HomeMy WebLinkAbout2015-07-28; City Council; 22053; Introduce Ordinance Adding Chapter 3.40 Reimbursement Fee for Construction Eligible ImprovementCITY OF CARLSBAD-AGENDA BILL 12
AB# 22,053 INTRODUCE AN ORDINANCE OF THE CITY DEPT. DIRECTOR n la$
MTG. 07/28/15 COUNCIL OF THE CITY OF CARLSBAD, · CITY ATTY. lZ/
DEPT. ASD CALIFORNIA, ADDING CHAPTER 3.40 TO THE CITYMGR. 'KtJ CARLSBAD MUNICIPAL CODE SETTING FORTH
PROCEDURES FOR THE ESTABLISHMENT OF A
REIMBURSEMENT FEE FOR FUNDING THE
. REIMBURSEMENT OF CERTAIN COSTS OF
CONSTRUCTION ELIGIBLE IMPROVEMENTS
RECOMMENDED ACTION:
Introduce Ordinance No. CS-281 of ~he City Council of the City of Carlsbad, California, adding
Chapter 3.40 to the Carlsbad Municipa l Code setting forth procedures for the establishment of a
reimbursement fee for funding the reimbursement of certain costs of the construction of eligible
improvements.
ITEM EXPLANATION:
On September 10, 2013, via Agenda Bill 21,360, Council approved a reimbursement agreement between
the City of Carlsbad and Bent-West, LLC for assessment district formation deposits and allowed Bent-West,
LLC to temporarily bypass the initial Policy No. 33 (the "Policy'') approval steps. On April 15, 2014, via
Agenda Bill 21,567, Council made a finding under the Policy to waive the provision of the pass-through
requirement for community facilities districts ("CFD~') based on the benefit of proceeding with the College
Boulevard improvements in a district with diverse ownership. Lastly, on February 17, 2015 via Agenda Bill
21,864 Council directed staff to pursue alternative fina'ncing in the form of a development condition or
reimbursement agreement based on the challenges of CFD financing over unentitled properties.
As such, staff has developed a re imbursement fee ordinance under the powers available to charter cities.
This reimbursement fee ordinance would allow the city to condition properties within a Local Faciliti.es
Management Plan ("LFMP") Zone. The development condition would require affected properties pay a
proportional share of public improvement costs incurred by an applicant(s) constructing public
improvements on behalf of other property owners also conditioned to construct the same public
improvements. The affected properties' proportional share and related reimbursement fee is determined
by a reimbursement fee study. The city acts as a pass-through for the reimbursement fees. Reimbursement
fees collected are remitted to the applicant(s) originally incurring the public improvements construction
costs.
The reimbursement fee ordinance increases the number of financing tools available to help finance public
improvements. This reimbursement fee ordinance can be used in LFMP Zone 15 and other situations in
DEPARTMENT CONTACT: Aaron Beanan 760-602-2414 Aaron.Beanim@carlsbadca.gov
FOR CLERK USE.
COUNCIL ACTION: APPROVED LiJ' CONTINUED TO DATE SPECIFIC D
DENIED D CONTINUED TO DATE UNKNOWN D
CONTINUED D RETURNED TO STAFF D
WITHDRAWN 0 OTHER-SEE MINUTES D
AMENDED 0 REPORT RECEIVED D
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which an applicant(s) constructs public improvements on behalf of multiple property owners also
conditioned to construct the same public improvements.
Staff is not recommending a specific financing approach for LFMP Zone 15 at this time. If Council adopts
the reimbursement fee ordinance, the ordinance will provide an additional financing tool for LFMP Zone
15 and allow an applicant to request the creation of a reimbursement fee.
Reimbursement Fee Ordinance
The reimbursement fee ordinance contains the following highlights:
• The applicant(s) requesting the creation of a reimbursement fee must:
o Detail the types and estimated costs of the public improvements proposed for
reimbursement,
o Mail the aforementioned information to the affected properties and provide proof of
mailing to the city, and
o Provide a deposit(s) to cover the costs of the city in considering the request.
• Only public improvements will be reimbursable.
• The reimbursement fee will be based on estimated or actual eligible costs depending on the timing
for each development project subject to the fee with a mechanism to adjust estimated costs to
actual eligible costs.
• The reimbursement fee will be based on actual unit counts; not estimated unit counts.
• The reimbursement fee will attach to a development project, i.e., be imposed, at grading permit
issuance.
• The reimbursement fee will be due and payable prior to building permit issuance.
• The reimbursement fee could escalate by a standard inflationary index (e.g. CPI, CCI, etc.) until the
obligation is paid or terminated.
• The city's obligation to collect reimbursement fees from properties will have a term which will:
o be consistent with any term contemplated in an LFMP, or
o consistent with other guiding authority, or
o consistent with past precedent, in that order, and
o in no event have a term greater than twenty years.
• The termination date will be calculated from the first day of the year following the date Council
established the fee.
• The reimbursement fee may not be combined with any other financing vehicle.
FISCAL IMPACT:
There is no fiscal impact to the city by providing an additional financing tool to fund public improvements.
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ENVIRONMENTAL IMPACT:
Pursuant to Public Resources Code Section 21065, this action does not constitute a "project" within the
meaning of CEQA in that it has no potential to cause either a direct physical change in the environment, or
a reasonably foreseeable indirect physical change in the environment, and therefore does not require
environmental review.
EXHIBITS:
1. Ordinance No. CS-281 of the City Council of the City of Carlsbad, California, adding Chapter
3.40 to the Carlsbad Municipal Code setting forth procedures for the establishment of a
reimbursement fee for funding the reimbursement of certain costs ofthe construction of eligible
improvements.
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EXHIBIT 1
ORDINANCE NO. CS-281
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, ADDING CHAPTER 3.40 TO THE
CARLSBAD MUNICIPAL CODE SETTING FORTH PROCEDURES
FOR THE ESTABLISHMENT OF A REIMBURSEMENT FEE FOR
FUNDING THE REIMBURSEMENT OF CERTAIN COSTS OF
CONSTRUCTION OF ELIGIBLE IMPROVEMENTS
WHEREAS, the Carlsbad City Council concurs that it is necessary to add Chapter 3.40
to the Carlsbad Municipal Code setting forth procedures for the establishment of a
reimbursement fee for funding the reimbursement of certain costs of construction of eligible
improvements.
NOW, THEREFORE, the City Council ofthe City of Carlsbad ordains as follows:
SECTION 1: That Chapter 3.40 is added to the Carlsbad Municipal Code to read as
follows:
Chapter 3.40 CARLSBAD REIMBURSEMENT FEE
3.40.010 Short Title
3.40.020 Purpose
3.40.030 Definitions
3.40.040 Request for Establishment of a Reimbursement Fee
3.40.050 Deposits
3.40.060 improvements Eligible for Reimbursement
3.40.070 Eligible Costs
3.40.080 Construction of Eligible Improvements
3.40.090 Reimbursement Fee Study
3.40.100 Notice of Public Hearing
3.40.110 Public Hearing and Establishment of Reimbursement Fee
3.40.120 Adjustment ofthe Reimbursement Fee to Reflect Actual Costs
3.40.130 Adjustment of Reimbursement Fee for Specific Projects
3.40.140 imposition of a Reimbursement Fee
3.40.150 Payment ofthe Reimbursement Fee
3.40.160 Establishment of Funds and Use of Reimbursement Fees
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EXHIBIT 1
3.40.010 Short Title. This Chapter shall be known as the "Carlsbad Reimbursement Fee."
3.40.020 Purpose. Chapter 21.90 ofthe Carlsbad Municipal Code requires the preparation
of a Local Facilities Management Plan for each Local Facilities Management Zone within the
City to include, among other provisions, a financing plan establishing various methods of
funding the public facilities and improvements identified in such Local Facilities Master Plan
needed to accommodate development within the related Local Facilities Management
Zone to fairly allocate the cost of construction of such public facilities and improvements to
the various properties within such Local Facilities Management Zone.
A Local Facilities Management Plan may provide that an owner or developer of
property within the related Local Facilities Management Zone fund and construct certain
required LFMP Improvements prior to or concurrent with development of such owner's or
developer's property to comply with the phasing schedule and performance standards for
such LFMP Improvements provided for in the LFMP.
The purpose of this Chapter is to establish, in accordance with the freedom afforded
to charter cities generally and by the Charter of the City of Carlsbad, a mechanism by which
the costs of the construction of LFMP Improvements (defined in Section 3.40.030 herein)
and certain appurtenant improvements, defined in Section 3.40.030 herein collectively as
"Eligible Improvements," incurred by an owner or developer of property within a Local
Facilities Management Zone may, as required pursuant to Chapter 21.90, be fairly allocated
among the properties within such Local Facilities Management Zone and the owner or
developer that originally incurred such costs may be reimbursed by the owners ofthe other
properties within the Local Facilities Management Zone that would otherwise have been
responsible for financing and/or constructing all or some portion of such Eligible
Improvements as a condition of approval ofthe development of such properties.
3.40.030 Definitions. As used in this Chapter, the following terms shall have the following
meanings:
"Administrative Services Director" shall mean the Administrative Services Director
of the City or his or her designee.
"Building Permit" means a permit required by and issued pursuant to Chapter 18.04
ofthe Carlsbad Municipal Code.
"Chapter 21.90" means Chapter 21.90 ofthe Carlsbad Municipal Code as it may be
amended from time to time.
"City" shall mean the City of Carlsbad.
"City Council" shall mean the City Council ofthe City.
"City Engineer" shall mean the City Engineer ofthe City or his or her designee.
"Eligible Improvements" shall mean those improvements for which the cost of
construction thereof may be eligible for reimbursement pursuant to this Chapter.
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"Eligible Incidental Costs" shall mean those incidental costs that may be eligible for
reimbursement pursuant to this Chapter and which the City Engineer determines are
reasonable and customary for the work performed or services provided.
"Local Facilities Management Plan" or "LFMP" shall have the meaning given such
term in Chapter 21.90.
"LFMP Improvements" means those public facilities and improvements identified in
an LFMP that are needed to accommodate development with the LMFZ for which such
LFMP was prepared pursuant to Chapter 21.90.
"LFMZ Property" or "LFMZ Properties" means a property or the properties, as
applicable, within a Local Facilities Management Zone.
"Local Facilities Management Zone" or "LFMZ" means a local facilities management
zone established pursuant to Chapter 21.90.
"Occupancy Permit" means a permit required by and issued pursuant to Chapter
21.60 ofthe Carlsbad Municipal Code.
"Project" means any project undertaken on LFMZ Properties for the purpose of
development. "Project" includes a project involving the issuance of a permit for
construction or reconstruction, but not a permit to operate.
"Public Agency" shall mean any city or county, whether general law or chartered,
special district, school district or any other municipal corporation, district, or political
subdivision ofthe State of California.
"Reimbursement Fee" means a fee adopted pursuant to the Charter of the City of
Carlsbad, this Chapter and any City Council resolution adopted pursuant to this Chapter.
"Reimbursement Fee Study" means a study prepared or caused to be prepared by
the City Engineer pursuant to Section 3.40.090 hereto pertaining to a request for
establishment of a Reimbursement Fee.
"Requesting Party" means the owner or developer of LMFZ Property within an LFMZ
that has filed a request pursuant to Section 3.40.050 hereto that the City establish a
Reimbursement Fee pursuant to the provisions of this Chapter. "Requesting Party" also
means, collectively, the owners and/or developers of LFMZ Properties within an LFMZ that
have jointly filed such a request.
3.40.040 Request for Establishment of a Reimbursement Fee. Whenever a Requesting
Party is required by the City to construct Eligible Improvements the cost of which such
Requesting Party believes will exceed the cost fairly allocable to the Requesting Party's LFMZ
Property, the Requesting Party may file a written request with the City Engineer requesting
that the City undertake proceedings pursuant to this Chapter to consider the establishment
by the City of a Reimbursement Fee to be imposed on those LFMZ Properties located within
such LFMZ upon which a portion of the cost of such Eligible Improvements should be fairly
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EXHIBIT 1
allocated as a condition of approval of the development of such LFMZ Properties. Such
request must be received by the City Engineer prior to the construction of the Eligible
Improvements for which reimbursement is being requested.
Such a request shall include a description of each Eligible Improvement in sufficient
detail to enable to the City Engineer to identify each such improvement and a detailed plat
of the applicable LFMZ showing the precise location of each such Eligible Improvement with
respect to each of the LFMZ Properties. Such request must also include an engineer's
estimate of the cost of construction of such Eligible Improvements, together with an
estimate of the Eligible Incidental Costs for which reimbursement is requested. For any
request for which the Requesting Party consists of multiple owners and/or developers that
are jointly filing such request, such request must be executed by all such owners and
developers and must include the designation of one party to whom the City is authorized
and directed to make all reimbursement payments, together with an acknowledgment that
the City shall have no responsibility whatsoever for determining the allocation of
reimbursements among such owners and/or developers or making such allocation to such
owners and developers. The Requesting Party shall, at such Requesting Party's expense, also
mail a copy of such request to the owner of each LFMZ Property and the Requesting Party
shall file proof of such mailing satisfactory to the City Engineer.
The request of such Requesting Party shall not be deemed to be complete until:
A. The City Engineer has received satisfactory proof of the mailing of the
Requesting Party's request for establishment of a Reimbursement Fee; and
B. The Administrative Services Director has received the initial deposit from
the Requesting Party as required pursuant to Section 3.40.050 below.
3.40.050 Deposits. All City and consultant costs incurred in the implementation of a
request for the establishment of a Reimbursement Fee pursuant to the provisions of this
Chapter, the preparation of the Reimbursement Fee Study for such Reimbursement Fee
request, the proceedings to establish a Reimbursement Fee, the amendment of the
Reimbursement Fee Study pursuant to Section 3.40.120 and the proceedings to consider
the adjustment of a Reimbursement Fee pursuant to Section 3.40.120 will be paid by the
Requesting Party by advance deposit with the City of monies sufficient to pay all such
costs.
Each request for the establishment of a Reimbursement Fee shall be accompanied
by an initial deposit in an amount to be determined by the Administrative Services
Director to be adequate to fund the initial review of the request, preparation of the
Reimbursement Fee Study and the proceedings to implement the Reimbursement Fee
request. If additional funds are required to pay implementation costs, the Administrative
Services Director rnay make written demand upon the Requesting Party for such
additional funds and the Requesting Party shall deposit such additional funds with the
City within five (5) working days of the date of receipt of such demand. Upon the
depletion ofthe funds deposited by the Requesting Party for such costs, all work related
to the preparation of the Reimbursement Fee Study and all proceedings related to the
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establishment of such Reimbursement Fee shall be suspended until receipt by the City of
such additional funds as the Administrative Services Director may demand.
The deposits shall be used by the City to pay for costs and expenses incurred by
the City incident to the initial review ofthe Reimbursement Fee request, preparation of
the Reimbursement Fee Study, proceedings for the consideration ofthe Reimbursement
Fee request, and the review of the actual costs of construction of the Eligible
Improvements and the Eligible Incidental Costs and proceedings for the consideration of
the adjustment of the Reimbursement Fee pursuant to Section 3.40.120, including, but
not limited to, legal. Reimbursement Fee consulting, engineering, administration and staff
costs and expenses, required notifications, printing, and publication costs.
The City shall refund any unexpended portion of the deposits if the Requesting
Party files a written request with the City Engineer that the Requesting Party is
terminating its reimbursement request.
3.40.060 Improvements Eligible for Reimbursement. Eligible Improvements must be LFMP
Improvements or other additional public improvements identified in this Section 3.40.060
below that will be owned, operated, or maintained by the City or another Public Agency and
that are constructed pursuant to and in compliance with all applicable requirements of the
City, including without limitation this Chapter, or such other Public Agency that will own,
operate or maintain such Eligible Improvements. The City Council shall have the final
determination as to the eligibility of any improvements for reimbursement. Such Eligible
Improvements may include, but are not limited to:
A. Streets and Highways: Arterial streets, highways, major bridges, and
freeway interchanges constituting LFMP Improvements for an LMFZ. If the primary
purpose of completing a circulation link is met, and overriding public interest is shown,
then public facilities increasing traffic capacity for a circulation element may be
considered. Right-of-way must be dedicated or acquired prior to submission of a request
for reimbursement. The value of right-of-way required to be dedicated by the owner
thereof is generally not eligible for reimbursement except under special circumstances as
recommended bythe City Engineer.
B. Additional Public Improvements: If appurtenant to the types of street and
highway improvements described in A. above, the following additional improvements may
be considered for reimbursement:
1. Sewer lines or other sewer facilities: Sewer lines must be located
within the rights-of-way of the arterial streets when the City Engineer has determined it is
necessary that they be so located.
2. Water lines and other water facilities: Water lines must be located
within the public rights-of-way ofthe arterial streets when the City Engineer has determined
it is necessary that they be so located.
3. Drainage facilities.
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4. Landscape and irrigation facilities.
5. Recycled water facilities.
6. Grading for eligible public streets.
7. The construction of environmental mitigation required for Eligible
Improvements.
8. Bicycle and pedestrian facilities, if located on land or easements
owned or dedicated to the City and accepted as part ofthe Citywide trail system.
9. Such other improvements as may be authorized by law and which the
City Council determines are consistent with Chapter 21.90 and the applicable LFMP.
Each Eligible Improvement must be located in public rights-of-way dedicated or
otherwise granted to the City or the other Public Agency that shall own, operate or maintain
any such Eligible Improvement.
Notwithstanding the foregoing, no facility or improvement the financing of which is
included in any fee program established for the purpose of financing such facility or
improvement by the City or the other Public Agency that will own such facility or
improvement shall be considered to be an Eligible Improvement. Additionally, dry utilities or
other utility improvements that will be owned by a public utility or other private entity shall
not be considered to be Eligible Improvements.
3.40.070 Eligible Costs. Costs of an Eligible Improvement that shall be eligible for
reimbursement pursuant to the provisions of this Chapter shall include the following:
A. The actual costs of construction as determined by the City Engineer to be
reasonable and customary costs of the work performed. Costs incurred to expedite the
completion of the construction of any Eligible Improvement within a time period not
required by the City or the Public Agency that will own such Eligible Improvement will not be
eligible for reimbursement.
B. Eligible Incidental Costs, as determined by the City Engineer to be reasonable
and customary for such incidental costs, that are directly related to Eligible Improvements
the costs of construction of which shall be reimbursed from the related Reimbursement
Fees and that are identified in the "Administrative Procedures for Reimbursable Public
Works Projects" as issued by the City Engineer from time to time as Eligible Incidental Costs
for public works projects.
The following incidental costs are considered ineligible to be reimbursed from
Reimbursement Fees established pursuant to this Chapter:
1. Development impact fees.
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2. Administrative or overhead expenses, financial consultant, or legal
fees incurred by a Requesting Party for the establishment of a Reimbursement Fee. This
limitation does not apply to amounts advanced by the Requesting Party to the City pursuant
to the provisions of this Chapter to pay for costs incurred by the City to undertake the
proceedings to establish Reimbursement Fees pursuant to this Chapter.
3. Land-use planning and subdivision costs and environmental review
costs related to such land use planning and subdivision.
4. Environmental impact studies, unless directly related to the project
and done separately for the project.
5. Maintenance, monitoring and endowment costs for mitigation land.
6. Construction loan interest.
7. Subdivision financial analysis.
8. Attorney's fees incurred by the property owners or their agents,
except as recommended bythe CityAttorney related to condemnation proceedings.
3.40.080 Construction of Eligible Improvements. A Requesting Party shall solicit at least
three (3) bids from licensed contractors for the construction of any Eligible Improvements
for which the Requesting Party is seeking reimbursement and shall award the contract for
the construction of such Eligible Improvements to the lowest responsible bidder. Nothing in
the preceding sentence shall prohibit a Requesting Party from including more than one such
Eligible Improvement in a single solicitation for bids. In the case where the Requesting Party
does include more than one such Eligible Improvement in a single solicitation for bids, the
Requesting Party shall award the contract forthe construction of such Eligible Improvements
to the bidder submitting the lowest aggregate bid for the construction of all such Eligible
Improvements included in such solicitation.
Following the award of a contract for the construction of an Eligible Improvement or
Eligible Improvements, the Requesting Party shall provide to the City Engineer copies ofthe
bid solicitation documents, the names of the contractors from whom such bids were
solicited, the results of the bid solicitation including the response provided by each
contractor submitting a bid or declining to submit a bid if provided and copies of the
executed construction contracts.
Following completion of the construction of the Eligible Improvements, the
Requesting Party shall submit to the City Engineer (a) copies of all change orders to the
construction contracts, all invoices for the construction of the Eligible Improvements for
which the Requesting Party is seeking reimbursement and documents satisfactory to the City
Engineer evidencing payment for the construction of the Eligible Improvements and (b)
copies of all contracts related to Eligible Incidental Costs for which the Requesting Party is
seeking reimbursement, all change orders related to such contracts, all invoices for such
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Eligible Incidental Costs and documents satisfactory to the City Engineer evidencing payment
of such Eligible Incidental Costs. All such invoices must be submitted to the City Engineer no
later than sixty (60) calendar days following acceptance by the City ofthe last ofthe Eligible
Improvements for which the Requesting Party is seeking reimbursement. Costs represented
by invoices received beyond this period of time shall not be eligible for reimbursement.
Following the receipt of such invoices, the City Engineer shall review the invoices and
shall determine whether or not the costs represented thereby are reasonable and
customary costs for the work performed or the costs incurred. If, in the opinion of the City
Engineer, the costs represented by the invoices are higher than that which are customary
and reasonable for such work performed or costs incurred, the City Engineer may deny
reimbursement for that portion of such costs deemed to be excessive.
3.40.090 Reimbursement Fee Studv. The City Engineer will, following receipt of the
documents required to be provided to the City Engineer pursuant to Section 3.40.040
hereto, in the exercise his or her independent professional judgment, prepare or cause to
be prepared a Reimbursement Fee Study for the requested Reimbursement Fee that will
include the following:
A. A legal description or list ofthe Assessor's Parcel Numbers of each parcel
within the applicable LFMZ, including the properties owned or being developed the
Requesting Party, upon which the City Engineer determines that a portion ofthe eligible
costs of Eligible Improvements and Eligible Incidental Costs should be fairly allocated, the
name of the owner thereof, street address thereof each such parcel, if any, and the
acreage thereof;
B. A detailed plat showing the precise locations of all of the Eligible
Improvements for which the Requesting Party has requested reimbursement shown
in relation to the parcels identified pursuant to paragraph A above;
C. A list of each of the Eligible Improvements and the estimated cost of the
construction of the Eligible Improvements and each of the estimated Eligible Incidental
Costs, as determined by the City Engineer to be reasonable and customary for such Eligible
Improvements and Eligible Incidental Costs;
D. A determination whether the any portion of the cost of the construction of
any Eligible Improvements and related Eligible Incidental Costs may be subject to
reimbursement from any existing City impact fee program. If and to the extent that any
portion of such costs is subject to reimbursement from such impact fee program, such
amount shall be deducted from estimated cost of the construction of such Eligible
Improvements and the related Eligible Incidental Costs.
E. A report identifying the burden which the development of each parcel,
including the parcels owned or being developed by the Requesting Party, identified
pursuant to paragraph A above in accordance with its zoning and general plan
designation and other existing land use entitlements, if any, will impose upon the Eligible
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Improvements and the extent to which the development of each such parcel will
contribute to the need for or burden upon such Eligible Improvements;
F. An explanation of how there is a reasonable relationship between the
Reimbursement Fee's use and the types of Projects on which the Reimbursement Fee
may be imposed;
G. A detailed description of the method of Reimbursement Fee allocation;
H. A reimbursement schedule to include a list of all LFMZ Properties
determined by the City Engineer to be subject to the proposed Reimbursement Fee with
current Assessor's parcel number, owner's name, property's street address, and the
acreage of such parcels and the proposed Reimbursement Fee applicable to each such
LFMZ Property.
Upon completion of a Reimbursement Fee Study the City Engineer shall mail a
copy of such study to the Requesting Party and the owner of each property determined
by the City Engineer to be subject to the proposed Reimbursement Fee as set forth in
such Reimbursement Fee Study, together with the notice ofthe date, time and place of a
property owner informational meeting at which the City Engineer or his or her designee
shall be available to answer questions regarding the Reimbursement Fee Study. Such
notice shall be given at no less than ten days before the date of such meeting. Such
meeting shall be scheduled to occur not less than 20 days prior to the public hearing
required to be held pursuant to Section 3.40.110 hereto.
3.40.100 Notice of Public Hearing. Upon completion of the Reimbursement Fee study
pursuant to Section 3.40.080 hereto, the time and place for a public hearing of the City
Council shall be set, as part of a regularly scheduled meeting ofthe City Council, at which oral
or written presentations can be made regarding the proposed Reimbursement Fee. Notice of
such public hearing shall be published pursuant to Government Code Section 6062a and such
notice shall be mailed to the Requesting Party and the owner of each parcel that may be
subject to the imposition of the proposed Reimbursement Fee at least fifteen (15) calendar
days prior to the date set for such public hearing.
3.40.110 Public Hearing and Establishment of Reimbursement Fee. The City Council shall
hold a public hearing to determine the types of Projects that shall be subject to the
Reimbursement Fee and the Reimbursement Fee that shall be imposed on each Project.
This Reimbursement Fee shall only be established if the City Council can make the
following findings:
A. The purpose and use of the.Reimbursement Fee.
B. Determine how there is a reasonable relationship between the use ofthe
Reimbursement Fee and the type of Project on which the Reimbursement Fee is imposed.
C. Determine how there is a reasonable relationship between the need for
the Eligible Improvement and the type of Project on which the Reimbursement Fee is
imposed.
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EXHIBIT 1
At the conclusion of the public hearing, the City Council shall adopt a resolution
approving, conditionally approving or denying the establishment of the Reimbursement
Fee. If the City Council approves the establishment of the Reimbursement Fee, the
resolution shall attach as an exhibit thereto a copy of the reimbursement plan as adopted
by the City Council and shall set forth the method of Reimbursement Fee allocation as
approved bythe City Council.
If the establishment of a Reimbursement Fee is approved, such resolution shall
establish the term that such Reimbursement Fee shall be in effect and may be collected
from LFMZ Properties subject to such fee. The term of a Reimbursement Fee shall be
consistent with the term, if any, for a reimbursement agreement specified in the LFMP
related to the LFMZ subject to the Reimbursement Fee, the terms for reimbursement
agreements or fees specified or contemplated in legislation or policies pertaining to such
reimbursement agreements or fees, including but not limited to the ordinances and
policies ofthe City, or the terms for reimbursement agreements previously established by
the City, in such order of priority; provided, however, no Reimbursement Fee shall have a
term longer than 20 years from the first day of the calendar year following the date of
adoption ofthe resolution ofthe City Council establishing such Reimbursement Fee.
If the Reimbursement Fee is to be subject to escalation, the resolution shall state
the rate of escalation applicable to the Reimbursement Fee.
3.40.120 Adjustment of the Reimbursement Fee to Reflect Actual Costs. Upon
completion ofthe construction of the Eligible Improvements for which a Reimbursement
Fee has been established and acceptance of such Eligible Improvements by the City or the
other Public Agency that will own, operate and maintain such Eligible Improvements and
receipt by the City Engineer ofthe information and documents required to be submitted
by the Requesting Party, the City Engineer shall prepare or cause an amendment to the
Reimbursement Fee study to be prepared to incorporate such actual costs ofthe Eligible
Improvements and the related Eligible Incidental Costs that are determined by the City
Engineer pursuant to Section 3.40.070 to be eligible costs. As to the Reimbursement Fee
applicable to properties owned or developed by the Requesting Party, the City Engineer
shall apply the eligible costs allocated to such properties as a credit against the
Reimbursement Fee applicable to such properties. If and to the extent that the eligible
costs allocated to any such properties are less than the Reimbursement Fee applicable to
such properties, the amount ofthe eligible costs allocable to such properties that shall be
subject to reimbursement shall be reduced by the difference between the
Reimbursement Fee applicable to such properties and such eligible costs.
Upon completion of the amendment to the Reimbursement Fee Study, the City
Engineer shall mail a copy of such amendment to the Requesting Party and the owner of
each property subject to the Reimbursement Fee, together with the notice of the date,
time and place of a property owner informational meeting at which the City Engineer or
his or her designee shall be available to answer questions regarding the amendment to
the Reimbursement Fee Study. Such notice shall be given at no less than ten days before
the date of such meeting. Such meeting shall be scheduled to occur not less than 20 days
prior to the public hearing required to be held pursuant to this Section 3.40.120 hereto.
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EXHIBIT 1
The existing Reimbursement Fee shall be subject to increase or decrease, as
applicable, to reflect differences between the estimated costs of the Eligible
Improvements and the Eligible Incidental Costs utilized to establish the Reimbursement
Fee and the eligible costs of such Eligible Improvements and Eligible Improvement Costs.
Such adjustments may be considered for approval by the City Council following a public
hearing thereon for which notice is given pursuant to Section 3.40.100 hereto. At such
public hearing oral or written presentations may be made regarding the proposed
adjustment in the Reimbursement Fee. At the conclusion of such public hearing, adjustments
to the Reimbursement Fee may be made by resolution ofthe City Council.
3.40.130 Adjustment of Reimbursement Fee for Specific Proiects. Upon application filed
with the City for approval of the land use entitlements to permit development and
construction of a Project to be developed on property subject to a Reimbursement Fee
established pursuant to this Chapter, the City Engineer shall prepare or cause to be
prepared an analysis of the Project based upon the land used entitlements reflected in
such application and whether there is a reasonable relationship between the amount of
the Reimbursement Fee to which such Project would be subject and the cost of the
Eligible Improvements attributable to such Project. The City Engineer shall mail a copy of
such analysis to the applicant for the entitlement and the owner of such property, if other
than the applicant, and the Requesting Party entitled to reimbursement from the
proceeds of the Reimbursement Fee not less than 20 days prior to the public hearing
described in the following paragraph.
The City Council shall, priorto imposing the payment of such Reimbursement Fee
as a condition of approval of such Project, hold a public hearing for the purpose of
determining whether there is a reasonable relationship between the amount of the
Reimbursement Fee to which such Project would be subject and the cost of the Eligible
Improvements attributable to such Project. Such public hearing may be consolidated with
any public hearing to consider the approval ofthe land use entitlements for such Project. In
addition to any other notice of such public hearing required by law, notice of such public
hearing shall be mailed to the owner ofthe property on which such Project is proposed to be
developed and the Requesting Party entitled to reimbursement from the proceeds of the
Reimbursement Fee not less than 15 days priorto the date of such public hearing.
At such public hearing oral or written presentations may be made regarding whether
there is a reasonable relationship between the amount of such Reimbursement Fee and the
cost ofthe Eligible Improvements attributable to such Project.
Upon the conclusion of such public hearing, the City Council shall determine whether
there is a reasonable relationship between the amount of the Reimbursement Fee to
which such Project would be subject and the cost of the Eligible Improvements
attributable to such Project. If the City Council determines that there is such a reasonable
relationship, the approval of such Project may be conditioned with the requirement for
the payment ofthe Reimbursement Fee. If the City Council determines that there is not a
reasonable relationship between the amount of the Reimbursement Fee to which such
Project would be subject and the eligible cost ofthe Eligible Improvements attributable to 14
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EXHIBIT 1
the Project, the City Council shall adopt a resolution modifying the Reimbursement Fee so
that there is a reasonable relationship between the Reimbursement Fee, as modified, to
which such Project will be subject and the eligible cost of the Eligible Improvements
attributable to such Project.
3.40.140 imposition of a Reimbursement Fee. Notwithstanding any provisions of the
Carlsbad Municipal Code, no permit shall be issued for any Project subject to a
Reimbursement Fee established pursuant to this Chapter except upon the condition that
the Reimbursement Fee applicable to such Project shall be paid in accordance with the
provisions of this Chapter. The obligation for the payment of a Reimbursement Fee for
any Project shall attach at the time the initial grading permit for such Project is issued.
Such obligation shall continue to apply to such Project for a period not to exceed twenty
(20) years from the first day of the calendar year following the date of adoption of the
resolution establishing such Reimbursement Fee pursuant to Section 3.40.110
notwithstanding the fact that such period may extend beyond the tei"m of such
Reimbursement Fee established pursuantto Section 3.40.110.
3.40.150 Payment of the Reimbursement Fee. The owner or developer of a Project
subject to the payment of a Reimbursement Fee established by the City Council pursuant
to this Chapter shall pay such Reimbursement Fee prior to issuance of any Building Permit
or Occupancy Permit for such Project; provided, however, that if the Carlsbad Municipal
Code provides for development impact fees assessed by the City pursuant to the Charter
of the City of Carlsbad or the Mitigation Fee Act (Chapter 5 of Division 1 of Title 7 of the
California Government Code) to be collected at a later time, then a Reimbursement Fee
collected pursuant to this Chapter shall be collected at the same time as that mandated
by the Carlsbad Municipal Code for the payment of such other fees.
In no event shall a final inspection or an Occupancy Permit be issued for any
Project subject to a Reimbursement Fee priorto the payment of such Reimbursement Fee
in full.
A Reimbursement Fee required to be paid pursuant to this Chapter shall be the
Reimbursement Fee in effect at the time of payment.
Notwithstanding anything in the Carlsbad Municipal Code or any other written
documentation to the contrary, the Reimbursement Fee applicable to a Project shall be
paid whether or not such Project is subject to conditions of approval by the City.
For Projects for which the City does not require a permit, final inspection or
issuance of an Occupancy Permit, the Reimbursement Fee applicable to a Project shall be
paid prior to use or occupancy of such Project.
3.40.160 Establishment of Funds and Use of Reimbursement Fees. Reimbursement Fees
collected under this Chapter shall be segregated into a Reimbursement Fee Fund with
separate accounts established for each separate Reimbursement Fee established
pursuant to this Chapter. Reimbursement Fees deposited in such an account may be
disbursed solely to reimburse the applicable Requesting Party for Eligible Improvements
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EXHIBIT 1
and Eligible Incidental Costs as approved by the City Council in the establishment of such
Reimbursement Fee.
No reimbursement payment shall be made to any Requesting Party until the
construction of all Eligible Improvements has been completed and such Eligible
Improvements have been accepted by the City or the other Public Agency that will own
such Eligible Improvements and the adjustment, if any, to the applicable Reimbursement
Fee pursuant to Section 3.40.120 has been approved. If a Reimbursement Fee shall have
paid at the rate initially established pursuant to Section 3.40.110 and such Reimbursement
Fee is reduced pursuant to this Section 3.40.120, the City shall refund to the payee of such
Reimbursement Fee the amount by which such Reimbursement Fee shall have been reduced
priorto disbursing any funds on deposit in the applicable account ofthe Reimbursement Fee
Fund to the Requesting Party.
3.40.161 Improvements Ineligible for Reimbursement. Notwithstanding anything to the
contrary in this Chapter, the costs of construction of improvements financed from the
proceeds of special tax bonds issued pursuant to the Mello-Roos Community Facilities Act of
1982, as amended, or limited obligation improvement bonds issued pursuant to the
Improvement Bond Act of 1915, as amended, shall not be eligible for reimbursement
pursuant to this Chapter.
EFFECTIVE DATE: This ordinance shall be effective thirty days after its
adoption; and the city clerk shall certify the adoption of this ordinance and cause the full text
of the ordinance or a summary of the ordinance prepared by the City Attorney to be
published at least once in a newspaper of general circulation in the City of Carlsbad within
fifteen days after its adoption.
INTRODUCED AND FIRST READ at a regular meeting of the Carlsbad City
Council on the day of , 2015, and thereafter,
///
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EXHIBIT 1
PASSED AND ADOPTED at a regular meeting ofthe City Council ofthe City of
Carlsbad on the day of , 2015, by the following vote, to wit:
AYES:
NOES:
ABSENT:
APPROVED AS TO FORM AND LEGALITY:
CELIA A. BREWER, CityAttorney
MATT HALL, Mayor
ATTEST:
BARBARA ENGLESON, City Clerk
n
All Receive -Agenda Item #' Q -
For the Information of the: WEST
July 23, 2015
Mayor Hall and
Members of the City Council
City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
CITY COUNCIL
ACM ..! CA ii""CC /
Date ., f2.'t{rs City Manager 7
Re: Proposed Carlsbad Reimbursement Fee Ordinance
Dear Mayor and Members of the City Council:
PARTNERS
In your meeting of Tuesday, July 28, you will be considering a draft
Reimbursement Fee Ordinance (the "Ordinance"). On behalf of Cantarini, LLC, I request that
the City Council consider four changes in the draft Ordinance, as further described below.
1. Section 3.40.050. In order to clearly provide that all of the Requesting
Party's deposits made with the City pursuant to the Ordinance will be reimbursable through the
Reimbursement Fee, please add the following sentence at the end of Section 3.40.050:
"The amount of deposits made by the Requesting Party pursuant to
this Section shall be considered Eligible Incidental Costs and
included in the calculation of the Reimbursement Fee."
2. Section 3.40.110. Further consider that the Ordinance not dictate a
specific term for any pruticular Reimbursement Fee. Instead, the term of any Reimbursement
Fee would be deterniined by the City Council in the proceedings to establish the Reimbursement
Fee based upon the specific circumstances of the proposed reimbursement plan. This flexibility
would be in accordance with the freedom afforded the City as a charter city and consistent with
the City's prior practice with respect to reimbursement agreements. In the past, reimbursement
obligations have been imposed for as little as approximately 11 years (Robertson Ranch) to an
indefinite period (Villages of La Costa).
In order to allow the City Council to exercise its discretion, we request that the
third paragraph of Section 3.40.110 of the Ordinance be revised to read as follows:
"If the establishment of a Reimbursement Fee is approved, such resolution
shall establish the term. that such Rehnbursement Fee shall be in effect and
may be collected from LFMZ Properties subject to such fee. The term of
West Partners I 5796 Armada Drive I Suire 300 I Carlsbad, CA 92008 I (760) 444-2920 I www. westpartners.com
. With these requested revisions, Cantarini, LLC supports the City Council's
adoption of the proposed Ordinance. Please contact me with any questions.
Very truly yours, -· -~ ..
1 \
;
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ohn P. .. .Yeage .,~c : ')!; !:J• f .,. . ... ' Ceu'crBrewer · · r '
Warren Diven /)' ·r.' ·
Aaron Beanan
Chuck McBride
Steve Powell
Dennis O'Brien
· .
July 23, 2015
City Council-City of Carlsbad
c/o Mr. Aaron Beanan
. Senior Accountant
Administrative Services
Finance
City of Carlsbad
1635 Faraday Ave.
Carlsbad, California 92008
. { r~PWEST!iving
RE: Reimbursement Fee Ordinance
Dear Council Members -City of Calrsbad:
The City Council of the City of Carlsbad is considering adding Chapter 3.40 (the "Ordinance") to the City
of Carlsbad Municipal Code setting forth procedures for the establishment of a reimbursement fee for
funding the reimbursement of certain costs for the construction of eligible improvements. This Ordinance
would allow the City to condition propertie$ within a Local Facilities Management Zone (LFMZ) zone to
pay a proportional share of public improvement costs incurred by a Lead Developer constructing public
improvements on behalf of, and for the benefit of, other property owners within the LFMZ.
On behalf of West Senior Living RJE, LLC, owner of the property commonly referred to as "Dos
Colinas'', I would like to request City Council make three changes in the draft Ordinance that has been
presented by City Staff prior to its adoption. Capitalized tenus used herein not otherwise defmed shall
have the meaning given in the Ordinance:
1) That the enabling Ordinance not dictate when the reimbursement fee obligation attaches to a
Project {i.e. is imposed). Instead, the attachnient and obligation to pay a portion of Eligible
Improvements would be determined and approved by the City Council in the proceedings to
establish a specific LFMZ Reimbursement Fee based upon the specific facts, circumstances and
requirements put forth in the Requesting Party's application filed pursuant to Section 3.40.050
and recommendation(s) of City Staff.
2) That the enabling Ordinance not dictate when the reimbursement fee obligation will be due and
payable (i.e. is collected). Instead, the timing of payment would be determined and approved by
the City Council in the proceedings to establish a specific LFMZ Reimbursement Fee based upon
the specific facts, circumstances and requirements put forth in the Requesting Party's application
flied pursuant to Section 3.40.050 and recommendation(s) of City Staff.
• ''
-BENTEQ BENTLEY EQU ITY, INC.
. All Receive -Agenda Item #, I~
For the Information of the:-
760.476.9572 · ofc
760.809.5216-cell
7449 Magellan Street ·
Carlsbad. CA 92011
CITY COUNCIL /
ACM v CA v CC v
Date ,/P[t; City Manager v bate:. ~·~
·Distribution: qny Clerk July 27,2015
Honorable· Mayor & Council Members
City of Carlsbad
1200 Carlsbad Vtllage Drive
Carlsbad, CA 92008
·. ·~· cny Cletk
~DepUty Clerk
Jock
Re: AB 22,053-Reimbursement Fee Ordinance, CS-281; Chapter 3.40.
Dear Mayor and Council:
We appreciate all the good work City Staff has done in preparing the draft Reimbursement
Fee Ordinance and we support Council's goal of adding another "tool to the toolbox" for
public infrastructure financing. While my O\\<n development experiences in Carlsbad's Zones
20, 12, 18 & 15, beginning in 1994, have included a variety of successful financing tools,
I've also \\<i tnessed the adverse impacts of developers using the wrong tools.
As proposed, the new Reimbursement Fee Ordinance could be a fair and effective alternative
financing method if the following modifications are made to provide greater clarity, pre-
dictability and fairness while ensuring meaningful participation by the Property Owners who
could become financially obligated under any particular LFMZ Reimbursement Fee program.
I. 3.40.060. To provide greater confidence and certainty that only public.projects and
facilities are mcluded in the Reimbursement Fee program, please add the following:
In no event shall any facility or improvement that is designed to satisfy the specific
development requirements of a private project, ·whether or not said facility or improvement
also satisfies the development conditions of a public project, be considered to be an Eligible
Improvement nor shall any of the costs associated there1i1ith be considered to be an Eligible
Cost or Eligible Incidental Cost or otherwise be reimbursable to the Requesting Party.
II. 3.04.070. To ensure the timely and cost-effective fom1ation and completion of any
Rein1bursement Fee program and to provide greater confidence and certainty that all Eligible
Incidental Costs are legitimate and reasonable, please add the following as item 9 under inel-
igible costs:
-
9. All costs incurred by the Requesting Party prior to the date that said Requesting
Party files a written request with the City Engineer requesting that the City Engineer under-
take proceedings pursuant to this Chapter 3. 40 to consider the establishment by the City of a
Reimbursement Fee. 7 ~ t'·-:~/\ · ·~·:•.: ir'·~;• ~h h! ~
.( :·:·~~Li :-t';,:;·~!lt r(~~: ·\.;:-t
. -~ ·--~ ~ ~ m. --~ 3:4o.o9o ." T~ :Pfqyide the CitY: ~a.P.r?peny:o~n<?rs with objective support for the
necessicy-and.r.easen&lheness of Eligible ImptQvements·and Costs~ insert new subsections:
· -·· ·· .... ,······ ·-~-~1i~/Jb~~!ysisfJJ1dc'oHco/np'arison-o/a~yjeasible alternative project that
could be CON{:{ft0fe-1fl . JU?quired to satisfy the required public facility;
A detern)Tnafion.w'hether any portion of the cost of the construction of any Eligible
-......l ~~· .. ~?.i!."'~-j lirq1~e~t~··afuireili1e'djE/igible Incidental Costs may also serve or benefit any private
· ·· ·· · · ---· project-w~mtlt't!Jer.!fffJ'!Ie. W--· fj!ligible for reimbursement. F"i~ • I
... -. ··-·· ,f) :
IV. 3.40.090. To provide reasonable notice and re\>iew time for the Property Owners who
c.ould become finaitcicUly obligated under this Chapter, the "ten days" notice for the Property
Owners (ref. the last paragraph in section 3.40.090, 3rd line from the bottom) should be
changed to thirty (30) days.
V. 3 .40.1 00. To ensure adequate public notice and participation, the first sentence of the
paragraph should be changed to read: Upon completion of the Reimbursement Fee Study and
pruperty owner informational meeting pursuant to Section 3:40. 080 hereto, ...
In addition, the "fifteen (15)" calendar days in the second to the last line of the para-
graph should be changed to thirty (30).
VI. 3.40.110. To limit U!l11ecessary cost to the City and Property Owners, while providing
sufficient frnancial incentive to a Requesting Party~ in connection with a Reimbursement Fee.
please add: no ReintbUI'Sement Fee shaU have a term longer than 10 (ten) years.
Unlike a Bond Assessment District (the 1915 Act) or CFD (Mello-Roos), under which
the 1ead developer is typically reimbursed through the sale of bonds during the build-out of
their development, Reimbursement Fee revenue becomes more speculative over time, partic-
ularly when raw un-entitled land is included in the Reimbursement Fee district. As a result,
the discount rate applicable to any pro-forma reimbursement fee revenue that might be re-
ceived after the build-out term of the "lead project" (typically 3 - 5 years), renders those fu-
ture speculative reimbursements/cash flows virtually worthless. Any competent developer,
investor or lender understands and incorporates these financial principles and e.conomic reali-
ties into their decision-making process when evaluating alternative financing tools. Accord-
ingly, the City, taxpayers and Property Owners should not be burdened with a Reimburse-
ment Fee program that runs beyond its economic life of 10 years; a term that is also well
supported by precedent
VII. 3.40.11 0. Similar to the foregoing~ the financial reality of a development reimburse-
ment fee program does not warrant an "inflator", or inflation factor since the benefit to be
derived by the Requesting Party is more than off-set by the extra burden placed on the Prop-
Peg., 2
..
t •
erty O""'ners and the City to administer and defend an inflator for the reimbursement fee. To
the extent an inflator is included; it should be based on simple interest (not compounded) and
the lesser of (i) a published authoritative index, i.e. ICC or CPI, or (ii) 2% per annum.
VIII. 3.40.120. To provide adequate notice and meaningful participation, the notice period
under the second paragraph of this section should be no less than thirty (30) days ...
IX. 3.40.120 & 3.40.130. To ensure a fair allocation of costs and reimbursement fees,
any Reimbursement Fee that is paid by a project prior to the completion of the City's final
accounting of all Eligible Costs and Incidental Costs shall be subject to adjustment and pay-.
ment of any higher amount within 30 days of completion by the City of said final accounting.
Notwithstanding any difference in the amount of the Reimbursement Fee applicable
to different land uses or types of development (i.e. single family, apartments, retail), the Re-
imbursement Fee should be a uniform amount for all projects in the LFMZ (fixed $per unit).
X. 3.40.140. The obligation for any project to pay the Reimbursement Fee .should attach.
only when that project secures a grading permit and should only be payabie when and as
building permits are secured. The obligation of any project to pay the Reimbursement Fee
should terminate upon the expiration or termination of the Reimbursement Fee program for
that particular LFMZ (i.e. no longer than 10 years from the date of the City's adoption of the
Reimbursement Fee for that particular LFMZ).
XI 3.40.161. As provided by this section, it is crucial that if a Reimbursement Fee pro-
gram is established, that it be the only public financing method allov.'edlu.tilized in that
LFMZ (i.e. no combination of public financing methods or ''hybrids" should be allowed).
XII. To ensure broad public support and consistency with the democratic process under-
pinning all City Ordinances~ the geographic boundaries for any Reimbursement Fee program
should be the LFMZ boundaries (no genymandering/modified boundaries) and no Reim-
bursement Fee should be approved by the City without a minimum of 65% written support,
by area, of the LFMZ properties. In addition, all costs for the City to formulate and adminis-
ter the Reimbursement Fee program should be paid by the Requesting Party, only.
Thank you for your consideration of our comments and proposed modifications for the draft
Reimbursement Fee Ordinance. Please don't hesitate to contact me with questions.
rr~ David M. Bentley, CCIM -President
Bentley Equity, Inc.
Page3
cc: Aaron Beanan • City Finance
Charles McBride -City Finance
Celia Brewer-City Attorney
RCOA-P4 Committee
Page 4
Marc Wing, Bentley-Wmg
Zone 15 Property Owners
.
'~
All Receive -Agenda Item #1 l_g_
For the Information of the:
CITY COUNCIL
ACM / CA .,/ CC .V
Date 1/2.r~/tsCity Manager v
Robin Madaffer, Esq.
Justine Nielsen, Esq.
Morgan Wazlaw, Esq. San Diego Land Lawyers~
Writer's Email:
robin@sdlandlaw.com
Lynne Heidel, Esq.
Of Counsel
Real Estate • land Use • Environmental Writer's Direct
(619) 239-7603
July 28, 2015
Via Email
Honorable Mayor and Council Members
City of Carlsbad
1635 Faraday Avenue
. Carlsbad, California 92008
·Date: /'~ ~~
Distr; -b . ~/-?. 8?o
C. ut•on: 1 ------
lty Clerk
Asst. City Clerk
Deputy Clerk Book
Re: Proposed Ordinance No. CS-281 -Reimbursement Fee
July 28, 2015, Agenda Item 12
Dear Mayor Hall and Honorable Council Members:
We represent Mandan a Co., which owns 195 acres of property in Zone 15 which
could be subject to the proposed Reimbursement Fee Ordinance. While we support Staffs
goal of creating a comprehensive method to allocate fees for public improvements in Zone
15, we believe the City already has the tools necessary to accomplish this through the
Community Facilities District. The proposed ordinance is inequitable for the reasons below.
The proposed ordinance states that the reimbursement fee could potentially escalate
by a standard inflationary index, such as CPl. However, we believe escalating a
reimbursement fee by a standard such as CPI is unfair for some property owners who may
not be ready to develop for several years. By that time, public improvements will be older
and will have depreciated in value. The ordinance does not consider this potential
depreciation, which will significantly alter the proportional share of costs for the
improvements. The ordinance should be modified to account for depreciation in order to
adequately assess each property owner's fair share of the improvements. Similarly,
reimbursement fees should be limited to a term of 10 years because a term of more than 10
years creates speculation for fee revenues, particularly for unentitled land.
Another inequitable portion of the ordinance is that the reimbursement fee as
proposed is based on actual unit counts. There are a few problems with measuring a fee
based on unit counts. First, some properties may be developed with non-residential units. If
so, it will be difficult to determine a fair fee amount. Secondly, using a unit metric does not
consider the proportional impact property owners will actually have on public improvements.
1620 Fifth Avenue, 4th Floor
San Diego, CA 92101
www.sdlandlaw.com Office: (619) 239~7600
Fax: (619) 239-7605
July 28, 2015
Page 2
For example, if one developer builds 100 four-bedroom homes, the public improvement
impact of that project will be significantly increased compared to another development with
100 one-bedroom condos. While the impact on public facilities would vary, the fee under the
proposed ordinance would r:.e!llain the same for both developers. As such , a metric of actual
units is an inequitable metlio of calculating the applicable fee for all property owners in
Zone .15. : !
. . ~ ,7~
In addition to'·'th~se 'issues, we would like to incorporate by reference all issues
rai~ed in the three letters ge to Council on behalf of Mandana Co. dated February 16,
·2015, Api"i · ;~ 015; and AP i~,e";J, 2015 and the letter sent to Council on behalf of Bentley
-Equity dated JlllV!~r, 20· 5. •
,. I o·.
We urge you to consider these issues and not adopt the proposed ordinance, but
-rather utilize the existing tools the City has for allocating costs of public improvements,
specifically the Community Facilities District.
__ / cc: Celia Brewer, City Attorney
Chuck McBride, Director of Finance
Aaron Beanan, Finance Department
Warren Diven, Best Best & Krieger
Ali Shashani, Mandana Co.
Very truly yours,
~f{~.
Robin Madaffer
Donna Heraty
From:
Sent:
To:
City Clerk
Wednesday, July 29, 2015 8:08 AM
Donna Heraty
Subject:
Attachments:
FW: FW: Comment Letter on Ordinance No. CS-281, July 28, 2015 Agenda Item #12
150728-Letter to Carlsbad.pdf
From: Warren Kato [mailto. 2 Q ·-
Sent: Tuesday, July 28, 2015 4:47 PM
To: Aaron Beanan; Celia Brewer; City Clerk
Cc: David Bentley; Bill Hofman;
Ali Shashani
Subject: Re: FW: Comment Letter on Ordinance No. CS-281, July 28, 2015 Agenda Item #12
Re: Reimbursement Fee Ordinance, Ordinance No. CS-281, July 28, 2015
Attached please find our comment letter regarding the above. Thank you for taking this into consideration.
On Tue, Jul28, 2015 at 1:42PM, Ali Shashani
From: Morgan Wazlaw [mailto:Morgan@sdlandlaw.com]
Sent: Tuesday, July 28, 2015 12:20 PM
To: 'clerk@carlsbadca.gov'
wrote:
Cc: 'Celia.Brewer@carlsbadca.gov';
'Chuck.McBride@carlsbadca.gov'; 'Aaron.Beanan@carlsbad .~g~ovi·T; iliiiiiiiiiiiiiilla Robin Madaffer; AJ
Wheeler
Subject: Comment Letter on Ordinance No. CS-281, July 28, 2015 Agenda Item #12
Good afternoon,
A comment letter on the Reimbursement Fee Ordinance, Ordinance No. CS-281 , which will be considered this
evening as Agenda Item 12 is attached on behalf of our client, Mandana Co.
Thank you,
1
estimated cost of the construction of such Eligible Improvements and the related
Eligible Incidental Costs."
We propose the additional language that "The credits should also include any other monies
from any other source, not limited to any existing City impact fee program."
Under proposed section 3.40.110 Public Hearing and Establishment of Reimbursement
Fee, we object to the 20 year term because the financial impact imposed by such a long term
is unknown and therefore is vague, arbitrary and unsustainable. As we all know, no one can
predict our economy, let alone interest rates, inflation or deflation. As such, a 20 year term
for a reimbursement fee agreement may make potential future development in the Sunny
Creek area economically infeasible. We therefore request that the City Council pass an
ordinance with a more reasonable term of 10 years.
Additionally, in the same section, there is no proposed "rate of escalation" applicable to the
Reimbursement Fee Proposal. Therefore it is difficult to render a comment on the proposed
rate, if it is to be applicable at all.
We thank you for the opportunity to be able to address our concerns.
Sincerely yours,
Warren Kato
Encl.
WARREN KATO
ATTORNEY AT LAW
P. 0. Box 53 7
Tustin, CA 92781
(7 1 4) 50 4-6 0 8 1
July 28, 2015
Honorable Mayor and City Council Members
Planning Commission of the City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Re: Ordinance No. CS-281, AB 22,053
Dear Mayor and City Council Members,
I represent the Kato Family Limited Partnership who currently owns approximately 73 acres
of potentially developable land in Zone 15. We are in receipt of the draft Reimbursement
Fee Ordinance referenced above. We support planned development and a fair allocation of
costs for the infrastructure to all those landowners who are impacted. However we have
some concerns with a few particular sections of the proposed ordinance and would like to
express those concerns.
First of all we would like to reference the July 27, 2015 letter by David Bentley, from
Bentley Equity, Inc. We are in agreement and support all of the suggestions contained in
this letter. Also we would like to reference and incorporate the July 28, 2015letter from
Robin Madaffer, representing the Mandana Co.
In addition to the concerns expressed in the above two letters, we like to address additional
issues that cause us some concern. In the preface to the introduction to the ordinance, a
comment was made by staff that "The reimbursement fee may not be combined with any
other financing vehicle." Although this may be a thought by one of the staff members, the
proposed language of the ordinance does not contain any such limitation as many other
financing vehicles. It does include a reference to excluding any Mello-Roos financing but
does not contain any limiting language for any other type of financing vehicles. Having the
availability of multiple financing vehicles may be problematic in that the parties choosing
the financing vehicle may be in a position to "pick and choose" whatever vehicle is
financially attractive to them. However, to allow the choice of multiple financing vehicles
may work unfairly as to any parties that are subject to the proposed reimbursement fees. We
would suggest that explicit language be included in the ordinance that prohibits the use of
multiple financing vehicles.
Under proposed section 3.40.090 Reimbursement Fee Studv D "A determination whether
the any portion of the cost of the construction of any Eligible Improvements and
related Eligible Incidental Costs may be subject to reimbursement from any existing
City impact fee program. If and to the extent that any portion of such costs is subject
to reimbursement from such impact fee program, such amount shall be deducted from
Morgan
Morgan Wazlaw
San Diego Land Lawyers, Inc.
1620 Fifth A venue, Suite 400
San Diego, CA 92101
619.239.7600 x105
Morgan@sdlandlaw.com
www.sdlandlaw.com
Son Diego land l awyers.
t.olt-• Loo4U,. • lml•-
WarrenKato
(714) 504-6081
2
City of Carlsbad
Introduce Ordinance to Enable
Establishment of Reimbursement Fees
July 28, 2015
1
Zone 15 Financing
•AB 21,360: Council approved a reimbursement
agreement to accept assessment district
formation deposits and allowed Bent-West,
LLC to temporarily bypass Policy 33 steps
•AB 21,567: Council waived pass-through
requirement for CFDs
•AB 21,864: Council directed staff to pursue
additional financing tools
2
Reimbursement Fee Ordinance
•What it is:
–Enabling ordinance allowing Council to establish a
reimbursement fee for public improvements
•What it is not:
–A contract with or for any specific party
Ordinance Details
•The applicant requesting the establishment of
a reimbursement fee must:
–Detail improvements and estimated costs
–Mail aforementioned to affected properties and
provide proof to the city
–Provide deposits to cover the city’s costs
•Only public improvements are reimbursable
4
Ordinance Details (cont.)
•The reimbursement fee:
–Is based on estimated or actual eligible costs
depending on timing
•Mechanism to adjust to actual eligible costs
–Adjusts at time of entitlement based on actual unit
counts
–Requires a Public hearing to establish or adjust fee
–Could escalate by a standard inflationary index
–May not be combined with community facilities
district or assessment district financing
5
Ordinance Details (cont.)
•The reimbursement fee:
–Has a term which shall:
•Be consistent with any contemplated LFMP term,
•Be consistent with other guiding authority,
•Be consistent with past precedent, in that order, and
•Shall have a maximum term of twenty years
–Termination date will be calculated from the first day
of the year following the establishment of the fee
–Is attached to a project at grading permit issuance
•May extend maximum term 10 years
–Is payable prior to building permit issuance
6
Questions?
7
· .il Receive -Agenda Item #, 4
For the Information of the:-
CITY COUNCIL
AC~ ..L CA-L::_ CC .,/ D~te ~ City Manager ./
Memorandum
July 28, 2015
{'cicyof
Carlsbad
To: Mayor and City Council Members .
From: ~ Kyle Lancaster, Parks Superintendent
Re: ERRATA SHEe·r FOR AGENDA ITEM #4-ADOPT RESOLUTION APPROVING
CONTRACT DOCUMENTS, PlANS, PROVIS.IONS AND SPECIFICATIONS1 AND
AUTHORIZING THE CITY CLERK TO AOVE_RTI$E FOR BIDS THE REPLACEMENT OF
THE SYNTHETIC TURF AT AVIARA COMMUNITY PARK SOCCER FIElD-
CONTRACT NO. PKS16-02PKS
Staff is recommend[ng that the City Council include the foUowlng revisions:
il. Item #4 -Agenda Bill # 22,045 entitled; ADOPT RESOLUTION APPROVING CONTRACT
DOCUMENTS, PLANS, PROVISIONS AND SPECIFICATIONS, AND AUTHORIZING THE CITY
CLERK TO ADVERTISE FOR BIDS THE REPLACEMENT OF THE SYNTHETIC TURF AT AVIARA
COMMUN/1Y PARK SOCCER FJIELD-CONTRACT NO. PKS16-02PkS
a. Exhibit 2 -Contract documents, plans, provisions and specifications for the
replacement of the synthetic tuif at the Aviara Community Park soccer field
i. Section 02500-Sitework Concrete, Part 2-Products, Subsection 2.01-
Concrete, G. -Cast-in-place Concrete components, 10. Control Joints:
replace uNot less than 3/8" thick x 3/8'' minimum depth with tooted edges",
with "PerSSPWC 305~5.4.3.b"
Date: :z/~g--{(s
Distribution: 1
City Clerk Asst. Ci-o-ty --=C~Ierk
·Deputy Clerk
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