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HomeMy WebLinkAboutRes 08-8 and Ord 1151 Mitigation Fee for the Prsrvtn of Natural Ecosystems � �— c?��— �� !'���"�u �;��E..s.,��----.___._ " �, �.;��r,',,.;°��J��.}i� CITY OF PALM DESER �, �ry�?�o.j��j r ��`�'��Og: C��k}�:€�������� ��� e��a:����,_.�.�., PLANNING DEPARTMEN � � STAFF REPORT REQUEST: Approval of a Local Development Mitigation Fee Ordinance for Funding the Preservation of Natural Ecosystems in Accordance with the Coachella Valley Multiple Species Habitat Conservation Plan Consideration. SUBMITTED BY: Renee Schrader DATE: January 24, 2008 CONTENTS: 1. Ordinance No. 1151 of the City Council of the City of Palm Desert to Establish a Local Development Mitigation Fee for Funding the Preservation of Natural Ecosystems in Accordance with the Coachella Valley Multiple Species Habitat Conservation Plan. 2. Resolution No. 08-8 of the City of Palm Desert adopting the Local Development Mitigation Fee Schedule Applicable to New Development within the City of Palm Desert. 3. Local Development Mitigation Fee Report, dated January 15, 2007, which is also referred to as the "Nexus Study." Recommendation: Waive further reading and pass: • Ordinance No. >>5' of the City Council of the City of Palm Desert to establish a Local Development Mitigation Fee for Funding the Preservation of Natural Ecosystems in Accordance with the Coachella Valley Multiple Species Habitat Conservation Plan. • Resolution No. 08-8 of the City of Palm Desert adopting the Local Development Mitigation Fee Schedule Applicable to New Development within the City of Palm Desert. Executive Summary: Adoption of an Ordinance for the local development mitigation fee schedule applicable to new development within the City of Palm Desert would allow the City to participate in the conservation goals set forth in the Coachella Valley Multiple Species Habitat Conservation Plan/Natural Community Conservation Plan ("MSHCP"), adopted by the City Council on October 11, 2007, to implement the associated Implementing Agreement executed by the City Council on October 11, 2007, and to preserve the ability of affected property owners to make reasonable use of their land consistent with the requirements of applicable laws, which could include the National Environmental Policy Act ("NEPA"), the California Environmental Quality Act ("CEQA"), the Federal Endangered Species Act ("FESA"), the California Endangered Species Act ("CESA") and the California Natural Community Conservation Planning Act ("NCCP � Act"). City Council January 24, 2008 Approval of the Local Development Mitigation Fee Ordinance Multiple Species Habitat Conservation Plan Discussion: As a permittee under the Coachella Valley Multiple Species Habitat Conservation Plan ("MSHCP") the City must take certain actions, including approval of the MSHCP, Implementing Agreement ("IA") and CEQA Responsible Agency Findings to effectuate the Plan. The City completed these actions on October 11, 2007. Another action the Ciry must take to prepare for MSHCP implementation is approval of a Local Development Mitigation Fee (LDMF) on new development within the plan area in order to meet the conservation goals set forth in the MSHCP. The LDMF imposed on new development projects will be a primary source of funding for the habitat acquisition program under the MSHCP. The LDMF is a type of development impact fee under California Government Code Section 66000 et seq. The legal and policy basis to support the adoption by local agencies in the Coachella Valley of the LDMF is provided in the Local Development Mitigation Fee Report, the Nexus Report, dated January 15, 2007 and prepared by MuniFinancial for CVAG. A copy of this report is included for your review. The LDMF is necessary for issuance of the Permit because the wildlife agencies require that the local permittees identify sufficient funding for implementation of the MSHCP. The LDMF will only be used for land acquisition and related costs. New development affects the environment directly through construction activity and cumulatively through the activities of the population bases that result from development. Government Code Section 66000 et seq. allows cities and counties to charge new development for the costs of mitigating the impacts of new development. All new development projects on vacant or partially vacant lands regardless of location will have direct and cumulative impacts on species and existing or potential habitat and natural communities. New development also causes a need for and benefits from the installation of public infrastructure. Without new development no further habitat conservation to mitigate for development impacts would be needed in the Plan Area. Therefore, there is a reasonable relationship between the need for habitat conservation and all rypes of residential and nonresidential development throughout. The proposed Development Mitigation Fee would be $5,730 per acre, with a per unit fee for residential development. The residential fee per unit for a density of 0-8 units per acre would be $1,284. The fee schedule in 2008 dollars is as follows: Cost Per Average Acre Lot Size Fee Residential 0 - 8 Units Per Acre $ 5,730 0.22 $ 1,284 8.1 - 14 Units Per Acre 5,730 0.09 533 14.1+ Units Per Acre 5,730 0.04 235 Nonresidential Commercial $ 5,730 NA $ 5,730 Industrial $ 5,730 NA $ 5,730 Page2of4 City Council January 24, 2008 Approval of the Local Development Mitigation Fee Ordinance Multiple Species Habitat Conservation Plan The proposed fee schedule presented here represents a reasonable approach to the fair allocation of costs across all new development. The Coachella Vaffey Conservation Commission (CVCC) will monitor the implementation of the residential fee approach over time and propose adjustments to the four categories if conditions warrant. The fee ordinance provides for an annual CPI adjustment based upon the Consumer Price Index for "All Urban Consumers" in the Los Angeles-Anaheim-Riverside Area, measured as of the month of December in the calendar year which ends in the previous fiscal year. There will also be a provision for the fee to be reevaluated and revised should it be found insufficient to cover mitigation of new development. As required by state law, the CVCC will update the Nexus Study at least every five years, and more often if deemed necessary, to ensure that the Local Development Mitigation Fee is adequate over the life of the acquisition program to fund the necessary land acquisition and land improvement. All LDMF revenue and habitat acquisition expenditures will be accounted for in a Land Acquisition & Improvement Fund, managed by the CVCC. The projected revenue from the Local Development Mitigation Fee (Table 5-2b of the MSHCP) is anticipated to be approximately $516,802,000 (nominal dollars) over the first 50 years of Plan implementation. For purposes of projecting revenue, the MSHCP (Table 5-3c) assumes that the fee increases 3.29% annually. The local permittees intend to generate funds for Plan implementation from sources in addition to the Local Development Mitigation Fee. These sources include but are not limited to landfill tipping fees, transportation project mitigation from CVAG, Caltrans and other agencies, and mitigation funds for regional infrastructure projects. CVAG and CVCC staff will be available to assist the local permittees with development of administrative guidelines for the LDMF program. Fiscal Analysis: Implementation of the MSHCP is designed to be self-funding and no assessments are required of the permittees. The MSHCP is to be funded from the Local Development Mitigation Fee, tipping fees and infrastructure mitigation payments from CVAG, Coachella Valley Water District, Caltrans, and Imperial Irrigation District. The projected revenue from the Local Development Mitigation Fee is anticipated to be approximately $516,802,000 over the first 50 years of Plan implementation, based on the updated Nexus Study prepared in January 2007. The local permittees intend to generate funds for Plan implementation from sources in addition to the Local Development Mitigation Fee, as described above. Assuming an annual increase in land value of 3.29%, the total cost for the land acquisition program over 30 years is estimated to be $526,705,000. CVCC proposes to complete the acquisition program in 30 years to minimize costs and potential land use conflicts. Page3of4 City Council January 24, 2008 Approval of the Local Development Mitigation Fee Ordinance Multiple Species Habitat Conservation Plan Submitted By: Department Head: '� '- ���'� !� Renee Schr der Lauri Aylaian Director of Community Development Approval: � �02 Homer Cro ACM Development Services Paul Gibson Finance Director Carlos L. Ortega City Manager ;,'STY COUNCIL�CTIOIaT: APPROVED DENIED �� VED OTHER r•S� • a. �IS�I fo � !�ETI DA E " - �„� AYES: � � �.... NOE3: ,�.,.� ABSENT: ._.. ABSTAIN: �_., VEitIFIED BY: ..,�, �riginal qn File wi City Clerk' s Offi�~� Page 4 of 4 ORDINANCE NO. 1151 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT TO ESTABLISH A LOCAL DEVELOPMENT MITIGATION FEE FOR FUNDING THE PRESERVATION OF NATURAL ECOSYSTEMS !N ACCORDANCE WITH THE COACHELLA VALLEY MULTIPLE SPECIES HABITAT CONSERVATION PLAN WHEREAS, the City Council of the Ciry of Palm Desert ("City") finds that the ecosystems of the City, the Coachella Valley and surrounding mountains located in central Riverside County, and the vegetation communities and sensitive species they support are fragile, irreplaceable resources that are vital to the general welfare of all residents; WHEREAS, these vegetation communities and natural areas contain habitat value which contributes to the City's and the region's environmental resources; WHEREAS, specia! protections for these vegetation communities and natural areas must be established to prevent future endangerment of the plant and animal species that are dependent upon them; WHEREAS, adoption and implementation of this Ordinance will help to enable the City to achieve the conservation goals set forth in the Coachella Valley Multiple Species Habitat Conservation Plan/Natural Community Conservation Plan ("MSHCP"), adopted by the City Council on October 11, 2007, to implement the associated Implementing Agreement executed by the City Council on October 11, 2007, and to preserve the ability of affected property owners to make reasonable use of their land consistent with the requirements of applicable laws, which could include the Nationa! Environmental Policy Act ("NEPA"), the California Environmental Quality Act ("CEQA"), the Federal Endangered Species Act ("FESA"), the California Endangered Species Act ("CESA") and the California Natural Community Conservation Planning Act ("NCCP Act"); WHEREAS, the purpose and intent of this Ordinance is to establish a Local Development Mitigation Fee to assist in the maintenance of biological diversiry and the natural ecosystem processes that support this diversity; the protection of vegetation communities and natural areas within the City, Coachella Valtey and surrounding mountains located in central Riverside County which are known to support threatened, endangered or key sensitive populations of plant and wildlife species; the maintenance of economic development within the City by providing a streamlined regulatory process from which development can proceed in an orderly process; and the protection of the existing character of the City and the region through the implementation of a system of reserves which will provide for permanent open space, community edges and habitat conservation for species covered by the MSHCP; WHEREAS, the findings set forth herein are based on the MSHCP and the studies referenced therein, and the estimated acquisition costs for such property as set forth in the MSHCP, a copy of which is on file in the City Clerk's office; WHEREAS, pursuant to Article 11, Section 7 of the California Constitution, the City is authorized to enact measures that protect the health, safety and welfare of its citizens; WHEREAS, pursuant to Government Code sections 66000 et seq., the City is empowered to impose fees and other exactions to provide necessary funding and public facilities required to mitigate the negative effect of new development projects; WHEREAS, on October 11, 2007 the City Council took action on the MSHCP and the associated Implementing Agreement, and made appropriate findings pursuant to CEQA; and NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES ORDAIN AS FOLLOWS: Ordinance No. ii5i and Title 3 Revenue Finance, Chapter 3.46 Local Development Mitigation Fee Multiple Species Habitat Conservation Plan Section(s) 3.46.10 through 3.46. 140 of the City of Palm Desert Municipal Code is hereby amended in its entirety to read as follows: SECTION 3.46.10. SHORT TITLE. This ordinance shall be known as the "Coachella Valley Multiple Species Habitat Conservation Plan/Natural Community Conservation Plan Mitigation Fee Ordinance." SECTION 3.46.20. FINDINGS. City Council finds and determines as follows: A. In order to implement the goals and objectives of the Coachella Valley Multiple Species Habitat Conservation Plan/Natural Community Conservation Plan ("MSHCP") and to mitigate the impacts caused by new development in the City, lands supporting species covered by the MSHCP must be acquired and conserved. B. The Local Development Mitigation Fee (the "Fee") is necessary in order to supplement the financing of the acquisition of lands supporting species covered by the MSHCP and to pay for new development's fair share of this cost. C. The appropriate source of funding for the costs associated with mitigating the impacts of new development to the natural ecosystems and covered species within the City, as identified in the MSHCP, is a mitigation fee paid for by residential, commercial and industrial development. The amount of the Fee is determined by the nature and extent of the impacts from the development to the identified natural ecosystems and the relative cost of mitigating such impacts. D. The Fee does not reflect the entire cost of the lands which need to be acquired in order to implement the MSHCP and mitigate the impact caused by new development. Additional revenues will be required from other sources. The City finds Page 2 of 9 that the benefit to each development project is greater than the amount of the Fee to be paid by that project. E. The MSHCP and Mitigation Fee Nexus Report, a copy of which is on file in the City Clerk's office, provide the basis for the imposition of the Fee on new developments. F. The use of the Fee is apportioned relative to the rype and extent of impacts caused by the development. G. The costs of funding the proper mitigation for natural ecosystems and covered species identified in the MSHCP which are impacted by new development are apportioned relative to the type and extent of impacts caused by the development. H. The facts and evidence provided to and considered by the Ciry Council establish that there is a reasonable relationship between the need for preserving the natural ecosystems and covered species identified in the MSHCP, and the impacts to such natural ecosystems and species created by the types of development on which the Fee will be imposed; and that there is a reasonable relationship between the Fee's use and the types of development for which the Fee is charged. This reasonable relationship is described in more detail in the MSHCP and Mitigation Fee Nexus Report. I. The fees collected pursuant to this Ordinance shall be used to finance the acquisition of the lands to protect natural ecosystems and covered species, as set forth in the MSHCP, are reasonable and will not exceed the reasonably estimated total of these costs. J. The Fee shall be used to finance the acquisition of lands and certain improvements necessary to implement the goals and objectives of the MSHCP. K. To ensure fair implementation of the development impact fees established in this Ordinance, it may be necessary for the Ciry to defer or waive such fees in special cases as may be permitted in accordance with procedures and guidelines established by the Coachella Valley Conservation Commission. L. Even though second units on existing single family lots may also contribute to the need for acquisition of lands necessary to implement the MSHCP, the City refrains from imposing the Fee on such development at this time, and in this regard finds that second units: (1) provide a cost effective means of serving development through the use of existing infrastructure, as contrasted to requiring the construction of new costly infrastructure to serve development in undeveloped areas; and (2) provide relatively affordable housing for low and moderate income households without public subsidy. SECTIUN 3.46.30 ADMINISTRATIVE RESPONSIBILITY. The Community Development Department of the City shall be responsible for the administration of this Ordinance. Detailed administrative procedures concerning the implementation of this Ordinance may be established and set forth in a resolution adopted by the City Council. Page3of9 SECTION 3.46.40. DEFINITIONS. As used in this Ordinance, the following terms shall have ihe following meanings: "City" means the Ciry of Palm Desert, California. "City Council" means the City Council of the City of Palm Desert, California. "Certificate of Occupancy" means a certificate of occupancy issued by the Ciry in accordance with all applicable ordinances, regulations, and rules of the Ciry and state law. "Coachella Valley Conservation Commission" means the governing body established pursuant to the MSHCP that is delegated the authority to oversee and implement the provisions of the MSHCP. "Credit" means a credit allowed pursuant to Section 11 of this Ordinance, which may be applied against the Fee paid. "Development Project" means any project undertaken for the purpose of development pursuant to the issuance of a building permit by the City pursuant to all applicable ordinances, regulations, and rules of the City and state law. "Final Inspection" means a final inspection of a project as defined by the building codes of the Ciry. "Gross Acreage" means the total property area as shown on a land division map of record, or described through a recorded legal description of the properry. This area shall be bounded by road right-of-way and/or legal properry lines. "Local Development Mitigation Fee" or "Fee" means the development impact fee imposed pursuant to the provisions of this Ordinance. "Multiple Species Habitat Conservation Plan" or "MSHCP" means the Coachella Valley Multiple Species Habitat Conservation Plan/Naturai Community Conservation Plan, adopted by the City Council on October 11, 2007. "Conservation Areas" has the same meaning and intent as such term is defined and utilized in the MSHCP. "Ordinance" means this Ordinance No. 1i51 of the City of Palm Desert, California. "Project Area" means the area, measured in acres, from the adjacent road right- of-way line to the limits of project improvements. Project Area includes all project improvements and areas that are disturbed as a result of the project improvements on an owner's Gross Acreage, including all areas depicted on the forms required to be submitted to the City pursuant to this Ordinance and/or other applicable development Page4of9 ordinance or regulation of the City. Except as otherwise provided herein, the Project Area is the area upon which the project will be assessed the Local Development Mitigation Fee. "Residential Unit" means a building or portion thereof used by one family and containing but one kitchen, which unit is designed or occupied for residential purposes, including single-family dwelling, multiple-family dwellings, and mobile homes on permanent foundations, but not including hotels and motels. "Revenue" or "Revenues" means any funds received by the Ciry pursuant to the provisions of this Ordinance for the purpose of defraying all or a portion of the cost of acquiring and preserving vegetation communities and natural areas within the City and the region which are known to support threatened, endangered or key sensitive populations of plant and wildlife species. SECTION 3.46.50. LOCAL DEVELOPMENT MITIGATION FEE. To assist in providing Revenue to acquire and conserve lands necessary to implement the MSHCP, the Fee shall be paid for each residential unit, Development Project or portion thereof to be constructed within the City. Five categories of the Fee are defined and include: (1) residential units, density less that 8.0 dwelling units per acre; (2) residential units, density between 8.1 and 14.0 dwelling units per acre; (3) residential units, density greater than 14.1 dwelling unites per acre; (4) commercial acreage; and (5) industrial acreage. Because there can be mixed traditional commercial, industrial and residential uses within the same project, for Fee assessment purposes only, the Fee which is applicable to commercial or industrial development projects shaH be applied to the whole project based upon the existing underlying zoning classification of the property at the time of issuance of a building permit. The fees are calculated using an Equivalent Benefit Unit methodology. A fee schedule which contains the Fee which is applicable to one of the five Fee categories shall be adopted by resolution ("Resolution"). A. The amount of the Local Development Mitigation Fee for a commercial or industrial development project required to be paid shall be based on the acreage to be developed and shall be calcuiated on the basis of the Project Area, in accordance with the following: 1. The Project Area shall be determined by City staff based on the subdivision map, plot plan, and other information submitted to or required by the City. 2. If the difference between the net acreage, as exhibited on the plot plan, and the Project Area is less than one-quarter acre, the Fee shall be paid on the full gross acreage. 3. An applicant may elect, at his or her own expense, to have a Project Area dimensioned, calculated, and certified by a registered civil engineer or licensed land surveyor. The engineer or land surveyor shall prepare a wet-stamped letter of certification of the Project Area dimensions and a plot plan exhibit thereto that clearly defineates the Project Area. Upon receipt of the letter of certification and plot plan exhibit, the City shall review the submitted documents. If the Project Area Page 5 of 9 dimensions, the letter of certificate and the plot plan are acceptable to the City, the City shall calculate the Local Development Mitigation Fee required to be paid based on the certified Project Area. If the Project Area dimensions, the letter of certification, or the plot plan are not acceptable to the City, the applicant shall perform such actions as directed by the City in order to resolve any deficiencies perceived by the City. 4. Where construction or other improvements on Project Area are prohibited due to legal restrictions on the Project Area, such as Federal Emergency Management Agency designated floodways or areas legally required to remain in their natural state, that portion of the Project Area so restricted shall be excluded for the purpose of calculating the Local Development Mitigation Fee. SECTION 3.46.60. IMPOSITION OF THE LOCAL DEVELOPMENT MITIGATION FEE. Notwithstanding any other provision of the City's Municipal Code, no permit shall be issued for any Development Project except upon the condition that the Local Development Mitigation Fee applicable to such Development Project has been paid in accordance with the provisions of this Ordinance. SECTION 3.46.70. PAYMENT OF LOCAL DEVELOPMENT MITIGATION FEE. A. The Local Development Mitigation Fee shall be paid in full at the time a certificate of occupancy is issued for the residential unit or development project or upon final inspection, whichever occurs first. No final inspection shall be made, and no certificate of occupancy shall be issued, prior to full payment of the Fee. However, this section shall not be construed to prevent payment of the Fee prior to the issuance of an occupancy permit or final inspection. B. The Local Development Mitigation Fee shall be assessed one time per lot or parcel, except in cases of changes in land use. The Fee required to be paid when there is a change in land use shall be reduced by the amount of any previously paid fee for that property. No refunds shall be provided for changes in land use to a lower fee category. It shall be the responsibility of the applicant to provide documentation of any previously paid Fee. C. The Local Development Mitigation Fee for commercial and industrial development projects shall be paid in its entirety for the Project Area and shall not be prorated. D. The Local Development Mitigation Fee required to be paid under this Ordinance shall be the Fee in effect at the time of payment. E. There shall be no deferment of the Fee beyond final inspection or issuance of certificate(s) of occupancy. F. Notwithstanding anything in the City's Municipal Code, or any other written documentation to the contrary, the Local Development Mitigation Fee shall be paid whether or not the Development Project is subject to conditions of approval by the Ciry imposing the requirement to pay the Fee. Page6of9 G. If all or part of the Development Project is sold prior to payment of the Local Development Mitigation Fee, the Project shall continue to be subject to the requirement to pay the Fee as provided herein. H. For development projects which the City does not require a final inspection or issuance of a certificate of occupancy, the Fee shall be paid prior to any use or occupancy. I. For purposes of this Ordinance, congregate care residential facilities and recreationai vehicle parks shall pay the commercial acreage Fee. SECTION 3.46.80. REFUNDS. There shall be no refund of all or part of any Local Development Mitigation Fee paid under this Ordinance, except in cases of overpayment or miscalculation of the applicable Fee. Only in cases of overpayment or miscalculation of the Fee will the person or entity that paid the Local Development Mitigation Fee be entitled to a refund. SECTION 3.46.90. ACCOUNTING AND DISBURSEMENT OF COLLECTED LOCAL DEVELOPMENT MITIGATION FEES. A. All fees paid pursuant to this Ordinance shall be deposited, accounted for, and expended in accordance with Section 66006 of the Government Code and all other applicable provisions of law. B. Subject to the provisions of this section, all Fees collected pursuant to this Ordinance shall be remitted to the Coachella Valley Conservation Commission at least quarterly, and will be expended solely for the purpose of acquiring and preserving vegetation communities and natural areas within the City and the region which support species covered in the MSHCP in accordance with the provisions of the MSHCP. C. The City may recover the costs of administering the provisions of this Ordinance using the Revenues generated by the Fees, in an amount and subject to the rules and regulations established by the Coachella Valley Conservation Commission. SECTION 3.46.100. AUTOMATIC ANNUAL FEE ADJUSTMENT. The Fee established by this Ordinance shall be revised annually by means of an automatic adjustment at the beginning of each fiscal year based on the average percentage change over the previous calendar year set forth in the Consumer Price Index for "All Urban Consumers" in the Los Angeles-Anaheim-Riverside Area, measured as of the month of December in the calendar year which ends in the previous fiscal year. The first Fee adjustment shall not be made prior to a minimum of ten (10) months subsequent to the effective date of this Ordinance. The Fee, as revised annually, shall be compiled by the City Manager's Office and shall be included in an annual report to the City Council pertaining to the accounting for the MSHCP Fee as required by Government Code section 66006. Page 7 of 9 SECTION 3.46.110. EXEMPTIONS. The following types of construction shall be exempt from the provisions of this Ordinance: A. Reconstruction of a residential unit or commercial or industrial building damaged or destroyed by fire or other natural causes. B. Rehabilitation or remodeling to an existing residential unit, commercial or industrial building, and additions to an existing residential unit or commercial or industrial building. C. Secondary residential units, constructed on developed residential property and meeting all state and City requirements for such units. D. Existing improvements that are converted from an existing permitted use to a different permitted use, provided that no additional area of the property is disturbed as a result of such conversion. E. Development within a Project Area that was being improved or had been improved prior to the effective date of this Ordinance. F. Construction of a family residential unit upon property wherein a mobile- home, installed pursuant to an installation permit, was previously located prior to the effect date of this Ordinance. G. Guest dwellings as defined in Title 25 of the City of Palm Desert Municipal Code. SECTION 3.46.120. FEE CREDITS AND WAIVERS. The City may grant to owners or developers of real property, a Credit against the Fee that would otherwise be charged pursuant to this Ordinance, for the dedication of land determined to be necessary for inclusion in the MSHCP Conservation Area. The amount of the Credit granted shall be determined by an estimate of the fair market value of the land dedicated. Any Credit granted by the City shall be given in stated dollar amounts only. An applicant for a proposed development may apply for Credit to reduce the amount of the Fee required to be paid prior to approval of the development. Any Credit granted and the amount of the Fee to be paid shall be included as a condition of approval for the development. If an applicant has received the development approval from the City and has not previously applied for a Credit to reduce the amount of the Fee required to be paid, an applicant may apply for such Credit prior to issuance of a grading permit for the development. Any Credit granted and the amount of the Fee required to be paid shall be included as a condition of approval on the grading permit issued for the development. SECTION 3.46.130. SEVERABILITY. This Ordinance and the various parts, sections, and clauses thereof, are hereby declared to be severable. If any part, sentence, paragraph, section, or clause is adjudged unconstitutional or invalid, the remainder of this Ordinance shall not be affected thereby. If any part, sentence, Page8of9 paragraph, section, or clause of this Ordinance, or its application to any person entity is adjudged unconstitutional or invalid, such unconstitutionality or invalidity shall affect only such part, sentence, paragraph, section, or clause of this Ordinance, or person or entity; and shall not affect or impair any of the remaining provision, parts, sentences, paragraphs, sections, or clauses of this Ordinance, or its application to other persons or entities. The City Council hereby declares that this Ordinance would have been adopted had such unconstitutional or invalid part, sentence, paragraph, section, or clause of this Ordinance not been included herein; or had such person or entity been expressly exempted from the application of this Ordinance. SECTION 3.46.140. EFFECTIVE DATE. This Ordinance shall take effect immediately upon issuance of the appropriate permits authorizing take in connection with the MSHCP by the U.S. Fish and Wildlife Service and California Department of Fish and Game, including, without limitations, the incidental take permits for covered species pursuant to Section 10(a)(1)(B) of the Federal Endangered Species Act and section 2800 of the California Fish and Game Code . However, in no event shall this Ordinance take effect prior to sixty (60) days after the date of its adoption. Upon the effective date of this Ordinance, Ordinance No. 1151 , also known as the Fringe Toad Lizard Mitigation Fee Ordinance, shall be repealed and superceded in its entirery by this Ordinance. PASSED, APPROVED, AND ADOPTED, this 24th day of January, 2008 by the following: Mayor, Jean Benson City of Palm Desert ATTEST: Rachelle Klassen City Clerk Page 9 of 9 RESOLUTION NO. 08-8 A RESOLUTION OF THE CITY OF PALM DESERT ADOPTING THE LOCAL DEVELOPMENT MITIGATION FEE SCHEDULE APPLICABLE TO NEW DEVELOPMENT WITHIN THE CITY OF PALM DESERT WHEREAS, the City Council of the City of Palm Desert ("City") finds that the ecosystems of the City, Coachella Valley and surrounding mountains located in central Riverside County, and the vegetation communities and sensitive species they support are fragile, irreplaceable resources that are vital to the general welfare of all residents; and WHEREAS, these vegetation communities and natural areas contain habitat value which contributes to the City's and the region's environmental resources; and WHEREAS, special protections for these vegetation communities and natural areas must be established to prevent future endangerment of the plant and animal species that are dependent upon them; and WHEREAS, adoption and implementation of Ordinance oa-a (the "Ordinance") and this Resolution will help to enable the City to achieve the conservation goals set forth in the Coachella Valley Multiple Species Habitat Conservation Plan/Natural Community Conservation Plan ("MSHCP"), adopted by the City Council on October 11, 2007, to implement the associated Implementing Agreement executed by the City Council on October 11, 2007, and to preserve the ability of affected property owners to make reasonable use of their land consistent with the requirements of applicable laws, which could include the National Environmental Policy Act ("NEPA"), the California Environmental Quality Act ("CEQA"), the Federal Endangered Species Act ("FESA"), the California Endangered Species Act ("CESA") and the California Natural Communiry Conservation Planning Act ("NCCP AcY'); and WHEREAS, the purpose and intent of the Ordinance and this Resolution is to establish a Local Development Mitigation Fee to assist in the maintenance of biological diversity and the natural ecosystem processes that support this diversity; the protection of vegetation communities and natural areas within the Ciry, Coachella Valley and surrounding mountains located in central Riverside Counry which are known to support threatened, endangered or key sensitive populations of plant and wildlife species; the maintenance of economic development within the City by providing a streamlined regulatory process from which development can proceed in an orderly process; and the protection of the existing character of the City and the region through the implementation of a system of reserves which will provide for permanent open space, community edges and habitat conservation for species covered by the MSHCP; and WHEREAS, as a Member Agency of Coachella Valley Association of Governments ("CVAG"), the City participated in the preparation of a certain "Local Development Mitigation Fee Nexus Report", dated January 15, 2007 ("Nexus Report") prepared pursuant to California Government Code, Section 66000 et seq., the Mitigation Fee Act; and WHEREAS, the City has reviewed the Nexus Report, and hereby finds that future development within the City will substantially adversely affect the natural ecosystems and covered species within the City, as identified in the MSHCP, and that unless such development contributes to the cost of acquiring land to preserve these natural ecosystems and covered species, the conservation goals of the MSHCP will not be met; and WHEREAS, the City finds that the Nexus Report proposes a fair and equitable method for distributing a portion of the cost of implementing the MSHCP and mitigate the impact caused by new development; and WHEREAS, pursuant to the Mitigation Fee Act, the Ciry Council adopts the Nexus Report, a copy of which is on file in the City Clerk's office, and the findings contained therein which provide additional support for the fees adopted by this Resolution; and WHEREAS, in addition to the foregoing, the Ciry Council hereby adopts in their entirety the findings contained in Section 2 of the Ordinance and any fees adopted by this Resolution shall be based on these findings; and WHEREAS, pursuant to Government Code sections 66016, 66017 and 66018, the City has: (a) made available to the public, at least ten (10) days prior to its public hearing, data indicating the estimated cost required to provide the facilities and infrastructure for which these development fees are levied and the revenue sources anticipated to provide those facilities and infrastructure; (b) mailed notice at least fourteen (14) days prior to this meeting to all interested parties that have requested notice of new or increased development fees; and (c) held a duly noticed, regularly scheduled public hearing at which oral and written testimony was received regarding the proposed fees. Page 2 of 4 NOW, THEREFORE, the City Council of the City of Palm Desert does hereby resolve as follows: Section 1. Findings. The recitals set forth above are hereby adopted as findings in support of this Resolution. The findings contained in both the Nexus Report and Section 2 of the Ordinance are also adopted herein as findings in support of this Resolution. Section 2. Definitions. The terms of this Resolution shall have the same meaning ascribed to them in Section 4 of Ordinance No. 08-8 Section 3. Fee Schedule. There is hereby adopted the following fee schedule for the Local Development Mitigation Fee: (1� Residential, density less than 8.0 dwelling units per acre - $1,284 per dwelling unit (2) Residential, density between 8.1 and 14.0 dwelling units per acre - $533 per dwelling unit (3) Residential, density greater than 14.1 dwelling units per acre - $235 per dwelling unit (4) Commercial - $5,730 per acre (5) Industrial - $5,730 per acre Section 3. CEQA Findings. The City Council hereby finds that in accordance with the California Environmental Quality Act ("CEQA") and the CEQA Guidelines the adoption of this Resolution is exempt from CEQA pursuant to Section 15061(b)(3) and Public Resources Code section 21166. Section 4. Severability.This Resolution and the various parts, sections, and clauses thereof, are hereby declared to be severable. If any part, sentence, paragraph, section, or clause is adjudged unconstitutional or invalid, the remainder of this Resolution shall not be affected thereby. If any part, sentence, paragraph, section, or clause of this Resolution, or its application to any person entiry is adjudged unconstitutional or invalid, such unconstitutionality or invalidity shall affect only such part, sentence, paragraph, section, or clause of this Resolution, or person or entity; and shall not affect or impair any of the remaining provision, parts, sentences, paragraphs, sections, or clauses of this Resolution, or its application to other persons or entities. The City Council hereby declares that this Resolution would have been adopted had such unconstitutional or invalid part, sentence, paragraph, section, or clause of this Resolution not been included herein; or had such person or entity been expressly exempted from the application of this Resolution. Page 3 of 4 Section 5. Effective Date. This Resolution shall take effect immediately upon issuance of the appropriate permits authorizing take in connection with the MSHCP by the U.S. Fish and Wildlife Service and California Department of Fish and Game, including, without limitation, the incidental take permits for covered species pursuant to Section 10(a)(1)(B) of the Federal Endangered Species Act and section 2800 of the California Fish and Game Code. However, in no event shall this Resolution take effect prior to sixty (60) days after the date of its adoption. PASSED, QPPROVED AND ADOPTED at a regular meeting of the Palm Desert City Council, held on this 24m day of January, 2008, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Mayor, Jean Benson City of Palm Desert ATTEST: RACHELLE KLASSEN, City Clerk City of Palm Desert, California Page 4 of 4 LOCAL DEVELOPMENT MITIGATIDN FEE COACHELLA VALLEY ASSOCIATION OF G4VERNMENTS .1ANUARY 15, 2007 MuniFinancial Oakland Office 1700 Broadway, 6`"Floor Anaheim, CA Phoenix,AZ Oakland, California 94612 Industry, CA Seattle,WA Tel: (510) 832-0899 Jacksonville, FL Temecula, CA Fax. (510) 832-0898 Lancaster, CA Oakland, CA www.muni.com TAB LE C3 F C O NTENTS EXECUTIVE SUMMARY...........................................................................IV Introduction iv Plan Area Land Use iv Need for Habitat Conservation iv Cost of Habitat Conservation v Cost Allocation and Fee Schedule v Mitigation Fee Act Findings vi Implementation vi CHAPTER 1: INTRODUCTION ................................................................. 1 Habitat Conservation Planning Process 1 MSHCP and the Incidental Take Permit 2 Local Development Mitigation Fee 2 CHAPTER 2: PLAN AREA LAND USE...................................................... 4 Plan Area Boundaries 4 Existing Land Use 6 New Development within the Plan Area 7 CHAPTER 3: NEED FOR HABITAT CONSERVATION ................................ 1 O Habitat Conservation Goals 10 Covered Species and Natural Communities 10 Identifying the MSHCP Reserve System 11 CHAPTER 4: COST OF HABITAT ACQUISITION....................................... 15 Amount of Habitat Acquisition 15 LDMF Financing Plan 15 Financing Alternatives 22 CHAPTER 5: COST ALLOCATION AND FEE SCHEDULE........................... 24 New Development Acreage 24 Net Land Acquisition Costs Per Acre 24 Fee Schedule 25 CHAPTER 6: MITIGATION FEE ACT FINDINGS ....................................... 28 Purpose of Fee 28 Use of Fee Revenues 28 Benefit Relationship 29 Burden Relationship 29 Proportionality 30 CHAP7ER 7: IMPLEMENTATION............................................................ 31 �MuneFnancia! 1 Local Development Mitigation Fee Coachella Valley Association of Governments Adoption of LDMF By local Permittees 31 Adoption of Administrative Guidelines 31 Programming Revenues and Projects 31 Annual Inflation Adjustment 32 Reporting Requirements 32 APPENDIX: CASH FLOW ANALYSIS.....................................................A-1 �MuniFin�cial ii LIST OFTABLES Table E.1: Fee Schedule (2008 dc�llars)............................................................................................vi Table 2.1: Plan Area Fxisang Land Use...........................................................................................7 Table 3.1: C�vered Species Under the �1SHCP............................................................................12 Table 3.2: Natural Communities Included in the MSIiCP..........................................................13 Table 4.1: l�1Sf(CP Reserve System.................................................................................................16 Table 4.2: Land Acquisition & Improvement Fund T�tal Revenues & Expenditures (nominal dollars).................................................................................................................................17 Table 4.3: �4SFiCP Reserve System Local Permittees I_and Acquisition Costs........................20 Table 4.4: Average Cost Per Acre....................................................................................................21 Table 5.1: (;overed Species and Natural Communities Found In L'rban Arc;as.......................24 Table 5.2: Cost Per Acre (2008 dollars)..........................................................................................25 Table �.3: Nc:e Schedule (2008 dollars)............................................................................................26 Table A-1: Land Acquisition & Improvement Nund..................................................................A-2 �MuniFnancial iii EXECUTIVE SUMMARY INTR�DUCTION Since 1994 local, state, and federal agencies responsible for regulating development and protecting habitat in the Coachella Valley have been participating in an extensive and comprehensive planning process. This planning effort has produced the Coachella Valley Multiple Species Habitat Conservation Plan/Natural Community Conservation Plan (:VfSHCP). The policy objectives of the MSI�CP are (1) to conserve adequate habitat in an unfragcnented manner for the most effective preservation of species and the conserved natural communities, and (2) to simplify compliance with environmental laws b5� providing an efficient and streamlined regulatory approach. (�ne of the primary requirements of the �1SHCP is the establishment of a Reserve Sy�stem of lands to provide habitat for Covered Species and the conserved natural communides. An additional purpose is the monitoring and management of the Reserve S�-stem. A i.ocal llevelopment ��itigauon Fee (LDMF) imposed on new development projects wilI be a primary source �f funding for the habitat acquisition program under the �1SF ICP. This report documents the legal and polic�� basis to support adoption of the I.D14F by Coachella Valle��cities and the Countv of Riverside. PLAN AREA LAND USE The Coachella Valley is a broad, low elevation, northwest-southeast trending valley cc�mprising the westernmost limits of the Sonoran Desert. The Valle}� is located in the central portion of Riverside Countt�, approximately 100 miles east of I.os Angeles. The I'lan r'lrea boundaries include approximately 1.2 milli�n acres. Growth projections were based on an extrapolation �f prior trends based on an analy�sis of informatic>n from the California Department of Kesources �'armland �1�tapping and �tonitoring Program and building permit data by the Coachella Valley tlssociation of CGc�eernments (CVAC'r). CVAG calculated that the rate of development in the Plan Area has at•c:ra�;ed 1,370 acres per y-ear based on development over the period 1988 to 2004. The LD�iF analysis assumes that this historical average annual rate will continue throu�;h the �0- y�ear planning horizon (for the acquisition program) of the LD�1N Financin� Plan. At this rate a total of 68,500 acres will be devel�ped (�0 y�ears x 1,370 acres per year). NEED FOR HABITAT CDNSERVATION Identif�-ing the :�1SHCP Reserve System was the result of an extensive and comprehensive analysis conducted by an inter-agencv planning team and led by CVAG. The planning team used the best available scientific and c�mmercial data standard t� develop the VtSHCP. The planning team de��eloped a list of 27 Co�ered Species and 27 natural communit�es to provide habitat for the Covered Species. This planning process resulted in the identification of 746,600 acres across 21 consen-ation areas, from which the �iSHCP Reser�-e S�•stem will �IYIuniFinanciai _ - i�� Local Development Mitigation Fee Coachella Valley Association of Governments be established. The Reserve Syste:m ensures the consennation of these species and natural communities as new development occurs. Without new development there would be no need to establish the Reserve System because the toss of existing habitat would not occur as a result of de��elopment activities. COST OF HAeITAT CONSERVATION Of the 746,600 acres in the Conser�ation Areas, a maximum of 22,660 acres may be developed, resulting in a Reserve System of 723,940 acres. r'�s of November 2006, just over three-quarters of the :VISHCP Reserve System, or 5�7,100 acres, had already been conserved. Complementary Conservation and state and federal contributions to MSI iCP implementauon will conserve an additional 51,840 acres from November 2006 forward. An additional 7,800 acres are in areas where the only Conservation Objective is maintaining the fluvial sand transport function through flood control standards and other regulatory mechanisms; these 7,800 acres will not be acquired. This leaves 107,200 acres to be conserved. Of this, 10,800 acres are non-Permittee public and quasi-public lands, and 7,�00 acres are Permittee-owned lands that will be conserved in perpenzity under the :�1SHCP. As of November 2006, this left 88,900 acres remaining to be acquired or otherwise conservcd b}' the Permittees. The I_ll�fF w-ill be the primary funding source for this habitat acquisition program. The primary objective of the i.,D�fF Financing Plan is to dem�nstrate that sufficient funding is available for the habitat acquisition program. A financial model was used to calculate the Ievel of the LD�fF ne;eded to fully Fund the habitat acquisition program after deducting other anticipated revenues and interest earnings on fund balances. All LDM� revenue and habitat acquisition expenditures would be accounted for in a i.and Acquisition & Improvement Fund. The (;oachella Valley Conservation Commission (CVCC), a jc�int powers authorin- that is being created to implemc:nt the :�1SF-iCP, would mana�e the Fund as part of these responsibilities. CVCC would stop collectin�; LD�1F revenue and would terminate the Fund after the 50-}'ear planning hori•r.�n, assuming the acquisition program has been c�mpleted. (�ther key objectives �f the Financing Plan include purchase of all habitat conservauc�n lands as scx>n as feasible within 30 �-ears while LD�VII� revenue will c�ntinue for �0 }�ears. This approach requires a financing mechanism. The �1SI�CP Fndowment Fund �vould provide this financing as needed during the 30-}�ear acquisiti�n period, w�ith funds repaid �ver the following 20}�ears to match the 50-}�ear planning hc>riz�n. COST ALLOCATlON AND FEE SCHEDULE Table E.1 presents the Local Development l�fiugation Fee schedule f�r the �1SI�(;P in 2008 dollars, the first y�ear that the fee is anticipated to be collected. The fee would be imposed per dvvelling unit for residential land uses and per acre for nonresidential land uses. �MuniFinancial �' Local Development Mitigation Fee Coachella Valley Association of Governments Table E.1 : Cost Per Acre (2008 dollars) 2008 2008-2037 Local Development Mitigation Fee Revenue' $ 7,850,000 $235,500,000 Total Acres 2 1,370 41,100 Cost Per Acre $ 5,730 $ 5,730 ' Net revenue required irom deve/opment mitigation fee reHenue in rea/2008 dollars. The 2008-2037 revenue estimate excludes the fee revenue needed to repay the Endowment loan during the 2038-2057 period. z Acres of new development. Source:MunrFrnancia! M/T/GAT/DN FEE ACT F�I N D I N G S llevelopment impact fees are one-time fees, t}�pically paid when a building permit is issued, imposed on development projects b��local agencies responsible for regulating land use (cities and counties). The five statutory findings required by the Mitigation Fee Act for adoption of the i.DMF' are summarized in Chapter 6 and supported in detail by the remainder of the report. IMPLEMENTATION The mit�gation fee would be collected at time of grading, building, or other appropriate permit issuance. T� implement the fee this report recommends CVCC do the f�llowing: • Assist I.ocal Permittees in adopting an ordinance and resoludc�n imposing the I.11MF<>n new development and that includes an inflatic�n adjustment to the fee; • ��'ork �vith L�cal Permittees to develop administrative guidelines fc>r the I.DNIF program. • Program fee revenues to specific acquisition projects and related espenditures, including administrative costs; • Altc:r the scope of the planned acquisiaon or related impro��ement costs from those shown in this report if appropriate; howevc;r, all expenditures must conunue to fund expansion of the inventory of land conserved for habitat under the guidelines of the �1SHCP. • Identif�� an apprc�priate inflation adjustment and recalculate the fee annuall}� for each T,�cal Permittee to adopt. �jMuniFinancial �i CHAPTER 1 : INTRODUCTION This chapter provides background on the Coachella Valley habitat consen ation planning process that led to the need f�r a Local Development Mitigation Fee (LDMF). This report differs from the January 12, 2006 draft primarily because of the following changes in assumptions: • Land acquisition needs were ree��aluated resulting in the planned acyuisition of additional acreage. • An updated market study has resulted in higher land cost estimates. • The City of llesert �I�t Springs has chosen not to participate in the MSHCP. This report therefore reflects new development projections excluding the City of llesert Hot Springs. HABITAT CONSERVATION PLANNING PROCESS Since 1994 local, state, and federal agencies responsible for regulating de��elopment and prote:cting habitat in the Coachella Valley have been participating in an extensive and comprehensive planning process. The purpose of this process is the preparation of a plan for multiple species habitat conser��ation that simultaneously allows continued economic growth from private develc>pment and associated public infrastructure projects. Approval of the ti1Si I(:P by state and federal wildlife agencies will allow the loss of natural communities and taking of species incidental to development and infrastructure projects, provided the mitigation and other measures set forth in the �1SI�CP are sausfied. This planning effort has prc�duce:d the Coachella Ualley Multiple Species Habitat Conservation Plan/Natural Community Conservation Plan (�4SHCP). 'The poficv objectives of the �-iSHCP are (1) to cc>nserve adequate habitat in an unfragmented manner for the effc;ctive preservation �f species and the conserved natural communiues, and (2) to simplify cc>mpliance with CEQA, CESA, :�ICCP Act, FESA, '.�iF.,PA, and other laws by providing an efficient and streamlined re�,n.ilatory approach. The agencies that have participated in the ��Sf-iCP include: • Local government - cities in the Coachella Valle}�, Ri��erside County, and fi��e special districts�; • Regional a�encies - Coachella Valley Ass�ciation of C'���•ernments (CVAG); • State agencies - California llepartment of Transportation (Caltrans), California Department of Parks and Recreation, Coachella Valley Mountains Conservanc}' (CVVIC)2 and California State llepartment of Nish and Game (CD�G); and 1 In addition to Riverside Counri�, local a�encies include the cities of Cathedral Ciri�, Coachella, Indian ��G'clls, Inciio, La Quinta, Palm Desert,,Palm Sprin�;s, and Rancho �lirage, as well as the Coachella Valley ��'ater District, Imperial Irrigation District, Riaerside Counry Flood Control and VG'arer Conservation District, Riverside Counry Regional Parks and <)pen Space District, and Riverside Counn� �X'aste Resources �fanagement District. �MuniFinanciai � Local Development Mitigation Fee Coachella Valley Association of Governments • Federal agencies - U.S. Fish and Wildlife Service (USFWS), U.S. Bureau of I.and ;�'fanagement, U.S. Forest Sen�ice,and National Parks Service. Implementation of the �IS��CP will fully mitigate the impacts on Covered Species and conserved natural communities from new devel�pment and associated public infrastructure projects in the Coachella Valley. M S H CP AND THE INCIDENTAL TAKE PERMIT Adoption of the MSHCP would enable the Wildlife Agencies (Cll�C'J and L;SN�'S) to grant a Permit for the Take of Covered Species ("Permit").3 Permittees will include the local g�vernments in the Coachella Valley listed above ("Local Permittees") and the three state agencies (excluding CDFG) listed above ("State Permittees"). "Covered Species" include species that are endangered, threatened, of special concern, or othenvise covere:d by the MSHCP. "(:onserved natural communities" refers to thc�se natural communities protected under the �ZSHCP pursuant to the Natural Communit�� Conservation Planning Act�f 2002. This type of permit is c�ften referred to as an "Incidental Take Permit" in that it enables the Permittee to engage in an otherwise lawful acti��in� that, as an attendant impact, causes the loss of Covered Species. The Permit�vould als� allow limited take of habitat and species for scientific purposes, also kn�wn as "scientific take". The Permit will enable the Permittc:es to allow or en�;aKe in acu��iues that result in the loss of C�vered Species and the consen ed natural communities without implementin� mitigation requirements be}'ond those required b}' the �fSHCP. F�r example, l�cal go��ernments will be able to approve new development and the state will be able to construct highway� infrastructure in the (:oachella Valley. As long as the Permittees remain in compliance with the :�'ISHCP they will be able to conduct these t}�pes of activities without developing and implementing additional project-specific miti�;ation measures �vith respect to the Co�•ered Species and conserved natural communities,except as ma}' be required b}�the :�fSI ICP. Coachc;lla Valle}� C�nservau�n Commissi<>n (CVCC) is a joint powers authorit}� that is bein� created to implement the �iSHCP. Nailure to adequatel}� implement the 1��1SI-�CP, such as not acquiring the lands necessary to protect habitat (described below), could result in the��'ildlife A�encies suspending�r revol:ing the Permit. LOCAL DEVELOPMENT MITIGATION FEE The primary requirement of the �TSI I(;P is the establishment and ongoing management of a Reserve S�-stem of lands to pro��ide habitat for Co��ered Species and the conser�ed natural communiues. i�luch of this �iSHCP Reserve Syste:m already exists. Portions of it will be established through Complementar}� Conservadon efforts and contribuu�ns b}� state and federal agencies. Substantial lands remain to be purchased from private landowners to Z CV�iC prepared the�iSHCP under contract to CV�1CT,and will also Ue a Pertnittee. 3 The permit would Ue granted b�• I;SFV('S undcr thc Federal Endangered Species Act, Section 10(a), and b}� CDFCJ under che California Natural Communiry Conservation Planning Act, California Fish and CTamc Code Section 2835. �MuniFinancial ` -— 2 Local Development Mitigation Fee Coachella Valley Association of Governments complete the Reserve System as part of the Permittees' mitigation. The I,ocal Permittees are rc;sponsible for this habitat acquisition program. A I,ocal Development �Vlitigation Fee (LD�1F) imposed on new de;velopment projects will be a primary source of funding for the habitat acqwsition program under the NISHCP. This report documents the legal and policy basis to support the adoption by local agencies in the (:oachella Valley of the i.Dl�1F, a type of de��el�pment impact fee under Californta Government Code Section 66000 et seq. The fee would be adopted by Coachella Valley cities and the County of Riverside and collected from new development under their jurisdiction within the Plan Area. The LD�IN is necessary for issuance of the Permit because the Wildlife Agencies require that the i.ocal Permittees identify sufficient funding for implementation of the MSHCP. A primary benefit to new development from the LD�VIF is avoidance of the process to determine mitigauon for impacts to Covered Species and habitat on a project-by-project basis. Implementation of the �1SHCP provides a comprehensive approach to mitigation for such impacts for new development thr�ughout the Coachella Valley• Without the Permit new development in the Coachella Valley w�uld face a significant constraint because projects could have to gain separate approval from CllI�G and the USFWS before proceeding. Project-by-project regulatory approval for habitat mitigation would add substantially to the time; and c�st of the development procc;ss. In addition, the iVISE fCP pr�vides a basis for mitigating the impacts to Covered Species and conserved natural communities associated with the development of public infrastructure necessary to serve new dc:velopment. �Muni�nancial .; C HAPTER 2 : P LAN AREA LAN D U S E This chapter describes the boundaries of the area covered by the MSHCP (the "Plan Area"), existing land use, and estimates of growth within the Plan Area. PLAN AREA BOUNDARIES The Coachella Valley is a broad, low elevation, northwest-southeast trending valley comprising the westernmost limits of the Sonoran Desert. The Valley is located in the central portion of Riverside Count}�, approximately 100 miles east of I.os Angeles. The Plan Area encompasses the Coachella Valley and the surrounding mountains up to the ridgeline. The Plan Area extends west to Cabazon where it is bounded by the range line common to Range 1 East and Range 2 East. This is approximately the limit of the Sonoran or Colorado Desert in the San Gorgonio Pass area. To the east the Plan Area extends to the range line common to Range 13 East and Range 14 L'ast. Lither the ridgeline of the Litde San Bernardino :�lountains or the boundary line with San Bernardino County where the rid�eline extends north of thc: county line defines the northern boundary. (�n the s�uth, either the ridgeline of the San Jacinto and Santa Rosa �lountains or the boundary line with San Die�o or Imperial (:ounties forms the Plan Area boundary. Figure 1 presents a �eneralized map of the Plan Area. The map inclicates how areas �vere analyzed to develop the I�fSFICP Reserve S}'stem. The Reserve System is the ��1Sf�CP preferred alternative and repre;sents the entire area necessary to protect the Covered Species and the conserved natural communities identified in the MSHCP (see Chapter 4 for more explanation). The categories of land identified on the map include: • Agricu�tural Land: Lands currendy primaril}� used for agricultural pr�ducti�n. Because agricultural lands provide biological ��alue for Covered Species,including habitat patches and foraging habitat, conversion of this land to urban use would result in a loss of habitat under the :�iSHCP. • Modeled Species Habitat: i.ands that .vere m�deled using physical data anal��zed as map la}�ers with a geographical informati�n system (G1S). The purpose of the mc�deling was tc� assess the relauve biological value of lands within the Plan Area and assist in developin� the ;�1SHCl� Reserve S}'stem. Substanuall}� all c�f the :�1SII(:P Reserve S}'stem is identified as part of these modeled habitats. Due to the great effort involved in mappin�; and modeling vacant parcels within the urban areas, thesc lands were excluded from the CV�'ISHCP anal}�sis, thou�;h these parcels do contain habitat. �MuniFna�ial � Local Development Mitigation Fee Coachella Valley Association of Governments Fiqure 1 � . �:-� - - �� a. :�� �"" � - �,,, . ��-:� �� e a �.` e �(� t Y� �i'` �. � w'd: �� �1:, �� i �. �� ��li ..!,v''�.: 'y.� .''i � • �, �� �� �~ . _ ,:�; � ��� ,. �t. � _. ..l. ��p /� l 9 �• 4s, . ./��j�^,�S4l�D!!$Qil � ��� "l�: _ �''� �� Plan Area Context Map Coachella Valley MSCHPMCCP �l�Agricultural Land �;'°� Developed Areas F Inaan Reservadon Lands ��� Modeled Speaes Habitat - Natural Communities without Modeled Habitat �MuniFnanciai -------- S Local Development Mitigation Fee Coachella Valley Association of Governments • Natural Communities without Modeled Habitat: I,ands rhat contain natural communities but were not modeled during the planning process because either (1) they are Indian Reservation lands not subject to the MSHCP, (2) they are already protected habitat and are included in the MSHCP Reserve S}'stem, or (3) not part of the �4SHCP. • Developed Areas (Urban and Rural): I_ands that are developed and vacant or partially vacant lands within developcd areas. These vacant or partially vacant lands represent current or potential habitat for Covered Species and the conserved natural communities identified in the �VISHCP. As the map indicates, substantially all the land within the Coachella Valley was subject to modeling to assist in making a comprehensive determination regarding which lands should be included in the �1SI I(:P Reserve S}'stem. EXISTING LAND USE The Plan Area boundaries include approximately 1.2 million acres, or approximately 1,885 square miles. Table 2.1 summarizes the existing acreage within the Plan Area b}' land use. The acreage indicated as Urban and Rural in the table corresponds to the lle��eloped Areas shown in Figure 1. The MSII(:P Reserve S}�stem will be composed of much of the Open Space and 1'rivate Conservation i.ands plus some Public and Private '_�on-Consen�atic�n Lands to be acquired with funding fr�m the LD�IN and other sources. Indian Reservation lands are included in the: Plan Area but not subject to the ;�ISHCP, reducing the total area covered by the :�1SHCP to approximatel�� 1.1 million acres. �MuniFinancial � Local Development Mitigation Fee Coachella Valley Association of Governments Table 2.1: Plan Area Existing Land Use Percent o Totai Acres Plan Area Urban 67,400 5.9% Rural, Rural Residential 92,500 1.1% Agriculture 84,900 7.5% Lake (includes Salton Sea)' 43,500 3.8% Reservoi� 800 0.1% Wind Energy Uses 4,400 0.4% Quarry 900 0.1% Landfill 400 0.0% Public and Private Non-Conservation Lands3 320.600 28.2% Open Space-Public and Private Conservation Lands4 601.000 52.9� Total Area Covered By Plan 1,136,400 100.0% Indian Reservation Lands(Not Covered By Plan) 69.600 Total Plan Area 1,206,000 Includes Salton Sea and other natural water bodies. `Includes Lake Cahuilla, Whifewater River recharge ponds,and other aRificial water bodies. 3lncludes private/ands which are primarily undeveloped and public lands used for non-conservation purposes. Public lands are owned 6y Riverside County, County Flood Control, Metropolitan Water District, the State Lands Commission, cities, U.S.Army Corps of Engineers, Coachella Valley Water District, U.S. Bu�eau of Reclamation,and the U.S.military. °Includes public lands dedicated to open space and conservation purposes and private lands owned by land trusts or conservation organirations,or protected by a conservation easement or deed restriction. Source:Coachel/a Valley Multiple Species Ha6itat Conservation P/an and Natural Community Conservation P/an;MuniFinancial NEW DEVELOPMENT WITHIN THE PLAN AREA ��'ith the assistance of data develc�ped by Cc�achella Valley Association of Governments (CVAG) staff, MuniFinancial estimated the total amount of new de��elopment anticipated within the Plan Area. These projections are usc:d by the LD�f� Financing Plan to allocate habitat acquisiu�n program costs to new develc�pment and to calculate the Local llc:vel�pment Vfitigation Fee (see Chapter 4). Planning Horizon The LDi�1F Financing Plan uses a �0-year planning horizon to estimate future g-rc�wth and assumes that the fee could be discontinued after that time. The Financing Plan assumes a 30- ��ear land acquisition program followed b}� a 20-year amortizauon of remaining program costs. The selection of a planning horizon considered that the MSf I(;P provides a comprehensive appr�ach to mitigating habitat impacts from new development in the Coachella Valle}'• The first acre and last acre of new development benefit equall}' from the I�tSHCP. �1ore �MuniFnancial � Local Development Mitigation Fee Coachella Valley Association of Governments importantly, the si�e of the �VISHCP Reserve System is unaffected by the level c�f new development and habitat acquisition program costs are fixed. If habitat acquisition costs were spread across all new development through build out of the Plan Area then the Local Permittees would not fully fund the MSHCP until construction of "the last home" in the Coachella Valley. This approach would result in a planning horizon of over a hundred years given recent developmcnt trends and the amount of land available for development.4 This is not a practicable planning horizon for the following reasons: • Permit Term: The Wildlife Agencies will issue the Permit for a 75-}�ear period so the planning h�rizon for the Lll:�IF should not extend beyond that time frame. • Permit Compliance: The habitat acquisition program needs to be accomplished within a reas�nable period of time, preferably long before expiration of the Permit. Otherwise, the Wildlife Agencies could determine that the Permittees are not fully funding their obligatic�ns under the MSHCP and therefore are not in compliance with the Permit. '.�Ion-compliance would constrain economic development within the region by requirin� each devel�pment project to separately mitigate habitat impacts. • Land acquisition cost inflation: Acquiring land s�oner rather than later will reduce total costs by limiting the impact of land price inflation. Land, particularly residential land, often increases faster than the average price inflati�n �f all goods and sc;nices as development in a region intensifies. Consequend}�, early� funding of the habitat acquisition pr�gram will reduce the total real (inflati�n-adjusted) cost of the program. • Lost Conservation Opportunities: Given current development pressure, if land acquisiuon is not completed within the first 30 years, development within the consen�ation areas could impede establishment of the reserve system. • Experience with Other Public Facility Financing Plans: Public facility master plans and associated financing plans typically use a 20- to 30-year planning hori�on because this is a reasonable period for estimatin� growth, plannin�; improvements, and amortizing capital costs. Growth factors such as land, water, and other physical resource cc�nstraints, the availability and cost of infrastructure, and local land use policy are difficult to predict o�-er long periods. Science, technolo�,n�, and public policy can change the improve:ments needed to accommodate growth. Finally, the public financial markets n'j�ically do not cxtend financing for public infrastructure be}'�>nd 30 years. A 50-year planning horizon �vas se:lected gi�ren these consideradons. The 50-y�ear horizon, though longer than most public facility financin� plans, is less than the 75-y�ear term of the Permit. This difference represents a conservaave approach b}�pro�•iding a 25-}�ear cushion in case additional revenues arc needed to complete the habitat acquisition pro�,>ram at the end of the �0-��ear planning horizon. At that point the Local Permittees (Coachella Valley cities 4 The amount of undeveloped land available for de�•elopment is defined b}• land use policies contained in the existing CTeneral Plans of cities and the Counn•within the Plan Area. �IV�niFinancial g Local Development Mitigation Fee Coachella Valley Association of Governments and the County) could continue to cc>llect the fee from new development until all habitat acquisition program costs are funded. This approach also does not unfairly burden near-term development with the entire cost of the program because it spreads costs over such an extended (�0-��ear) period. In sum, a 50-year plannin� horizon, by being reasonable, conservative, and flexible ensures that the Permittees can provide the maximum practicable funding and benefit to comply with the Permit through fully funding of the MSHCP. Growth Projections Gr�wth projections were based on an extrapolation of prior trends based on an analysis of information from the California Department of Resources Farmland �Tapping and Monitoring Program and building permit data conducted by the Coachella Valley Association of Governments (CVAG). The estimate of acres developed per year was based on historical development during the period �f 1988 to 2004 for the Plan Area. This time period is a reasonable basis for projection purposes because it captures the volatility of development during periods of recession and expansion. The Plan Area analyzed excluded [ndian Resen•ation land. Geographical lnformauon S}'stem (GIS) co��erages of Riverside Count}� by the California Department of Resources Farmland i�fapping and IVlonitoring Program provided data for the 1988 to 2004 period. This data shows different types c�f agricultural uses as well as developed areas. Based on the analysis described above, CVAG estimated that the rate of development in the Plan Area excluding Indian Resen�ation land has ave;raged 1,370 acres per year. The LD�fF anal}�sis assumes that the: historical average annual rate �vill continue thr�ugh the 50-��ear planning horizon of the LDMF Financing Plan. At this rate a total of 68,�00 acres will be developed (50 }�ears x 1,370 acres per �-ear). The current General Plans of the Coachella Valle}' ciues and the County of Riverside have sufficient unde��elc�ped land zoned for urban uses within the Plan Area to accc�mmodate this level of development. The development projecti�n of 68,500 acres is the total amount of development that the i,Di�fN Financin�Plan assumes is subject tc> and will �ay the fee. Hc>wever, the fee may be increased c>r extended if necessar�� to full�� fund the habitat acquisidon program, as menuoned abo��e. �MuniFnancial � C HAPTER 3 : N EED FO R HAB ITAT CONSERVATtON Identifying the �iSHCP Reserve System was the result of an extensive and comprehensive analysis conducted by an inter-agency planning team and led by� CVAG. The planning team used the best scientific standard and commercial data available to develop the ;�iSHCP. This chapter describes how the planning team identified lands to include in the :VISHCP Reserve Svstem. HABITAT CONSERVATION GOALS The MSI�CP was developed to achieve the following habitat conservation goals: • Represent native ecos}�stem types or natural c�mmunities across their natural range of variation in a s}�stem of conserved areas. • Maintain or restore viable populations of the species included in the �VISHCP so that incidental take permits can be obtained for currendy listed species and non- listed species can be coeered in case the��are listed in the future. • Sustain ecological and evolutionar}- processes necessary to maintain the viability of the natural communities and habitats for the species included in the MSHCP. 'I'hese three goals were used to guide the development of the MSE�CP Reserae System. A fourth objecti��e of the ��fHSCP is to manage the system adapuvely to be rc:sponsive to short-term and long-term environmental change. The management costs will continue in perpetuity and will be func�ed by earnin�s from an end�wment. The LDMF will not fund these c�sts and the;se costs are nc�t part of the anal��sis c�ntained in this report. Development impact fees are a one-time ree=enue source paid as new de;velopment�ccurs and therefore are ill suited to fund consistent, ongc�ing costs such as habitat management, species monitoring, and administration. The endowment is funded b}� contributions from state and local agencies and re��enue ass�ciated �vith landfill tipping fees and interest earnin�s on the f?ndowment Fund balance. COVERED SPECIES AND NATURAL COMMUNITIES The planning team de��eloped an initial list c�f 52 species tc� consider protecdng under the �1SHCP. Thesc: species were idenufied as either endangered or threatened b}� the VG'ildlife Agencies, or at risk for becoming listed as threatened or endangered. Through the planning process this list was reduced to 27 Covered Species. Species were eliminated from the final list for reasons such as a lack of known l�cations in the Plan Area and insufficient data to facilitate conservation planning. Table 3.1 lists the 27 C�vered Species and idenufies the reason for their inclusion in the ��fSI iCP. The Plan Area contains 46 natural communities. The 27 natural communities included in the �iSHCP Reserve S}�stem are thc>se needed to provide habitat for the Covered Species. Table 3.2 lists the natural communities protected b�• the MSHCP Reserve S}�stem. �Mun�inanci� �� Local Development Mitigation Fee Coachella Valley Association of Governments I DENTIFYING THE M S H C P RESERVE SYSTEM The MSF�CP planning team collected information on each Covered Species' life history, habitat, ecological requirements, overall range, distribution, threats, and consen�ation needs. The team gathered similar information on the composition and distribution of natural communities and on existing conser�ation areas, topography, watersheds, ecological processes, roads, and current land uses. The team then had maps prepared of the natural communities and species' habitat distribution. These maps became the basis of for identif��ing lands with the highest biological resource value t� include in the Reserve System. For each Covered Species for which sufficient information was available, core habitat areas were delineated with unfragtnented habitat that contained intact ecological processes large enough for self-sustaining populations of species. Areas needed to maintain essential ecological processes, core habitat, biological corridors, and linkages were also identified. The following measures of adequacy were used to dete:rmine the habitat necessar}� to preserve Covered Species and the consen�ed natural communities and idendfy lands to be included in the yISHCP Reserve System. • Size of habitat patches. �or each C�vered Species, the planning team assessed whether a consen�ation area provided core habitat. The Core I�abitat concept was not applied to species that were considered to occur as metapopulations. These species are the burrotvin� owl, i.e Conte's thrasher, Yuma clapper rail, Calif�rnia black rail, riparian bird species, and southern }�ellow bat. A conservation area was not dee;med inadeyuate because of the lack of core habitat for these species. The concept of c�re habitat was n�t used with natural communities. • The number of core habitat areas protected in conservation areas for each Covered Species. Where possible, the planning team s�ught to cc�nsen�e a minimum of three core habitat areas for each Co��ered Specie;s. In s�me cases, more than three core habitat areas for a C�vered Species occurred in the conservati�n areas. In other instance:s, fewer than three core habitat areas for a Cc�vered Species occurred in the Plan Area. �MuniFnancial i i Local Development Mitigation Fee Coachella Valley Association of Governments Table 3.1: Covered Species Under the MSHCP Plants Mecca aster,Xylorhiza cognuta (NS) Coachella Valley milk�etch,Astragalus lentiginosus var.couchellae (FE) Tiiple-ribbed milki,etch, Astragalus tricarinutus (FE) Orocopia sage, SQ[via greatae (NS) Little San Bemardino Mountains linanthus, Linanthus maculatus(or Giliu maculuta) (NS) InveRebrates-Insects Coachella Valley giant sand-treader cricket, Macrobaenetes valgum Coachella Valley Jerusalem cricket, Stenopelmutus cuhuilaensis Fish Desert pupfish, Cyprinodon macularius (FE/SE) Amphibians Arroyo toad, Bufo californiceis (FE/CSC) Re tiles Desen toRoise, Gopherus agussizii (FT/ST) Flat-tailed homed lizard, Phrynosoma mcallii (CSC) Coachella Valley fringe-toed lizarrl, Uma inornata (FT/SE) Birds Yuma clapperrail, Rallus lvngirostris yumanen.sis (FE/ST/SFP) Califomia black rail, Laterullus jamaicensis (ST/SFP) Burrowing owl, Athene cunicularia (CSC) Southwestem willow flycatcher, Empidonux traillii extimus (SE/FE) Cnssal thrasher, Toxostomu crissale (CSC) Le Conte's thrasher, Toxostomcr lecontei (CSC) Least Bell's rireo, Yireo hellii pu.+•i!!us (FE/SE) Gray ureo, Vif•eo vicinior (CSC) Yellow warbler, Dendroica petechiu brex�steri (CSC) Yellow-breasted chat, /cteria virens (CSC) Summertanager, plrunga rubra (NS) Mamma/s Southem yellow bat, Lasiurus egu or xanthinu.s (NS) Coachel/a Valley raund-tailed ground squirrel, Spermophilus tereticaudus chlorus (CSC) Palm Springs pocket mouse, Perogna�hus(ongimembris bangsi (CSC) Peninsular bighom sheep, Ovis cunadensis nelsoni (FE/ST/SFP) Key: FE�Federal Endangered CSC:Species of Special Concern(a state list of species that are at risk) FT•Federal Threatened NOS:hb Oflicial Status(USFWS,CDFG,and the Scientific Advisory Corrrrittee SE State Endangered that assisted in preparing the MSHCPrecormiend inclusan of these specres ST.State Threatened because of the pro6abil'rty ol their being placed on an official list. SC:State Candidate SFP.Sfate Fuly Hotected Source:Coachella VaHey Associatan ol Governments,Coachella Valley Multiple Species Habitat Conserva6on Plan/Natural CommunityConservation Plan, Table 3-1. �MuniFinanciai �� Local Development Mitigation Fee Coachella Valley Association of Governments Table 3.2: Natural Communities Included in the MSHCP Acti�e desert dunes Stabilized and partially stabilized desert dunes Acti�e desert sand fields Ephemeral desert sand fields Stabilized and partially stabilized desert sand fields Stabilized shielded desert sand fields Mesquite hummocks Sonoran creosote bush scrub Sonoran mixed woody and succulent scrub Moja�e mixed woody scrub Desert saltbush scrub Desert sink scrub Chamise chaparral Redshank chaparral Semi-desert chaparral Interior li�e oak chaparral Cismontane alkali marsh Coastal and valley fi�shwater marsh Southem arroyo willow riparian forest Sonoran cottonwood-willow riparian fnrest Mesquite bosque Desert dry wash woodland Desert fan palm oasis woodland Southem sycamore-alder riparian woodland Arrowweed scrub Mojai,ean pinyon juniper woodland Peninsular juniper woodland and scrub Source:Coachella Valley Association of Governments, Coachella Valley Multiple Species Habitat Conservation P/an/Natura/Community Conservation Plan, Tab/e 3-3. • Representative range of environmental conditions, including temperature, moisture, and elevation gradients, under which the species or natural community occurs in a viable population. �c�r each (;c���ered Species, the planning tcam assessed whether the consen�ation are:as includc:d other conserved habitat that provide:d for the conservauc�n of the range of environmental conditi�ns in which the species occurs in the Plan Area. • Essential ecological processes. These could include h}�drol���ical processes (both subsurface and surface), bl�wsand movement, erosion, deposiuon, substrate development, soil formation, and biological processes such as reproduction, pollination, dispersal, and migrati�n. The plannin� tc:am assessed the conservation areas to e�-aluate whether the essenual ecological processes �MuniFinanciai J-; Local Development Mitigation Fee Coachella Valley Association of Governments necessary to sustain the Covered Species and the conserved natural cc�mmunities present were included in the consen�ation areas. • Biological corridors and linkages. For each Co�ered Species, the planning team assessed whether connectivity of the population in each conservation area was maintained with populations in other conservation areas and to populations outside the Plan Area to the maximum extent feasible. This planning process resulted in the identification of 74G,�00 acres across 21 conservation areas. Within the conservation areas, the :�'ISI�(:P allows a maximum of 22,G60 acres to be developed, leaving 723,940 acres to comprise the :VISHCP Reserve System.5 The Reserve System ensures the conservation of these species and natural communities as new development occurs. Without new development there would be no need to establish the Reserve System because the loss of existing habitat would not occur. :�Iew development has both direct and cumulative impacts on the need f�r habitat conservation. Direct impacts occur from the development of vacant and partially ��acant land within the Plan Area because these lands contain habitat for Covered Species. Cumulative impacts occur as a result of development over time and acrc�ss the Plan Area by reducing the total amount of ai�ailable habitat and thus the viability of Covered Species. 5 Development that is consistent with maintaining certain conservauon objecuves is also allowed within 7,800 acres dcsignated as flu�7a1 sand cransporc areas. �MuniFnancial �-� CHAPTER 4: COST OF HABITAT ACQUISITION This chapter describes the cost of the habitat acquisition pro�ram and presents the Financing Plan for completing the program during the 50-year planning horizon. If no new development occurred within the Plan Area then there would be no take of Co��ered Species' habitat and no need for mitigation. Thus, new development is solely responsible for and benefits entirelv from these costs. AMOUNT OF HABITAT ACQUISITION Table 4.1 presents a summary of the land acreage that will comprise the MSHCP Reserve System described in the last chapter. Of the 1.2 million acres in the Plan Area, 723,940 acres will be preserved as habitat. Sevent��-seven percent or 5�7,100 acres of the Reserve System has already been set aside. Complementary Conservaaon and state and federal contributions to VfSfiCP implementation will conserve an additional 51,840 acres from '.�;ovember 2006 forward. The remainin� amount of 11�,000 acres includes 10,$00 acres of non-Permittee public and quasi-public land, and 7,800 fluvial sand transport areas where acquisition is not required. Appr�ximately 7,500 acres is Pc;rmittee-owned land that will be conserved in pc:rpetuity thou�h the VISHCP, leaving 88,900 acres as of November 2006 that must be acquired from willing seller private landowners, or otherwise conserved. The LDMF will be the primary funding source for this habitat acquisition program. LDM F FINANCING PLAN The primary objecu�e of the Lll`�1F Financing Plan is t� demonstrate that sufficie:nt funding is a��ailable for the habitat acquisition program. The Financing Plan is based on a financial model constructed to estimate annual revenues and costs for the Land Acquisition & lmprovement Fund. The model was used tc> calculate the leve! of the I.D�TF needed to fully fund the habitat acquisition prog-ram after deducting c�ther anticipated revenues and interest earnings on the Fund balance. [mplementatic>n of the �-1SI iC1' includes other costs such as land management, habitat monit<>rin�, and administration that are in addition to the habitat acquisition prc�gram. As discussed in the last chapter these other costs are not included in the calculation of the LD�VIF bc;cause the�� are ongoing costs ill suited to funding�vith one-time fee re��enue ded to the rate of new development. Funding in perpetuity after Year 7� for these costs would cc�me from earnings generated by an Endowment f;und. All i_D�iN revenue and haUitat acyuisition expenditures would be accounted for in the Land rlcyuisition & Improvement Fund. CVCC would manage the Fund as part of its responsibilities to implement the ti1SI�CP. The Fund would enable CVCC to compl�� with a provision of thc Fee Mttigatton Act described in Chapter 6 that requires de��elc�pment impact fees to be placed in a separate account. CVCC would stop collecung i,ll`-fF revenue and would terminate the fund after 50 �-ears, the planning horizon discussed in (;hapter 2. �MuniFinancial i S Local Development Mitigation Fee Coachella Valley Association of Governments Table 4.1: MSHCP Reserve System Acres Conservation Areas Total 746,600 Potential Development Within Conservation Areas 22,660 MSHCP Reserve System Total 723,940 Existing Conservation Lands (as of November 2006) 557.100 Land to be Conserved(as of November 2006) 166,840 Future Complementary Conservation(as of November 2006) 29,990 State and Federal Contribution To Plan Implementation(as of November 2006) 21,850 Consenration of Lands Owned By Non-permittee Public or Quasi-Public Entities� 10,800 Conserved Land Not Responsibility of Local Permittees 62,640 Remaining Lands to Be Conserved By Local Permittees 104,200 Local Permittee Responsibility Conservation of Existing Local Permittee Lands 3 7,500 Conservation of Fluvial Sand Transport Area° 7.800 Subtotal Local Permittee Responsibility 15,300 Remaining Lands To Be Acquired By Local Permittees 88,900 ' Lands set aside for conservation purposes and owned by federal,state,and local agencies and non-profit organizations. 1 Lands currentlyowned byentities such as local utilities that the MSHCP estimates will be conserved through the regulatory process as those entities seek approva/to conduct various activities on their lands. � Lands currentl y owned by Local Permittees that they will set aside for conservation. ° Lands that,through land use regulation,will be required to maintain their natural function as fluvial sand transport areas. Source:Coachella Va1leyAssociation ofGovernments, Coachella Va1leyMultiple Species Habitat Conservation Plan/Natura!Communily Conservation Pfan, Table 4-1. Another ke}� objective of the Financing Plan is purchase of all habitat conservauon lands as soon as financially feasible within 30 ��ears. Given the current development pressure, if land acquisition is nc>t c�mpleted within the first 30 years, important resources may becc�me developed, or surrounded by new development to the extent that the land ma�- become isolated and unsuitable habitat. The onl�� approach that allows acc{uisiti�n <>ver a shorter period than the planning horizon for new de��elopment is to use some t��e of financing mechanism. The Endo�vme;nt Nund would provide this financing as needed during the 30- �•ear acquisition peric�d, with funds repaid o�•er the following 20 years to match the �0-��ear planning horizon. Table 4.2 summarizes total revenues, expenditures, and other assumptions for the I,and ticquisiti�n & Improvement Fund in nominal dollars based on the LDMF Financing Plan. The Financing Plan assumes that Lc�cal Permittees will be�rin to impose the i_DMF on new development in fiscal }'ear 2007-2008 (2008). The Land Acquisiuon tic Improvement l�und is assumed to terminate 50 }�ears later at the end of 2057. See Table A.1 in the Appendix f�r the cash flow detail. �llf�niFnarxial ��� Local Development Mitigation Fee Coachella Valley Association of Governments Table 4.2: Land Acquisition & Improvement Fund Total Revenues & Expenditures (nominal dollars) 2008-2057 Revenues Development Mitigation Fee Revenue $516,802,000 Endowment Loan Proceeds 67,580,000 Regional Road Project Mitigation 21,819,000 Regional Infrastructure Mitigation 48,500,000 Interest Eamings _30,929,000 Total Revenues $685,630,000 Expenditures Land Acquisition $526,705,000 Land lmprovement 9,080,000 Administration Land Acquisition Manager(contract) 5,963,000 Administration (program-►n�de share) 18,602,000 Endowment Loan Repayment 125,280,000 Total Expenditures 685,630,000 Ending Fund Balance $ - Source:Appendix TableA.l;MuniFinancial The following sections describe the reeenues and expe;nditures included in the Lll:�1N �inancing Plan and listed in Table 4.2. Revenues LOCAL DEVELOPMENT MITIC3ATION FEE REVENUE LD�iF revenue would provide the majority of funding for the habitat acquisiti�n program. The Financing Plan generates i.11:�I� revenue by multiplying the per acre fee by the estimated acres c�f new de��elopment. Nee revenue is projected to increase at 3.29 percent annually to equal the estimated rate of land price inflation during the Iand acquisition period fr�m Years 1 to 30 (see Expenditures - Land Acquisition, belc�w). The inflation rate c>f 3.29 �ercent is �nly an estimate, and the actual increase will be based �n economic indicat�rs evaluated as implementauon proceeds. ()nce all land acquisition has been c�mpleted in Year 30 the only Financing Plan cost is for repayment of the Endowment Fund loan. The fee is adjusted to generate revenues sufficient to fund the I�nd�wment f{und loan repa}'ment in }'ears 31 through 50 (see Expendttures - Endowment Loan Repayment, below). �MuniFinancia( �� Local Development Mitigation Fee Coachella Valley Association of Governments Actual fee levels may vary depending on the rate of development, actual land price inflation and loan repa}�ment obligations. ENDL]WMENT LOAN PROCEE05 To complete habitat acquisition in the first 30 years the Land Acquisition and Improvement Fund must borrow from the Endowment Fund. The financial model draws funds from the Endowment Fund as needed to maintain a positive fund balance in any given year. The Land Acquisition and Improvement Fund repays this loan with interest in Years 31 through �0 (see Expenditures-Endowment Loan Repayment, below). REC310NAL ROAD PROJECT MITIGATION �Ieasure A is a half-cent sales tax approved by Riverside County voters to fund transportation projects. Thirty million dollars of �Ieasure A funds are dedicated to fully mitigate the direct, indirect, and cumulative effects of transportation projects on the (:overed Species and the conserved natural c�mmunities. Of this amount g21,819,000 will be contributed to the Land Acquisition and Improvement Fund. Measure A is anticipated to fund this contribution during the first few }'ears of the Financing Plan. 'These bond proceeds cannot be increased for inflauon. REGIONAL INFRASTRUCTURE MITIGATI�N This revenue source is generated by two public agencies in connection with mitigation oF infrastructure projects. The first agency is the Coachella Valley �Y�ater District (CVWD). CV��'D is anticipated to acquire 5�0 acres for the tiiSHCP Reserve S��stem in the Thousand Palms Conservation Area. The acquisition would mitigatc: habitat impacts of the Whitewater River Flood Control Project and is estimated to cost $20,G25,000. This acquisition is anticipated to occur as soon as pracucable upon adoption of the MSI-�CP. The cost estimate is based on the current mid-range market value per acre for the Thousand Palms area of �37,500 (see discussion and table under Expenditures-Land Acquisition, bel�w). The second agency is the (:aliFornia Department of Transportation (Caltrans). (:altrans has an �bligation to acquire 5,791 acres �f habitat to mitigate non-interchange highway projects in the (:oachella Valle}'. For the purposes of the Ninancing Plan, Caltrans is assumed to acyuire 1,930 acres in Financing Plan Years 5 and 10, and 1,931 acres in Ye:ar 15. �'lcyuisition costs per acre are assumed to be the same average cost f«r all acquired acres in the year of acquisition. The actual phasing of the funding for this obli�ation by Caltrans on an annual basis is not material to the Financing Plan because the miugauon is based on a�;iven amount of acreage to be acquired, not on a specific amount of revenue to be contributed. (NTEREST EARNINGS The Fee Mitigation Act described in Chapter 1 requires that interest earnings on development impact fee revenues be credited to the same fund in which the fees are deposited and expended for the same purposes. The �inancing Plan assumes an interest rate of 5.73 percent on Fund balances, a rate similar to that earned by the State's Local Agency Investment Fund during the relatively stable interest rate period of the 1990s. �MuniFinancial /S Local Development Mitigation Fee Coachella Valley Association of Governments Expenditures LAND ACC�IUISiTfON The total estimated cost of the remaining land to be acquired by Local Permittees is $583.7 million in 2008 dollars. These estimates are based on an independent study that relied on current sales and listings of comparable properties (A Market Study of Land Values, Related to Several Areas of Prospective Acquisition, Associated with the Coachella Ualley Multiple Species Habitat Conservation Plan, Scarcella, September 2006). The study estimated low, mid, and high range market values per acre for each of 20 conservation areas within the Plan Area. F.stimates were made of the percentage of land to be acquired at each market level in each conservation area. These costs exclude transaction costs (see below). Table 4.3 on the following page details land acquisition amounts and estimated purchase costs by consen�ation area within the VfSHCP Reserve System. �MuniFinancial �� N �J � O O O O O O Op Op Op O O O Op Op Op Op OO OO O OO O � N � � O O O S S S O O O O S O O O O O O O S O e�- c7 � � D e� t� f� Oi � e� � (h � O e= O e= CV 7 �`) � h O 10 N l'7 i�" + � .�,. 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Average per acre costs include related transaction costs for appraisals, escrow fees, and other costs that are esdmared to be approximately five percent in addition to the land purchase price. The calculation of the average cost per acre including transaction costs in 2008 dollars (the first year of the Financing Plan) is sh�wn in Table 4.4. The Financing Plan assumes that land acquisition costs will increase at 3.29 percent annually during the 30-year acquisition period, resulting in the larger cost estimate tn nominal dollars shown in Table 4.2. The Financing Plan does not increase land acquisition costs from 200G, the year the cost per acre was calculated, to Year 1, fiscal }�ear 2007-2008. Recent real estate market activity in the Coachella Valley does not support such an increase in value. CVAG expects to update this analysis periodicall}� based on new land appraisal studies. Table 4.4: Average Cost Per Acre Average Cost PerAcre($2006) $ 3,391 Transaction Costs' S.00% Average Cost PerAcre Year 1 of Financing Plan Including Transaction Costs ($2006) $ 3,560 ' Includes costs forappraisals,escrowfees,and related transaction activities. Source:Tab/e 4.3;Coachella ValleyAssociation of Governments, Coachella Valley Multiple Species Habitat Conservation Plan/Natura/Community Conservation Plan, Table 5.4a;MuniFinancial 'I'he Financing I'lan includes an estimate of the amount of land acquired on an annual basis o��er the 30-�-ear acquisition period. The Financing Plan assumes that as much land as possible is acquired as early as possible subject to reve:nue constraints. To supplement LD�iF re�•enues, regional road project and infrastructure mitigation payments provide re��enue through Year 15 c>f the Financing Plan. Endowment loan proceeds supplement revenues in Years 26 through 30. To de��elop a financially feasible land acquisitic�n sce:nario, the primary constraint was the capaciri� �f the Endowment to lend to the Land Acquisition F'und during the latter years of the land acyuisition period. The phasing assumptions mec:t the "Rough ProporucmaGty" reyuirements of the �fSE�CP regarding the amount of habitat land conser��ed compared to the amount of de�-elc�pment that c�ccurs. r'lctual land acquisition costs ma}� turn out to be m�re or less than these estimates. Land price inflation may vary from the rate assumed here. Also, costs would be lower to the extent that land is pr�tected through methods �ther than fee simple purchase, such as conservation easements. CVAG will conduct land market appraisals and adjust the rate of increase in the LD:�IF discussed in the revenue section above to mirror actual cost trends and ensure that total revenues do n�t exceed total costs w�ithin the Land Acquisiti�n I�und. -- —...... _-------21 �MuniFnancial Local Development Mitigation Fee Coachella Valley Association of Governments LAND IMPR�VEMENT I,and improvements are one-time capital costs to render the land usable for intended conservation purposes. These costs primarily include the removal of an invasive species, the Saharan mustard, and fencin�;. Other cc>st� include �;atr�, sis�na�;e, anc! r.ra�h rem�>��al. Ungoing maintenance custs arr n�rt included. In the first year of the acquisiuon program, 5182,465 is allocated to land improvement. This cost is inereased by 3.29 percent annually for inflation. Costs terminate at the end of the 30-year acquisition peric�d. ADMINISTRATIDN CV(;C will contract with CVAG for staff senices for the first five years of �TSHCP implementation and may continue to do so thereafter if desired. Total administration costs for all �VISH(.;P implementation activities are estimated to be �429,000 annually in 2008 dollars. This amount would fund about 3.3 fulI-time equivalent positions for management, accounting, information technolo�,ry, and related overhead costs. The I.DMF Ninancing Plan includes $37�,000 of this total amount as the share allocated to the habitat acquisition program. This share is based on total Financing 1'lan eYpenditures as a percent of total program-wide expenditures including the monitoring and management programs, excluding administraaon costs. Administration costs also include �120,OQ0 annually for a contract T.and Acquisition ti'[anager funded solel}' by the Land Acquisition and Improvement Fund. All administration costs are increased 3.29 percent annuall}� for inflation. Costs terminate at the end of the 30-year acquisition period. ENDDWMENT LOAN REPAYMEN7 As discussed above the Land Acquisition and Impr�vement Fund would borrow from the F.ndowment Fund to complete land acquisition within 30 ��ears. The Financing Plan assumes that interest would accrue and principal payments would be deferred until the end of the land acquisition program in Year 30. In Year 31 repayment of the entire l�an balance and accrued interest would begin in even installments over the following 20 years. Interest is calculated using a six percent annual interest rate. Thus repayment wc�uld be completed 50 }�ears after the program begins. t1t that time the Land r�cquisition and Improvement Fund could be terminated. FINANCING ALTERNATIVES As with an}� financing plan, the:re are si�nificant uncertainties regarding revenue assumpti�ns. There is risk of revenues not being available in the future, e.g. investment risk associated with endowment funcling and political risk associated with fees and property-related charges. This sectic�n describes three financing alternatives to consider should revenues fall short of those projected in the Financing Plan: • Increase the I.ocal llevelopment �fiti�;ation Fee: If other revenue sources are not available or if costs increase, the I,Dl4F could be increased to cover reti�enue requirements. • Form a f nance district: �IV�niFnancial 22 Local Development Mitigation Fee Coachella Valley Association of Governments • Benefit assessment districts allow for the imposition of annual benefit assessments on property owners commensurate with the annual costs of an identified special benefit to that property. Beneft assessments can only fund facilities or services that provide a special benefit to a disunct group of property owners that are in addition to any general benefits accruing to all propert}� owners in a jurisdiction. An increase in property value alone does not qualify as a special benefit. Propert}� owners must approve a benefit assessment by majorit}� v�te. Property owners can repeal an existing benefit assessment using an initiati��e process unless the assessment is funding repayment of debt. Benefit assessments are often imposed as a c�ndiuon of approval for devel�pment projects • The :Vlell�-Roos Communiry Facilities Act of 1982 enables the formation of Community Faeilities Distriets (CFDs) by local agencies for the purpose of imposing special taxes on property owners. CFDs are primarily used as a way to finance public facilities with debt financing secure;d by a lien on property within the district, though certain ongoing public sec-vice costs may be funded as well. CFlls impose special taxes on property owners, not special assessments. (;FD approval requiremencs make this funding source primarily attracti��e to development prc�jects cm undevelc�ped land. • Pursue voter approved revenue sources such as parcel taxes: Parcel taxes are a n�e c�f excise tax on the use of pr�pert}�. �G'idely used throughout the state, these taxes are adopted as a special tax dedicated t� specific purpose:s. All special taxes reyuire two-thirds vote;r approval. These taxes are also always adopted jurisdiction-wide and not for sub-areas. Thus, the �re:atest challenge for this funding source is gaining c�untt�wide voter approval. The greatest advantages of a parcel tax are (1) the large and stable potent�al funding base from a countywide tax, and (2) the tlexible use of revenues. Parcel taxes are usuallt� levied as a Elat amc�unt per parcel with variances by major land use cate�ories. The parcel tax rate must not be correlated �i�ith assessed value to avoid being considered a property tax subject to the constraints of Pr�position 13. The parcel tax on a specific property need not be correlated with the benefit received by- that propern� from the c;xpenditure of tax re��enues. �lV�n�nancial 2:; Local Development Mitigarion Fee Coachella Valley Association of Governments CHAPTER 5 : COST ALLOCATIDN AND FEE SCHEDULE This chapter describes the allocation �f habitat acquisition program costs per acre of new devet�pment. The cost per acre is used to generate the fee schedule to calculate the LD:�1F for individual development projects. N EW DEVELOPMENT ACREAGE The cost of the habitat acquisiti�n program is allocated to all 68,500 acres of new development on ��acant or partially vacant land within the Plan Area (see Chapter 2). All ��acant �r partially vacant land represents habitat or potential habitat for one or more Covered Species, including vacant or partially vacant land within the urban areas. Loss of all such lands also represents a cumulative loss c�f habitat for the Covered Species. Table 5.1 lists the (;overed Species and the conserved natural communities that may be found �n vacant or partially vacant land in urban areas on the valley floor. When habitat conversion takes place an��vhere thc:re is an overall loss to habitat quantity and the quality �f the remaining occupied or potential habitat is degraded because these areas may become even more isolated and impede species movement. Thus, all development has a direct, indirect and/or cumulative impact on the loss of habitat for the Covered Species. Table 5.1: Covered Species and Natural Communities Found In Urban Areas Covered Speciea Natural Communitles Invenebrates-Insects Active desert dunes Coachella Valley giant sand-treader enekeG ,14acrohaenetes vp(gum Acfive desert sand fields Coachella Valley Jeiusalem cncket, Slenope(mulus cahuilaensu Ephemeral deseR sand lields Re tiles Sta6ilized and partially stabilized dese�t sand/ields Flat-tailed homed lizard, Phn•nosomn mc•allri Stabilized shielded desert sand fields Coachella Valley fnnge-toed liza�d, Unr!inornulo Mesquite hummocks Bircls Sonoran creosote bush scrub BuiroKing oKl, �Jhene cuniculoria Sono2n mixed Noody and succulent scrub Cnssal thrasher, Toxoslumo crirsale DeseR saltbush scrub Le Conte's thrasher, Toxostomu lecun�ei Mammals Coachella Valley round-tailed ground squirral, Spermophilus tereticnudus ch(r�rus Palm Spnngs pocket mouse, perognnfhus fongimemhris bangsi Source:Coachella Va/ley Mountain Conservancy. NET LAND ACQUISITION COSTS PER ACRE The LD1TF is based c�n the net revenue requirement for the Land Acquisition Fund. As discussed above in Chapter 4 (Expenditures - Land Acquisition), for Years 1 throu�h 30 revenue requirements are based �n Land Acquisition I;und expenditures net of revenue from regional road project mitigation, regional infrastructure mitigati�n, Endowment I�an �IVluniFr�ncial 2-� Local Development Mitigation Fee Coachella Valley Association of Governments proceeds, and interest earnings. For Years 31 through 50 revenue requirements are based �n repa}'ment of the Endowment Loan. Table 5.2 presents the cost per dee•eloped acre for the land acquisition program in Year 1 of the Financing Plan. The amount per acre of �5,730 in Year 1 is based on a net revenue requirement of�7,905,000 and 1,370 acres estimated to be developed in Year 1. Increased at 3.29 percent annuall}�, this is the net revenue needed to fund land acquisition costs through y�ear 30. The $5,730 cost per acre als� equals the total I..D1�fF net revenue requirement through Year 30 shown in the Appendix, Table A-1, discounted at 3.29 percent annuall}�, and divided by the total estimated developed acreage of 68,500 acres. Table 5.2: Cost Per Acre (2008 dollars) 2008 2008-2037 Local Development Mitigation Fee Revenue� $ 7,850,000 $235,500,000 Total Acres z 1,370 41,100 Cost Per Acre $ 5,730 $ 5,730 ' Net revenue required from development mitigation fee revenue in real 2008 dollars. The 2008-2037 revenue estimate excludes the fee revenue needed fo repay fhe Endowment loan during the 2038-2057 period. z Acres ofnewdevelopment. Source:MuniFinancial In Year 31 the fee is adjusted to match the cost of repa��ing the F:ndowment l�an. The fee is calculated to repa� the loan based on a constant annual debt servicc thr�ugh Year �0. FEE SCHEDLJLE :�]ew development will pa�� the LDMF over an estimatc:d �0 }-ears of growth represenung G8,�00 developed acres. Each newly developed acre has approximately the same proportionate impact by causing direct, indirect, and cumulative impacts on species and existing or potential habitat and natural communities. I�iew development also causes a need for and benefits from the installation of public infrastructure, which also impacts habitat. As a result, the Financing Plan funds the mitigatic�n of these impacts u�ith a fee imp�sed per developed acre. 'The per acre cost from Table 5.2 provides the basis for the fee schedule. The total fee for a specific project is based on its size as measured in acres. This approach ensures a reasonable relationship betu�een the fee for a specific development prc>ject and the impact of that project on the need for habitat protection. The fee schedule uses the per acre c�st shown in Table 5.2 to appl}� to all nonresidential development pr�jects. For residential development projects, the fee schedule converts the per acre cost to a cost per dwelling unit based on the density� of the project (d���elling units per acre). The mitigadon �MuniFinancial 2 S Local Development Mitigation Fee Coachella Valley Association of Governments fee is based on average lot si•r.e for the three residential categories (0 to 8 units per acre, 8.1 to 14 units per acre, and 14 units and over per acre). To simplify administration of the Coachella Valley I_DMF in conjunctic>n with the Western Riverside (:ounty DMF, the same density categories and average lot size assumptions are used for this fee schedule (see Mitigation Fee Nexus Report for the Western Riverside County Multiple Species Habitat Conservation Plan). Table 5.3 presents the Local llevelopment i�titigatic�n Fee schedule fc�r the MSHCP in 2008 dollars.The table includes the average lot sixe assumption for cach of the residential land use categories. The I.11I�1F would onlj� apply to new development on vacant or partially vacant land. The fee would not apply to development projects on land that is already developed, such as expansion and renovation projects. Table 5.3: Fee Schedule (2008 dollars) Cost Per Average Acre Lot Size Fee� Residential 0-8 Units PerAcre $ 5,730 0.22 $ 1,284 8.1 - 14 Units Per Acre 5,730 0.09 533 14.1+ Units Per Acre 5,730 0.04 235 Nonresidential Commercial $ 5,730 NA $ 5,730 Industrial 5,730 NA 5,730 Per dwelling unit for residential and per acre for nonresidential land uses. Source: Table 5.2;MuniFinancial Revenue requirements for the LD�41� ma}'�'ar}� substantially� depending �n economic factors discussed in Chapter 4 that affect the Financing Plan. These factors include, for example, land acyuisition price inflation, interest rates, and the rate of new develc�pment. In particular, the �inancing I'lan shown in r�ppendix Table A.1 indicates a substantial change in revenue requirements betw�een the land acyuisition peric>d (assumed to be Years 1 thrc�ugh 30) and the repa��ment of the F.ndowment loan (assumed tc> be Years 31 throu�h 50). A prior draft of this rep<>rt �farch 2004) sh�wed a much less significant chan�;e between these t�vo periods. The difference is primarily a functi�n of the change in estimated land acquisition costs since that prior report was prepared. The proposed fee schedule represents a reasonable approach For allocating mitigation costs as e�•enly as practicable across new developed acreage. The Financing Plan is constrained b}� (1) the polic}� objecuves to fund land acquisition as so�n as feasible within 30 }�ears while allowing costs tc� be spread ���er a 50-year period, and (2) the limited financing opdons a��ailable. Furthermore, as indicated above regarding the difference between the pri�r and current drafts, there are si�,mificant uncertainties regarding Financing 1'lan assumptions. Depending �n the actual value of these assumptions as the Fainancing Plan is implemented, �MuniFinancia! 2G Local Development Mitigation Fee Coachella Valley Association of Governments the allocation of costs to the repayment period (Years 31 to 50) could vary substantially. In the future the CVCC may be able to access financing mechanisms in addition to the Fndowment to more evenly spread costs across all new developed acres through Year 50. Given these c�nsiderations, the fee schedule presented here represents a reasonable approach to the fair allocation of c�sts across all new development. �MuniFnancial 27 CHAPTER 6 : MIT/GAT/�N FEEACT FINDINGS Development impact fees are one-time fees, typically paid when a building or grading permit is issued, imposed on development projects b}� local agencies responsible for regulating land use (cities and counties). Ta guide the widespread imp�sition of impact fees, the State Legislature adopted the Mitigation Fee Act (the Act) with Assembly Bill 1600 in 1987 and subsequent amendments. The Act, contained in California Government Code Sections 66000 through 66025, establishes requirements on local agencies for the imposition and administration of impact fe;e programs. The Act requires local agencies to document five findings when adopting an impact fee. The five statutory findings required for adoption of the Local Development Mitigation Fee (I,D�IN� to fund habitat acquisition and related costs unde:r the MSI�CP are summarized in this chapter and supported in detail by the report that follows. All statutory references are to the Act. PURPOSE OF FEE For the first finding the agenc}�must: Idenufy the purpose �f the fee. (§66001(a)(1)) The purpose of the LD�VIF is to provide a funding source from new development for the acyuisition of habitat and related costs to mitigate development impacts and to carry forward the purposes and objectives af the VISHCP. The LD:VIF advances a legitimate public interest by funding habitat conservation as defined within the �'ISI I(�P. USE OF FEE REVENUES For the second finding the agenc}' must: Identif}� the use to which the fee is to be put. If the use is financing public facilities, the facilities shall be identified. That identification ma}�, but need not, be made by reference tv a capital improvement j�lan as specified in Section 6�403 or 66002, may be made in applicable general �r specific plan requirements, �r ma}� be made in �ther public documents that identify the public facilities for which the fee is charged. (§66001(a)(2)) Fees covered by the requirements �f the Act are th�se used to defray all or a portion c�f the cost of public faciGties related to new development. The Act defines public facilities as including "public improvements, public services, and community amenities." (§66000(d)). LDMF revenue will be used to pro��ide community amenities by fundin� acquisiuon of land for the conservation c�f habitat, and will facilitate public and private project compliance with federal and state endangered species laws. Lll:�4F revenue will pro��ide most of the funding necessary to acquire an esdmated 88,900 acres of habitat and related costs. L�nder the :�1SHCP, this habitat acquisition program provides a comprehensive approach t� miti�;ate the loss c>f species and habitat caused by all �MuniFinancial �s Local Development Mitigation Fee Coachella Valley Association of Governments development in the C�achella Valley or adjacent areas. All habitat acquired with funding from the LD1�-fF will be located within the Conservation Areas. The MSHCP represents the public document referenced in the statute above that adequately idendfies the amount, type, and general location of land to be acquired vvith LDMF funding. The agencies responsible for implementing the LDMF (CVCC) will restrict the use of fee revenues to one-time costs associated with the habitat acquisition program. These costs include: • Land acquisition and related costs such as appraisals and tide insurance; • I.and improvements such as fencing to protect habitat from human impacts; • Administrative costs associated with management of the habitat acquisition program; and • F'inancing costs to enable the cost-effective purchase of large contiguous areas of habitat required by the �ZS�{CP prior t� the receipt of LDMF revenue from new development. I�abitat acquisition costs to be funded by the LllMF are describcd in detail in Chapter 4 of this report, Cost of Habitat Acquisition. BENEFIT RELATIDNSHIP For the third finding the a�enc}' must: lletermine ho�v there is a reasonable relationship between the fee's use and the type of development project on which the fee is imposed. (�66001(a)(3)) All new development within the Coachella Valle}� will direcd}' or indirectly benefit from the LD�4F b}� funding a comprehensive approach to habitat mitigation. The 88,900 acres to be acquired in part with fee re��enues are one component of the 723,940-acre �1SHCP Kesen�e S}�stem. The �iSf iCP Reserve System is the preferred alternauve represenung the area necessary to protect the C�vered Species and the conserved natural communities identified in the I�tSHCP. F?stablishment �f the MSHCP Reserve System �ti�ill mitigate the impacts on C�vered Species and conserved natural communities of all new development and associated public infrastructure projects within the Cc>achella Valle}' for the term of the Permit. I:ach ri'pc; c�f projeet leads to the eliminati�n of habitat. Thus, there is a reasc>nable relationship between the use of LD;VIN revenue and a11 t}pes of new residential and nonresidential development throughout the Coachella VaUe�� that will pa�� the fee. The use �f LD�iF rerenue to benefit new de�•elopment is described in detail in Chapter 4 of this reporc, Cost of Habitat Acquisition. BCJRDEN RELATiONSHIP �or the fourth finding the agcnc}� must: �MuniFriar�cial 29 Local Development Mitigation Fee Coachella Valley Associatzon of Governments Determine how there is a reasonable relati�nship between the need for the public facility and the type of development project on which the fee is imposed. (�66001(a)(4)) All vacant lands in the Coachella Valley, including vacant lands or partially vacant lands in urban areas, represent currern �r potential habitat for Covered Species and the conserved natural communities identified in the MSI i(:P. r1ll new development projects on vacant or partially vacant lands regardle;ss of location will have direct and cumulative impacts on species and existing or p�tential habitat and natural communities. :�Iew development also causes a need for and benefits from the installati�n of public infrastructure. Without new development no further habitat conservation to mitigate for development impacts would be needed in the Plan Area. Therefore, there is a reasonable relationship between the need for habitat conservation and all t�rpes of residential and nonresidential development throughout the Coachetla Vallet� that will pay the fee. The need for habitat conservation was determined through the MS��(.;P planning process using seientifie standards. The MSHCP Reserve System includes land necessary to represent a range of native ecos}'stem types, to maintain or restore viable populations of species, and to sustain ccological and evolutionary process necessary for maintaining the viability of habitats. Based �n these standards the Reserve System only includes that amount of habitat conservation necessar��to mitigate new dc;velopment impacts. Habitat needs are described in more detail in Chapter 3,Need for Habitat Conservation. PROPORTIDNALITY For the fifth finding the agency must: Determine h��v there is a reasonable relationship between the amount of the fee and the c�st of the public facilit}� or portion of the public facility attributable to the devel�pmc;nt on which the fee is imposed. (§66001(b)) :�Iew development will pay the LD�1F over an estimated 50 ��ears of growth representing 68,�00 developed acres. C;ach new�15� dereluped acre has approximately the same proportionate impact bt� causing the direct, indirect, or cumulative, loss of an acre of habitat fc�r Covered Species and the c�nser�ed natural communities. As a result habitat acquisition program costs are spread as evenl}� as practicable across all developed acres. The LD��fF is calculated on a per acre basis and the total fee for a specific project is based on its size as measured in acres. Thus there is a reasonable relationship betvveen the fee for a spe;cific development project and the direct, indirect, or cumulauve impact �f that pr�ject on the need for habitat pr�tection. The fee schedule uses the per acre cost of the pro�ram to apply to nonresidential devel�pment projects. For residential de�-elopment projects, the fee schedule c�ncerts the per acre cost to a cost per dwelling unit based on the densit�� oF the project (dwelling units per acre). See Chapter 2, Plan Area Land Use, for a description of h�w new development is determined. See (:hapter 5, Cost Allocation and Fee Schedule, for a presentatic�n �f the mitigation fee schedule. �MuniFinancial ;� Local Development Mitigation Fee Coachella Valley Association of Governments C HAPTER 7 : I M PLEM ENTATI O N This chapter identifies responsibilities that CVCC and i.ocal Permittees should complete �vhen implementing the LllMF program. ADDPTION OF LDM F BY LOCAL PERMITTEES Each Local Permittee must adopt an ordinance or amend an existing ordinance providing the authoriry to adopt the Local llevelopment �lidgauon Nee, and a fee resoluuon staung the amount of the fee. The fee orciinance shall become effective 60 days after adoption. However, fees shall not be collected until the MSI�CP Take Permit is issued or the 60-day period has been met, whichever date is later. The ordinance should include provisions for an automatic inflation adjustment to the fee. CV(;C could assist in this process by preparing a model ordinance and resolution for each agenc}'to review. ADOPTION OF ADMINISTRATIVE GUIDELINES CVCC should work with I.ocal Permittees to develop administrative guidelines for the LDMF program. These guidelines would address, for example: • A definiuon for"vacant" land that if devel�ped would be subject to the fee; • f1 method f�r appl��ing the fee to de��elopment of partially�•acant parcels; • Definitions of land use categories; and • Transfer�f fee revenues to the Land Acquisition and Impro��ement Fund. PROGRAMMING REVENtJES AND PROJECTS CVCC should program fee re��enues to its acquisition program and related expenditures. This ensures documentation of a reasonable relationship between new devc;l�pment and the use of miti�ation fee revenues. CVCC ma}� alter the planned acquisition or related improvement costs from those shown in this report. However, all e�penditures must condnue to fund expansion of the inventc>r}� of land consen�ed for habitat under the�,Tuidelines of the �'VTSHCP or pay for the other costs set forth above. �or a fi�e-year planning period, the agency should allocate all existing fund balances and projected fee revenue to specific acquisitions or related improvements. The agency can hc�ld funds in an account for longer than five �-ears if necessary to collect sufficient funds to complete the acquisition. �MuniFnancial =;! Local Development Mitigation Fee Coachella Valley Association of Governments ANNUAL INFLATION ADJUSTMENT c.vcc should identify an appropriate inflation adjustment and recalculate the fee annuall}� for each I.ocal Permittee to adopt. Given that the majority of costs are associated with land prices, the annual infladon adjustment could be calcuIated either by: • Using actual prices per acre for recently purchased habitat; or • Providing for an annual (:PI adjustment based upon the Consumer Price Index for "All Urban Consumers" in the I.os Angeles-Anaheim-Riverside Area, measured as of the month of December in fiscal ��ear immediately prior t� the f scal year that the revised fee will take affect. Regardless of the calculated annual inflation adjustment, CVCC should revise the fee accordingl}' �f it appears that total program revenues and costs will not be in balance when the I,and Acquisition and Improvement Fund is terminated. The MSHCP states that the CVCC will update the :�lexus Study at least every five years, and m�re often if deemed necessary, to ensure that the I,ocal Development �iitigation Fee is adequate over the life of the acquisition program to fund the necessary land acquisition and land improvement. REPORTING REQUIREMENTS c_vc:c should assist the Local Permittees in complying with the annual and five-}�ear reporting requirements of the Mittgation Fee Act. In additic�n to reportin�; on revenue and expenditure activity, the agency must identift� when the other revenues in addition t� the T.11MF are anticipated to be available to fund the habitat acquisition program. �MuniFnancial -;2 APPENDIX: CASH FLOW ANALYSIS Table A.1 presents the cash flow analysis for the I,and Acquisition and Improvement Fund. 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J Q W Z W � � � y r� � . o, � � �i � 0 V O � O •N � .� � N N � � ti � ti V �l � U � O U �I � � � z� $ ogg o i � go 00 0 � g � N � N cV O Oi O O N �O (") fV O o N � � � � aD � � � O O�i t�0 � O � ' � ~ � <O N �l hW N Oi � N � N � <O 4� <D ` �+9 t9 69 69 E9 t9 59 W � W � � �° a �a�oa�aaI1'1 a��C'1I' aooaS/�1a�o� a ����.///�� E E E LL � ? �v� O vC� � CJ OYO O �U � � �. �. 01 0 0 � � a a a � p� � y 'w � a � m a J v � D C C N �y � �m a � � W � � � �o � 0 o LL � o Q o � ¢ Q ¢ �'� �v� � � = .� Nl ^o j�vr v,� y 3 m m m B � �7 Q p� �° � � m E � m a8 � � � � = � 2 '� ti � m Q � o � m � � y h m a 8 Q c � m ���. � v � � m `c a o c�i � e � n � � U U � � � � C m a � � o D y�°� � Q � o E ° o o a `—�° Q � �°- o J a e° o � '° � c m m �0 'y m .o �� i� J � ; m e � � � �i a� �' m a�i � � W m ��� � a. n� am mW � e ii �, � � � ,� m � ro E m 'm � yo � � E yQ c_ E _ � q a m c m� � O 3 c c y y U ¢ � a ' 3 :° y � C i a � � mm � � c m ro �' � � m � m ma � Q c ~ U � �' Q � v y �Z �l J W � � � W J Q J J Q W Z W � N m I CITY OF PALM DESERT LEGAL NOTICE NOTICE IS HEREBY GIVEN that a public hearing will be held before the Palm Desert City Council to consider adopting an Ordinance for the local development mitigation fee schedule applicable to new development within the City of Palm Desert. The fees are detailed within the ordinance and are intended to preserve the ecosystems of the City, Coachella Valley and surrounding mountains located in central Riverside County. Adoption and implementation of the Ordinance will help to enable the City to achieve the conservation goals set forth in the Coachella Valley Multiple Species Habitat Conservation Plan/Natural Community Conservation Plan ("MSHCP"), adopted by the City Council on October 11, 2007, to implement the associated Implementing Agreement executed by the City Council on October 11, 2007, and to preserve the ability of affected property owners to make reasonable use of their land consistent with the requirements of applicable laws, which could include the National Environmental Policy Act ("NEPA"), the California Environmental Quality Act ("CEQA"), the Federal Endangered Species Act ("FESA"), the California Endangered Species Act ("CESA") and the California Natural Community Conservation Planning Act ("NCCP Act"). SAID public hearing will be held on January, 24 2008, at 4:00 p.m. in the Council Chamber at the Palm Desert Civic Center, 73-510 Fred Waring Drive, Palm Desert, California, at which time and place all interested persons are invited to attend and be heard. Written comments concerning all items covered by this public hearing notice shall be accepted up to the date of the hearing. Information concerning the proposed Ordinance is available for review in the Department of Community Development at the above address between the hours of 8:00 a.m. and 5:00 p.m. Monday through Friday. CVMSHCP/NCCP documents are also available for review at CVAG offices, 73-710 Fred Waring Drive, Suite 200, Palm Desert, CA 92260, all Coachella Valley public libraries, and online at http://www.cvmshcp.org. If you challenge the proposed actions in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City Council at, or prior to, the public hearing. PUBLISH: Desert Sun RACHELLE D. KLASSEN, City Clerk January 11, 2008 City of Palm Desert, California