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SR 12-12-2023 5B City Council Report City Council Meeting: December 12, 2023 Agenda Item: 5.B 1 of 9 To: Mayor and City Council From: Gigi Decavalles-Hughes, Director, Finance Department, Financial Operations Subject: Annual Reporting of Development Impact Fees and Adoption of Transportation Impact Fee Resolution Recommended Action Staff recommends that the City Council: 1. Review and accept the FY 2022-23 Annual Reporting of Development Impact Fees per the Mitigation Fee Act (Government Code 66000-66025) and the FY 2022-23 Child Care Linkage Fee Report per SMMC Chapter 9.65; 2. Approve and adopt the proposed resolution making the necessary five-year findings for the Transportation Impact Fee; and 3. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines. Summary Santa Monica collects Council authorized fees from developers to fund investments in child care, transportation, parks, affordable housing, and water conservation. The City also uses these funds to meet the City’s match requirement when seeking grant funding that further offsets costs for City projects. This report transmits the attached Development Impact Fees Report on the status of funds collected from the City’s development impact fees, including investments made in the last year, that qualify to be reported under the Mitigation Fee Act (Government Code sections 66000-66025) (Attachment A). This Annual Report also provides the required annual reporting for the Child Care Linkage Fee per SMMC section 9.65.090. Government Code 66001(d) requires the City Council to make findings every five years 5.B Packet Pg. 77 2 of 9 after a development fee is established. Only the Transportation Impact Fee is due to be reported this year under the five-year requirement. Staff is requesting that the City Council approve and adopt the proposed resolution making the necessary findings for the Transportation Impact Fee. Discussion In 1987, Assembly Bill 1600 (AB1600), also known as the California Mitigation Fee Act, codified the legal and procedural parameters for charging development impact fees as set forth in Government Code sections 66000-66025. A development impact fee is a monetary exaction, other than a tax or special assessment, that an applicant of an approved development project pays to defray all or a portion of the costs of public facilities related to the project. The Mitigation Fee Act defines “public facilities” broadly to include public improvements, public services, and community amenities. At the time that a development impact fee is established, the purpose of the fee and its anticipated use must be clearly identified. Per Government Code section 66006, collection of these fees requires separate funds or accounts to avoid commingling and requires that information be reported within 180 days after fiscal year-end. The City publicly posted the annual Mitigation Fee Act Report, as required by AB1600, on November 15, 2023 for the following fees: Child Care Linkage Fee, Transportation Impact Fee, Parks and Recreation Impact Fee, Affordable Housing Commercial Linkage Fee, and Water Demand Mitigation Fee. Per Government Code section 66001, the City must also report on unexpended and expended fee amounts, whether committed or uncommitted, for the fifth fiscal year following the first deposit and every five years thereafter. This year, only the Transportation Impact Fee is subject to the five-year reporting. Staff continues to monitor development projects and revenue collected to ensure that fees are accounted for and expended in accordance with the purposes for which they were collected as required by law. It can take several years to accumulate sufficient funds to implement the relatively high-cost projects the City's development impact fees 5.B Packet Pg. 78 3 of 9 are eligible to fund. The following is a summary of each development fee, the current balance, and a description of how funds are being spent: 1. Child Care Linkage Fee – This fee is intended to address the increased demand for child care triggered by the development of commercial projects adding floor area of at least 7,500 square feet or multi-family residential projects. Developers can satisfy the ordinance requirements by either paying a fee or by agreeing to participate in the construction or establishment of one or more childcare facilities. Fees are computed annually on July 1, increasing by a percentage equal to the Engineering Construction Cost Index as published by Engineering News Record. Child Care Linkage Fees (CCLF) shall be paid by the final inspection date and prior to the issuance of the Certificate of Occupancy. SMMC section 9.65.070 specifies that funds collected in the Child Care Linkage Fee Reserve Account shall be expended only on the construction and establishment of child care facilities within the City of Santa Monica, including, but not limited to, expenditures for land acquisition, planning, legal advice, engineering, design, construction and equipment, as well as any administrative costs incurred by the City to administer the reserve account. Eligible expenditures shall not include ongoing operating expenses and general maintenance of childcare facilities. FY 2022-23 Fee Activity FY 2022-23 Child Care Linkage Fee Beginning Balance Fees Collected Interest Earned Expenditures Ending Balance $769,644 $655,413 $8,623 $0 $1,433,680 In 2021, the balance of the Child Care Linkage Fee (CCLF) fund reserve account was fully expended on construction of the Santa Monica Early Childhood Lab School, which created 106 new child care slots in Santa Monica, including 38 for infants/toddlers, and 68 for preschool-aged children. Future programs may include loans or grants for those looking to develop new, licensed childcare in Santa Monica. 5.B Packet Pg. 79 4 of 9 2. Transportation Impact Fee (TIF) – This fee is collected on eligible new development and changes in land use that result in increased trip generation. The fees are based on residential units or commercial square footage and are charged prior to issuance of building permits, unless State law requires the City to accept later fee payment. The TIF is based upon the costs associated with transportation improvements and the amount of new auto trips that can be attributed to land use changes. Funds collected are used to fund transportation improvements, such as sidewalks, pedestrian crossing improvements, traffic signal upgrades, transit, and bicycle facilities, per SMMC Chapter 9.66. Funds are frequently leveraged as grant match for projects such as Safe Streets for 17th Street and implementation of the Wilshire Boulevard Safety Study recommendations. Grant projects have longer delivery times but increase the number and size of improvements resulting from use of these fees. Grant matching was assumed in the fee calculation and nexus study supporting the development of the TIF. FY 2022-23 Fee Activity FY 2022-23 Transportation Impact Fee Beginning Balance Fees Collected Interest Earned Expenditures Ending Balance $11,418,765 $2,270,504 $35,560 $1,917,592 $11,807,237 In FY 2022-23, $1,917,592 was expended on capital improvement project delivery, including tools to analyze crash reports to determine safety countermeasures, project design, right of way, required studies, prevailing wage monitoring, utility coordination, and construction to implement Vision Zero improvements associated with the following projects: • 4th St Enhancements – Expo Linkages, Phase 2: $433,343 • Michigan Ave Greenway / 20th St Bike Connection: $7,647 5.B Packet Pg. 80 5 of 9 • Pico Blvd / SMC Pedestrian Safety Improvements: $752,693 • Multimodal Signal Detection: $24,548 • Stewart and Pennsylvania Safety Enhancement Project: $21,485 • Project Management Support: $26,187 • Safe Routes at Four Schools: $290,702 • Safe Streets for 17th Street and Michigan Avenue: $197,250 • Construction Management Services: $163,737 State law requires that TIF funds be used for the delivery of physical improvements. These projects require significant time for project delivery because of local design, outreach and procurement steps and State and Federal grant funding approval processes. TIF funds are pre-committed to projects for an extended time as a result, and funds need to be held available for upcoming grant match commitments. Staff anticipates using portions of the fund balance to support longer-term projects identified in the TIF nexus study such as bike facilities, sidewalks, and safe crossings. This information along with additional project and expenditure information is available in Attachment A. 3. Parks and Recreation Impact Fee – This fee is collected from new residential and commercial development for the upgrade and/or expansion of parks and recreation facilities needed to accommodate additional occupants per SMMC Chapter 9.67. FY 2022-23 Fee Activity FY 2022-23 Parks and Recreation Impact Fee Beginning Balance Fees Collected Interest Earned Expenditures Ending Balance $4,037,185 $2,551,908 $42,907 $246,410 $6,385,590 In FY 2022-23, a total $246,410 was expended. Of the total, $150,210 was spent on playground safety upgrades; $440 on the basketball court at Marine Park; $50,680 was used on the Citywide Park Condition Assessment; $75 was spent on Douglas Park for the Notice of Exemption Fee; $42 was spent on labor 5.B Packet Pg. 81 6 of 9 compliance review to begin construction at Beach Park #1; and one project, the expansion of the Community Gardens at Marine Park, was completed and partially funded at 80% with parks and recreation impact fees in the amount of $44,963. Included in the FY 2023-25 Adopted Budget, a total $664,700 was allocated to the reconstruction of two basketball courts at Marine Park ($414,700) and to address needed repairs and deferred maintenance in parks ($250,000), as per the Park Condition Assessment, a project that identifies and prioritizes parks and playground safety enhancements. Work on the basketball courts is expected to start and finish in Summer 2024. Construction of repairs and maintenance will start after the Park Condition Assessment is complete, which started in the Spring of 2023 and is scheduled to be completed in Summer 2024. Staff continues to evaluate potential park-based projects, such as repairs and construction to essential equipment and infrastructure to maintain access to open spaces. Staff also actively utilize this funding to meet local match requirements when applying for grants. This enables the City to maximize available funding for priority projects. Projects are prioritized based on health and safety criteria and presented to Council as part of the proposed Capital Improvement Program budget. Staff anticipates that $4.9 million in available funding would be used for future projects at Memorial Park and Clover Park and would be set aside for annual park improvements, the Park and Recreation Master Plan, implementation of emergency projects identified by the Park Condition Assessment, the conversion of the Santa Monica Airport to a ”Great Park”, possible pickleball expansion projects, and local match requirements when applying for grants, and to support ongoing playground safety upgrades. 4. Affordable Housing Commercial Linkage (AHCL) Fee – To offset the additional need for affordable housing generated by new commercial development, the City adopted the AHCL fee, per SMMC Chapter 9.68 on June 23, 2015 to contribute 5.B Packet Pg. 82 7 of 9 to the creation of affordable housing production and preservation. The City utilizes this funding for the production and preservation of affordable housing by issuing loans to nonprofits for the acquisition of property, new construction, or rehabilitation of existing buildings within the City. In FY 2022-23, no fees were disbursed. FY 2022-23 Fee Activity FY 2022-23 Affordable Housing Commercial Linkage Fee Beginning Balance Fees Collected Interest Earned Expenditures Ending Balance $1,284,476 $1,023,326 $14,432 $0 $2,322,234 AHCL fees are one of several funding sources deposited into the Citywide Housing Trust Fund. As affordable housing projects are identified and reviewed by staff, these funds are considered for use as part of each project’s funding mix. The available funding included in this report has not yet been dedicated to a specific property acquisition, rehabilitation, or new development. However, there are affordable housing developments in the pipeline that could utilize this funding. Final funding mixes for these developments will be decided as development proposals are refined and financial feasibility determined. As of November 2023, the City is tentatively planning on committing $1.7M of these funds to address cost increases at the 1342 Berkeley project. This project would create 13 affordable housing residences primarily targeted to young adults 18-24 years old. 5. Water Demand Mitigation Fee – On March 19, 1991, the City Council adopted Resolution 8196 (CCS) which established a one-time fee to mitigate the total daily water consumption rate projected for new development (Water Demand Mitigation Fee). The Water Demand Mitigation Fee was set at $3.00 for each gallon of daily water demand that must be mitigated. The Water Demand Mitigation Fee is required when: a new single-family residence is constructed or there is an addition of 50% or more to existing square footage; for construction of a new multi-family building or addition of new units; for construction of a new 5.B Packet Pg. 83 8 of 9 non-residential building or whenever there is a change of use, change or addition to new plumbing fixtures, addition of restaurant seating, or addition of square footage. On July 1, 2017, the Water Neutrality Fee replaced the Water Demand Mitigation Fee. FY 2022-23 Fee Activity FY 2022-23 Water Demand Mitigation Fee Beginning Balance Fees Collected Interest Earned Expenditures Ending Balance $320,894 $0 $0 $552 $320,342 In FY 2022-23, $552 was expended on the Recycled Water Main Expansion Project. Staff anticipates using the available balance of $320,342 to complete the Recycled Water Main Expansion Project. This is not a close out of the developer fee. The City will continue to collect Water Demand Mitigation revenues for permit applications submitted prior to July 1, 2017, and will continue to report on it until all funds are expended. Environmental Review This report is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) (Common Sense Exemption) of the CEQA Guidelines, which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” This report is administrative in nature, and no action is being undertaken. Therefore, it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. Financial Impacts and Budget Actions There is no immediate financial impact or budget action necessary as a result of the recommended action. 5.B Packet Pg. 84 9 of 9 Prepared By: Stephanie Manglaras, Assistant City Treasurer Approved Forwarded to Council Attachments: A. Attachment A - FY 2022-23 Development Impact Fees Report (AB 1600) B. 121223 (001) - Resolution Adopting Five-year Findings for TIF 5.B Packet Pg. 85 (A)A brief description of the type of fee in the account or fund. (B)The amount of the fee. Project Fee Residential $179.46 per unit Hotel $4.28 per square foot Retail $6.09 per square foot Office $8.52 per square foot (C)The beginning and ending balance of the account or fund and (D) The amount of the fees collected and the interest earned. FISCAL YEAR BEGINNING FUND BALANCE FEES COLLECTED INTEREST EARNED EXPENDITURES ENDING FUND BALANCE FY 2022-23 769,644$ 655,413 8,623 - 1,433,680$ No interfund transfers or loans were made during the fiscal year from this fund. No refunds were made during the fiscal year. (G)A description of each interfund transfer or loan made from the account or fund, including the public improvement on which the transferred or loaned fees will be expended, and, in the case of an interfund loan, the date on which the loan will be repaid and the rate of interest that the account or fund will receive on the loan. (H)The amount of refunds made pursuant to subdivision (e) of Section 66001 and any allocation pursuant to subdivision (f) of Section 66001. For each separate account or fund established pursuant to subdivision (a), the local agency shall, within 180 days after the last day of each fiscal year, make available to the public the following information for the fiscal year: Child Care Linkage Fee - The purpose of the Child Care Linkage Fee (CCLF) imposed and collected on development of commercial projects adding floor area of at least 7,500 square feet or multi-family residential projects development within the City since fiscal year 2011-2012 is to fund property acquisition, development, and construction of child care facilities in order to create new child care spaces. (E)Identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with fees. Note: The percentage will be reported upon completion of the project/s. Staff are working on ways to make funds available. Future programs may include loans or grants for those looking to develop new, licensed child care in Santa Monica. No expenditures were incurred during this reporting period. F)An approximate date by which the construction of the public improvement will commence if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement, as identified in paragraph (2) of subdivision (a) of Section 66001, and the public improvement remains incomplete. City of Santa Monica Development Impact Fees Report Pursuant to the Mitigation Fee Act Fiscal Year Ended June 30, 2023 Child Care Linkage Fee For the purpose of compliance with Government Code subsection 66006(b)(1), the following information regarding AB 1600 fees is presented: 5.B.a Packet Pg. 86 Attachment: Attachment A - FY 2022-23 Development Impact Fees Report (AB 1600) (5887 : Annual Reporting of Development Impact Fees) (A) A brief description of the type of fee in the account or fund. (B) The amount of the fee. Project Fee Single Family, Area 1 $9,427.39 per unit Single Family, Area 2 $9,675.48 per unit Multi-Family, Area 1 $3,225.16 per unit Multi-Family, Area 2 $4,093.47 per unit Multi-Family, Area 3 $3,225.64 per unit Retail, Area 1 $26.05 per square foot Retail, Area 2 $37.33 per square foot Office, Area 1 $12.03 per square foot Office, Area 2 $13.40 per square foot Medical Office, Area 1 $34.86 per square foot Medical Office, Area 2 $36.96 per square foot Hospital, Area 1 N/A Hospital, Area 2 $18.24 per square foot Lodging, Area 1 $4.46 per square foot Lodging, Area 2 $4.46 per square foot Industrial, Area 1 $1.48 per square foot Industrial, Area 2 $1.62 per square foot Auto Sales and Display Areas, Area 1 $1.48 per square foot Auto Sales and Display Areas, Area 2 $1.62 per square foot City of Santa Monica Development Impact Fees Report Pursuant to the Mitigation Fee Act Fiscal Year Ended June 30, 2023 Transportation Impact Fee For the purpose of compliance with Government Code subsection 66006(b)(1), the following information regarding AB 1600 fees is presented: For each separate account or fund established pursuant to subdivision (a), the local agency shall, within 180 days after the last day of each fiscal year, make available to the public the following information for the fiscal year: Residential (dwelling unit) Non-Residential (sq. ft.) Transportation Impact Fee - The City Council adopted an ordinance on February 26, 2013 that established a Transportation Impact Fee for new development and intensified land uses that will fund transportation network improvements such as new sidewalks, crosswalks, traffic signal upgrades, bus stops, transportation demand management, and bicycle facilities that are necessitated by the new trips associated with the land use change. The fees are based on a nexus study and calculated using residential units or commercial square footage. The fee is charged prior to issuance of building permits, unless state law requires the City to accept later fee payment. The Transportation Impact Fee reflects the costs associated with transportation network improvements and the amount of new auto trips that can be attributed to land use changes. 5.B.a Packet Pg. 87 Attachment: Attachment A - FY 2022-23 Development Impact Fees Report (AB 1600) (5887 : Annual Reporting of Development Impact Fees) City of Santa Monica Development Impact Fees Report Pursuant to the Mitigation Fee Act Fiscal Year Ended June 30, 2023 Transportation Impact Fee (C) The beginning and ending balance of the account or fund and (D) The amount of the fees collected and the interest earned. FISCAL YEAR BEGINNING FUND BALANCE FEES COLLECTED INTEREST EARNED EXPENDITURES ENDING FUND BALANCE FY 2022-23 11,418,765$ 2,270,504 35,560 1,917,592 11,807,237$ Memorial Park Multi-Use Path Olympic Blvd First/Last Mile Improvements to Bergamot Station FY23-24 Wilshire Boulevard Safety Improvements - Phase 2 FY24-25 Project Progress Ongoing Stewart-Pennsylvania Safety Enhancement Project FY23-24 FY24-25 Santa Monica Blvd Safety Improvements FY24-25 Citywide Vision Zero Improvements via Annual Repaving Project (Wilshire Boulevard Safety Improvements - Phase 1, Ocean Avenue Protected Bikeway, Crosswalk Renewal Program, Vision Zero Priority Intersections) Ongoing4th Street Enhancements - Expo Linkages, Phase 2 FY25-26 Broadway Protected Bikeway - 5th Street to 26th Street Ongoing Project Name (E) Identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with fees. Note: The percentage will be reported upon completion of the project/s. F) An approximate date by which the construction of the public improvement will commence if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement, as identified in paragraph (2) of subdivision (a) of Section 66001, and the public improvement remains incomplete. In FY 2022-23, $1,917,592 of TIF funds were expended on capital improvement project delivery, including tools to analyze crash reports to determine safety countermeasures, project design, right of way, required studies, prevailing wage monitoring, utility coordination, and construction to implement Vision Zero improvements associated with the following projects: > 4th St Enhancements – Expo Linkages, Phase 2: $433,343 > Michigan Ave Greenway / 20th St Bike Connection: $7,647 > Pico Blvd / SMC Pedestrian Safety Improvements: $752,693 > Multimodal Signal Detection: $24,548 > Stewart and Pennsylvania Safety Enhancement Project: $21,485 > Project Management Support: $26,187 > Safe Routes at Four Schools: $290,702 > Safe Streets for 17th Street and Michigan Avenue: $197,250 > Construction Management Services: $163,737 Pearl Street Preliminary Design Michigan Avenue Greenway 20th Street Bike Connection Ongoing 14th Street Bikeway - Plans, Specification, and Estimates FY25-26 5.B.a Packet Pg. 88 Attachment: Attachment A - FY 2022-23 Development Impact Fees Report (AB 1600) (5887 : Annual Reporting of Development Impact Fees) City of Santa Monica Development Impact Fees Report Pursuant to the Mitigation Fee Act Fiscal Year Ended June 30, 2023 Transportation Impact Fee No refunds were made during the fiscal year. Additional Information is being provided regarding this fee: Local Funds Misc. Grants Fund $17,136 $623,723 $165,498 $590,915 $0 $0 $498,373 $2,851,421 $0 $569,758 $0 $0 $0 $0 $0 $2,711,986 $0 $6,811,454 $0 $4,000,000 $0 $522,327 $0 $0 $290,000 $0 $971,007 $18,681,584 Santa Monica Blvd Safety Improvements $680,000 Wilshire Boulevard Safety Improvements - Phase 2 Stewart-Pennsylvania Safety Enhancement Project Construction Management Services for TIF- Funded Capital Projects Citywide Vision Zero Improvements via Annual Repaving Project (Wilshire Boulevard Safety Improvements - Phase 1, Ocean Avenue Protected Bikeway, Crosswalk Renewal Program, Vision Zero Priority Intersections) $1,000,000 $500,000 $808,000 $11,804,686 $650,000 Pearl Street Preliminary Design Broadway Protected Bikeway - 5th Street to 26th Street Olympic Blvd First/Last Mile Improvements to Bergamot Station $1,171,058 $376,345 $255,000 $1,331,000 $2,572,283 $1,053,000 $730,000 14th Street Bikeway - Plans, Specification, and Estimates Memorial Park Multi-Use Path - Plans, Specifications and Estimates No interfund transfers were made during the fiscal year. Project Transportation Impact Fee Traffic Engineering Services for TIF-Funded Capital Projects Total $678,000 Michigan Avenue Greenway 20th Street Bike Connection 4th Street Enhancements - Expo Linkages, Phase 2 (G) A description of each interfund transfer or loan made from the account or fund, including the public improvement on which the transferred or loaned fees will be expended, and, in the case of an interfund loan, the date on which the loan will be repaid and the rate of interest that the account or fund will receive on the loan. (H) The amount of refunds made pursuant to subdivision (e) of Section 66001 and any allocation pursuant to subdivision (f) of Section 66001. The Transportation Impact Fee was established to ensure that new development pays its fair share of the costs of providing the transportation infrastructure necessary to implement the no net increase in vehicle trips originating or ending within the City during the PM peak hour goal of the Plan. By supporting this goal, it also supports Santa Monica's goals established in the adopted Land Use and Circulation Element of reducing vehicle trips and promoting walking, bicycling, carpooling, and use of public transit, in order to accommodate some desired growth and development. The Transportion Impact Fee funds capital improvements projects including the completion of the sidewalk network, and enhanced pedestrian crossings along major boulevards, striping and signage of new bike lanes, bike paths, and bike boulevards, and installation of new bus pads, bus benches and transit only lanes. (1) Identification of the purpose to which the reportable fees are to be put. (2) Demonstration of a reasonable relationship between the reportable fees and the purposes for which they are charged. (3) Identification of all City sources and amounts of funding to complete financing of the projects as identified by the City. 5.B.a Packet Pg. 89 Attachment: Attachment A - FY 2022-23 Development Impact Fees Report (AB 1600) (5887 : Annual Reporting of Development Impact Fees) City of Santa Monica Development Impact Fees Report Pursuant to the Mitigation Fee Act Fiscal Year Ended June 30, 2023 Transportation Impact Fee Local Funds Misc. Grants Fund Funds Available Funds Available Funds Available Funds Available N/A N/A Funds Available Funds Available N/A Funds Available N/A N/A N/A N/A N/A Funds Available N/A FY24-25 N/A Funds Available N/A FY23-24 N/A N/A Funds Available N/A Construction Management Services for TIF- Funded Capital Projects Funds Available Traffic Engineering Services for TIF-Funded Capital Projects Funds Available Stewart-Pennsylvania Safety Enhancement Project Funds Available Santa Monica Blvd Safety Improvements Funds Available Memorial Park Multi-Use Path Funds Available Olympic Blvd Pedestrian Improvements Funds Available Wilshire Boulevard Safety Improvements - Phase 2 Funds Available Broadway Protected Bikeway Funds Available 14th Street Bikeway - Plans, Specification, and Estimates Funds Available Citywide Vision Zero Improvements via Annual Repaving Project (Wilshire Boulevard Safety Improvements - Phase 1, Ocean Avenue Protected Bikeway, Crosswalk Renewal Program, Vision Zero Priority Intersections) Funds Available Michigan Avenue Greenway 20th Street Bike Connection Funds Available Funds AvailablePearl Street Preliminary Design Transportation Impact Fee Funds Available Project 4th Street Enhancements - Expo Linkages, Phase 2 (4) Identification of the approximate dates on which the funding referred to in item C is expected to be deposited into the appropriate account or fund. 5.B.a Packet Pg. 90 Attachment: Attachment A - FY 2022-23 Development Impact Fees Report (AB 1600) (5887 : Annual Reporting of Development Impact Fees) (A) A brief description of the type of fee in the account or fund. (B) The amount of the fee. Project Fee Single Family Residential $9,841.95 Multi-Family Residential - Studio/1 Bedroom $5,333.41 per unit Multi-Family Residential - 2+ Bedrooms $8,590.44 per unit Retail $1.93 per square foot Office $2.98 per square foot Medical Office $1.64 per square foot Lodging $4.01 per square foot Industrial $1.67 per square foot (C) The beginning and ending balance of the account or fund and (D) The amount of the fees collected and the interest earned. FISCAL YEAR BEGINNING FUND BALANCE FEES COLLECTED INTEREST EARNED EXPENDITURES ENDING FUND BALANCE FY 2022-23 4,037,185$ 2,551,908 42,907 246,410 6,385,590$ For each separate account or fund established pursuant to subdivision (a), the local agency shall, within 180 days after the last day of each fiscal year, make available to the public the following information for the fiscal year: City of Santa Monica Development Impact Fees Report Pursuant to the Mitigation Fee Act Fiscal Year Ended June 30, 2023 Parks and Recreation Development Impact Fee For the purpose of compliance with Government Code subsection 66006(b)(1), the following information regarding AB 1600 fees is presented: Parks and Recreation Development Impact Fee - The purpose of the fee is to provide a direct funding source from new residential and commercial development to be used solely for the acquisition and development of open space, parkland, and recreation facilities to meet demand generated by occupants and users of the new development. (E) Identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with fees. Note: The percentage will be reported upon completion of the project/s. (F) An approximate date by which the construction of the public improvement will commence if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement, as identified in paragraph (2) of subdivision (a) of Section 66001, and the public improvement remains incomplete. (G) A description of each interfund transfer or loan made from the account or fund, including the public improvement on which the transferred or loaned fees will be expended, and, in the case of an interfund loan, the date on which the loan will be repaid and the rate of interest that the account or fund will receive on the loan. (H) The amount of refunds made pursuant to subdivision (e) of Section 66001 and any allocation pursuant to subdivision (f) of Section 66001. In FY 2022-23, Parks and Recreation Development Impact Fees were expended on the following public improvements: > $150,210 was spent on playground safety upgrades at Marine Park - This project is ongoing. > $440 was spent on the Marine Park basketball court - This project is ongoing. > $50,680 was spent on the Park Condition Assessment - This project is ongoing. > $75 was spent on Douglas Park - This project is ongoing. > $42 was spent on Beach Park #1 - This project is ongoing. > $44,963 was spent to expand the Community Gardens at Marine Park - This project is complete and used 27% Parks and Recreation Development Impact Fee funds. In the City’s FY 2023-25 CIP Biennial Budget, Parks and Recreation Development Impact Fees have been allocated for use on two projects: > $414,700 allocated for the reconstruction of two basketball courts at Marine Park - expected construction to start Summer 2024, completion anticipated Summer 2024. > $250,000 allocated to address repairs and deferred maintenance in parks, identified by the priorities identified in the Park Condition Assessment. Repairs and construction are anticipated to begin in Summer 2024. No interfund transfers or loans were made during the fiscal year from this fund. No refunds were made during this fiscal year. 5.B.a Packet Pg. 91 Attachment: Attachment A - FY 2022-23 Development Impact Fees Report (AB 1600) (5887 : Annual Reporting of Development Impact Fees) (A) A brief description of the type of fee in the account or fund. (B) The amount of the fee. Project Fee Retail $12.56 per square foot Office $14.44 per square foot Hotel/Lodging $3.96 per square foot Hospital $7.92 per square foot Industrial $9.71 per square foot Creative Office $12.36 per square foot Medical Office $8.88 per square foot Institutional $13.18 per square foot (C) The beginning and ending balance of the account or fund and (D) The amount of the fees collected and the interest earned. FISCAL YEAR BEGINNING FUND BALANCE FEES COLLECTED INTEREST EARNED EXPENDITURES ENDING FUND BALANCE FY 2022-23 1,284,476$ 1,023,326 14,432 - 2,322,234$ (H) The amount of refunds made pursuant to subdivision (e) of Section 66001 and any allocation pursuant to subdivision (f) of Section 66001. For each separate account or fund established pursuant to subdivision (a), the local agency shall, within 180 days after the last day of each fiscal year, make available to the public the following information for the fiscal year: City of Santa Monica Development Impact Fees Report Pursuant to the Mitigation Fee Act Fiscal Year Ended June 30, 2023 Affordable Housing Commercial Linkage Fee For the purpose of compliance with Government Code subsection 66006(b)(1), the following information regarding AB 1600 fees is presented: Affordable Housing Commercial Linkage Fee - A fee paid to the City by an applicant for approval of certain development projects to contribute to the creation of affordable housing production or preservation to offset additional need for affordable housing generated by new commercial development. (E) Identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with fees. Note: The percentage will be reported upon completion of the project/s. No expenditures were incurred during this reporting period. F) An approximate date by which the construction of the public improvement will commence if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement, as identified in paragraph (2) of subdivision (a) of Section 66001, and the public improvement remains incomplete. (G) A description of each interfund transfer or loan made from the account or fund, including the public improvement on which the transferred or loaned fees will be expended, and, in the case of an interfund loan, the date on which the loan will be repaid and the rate of interest that the account or fund will receive on the loan. There are no projects underway that utilize these funds. The City is in the process of identifying eligible projects. No interfund transfers or loans were made during the fiscal year from this fund. No refunds were made during the fiscal year. 5.B.a Packet Pg. 92 Attachment: Attachment A - FY 2022-23 Development Impact Fees Report (AB 1600) (5887 : Annual Reporting of Development Impact Fees) (A) A brief description of the type of fee in the account or fund. (B) The amount of the fee. Fee $990.00 $315.00 $375.00 $570.00 $750.00 $900.00 To be determined by the Civil Engineering Plan Checker (C) The beginning and ending balance of the account or fund and (D) The amount of the fees collected and the interest earned. FISCAL YEAR BEGINNING FUND BALANCE FEES COLLECTED INTEREST EARNED EXPENDITURES ENDING FUND BALANCE FY 2022-23 320,894$ 0 0 552 320,342$ No interfund transfers or loans were made during the fiscal year from this fund. No refunds were made during the fiscal year. Non-Residential: For each separate account or fund established pursuant to subdivision (a), the local agency shall, within 180 days after the last day of each fiscal year, make available to the public the following information for the fiscal year: City of Santa Monica Development Impact Fees Report Pursuant to the Mitigation Fee Act Fiscal Year Ended June 30, 2023 Water Demand Mitigation Fee For the purpose of compliance with Government Code subsection 66006(b)(1), the following information regarding AB 1600 fees is presented: $1,127,540 was appropriated to the Recycled Water Main Expansion Project. Construction began December 2020 and is expected to be completed mid 2024. (G) A description of each interfund transfer or loan made from the account or fund, including the public improvement on which the transferred or loaned fees will be expended, and, in the case of an interfund loan, the date on which the loan will be repaid and the rate of interest that the account or fund will receive on the loan. (H) The amount of refunds made pursuant to subdivision (e) of Section 66001 and any allocation pursuant to subdivision (f) of Section 66001. The Water Demand Mitigation Fee - A one-time fee the City charges new development to mitigate the total daily water consumption rate projected for the development. The total daily water demand for the project is calculated using standard water demand factors which have been developed by City staff. The water demand mitigation fee is set at $3.00 for each gallon of daily water demand which must be mitigated. Effective, July 1, 2017, the Water Demand Mitigation Fee was replaced with the Water Neutrality Fee. The City will continue to collect Water Demand Mitigation revenues for permit applications submitted prior to July 1, 2017 with the following exception: Any new development applications for a building permit filed on or before November 27, 2018, that only results in a change of use of less than 6,000 square feet and/or an addition of less than 1,500 square feet, will be required to pay the water demand mitigation fee in effect as of November 27, 2018. This fee is required when: • Single-Family Residence -- for construction of a new residence or whenever adding 50% or greater to the square footage. • Multi-Family -- for construction of a new building or whenever new units are added. • Non-Residential -- for construction of a new building or whenever there is a change of use, changing or adding plumbing fixtures, or adding restaurant seats or square footage. Multi-Family (condominium fees same as apartments): (E) Identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with fees. Note: The percentage will be reported upon completion of the project/s. In FY 2022-23, $552 of Water Demand Mitigation Fees were expended on the Recycled Water Main Expansion Project. F) An approximate date by which the construction of the public improvement will commence if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement, as identified in paragraph (2) of subdivision (a) of Section 66001, and the public improvement remains incomplete. Single-Family Project Studio/Single Apartment: 1 Bedroom Apartment: 2 Bedroom Apartment: 3 Bedroom Apartment: Duplex (2 Apartments): 5.B.a Packet Pg. 93 Attachment: Attachment A - FY 2022-23 Development Impact Fees Report (AB 1600) (5887 : Annual Reporting of Development Impact Fees) 1 City Council Meeting: December 12, 2023 Santa Monica, California RESOLUTION NUMBER _________ (CCS) (City Council Series) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA ADOPTING FIVE-YEAR FINDINGS AS TO THE TRANSPORTATION IMPACT FEE WHEREAS, the Mitigation Fee Act, Government Code Section 66000 et seq., authorizes the City of Santa Monica (“City”) to impose, collect, and expend mitigation fees to offset the impacts of development within the City; and WHEREAS, Section 66001(d) of the Mitigation Fee Act requires the City Council to adopt a resolution making certain findings as to any portion of development fees collected over five years ago, and each fifth fiscal year thereafter, whether such unexpended fees have been committed or uncommitted; and WHEREAS, Chapter 9.66 of the Santa Monica Municipal Code established a Transportation Impact Fee to implement the “goals, objectives, and policies of the City of Santa Monica’s Land Use Circulation Element” and address the burdens on the City’s surface transportation system, including inter alia increased trip generation, created by new development; and WHEREAS, portions of the Transportation Impact Fee funds were collected over five years ago, or otherwise subject to the five-year reporting requirement under the Mitigation Fee Act (the “Unexpended Fees”); and WHEREAS, the Mitigation Fee Act requires the City Council to issue findings that identify the purposes of which the Unexpended Fees are to be used, demonstrate a reasonable relationship between the Unexpended Fees and the purposes for which they 5.B.b Packet Pg. 94 Attachment: 121223 (001) - Resolution Adopting Five-year Findings for TIF [Revision 1] (5887 : Annual Reporting of Development Impact Fees) 2 are charged, and identify the sources and amounts of funding anticipated to complete each project for which the Unexpended Fees are collected and provide approximate dates on when such funding is expected to be deposited; and WHEREAS, the City has complied with all notice obligations under Government Code Section 66006, including publicly posting a Mitigation Fee Act Report on November 15, 2023 at City Hall and on the City’s website. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES RESOLVE AS FOLLOWS: SECTION 1. The City Council has considered the accompanying staff report and five-year report for the Transportation Impact Fee attached as Exhibit A to the staff report. SECTION 2. The Unexpended Fees relating to the Transportation Impact Fee will be used to fund several projects, including: the Michigan Avenue Greenway 20th Street Bike Connection; 4th Street Enhancements – Expo Linkages, Phase 2; Pearl Street Preliminary Design; Citywide Vision Zero Improvements; Broadway Protected Bikeway – 5th Street to 26th Street; 14th Street Bikeway; Memorial Park Multi-Use Path; Olympic Blvd First/Last Mile Improvement to Bergamot Station; Wilshire Boulevard Safety Improvements – Phase 2; Stewart-Pennsylvania Safety Enhancement Project; and the Santa Monica Blvd Safety Improvements as further described in Attachment A. There is a reasonable relationship between using the Transportation Impact Fee to fund these projects and the stated goal to address the burdens on the City’s surface transportation system created by new development. 5.B.b Packet Pg. 95 Attachment: 121223 (001) - Resolution Adopting Five-year Findings for TIF [Revision 1] (5887 : Annual Reporting of Development Impact Fees) 3 SECTION 3. The five-year report for the Transportation Impact Fee identifies the sources and amounts of prior funding, or anticipated funding, to complete each project for which the fee is collected. The five-year reports also provide approximate dates on when such funding has been deposited as adopted in prior meetings, or when such funding is expected to be deposited in connection with future City Council actions . SECTION 4. The City Clerk shall certify to the adoption of this Resolution, and thenceforth and thereafter the same shall be in full force and effect. APPROVED AS TO FORM: _________________________ Douglas Sloan, City Attorney 5.B.b Packet Pg. 96 Attachment: 121223 (001) - Resolution Adopting Five-year Findings for TIF [Revision 1] (5887 : Annual Reporting of Development Impact Fees)