4/19/2022
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City Council
Item 6. 22-302 Action on a
Resolution Establishing the Average
Per-Acre Land Values in order to set
the Parkland In-Lieu Fees for
FY2022/23 for New Residential
Development
Council Pillar: Enhance Community
Sports, Recreational &Arts Assets
April 19, 2022
• Background City Code i~.g5 "Park &Recreational Land"
• Overview of Quimby Act and Mitigation Fee Act (MFA)
• Fee Components
• Land Valuation —Appraisal i2-3i-2o2i
• Annual Land Valuation Comparisons
• Fee amounts based on 100 % Cost Recovery
• Public Input &Response
• Policy Direction Impacts
• Summary/Recommendation z
22-302
Item 6
COST MEETINGi MATERI~►~
Presentation Overview
• Established by Council Ordinance No. 1928 (July 2014) — Requires new residential development to dedicate public parkland at current City standards 2.6 to 3 acres per i,000 residents • Amended by Council Ordinance No. 1937 (February 2015) — Removed pre-requisite for dedication of one acre of public parkland prior to eligibility for financial credit at 50% of Fees due in Lieu for private open space devoted to "Active Recreational Uses" • Addresses statutory provisions in accordance with California's — Quimby Act (Quimby) and Mitigation Fee Act (MFA)
• Quimby —Cities may require Land Dedication and/or payment of Proportional Fees "in lieu" of land dedication, and "fee only" for 5o units or less • MFA—Cities may require Dedication of parks and recreation facilities and/or Fees "in lieu" of dedication (66002(c)(~))
• Fee Components:
— Land Value (established by appraisal process for areas of City) — Improvement Value (cost of parks' amenities at existing level of service) — Administration (2 % )
• Municipal Fee Schedule contains the Fees due "In Lieu" of parl~land dedication adopted on an annual basis
— See Council Agenda Report 22-99 for Apri119, 2022
City Code 17.35 Park &Recreational Land
Background -continued
• Completed by Franlc Schmidt &Associates
• Follows City Code Section 17.35.040 &Supplemental Instructions • Valuation date of December 3i, 2021 ~01-01-2021 t0 12-31-2021 • Public comment period from April 4, 2022 t0 APT'll 14, 2022 • Parkland average per acre values for residential ZIP Code areas — 95050 $5.15 million
95051 $6.00o million
95054 $5.495 million
$5,715,000 $4,720,000 21.0% $4,385,000 $3,738,000 $3,315,000 $6,000,000 $5,120,000 17.2% $4,630,000 $3,993,000 $3,583,000 $5,495,000 $4,830,000 13.8% $4,495,000 $4,035,000 $3,669,000 5 Land Valuation—Appraisal
Land Valuation Comparisons 2016 to 2021
..- .- - -_
12-31-2021 12-31-2020 % Diff 12-31-2019 12-31-2017 12-31-2016
Quimby MFA
Current Proposed % Diff. Current Proposed % Diff.
$51,567 $62,664 021.5 /o $45,828 $55,716 021.6 /o
$41,530 $50,468 36,908 $44,872
$55,214 $65,263 0
~ 8'2 ~0
$48,989 $57,968 018.3 /o
$44,468 $52,561 $39,454 $46,686
$52,570 $60,658 015.4 /o $46,697 $53,977 015.6 /o
$42,338 $48,852 $37,609 $43,472
See Municipal Fee Schedule, RTC 22-99. Current calculation uses 2020 land values & 75% of 2oi~ park improvement value. Proposed calculation uses 2o2i land value & i00% of 2oi~ park improvement value. ~ ■ v~■vim ■■■~~r~v~.~
• Cost recovery set at 100%
— Maintains parkland standard of 2.6 to 3.o acres per i000 residents — Provides funds for acquisition and development of new parks — May provide for rehabilitation/expansion of existing parks • Cost recovery set at less than i00%
— Prior policy of using 2oi~ land valuation and a 4-year phase in of improvement value resulted in $4~583,00o uncollected value, based on actual development projects — Erosion of parkland standards and program service capacity • Construction cost escalation impacts both Developers and City — 2oi8-2o2i saw price escalation of 2i.i% (22.3% compounded) — City is equally affected by labor, supplies and construction cost increases for parks 8 1 n Lieu Fees set at 100% Cost Recovery
Public Input
• Comment:
— Developers in Patrick Henry Drive Specific Plan Area (95054) • Concerned about the impact of a Park In Lieu Fee increase on PHD • Delays in the PHD Specific Plan adoption, extra-ordinary parl~land, infrastructure fees, and long-term maintenance costs impact development • Request to keep PHD In Lieu Fee same as 2021/22 for one year or longer • Response:
— The Patrick Henry Drive Specific Plan has clearly defined "area" boundaries. — Council may set land values for other "areas" of the City in addition to 95050, 95051, 95054 see City Code 17.35.040)
Public Input
• Response (continued):
— Past City Councils have provided In Lieu Fee Policy exceptions:
• delayed implementation of a fee increase;
• maintained land valuation at less than i00% cost recovery; • kept park improvement costs artificially low; and/or, • provided a "phased in" timeline for percentage of increases. — Council could set a specific land value for PHD SP, such as • "For new residential development projects in the PHD SP Area, use the average land valuation for 95054 as of i2-3i-2o2o ($4,830,00 per acre) in MFA fee calculations from July i, 2022 to June 30, 2023."
— Alternatively, developers could request an appraisal of their specific development property, but it maybe higher than the average appraisal value for the area. (see City Code 1~.35.04o b) ,o
Public Input
• Response (continued):
— In PHD SP, Council had identified more parkland as a need that significantly adds to the quality of life in ahigh-density neighborhood. — If an in-lieu Fee policy exception is made to set at less than l00% cost recovery, then
- less fee revenue is collected to allocate toward acquisition and development of new parkland to serve the new residents;
• less funding is available for development of needed park facilities and amenities, including the proposed multi-use facility serving the community including seniors, youth, indoor recreation (community center/gym/library/parking). • Hypothetically, 4,00o units x $~,~ii/unit (difference of 2o2i land value increase on in lieu fee) _ $28M
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• The 2021 annual land valuation study is complete following the established Council approved processes.
• Values are used in Fee Calculations proposed in Municipal Fee Schedule (22-99) Land values in the areas are:
— 95050 $5,715,000
9505 $6,000,000
95054 $5,495,000
• Patrick Henry Drive Specific Plan Area developers requested an exception • Council may set a land value for specific areas in addition to the 3 Zip Code areas • Use of older/lower land values results in City cost recovery of less than l00% and creates a significant challenge for the acquisition and development of new public parkland and recreational amenities. 1z
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• Adopt a Resolution to establish the Average Per-Acre Land Values in order to set the Parkland In -Lieu Fees for FY2o22/23 for New Residential Development in accordance with Title 1~
("Development") Chapter 35 ("Park and Recreational Land") of the City Code using the December 3i, 2o2i land valuation report. • Or, other Council direction incorporated into the above resolution. 13