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HomeMy WebLinkAbout1980-02-05; City Council; 5779-8; Public Facilities Fees (Policy #17)__--- I. -. &&----..- ., +V’. * ,- m c _ “.“_I--.wI-.e.e---n--- y<-,--- ~------__-“_,__^-._~ ._-.-.. --______ _ __,-_. ___. -.-. .- -- CITY OF CARLSBAD AGENDA BILL NO. /j- 779 - DATE: February 5, 1980 (79 0 ‘r/o .._ Initial: Dept.Hd. c. Atty.\&~ DEPARTMENT: City Attorney C. Xgr, W -- Subiect: .-- PUBLIC FACILITIES FEE -- IMPLEMENTATION OF COUNCIL POLICY NO. 17 - Statement of the Matter As directed by the City Council at your meeting of January 15, 1980, the Assistant City Attorney prepared a report on the public facilities fee, paying particular attention to the necessity for a secured agreement. That report, dated January 22, 1980, is attached for your consideration. In attempting to accommodate the Council's intent, it recommends eliminating the security requirement from all but the final discretionary approval for a development and the broadening of the types of security to include non- cost measures such as lien contracts. Under the circum- stances, the procedure outlined in the report will place the City in the best position possible to collect the fee. In the final analysis, the decision to continue to require security is a business judgment for the Council and,a policy question. In that regard, the City Manager may wish to make a recommendation in the matter. Ekhibit Memorandum to Mayor and City Council dated January 22, 1980. Recommendation That the City Council take action \~as they consider appropriate. NOTE: See attached recommendation by City Manager Council Action: 2-5-80 Council approved the recommendations contained in the Memorandum from the City Attorney dated Janaury 22, 1980, with the exception of section 3, which related to requiring security. , A . ,- 1. ‘a * DATE: JANUARY 30; 1980 TO: MAYOR AND CITY COUNCIL FROM: City Manager SUBJECT: PUBLIC FACILITY FEE - SECURED AGREEMENT , RECOMMENDATION That Council direct City Attorney to amend Resolution 5935 to delete the provision that security (bond, lien, cash) be required in con- nection with the "Agreement between Developer and the City for the Payment of Public Facilities Fees." DISCUSSION I have reviewed the City Attorney's report to the Council dated February 5, 1980 which recommends that City require adequate security to guarantee collection of the public facilities fee. There is no doubt that such security improves the City's chances of collecting the fee and makes it more likely that any successor would be aware of the requirement to pay the fee. However, I believe the require- ment can be deleted for the following reasons: 1) The City can and will refuse to issue building permits if the fee is not paid. 2) The only time the fee can be accurately determined is at the time building permits are taken out. 3) The cost of filing and monitoring secured agreements imposes an unknown administrative burden on City staff which I believe is unnecessary. 4) The additional cost to developer of posting security seems to me to be disproportionate to the benefit received by the City. The City Attorney has provided a sound analysis of the reasons for requiring a secured agreement. I do not disagree with his advice insofar as his legal arguments are concerned. I do feel that the additional risk involved in deleting security is justified because it will simplify the procedure and reduce the cost for the City as well as for the developer. If a lawsuit is filed contesting the validity of the public facility fee, I do not believe that the lack of se f urity guaranteeing the agreement will have any bearing on a judge, s decision. Since developers are willing at this time to pay the fee and to sign the agreement, I believe the Council could safely delete the security requirement. If problems occur in the future which could be remedied by requiring security, Council action could be reconsidered. January 30, 1980 Page 2 Subject: Public Facility Fee - Secured Agreement Currently, we have 20 projects which are being held pending approval of a security agreement. Your decision to delete security would allow those projects to move forward (see attached list). In addition there are 15 projects which have signed the agreement and posted bond (list attached). FRANK ALESHIRE City Manager FDA:ldg Atts. MEMORANDUM DATE: January 25, 1980 TO: James Hagaman, Planning Director FROM: CASES PENDING PUBLIC FACILITY SECURED AGREEMENTS When the administration of City Council Policy No. 17 was initiated the City was processing many applications at various levels. The following is a list of these pending applications: A. Pending City Council action (approved by PC) 1. 7X-206, Meadowlark, La Costa Land Co. 2. MP-149(D), Northeast La Costa, La Costa Land Co. B. Pending CC Action (noticed by CC, but PC Reso not yet adopted) 3. CT 75-9(A), Santa Fe Knolls, La Costa Land Co. C. Pending PC Reso (hearing held but reso not adopted) 4. CT 79-2O/CP-23, Elihu (to CC) 5. CP-33, Ward, (to CC) 6. V-298, Sohol, (final action PC) 7. SDP 78-3(B), Burnett (final action PC) (appeal public facilities fee to City Council). 8. V-295, Easterbrooks, (final action PC) D. Application at PC, but not approved 9. CT 79-23/CP-32, Kupfer 10. MS-402, Jordan E. Applications submitted for review, but not accepted, pending public facility agreement. 11. CT 79-25/PUD-12, Rancheros - La Costa Land Co. 12. CUP-88(B), Hall - A-l Wrecking 13. SDP 77-2(B), Hughes - office building 14. CT 79-27/CP-44, Broadmoor 15. CT 79-26/CP-42, Morrow/Goodman 16. SDP 80-1, Beckman - Industrial building 17. CT 75-6(B), Alicante Hills La Costa 18. CT 80-2/CP-48, Noort Condos 19. CT 77-8(A)/CP-45, Mola 20. CT 79-28/PUD-13, Mola This list is an update as of January 24, 1980, 5:00 P.M. The list is in constant change as secured agreements are entered into and new applications submitted for review. BP:ar MEMORANDUM - TO: FROM: DATE: City Manager Principal Civil Engineer Current Development Section January 30, 1980 SUBJECT: PUBLIC FACILITIES FEE SECURITY The following applicants have either posted a security or paid the Public Facilities Fee as of this date: PROJECT NO. NAME TYPE AMOUNT CT79-16 Malter 9 Unit Condo. $13,500 CT79-13 Joseph 13 Unit Condo 12,000 CT79-15 La Forte 7 Unit Condo 9,000 CT79-12 Malter 18 Unit Condo 29,000 CT79-19 Bodjanac 8 Unit Condo 7,624 CT79-21 Pacific Engr. 10 Unit Condo 15,368 CT79- 9 Hunt 172 Unit Condo 130,000 CT79-23 Kupfer 18 Unit Condo 23,000 CUP-171 Coast Waste Mgt. Repair Shop 300 CUP-174 La Costa Land Cable T.V. 200 CT79-17 Jerez Co. 5 Unit Condo 8,000 MS 413 Shakiel 2 Unit Condo 2,572 MS 414 Zipser 3 Unit Condo 4,420 MS 418 Wilson Single Family 1,189 MS 422 Ward 3 Single Family 3,736 Richard H. Allen, Jr. Principal Civil Engineer RHA:mmt - MEMORANDUM . DATE: January 22, 1980 TO: Mayor and City Council FROM: City Attorney SUBJECT: IMPLEMENTATION OF COUNCIL POLICY NO. 17 At your January 18, 1980 meeting the Council requested this office to prepare a report on the administration of the Public Facilities Fee, paying particular attention to the necessity for a secured agreement at the various stages of the planning process. Attempting to meet what we perceive as the Council direction, we have discussed the issue of the security with the Manager and with various major developers in the City. While the method for implementation of the public facilities fee is a matter of policy for the Council, our best judgment, considering the legal basis for the public facilities fee, leads us to recommend that security for the agreement be required at least at the last discretionary action stage. Because imposition of the fee is based upon a finding of consistency with the general plan, which requires that public facilities be available concurrent with need, it is not sufficient to merely rely upon payment of the fee as a precondition to the issuance of a building permit. The procedure that we will outline in this memorandum is intended to accomplish two primary goals. The first goal is to insure that the Council has sufficient evidence upon which to make its finding that the project will be consistent with the public facilities element of the generalplan and, secondly, to insure the legal basis of collection of the public facilities fee is maintained. We recommend that the Council adopt the following procedure for the administration of the public facilities fee: 1. That at each stage of the discretionary approval process for any developmental project, that an agreement shall be required which: A. Obligates the applicant to pay a public facilities fee in an amount to be determined consistent with Council Policy No. 17 at the time of the issuance of the building permit. B. Indicates that the City will use the fees to create a public facilities fund for the financing of public facilities when Council determines the need exists to provide the facility. . Mayor and City Council -2- January 22, 1980 C. Clearly stating that the discretionary action is taken only because of the commitment by the developer to pay the fee and that the'City's commitment to provide public facilities cannot be met unless that and other fees are paid. These mutual obligations will provide the City with evidence upon which the Council can make the finding that public facilities necessary to serve the project will be available concurrent with need. The agreements would be recorded with the County Recorder's Office.. 2. That at each stage of the discretionary approval process a condition of approval would be imposed. This condition would state substantially the following: "This approval is expressly conditioned on the payment by the applicant of the public facilities fee required by City Council Policy No. 17, dated August 29, 1979, on file with the City Clerk and incorporated by reference. According to the agreement executed by the applicant for payment of said fee.' A copy of that agreement, dated I is attached hereto and incorporated by reference. If said fee is not paid as promised, this application will not be consistent with the general plan and the project cannot proceed and this approval shall be void." Imposition of this condition would allow the Council to make the following finding: "The applicant has agreed, and is required by the inclusion of an appropriate condition, to pay a public facilities fee. Performance of that contract, and payment of this fee , will insure that facilities will be available concurrent with need as required by the general plan." This finding recognizes the mutual obligation of both the developer and the City to provide public facilities. 3. That before the Council will take action approving any final discretionary permit for a development project, the agreement would be secured by the Developer. This security, which may be in the form of a bond, an instrument of credit, a letter of credit, a lien, a lien contract, deed of trust, a deposit or any other traditional security acceptable to the City, will give the Council - Mayor and City Council -3- January 22, 1980 assurance that the fee will be paid as promised and that the funds will be available for payment of the fee. While there may be an administrative burden on the City to calculate the amount of the anticipated fee in order to determine the amount of security required, this administrative burden is a necessary one and will be beneficial to the City for the following reason: In order to meet its obligation under the agreements to provide public facilities when needed for the project, the City will have to project the revenues which will be collected from that project and other projects and plan the provision of the public facilities based on the availability of those revenues. This revenue projection can best be done at the tentative map stage and would allow the City sufficient time to set priorities for the provision of various public facilities, coordinate the provision of public facilities with the capital improvement plan and insure that the provision of public facilties is consistent with the growth management plan when that plan is adopted by the City. 4. Finally, the developer would be required to pay the fee prior to the issuance of the building permit. We believe that this procedure best satisfies the needs of the City, as well as accommodates the economic realities and needs which face developers. We believe that this procedure is consistent with Council Policy No. 17 which requires the applicant to pay or agree to pay a public facilities fee prior to the approval of any zoning, rezoning or redevelopment proposal. If Council concurs with these suggestions, the appropriate action would be to direct the matter back to the City Attorney's office for the preparation of documents consistent with the Council's direction. In the interim the City would continue to operate under Resolution No. 5935. By a memorandum, dated January 18, 1980, from our office to the City Manager, we suggested an interim procedure until a final administrative policy has been set. We suggest that the interim procedure be used until our office has had an opportunity to prepare the necessary documents and they have been approved by Council. A copy of that memorandum has been attached to this report. To provide Council with the history of the public facilities fee and necessary background information, we have attached a' memorandum, dated January 9, 1980, to the City Manager and the attachments to that memorandum. . Mayor and City Council -4- January 22, 1980 Regarding the imposition of the public facilities fee on applications for developmental projects which do not require discretionary action, we continue to be of the opinion that that matter would as we indicated to you in our memorandum dated January 10, 1980. A copy of that memorandum has been attached for your ready reference. In summary, while the issue of requiring a security is a matter of policy judgment for the Council, it is our recommendation that security be required at the last discretionary approval stage and that the other procedures as suggested in this memorandum be followed for the collection of the public facilities fee. Assistant Cit"y Attorney DSH/mla Attachment MEMORANDUM DATE: TO: FROM: SUBJECT: January 18, 1980 City Manager City Attorney PUBLIC FACILITIES FEE At its last.meeting the Council directed this office to prepare a report on the administration of the public facilities fee with a close examination of the necessity for a secured agree- ment at the various stages of the planning process. This office is undertaking that task and has met with you concerning various options for administration of the public facilities fee. In the meantime, we will still be operating under the present system as adopted by the City Council in Resolution No. 5935. To accommodate the apparent desire of the Council and yet maintain the maximum protection to the City under the public facilities fee policy, the following three suggestions are made: 1. That paragraph 3.3 of the secured agreement which reads, "such other security as may be acceptable to the City", should be interpreted so that lien contracts, liens, deeds of trust, and other similar security are deemed * acceptable to the City, in addition to surety bonds or banks or savings and loans time certificates of deposit. 2. That the amount of security required at the initial planning stage, when other discretionary approvals are certain, should be calculated based on the maximum number of units which can be built pursuant to the proposed approval as if no other discretionary approvals are forthcoming. Kowever, because of the nature of zone changes they may require different calculations. 3. That the following finding and condition should be attache!d to each approval; Finding: I’rp- e Al-l, applicant has agreed, and is required by the inclusion of an appropriate condition, to pay a public facilities fee. Performance of that contract and payment of this fee will insure the public facilities will be available concurrent with need as required by the general plan." -. _ . c - .**^l I . . I City Manager -2- January 18, 1980 Condition of approval: "This approval is expressly conditioned on the payment by th e applicant of the public facilities fee required by City Council Policy No. 17, dated August 29, 1979, on file with the City Clerk and incorporated by reference, according to the agreement executed by the applicant for payment of said fee. A copy of that agreement, dated , is attached hereto and incorporated by reference. If said fee is not paid as promised, this application will not be consistent with the general plan and the project cannot proceed." If you agree with these suggestions, the department responsible for administering the public facilities fee should be instructed accordingly. . DSH/mla VINCE T F. BI NDO, JR., City Attorney BYDY City Attorney . “.. -, I . *‘a b . . MEMORANDUM / ( -DATE: January 9, 1980 TO: City Manager FROM: City Attorney SUBJECT: PUBLIC FACILITIES FEE Because the Public Facilities Fee Committee is presenting its report to Council at its January 15, 1980 meeting, and because you indicated that the Mayor intends to bring up the issue of a secured agreement for the public facilities fee, I thought this would be a good time to review the events of the past year which lead to the development of the public facilities fee and also indicate projections for the future of that fee. This memorandum will be divided into basically two parts. The first part will be a brief chronology of the developments leading up to the implementation of Policy No. 17 and the chronology of the events implementing that policy. The second part will be a discussion of the proposed courses of action for the future. At its March 6, . 1979 meeting.the City Council directed the staff to prepare the necessary documents calling a special election for the purpose of placing before the voters an ordinance establishing a public facilities fee. On March 20, 1979 our office presented to council the necessary documents calling the election, The documents were approved by a 4-l vote. Had the election been successful, the people of Carlsbad would have added Chapter 5.09 to the Carlsbad Municipal Code. That chapter was entitled "Additional License Tax on New Construction". The tax would have been imposed pursuant to the City's authority under Government Code Section 37101 to impose business license taxes 'under the general taxing authority of the City. This tax would have applied to all new construction within the City limits. Prior to recommending that the Council place that particular ordinance on the ballot, this office and the Manager's office engaged in a great deal of discus- sion over whether or not the prOpOSed new construction tax would be considered a special tax under Article .XIIIA of the California . Constitution, otherwise known as Proposition 13. At that time there was zc clear consensus throughout the state as to what a special ta.:: ;qas, SF:ce then the dialogue concerning the definition of a SDS~-~=- +-av L=- * ----- -k A--= continued in legal circles throughout the state. ,.--;le tn2 Iss-~e T,--- is still not settled, it appears that a local tax zz ~2% ~2~s zruction would be considered a special tax While we zzt not ready to concede the issue for all time, the most prud.r:z coursa OS action would be to assume that it is and act accorZFzfL2. It r $. convince 2 court i-ha7 wsoilld be an interesting legal fight to try and irr- a it's not a special tax. . , I.. . . .,. i City'Manager -2- January 9, 1980 On July 5, 1979 an election was held on the issue of imposing a tax on new construction in the city. Although a majority of the voters approved the tax, the required two thirds under Article XIIIP, of the Constitution was not met. Since COUnCil Still Saw need for funds for public facilities, the public facilities fee based on the general plan was suggested. . On July 3, 1979 the City Manager prepared an agenda bill for the Council regarding the final report of the staff committee to study the public facilities fee. That report suggested that the Council may want to apply the fee as a condition of approval to all future discretionary actions or on a per unit basis as a condition of the building permit. By a 5-O vote the Council accepted the report and by a 3-2 vote appointed a committee to study the issue further. On August 2, 1979 the City Attorney wrote a memorandum to the City Manager entitled, "Implementation of the Public Facilities Fee". That memorandum outlined the various legal issues con- cerning a public facilities fee and suggested a possible course of action. A copy of that memorandum has been attached for your ready reference. On August 13, 1979 the City Manager wrote a memorandum to the City Council on the public facilities fee. A copy of that memorandum is also attached. On August 21, 1979 the matter was again taken before the City Council. Exhibits to the agenda bill included the memorandum from the City Manager, dated August 13, 1979; the memorandum from the City Attorney, dated August 2, 1979; a copy of the Public Facilities Report, dated July 3, 1979 and a proposed Council policy. The Council decided to direct the Planning Commission to implement the documents and continue the matter until August 29, 1979, directing the City Manager to correct the policy and send a copy to the Planning Commission. On August 29, 1979 Council Policy No. 17, was adopted and is the one under which we are presently operating. On August 31, 1979 the City Attorney sent a memorandum to the City Kanager rrarding =:I% implementation of Council Policy No. 17. That mezrza?dum wzs zzcompanied by a copy of a proposed Secured Agreeme:= ---;>i ch -*Y= -:2 be used to implement payment of the fee. It made se\TsyTi succz 7-2 ,-----ens as to the various stages at which that Secured .A--==r;japt _--- .i -- --<culd be required. As you can gather from reading .a:: the ~rs::ious memoranda, all the various problems with administrazlon a:- implementation, including administrative burdens and policy ;utsticns, were anticipated and discussed. The City Manager an.5 the Ccunci 1 at the time that they adopted the public , ,a* \__ ‘.: c City Manager -37 h January 9, 1980 l facilities fee should hatie been fully aware of these particular burdens. On September 18, 1979 the Council, by Resolution No. 5935, adopted the proposed Secured Agreement by a 4-O vote. On November 6, 1979 the matter again came before the City Council. - The issue was whether or not the public facilities fee should be applied to nondiscretionary permits or, more specifically, to the sewer as a condition of the sewer allocation. It was decided' that the public facilities fee should not be paid as a condition of issuance of a sewer allocation by a 5-O vote. The memorandum from the Assistant to the City Manager adequately outlines the problems of applying the public facilities fee to nondiscretionary applications. On December 28', 1979 Fred Morey, Vice President of Governmental Relations for the La Costa Land Company, sent a letter to the City Council regarding the public facilities fee and objecting to the use of the Secured Agreement at the time of discretionary approvals. Now, on January 15, 1980, the issue of the Secured Agreement on the public facilities fee will again come before the Council because of the presentation of the report by the Public Facilities pee Committee and by request of the Mayor. :; As to future implementation of the public facilities fee, two very important issues arise. The first is to whether or not the public facilities fee should be applied to all building permits within the City as recommended by the Public Facilities Fee Committee. This office is aware of and commends the work &hat'.the Committee has put into its analysis of the public faclities fee problem and without commenting on the general content of the report, we feel we must take issue with the conclusion that the City Council can impose the fee on all building permits in the City by ordinance without placing it before the people. It is our legal opinion that the prudent course of action at this time, if the Council desires to apply the fee to all building permits within the City, would be to again place the .issue on the ballot. The reasons for this are the prevailing attitudes of the legal authorities in the state that taxes of z3-i~ natTLil_s Article IITTI.? of +.a ;<ould be considered to be special taxes under Constitution and application of the fee to all bui.1:::; peri- could set the City up for litigation on the issue of &-.=&er cr zct - -; - L the fee is a special tax. Because there is a reac-- z.eth~e ~2 +- general ;?a:, ix -i:.30sing the fee as a requirement of the -&q:Llr, - seem prudent that the City avoid the possibiliz;- 05 a Preposition 13 lawsuit; at least until the matter is more aZ-,-ua; itlv determined by the courts. This issue was specifically ad&ssed in the City Attorney's memorandum, dated August 2, 1379. *..-.. .. _ ...-.*” .-.. / .-. - - *,- *’ 4. ‘. c. . City Manager -4- January 9, 1980 The second issue regards use of the Secured Agreement for implemen- tation of the public facilities fee. For a variety of reasons which we have outlined to you in prior discussions, it is our best advice that the Secured Agreement continue to be used as a means I of implementing the public facilities fee. It was recognized by the Council and the staff at the time the fee was imposed that a substantial administrative burden would occur to the City because of the collection of these fees. Fe recognize that the types of security that are presently required by' the agreement may be too burdensome in certain circumstances; therefore, we are ready to recommend that other types of security, including liens and deeds of trust, be made available to developers at all stages of the discretionary processes. If you have any further questions on this matter, I will be glad to review them,with you. DSH/mla Attachments: City Attorney memorandum dated August 2, 1979 City Manager memorandum dated August 13, 1979 City Attorney memorandum dated August 31, 1979 Resolution No. 5935 Agenda Bill 5998-SupFlement'#l Assistant to City Manager memorandum dated October 26, 1979 City Attorney memorandum dated November 21, 1979 l % , 1 : “. . ,. . . c -_ MEMORANDUM DATE: +’ TO: FROM: City Attorney SUBJECT: IMPLEMENTATION OF THE PUBLIC FACiLITIES FEE ._ August 2, 1979 City Manager . The City Council, at their July 3, 1939 meeting, expressed their intent to use the staff report entitled "A Public Facilities Fee for the City of Car&bad -- An Analysis" as the basis for collection of a public facilities fee on all future discretionary actions and instructed the preparation of a report on how that might be accomplished. This memoran- dum is to provide the legal input necessary to assist you in preparing that report. . The ability of a city to impose a business license-tax on all new construction to be used for capital facilities is well established. The constraints of Proposition 13 as:they apply to such a tax are not so clear. As you know, we:: advised the City Council that the prudent course of action was to submit the question of whether or not to impose such a tax to the voters; Arguments can be made that a vote is not required. The Council could simply adopt an ordinance requiring all naw development to pay the fee. A majority of Carlsbad's citizens are on record as supporting that action. The ordinance would have the advantage of applying to all . new construction. It could be utilized in combination with a fee imposed as a condition of discretionary approvals and a Council policy which, together, would place the City in a stronger position to sustain the validity of the fee. It seems to me that the arguments for not proceeding with an ordinance would also apply to proceeding with the fee or polic-q. The best course of action from a legal point of view 2s to defer imposing a fee until the two-thirds vote contemplated by Proposition 13 can be obtained. decision has b,~,en Assuming a of adopting th-;i made to proceed at this time, the option ordinance should not be discounted, There is some question as to the City's legal ability to collect a There public facilities fee as a condition of dcvelopment- is a problem of equity presented by the fact that the fee woxld not apply to building permits. then be The City would faced with funding the public facilities necessary to serve that portion of new growth out of general revenues. In addition, many of the problems emanating from Proposition 13, . . . .“... c ,? ’ . . - < / J 1 1 City Manager -2- August 2, 1979 . . that place our ability to.adopt the ordinance in question, also apply to imposing it as a fee. Assuming the policy judgment has been made to attempt to impose a fee, it is our advice that we use an approach similar to the one used in the past for school fees, which would be bastd upon the public facilities element of the general 21~~ and an iz?lementing Council policy. Before discussing a 'public facilities .fee it is useful to briefly review the school fee. The City never became directly involved in the collection of a fee for schools. The public facilities element required that, "evidence satisfactory to the City Council" be presented that school facilities would be available concurrent.with need for the development. It was always possible that a developer, for instance one whose project was located across the street from a school that was not operating to capacity, could have presented his situation directly to the City Council with a request for a finding that facilities were available. With one exception, that situation never presented itself. As a matter of choice the developers elected to meet the general pl an requirement by presenting a letter from the school district indicating that facilities were available. The letter was certainly not conclusive. It was always . possible that in spite of a letter from the school board concerned citizens could still present evidence to the Council that facilities were not available. We have been fortunate that to date the Council has not been faced with resolving that kind of conflict. In the absence of any ' evidence to the contrary, the Council, withou-t exception, accepted the school district's letter as constituting sufficient evidence to allow the Council to make the '*availability of the facilities" finding required by the general plan in regards to school,s,: As a practical matter we know that the school districts would not issue a letter until the developer had entered into an agreement with the district to contribute to the provision of facilities. With one' exception, which was resolved through a compromise of litigation, the City never became directly involved in the fee arrangements between the district and the developer, For a number of years that system functioned in a satis- factory manner primarily, in my opinion, because of the willingness on part of the school districts, developers aid City to compromise. Applying the public facilities element to facilities or services which are the responsibility of the City is considerably more complicated. The legally preferred approach would be to individually evaluate a project in regard to all services provided by the City with a staff analysis as to whether or not each is available. For instance, a project . .I i a- . I ,p . , Lfr , .I.>. . ‘. City Manager -3- August 2, 1979 proposed for a vacant lot next door to the Elm Avenue Fire Station can make a good case that it ought to be treated differently in regards to availability of fire services from ' a new subdivision proposed for land east of El Camino Real. i Such an analysis would require a substantial amount of staff resources, resulting in a varying fee for each project and involving the staff and the Council--a.series of difficult negotiations. A less desirable alternative to a project-by-project analysis is to do one in general terms for the City. To support a fee it will be necessary for staff to evaluate all existing services and facilities in light of our current population and make judgments as to the ability of those facilities and services to serve additional development. Assuming the analysis would show that public facilities are not available, the Council could incorporate the report as part of a,Council Policy on public facilities. If adequate facts cran be developed to support the conclusion -that facilities .are not or will not be available, it will then be necessary to determine a financying plan and a fee which, if imposed, would put the City in a'position of being able to provide those facilities. That determination should be a part of the staff report and the Council policy- 2. 27. The following matters should also be considered in making the determination to proceed with a public facilities fee:' 1. The fee would only apply to discretionary approval and a development requiring only a building permit *+ould not have to pay. s 2. The City would have to become actively involved in .the collection of the fee, requiring new administrative procedures. 3. There is no mechanism under the element to require payment of the fee at the building permit stage. Arrange- ments for payment of the school fee'had to be made before the Co-cr?cil considered approving the project. Similar arrangrzents would have to be made here. It would be necessary to devzLop an aGreetment between the City and the developer obligat; -ng the dev eloper to make the payment. That agree- ment would be acccmplished as a part of the preparation of the staff report on the development. in dealing with public facilities, The staff report, would continue to require letters Of availability for services to be provided by other agencies, For services to be provided by the City, the staff would.simply reflect that based on the Council policy, buttressed by the facts in the staff report prcv+ously Q . 4. a*., . ,- * * - , f- . . F- I City Manager -4- August 2, 1979 - . , discussed, public facilities are not available and can not _ be made available for tne development unless the develop- ment contributes to their construction and that the developer 4 has entered into an agreement to pay his fair share of the public facilities costs necessary to serve his project therefore the staff is able to conc.1ud.e that facilities will be available concurrent with need. 4. In processing agreements it's suggested that the Council adopt a resolution approving the basic form of the agreement and the amount of the fee and authorizing the City Manager to execute them on behalf of the City. 5. Agreements of this type carry the potential for .. involving the City in a series of problems which are now confronting the school districts, including: A. Old agreements executed at the one fee level which have been outpaced by events. B. Agreements to provide facilities which because of unforeseen events can not be provided. ' C. Problems with the agreements arising out changes in the attitudes of elected officials regarding development. of D. Agreements imposing obligations on the City to provide certain facilities which could significantly affect Council's ability to set priorities in the future. To summarize, assuming Council accepts the risks, we can . attempt to use the public facilities element to impose and collect a public facilities fee, provided arrangements are made to guarantee the payment of the fee before developmental approvals are given. If the Council determines to proceed, my office can assist in preparing the form of the necessary agreement, which can be submitted to the Council with an agenda bill, and a resolution approving it, and authorizing you to execute it on behalf of the City. We should also develop a draft Zzuncil policy reflecting the judgments that facil iti-s can ~92 be provided and that a fee of "X" amount is required including the factual basis for such judgments, If, arrangements satisfactory to the City are made prior to approval of discretionary actions to pay the fee, then the Council :qill be able to find that facilities are available. For developments, which have been and will.be approved, in the interim before that policy can be adopted and imple- mented, we can provide for the execution'of the agreement to pay the fee prior to approval of the final map or the issuance of building permits. VFB/mla I , VINCENT. F. BIOPJDO,' JR. t City Attorney f L ut I . .>’ ._’ DATE: AUGUST 13, 1979 TO: CITY COUNCIL FROM: City Manager SUBJECT: PUBLIC FACILITIES FEE Attached is a Council Policy which may he used to implement a Public Facilities Fee for development which will require City discretionary approval. The City Attorney in his memo dated August 2, 1979, discusses the implication of such a fee being imposed by ordinance to all development or only being applied under the General Plan Public Facilities Element. If the Council,in discussing this issue, determines that they-will apply it to all development, the matter should be returned to the staff for preparation of the necessary documents rather than utilizing this policy. In the Ci,ty Attorney's memo he also.briefly discusses applying a general fee to development versus evaluating development on a project by project basis. The policy as prepared, applies the general fee ii, the same manner as the previously proposed ordinance. It is my view that. each new development impacts public facilities on an incremental basis which is more or less equal, and therefore, applying the same fee to all affected development is most equitable. My primary concern in considering a case by case evaluation of development is,that without proper standards, the decision of when and what facilities are required would require many subjective judgments. While it may be possible to develop standards, it would take a significant amount of additional staff work, possibly many months. Eventual work on a long w -term Growth Management Plan may provide a basis for this. Even then I believe that it may be shown that the general fee is as, or in fact, more equitable. If :lg;ring Count il discussion you have questions which are not ? yswered, Ike issue can be referred back to the staff for fzrther work. n PAUL D. BUSSEY City Manager PDB:ldg Att. . E , c - - / _., _- - . DATE : TO: Fi?OM : ‘SUB JEW: Augmt 31, 1979 c I... 14IEP;IORANDtJM City Manager City Attorney IMPLRi~IEE~TATION OF COUNCIL POLICY NO. 17 -. -a.. In accordance with the City Council's direction, my office has prepared an agreement implementing Council Policy No. 17 and a resolution which authorizes you to execute such agreements on behalf of the Ci-1:~. They parallel the form County Counsel for use by the School-Districts with school policies. developed by in connection It is contemplated that the agreements will be executed as a part of the preparation of the staff report on a developmental application. Completion of the agreement will alloy7 the staff to represent to the decision making bodies that services and facilities which are the responsibility of the City will be available for -%he project concurrent with need in satisfaction of the requirements of the General Plan. SiX?pS s.t10u16 l.22 : taken for those projects in process to have the agreements executed as soon as possible. There have been several developments already approved subject to a condition that they pay whatever fee the Council shall establish. The individuals responsible for those projects should be contacted and asked to execute the agreements in satisfaction of such conditions. The agreements require the Developer' to furnish security, guaranteeing payment of the fee. It will, therefore, be necessary for the staff, in processing an agreement, to estima-te ?he amount of construction which ~7ill occur pursuant to the z2=roval for fee to -- the development and then apply the 2% tkat estimate. Obviously, there is considerable lati- tude fcr %e'exercise of judgment in making such estimates. It woult5 22 apprzT---c te for your office to develop guidelines in that regard. :'ZZ residential subdivisions the matter is relativel;: simple sLnce the number of lots will generally be known an.5 it will be possible to determine the likely type of constr!ietion by reference to the neighborhood. A situation . for a rezoning is more difficult since that provides for a range of uses and the applicant in many cases will not have specific developmental plans. . a ., ,. a.’ .- c City Manager -2- nugu s t 31, 1979 . AS you know, it will be necessary to establish an administrative system to deals with the agreements. They will have to be posted to the City zoning maps so they can be picked up as a part of the proces.sing of any subsequent developmental approvals on the same propcxty . They will also have to be indexed so when a building permit is sought on a particular parcel, it will trigger the requii-cment for the payment of the fee. We will also have. to keep track of the securities posted and establish a procedure for the release of all or part of such of such securities upon payment of the fee. Ylease let me know if you have any concerns'about the documents we have prepared. As always, my office will be happy to assist in any way we .can in the implementation of this rather significant new requirement. VPB/mla Attachments VINCEIU'T F. BIONDO, Jl?. City Attorney . _... . a _ 2 3 6 3.0 21 22 23 24 25 26 c l?ESoLwION NO. 5935 A RESOLTJTION OF THE CITY COUNCIL OF THE CITY OF CAKLSBAD, CALIFORNIA, APPROVING THE FORM OF A SECURED AGREEMEl:T FOR THE PAYl?rrENT OF PUBLIC FACILITIES FEES AND AUTHORIZING 'S.'tlE CITY MNAGER TO EXECUTE THB4 ON EZKALF OF THE CITY IN ACCORDANCE WITH COUNCIL POLICY NO. 17, ------- WHEREAS, the Public Facilities Element of the General Plzk provides that new development may not be approved unless the City Council is satisfied that all necessary public facilities wil.1 be available concurrent with need; and WHEREAS, the City Council, by.adoption of Council Policy NO. 17, has found that there is a present need for and lack of ability to provide public facilities and services for new development and has established requirements which must be rnet in order to satisfy the public facilities element of the General Plan. Said policy is on file \qj:i& t& cjmte:r Cl&r::: arid. . is incorporated by reference herein; and WHEREAS, Council Policy No. 17 requires that, prior to the approval of any zoning, rezoning, developmen? or redevelonaent proposal, the applicant shall pay, or agree to pay, a public facilities fee in the amount of"2% of the building permit valuation of the building or structure or the sum of $1,167.@0 for Each mobilchome space to be constructed pursuant to such ap-p3&; and ‘: yyEF?JgiS I t‘;;e City Council. wishes to establish a procedure to provide for the execution of secured agreements for the payme;~t of pldblic faciltities fees in satisfaction of the . recfulrexcnts .I of the Public Faci.lities'~~lemcnt of the General Plan and Council Policy No. 17: I, ” I I._ _’ f- i . . . : NOW * THEF.EX'ORX, BE IT FESOLVZZ by the City Council of the City of C'arlshad, Califorrria as follow3: 1. That the above recitations are true and correct. 2. That the City Couwzi.1 hereby approves the attached agrezxent entitled, "Secured Agreement Between Developer and the Cit:f of Carlsbad for the Payment of Public Facilities Fee-s". 3. That the City . Manager is hereby authorized to'execute such agreements on behalf of the City of Carlshad. PASSED, APPROVED AND ADSPTED at a regular meeting of th.? City Council of the City of Carl.sbad, Califcrnia, held on the day of -- AYES: , 1979 by the foll.owing vote, to wit: NOES : ABSENT: .z, ATTEST : I__- - FON9ED c . L . PACKARD, m?,or . . . ALETEA I,. FMJTENKRAKZ, City Clerk -2- .