REPORT TO COUNCIL
SUBJECT
Title
Receive and File FY 2013/14 Annual Status Report on Receipt and Use of Development Impact Fees and Adopt a Resolution Approving Findings Regarding Unspent Transportation Impact and Sense of Place Fees
Report
BACKGROUND
In order to ensure that mitigation fees are spent in a timely manner and on projects for which they were being collected, the State Legislature passed a bill known as AB 1600 (The Mitigation Fee Act). This bill applies to developer fees which were increased or imposed on or after January 1, 1989.
The Mitigation Fee Act (California Government Code, § 66000 et seq.) requires local agencies that impose development impact fees to present an annual, consolidated report showing the receipt and use of those fees. The Annual Status Report must be reviewed by Council within 180 days after the close of the fiscal year represented.
The City assesses four development impact fees - the Housing Mitigation Fee; the Sense of Place Fee; the Transportation Impact Fee; and the Park Dedication Fee. The first three are subject to the Mitigation Fee Act, while only a portion of the City's Park Dedication Fee is subject to the Mitigation Fee Act. Specifically, Park Dedication Fees assessed pursuant to the Quimby Act (California Government Code §66477) and codified by the City in the Sunnyvale Municipal Code, Chapter 18.10 (Subdivisions - Parks and Open Space Dedication) are exempt from the reporting requirements included in the Mitigation Fee Act. Park Dedication Fees assessed pursuant to Sunnyvale Municipal Code, Chapter 19.74 (Zoning - Park Dedication Fees for Rental Housing Projects) are subject to the reporting requirements included in the Mitigation Fee Act. Therefore, only the details of the non-exempt Park Dedication Fees are included in the report.
In addition to these four active fees, the City maintained a fund balance in FY 2013/14 resulting from Traffic Mitigation Fees. Traffic Mitigation Fees have not been assessed by the City since 2004. It is important to note that the Traffic Mitigation Fee and the Transportation Impact Fee are exclusive of one another and monies associated with each are segregated in separate sub-funds. The Traffic Mitigation Fee was created in 2000 as a key component of the Transportation Strategic Program to provide an interim revenue mechanism to fund needed upgrades to the transportation system resulting from new development. In 2004, the City stopped assessing Traffic Mitigation Fees and began assessing Transportation Impact Fees. Both the Traffic Mitigation Fees and the Transportation Impact Fees are subject to the Mitigation Fee Act and are included in the report.
The Mitigation Fee Act also specifies that every five years, findings are required to specify the intended use of any unexpended impact fees. This report contains the FY 2013/14 findings for Transportation Impact Fees and Sense of Place Fees. For Housing Mitigation Fees, Park Dedication Fees, and Traffic Mitigation Fees, Council made the required findings for FY 2010/11. The next findings for those fees will be required for FY 2015/16. If findings are not presented as scheduled, it is possible that the City may be obligated to refund either all or a portion of the fees collected under the authority of the Act.
EXISTING POLICY
Sunnyvale Municipal Code Chapters 3.50, 18.10, 19.22, and 19.74.
ENVIRONMENTAL REVIEW
N/A
DISCUSSION
As prescribed by the Mitigation Fee Act, the Annual Status Report must include the following information for each development impact fee:
· A brief description of the fee and the fund into which the fee was deposited;
· The amount of the fee;
· The associated fund's beginning and ending balances for the fiscal year;
· The total amount of fees collected and interest earned;
· Identification of each public improvement on which impact fees were expended and amount of expenditure on each improvement, including the total percentage of the cost of the public improvement that was funded with impact fees;
· Identification of approximate date by which construction of a public improvement will begin;
· Determination that sufficient funds have been collected to complete financing on an incomplete public improvement;
· Description of each inter-fund transfer or loan made from the account or fund, including the public improvement on which the loaned funds will be expended, and in the case of an inter-fund 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; and
· Amount of any refunds made due to inability to expend impact fees once a determination is made that sufficient impact fees have been collected to finance a public improvement, and the improvement remains incomplete, and the City has not determined an approximate date by which construction will begin.
This information is presented in the attached FY 2013/14 Annual Status Report on Receipt and Use of Development Impact Fees (Attachment 1).
In addition, findings are required this year for Transportation Impact Fees and Sense of Place Fees. The findings are found in the attached Resolution (Attachment 2).
FISCAL IMPACT
In FY 2013/14, the City received $18,778,056 in new development impact fees. Of that total amount $14,442,758 was reportable under the Mitigation Fee Act and $4,335,298 was exempt from reporting requirements. The fee revenue will be used to fund public improvements necessary to meet the demand for services resulting from commercial and residential development in the City. The specifics of how these monies are programmed for expenditure are included in the status report, as well as in the FY 2013/14 Adopted Budget and Resource Allocation Plan.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, at the Sunnyvale Senior Center, Community Center and Department of Public Safety; and by making the agenda and report available at the Sunnyvale Public Library, the Office of the City Clerk and on the City's website.
The Mitigation Fee Act stipulates a 15-day public review period for the Annual Status Report. The Annual Status Report was available for public inspection on November 21, 2014.
RECOMMENDATION
Recommendation
Receive and file the FY 2013/14 Annual Status Report on receipt and use of development impact fees and adopt a resolution approving findings regarding unspent Transportation Impact and Sense of Place Fees.
Staff
Prepared by: Brice McQueen, Senior Management Analyst
Reviewed by: Grace K. Leung, Director, Finance
Reviewed by: Hanson Hom, Director, Community Development
Reviewed by: Manuel Pineda, Director, Public Works
Reviewed by: Robert A. Walker, Assistant City Manager
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. FY 2013/14 Annual Status Report on Receipt and Use of Development Impact Fees
2. A Resolution of the City Council of the City of Sunnyvale Making Findings With Respect to Unspent Impact Fees; Transportation Impact Fees Sub-Fund; Sense of Place Fees Sub-Fund