HomeMy WebLinkAbout09 - Annual Reporting on Development Impact Fees and Development AgreementsQ �EwP0
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TO:
FROM:
CITY OF
NEWPORT BEACH
City Council Staff Report
November 5, 2019
Agenda Item No. 9
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
Dan Matusiewicz, Finance Director - 949-644-3123,
dmatusiewicz@newportbeachca.gov
PREPARED BY: Rukshana Virany, Accounting Manager
rvirany@newportbeachca.gov
PHONE: 949-644-3146
TITLE: Annual Reporting on Development Impact Fees and Development
Agreements
ABSTRACT:
Pursuant to the Mitigation Fee Act (Government Code Section 66000, et seq.), the City
is required to report on the receipt and use of development impact fees.
Regarding Development Agreements (Government Code Section 65865(e)), the City is
required to comply with the reporting requirements in Government Code Section 66006
with respect to any fee the City receives or cost it recovers.
RECOMMENDATION:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
b) Receive, review and file the Annual Reports on Development Impact Fees and
Development Agreements.
FUNDING REQUIREMENTS:
There is no fiscal impact related to this item.
DISCUSSION:
The Mitigation Fee Act (hereafter "the Act") requires each agency that imposes
development impact fees to submit annual and five-year reports providing specific
information about the receipt and use of such fees. Fees collected must be placed in
separate accounts and are not to be commingled with other sources of general revenues.
Interest on each account must be credited to that account and used only for the purpose
for which the fees were collected. The Act also requires that the City make periodic
findings in order to justify continued receipt of unexpended funds, or possibly be subject
to refunding a portion of such funds.
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Annual Reporting on Development Impact Fees and Development Agreements
November 5, 2019
Page 2
Although the Act does not apply to Developer Agreements, the reporting requirements on
both the Development Impact Fee and Developer Agreements are the same and fall
under Government Code Section 66006.
Section 66006(b) of the Act requires that within 180 days after the close of the fiscal year,
the City must make available to the public a brief description of the fee, amount of the
fee, beginning and ending balances of the account or fund for the fiscal year, and amount
of fees collected and the interest earned. The Act also requires identification of each
public improvement on which the fees were expended, the amount of expenditures on
each improvement, an approximate date by which the construction of the public
improvement will commence, a description of each inter -fund transfer or loan made from
the account or fund, and the amount of any refunds made due to the inability to expend
impact fees. Section 66001(d) provides that, for the fifth fiscal year following the first
deposit into the account or fund and every five years thereafter, the City shall make
findings with respect to any portion of the fee remaining unexpended, whether committed
or uncommitted.
The City is in conformance with the Act, is not subject to any refunding requirements, and
the City has Fair Share Fees as the only source of reportable impact fees. Regarding
Development Agreements, the City has one reportable Development Agreement, the
Uptown Newport Development Agreement. The first deposit for the Uptown Newport
Development Agreement was received in FY 2016-17, as a result, the City has nothing
to report under the five-year reporting requirement.
Attachments A and B provide additional narrative and all the required information related
to the annual review and accounting of applicable development impact fees and
Development Agreements, as well as periodic findings concerning unexpended funds.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
The annual reports were also made available to the public and the Building Industry
Association of Southern California, Orange County Chapter, prior to the Council Meeting.
ATTACHMENTS:
Attachment A — Development Impact Fee Report Fiscal Year 2018-2019
Attachment B — Development Agreements Report Fiscal Year 2018-2019
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Attachment A
City of Newport Beach Development Impact Fee Report Fiscal Year 2018-2019
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City of Newport Beach
Development Impact Fee Report
Fiscal Year 2018-2019
Background
The City's Fair Share Fee program was originally adopted in 1984, updated in 1994 and adjusted
periodically based upon the consumer price index. The purpose of the Fair Share Fee program is
to equitably distribute the cost of traffic congestion reduction improvements to the future
development that generates the need for such projects. The fair share traffic contribution is
based upon the unfunded portion of the estimated construction cost of the total circulation
system roadway improvements necessary to implement the master plan of streets and highways
(net roadway costs), and the total number of vehicle trips anticipated as a result of trend growth.
The Mitigation Fee Act, Government Code §66000 et seq., (the "Act"), the bulk of which were
adopted as 1987s AB 1600, contains what are commonly referred to as "AB 1600 requirements".
The Act governs the establishment and administration of development impact fees paid by new
development projects for public facilities needed to serve new development. Fees must be
separately accounted for and used for the specific purpose for which the fee was imposed.
Annual Reporting
The Act requires that the City prepare an annual report detailing the status of collected
development impact fees as defined in the Act. The annual report must be made available to the
public and presented to the City Council not less than fifteen (15) days after it is made available
to the public at the next regularly scheduled City Council meeting. The meeting before the City
Council must be held within one hundred eighty (180) days of the end of the fiscal year. The
report must include the type of fee, beginning and ending balances, the amount of fees collected
and interest earned, expenditures by type, a description of interfund transfers or loans, and the
amount of any refunds made.
Excluded from this report are types of developer fees that are not subject to the reporting
requirements of the Act. For example, fees collected pursuant to the City's zoning powers, rather
than pursuant to the Act, are in -lieu housing fees, and park -in -lieu fees.
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Annual Report
To comply with Government Code §66006, the following information regarding AB 1600 fees is
presented:
1) A brief description of the type of fee in the account or fund:
Fair Share Fees - These fees provide funding to accommodate traffic generated
by future development within the City and are separately accounted for in the
Circulation & Transportation Fund.
2) The amount of the Fair Share Fee:
Fair Share rate is $216.91 per trip for Fiscal Year 2018-2019.
3) The Beginning & Ending balance of the account or fund:
See attached Financial Report.
4) The amount of fees collected and interest earned:
See attached Financial Report.
5) An identification of each public improvement on which fees were expended and the
amount of the expenditures on each improvement, including the total percentage of the
cost of the public improvement that was funded with the fees:
There were no public improvement projects constructed in the fiscal year.
6) An identification of an approximate date by which the construction of the public
improvements will commence if the City determines that sufficient funds have been
collected to complete financing on an incomplete public improvement, as identified in
the City's master plans, and the public improvement remains incomplete:
There were no public improvement projects constructed in the fiscal year.
7) A description of each interfund transfer or loan made from the account or fund, including
the public improvement on which the transferred or loaned fees will be expended, and in
the case of an interfund loan, the date on which the loan will be repaid, and the rate of
interest that the account or fund will receive on the loan:
There were no interfund transfers or loans during the fiscal year.
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8) The amount of refunds or any allocation made pursuant to subdivision (f) of Section
66001:
There were no refunds during the fiscal year.
Financial Report
Fair Share Revenues, Expenditures & Changes in Fund Balance
FY 2018-2019
Total Project %
Costs Fair Share
(FY Only) Funded
Revenues:
Fair Share Fees
$ 363,534
Investment Income
78,418
Total Revenues
441,952
Expenditures:
Capital Improvement Projects
-
Net Change in Fund Balance
441,952
Fund Balance, Beginning
$1,802,843
Fund Balance, Ending
$2,244,795
Description of Projects
Not Applicable.
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ATTACHMENT B
City of Newport Beach
Development Agreements Report
Fiscal Year 2018-2019
Background
A Development Agreement ("DA") is a contract between a local jurisdiction and a person who
has ownership or control of property within the jurisdiction. The purpose of the agreement is to
specify the standards and conditions that will govern development of the property. The
development agreement provides assurance to the developer that he/she may proceed to
develop the project subject to the rules and regulations in effect at the time of approval, because
the development will not be subject to subsequent changes in regulations.
The DA should also benefit the local jurisdiction. The city or county may include conditions
(mitigation measures) that must be met to assure that a project at a specific location does not
have unacceptable impacts on neighboring properties or community infrastructure. The
agreement may clarify how the project will be phased, the required timing of public
improvements, the developer's contribution toward funding system -wide community
improvements, and other conditions. The agreement can also facilitate enforcement of
requirements, since it is a contract that details the obligations of the developer and local
jurisdiction.
Annual Reporting
For DAs entered into or after January 1, 2004, Government Code §65865 (e) requires that the City
shall comply with the reporting requirements pursuant to Government Code §66000, with
respect to any fee the City receives or cost it recovers. Government Code §66006 requires the
City to submit annual and five-year notices detailing the status of collected public benefit fees,
and be placed on the agenda for review at a public meeting not less than fifteen (15) days after
the report is made available to the public. The meeting before the City Council must be held
within one hundred eighty (180) days of the end of the fiscal year. The report must include the
beginning and ending balances, the amount of fees collected and interest earned, expenditures
by type, a description of interfund transfers or loans, and the amount of any refunds made.
Excluded from this report are types of developer fees that are not subject to the reporting
requirements under Government Code §65865(e). For example, these include fees collected
pursuant to the City's zoning powers, such as in -lieu housing fees, and park -in -lieu fees.
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Annual Report
To comply with Government Code §66006, the following information regarding DA Fees is
presented:
1) A brief description of the type of public benefit fee in the account or fund:
a) Uptown Newport Development Agreement — On March 12, 2013 the City Council
adopted Ordinance No. 2013-6 approving the Development Agreement for the
development of a 25 -acre, mixed-use residential project consisting of 1,244
residential dwelling units, two one -acre public parks, and 11,500 square feet of
retail use located at 4311-4321 Jamboree Road. On April 28, 2015 the City Council
approved the First Amendment to the Development Agreement that delayed the
timing of payment of public benefit fees and park in -lieu fees. The DA specifies
the term, permitted uses, public benefits fees, park in -lieu fees, dedication of park
land and open space. Public benefit fees were required to be paid by Uptown
Newport, LP as part of the DA approval, and are accounted for in the Facilities
Financial Planning Reserve Fund.
2) The amount of the DA fees:
a) Uptown Newport Development Agreement— $34,826 per residential unit for 462
units at the issuance of building permits for construction. Total of $16,089,612
was received in May 2017.
3) The Beginning and Ending balance of individual DAs:
See attached Financial Report.
4) The amount of DA fees collected and interest earned:
See attached Financial Report.
5) An identification of each public improvement on which fees were expended and the
amount of the expenditures on each improvement, including the total percentage of the
cost of the public improvement that was funded with the fees:
See attached Financial Report.
6) An identification of an approximate date by which the construction of the public
improvements will commence if the City determines that sufficient funds have been
collected to complete financing on an incomplete public improvement, as identified in
the City's master plans, and the public improvement remains incomplete:
Uptown Newport development agreement funds are expected to be expended by
fiscal year 2019-2020
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.;
7) A description of each interfund transfer or loan made from the account or fund, including
the public improvement on which the transferred or loaned fees will be expended, and in
the case of an interfund loan, the date on which the loan will be repaid, and the rate of
interest that the account or fund will receive on the loan:
No interfund transfers or loans were made during the fiscal year.
8) The amount of refunds made pursuant to subdivision (f) of Government Code §66001 any
allocation pursuant to subdivision (f) of Government Code §66001.
No refunds were made during the fiscal year.
Financial Reports
Uptown Newport Development Agreement
FY 2018-2019
Revenues:
Interest Income
Total Revenues
Expenditures:
Transfers In/(Out):
Transfer Out - Fire Stations Fund
Total Transfers
Net Change in Fund Balance
Fund Balance, Beginning
Fund Balance, Ending
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Total Project Developer
Costs Agreement
(FY Only) Funded
$ 112,073
112,073
(5,718,302) (5,718,302)
(5,718,302) (5,718,302)
(5,606,229)
7,348,132
$ 1,741,903
100.0%