private funding. There shall be no adjustment to the Fee Program based on the method by which a constructing party funds or constructs eligible project costs.

Fee Credits
Impact fee ordinances frequently allow for fee credits if a developer provides a particular facility or improvement that replaces facilities that would have otherwise been funded in whole or in part by the PHDSP Area Infrastructure Impact Fee. For example, the City may elect to offer a fee credit to developers who provide transportation related improvements, consistent with those specified in the current Area Fee program. The fee credit is usually equal to the most current cost estimate of the infrastructure item (as defined by annual cost review or other recent evaluation of cost) regardless of the actual cost to construct. The City’s Ordinance should allow for fee credits under specific terms.

Fee Reimbursements
Fee reimbursements are typically considered for developers who contribute more funding and/or build and dedicate infrastructure items that exceed their proportional obligation, especially if the project funded is a priority project. Such reimbursements should be provided as fee revenue becomes available but should not compromise the implementation of other priority capital projects. As will be more specifically detailed in an Infrastructure Fee Program Reimbursement Agreement (Fee Reimbursement Agreement), a form of which shall be approved by the City Council, reimbursements will be provided under the following conditions:
• A Constructing Owner shall have executed a Fee Reimbursement Agreement with the City. • Constructing Owner-installed improvements or dedicated public facility land in excess of a Constructing Owner’s obligations, which shall be illustrated and identified in a Fee Reimbursement Agreement, would be eligible for reimbursement. Only funds collected from Patrick Henry Drive Specific Plan Area Infrastructure Impact Fee Final Nexus Report, March 2022
Economic & Planning Systems, Inc. 14
the Fee Program shall be used to reimburse a developer who installed eligible infrastructure improvements identified in this report. Reimbursements are an obligation of the Fee Program and not an obligation of the City General Fund or other operating funds.

The total amount of reimbursement for completed infrastructure will be based on the most current cost estimate of the infrastructure item (as defined by annual cost review or other recent evaluation of cost) or the actual costs incurred for eligible hard costs based on a properly bid construction contract. Soft costs will be calculated as a fixed percentage (e.g., 20 percent) of hard costs. Descriptions of hard costs and soft costs will be more specifically detailed in the Fee Reimbursement Agreement. All hard costs will be subject to verification by the City and actual costs expended will go through a true-up process upon completion of the infrastructure component. The true-up process, which will be more specifically detailed in the Fee Reimbursement Agreement.

Periodic Program Updates and Fee Adjustments
This fee program is based on the estimated PHDSP development program as well as the associated capital facility needs as of 2022. It is recognized that these individual projects and associated costs may change over time due to economic, technological, or other factors. The amount of residential development may also deviate from the projections assumed in the Fee Program. These factors may affect the appropriate fee level needed to cover necessary infrastructure. Accordingly, the Nexus Study should be updated periodically to account for these potential changes. Ideally this would occur every five (5) years, however, more frequent updates may be necessary to account for major changes.

The Development Impact Fee Ordinance should also allow for an automatic annual adjustment to account for inflation. This adjustment will be based on data from the Engineering News Record Construction Cost Index.

Annual Reporting and Fund Management
State Law (at Govt. Code. §§ 66001(c), 66006(b)(1)) stipulates that each local agency that requires payment of a fee make specific information available to the public annually within 180 days of the last day of the fiscal year. This information includes the following:
• A description of the type of fee in the account
• The amount of the fee
• The beginning and ending balance of the fund
• The amount of fees collected and interest earned
• Identification of the improvements constructed
• The total cost of the improvements constructed
• The fees expended to construct the improvement
• The percentage of total costs funded by the fee
Patrick Henry Drive Specific Plan Area Infrastructure Impact Fee Final Nexus Report, March 2022
Economic & Planning Systems, Inc. 15
If sufficient fees have been collected to fund specific improvements, the agency must specify the approximate date for the development of that improvement. Because of the dynamic nature of growth and capital equipment requirements, the City should monitor inventory activity, the need for infrastructure improvements, and the adequacy of the fee revenues and other available funding. Formal annual review of the Fee Program should occur, at which time adjustments should be made. Costs associated with this monitoring and updating effort are included in the PHDSP Area Infrastructure Impact Fee and are assumed to be 2 percent of overall Fee Program capital costs.

State Law also requires that if any portion of a fee remains unexpended or uncommitted in an account for five years or more after deposit of the fee, the City Council shall make findings once each year: (1) to identify the purpose to which the fee is to be put, (2) to demonstrate a reasonable relationship between the fee and the purpose for which it was charged, (3) to identify all sources and amounts of funding anticipated to complete financing of incomplete improvements, and (4) to designate the approximate dates on which the funding identified in (3) is expected to be deposited into the appropriate fund (§66001(d)).

If adequate funding has been collected for planned improvements, an approximate date must be specified as to when the cost of the improvement will be incurred. If the findings show no need for the unspent funds, or if the conditions discussed above are not met, and the administrative costs of the refund do not exceed the refund itself, the local agency that has collected the funds must refund them (Govt. Code §66001(e)(f)).

APPENDIX A:

PHDSP Area Long-Term
Capital Improvements and Cost Estimates
Economic & Planning Systems, Inc. A-1
Table A-1 PHDSP Area Long-Term Capital Improvement Plan Item Description Scope
1 Sanitary Sewer Upgrades Abandon or remove existing sanitary sewer mains and install 5,080 LF of new 8 to 39 inch sanitary sewer mains
2 Water Line Replacement
Abandon and remove 1,900 LF of 8" AC Water Main and 4,000 LF of 12" AC Water Main and install 4,000 LF of 12" DIP Water Main
3 New Recycled Water Line
Abandon and remove 1,100 LF of 8" PVC RCW Main and 2,900 LF of 12" Yelomine RCW Main and install 4,000 LF of 12" DIP RCW Main
4 Stormwater Treatment Facilities Post-Constructuion Stormwater Treatment facilities estimated at 4% of total impervious area for existing roadways
5 New Roadways Improvement Cost
Creation of new 192,610 SF of roadways to support the plan area. Inclucdes roadway construction costs and land acquistion costs
6 Roadway Pavement Treatment
Existing roadway pavement treatment; grind and overlay at Patrick Henry Drive, Old Ironsides Drive, Old Glory Lane and slurry seal at Great America Parkway
7 Specific Plan Traffic Improvements Traffic improvements at various locations 8 Non-Specific Plan Traffic Improvements Traffic improvements at various locations 9 Traffic Fair Share Payments Fair share payments for traffic improvements at various locations
10 EMS Response Vehicle or Ambulance (2 each)
and Tiller Aerial Ladder Apparatus
One tractor drawn aerial ladder apparatus and two Type 1 fire ambulances
11 Entry Monument & Signs Four entry monuments and signs 12 Transportation Management Association
Formation
Formation of a transportation management association to determine needs for a shuttle
Source: City of Santa Clara
Economic & Planning Systems, Inc. A-2
Table A-2 PHDSP Area Long-Term Capital Improvements and Construction Cost Estimates (FY $21-22) Item Description Category Estimated
Cost
Construction
Costs
(Rounded)1
Delivery
Costs2 Total Costs
1 Sanitary Sewer Upgrades $5,073,221 $6,600,000 $2,970,000 $9,570,000 2 Water Line Replacement $3,055,000 $3,600,000 $1,620,000 $5,220,000 3 New Recycled Water Line $2,430,000 $2,800,000 $1,260,000 $4,060,000 4 Stormwater Treatment Facilities
Sanitary Sewer
Water
Water
Storm Water
$2,483,772 $2,856,800 $1,286,000 $4,142,800
5 New Roadways Improvement Cost Roadway $13,140,630 $15,113,000 $6,801,000 $21,914,000 6 Roadway Pavement Treatment Roadway $1,781,500 $2,050,000 $923,000 $2,973,000 7 Specific Plan Traffic Improvements Roadway $781,500 $900,000 $405,000 $1,305,000 8 Non-Specific Plan Traffic Improvements Roadway $5,071,080 $5,840,000 $2,628,000 $8,468,000 9 Traffic Fair Share Payments Roadway $11,516,032 $11,520,000 $0 $11,520,000 10 EMS Response Vehicle or Ambulance (2 each)
and Tiller Aerial Ladder Apparatus Emergency Response $2,704,757 $3,120,000 $0 $3,120,000 11 Entry Monument & Signs Monuments & Signage $200,000 $230,000 $104,000 $334,000 12 Transportation Management Association Formation Roadway $150,000 $150,000 $0 $150,000 Subtotal $48,387,492 $54,779,800 $17,997,000 $72,776,800 Real Estate (Land) Cost3 $31,031,240
2% Administrative Cost4 $2,076,161
Total Infrastructure Cost $105,884,201
[1] Includes a 15 percent contingency cost when applicable. [2] Delivery costs are calculated as a percentage of construction costs. 20 percent is for Design, 10 percent for Administration and Permitting, 5 percent to Construction Management, and 10 percent to Inspection.
[4] The 2 percent administration cost is designed to cover expenses for subsequent updates to the development impact fee technical report and as well as the required reporting, auditing, collection and other annual administrative costs involved in overseeing the program. Development impact fee programs throughout California have applied similar administrative charges.

Source: BKF; City of Santa Clara; Hexagon Transportation Consultants; Economic & Planning Systems, Inc. [3] Real estate costs and market land values are assumed at $155/SF and includes a 1 percent administrative cost.

City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
22-419 Agenda Date: 3/22/2022

REPORT TO COUNCIL

SUBJECT
Update on City Council and Stadium Authority Staff Referrals

COUNCIL PILLAR
Enhance Community Engagement and Transparency

BACKGROUND AND DISCUSSION
During Council and Stadium Authority meetings, the City Council or Stadium Authority Board provide direction on policy issues or refer information requests to staff for follow-up.

The purpose of the City Council and Stadium Authority Referrals Update is to provide the City Council/Stadium Authority Board and the public with a current, status report. Completion of the referrals may be communicated by various means such as: Report to Council; Information Memorandum provided through a Council Agenda; City Manager Biweekly Report/Blog; or a City Manager/Executive report out during a future Council meeting.

The Referrals list will be published in the Council agenda packet under the “City Manager/Executive Director Report” section of the Council Agenda. Reports will include both open and closed referrals.

ATTACHMENTS

1. City Council and Stadium Authority Staff Referrals
City of Santa Clara Printed on 3/17/2022Page 1 of 1
powered by Legistar™
CITY COUNCIL AND STADIUM AUTHORITY STAFF REFERRALS
FOR FOLLOW‐UP/ACTION
Updated 3/15/22

Date
Assigned
Source  Referral Description  Assigned
Department
Projected
Completion
Completed

1.   1/25/22  Council Meeting  Postpone Action on Task Force on Diversity, Equity, and Inclusion’s Letter regarding Elected Police Chief until after 2022 Priority Setting (Pending Completion of 2022 Priority Setting)
CMO  TBD

2.   1/11/22  Council Meeting  Action on a Written Petition (Council Policy 030) submitted by Keith Stattenfield requesting to place an agenda item at a future Council meeting to discuss requirements from the CAO on approving an update to the CC&Rs of the Case del Rey HOA Bylaws
CAO  April 5, 2022

3.   1/11/22  Council Meeting  Update on Review and Monitoring of Transportation Demand Management (TDM) Measures. Staff to Issue RFP to Support online reporting and tracking of TDM Measures and Present a Template to Complete the Forms
DPW  TBD

4.   1/11/22  Council Meeting  Action on a Council Written Request (Council Policy 030) submitted by CM Jain requesting to place an agenda item at a future Council Meeting to discuss making the Youth Soccer Park parking lot available when there are no events at the Youth Soccer Park

1. Investigate ADA Improvements for parking

2. Investigate whether the City can engage a private ope rator to manage for parking

3. Investigate whether the 49ers can use their practice facility for parking

4. Determine the fair market value of VIP parking
Parks &
Rec/CAO
TBD

5.   1/5/22  Joint City/VTA Study
Session re: BART to Santa
Clara

1. Set a meeting with VTA near the proposed Santa Clara BART Station location to provide details to the public regarding station design (tentatively scheduled for 3/22/22)

2. Funding a Brokaw undergrounding study for February 8, 2022 Priority Setting Session
DPW  May 10, 2022

6.   12/14/21  Council Meeting  Action on Amendment No. 1 to the Agreement for the Performance of Services with Wilson, Ihrig & Associates for Noise Monitoring Services at Vantage CA2 Data Center and Owens Corning Facility and Related Budget Amendment: item continued to get more information on broadcasting, moving from the Northside to the stadium, and an implemen
tation timeline
CDD  April 19, 2022

7.   12/7/21  Council Meeting  Written Petition (030) to be added to Future Agenda:
10A: Action on a Written Petition (Council Policy 030) Submitted by Jared Peters Requesting to Place an Agenda Item at a Future Council Meeting to Consider making a Policy Decision Regarding the City Assuming Responsibility of an Unstable and Dangerous Sound Wall in the Laurel Park East Neighborhood DPW  April 19,
2022
CITY COUNCIL AND STADIUM AUTHORITY STAFF REFERRALS
FOR FOLLOW‐UP/ACTION
Updated 3/15/22

Date
Assigned
Source  Referral Description  Assigned
Department
Projected
Completion
Completed

8.   10/19/21  Council Meeting  Written Petition (CP 030) regarding 1601 Civic Center Drive to be added to a future meeting agenda.

CDD/CMO  Spring 2022

9.   9/28/21  Council Meeting  Approve staff recommendation for Item 6. Public Hearing: 2020‐2021 Consolidated Annual Performance and Evaluation Report (CAPER) with changes to increase grant funding to $30,000 for 7 agencies and fund the remaining 4 from the City’s General Fund.

Community
Development/
Housing
May 2022

10.   9/28/21  Council Meeting  Refer the following Written Petition submitted by Councilmember Jain to the City Attorney’s Office for review, prior to being heard by the Governance Committee:

10 B. Request to Place an Agenda Item at a Future Meeting to Consider Hiring an Ethics Consultant for Upcoming Elections
Requested that the City Attorney’s Office provide an update to Council on fi ndings.

City Attorney  2022

11.   8/17/21  Council Meeting (Priority
Setting Check‐in)
Staff to return at a future Council meeting with draft ordinance to adopt recommended procurement reforms
Finance  Early 2022

12.   8/17/21  Council Meeting (Priority
Setting Check‐in)
Direct staff to bring back on a future agenda a presentation on Councilmember conflict of interest, including what staff currently does and what the Council is responsible for
City Manager/
City Attorney
TBD

13.   6/15/21  Council Meeting  Request to provide date‐based search capability on City website   IT/City Manager
May 2022

14.   1/12/21  Council Meeting  Defer approval of the 1205 Coleman Gateway neighborhood park design to work with the developer within current project approvals to receive additional community input including the Old Quad on park design
Parks & Rec  Spring 2022

15.   1/12/21  Council Meeting  Provide a Study Session on pros/cons lifecycle cost/benefits of artificial surfacing including turf (staff will return to Council with an Information Memo) Parks & Rec  Summer 2022

16.   10/13/20  Council Meeting  Community Benefits Policy – Return to the Governance Committee with potential models of a Community Benefits Policy with feedback from various Community groups (i.e., CatalyzeSV) and best practices from other Cities Community
Development
Spring 2022

17.   9/24/19  Council Meeting  Staff to review the Ordinance and enforcement of illegal street food vendors. At the 9/25/20 Council meeting, Council asked staff to review enforcement of vendors outside of Levi’s Stadium
Police  Summer 2022

18.   4/30/19  Council Meeting  Number of public transit riders for large stadium events

49ers Stadium
Manager
TBD

19.   4/30/19  Council Meeting  Ask Stadium Manager for analysis to support their position that reducing the cost of  49ers Stadium  TBD CITY COUNCIL AND STADIUM AUTHORITY STAFF REFERRALS
FOR FOLLOW‐UP/ACTION
Updated 3/15/22

Date
Assigned
Source  Referral Description  Assigned
Department
Projected
Completion
Completed
parking would likely adversely impact public transit ridership, resulting in more cars on the roads
Manager

20.  10/2/18  Council Meeting  Amend sign ordinance to prohibit signs on public property  Parks & Rec/ City Attorney
TBD

21.  3/13/18   Council Meeting  Develop a Stadium Authority Financial Reporting Policy in conjunction with the Stadium Authority Auditor and the external auditor
Finance  Early 2022

Date
Assigned
Source  Items Referred to 2022 Council Priority Setting  Assigned Department
Projected
Completion
Completed

1.   1/25/22  Council Meeting  Refer Swim Club Facility Condition Discussion to 2022 Priority Setting  Parks & Rec  2022 Priority Setting Session

2.   1/25/22  Council Meeting  Refer Senior Transportation Letter to 2022 Priority Setting  Parks & Rec  2022 Priority Setting Session

3.   12/7/21  Council Meeting  Written Petition (030) to be added to 2022 Priority Setting Session Agenda:
10C: Action on a Council Written Request (Council Policy 030) Submitted by Councilmember Jain Requesting to Place an Agenda Item at a Future Council Meeting to Consider a Neighborhood Stadium Relations Committee CMO  2022 Priority
Setting Session

4.   11/16/21  Council Meeting  Refer a Potential Quiet Zone Policy to the 2022 Goal Setting Session on February 8 and direct staff to research any funding sources available before the meeting DPW  2022 Council
Priority Setting
Session

5.   11/16/21  Council Meeting  Refer the Vision Zero Policy to the Goal Setting Session in February 2022 and return to Council with a funding source in the amount of $315K prior to the priority setting session – potential funding source identified before Priority Setting) DPW/Finance  2022 Council
Priority Setting
Session

6.   10/19/21  Council Meeting  Discussion of New City Hall into New Santa Clara Downtown Plan at the 2022 Priority Setting Session
CDD  2022 Priority
Setting Session

7.   10/19/21  Council Meeting  Discussion of Proposal of a New City Film Commission at the 2022 Priority Setting Session
CMO  2022 Priority
Setting Session

8.   10/19/21  Council Meeting  Discussion of Construction of Lawn Bowl Facility for consideration at the 2022 Priority Setting Session
Parks &
Rec/CMO
2022 Priority
Setting Session

9.   10/19/21  Council Meeting  Discussion of Future Ballot Measure Discussion in 2022 for Infrastructure Bond or Tax to 2022 Priority Setting Session
CDD/City
Attorney/Finan
ce
2022 Priority
Setting Session

CITY COUNCIL AND STADIUM AUTHORITY STAFF REFERRALS
FOR FOLLOW‐UP/ACTION
Updated 3/15/22

Date
Assigned
Source  Items Referred to 2022 Council Priority Setting  Assigned Department
Projected
Completion
Completed

10.   10/19/21  Council Meeting  Discussion of Rainbow Crosswalk Painting to 2022 Priority Setting Session (unless actions occur prior)
DPW/CMO  2022 Priority
Setting Session

11.   9/7/21  Council Meeting  Agendize Written Petition submitted by David Donaldson to a future Council Agenda to Consider Placing a Ballot Measure on the 2022 Ballot for Charter Amendments calling for the voters to consider Campaign Reform actions relative to donations from Santa Clara businesses and residents, City matching funds for donations, funding caps, and disc
losures of funding raising activities. The
component regarding Mayor and Council salaries will be removed. Directed staff to return with a comparison of what other cities do.

City Clerk/City
Attorney
2022 Priority
Setting Session

12.   8/17/21  Council Meeting (Priority
Setting Check‐in)
Implement pilot meeting management protocol for Council meetings recommended by the Mayor and revisit/assess at 2022 Priority Setting Session in January/February 2022. City Attorney to return to Council with resolution outlining this process.

City Attorney  2022 Priority
Setting Session

13.   2/23/21  Council Meeting  Return with information in 6 months on a cost analysis on City’s undertaking of responsibility of sewer laterals on and options for potential grant program and/or insurance policies
Water & Sewer  2022 Priority
Setting Session

COMPLETED 2022
CITY COUNCIL AND STADIUM AUTHORITY STAFF REFERRALS
Updated 3/15/22

Date
Assigned
Source  Referral Description  Assigned
Department
Projected
Completion
Completed  Resolution

1.   9/7/21  Council Meeting  Shorten term of amendment to the agreement for the performance of services with Wilson, Ihrig & Associates for Noise Monitoring Services at Levi’s Stadium from 18 months to 6 months and directed staff to return with a proposal for owning versus leasing equipment and the cost benefit for monitoring the noise data and quality of reporting.

CDD  March 2022  3/8/22  Approved by Council
at 3/8/22 Council
Meeting

2.   12/14/21  Council Meeting  Defer Loyalton to future meeting to develop strategy for the sale of the property; staff to coordinate a visit to the property for interested Councilmembers
CMO/SVP  TBD  3/8/22  Approved by Council
at 3/8/22 Council
Meeting

3.   11/16/21  Council Meeting  Consider Resolution to support the bid to FIFA for the 2026 World Cup and related events.

CMO/CAO  February 22,
2022
2/22/22  Approved by Council
at 2/22/22 Council
Meeting

4.   10/26/21  Council Meeting   Item 4: Presentation on Business Tax Ballot Measure and Other Potential Revenue Measures for November 2022 Ballot: Explore a business tax that strikes a balance with the value of a business‐friendly city (key priority) and progressive tax with input and advice of a consultant.

CMO/Finance   2022 Priority
Setting Session
2/8/22  Approved by Council
at 2/8/22 Priority
Setti
ng Session

5.   8/24/21  Council Meeting
(Study Session)
Directed staff to:
 Engage with HomeBase to design City Plan Framework and start prep for workgroup discussions
 Fast‐track Task Force/Housing Commission development and implementation
 Fast‐track HomeKey progress where possible, especially in entitlements processing
Explore short‐term basic services, including bathrooms, showers, laundry, cell phone charging and others
CDD/City Clerk/
City Attorney/
Police
2022  1/25/22  Approved
by Council
at 1/25/22 Council
Meeting

6.   5/4/21  Council Meeting  Parking Maintenance District No. 122 – Engage with property owners to discuss options for increasing their share of the annual O&M costs and potential for dissolving the district
Public Works  February 2022  1/25/22  Reported at Council Meeting

7.   8/17/21  Council Meeting
(Priority Setting
Directed staff to return to Council at a future date with changes to the eligibility for serving on City Commissions that expands the eligibility City Attorney  12/7/21  1/11/22  Approved by Council
at 1/11/22 Council
COMPLETED 2022
CITY COUNCIL AND STADIUM AUTHORITY STAFF REFERRALS
Updated 3/15/22

Date
Assigned
Source  Referral Description  Assigned
Department
Projected
Completion
Completed  Resolution
Check‐In)  requirement from Santa Clara electorate to Santa Clara resident – deferred to December
Meeting

8.   8/17/21  Council Meeting
(Priority Setting
Check‐in)
Direct staff to explore a consultant for a TDM Study (scope, cost, ongoing cost) and talk to other cities and gather anything that may be able to be shared
CDD  12/14/21  1/11/22  Reported at Council
Meeting

9.   11/9/21  Council Meeting  Project Homekey: Look for alternate site in Santa Clara better suited for this use
CDD  TBD  11/9/21  Update to Council
emailed to Council
on 3/10/22