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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />JULY 16, 2012 <br />TITLE: <br />PUBLIC HEARING - ORDINANCE <br />TEMPORARILY DEFERRING COLLECTION <br />OF DEVELOPMENT IMPACT FEES <br />CITY MANAGER <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />? As Recommended <br />? As Amended <br />? Ordinance on 1" Reading <br />? Ordinance on 2nd Reading <br />? Implementing Resolution <br />? Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />Adopt an ordinance amending various sections of the Santa Ana Municipal Code to temporarily <br />defer collection of development fees until the issuance of certificates of occupancy/compliance. <br />DISCUSSION <br />Development activity in Orange County continues to experience the after-effects of the economic <br />slow-down. Although there are clear indications that development activity in the City is <br />increasing, it is anticipated to be a slow recovery. <br />Adopted originally in 2008, and again in 2011, the City Council approved a one-year <br />development impact fee deferral program to help stimulate development. Programs similar to <br />Santa Ana's were adopted by a number of cities in Orange County and more than 75 jurisdictions <br />statewide. Santa Ana, like most cities, collects various fees to offset impacts created by new <br />development. These impact fees provide funding for both new infrastructure and for <br />improvements to existing infrastructure, including street circulation and park development. <br />Development impact fees can represent a sizable up-front cost, and in some cases be the <br />deciding factor in the financial feasibility of a project. Allowing these fees to be deferred until the <br />project is nearly complete provides a valuable incentive to both the developer and lender by <br />reducing the time between the investment of money into a project and realizing a return on that <br />investment in the form of sales or leasing of the building and/or units. <br />Allowing construction to commence with a deferment has the potential to benefit the City in a <br />variety of ways including: (a) accelerating increases in property tax valuation due to assessment <br />as improved land; (b) collection of sales tax on building materials purchased locally; (c) revenue <br />from business license taxes from contractors and design professionals; and (d) employment of <br />construction personnel and their spending in the local area. <br />75A-1