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HomeMy WebLinkAbout04 - Establishing a Development Impact Fee Program (PA2021-127)Q �EwPpRT CITY OF s NEWPORT BEACH `q44:09 City Council Staff Report December 10, 2024 Agenda Item No. 4 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Seimone Jurjis, Assistant City Manager/Community Development Director - 949-644-3232, sjurjis@newportbeachca.gov PREPARED BY: Liz Westmoreland, AICP, Principal Planner - 949-644-3234, Iwestmoreland@newportbeachca.gov TITLE: Ordinance Nos. 2024-30 to 2024-32: Establishing a Development Impact Fee Program (PA2021-127) ABSTRACT: For the City Council's consideration is the adoption of Ordinance Nos. 2024-30 to 2024-32, which will establish a development impact fee (DIF) program for the City of Newport Beach. The City's DIF Program will help offset the cost of public infrastructure and facilities related to recreation, public safety (police and fire), and water and sewer facilities that are needed to accommodate increased demand created by new development. As proposed, the DIF Program would apply to new residential development planned in the 6th Cycle Housing Element as well as new nonresidential development with some exceptions. On November 12, 2024, the City Council approved Resolution No. 2024-83 to adopt the required Nexus Study pursuant to the Mitigation Fee Act and the corresponding Fee Schedule and introduced the attached ordinances for consideration. RECOMMENDATIONS: a) Determine the adoption of these ordinances is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2), 15060(c)(3), 15273, and 15378(b)(4) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; b) Conduct second reading and adopt Ordinance No. 2024-30, An Ordinance of the City Council of the City of Newport Beach, California, Repealing and Replacing Chapter 14.33 (Water and Sewer Capital Improvement Fee) to the Newport Beach Municipal Code Authorizing Collection of Development Impact Fees for Water and Sewer Service Facilities; c) Conduct second reading and adopt Ordinance No. 2024-31, An Ordinance of the City Council of the City of Newport Beach, California, Adding Chapter 15.43 (Recreation Facilities Improvement Fee) to the Newport Beach Municipal Code Authorizing Collection of Development Impact Fees for Recreation Facilities; and 4-1 Ordinance Nos. 2024-30 to 2024-32: Establishing a Development Impact Fee Program December 10, 2024 Page 2 d) Conduct second reading and adopt Ordinance No. 2024- 32, An Ordinance of the City Council of the City of Newport Beach, California, Adding Chapter 15.44 (Public Safety Development Impact Fee) to the Newport Beach Municipal Code Authorizing Collection of Development Impact Fees for Police and Fire Service Facilities. DISCUSSION: The City is authorized to collect development impact fees pursuant to the Mitigation Fee Act (MFA) through establishment of a DIF program. To establish the City's DIF Program, the City must first demonstrate a nexus between the fees and the proposed development through preparation of a nexus study. The City's Nexus Study was prepared by Willdan Financial Services, Inc. (Nexus Study) and provides a basis for the City to charge DIFs along with the required findings to comply with the MFA and State law. On November 12, 2024, the City Council adopted Resolution No. 2024-83 to approve the Nexus Study and to adopt the corresponding fee schedule, which will become effective 60 days thereafter (January 12, 2025). Ordinance Nos. 2024-30 to 2024-32 are also required to implement the DIF Program and were also introduced and considered at the November 12 meeting. Ordinance No. 2024-30 would repeal and replace Chapter 14.33 (Water and Sewer Capital Improvement Fee) of the Newport Beach Municipal Code (NBMC) and authorize the City to collect DIFs to fund water and sewer infrastructure. Ordinance No. 2024-31 would establish Chapter 15.43 (Recreation Facilities Improvement Fee) of the NBMC to allow the City to collect DIFs to fund special use recreational facilities. Lastly, Ordinance No. 2024-32 would establish Chapter 15.44 (Public Safety Development Impact Fee) of the NBMC to allow the City to collect separate DIFs to fund police and fire facilities. Based on written comments provided prior to this meeting, staff revised Ordinance No. 2024-32 for public safety fees to correct a typographical error and Ordinance No. 2024-30 for the water and sewer fees to remove the reference to sewer "treatment" facilities. The complete staff report from the November 12, 2024, meeting is included for reference as Attachment A. FISCAL IMPACT: Assuming full buildout of the Housing Element's residential capacity and full buildout of nonresidential development as projected by the Southern California Association of Governments, the DIF Program is projected to provide approximately $140,630,400. This funding will support specific City service facilities, including recreation, police, fire, water and sewer. The City would be responsible for identifying approximately $94,453,175 in non-DIF funding to fully fund the planned facilities. The approved fee schedule identified in Resolution No. 2024-83 includes a 2% administrative fee that is expected to fully recover the cost of implementing the DIF Program. This administrative fee is consistent with other cities and will be reviewed annually to ensure it does not exceed the City's costs associated with administering the DIF Program. 4-2 Ordinance Nos. 2024-30 to 2024-32: Establishing a Development Impact Fee Program December 10, 2024 Page 3 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), 15060(c)(3), 15273, and 15378(b)(4) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, 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). ATTACHMENTS: Attachment A — City Council Staff Report dated November 12, 2024 Attachment B — Ordinance No. 2024-30: Water and Sewer Capital Improvement Fee Attachment C — Ordinance No. 2024-31: Recreational Facilities Development Impact fee Attachment D — Ordinance No. 2024-32: Public Safety Development Impact Fee 4-3 Attachment A City Council Staff Report dated November 12, 2024 Available via link due to file size: https://ecros.newportbeachca.gov/WEB/DocView.aspx?id=3075189&dbid=0&repo=CNB Attachment B Ordinance No. 2024-30: Water and Sewer Capital Improvement Fee M ORDINANCE NO. 2024-30 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, REPEALING AND REPLACING CHAPTER 14.33 (WATER AND SEWER CAPITAL IMPROVEMENT FEE) TO THE NEWPORT BEACH MUNICIPAL CODE AUTHORIZING COLLECTION OF DEVELOPMENT IMPACT FEES FOR WATER AND SEWER SERVICE FACILITIES WHEREAS, Section 200 of the City of Newport Beach ("City") Charter vests the City Council with the authority to make and enforce all laws, rules and regulations with respect to municipal affairs subject only to the restrictions and limitations contained in the Charter and the State Constitution, and the power to exercise, or act pursuant to any and all rights, powers, and privileges, or procedures granted or prescribed by any law of the State of California; WHEREAS, cities may apply fees for proposed developments to cover the cost of public facilities by way of its police power as codified in the California Constitution Article XI Section 7; WHEREAS, California Government Code Section 66000 et seq. ("Mitigation Fee Act") authorizes the City to collect fees in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project; WHEREAS, development impact fees must be supported by a nexus study which calculates the purpose of the fee, the use to which it will be put, the relationship between the fee's use and the development, and establish the need for the fee pursuant to the Mitigation Fee Act; WHEREAS, the Community Development Department commissioned a development impact fee nexus study with Willdan Financial Services; WHEREAS, the City's 6th Cycle Housing Element projects an increase in the population, residential dwelling units, and employment in Newport Beach; WHEREAS, this future residential and nonresidential growth will create additional demand on the City's infrastructure for water and sewer service facilities; mo Ordinance No. 2024- Page 2 of 4 WHEREAS, the City's current system consists of water and sewer lines and infrastructure to serve the community; WHEREAS, Chapter 14.33 (Water and Sewer Capital Improvement Fee) authorizes the City to collect water system impact fees and sewage collection and treatment facilities impact fees to pay for the cost of improvements to the water and sewer system necessitated by new development; and WHEREAS, a duly noticed public hearing was held by the City Council on November 12, 2024, in the Council Chambers located at 100 Civic Center Drive, Newport Beach, California. A notice of time, place and purpose of the public hearing was given in accordance with California Government Code Section 54950 et seq. ("Ralph M. Brown Act") and the Mitigation Fee Act. Evidence, both written and oral, was presented to, and considered by, the City Council at this public hearing. NOW THEREFORE, the City Council of the City of Newport Beach ordains as follows: Section 1: Chapter 14.33 (Water and Sewer Capital Improvement Fee) of the Newport Beach Municipal Code is hereby repealed and replaced with Exhibit "A," which is attached hereto and incorporated by reference. Section 2: The recitals provided in this ordinance are true and correct and are incorporated into the substantive portion of this ordinance. Section 3: If any section, subsection, sentence, clause or phrase of this ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. 4-7 Ordinance No. 2024- Page 3 of 4 Section 4: The City Council finds the introduction and adoption of this ordinance 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, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 5: Except as expressly modified in this ordinance, all other sections, subsections, terms, clauses and phrases set forth in the Newport Beach Municipal Code shall remain unchanged and shall be in full force and effect. Ordinance No. 2024- Page 4 of 4 Section 6: The Mayor shall sign and the City Clerk shall attest to the passage of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be published pursuant to City Charter Section 414. This ordinance shall be effective thirty (30) calendar days after its adoption. This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 12th day of November, 2024, and adopted on the 10th day of December, 2024, by the following vote, to -wit: AYES: NAYS: ABSENT: WILL O'NEILL, MAYOR ATTEST: LEILANI I. BROWN, CITY CLERK APPROVED AS TO FORM: CITY ATT RNEY'S OFFICE --k im- AAROrV"t. HARP, JIV ATTORNEY Attachment: Exhibit A — Chapter 14.33 (Water and Sewer Capital Improvement Fee) Exhibit A Chapter 14.33 WATER AND SEWER CAPITAL IMPROVEMENT FEE Sections: 14.33.010 Purpose. 14.33.020 Definitions. 14.33.030 Established. 14.33.040 Use. 14.33.050 Developer construction. 14.33.060 Adjustments. 14.33.010 Purpose. A. To implement the goals and objectives of the capital improvement program for facilities and equipment of the City of Newport Beach, and to mitigate the impacts upon the City's sewage collection and treatment facilities caused by new development in the City, certain public facilities and equipment must be constructed and/or improvements made. The public facilities and equipment are specifically identified in the City's capital improvement program for facilities and equipment as adopted by the City Council and as amended from time to time. The list of water and sewage collection and treatment facilities and equipment may be added to or deleted from the approved program. The City Council has determined that a development impact fee is needed to finance these public improvements and to pay for the development's fair share of the costs of these improvements. B. In establishing the fee described in this chapter, the City Council has found the fee to be consistent with its general plan and, pursuant to Govt. Code Section 65913.2, has considered the effects of the fee with respect to the City's housing needs as established in the Housing Element of the General Plan. 14.33.020 Definitions. In this chapter, unless the context otherwise requires: "Cost of improvements" means all costs related to acquisition, construction, repair and financing, but does not include costs of routine maintenance. "New development" means any residential or nonresidential (nonresidential includes commercial and industrial) construction project except as specifically exempted in this chapter or by resolution establishing the fee. 4-10 "Sewage collection and treatment facilities" means capital improvements related to the collection, treatment and disposal of sewage including but not limited to collection systems and sewage treatment plant facilities. "Water system" means capital improvements related to the distribution, treatment and storage of potable water for public health and safety. 14.33.030 Established. A. A water system impact fee is established for development within the City to pay for the City's water distribution, collection and treatment facilities as shown in the adopted capital improvement program for facilities and equipment. B. A sewage collection and treatment facilities impact fee is established for development within the City to pay for the sewage collection system and sewage treatment plant improvements and expansion as shown in the adopted capital improvement program for facilities and equipment. C. The City Council shall, by resolution, set forth the specific amount of the fee, describe the benefit and impact area on which the development fee is imposed, list the specific public improvements to be financed, describe the estimated cost of these facilities, describe the reasonable relationship between this fee and the various types of new developments and set forth time for payment. On an annual basis, the City Council shall review this fee to determine whether the fee amounts are reasonably related to the impacts of developments and whether the described public facilities are still needed. 14.33.040 Use. The revenues raised by payment of this fee shall be placed in a separate and special account and such revenues, along with any interest earnings on that account, shall be used solely to: A. Pay for the City's future facilities described in the resolution enacted pursuant to this chapter, or to reimburse the City for those described or listed facilities constructed by the City with funds advanced by the City from other sources, or B. Reimburse developers who have been required or permitted by this section, to install such listed facilities which are oversized with supplemental size, length or capacity. 14.33.050 Developer construction. A. Whenever a developer is required, as a condition of approval of a development permit, to construct a public facility described in a resolution adopted pursuant to this section which facility is determined by the City to have supplemental size, length or capacity over that needed for the impacts of that development, and when such construction is necessary to ensure efficient and timely construction of the 4-11 facilities network, a reimbursement agreement with the developer and a credit against the fee, which would otherwise be charged pursuant to the ordinance codified in this section on the development project, shall be offered to the developer. B. The reimbursement amount shall not include the portion of the improvement needed to provide services or mitigate the need for the facility or the burdens created by the development. 14.33.060 Adjustments. A. A developer of any new development subject to the fees described in this chapter may apply to the City Council for a reduction or adjustment to that fee(s), or a waiver of that fee(s), based upon the absence of any reasonable relationship or nexus between the sewage collection and treatment facilities and/or water system impacts of that development and either the amount of the fee charged or the type of facilities to be financed. B. A separate application shall be filed for each adjustment request made pursuant to this section. Such application shall be made on a form provided by the City Clerk and shall be filed with the City Clerk not later than: 1. Thirty (30) days prior to the first public hearing on the discretionary permit application for the development project, or 2. If no discretionary permit application is required, within thirty (30) days of filing for a building permit. A building permit for any phase of construction (including grading, demolition, or new construction) shall not be issued until a determination of the base fees is final. C. The application shall state in detail the factual basis for the claim of waiver, reduction, or adjustment. The burden of proof shall be on the applicant to establish that the applicant is not subject to the imposition of the full development impact fee(s) pursuant to the applicable development impact fee ordinance and applicable state law. D. The City Council shall consider the application at the public hearing on the permit application or at a separate hearing held within sixty (60) days after the filing of the fee adjustment application, whichever is later. The decision of the City Council shall be final. E. If a reduction, adjustment, or waiver is granted, any change in use within the project shall invalidate the waiver, adjustment or reduction of the fee. 4-12 Attachment C Ordinance No. 2024-31: Recreational Facilities Development Impact fee 4-13 ORDINANCE NO. 2024-31 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, ADDING CHAPTER 15.43 (RECREATION FACILITIES IMPROVEMENT FEE) TO THE NEWPORT BEACH MUNICIPAL CODE AUTHORIZING COLLECTION OF DEVELOPMENT IMPACT FEES FOR RECREATION FACILITIES WHEREAS, Section 200 of the City of Newport Beach ("City") Charter vests the City Council with the authority to make and enforce all laws, rules and regulations with respect to municipal affairs subject only to the restrictions and limitations contained in the Charter and the State Constitution, and the power to exercise, or act pursuant to any and all rights, powers, and privileges, or procedures granted or prescribed by any law of the State of California; WHEREAS, cities may apply fees for proposed developments to cover the cost of public facilities by way of its police power as codified in the California Constitution Article XI Section 7; WHEREAS, California Government Code Section 66000 et seq. ("Mitigation Fee Act") authorizes the City to collect fees in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project; WHEREAS, development impact fees must be supported by a nexus study which calculates the purpose of the fee, the use to which it will be put, the relationship between the fee's use and the development, and establish the need for the fee pursuant to the Mitigation Fee Act; WHEREAS, the Community Development Department commissioned a development impact fee nexus study with Willdan Financial Services; WHEREAS, the City's 61h Cycle Housing Element projects an increase in the population, residential dwelling units, and employment in Newport Beach; WHEREAS, this future residential and nonresidential growth will create additional demand on the City's infrastructure for recreation facilities; 4-14 Ordinance No. 2024- Page 2 of 4 WHEREAS, the City's current recreational facilities inventory is comprised of various community centers, senior centers, junior lifeguard facility, and harbor facilities to serve the community; WHEREAS, Chapter 15.43 (Recreation Facilities Improvement Fee) authorizes the City to collect development impact fees for recreation facilities to cover the cost of developing additional recreational facilities necessitated by new development; and WHEREAS, a duly noticed public hearing was held by the City Council on November 12, 2024, in the Council Chambers located at 100 Civic Center Drive, Newport Beach, California. A notice of time, place and purpose of the public hearing was given in accordance with California Government Code Section 54950 et seq. ("Ralph M. Brown Act") and the Mitigation Fee Act. Evidence, both written and oral, was presented to, and considered by, the City Council at this public hearing. NOW THEREFORE, the City Council of the City of Newport Beach ordains as follows: Section 1: Chapter 15.43 (Recreation Facilities Improvement Fee) is hereby added to the Newport Beach Municipal Code as set forth in Exhibit "A," which is attached hereto and incorporated by reference. Section 2: The recitals provided in this ordinance are true and correct and are incorporated into the substantive portion of this ordinance. Section 3: If any section, subsection, sentence, clause or phrase of this ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. 4-15 Ordinance No. 2024- Page 3 of 4 Section 4: The City Council finds the introduction and adoption of this ordinance 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, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 5: Except as expressly modified in this ordinance, all other sections, subsections, terms, clauses and phrases set forth in the Newport Beach Municipal Code shall remain unchanged and shall be in full force and effect. 4-16 Ordinance No. 2024- Page 4 of 4 Section 6: The Mayor shall sign and the City Clerk shall attest to the passage of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be published pursuant to City Charter Section 414. This ordinance shall be effective thirty (30) calendar days after its adoption. This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 12th day of November, 2024, and adopted on the 10th day of December, 2024, by the following vote, to -wit: Iyd:& i NAYS: ABSENT: ATTEST: WILL O'NEILL, MAYOR LEILANI I. BROWN, CITY CLERK APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE RP, CITYWTTORNEY Attachment: Exhibit A — Chapter 15.43 (Recreation Facilities Improvement Fee) 4-17 Exhibit A Chapter 15.43 RECREATION FACILITIES IMPROVEMENT FEE Sections: 15.43.010 Purpose. 15.43.020 Definitions. 15.43.030 Established. 15.43.040 Use. 15.43.050 Developer construction. 15.43.060 Adjustments. 15.43.010 Purpose. A. To implement the goals and objectives of the capital improvement program for facilities and equipment of the City of Newport Beach, and to mitigate the impacts to the City's recreational facilities caused by new development in the City, certain public facilities and equipment must be constructed and/or acquired. The public facilities and equipment are specifically identified in the City's capital improvement program for facilities and equipment as adopted by the City Council and as amended from time to time. The list of recreational facilities and equipment may be added to or deleted from the approved program. The City Council has determined that a development impact fee is needed to finance these public improvements and to pay for the development's fair share of the costs of these improvements. B. In establishing the fee described in this chapter, the City Council has found the fee to be consistent with its general plan and, pursuant to Govt. Code Section 65913.2, has considered the effects of the fee with respect to the City's housing needs as established in the Housing Element of the General Plan. 15.43.020 Definitions. In this chapter, unless the context otherwise requires: "Cost of improvements" means all costs related to acquisition, construction, repair and financing, but does not include costs of routine maintenance. "New development" means any residential or nonresidential (nonresidential includes commercial, office, and industrial) construction project except as specifically exempted in this chapter or by resolution establishing the fee. "Recreational facility" means capital improvements related to the buildings, furnishings, vehicles, equipment, software, and similar facilities utilized for recreational purposes. 15.43.030 Established. A. A recreation facility impact fee is established on issuance of all building permits, for development within the City to pay for the City's buildings, furnishings, vehicles, equipment and similar facilities utilized for recreational purposes as shown in the adopted capital improvement program for facilities and equipment. B. The City Council shall, in a council resolution, set forth the specific amount of the fee, describe the benefit and impact area on which the development fee is imposed, list the specific public improvements to be financed, describe the estimated cost of these facilities, describe the reasonable relationship between this fee and the various types of new developments and set forth time for payment. On an annual basis, the City Council shall review this fee to determine whether the fee amounts are reasonably related to the impacts of developments and whether the described public facilities are still needed. 15.43.040 Use. The revenues raised by payment of this fee shall be placed in a separate and special account and such revenues, along with any interest earnings on that account, shall be used solely to: A. Pay for the City's future facilities described in the resolution enacted pursuant to this chapter, or to reimburse the City for those described or listed facilities constructed by the City with funds advanced by the City from other sources, or B. Reimburse developers who have been required or permitted by this chapter, to install such listed facilities which are oversized with supplemental size, length, or capacity. 15.43.050 Developer construction. A. Whenever a developer is required, as a condition of approval of a development permit, to construct a public facility described in a resolution adopted pursuant to this chapter which facility is determined by the City to have supplemental size, length, or capacity over that needed for the impacts of that development, and when such construction is necessary to ensure efficient and timely construction of the facilities network, a reimbursement agreement with the developer and a credit against the fee, which would otherwise be charged pursuant to the ordinance codified in this chapter on the development project, shall be offered to the developer. B. The reimbursement amount shall not include the portion of the improvement needed to provide services or mitigate the need for the facility or the burdens created by the development. 15.43.060 Adjustments. A. A developer of any new development subject to the fee described in this chapter may apply to the City Council for a reduction or adjustment to that fee, or a waiver of that fee, based upon the absence of any reasonable relationship or nexus between the 4-19 recreational impacts of that development and either the amount of the fee charged or the type of facilities to be financed. B. A separate application shall be filed for each adjustment request made pursuant to this section. Such application shall be made on a form provided by the City Clerk and shall be filed with the City Clerk not later than: Thirty (30) calendar days prior to the first public hearing on the discretionary permit application for the development project, or 2. If no discretionary permit application is required, within thirty (30) calendar days of filing for a building permit. A building permit for any phase of construction (including grading, demolition, or new construction) shall not be issued until determination of the base fees is final. C. The application shall state in detail the factual basis for the claim of waiver, reduction, or adjustment. The burden of proof shall be on the applicant to establish that the applicant is not subject to the imposition of the full development impact fee(s) pursuant to the applicable development impact fee ordinance and applicable state law. D. The City Council shall consider the application at the public hearing on the permit application or at a separate hearing held within sixty (60) days after the filing of the fee adjustment application, whichever is later. The decision of the City Council shall be final. E. If a reduction, adjustment, or waiver is granted, any change in use within the project shall invalidate the waiver, adjustment or reduction of the fee. 4-20 Attachment D Ordinance No. 2024-32: Public Safety Development Impact Fee 4-21 ORDINANCE NO. 2024-32 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, ADDING CHAPTER 15.44 (PUBLIC SAFETY DEVELOPMENT IMPACT FEE) TO THE NEWPORT BEACH MUNICIPAL CODE AUTHORIZING COLLECTION OF DEVELOPMENT IMPACT FEES FOR POLICE AND FIRE SERVICE FACILITIES WHEREAS, Section 200 of the City of Newport Beach ("City") Charter vests the City Council with the authority to make and enforce all laws, rules and regulations with respect to municipal affairs subject only to the restrictions and limitations contained in the Charter and the State Constitution, and the power to exercise, or act pursuant to any and all rights, powers, and privileges, or procedures granted or prescribed by any law of the State of California; WHEREAS, cities may apply fees for proposed developments to cover the cost of public facilities by way of its police power as codified in the California Constitution Article XI Section 7; WHEREAS, California Government Code Section 66000 et seq. ("Mitigation Fee Act") authorizes the City to collect fees in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project; WHEREAS, development impact fees must be supported by a nexus study which calculates the purpose of the fee, the use to which it will be put, the relationship between the fee's use and the development, and establish the need for the fee pursuant to the Mitigation Fee Act; WHEREAS, the Community Development Department commissioned a development impact fee nexus study with Willdan Financial Services; WHEREAS, the City's 6►h Cycle Housing Element projects an increase in the population, residential dwelling units, and employment in Newport Beach; WHEREAS, this future residential and nonresidential growth will create additional demand on the City's infrastructure for police and fire service facilities; 4-22 Ordinance No. 2024- Page 2 of 4 WHEREAS, the City's current police facilities consist of the police station, police vehicles, animal shelter, and equipment inventory that are utilized to protect the community; WHEREAS, the City's current fire and life safety facilities consist of fire stations, apparatus and vehicles that are utilized to protect the community; WHEREAS, Chapter 15.44 (Public Safety Development Impact Fee) authorizes the City to collect development impact fees for police, fire and life safety services to cover the cost of developing additional police and fire facilities necessitated by new development to continue to protect the community; and WHEREAS, a duly noticed public hearing was held by the City Council on November 12, 2024, in the Council Chambers located at 100 Civic Center Drive, Newport Beach, California. A notice of time, place and purpose of the public hearing was given in accordance with California Government Code Section 54950 et seq. ("Ralph M. Brown Act") and the Mitigation Fee Act. Evidence, both written and oral, was presented to, and considered by, the City Council at this public hearing. NOW THEREFORE, the City Council of the City of Newport Beach ordains as follows: Section 1: Chapter 15.44 (Public Safety Development Impact Fee) is hereby added to the Newport Beach Municipal Code as set forth in Exhibit "A," which is attached hereto and incorporated by reference. Section 2: The recitals provided in this ordinance are true and correct and are incorporated into the substantive portion of this ordinance. Section 3: If any section, subsection, sentence, clause or phrase of this ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. 4-23 Ordinance No. 2024- Page 3 of 4 Section 4: The City Council finds the introduction and adoption of this ordinance 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, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 5: Except as expressly modified in this ordinance, all other sections, subsections, terms, clauses and phrases set forth in the Newport Beach Municipal Code shall remain unchanged and shall be in full force and effect. 4-24 Ordinance No. 2024- Page 4 of 4 Section 6: The Mayor shall sign and the City Clerk shall attest to the passage of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be published pursuant to City Charter Section 414. This ordinance shall be effective thirty (30) calendar days after its adoption. This ordinance was introduced at a regular meeting of the City Council of the City of Newport Beach held on the 12th day of November, 2024, and adopted on the 10th day of December, 2024, by the following vote, to -wit: AYES: NAYS: ABSENT: WILL O'NEILL, MAYOR ATTEST: LE[LANI I. BROWN, CITY CLERK APPROVED AS TO (FORM: CITY ATTORNEY'S OFFICE AARON\O' HARP, CITY ATTORNEY Attachment: Exhibit A — Chapter 15.44 (Public Safety Development Impact Fee) 4-25 EXHIBIT A Chapter 15.44 Public Safety Development Impact Fees Sections: 15.44.010 Purpose. 15.44.020 Definitions. 15.44.030 Established. 15.44.040 Use. 15.44.050 Developer construction. 15.44.060 Adjustments. 15.44.010 Purpose. A. To implement the goals and objectives of the capital improvement program for facilities and equipment of the City of Newport Beach and to mitigate the impacts to the City police and fire services caused by new development in the City, certain public facilities and equipment must be constructed and/or acquired. The public facilities and equipment are specifically identified in the City's capital improvement program for facilities and equipment as adopted by the City Council and as amended from time to time. The list of police and fire service facilities may be added to or deleted from the approved program. The City Council has determined that a development impact fee is needed to finance these public improvements and to pay for the development's fair share of the costs of these improvements. B. In establishing the fees described in this chapter, the City Council has found the fees to be consistent with its general plan and, pursuant to Govt. Code Section 65913.2, has considered the effects of the fee with respect to the City's housing needs as established in the Housing Element of the General Plan. 15.44.020 Definitions. In this chapter, unless the context otherwise requires: "Cost of improvements" means all costs related to acquisition, construction, repair and financing, but does not include costs of routine maintenance. "Fire service facilities" means capital improvements related to buildings, furnishings, vehicles, equipment, software, and similar facilities utilized by the City's fire department. "New development" means any residential or nonresidential (nonresidential includes commercial, office, and industrial) construction project except as specifically exempted in this chapter or by resolution establishing the fee. "Police service facilities" means capital improvements related to buildings, furnishings, vehicles, equipment, software, and similar facilities utilized by the City's police departments. 4-26 15.44.030 Established. A. A police service facilities impact fee is established for development within the City to pay for buildings, furnishings, vehicles, software, and equipment as shown in the adopted capital improvement program for facilities and equipment. B. A fire service facilities impact fee is established for development within the City to pay for buildings, furnishings, vehicles, software, and equipment as shown in the adopted capital improvement program for facilities and equipment. C. The City Council shall, in a council resolution, set forth the specific amount of the fee, describe the benefit and impact area on which the development fee is imposed, list the specific public improvements to be financed, describe the estimated cost of these facilities, describe the reasonable relationship between this fee and the various types of new developments and set forth time for payment. On an annual basis, the City Council shall review this fee to determine whether the fee amounts are reasonably related to the impacts of developments and whether the described public facilities are still needed. 15.44.040 Use. The revenues raised by payment of the fire service facilities fee and/or the police service facilities fee shall be placed in a separate and special account and such revenues, along with any interest earnings on that account, shall be used solely to: A. Pay for the City's future facilities described in the resolution enacted pursuant to this chapter, or to reimburse the City for those described or listed facilities constructed by the City with funds advanced by the City from other sources, or B. Reimburse developers who have been required or permitted by this chapter, to install such listed facilities which are oversized with supplemental size, length, or capacity. 15.44.050 Developer construction. A. Whenever a developer is required, as a condition of approval of a development permit, to construct a public facility described in a resolution adopted pursuant to this chapter which facility is determined by the City to have supplemental size, length, or capacity over that needed for the impacts of that development, and when such construction is necessary to ensure efficient and timely construction of the facilities network, a reimbursement agreement with the developer and a credit against the fee, which would otherwise be charged pursuant to the ordinance codified in this chapter on the development project, shall be offered to the developer. B. The reimbursement amount shall not include the portion of the improvement needed to provide services or mitigate the need for the facility or the burdens created by the development. 15.44.060 Adjustments. A. A developer of any new development subject to the fees described in this chapter may apply to the City Council for a reduction or adjustment to the fee(s), or a waiver of that fee(s), based upon the absence of any reasonable relationship or nexus 4-27 between the police service and/or fire service impacts of that development and either the amount of the fee charged or the type of facilities to be financed. B. A separate application shall be filed for each adjustment request made pursuant to this section. Such application shall be made on a form provided by the City Clerk and shall be filed with the City Clerk not later than: 1. Thirty (30) days prior to the first public hearing on the discretionary permit application for the development project, or 2. If no discretionary permit application is required, within thirty (30) days of filing for a building permit. A building permit for any phase of construction (including grading, demolition, or new construction) shall not be issued until a determination of base fees is final. C. The application shall state in detail the factual basis for the claim of waiver, reduction, or adjustment. The burden of proof shall be on the applicant to establish that the applicant is not subject to the imposition of the full development impact fee(s) pursuant to the chapter and applicable state law. D. The City Council shall consider the application at the public hearing on the permit application or at a separate hearing held within sixty (60) days after the filing of the fee adjustment application, whichever is later. The decision of the City Council shall be final. E. If a reduction, adjustment, or waiver is granted, any change in use within the project shall invalidate the waiver, adjustment or reduction of the fee.