FOR THE COUNCIL MEETING OF JANUARY 16, 2024
COUNCIL AGENDA REPORT
TO: City Council
FROM: Interim City Manager Alex Posada
BY: Director of Public Works Brett Fulgoni
SUBJECT: Adoption of a Resolution Approving the Just BOBA Five -Year Payment Plan for Growth Mitigation Impact Fees
Description:
The City Council will consider approving a five -year payment plan for Traffic Growth Mitigation fees. The total amount of Traffic Growth Mitigation Impact Fees to be deferred is $22,212.34. This will allow Just BOBA to operate as a business while paying the required fees over time.
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
RECOMMENDATION:
Adopt a Resolution approving the deferral of Traffic Growth Mitigation Impact Fees to be paid over a five -year period for the Just BOBA development, located at 1 954 S outh Broadway.
BACKGROUND:
The developer Judith Mendoza has applied for a building permit with the City of Santa Maria, Building Permit number B23 -0552 to remodel an existing 1,348 square foot commercial retail space and construct a high -turnover sit-down restaurant in a PD/C -2 (Planned Development General Commercial) zone.
The California Legislature enacted AB1600 (the Mitigation Fee Act of 1987) to provide a method for communities to mitigate the impacts of growth on the local infrastructure. The City Council adopted the first Capital Improvement Plan and Ordinances for the City’s Growth Mitigation Fee program in July 1993.
The City’s Growth Mitigation Fee Program is codified in Municipal Code Chapter 8-15 and imposes the development impact fees on development projects. Development means any building or other alteration of or change in use. Changes in use may include, but not be limited to, conversion of general office to medical office, or conversion of retail space to restaurant/laundry/entertainment. The proposed development to remodel an existing 2 commercial retail space into a high-turnover sit-down restaurant is within the criteria to be considered for the City’s Growth Mitigation Fee Program.
Impact fees are reflective of a development’s share of the cost of providing the improvements necessary to meet the service demands that the development creates.
Municipal Code Section 8-15.06(g) stipulates that the City Council may consider allowing qualifying commercial developments the ability to pay Growth Mitigation fees as outlined in the current fee schedule over a period of time. The maximum amount of time for payback shall be five years. The payments shall be made yearly, and interest shall be paid. Interest calculations shall be based on the average annual interest rate for the Local Agency Investment Fund. Qualifying companies who wish to pursue this option shall sign an agreement in a form approved by the City Attorney and shall provide financial security guaranteeing payment.
DISCUSSION:
An agreement for the deferral of growth mitigation fees has been prepared by the City Attorney’s Office and a Faithful Performance Bond ensuring financial security has been secured.
Per Section 8 -15.06 of the City of Santa Maria Municipal Code, Just BOBA seeks the consideration of the City Council for the deferred payment of Growth Mitigation Impact Fees over the next five years for Building Permit B23-0552.
Alternative
The City Council may require the payment of growth mitigation fees over a shorter payback term, less than five years. This will require higher annual payments to be payable to the City.
Fiscal Considerations
The deferred payment of mitigation fees will result in delayed fees to the City . Although deferred, the City will obtain interest for the delay in payment.
The total amount of Traffic Growth Mitigation Impact Fees to be deferred is $22,212.34.
These payments are to be paid annually in five equal installments, plus interest based on the average annual interest rate for the Local Agency Investment Fund, on or before the dates set forth below:
1. January 16th, 2024
2. January 16th, 2025
3. January 16th, 2026
4. January 16th, 2027
5. January 16th, 2028
Impact to the Community
There should be no impacts outside of fiscal deferral. The funds are necessary for the buildout of the Traffic projects in the Capital Improvement Program, but the fund balance 3 is adequate for the planned projects and the deferral will not create delays for planned projects.
ATTACHMENTS
A. Agreement_ Just BOBA Growth Mitigation Impact Fees_2024-01-16