The URL can be used to link to this page

Home My WebLink About30- City Administrator CITY OF SAN BERNANO - REQUEST FOP COUNCIL ACTION F" FRED WILSON Subject: Request for deferment of Assistant City Administrator development impact fees -- Dept: Spring Mountain Homes Project September 14 , 1993 Date: Synopsis of Previous Council action: 9/9/93 -- Legislative Review Committee, on a 2-1 vote, Councilwoman Pope Ludlam dissenting, to recommend denial of request of Michael John Enterprises , for a deferment of the development impact fees connected with Spring Mountain Homes project. Recommended motion: That the request of Michael John Enterprises (MJE) for the deferment of all development impact fees for the Spring Mountain Homes project, as noted in Attachment "A" be approved. or That the request of Michael John Enterprises (MJE) for the deferment of all development impact fees for the Spring Mountain Homes project, as noted in Attachment "A" b de ed. Signature Fred Wilson 5122 Contact perso... Phone: Supporting data attached: yes Ward: 5 FUNDING REQUIREMENTS: Amount: Source: (Acct No.) (Acct Description) Finance: cil Notes: 75.0262 Agenda Item No. SPRING MOUNTAIN HOMES -- VERDEMONT A. DETAIL OF FEES FOR 24 UNITS AND UNIT COS ATTACHMENT "A" B. DETAIL OF FEES FOR 11 UNITS PHASE I Cost/. Total Cost Phase I zm Unit 24 Houses ll Houses ------------------------------------------ CITY FEES ------------------------------------------ Building Plan Check $595 $14,282 $6,546 Building Permits $794 $19,045 $8,729 Mechanical Permit (Elec,Plumb,Heat) $289 $6,927 $3,175 Strong Motion $13 $321 $147 Mechanical Plan Check (Elec,Plumb,Heat) $87 $2,092 $2,092 Storm Drain - Chstnt strm drn assmt dist $1,716 $41,179 $41,179 Parks & Recreation $1,431 $34,346 $15,742 Signs $33 $781 $781 Traffic System Fee $145 $3,469 $1,590 Trfc Sig Assmt/Box Clvrt (Palm Ave) $290 $6,952 $6,952 Drainage Fee $1,467 $35,214 $16,140 Palm Ave Impr Asmnt Dist $516 $12,384 $5,676 Verdemont Dev. Infrastructure Fee $7,699 $184,776 $84,689 Notice of Exemption $4 $100 $100 Map Checking Fees (Final Map) $72 $1,720 $1,720 Street Imp. Plan Check Fees $477 $11,443 $11,443 Street Imp. Inspection Fee $475 $11,400 $11,400 On-Site Improvement Plan Check Fee $30 $715 $715 On-Site Improvement Inspection Fee $36 $858 $858 Grading Plan Check $3 $75 $75 Grading Inspector Fee $13 $320 $320 Landscape Plan Review $17 $400 $400 Retaining & Garden Wall Plan Check Fee $58 $1,400 $1,400 Retaining & Garden Wall Permit Fee $88 $2,100 $2,100 Tw Street Light Electrical Energy Fee $118 $2,836 $2,836 artificate of Occupancy $47 $1,128 $517 Sewer Conn $900 $21,600 $9,900 Grading Permit $31 $750 $750 Misc $425 $10,200 $10,200 TOTAL CITY FEES $17,867 $428,815 $248,173 ------------------------------------------ SCHOOL FEES ------------------------------------------ School Fees (Avg House Area X $2.65/eq ft) $5,387 $129,299 $59,262 ------------------------------------------ WATER DEPARTMENT ------------------------------------------ Sewer Capacity fee $3,730 $89,520 $41,030 Water Department Fees $3,176 $76,235 $76,235 TOTAL WATER DEPARTMENT FEES $6,906 $165,755 $117,265 ------------------------------------------ UTILITIES ------------------------------------------ SCE Tax $149 $3,576 $1,639 Gas Tax $89 $2,136 $979 TOTAL UTILITIES $238 $5,712 $2,618 ------------------------------------------ TOTAL UNIT/COST $30,399 $729,581 $427,318 c:\gpro\feestruc.wkl C I T Y OF S A N B E R N A R D I N O INTEROFFICE MEMORANDUM TO: The Legislative Review Committee FROM: Dennis A. Barlow, Sr. Asst. City Attorney DATE: September 9, 1993 RE: Deferral of Fees At the LRC meeting of August 5 the request was made to defer many of the planning and building fees applicable to the Spring Mountain Home Project. Staff has been looking at the practical effects of such a deferral and I understand will recommend that such deferral not be authorized for fees where a direct city service is required, but where the fees are essentially impact fees, that deferral might be considered. From a legal standpoint none of the fees may be deferred for this type of a project without amendment of the applicable ordinances and resolutions. Additionally, if it is determined that it would be appropriate to explore the deferral of any of the impact fees, all of the authorizing ordinances and resolutions for such fees must be examined as well as a determination made whether there are any restricting contractual commitments and obligations. Pending a policy decision, we have not undertaken such an analysis. If it is decided to go forward with this proposal, it must be remembered that such a deferral must be made available to all similarly situated developers on the same basis. This may have a financial impact on the City that one project would not have. In securing such deferral there should be a written agreement specifying the terms thereof and providing for either the right of the City to place a lien on the property or that the filing of the agreement creates such a lien. Certainly deferral should provide for interest and a City processing fee on final payment. DENNIS A ARLOW DAB:js [Deferral.Mem] LEGISLATIVE REVIEW COMMITTEE September 9, 1993 ATTENDEES: Councilwoman Valerie Pope-Ludlam - Chairwoman Councilman Edward Negrete Councilman David Oberhelman Dennis Barlow - Sr. Assistant City Attorney Fred Wilson - Assistant City Administrator Annie Ramos - Parks, Recreation & Community Services Director David Kennedy - City Treasurer Gene Klatt - Assistant City Engineer Cheryl Flowers - Water Dept. Asst. General Manager Paule Harmon - Water Dept. Finance Director Ernie Wilson - Affirmative Action Officer Phil Arvizo - Council Executive Assistant Rod Shain - MJE Brokers Michael Geber - Michael John Enterprises James Lynas - Citizen 1. SPRING MOUNTAIN HOMES-The Committee, on a 2-1 vote,Councilwoman Pope-Ludlam dissenting, recommended to deny MJE Enterprise's request for a deferral of fees. This item will be placed on the September 20 agenda for Council consideration. Councilwom- an Pope-Ludlam requested a meeting be set up with the Small Business representative in the Economic Development Agency to determine whether the project would qualify for assistance. 2. HUMAN RELATIONS COMMISSION - The Committee recommended that staff refer both options back to Council. One option would include selection of Commission- ers by Ward, the other at large. The question of oath would also be considered. The Committee requested that staff also present funding options for the support position. This item will be placed on the September 20 agenda. Meeting adjourned. Councilwoman Valerie Pope-Ludlam Chairwoman VPL:jv City of San Bernardino Department of Planning and Building Services TO: Legislative Review Committee FROM: Al Boughey, Director of Planning and Building Services SUBJECT: Request for Deferment of Fees Spring Mountain Homes DATE: September 8 , 1993 CO_P_IES: Shauna Clark, City Administrator Fred Wilson, Assistant City Administrator Annie Ramos, Director of Parks, Recreation and Community Services Roger Hardgrave, Director of Public Works/City Engineer Bernard Kersey, General Manager, Water Department Gene Klatt, Assistant City Engineer Dennis Barlow, Senior Assistant City Attorney Cheryl Flowers, Assistant General Manager, Water Department ------------------------------------------------------------------- Staff has been reviewing the potential of establishing a method whereas payment of certain fees could be deferred. We assume that the deferment being requested is until a house is sold. In reviewing the issue, several points should be considered by the Legislative Review Committee (LRC) . 1. Should we revievr this request only for this developer or should this discussion be directed toward establishing a policy and payment mechanism that would be available to all housing developers? This issue is raised since staff is not aware of any special circumstance or problem that would single out this request from any other housing developer. 2. The deferring of fees until a house is sold assumes, of course, that the house will be purchased in a timely manner. Failure of a development, or if the house sits empty for an extended period, would greatly lengthen the time before the City would receive the fees. In many cases, these fees are required to construct facilities/infrastructure needed to serve the development. 3 . The homes for this development range from 1,400 to 2 ,400 square feet. The project does not, by definition, constitute an affordable housing project. The developer is requesting the deferral of fees so as to.close the gap between the financing available and his projected cost. - . - LRC Request for Deferment of Fees Spring Mountain Homes Page 2 One issue to be addressed by LRC is whether the City should rely on private market forces to determine the marketability and timing of a development or should the City explore methods to assist a development of this type. Staff is providing the following discussion points if LRC wishes to explore the idea of fee deferrals further. The attached fee list provided by the developer can be categorized into four major groups. 1. Development Service Fees - i.e. , fees for the City to provide a service during the construction process (i.e. , inspection, plan check, etc. ) 2. Assessment District Fees - ongoing assessments that have been placed on the property. 3 . Development Impacts Fees - such as the park and recreation, sewer capacity, and Verdemont Development Infrastructure fees. 4 . Non-City- Fees - such as school -or private utility fees. Since the City and Water Department do not control these-- fees, they will not be discussed further. Staff is recommending that Development---Service fees not be deferred. The City must expend resources to provide needed plan checks, inspections, and other services to support the construction of a project. The City relies on these fees to cover the cost of those services. To defer payment could cause a significant burden to the City. Assessment district fees are annual fees that have been placed on the property whether it is developed or vacant. Since they are placed on the tax bill annually and not at the time of development, they are not suitable for deferment. If a developer wished to pay off an assessment early, this can be accomplished upon the sale of the property. The category of fees most suitable far deferral are impact-type fees that are collected at permit issuance. They pay for improvements that have been installed or for future system improvements. The typical Spring Mountain Home would have the following impact-type charges (estimated) per unit: A LRC Request for Deferment of Fees Spring Mountain Homes Page 3 1. Park and Recreation $ 1,450 2 . Traffic System Fee 150 3 . Drainage Fee 1, 500 4 . Chestnut Storm Drainage Fee 1,700 5. Verdemont Infrastructure 7, 700 6. Sewer Connection Fee 900 7. Sewer Capacity Fee (Water p 7 Department) TOTAL $17 , 100 If LRC wishes to explore the feasibility of deferring fees further, the following should be addressed: 1. City Attorney's Office should review each of the above fees to see if they can legally be deferred beyond the Building Permit issuance. 2. A legal mechanism must be devised to ensure that certain safeguards are provided, including but not limited to; lien or other mechanisms to be filed on property tom- ensure payment by the developer upon the sale of the- house. A maximum deferment period should be established (possibly 18 months) for the payment of fees. 3. Detailed procedures must be created to ensure that the City can track all future payments each time a home is sold and that each appropriate City account will be properly credited. Detailed escrow instructions should be prepared and a disclosure statement drafted for the developer and purchaser that the fees were deferred at the request off the developer and are included within the sale price of the home. 4. An interest rate or mechanism should be established to cover the cost of money during the period of deferment. Interest would be added to the cost of the fee. 5. A processing fee should be established to cover the cost of preparing the necessary documents to defer fees and the staff time anticipated in collecting and processing fee payments in the future. 0 LRC Request for Deferment of Fees Spring Mountain Homes Page 4 Recommendation As noted in the preceding discussion, establishing a fee deferral process is a complex undertaking and the legal safeguards must be carefully examined. In addition, the Water, Park/Recreation, and Planning and Building Services Departments have concerns related to the amount of processing that will be necessary to keep track of fees paid on each individual house over an unspecified period of time. In addition, Parks, Recreation and Community Service has expressed their concern about the uncertainty of when fees will actually be collected. It is felt that not knowing when the revenue will be received will make it difficult to plan and construct new recreational facilities to serve the area. overall, staff questions whether the benefits to the developer and City outweigh the increased processing necessary to establish a deferral process. If Council feels that the merits of a deferral system outweigh the cost and complexity, the City Attorney's office should be directed- - to prepare the necessary ordinance(s) and legal documents and to work with impacted departments to establish appropriate processing fees and interest rates. aPRIXO MOUNTAIN BOMB -- VERDEMONT 0 A. DETAIL OF FEEa FOR 24 UNITS AND UNIT COSTS B. DETAIL OF FEES FOR 11 UNITS PHASE I Cost/ Total Cost Phase I Item Unit 24 Houses 11 Houses ------------------------------------------ CITY FEES Building Plan Check $595 $14,282 $6,546 Building Permits $794 $19,045 $8,729 Mechanical Permit (Elec,Plumb,Heat) $289 $6,927 $3,175 Strong Motion $13 $321 $147 Mechanical Plan Check (Elec,Plumb,Heat) $87 $2,092 $2,092 Storm Drain - Chstnt strm drn assmt dist $1,716 $41,179 $41,179 Parks i Recreation $1,431 $34,346 $15,742 Signs $33 $781 $781 Traffic System Fee $145 $3,469 $1,590 Trfc Sig Asamt/Box Clvrt (Palm Ave) $290 $6,952 $6,952 Drainage Fee $1,467 $35,214 $16,140 Palm Ave Impr Asamt Dist $516 $12,384 $5,676 Verdemont Dev. Infrastructure Fee $7,699 $184,776 $84,689 Notice of Exemption $4 $100 $100 Map Checking Fees (Final Map) $72 $1,720 $1,720 Street Imp. Plan Check Fees $477 $11,443 $11,443 Street Imp. Inspection Fee $475 $11,400 $11,400 On-Site improvement Plan Check Fee $30 $715 $715 On-Site Improvement Inspection Fee $36 $858 $858 Grading Plan Check $3 $75 $75 Grading Inspector Fee $13 $320 $320 Landscape Plan Review $17 $400 $400 Retaining i Garden Wall Plan Check Fee $58 $1,400- 51,400 Retaining i Garden Wall Permit Fee $B8 $2,100 $2,100 Now Street Light Electrical Energy Fee $118 $2,836 $2,636 Certificate of Occupancy $47 $1,128 $517 Sewer Conn $900 S21,608 59,900 Grading Permit $31 $750 $750 Misc $425 $10,200 sls,2ae TOTAL CITY FEW $17,867 $428,815 $246,173 ------------------------------------------ SCHOOL FEES ----------------------------------------- School Fees (Avg House Area X 52.65/sq ft) $5,387 $129,299 $59,262 ------------------------------------------ WATER DEPARTMENT ------------------------------------------ Sewer Capacity fee $3,730 $89,520 $41,030 Water Department Pees $3,176 $76,235 $76,235 TOTAL WATER DZPAY43G NT FEEB $6,906 $165,755 $117,265 ------------------------------------------ UTILITIES ----------------------------------------- SCE Tax $149 $3,576 $1,639 Gas Tax $89 $2,136 $979 TOTAL UTILITIES $238 $5,712 $2,618 ----------------------------------------- TOTAL UNIT/COST $30,399 $729,581 $427,318 c:\gpro\feestruc.wkl