HomeMy WebLinkAbout75A - PH DEVELOPMENT IMPACT FEES
CITY COUNCIL MEETING DATE:
REQUEST FOR
COUNCIL ACTION
CLERK OF COUNCIL USE ONLY:
AUGUST 18, 2008
TITLE:
PUBLIC HEARING - ORDINANCE
TEMPORARILY DEFERRING COLLECTION
OF DEVELOPMENT IMPACT FEES
APPROVED
o As Recommended
o As Amended
o Ordinance on 15t Reading
o Ordinance on 2nd Reading
o Implementing Resolution
o Set Public Hearing For
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CITY MANAGER
CONTINUED TO
FILE NUMBER
RECOMMENDED ACTION
Adopt an ordinance amending various sections of the Santa Ana Municipal
Code to temporarily defer collection of development fees until the
issuance of certificates of occupancy/compliance.
DISCUSSION
Santa Ana like most cities collects various fees to offset impacts
created by new development. These impact fees are used to provide and
upgrade infrastructure, facilities and equipment to properly serve new
development. Examples of these fees include:
. Parks Acquisition and Development Fee
. Drainage Area Master Plan Fee
. Transportation System Improvement Assessment (TSIA)
. Major Thoroughfare and Bridge Fee
. Fire Facilities Fee
Under the current system, these impact fees must be paid before building
permits are issued. However, given the general slowdown in the economy
the Building Industry Association of Orange County (BIA/OC) has requested
that cities consider deferring collection of these fees to the point when
projects are complete and certificates of occupancy/compliance are
issued. When combined, these fees can represent millions of dollars.
Therefore, deferring payment of the fees can present a significant cash
flow benefit for developers, which according to BIA/OC may mean the
difference between projects that move forward and those that do not.
A temporary one-year deferral program is recommended as a stimulus for
both residential and non-residential development. To ensure that fees
are paid prior to certificate of occupancy/compliance, provisions in the
75A-1
Deferring Collection of
Development Impact Fees
August 18, 2008
Page 2
draft ordinance require a developer to execute a contract to pay the
fees, with interest, prior to issuance of the certificate of
occupancy/compliance. This contract will be recorded with the Orange
County recorder and constitute a lien for the payment of the fees.
Alternatively, the obligation will be secured by an irrevocable letter of
credit from the developer. So as to avoid any fiscal impact to the City,
the ordinance further provides that a developer will offset the City's
costs to implement and administer the fee deferral program.
Additionally, this ordinance
authority to extend plan check
to one year, without the need
pay new fees.
will temporarily grant the City the
review or inactive building permits for up
for the developer to submit new plans and
The ordinance will be in effect for one year, unless extended for one
additional year by further action of the City Council.
FISCAL IMPACT
There is no fiscal impact associated with this action.
~ino
Executive Director
Planning and Building Agency
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75A-2
ORDINANCE NO. NS-XXX
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF SANTA ANA TO TEMPORARILY
SUPERSEDE CERTAIN PROVISIONS OF THE
SANTA ANA MUNICIPAL CODE AND TO PERMIT
DEVELOPERS TO DEFER PAYMENT OF CERTAIN
DEVELOPMENT IMPACT FEES, AND TO PERMIT
THE EXTENSION OF INACTIVE BUILDING
PERMITS AND PERMIT APPLICATIONS
THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES ORDAIN AS
FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby finds,
determines and declares as follows:
A. The Mitigation Fee Act (Government Code section 66000, ef seq.)
authorizes the City to adopt and regulate monetary exactions for the
purpose of defraying all or a portion of the public facility costs relating
to a development project. The development impact fees are charged
as a condition of approval and are used to alleviate the effects of
development on the community by financing public improvements,
services, or programs that bear a reasonable relationship to the
development. Virtually all California cities, including Santa Ana,
require applicants to pay mitigation fees as a precondition to issuing a
building permit. The City may determine when such fees are to be
paid.
B. Due to recent changes in the economic conditions throughout the
United States relating to new residential, commercial and industrial
development, construction of development projects previously
approved and fully entitled by local cities have been put on hold by
developers.
C. The City relies on new development to stimulate the local economy
and to provide direct and indirect benefits to its residents and
business by creating construction jobs, new market-rate and
affordable housing, and new tax-base and revenues for the City.
D. This ordinance is intended to alleviate certain barriers to
development, in light of the challenges facing the development
industry in a fluctuating market economy, by allowing eligible
project applicants to defer certain development impact fees.
75A-3
Ordinance No. NS-XXX
Page 1 of _
Section 2. Definitions. The following words and phrases are defined for
purposes of this ordinance as follows:
"Applicant" means the owner or owners of record of the real property for
which a fee deferral is sought pursuant to this ordinance.
"Code" means the Santa Ana Municipal Code.
"Executive Director" means the Executive Director of the Planning and
Building Agency of the City.
"Eligible Applicant" means an Applicant meeting the Eligibility Criteria for
deferral of impact fees.
"Eligibility Criteria" means an objective standard established by the
Executive Director, which may be amended from time to time as deemed
necessary, used to determine appropriateness for incentives under this Chapter.
"Fee Deferral Agreement" means an agreement, secured as provided in
Section 4, below, which is a prerequisite requirement for approval for any fee
deferral under this ordinance.
"Nonresidential" means (a) those commercial business activities which are
permitted or allowed in the C 1, C2, C3, C3A. C4, or C5, or in commercial CR, SP
or SD zoning districts as set forth in Title 41 of this Code, or (b) those industrial
business activities which are permitted or allowed in the M1 or M2 zoning
districts as set forth in Chapter 41 of this Code.
"Subject Property" means the real property owned by the Applicant subject
to the Fee Deferral Agreement.
"Residential" means those activities which are permitted or allowed in the
RE, R1, R2, R3, R4, PD, or in residential CR, SP or SD zoning districts, as set
forth in section 41-143 of this Code, and includes a live-work community as set
forth in section 41-101.5 of the Code.
Section 3. Deferral of Development Impact Fees for Residential and
Nonresidential projects.
A. Notwithstanding any other provisions of this Code, some or all of
the development impact fees imposed on new Residential or Nonresidential
buildings and structures located in the City may, upon application by an Eligible
Applicant and approval of the Executive Director, be deferred subject to the
provisions set forth below. Fees eligible to be deferred shall be:
Ordinance No. NS-XXX
Page 2 of 6
75A-4
· Parks Acquisition and Development Fee
· Drainage Area Master Plan Fee
· Transportation System Improvement Fee (TSIP)
· Major Thoroughfare and Bridge Fee (to the extent, if any, it is both
collected and retained by the City)
. Fire Facilities Fee
· Sewer Connection Fee
B. Prior to the City's consideration of an application for deferral of
impact fees, the Applicant shall provide to the Executive Director, at the
Applicant's sole cost and expense, a current preliminary title report on the
Subject Property.
C. No deferral shall be effective until the Applicant provides security to
the City in the form of a Fee Deferral Agreement as set forth in section 4 of this
ordinance, approved by the Executive Director and in a form acceptable to the
City Attorney.
D. The maximum deferral period shall be the earlier of:
1. The final inspection or issuance of a temporary certificate of
occupancy or final certificate of occupancy for the new building or structure on
the Subject Property, whichever comes first, or
2. One (1) year from the date of issuance of the building permit
for the Subject Property.
E. Notwithstanding any provision to the contrary, the deferred impact
fees not paid at the time of building permit shall be subject to:
1. Interest on unpaid fees at the annual rate of interest which
the City earns on its investment of pooled funds which shall accrue from the date
of issuance of the initial building permit until the deferred impact fees and all
accrued interest is paid, and
2. A charge, due and payable upon execution of the Fee
Deferral Agreement, to cover the City's reasonable administrative costs incurred
in processing the fee deferral application and administering the fee deferral
program.
75A-5
Ordinance No. NS-XXX
Page 3 of _
Section 4. Form of Security for Unpaid Development Impact Fees.
A. As a condition of the deferral, the City shall require the property
owner, or lessee if the lessee's interest is of record, to execute prior to and as a
condition of issuance of a building permit, a Fee Deferral Agreement which shall
provide that the deferred development impact fees shall be paid within the time
set forth in section 4.D. of this ordinance, and secured by an obligation that shall
inure to the benefit of, and be enforceable by the City, evidenced by either:
1. a promissory note secured by a senior, unsubordinated
recorded lien on the Subject Property which shall be enforceable against
successors in interest to the property owner or lessee, releasable when the
obligation is paid in full, which shall in the case of a Residential project include
requirement for an escrow instruction providing for payment out of escrow from
sale proceeds of the deferred fees prior to disbursing proceeds to the seller; or,
at the Applicant's option,
2. an direct draw irrevocable letter of credit from the Applicant
in a form approved by the City Attorney, which shall be releasable when the
obligation is paid in full.
B. The payment of such development impact fees shall be deemed a
debt due and owing to the City at such time as set forth herein, which debt shall
only be deemed satisfied and discharged upon payment in full to the City. The
City may pursue collection through all available legal and administrative means
including, but shall not be limited to, judicial or non-judicial foreclosure of the
recorded lien against the Subject Property, a demand upon the irrevocable letter
of credit, and/or civil judgment against the Applicant for breach of the Fee
Deferral Agreement and/or the security provided hereunder.
Section 5. Extension of Inactive Plan Check and Building Permits.
A. Notwithstanding Section 3 of Ordinance No. NS-2760, amending
Appendix Chapter 1, section 105.3.2 of the California Building Code, 2007
Edition, the building official may grant (i) extensions of applications for a permit
for a period of up to one (1) year, and (ii) more than one extension per
application, both without resubmission of plans and payment of new plan review
fee.
B. Notwithstanding Section 3 of Ordinance No. NS-2760, adopting
Appendix Chapter 1, section 105.5 of the California Building Code, 2007 Edition,
the building official may grant (i) extensions of building permits for a permit for a
period of up to one (1) year, and (ii) more than one extension per permit, both
without resubmission of plans and payment of new fees.
Ordinance No. NS-XXX
Page 4 of 6
75A-6
Section 6. Applicability.
This ordinance and the incentives derived hereunder shall apply only to
new development projects that have not obtained a building permit from the City
at the time this ordinance is adopted by the City Council. This ordinance shall
remain in effect through Monday, October 5, 2009, and as of that date is
repealed unless a City Council adopts a further ordinance or resolution to extend
that sunset date for an additional period not to exceed twelve (12) months.
Section 7. Ordinance to Operate Exclusively.
Except as set forth in this ordinance, all other provisions of the Code shall
remain in full force and effect. Nothing contained in this ordinance is deemed to
authorize or permit the deferral of payment of any fee or charge imposed upon
Residential or Nonresidential development in the City except for those
development impact fees expressly set forth in section 2 above.
Section 8. Severability.
If any section, subsection, sentence, clause, phrase or portion of this
ordinance is for any reason held to be invalid or unconstitutional by the decision of
any court of competent jurisdiction, such decision shall not affect the validity of the
remaining portions of this ordinance. The City Council of the City of Santa Ana
hereby declares that it would have adopted this ordinance and each section,
subsection, sentence, clause, phrase or portion thereof irrespective of the fact that
anyone or more sections, subsections, sentences, clauses, phrases, or portions be
declared invalid or unconstitutional.
ADOPTED this
day of
,2008
Miguel A. Pulido
Mayor
Ordinance No. NS-XXX
Page 5 of _
75A-7
APPROVED AS TO FORM:
Joseph W. Fletcher, City Attorney
By:
Benjamin Kaufman
Chief Assistant City Attorney
AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, PATRICIA E. HEALY, Clerk of the Council, do hereby attest to and certify that
the attached Ordinance No. NS-XXX to be the original ordinance adopted by the
City Council of the City of Santa Ana on , and that said
ordinance was published in accordance with the Charter of the City of Santa Ana.
Date:
Clerk of the Council
City of Santa Ana
Ordinance No. NS-XXX
Page 6 of 6
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