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HomeMy WebLinkAbout8.3 Report on the Public Facilities Fee Program 2 Agenda Item 8.3 Ile STAFF REPORT DUBLIN CITY COUNCIL CALIFORNIA DATE: May 2, 2023 TO: Honorable Mayor and City Councilmembers FROM: Linda Smith, City Manager SU B.ECT: Report on the Public Facilities Fee Program Prepared by: Colleen Tribby,Assistant City Manager EXECUTIVE SUMMARY: The City Council will receive an overview on the City's Public Facilities Fee Program and on the Program update currently underway. Staff is seeking direction on a recommended change to the Program to satisfy the parkland requirement as the City nears build out. STAFF RECOMMENDATION : Receive the report and provide direction Staff's recommended change to the Program to satisfy the parkland requirements. FINANCIAL IMPACT: None. DESCRIPTION : This Staff Report serves two purposes. First, it provides a general overview of the Public Facilities Fee Program to answer questions about the impact fee, such as what the program is designed to accomplish, how fees are collected,what expenses are eligible,the current fund balance, and project priorities. Second, it presents a potential change for the City Council to consider in order to satisfy parkland requirements. Overview What are development impact fees? Development impact fees are fees charged to developers for the purpose of paying all or a portion of the cost of public facilities needed to serve future residents of the development project. These fees are subject to strict requirements: if they do not relate to the impact created by the development or exceed the reasonable cost of providing the public facility,the fees may be declared a special tax and would then be subject to a two-thirds voter approval. In addition,the Page 1 of 6 426 revenues generated from development impact fees may only be used for the purpose for which they were collected. The City can collect impact fees to fund many types of public facilities. State law defines public facilities (Government Code section 66000(d)) broadly. For example, public facilities can include public improvements such as fire stations, libraries, sewer plants,traffic improvements, and city administrative buildings,but does not include schools. The City of Dublin collects various impact fees including: • Public Facilities Fee • Fire Impact Fee • Eastern Dublin Transportation Impact Fee • Western Dublin Transportation Impact Fee • Dublin Crossing Transportation Fee • Tri-Valley Transportation Development Fee • Noise Mitigation Fee • Freeway Interchange Fee • Affordable Housing In-Lieu Fee • Dublin Ranch West Side Storm Drain Benefit District • Dublin Ranch East Side Storm Drain Benefit District This report focuses solely on the City's Public Facilities Fee (PFF) Program, which collects fees from new development to build parks, recreational, and administrative facilities within the City of Dublin. What exactly does the PFF fund? In 1996, the City of Dublin adopted PFF Program as one means of paying for infrastructure needs resulting from new development. As part of the PFF adoption,the City developed public facilities plans (Parks and Recreation Master Plan, Civic Center Master Plan, Library Master Plan, etc.) for public improvements that are necessary through buildout. The objective is to ensure that adequate public facilities will be available to meet the projected needs of the City as it grows and to further ensure that the facilities planned are consistent with the adopted General Plan. Currently,the PFF collects funds to support the development of facilities in the following categories: Parks, Civic Center, Library, Community Buildings, and Aquatics.Within the Parks category, the City collects a land acquisition fee and an improvement fee for the following types of parks: 1. Neighborhood Parkland 2. Neighborhood Park Improvements 3. Community Parkland 4. Community Park Improvements 5. Nature Parkland 6. Nature Community Park Improvements Page 2 of 6 427 As previously mentioned,various studies and plans provide standards for the amount or size of the facilities the City needs to have available to provide adequate services to the population within the community. For example, the Parks and Recreation Master Plan established a standard that for every 1,000 residents, the City will provide five acres of parkland to provide sufficient recreational and cultural opportunities. The Dublin Municipal Code (Chapter 9.28.040) breaks those five acres per thousand residents into specific needs by category: 1.7 acres for neighborhood parks,three acres for active community parks, and 0.3 acres for nature community parks. To mitigate the cumulative impact, a public facilities fee is charged so that the new development, both residential and commercial, bears its fair share of the increase in service demands on its facilities. What are PFF eligible expenditures? As indicated above, different fee categories have been established to mitigate the impact of new development on the City's public facilities. The City can use the fees to design and construct the facilities identified in the program. This includes construction costs; soft costs such as staff time for project management; contract services for design, engineering,testing, etc.; furnishings, fixtures, and equipment; and miscellaneous costs such as printing, legal noticing, etc. What happens when the City receives the Public Facility Fees? Funds received under the PFF program are segregated from the General Fund and used solely, as required by State law, for the purposes of acquiring and developing new parks and public facilities.When a developer remits PFF fees to the City, the fees are deposited into the Public Facilities Fund, for which the balance is reported in the City's Annual Comprehensive Financial Report (ACFR).While the fees collected are held in this one fund within the City's accounting system, Staff tracks the receipts and expenditures of fees by fee category (Library, Civic, Neighborhood Park, Community Park, Community Buildings, etc.). This ensures at build-out the City can account for how the fees were spent on the intended facilities. What has the PFF funded? Since the adoption of the PFF Program in 1996, the City has acquired and/or improved most of its 267 acres of current parkland using the PFF.A list of total parkland inventory is provided in the table below (parkland already in existence when the PFF was adopted in 1996 are noted with an asterisk). Page 3 of 6 428 City Parkland Inventory Neighborhood Parks Acres Community Parks Acres Alamo Creek Park * 5.30 Don Biddle Community Park 30.00 Bray Commons 4.80 Dublin Heritage Park and Museums * 10.00 Clover Park 2.00 Dublin Sports Grounds * 22.90 Cottonwood Creek Park and School 10.08 Emerald Glen Park 49.00 Devany Square 2.00 Fallon Sports Park 60.10 Dolan Park * 4.90 Shannon Park * 9.60 Dougherty Hills Dog Park 1.40 Subtotal 181.60 Jordan Ranch Park 4.90 Kolb Park * 4.90 Nature Community Parks Mape Memorial Park * 2.60 Sunrise Park 10.80 Passtempo Park 5.10 Subtotal 10.80 Piazza Sorrento 2.00 Postinao Hills Park 4.60 Schaefer Ranch Park 6.30 Sean Diamond Park 5.03 Total Acres: 267.09 Stagecoach Park * 0.90 Ted Fairfield Park 6.90 Butterfly Knoll Park 1.08 Subtotal 74.79 What is the current fund balance in the PFF? Fiscal Year 2022-23 fund balance in the Program is approximately$101,000 in the negative.At the end of the current Five-Year Capital Improvement Program,the PFF will have a negative fund balance of approximately$2.0 Million. Impact fee funds can run in a deficit position due to a lag between expenditures on projects and collection of development impact fees. How are PFF project priorities set? Project priorities are set by the City Council and are adopted as part of the City's Capital Improvement Program (CIP) on an annual basis at a noticed Public Hearing. The CIP includes projects that Staff recommends for funding and shows the timeline for when certain portions of a project will proceed. Importantly, it is a funding program that is designed to be self-sustaining and separate from the City's other sources of revenue. What are the City's current spending priorities in the PFF? The current Five-Year CIP includes the following improvements: • Cultural Arts Center- The project started demolition in November 2022 with completion of construction anticipated in mid-2024. Page 4 of 6 429 • Library Tenant Improvements - Staff is in the process of surveying residents on the uses of the expanded space and will engage with a design firm later in 2023. • Fallon Sports Park Phase 3 - The project is anticipated to be entirely completed in spring/summer 2023. • Downtown Dublin Town Square Park- The planning phase will begin in 2023. • Jordan Ranch Neighborhood Square - Construction is anticipated to begin in 2024. • Wallis Ranch Community Park- Construction is anticipated to begin summer 2023. • Iron Horse Nature Park and Open Space - Construction of the first phase is anticipated to begin in summer 2023. What are the future, remaining PFF projects not included in the Five-Year GIP? The following projects funded by the PFF are currently planned for outside the 2022-2027 CIP: • Jordan Ranch Community Park (GH PAC Vest) - 7.2 acres • Croak North - 5.0 acres • Croak South - 6.0 acres • Dublin Crossing Neighborhood School Site - 5.0 acres • SCS Linear Park- 2.5 acres • Emerald Glen Park Phase 2 - Facility estimated at$17.6 million In addition to those identified projects listed above, according to the 2017 Public Facility Fee Program, the City would need additional parkland acquisition of 21 acres to meet the City's overall acreage requirement. This will change with the update to the PFF,which will account for an increase in population and land and improvement costs. Will the General Fund need to loan funds to or subsidize the Program in the future? Yes. The City adopted its first fee program in 2003 and didn't adopt another comprehensive fee update until 2015. During that period,the City did not generate sufficient revenues to fully fund facilities to serve new development.With the 2017 update, the City's General Fund will need to subsidize the Program with approximately$6.7 million. Based on the 2023 update currently underway,that number will double. In terms of loaning funds to the Program,the City's General Fund has contributed $15 million to the Public Safety Complex, of which $13.5 million will be reimbursed by future PFFs. The City Council received the $15 million as a Community Benefit Payment as part of the negotiated development agreement with the Dublin Crossing Project. In, as of Fiscal Year 2022-23,the City has set aside a reserve of$10 million. It is being used to advance funding to projects like Wallis Ranch Community Park, Jordan Ranch Neighborhood Square, and the Library Tenant Improvements, and will be paid back by the PFF over time. In addition to the loans,the City Council allocated $4.8 million as a "gift" from the General Fund to two PFF projects to pay for enhancements to The Wave ($3.0 million towards the natatorium) and Fallon Sports Park ($1.8 million toward synthetic turf and field lighting for the soccer fields) that were not anticipated in the PFF program. These contributions were characterized as "gifts" or Page 5 of 6 430 "grants" because they paid for enhancements to projects in the PFF and, therefore, are not eligible for repayment from the PFF in the future. 2023 PFF Update Considerations Parkland Discussion In keeping with good government practice,the City embarked on an update to the Fee Program late last year following the release of new census data (population counts) and updates to the City's Housing Element of the General Plan, as well as to capture the increased costs for improvement to public facilities and parks. The City retained the services of Willdan,who has previously conducted our fee analysis for the update. In summary,because of the new population data from the US Census and the Housing Element,the City will have a deficit of parkland of close to 50 acres,which is a significant increase from the 2017 report's deficit of 21 acres. The majority of this is in the active community parkland category. Because there is virtually no land left for active community parks in Dublin, the City will be unable to meet this objective. Staff's recommendation is to shift the acreage requirement from Community Parkland to Nature Community Parkland, essentially so that the remaining deficit can be solved with the addition of nature parks. Staff has been engaged in discussions with the property representatives of GH Pac Vest regarding the conversion of their significant open space designation into nature community parkland. This area is approximately 35 acres and can be designed to accommodate low impact use, such as hiking and walking along designated trails. In the recent update the Parks and Recreation Master Plan,walking and trail use was one of the most popular and requested use of city facilities. Nature community parks also have the added benefit of being less costly to the City for maintenance and ongoing use. They do not require any restroom facilities, also limiting cost to the City. If the City Council is interested this approach, Staff will work with the consultant on how to capture remaining improvement needs for the current active community park, update the City's parks dedication ordinance accordingly, and continue the discussions and the possible General Plan amendment with GH Pac Vest to accommodate the area's use a park facility. STRATEGIC PLAN INITIATIVE: None. NOTICING REQUIREMENTS/PUBLIC OUTREACH : The City Council Agenda was posted. ATTACHMENTS: None. Page 6 of 6 431 I : t Report the S d • : . 1 *1 .: ) * .., --- - : ci' • A h' T ' ' PP I Development Impact Fees Overview • Fees charged to developers to pay for public facilities needed for future residents • E.g., fire stations, libraries, traffic improvements • Must relate to impact created by development • Dublin has I I different impact fees; we update these periodically . uivi433 Public Facilities Fees • Adopted in 1996, and links to other City plans • Parks & Rec Master Plan, Civic Center Master Plan, Library Master Plan • They dictate the standards we use when building facilities • PFF supports development of five types of facilities: Parks, Civic Center, Library, Community Buildings, Aquatics — This update focuses on parkland . uivi� 434 Parkland Fees • For parks development, we collect fees for: — Neighborhood Parkland — Neighborhood Park improvements — Community Parkland — Community Park Improvements — Nature Parkland — Nature Community Park Improvements . uivi� 435 Parkland Fees • Parks fees have funded most of the parkland in the City — Don Biddle, Emerald Glen, Fallon, Positano Hills, Sean Diamond, Cottonwood Creek • Current CIP has additional projects — Cultural Arts Ctr, Library Tenant Improvements, Fallon Phase 3, Downtown Dublin Town Square Park, Jordan Ranch Neighborhood Square,Wallis Ranch, Iron Horse Nature Park • Future projects — Jordan Ranch Comm Park, Croak North and South, Dublin Crossing Neighborhood School Site, SCS Linear Park, Emerald Glen Phase 2 � 436 Parkland Fees • Specific needs with this update — No more available community parkland to develop — Staff recommend minor adjustment to acreage requirement • Shift need to nature parkland • Requires change to Ordinance — Staff is working on potential nature parkland opportunities (with GH Pac Vest) • Staff seeks City Council direction . uivi� 437 • • DUBLIN CALIFORNIA