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Exhibit 1 Implied Costs Per Acre of Parkland Another approach to assessing the appropriateness of the current fee level is to focus more specifically on the future parks needs of new residents and the costs and fees associated with meeting those needs. While the PIMP recommends 1.5 acres per 1,000 residents for parkland, the City's Municipal Code sets a parkland standard of two acres per 1,000 residents. To meet this standard for the projected new residents, the City would need to provide nearly 56 additional acres of parkland. If the current fee levels generate $43M in revenues, then the City could provide this additional park acreage only if parkland acquisition costs are approximately $775,000 per acre (Table 8-6). However, the City of Santa Ana estimates that park acquisition will cost approximately $2.25 million per acre (see Appendix E) — three times the cost that could be funded through current fee levels. If the City updated its Nexus Study to include these higher acreage costs, the maximum justifiable fee could increase by close to three times. If such a fee increase were justified and adopted, the expected fee revenues would increase substantially, and fee funding from new residential development would cover a larger proportion of the City's envisioned parks and recreation investments. The City's current fees are inadequate to support the investments needed to achieve PIMP recommendations for new residential developments. Impact fees also do not address the current deficiencies in parkland in existing residential areas. TABLE 8-6: IMPLIED PARKLAND ACREAGE COSTS BASED ON CITY SERVICE STANDARD FEE UPDATE OPTIONS To implement the Master Plan, the City should consider three primary changes as part of a potential fee program update: • Increase the fee; • Remove the district structure; and • Charge fees on wider range of land uses. These changes are not mutually exclusive, and the City may undertake them in any combination. Approaches to these potential changes are detailed below. However, the fee program, even when updated, will be limited in its potential to fund recommended improvements. The City will have to pursue additional funding sources, including other municipal revenue sources and grant programs, to fully realized the community's vision for the park and recreation system. Increase the Fee Level time. To set the fee at an appropriate level, the City should compare current and potential new fees with neighboring and peer cities in the region. Remove the District Structure The current district structure for fee collection and expenditures targets new park investments in the same areas that experience new residential growth. While there is a logic to this "return -to - source" approach, it is also limiting. For example, the distribution of fee revenues in recent years has been weighted towards one district. The City must spend fee revenues in that district. This is true even if there are no realistic opportunities for parkland acquisition in that district and even if a new park may serve residents in several districts or Citywide. If the City were to shift to a citywide fee, it would have more flexibility in directing financial resources to areas with the best opportunities for developing new parks. A citywide fee is more common approach among California jurisdictions. Charge Fee to Additional Land Uses The existing Residential Development Impact Fee is only charged on new residential development. However, there are cities throughout California that also charge park impact fees on non- residential land uses, such as hotel, office, and industrial uses (among others). Charging non- residential impact fees recognizes that workers and visitors use City parks as well. If the City is expecting significant new employment growth, it should consider this change. Depending on City policy, this shift may not increase the total fee revenue generation, but spreads the costs associated with new development more widely See Table 2. lull t1 m fee-bat—t'tcthemazi.rnmmiivov across new projects. The result, however, is that Sources: City of Santa A�ia;ityride®Ufgdt.rvey, EPS 1 4 — 1 1 4 level and/or to phase in the fee increase over fees for resider7tA71 1202e2might decrease. Exhibit A ® SANTA ANA PARKS MASTER PLAN CHAPTER 8: ACTION PLAN Projected Population Growth through 2030 [1] a 27,817 Parkland Acreage Standard Per 1,000 People [2] b 2 Parkland Acreage Needs for New Population c=(a/1000)*b 55.63 Est. Fee Revenue Generated by New Units [3] d $42,999,049 The City of Santa Ana should complete a Development Impact Fee Nexus Study to determine the appropriate level for impact fees to help implement PIMP recommendations. The Nexus Study would consider the appropriate approach to determining the parks and recreation facility costs associated with new development. It would also determine the legally supportable fee level that the City could charge based on the requirements of the Mitigation Fee Act. Implied Cost Per Parkland Acre I e=d/c $772,892 As part of a Nexus Study, the City should consider 2019 population and population growth projections provided by City of Santa Ana. 2020 U.S. Census data show that population the impact that an increased fee level would have growth in Santa Ana has been slower than the 2018 Orange County projections. When State and Orange County projections are updated in 2022, these trends may change. on the costs of new development. If the potential IAs adopted in City of Santa Ana's Municipal Code Chapter35 Article IV. fee increase is significant the City may choose to