HomeMy WebLinkAbout07.B- Community Development 7.B
DOC ID: 3333 B
CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION
Information/Report
From: Mark Persico M/CC Meeting Date: 07/21/2014
Prepared by: Lisa Sherrick, (909) 384-5057
Dept: Community Development Ward(s): All
Subject:
Discuss and Take Possible Action on Sunset of Fee Reductions for Fees for Service and
Development Impact Fees (#3333)
Current Business Registration Certificate: Not Applicable
Financial Impact:
Approximately$350,000 in increased revenue to the Community Development Department
based upon the average activity level over the previous four years. Additional revenue from
Development Impact Fees cannot be assessed at this time due to the delay between project
approval and commencement of construction.
Motion: Allow fee reduction in place since August 2010 to sunset.
Synopsis of Previous Council Action:
August 2,2010 Mayor and Council approved Resolution 2010-266 allowing the temporary
reduction of certain Development Impact Fees expiring August 2, 2012.
August 2,2010 Mayor and Council approved Resolution 2010-276 allowing the temporary
deferral of certain Development Impact Fees expiring August 2, 2012.
August 2, 2010 Mayor and Council approved Resolution 2010-278 allowing the temporary
reduction of certain Development Fees for Service expiring August 2,
2012.
February, 212012 Mayor and Council approved Resolution 2012-34 extending the temporary
reduction of Development Impact Fees and Development Fees for Service
until August 2,2014.
Background:
The Baldy View Chapter of the Building Industry Association(BIA) initially requested that the
City reduce Development Impact Fees and Fees for Service in 2010 in order to spur development
activity. In response the Common Council adopted three separate resolutions that temporarily
reduced or deferred certain fees. In February 2012 the Common Council extended the temporary
fee reductions through August 2, 2014.
Analysis:
The temporary reductions covered both fees for service and development impact fees (DIF).
Updated: 7/15/2014 by Henry Empeno Jr. B Packet Pg. 766
3333
Imposition of fees for service are regulated by Governmental Code Sections 65104 and 65909.5.
These fees are intended to recover the cost of processing planning, zoning and building
applications submitted by builders and developers seeking to build residential, commercial and
industrial projects. By law cities cannot charge more than the"reasonable cost"of providing the
service. The most recent study of the fees for service was conducted in February 2006.
The cost of staffing the Community Development Department should be borne by those using
the service (e.g. builders, developers and homeowners). But it should also be noted that other
departments (e.g. City Attorney, City Manager, City Clerk, etc.)are often involved in the review
and approval of planning projects. A reduction in fees for service means that the City General
Fund is underwriting the cost of providing staff services to builders and developers.
The second type of fee is called a development impact fees (DIFs). Establishment and collection
of DIFs is regulated by Government Code Section 66000 et. seq. also known as AB 1600. These
fees pay for infrastructure improvements (sewer,water,police and fire facilities, libraries,parks,
etc.)based upon the most recently adopted master plan for the particular facility. The most recent
DIF study was completed in February 2006.
San Bernardino has a need for new infrastructure and a need to replace aging infrastructure.New
development projects pay"their fair-share" in development impact fees based upon the nexus
between the new development and the increased demand for infrastructure. If a DIF is reduced,
the City does not have adequate revenue to provide the needed new infrastructure.
In summary, staff believes that all projects should pay the full cost for the services needed to
review the project, and the full cost to install the needed infrastructure.
Local and Regional Economic Outlook
The theory most often used to support a reduction in city fees is that reduced fees spur economic
activity. In some limited circumstances, where a fee is significantly greater than a fee in
surrounding cities, staff agrees with this theory. Cities are in competition for new development
and high fees can be a disincentive to development. However, cities are also subject to regional
and global economic forces.
According to a recent report"U.S. Metro Economies" conducted by IHS Global Insight and
prepared for The US Conference of Mayors,the economic outlook for the nation and Metro areas
specifically is very strong. In brief the January 2014 report notes:
"Improved global growth will support stronger exports, while business and
consumer spending will also gain some traction. Metro economies will lead the
way, first enabling the nation to at last recover the jobs lost during the
recession, and then propelling the US economy to achieve its growth potential
of greater than 3% real gains per year, a rate not reached since 2004. In 2015
almost half of all metros will exceed the 3% growth rate."
Figure 4: Real Gross Metro Product Growth
Average Annual Percent Change, 2013-2020
Updated: 7/15/2014 by Henry Empeno Jr.B Packet Pg. 767
3333
100 Largest Metro Areas
Highest(%)
Austin- Round Rock- San Marcos,TX 4.4
Raleigh-Cary,NC 4.3
Fayetteville - Springdale - Rogers,AR-MO 4.2
Riverside- San Bernardino - Ontario, CA 4.2
Durham- Chapel Hill,NC 4.1
Orlando -Kissimmee - Sanford, FL 4.1
Bakersfield-Delano, CA 4.1
Phoenix - Mesa- Glendale,AZ 4.0
Houston- Sugar Land-Baytown, TX 4.0
McAllen- Edinburg- Mission, TX 4.0
According to the IHS Report the San Bernardino Metro area is expected to be the fourth fastest
growing metropolitan area nationally through the remainder of the decade. Based upon the IHS
report, staff believes that development interest will increase and construction activity will
rebound regardless of reduced City fees. Furthermore,the fee reductions that have been in place
since August 2, 2010, should sunset.
Supporting Documents:
2010-266 Reducing Certain Development Impact Fees (PDF)
2010-267 Deferral of Certain Development Impact Fees (PDF)
2010-268 Temporary Reduction of Certain Development Fees for Services(PDF)
2012-034 Extending the Temporary Reduction of Development Fees (PDF)
Comparison—Table_07212014 (PDF)
Notification Letters (PDF)
BIA-SB Letter 7-15-14 (PDF)
Updated: 7/15/2014 by Henry Empeno Jr.B
(IMPORTANT NOTE: REPEALS RESO 2010-246)
COMPANION RESOLUTIONS 2010-267 & 2010-268
AMENDED BY RESOLUTION 2012-34
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3 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
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6 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY O o
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SAN BERNARDINO AS FOLLOWS:
8 SECTION 1: The following Development Impact Fees established by Resolution No
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2006-97 are hereby reduced for a period of two years from the effective date of this resolution 0
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for new single family subdivisions, townhomes, and condominium projects of five or more unit
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and for new commercial and office projects, provided that building permits are issued an o
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3. Library Facilities and Collection—55%Reduction. U-
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2 SECTION 2: Resolution No. 2010-246 is hereby repealed. °
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2010-266
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s I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor an o
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6 2nd day of August , 2010,by the following vote, to wit: o
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(IMPORTANT NOTE: REPEALS RESO 2010-247) � k„ •b
COMPANION RESOLUTIONS 2010=266 & 2010-268
1 RESOLUTION NO. 2010-267
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SA
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BERNARDINO RELATING TO THE DEFERRAL OF CERTAIN DEVELOPMENT
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6 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF o
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SECTION 1: For the construction of new single-family subdivisions, townhomes, an
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condominium projects of five or more units, and for the construction of new commercial, office N
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11 or industrial projects, the following fees established by Resolution No. 2006-97 may be deferre o
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13 months from the issuance of the Building Permit, whichever is less: Law Enforcement Facilities
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18 Storm Drain Development. The owner of the property shall personally guarantee payment of the
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19 fees, sign documents authorizing the City to place a lien on the property in the amount of the o
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the City to demand payment in any such escrow, and pay an administrative fee set by resolution
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The foregoing resolution is hereby approved this ` � day of August
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The foregoing resolution is hereby approved this day of August ,2010. _
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3 BERNARDINO AMENDING RESOLUTIONS NO. 2010-266 AND 2010-268, AND o
EXTENDING THE TIME PERIOD FOR THE TEMPORARY REDUCTION OF a
4 CERTAIN DEVELOPMENT IMPACT FEES AND DEVELOPMENT FEES FOR
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6 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY 0
OF SAN BERNARDINO AS FOLLOWS:
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8 SECTION 1. Resolution No. 2010-266, entitled "Resolution of the Mayor and Common c
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9 Council of the City of San Bernardino Relating to the Temporary Reduction of Certain
10 Development Impact Fees Established by Resolution No. 2006-97 and Repealing Resolution No. o
1 2010-246," is hereby amended to extend the time period for the reduction of certain M
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12 Development Impact Fees listed in Resolution No. 2010-266 by an additional two years, from
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14 SECTION 2. Resolution No. 2010-268, entitled "Resolution of the Mayor and Common
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16 Development Fees for Services Established by Resolution No. 2009-122 and Repealing o
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18 certain Development Fees for Services listed in Resolution No. 2010-268 by an additional two
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19 years, from August 2, 2012 to August 2, 2014.
' 20 SECTION 3. All other provisions of Resolutions No. 2010-266 and 2010-268 remain 0
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1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN o
2 BERNARDINO AMENDING RESOLUTIONS NO. 2010-266 AND 2010-268, AND
EXTENDING THE TIME PERIOD FOR THE TEMPORARY REDUCTION OF o
3 CERTAIN DEVELOPMENT IMPACT FEES AND DEVELOPMENT FEES FOR
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5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
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6 Common Council of the City of San Bernardino at a regular meeting thereof, held on the 21st N
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7 day of February ,2012,by the following vote,to wit:
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The foregoing Resolution is hereby approved thisa7flday of February , 2012. C
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23 AT CK J. MOINUSMayor
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25 JAMES F. PENMAN °
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COMMUNITY DEVELOPMENT DEPARTMENT
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300 North"D"Street•San Bernardino•CA 92418-0001
Planning&Building 909.384.5057•Fax:909.3 84.508o
San Bernar Ana www.sbeity.org _
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Yvette Martinez-Garofano E
Governmental Liaison
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1265 Van Buren,Room 180 0
Anaheim, CA 92807 >
SUBJECT: City of San Bernardino Development Impact Fees
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Dear Ms. Martinez-Garofano: i
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On July 21, 2014 at 4:OOPM, the City of San Bernardino Mayor and Common Council has ,o
agendized a discussion item regarding the sunset of the temporary fee reduction that has been in a
effect since August 2, 2010. The Common Council will discuss allowing the temporary U-
reduction in fees to end on August 2,2014,or to extend the temporary reduction. o
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If you should have any questions, please contact me at (909) 384-5357 or
Persico ma@,s1)cqy.org.
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Sincerely, M
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Mark Persico, AICP
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Interim Community Development Director c
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COMMUNITY DEVELOPMENT DEPARTMENT
300 North"D"Street•San Bernardino•CA 92418-000l
Skn—arfiio Planning&Building 909.384.5057 Fax:909.384.5080 an
www.sbcity.org _
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July 2,2014
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Beverly Powell,Regional Manager E
Local Public Affairs
Southern California Edison E
287 Tennessee Street o
Redlands, CA 92373 >
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SUBJECT: City of San Bernardino Development Impact Fees
Dear Ms. Powell:
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On July 21, 2014 at 4:OOPM, the City of San Bernardino Mayor and Common Council has o
agendized a discussion item regarding the sunset of the temporary fee reduction that has been in
effect since August 2, 2010. The Common Council will discuss allowing the temporary U-
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4-in fees to end on August 2,2014, or to extend the temporary reduction, o
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If you should have any questions, please contact me at (909) 384-5357 or N
Persico ma@Nbcity.org.
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Mark Persico, AICP d
Interim Community Development Director
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COMMUNITY DEVELOPMENT DEPARTMENT
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300 North"D"Street•San Bernardino•CA 92418-00ol
Planning&Building 909.384,5057•Fax:909.384.5080
San Berner ino www.sbcity.org
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July 2, 2014
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Carlos Rodriguez,Chief Executive Officer E
Building Industry Association of Southern, California, Inc.
Baldy View Chapter E
8711 Monroe Court, Suite B o
Rancho Cucamonga, CA 91730 d
SUBJECT: City of San Bernardino Development Impact Fees
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Dear Mr. Rodriguez: L
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On July 21, 2014 at 4:OOPM, the City of San Bernardino Mayor and Common Council has 0
agendized a discussion item regarding the sunset of the temporary fee reduction that has been in
effect since August 2, 2010. The Common Council will discuss allowing the temporary U--
reduction in fees to end on August 2, 2014, or to extend the temporary reduction, o
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If you should have any questions, please contact me at (909) 384-5357 or v
Petsico ma a?sbcity.org.
Sincerel
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Mark Persico,AICP
Interim Community Development Director o
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COMMUNITY DEVELOPMENT DEPARTMENT
300 North"D"Street•San Bernardino•CA 92418-0001
Planning&Building 909.384.5057 •Fax:909.384.5080
San=Bernar www.sbcity.org
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July 2,2014 u
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Kristine Scott E
Public Affairs Manager
Southern California Gas Company E
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155 South G Sheet °
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San Bernardino, CA 92410
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SUBJECT: City of San Bernardino Development Impact Fees
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Dear Ms. Scott:
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On July 21, 2014 at 4:OOPM, the City of San Bernardino Mayor and Common Council has ,0
agendized a discussion item regarding the sunset of the temporary fee reduction that has been in
effect since August 2, 2010. The Common Council will discuss allowing the temporary u_
reduction in fees to end on August 2, 2014,or to extend the temporary reduction. c
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If you should have any questions, please contact me at (909) 384-5357 or
Persico maOsbcitLorg. y
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Sincerely, M
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Mark Persico, AICP
Interim Community Development Director o
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Cc: Henry Empeno, Senior Deputy City Attorney
City Clerk's Office r
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Packet Pg.783
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July 15, 2014 •• 'R
City of San Bernardino
300 North"D" Street
San Bernardino, CA 92418 Oal*`1 e -Chcr#t
8711 Monroe Court, Suite 1 H
Rancho Cucamonga, ti
California 91730 r
ph 909.945.1884 a
RE: Development Impact Fee Temporary Reduction fx 909.948.9631 E
www.biabuild.com
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Dear Mayor Davis and fellow City Councilmembers, o
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The Building Industry Association, Baldy View Chapter(BIA)respectfully requests that the City
Council extend the Development Impact Fee (DIF) reduction 24-months to August 2016 in an
effort to encourage new residential development,job creation and economic growth. We believe
that a temporary DIF reduction for residential construction is a viable economic development
strategy as the City of San Bernardino works toward sustainable fiscal recovery.
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Specifically, BIA recommends that the DIFs associated with residential development
remain reduced by a net total of 50%. We also recommend that a cap be placed on the DIF
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reductions once development rates have stabilized in two years or to a rate of 150 single- o
family residential permits per year,whichever comes first. o
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To remain competitive the City of San Bernardino should also reevaluate the current
development impact fee schedule through a nexus study in an effort encourage new
development.
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The City Council recently adopted a balanced budget which included the restoration of ='
Administrative Fees for the Community Development Department. BIA has no comment on the r
administrative fees except, we hope that by restoring administrative fees and hiring new staff the
overall efficiency of the entitlement process will be greatly improved.
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The U.S. Conference of Mayors recently conducted a study and found that Riverside-San
Bernardino-Ontario, CA metropolitan area is posed to have the third highest Gross Product
Growth in the nation, 4.2%by 2020. Business friendly policies such as a DIF reduction will help Q
position the San Bernardino to compete with neighboring jurisdictions such as Rancho 00
Cucamonga, Ontario and Fontana. Over the past 17 months these cities have significantly
outperformed San Bernardino for new residential development (see graphs below). E
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With policies focused on attracting the jobs associated with new residential development the City Q
can better compete in a competitive marketplace. For example 100 new homes creates 350 new
jobs with a net benefit of $4.0 million to local government over 15 year period (please see
attached NAHB economic overview).
An Affiliate of the National Association of Home Builders and the California Building Industry Association Packer Pg.784
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In summary, we urge you to consider extending the current fee reduction policy for an
additional 24-month period with the stipulations outlined in this letter.
Our industry appreciates your time and attention on this matter. BIA remains optimistic that by
continuing to work together we can provide economic growth,jobs and revenue to the City for
years to come. Please feel free to contact me at 909-945-1884 if you have any questions or
comments pertaining to this letter.
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Respectfully, E
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Carlos Rodriguez, CEO o
CC: Planning Commission, City Manager Allen Parker
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San Bernardino Comparison of Residential Permits Totals E
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