FOR THE COUNCIL MEETING OF DECEMBER 20, 2022
COUNCIL AGENDA REPORT
TO: City Council
FROM: City Manager
Prepared by: Director of Recreation and Parks
SUBJECT: RECREATION AND PARKS SUBDIVISION IN -LIEU FEE
RECOMMENDATION:
That the City Council adopt a Resolution setting the value for a developable acre of land, setting the average household size, and establishing the 2023 Subdivision In -Lieu Fee in accordance with Santa Maria Municipal Code Section 11-9.05(d)(2).
BACKGROUND:
The State of California recognized the need for municipalities and other local government agencies to provide new park and open space areas to meet the demands brought on by new residential development when it enacted Government Code Section 66477, more commonly known as the Quimby Act in 1974, which established a mechanism for cities to impose fees on new residential development to provide land and/or funds for parks and recreation purposes. In the City of Santa Maria, this fee is referred to as the "Subdivision In -Lieu Fee" (SDIL) and was adopted by the City Council as Section 11-9.05 of the Santa Maria Municipal Code (SMMC) in 1994 as part of the City's Subdivision Ordinance. This fee program funded much of the expansion of existing parks and the development of new parks necessitated by the construction of new residential developments in the City.
SMMC Section 11-9.05 requires the minimum dedication of (or payment of a fee equivalent to) three acres of prime park land easily accessible to residents of the subdivision for each 1,000 persons residing within a subdivision. Based on the City's 2022 estimated population of 115,000, the City's park system should consist of 345 acres. The City's current park land and sports basin inventory is approximately 243 acres. To assist in filling this deficit in park land, the City Council is asked to adopt a higher standard of park land to population of five acres per 1,000 persons residing within a subdivision, as authorized by State Law. Accordingly, the City requires developers to dedicate five acres of prime land (or pay a fee equivalent to the value of five acres of land) per 1,000 persons expected to reside within a new subdivision or portion thereof.
DISCUSSION:
SMMC Section 11-9.05(d)(2) provides that the in -lieu fee per acre shall be based on the Citywide average fair market value of land that would be dedicated, and that the fair market value per acre be set by Resolution of the City Council. 1 This item was last brought to the City Council in November 2020 for an update to the land value as required by the SMMC. At that time, the City Council set the value of a developable acre of land at $390,000, which is the first factor in calculating the SDIL fee, and it is staffs recommendation that this value remain in place for 2023.
A secondary factor in the calculation is the estimated Average Household Size (AHS) for dwelling units in the City of Santa Maria. The AHS figure is set by the State Department of Finance. This figure is used to calculate the estimated number of persons residing in any new subdivision. For 2022, the AHS for Santa Maria is set at 3.75 persons per residence according to State Department of Finance (Attachment A).
Another factor to consider in setting the new fee is the Construction Cost Index. California construction costs have escalated by 16.2 percent cumulatively for 2020 and 2021 (Attachment B); 2022 figures are not yet available. However, based on past increases, the 2022 increase is estimated to increase by the same percentage amount.
Based on these factors, the recommendation is to set the 2022 SDIL fee at $2,764 per unit, a 16.2 percent increase from the 2020 SDIL fee of $2,379. The fee is collected at the time the building permit is issued for each residential dwelling constructed.
Alternatives:
1. Leave the SDIL fee at the 2020 rate of $2,379 per unit; which would leave the City to fund the gap created by not collecting sufficient fees to cover escalating 2022 construction costs.
2. Adopt a lesser increase to the current SDIL fee, which would leave the City to find alternate funding to deal with park impacts created by new residential development.
Fiscal Considerations:
The population growth that new residential development creates increases the demand for new public parks and facilities, and places an increased burden on the existing City park system to meet the demands of new residents. The SDIL fees outlined in this report are critically needed to keep pace with new residential growth. The absence of the authority to levy the SDIL fee would place the funding of park improvements and development solely on the City's General Fund. It is essential to maintain funding sources to ensure the City's ability to meet the growing leisure needs of its residents. /11
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2 Impact to the Community:
The SDIL fee provides for the acquisition of park land, granting of credit to developers for land/facility dedications, and provides funding for the City to develop new and improved recreation and park facilities. Without the availability of such fees, park development would not be possible, adversely affecting the quality of life, and possibly impacting the decision of companies a iusinesses to base their operations in the City of Santa Maria.
AL:XA`' POSADA
Dire. - ecreation and Parks
Attachment A: 2022 Average Household Size Index
Attachment B: Chart of Construction Cost Index
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S C. :[ :h.' : I Slri
Santa Mafia, CA Data &'Demographics (As of July 1, 2022)-$
POPULATION
Total Population
Population in Households
Population in Families
Population in Group Quarters1
Population Density
Diversity Index2
INCOME
Median Household Income
Average Household Income
% of Income for Mortgagee
Per Capita Income
Wealth Index5
NOTES
109,842 (100%)
108,962 (99.2%)
91,456 (83.3%)
880 (0.8%)
4,816
81 $68,684
$89,166
31%
$23,672
70 HOUSING
Total HU (Housing Units) 30,291 (100%)
Owner Occupied HU 14,717 (48.6%)
Renter Occupied HU 14,354 (47.4%)
Vacant Housing Units 1219 (4.0%)
Median Home Value $404,209
Average Home Value $498,086
Housing Affordability Index3 81
HOUSEHOLDS
Total Households
Average Household Size
Family Households
Average Family Size
1. Group Quarters - e place where people live Of stay in a poop living arrangement. lncWas college residents hale, nursing (adages. martyry benaae, and correctional taGAtlas.
2. The olvaraay Index is a scab of 0 to 100 that represents the akebhood that two persons. chosen at random from eta same area, belong to different races or ethnic groups. I an area's entire population belongs to one rice AND ore ethnic group. then the area hair zero diversiy.
MI area's diversity Index Increases to 100 when the population is evenly divided Into two or more owe/ethnic groups.
3. The Housing affordability Index base 1 100 and represents a balance print whets a resident with a median household Income can normal), pally to purcwse a median prim home. Values above 100 indicate anaeased affordability while values below 100 Indicate decreased affordably.
4, The %of Income for Mortgage criminate, the percentage of median household Income dedicated to mortgage payments on a home priced at the median vale (essenbp a 30 -year mortgage end a 20% down payment).
5. 'The Wealth Index Is based on a number of Indicator, of anthem) Including average household Income and average net worth, but It also Includes the value of material possessions and resources. It represents the wealth of the area relative to the national level. Values above or below 100 represent above -average west or be W overage wealth compared to the national level.
GROWTH RATE I YEAR
Population
Homehnlds
2020-2022
0.05%
(1.20%
2022.2027
0.00%
-001%
29,072
21,888
4.00 Santa Marla Jobs
• Amamtlne held
• Administrative end Clinical Jth%
• err 99.A Flnanee Jobs
• puslrwaa Opportunity Jobs
• Custemar servlpe Jobe
• Ersbaadmidsl a
• Fxeouave Jobs
• Goramrnant Job.
• HealtCareJohs
• 113abltaaly Jobs
• Human Resources Jobe
• pdemallen Technology Jobe
• Part -Thee Jobs
• Reeall Jobs
• ;ales and MMSOggulgpa
Owner Occupied HU 0.13%
( http://www.ca.gov)
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subjecrDGS%20Califomia%20Constmction%20Cost%201ndex%20CCCI&body=%Oahltps%3A%2F%2F www.dgs.ca.gov%2FRESD%2FResources%2FPagt Content%2FReal-Estate-Services-Division-Resources-List-Folder%2FDGS-Califumia-Construction-Cost-Index-CCCI%0a%0a) Careers VOHR/Careers) Translate
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HOME (/) REAL ESTATE SERVICES DIVISION (HTTPS://WWW.DGS.CA.GOV/RESD) RESOURCES (HTTPS://WWW.DGS.CA.GOV/RESD/RESOURCES) DGS CALIFORNIA CONSTRUCTION COST INDEX CCCI (HTTPS://WWW.DGS.CA.GOV/RESD/RESOURCES/PAGE-CONTENT/REAL-ESTATE-SERVICES-DIVISION-RESOURCES-
L IST-FOLDER/DGS-CAL I FORNIA-CON STR U CTIO N-COST-INDEX-CCCI) DGS California Construction Cost Index CCCI
Client agencies can find current construction cost index for California by the Real Estate Services Division.
The California Construction Cost Index (CCCI) is developed based upon Building Cost Index (BCI) cost indices average for San Francisco and Los Angeles ONLY as produced by Engineering News Record (ENR) and reported in the second issue each month.
The current five year CCCI table is updated the 2nd half of the month for the current month. The ENR BCI reports cost trends for specific construction trade labor and materials in the California market and does not reflect current market bidding environment. Prior to July 1991, CCCI was recorded quarterly, all months post July 1991 are calculated based on the ENR BCI reports and recorded for each month.
California Construction Cost Index 2021-2025
Month
January
February
March
April
May
June
July
August
September
October
November
December
2025 2024 2023 2022 2021
8151 7090
8293 7102
8736 7130
8903 7150
9001 7712
8925 7746
9110 7892
8729 8122
8604 7900
8712 8080
8765 8141
8072
mono 4(143 4(144 AWLS LULL
Annual %*
'Annual Percentage is calculated from December to December.
HISTORIC CALIFORNIA CONSTRUCTION COST INDEX
Expand All
CALIFORN4A:CONSTRUciiQN :CQ$LIND:EX 20•t6,4020
Month r2020* 2019 2018 2017 2016
January 6995 6684 6596 6373 6106
February 6945 6700 6596 6373 6132
March 6947 6616 6596 6373 6248
April 6955 6841 6596 6461 6249
May 6958 6852 6596 6455 6240
June 7041 6854 6598 6470 6238
July 6984 6854 6643 6474 6245
August 6988 6823 6613 6620 6244
September 7036 6814 6674 6620 6267
October 7120 6851 6679 6596 6343
November 7123 6895 6679 6596 6344
December 7120 6924 6684 6596 6373
Annual%* f40?a8%' 3.6% 1.3% 3.5% 4.4%
'Annual Percentage is calculated from December to December.
CALIFORNIA CONSTRUCTION COST INDEX 2011-2015
CALIFORNIA CONSTRUCTION COST INDEX 2006-2010
CALIFORNIA CONSTRUCTION COST INDEX 2001-2005
CALIFORNIA CONSTRUCTION COST INDEX 1996-2000
QUESTIONS AND RESOURCES
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MARIA,
CALIFORNIA, SETTING THE VALUE FOR A DEVELOPABLE ACRE OF LAND, SETTING THE AVERAGE HOUSEHOLD SIZE, AND ESTABLISHING THE 2023
SUBDIVISION IN -LIEU FEE IN ACCORDANCE WITH
SANTA MARIA MUNICIPAL CODE SECTION 11-9.05(d)(2)
WHEREAS, the State of California recognized the need for municipalities and other local government agencies to provide new park and open space areas to meet the demands brought on by new residential development when it enacted Government Code Section 66477, more commonly known as the Quimby Act in 1974; and WHEREAS, the Quimby Act established a system for cities to impose fees on new residential development to provide land and/or funds for parks and recreational purposes.
This fee program is known in the City of Santa Maria as the "Subdivision In -Lieu Fee" and was adopted in 1994 by the City Council as Section 11-9.05 of the Santa Maria Municipal Code (SMMC) as part of the City's Subdivision Ordinance; and WHEREAS, the City has met the requirements of Government Code 66477 and the SMMC Section 11-9.05 in determining this land value by evaluating and negotiating a land value of $390,000 per acre; and
WHEREAS, the City Council establishes the Average Household Size in the City of Santa Maria as set by the California Department of Finance is 3.75 residents; and WHEREAS, the City establishes that there is a critical deficit in public park acreage and that the minimum standard of five acres of land per 1,000 residents be used to calculate the "Subdivision In -Lieu Fee" as provided in the Government Code.
NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of Santa Maria, California, as follows:
1. That the above recitals are true and correct.
2. That the value of a residential developable acre of land in the City of Santa Maria is set at $390,000 per acre for 2023 based on a 2020 Citywide appraisal and a negotiation with involved parties.
3. That the Construction Cost Index is set at 16.2 percent pursuant to the inflation rates for 2020 and 2021 in the State of California.
4. Based on these factors the Subdivision In -Lieu Fee for 2023 shall be set at $2,764 per dwelling unit.
1 5. The Chief Deputy City Clerk is hereby authorized to make minor changes herein to address clerical errors, so long as substantial conformance of the intent of this document is maintained. In doing so, the Chief Deputy City Clerk shall consult with the City Manager and City Attorney concerning any changes deemed necessary.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Santa Maria held this 20th day of December 2022.
Mayor
ATTEST:
Chief Deputy City Clerk
VE0 S TO FORM:
City Attorney
Department Director
ity Ma ger
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