To: Board of Supervisors
Department or Agency Name(s): County Administrator’s Office
Staff Name and Phone Number: Michelle Arellano 707-565-3776, Katherine DiPasqua 707-565-3779
Vote Requirement: Majority
Supervisorial District(s): All
Title:
Title
AB 1600 Development Fees Annual Reports for FY 2018-2019
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Recommended Action:
Recommended action
A) Adopt a Resolution approving and making findings related to the AB 1600 Development Fees Annual Reports for FY 2018-2019 for the Regional Parks Department and the Department of Transportation and Public Works.
B) Authorize the County Administrator to execute the third amendment to a contract with Economic & Planning Systems, Inc. for consulting services to review existing development impact fees by expanding the scope of service to include an analysis of economic effects of impact fees on the feasibility of new development and a fee comparison with other local jurisdictions for the Regional Parks fee, increase the contract amount to a new not to exceed amount of $127,800, and extend the term end date to June 30, 2020.
end
Executive Summary:
AB 1600 enacted Government Codes Sections 66000-66008, requiring that local agencies prepare annual reports on all development impact fees collected on new developments to finance construction costs associated with public facilities, if those fees were established, increased, or imposed on or after January 1, 1989. Reporting is applicable to the fees collected by the Regional Parks Department and the Department of Transportation and Public Works. Among other fee and project information, balances of any fee deposits that are five or more years old are required to be reported.
The requested Board action authorizes the County Administrator to execute the third amendment to the agreement with Economic & Planning Systems, Inc. (EPS). EPS was retained in March 2018 to provide consulting services for the preparation of development impact fee studies for the Transportation and Public Works Department. The first amendment expanded the contract to prepare a study for Regional Parks. The second amendment extended the term until December 31, 2019. The third amendment extends the term of the agreement to June 30, 2020, expands the scope of services to include an analysis of the possible economic effects of impact fees on the feasibility of new development, particularly development of affordable housing in Sonoma County and prepare a fee comparison analysis of other jurisdictions’ Regional Park impact fees, and increases the maximum contract amount by $27,800 for a new not to exceed contract amount of $127,800.
Discussion:
Annually, the Regional Parks Department and the Department of Transportation and Public Works provides reports on fee programs under its jurisdiction in compliance with AB 1600, as well as applicable County Code sections. It does not include fees charged for processing development applications, development agreements, or reimbursement agreements. The report is due 180 days (6 months) after the close of each fiscal year and requires that a report concerning each fee fund be made available to the public.
Each agency’s report includes the following components:
1. A narrative summary of the financial statement.
2. A brief project status statement for each capital project referenced in the financial statement.
3. The financial statement.
Regional Parks
The Regional Parks Department’s report covers Park Mitigation fees under Chapter 20, Article X - Development Fees for Parks and Chapter 25, Article VI - Public Improvements of the Sonoma County Code <http://library.municode.com/index.aspx?clientId=16331>. First established in 1986, the purpose of the Ordinance is to assist the County in acquiring and developing parks to meet the growing population as a direct correlation to the development and construction of new homes. The Sonoma County Code and Government Code Section 66006 requires the Director of Regional Parks to report to the Board annually on the income and appropriations in each of the seven areas covered by the Park Mitigation Fee Ordinance. This information is contained in the attached report. In addition, Government Codes Sections 66006 requires an annual report be made available to the public with specific information about the fee - the amount of the fee, the purpose of the fee, the projects that were funded by the fee, etc.
The Permit & Resources permit fee schedule Regional Park Mitigation rate for FY 2018-19 was $3,678 per developed unit. The FY 2018-19 beginning fund balance in the Park Mitigation Fund (seven areas) was $1,457,611. Total fees collected and miscellaneous revenue were $739,876. Interest earned was $33,259. Thus, the total fees plus interest earned in the Park Mitigation Fee Fund in FY 2018-19 was $773,135.
A total of $720,335 was transferred to 34 Capital Projects for the planning, acquisition, design and construction of new and expanded park facilities. The FY 2018-19 ending fund balance was $1,510,412. The attached report includes a full breakdown of fees collected and funds appropriated for each of the seven areas.
Park Mitigation Fees were used to leverage grants and other matching contributions at an approximate ratio of 7 to 1. This means that each dollar generated by mitigation fees helps generate about $7 in additional funding for Park acquisitions and development, which was primarily from State and Federal sources. No funding collected on or before FY 2013-14 remains unspent in any of the seven Park Mitigation Fee Trust Accounts as of June 30, 2019.
Transportation and Public Works (TPW)
In order to implement the goals and objectives of the general plan, including the circulation and transit element of that general plan, and to mitigate the traffic impacts caused by new development in Sonoma County, certain public roadway improvements must be constructed to ensure a safe and efficient level of service. The purpose of the traffic mitigation fees adopted by ordinance <http://library.municode.com/HTML/16331/level2/CH26SOCOZORE_ART98DEFE.html> (Section 26-98 of the Sonoma County Code <http://library.municode.com/index.aspx?clientId=16331>) is to pay the costs of roadway facilities and improvements in accordance with the provisions of the general plan. Per the Sonoma County Code the Board of Supervisors shall review the adequacy of the development fees established at least once every three years or, if required or appropriate, more often than once every three (3) years. This review is achieved through the AB 1600 Development Fees Annual Report. Under AB 1600 and the Sonoma County Code, TPW reports on the following traffic mitigation fee programs:
1. Countywide Traffic Mitigation - In May 1990, the Board established the Countywide Development Fees (Sec. 26-98-605 <https://www.municode.com/library/ca/sonoma_county/codes/code_of_ordinances?nodeId=CH26SOCOZORE_ART98DEFE_S26-98-605CODEFEIMAR>), which apply to all unincorporated lands within the boundary of the county except for those lying within the boundaries of the Sonoma Valley development fee impact area. The FY 2018-19 beginning balance was $7,219,652. Collected fees and interest earnings total $1,453,814. No funds were expended during FY 2018-2019, for an ending balance as of June 30, 2019 of $8,673,466. Fees which remain unexpended for five years or more total $2,200,651 and have been committed to the following traffic capacity increasing projects in FY 2019-20: Traffic Improvement Project at intersection of Dry Creek Road and Highway 101 and Airport Boulevard Widening Project.
2. Sonoma Valley Traffic Mitigation - In 1989, the Board adopted Ordinance No. 4073 (Sec. 26-98-010 <https://www.municode.com/library/ca/sonoma_county/codes/code_of_ordinances?nodeId=CH26SOCOZORE_ART98DEFE_S26-98-010SOVADEFE>) establishing development fees to finance the improvements of certain public facilities and services within the Sonoma Valley area. The FY 2018-19 beginning balance was $923,746. Collected fees and interest earnings total $109,329. Funds expended during the FY 2018-19 total $165,477 for an ending balance, as of June 30, 2019, of $867,598. There are no fees which remain unexpended or uncommitted for five years or more in the Sonoma Valley Traffic Mitigation Fund.
Automatic Annual Fee Adjustments
County Codes Sections 26-98-070 <https://www.municode.com/library/ca/sonoma_county/codes/code_of_ordinances?nodeId=CH26SOCOZORE_ART98DEFE_S26-98-070ANADREFE> and 26-98-650 <https://www.municode.com/library/ca/sonoma_county/codes/code_of_ordinances?nodeId=CH26SOCOZORE_ART98DEFE_S26-98-650ANADREFE> require traffic development fees be adjusted automatically based upon the Engineering News Record (ENR) Construction Cost Index (CCI). In January, the fees for Countywide Traffic Mitigation and the Sonoma Valley Traffic Mitigation programs are adjusted annually by a percentage amount equivalent to the change in the ENR CCI for the preceding twelve-month period. Fees are collected by the Permit Resource Management Department as part of the permitting process. Effective January 1, 2019, the increase was 2.9% and are as follows:
|
Fee Type |
January 2018 |
2.9% Increase |
January 2019 |
|
Residential Fee |
$801 |
X 1.029 = |
$824 |
|
Commercial Fee |
$245 |
X 1.029 = |
$252 |
|
Industrial Fee |
$224 |
X 1.029 = |
$230 |
The requested Board action includes the adoption of the attached resolution approving and making findings related to the AB 1600 Development Fees Annual Reports for the Regional Parks and the Department of Transportation and Public Works.
Development Impact Fee and User Fee Studies Update
In March 2018, the County Administrator retained the services of two consultants, EPS and Willdan Financial Services, to complete nexus studies for traffic and park impact fees, and user fee studies for Permit Sonoma, Agriculture, Weights and Measures, and Animal Services.
EPS and Willdan Financial Services were selected through a comprehensive Request for Proposal process conducted in January 2018, which culminated with contracts with both firms; EPS was charged with reviewing impact fees in TPW and Willdan Financial Services was tasked with reviewing the Regional Park impact fees and the user fee study. In December 2018 the County released Willdan Financial Services from contract on both the development impact and user fee studies.
Given that EPS had submitted a proposal for the development impact fee study, the County Administrator expanded the contract with EPS to include an analysis for Regional Parks. The First Amendment to the agreement with EPS increased the contract amount to $100,000 under the delegated signature authority of the Purchasing Agent and revised the scope of work to include an analysis for Regional Parks development impact fees. The Second Amendment extended the term to December 31, 2019. The proposed third amendment to the agreement with EPS includes an expanded scope to include an analysis of the possible economic effects of impact fees on the feasibility of new development, particularly development of affordable housing in Sonoma County and prepare a fee comparison analysis of other jurisdictions’ Regional Park impact fees, extends the term of the agreement to June 30, 2020, and increases the maximum contract amount by $27,800.
Following the release of WillDan Financial Services, NBS Government Finance Group was selected through a second comprehensive Request for Proposal process that was completed this past summer. A contract with NBS Government Finance Group was entered into on September 4, 2019 to prepare user fee studies, under the delegated signature authority of the Purchasing Agent.
Both the development impact and user fee studies are underway and draft reports are anticipated before the end of the fiscal year.
Prior Board Actions:
The Board has annually approved AB 1600 Development Fee Reports, with the most recent report approved on 12/11/18.
Fiscal Summary
|
Expenditures |
FY 19-20 Adopted |
FY20-21 Projected |
FY 21-22 Projected |
|
Budgeted Expenses |
127,800 |
|
|
|
Additional Appropriation Requested |
|
|
|
|
Total Expenditures |
127,800 |
|
|
|
Funding Sources |
|
|
|
|
General Fund/WA GF |
127,800 |
|
|
|
State/Federal |
|
|
|
|
Fees/Other |
|
|
|
|
Use of Fund Balance |
|
|
|
|
Contingencies |
|
|
|
|
Total Sources |
127,800 |
|
|
Narrative Explanation of Fiscal Impacts:
There are sufficient appropriations in the Non-Departmental budget to cover EPS contract costs.
There is no impact to the FY 2019-2020 budget associated with the AB 1600 Development Fees Annual Report. This report is administrative and intended to document development impact fees accumulated and investment activities completed in FY 2018-2019.
Staffing Impacts:
|
Position Title (Payroll Classification) |
Monthly Salary Range (A-I Step) |
Additions (Number) |
Deletions (Number) |
|
|
|
|
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Narrative Explanation of Staffing Impacts (If Required):
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Attachments:
1. Resolution
2. AB 1600 Development Fees Annual Report
3. Third Amendment to Agreement with Economic & Planning Systems, Inc.
Related Items “On File” with the Clerk of the Board:
Agreement with Economic & Planning Systems, Inc., First Amendment, Second Amendment