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HomeMy WebLinkAboutR 5346 RESOLUTION NO. 5346 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE ADOPTING DEVELOPMENT IMPACT FEES FOR ALL NEW DEVELOPMENT WITHIN THE CITY AND TAKING OTHER ACTIONS THERETO WHEREAS, the City of Arroyo Grande (the "City"), County of San Luis Obispo, State of California is duly authorized pursuant to the Mitigation Fee Act (the "Act"), commencing with California Government Code, section 66000 et seq., to impose development impact fees ("DIF") for purposes defraying all or a portion of the costs of public facilities related to new development occurring within the City; and WHEREAS, in accordance with requirements of the Act, the City Council has directed staff to conduct a comprehensive review of the City's DIF to determine whether those fees are adequate to defray the cost of public facilities related to new development projects; and WHEREAS, the City contracted with Willdan Financial Services to provide a comprehensive evaluation of the City's existing DIF; and WHEREAS, Willdan Financial Services prepared a report, entitled 2024 Development Impact Fee Nexus Study Update (the "Study"), dated January 30, 2024, attached to this Resolution as Exhibit "B," and incorporated herein by this reference, which establishes amounts of the City's DIF and explains the nexus between the imposition of the fee and the estimated reasonable cost of constructing certain facilities for which the DIF is charged; and WHEREAS, the Study and related documents have been made available for public review and comment as required by the Act; and WHEREAS, the Study substantiates the need for DIF amongst eight different categories of facilities provided by the City; and WHEREAS, the City provided notice of the public hearing and provided written notice to any interested parties that have requested such notice pursuant to the notice requirements of the Act; and WHEREAS, in compliance with the Act, the City Council held a duly noticed public hearing on the proposed DIF on February 13, 2024 to hear all oral and written presentations from the public regarding the proposed DIF; and WHEREAS, following the adoption of this Resolution, the City Council will adopt Ordinance No. , amending Arroyo Grande Municipal Code section 3.36.030 to reflect minor changes to the newly adopted DIF categories; and 65501.00008\41993952.1 RESOLUTION NO. 5346 PAGE 2 WHEREAS, the City Council now desires to adopt the proposed DIF, in accordance with the nexus calculations and recommendations in the Study. NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Arroyo Grande hereby finds as follows: SECTION 1. Incorporation. The above recitals are true and correct and are incorporated herein by this reference. SECTION 2. Findings. The City Council finds and determines that the Study, complies with the Act by establishing the basis for the imposition of fees on new development. This finding is based on the fact that the Study: (a) Identifies the purpose of the fee; (b) Identifies the use to which the fee will be put; (c) Shows a reasonable relationship between the use of the fee and the type of development project on which the fee is imposed; (d) Demonstrates a reasonable relationship between the need for the public facilities and the type of development projects on which the fee is imposed; and (e) Demonstrates a reasonable relationship between the amount of the fee and the cost of the public facilities or portion of the public facilities attributable to the development on which the fee is imposed. SECTION 3. Fees for Uses Consistent with the Study. The City Council hereby determines that the fees collected pursuant to this Resolution shall be used to finance the public facilities described or identified in the Study or other such facility plans as may be proposed, modified, or amended from time to time by the City Council. SECTION 4. Approval of Items in Development Impact Fee Study. The City Council has considered the specific project descriptions and cost estimates identified in the Study and hereby approves such project descriptions and cost estimates and finds them reasonable as the basis for calculating and imposing certain DIF. SECTION 5. Differentiation Among Fees. The City Council finds that the fees recommended in the Study are separate and different from other fees the City may impose through the implementation of a specific plan or as a condition of final map approval, building permit issuance or tentative or parcel map approval pursuant to its authority under the Subdivision Map Act, the Quimby Act, and the City's implementing resolutions and ordinances, as may be amended from time to time. In addition, this Resolution shall not be deemed to affect the imposition or collection of other fees the City is legally authorized to impose and collect. 65501.00008\41993952.1 RESOLUTION NO. 5346 PAGE 3 SECTION 6. CEQA Finding. The City Council finds that this Resolution is exempt from the California Environmental Quality Act ("CEQA") because this Resolution does not qualify as a "project" under CEQA and because this Resolution will not result in a direct or reasonably foreseeable indirect physical change in the environment. (State CEQA Guidelines section 15060, subd. (c)(2), (3).) Section 15378 of the State CEQA Guidelines defines a project as the whole of an action, which could potentially result in either a direct physical change, or reasonably foreseeable indirect physical change, in the environment. Here, this Resolution will not result in any construction or development, and it will not have any other effect that would physically change the environment. This Resolution therefore does not qualify as a project subject to CEQA. SECTION 7. Adoption of Report. The Study is hereby adopted. SECTION 8. Amount of Fee. The City Council hereby approves and adopts the DIF as set forth in Exhibit "A" to this Resolution, attached hereto and incorporated herein by this reference. Exhibit "A" sets forth the aggregate amount imposed as a DIF for development projects and also sets forth the breakdown of each DIF by category type. The DIF set forth in Exhibit "A" are consistent with the Study. The amount of the DIF shall be modified annually to account for inflation each January 1 based on the change in the Engineering News Record, California Construction Cost Index each year. Such inflationary increases shall not constitute an increase within the meaning of the Act and may be implemented each year without the requirement to obtain approval of the City Council. SECTION 9. Prior Resolutions Superseded. The DIF approved by this Resolution supersede previously adopted resolutions that set the amounts of DIF. SECTION 10. Severability. If any action, subsection, sentence, clause or phrase of this Resolution or the imposition of the DIF for any project described in the Study or the application thereof to any person or circumstance shall be held invalid or unconstitutional by a court of competent jurisdiction, such invalidity shall not affect the validity of the remaining portions of this Resolution or other DIF levied by this Resolution that can be given effect without the invalid provisions or application of the DIF. SECTION 11. Effective Date. Consistent with the Act, the DIF as identified in attached Exhibit "A" adopted by this Resolution shall take effect on April 15, 2024, a period longer than the required sixty (60) days following the adoption of this Resolution by the City Council. SECTION 12. Records. The documents and materials associated with this Resolution that constitute the record of proceedings on which the City Council's findings and determinations are based are located at 300 E. Branch Street, Arroyo Grande, CA 93420. The City Clerk is the custodian of the record of proceedings. PASSED AND ADOPTED by the City Council of the City of Arroyo Grande this 13th day of February 2024 by the following vote: 65501 00008\41993952 1 RESOLUTION NO. 5346 PAGE 4 On motion of Council Member Guthrie, seconded by Council Member George, and on the following roll call vote, to wit: AYES: Council Members Guthrie, George, Secrest, Barneich, and Mayor Ray Russom NOES: None ABSENT: None The foregoing Resolution was passed and adopted this 13th day of February, 2024. 65501.00008\41993952.1 RESOLUTION NO. PAGE 5 A - f CAREN RAY RUSS•<` , MAYOR ATTEST: SICA MATSON, CITY CLERK APPROVED AS TO CONTENT: A THEW DOWNING, CI ANAGER APPROVED AS TO FORM: f� ISAAC ROSEN, CITY ATTORNEY 65501.00008\41993952.1 RESOLUTION NO. 5346 PAGE 6 EXHIBIT "A" 2024 DEVELOPMENT IMPACT FEE SCHEDULE Fire Storm Land Use Protection Police Parks1 Recreation Trans•°dation Drain Wastewater Total Residential -per Sq. Ft. $ 0.24 $ 0.17 $ 3.22 $ 0.17 $ 1.37 $ 0.03 $ 0.59 $5.79, Nonresidential - •er S•. Ft. Commercial $ 0.21 $ 0.15 $ - $ - $ 6.94 $ 0.01 $ 0.26 $ 7.57 Office 0.32 0.23 7.27 0.01 0.29 8.121 'Mitigation Fee Act fee for infill development shown.Development occurring in subdivisions subject to Quimby Act fee in- lieu of dedication at$2.77 per square foot.Refer to Table 5.7 for more information. Water Impact Fee Meter Size per Meter 5/8 inch 2,588 3/4 inch 3,881 1 inch 6,469 1-1/2 inch 12,938 2 inch 20,701 3 inch 38,814 4 inch 64,690 6 inch 129,380 65501 00008\41993952.1 RESOLUTION NO. 5346 PAGE 7 EXHIBIT "B" 2024 DEVELOPMENT IMPACT FEE NEXUS STUDY 65501.00008\41993952.1 Exhibit B CITY OF ARROYO GRANDE DEVELOPMENT IMPACT FEE NEXUS STUDY UPDATE • FINAL JANUARY 29, 2024 WILLDAN ._, ,..: FINANCIAL SERVICES Oakland Office Corporate Office Other Regional Offices 66 Franklin Street 27368 Via Industria Aurora,CO Suite 300 Suite 200 Orlando, FL Oakland,CA 94607 Temecula, CA 92590 Phoenix,AZ Tel: (510)832-0899 Tel: (800)755-6864 Plano,TX Fax: (888)326-6864 Seattle,WA Washington, DC www.willdan.com This page intentionally left blank. TABLE OF CONTENTS EXECUTIVE SUMMARY 1 Background and Study Objectives 1 Facility Standards and Costs 1 Use of Fee Revenues 2 Development Impact Fee Schedule Summary 2 Other Funding Needed 4 1. INTRODUCTION 6 Public Facilities Financing in California 6 Study Objectives 6 Fee Program Maintenance 7 Study Methodology 7 Types of Facility Standards 7 New Development Facility Needs and Costs 8 Organization of the Report 9 2. GROWTH FORECASTS 10 Land Use Types 10 Impact Fees for Accessory Dwelling Units 10 Existing and Future Development 11 Occupant Densities 12 3. FIRE PROTECTION FACILITIES 14 Service Population 14 Existing Facility Inventory 15 Planned Facilities 15 Cost Allocation 15 Fee Revenue Projection 16 Fee Schedule 16 4. POLICE FACILITIES 18 Service Population 18 Existing Facility Inventory 18 Planned Facilities 19 Cost Allocation 19 Fee Revenue Projection 20 Fee Schedule 20 5. PARK FACILITIES 22 Service Population 22 Existing Park Facilities Inventory 22 Parkland and Park Facilities Unit Costs 23 Park Facility Standards 24 WW1 LLDAN tmRu, E City of Arroyo Grande Development Impact Fee Nexus Study Update Quimby Act Standard 24 City of Arroyo Grande Park Facilities Standards 25 Facilities Needed to Accommodate New Development 25 Parks and Recreation Facilities Cost per Capita 26 Use of Fee Revenue 27 Fee Schedule 27 6. RECREATION FACILITIES 29 Service Population 29 Existing Facilities Inventory 29 Planned Facilities 30 Cost Allocation 30 Fee Revenue Projection 31 Fee Schedule 31 7. WATER FACILITIES 33 Water Demand 33 EDU Generation by New Development 33 Facility Needs and Costs 34 Cost per EDU 35 Fee Schedule 35 8. TRANSPORTATION FACILITIES 37 Trip Demand 37 Trip Demand Growth 38 Planned Facilities 39 Fee per Trip Demand Unit 41 Fee Schedule 41 9. STORM DRAIN FACILITIES 43 Storm Drain Demand 43 EDU Generation by New Development 43 Planned Facilities 44 Cost per Equivalent Dwelling Unit 44 Fee Schedule 45 10. WASTEWATER FACILITIES 46 Wastewater Demand 46 EDU Generation by New Development 46 Facility Needs and Costs 47 Cost per EDU 47 Fee Schedule 48 11. AB 602 REQUIREMENTS 49 Compliance with AB 602 49 66016.5. (a)(2)-Level of Service 49 66016.5. (a)(4)—Review of Original Fee Assumptions 49 LLDAN Sr,k City of Arroyo Grande Development Impact Fee Nexus Study Update 66016.5. (a)(5)—Residential Fees per Square Foot 52 66016.5. (a)(6)—Capital Improvement Plan 52 12. IMPLEMENTATION 53 Impact Fee Program Adoption Process 53 Inflation Adjustment 53 Reporting Requirements 53 Programming Revenues and Projects with the CIP 56 13. MITIGATION FEE ACT FINDINGS 57 Purpose of Fee 57 Use of Fee Revenues 57 Benefit Relationship 57 Burden Relationship 58 Proportionality 58 APPENDIX 59 Ut LLDAN Executive Summary This report summarizes an analysis of development impact fees needed to support future development in the City of Arroyo Grande through 2050. It is the City's intent that the costs representing future development's share of public facilities and capital improvements be imposed on that development in the form of a development impact fee, also known as a public facilities fee. The public facilities and improvements included in this analysis are divided into the fee categories listed below: ■ Fire Protection Facilities ■ Water Facilities • Police Facilities • Transportation Facilities ■ Park Facilities ■ Storm Drain Facilities • Recreation Facilities • Wastewater Facilities Background n Objectives The primary policy objective of a development impact fee program is to ensure that new development pays the capital costs associated with growth. Although growth also imposes operating costs, there is not a similar system to generate revenue from new development for services. The primary purpose of this report is to calculate and present fees that will enable the City to expand its inventory of public facilities, as new development creates increases in service demands. The City collects public facilities fees under authority granted by the Mitigation Fee Act (the Act), contained in California Government Code Sections 66000 et seq. This report provides the necessary findings required by the Act for adoption of the fees presented in the fee schedules contained herein. The City programs development impact fee-funded capital projects through its Capital Improvement Plan (CIP). Using a CIP allows the City to identify and direct its fee revenue to public facilities projects that will accommodate future growth. By programming fee revenues to specific capital projects, the City can help ensure a reasonable relationship between new development and the use of fee revenues as required by the Mitigation Fee Act. Facility Standards There are three approaches used to calculate facilities standards and allocate the costs of planned facilities to accommodate growth in compliance with the Mitigation Fee Act requirements in this study. The existing inventory approach is based on a facility standard derived from the City's existing level of facilities and existing demand for services. This approach results in no facility deficiencies attributable to existing development. This approach is often used when a long-range plan for new facilities is not available. Future facilities to serve growth will be identified through the City's annual CIP and budget process and/or completion of a new facility master plan. This approach is used to calculate the fire protection, police, parks and recreation facility fees in this report. The planned facilities approach allocates costs based on the ratio of planned facilities that serve new development to the increase in demand associated with new development. This approach is appropriate when specific planned facilities that only benefit new development can be identified, or when the specific share of facilities benefiting new development can be identified. Examples include street improvements to avoid deficient levels of service or a sewer trunk line extension to a previously undeveloped area. This approach is used for the water, transportation, storm drain and wastewater facilities fees in this report. WILLDAN 1 ..._.., FiN.C,At.SFNVIC'F5 City of Arroyo Grande Development Impact Fee Nexus Study Update The system plan approach is based on a master facility plan in situations where specific needed facilities serve both existing and new development. This approach allocates existing and planned facilities across existing and new development to determine new development's fair share of facility needs. This approach is used when it is not possible to differentiate the benefits of new facilities between new and existing development. This approach is not used in this report. Use of Fee Revenues Impact fee revenue must be spent on new facilities or expansion of current facilities to serve new development. Facilities can be generally defined as capital acquisition items with a useful life greater than five years. Impact fee revenue can be spent on capital facilities to serve new development, including but not limited to land acquisition, construction of buildings, construction of infrastructure, the acquisition of vehicles or equipment, information technology, software licenses and equipment. In that the City cannot predict with certainty how and when development within the City will occur during the planning horizon assumed in this study, the City may need to update and revise the project lists funded by the fees documented in this study. Any substitute projects should be funded within the same facility category, and the substitute projects must still benefit and have a relationship to new development. The City could identify any changes to the projects funded by the impact fees when it updates the CIP. The impact fees could also be updated if significant changes to the projects funded by the fees are anticipated. Development Impact Table E.1 summarizes the development impact fees that meet the City's identified needs and comply with the requirements of the Mitigation Fee Act. Table E.2 displays the maximum justified water facilities impact fee schedule. 2 W I LLDAN t A"(:At Sffl:•!G4S k ® . . � • '..D.--7 \ 0) 2 2 / / a & a 0 t ® ^ \ $ \ q \ 7 6 6 6 / k / y @ # - \ § c $ G 0 / 49, E o o o \ ® 0 @ _ k « o k 7 % ) J — e K / o c ) it ® ® / 3 2 , . , { < : ■ m « f W C \ o - 6 ' ) g k as. \ \ 2 CO _ « , 0) I LL 2 . , a 4 ® d ) e O. m « 0 0 N. f q ? k ■ 6 6 a - ) e ° ° E a / \ al v in o ® ® } I- c O c " % In ° 0) C k 6 6 6 ? $ / "CS,,,,, Li- // k / 2 m ¢ « / 2 [ \ _ � _ CO \ � k (6.- "'I « E kf � # \ k / \ \ j � j } Z o k t y o & , \( ' 2a \ � k - ° ^ E ° # g k 0 2 \ $ / R 8 $ = g UJ j / 2 / ) L.L. \ City of Arroyo Grande Development Impact Fee Nexus Study Update Table E.2: Maximum Justified Water Impact Fee Schedule Impact Fee per Meter Size Meter 5/8 inch $ 2,588 3/4 inch 3,881 1 inch 6,469 1-1/2 inch 12,938 2 inch 20,701 3 inch 38,814 4 inch 64,690 6 inch 129,380 1 hcludes administrative charge of 2.0 percent for(1)legal,accounting, and other administrative support and(2)impact fee program administrative costs including revenue collection,revenue and cost accounting,mandated public reporting,and fee justification analyses. Source: Table 7.5. Other Funding Impact fees may only fund the share of public facilities related to new development in Arroyo Grande. They may not be used to fund the share of facility needs generated by existing development or by development outside of the City. As shown in Table E.3, approximately $4 million in additional funding will be needed to complete the facility projects the City currently plans to develop if fees are adopted at the maximum justified fee level. The "Additional Funding Required" column shows non-impact fee funding required to fund a share of the improvements partially funded by impact fees. Non-fee funding is needed because these facilities are needed partially to remedy existing deficiencies and partly to accommodate new development. To the extent that the City adopts fees that are lower than the maximum justified amount, the non-fee funding requirements may increase, depending on the fee category and methodology. The City will need to develop alternative funding sources to fund existing development's share of the planned facilities. Potential sources of revenue include but are not limited to existing or new general fund revenues, existing or new taxes, special assessments, and grants. 4 WILLDAN City of Arroyo Grande Development Impact Fee Update Study Table E.3: Non-Impact Fee Funding Required Other Additional Total Project Identified Development Funding Fee Category Cost Revenue Fee Revenue Required Fire Protection $ 1,076,649 $ - $ 1,076,649 $ - Police 673,344 - 673,344 - Parks 10,628,000 - 10,628,000 - Recreation 574,308 - 574,308 - Water 9,995,398 - 7,179,581 2,815,817 Transportation 22,554,000 11,014,000 11,540,000 - Storm Drain 784,000 - 96,432 - Wastewater 3,266,458 - 2,038,454 1,228,003 Total $ 49,552,156 $ 11,014,000 $ 33,806,768 $ 4,043,821 Sources:Tables 3.5,4.5,5.5,6.5,7.3,7.4,8.3,9.3 and 10.3. WILLDAN 5 GiNANC:A[SE its,CES Introduction f This report presents an analysis of the need for public facilities to accommodate new development in the City of Arroyo Grande. This chapter provides background for the study and explains the study approach under the following sections: • Public Facilities Financing in California; • Study Objectives; • Fee Program Maintenance; • Study Methodology; and • Organization of the Report. Public Facilities Financing in lifri The changing fiscal landscape in California during the past 45 years has steadily undercut the financial capacity of local governments to fund infrastructure. Three dominant trends stand out: ■ The passage of a string of tax limitation measures, starting with Proposition 13 in 1978 and continuing through the passage of Proposition 218 in 1996; • Declining popular support for bond measures to finance infrastructure for the next generation of residents and businesses; and ■ Steep reductions in federal and state assistance. Faced with these trends, many cities and counties have had to adopt a policy of"growth pays its own way." This policy shifts the burden of funding infrastructure expansion from existing ratepayers and taxpayers onto new development. This funding shift has been accomplished primarily through the imposition of assessments, special taxes, and development impact fees also known as public facilities fees. Assessments and special taxes require the approval of property owners and are appropriate when the funded facilities are directly related to the developing property. Development impact fees, on the other hand, are an appropriate funding source for facilities that benefit all development jurisdiction-wide. Development impact fees need only a majority vote of the legislative body for adoption. Study b ti The primary policy objective of a public facilities fee program is to ensure that new development pays the capital costs associated with growth. The primary purpose of this report is to update the City's existing impact fees based on the most current available facility plans and growth projections. The maximum justified fees will enable the City to expand its inventory of public facilities as new development leads to increases in service demands. The City collects public facilities fees under authority granted by the Mitigation Fee Act (the Act), contained in California Government Code Sections 66000 et seq. This report provides the necessary findings required by the Act for adoption of the fees presented in the fee schedules presented in this report. Arroyo Grande is forecast to see significant growth through this study's planning horizon of 2050. This growth will create an increase in demand for public services and the facilities required to deliver them. Given the revenue challenges described above, Arroyo Grande has decided to continue to use a development impact fee program to ensure that new development funds its share of facility costs associated with growth. This report makes use of the most current available W I t_t_DAN ,:AFv, fs City of Arroyo Grande Development Impact Fee Nexus Study Update growth forecasts and facility plans to update the City's existing fee program to ensure that the fee program accurately represents the facility needs resulting from new development. Fee Program Maintenance Once a fee program has been adopted it must be properly maintained to ensure that the revenue collected adequately funds the facilities needed by new development. To avoid collecting inadequate revenue, the inventories of existing facilities and costs for planned facilities must be updated periodically for inflation, and the fees recalculated to reflect the higher costs. The use of established indices for each facility included in the inventories (land, buildings, and equipment), such as the California Construction Cost Index, is necessary to accurately adjust the impact fees. For a list of recommended indices, see Chapter 12. While fee updates using inflation indices are appropriate for annual or periodic updates to ensure that fee revenues keep up with increases in the costs of public facilities, it is recommended to conduct more extensive updates of the fee documentation and calculation (such as this study) when significant new data on growth forecasts and/or facility plans become available. For further detail on fee program implementation, see Chapter 12. Study the y Development impact fees are calculated to fund the cost of facilities required to accommodate growth. The six steps followed in this development impact fee study include: 1. Estimate existing development and future growth: Identify a base year for existing development and a growth forecast that reflects increased demand for public facilities; 2. Identify facility standards: Determine the facility standards used to plan for new and expanded facilities; 3. Determine facilities required to serve new development: Estimate the total amount of planned facilities, and identify the share required to accommodate new development; 4. Determine the cost of facilities required to serve new development: Estimate the total amount and the share of the cost of planned facilities required to accommodate new development; 5. Calculate fee schedule: Allocate facilities costs per unit of new development to calculate the development impact fee schedule; and 6. Identify alternative funding requirements: Determine if any non-fee funding is required to complete projects. The key public policy issue in development impact fee studies is the identification of facility standards (step #2, above). Facility standards document a reasonable relationship between new development and the need for new facilities. Standards ensure that new development does not fund deficiencies associated with existing development. Types of Facility Standards There are three separate components of facility standards: • Demand standards determine the amount of facilities required to accommodate growth, for example, park acres per thousand residents, square feet of library space per capita, or gallons of water per day. Demand standards may also reflect a level of service such as the vehicle volume-to-capacity(V/C)ratio used in traffic planning. 7 W I LLDAN ieN&NC,At SERVICES City of Arroyo Grande Development Impact Fee Nexus Study Update • Design standards determine how a facility should be designed to meet expected demand, for example, park improvement requirements and technology infrastructure for City office space. Design standards are typically not explicitly evaluated as part of an impact fee analysis but can have a significant impact on the cost of facilities. Our approach incorporates the cost of planned facilities built to satisfy the City's facility design standards. • Cost standards are an alternate method for determining the amount of facilities required to accommodate growth based on facility costs per unit of demand. Cost standards are useful when demand standards were not explicitly developed for the facility planning process. Cost standards also enable different types of facilities to be analyzed based on a single measure (cost or value) and are useful when different facilities are funded by a single fee program. Examples include facility costs per capita, cost per vehicle trip, or cost per gallon of water per day. New Development Facility Needs and Costs A number of approaches are used to identify facility needs and costs to serve new development. This is often a two-step process: (1) identify total facility needs, and (2) allocate to new development its fair share of those needs. There are three common methods for determining new development's fair share of planned facilities costs in this study: the existing inventory method, the planned facilities method, and the system plan method. Often the method selected depends on the degree to which the community has engaged in comprehensive facility master planning to identify facility needs. The formula used by each approach and the advantages and disadvantages of each method is summarized below: Existing Inventory Method The existing inventory method allocates costs based on the ratio of existing facilities to demand from existing development as follows: Current Value of Existing Facilities = cost per unit of demand Existing Development Demand Under this method new development will fund the expansion of facilities at the same standard currently serving existing development. The existing inventory method results in no facility deficiencies attributable to existing development. This method is often used when a long-range plan for new facilities is not available. Future facilities to serve growth are identified through an annual CIP and budget process, possibly after completion of a new facility master plan. This approach is used to calculate the fire protection, police, parks, and recreation facility fees in this report. Planned Facilities Method The planned facilities method allocates costs based on the ratio of planned facility costs to demand from new development as follows: Cost of Planned Facilities =cost per unit of demand New Development Demand This method is appropriate when planned facilities will entirely serve new development, or when a fair share allocation of planned facilities to new development can be estimated.An example of the former is a Wastewater trunk line extension to a previously undeveloped area. An example of the latter is expansion of an existing library building and book collection, which will be needed only if new development occurs, but which, if built, will in part benefit existing development, as well. Under this method new development will fund the expansion of facilities at the standards used in 8 WILLOAN City of Arroyo Grande Development Impact Fee Nexus Study Update the applicable planning documents. This approach is used for the water, transportation, storm drain and wastewater facilities fees in this report. System Plan Method This method calculates the fee based on the value of existing facilities plus the cost of planned facilities, divided by demand from existing plus new development: Value of Existing Facilities+ Cost of Planned Facilities Existing + New Development Demand =cost per unit of demand This method is useful when planned facilities need to be analyzed as part of a system that benefits both existing and new development. It is difficult, for example, to allocate a new fire station solely to new development when that station will operate as part of an integrated system of fire stations that together achieve the desired level of service. The system plan method ensures that new development does not pay for existing deficiencies. Often facility standards based on policies such as those found in Comprehensive Plans are higher than the existing facility standards. This method enables the calculation of the existing deficiency required to bring existing development up to the policy-based standard. The local agency must secure non-fee funding for that portion of planned facilities required to correct the deficiency to ensure that new development receives the level of service funded by the impact fee. This approach is not used in this report. Organization of the Report The determination of a public facilities fee begins with the selection of a planning horizon and development of growth projections for population and employment. These projections are used throughout the analysis of different facility categories and are summarized in Chapter 2. Chapters 3 through 10 identify facility standards and planned facilities, allocate the cost of planned facilities between new development and other development, and identify the appropriate development impact fee for each of the following facility categories: ■ Fire Protection Facilities • Water Facilities • Police Facilities • Transportation Facilities • Park Facilities • Storm Drain Facilities ■ Recreation Facilities • Wastewater Facilities Chapter 11 describes how this nexus study complies with the requirements of AB 602. Chapter 12 details the procedures that the City must follow when implementing a development impact fee program. Impact fee program adoption procedures are found in California Government Code Sections 66016 through 66018. The five statutory findings required for adoption of the maximum justified public facilities fees in accordance with the Mitigation Fee Act are documented in Chapter 13. 9 WlLLDAN FiNht.ai.=.eevic,s e Growth Forecasts Growth projections are used as indicators of demand to determine facility needs and allocate those needs between existing and new development. This chapter explains the source for the growth projections used in this study based on a 2023 base year and a planning horizon of 2050. Estimates of existing development and projections of future growth are critical assumptions used throughout this report. These estimates are used as follows: • The estimate of existing development in 2023 is used as an indicator of existing facility demand and to determine existing facility standards. • The estimate of total development at the 2050 planning horizon is used as an indicator of future demand to determine total facilities needed to accommodate growth and remedy existing facility deficiencies, if any. • Estimates of growth from 2023 through 2050 are used to (1) allocate facility costs between new development and existing development, and (2) estimate total fee revenues. The demand for public facilities is based on the service population, dwelling units or nonresidential development creating the need for the facilities. Land Use Types To ensure a reasonable relationship between each fee and the type of development paying the fee, growth projections distinguish between different land use types. The land use types for which impact fees have been calculated for are defined below. • Residential Dwelling Units: All residential dwelling units, including detached and attached one-unit dwellings and all multifamily dwellings including apartments, duplexes and condominiums. • Commercial: All commercial, retail, educational, and service development. • Office: All general, professional, and medical office development. Some developments may include more than one land use type, such as a mixed-use development with both multifamily and commercial uses. In those cases, the facilities fee would be calculated separately for each land use type. The City has the discretion to determine which land use type best reflects a development project's characteristics for purposes of imposing an impact fee and may adjust fees for special or unique uses to reflect the impact characteristics of the use. If a project results in the intensification of use, at its discretion, the City can charge the project the difference in fees between the existing low intensity use and the future high intensity use. Impact Fees for Accessory Dwelling Units The California State Legislature recently amended requirements on local agencies for the imposition of development impact fees on accessory dwelling units (ADU) with Assembly Bill AB 68 in 2021. The amendment to California Government Code §65852.2(f)(2) stipulates that local agencies may not impose any impact fees on ADU less than 750 square feet. ADU greater than 750 square feet can be charged impact fees in proportion to the size of the primary dwelling unit. Calculating Impact Fees for Accessory Dwelling Units For ADUs greater than 750 square feet, impact fees can be charged as a percentage of the single family impact fee. The formula is: 10 W I LLDAN FALAN,I AL Scfi V:CFS City of Arroyo Grande Development Impact Fee Nexus Study Update ADU Square Feet x Single Family Impact Fee = ADU Impact Fee Primary Residence Square Feet In the case of an 800 square foot ADU and a 1,600 square foot primary residence, the impact fees would be 50 percent (800 square feet / 1,600 square feet = 50%) of the single family dwelling unit fee. Existing and FutureDevelopment Table 2.1 shows the estimated number of residents, dwelling units, employees, and building square feet in Arroyo Grande, both in 2023 and in 2050. The base year estimates of household residents and dwelling units comes from the California Department of Finance (DOF). The 2050 projection of residents was identified in the "Meduim" growth scenario from the SLOCOG 2050 Regional Growth Forecast. The regional growth forecast projected 8,460 households in 2050. Accounting for 7% vacancy (which is the current vacancy rate reported by the DOF), the projection totals an increase of 1,016 housing units. It assumes that the same ratio of single family to multifamily will be maintained as development occurs. Base year employees were estimated based on the latest data from the US Census' OnTheMap application and exclude 187 local government (public administration) employees. Total projected workers in 2050 are identified the regional growth forecast. The proportion of workers by land use is held consistent with current estimates. The estimates of nonresidential building square feet were estimated by dividing employee counts by the occupancy density factors presented in the following table. 11 WILLDAN F.ANC Al.5=a, City of Arroyo Grande Development Impact Fee Nexus Study Update Table 2.1: Existing and New Development 2023 Increase 2050 Residents17,740 2,709 20,449 Duelling Units 2 Single Family 6,233 783 7,016 Multifamily 1,853 233 2,086 Total 8,086 1,016 9,102 Employment 3 Commercial 3,696 1,783 5,479 Office 1,642 792 2,434 Total 5,338 2,575 7,913 Building Square Feet(000s14 Commercial 1,743 841 2,584 Office 504 243 747 Total 2,247 1,084 3,331 'Current household population from California Department of Finance. Projection based on SLOCOG 2050 Regional Growth Forecast,Medium Scenario. 2 Current values from California Department of Finance. Projection of 9,102 housing units for 2050 from SLOCOG Regional Growth Forecast.Assumes 7.0%vacancy and a total of 8,460 households.Assumes same ratio of single family to multifamily w ill be maintained as development occurs. 3 Current estimates of primary jobs from the US Census'OnTheMap. Projection based on SLOCOG 2050 Regional Growth Forecast. Assumes current ratio among land uses w ill be maintained. 4 Estimated building square feet calculated based on increase of employees and density factors in Table 2.2. Sources:California Department of Finance,Table E-5,SLOCOG 2050 Regional Growth Forecast;OnTheMap Application, http://onthemap.ces.census.gov;Table 2.2,Willdan Financial Services. Occupant Densities All fees in this report are calculated based on dwelling units or building square feet. Occupant density assumptions ensure a reasonable relationship between the size of a development project, the increase in service population associated with the project, and the amount of the fee. Occupant densities (residents per dwelling unit or workers per building square foot) are the most appropriate characteristics to use for most impact fees. The fee imposed should be based on the land use type that most closely represents the probable occupant density of the development. The occupancy factors are shown in Table 2.2. The residential density factors are based on data for Arroyo Grande from the 2021 U.S. Census' American Community Survey, the most recent data available. The nonresidential occupancy factors are derived from data from the Institute of Traffic Engineers Trip Generation Manual, 11th Edition. 12 WILLDAN City of Arroyo Grande Development Impact Fee Nexus Study Update Table 2.2: Occupant Density Assumptions Residential-All Units 2.27 Residents per dwelling unit Nonresidential Commercial 2.12 Employees per 1,000 square feet Office 3.26 Employees per 1,000 square feet Sources: U.S.Census Bureau,2021 American Community Survey 5-Year Estimates,Tables B25024 and B25033; ITE Trip Generation Manual, 11th Edition; Willdan Financial Services. 13 WILLDAN F NAAA At AERVICFA 3. Fire Protection Facilities The purpose of this fee is to ensure that new development funds its fair share of fire protection facilities. A fee schedule is presented based on the existing facilities standard of fire protection facilities in the City of Arroyo Grande to ensure that new development provides adequate funding to meet its needs. Service i tion Fire protection facilities serve both residents and businesses. Therefore, demand for services and associated facilities are based on the City's service population including residents and workers. Table 3.1 shows the existing and future projected service population for fire protection facilities. While specific data is not available to estimate the actual ratio of demand per resident to demand by businesses (per worker) for this service, it is reasonable to assume that demand for these services is less for one employee compared to one resident, because nonresidential buildings are typically occupied less intensively than dwelling units. The 0.31-weighting factor for workers is based on a 40-hour workweek divided by the total number of non-work hours in a week(128)and reflects the degree to which nonresidential development yields a lesser demand for police facilities. Table 3.1: Fire Protection Facilities Service Population A B AxB=C Weighting Service Persons Factor Population Residents Existing (2023) 17,740 1.00 17,740 New Development 2,709 1.00 2,709 Total (2050) 20,449 20,449 Workers Existing (2023) 5,338 0.31 1,655 New Development 2,575 0.31 798 Total (2050) 7,913 2,453 Combined Residents and Weighted Workers Existing (2023) 19,395 New Development 3,507 Total (2050) 22,902 1 Workers are w eighted at 0.31 of residents based on a 40 hour w ork w eek out of a possible 128 non-work hours in a w eek(40/128=0.31) Sources:Table 2.1;Willdan Financial Services. 14 W I LLDAN City of Arroyo Grande Development Impact Fee Nexus Study Update Existing i ity inventor The City owns a single fire station. The replacement cost of the station and canopy are listed in the City's insured property schedule. The land that the station is sited on is valued at $566,400 per acre, based on an analysis of land sales comparisons in Arroyo Grande since 2018, as reported by CoStar. In total, the City owns approximately $6 million worth of fire facilities, which are summarized in Table 3.2. Table 3.2: Existing Facility Inventory Replacement Quantity Units Unit Cost Cost Fire Station- 140 Traffic Way Land 1.05 acres $ 566,400 $ 594,720 Fire Station 12,698 sq. ft. 420 5,332,554 Canopy 880 sq. ft. 29 25,397 Total Value-Existing Facilities $ 5,952,671 Sources:City of Arroyo Grande;CJPIA Property Schedule,March 7,2023;Willdan Financial Services. Planned Facilities The City is planning to spend future fire facilities fee revenue on an expansion and reconfiguration of the sleeping quarters at the fire station. This will allow the Five Cities Fire Authority to increase staffing and service capacity as the City grows. Cost Allocation Table 3.3 expresses the City's current fire facilities level of service in terms of an existing cost per capita, by dividing the replacement cost of the City's existing facilities by the existing service population. The resulting cost per capita drives the fee calculation. The cost per capita is multiplied by the worker weighting factor to determine the cost per worker. Table 3.3: Fire Protection Facilities Existing Standard Value of Existing Facilities $ 5,952,671 Existing Service Population 19,395 Cost per Capita $ 307 Facility Standard per Resident $ 307 Facility Standard per Worker 95 Based on a weighing factor of 0.31. Sources: Tables 3.1 and 3.2. WILLDAN 15 FENZNC.,sEawcFS City of Arroyo Grande Development Impact Fee Nexus Study Update Fee Revenue Projection The City plans to use fire protection facilities fee revenue to construct improvements and acquire capital facilities and equipment to add to the system of fire facilities to serve new development. Table 3.4 details a projection of fee revenue, based on the service population growth increment identified in Table 3.1. Table 3.4: Revenue Projection - Existing Standard Cost per Capita $ 307 Growth in Service Population (2023 to 2050) 3,507 Fee Revenue $ 1,076,649 Sources:Tables 3.1 and 3.4. Fee Schedule Table 3.5 shows the maximum justified fire protection facilities fee schedule. The City can adopt any fee up to this amount. The cost per capita is converted to a fee per unit of new development based on dwelling unit and employment densities (persons per dwelling unit or employees per 1,000 square feet of nonresidential building space). The fee per dwelling unit is converted into a fee per square foot by dividing the fee per dwelling unit by the assumed average square footage of a dwelling unit. The total fee includes a two percent (2.0%) administrative charge to fund costs that include: a standard overhead charge applied to City programs for legal, accounting, and other departmental and administrative support, and fee program administrative costs including revenue collection, revenue and cost accounting and mandated public reporting. In Willdan's experience with impact fee programs, two percent of the base fee adequately covers the cost of fee program administration. The administrative charge should be reviewed and adjusted during comprehensive impact fee updates to ensure that revenue generated from the charge sufficiently covers, but does not exceed, the administrative costs associated with the fee program. 16 WILLDAN F$NAMA At SEFYIC'zA City of Arroyo Grande Development Impact Fee Nexus Study Update Table 3.5: Maximum Justified Fire Protection Facilities Fee Schedule A B C=AxB D=Cx0.02 E=C+D F=E/Average Cost Per Admin Fee per Land Use Capita Density Base Fee' Charge''2 Total Feel Sq. Ft.3 Residential Dwelling Unit $ 307 2.27 $ 697 $ 14 $ 711 $ 0.24 Nonresidential-per 1,000 Sa. Ft. Commercial $ 95 2.12 $ 201 $ 4 $ 205 $ 0.21 Office 95 3.26 310 6 316 0.32 1 Fee per average sized dw elling unit or per 1,000 square feet of nonresidential building space. 2 Adrrinistrative charge of 2.0 percent for(1)legal,accounting,and other administrative support and(2)impact fee program admnistrative costs including revenue collection,revenue and cost accounting,mandated public reporting, and fee justification analyses. 3Assumes an average of 2,974 square feet per dwelling unit in Arroyo Grande,based on an analysis of recent building permits. Sources:Tables 2.2 and 3.3. 17 WILLDAN ... __ Ffhah Ctat SER,CLS 4. Police Facilities The purpose of this fee is to ensure that new development funds its fair share of police facilities. A fee schedule is presented based on the existing standard of police facilities in the City of Arroyo Grande to ensure that new development provides adequate funding to meet its needs. Service 1 ti Police facilities serve both residents and businesses. Therefore, demand for services and associated facilities are based on the City's service population including residents and workers. Table 4.1 shows the existing and future projected service population for police facilities. While specific data is not available to estimate the actual ratio of demand per resident to demand by businesses (per worker) for this service, it is reasonable to assume that demand for these services is less for one employee compared to one resident, because nonresidential buildings are typically occupied less intensively than dwelling units. The 0.31-weighting factor for workers is based on a 40-hour workweek divided by the total number of non-work hours in a week(128)and reflects the degree to which nonresidential development yields a lesser demand for police facilities. Table 4.1: Police Facilities Service Population A B AxB=C Weighting Service Persons Factor Population Residents Existing (2023) 17,740 1.00 17,740 New Development 2,709 1.00 2,709 Total (2050) 20,449 20,449 Workers Existing (2023) 5,338 0.31 1,655 New Development 2,575 0.31 798 Total (2050) 7,913 2,453 Combined Residents and Weighted Workers Existing (2023) 19,395 New Development 3,507 Total (2050) 22,902 Workers are weighted at 0.31 of residents based on a 40 hour work w eek out of a possible 128 non-work hours in a w eek(40/128=0.31) Sources:Table 2.1;Willdan Financial Services. Existing Facility Inventory The City's police facilities inventory is comprised of a police station, garage and police vehicles. The replacement cost of the buildings of these facilities was identified in the City's insurance 18 WILLDAN City of Arroyo Grande Development Impact Fee Nexus Study Update property schedule. The land that the station is sited on is valued at$566,400 per acre, based on an analysis of land sales comparisons in Arroyo Grande since 2018, as reported by CoStar. In total, the City owns $4.2 million worth of police facilities. Table 4.2 displays the City's existing inventory of police facilities. Table 4.2: Existing Police Facilities Inventory Replacement Quantity Units Unit Cost Cost Police Station-200 North Halycon Road Land 0.69 acres $566,400 $ 390,816 Station 7,528 sq. ft. 357 2,686,425 Garage 1,000 sq. ft. 91 90,864 Subtotal $ 3,168,105 Vehicles $ 1,056.204 Total Value- Existing Facilities $ 4,224,309 Sources:City of Arroyo Grande;CJPIA Property Schedule,March 7,2023;Appendix Table A.1;Willdan Financial Services. Planned Facilities Table 4.3 displays the planned police facilities, including upgrades to its records management system, upgrades to property and evidence storage, and new community safety cameras. In total, the City has identified $175,000 of planned police facilities. Table 4.3: Planned Police Facilities Cost Report Management System (RMS) Upgrade at PD $ 150,000 Property and Evidence Storage System Upgrade 25,000 Total Cost of Planned Facilities $ 175,000 Source:City of Arroyo Grande FY 2023-25 Biennial Budget. Cost Allocation Table 4.4 expresses the City's current police facilities level of service in terms of an existing cost per capita, by dividing the replacement cost of the City's existing facilities by the existing service population. The resulting cost per capita drives the fee calculation. The cost per capita is multiplied by the worker weighting factor to determine the cost per worker. WILLDAN 19 PFNAN('Al SEM(ES City of Arroyo Grande Development Impact Fee Nexus Study Update Table 4.4: Police Facilities Existing Standard Value of Existing Facilities $4,224,309 Existing Service Population 19,395 Cost per Capita $ 218 Facility Standard per Resident $ 218 Facility Standard per Worker' 68 1 Based on a weighing factor of 0.31. Sources: Tables 4.1 and 4.2. Fee Revenue r j i The City plans to use police facilities fee revenue to construct improvements and acquire capital facilities and equipment to add to the system of police facilities to serve new development. Table 4.5 details a projection of fee revenue, based on the service population growth increment identified in Table 4.1. When setting fees to maintain the existing level of service, the resulting fee revenue will fully fund the identified planned facilities, and the City will need to identify additional facilities to maintain the level of service as new development adds demand for police services and facilities through the planning horizon. Table 4.5: Revenue Projection - Existing Standard Cost per Capita $ 218 Growth in Service Population (2023 to 2050) 3,507 Fee Revenue $ 764,526 Sources:Tables 4.1 and 4.4. Fee Schedule Table 4.6 shows the maximum justified police facilities fee schedule. The City can adopt any fee up to this amount. The cost per capita is converted to a fee per unit of new development based on dwelling unit and employment densities (persons per dwelling unit or employees per 1,000 square feet of nonresidential building space). The fee per dwelling unit is converted into a fee per square foot by dividing the fee per dwelling unit by the assumed average square footage of a dwelling unit. The total fee includes a two percent (2.0%) administrative charge to fund costs that include: a standard overhead charge applied to City programs for legal, accounting, and other departmental and administrative support, and fee program administrative costs including revenue collection, revenue and cost accounting and mandated public reporting. 20 W1LLDAN City of Arroyo Grande Development Impact Fee Nexus Study Update In Willdan's experience with impact fee programs, two percent of the base fee adequately covers the cost of fee program administration. The administrative charge should be reviewed and adjusted during comprehensive impact fee updates to ensure that revenue generated from the charge sufficiently covers, but does not exceed, the administrative costs associated with the fee program. Table 4.6: Maximum Justified Police Facilities Fee Schedule A B C=AxB D=Cx0.02 E=C+D F=E/Average Cost Per Admin Fee per Land Use Capita Density Base Feel Charge''2 Total Fee' Sq. Ft.3 Residential Dwelling Unit $ 218 2.27 $ 495 $ 10 $ 505 $ 0.17 Nonresidential-per 1.000 Sq. Ft. Commercial $ 68 2.12 $ 144 $ 3 $ 147 $ 0.15 Office 68 3.26 222 4 226 0.23 'Fee per average sized dwelling unit or per 1,000 square feet of nonresidential building space. 2 Administrative charge of 2.0 percent for(1)legal,accounting,and other administrative support and(2)impact fee program administrative costs including revenue collection, revenue and cost accounting,mandated public reporting, and fee justification analyses. 3Assumes an average of 2,974 square feet per dwelling unit in Arroyo Grande,based on an analysis of recent building permits. Sources:Tables 2.2 and 4.4. 21 WILLDAN -....,.... F.AN,At SF RV1C.FS 5. Park Facilities The purpose of the park facilities impact fee is to fund the park facilities needed to serve new development. The maximum justified impact fee is presented based on the existing standard of park facilities per capita. Service lati Park facilities in Arroyo Grande primarily serve residents. Therefore, demand for services and associated facilities is based on the City's residential population. Table 5.1 shows the existing and future projected service population for park and recreation facilities. Table 5.1: Park Facilities Service Population Residents Existing (2023) 17,740 New Development 2,709 Total (2050) 20,449 Source:Table 2.1. Existing ark Facilities Inventory The City of Arroyo Grande owns and maintains several parks throughout the city. Table 5.2 summarizes the City's existing parkland inventory in 2023. All facilities are located within the City limits. In total, the inventory includes a total of 43.9 acres of improved parkland. 22 WILLDAN F,M1n Nf:..At 5€flYiGFti City of Arroyo Grande Development Impact Fee Nexus Study Update Table 5.2: Parkland Inventory Developed Unimproved Name Acres Open Space Total Neighborhood and Community Parks Soto Sports Complex 18.00 - 18.00 Rancho Grande Park 8.00 - 8.00 Strother Park 8.14 - 8.14 Terra De Oro Park 3.94 - 3.94 Elm Street Park 5.00 - 5.00 Heritage Square Park 2.12 - 2.12 Health Fitness Park 0.51 - 0.51 Kingo Park 0.80 - 0.80 Kiwanis Park 3.30 - 3.30 Parque Pequeno 0.58 - 0.58 Hoosegow Park 0.31 - 0.31 Hart-Collett Firefighters Memorial Park 0.36 - 0.36 Village Gazebo 0.25 - 0.25 Dower Way Side Park 0.10 - 0.10 Tiger Tail Park 1.22 - 1.22 Total 52.63 - 52.63 Open Space James Way Oak Habitat & Wildlife Preserve - 75.02 75.02 Total 52.63 75.02 127.65 Source:City of Arroyo Grande. Parkland l Park i Unit Table 5.3 displays the unit costs necessary to develop parkland in Arroyo Grande. The land cost assumption was based on an analysis of recent land sales within the City of Arroyo Grande using data from CoStar. An estimate of $750,000 per acre for standard parkland improvements is based on Willdan's recent experience with other clients in California. Parkland acquisition is valued at $566,400 per acre, based on an analysis of land sales comparisons in Arroyo Grande since 2018, as reported by CoStar. In total, it is assumed to cost approximately $1.3 million to acquire and improve an acre of parkland in Arroyo Grande. Also shown in the table is an estimate for open space acquisition. This assumption is based on land sales comparisons of agricultural land, also reported by CoStar. 23 WILLDAN F.NAN(,11 SERVICES City of Arroyo Grande Development Impact Fee Nexus Study Update Table 5.3: Park Facilities Unit Costs Cost Share of Per Acre Total Costs Standard Park Improvements $ 750,000 Vehicles (See Appendix Table A.2) 3,757 Total Park Improvements $ 753,757 57% Land Acquisition 566,400 443% Total Cost per Acre $1,320,157 100% Open Space Acquisition $ 52,800 Sources:City of Arroyo Grande;CoStar;Willdan Financial Services. Park ility Standards Park facility standards establish a reasonable relationship between new development and the need for expanded park facilities. Information regarding the City's existing inventory of existing parks facilities was obtained from City staff. The most common measure in calculating new development's demand for parks is the ratio of park acres per resident. In general, facility standards may be based on a jurisdiction's existing inventory of park facilities, or an adopted policy standard contained in a master facility plan or general plan. Facility standards may also be based on a land dedication standard established by the Quimby Act.1 Quimby Act Standard The Quimby Act specifies that the dedication requirement must be a minimum of 3.0 acres and a maximum of 5.0 acres per 1,000 residents. A jurisdiction can require residential developers to dedicate above the three-acre minimum if the jurisdiction's existing park standard at the time it adopted its Quimby Act ordinance justifies the higher level (up to five acres per 1,000 residents). The standard used must also conform to the jurisdiction's adopted general or specific plan standards. The Quimby Act only applies to land subdivisions. The Quimby Act would not apply to residential development on future approved projects on single parcels, such as apartment complexes and other multifamily development. The Quimby Act allows payment of a fee in lieu of land dedication. The fee is calculated to fund acquisition of the same amount of land that would have been dedicated. The Quimby Act allows use of in-lieu fee revenue for any park or recreation facility purpose. Allowable uses of this revenue include land acquisition, park improvements including recreation facilities, and rehabilitation of existing park and recreation facilities. The Quimby Act generally requires that fees be used for neighborhood and community park acreage to serve the subdivision, except in limited circumstances. 1 California Government Code§66477. 24 WWI LLDAN City of Arroyo Grande Development Impact Fee Nexus Study Update City of Arroyo Grande Park Facilities Standards Table 5.4 shows the existing standard for improved park acreage per 1,000 residents based on the type of parkland. In total the City has an existing parkland standard of 2.97 acres per 1,000 residents, which is less than the minimum Quimby standard of 3.0 acres per 1,000 residents.. The impact fee analysis in this report will be based on maintaining the City's 2.97 acre per 1,000 resident standard as new development adds demand for parks in Arroyo Grande. Fees in-lieu of land dedication for subdivisions are calculated at the minimum Quimby standard of 3.0 acres of developed parkland per 1,000 residents. Table 5.4 also shows the City's existing open space standard. This is calculated separately from the parkland standard. The current open space standard is 4.23 acres per 1,000 residents. Table 5.4: Parkland Standards Developed Park Acreage 52.63 Existing Service Population (2023) 17,740 Existing Standard (Acres per 1,000 Residents) 2.97 Quimby Act Standard (Acres per 1,000 Residents) 3.00 Open Space Acreage 75.02 Existing Service Population (2023) 17,740 Existing Standard (Acres per 1,000 Residents) 4.23 Sources:Tables 5.1 and 5.2. Facilities to ccs t Table 5.5 shows the park facilities needed to accommodate new development at the existing standard. To achieve the standard by the planning horizon, depending on the amount of development subject to the Quimby Act, new development must fund the purchase and improvement of between 8.05 and 8.13 parkland acres. The facility standards and resulting fees under the Quimby Act are higher because development will be charged to provide 3.0 acres of parkland per 1,000 residents, and 2.97 acres of improvements, whereas development not subject to the Quimby Act will be charged to provide only 2.97 acres of parkland and improvements per 1,000 residents. Since the exact amount of development that will be subject to the Quimby fees is unknown at this time, Table 5.5 presents the range of total facility costs that may be incurred depending on the amount of development subject to the Quimby Act. Table 5.5 also displays the cost necessary to maintain the City's existing open space standard. The City would need to acquire 11.46 acres of open space to maintain this standard. 25 WILLDAN seev:ces City of Arroyo Grande Development Impact Fee Nexus Study Update Table 5.5: Park Facilities to Accommodate New Development Calculation Parkland Improvements Total Rangel Parkland(Quimby Act), Improvements (Mitigation Fee Act)2 Facility Standard (acres/1,000 capita) A 3.00 2.97 Growth in Service Population(2023 to 2050) B 2,709 2,709 Facility Needs (acres) c=Ax B/1000 8.13 8.05 Average Unit Cost(per acre) D $ 566.400 $ 753,757 Total Cost of Facilities E=Cx D $4,605,000 $ 6,068,000 $10,673,000 Parkland and Improvements-Mitigation Fee Acta Facility Standard (acres/1,000 capita) A 2.97 2.97 Growth in Service Population(2023 to 2050) B 2,709 2,709 Facility Needs (acres) C=AxB/1000 8.05 8.05 Average Unit Cost(per acre) D $ 566,400 $ 753,757 Total Cost of Facilities E=CxD $4,560,000 $ 6,068,000 $10,628,000 Open Space Facility Standard (acres/1,000 capita) A 4.23 Growth in Service Population(2023 to 2050) B 2,709 - Facility Needs (acres) C=AxB/1000 11.46 - Average Unit Cost(per acre) D $ 52,800 - Total Cost of Facilities E=Cx D $ 605,000 $ - $ 605,000 Note:Totals have been rounded to the thousands. Values in this column show the range of the cost of parkland acquisition and development should all development be either subject to the Quimby Act,or to the Mitigation Fee Act,respectively. 2 Cost of parkland to serve new development shown if all development is subject to the Quimby Act(Subdivisions of 50 units or more). Parkland charged at 3.0 acres per 1,000 residents;improvements charged at the existing standard. 3 Cost of parkland to serve new development show n if all development is subject to the Mtigation Fee Act. Parldand and irrprovem•nts are charged at the existing standard. Sources:Tables 5.1,5.3,and 5.4. Parks and Recreation iii i Cost per Capita Table 5.6 shows the cost per capita of providing new park facilities at the Quimby standard, and the existing facility standard. The cost per capita is shown separately for land and improvements. The costs per capita in this table will serve as the basis of four fees: • A Quimby Act Fee in-lieu of parkland dedication. This fee is payable by residential development occurring in subdivisions. • A Mitigation Fee Act Fee for parkland acquisition. This fee is payable by residential development not occurring in subdivisions. • A Mitigation Fee Act Fee for parkland improvements. This fee is payable by all residential development. • A Mitigation Fee Act Fee for open space acquisition. This fee is payable by all residential development. 26 W I LLDAN City of Arroyo Grande Development Impact Fee Nexus Study Update A development project pays either the Quimby Act Fee in-lieu of land dedication, or the Mitigation Fee Act Fee for land acquisition, not both. All development projects pay the Mitigation Fee Act Fees for park improvements and open space. Table 5.6: Park Facilities Investment per Capita Land Improvements Open Space Calculation Quimby Fee OR Impact Fee AND Impact Fee AND Impact Fee Parkland Investment(per acre) A $ 566,400 $ 566,400 $ 753,757 $ 52,800 Existing Standard(acres per 1,000 capita) B 3.00 2.97 2.97 4.23 Total Cost per 1,000 capita C=Ax B $ 1,699,200 $1,682,200 $ 2,238,700 $ 223,300 Cost per Resident D=C/1,000 $ 1,699 $ 1,682 $ 2,239 $ 223 Sources:Tables 5.3 and 5.4. Use of Fee Revenue The City plans to use park and recreation facilities fee revenue to purchase parkland and open space and construct improvements to add to the system of park facilities that serves new development. The City may only use impact fee revenue to provide facilities and intensify usage of existing facilities needed to serve new development. The City should program fee revenue to capacity expanding projects annually through its CIP and budget process. Fee Schedule To calculate fees by land use type, the investment in park facilities is determined on a per resident basis for parkland acquisition, open space acquisition and parkland improvements. These investment factors(shown in Table 5.6)are based on the unit cost estimates and the City's existing facility standards. Table 5.7 shows the maximum justified park and recreation facilities fee based on the existing standard per capita under the Quimby Act and under the existing park standard under the Mitigation Fee Act, respectively. The cost per resident is converted to a fee per dwelling unit using the occupancy density factor from Table 2.2. The fee per dwelling unit is converted into a fee per square foot by dividing the fee per dwelling unit by the assumed average square footage of a dwelling unit. The total fee includes a two percent (2.0%) administrative charge to fund costs that include: a standard overhead charge applied to City programs for legal, accounting, and other departmental and administrative support, and fee program administrative costs including revenue collection, revenue and cost accounting and mandated public reporting. In Willdan's experience with impact fee programs, two percent of the base fee adequately covers the cost of fee program administration. The administrative charge should be reviewed and adjusted during comprehensive impact fee updates to ensure that revenue generated from the charge sufficiently covers, but does not exceed, the administrative costs associated with the fee program. WI LLDAN 27 FINANC AI SERVICES City of Arroyo Grande Development Impact Fee Nexus Study Update Table 5.7: Maximum Justified Park and Recreation Facilities Fee Schedule A B C=AxB D=Cx0.02 E=C+D F=E/Average Cost Per Base Admin Fee per Land Use Capita Density Feel Charge1'2 Total Fee Sq. Ft.3 Quimby Act-Subdivisions Parkland $ 1,699 2.27 $ 3,857 $ 77 $ 3,934 $ 1.32 Improvements 2,239 2.27 5,083 102 5,185 1.74 Open Space 223 2.27 506 10 516 0.17 Total $ 4,161 $ 9,446 $ 189 $ 9,635 $ 3.23 Mitigation Fee Act-Infill Parkland $ 1,682 2.27 $ 3,818 $ 76 $ 3,894 $ 1.31 Improvements 2,239 2.27 5,083 102 5,185 1.74 Open Space 223 2.27 506 10 516 0.17 Total $ 4,144 $ 9,407 $ 188 $ 9,595 $ 3.22 'Fee per average sized dwelling unit or per 1,000 square feet of nonresidential building space. 2 Administrative charge of 2.0 percent for(1)legal,accounting,and other administrative support and(2)impact fee program administrative costs including revenue collection,revenue and cost accounting,mandated public reporting, and fee justification analyses. 3Assumes an average of 2,974 square feet per dwelling unit in Arroyo Grande,based on an analysis of recent building permits. Sources: Tables 2.2 and 5.6. 28 WILLDAN 6. Recreation Facilities The purpose of this fee is to ensure that new development funds its fair share of recreation facilities. A fee schedule is presented based on the existing facilities standard of recreation facilities in the City of Arroyo Grande to ensure that new development provides adequate funding to meet its needs. Service tion Park facilities in Arroyo Grande primarily serve residents. Therefore, demand for services and associated facilities is based on the City's residential population. Table 6.1 shows the existing and future projected service population for recreation facilities. Table 6.1: Recreation Facilities Service Population Residents Existing (2023) 17,740 New Development 2,709 Total (2050) 20,449 Sources:Table 2.1;Willdan Financial Services. Existing i ti inventory The City's recreation facilities inventory is comprised of the Community Center/Woman's Club, Historical Society Complex, and Mark M. Millis Community Center. The replacement cost of the buildings was identified in the City's insured property schedule. The assumed land costs is valued at $566,400 per acre, based on an analysis of land sales comparisons in Arroyo Grande since 2018, as reported by CoStar. In total the City owns $3.8 million worth of recreation facilities. The recreation facilities inventory is displayed in Table 6.2. 29 WILLDAN FINAHt AL SE kYICFS City of Arroyo Grande Development Impact Fee Nexus Study Update Table 6.2: Existing Recreation Facilities Inventory Replacement Quantity Units Unit Cost Cost Land(acres) Community Center/Womans Club 2.05 acres $566,400 $ 1,161,120 Historical Society Complex 1.21 acres 566,400 685,344 Subtotal -Land 3.26 $ 1,846,464 Buildings (square feet) Community Center/Womans Club 4,477 sq. ft. $ 251 $ 1,125,815 Mark M. Millis Community Center' 5,600 sq. ft. - - Historical Society Complex - House, Single Family 1,371 sq. ft. 201 275,528 Historical Society Complex - Museum 864 sq. ft. 195 168,748 Historical Society Complex - Barn 2,400 sq. ft. 81 194,145 Historical Society Complex - House, Single Family 780 sq. ft. 187 146,173 Historical Society Complex - 100% Garage 160 sq. ft. 49 7,901 Subtotal -Buildings 15,652 $ 1,918,310 Total Value- Existing Facilities $ 3,764,774 'No value is shown for this facility because it will be replaced by the planned facility. Sources:City of Arroyo Grande;CJPIA Property Schedule,March 7,2023;CoStar;WIldan Financial Services. Planned i itl The City plans to construct a new community center to replace the Millis Community Center. The total cost of the planned facility is $6.2 million. This planned facility cost does not drive the fee calculation, rather, the fees are set to maintain the existing level of service. Table 6.3: Planned Facilities Cost Recreation Services /Community Center Building $ 6,150,000 Total $ 6,150,000 Source:City of Arroyo Grande FY 2023-25 Biennial Budget. Cost Allocation Table 6.4 expresses the City's current recreation facilities level of service in terms of an existing cost per capita, by dividing the replacement cost of the City's existing facilities by the existing service population. The resulting cost per capita drives the fee calculation. 30 W I LLDAN ,NANC City of Arroyo Grande Development Impact Fee Nexus Study Update Table 6.4: Existing Standard Value of Existing Facilities $ 3,764,774 Existing Service Population 17,740 Cost per Resident $ 212 Sources: Tables 6.1 and 6.3. Fee Revenue Projection The City plans to use recreation facilities fee revenue to construct improvements and acquire capital facilities and equipment to add to the system of recreation facilities to serve new development. While the City plans to construct the facilities in Table 6.3 the costs in that table do not drive the fee calculation. Table 6.5 details a projection of fee revenue, based on the service population growth increment identified in Table 6.1 and the existing facility standard identified in Table 6.4. The City will have spent the fee revenue appropriately so long as the fee revenue is spent on new or expanded recreation facilities that benefit new development. Table 6.5: Revenue Projection - Existing Standard Cost per Capita $ 212 Growth in SenAce Population (2023 to 2050) 2,709 Projected Fee Revenue $ 574,308 Sources:Tables 6.1 and 6.4. Fee Schedule Table 6.6 shows the maximum justified recreation facilities fee schedule. The cost per capita is converted to a fee per unit of new development based on dwelling unit densities (persons per dwelling unit). The fee per dwelling unit is converted into a fee per square foot by dividing the fee per dwelling unit by the assumed average square footage of a dwelling unit. The total fee includes a two percent (2.0%) administrative charge to fund costs that include: a standard overhead charge applied to City programs for legal, accounting, and other departmental and administrative support, and fee program administrative costs including revenue collection, revenue and cost accounting and mandated public reporting. In Willdan's experience with impact fee programs, two percent of the base fee adequately covers the cost of fee program administration. The administrative charge should be reviewed and adjusted during comprehensive impact fee updates to ensure that revenue generated from the charge sufficiently covers, but does not exceed, the administrative costs associated with the fee program. 31 WILLDAN ._. GiN&NCfEI SH3V CF. City of Arroyo Grande Development Impact Fee Nexus Study Update Table 6.6: Maximum Justified Recreation Facilities Fee Schedule A B C=AxB D=Cx0.02 E=C+D F=E/Average Cost Per Admin Fee per Land Use Capita Density Base Fee' Charge1'2 Total Feel Sq. Ft.3 Residential Dwelling Unit $ 212 2.27 $ 481 $ 10 $ 491 $ 0.17 Fee per average sized dwelling unit. 2 Administrative charge of 2.0 percent for(1)legal,accounting,and other administrative support and(2)impact fee program administrative costs including revenue collection,revenue and cost accounting,mandated public reporting, and fee justification analyses. 3 Assumes an average of 2,974 square feet per dwelling unit in Arroyo Grande,based on an analysis of recent building permits. Sources:Tables 2.2 and 6.4. 32 WWI LLDAN .'i: f.T.i RVii#S T Water Facilities This chapter details an analysis of the need for water facilities to accommodate growth within the City of Arroyo Grande. The projects and associated costs in this chapter were identified in the City's Water System Master Plan. This chapter documents a reasonable relationship between new development and a water facilities impact fee to fund facilities that serve new development. Water Demand Estimates of new development and its consequent increased water demand provide the basis for calculating the water facilities fee. The need for water facilities improvements is based on the water demand placed on the system by development. A typical measure of demand is a flow generation rate, expressed as the number of gallons per day generated by a specific type of land use. Flow generation rates are a reasonable measure of demand for the City's system of water improvements because they represent the average rate of demand that will be placed on the system per land use designation. Table 7.1 shows the calculation of equivalent dwelling unit(EDU) demand factors based on flow generation by land use category. The residential flow generation estimates are based on 2023 actual usage data from the City. The nonresidential flow generation factors per acre are based on data from the City's Water System Master Plan. EDU factors express water flow from each land use in terms of the flow generated by a single family dwelling unit. Table 7.1: Water Demand by Land Use Average Flow Generation per Equivalent Flow DU or 1,000 Sq. Dwelling Unit Land Use Type Generation' Density2 Ft.3 (EDU) Residential Dmlling Unit Single Family 178 1.00 Multifamily 148 0.83 Nonresidential-per 1.000 Sq. Ft. Commercial 1,102 43.56 25.30 0.14 Office 1,243 43.56 28.54 0.16 1 Gallons per acre per day. 2 1,000 square feet per acre for nonresidential. Nonresidential densities are based on typical densities for each land use from the City's zoning code.Nonresidential densities are based on floor-area-ratios of 1.0 for commercial and 1.0 for office. 3 Residential flow generation by unit type provided by the City for use in this analysis.Nonresidential flow generation calculated using flow generation per acre and density assumptions shown in this table. Sources:Table 3-2,City of Arroyo Grande Water System Master Flan;Willdan Financial Services. EDU Generation veli rpt Table 7.2 shows the estimated EDU generation from new development through 2050. The EDU factors from Table 7.1 are multiplied by the land use assumptions from Table 2.1 to estimate total EDUs in the base year, at the planning horizon and for new development. New development will WILLDAN 33 FIN0.tit SFRVICFS City of Arroyo Grande Development Impact Fee Nexus Study Update generate approximately 1,132 new EDUs through 2050, comprising 12.3% of water demand in the City at that time. Table 7.2: Water Facilities Equivalent Dwelling Units 2023 Growth 2023 to 2050 Total -2050 EDU Units/ Units/ Units/ Land Use Factor 1,000 SF EDUs 1,000 SF EDUs 1,000 SF EDUs Residential-per Dwelling Unit Single Family 1.00 6,233 6,233 783 783 7,016 7,016 Multifamily 0.83 1,853 1,538 233 193 2,086 1,731 Subtotal 8,086 7,771 1,016 976 9,102 8,747 Nonresidential-per 1,000 So. Ft. Commercial 0.14 1,743 244 841 118 2,584 362 Office 0.16 504 81 243 38 747 119 Subtotal 2,247 325 1,084 156 3,331 481 Total 8,096 1,132 9,228 87.7% 12.3% 100% Sources:Tables 2.1 and 7.1. Facility t Table 7.3 identifies the planned water facilities to be funded by the fee. Project costs from the 2012 Water System Master Plan have been adjusted for inflation into 2023 dollars, using the Engineering News Record's Construction Cost Index (CCI). Those projects that have already been completed, or that do not benefit new development have been excluded from the table. Projects that are needed to serve both existing and new development are allocated to the impact fee based on the increase in capacity associated with each improvement. For project C-3, the impact fee is allocated a portion of the costs based on new development's share of EDUs in 2050 (12.3%), identified in Table 7.2. Projects that are needed solely to serve new development are allocated 100%to new development through this impact fee. Table 7.3: Water Facilities Costs to Serve New Development Allocation to Cost Allocated Total Cost Total Cost New to New No. Description Size (2012) (2023) Development Development B-4 Highway 101 Crossing Upgrade-El Camino Real to West Brach St.' 415-LF $ 454,600 $ 659,852 57.3% $ 377,864 B-5 Highway 101 Crossing Upgrade-West Cherry Aoenue' 280-LF 358,600 520,508 57.3% 298,069 B-6 Phased Mains Replacement' 3,865-LF 1,018,050 1,477,700 57.3% 846,205 B-10 Lierty Lane to Coach Road Upgrade2 3,245-LF 288,800 419,193 75.0% 314,395 C-1 New Well 800-gpm 1,134,900 1,647,308 100.0% 1,647,308 C-2 Miller Way Booster Zone Upgrade 75-gpm 136,600 198,275 50.0% 99,138 C-3 Security Upgrades N/A 47,100 68,366 12.3% 8,409 C-4 Coach Road and Greenwood Drive Upgrades 1,385-LF 267,600 388,422 100.0% 388,422 C-7 4-inch Mains Upgrades2 11,600-LF 2,162,000 3,138,145 75.0% 2,353,609 C-8 Phased Mains Replacement' 3,865-LF 1,018,000 1,477,628 57.3% 846,163 Total $ 6,886,250 $ 9,995,398 $ 7,179,581 'Upgrading 8"cast iron mains to 8"WC reins wit increase capacity by 234%. 'Larger trains represent 400%increase h capacity. Sources:City of Arroyo Grande Water SystemMaster Ran,2012;Engineering News Record's Construction Cost index(CCO;Table 7.2,Wtdan Financial Services. 34 WW I LLDAN _. ,,,, dCull i£RY,Ci!+ City of Arroyo Grande Development Impact Fee Nexus Study Update Cost per EDU Table 7.4 calculates a cost per EDU associated by dividing the total cost of projects allocated to new development identified in Table 7.3 by the growth in EDUs identified in Table 7.2. Table 7.4: Cost per EDU Cost Allocated to New Development $ 7,179,581 Growth in EDUs (2023 to 2050) 1,132 Cost per EDU $ 6,342 2% Fee Program Administration 127 Total Fee per EDU $ 6,469 Sources:Tables 7.2 and 7.3. Fee Schedule The maximum justified fee for water facilities is shown in Table 7.5. The cost per EDU is converted to a fee per unit of new development based on capacity of a 1" meter relative to the capacity of other meter sizes. Using water meter size to drive the fee schedule is reasonable and directly proportional to the amount of water that can be accommodated by a connection. The total fee includes a two percent (2.0%) administrative charge to fund costs that include: a standard overhead charge applied to City programs for legal, accounting, and other departmental and administrative support, and fee program administrative costs including revenue collection, revenue and cost accounting and mandated public reporting. In Willdan's experience with impact fee programs, two percent of the base fee adequately covers the cost of fee program administration. The administrative charge should be reviewed and adjusted during comprehensive impact fee updates to ensure that revenue generated from the charge sufficiently covers, but does not exceed, the administrative costs associated with the fee program. 35 W I LLDAN FMANC.(At SERVICES City of Arroyo Grande Development Impact Fee Nexus Study Update Table 7.5: Maximum Justified Water Facilities Fee Schedule Factor AWWA based on Impact Fee Impact Fee Meter Size Capacity 1" Meter per EDU1 per Meter 5/8 inch 20 0.40 $ 6,469 $ 2,588 3/4 inch 30 0.60 6,469 3,881 1 inch 50 1.00 6,469 6,469 1-1/2 inch 100 2.00 6,469 12,938 2 inch 160 3.20 6,469 20,701 3 inch 300 6.00 6,469 38,814 4 inch 500 10.00 6,469 64,690 6 inch 1,000 20.00 6,469 129,380 ' Includes administrative charge of 2.0 percent for(1)legal,accounting,and other administrative support and(2)impact fee program administrative costs including revenue collection,revenue and cost accounting,mandated public reporting,and fee justification analyses. Sources: Table 7.4,AMA;Willdan Financial Services. 36 W l LLDAN 8Transportation Facilities a This chapter details an analysis of the need for transportation facilities to accommodate new development. The chapter documents a reasonable relationship between new development and the impact fee for funding of these facilities. Trip Demand The need for transportation facilities is based on the trip demand placed on the system by development. A reasonable measure of demand is the number of average daily vehicle trips, adjusted for the type of trip. Vehicle trip generation rates are a reasonable measure of demand on the City's system of street improvements across all modes because alternate modes (transit, bicycle, pedestrian)often substitute for vehicle trips. The two types of trips adjustments made to trip generation rates to calculate trip demand are described below: • Pass-by trips are deducted from the trip generation rate. Pass-by trips are intermediates stops between an origin and a destination that require no diversion from the route, such as stopping to get gas on the way to work. ■ The trip generation rate is adjusted by the average length of trips for a specific land use category compared to the average length of all trips on the street system. These adjustments allow for a holistic quantification of trip demand that takes trip purpose and length into account for fee calculation purposes. Table 8.1 shows the calculation of trip demand factors by land use category based on the adjustments described above. Data is based on extensive and detailed trip surveys conducted in the Institute of Traffic Engineers (ITE), and by the San Diego Association of Governments (SANDAG). The trip rates and pass-by trip assumptions come from ITE. The trip length assumptions come from SANDAG. The surveys provide some of the most comprehensive databases available of trip generation rates, pass-by trips factors, and average trip length for a wide range of land uses. WILLDAN 37 Firvt,/,A!SERVICES City of Arroyo Grande Development Impact Fee Nexus Study Update Table 8.1: Trip Rate Adjustment Factors Primary and Average Adjust- PM Peak Trip Pass-by Diverted Trip ment Hour Demand Trips1 Trips Length2 Factor3 ITE Category Trips° Factors D=BxC A B=1-A C /Avg. E F=DxE Residential-per Dwelling Unit Single Family 3% 97% 7.9 1.11 Single Family Housing(210) 0.99 1.10 Multifamily 3% 97% 7.9 1.11 Multifamily Housing(Low-Rise)(220) 0.57 0.63 Nonresidential-per 1.000 Sa. Ft. Commercial 22% 78% 3.6 0.41 Shopping Center(820) 4.09 1.68 Office 4% 96% 8.8 1.22 General Office(710) 1.44 1.76 'Percent of total trips. A pass-by trip is made as an intermediate stop on the way from an origin to a primary trip dest,ation without a route diversion.Pass-by trips are not considered to add traffic to the road network.Based on SANDAG data. 2 ki miles.Based on SANDAG data. 3 The trip adjustment factor equals the percent of non-pass-by trips multiplied by the average trip length and divided by the systems ide average trip length of 6.9 miles. "Trips per dwelling unit or per 1,000 building square feet. 5 The trip demand factor is the product of the trip adjustment factor and the trip rate. Sources: hstitute of Traffic Engineers,Trip Generation Manual,11th Edition;San Diego Association of Governments,Brief Guide of Vehicular Traffic Generation Rates for the San Diego Region,April 2002;NfHdan Financial Services. Trip r The planning horizon for this analysis is 2050. Table 8.2 lists the 2023 and 2050 land use assumptions used in this study. The trip demand factors calculated in are multiplied by the existing and future dwelling units and building square feet to determine the increase in trip demand attributable to new development. Table 8.2: Land Use Scenario and Trip Demand Trip 2023 2050 Total -2050 Demand Units/ Units/ Units/ Land Use Factor 1,000 SF Trips 1,000 SF Trips 1,000 SF Trips Residential-per Dwelling Unit Single Family 1.10 6,233 6,856 783 862 7,016 7,718 Multifamily 0.63 1,853 1,167 233 147 2,086 1,314 Subtotal 8,086 8,023 1,016 1,009 9,102 9,032 Nonresidential-per 1,000 Sq. Ft. Commercial 1.68 1,743 2,929 841 1,413 2,584 4,342 Office 1.76 504 886 243 428 747 1,314 Subtotal 2,247 3,815 1,084 1,841 3,331 5,656 Total 11,838 2,850 14,688 80.6% 19.4% 100% Sources:Tables 2.1 and 8.1. 38 WWI LLDAN . nrvc,ni s=emotes City of Arroyo Grande Development Impact Fee Nexus Study Update Planned Facilities Table 8.3 lists the transportation projects included in this analysis. The projects and allocation to new development were identified in the Draft Arroyo Grande Citywide Circulation Study ("circulation study'), 2021, prepared by GHD Engineering. The circulation study identified improvements needed to mitigate new development's impact on traffic level of service (LOS) as new development added trips to the City's circulation network. The City has a LOS standard of LOS D. W I LLDAN 39 Nt NCIrtL SERVICES cu o md 888 88 8 88 8 8 8 88884 p p .9.1 ; N O O " N O M M 9 c P O N O N N Q y N 04 g N U w w g „ 8 8 " V8 y 232cu C cd V f0 O� Ci O Z JAL M N O t-- 9 to o L d , s 8 ill ip 8 8 co co s $ V C O .- ro N �t�hpp os 0. Tj C N V N O N 0 IL 7 N O cdN sr 8Q §§§§ 888 8 O ' 8 D ,- oM O OON a NQ WM W ,- M ON 0 '6'8 bi M w op pp�opp op pp o o ' 2 . o 09898 0 0 0 L 8 0 0 8 9 O O O S I 8 8 9 8 9 8 • q O U Z d O a 8 2 O O p o d d m 1 ° 05. E ac w 5 m g 2 v w v N g3! m 5 2 R" E Eo E E c °' m m m s m m o E A E 2 C2 5 g 5 g s d'g s 0 o 2 m m d. 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N W t0 = t0N m W N -2' Q Q C W W W W LL LL W W Y CO L O O I— s LL LL w C C C G G N m N y C ; EEE E " 555 5 NO C 1- o o E 5 p m e c c o °1 E E E E g m $ 2 t L O w m m m C) m Q, c c c c � �w w w LU a a a a Z ` SSE 0 0 o c cc o `o `o `o co co co r<r'��' O M E C C E 2 a U o 0 0 2 J- m m m m U U U Op 555 c ¢` _-z O 12 t o _ d Z.` to o§ co m n U m a m a 10 S U 6 2 Nsr O-- 9 9 st V O O NNN F CO City of Arroyo Grande Development Impact Fee Nexus Study Update Fee per Trig Demand Unit Every impact fee consists of a dollar amount, representing the value of facilities, divided by a measure of demand. In this case, all fees are first calculated as a cost per trip demand unit. Then these amounts are translated into housing unit (cost per unit) and employment space (cost per 1,000 square feet or room)fees by multiplying the cost per trip by the trip generation rate for each land use category. These amounts become the fee schedule. Table 8.4 displays the calculation of the cost the cost per trip demand unit. The project costs allocated to new development are divided by the increase in trip demand from 2023 to 2050 from Table 8.2 to determine the cost per trip attributable to new development. This figure drives the fee calculation. Table 8.4: Cost per Trip to Accommodate Growth Costs Allocated to New Development $ 11,539,440 Growth in Trip Demand (2023 to 2050) 2,850 Cost per Trip $ 4,049 Sources:Tables 8.2 and 8.3. Fee Schedule Table 8.5 shows the maximum justified transportation facilities fee schedule. The City can adopt any fee up to these amounts. The maximum justified fees are based on the cost per trip identified in. Table 8.4. The cost per trip is multiplied by the trip demand factors in Table 8.1 to determine a fee per unit of new development. The fee per dwelling unit is converted into a fee per square foot by dividing the fee per dwelling unit by the assumed average square footage of a dwelling unit. The total fee includes a two percent (2.0%) administrative charge to fund costs that include: a standard overhead charge applied to City programs for legal, accounting, and other departmental and administrative support, and fee program administrative costs including revenue collection, revenue and cost accounting and mandated public reporting. In Willdan's experience with impact fee programs, two percent of the base fee adequately covers the cost of fee program administration. The administrative charge should be reviewed and adjusted during comprehensive impact fee updates to ensure that revenue generated from the charge sufficiently covers, but does not exceed, the administrative costs associated with the fee program. 41 WILLDAN FINANCAt SEPVICE4 City of Arroyo Grande Development Impact Fee Nexus Study Update Table 8.5: Maximum Justified Transportation Facilities Impact Fee Schedule A B C=AxB D=Cx0.02 E=C+D E/1,000 Trip Fee Cost Per Demand Admin per Sq. Land Use Trip Factor Base Fee' Charge''2 Total Fee' Ft Residential Dwelling Unit 4 $ 4,049 0.99 $ 4,009 $ 80 $ 4,089 $ 1.37 Nonresidential-per 1,000 Sq. Ft. Commercial $ 4,049 1.68 $ 6,802 $ 136 $ 6,938 $ 6.94 Office 4,049 1.76 7,126 143 7,269 7.27 1 Fee per average sized dwelling unit or per 1,000 square feet of nonresidential. 2 Administrative charge of 2.0 percent for(1)legal,accounting,and other administrative support and(2)impact fee program adninistrative costs including revenue collection,revenue and cost accounting,mandated public reporting,and fee justification analyses. 3Assumes an average of 2,974 square feet per dwelling unit in Arroyo Grande,based on an analysis of recent building pewits. 4 Average trip demand factor per residential dwelling unit weighted by projected single family and multifamily development. Sources: Tables 8.1 and 8.4. 42 UVI LLDAN 9. Storm Drain Facilities This chapter summarizes an analysis of the need for storm drain facilities to accommodate growth within Arroyo Grande. This projects and associated costs in this chapter were identified it the City's CIP from the FY2023-25 Biennial Budget. This chapter documents a reasonable relationship between new development and an impact to fund storm drain facilities that serve new development. Storm i Demand Most new development generates storm water runoff that must be controlled through storm drain facilities by increasing the amount of land that is impervious to precipitation. Table 9.1 shows the calculation of equivalent dwelling unit (EDU) demand factors based on impervious surface coefficient by land use category. The impervious surface coefficients are based data from the California Environmental Protection Agency. EDU factors relate demand for storm drain facilities in terms of the demand created by a single-family dwelling unit. Table 9.1: Storm Drain Facilities Equivalent Dwelling Units A B C—(43,560/A)x B D=C/Single Faulty Average Impervious DU, 1,000 Percent Square feet per Equivalent Sq. Ft. or Impervious DU or 1,000 Sq. Dwelling Unit Land Use Type per acreper Acre2 Ft. (EDU)3 Residential Dwelling Unit Single Family 4.50 70% 6,776 1.00 Multifamily 14.00 81% 2,520 0.37 Nonresidential-per 1.000 Sq. Ft. Commercial 43.56 86% 860 0.13 Office 43.56 85% 850 0.13 1 Dwelling units for residential and thousand building square feet for non-residential.Nonresidential densities are based on floor-area-ratios of 1.0 for commercial, 1.0 for office and institutional,and 0.45 for industrial. 2 Based on California Environmental Protection Agency data. 3 EDUs per dwelling unit for residential development and per thousand square feet for nonresidential development. Sources:User's Guide for the California Impervious Surface Coefficients,Office of Environmental Health Hazard Assessment California Environmental Protection Agency;Willdan Financial Services. EDU Generation rt Table 9.2 shows the estimated EDU generation from new development through 2050. New development will generate 1,010 new EDUs, representing 12.3% percent of total storm drain demand in 2050. W I LLDAN 43 FKNAVCiAt SERVICES City of Arroyo Grande Development Impact Fee Nexus Study Update Table 9.2: Storm Drain Facilities Equivalent Dwelling Units 2023 Growth 2023 to 2050 Total -2050 EDU Units! Units! Units! Land Use Factor 1,000 SF EDUs 1,000 SF EDUs 1,000 SF EDUs Residential-per Dwelling Unit Single Family 1.00 6,233 6,233 783 783 7,016 7,016 Multifamily 0.37 1,853 686 233 86 2,086 772 Subtotal 8,086 6,919 1,016 869 9,102 7,788 Nonresidential-per 1,000 Sq. Ft. Commercial 0.13 1,743 227 841 109 2,584 336 Office 0.13 504 65 243 32 747 97 Subtotal 2,247 292 1,084 141 3,331 433 Total 7,211 1,010 8,221 87.7% 12.3% 100% Sources:Tables 2.1 and 9.1. Planned Intl Table 9.3 identifies the planned storm drain facilities to be funded by the fee. The new storm drain facilities were identified in the City's FY2023-25 Biennial Budget, and by City staff. Projects that are needed to serve both existing and new development are allocated to the impact fee based on new development's share of EDUs in 2050 (12.3%), identified in Table 9.2. Table 9.3: Storm Drain Projects and Allocation to New Development Allocation to Cost Allocated Total Cost New to New Description (2023) Development Development Corrugated Metal Pipe (CMP) Investigation and Repair $ 400,000 12.3% $ 49,200 Trash Capture Devices 214,000 12.3% 26,322 Halcyon Road Storm Drain 170,000 12.3% 20,910 Total $ 784,000 $ 96,432 Sources:City of Arroyo Grande FY 2023-25 Biennial Budget;Table 9.2,Wildan Financial Services. Cost per Equivalent Dwelling Unit This chapter uses the planned facilities approach to calculate the storm drain facilities cost standard. The cost of planned facilities allocated to new development is divided by the growth in EDUs to determine a cost standard per EDU. Table 9.4 shows the facility cost standard for storm drain facilities. 44 WILLDAN v,F,At SERVICES City of Arroyo Grande Development Impact Fee Nexus Study Update Table 9.4: Cost per Equivalent Dwelling Unit Cost Allocated to New Development $ 96,432 Growth in EDUs (2023 to 2050) 1,010 Cost per EDU $ 95 Sources:Tables 9.2 and 9.3. ScheduleFee The maximum justified fee for storm drain facilities is shown in Table 9.5. The City can adopt any fee up to this amount. The cost per EDU from Table 9.4 is converted to a fee per unit of new development based on the EDU factors shown in Table 9.1. The fee per dwelling unit is converted into a fee per square foot by dividing the fee per dwelling unit by the assumed average square footage of a dwelling unit. The total fee includes a two percent (2.0%) administrative charge to fund costs that include: a standard overhead charge applied to City programs for legal, accounting, and other departmental and administrative support, and fee program administrative costs including revenue collection, revenue and cost accounting and mandated public reporting. In Willdan's experience with impact fee programs, two percent of the base fee adequately covers the cost of fee program administration. The administrative charge should be reviewed and adjusted during comprehensive impact fee updates to ensure that revenue generated from the charge sufficiently covers, but does not exceed, the administrative costs associated with the fee program. Table 9.5: Storm Drain Facilities Impact Fee Schedule A 8 C=AxB D=Cx0.02 E=C+D E/Average Cost Per EDU Base Admin Fee per EDU Factor Feel Charge1'2 Total Feel Sq. Ft.3 Residential Dwelling Unit 4 $ 95 0.86 $ 82 $ 2 $ 84 $ 0.03 Nonresidential-per 1,000 Sq. Ft. Commercial $ 95 0.13 $ 12 $ - $ 12 $ 0.01 Office 95 0.13 12 - 12 0.01 1 Fee per dwelling unit or per 1,000 square feet of nonresidential building space. 2 Administrative charge of 2.0 percent for(1)legal,accounting,and other administrative support and(2)impact fee program administrative costs including revenue collection,revenue and cost accounting,mandated public reporting,and fee justification analyses. 3 Assumes an average of 2,974 square feet per dwelling unit in Arroyo Grande,based on an analysis of recent building permits. `Average EDU factor per residential dwelling unit weighted by projected single family and multifamily development. Sources:Tables 9.1 and 9.4. 45 W I LLDAN EIIvANt,At SERVICES 1 Wastewater O. Facilities This chapter details an analysis of the need for wastewater facilities to accommodate growth within the City of Arroyo Grande. This projects and associated costs in this chapter were identified it the City's Wastewater System Master Plan, 2012. It documents a reasonable relationship between new development and an impact fee to fund wastewater facilities that serve new development. Wastewater Demand Estimates of new development and its consequent increased wastewater demand provide the basis for calculating the wastewater facilities fee. The need for wastewater facilities improvements is based on the wastewater demand placed on the system by development. A typical measure of demand is a flow generation rate, expressed as the number of gallons per day generated by a specific type of land use. Flow generation rates are a reasonable measure of demand on the City's system of wastewater improvements because they represent the average rate of demand that will be placed on the system per land use designation. Table 10.1 shows the calculation of equivalent dwelling unit(EDU) demand factors based on flow generation by land use category. The water flow generation estimates used in Chapter 7 are multiplied by a return flow rate of 51% based on City data to estimate the amount of wastewater flow, by land use. EDU factors express water flow from each land use in terms of the flow generated by a single family dwelling unit. Table 10.1: Wastewater Demand by Land Use Average Sewer Average Water Flow Flow Generation Generation per Equivalent per DU or Return Flow DU or Dwelling Unit Land Use Type 1,000 Sq. Ftp Rate2 1,000 Sq. Ft3 (EDU) Residential Duelling Unit Single Family 178.00 51% 90.78 1.00 Multifamily 148.00 51% 75.48 0.83 Nonresidential-per 1,000 Sq. Ft. Commercial 25.30 51% 12.90 0.14 Office 28.54 51% 14.56 0.16 See Table 7.1. 2 Share of water flow generated that is returned in sewer. 3 Sewer flow generation is equal to water flow generation multiplied by return flow rate. Sources:City of Arroyo Grande;Table 7.1,Wlldan Financial Services. EDU Generation ever t Table 10.2 shows the estimated EDU generation from new development through 2050. The EDU factors from Table 10.1 are multiplied by the land use assumptions from Table 2.1 to estimate total EDUs in the base year, at the planning horizon and for new development. New development will generate 1,132 new EDU5 through 2050, comprising 12.3%of wastewater demand in the City at that time. 46 WILLDAN City of Arroyo Grande Development Impact Fee Nexus Study Update Table 10.2: Wastewater Facilities Equivalent Dwelling Units 2023 Growth 2023 to 2050 Total -2050 EDU Units/ Units/ Units/ Land Use Factor 1,000 SF EDUs 1,000 SF EDUs 1,000 SF EDUs Residential-per Dwelling Unit Single Family 1.00 6,233 6,233 783 783 7,016 7,016 Multifamily 0.83 1,853 1,538 233 193 2,086 1,731 Subtotal 8,086 7,771 1,016 976 9,102 8,747 Nonresidential-per 1.000 Sq. Ft. Commercial 0.14 1,743 244 841 118 2,584 362 Office 0.16 504 81 243 38 747 119 Subtotal 2,247 325 1,084 156 3,331 481 Total 8,096 1,132 9,228 87.7% 12.3% 100% Sources:Tables 2.1 and 10.1. Facility Needs anosis Table 10.3 identifies the planned water facilities to be funded by the fee. Project costs from the 2012 Wastewater System Master Plan have been adjusted for inflation into 2023 dollars, using the Engineering News Record's Construction Cost Index (CCI). Those projects that have already been completed, or that do not benefit new development have been excluded from the table. Projects that are needed to serve both existing and new development are allocated to the impact fee based on the increase in capacity associated with each improvement. Projects that are needed solely to serve new development are allocated 100% to new development through this impact fee. Table 10.3: Wastewater Facilities Allocation to New Development Allocation to Cost Allocated Total Cost Total Cost New to New No. Description Size (2012) (2023) Development Development A-2 Trenchless Sewer Rehabilitation' N/A $ 719,900 $ 1,044,935 49.2% $ 514,108 B-2 Huasna Road Sewer Upgrade N/A 585,000 849,128 100.0% 849,128 B-3 Backyard Sewer Replacement' 650-LF 945,500 1,372,394 49.2% 675,218 Total $ 2,250,400 $ 3,266,458 $ 2,038,454 Upgrading clay sewers to smooth wall pipe w ill increase capacity by 197%at a 1%slope. Sources:City of Arroyo Grande wastew ater System Master Ran,2013;Engineering New s Record's Construction Cost hdex(CCI);Table 10.2, 'Mlldan Financial Services. Cost per EDU The cost of planned facilities allocated to new development in Table 10.3 is divided by the total growth in EDUs to determine a cost per EDU. Table 10.4 displays this calculation. 47 WWI LLDAN P NAN(.:AI.SERVIC, City of Arroyo Grande Development Impact Fee Nexus Study Update Table 10.4: Cost per EDU Cost Allocated to New De'lopment $ 2,038,454 Growth in EDUs (2023 to 2050) 1,132 Cost per EDU $ 1,801 Sources:Tables 10.2 and 10.3. Fee Schedule The maximum justified fee for wastewater facilities is shown in Table 10.5. The cost per EDU is converted to a fee per unit of new development based on the EDU factors shown in Table 10.1. The fee per dwelling unit is converted into a fee per square foot by dividing the fee per dwelling unit by the assumed average square footage of a dwelling unit. The total fee includes a two percent (2.0%) administrative charge to fund costs that include: a standard overhead charge applied to City programs for legal, accounting, and other departmental and administrative support, and fee program administrative costs including revenue collection, revenue and cost accounting and mandated public reporting. In Willdan's experience with impact fee programs, two percent of the base fee adequately covers the cost of fee program administration. The administrative charge should be reviewed and adjusted during comprehensive impact fee updates to ensure that revenue generated from the charge sufficiently covers, but does not exceed, the administrative costs associated with the fee program. Table 10.5: Maximum Justified Wastewater Facilities Fee Schedule A B C=AxB D=Cx0.02 E=C+D E/Average Cost Per EDU Base Admin Fee per EDU Factor Feel Charge1'2 Total Feel Sq. Ft3 Residential Dwelling Unit 4 $ 1,801 0.96 $ 1,729 $ 35 $ 1,764 $ 0.59 Nonresidential-per 1,000 Sq. Ft. Commercial $ 1,801 0.14 $ 252 $ 5 $ 257 $ 0.26 Office 1,801 0.16 288 6 294 0.29 1 Fee per dwelling unit or per 1,000 square feet of nonresidential building space. 2 Administrative charge of 2.0 percent for(1)legal,accounting,and other administrative support and(2)impact fee program administrative costs including revenue collection,revenue and cost accounting,mandated public reporting,and fee justification analyses. 3Assumes an average of 2,974 square feet per dwelling unit in Arroyo Grande,based on an analysis of recent building permits. 4 Average EDU factor per residential dwelling unit weighted by projected single family and multifamily development. Sources:Tables 10.1 and 10.4. 48 WILLDAN 11 . AB 602 Requirements On January 1, 2022, new requirements went into effect for California jurisdictions implementing impact fees. Among other changes, AB 602 added Section 66016.5 to, the Government Code, which set guidelines for impact fee nexus studies. Four key requirements from that section which concern the nexus study are reproduced here: 66016.5. (a) (2) When applicable, the nexus study shall identify the existing level of service for each public facility, identify the proposed new level of service, and include an explanation of why the new level of service is appropriate. 66016.5. (a) (4) If a nexus study supports the increase of an existing fee, the local agency shall review the assumptions of the nexus study supporting the original fee and evaluate the amount of fees collected under the original fee. 66016.5. (a) (5) A nexus study adopted after July 1, 2022, shall calculate a fee imposed on a housing development project proportionately to the square footage of proposed units of the development. A local agency that imposes a fee proportionately to the square footage of the proposed units of the development shall be deemed to have used a valid method to establish a reasonable relationship between the fee charged and the burden posed by the development. 66016.5. (a) (6) Large jurisdictions shall adopt a capital improvement plan as a part of the nexus study. Compliance with The following sections describe this study's compliance with the new requirements of AB 602. 66016.5. (a) (2) - Level of Service 1. For fees calculated under the existing standard methodology, the fees are calculated such that new development funds facilities at the existing level of service. These fee categories are: fire protection, police, parks and recreation. The existing level service in terms of the existing facility cost per capita is shown in each corresponding chapter. 2. For fees calculated under the planned facilities methodology, the fees are calculated to ensure that the level of service does not fall to unacceptable levels and are based on Citywide facility master planning documents. The fees calculated under this approach are the water, transportation, storm drain and wastewater facilities impact fees. 66016.5. (a) (4) — Review of Original Fee Assumptions The original fee schedules and corresponding revenue generated were reviewed by the City and Willdan prior to conducting the nexus study analysis. The planning and cost assumptions from the City's prior Impact Fee Study (2000), were out of date and in need of update. Table 11.1 summarizes the review of the prior impact fee study's assumptions. Table 11.2 displays annual fee revenue collected, by impact fee fund. W I LLDAN 49 k.N, SFNVI CES City of Arroyo Grande Development Impact Fee Nexus Study Update Table 11.1: Review of Prior Fee Study Assumptions 2000 Study 2024 Study Planning Horizon Buildout 2050 Population at Planning Horizon 18,231 20,449 Projected Fee Revenue Traffic Signals and Street Imprmements $7,431,919 $15,359,440 Fire Protection 494,699 1,231,623 Parks 888,014 8,837,000 Community/Recreation Centers 51,142 574,308 Police Facilities 351,863 764,526 Sources:City of Arroyo Grande,Impact Fee Study,2000;Willdan Financial Services. 50 WILLDAN Cp w M h ' N O N CO CO Q COD N- CO N- r et CO -.�., IS Hf apVOM > Cnr U, 'U Q Q to CO __- W-W___---_W__r__- _- M CO LO et 00 C rtO)NM 0 ti M N- N- N Z _.. 4. C Vi N N V N N 'I" N M M CL W Q (fl Q. N CDQ) NrE a CO (D D N Z N- M N h .- a- N- 0) >- Q N N 64 O. W CO M et ' M et 0I.0 y ' ea M 00 N et N M u) O C) N ) UC) U) NN " � N U. d9 N 6 N I O N NCS- CCC) 0 O) 3 N- N- O e)` N 0 ▪ V N VO' U) 00) , ~ N W < N .- 64 0) 0) CO ' et 0 0 CO CO co7 MI 3 0) CO ts I- O It) N O e- V N N 0) COC) U. Q 64 n 7 N 01 N CCD 000 0 000 CC0 • ) v co CO N N, 0) N. N N 0) 00)) CCO CO t CD 7 co (7) N- N- N CO N- ▪ Al. M COD CO N ci Cn 06 >. -- M a- .- C (1,) CO 0) CO h 00 N- 0 M 7 at M et r N 0N)CCO COO ce T- 15 - coOO r CD LL 69 d LL in C0 CO ' N- N C0 CO O 4,0 ' CC M M et U1 CO et 0 N R V N N 000 0) C CO E `- a (fl 13 ON- C) 0 0 0 CO M d o = 0 CD N rt• co 0 co V V N N- M N M N M O U N Cn Z (43 a) d = E u_ LL m C tot) C = U C N a. O C) . 0 GyQ y 6 LL yd m N Z w:Q C CC C °) E QN (0am o U n— •= o ..5.. r C to LL 7 O .a) as i o J r OjC Jz[q Z 2 LL .tu a) E V . }z O C U N (6 ` 0 v H t` Hc a:a.c) a. a) City of Arroyo Grande Development Impact Fee Nexus Study Update 66016.5. (a) (5) — Residential Fees per Square Foot Impact fees for residential land uses are calculated per square foot for all fee categories except for water facilities and comply with AB 602. Water facilities fees are calculated based on the water meter size, which scales based on the capacity accommodated by different sized meters. Thus the water facilities fees are proportionate to the burden placed on the water system by new development. 66016.5. (a) (6) — Capital Improvement Plan A description of the planned facilities that the City expects to fund with impact fee revenue is included in each chapter in this report. Adoption of this nexus study would approve the planned facilities identified herein as the Capital Improvement Plan for this nexus study. 52 WILLDAN 12. Implementation Impact Fee ProgramAdoption Process Impact fee program adoption procedures are found in the California Government Code section 66016. Adoption of an impact fee program requires the City Council to follow certain procedures including holding a public hearing. Data, such as an impact fee report, must be made available at least 10 days prior to the public hearing. The City's legal counsel should be consulted for any other procedural requirements as well as advice regarding adoption of an enabling ordinance and/or a resolution. After adoption there is a mandatory 60-day waiting period before the fees go into effect. Inflation tart The City can keep its impact fee program up to date by periodically adjusting the fees for inflation. Such adjustments should be completed regularly to ensure that new development will fully fund its share of needed facilities. We recommend that the California Construction Cost Index (https://www.dgs.ca.gov/RESD/Resources/Page-Content/Real-Estate-Services-Division- Resources-List-Folder/DGS-California-Construction-Cost-Index-CCCI) be used for adjusting fees for inflation. The California Construction Cost Index is based on data from the Engineering News Record and is aggregated and made available for free by the State of California. The fee amounts can be adjusted based on the change in the index compared to the index in the base year of this study(2023). While fee updates using inflation indices are appropriate for periodic updates to ensure that fee revenues keep up with increases in the costs of public facilities, the City will also need to conduct more extensive updates of the fee documentation and calculation (such as this study) when significant new data on growth forecasts and/or facility plans become available. Note that decreases in index value will result in decreases to fee amounts. Reporting Requirements The City will comply with the annual and five-year reporting requirements of the Mitigation Fee Act. For facilities to be funded by a combination of public fees and other revenues, identification of the source and amount of these non-fee revenues is essential. Identification of the timing of receipt of other revenues to fund the facilities is also important. There is no time limit by which impact fee revenue must be spent. However, if the City is accruing impact fee revenue to fund new development's share of a project, then it must make certain findings with respect to unexpended impact fee fund balances after five years. Among other requirements, the five-year report requires the City to"Identify all sources and amounts of funding anticipated to complete financing in incomplete improvements," and to "Designate the approximate dates on which supplemental funding is expected to be deposited into the appropriate account or fund."2 On October 13, 2023 AB 516 was signed into law by the Governor of California, and will go into effect on January 1,2024. This the bill requires local agencies to: 2 California Government Code§66001(d). W I LLDAN 53 t.ANnAt SFR,:CFS City of Arroyo Grande Development Impact Fee Nexus Study Update • Include information on projects noted in prior reports and whether construction began on the approximate date noted,in the previous report. • Explain the reason for any delay in the start of the project and provide a new approximate date construction will begin. • Identify the number of people or entities that receive refunds of Mitigation Fee Act fees. The bill also requires local agencies to inform people paying mitigation fees that they: • Can request an audit to determine if the fees charged by a local agency are more than the amount of money needed to cover the cost of the public improvements. • Can receive information by mail about when the local agency will meet to review its annual Mitigation Fee Act report. • Can access and review mitigation fee information on the local agency's website, and how to do so. Table 12.1 summarizes the annual and five-year reporting requirements identified in the Mitigation Fee Act. 54 WILLDAN as a1.0 a Q.0 m0 g m E. d as- c cc' ocEa) ° , DL iv U) as E c a) cas Q tioQ E o a a) 4) 0 E au. c m v -SS O c O > N m C 2 (s P U m w a) N a o E c •C c a) to O N CO E- Q. co N C CCs C O p V a) a) 0 O 0 0 0 E a m = p p C C N 0 o C E a) 0 O O .6 ,R .G C N a 0 m3 -U C C " V 0 L C N aci s2 E s U ca o V c 0 a ,.1(�? f6 E o O V S C E p a) 0 a as c ••h 0 o c w a L .0 7 0 0 00 N Cp a) 3@ m a) N 'G is p .o p -p t N a) 0 U U U >+ U E - to -O as 0) .0 as a) U C C -0 O E ' c c .:.V 0 c p a) c o N N a) '0 a) N O 0 U N ,O a) S co N 3 o is E 0 pE� U 0 E E N L a .E �.�- 'O O a3 !t.--- o � 0. 52 a >( C „- N C Q) 2 (0 U a) O m = N �' us a ��' o as E co c '� E 0 o .0 a o co a) co c a> co O C c . .x a) 0 lc U a) O C v s ' O E a . a as .Q a .c r ' E co f° a) 0 E > a) O w p o a N a o c c N a �' c C a) -a a c a, c N U a . mE . o a o o f E O a) C E -� 0 'C a) 0 >, S .am �y U u, 0- ns a m E d N C as 'O O ..J O S N .2 0 ° O S 5 o a0i m o !=1:3a) C 0 >,C i m co c o ° 0 ao oYc .� as o ^ -2 a) a) 2 a. E- as a e a a) a •� ca o c E c 0 a as 2 0 •� 'j a N p EO �0.. 'O .0 0 co, 0 :N '2 0 > c .0 •- 0 a) .0 5 U C O CD re w cu • o es c m ,c as a) o c c a s 0 = a c o. .4.-... •c .o U c 0 .•o- 0 ,Z, as 0 . .. C c a c E 0 E amici y m m ai B a a E ` as E • c 0).rn V o m a) -0 0) c .a R �O 0 0 as cu E c a) a) C 'C amici c " C ••- U) t An a) a) a) '� c < a s.- m c - E c a) a a) f c a E 0v c0 ami QFcgFcQc a o oQ as ti U N EQFc s Q• p P.C ? Qa?U�W c �ww .c .� av c �s � (�= a Ce w us 0 as v m O L • O C 0 N c'3 CSO O a) CO) O 0 a) �. O N 0 S N T 0 a) _ (D w a) T O c0 C a) N coC — RI co 0 O Co m CG co .0 fl.C N Lam, C • E_ - a F= g ,"" = v 0• 8Q c ▪ d < o cC)o d`N 5o r' o g LLiiQ d O O v d(o Uv O O ay C) 271 VH 0 c0 ctoo co COi City of Arroyo Grande Development Impact Fee Nexus Study Update Programming Ravenues and Projects with the CIP The City maintains a Capital Improvement Program (CIP) to plan for future infrastructure needs. The CIP identifies costs and phasing for specific capital projects. The use of the CIP in this manner documents a reasonable relationship between new development and the use of those revenues. The City may decide to alter the scope of the planned projects or to substitute new projects if those new projects continue to represent an expansion of the City's facilities and provide benefit to new development. If the total cost of facilities varies from the total cost used as a basis for the fees, the City should consider revising the fees accordingly. 56 WILLDAN NA,C..1 S,R,,ES 13. Mitigation Findings Public facilities fees are one-time fees typically paid when a building permit is issued and imposed on development projects by local agencies responsible for regulating land use (cities and counties). To guide the widespread imposition of public facilities fees the State Legislature adopted the Mitigation Fee Act (the Act) with Assembly Bill 1600 in 1987 and subsequent amendments. The Act, contained in California Government Code Sections 66000 through 66025, establishes requirements on local agencies for the imposition and administration of fee programs. The Act requires local agencies to document five findings when adopting a fee. The five statutory findings required for adoption of the public facilities fees documented in this report are presented in this chapter and supported in detail by the preceding chapters. All statutory references are to the Act. Purpose of Fee ■ Identify the purpose of the fee (§66001(a)(1) of the Act). Development impact fees are designed to ensure that new development will not burden the existing service population with the cost of facilities required to accommodate growth. The purpose of the fees documented by this report is to provide a funding source from new development for capital improvements to serve that development. The fees advance a legitimate City interest by enabling the City to provide public facilities for new development. Use of Fee Revenues • Identify the use to which the fees will be put. if the use is financing facilities, the facilities shall be identified. That identification may, but need not, be made by reference to a capital improvement plan as specified in §65403 or§66002, may be made in applicable general or specific plan requirements, or may be made in other public documents that identify the facilities for which the fees are charged(§66001(a)(2)of the Act). Fees documented in this report, if enacted by the City, would be used to fund expanded facilities to serve new development. Facilities funded by these fees are designated to be located within the City's sphere of influence. Fees addressed in this report have been identified by the City to be restricted to funding the following facility categories: fire protection, police, parks, recreation, water,transportation, storm drain and wastewater facilities. Benefit Relationship ■ Determine the reasonable relationship between the fees' use and the type of development project on which the fees are imposed(§66001(a)(3)of the Act). The City will restrict fee revenue to the acquisition of land, construction of facilities, infrastructure and buildings, and purchase of related equipment, furnishings, vehicles, and services used to serve new development. Facilities funded by the fees are expected to provide a citywide network of facilities accessible to the additional residents and workers associated with new development. Under the Act, fees are not intended to fund planned facilities needed to correct existing deficiencies. Thus, a reasonable relationship can be shown between the use of fee revenue and the new development residential and non-residential use classifications that will pay the fees. I LLDAN 57 W FtNA NC.fA!SERVICES City of Arroyo Grande Development Impact Fee Nexus Study Update Burden Relationship ■ Determine the reasonable relationship between the need for the public facilities and the types of development on which the fees are imposed(§66001(a)(4) of the Act). Facilities need is based on a facility standard that represents the demand generated by new development for those facilities. For each facility category, demand is measured by a single facility standard that can be applied across land use types to ensure a reasonable relationship to the type of development. For some facility categories service population standards are calculated based upon the number of residents associated with residential development and the number of workers associated with non-residential development. To calculate a single, per capita standard, one worker is weighted differently than one resident based on an analysis of the relative use demand between residential and non-residential development. The standards used to identify growth needs are also used to determine if planned facilities will partially serve the existing service population by correcting existing deficiencies. This approach ensures that new development will only be responsible for its fair share of planned facilities, and that the fees will not unfairly burden new development with the cost of facilities associated with serving the existing service population. Chapter 2, Growth Forecasts provides a description of how service population and growth forecasts are calculated. Facility standards are described in the Facility Standard sections of each facility category chapter. Proportionality Determine how there is a reasonable relationship between the fees amount and the cost of the facilities or portion of the facilities attributable to the development on which the fee is imposed(§66001(b) of the Act). The reasonable relationship between each facilities fee for a specific new development project and the cost of the facilities attributable to that project is based on the estimated new development growth the project will accommodate. Fees for a specific project are based on the project's size. Larger new development projects can result in a higher service population resulting in higher fee revenue than smaller projects in the same land use classification. Thus, the fees ensure a reasonable relationship between a specific new development project and the cost of the facilities attributable to that project. See Chapter 2, Growth Forecasts, or the Service Population sections in each facility category chapter for a description of how service populations or other factors are determined for different types of land uses. See the Fee Schedule section of each facility category chapter for a presentation of the maximum justified facilities fees. 58 WILLDAN Appendix Appendix Table A.1: Police Vehicle Inventory Current Vehicle #Type Year Make Model Valuation 4602 Police 2017 Ford Explorer Interceptor $ 40,000 4604 Private Passenger 2017 Ford Explorer Interceptor 40,000 PD- Trailer 2006 Haulm Carrier 20,000 6 PD-4621 Motorcycle 2022 BMW RS 29,985 PD-4649 Police 2021 Ford Explorer 37,000 4605 Police 2017 Ford Explorer Interceptor 40,000 4601 Police 2017 Ford Explorer Interceptor 40,000 4603 Police 2017 Ford Explorer Interceptor 40,000 4604 Private Passenger 2013 DODGE CHARGER 26,500 4605 Private Passenger 2013 DODGE CHARGER 26,500 4606 Police 2017 Ford Explorer Interceptor 40,000 4607 Police 2017 Ford Explorer Interceptor 40,000 4608 Police 2017 Ford Explorer Interceptor 40,000 4609 Police 2017 Ford Explorer Interceptor 40,000 4613 Light Truck 2016 DODGE RAM CREW CAB 4X4 23,000 4614 Private Passenger 2016 DODGE CHARGER 29,700 4615 Private Passenger 2016 DODGE CHARGER 29,700 4616 Private Passenger 2016 DODGE CHARGER 29,700 4617 Private Passenger 2016 DODGE CHARGER 29,700 4618 Private Passenger 2016 DODGE CHARGER 29,700 4620 Motorcycle 2009 Honda Motorcycle 22,982 4623 Trailer 1988 SPCNS FLAT BED TRAILER 1 4625 Private Passenger 1962 FORD 4 DOOR PD CAR 25,000 4626 Private Passenger 2002 CHEVROL PICK-UP -CSO 27,000 4630 Trailer 2001 PACAM UTILITY TRAILER(DARE) 2,300 4637 Trailer 2015 PJMFG Trailer 15,000 PD-4616 Police 2021 Ford Explorer 37,000 PD-4617 Police 2021 Ford Explorer 37,000 PD-4620 Motorcycle 2022 BMW RS 29,985 PD-4614 Police 2021 Ford Explorer 37,000 PD-4615 Police 2021 Ford Explorer 37,000 PD-4618 Police 2021 Ford Explorer 37,000 4619 Private Passenger 2016 DODGE CHARGER 29,700 4621 Motorcycle 2009 Honda Motorcycle 22,982 4624 Police 1998 TRAILER RADAR TRAILER 16,000 4628 Trailer 1993 LCHIH TRAILER 1 4636 Private Passenger 2006 Chevrolet Impala 8,768 Total $1,056,204 Source:City of Arroyo Grande. 59 VVI LLDAN Fnnnc:ai sFR4crs City of Arroyo Grande Development Impact Fee Nexus Study Update Appendix Table A.2: Park Vehicle Inventory Current Vehicle # Type Year Make Model Valuation P13 Private Passenger 2006 FORD RANGER $ 17,334 P-16 Light Truck 1997 FORD RANGER 18,000 PW-61 Light Truck 2003 FORD F-150 XL 25,000 PW-7 Medium Truck 2014 FORD F-550 38,717 P17 Private Passenger 2006 FORD F250 20,575 P-3 Light Truck 2006 FORD F250 20,000 P-26 Light Truck 1989 DAIHATSL HIGH JET 9,540 P-57 Light Truck 2001 FORD F-150 TRUCK 30,000 PW-14 Light Truck 2013 FORD F-150 18,566 Total $ 197,732 Developed Park Acres 52.77 Vehicle Cost per Acre $ 3,747 Sources:City of Arroyo Grade;Table 5.2,Willdan Financial Services. 60 WILLDAN OFFICIAL CERTIFICATION I, JESSICA MATSON, City Clerk of the City of Arroyo Grande, County of San Luis Obispo, State of California, do hereby certify under penalty of perjury, that the attached Resolution No. 5346 was passed and adopted at a regular meeting of the City Council of the City of Arroyo Grande on the 13th day of February, 2024. WITNESS my hand and the Seal of the City of Arroyo Grande affixed this 15th day of February, 2024. SSICA MATSON, CITY CLERK