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HomeMy WebLinkAbout2005-12-13; City Council; 18385; Revision of Habitat Management PlanCITY OF CARLSBAD - AGENDA BILL AB# 18.385 MTG. 12/13/05 DEPT. PLN TITLE: REVISION OF HABITAT MANAGEMENT PLAN MITIGATION FEE PROGRAM DEPT. HD. | CITY ATTY. CITYMGR ^ \ jyn9P S W oo CN M r-efl ro D IC "Icfl O •n Oc-j O •H O 4J C3 C CJ O HHu13in <ii e "SQJ cti 4-1 •H iH•H 03 O •H C43 3 '"in •• O ^DO O CM O r-l-*^ Csl g o o I) Oo 2005-373 _, APPROVING the revised Habitat RECOMMENDED ACTION: That the City Council ADOPT Resolution No. Management Plan Mitigation Fee Program. ITEM EXPLANATION: In July 2000, anticipating final approval of the Habitat Management Plan (HMP), the City Council approved a Habitat Management Plan Mitigation Fee Program. Shortly after approval, the California Coastal Commission intervened in the process of federal approval of the HMP resulting in a delay of over A years. The HMP received all of its final approvals in November of 2004. During the delay, the fee was not collected due to the uncertainty regarding eventual approval of the HMP and several major development projects that would have been subject to the fee were approved with other forms of mitigation. Since approval of the HMP last November, the City has been conditioning new projects to pay the fee. The purpose of the fee is to fund the preservation of habitat land. The majority of this habitat land is located in the unincorporated area southeast of Carlsbad known as the Multiple Habitat Conservation Plan (MHCP) Gnatcatcher Core Area. The MHCP is the regional habitat plan for all the North County cities of which the Carlsbad HMP is a critical component. As part of the HMP, Carlsbad agreed to identify a funding source for the preservation of approximately 307 acres of habitat land in the MHCP Core Area. Also, as part of approval of the separate Habitat Conservation Plan (Fieldstone HCP) for the area now known as the Villages of La Costa, the master developer of the Villages agreed to front the acquisition of land in the Core Area with future reimbursement from the HMP Mitigation Fee Program. Although the HMP was not formally approved until November of last year, several projects, approved and constructed prior to that time, mitigated their habitat impacts by acquiring conservation easements on the land already acquired by the Villages master developer in the MHCP Core Area. The City also mitigated some of the Municipal Golf Course habitat impacts by acquiring conservation easements. These acquisitions count toward meeting the HMP requirement and also reduce the amount of money that needs to be reimbursed. In addition, the wildlife agencies have given the City credit toward the Core Area requirement for projects which have been approved in the City that exceed the habitat preservation standards contained in the approved HMP. The purpose of the HMP Mitigation Fee now is to fund the remaining amount of money that needs to be reimbursed, as well as the remaining amount of land that needs to be acquired in the Core Area. The first priority would be to reimburse the private developer for the habitat land they own. Once the reimbursement is complete, the funds would be directed towards habitat land acquisition. As discussed below, the amount of habitat land acquisition needed may vary due to several factors. The loss of fees resulting from the delay of final approval of the HMP requires that the HMP Mitigation be revised and the amount of the fee adjusted in order to ensure that sufficient funds are generated. A fee study was prepared when the City Council originally approved the fee program in 2000. The purpose of the fee study was to define the need for the fee, calculate the amount of the fee and, as required by state law, to establish that there is a reasonable relationship (nexus) between the amount of the fee and the cost of the project that it is funding. The fee study has now been updated and is attached as Exhibit 3 to this Agenda Bill. The nexus for the fees remains the same as when the fee was originally adopted in 2000. The fee will be applied only to undeveloped properties that will be developed, resulting in impacts to wildlife. PAGE 2 OF AGENDA BILL NO. The fee will be in lieu of other mitigation that would otherwise be required of the project. The fee amount is proportional to the degree of impact of the property, taking into consideration the acreage of impact, the type of vegetation being affected, and its relative value for wildlife. Based on the acreage anticipated to pay the fee, the total amount of revenue generated is expected to be no greater than what is needed to fully fund Carlsbad's participation in the HMP and MHCP Gnatcatcher Core Area. The fee is paid in lieu of standard mitigation. Instead of directly acquiring and preserving land for mitigation, qualifying applicants would pay the fee and the City would acquire and preserve the land in the identified Core Area. The fee also includes funding to manage and maintain the land. The fee would be applied to projects impacting coastal sage scrub where gnatcatchers are not present, chaparral, non-native grassland, eucalyptus woodland, agricultural and disturbed lands. The current fee amount is below the market cost for this type of mitigation land. With the proposed adjustments, the fee now approximates actual market rate for mitigation land. Coastal Sage scrub would set the Base Rate for the fee which would be $ 25,683 per acre impacted. Because grassland is mitigated at a ratio of 1>4 to 1, the fee would be half the Base Rate, or $12,842 per acre impacted. The fee for eucalyptus woodland, agriculture and disturbed land is set at a ratio of approximately 1/10 of the Base Rate, or $2,569 per acre impacted. If approved, the fee will take effect in 60 days. As mentioned previously, qualifying projects have been conditioned since approval of the HMP to pay the revised fee once it is established. The precise amount of the fee for a given project will be calculated and paid prior to issuance of a grading permit, or building permit if no grading permit is required. The fee will be adjusted for inflation automatically each year at the annual Consumer Price index. If other adjustments to the fee are necessary in the future, these will be brought back to the City Council for action. A reimbursement agreement will also be brought forward for Council approval in the near future to complete the remaining reimbursement owed to the owner of the habitat land in the Core Area which fronted the acquisition of the property. As indicated in detail in the fee study (Exhibit 3), there is still a need to acquire an additional 43 acres of habitat in the Core Area or the City to complete the agreement reached with the Wildlife Agencies to obtain HMP approval. This additional 43 acres is included in the fee program at the current market value for land. This acreage could be reduced in the future if additional credit is given for enhanced habitat preservation in Carlsbad. For example, if Proposition C funds are used to acquire additional open space lands with natural habitat on them in Carlsbad, a credit would be given and the acreage of additional acquisition in the Core Area would be correspondingly reduced. Also as indicated in the fee study, there is a need to reimburse the property owner for the remaining 50.13 acres of fronted acquisitions in conjunction with the Villages of La Costa project. The total cost for the remaining acquisition and reimbursement is $3,652,091. The HMP Mitigation Fee at the revised rates will generate the funds needed to pay for the remaining acreage. Since the amount of open space acquisition may be adjusted due to other activities (such as use of Proposition C monies), staff intends to use the mitigation fee funds for reimbursement first. Additional acreage would then be acquired over time as funds become available from the fees. A chart summarizing the HMP Mitigation Fee Program calculations is attached as Exhibit 2 to this Agenda Bill. Exhibit 3, 4 and 5 to this Agenda Bill are tables from the fee study providing more detail on the calculations. ENVIRONMENTAL: The Habitat Management Plan and Implementing Agreement which included the provision for a Mitigation Fee Program underwent environmental review. In addition, the adoption of the revised fee is exempt from the requirements of the California Environmental Quality Act pursuant to Section 15313 which exempts acquisition of lands for wildlife conservation purposes, including preservation of fish and wildlife habitat, establishing ecological preserves, and preserving access to public lands and waters where the purpose of the acquisition is to preserve land in its natural condition. PAGE 3 OF AGENDA BILL NO. /%/ FISCAL IMPACT: The Habitat Plan Mitigation Fee is set to generate $3,652,091. Mitigation fees collected to-date from property owners total $17,493, so the total estimated amount available to fund the preservation costs is $3,669,584. The fee revenue will be used first, to reimburse the owner of the habitat land purchased in the Core Area (estimated at $1,353,510) and second, to acquire an additional 43 acres of habitat land at an estimated total cost of $2,129,500. In addition, $186,574 will be used to reimburse the City for administrative costs. EXHIBITS: 1. City Council Resolution No. 2005-373 approving the revised HMP Mitigation Fee 2. Summary of Core Area Calculations 3. Components of Core Area Conservation (Exhibit 1 from Fee Study) 4. Cost and Sources of Funds for Core Area Conservation (Exhibit 4 from Fee Study) 5. Schedule of Fees (Exhibit 5 from Fee Study) 6. Revised Fee Study for Habitat Management Plan Mitigation Fee Program, dated September 9, 2005 7. Previous City Council Agenda Bill, dated July 11, 2000. DEPARTMENT CONTACT: Michael Grim, (760) 602-4623, mgrim@ci.carlsbad.ca.us or Helga Stover, (760) 602-2429, hstov@ci.carlsbad.ca.us 3 1 RESOLUTION NO. 2005-373 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING A REVISED HABITAT 3 MANAGEMENT PLAN MITIGATION FEE. CASE NAME: HABITAT MANAGEMENT PLAN MITIGATION 4 FEE 5 WHEREAS, the City Council of the City of Carlsbad has approved the Habitat 6 Management Plan (HMP); and 7 WHEREAS, the California Department of Fish and Game, the U.S. Fish and 8 Wildlife Service and the California Coastal Commission have also approved the Habitat 9 Management Plan and a citywide incidental habitat take permit has been issued to the City; and 10 WHEREAS, the HMP proposes a fee program in order to generate funding for the preservation of habitat in the unincorporated area to the southeast of Carlsbad also known12 as the North County Multiple Habitat Conservation Plan (MHCP) Gnatcatcher Core Area which is essential to the biological viability of the HMP and the MHCP; and14 WHEREAS, the City has caused a fee study to be prepared analyzing the need for the fee, the uses of the funds to be derived from the fee, and the relationship between the16 fee and the impacts which will be mitigated by the fee; and WHEREAS, the City Council approved the HMP Mitigation Fee in July of 200018 subject to the approval of the HMP by the Wildlife Agencies and the Coastal Commission; and WHEREAS, the HMP has now been approved but the fee needs to be updated -, and revised due to the rising cost of habitat land and changes in the amount of habitat land to 22 be acquired and the amount of money to be reimbursed for prior acquisition; and 2^ WHEREAS, the City Council held a public hearing to consider all pertinent facts 24 and information regarding the fee and testimony, if any, from all persons having an interest in 25 the matter. 26 NOW, THEREFORE, Be It Hereby Resolved by the City Council of the City of 27 Carlsbad, California, as follows: 28 1 • That the above recitations are true and correct. 2. That the City Council finds: a. The fee is necessary and appropriate in order to implement the Habitat Management Plan and to ensure that the plan will adequately provide for the long-term conservation of wildlife species addressed by the plan, which is a recognized public benefit. L The fee will produce adequate revenues to accomplish its intended c purposes. c. The fee is based on a clear and rational relationship between the impacts of development projects and the mitigation for those impacts. d. In the absence of the fee, development projects which would result in 7 impacts to the habitats addressed by the fee would be required to mitigate those impacts in other ways. 8 e. The fee amounts are proportional to the impacts which will be mitigated by the fee. 9 3. That the revised report entitled "City of Carlsbad Updated Fee Study Report for Habitat Management Plan Mitigation Fee Program" dated September 9, 2005, and prepared by Onaka Planning and Economics is incorporated herein by reference and is approved as to its methodology, findings and recommendations. 12 4. That staff is authorized to make payment of the fee a condition of ,., approval of all applicable discretionary projects. 14 5. That staff is authorized to administer the fee, including establishing any necessary accounting and implementing procedures. 15 6. That the fee shall become effective 60 days following the date on which 16 the City Council adopts this resolution. 17 7. That the amount of the fee shall be automatically escalated annually at the rate of increase in Consumer Price Index for the City of San Diego, using as base the 18 reported index of the last biennial period preceding the date of adoption of this resolution (218.3). 19 8. Based on the foregoing, the City Council of the City of Carlsbad adopts 0 the Habitat Management Plan Mitigation Fee as set forth in the September 9, 2005 Fee Study. 21 22 23 24 25 26 27 s 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED AND ADOPTED at a regular meeting of the City Council of the City of Carlsbad on the 17th day of January , 2006 by the following vote, to wit: AYES: Council Members Lewis, Hall, Kulchin, Packard, Sigafoose NOES: None ABSENT: None LORRAINE M. WOOD, City Clerk (SEAL) o 0.0 fl<UJ Ml u-Sz < O ui P 01<0o o 1 to h- LJJ 5E UJo: D PRESERVATION REQCO CO CO COCD 0 0 CD1_ l_ L. t_o o o o« « oooo£j 0 00 05 gco co T- R r^ d 't 2ooS^CO CM^xJ *^ *^ ^s *^c c -ff c0 0 CJ 0E E" £CD 0) .E CD.h: .i= ,- .b:ZJ ZJ § Z! CT CT.y O"0 0 •£ 0a: a: > a:Totalitions Counting Towardits for Enhanced PreseiRemaining Acquisition•52 ^ !"< "co£: ^.13 eoz H O V/ 01 CO DLJJ £0 Suj o o co0 CO CD i? o o o o o o ** « < « < 00 O O O O O Ooo o T- o o a>co co cq LO o> cq too v^ d ^r ^ o>O LO CM CM >_,CO£\J *«—•'' *—-•* N—' coI oLO c0 0213JD EI TJp DC Q Q. c *=g co '•» s o tCD co TsO oo CO TJ0 12D_QEI 000 s ^ CL co Q. 2? !o .£ ro •EM3 CO _ g 18:9co t o)i= m-2 W CE TO = ODQ Q. > O EXHIBIT 2 fco z ot$£ UJ CO UJor 0.o UJoz<X.z UJ £ OLL, CO p^ Q UJQ£o co co co co0000i— C i- C<<<<^** ^"V ^"<. ^Vo o o oO 0) O O0 h- CD M; CM T-' LO LOT- i- CM T- tfi -2J2 0c £ o-O 00 1 II <i> £ 0co co 3)0 .C C>- *-. C 3Q. C LU 0 0^0)°.t: t •> «*-CO 0 C- ^oc = 0 if. 0 0 K?0 COCD ^OO) T- •<tCO CO•^f T3 2 0 2I— ro co £• "coto ^ Q- Q- 3 8 Siro -§=55 -1 -5 m ^>tr Z TO0 co 3: ^ w c co oQ) 0 D cD) C O CCCO C "C JZ:= CO CO C > 0> LU c £ 1 a§ Q. UJ UJLL 0 H< 0 H Q.sT. tt 0LL. Q LU Q UJLJJ Z 0 Z Q DLL •f)Oo LU a i woo ACRESo D O>" N CM" V* o0LO 0)Ti- *& CMo CO•* co 'in'Ds "ccco ^"CJ< ot — LO CO LO CO ^ o0oh>r CM V* CO o LO ^— ' p 0)C/)1^ <-^_LJ E 1 0Qi en^c '^ 'cc E0on ** o co"00 <& <. Z ^Z c ^^ CO ^"tc 'c "ET3 < COO)^1->J ^ ^z < z rt'U. *TQ. "co 00LL, . 0.b ~" O C3) 0CM" LO CO co"tf* II COOO ^ 0 Carlsbad HMP Exhibit 1. COMPONENTS OF CORE AREA CONSERVATION EXHIBIT 3 Target Core Area Conservation [1] Components of Core Area Conservation Parcel 1 (Villages ot La Costa - Alemir) Conservation Funded by: Villages of La Costa Bressi Ranch Future: City of Carlsbad HMP Fee (A) [2] Subtotal Conserved Parcel 2 (Villages ot La Costa - Choumas Pappas) Conservation Funded by: City of Carlsbad Municipal Golf Course Villages of La Costa - HCP Cost Share Palomar Forum Villages of La Costa - Other The Bridges Project (Non-HMP) Subtotal Conserved Less: Non-HMP Conservation (Bridges) Parcel 3 (Rancho Carrillo Mitigation - Nelson) Conservation Funded by: Rancho Carrillo Subtotal Conserved Onsite Conservation Credits Villages of La Costa (Canyons Network Settlement) Additional Carlsbad Golf Course Revegetation Additional Carlsbad Citywide Miscellaneous Adjustments Subtotal Conserved or to Be Conserved Future Carlsbad HMP Acquisition Future: City of Carlsbad HMP Fee (B) [3] Subtotal to Be Conserved Total Habitat Conservation 307.60 Ac. 114.02 Ac. 39.39 24.50 50.13 113.94 51.60 5.50 4.90 4.06 47.88 20.31 20.31 23.79 15.40 25.00 43.02 114.02 113.94 (47.88) 20.31 64.19 43.02 307.60 Ac. Source: City of Carlsbad; Onaka Planning & Economics. 1. Target conservation of core California Gnatcatcher habitat area southeast of the City of Carlsbad, as stipulated in its "Habitat Management Plan" (HMP) (2000). 2. This is the residual area of mitigation land originally purchased by the Villages of La Costa pursuant to the 1994 Habitat Conservation Plan (HCP), which the City of Carlsbad is obligated to acquire under the HMP. 3. This is the remaining area of core California gnatcatcher habitat land to be acquired in the future by the City of Carlsbad, in order to reach the target conservation of 307.6 acres. (See Note [1] above.) S EXHIBIT 4 Carlsbad HMP Exhibit 4. COST AND SOURCES OF FUNDS FOR CORE AREA CONSERVATION Habitat Acquisition and Management Endowment City of Carlsbad HMP Fee (A) - Alemir [1] City of Carlsbad HMP Fee (B) - Future [2] Estimated Acquisition Cost Management Endowment [3] Subtotal Planning and Administration Preparation of HMP and Open Space Management Plan [4] Percent Allocable to Core Area Conservation [5] Plan Preparation Cost Allocable to Core Area City Administration Costs Subtotal Total Cost to be Funded by HMP Fee Balance of HMP Fees Collected through 8/31/05 [6] Net Cost to be Funded by HMP Fee 50.13 Ac. 43.02 $ 1,806,800 322,700 845,900 13.19% 111,574 75,000 $ 1,353,510 2,129,500 186,574 $ 3,669,584 (17,493) $ 3,652,091 Source: Exhibit 1; City of Carlsbad; Onaka Planning & Economics. 1. Residual area of mitigation land originally purchased by the Villages of La Costa pursuant to the 1994 Habitat Conservation Plan (HCP), which the City of Carlsbad is obligated to acquire under the HMP; agreed purchase price is $27,000 per acre, including endowment for habitat management in perpetuity. 2. Remaining area of core California gnatcatcher habitat land to be acquired in the future by the City of Carlsbad, in order to reach the target conservation of 307.6 acres; assumed average cost is $40,000 per acre, plus 5.0% for legal and other costs of purchase. 3. Endowment to fund in perpetuity management of the land to be acquired; estimated to be $7,500 per acre, or $300 per acre per year, with average net interest yield of 4.0% per year after adjustment for inflation. 4. $750,000 for preparation of HMP and $95,900 for preparation of Open Space Management Plan. 5. Core habitat area (307.6 Ac.) divided by total area to be newly conserved under HMP (2,332 Ac.). Total area to be conserved under the HMP is 6,786 Ac. (including the Core Area), of which 4,454 Ac. were conserved prior to initiation of the program (HMP [2004], Tables 4 and 8, pp. D-13 and D-88). 6 HMP Fees collected through August 31, 2005; excludes funds deposited for construction of wildlife undercrossings at and near Palomar Airport Road. EXHIBIT 5 O COUJ111u.u.0.0 <D13 „ 3" m 4rf3 £ {2 58E £ .2 = DC oup to Bes §(O 00 S S s 10LO(OW o>CO CVJ dO - i/j ^ 6 d otuJ 11! d « I a, £notwhi EXHIBIT 6 CITY OF CARLSBAD UPDATED FEE STUDY REPORT FOR HABITAT MANAGEMENT PLAN MITIGATION FEE PROGRAM September 9, 2005 Preparedfor City of Carlsbad Planning Department 1635 Faraday Avenue Carlsbad, CA 92008-7314 Prepared by Onaka Planning & Economics P. O. Box 12565 La Jolla, CA 92039-2565 (858)535-1420 OP/E 155.2 Table of Contents Background and Purpose 1 HMP and Context of the Mitigation Fee Program 1 Core Habitat Area of the California Gnatcatcher 2 HMP's Mitigation Requirements for Impacts to Habitat 3 Mitigation for Impacts to Agriculture and Disturbed Lands 3 Estimated Cost of Core Area Conservation 5 Habitat Acquisition and Endowment 5 Planning and Administrative Costs 6 Properties Subject to Mitigation Fees 6 Fee Calculation Method 7 Recommended Fee Schedule 7 List of Exhibits Exhibit 1 Components of Core Area Conservation Exhibit 2 Vegetation Categories Potentially Subject to Mitigation Fee Exhibit 3 HMP Mitigation Ratios for Impacts to Habitats Exhibit 4 Cost and Sources of Funds for Core Area Conservation Exhibits Schedule of Fees Exhibit 6 Habitat Acres Subject to Mitigation or Payment of Fees City of Carlsbad Updated Fee Study Report for Habitat Management Plan Mitigation Fee Program Background and Purpose The City of Carlsbad conditionally adopted in July 2000 a Mitigation Fee Program (AB 15,816) for the City's Habitat Management Program (HMP), pending approval of the latter by the U.S. Fish and Wildlife Service (USFWS) and the California Department of Fish and Game (CDFG). The HMP is a habitat conservation plan prepared pursuant to the federal and State Endangered Species Acts and the State Natural Communities Conservation Planning (NCCP) Act. The goal of the Mitigation Fee Program is to provide funding for conservation of 307.6 acres of habitat of the coastal California gnatcatcher and other species, a part of the 6,786 acres of habitat addressed by the HMP. The area to be conserved is largely located in an unincorporated area of San Diego County, east of the cities of Carlsbad and Encinitas and south of San Marcos. The City of Carlsbad HMP, initially prepared in 1999, received federal and State approval and permits in 2004. The City also prepared an Open Space Management Plan (OSMP) (May 2004), which describes a process, structure, and strategies for habitat management and estimates management costs. This Updated Fee Study Report revises the current Mitigation Fee Program, taking into account changes in habitat conservation and land development which have occurred since the program's adoption in 2000 and additional planning information provided by the OSMP. This report describes conservation actions to be funded by the Mitigation Fee Program, the estimated costs of those actions, types of undeveloped land which would benefit from, and be subject to, the fee program, the method used to calculate fees, and the recommended schedule of fees. It is intended that this report be circulated for comment by property owners, federal and State wildlife agencies with authority to review and approve the HMP, and by other interested individuals and organizations. Amendments to the current Mitigation Fee Program will be reviewed for adoption at a noticed public hearing of the City Council of the City of Carlsbad. HMP and Context of the Mitigation Fee Program The Habitat Management Plan for Natural Communities in the City of Carlsbad (HMP) was issued in draft form in December 1999 and approved, with revisions, by the U.S. Fish and Wildlife Service and California Department of Fish and Game in November 2004.! The City also circulated for public comment and subsequently adopted an Environmental Assessment of the HMP,2 describing the affected environment and potential environmental consequences of the proposed action and alternatives. The purpose of the HMP is to "preserve the diversity of habitat 1 City of Carlsbad, Habitat Management Plan for Natural Communities in the City of Carlsbad, December 1999, as amended; approved in November 2004. 2 City of Carlsbad, Environmental Assessment of the Habitat Management Plan for Natural Communities in the City of Carlsbad, December 1999 (Draft). HMP Updated Mitigation Fee Study Report and protect sensitive biological resources within the City while allowing for additional development consistent with the City's General Plan and its Growth Management Plan."3 To this end, the BMP would "lead to citywide permits and authorization for the incidental take of sensitive species in conjunction with private development projects, public projects, and other activities which are consistent with the Plan."4 The permits, also called "take authorizations", would be issued under the U.S. and State of California Endangered Species Acts and the State Natural Community Conservation Planning Act. Under federal law,5 "incidental take" may include direct or indirect harm to species, such as significant habitat modification or degradation, that accompanies otherwise lawful activity—for example, grading in accordance with an approved grading permit. The HMP is also a "subarea plan" under the Multiple Habitat Conservation Program (MHCP) Plan, a regional habitat conservation plan prepared cooperatively by the City of Carlsbad and other cities in north San Diego County and approved by the Board of San Diego Association of Governments (SANDAG) in March 2003.6 Together, the HMP and the MHCP plans comprise a multiple-species habitat conservation plan (HCP) under the federal Endangered Species Act, as well as a natural community conservation plan (NCCP Plan) under the State Natural Community Conservation Planning (NCCP) Act and the State Endangered Species Act. The HMP authorizes the City of Carlsbad to approve incidental take of species and habitats by public and private development projects, if they adhere to its conservation goals and guidelines. In May 2004 the City prepared the City of Carlsbad Open Space Management Plan (OSMP), which describes a process and structure for open space management and monitoring, identifies key management issues, and recommends strategies and solutions, including detailed cost estimates for management.7 The OSMP does not specifically address habitat areas to be conserved and managed by this Mitigation Fee Program. However, it is assumed that standards of habitat and open space management identified by the OSMP for the HMP preserve system will also be applied to the core habitat area, as described below. Core Habitat Area of the California Gnatcatcher An important component of the HMP conservation program is the protection and management of a core habitat area of the coastal California gnatcatcher ("Core Area" and "Core Area Conservation"), largely located in an unincorporated area of San Diego County, east of the cities of Carlsbad and Encinitas and south of San Marcos.8 Core Area Conservation is necessary to ensure the continued viability of the California gnatcatcher in north San Diego County9 and to meet the HMP's overall conservation goals for the California gnatcatcher and coastal sage scrub. 3 HMP, p. A-1. 4 HMP, p. A-1. 5 Endangered Species Act of 1973 (ESA), as amended (16 U.S.C. Sec. 1539). 6 San Diego Association of Governments, Multiple Habitat Conservation Program (Final MHCP Plan), March 2003. 7 City of Carlsbad, Open Space Management Plan, May 2004. 8 HMP, pp. D-84 and D-85 and Figure 29. 9 Final MHCP Plan, Section 3. HMP Updated Mitigation Fee Study Report I'f Recognizing the importance of Core Area Conservation, the City of Carlsbad previously participated in the preparation of a habitat conservation plan (HCP) for the southeastern area of the city, called The Villages of La Costa, then owned by The Fieldstone Company and subsequently by Real Estate Collateral Management Company (RECMC; "Villages of La Costa HCP"). Under the Villages of La Costa HCP, RECMC is committed to pay $1,000,000, plus escalation according to the Consumer Price Index, for purchase of lands in the Core Area, and the City is committed to "act as the lead agency" to bring about the conservation of 240 acres in the Core Area, including the purchase by RECMC. Subsequently, Core Area conservation target was increased by 67.6 acres to a total of 307.6 acres, including off-site mitigation of various public and private projects and adjustments for other conservation actions. Exhibit 1 summarizes the specific components of Core Area conservation which have been, or will be, accomplished through the implementation of the HMP and the Mitigation Fee Program. Villages of La Costa acquired Parcels 1 and 2, totaling 227.96 acres, of which 39.39 acres represent their mitigation obligation of $1,000,000 plus price escalation. Villages of La Costa acquired these parcels, with the understanding that excess mitigation credits could be sold to other public or private projects requiring mitigation (subject to approval by the USFWS and CDFG) and that the City of Carlsbad would establish a mitigation fee program to acquire any outstanding credits. Sales to date, including sales to the City of Carlsbad for its municipal golf course, total 177.83 acres, leaving 50.13 acres as a future obligation of the City to reimburse Villages of La Costa. However, one of the sales, 47.88 acres to a project located outside the city, was subsequently determined by the wildlife agencies to be incompatible with the HMP, hence cannot be considered as contributing to the 307.6-acre conservation target. Parcel 3 (20.31 acres) was acquired using funds contributed by the developers of Rancho Carrillo Master Plan. Three additions to onsite conservation by various projects (Villages of La Costa, Carlsbad Golf Course, and others), totaling 64.19 acres, were included in Core Area Conservation, leaving 43.02 acres (in addition to 50.13 acres noted above) as a residual obligation of the City to meet the 307.6-acre conservation target. HMP's Mitigation Requirements for Impacts to Habitat The HMP establishes compensatory mitigation requirements for impact to habitats, which are grouped by affinity into Groups A through F (Exhibits 2 and 3). Compensatory mitigation is required by federal and state ESAs for unavoidable impacts, or those which remain after measures have been taken to avoid and minimize a project's adverse impacts on species and habitat. Under the HMP, a project's impacts to habitat must be compensated, or mitigated, by the conservation of other habitat areas, where the ratio of conserved to impacted areas differs according to habitat group. The HMP also specifies that mitigation for impacts to habitats in Groups A, B and C be in the form of physical habitat conservation, while impacts to habitats in Groups D, E and F would be mitigated by payment of an in-lieu fee. Accordingly, the Mitigation Fee Program is applicable only when there is impact to habitats in Groups D, E and F. Coastal sage scrub is classified as Group C habitat if it is occupied by the California gnatcatcher and as Group D habitat if it is not occupied. Coastal sage/chaparral mix and chaparral other than southern maritime chaparral are also classified as Group D habitat. For a specific parcel or group of parcels, investigation by a qualified biologist will be required to determine the type and extent HMP Updated Mitigation Fee Study Report of habitat groups and to determine whether coastal sage scrub is or is not occupied by the California gnatcatcher. Much of the coastal sage scrub in the city is occupied by the California gnatcatcher.10 For purposes of this study, it is estimated that 75% of coastal sage scrub that will be impacted by development is occupied (Group C) and the remaining 25% unoccupied (Group D). Exhibit 2 indicates the approximate locations of Groups C through F habitats, i.e., coastal sage scrub, coastal sage scrub/chaparral mix, chaparral other than southern maritime chaparral, annual (non-native) grassland, agricultural land, disturbed areas, and eucalyptus in the City of Carlsbad. For purposes of the Mitigation Fee Program, the mitigation ratios shown in Exhibit 3 may be taken as indicating relative biological values of habitat groups. Thus, Group D habitat, with a mitigation ratio of 1:1, can be regarded as twice as important to the HMP as Group E habitat, with a mitigation ratio of 0.5:1. Accordingly, the HMP directs that mitigation fees be calculated according to mitigation ratios contained in Exhibit 3.11 Mitigation for Impacts to Agriculture and Disturbed Lands Mitigation has not traditionally been required for development of agricultural land or disturbed areas or for removal of non-native vegetation communities such as eucalyptus groves. However, in order equitably to meet the multiple-species, multiple-habitat goals of the HMP and the NCCP Act, the HMP requires that a fee be paid in lieu of mitigation for impacts to non-native habitats. The fee is justified due to the biological values that these lands currently provide to HMP species; to the fact that, prior to their conversion, these lands supported native habitats and species; and to their potential for reversion to native vegetation in the future if left undeveloped or if restored. The HMP recognizes that although agricultural land, disturbed areas, and eucalyptus groves have a lower biological value than native habitats, they currently provide a variety of benefits to HMP species that are not provided by developed lands. For example, some HMP species forage in agricultural fields or disturbed areas (e.g., burrowing owl, western spadefoot toad, long-billed curlew, and northern harrier), and some raptor species frequently use eucalyptus groves for nesting and roosting. These non-native habitats also provide important linkage and buffer functions for the preserve system. In some areas, agricultural fields, disturbed land, and eucalyptus groves provide linkages that allow wildlife to move between remaining natural blocks of habitat. The non-native habitats also help buffer the conserved habitats from edge effects associated with development. This reduces the adverse effects of habitat fragmentation and the associated need for specialized management. In the past, conversion of natural biological habitats to agricultural use did not require mitigation, despite adverse effects to biological resources. A fee collected when agricultural lands are proposed for development accounts in part for this historic impact. In addition, fallow agricultural fields or disturbed areas may eventually revert to native vegetation (e.g., disked areas may revert to coastal sage scrub), thus representing potential future habitat for HMP species. Development of these lands would remove the potential to be converted to natural habitat. 10 See HMP, Figure 33, Appendix page C-43, for reported locations of California gnatcatchers in the city. 11 See "Financing", HMP, p. E-8. HMP Updated Mitigation Fee Study Report Thus, development of agricultural, disturbed, and eucalyptus areas will have a variety of indirect, adverse impacts on HMP species, which require mitigation. Because these impacts are less severe than development in natural habitat areas, Group F habitat is assigned, for purposes of the Mitigation Fee Program, an implicit mitigation ratio of 0.1 to 1, or 0.1 acre of conservation for each acre of impact. The implicit mitigation ratio is used only to calculate the mitigation fee; it is not intended that impacts to Group F habitat should be mitigated by conservation of other Group F habitats. At an implicit ratio of 0.1 to 1, fee for impact to Group F habitat would be 20% of the fee for impact to Group E habitat, which has a mitigation ratio of 0.5:1, and 10% of the fee for impact to Group D habitat, which has a mitigation ratio of 1:1. Although the Group F fee would be small, its use helps to spread the cost of Core Area Conservation equitably among all properties which benefit from the HMP. Estimated Cost of Core Area Conservation Actions required to implement Core Area Conservation are estimated to cost $3,669,584, including land acquisition, establishment of an endowment to fund habitat management in perpetuity, and incidental costs for planning and administration. Between July 2000, when the Mitigation Fee Program was initially adopted, and August 31, 2005, the City collected $17,493 in HMP Mitigation Fees. When this amount is subtracted from the estimated cost to implement Core Area Conservation, a total of $3,652,091 would need to be raised by the Updated Mitigation Fee Program. These costs are summarized in Exhibit 4 and discussed below. Habitat Acquisition and Endowment Two acquisitions are needed to complete the Core Area conservation target of 307.6 acres — 50.13 acres of mitigation credit on Parcel 1 (previously acquired by Villages of La Costa) and 43.02 acres of new acquisition, to be identified in the future. The cost of mitigation credit on Parcel 1 has been determined to be $27,000 per acre, including endowment for perpetual management (the same as for mitigation of Carlsbad Municipal Golf Course). The cost of future acquisition is estimated to be $40,000 per acre, plus additional costs incidental to purchase, such as biological investigation, and an endowment for management, discussed below. Based on management and monitoring of City-owned habitat lands developed by the OSMP, it is estimated that the average cost of habitat management and monitoring is $300 per acre per year (in 2005 dollars). Net interest yield, after adjusting for inflation, is estimated to be 4% per year,12 resulting in required endowment of $7,500 per acre, or $258,100 for the 43.02-acre habitat land when acquired. 12 Nominal interest yield must pay for both annual management and monitoring costs and an addition to the endowment to make up for inflation. For example, if nominal interest yield is 7% and inflation is 3%, then only 4% would be available to cover annual costs. Although both nominal interest and inflation rates may vary from year to year, calculation of an endowment assumes a fixed net interest yield (here, 4%), after adjustment for inflation. HMP Updated Mitigation Fee Study Report Planning and Administrative Costs The City of Carlsbad has previously expended $750,000 for preparation of the HMP and $95,900 to prepare the OSMP. Since the HMP would lead to new conservation of 2,332 acres,13 including 307.6 acres in the Core Area, planning cost associated with the Core Area represents 13.19% (= 307.6/2,332) of the total planning cost for new conservation under the HMP, or $111,574. The City will also incur estimated $75,000 of administrative costs related to acquisition and establishment of the Mitigation Fee Program. Properties Subject to Mitigation Fees The HMP benefits all properties in the city through a comprehensive conservation program for various species which are protected under the federal and state ESAs and by streamlining the requirements of those acts into a single permit under the HMP. A project which does not itself require a take authorization or which does not impact native habitat would nevertheless benefit from the HMP and the Mitigation Fee Program, because it relies on Growth Management Zone- wide infrastructure improvements which require such an authorization. In addition, the Mitigation Fee Program benefits properties which impact Group D, E or F by simplifying compliance with HMP's mitigation guidelines and ratios. All undeveloped land with Group D, E or F habitat is potentially subject to the Mitigation Fee Program. As previously noted, survey by a qualified biologist is required to determine the extent and type of habitat impacted. Mitigation fee will be calculated for projects which impact Group D, E or F habitat and which require discretionary approvals by the City of Carlsbad, including but not limited to general plan amendment, specific plan, and subdivision map. The fee will be payable upon issuance of a grading permit, or a building permit if no grading permit is required, since the City has previously expended funds for Core Area Conservation and the fee is paid in lieu of mitigation for impact that results from clearing or grading activity, or with construction subsequent to grading. Mitigation fees will not be levied for impacts on land owned by the City of Carlsbad, since city- owned habitats will largely be conserved and any impacts will be mitigated in accordance with the HMP, including the use of a city-owned mitigation bank. Mitigation fees will not be levied on lands owned by other public agencies which independently obtain take authorizations from the U.S. Fish and Wildlife Service and/or California Department of Fish and Game; on properties with existing take authorizations; on properties which permanently conserve 67% or more of the undeveloped land, including Groups A through F, in accordance with conservation and management guidelines of the HMP; or on any land that is subject to an agricultural mitigation fee required by the Carlsbad Local Coastal Program. Based on an analysis of geographic information systems (GIS) data for the HMP, estimated acres of impact from future development to Group D, E and F habitats subject to mitigation fees are 45 acres, 84 acres, and 552 acres, respectively. 13 6,786 acres of total planned conservation, less 4,454 acres of existing conservation (HMP, Tables 4 and 8, pages D-13andD-88). HMP Updated Mitigation Fee Study Report Fee Calculation Method In calculating mitigation fees, acres of habitat impact are converted to proportionate units, using the mitigation ratios specified in the HMP Plan or, in the case of Group F habitat, using the implicit mitigation ratio discussed above. Thus, one acre of impact to Group D, E and F habitats represents, respectively, 1.0, 0.5, and 0.1 proportional units for calculating mitigation fees. Habitats which may be impacted under the HMP and subject to fees represent a total of 142.2 proportional units, of which Group D, E and F habitats represent, respectively, 31.65%, 29.54%, and 38.82% (Exhibit 4). Total funding requirement of $3,652,091 is allocated to habitat groups according to these proportions, then divided by the estimated acres of impact, yielding mitigation fee per acre by habitat group (rounded to the next whole dollar). The fee is applied to acres of impact, without regard to the amount of habitat conserved on-site. Use of mitigation ratios establishes a direct relationship between the fees and acres of impact to habitat. Recommended Fee Schedule Recommended mitigation fees are as follows: Group D Habitat $25,683 per acre Group E Habitat $ 12,842 per acre Group F Habitat $2,569 per acre It is also recommended that these fees be escalated annually at one-half the rate of increase in Consumer Price Index-All Urban Consumers for San Diego County, using as base the reported index of the last biennial period preceding the adoption of the Mitigation Fee Program and adjusted every 6 months.14 14 For example, San Diego's index for the second half of 2004 was 214.3 (all items, not seasonally adjusted) (U.S. Bureau of Labor Statistics). HMP Updated Mitigation Fee Study Report Carlsbad HMP Exhibit 1. COMPONENTS OF CORE AREA CONSERVATION Target Core Area Conservation [1] Components of Core Area ConservationParcel 1 (Villages ot La Costa - Alemir) Conservation Funded by: Villages of La Costa Bressi Ranch Future: City of Carlsbad HMP Fee (A) [2] Subtotal Conserved Parcel 2 (Villages ot La Costa - Choumas Pappas) Conservation Funded by: City of Carlsbad Municipal Qolf Course Villages of La Costa - HCP Cost Share Palomar Forum Villages of La Costa - Other The Bridges Project (Non-HMP) Subtotal Conserved Less: Non-HMP Conservation (Bridges) Parcel 3 (Rancho Carrillo Mitigation - Nelson) Conservation Funded by: Rancho Carrillo Subtotal Conserved Onsite Conservation Credits Villages of La Costa (Canyons Network Settlement) Additional Carlsbad Golf Course Revegetation Additional Carlsbad Citywide Miscellaneous Adjustments Subtotal Conserved or to Be Conserved Future Carlsbad HMP Acquisition Future: City of Carlsbad HMP Fee (B) [3] Subtotal to Be Conserved Total Habitat Conservation 20.31 20.31 307.60 Ac. 114.02 Ac. 39.39 24.50 50.13 113.94 51.60 5.50 4.90 4.06 47.88 23.79 15.40 25.00 43.02 114.02 113.94 (47.88) 20.31 64.19 43.02 307.60 Ac. Source: City of Carlsbad; Onaka Planning & Economics. 1. Target conservation of core California Gnatcatcher habitat area southeast of the City of Carlsbad, as stipulated in its 'Habitat Management Plan" (HMP) (2000). 2. This is the residual area of mitigation land originally purchased by the Villages of La Costa pursuant to the 1994 Habitat Conservation Plan (HCP), which the City of Carlsbad is obligated to acquire under the HMP. 3. This is the remaining area of core California gnatcatcher habitat land to be acquired in the future by the City of Carlsbad, in order to reach the target conservation of 307.6 acres. (See Note [1] above.) Exhibit 2. City of Carlsbad Vegetation Categories Potentially Subject to Mitigation Fee if CAMMO VDA HOM.E 4ii^ J Legend IB1 Coastal Sage Scrub Grassland Agriculture, Eucalyptus Woodland, Disturbed This exhibit depicts locations of coastal sage scrub, chaparral, grassland, and other habitats in the city based on historical information. Current conditions may differ from what is indicated, and a site survey will be required to determine the type and extent of habitat that may be subject to mitigation fee upon impact. Primed 21 April 2004 by the Cily of Carlsbad GIS. /cargis2/products/planning/r130.04/veQ_blackandwhit2.mxd Carlsbad HMP Exhibit 3. MITIGATION RATIOS FOR IMPACTS TO HABITATS Habitat Group and Type A. B. C. D. E. F. Coastal salt marsh, alkali marsh, freshwater marsh, estuarine, salt pan/mudflats, riparian forest, riparian woodland, riparian scrub, vernal pools, disturbed wetlands, flood channel, fresh water Engelmann oak woodland, coast live oak woodland [1] Beach, southern coastal bluff scrub, maritime succulent scrub, southern maritime chaparral, native grass Gnatcatcher-occupied coastal sage scrub Unoccupied coastal sage scrub, coastal sage/chaparral mix, chaparral (excluding southern maritime chaparral) Annual (non-native) grassland Disturbed lands, eucalyptus, agricultural lands Mitigation Ratio/Requirement by Type of Impacted Habitat No net loss goal (mitigation ratio varies by type of replacement habitat) 3:1 [2] 2:1 [3] 1:1 [4] 0.5:1 [4] Mitigation Fee [4] Source: City of Carlsbad, Habitat Management Plan (2004), p. D-113, Table 11. 1. Group A habitats are associated with wetland and riparian areas. Impacts to these habitat types are subject to review under Section 404 of the federal Clean Water Act or Section 1600 of the California Fish and Game Code. 2. It is assumed that all habitat types in Group B will be included in the proposed preserve system. Small, isolated patches of low quality southern maritime chaparral may be located outside a preserve area and maximum avoidance and onsite conservation is preferred. 3. Maximum avoidance and onsite conservation of Group C habitat is encouraged. 4. Offsite mitigation for habitat in this group which is not conserved onsite, shall pay a per acre in-lieu mitigation fee in an amount to be determined by the City Council. Carlsbad HMP Exhibit 4. COST AND SOURCES OF FUNDS FOR CORE AREA CONSERVATION Habitat Acquisition and Management Endowment City of Carlsbad HMP Fee (A) - Alemir [1] City of Carlsbad HMP Fee (B) - Future [2] Estimated Acquisition Cost Management Endowment [3] Subtotal Planning and Administration Preparation of HMP and Open Space Management Plan [4] Percent Allocable to Core Area Conservation [5] Plan Preparation Cost Allocable to Core Area City Administration Costs Subtotal Total Cost to be Funded by HMP Fee Balance of HMP Fees Collected through 8/31/05 [6] Net Cost to be Funded by HMP Fee 50.13 Ac. 43.02 $ 1,806,800 322,700 845,900 13.19% 111,574 75,000 $ 1,353,510 2,129,500 186,574 $ 3,669,584 (17,493) $ 3,652,091 Source: Exhibit 1; City of Carlsbad; Onaka Planning & Economics. 1. Residual area of mitigation land originally purchased by the Villages of La Costa pursuant to the 1994 Habitat Conservation Plan (HCP), which the City of Carlsbad is obligated to acquire under the HMP; agreed purchase price is $27,000 per acre, including endowment for habitat management in perpetuity. 2. Remaining area of core California gnatcatcher habitat land to be acquired in the future by the City of Carlsbad, in order to reach the target conservation of 307.6 acres; assumed average cost is $40,000 per acre, plus 5.0% for legal and other costs of purchase. 3. Endowment to fund in perpetuity management of the land to be acquired; estimated to be $7,500 per acre, or $300 per acre per year, with average net interest yield of 4.0% per year after adjustment for inflation. 4. $750,000 for preparation of HMP and $95,900 for preparation of Open Space Management Plan. 5. Core habitat area (307.6 Ac.) divided by total area to be newly conserved under HMP (2,332 Ac.). Total area to be conserved under the HMP is 6,786 Ac. (including the Core Area), of which 4,454 Ac. were conserved prior to initiation of the program (HMP [2004], Tables 4 and 8, pp. D-13 and D-88). 6. HMP Fees collected through August 31, 2005; excludes funds deposited for construction of wildlife undercrossings at and near Palomar Airport Road. is %u_ « o ® ^C5 B g oe 5 a S £ E 0) "coS^ 11 "5 El •S .125 UJUl is W X 3«m S 2 S co E6 Tf LO O> <N CM CM UC5d o - S O CO^ &^§ o ~o " i cCD 'a.3 "3 >0 CO o Q o>O < LJU 1- 111 CD 1 CD CO.aCOfeO 8- -s U -—W Q. CD 3 O) QCO Xeo wi? ssi I S|l&•n _ Q- a. « f?I!.. o <o •-« < HI ~B Z T- PJ CO •Q. •B? CO (0UJUJ u.Ol- UJ O Zo il •o O5^^tm UJ°s (0UJ CO (O .•S.g XUJ a. a. E P <aCL •—,p CM .To 2 Sm Q. co o 2<CD <DCO ooO) COOOOU5O)COIO to co o T-h-CD COcoCN _ 0 e -S "5•o JS ° coCO r- C Q.S § I .i 31 Is Si &°^ff^S io>-s a IE iri E '0 <o 2 8 to '•£ 2U. CM UJ CO CO ^15S-| §CO u> COE » £=§.2 ™ UJ ±± 0> CO •* O EXHIBIT? { ' 7 CITY OF CARLSBAD - AGENDA BILL AB# lS,S/k MTG. -J -\\-OO DEPT. PLN TITLE: HABITAT IN-LIEU MITIGATON FEE DEPT.HD. iMfcjt^ CrTYArrY<^D? — ^t^»CITY MGR &r£r RECOMMENDED ACTION: That the City Council ADOPT Resolution No. 3<?OO'3a3 . APPROVING the Habitat In-Lieu Mitigation Fee and AUTHORIZING staff to begin requiring payment of the fee as a condition of approval of applicable projects. ITEM EXPLANATION: On September 21, 1999, the City Council approved the Habitat Management Plan for Natural Communities in the City of Carlsbad and authorized staff to submit the plan to federal and state wildlife agencies for their processing. The plan was submitted to those agencies in December 1999, and processing has been proceeding. It is anticipated that the plan will receive final approval within the next 90 days. A key element of the plan is the acquisition and conservation of approximately 300 acres of habitat land in the unincorporated area southeast of Carlsbad, within an area referred to as the County Core Area. The primary purpose of the Habitat In-lieu Mitigation Fee is to generate approximately $4.3 million to accomplish the preservation in the Core Area. The plan proposes that projects in Carlsbad that impact certain habitat types will be required to pay the fee as the mitigation for their impacts. State law requires that, prior to adopting a new fee of this type, the City must prepare a study of the proposed uses of the funds and the relationship (or nexus) of the fee to the impacts that are being mitigated. Onaka Planning and Economics was commissioned to prepare the study for the City. Onaka's report is attached as Exhibit 2. The report itself provides a detailed explanation of the methodology and basis for the conclusions. The following is a brief summary of the report: •> Conservation within the County Core Area is essential to the viability of the HMP * Sources of funds available to assist with the acquisition total approximately $2.6 million *> The unfunded balance totals approximately $4.3 million, and the fee program has been designed for projects in Carlsbad which impact coastal sage scrub (not occupied by the California gnatcatcher), chaparral, grassland, and disturbed/agricultural lands to mitigate their impacts by payment of the fee * The fee for the above habitat types is based on the mitigation ratios stated in the HMP. * The mitigation ratio for unoccupied coastal sage scrub and chaparral is 1:1, and the proposed fee is $7,897 per acre of impact «> The mitigation ratio for grassland is Va'A, and the proposed fee is $3,949 per acre of impact * The proposed fee for agricultural land and disturbed land is $790, per acre of impact, based on a ratio of 1/10:1 * Impacts to habitat types other than those stated above must be mitigated in-kind at the ratios stated in the HMP. Staff has met with the various interest groups and reviewed the structure of the fee program with them. Attached as Exhibit 3, is a letter submitted by the Endangered Habitat League. The Building Industry Association submitted verbal comments, and a letter is anticipated. Verbal comments were also offered by the wildlife agencies, and these were considered in preparing the final report.o 3(0 PAGE 2 OF AGENDA BILL NO. IS. ffl 10 Although each group expressed some concerns about specific aspects of the fee, staff believes that the fee concept is supported overall. ENVIRONMENTAL: Adoption of this fee is exempt from the requirements of the California Environmental Quality Act pursuant to Section 15313 which exempts acquisition of lands for fish and wildlife conservation purposes, including preservation of fish and wildlife habitat, establishing ecological reserves, and preserving access to public lands and waters where the purpose of the acquisition is to preserve land in its natural condition. In addition, this fee program was discussed in the Habitat Management Plan covered by a Mitigated Negative Declaration approved September 21,1999. FISCAL IMPACT: Approval of the staff recommendation will result in a number of fiscal effects. By assessment of the fee on new development, a revenue stream of approximately $4.3 million will be produced over the next 20 to 30 years. At the same time, the City will be required to make contributions toward conservation of the Core Area, primarily by directing golf course mitigation funds to that area. The City's total contribution is estimated to be $1.1 million, of which $891,000 is Golf Course Mitigation and $178,000 is other City advances. The following table shows the flow of funds to acquire and preserve the acreage in the Core area as required by the HMP: Villages of La Costa Advances City Advances Total (in thousands) Purchase land Endowment costs HMP preparation/fee program costs Preserve management plan Less: HCP Mitigation requirement HCP/HMP contribution Amount to be repaid $5,939.6 780.4 -1,063.3 -150.0 $5,506.7 $171.5 6.4 $177.9 $5,939.6 780.4 171.5 6.4 -1,063.3 -150.0 $5,684.6 Sources of repayment: Rancho Carrillo mitigation Golf course mitigation Habitat In-Lieu Fees I Total $ 500.C 891.41 4,293.2 $5,684.6) The HMP requires the acquisition and maintenance of 307.6 acres of habitat. Land totaling 239 acres has been previously acquired and conserved by Villages of La Costa (VLC), including 12 acres of onsite credit, and it is expected that VLC will also provide the funding for the remaining 68.6 acres required by the HMP. VLC will also be advancing funds for an endowment totaling $780,400 that will provide the necessary funding for the maintenance of the property in perpetuity. These advances less the mitigation amounts required to be paid by VLC will be reimbursed from amounts previously paid by Rancho Carrillo ($500,000) for mitigation, from amounts to be paid from the Carlsbad Golf Course fund for mitigation on the proposed golf course (approximately $891,000) and from the Habitat In-Lieu fees, as collected. PAGE 3 OF AGENDA BILL NO. A portion of the costs spent by the City in the preparation of the HMP and the fee program and future costs for the preparation of the preservation plan (totaling $177,900) will also be reimbursed from the Habitat In-Lieu fees when available. EXHIBITS: 1 . City Council Resolution No. 900Q~3i33 2. Fee Study Report for Habitat Management Plan Mitigation Fee Program, dated May 16, 2000 3. Letter from Endangered Habitat League, dated March 22, 2000. 1 RESOLUTION NO.2000-223 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF , CARLSBAD, CALIFORNIA, APPROVING A HABITAT IN-LIEU MITIGATION FEE. 4 CASE NAME: HABITAT IN-LIEU MITIGATION FEE 5 WHEREAS, the City Council of the City of Carlsbad has approved the Habitat 6 Management Plan (HMP) and submitted the plan to the California Department of Fish and 7 Game and the U.S. Fish and Wildlife Service for their approval; and 8 WHEREAS, the HMP proposes a fee program in order to generate funding for 9 conservation of certain parcels totaling approximately 300 acres which lie in the unincorporated 10 area to the southeast of Carlsbad and which are essential to the biological viability of the HMP; 11 and 12 WHEREAS, the City has caused a study to be prepared analyzing the need for the fee, the uses of the funds to be derived from the fee, and the relationship between the fee 14 and the impacts which will be mitigated by the fee; and 15 WHEREAS, the City Council has considered all pertinent facts and information 16 regarding the fee that have been brought to its attention by persons or organizations having an 17 interest in the matter. 18 NOW. THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of Carlsbad, California, as follows: -. 1. That the above recitations are true and correct. 22 2. That the City Council finds: 23 a. The fee is necessary and appropriate in order to implement the Habitat Management Plan and to ensure that the plan will adequately provide for the 24 long-term conservation of wildlife species addressed by the plan, which is a recognized public benefit. 25 b. The fee will produce adequate revenues to accomplish its intended purposes. c. The fee is based on a clear and logical relationship between the impacts of 26 development projects and the mitigation for those impacts. d. In the absence of the fee, development projects which would result in 27 impacts to the habitats addressed by the fee would be required to mitigate those impacts in other ways. 28 e. The fee amounts are roughly proportional to the impacts which will be mitigated by the fee. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3. The report entitled "City of Carlsbad Fee Study Report for Habitat Management Plan Mitigation Fee Program" dated May 16, 2000, and prepared by Onaka Planning and Economics is incorporated herein by reference and is approved as to its methodology, findings and recommendations. 4. That staff is authorized to make payment of the fee a condition of approval of all applicable discretionary projects. 5. That staff is authorized to administer the fee, including establishing any necessary accounting and implementing procedures. 6. In the event the HMP is not approved, the fee will be rescinded. 7. The fee shall become effective 60 days following the date on which the City Council adopts this resolution. 8. The amount of the fee shall be automatically escalated annually at one-half the rate of increase in Consumer Price Index - All Urban Consumers for San Diego County, using as base the reported index of the last biennial period preceding the date of adoption of this resolution. 9. Based on the foregoing, the City Council of the City of Carlsbad adopts the Habitat In-Lieu Mitigation Fee. PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad City Council held on the nth day of July , 2000 by the following vote, to wit: AYES: Council Members Lewis, Hall, Finnila, and Kulchin NOES: None ABSENT: Council Member Nygaard ABSTflTN None CLAUDE A. ATTEST: KAREN R. KUNDTZ, Assistant City Clerk (SEAL) EXHIBIT 2 CITY OF CARLSBAD FEE STUDY REPORT FOR HABITAT MANAGEMENT PLAN MITIGATION FEE PROGRAM May 16, 2000 Prepared by Onaka Planning & Economics P. O. Box 12565 La Jolla.CA 92039-2565 (858) 535-1420 Table of Contents Bags Purpose 1 HMPand Context of the Mitigation Fee Program 1 Core Habitat Area of the California Gnatcatcher 2 HMP's Mitigation Requirements for Impacts to Habitat 3 Mitigation for Impacts to Agriculture and Disturbed Lands 3 Estimated Cost of Core Area Conservation 4 Habitat Acquisition 4 Endowment for Habitat Management 5 Incidental Costs 5 Funding Sources 5 Properties Subject to Mitigation Fees 6 Fee Calculation Method 7 Recommended Fee Schedule 7 List of Exhibits Exhibit 1 HMP Mitigation Ratios for Impacts to Habitats Exhibit 2 Map of Groups C, D, E and F Habitats Exhibit 3 Core Area Conservation Cost and Sources of Funds Exhibit 4 Schedule of Fees City of Carlsbad Fee Study Report for Habitat Management Plan Mitigation Fee Program Purpose City of Carlsbad Habitat Management Plan (HMP) Mitigation Fee Program is intended to provide funding for conservation of 295.6 acres of habitat of the coastal California gnatcatcher and other species, a part of the 6,757 acres of habitat addressed by the HMP. The area to be conserved is located in an unincorporated area of San Diego County, east of the cities of Carlsbad and Encinitas and south of San Marcos. This report describes conservation actions to be funded by the Mitigation Fee Program, the estimated costs of those actions, types of undeveloped land which would benefit from, and be subject to, the fee program, the method used to calculate fees, and the recommended schedule of fees. It is intended that this report be circulated for discussion among property owners, federal and state wildlife agencies with authority to review and approve the HMP, and by other interested individuals and organizations. The Mitigation Fee Program will be reviewed for adoption at a noticed public hearing of the City Council of the City of Carlsbad. HMP and Context of the Mitigation Fee Program The City of Carlsbad has issued a draft Habitat Management Plan for Natural Communities in the City of Carlsbad (HMP).1 The city has also prepared and circulated for public comment a draft Environmental Assessment of the HMP,2 describing the affected environment and potential environmental consequences of the proposed action and alternatives. The purpose of the HMP is to "preserve the diversity of habitat and protect sensitive biological resources within the City while allowing for additional development consistent with the City's General Plan and its Growth Management Plan."3 To this end, the HMP would "lead to citywide permits and authorization for the incidental take of sensitive species in conjunction with private development projects, public projects, and other activities which are consistent with the Plan."4 The permits, also called "take authorizations", would be issued under the U.S. and State of California Endangered Species Acts and the state Natural Community Conservation Planning Act. Under federal law,5 "incidental take" may include direct or indirect harm to species, such 1 City of Carlsbad, Habitat Management Plan for Natural Communities in the City of Carlsbad, December 1999. * City of Carlsbad, Environmental Assessment of the Habitat Management Plan for Natural Communities in the City of Carlsbad (Draft), December 1999. 3 HMP, p. A-l. 4 HMP, p. A-l. 5 Endangered Species Act of 1973 (ESA), as amended (16 U.S.C. Sec. 1539). HMP Mitigation Fee Study Report 33 as significant habitat modification or degradation, that accompanies otherwise lawful activity— for example, grading in accordance with an approved grading permit. The HMP is also a "subarea plan" within the context of a regional habitat conservation plan currently under preparation by seven cities in north San Diego County in cooperation with San Diego Association of Governments (MHCP Plan).6 The combination of the HMP and the MHCP Plan serves as a multiple-species habitat conservation plan (HCP) under the federal Endangered Species Act, as well as a natural community conservation plan (NCCP Plan) under the state Natural Community Conservation Planning (NCCP) Act and the state Endangered Species Act. The HMP authorizes the City of Carlsbad to approve incidental take of species and habitats by public and private development projects, if they adhere to its conservation goals and guidelines. Core Habitat Area of the California Gnatcatcher An important component of the HMP conservation program is the protection and management of a core habitat area of the coastal California gnatcatcher ("Core Area" and "Core Area Conservation"), located in an unincorporated area of San Diego County, east of the cities of Carlsbad and Encinitas and south of San Marcos.7 Core Area Conservation is necessary to ensure the continued viability of the California gnatcatcher in north San Diego County* and to meet the HMP's overall conservation goals for the California gnatcatcher and coastal sage scrub. Recognizing the importance of Core Area Conservation, the City of Carlsbad previously participated in the preparation of a habitat conservation plan (HCP) for the southeastern area of the city, called The Villages of La Costa, then owned by The Fieldstone Company and subsequently by Real Estate Collateral Management Company (RECMC; "Villages of La Costa HCP"). Under the Villages of La Costa HCP, RECMC is committed to pay $1,000,000, plus escalation according to the Consumer Price Index, for purchase of lands in the Core Area, and the city is committed to "act as the lead agency" to bring about the conservation of 240 acres in the Core Area, including the purchase by RECMC. Under the HMP, the city will conserve additional 67.6 acres in the Core Area, or to contribute equivalent funding, using a portion of mitigation funds paid by the developers of Rancho Carrillo Master Plan and funds to be paid by the city to mitigate for impacts resulting from construction of Carlsbad Municipal Golf Course. The city will also contribute $150,000 to Core Area Conservation; this amount was previously committed by RECMC to defray the cost of the HMP. In summary, Core Area Conservation under the HMP will total 307.6 acres,9 of which 12 acres represent additional on- site conservation in The Villages of La Costa and 295.6 acres represent new purchases in the Core Area. * San Diego Association of Governments, Multiple Habitat Conservation Program (Consultants' Working Draft MHCP Plan), June 1998. 7 HMP, pp. D-71ff. and Figure 29. 1 MHCP Plan, Attachment E. 9 See HMP, pp. E-6ff. for discussion of existing funding sources for Core Area Conservation. HHP Mitigation Fee Study Report 34 HMP's Mitigation Requirements for Impacts to Habitat The HMP establishes compensatory mitigation requirements for impacts to habitats, which are grouped by affinity into Groups A through F (Exhibit 1). Compensatory mitigation is required by federal and state ESAs for unavoidable impacts, or those which remain after measures have been taken to avoid and minimize a project's adverse impacts on species and habitat. Under the HMP, a project's impacts to habitat must be compensated, or mitigated, by the conservation of other habitat areas, where the ratio of conserved to impacted areas differs according to habitat group. The HMP also specifies that mitigation for impacts to habitats in Groups A, B and C be in the form of physical habitat conservation, while impacts to habitats in Groups D, E and F will be mitigated by payment of an in-lieu fee. Accordingly, the Mitigation Fee Program is applicable only when there is impact to habitats in Groups D, E and F. Coastal sage scrub is classified as Group C habitat if it is occupied by the California gnatcatcher and as Group D habitat if it is not occupied. Coastal sage/chaparral mix and chaparral other than southern maritime chaparral are also classified as Group D habitat. For a specific parcel or group of parcels, investigation by a qualified biologist will be required to determine the type and extent of habitat groups and to determine whether coastal sage scrub is or is not occupied by the California gnatcatcher. Much of the coastal sage scrub in the city is occupied by the California gnatcatcher.10 For purposes of this study, it is estimated that 75% of coastal sage scrub that will be impacted by development is occupied (Group C) and the remaining 25% unoccupied (Group D). Exhibit 2 indicates the approximate locations of Groups C through F habitats, i.e., coastal sage scrub, coastal sage scrub/chaparral mix, chaparral other than southern maritime chaparral, annual (non-native) grassland, agricultural land, disturbed areas, and eucalyptus in the City of Carlsbad. For purposes of the Mitigation Fee Program, the mitigation ratios shown in Exhibit 1 may be taken as indicating relative biological values of habitat groups. Thus, Group D habitat, with a mitigation ratio of 1:1, can be regarded as twice as important to the HMP as Group E habitat, with a mitigation ratio of 0.5:1. Accordingly, the HMP directs that mitigation fees be calculated according to mitigation ratios contained in Exhibit I.11 Mitigation for Impacts to Agriculture and Disturbed Lands Mitigation has not traditionally been required for development of agricultural land or disturbed areas or for removal of such non-native vegetation communities as eucalyptus groves. However, in order equitably to meet the multiple-species, multiple-habitat goals of the HMP and the NCCP Act, the HMP requires that a fee be paid in lieu of mitigation for impacts to non-native habitats. The fee is justified due to the biological values that these lands currently provide to HMP species; to the fact that, prior to their conversion, these lands supported native habitats and species; and to their potential for reversion to native vegetation in the future if left undeveloped or if restored. 10 See HMP, Appendix C-43. " HMP, p. E-8. HHP Mitigation Fee Study Report The HMP recognizes that although agricultural land, disturbed areas, and eucalyptus groves have a lower biological value than native habitats, they currently provide a variety of benefits to HMP species that are not provided by developed lands. For example, some HMP species forage in agricultural fields or disturbed areas (e.g., burrowing owl, western spadefoot toad, long-billed curlew, and northern harrier), and some raptor species frequently use eucalyptus groves for nesting and roosting. These non-native habitats also provide important linkage and buffer functions for the preserve system. In some areas, agricultural fields, disturbed land, and eucalyptus groves provide linkages that allow wildlife to move between remaining natural blocks of habitat. The non-native habitats also help buffer the conserved habitats from edge effects associated with development. This reduces the adverse effects of habitat fragmentation and the associated need for specialized management. In the past, conversion of natural biological habitats to agricultural use did not require mitigation, despite adverse effects to biological resources. A fee collected when agricultural lands are proposed for development accounts in part for this historic impact. In addition, fallow agricultural fields or disturbed areas may eventually revert to native vegetation (e.g., disked areas may revert to coastal sage scrub), thus representing potential future habitat for HMP species. Development of these lands would remove the potential to be converted to natural habitat. Thus, development of agricultural, disturbed, and eucalyptus areas will have a variety of indirect, adverse impacts on HMP species, which require mitigation. Because these impacts are less severe than development in natural habitat areas, Group F habitat is assigned, for purposes of the Mitigation Fee Program, an implicit mitigation ratio of 0.1 to 1, or 0.1 acre of conservation for each acre of impact. The implicit mitigation ratio is used only to calculate the mitigation fee; it is not intended that impacts to Group F habitat should be mitigated by conservation of other Group F habitats. At an implicit ratio of 0.1 to 1, fee for impact to Group F habitat would be 20% of the fee for impact to Group E habitat, which has a mitigation ratio of 0.5:1, and 10% of the fee for impact to Group D habitat, which has a mitigation ratio of 1:1. Although the Group F fee would be small, its use helps to spread the cost of Core Area Conservation equitably among all properties which benefit from the HMP. Estimated Cost of Core Area Conservation Actions required to implement Core Area Conservation are estimated to cost $6,897,832, including land acquisition, establishment of an endowment to fund habitat management in perpetuity, and incidental costs for planning and administration. These costs are summarized in Exhibit 3 and discussed below. Habitat Acquisition To date, two properties totaling 227 acres have been acquired for Core Area Conservation. Estimated cost of acquisition, including legal, escrow and environmental costs, is $4,195,568. Additional 68.6 acres need to be acquired in order to attain the target total of 295.6 acres. HMP Mitigation Fee Study Report Including legal, escrow and environmental costs, the estimated cost of additional acquisition is $1,744,000. Endowment for Habitat Management The 295.6 acres of Core Area Conservation is part of a larger core habitat for the California gnatcatcher identified by the subregional MHCP Plan,12 ranging ultimately in size from 400 to 500 acres. Assuming that the HMP Core Area will be managed together with the larger MHCP core area, the average cost of management is estimated to be $85 per acre per year,13 plus $7.40 per acre per year for management administration,14 for a total of $92.40 per acre per year. Based on an inflation-adjusted discount rate of 3.5%,15 estimated endowment required to fund management costs in perpetuity is $2,640 per acre, or $780,384 for the HMP Core Area. Incidental Costs The City of Carlsbad has previously expended $750,000 for preparation of the HMP and plans to expend $50,000 to prepare a preserve management plan. Since the HMP would lead to new conservation of 2,298 acres,16 including 295.6 acres in the Core Area, planning cost associated with the Core Area represents 12.86% (= 295.6/2,298) of the total planning cost for new conservation under the HMP, or $102,880. The city will also incur estimated $75,000 of administrative costs related to acquisition and establishment of the Mitigation Fee Program. Funding Sources The City of Carlsbad has committed the following funds to Core Area Conservation: • Real Estate Collateral Management Company (RECMC), Villages of La Costa HCP mitigation fund, adjusted by Consumer Price Index-All Urban Consumers for Los Angeles-Riverside-Orange County, CA, for the period from June 1995 to February 1999, as specified in the HCP — $1,063,307. • RECMC, contribution toward preparation of the HMP, committed under the Villages of La Costa HCP - $150,000. • Rancho Carrillo Mitigation Fund — $500,000. • Carlsbad Municipal Golf Course Mitigation, equivalent to the cost of 51.6 acres of mitigation for impacts associated with golf course construction and contribution to ai< endowment for habitat management — $891,395. 12 MHCP (Consultants' Working Draft), Attachment E. 13 MHCP, "Estimated Implementation Costs" (Discussion Paper), January 26, 2000. 14 Estimated annual cost of $50,000 per year divided by total conservation (existing and new) of 6,757 acres (HMP, p. D-75, Table 8). 15 Net interest revenue from an endowment after adjustment for inflation. 16 Separate from habitat conserved in existing "hardline", or committed, areas (HMP, p. D-75, Table 8). HMP Mitigation Fee Study Report 31 Total funds committed is $2,604,702. The remainder, or $4,293,130, is funded by the Mitigation Fee Program (Exhibit 3). Properties Subject to Mitigation Fees The HMP benefits all properties in the city through a comprehensive conservation program for various species which are protected under the federal and state ESAs and by streamlining the requirements of those acts into a single permit under the HMP. A project which does not itself require a take authorization or which does not impact native habitat nevertheless benefits from the HMP and the Mitigation Fee Program, because it relies on Growth Management Zone- wide infrastructure improvements which require such an authorization. In addition, the Mitigation Fee Program benefits properties which impact Group D, E or F by simplifying compliance with HMP's mitigation guidelines and ratios. It may be noted that the average cost of Core Area habitat exceeds $20,000 per acre,17 excluding management and incidental costs. All undeveloped land with Group D, E or F habitat is potentially subject to the Mitigation Fee Program. As previously noted, survey by a qualified biologist is required to determine the extent and type of habitat impacted. Mitigation fee will be calculated for projects which impact Group D, E or F habitat and which require discretionary approvals by the City of Carlsbad, including but not limited to general plan amendment, specific plan, and subdivision map. The fee will be payable upon issuance of a grading permit, or a building permit if no grading permit is required, since the dry has previously expended funds for Core Area Conservation and the fee is paid in lieu of mitigation for impact that results from clearing or grading activity, or with construction subsequent to grading. Mitigation fees will not be levied for impacts on land owned by the City of Carlsbad, since city-owned habitats will largely be conserved and any impacts will be mitigated in accordance with the HMP, including the use of a city-owned mitigation bank. Mitigation fees will not be levied on lands owned by other public agencies which independently obtain take authorizations from the U.S. Fish and Wildlife Service and/or California Department of Fish and Game; on properties with existing take authorizations; on properties which permanently conserve 67% or more of the undeveloped land, including Groups A through F, in accordance with conservation and management guidelines of the HMP; or on any portion of a property for which an agricultural mitigation fee is paid to the California Coastal Commission. Based on an analysis of geographic information systems (GIS) data for the HMP, estimated acres of impact to Group D, F, and F habitats subject to mitigation fees are 145 acres, 474 acres, and 1,617 acres, respectively. 17 Average cost is $20,093, obtained by dividing total purchase cost ($4,195,568 + $1,744,000) by 295.6 acres (see Exhibit 3). HMP Mitigation Fee Study Report 3S Fee Calculation Method In calculating mitigation fees, acres of habitat impact are converted to proportionate units, using the mitigation ratios specified in the BMP Plan or, in the case of Group F habitat, using the implicit mitigation ratio discussed above. Thus, one acre of impact to Group D, E and F habitats represents, respectively, 1.0, 0.5, and 0.1 units for calculating mitigation fees. Habitats which may be impacted under the HMP and subject to fees represent a total of 543.7 units, of which Group D, E and F habitats represent 26.67%, 43.59%, and 29.74% (Exhibit 4). Total funding requirement of $4,293,130 is allocated to these habitat groups according to these proportions, then divided by the estimated acres of impact, yielding mitigation fee per acre by habitat group (rounded to the next whole dollar). The fee is applied to acres of impact, without regard to the amount of habitat conserved on-site. Use of mitigation ratios establishes a direct relationship between the fees and acres of impact to habitat. Recommended Fee Schedule Recommended mitigation fees are as follows: Group D Habitat $7,897 per acre Group E Habitat $3,949 per acre Group F Habitat $790 per acre It is also recommended that these fees be escalated annually at one-half the rate of increase in Consumer Price Index-All Urban Consumers for San Diego County, using as base the reported index of the last biennial period preceding the adoption of the Mitigation Fee Program and adjusted every 12 months thereafter. HMP Hit(gation Fee Study Report it. Carlsbad HMP Exhibit 1. MITIGATION RATIOS FOR IMPACTS TO HABITATS Habitat Group and Type A. B. C. D. E. F. Coastal salt marsh, alkali marsh, freshwater marsh, estuarine, salt pan/mudflats, riparian forest, riparian woodland, riparian scrub, vernal pools, disturbed wetlands, flood channel, fresh water Engelmann oak woodland, coast live oak woodland [1] Beach, southern coastal bluff scrub, maritime succulent scrub, southern maritime chaparral, native grass Gnatcatcher-occupied coastal sage scrub Unoccupied coastal sage scrub, coastal sage/chaparral mix, chaparral (excluding southern maritime chaparral) Annual (non-native) grassland Disturbed lands, eucalyptus, agricultural lands Mitigation Ratio/Requirement by Type of Impacted Habitat No net loss goal (mitigation ratio varies by type of replacement habitat) 3:1 [2] 2:1 [3] 1:1 [4] 0.5:1 [4] Mitigation Fee [4] Source: City of Carlsbad, Habitat Management Plan (December 1999), p. D-95, Table 11. 1. Group A habitats are associated with wetlands. Impacts to these habitat types are subject to review under Section 404 of the federal Clean Water Act or Section 1600 of the California Fish and Game Code. 2. It is assumed that all habitat types in Group B will be included in the proposed preserve system. Small, isolated patches of low quality southern maritime chaparral may be located outside a preserve area and maximum avoidance and onsite conservation is preferred. 3. Maximum avoidance and onsite conservation of Group C habitat is encouraged. 4. Offsite mitigation for habitat in this group which is not conserved onsite, shall pay a per acre in-lieu mitigation fee in an amount to be determined by the City Council. Legend Chaparral Grassland Urban/Developed Agriculture, Disturbed, Eucalyptus Woodland Coastal Sage Scrub Exhibit 2 Vegetation Map City of Carlsbad ©2000 City of CvWMdGE Anql 06/18/00 Carlsbad HMP Exhibit 3. CORE AREA CONSERVATION COST AND SOURCES OF FUNDS Conservation Cost Core Habitat Acquired to Date Land cost - Parcel 1 Land cost - Parcel 2 Legal, taxes, escrow, environmental Subtotal Core Habitat to Be Acquired Estimated land cost - Parcel 3 Legal, taxes, escrow, environmental Subtotal Core Habitat Management Core Habitat Acres Management Endowment Per Acre [1] Total Endowment Incidental Costs Preparation of HMP and Preserve Management Plans Percent Allocable to Core Area Conservation [2] Plan Preparation Cost Allocable to Core Area City Administration Costs Total Costs Funding Sources Villages of La Costa HCP Mitigation CPI Adjustment [3] Subtotal Villages of La Costa HCP Reimbursement to City Rancho Carrillo Mitigation Fund Carlsbad Municipal Golf Course Mitigation [4] Subtotal Excluding HMP Fees Costs to be Funded by HMP F-.es Total Sources 113.0 Ac. 114.0 Ac. 68.6 Ac. $1,625,000 2,500,000 70.568 1,715.000 29,000 295.6 $2,640 800,000 12.86% $1,000,000 63,307 $4,195,568 1,744,000 780,384 102,880 75,000 $6.897.832 $1,063,307 150,000 500,000 891.395 $2,604,702 4.293.130 $6,897.832 1. Estimated management cost of $85 per acre per year, plus administration of management activities, $7.40 per acre per year, for a total of $92.40 per acre per year. Endowment amount is estimated as present value of annual management and administration costs, using inflation-adjusted discount rate of 3.5%. 2. Core habitat area (295.6 ac.) divided by total area newly conserved under HMP (2,298 ac.). The newly conserved area consists of 1,990 ac. to be conserved under proposed hardline and standards areas plus 308 acres in MHCP core, including 12 ac. in Villages of La Costa (HMP, p. D-75, Table 8) 3. CPI-AII Urban Consumers, Los Angeles-Riverside-Orange County, June 1995 (154.8) to February 1999 (164.6). 4. Includes cost of land acquisition and prorata contribution toward an endowment for habitat management. 6 x£ m*a. .? -e s a a££^ (0UJ111U. *3•5 o2£ So« (0 4)73 o*?~ gti $If^ w c *fi££ O« CO r- a> oo> •* c»co o> h- i>T co" O itt if)S CO O_ «o_ eq_ •* T^ <O CO «P c? «£ CD in r~ c^9c^ p p t^uj r-^ •>-Tf CO <DT- CM T- O0 Is-.eo in •* r-•* r«. T-T- •*• to" CD«CNCM" C) CD OT I >• 8 a. o ?COf 3- « il".Z « ±s IIIO O< d iii u.' E o•D ^ 1« o oso . 0 JS* CDfSCO a « -g oI I «<2 o5 o§ S. -IQ tn > = • O "S« O o o 5S! S S o§§- f•» » o P Q) CO CBe5 « "S. ~ Q) .<* *.Ipl§^§•^"00 S fe .— « 2 o T3UlSSH«ii|iiiiU^i2 CO CO -S O X S Q CO Q. l2 < W X . . .O O ^ eg co EXHIBIT 3 ENDANGERED HABITATS LEAGUE Dedicated to Ecosystem Protection and Improved Land Use Planning Dan Silver • Coordinator PMB 592 8424-A Santa Monica Blvd. Los Angeles, CA 90069-1267 TEL 323-654-1456 • FAX 323-654-1931 • dsilverQexo.com March 22,2000 TRANSMUTED VIA FACSIMILE AND US MAIL Michael HolzrniUer, Director PlanningDept City-of Carlsbad v1635 Faraday Avc. Carlsbad, CA 92008 RE: Draft Fee Study Report for BMP Mitigation Fee Program Dear Mr. HolzmiUer The Endangered Habitats League (EHL) appreciates the opportunity to review the Draft Mitigation Fee Program. For your reference, EHL is a Southern California organization dedicated to ecosystem protection, improved land use planning, and collaborative conflict resolution. It has been our privilege to work with the City on the HMP for many years, and we are committed to seeing this excellent program to fruition. Our comments are as follows: 1. A strong nexus has been established between impacts and mitigation. On page 4, compelling and well-documented rationales are provided for the mitigation of impacts to disturbed, agricultural, and eucalyptus groves. 2. The implicit mitigation ratio of 0.1 to 1 for disturbed, agricultural, and eucalyptus grove is low. For the very reasons enumerated on page 4, the value of these lands is significantly under- represented by the proposed 0.1 ratio. Value for raptors alone justifies a much higher ratio. We recommend the following ratios as being more consistent with biological value: non-occupied coastal sage scrub: 1.5:1 chaparral, ess/chaparral mix, annual grassland: 1:1 disturbed, agricultural, eucalyptus groves: 0.5:1 3. The calculated fees produce very little actual acreage. The proposal is for unoccupied coastal sage scrub and chaparral to pay $7,727 per acre, non-native grassland $3,854 per acre, and agriculture, disturbed and eucalyptus to pay $773 per acre. At a total cost of $20,093/acre for conserved and managed lands, these fees will purchase only two fifths, one fifth, and one twenty-fifth of an acre of actual preserved land, respectively. These on-the-ground outcomes are extremely low. For comparison, the Gty of San Diego requires one acre of actual mitigation for unoccupied coastal sage scrub or chaparral, and one half acre of actual mitigation for non-native grassland. It is unclear why developers in Carlsbad are uniquely eligible for such low and insufficient mitigation. The problem, of course, is the predetermined acreage figure. A preferred approach would be to set appropriate ratios (such as those suggested above) which correspond not to "units" but to acreage conserved. This would pay for the 296 acres in the Core Area plus acquire substantial additional lands. 4. The 67% level of on-svte conservation for relief from fees is reasonable, but^hould only apply when the conserved land is of long-terrn biological yalue. 5. The fee should be assessed at the grading permit or builffing permit stage for all projects. It is safe to assume that previously approved projects never mitigated for the full range of impacts to be assessed by the fee, and yet will benefit from the preserve system. Thus, the mitigation fee should be collected from all impacting users. Thank you for considering these comments. Sincerely, Dan Silver, Coordinator cc: U.S. Fish and Wildlife Service Calif. DepL of Fish and Game DEVELOPMENT PMB #685 AGENDA ITEM * / / 69&5 El Camino Real, Ste. 105 a Mayor Carlsbad, CA 92009 City Council City Manager phone: 7&o 929-2/01 July 11,2000 City Attorney CJty Clerk fax: 76° 929-2703 The Honorable Bud Lewis - City of Carlsbad ______ 1200 Carlsbad Village Drive Carlsbad, CA 92008 Dear Mayor Lewis: Morrow Development supports the creation of a Habitat Management Plan (HMP). We believe that this plan may provide for a viable and comprehensive preserve system. The HMP will facilitate an orderly assemblage of valuable habitat while allowing implementation of the City's General Plan to occur in an orderly fashion. The cost of implementing the HMP should be born by those benefiting from the program. Therefore, we support the Habitat in-lieu mitigation fee before you this evening. However, I believe that there remains some uncertainty with respect to the City's ultimate mitigation responsibility. Final approvals by Fish and Wildlife and the Coastal Commission have not been obtained. Therefore, I respectfully request that Council clarify that the dollar amount of mitigation that the city will pay will not be less than stated in the staff report, but it could be more. The exact amount will be determined concurrent with construction of the golf course or the need to implement the acquisition of mitigation lands. President JAN. 17.2006 4:07PM NO. 9117 P, 2 9201 Spectrum Center Blvd., Suite 110 r^n Diego, CA 92123-1407 PBS8.450.1221 F 858.552.1445 www.blM4ndiego.org PRESIDENT Horace Hogan II Brehm Communities VICE PRESIDENT Scott Brusseau Newport National Corp. TREASURER / SECRETARY Paul Barnes Shea Homes IMMEDIATE PAST PRESIDENT Scot Sancktrom Richmond American Home* of California CHIEF EXECUTIVE OFFICER Paul A. Tryon AFFILIATES California Building Industry Association National Association of Home Builders National Association of Industrial and Office Properties January 17, 2006 Honorable Claude Lewis Mayor City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, CA 92008 AGENDAITEM#. tt Mayor City Council City Manager City Attorney City Clerk fl JAN 1 7 2006 CITY CLERK'S OFFICE RE; Agenda Item 6: Habitat Management Plan bi-Lieu Mitigation Fees Dear Mayor Lewis and Members of the City Council; C v The San Diego County Building Industry Association represents 1,480 companies comprising a workforce of 165/000 men and women. Thank you for this opportunity to provide input on the proposed increases to the HMP In-Lieu Mitigation Fees. While we support implementation of the HMP, we are concerned by the dramatic increase in the fee. In July 2000 when the fee program was approved, the fee was set at $7,897 per acre of unoccupied coastal sage scrub habitat impacted. The proposed new fee is $25,683 per acre impacted, a more than three-fold increase (325%) for a 5 Vi- year period (60% per year). We appreciate the substantial delay in the implementation of HMP that precluded the city from collecting the fee for over four years. In reviewing the staff report for the fee increase, we understand that the increase is as a result of a loss of fee revenue from the delay in implementation. The staff report also indicates that the fee study has established a nexus between the amount of the fee and the cost of the project being funded, the city's outstanding acquisition commitment for 307 acres of habitat land in the MHCP Core Area. On its face, this would not appear to be a legitimate reason to increase the fee. TO BUILDING INDUSTRY ASSOCIATION OF SAN DIECO COUNTY JAN. 17.2006 4:07PM NO. 9117 P. 3 It is not clear that only projects that are not able to meet their mitigation requirements onsite would have the option to pay the fee. We assume that any project that does meet its mitigation requirements onsite would be exempt from the fee. We request that this issue be clarified or resolved before the fee increase is adopted. Lastly/ we request that the fee increase be phased in over a year or more and that all projects with applications deemed complete be pipelined under the current fee scheduled. Thank you for your consideration of our comments. Very truly yours, Scott C. Molloy Public Policy Advocate The Coast News Decreed A Legal Newspaper by the Superior Court of San Diego County. Mail all correspondence regarding public notice advertising to The Coast News, P.O. Box 232-550, Encinitas, CA 92023 (760) 436-9737 Proof of Publication STATE OF CALIFORNIA, ss. COUNTY OF SAN DIEGO, I am a citizen of the United States and a resident of the county aforesaid; I am over the age of eighteen years, and not a party to or interested in the above entitled matter. I am principal clerk of the printer of The Coast News, a newspaper printed and published weekly and which news- paper has been adjudged a newspaper of general circulation for the cities of Del Mar, Solana Beach, Encinitas/Cardiff, Carlsbad, Oceanside, San Marcos/Vista and the County Judicial District by the Superior Court of the State of California, County of San Diego (8/4/94, #677114, B2393, P396); and that the notice, of which the annexed is a print- ed copy, has been published in, each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to-wit: January 6. 2006 I certify under penalty of perjury that the foregoing is true and correct. Executed at Encinitas, County of San Diego, State of California, on the 6th day_ of January 2006. Clerk of the Printer Space above for County Clerk's Filing Stamp NOTICE OF PUBLIC HEARING REVISION OF HABITAT MANAGEMENT PLAN MITIGATION FEE PROGRAM NOTICE IS HEREBY GIVEN, that the City Council of the City of Carlsbad will hold a public hearing at the City Council Chambers, 1200 Carlsbad Village Drive, Carlsbad, California, at 6:00 p.m., on Tuesday, January 17, 2006, to consider a request for adoption of a revised Habitat Management Plan Mitigation Fee Program to fund the preservation ofhabitat land. Those persons wishing to speak on this proposal are cordially invited to attend the public hearing. Copies of the agenda bill will be available on or after January 13,2006. If you have any questions regarding this mat- ter, please contact Mike Grim in the Planning Department, at (760) 602-4623. If you challenge the revised Habitat Management Plan Mitigation Fee Program in court, you may be limited to raising only those issues raised by you or someone else at the public hearing described in this notice, or in written correspondence delivered to the City of Carlsbad, Attn: City Clerk, 1200 Carlsbad Village Drive, Carlsbad, CA 92008 at, or prior to,the public hearing. CN 2750, Jan. 6, 2006 PROOF OF PUBLICATION (2010 & 2011 C.C.P.) This space is for the County Clerk's Filing Stamp STATE OF CALIFORNIA County of San Diego I am a citizen of the United States and a resident of the County aforesaid: I am over the age of eighteen years and not a party to or interested in the above- entitled matter. I am the principal clerk of the printer of North County Times Formerly known as the Blade-Citizen and The Times-Advocate and which newspapers have been adjudicated newspapers of general circulation by the Superior Court of the County of San Diego, State of California, for the City of Oceanside and the City of Escondido, Court Decree number 171349, for the County of San Diego, that the notice of which the annexed is a printed copy (set in type not smaller than nonpariel), has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to-wit: ndJanuary 02, 2006 I certify (or declare) under penalty of perjury that the foregoing is true and correct. Dated at SAN MARCOS California This 03rd, Day of January, 2006 Proof of Publication of NOTICE OF PUBLIC HEARING f , REVISION OF HABITAT MANAGEMENT PLAN MITIGATION FEE PROGRAM NOTICE IS HEREBY GIVEN, that the City Council pf the City of Cartsbad will hold a public hearing at the City Council Chambers, 1200 Carlsbad Village Drive, Carlsbad, California, at 6:00 p.m., on Tuesday, January 17,2006, to consider a request for adoption of a revised Habitat Management Plan [ Mitigation Fee Program to fund the preservation of habitat land. Those persons wishing to speak on this proposal are cordially invited to attend the public hearing. Copies of the agenda bill will be available on or after January 13,2006. If you have any questions regarding this matter, please contact Mike Grim in the Planning Department, at (760) 602-4623. If you challenge the revised Habitat Management Plan Mitigation Fee Program in court, you may be limited to raising only those issues raised by you or someone else at th,e public hearing described in this notice, or in written correspondence delivered to the City of Carlsbad', Attn: City Clerk, 1200 Carlsbad Village Drive, Carlsbad, CA 92008 at, or prior to, the pqbjjp hearing. CITY OF CARLSBAD CITY COUNCIL • Signature Jane Allshouse NORTH COUNTY TIMES Legal Advertising HMP Mitigation Fee Program HMP Mitigation Fee Program RevisionRevision HMP BackgroundHMP BackgroundzEstablish approximately 6,400 acre preservezAcreage, quality and diversity of habitat provides “coverage” allowing incidental take of covered species.zPreserve must be managed in perpetuity.zNumber of implementing tools for achieving this goal. Components of PreserveComponents of PreservezExisting preserved open space (City, other agencies, private landowners).zFuture open space preservation acquired in conjunction with private development.zExisting and future core area acquisitionszFuture Prop C acquired open space.zFuture additional open space preservation. Establishment MethodsEstablishment MethodszOpen Space Management Plan (OSMP)–Established management criteria for preserve.–Estimated costs for managing City open space.–Authorized negotiations for City open space preserve manager.zFuture private open space preservation–Hardline and standards preserve areas–Other open space within Focus Planning Area–Implemented through HMP ordinances Establishment MethodsEstablishment MethodszCore Area Acquisitions–Total requirement of 307.6 acres.–HMP and Implementing Agreement (IA) require funding program for payment of cost of acquisition.–Funding program would cover both reimbursement for previously acquired habitat and acquisition of additional habitat. History of HMP FeeHistory of HMP FeezOriginally approved in July 2000.zApplied only to three lesser quality HMP habitat types (Groups D, E, and F).zBased upon remaining developable acreage (approx. 2,236 acres) and cost of open space acquisition and management ($27,000/ac) at that time. History of HMP FeeHistory of HMP FeezFee not in place until final HMP approval in November 2004.zSome fees were collected in the interim as mitigation through the CEQA process on three projects.zCurrent fee balance = $17,493 History of FeeHistory of FeezFinal application of fee delayed approximately 5 years during HMP processing with Coastal Commission.zOver half of the property potentially subject to the fee developed during this time, providing alternative mitigation.zCost of open space land acquisition and management increased by over 80 percent. Core Area CalculationsCore Area CalculationszTotal Core Area Requirement = 307.6 acreszReimbursement by City to private developer for previous acquisition = 50.13 acres.–Assessed at $27,000 per acre.zAcquisition by City of additional preserve open space = 43.02 acres.–Assessed at $49,500zTotal revenue requirement = $3,652,091 Applicability of FeeApplicability of FeezApplies to HMP Habitat Groups as follows:–Group D: unoccupied coastal sage scrub and chaparral (excluding southern maritime) at a 1:1 ratio.–Group E: non-native grasslands at a 0.5:1 ratio.–Group F: disturbed lands, eucalyptus, and agricultural lands at a 0.1:1 ratio. Proposed Fee StructureProposed Fee StructurezBased upon costs of open space reimbursement and acquisition, and the amount of remaining undeveloped lands subject to the fee, the proposed fee amounts are:–Group D -$25,683 per acre–Group E -$12,842 per acre–Group F -$2,569 per acre Applicability of FeeApplicability of FeezThe following properties are not subject to the HMP Mitigation Fee:–Properties covered by an existing take authorization or owned by other agencies.–Coastal zone agricultural lands subject to the Agricultural Mitigation Fee.–Properties conserving at least 67% of the undeveloped land on site.–Areas with authorized grading within the last 5 years Program SpecificsProgram SpecificszRevised fee would take effect 60 days after Council action.zFee would be assessed at time of grading permit or building permit issuance, whichever occurs first.zFirst priority is reimbursement based upon Reimbursement Agreement to follow. RecommendationRecommendationzThat the City Council adopt Resolution No. 2005-373, approving the revised HMP Mitigation Fee Program. HMP Mitigation Fee Program HMP Mitigation Fee Program RevisionRevision