HomeMy WebLinkAboutCC 2025-01-14_09d Annual Development Impact Fee CRAT \ED -�
* JULY 10, 1911 *
cQE�FORJ MEMORANDUM
TO: City Council
FROM: Nicole Valentine, Director of Administrative Services
SUBJECT: Accept the Annual Development Impact Fee Report for Fiscal Year
2023-24 (AB 1600 Report)
DATE: January 14, 2025
RECOMMENDATION:
1) Accept Annual Development Impact Fee Report for Fiscal Year 2023-24 (AB1600
Report); and
2) Determine that accepting the Annual Development Impact Fee Report for Fiscal Year
2023-24 is not a project subject to the California Environmental Quality Act ("CEQA")
because it has no potential to result in either a direct, or reasonably foreseeable indirect,
physical change in the environment. (State CEQA Guidelines, Cal. Code Regs., tit. 14,
§§ 15060, subd. (c)(2)-(3), 15378.)
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
There is no direct financial impact of the status report other than the staff time required to
prepare it, which is built into the department workplan.
BACKGROUND:
The Mitigation Fee Act (Government Code Sections 66000, et seq.) requires local
agencies to provide an accounting of impact fees imposed on development projects.
These fees (sometimes referred to as "AB 1600 fees") are intended to mitigate impacts
of development projects on City facilities and infrastructure. AB 1600 requires the City to
provide a detailed report of information related to development impact fees every year in
accordance with Government Code Section 66006.
ANALYSIS OF ISSUES:
There are eight Development Impact Fees subject to AB 1600 reporting requirements,
contained within the attached report.
1. Fire Protection Fund (Fund 210)
2. Police Protection Fund (Fund 212)
3. Park Improvement Fund (Fund 214)
4. Recreation Facilities Fund (Fund 215)
5. Traffic Signalization Fund (Fund 222)
Item 9.d.
Page 58 of 190
City Council
Accept the Annual Development Impact Fee Report for Fiscal Year 2023-24 (AB
1600 Report)
January 14, 2025
Page 2
6. Transportation Facility Impact Fund (Fund 224)
7. Water Neutralization Impact Fund (Fund 226)
8. Storm Drain Facility Fund (Fund 231)
The annual Development Impact Fee Report for Fiscal Year 2023-24 is attached to this
report as Attachment 1. The report includes the required financial information as of
June 30, 2024. The report was made publicly available on the City's website 180 days
after the close of FY 2023-24 and at least 15 days before this regular meeting, consistent
with State law. Notice was also provided to any interested party who filed a written request
of the meeting to review the AB 1600 report in accordance with Government Code Section
66006.
Pursuant to Government Code Section 66006(b), the City is required to make available
to the public the following information each year:
1. A brief description of the type of fee in the account.
2. The amount of the fee.
3. The account's beginning and ending balance.
4. The amount of fees collected and the interest earned.
5. A description of the improvements on which the funds were expended and the
amount expended on each improvement, including the percentage of the
improvement funded with development impact fees.
6. An approximate date by which the construction of a public improvement will begin
if the City determines that sufficient funds have been collected to complete
financing on the incomplete improvement.
7. A description of each inter-fund transfer or loan made from the account, including
the public improvement on which the transferred or loaned fees will be expended,
and, in the case of an interfund loan, the date on which the loan will be repaid, and
the rate of interest that the account or fund will receive on the loan.
8. The amount of any refunds made for failing to identify the approximate date by
which construction of the public improvement will commence within 180 days of
the local agency's determination that sufficient funds have been collected to
complete financing on an incomplete public improvement.
9. Identify all public improvements identified in previous annual reports as having
sufficient funding for completion, and whether construction began on the
approximate date previously listed. If construction did not begin on the approximate
date listed in a prior report, the annual report must include the reason for the delay
and a revised approximate date that construction will begin.
10.Specify the number of persons and entities identified to receive refunds.
The City has established separate capital facility accounts for each development impact
fee collected. Earned interest is deposited in, and recorded for, each account.
Item 9.d.
Page 59 of 190
City Council
Accept the Annual Development Impact Fee Report for Fiscal Year 2023-24 (AB
1600 Report)
January 14, 2025
Page 3
ALTERNATIVES:
The following alternatives are provided for the Council's consideration:
1. Adopt the Resolution accepting and filing the report;
2. Do not adopt the Resolution and request further information; or
3. Provide other direction to staff.
ADVANTAGES:
By accepting the status report on Development Impact Fees, the City will be complying
with the Mitigation Fee Act, which requires local agencies to provide an annual accounting
of impact fees collected from development projects.
DISADVANTAGES:
There are no disadvantages in relation to the recommended action.
ENVIRONMENTAL REVIEW:
Adopting a resolution accepting the status report on the receipt and use of Development
Impact Fees (AB 1600) is not a project subject to the California Environmental Quality Act
("CEQA") because it has no potential to result in either a direct, or reasonably foreseeable
indirect, physical change in the environment. (State CEQA Guidelines, Cal. Code Regs.,
tit. 14, §§ 15060, subd. (c)(2)-(3), 15378.)
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City's website in accordance with
Government Code Section 54954.2.
ATTACHMENTS:
1. Annual Development Impact Fee Report for Fiscal Year 2023-24
Item 9.d.
Page 60 of 190
ATTACHMENT 1
City of Arroyo Grande
Annual
Development Impact Fee Report
Fiscal Year 2023-2024
1
Page 61 of 190
Background
The City of Arroyo Grande (City) is located in Southern San Luis Obispo County. The City
borders the incorporated cities of Pismo Beach and Grover Beach on the west, and
adjoins unincorporated County territory along its other boundaries.
The Mitigation Fee Act (Government Code Sections 66000 et seq.), established by AB
1600, requires local agencies to provide an accounting of impact fees imposed on
development projects. These fees are intended to mitigate certain impacts of
development projects on City facilities and infrastructure.
The accounting and reporting responsibilities of AB 1600 require the City to provide a
detailed reporting of the use of development impact fees every year in accordance with
Government Code section 66006.
Annual Development Impact Fee Reporting Requirements
Pursuant to Government Code section 66006(b), the City is required to make available to
the public the following information each year:
1. A brief description of the type of fee in the account.
2. The amount of the fee.
3. The account's beginning and ending balance.
4. The amount of fees collected and the interest earned.
5. A description of the improvements on which the funds were expended and the
amount expended on each improvement, including the percentage of the
improvement funded with development impact fees.
6. An approximate date by which the construction of a public improvement will begin
if the City determines that sufficient funds have been collected to complete
financing on the incomplete improvement.
7. A description of each inter-fund transfer or loan made from the account, including
the public improvement on which the transferred or loaned fees will be expended,
and, in the case of an interfund loan, the date on which the loan will be repaid, and
the rate of interest that the account or fund will receive on the loan.
8. The amount of any refunds made for failing to identify the approximate date by
which construction of the public improvement will commence within 180 days of
the local agency's determination that sufficient funds have been collected to
complete financing on an incomplete public improvement.
9. Identify all public improvements identified in previous annual reports as having
sufficient funding for completion, and whether construction began on the
approximate date previously listed. If construction did not begin on the approximate
date listed in a prior report, the annual report must include the reason for the delay
and a revised approximate date that construction will begin.
10.Specify the number of persons and entities identified to receive refunds.
2
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List of City's Development Impact Fees
There are eight active Development Impact Fees identified as subject to AB 1600
reporting requirements.
1. Fire Protection Fund (Fund 210)
2. Police Protection Fund (Fund 212)
3. Park Improvement Fund (Fund 214)
4. Recreation Facilities Fund (Fund 215)
5. Traffic Signalization Fund (Fund 222)
6. Transportation Facility Impact Fund (Fund 224)
7. Water Neutralization Impact Fund (Fund 226)
8. Storm Drain Facility Fund (Fund 231)
Commencement of Annual DIF Reports for Each Fund
The first annual report for the Traffic Signalization Fee, the Transportation Facility Fee,
and the Drainage Facility Fee was required in January 1999. The first annual report for
the Water Neutralization Fee was in 2003. The first annual report for the Fire Protection
Fee, the Police Facilities Fee, the Community Center Fee, and the Park Improvement
Fee was in 2005.
Separation of Funds and Interest
The City utilizes fund accounting to track and segregate Development Impact Fees from
other City revenues. Although the City pools its cash for investment purposes, interest
income is allocated to each of the funds based on their respective cash balances. Staff
examined the accounts to determine if any Development Impact Fees remain
unexpended. No inter-fund transfers or loans have been made to any of the Development
Impact Funds. The most recent Development Impact Fee Study was prepared in 2024.
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Fire Protection Fund (Fund 210)
The purpose the Fire Protection Fee is to ensure that new development funds its share
of fire protection facilities. The City owns a single fire station. The City is planning to spend
fire facilities fee revenues 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.
The Current Amount of the DIF for Residential per square foot is $0.24 and for
Nonresidential per square foot Commercial is $0.21 and Office is $0.32.
FY 23-24
Actual
Revenues:
Impact Fees $ 28,072
Interest Income 16,289
Transfers in - operating
Total Revenues 44,361
Expenditures:
Operating Expenses -
Excess of Revenues Over
Expenditures 44,361
Other Financing Uses:
Capital Transfers Out -
Excess of Revenues Over
(Under) Expenditures and
Other Financing Uses 44,361
Fund Balance, Beginning of Year 382,384
Fund Balance, End of Year $ 426,745
Fire Protection Funds were not spent on improvements in FY 2023-24. There are no inter-
fund transfers or loans made from the Fire Protection Fund. There were no refunds made
from the Fire Protection Fund and no one was entitled to receive a refund.
4
Page 64 of 190
Police Protection Fund (Fund 212)
The purpose the Police Protection Fee is to ensure that new development funds its share
of police protection facilities. This fee provides funding for the expansion of police
facilities, including upgrades to its records management system, upgrades to property
and evidence storage, and new community safety cameras.
The Current Amount of the DIF for Residential per square foot is $0.17 and for
Nonresidential per square foot Commercial is $0.15 and Office is $0.23.
FY 23-24
Actual
Revenues:
Impact Fees $ 3,065
Interest Income 2,439
Total Revenues 5,504
Expenditures:
Operating Expenses -
Excess of Revenues Over
Expenditures 5,504
Other Financing Uses:
Capital Transfers Out -
Excess of Revenues Over
(Under) Expenditures and
Other Financing Uses 5,504
Fund Balance, Beginning of Year 58,518
Fund Balance, End of Year $ 64,022
Police Protection Funds were not spent on improvements in FY 2023-24. There are no
inter-fund transfers or loans made from the Police Protection Fund. There were no
refunds made from the Police Protection Fund and no one was entitled to receive a
refund.
5
Page 65 of 190
Park Improvement Fund (Fund 214)
The purpose the park facilities impact fee is to fund park facilities needed to serve new
development. This fee is to be used to fund the purchase and improvement of over 8
parkland acres.
The Current Amount of the DIF for Residential per square foot is $3.22.
FY 23-24
Actual
Revenues:
Impact Fees $ 48,012
Interest Income 8,233
Total Revenues 56,245
Expenditures:
Operating Expenses 38,487
Excess of Revenues Over
Expenditures 17,759
Other Financing Uses:
Capital Transfers Out -
Excess of Revenues Over
(Under) Expenditures and
Other Financing Uses 17,759
Fund Balance, Beginning of Year 189,988
Fund Balance, End of Year $ 207,747
Park facilities impact fees were not spent on improvements in FY 2023-24. There are no
inter-fund transfers or loans made from the Park Improvement Fund. There were no
refunds made from the Park Improvement Fund and no one was entitled to receive a
refund.
6
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Recreation Facilities Fund (Fund 215)
The purpose the recreations facilities impact fee is to ensure that new development funds
its fair share of recreation facilities. 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 City plans to construct a new community center to replace the
Millis Community Center.
The Current Amount of the DIF for Residential per square foot is $0.17.
FY 23-24
Actual
Revenues:
Impact Fees $ 2,763
Interest Income 1,219
Expense Recovery
Total Revenues 3,982
Expenditures:
Operating Expenses -
Excess of Revenues Over
Expenditures 3,982
Other Financing Uses:
Capital Transfers Out -
Excess of Revenues Over
(Under) Expenditures and
Other Financing Uses 3,982
Fund Balance, Beginning of Year 28,486
Fund Balance, End of Year $ 32,468
Recreation facilities impact fees were not spent on improvements in FY 2023-24. There
are no inter-fund transfers or loans made from the Recreation Facilities Fund. There were
no refunds made from the Recreation Facilities Fund and no one was entitled to receive
a refund.
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Traffic Signalization Fund (Fund 222)
The purpose of the Traffic Signalization Impact Fee it to install traffic signals needed to
serve future development in the study. This fee revenues are used to fund the
construction of traffic signal systems, signs, and other traffic control devices. The projects
are based on the City's signalization plan and General Plan Circulation Element.
This development impact fee is not longer being collected as of April 14, 2024.
FY 23-24
Actual
Revenues:
Traffic Signal Assessments $ 12,652
Interest Income 46,541
Total Revenues $ 59,193
Expenditures:
Operating Expenses -
Excess of Revenues Over
Expenditures 59,193
Other Financing Uses:
Capital Projects -
Excess of Revenues Over
(Under) Expenditures and
Other Financing Uses 59,193
Fund Balance, Beginning of Year 1,136,640
Fund Balance, End of Year $ 1,195,833
Traffic signalization impact fees were not spent on improvements in FY 2023-24. There
are no inter-fund transfers or loans made from the Traffic Signalization Fund. There were
no refunds made from the Traffic Signalization Fund and no one was entitled to receive
a refund.
8
Page 68 of 190
Transportation Facility Impact Fund (Fund 224)
The purpose the transportation impact fee is to ensure that transportation facilities and
demand can accommodate growth within the City. The fees will fund projects identified in
the Arroyo Grande Citywide Circulation Study to mitigate new development's impact on
traffic level of service as new development added trips to the City's circulation network.
The Current Amount of the DIF for Residential per square foot is $1.37 and for
Nonresidential per square foot Commercial is $6.94 and Office is $7.27.
FY 23-24
Actual
Revenues:
Transportation Impact Fees $ 43,218
Interest income 110,033
Total Revenues 153,251
Expenditures:
Operating Expenses -
Excess of Revenues Over
Expenditures 153,251
Other Financing Uses:
Capital Projects -
Excess of Revenues Over
(Under) Expenditures and
Other Financing Uses 153,251
Fund Balance, Beginning of Year 2,682,500
Fund Balance, End of Year $ 2,835,751
Transportation facility impact fees were not spent on improvements in FY 2023-24. There
are no inter-fund transfers or loans made from the Transportation Facility Impact Fund.
There were no refunds made from the Transportation Facility Impact Fund and no one
was entitled to receive a refund.
9
Page 69 of 190
Water Neutralization Impact Fund (Fund 226)
The purpose of this fee is to ensure that water facilities and demand can accommodate
growth within the City. The need for water facilities improvements is based on the water
demand placed on the system by development and the Water System Master Plan.
The Current Amount of the DIF is based on meter size shown in the table below:
Water Impact
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
Here is a reporting of the Revenues, Expenditures, and change in Fund Balances at
June 30, 2024.
FY 23-24
Actual
Revenues:
Water Neutralization Fee $ 45,781
Interest Income 9,285
Transfer In-Water Fund -
Total Revenues 55,066
Expenditures:
Operating Expenses 22,199
Excess of Revenues Over/(Under)
Expenditures 32,867
Other Financing Uses:
Capital Projects -
Excess of Revenues Over
(Under) Expenditures and
Other Financing Uses 32,867
Fund Balance, Beginning of Year 218,316
Fund Balance, End of Year $ 251,183
Water impact fees were not spent on improvements in FY 2023-24. There are no inter-
fund transfers or loans made from the Water Neutralization Impact Fund. There were no
refunds made from the Water Neutralization Impact Fund and no one was entitled to
receive a refund.
10
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Storm Drain Facility Fund (Fund 231)
The purpose of this fee is to ensure that storm drain facilities and demand can
accommodate growth within the City. 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. The new storm drain facilities were identified in
the City's FY 2023-25 Biennial Budget, and by City staff.
The Current Amount of the DIF for Residential per square foot is $0.03 and for
Nonresidential per square foot Commercial and Office is $0.01.
FY 23-24
Actual
Revenues:
Drainage Fees $ 74
Interest Income -
Total Revenues 74
Expenditures:
Operating Expenses -
Excess of Revenues Over
Expenditures 74
Other Financing Uses:
Capital Projects -
Excess of Revenues Over
(Under) Expenditures and
Other Financing Uses 74
Fund Balance, Beginning of Year 5,891
Fund Balance, End of Year $ 5,965
Storm drain impact fees were not spent on improvements in FY 2023-24. There are no
inter-fund transfers or loans made from the Storm Drain Facility Fund. There were no
refunds made from the Storm Drain Facility Fund and no one was entitled to receive a
refund.
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