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HomeMy WebLinkAboutRes 06-72 and Ord. 1120 Fire Facilities Impact Mitigation FeeMEETI DATE CONTINUED TO P CITY OF PALM DES RR PASSED TO 2ND READING FINANCE DEPARTMENT STAFF REPORT REQUEST: Consideration of a Fire Facilities Impact Mitigation Fee pursuant to the findings of a new Nexus Study. SUBMITTED BY: Paul S. Gibson, Director of Finance/City Treasurer Date: May 25, 2006 CONTENTS: Recommendation Fire Facilities Impact Fee Nexus Study Legal Notice Resolution No.06-72 Adopting Nexus Study and Setting Fee Levels Ordinance No. i12o Establishing Impact Fee Recommendation: Adopt Resolution No. 06-72 and Ordinance No. 1120 adopting Nexus Study and Setting Fee Levels, establishing a Fire Facilities Impact Fee for all new residential, commercial and business park/light industrial uses. Executive Summary: In the early 1981, the City established a Fire Facilities fee at $100 per residential units and $100 per one thousand square feet of non-residential construction for purpose of fire protection sites, facilities and equipment required by the demand for services from new developments in the city. The City has been and continues to experience significant development activity, which will require the Fire department to improve on existing facilities and construct a new fire facility and purchase new fire equipment. In March 2006, the City Council selected a site to place a new fire station at Gerald Ford and Frank Sinatra east of Cook Street. In the attached, City of Palm Desert Fire Facilities Impact Fee Nexus Study, the nature of both existing and future fire facilities conditions created by commercial and residential development is analyzed pursuant to the requirement of Government Code Section 66000 (The Mitigation Fee Act). Based on the growth of the North half of the City of Palm Desert and the five minute response time of the Fire Department will require a new fire station of which we can only collect the portion attributable to the new development around the station. The revised fee would generate around $3.4 million and the City would pay for the remaining amount of $5.5 million. The study concludes that without financial assistance the City would not be able to adequately address the growing demand for fire services in the north half of the City. The Mitigation Fee Act allows the City to assess a fee on developments identified in a nexus study to help fund facility needs generated by those uses. Based on the costs of a new facility, the projected composition of future residential and commercial developments and their respective impact on fire facilities needs; the following fees are recommended: • $688.46 per low density residential dwelling unit; • $296.59 per medium density residential dwelling unit; • $176.83 per high density residential dwelling unit; • $0.22 per square foot for commercial development; • $0.20 per square foot for business park/light industrial uses; • Mixed use projects shall be assessed a blended rate based on the anticipated uses. Fees will be collected for all residential and non-residential uses at issuance of building permits. Fees will be used to fund a new fire facilities and expansion or improvements to existing facilities. Submitted By: Paul S. Gibson Director of Finance/City Treasurer Carlos Ortega, ity Man RESOLUTION NO.06-72 A RESOLUTION OF THE CITY OF PALM DESERT, CALIFORNIA, APPROVING A FIRE FACILITIES IMPACT NEXUS STUDY AND ADOPTING FIRE FACILITIES IMPACT MITIGATION FEES. WHEREAS, since its incorporation, the City has been and continues to experience significant development activity in the form of applications and proposals for new residential, commercial, and industrial land development within the City; and WHEREAS, the proposed new residential, commercial, and industrial development within the City will generate a deficiency in fire facilities, and the City is responsible for maintaining an appropriate level of service to the present and future citizens of Palm Desert; and WHEREAS, the City's existing fire facilities are inadequate to handle current and future demand and it is essential to both improve existing facilities, as well as construct a new facility in order to meet the projected increase in demand for fire services; and WHEREAS, the continued and cumulative development of the City, with the consequent increase in population and demand for the use of fire facilities, and the need cannot be met and financed from ordinary City revenues or the existing fire facilities fee; and WHEREAS, the City Council has reviewed a Fire Facilities Impact Fee Nexus Study which sets forth the reasonable relationship between the need for additional fire facilities and residential and nonresidential development, establishes a nexus between certain fees and the cost of fire facilities needed to serve such development, all in conformance with the requirements of The Mitigation Fee Act, California Government Code Section 600 et seq.; and WHEREAS, the City Council of the City of Palm Desert did hold a duly noticed public hearing on May 25, 2006, to consider the Fire Facilities Impact Mitigation Fee. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Palm Desert, California, DOES HEREBY DETERMINE, ORDER AND RESOLVE, as follows: SECTION 1. The City Council hereby adopts the Fire Facilities Impact Mitigation Fee amounts set forth below: • $688.46 per low density residential dwelling unit; • $296.59 per medium density residential dwelling unit; • $176.83 per high density residential dwelling unit; Resolution No. 06-72 • $0.22 per square foot for commercial development; • $0.20 per square foot for business park/light industrial uses; • Mixed use projects shall be assessed a blended rate based on the anticipated uses. SECTION 2. Unless the City Council adopts a resolution setting forth different fee amounts, these fees shall be automatically updated pursuant to Section 3.45.030.0 of the Palm Desert Municipal Code. PASSED, APPROVED AND ADOPTED at the regular meeting of the Palm Desert City Council held on this day of May 2006, by the following vote:: AYES: NOES: ABSENT: ABSTAIN: JIM FERGUSON, MAYOR ATTEST: RACHELLE D. KLASSEN, City Clerk City of Palm Desert, California ORDINANCE NO. 1120 AN ORDINANCE OF THE PALM DESERT CITY COUNCIL UPDATING THE FIRE FACILITY IMPACT FEE APPLICABLE TO NEW COMMERCIAL, RESIDENTIAL, AND INDUSTRIAL DEVELOPMENT WITHIN FIRE SERVICE AREA NO. 71 WHEREAS, the City of Palm Desert was incorporated in 1973; and WHEREAS, since its incorporation, the City has been and continues to experience significant development activity in the form of applications and proposals for new residential, commercial, and industrial land development within the City; and WHEREAS, the proposed new residential, commercial, and industrial development within the City will generate a deficiency in fire facilities, and the City is responsible for maintaining an appropriate level of service to the present and future citizens of Palm Desert; and WHEREAS, the City's existing fire facilities are inadequate to handle current and future demand and it is essential to both improve existing facilities, as well as construct a new facility in order to meet the projected increase in demand for fire services; and WHEREAS, the continued and cumulative development of the City, with the consequent increase in population and demand for the use of fire facilities, and the need cannot be met and financed from ordinary City revenues; WHEREAS, the most practical and equitable method of paying for such needed facilities is to impose a fee upon new development within Fire Service Area 71 and the payment of such a fee enables the City to fund the fire facilities improvement program, thereby providing such facilities as they are required and demanded; that when a development pays the Development Impact Fee established by this policy, the City Council will be able to find that all necessary fire services will be available concurrent with the need and, in the event such finding cannot be made, the City Council will be required to disapprove the development as being inconsistent with the General Plan; and WHEREAS, in 1989, the California Statute took effect which governs the establishment, increase, and imposition of fees levied by local agencies as a condition of development project approval "for the purpose of defraying all or a portion of the cost of public facilities related to the development project;" and WHEREAS, public facilities are defined in the statute to include "public improvements, public services, and community amenities;" and WHEREAS, these requirements are found in the Mitigation Fee Act (Government Code Sections 66000 et seq.) and are commonly known as "AB 1600" requirements after the 1987 Assembly Bill in which they originated; and WHEREAS, pursuant to Section 66001, an agency establishing, increasing, or Ordinance No. 1120 imposing impact fees must make findings to: 1. Identify the purpose of the fee; 2. Identify the use of the fee; 3. Determine that there is a reasonable relationship between: a. The use of the fee and the type of development on which it is imposed; b. The need for the facility and type of development on which the fee is imposed; c. The amount of the fee and the public facility cost attributable to the development on which the fee is imposed; and WHEREAS, the adoption of this fee program and procedures as set out in this Ordinance is found to be a matter of local concern to implement in a timely manner; and NOW, THEREFORE, the Palm Desert City Council does hereby find, determine and ordain as follows: Section 1. The report entitled "Fire Protection Impact Fee Study" ("Fee Study") dated May _, 2006 accurately states the City's need of and lack of ability to provide for the described the facilities and services to serve new development in the Fire Service Area, as defined in the Fee Study. The Fee Study shows that there is a reasonable relationship between the use of the fee and the projected types of development; the need for the new Fire Station and appropriate upgrades to existing facilities by the projected types of development pursuant to the City's General Plan; and the amount of the fee and the proportionate facility cost related to the development. Section 2. As set forth in detail in the Fee Study, in order to allow development to proceed in an orderly manner, while ensuring that all new development is consistent with the General Plan, it is necessary and appropriate to approve the following Development Impact Fee to be imposed upon new development in the Fire Service Area, as defined in the Fee Study. Said fee will assist the City in funding the construction of the new Fire Station as needed. Section 3. As described in the Fee Study, the Mitigation Fee Act contains requirements for establishing, increasing, and imposing impact fees. Said fee must relate to the effect created by development, and may not exceed the reasonable cost of providing the public service. The Fee Study exhibits the relationship between the overall cost of providing such a service and the proposed fee. Section 4. Prior to the approval of any building permit, the applicant shall pay or agree to pay a Development Impact Fee in the following amount for the type of development: a. Commercial (all types) — $0.22 per square foot b. Industrial/Office Park — $0.20 per square foot c. Residential — Low Density: $688 per unit Ordinance No. 1120 d. Residential — Medium Density: $297 per unit e. Residential — High Density: $177 per unit Section 5. All proceeds from fees collected pursuant to the Development Impact Fee Policy shall be paid into the fire facility fund to be established by the City. Said fund or funds shall be used only for the purpose of acquiring, building, building, improving, and expanding the Fire Facilities analyzed in the Fee Study. Designation of expenditures of funds available from the fire facility fund shall be made by the City Council in the context of approval of the City's annual operating and capital improvements budget or at such other time as the City Council may direct. Section 6. Excluded from the fees imposed by policy are the following: a. Any person when imposition of such fee upon that person would be in violation of the constitution and laws of the United States or the State of California. b. The construction of any facility by the City of Palm Desert, the United States, or any department or agency thereof or by the State of California or any department, agency, or political subdivision thereof. Section 7. The City hereby determines that the Development Impact Fee is not intended to be the exclusive method of construction and upgrade of fire facilities and the City will consider alternative proposals to provide needed infrastructure to particular development and, to the extent such alternative proposal is discretionary approved by the City Council, the developer shall receive a fair and equitable credit against payment of the Impact Fee. Any developer seeking alternative methods of installation shall submit such proposal to the City at the time of submittal of an application for development. Section 8. If any section, subsection, sentence, clause or phase of this Ordinance is for any reason held to be invalid, such holding or holdings shall not affect the validity of the remaining portions of this Ordinance. The City Council declares that it would have passed this Ordinance and each section, subsection, sentence, clause and phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phases be declared invalid. In determining the amount of the Impact Fee, the City Council has been guided by the Fee Study mentioned in paragraph one hereof. In the event any category of such fee shall be declared invalid, such determination shall not affect the validity of any other category. The City Council further finds, declares, and ordains that the Impact Fee on all remaining valid fee categories shall be increased, however they will not be so increased over and above the amount recommended by said report for each category. Section 9. The Community Development Director shall be responsible for the administration and enforcement of this policy. The Community Development Director's decision may be appealed to the City Council whose decision shall be final and Ordinance No. 1120 conclusive. The City Manager is hereby authorized to execute necessary agreements for the administration of this policy. Adopted at the regular meeting of the Palm Desert Redevelopment Agency on the day of May 2006, by the following vote: Ayes: Noes: Absent: Abstain: Chairperson of the Palm Desert Redevelopment Agency ATTEST: Secretary of the Agency City of Palm Desert Lea (:-lei ''LOA' I May 2006 Palm Desert RedevelopmentAgency 73-510 Fred Waring Drive Palm Desert CA92260-2578 nG R S G IGENT COMMUNITY DEVELOPMENT INTELL ROSENOW SPEVACEK GROUP INC. 309 West 4th Street Santa Ana, California 92701-4502 Phone: (714) 541-4585 Fax: (714) 541-1175 E-Mail: info5webrsq.corn City of Palm Desert Fire Protection Impact Fee Study Purposeof the Study ........................................................................................... 1 MitigationFee Act ................................................................................................ 1 City of Palm Desert Fire Protection Services ....................................................... 3 ExistingFire Stations ................................................................................. 3 Proposed Fire Facilities Improvements ...................................................... 4 Proposed Fire Service Area ....................................................................... 4 Methodology........................................................................................................ 7 Future and Existing Development within the Fire Service Area .................. 7 Facility Cost to Serve Growth ..................................................................... 8 ProjectedRevenue .................................................................................. 10 Implementation.................................................................................................. 12 CouncilAdoption ................................................................................................ 12 Impositionof Fees ............................................................................................. 12 Collectionof Fees .............................................................................................. 14 Exceptions, Reductions, and Waivers ................................................................ 15 Credit for Improvements Provided by Developers .............................................. 15 Credit for Existing Development ......................................................................... 16 Earmarking of Fee Revenue .............................................................................. 16 Reporting........................................................................................................... 16 Costsof Implementation .................................................................................... 17 Annual Update of Capital Improvement Plan ..................................................... 17 The City of Palm Desert ("City") has retained the Rosenow Spevacek Group Inc. ("RSG") to prepare a Fire Protection Impact Fee Study ("Study") to analyze the direct and cumulative impacts of development on the City's future fire facilities, and to calculate appropriate fees based on that analysis. This Study documents the data, methodology, and results of the fire protection impact fee ("Impact Fee") to mitigate the fiscal burden of new development on the quality of services provided to the community. The methods used to calculate the Impact Fee in this Study are intended to satisfy all legal requirements pursuant to the Mitigation Fee Act (Government Code 66000 et seq.). Because the passage of Proposition 13 in 1978 resulted in a decline in revenues, local governments have increasingly relied on impact fees to mitigate the effects on public services created by new development. In response to these changes in spending behavior, the Legislature passed Assembly Bill 1600 ("Mitigation Fee Act") in 1987, stipulating that a local agency may establish development impact fees for the purpose of defraying all or a portion of the cost of public facilibes related to development projects. Prior to the implementation of the California Mitigation Fee Act, local government agencies had been collecting impact fees for many years. Impact fees, originally called exactions, were first adopted in the 1920's by cities seeking new infrastructure financing alternatives. In 1949, California courts first adopted the "reasonable relationship" test between a project's conditions of approval and development impacts. The concept of exactions expanded in the 1960's with the enactment of the Quimby Act, which authorized either the dedication of land or payment of in -lieu fees for the development of pa rks. In the past, cities have been able to subsidize new development by installing infrastructure, or by charging impact fees that did not pay for the entire cost of the infrastructure necessitated by the project. Today, because of the rising costs of land and construction, local governments find themselves unable to afford the infrastructure improvements the development will need. As a result, cities are requiring developers to carry the burden of these costs, and in turn, the consumer. The Mitigation Fee Act contains requirements for establishing, increasing, and imposing impact fees. Since a fee is voluntary, it must be reasonably related to the cost of providing the service by the local agency. If a development impact fee does not relate to the effect created by development, or exceeds the reasonable cost of providing the public service, then the fee may be declared a special tax, and must then be subject to a two4hirds voter approval. The Mitigation Fee Act also contains provisions that govern the collection and expenditure of fees, and require annual reports and periodic re- evaluation of impact fee programs which will be detailed in the Implementation Section of this Study. CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE I Required findings pursuant to the Mitigation Fee Act in any action establishing, increasing, or imposing a fee as a condition of approval of a development project by a local agency on or after January 1, 1989, include the following: 1. Identify the purpose of the fee; 2. Identify the use of the fee; and 3. Determine that there is a reasonable relationship between: a. The use of the fee and the development type on which it is imposed; b. The need for the facility and the type of development on which the fee is imposed; and c. The amount of the fee and the facility cost aftdbutable to the development project. On August 26, 2004, the Palm Desert City Council passed Ordinance No. 1073, authorizing the collection of a development impact fee for the provision of fire services. The fire protection fund has been established for providing fire protection sites, facilities, and equipment required by the demand for services from new developments in the City. The current fee for the fire protection fund is $100 per dwelling unit, and $100 per 1,000 square feet of non-residential development. The goal of this Study is to update the applicability of this Impact Fee, as additional fire services are required by the new development occurring within the Fire Service Area. Currently, the Riverside County Fire Department maintains a five-minute response time standard within the City to any fire/medical emergency, and holds a Class 3 Insurance Services Offices ("ISO") Fire Insurance Rating. The five minute response time is a nationally recognized standard per the National Fire Protection Association. According to the City's General Plan, a major goal of emergency vehicles is to maintain a five-minute response time over 95% for all priodty one engagements. While this goal is higher than the National Fire Protection Association standard of 90% within five minutes, ISO considers this element as part of their criteria in the evaluation of fire companies, furthering the need for decreased response times. With significant growth expected throughout the northern portion of the City, the fire facilities, as they are currently situated, will find it increasingly difficult to maintain the five-minute response time to priodty one engagements. Continued growth and density forecasts indicate a steady increase in the volume of calls for service, thereby adversely affecting fire service response time. It has been determined that an appropriate solution to maintain the current five minute response standard would be to allocate additional resources in the direction of the City's forecasted growth. This area of the City, the proposed Fire Service Area, is demonstrated in Map 1, located on page 6 of this Study. Fire facilities improvements are needed to mitigate the impacts of expected development in the City, prevent the deterioration of public services, maintain response time goals, and ensure the provision of efficient, high quality fire protection for all types of development and socio-economic segments of the community. In doing so, the City will be able to effectively and efficiently serve the community, and positively respond to the current needs as well as the anticipated growth of the community. New development will CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE 2 benefit greatly from a new fire facility, and the burden of such new development will be mitigated in part by the payment of the Impact Fee. City of Palm Desert Fire Protection SerAces Fire protection services are provided to the City of Palm Desert by the Riverside County Fire Department, which contracts with the California Department of Forestry. The service contract for fire protection is entered into jointly by the member jurisdictions of the Cove Communities Service Commission, which includes the cities of Palm Desert, Rancho Mirage, and Indian Wells. Each city has access to the services provided by fire stations in the member cities, creating a Regional Fire Protection Program. This allows fire stations to actively support one another regardless of jurisdictional boundaries. When an emergency call is received, the station that is physically closest to the emergency will respond, even if the emergency is located outside the station's official jurisdiction. This provides the communities with the most effective and efficient method of emergency response, and allows for the shared use of specialized equipment and personnel between neighboring communities. The cost of protection to each city is based on the city's total assessed value. The City of Palm Desert funds it share of fire protection costs using revenues collected under the Proposition A Fire Tax, Fire Fees, and transfers from the General Fund. Existing Fire Stations The Riverside County Fire Department maintains three fire stations within the incorporated boundaries of the City of Palm Desert. Four stations also exist within its sphere of influence and expanded General Plan Planning Area. Station No. 33 is located on Town Center Way, just south of Fred Waring Drive. Station No. 33 is staffed by a total of twenty-four crewmembers, including the Battalion Chief Officer. Equipment at Station No. 33 includes one engine staffed by three people per day; one ambulance staffed by two people per day; one company truck staffed by four people per day; and one reserve truck, which serves as a back-up vehicle when other equipment is unavailable. Station No. 67 is located on Mesa View Drive and is staffed by twelve crewmembers, five of which are on duty each day. Equipment at Station No. 67 includes one engine staffed by three people per day and one ambulance that is staffed by two people per day. Station No. 71 is located at the southwest comer of Portola Avenue and Country Club Drive. This station serves as the administrative hub for the Palm Desert Volunteer Fire Company, which currently includes twelve volunteers, but may include up to twenty-five. The station is staffed by a total of twelve crewmembers, five of which are on duty each day. Equipment in this station includes one engine, which is staffed by three people per day; one ambulance staffed by two people per day; one reserve engine that functions as a back-up unit; and one Breathing Support Unit that is staffed by volunteers. Station 71 will be renovated after the completion of a new fire facility to include improvements to the living and office areas, apparatus bay, and exhaust removal system. CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE 3 Proposed Fire Facilities Improvements During the FY 2005-06 budget discussions, the Palm Desert City Council directed staff to explore the option of constructing a new fire station in the northern portion of the City, in order to meet the needs of the development of new commercial, residential, and resort properties, as well as the expanding California State University. County Fire officials and staff initiated discussions on a suitable site for the proposed station, as there are various Redevelopment Agency properties in this area. Constructing a new station in the City is pertinent for emergency medical services because of the various planned developments in the area. Based on the Emergency Medical Service ("EMS") best response time standards of 3-6 minutes for optimal patient survivability, this new station would efficiently serve the community in this region by maximizing rescue potential, increasing the ability to combat fires, and decreasing property damage. The following table lists existing fire stations, future fire stations, and fire facilities improvements planned for the City. Land acquisition cost is based on the current market rate of vacant property in Palm Desert as of the time of this Study. Facility construction costs were provided by the County of Riverside based on recent fire stations built throughout the County. TABLE I CITY OF PALM DESERT EXISTING AND FUTURE FIRE FACILITIES AND EQUIPMENT Vehicles and Station Building Valuell Land Value/2 Apparatus 13 Total Value Fire Station 33 $887,080 $353,808 $599,272 $1,840,160 Fire Station 67 $583,707 $665,597 $599,272 $1,848,576 Fire Station 71(Current) $708,153 $485,873 $680,500 $1,874,526 New Fire Station $8,000,000 $168,000 $630,000 $8,798,000 Total $10,178,940 $1,673,278 $2,509,044 $14,361,262 1/ Building cost based on historical building cost. 2/ Land cost based on current market value of vacant land in Palm Desert. 3/ Vehicle and apparatus costs were derived from a total equipment list for the three existing stations. Proposed Fire Service Area According to GIS data, the proposed Fire Service Area encompasses approximately 4,076 acres of commercial, residential, hotel and resort, office, public, and undeveloped uses. The Fire Service Area is generally bounded by the City limits and Interstate 10 to the north, El Dorado Drive to the east, Country Club Drive to the south, and Monterey Avenue to the west. The boundaries of the Fire Service Area are illustrated in Map 2, located on page 11 of this Study. According to the General Plan and Land Use Element (2004), most of the vacant land within the City's limits available for coordinated master planning and development is limited primarily to the northern portions of the City, particulady in the University Park Planning Area. University Park extends south of the US Interstate- 1 O/Union Pacific CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE 4 Railroad corridor and is bounded on the east by Cook Street, on the west by Monterey Avenue and on the south by Frank Sinatra Drive. Major influences on future development include the construction of the Palm Desert campus of the California State University, residential resort development, and regional commercial development in the vicinity of the 1-10. The General Plan and Land Use Element further indicates that development of the new California State University campus on Cook Street and a branch of the University of California Riverside Gary Anderson Graduate School of Business, will act as important catalysts for other land development ventures in the planning area. Important opportunities for commercial synergies are anticipated with the buildout of the University Campus and facilities. A full range of commercial development, including entertainment, dining, nightclubs, and other retail are expected along the Cook Street corridor, and will provide the City with another dynamic distdct supported by local residential, tourist and resort development, and the university campuses. This Study will consider the direct and cumulative impacts of new development within the proposed Fire Service Area, on the City's Fire Facilities and calculate the appropdate Impact Fee for the fair share cost to new development. The following section details the methodology utilized to create the appropdate Impact Fee for new development in the construction of the new fire facility. CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE 5 City of Palm Desert - Proposed Fire Service Area Rancho Mirage =-t,e Statie-n Nz 71 Couq-y Mb &�*f Town Cemer *NW�' zrft,ohring 0-iVe I- Propowd New Ftr* S*a*,or- Fr3.nk S natra D, W-1 %Plwm, -- I r I rKI. A, 'T.Nsb i ir r. Indian Wells 01r No. 57 j-i ;;Lu, 4! Drive IMPt000sed Fire -Service Area Map I CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE 6 This section of the Study calculates the Impact Fee for the new fire department facilities and equipment. In order to calculate the Impact Fee, it is essential to specify formulas that quantify the relationship between development and the need for facilities. In these formulas, demand variables are used to represent the effect of various types of development on the need for fire services. In the case of providing fire services, the most important factor in maintaining the appropriate level of service for the Fire Service Area is the potential development of the area served. If all future developed acreage was included in the cost allocation formula, a portion of the cost for fire station facilities would be allocated to parks, schools, and other public facilities. However, since those public facilities will be constructed to serve future private development, their fire protection needs are also attributable indirectly to future private development. To reflect this assumption, the future acreage devoted to those uses will not be included in the cost allocation of fire facilities. This approach is utilized in this Study because fire services are supported by the entire system of facilities and equipment, and it is not possible to identify certain facilities or apparatus that serve future development as opposed to existing development. Using this method ensures that both existing and future development share in the capital costs for fire protection in proportion to the demand they create. The Impact Fee assessed to new development within the proposed Fire Service Area shall be used only to finance the fair share cost of the Fire facilities as identified by City Staff. These costs include land, construction, fire apparatus and equipment, and other related capital improvements.' According to California Government Code 65913.8, this fee may not include the maintenance or operation of an improvement when the fee is required as a condition of approval of a development project. Future and Existing Development within the Fire Service Area The first step in calculating the Impact Fee is determining the existing development versus the amount of new development anticipated in the Fire Service Area. Utilizing estimates from City Staff, Table 2 summarizes existing developed land within the Fire Service Area. According to City Staff estimates, there are 1,869 acres of developed commercial, residential, and industrial land within the 4,076 acre proposed area, with an 2 additional 1,534 acres of development expected in the future. In addition, there are 883 acres of open space and public facilities within the area. Map 2 on page I I displays the developed acreage within the Fire Service Area per the General Plan and Land Use Element (2004). ' Estimates for the new 11,000 square foot facility include a dual bedroom design and exercise room, individual unisex bathrooms with showers, administrative offices, four bays with a climate controlled storage building, exhaust evacuation system, commercially equipped kitchen, oversized hose rack, and covered parking. 2 These estimates do not include roads. CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE 7 TABLE 2 CITY OF PALM DESERT - PROPOSED FIRE SERVICE AREA EXISTING LAND USE AND DEVELOPMENT Development Developed Land Use Units Units Acreage Commercial Community square feet 259,182 24 Office Professional square feet 96,921 9 Regional square feet 1,024,749 94 Resort square feet 884,790 145 Vacant square feet 6,395,048 610 Subtotal Commercial 8,660,690 882 Industrial Inclustrial/Business Park square feet 391,496 36 Vacant square feet 2,069,644 190 Subtotal Industrial 2,461,140 226 Residential Low -Density dwelling units 4,146 1,325 Medium -Density dwelling units 127 26 High -Density dwelling units 0 0 Vacant dwelling units 0 714 Subtotal Residential 4,273 2,065 Mixed Use acreage 0 20 Open Space Parks acreage 0 571 Private acreage 0 79 Public Reserves acreage 0 19 Subtotal Open Space 669 Public Facilities Schools acreage 0 13 University acreage 0 192 Quasi -Public Facilities acreage 0 9 Subtotal Public Facilities 214 TOTAL ACREAGE 4,076 Facility Cost to Serve Growth In order to determine the appropriate fee to charge to new development, the total potential future build out estimates were obtained from City Staff. According to this data, approximately 62.3% of the total acreage, or 2,752 acres, is either developed or open space, as demonstrated in Table 4. Because the Impact Fee must be based on the total demand created by the new development, 37.7% of the eligible fire protection facility costs will be assigned to future development (1,534 acres) in this analySiS.3 By utilizing this method, the total cost of the new fire station ($8,798,000) and Fire Station 71 renovation ($150,000) were divided by the total demand created by new development to calculate a cost per acre of demand, as demonstrated in Table 3. This table shows that 3 This does not include the development of the California State University, San Bernardino campus. CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE 8 37.7% of the total cost of the fire facilities improvements, or $3.37 million, will be attributed to the 1,534 acres of new development, at a cost of $2,195 per net acre. TABLE 3 CITY OF PALM DESERT - PROPOSED FIRE SERVICE AREA FIRE FACILITY COST PER ACRE Construction Fire Service Cost Per Net Cost Area Acres Acre Fire Station 71 Renovation $150,000 4,076 $37 New Fire Station $8,798,000 4,076 $2,158 Subtotal $8,948,000 4,076 $2,195 Service Costs Attributable to New Development $3,367,574 1,534 $2,195 Subsequently, this cost per net acre is multiplied by the total acres per unit of new development in each land use category, in order to arrive at a fee per unit of new development, as demonstrated in Table 4. All commercial development, including community, office professional, regional, resort, and mixed -uses, have been grouped together in one category. The recommended fee per square foot of commercial development is $.22, and $.20 per square foot for industrial/business park development. For residential development, these fees range from $176.83 for each unit of high density residential development, to $688.46 per each unit of low density housing developed. Although the development of the California State University, San Bernardino campus will generate significant demand for fire services, it will not be charged a development impact fee, due to its public nature. Since inflation is not included within these calculations, the City may wish to identify appropriate inflation indexes in the implementing ordinance and resolution and allow an automatic inflation adjustment to the Impact Fee annually. TABLE 4 CITY OF PALM DESERT - PROPOSED FIRE SERVICE AREA FIRE IMPACT FEE PER LANDUSE CATEGORY Not Yet Not Yet Acres Per Development Developed Developed Unit of Cost Per Fee Per Land Use Units Units Acres Development Acre Unit Commercial square feet 6,395,048 630 0.0000985 $2,195 $0.22 Industrial square feet 2,069,644 190 0.0000918 $2,195 $0.20 Residential Low Density dwelling units 507 159 0.3136095 $2,195 $688.46 Medium Density dwelling units 2,376 321 0.1351010 $2,195 $296.59 High Density dwelling units 2,905 234 0.0805508 $2,195 $176.83 TOTAL 1,534 $2,195 CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE 9 Projected Revenue Table 5 demonstrates the total revenue to be expected from the implementation of the Impact Fee, according to projected build -out estimates given by the City. Section 66005 of the Government Code stipulates that the Impact Fee shall not exceed the estimated reasonable cost of providing the service or facility for which the fee is imposed. The City of Palm Desert can expect to receive approximately $3.37 million from the implementation of an Impact Fee to assist in the funding of the fire facilities upgrades. This method implicitly assumes that the entire new service demand of the facilities will 4 be absorbed by the new development. TABLE5 CITY OF PALM DESERT - PROPOSED FIRE SERVICE AREA PROJECTED IMPACT FEE REVENUE FROM FUTURE DEVELOPMENT Development Fee per Unit of Units to Be Impact Fee Land Use Units Development Developed Revenue Commercial square feet $0.22 6,395,048 $1,383,032 Industrial square feet $0.20 2,069,644 $417,105 Residential Low Density dwelling units $688.46 507 $349,051 Medium Density dwelling units $296.59 2,376 $704,688 High Density dwelling units $176.83 2,905 $513,698 TOTAL $3,367,574 4 This does not include open space and public facilities. CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE 10 City of Palm Desert - Fire Service Area - Existing Land Use Map 2, 0 O�2 04 0.8MIeS lid IndustriallOffice Commercial Single Family Residential La Tuneshare Estate Vacant Mobile Home Residential - Multi -Family CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE 11 CoLmcill Adoption On August 26, 2004, City Council adopted Ordinance No. 1073 for the collection of fire facility fees for new development. Should City Council choose to adopt the proposed fee schedule and service area to fund future fire facilities, the City must comply with California Government Code Sections 66016 through 66018 by: Sending a Notice of Public Hearing at least 14 days prior to the hearing to any party that has submitted a written request for such a notice. Have this Study and supporting documentation available for review by the public at least 10 days prior to the hearing; 9 Hold a public hearing to consider adoption of the Impact Fee schedule; • Adopt an implementing resolution to establish the City's authority to impose the proposed fee and automatically adjust the fee annually for inflation, and adopt a resolution to set the fee based on the proposed fee schedule; • Begin collecting the fee no sooner than 60 days following adoption of the ordinance and resolution. • Create a separate Fire Facilities Fund for revenues collected by the implementation of the Impact Fee. In addition to the obligations listed above, if the City should decide to implement the proposed Impact Fee, it is recommended that the Impact Fee would be collected at the time of building permit issuance. The City should also identify other funding sources to complement impact fee revenues to fully fund planned facilities. Government Code 66020 requires that the City, at the time it imposes an impact fee provide written statement of the amount of the fee and a written notice of a 90-day period during which the imposition of the fee can be protested. Failure to protest imposition of the fee during that period may deprive the fee payer of the right to subsequent legal challenge. Government Code 66022 provides a separate procedure for challenging the establishment of an impact fee. Such challenges must be filed within 120 days of the enactment. Imposition of Fees Pursuant to the Mitigation Fee Act, when the City imposes an impact fee upon a specified development project, it must make findings to: Identify the purpose of the fee; 2. Identify the use of the fee; and 3. Determine that there is a reasonable relationship between: a. The use of the fee and the development type on which it is imposed; b. The need for the facility and the type of development on which the fee is imposed;and CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE 12 c. The amount of the fee and the facility cost attributable to the development project. When considering the creation of an ordinance and resolution for the implementation of the Impact Fee developed in this Study, the findings could be stated as follows: The report entitled "Fire Protection Impact Fee Study" ("Fee Study") dated May _, 2006 accurately states the City's need of and lack of ability to provide for the described the facilities and services to serve new development in the Fire Service Area, as defined in the Fee Study. The Fee Study shows that there is a reasonable relationship between the use of the fee and the projected types of development; the need for the new Fire Station and appropriate upgrades to existing facilities by the projected types of development pursuant to the City's General Plan; and the amount of the fee and the proportionate facility cost related to the development. 2. As set forth in detail in the Fee Study, in order to allow development to proceed in an orderly manner, while ensuring that all new development is consistent with the General Plan, it is necessary and appropriate to approve the following Development Impact Fee to be imposed upon new development in the Fire Service Area, as defined in the Fee Study. Said fee will assist the City in funding the construction of the new Fire Station as needed. 3. MiticIation Fee Act. As described in the Fee Study, the Mitigation Fee Act contains requirements for establishing, increasing, and imposing impact fees. Said fee must relate to the effect created by development, and may not exceed the reasonable cost of providing the public service. The Fee Study exhibits the relationship between the overall cost of providing such a service and the proposed fee. 4. Develooment Imoact Fee Policv Amount. Prior to the approval of any building permit, the applicant shall pay or agree to pay a Development Impact Fee in the following amount for the type of development: a. Commercial (all types) — $0.22 per square foot b. Industrial/Office Park — $0.20 per square foot c. Residential — Low Density: $688 per unit d. Residential — Medium Density: $297 per unit e. Residential — High Density: $177 per unit 5. Use of Funds Caoital Outlay. All proceeds from fees collected pursuant to the Development Impact Fee Policy shall be paid into the established fire facility fund to be established by the City. Said fund or funds shall be used only for the purpose of acquiring, building, building, improving, and expanding the Fire Facilities analyzed in the Fee Study. Designation of expenditures of funds available from the fire facility fund shall be made by the City Council in the context of approval of the City's annual operating and capital improvements budget of at such other time as the City Council may direct. CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE 13 6. Exclusions and Exceotions. Excluded from the fees imposed by policy are the following: a. Any person when imposition of such fee upon that person would be in violation of the constitution and laws of the United States or the State of California. b. The construction of any facility by the City of Palm Desert, the United States, or any department or agency thereof or by the State of California or any department, agency, or political subdivision thereof. 7. Other Methods of Providinq Infrastructure. The City hereby determines that the Development Impact Fee is not intended to be the exclusive method of construction and upgrade of fire facilities and the City will consider alternative proposals to provide needed infrastructure to particular development and, to the extent such alternative proposal is discretionary approved by the City Council, the developer shall receive a fair and equitable credit against payment of the Impact Fee. Any developer seeking alternative methods of installation shall submit such proposal to the City at the time of submittal of an application for development. 8. Validitv and Severance. If any section, subsection, sentence, clause or phase of this resolution is for any reason held to be invalid, such holding or holdings shall not affect the validity of the remaining portions of this Resolution. The City Council declares that it would have passed this Resolution and each section, subsection, sentence, clause and phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phases be declared invalid. In determining the amount of the Impact Fee, the City Council has been guided by the Fee Study mentioned in paragraph one hereof. In the event any category of such fee shall be declared invalid, such determination shall not affect the validity of any other category. The City Council further finds, declares, and determines that the Impact Fee on all remaining valid fee categories shall be increased by the amounts of the remaining valid fee categories shall not be so increased over and above the amount recommended by said report for each category. 9. Administration and Enforcement. The Community Development Director shall be responsible for the administration and enforcement of this policy. His decision may be appealed to the City Council whose decision shall be final. The City Manager is hereby authorized to execute necessary agreements for the administration of this policy. Collection of Fees Section 66607 provides that a local agency shall not require payment of fees by developers of residential development for the construction of public improvements or facilities shall not require the payment of those fees or charges, notwithstanding any other provision of law, until the date of the final inspection, or the date the certificate of occupancy is issued, which ever CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE 14 occurs first. However, "utility services fees" may be collected upon application for utility service. If the residential development contains more than one dwelling, the local agency may determine whether the fees or charges shall be paid on a pro rata basis for each dwelling when it receives its final inspection or certificate of occupancy, whichever occurs first; on a pro rata basis when a certain percentage of the dwellings have received their final inspection or certificate of occupancy, whichever occurs first; or on a lump -sum basis when the first dwelling in the development receives its final inspection or certificate of occupancy, which ever occurs first. According to Section 66607, a local agency may require the payment of those fees or charges prior to the time of inspection if, the local agency determines that the fees or charges will be collected for public improvements or facilities for which an account has been established and funds appropriated and for which the local agency has adopted a proposed construction schedule or plan prior to final inspection or issuance of the certificate of occupancy or the fees or charges are to reimburse the local agency for expenditures previously made. If any fee or charge is not fully paid prior to issuance of a building permit for construction of any portion of the residential development encumbered thereby, the local agency issuing the building permit may require the property owner, or lessee if the lessee's interest appears of record, as a condition of issuance of the building permit, to execute a contract to pay the fee or charge, or applicable potion thereof. If the fee or charge is prorated, if the fee or charge is pro -rated, the obligation under the contract shall be similarly prorated. Methods of complying with the requirement that a proposed construction schedule or plan be adopted can include a capital improvements plan or similar document. The local agency shall expend a fee for public improvements, as accounted for pursuant to Section 66006, solely and exclusively for the purpose for which the fee was collected. The fee shall not be levied, collected, or imposed for general revenue purposes. Exceptions, Reductions, and Waivers If a development project is found to have no impact on facilities for which impact fees are charges, the project is exempted from the fees. If a project has characteristics that indicate its impacts on a particular public facility or infrastructure system will be significantly and smaller impact used to calculate impact fees in this Study, the fees should be reduced accordingly. The City may desire to voluntarily waive or reduce fees that would otherwise apply to a project to promote goals such as affordable housing or economic development. Such waivers or reductions may not result in increased costs to other development projects, and are allowable only if the City offsets the lost revenue from other fund sources. Credit for Improvernents Provided by Developers If the City requires a developer to construct facilities or improvements for which impact fees have been, or will be, charged, the impact fee imposed on that development project for that type of facility must be adjusted to reflect a credit for the cost of the facilities or improvements constructed by the developer. If the reimbursement would exceed the amount of the fee to be paid by the development for that type of facility, the City may seek to negotiate a reimbursement agreement with the developer. CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE 15 In the event a developer offers to dedicate land, buildings, or other valuable consideration in lieu of paying impact fees, the City has the discretion to accept or reject such offers, and may negotiate the terms under which such an offer would be accepted. Credit for Existing Development If a project involves replacement, redevelopment or intensification of previously existing development, impact fees should be applied only to the portion of the project which represents a net increase in demand for City facilities, as measured by the demand variable used in this study to calculate that particular impact fee. Since residential service demand is normally estimated on the basis of demand per dwelling units, an addition to a single family dwelling unit typically would not be subject to an impact fee if it does not increase the number of dwelling units in the structure. In any project that results in a net increase in the number of dwelling units, the added units would normally be subject to impact fees. A similar analysis can be applied to non-residential development. EarmarkMg of Fee Revenue Section 66006 mandates that fees be deposited with other fees for the improvement in a separate capital facilities account or fund in a manner to avoid any co -mingling of the fees with other revenues and funds of the local agency, except for temporary investment. Fees must be expended solely for the purpose for which they were collected. Interest earned on the fee revenues must also be placed in the capital account and used for the same purpose. Reporting For each separate account or fund established for the Fees, 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 A brief description of the type of fee in the account or fund; 2. The amount of the fee; 3. The beginning and ending balance of the account or fund; 4. The amount of the fees collected and the interest earned; 5. An 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; 6. An identification of 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; and 7. The amount of refunds made pursuant to Section 66001. CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE 16 Costs of Impilementation The ongoing cost of implementing the impact fee program is not included in the fees themselves. Implementation costs would include the staff time involved in applying the fees to specific projects, accounting for the fee revenues and expenditures, preparing required annual reports, updating the fees, and preparing forms and public information handouts. RSG recommends that those costs be included in user fees charged to applicants for processing development applications. Anmiall Update of Capital Improvement Plan Section 66002 provides that as a local agency adopts a capital improvement plan to identify the use of impact fees, that plan must be adopted and annually updated by resolution of the governing body at a notices public hearing. A document other than a capital improvement plan can be the public document on which the fees are based, if it indicates the approximate location, size, time of availability, and estimates of cost for all facilities or improvements stating the improvements and cost, and is approved by the City Council. CITY OF PALM DESERT MAY 2006 FIRE PROTECTION IMPACT FEE STUDY PAGE 17 NOTICE OF PUBLIC HEARING REGARDING FIRE FACILITIES FEE Notice is hereby given by the CITY OF PALM DESERT that a PUBLIC HEARING on the following item will be held before the PALM DESERT CITY COUNCIL AT THE CIVIC CENTER COUNCIL CHAMBERS located at 73-510 Fred Waring Drive, Palm Desert, California on Thursday, May 25, 2006 at 4:00 p.m. SUBJECT: A Public Hearing to consider the adoption of a fire facilities fee for residential and non-residential uses. Based upon a Fire Facilities Impact Fee Nexus Study, the proposed fire facilities fee would be as follows: $0.20 per square foot for business park/light industrial uses; $0.22 per square foot for commercial uses; $688 per unit for low density residential uses; $297 per unit for medium density residential uses; and $177 per unit for High density residential uses. If adopted, the fee would apply to all new development in these categories, with certain limited exceptions. ADDITIONAL INFORMATION: Pursuant to the California Government Code, please take notice as follows: If you challenge the action described in this written notice in court, you may be limited to raising only those issues you or someone else raises at the public hearing, or in written correspondence delivered to the City of Palm Desert at, or prior to, the Procedure Section 1094.5. The City of Palm Desert complies with the Americans with Disablities Act. If you require reasonable accommodations for this meeting, contact the City Clerk's Office at (760) 346-0611 ext. 481. Rachelle D. Klassen, City Clerk City of Palm Desert, California CITY OF PALM DESERT NOTICE OF PUBLIC HEARING REGARDING FIRE FACILITIES FEE Notice is hereby given by the CITY OF PALM DESERT that a PUBLIC HEARING on the following item will be held before the PALM DESERT CITY COUNCIL AT THE CIVIC CENTER COUNCIL CHAMBERS located at 73-510 Fred Waring Drive, Palm Desert, California on Thursday, May 25, 2006 at 4:00 p.m. SUBJECT: A Public Hearing to consider the adoption of a fire facilities fee for residential and non-residential uses. Based upon a Fire Facilities Impact Fee Nexus Study, the proposed fire facilities fee would be as follows: $0.20 per square foot for business park/light industrial uses; $0.22 per square foot for commercial uses; $688 per unit for low density residential uses; $297 per unit for medium density residential uses; and $177 per unit for High density residential uses. If adopted, the fee would apply to all new development in these categories, with certain limited exceptions. ADDITIONAL INFORMATION: Pursuant to the California Government Code, please take notice as follows: If you challenge the action described in this written notice in court, you may be limited to raising only those issues you or someone else raises at the public hearing, or in written correspondence delivered to the City of Palm Desert at, or prior to, the Procedure Section 1094.5. The City of Palm Desert complies with the Americans with Disablities Act. If you require reasonable accommodations for this meeting, contact the City Clerk's Office at (760) 346-0611 ext. 481. Date: May 11, 2006 RA HELLE D. KLASSEN, ITY CLERK CITY OF PALM DESERT, CALIFORNIA ciTr of P H [ M OESERI 73-510 FRED WARING DRIVE PALm DESERT, CALIFORNIA 92260-2378 TEL:76o 346—o6ii FAX: 760 340-0574 infoCa)palm-desemorg NOTICE OF PUBLIC HEARING REGARDING FIRE FACILITIES FEE NOTICE IS HEREBY GIVEN by the CITY OF PALM DESERT that a PUBLIC HEARING on the following item will be held before the PALM DESERT CITY COUNCIL AT THE CIVIC CENTER COUNCIL CHAMBER located at 73-510 Fred Waring Drive, Palm Desert, California on Thursday, May 25, 2006, at 4:00 p.m. SUBJECT: A Public Hearing to consider the adoption of a fire facilities fee for residential and non-residential uses. Based upon a Fire Facilities Impact Fee Nexus Study, the proposed fire facilities fee would be as follows: $0.20 per square foot for business park/light industrial uses; $0.22 per square foot for commercial uses; $688 per unit for low density residential uses; $297 per unit for medium density residential uses; and $177 per unit for High density residential uses. If adopted, the fee would apply to all new development in these categories, with certain limited exceptions. ADDITIONAL INFORMATION: Pursuant to the California Government Code, please take notice as follows: If you challenge the action described in this written notice in court, you may be limited to raising only those issues you or someone else raises at the public hearing, or in written correspondence delivered to the City of Palm Desert at, or prior to, the Procedure Section 1094.5. The City of Palm Desert complies with the Americans with Disabilities Act. If you require reasonable accommodations for this meeting, contact the City Clerk's Office at (760) 346-0611, ext. 304. Dated this 11 th day of May, 2006. r Rac elle D. Klassen, City Clerk City of Palm Desert, California