CC 2019-01-22_08d Annual Adjustment of Development Impact Fees
MEMORANDUM
TO: CITY COUNCIL
FROM: NICOLE VALENTINE, INTERIM DIRECTOR OF ADMINISTRATIVE SERVICES
SUBJECT: CONSIDERATION OF ANNUAL ADJUSTMENT OF DEVELOPMENT IMPACT
FEES
DATE: JANUARY 22, 2019
SUMMARY OF ACTION:
Annual adjustment of development impact fees.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
Adoption of the Resolution will increase development impact fees charged for new
development projects in 2019. The revenue generated from this increase is dependent on the
amount of new development in the community during the coming year.
RECOMMENDATION:
It is recommended the City Council adopt a Resolution approving the annual adjustment to the
City’s Development Impact Fees pursuant to Municipal Code Section 3.36.040.
BACKGROUND:
Section 3.36.040 of the Arroyo Grande Municipal Code states that development impact fees shall
be adopted by Resolution and shall be adjusted each year in accordance with the percentage
increase based on changes in the annual average Engineering News Record (ENR) Construction
Cost Index (CCI). The current fee schedule was adopted in 2014 and an appropriation for a
comprehensive development impact fee study was included in the approved FY 2014-15
budget. However, due to shifting project priorities, staffing changes, and workload since that
time, the fee study has been delayed.
ANALYSIS OF ISSUES:
Until such time an updated fee study can be completed, it is recommended that the annual fee
adjustments resume as provided for in Municipal Code Section 3.36.040. The calculation
shown as follows provides documentation that a 3.03% increase in the ENR CCI warrants an
adjustment in the City’s development impact fees.
Item 8.d. - Page 1
CITY COUNCIL
CONSIDERATION OF ANNUAL ADJUSTMENT OF DEVELOPMENT IMPACT FEES
JANUARY 22, 2019
PAGE 2
The calculation adjusts the fees as follows:
Factor = 1 + Current Index –Base Index for Date of Adoption
Base Index for Date of Adoption
The calculation is as follows:
1.0303 = 1 + 11,062 – 10,737
10,737
The City’s last development impact fee study was in 2000. Staff anticipates requesting funding
for a comprehensive development impact fee study in the second year of the FY 2019-20
Budget in order to examine the level of fees necessary to appropriately mitigate development
impacts and determine if fee amounts are competitive with other jurisdictions.
ALTERNATIVES:
The following alternatives are provided for City Council consideration:
1. Adopt the Resolution;
2. Do not adopt the Resolution and request further information; or
3. Provide direction to staff.
ADVANTAGES:
By approving the recommended fees, the City will be able to maximize revenue by recovering
the estimated cost of providing services to new development.
DISADVANTAGES:
The only disadvantage identified in relation to this recommendation is an increased cost to new
development.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
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.
Item 8.d. - Page 2
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARROYO GRANDE ADJUSTING DEVELOPMENT
IMPACT FEES BY THE CHANGE IN THE ENGINEERING
NEWS RECORD CONSTRUCTION COST INDEX
WHEREAS, pursuant to Section 3.36.040 of the Municipal Code, Development Impact
Fees are to be adjusted annually by modifying the adopted value up or down in
conformance with the Engineering News Record Construction Cost Index.
NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Arroyo
Grande hereby adopts the fees and fee schedules set forth in Exhibit “A” attached
hereto and incorporated herein by this reference. This Resolution shall take effect sixty
(60) days after its adoption, per Government Code Section 66017.
On motion of Council Member __________________ seconded by Council Member
__________________ and on the following roll call vote, to wit:
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted this day of , 2019.
Item 8.d. - Page 3
RESOLUTION NO.
PAGE 2
_____________________________________
CAREN RAY RUSSOM, MAYOR
ATTEST:
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
_____________________________________
JAMES A. BERGMAN, CITY MANAGER
APPROVED AS TO FORM:
_____________________________________
HEATHER WHITHAM, CITY ATTORNEY
Item 8.d. - Page 4
Definitions:
Development Types –Residential and commercial development divided into sub-
categories.
Units of Development – A standard measure of the cost to provide services. The
acre is the fundamental unit measure, which is divided into a smaller component,
the dwelling unit (DU).
Asset Cost Per Acre – The calculated cost to provide additional services/facilities
to new development.
Calls Per Unit – The number of yearly additional police calls generated by new
development.
Facility Cost Per Call – The cost per call to expand current police facilities to
accommodate new development.
Persons Per Unit – The number of persons expected to reside in the unit of
development.
Costs Per Capita – The cost of new or additions to the current community center,
on a per person basis, to maintain the current level of service of recreation
facilities.
Impact Fee Per Unit – The fee to be levied per unit of development in order to
recover future cost of new or expanded facilities.
Fees:
A person seeking to construct a residential or non-residential development project shall pay
Development Impact Fees for fire protection, police facilities, traffic signalization, transportation
facilities, community centers, park improvements, and water facilities based upon the following
schedule:
EXHIBIT A
Item 8.d. - Page 5
Development Fee per Acres Fee
Type Units Acre Per Unit Per Unit
Residential - Estate Dwelling Unit 1,976.00$ 2.500 4,940.00$
Residential Rural Dwelling Unit 1,976.00$ 1.000 1,976.00$
Residential - Single-Family Dwelling Unit 1,976.00$ 1.000 1,976.00$
Low- income Dwelling Unit 494.00$ 1.000 494.00$
Very Low-income Dwelling Unit -1.000
Residential - Multi-Family Dwelling Unit 1,976.00$ 0.090 178.00$
Low- income Dwelling Unit 494.00$ 0.090 44.00$
Very Low-income Dwelling Unit -0.090
Residential Mobile Home Dwelling Unit 1,976.00$ 0.120 237.00$
Low- income Dwelling Unit 494.00$ 0.120 59.00$
Very Low-income Dwelling Unit -0.120
Commercial - General Thousand Square Feet 1,976.00$ 0.091 180.00$
Commercial - Service Thousand Square Feet 1,976.00$ 0.091 180.00$
Hotel/Motel Thousand Square Feet 1,976.00$ 0.050 99.00$
Professional Office Thousand Square Feet 1,976.00$ 0.077 152.00$
Industrial Thousand Square Feet 1,976.00$ 0.067 132.00$
Development Fee per Calls Fee
Type Units Call Per Unit Per Unit
Residential - Estate Dwelling Unit 165.00$ 0.250 41.00$
Residential Rural Dwelling Unit 165.00$ 0.250 41.00$
Residential - Single-Family Dwelling Unit 165.00$ 0.750 124.00$
Low- income Dwelling Unit 41.00$ 0.750 31.00$
Very Low-income Dwelling Unit -0.750
Residential - Multi-Family Dwelling Unit 165.00$ 1.320 218.00$
Low- income Dwelling Unit 41.00$ 1.320 54.00$
Very Low-income Dwelling Unit -1.320
Residential Mobile Home Dwelling Unit 165.00$ 0.750 124.00$
Low- income Dwelling Unit 41.00$ 0.750 31.00$
Very Low-income Dwelling Unit -0.750
Commercial - General Thousand Square Feet 165.00$ 3.909 645.00$
Commercial - Service Thousand Square Feet 165.00$ 2.273 375.00$
Hotel/Motel Thousand Square Feet 165.00$ 1.195 197.00$
Professional Office Thousand Square Feet 165.00$ 0.095 16.00$
Industrial Thousand Square Feet 165.00$ 0.045 7.00$
CITY OF ARROYO GRANDE
DEVELOPMENT IMPACT FEES
EFFECTIVE 3/25/19
Fire Protection
Police Facilities
Item 8.d. - Page 6
Development Fee per PeakTrips Fee
Type Units Trip Per Unit Per Unit
Residential - Estate Dwelling Unit 726.00$ 1.2 871.00$
Residential Rural Dwelling Unit 726.00$ 1.2 871.00$
Residential - Single-Family Dwelling Unit 726.00$ 1.0 726.00$
Low- income Dwelling Unit 182.00$ 1.0 182.00$
Very Low-income Dwelling Unit -1.0
Residential - Multi-Family Dwelling Unit 726.00$ 0.7 508.00$
Low- income Dwelling Unit 182.00$ 0.7 127.00$
Very Low-income Dwelling Unit -0.7
Residential Mobile Home Dwelling Unit 726.00$ 0.5 363.00$
Low- income Dwelling Unit 182.00$ 0.5 91.00$
Very Low-income Dwelling Unit -0.5
Commercial - General Thousand Square Feet 726.00$ 7.0 5,082.00$
Commercial - Service Thousand Square Feet 726.00$ 4.0 2,904.00$
Hotel/Motel Thousand Square Feet 726.00$ 1.8 1,307.00$
Professional Office Thousand Square Feet 726.00$ 2.8 2,033.00$
Industrial Thousand Square Feet 726.00$ 0.8 581.00$
Development Fee per PeakTrips Fee
Type Units Trip Per Unit Per Unit
Residential - Estate Dwelling Unit 1,983.00$ 1.2 2,380.00$
Residential Rural Dwelling Unit 1,983.00$ 1.2 2,380.00$
Residential - Single-Family Dwelling Unit 1,983.00$ 1.0 1,983.00$
Low- income Dwelling Unit 496.00$ 1.0 496.00$
Very Low-income Dwelling Unit -1.0
Residential - Multi-Family Dwelling Unit 1,983.00$ 0.7 1,388.00$
Low- income Dwelling Unit 496.00$ 0.7 347.00$
Very Low-income Dwelling Unit -0.7
Residential Mobile Home Dwelling Unit 1,983.00$ 0.5 992.00$
Low- income Dwelling Unit 496.00$ 0.5 248.00$
Very Low-income Dwelling Unit -0.5
Commercial - General Thousand Square Feet 1,983.00$ 7.0 13,881.00$
Commercial - Service Thousand Square Feet 1,983.00$ 4.0 7,932.00$
Hotel/Motel Thousand Square Feet 1,983.00$ 1.8 3,569.00$
Professional Office Thousand Square Feet 1,983.00$ 2.8 5,552.00$
Industrial Thousand Square Feet 1,983.00$ 0.8 1,586.00$
CITY OF ARROYO GRANDE
DEVELOPMENT IMPACT FEES
EFFECTIVE 3/25/19
Traffic Signalization
Transportation Facilities
Item 8.d. - Page 7
Development Fee per Persons Fee
Type Units Capita Per Unit Per Unit
Residential - Estate Dwelling Unit 54.00$ 2.7 146.00$
Residential Rural Dwelling Unit 54.00$ 2.7 146.00$
Residential - Single-Family Dwelling Unit 54.00$ 2.7 146.00$
Low- income Dwelling Unit 14.00$ 2.7 38.00$
Very Low-income Dwelling Unit -2.7
Residential - Multi-Family Dwelling Unit 54.00$ 2.0 108.00$
Low- income Dwelling Unit 14.00$ 2.0 28.00$
Very Low-income Dwelling Unit -2.0
Residential Mobile Home Dwelling Unit 54.00$ 1.5 81.00$
Low- income Dwelling Unit 14.00$ 1.5 21.00$
Very Low-income Dwelling Unit -1.5 -
Development Fee per Persons Fee
Type Units Capita Per Unit Per Unit
Residential - Estate Dwelling Unit 934.00$ 2.7 2,522.00$
Residential Rural Dwelling Unit 934.00$ 2.7 2,522.00$
Residential - Single-Family Dwelling Unit 934.00$ 2.7 2,522.00$
Low- income Dwelling Unit 234.00$ 2.7 632.00$
Very Low-income Dwelling Unit -2.7 -
Residential - Multi-Family Dwelling Unit 934.00$ 2.0 1,868.00$
Low- income Dwelling Unit 234.00$ 2.0 468.00$
Very Low-income Dwelling Unit -2.0
Residential Mobile Home Dwelling Unit 934.00$ 1.5 1,401.00$
Low- income Dwelling Unit 234.00$ 1.5 351.00$
Very Low-income Dwelling Unit -1.5 -
Meter Size Fee
5/8 inch - 3/4 inch 1,027.00$
1 inch 1,712.00$
1 1/2 inch 3,424.00$
2 inch 5,477.00$
3 inch 10,272.00$
4 inch 17,120.00$
6 inch 34,255.00$
8 inch 68,510.00$
CITY OF ARROYO GRANDE
DEVELOPMENT IMPACT FEES
EFFECTIVE 3/25/19
Community Centers
Park Improvements
Water Facilities
Item 8.d. - Page 8