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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />NOVEMBER 18, 2013 <br />TITLE: <br />PUBLIC HEARING — ORDINANCE <br />TEMPORARILY DEFERRING COLLECTION <br />OF DEVELOPMENT IMPACT FEES <br />�, <br />CITY MANAGER <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 is beginning to recover from the effects of the recession. <br />Although there are clear indications that development activity and construction in the City is <br />increasing, it is anticipated to continue to be a slow recovery. <br />Adopted originally in 2008, and renewed in 2012, the City Council adopted a one -year <br />development impact fee deferral program to help stimulate investment. Programs similar to <br />Santa Ana's have been adopted by a number of cities in Orange County and more than 75 <br />jurisdictions statewide. Santa Ana, like most cities, collects various fees to offset impacts created <br />by new 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 limiting <br />factor in the financial feasibility of a project. Allowing these fees to be deferred until the project is <br />nearly complete provides an incentive to both the developer and lender by reducing the time <br />between the investment of money into a project and realizing a return on that investment in the <br />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 />7513-1 <br />