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11-13-2018 CC Rpt 22-ri COUNCIL AGENDA STAFF REPORT t�il5 til TO: HONORABLE MAYOR AND CITY COUNCIL DATE: NOVEMBER 13, 2018 MEMBERS FROM: CITY MANAGER ITEM NO: 22 SUBJECT: DEVELOPMENT IMPACT FEE PROGRAM EVALUATION RECOMMENDATION: Introduce an ordinance entitled: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHINO HILLS, CALIFORNIA, AMENDING CHINO HILLS MUNICIPAL CODE SECTION 3.40.120 TO ADOPT A PROVISION TO ANNUALLY AUTOMATICALLY ADJUST THE GENERAL FACILITIES FEE AND PARKS AND RECREATION FEE CONSISTENT WITH THE PRICE INDEX FACTOR PURSUANT TO AND IN ACCORDANCE WITH GOVERNMENT CODE SECTION 66000 ET SEQ, TO MAKE FIVE-YEAR FINDINGS REQUIRED BY GOVERNMENT CODE SECTION 66001 REGARDING UNEXPENDED TRAFFIC, WATER, SEWER, STORM DRAIN, PARKS AND RECREATION, AND GENERAL CITY FACILITIES FEE FUNDS, TO FIND THAT EACH OF SUCH FEES COMPLIES WITH CHAPTER 3.40 AND APPROPRIATELY MITIGATES IMPACTS OF NEW DEVELOPMENT PROJECTS AND TO DETERMINE THIS PROJECT IS EXEMPT FROM REVIEW UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. BACKGROUND/ANALYSIS: The City of Chino Hills has been undergoing development since its incorporation. In order to finance various public facilities necessitated by new development and to also retire debt incurred to fund infrastructure throughout the City, the City imposes certain fees on new development through the Development Impact Fee (DIF) program. The DIF is based upon a Public Facilities Implementation Plan (PFIP) that was prepared in August 1998 by Keyser Marston Associates (KMA) to update certain fees determined by the County of San Bernardino prior to the City's incorporation. The PFIP included an update and restructuring of a number of development fees including the Traffic Facilities Fee, the Water Facilities Fee, the Sewer Facilities Fee, the Storm Drain Facilities Fee, the Parks and Recreation Facilities Fee, and General City Facilities Fee, collectively, "Facilities Fees." Over the years, the City has reviewed and updated the DIF and PFIP several times. The following provides a listing of prior Council actions related to the DIF: • September 8, 1998 - Adopted Ordinance No. 109 which reorganized the City's previous development fee program and imposed a new development fee program. • November 24, 1998 - Adopted Ordinance No. 111 in order to adjust the amount of certain Facilities Fees and clarify certain provisions provided in Ordinance No. 109. • April 11, 2000 - Adopted Ordinance No. 128 to update the Facilities Fees. • September 23, 2014 - Adopted Ordinance No. 277 to amend Ordinances Nos. 109, 111, and 128. The purpose was to modify the fee program, apply an annual escalation factor, based on the Engineering News Record's 20 -City Construction Index, to Traffic, 150/211 Water, Sewer, and Storm Drain Facilities Fees, and amend the Chino Hills Municipal Code accordingly. Section 3.40.120 of the Chino Hills Municipal Code requires that the City Council review the DIF program every three years. Under the State Mitigation Fee Act, the City is also required to review the DIF program and make certain findings every five years regarding any unexpended funds. The City Council also reviews and approves an annual DIF Public Disclosure per Government Code Sections 66006(b) and 66001(d). A copy of the December 12, 2017 City Council staff report containing the Annual Development Impact Fee Financial Report for Fiscal Year 2016 -17 is attached (Exhibit A). Staff will bring the Annual Public Disclosure for Fiscal Year 2017-18 to an upcoming Council meeting. In 2017, David Taussig & Associates (DTA) was hired to evaluate and review the status of the DIF program. In August 2018, DTA completed an updated analysis (Exhibit B) of the Traffic, Water, Sewer, Storm Dain, Parks and Recreation, and General City Facilities Fee. The evaluation was conducted to determine the status of these fee programs and evaluate their ability to pay for the remaining facilities, not yet built but contemplated, by the PFIP. The report provides the information enabling the City Council to fulfill its duty under both the City's and State's requirements described above. The approximate dates on which the funding referred to in Table IV -A of the 2018 DTA Evaluation is expected to be deposited into the appropriate account or fund are set forth in Table A attached. Staff estimated the dates based on the project costs, projected revenue, and project priority. Based on the development projections and current fees, the facilities' costs and other funding sources indicate that the Traffic, Water, Sewer, Storm Drain, Parks and Recreation and General City Facilities Fee funds will be sufficient to cover the costs of outstanding projects at the anticipated development rate. Because no increase in funding is needed to complete the remaining facilities, no increase in the fees is recommended other than the addition of an annual construction cost escalator to account for inflation. The cost escalator is recommended to be added to the Parks and Recreation Facilities Fee and the General City Facilities Fee to ensure inflation does not erode the ability of these funds to pay for future planned facilities. This is consistent with the escalator already added in 2014 to the Traffic Facilities Fee, Water Facilities Fee, Storm Drain Facilities Fee and Sewer Facilities Fee. The Engineering News -Record's 20 -City Average Construction Cost Index was chosen as the basis of the escalation factor, because it is tied to the increase in construction costs. In order to streamline the update efforts, staff also propose to align the City's requirements with those of the State, by requiring the review and update of the program every five years. If approved, the Municipal Code Section 3.40.120 will be amended to change the review cycle from three years to five years, which will also be consistent with the State's requirements. Public Notice: Pursuant to Government Code § 66016, the City made the documents noted below available to the public regarding the cost, or estimated cost, of facilities being funded by the Facilities Fees and the other revenue sources anticipated to provide for the facilities. Pursuant to Government Code §§ 66004 and 66018, on November 3, 2018, and on November 10, 2018, the City published notices pursuant to Government Code Section 6062a in the Champion Newspapers, a regularly published newspaper, providing notice of the time and place of the November 13, 2018 public hearing on the Facilities Fees. 151/211 Documents Made Available for Public Review: In accordance with Government Code §66016, the following documents have been made available in the City Clerk's office on November 2, 2018, for public review: 1. Development Impact Fee Program Evaluation dated August 2018; 2. Traffic, Water, Sewer and Storm Drain Facilities Fee Evaluation dated April 2014; 3. Public Facilities Implementation Plan (PFIP) dated August 1998; 4. 2003 SCADA System Upgrade Study; 5. Water, Recycled Water, and Sewer Master Plan dated October 2005; 6. Parks, Recreation & Open Space Master Plan dated May 2007; 7. Storm Drain Master Plan dated December 2008; 8. General Plan Update dated February 2015; 9. FY 2018-19 Capital Improvement Program Budget; 10. FY 2016-17 Annual Public Disclosures; and 11. A draft of this Staff Report and attachments. ENVIRONMENTAL (CEQA) REVIEW: This Ordinance is exempt from review under the California Environmental Quality Act (Cal. Pub. Res. Code §§ 21000, et seq.; "CEQA") and CEQA regulations (Cal. Code Regs. tit. 14, §§ 15000, et seq.) pursuant to Pub. Resources Code, § 21080(b)(8) because it modifies and restructures charges necessary to obtain funds for capital projects necessary to maintain service within existing service areas, and pursuant to Cal. Code Regs. tit. 14, § 15273 because it establishes, modifies, structures, restructures, and approves fees for capital projects needed to maintain existing Facilities Fee programs originally adopted in 1998 by the City Council. FISCAL IMPACT: The adoption of this Ordinance has no fiscal impact for the City's General Fund. The funding sources from Traffic, Water, Sewer, Storm Drain, Parks and Recreation, and General City Facilities Fee as well as existing fund balances, loan repayments, and other funding is anticipated to cover costs of facilities through FY 2026/27 at the anticipated development rate. REVIEWED BY OTHERS: This agenda item has been reviewed by the City Attorney, the Finance Director, and the Community Development Director. Respectfully Submitted, Konradt Bartlam City Manager Attachments Ordinance Recommended By: Nadeem Majaj P.E , Director of Public Wofks Exhibit A - Annual DIF Financial Report Exhibit B - Development Impact Fee Program Evaluation Table A - Dates Funding Complete 152/211 ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHINO HILLS, CALIFORNIA, AMENDING CHINO HILLS MUNICIPAL CODE SECTION 3.40.120 TO ADOPT A PROVISION TO ANNUALLY AUTOMATICALLY ADJUST THE GENERAL FACILITIES FEE AND PARKS AND RECREATION FEE CONSISTENT WITH THE PRICE INDEX FACTOR PURSUANT TO AND IN ACCORDANCE WITH GOVERNMENT CODE SECTION 66000 ET SEQ, TO MAKE FIVE-YEAR FINDINGS REQUIRED BY GOVERNMENT CODE SECTION 66001 REGARDING UNEXPENDED TRAFFIC, WATER, SEWER, STORM DRAIN, PARKS AND RECREATION, AND GENERAL CITY FACILITIES FEE FUNDS, TO FIND THAT EACH OF SUCH FEES COMPLIES WITH CHAPTER 3.40 AND APPROPRIATELY MITIGATES IMPACTS OF NEW DEVELOPMENT PROJECTS AND TO DETERMINE THIS PROJECT IS EXEMPT FROM REVIEW UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT THE CITY COUNCIL OF THE CITY OF CHINO HILLS DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. The City Council does hereby make the following findings of fact: A. On September 8, 1998, the City Council adopted Ordinance No. 109 imposing fees on new development within the City to finance various public facilities necessitated by such development, based in part on a study dated August 1998 by Keyser Marston Associates, Inc., entitled the Public Facilities Implementation Plan ("PFIP"). The PFIP calculated the fees that would need to be paid by new development to fund the costs of City facilities. The PFIP included the Traffic Facilities Fee ("TFF"), the Water Facilities Fee ("WFF"), the Sewer Facilities Fee ("SFF"), the Storm Drain Facilities Fee ("SDFF"), the Parks and Recreation Facilities Fee ("PRFF"), and General City Facilities Fee ("GCFF"), collectively, "Facilities Fees." B. On November 24, 1998, the City Council adopted Ordinance No. 111, amending Ordinance 109 to adjust certain of the Facilities Fees set forth in Ordinance 109 based upon updated information. C. On April 11, 2000, the City Council adopted Ordinance No. 128, amending Ordinance 109 to update the Facilities Fees. D. On September 23, 2014, the City Council adopted Ordinance No. 277, amending Ordinance Nos. 109, 111, and 128 to update the Facilities Fees based on the Traffic, Water, Sewer and Storm Drain Facilities Fee Evaluation prepared by Keyser Marston Associates. 1 of 7 153/211 E. David Taussig & Associates, Inc. has now prepared a new report, in collaboration with City staff, entitled: "Development Impact Fee Program Evaluation" dated August 2018 ("2018 DTA Evaluation"), that evaluates the Facilities Fees programs and the ability of the revenue sources for each program to pay for outstanding facilities needed as the City continues to grow. The 2018 DTA Evaluation outlines anticipated project costs, funding sources, and fund balances at the end of the development period through FY 2026/27 and makes recommendations regarding the Facilities Fees programs. The 2018 DTA Evaluation is an amendment and revision to the PFIP, also known as the "1998 Study," as referenced in CHMC Section 3.40.010. F. The 2018 DTA Evaluation is based upon analysis and input of City staff and the reports and studies, including: 1. Public Facilities Implementation Plan ("1998 PFIP") prepared by Keyser Marston Associates; 2. Annual Public Disclosures; 3. 2014 Keyser Marston Associates Study; 4. 2007 Park Master Plan; 5. General Plan 2015 Update; 6. 2003 SCADA System Upgrade Study; 7. 2005 Water, Recycled Water, and Wastewater Master Plan; 8. 2008 Storm Drain Master Plan; and 9. 2018-19 Capital Improvement Program Budget All of these studies, plans, and reports were entered into the record during the public hearing on this matter before the City Council. G. Pursuant to Government Code § 66016, on November 3, 2018, the City provided notice of the time and place of the November 13, 2018 public hearing on the Facilities Fees, including a general explanation of the matter to be considered, and a statement that the data required by Government Code § 66016 is available, by mailing notice to all interested parties who had on file with the City a written request for mailed notice of meetings on new or increased fees. H. Pursuant to Government Code § 66016, the City made data available regarding the cost, or estimated cost, of facilities being funded by the Facilities Fees and the other revenue sources anticipated to provide for the facilities, on November 3, 2018, more than ten (10) days before the public hearing held on November 13, 2018. 2of7 154/211 I. Pursuant to Government Code §§ 66004 and 66018, on November 3, 2018 and on November 10, 2018, the City published notice pursuant to Government Code Section 6062a in the Champion Newspapers, a regularly published newspaper, providing notice of the time and place of the November 23, 2018 public hearing on the Facilities Fees. SECTION 2. On November 13, 2018, the City Council conducted the public hearing, and considered evidence presented at the public hearing. Based upon that evidence, including the 2018 DTA Evaluation, the agenda reports presented to the City Council regarding this issue, the testimony of City staff and the public, the City Council finds, pursuant to Government Code, § 66001, subsection (a)(1) and (d)(1), Chino Hills Municipal Code Section 3.40.120, and all other applicable law as follows: A. The Facilities Fees as shown in Tables ES -2 of the 2018 DTA Evaluation are to finance traffic, water, sewer, storm drain, parks and recreation, and general city facilities projects originally identified in the PFIP but not yet completed, as determined by the City Public Works Department and Community Services Department, including any adjustments for equivalent projects deemed by the City Public Works Department and Community Services Department to address current circumstances and technological improvements. B. There is a reasonable relationship between the use of the Facilities Fees and the type of development on which such fees are imposed because such fees fund the traffic, water, sewer, storm drain, parks and recreation, and general city facilities projects required or anticipated to be required to properly support development in the City as originally described in the PFIP, and as updated as set forth in the 2018 DTA Evaluation. C. Further, there is a reasonable relationship between the need for the public facility and the type of development project on which the Facilities Fees are imposed because such fees vary by land use type as necessary to tailor the impacts from the type of development with the amount of the fees charged to fund the traffic, water, sewer, parks and recreation, and general city facilities as originally described in the PFIP, and as updated as set forth in the 2018 DTA Evaluation. D. All of the sources and amounts of funding anticipated to complete the financing in incomplete improvements shown in Table ES -2 are identified in Table IV -A of the 2018 DTA Evaluation. The Facilities Fees do not include the costs attributable to existing deficiencies in public facilities because any such existing deficiencies were excluded from the projected total cost of facilities for new development, both in the PFIP and in the 2018 DTA Evaluation. E. The approximate dates on which the funding referred to in Table IV -A of the 2018 DTA Evaluation is expected to be deposited into the appropriate account or fund is set forth in Table A attached to the City Council staff report prepared in support of his Ordinance. 3 of 7 155/211 F. The Facilities Fees for public facilities are of proportional benefit to the property being charged because such fees are tailored to the impacts from the type of development with the amount of the fees charged to fund the traffic, water, sewer, storm drain, parks and recreation, and general city facilities as originally described in the PFIP. G. An automatic annual escalation factor provision is to be applied to Parks and Recreation and General City Facilities Fees every July 1St based upon the Engineering News Record's 20 -City Construction Cost Index which reflects construction cost increases to ensure that the funds to construct the required public facilities which were calculated in 2018 dollars are not eroded over time by inflation. H. The Facilities Fees comply with Chino Hills Municipal Code Chapter 3.40 the Facilities Fees collected appropriately mitigate impacts of new development projects. I. This Ordinance is exempt from review under the California Environmental Quality Act (Cal. Pub. Res. Code §§ 21000, et seq.; "CEQA") and CEQA regulations (Cal. Code Regs. tit. 14, §§ 15000, et seq.) pursuant to Pub. Resources Code, §21080 (b)(8) because it modifies and restructures charges necessary to obtain funds for capital projects necessary to maintain service within existing service areas, and pursuant to Cal. Code Regs. tit. 14, § 15273 because it establishes, modifies, structures, restructures, and approves fees for capital projects needed to maintain existing Facilities Fee programs originally adopted in 1998 by the City Council. SECTION 3. Section 3.40.120 of the Chino Hills Municipal Code is amended as follows: A. After July 1st of every fifth year, in connection with the annual City audit, or as soon thereafter as is possible, the City Council shall review the status of compliance with this chapter of each fee and the degree to which the fees collected pursuant to this chapter are mitigating impacts of new development projects. All aspects of the PFIP and subsequent studies shall be reviewed and updated accordingly. The review of each fee may, but is not required to be, on the same five-year cycle. By ordinance, and after a noticed public hearing, any of the fees may be increased or decreased annually to reflect changes in actual and estimated revenues and costs (including, but not limited to, debt service, lease payments, inflation, identification of other funding sources, acquisition and construction costs) of facilities financed by the fees as compared to original estimates of revenues and costs for facilities in the PFIP. Any such adjustments in the fees will be prospective only and will become effective as of the date specified in any such ordinance. B. Fees for land uses that do not fit into categories of use identified in the PFIP and subsequent studies shall be determined by the Community Development Director on a case-by-case basis, based upon the input of appropriate City staff and consultants, and based upon studies indicating the demands of and benefits received by the proposed uses. 4 of 7 156/211 C. Notwithstanding the above, the TIFF, WFF, SFF, SDFF, PRFF and GCFF are to be reviewed annually and adjusted by the price index factor set forth in the Engineering News Record's 20 -City Average Construction Cost Index, for each January 1 of the prior year to January 1 of the current year, to be effective each July 1, as appropriate, beginning on July 1, 2019. SECTION 4. This Ordinance must be broadly construed in order to achieve the purposes stated in this Ordinance. It is the City Council's intent that the provisions of this Ordinance be interpreted or implemented by the City and others in a manner that facilitates the purposes set forth in this Ordinance. Nothing in this Ordinance shall be interpreted to conflict with the provisions of Health and Safety Code Section 11362.5, et seq. SECTION 5. Repeal of any provision of the Chino Hills Municipal Code does not affect any penalty, forfeiture, or liability incurred before, or preclude prosecution and imposition of penalties for any violation occurring before, this Ordinance's effective date. Any such repealed part will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Ordinance. SECTION 6. If this entire Ordinance or its application is deemed invalid by a court of competent jurisdiction, any repeal or amendment of the Chino Hills Municipal Code or other city ordinance by this Ordinance will be rendered void and cause such previous Chino Hills Municipal Code provision or other City Ordinances to remain in full force and effect for all purposes. SECTION 7. If any part of this Ordinance or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Ordinance are severable. SECTION 8: The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City of Chino Hills' book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, within fifteen (15) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law. 5 of 7 157/211 SECTION 9. This Ordinance will take effect on the 60th day following its final passage and adoption. PASSED, APPROVED, AND ADOPTED this day of 2018. ATTEST: CHERYL BALZ, CITY CLERK APPROVED AS TO FORM: MARK D. HENSLEY, CITY ATTORNEY 6of7 PETER J. ROGERS, MAYOR 158/211 STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO ) ss. CITY OF CHINO HILLS ) I, CHERYL BALZ, City Clerk of the City of Chino Hills, DO HEREBY CERTIFY that Ordinance No. was duly introduced at a regular meeting held , 2018; and adopted at a regular meeting of the City Council held on the day of , 2018 by the following vote, to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: CHERYL BALZ, CITY CLERK I hereby certify that the foregoing is the original of Ordinance No. duly passed and adopted by the Chino Hills City Council at their regular meeting held on and that summaries of the Ordinance were published on and in the Chino Hills Champion newspaper. CHERYL BALZ, CITY CLERK 7of7 159/211 EXHIBIT A COUNCIL AGENDA STAFF REPORT C'rk} tlC �Itino �lill.� TO: HONORABLE MAYOR AND CITY COUNCIL DATE: DECEMBER 12, 2017 MEMBERS FROM: CITY MANAGER ITEM NO: 14 SUBJECT:ANNUAL DEVELOPMENT IMPACT FEE FINANCIAL REPORT FOR FISCAL YEAR 2016-17 RECOMMENDATION: 1. Review and file the Annual Development Impact Fee Financial Report for fiscal year 2016-17. 2. Adopt a schedule attached as Section 4 confirming that the Parkland (Quimby in -lieu) Fee is committed to construction of Los Serranos and Pinehurst Parks. BAC KG RO U N D/ANALYSIS: In accordance with Government Code Section 66006(b), the City is required to make information regarding certain Development Impact Fee funds available on an annual basis, for the previous fiscal year. The disclosure of the information to the public must be made within 180 days after the end of the fiscal year, and the City Council must review the disclosure statements not less than 15 days after the disclosure is made. The disclosures have been on file for public viewing in the City Clerk's office and the Finance Department since November 27, 2017. The disclosure statements are attached to this report as the Annual Development Impact Fee Financial Report. There were no requests for notification of this information on file with the City Clerk, therefore, none were made. For the fiscal year ended June 30, 2017, no refunds were made pursuant to subdivision (e) of Section 66001 and there were no allocations pursuant to subdivision (f) of Section 66001. Government Code Section 66001(e) requires the City Council identify an approximate date by which the construction of the public improvement will be commenced if sufficient funds in certain Development Fee funds have been collected to complete financing on incomplete public improvements identified in the Capital Improvement Program (CIP), General Plan, a Specific Plan, or other public documents, and the public improvements remain incomplete within 180 days of the determination that sufficient funds have been collected, or refund the unexpended portion of the fees. As of June 30, 2017, funds have been collected for the capital improvement projects listed in Section 3. All funds collected have been committed to capital improvement projects as set forth in the Public Facilities Implementation Plan prepared by Keyser -Marston Associates (KMA) in 1998, and as revised and updated in the Traffic, Water, Sewer and Storm Drain Facilities Fee Evaluation prepared by KMA in 2014, the Capital Improvement Program (CIP), General Plan, a Specific Plan, or other public documents, other similar studies, the adopted budget, and the General Plan. 106/201 160/211 Parkland (Quimby in -lieu) Fee Fund Government Code Section 66477(a)(6)(A)(i) requires the City to develop a schedule specifying how, when, and where it will use the Parkland (Quimby in -lieu) land or fees, or both, to develop park or recreational facilities to serve the residents of the subdivision. Any fees collected under the ordinance shall be committed within five years after the payment of the fees or the issuance of building permits on one-half of the lots created by the subdivision, whichever occurs later. If the fees are not committed, the fees must be distributed to the record owners of the subdivision. Development Fee Category Fund Balance as of Portion held for more 06/30/17 than five years Parkland (Quimby in -lieu) Fee $ 2,081,180 $ 732,699 The Parkland (Quimby in -lieu) Fee schedule attached as Section 4 confirms that the City is committed to funding the construction of Los Serranos Park (formerly known as Bird Farm Park) in an amount of $1,500,000, of which the Parkland (Quimby in -lieu) Fee Fund will be responsible for 50%, or $750,000. Also, the City has reserved $916,984 toward the construction of the Pinehurst Park, which was completed recently by the developer. Based on the terms of Agreement No. A14-34, the developer will be reimbursed once an audit of the construction costs is complete. If not all of the Parkland (Quimby in -lieu) Fee is needed for the abovementioned projects, then any remaining funds will be recommitted to other parks projects that benefit the relevant subdivisions, or the funds will be refunded. ENVIRONMENTAL (CEQA) REVIEW: This proposed action is exempt from review under the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq.; "CEQA") and CEQA regulations (14 California Code Regulations §§15000, et seq.) because it does not involve any commitment to a specific project which could result in a potentially significant physical impact on the environment; and constitutes an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. Accordingly, this action does not constitute a "project" that requires environmental review (see specifically 14 CCR § 15378(b)(4-5)). FISCAL IMPACT: None. NOTICE: Courtesy notice of the report and of the meeting was provided to the Building Industry Association of Southern California, Baldy Chapter. 107/201 161/211 REVIEWED BY OTHERS: This agenda item has been reviewed by the City Attorney, the Community Development Director and the Public Works Director. Respectfully Submitted, `Arl/ 0 • .• BartlemCity Manager, Recommended By: Christa Buhagiar Finance Director Attachments Annual Development Impact Fee Financial Report for Fiscal Year 2016-17 108/201 162/211 C.�1imo Xms ANNUAL DEVELOPMENT IMPACT FEE FINANCIAL REPORT FISCAL YEAR 2016-17 109/201 163/211 City of Chino Hills BACKGROUND The Mitigation Fee Act, Government Code §66000 et seq., (the "Act") governs the establishment and administration of development impact fees paid by new development projects for public facilities needed to serve new development. Fees must be separately accounted for and used for the specific purpose for which the fee was imposed. The City's adopted development impact fees are listed in this report. Expenditures are authorized annually through the City's Adopted Budget and the Capital Improvement Program which is on file with the City Clerk's office. ANNUAL DEVELOPMENT FEE REPORTING In accordance with Government Code Section §66006(b), the City is required to make available on an annual basis, the following information regarding certain Development Fee funds for the fiscal year: • A brief description of the type of fee in the account or fund. • The amount of the fee. • The beginning and ending balance of the account or fund. • The amount of the fees collected and the interest earned. • An identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with fees. • An identification of an approximate date by which the construction of the public improvement will commence if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement identified in the capital improvement program, General Plan, a Specific Plan, or other public documents, and the public improvement remains incomplete. • A description of each interfund transfer or loan made from the account or fund, if any, including the public improvement on which the transferred or loaned fees will be expended, and, in the case of an interfund loan, the date on which the loan will be repaid, and the rate of interest that the account or fund will receive on the loan. • The amount of refunds made pursuant to subdivision (e) of §66001 and any allocations pursuant to subdivision (f) of §66001. The disclosure of the information to the public needs to be made within 180 days after the end of the fiscal year, and the City Council needs to review the disclosure statements not less than 15 days after the disclosure is made. For the fiscal year ended June 30, 2017, no refunds were made pursuant to subdivision (e) of §66001 and there were no allocations pursuant to subdivision (f) of §66001. 2 110/201 164/211 This report was compiled based on the annual financial statements of the City as of June 30, 2017. It provides an opportunity for management and staff to evaluate what is available for the City's development, to plan what can be accomplished with the resources identified, and to inform the public of future projects. Questions regarding the data in this report should be directed to the City's Finance Department at 14000 Civic Center Drive, Chino Hills, California 91709 or by phone at (909) 364-2640. The report was submitted to City Council on December 12, 2017, and is organized as follows: Section 1. A brief description of the purpose of each development impact fee, its authorizing legislation and current amount (Government Code §66006(b)(1)(A)). Section 2. A summary of the beginning fund balance, annual fee revenue collected and interest earned, public improvement expenditures, and the ending fund balance for each fee (Government Code §66006(b)(1)(C) and (D)). Section 3. A list of projects to be funded by development impact fees. Section 4. Quimby Act financial information. 3 111/201 165/211 SECTION 1 CITY OF CHINO HILLS DEVELOPMENT IMPACT FEE DESCRIPTION Development Fee Name 113— Descnption W the Tkoe of Fee Affordable Housing In -Lieu Fee The Affordable Housing In -Lieu Fee is the fee assessed on new construction in the amount representing new construction's proportionate share of the cost of constructing the affordable housing unit. Existing Infrastructure Fee The Existing Infrastructure Fee is the fee assessed on new construction in the amount representing new construction's proportionate share of existing infrastructure debt, in the form of credits earned through reimbursement agreements, assessment district installment payments made, the outstanding assessment district principal, and other reimbursement obligations of the City. General City Facilities Fee The General City Facilities Fee is the fee assessed on new construction in the amount representing new construction's proportionate share of the cost of constructing the general city facilities, less any amount deducted from such cost representing existing development's share of such cost, where appropriate. Parks & Recreation Facilities Fee The Parks & Recreation Facilities Fee is the fee assessed on new construction in the amount representing new construction's proportionate share of the cost of constructing the parks and recreation facilities, including land development, less any amount deducted from such cost representing existing development's share of such cost, where appropriate. Parkland (Quimby In -Lieu) Fee The Parkland (Quimby In -Lieu) Fee is the fee assessed on new construction in the amount representing new construction's proportionate share of the cost of constructing the parks or recreation facilities, including land development, less any amount deducted from such cost representing existing development's share of such cost, where appropriate. Sewer Facilities Fee The Sewer Facilities Fee is the fee assessed on new construction in the amount representing new construction's proportionate share of the cost of constructing the sewer facilities, less any amount deducted from such cost representing existing development's share of such cost, where appropriate. Storm Drain Facilities Fee The Storm Drain Facilities Fee is the fee assessed on new construction in the amount representing new construction's proportionate share of the cost of constructing the storm drain facilities, less any amount deducted from such cost representing existing development's share of such cost, where appropriate. Traffic Facilities Fee The Traffic Facilities Fee is the fee assessed on new construction in the amount representing new construction's proportionate share of the cost of constructing the traffic facilities, less any amount deducted from such cost representing existing development's share of such cost, where appropriate. Traffic Signal Fee The Traffic Signal Fee is the fee assessed on new construction in the amount representing new construction's proportionate share of the cost of constructing the related traffic infrastructure, less any amount deducted from such cost representing existing development's share of such cost, where appropriate. The Traffic Signal Fee is designated to a specific project where the new construction has direct impact to the assessed area based on analysis. Traffic Impact Fee The Traffic Impact Fee is the fee assessed on new construction in the amount representing new construction's proportionate share of the cost of constructing the related traffic infrastructure, to mitigate traffic impacts due to the new development, less any amount deducted from such cost representing existing development's share of such cost, where appropriate. The Traffic Impact Fee is designated to a specific project where the new construction has direct impact to the assessed area based on analysis. Water Facilities Fee The Water Facilities Fee is the fee assessed on new construction in the amount representing new construction's proportionate share of the cost of constructing the water facilities, less any amount deducted from such cost representing existing development's share of such cost, where appropriate. 4 112/201 166/211 SECTION 1 CITY OF CHINO HILLS DEVELOPMENT IMPACT FEE SCHEDULE a Fee Category .. :- Land °Use Type %° Unit Amount of Fee' Parks and Recreation Facilities Single -Family Dwelling Unit $ 2,422 Multi -Family Dwelling Unit $ 2,422 Parkland(Quimby In -Lieu Single -Family Dwellin Unit $ 867 Multi -Family Dwelling Unit $ 867 Existing Infrastructure Single -Family Dwellin Unit $ 11,450 Multi -Family Dwelling Unit $ 11,450 Commercial 1,000 SF $ 2,290 Business Park 1,000 SF $ 2,290 Private Institutional 1,000 SF $ 2,290 Public Institutional 1,000 SF $ 2,290 Commercial Recreation TBD General City Facilities Single -Family Dwelling Unit $ 1,791 Multi -Family Dwelling Unit $ 1,791 Private Institutional 1,000 SF $ 698 Commercial Recreation TBD Traffic Facilities Single -Family Dwellin Unit $ 228 Multi -Family Dwelling Unit $ 228 Traffic Impact b Single -Family 9.57 trips per dwelling unit @$57.95 each $ 554.60/DU Multi -Family 6.65 trip per dwelling unit @$57.95 each $ 385.38/DU Retail 0.02925 taps per square foot @$57.95 each $ 1.70/Sq, Ft. Office 0.01100 trips per square foot @$57.95 each $ 0.64/Sq. Ft. Industrial 0.00697 trips per square foot @$57.95 each $ 0.40/Sq. Ft. Storm Drain Facilities Single -Family Dwellin Unit $ 1,261 Multi -Family Dwelling Unit $ 1,261 Commercial 1,000 SF $ 870 Business Park 1,000 SF $ 655 Private Institutional 1,000 SF $ 870 Public Institutional 1,000 SF $ 870 Commercial Recreation TBD Water Facilities ° Single -Family Dwellin Unit $ 6,415 Multi -Family Dwelling Unit $ 4,490 Non -Residential Per 1" meter $ 6,415 Non -Residential Per 1 1/2" meter $ 9,623 Non -Residential Per 2" meter $ 20,527 Non -Residential Per 3" meter $ 44,905 Non -Residential Per 4" meter $ 76,979 Non -Residential Per 6" meter $ 160,374 Non -Residential Per 8" meter $ 230,938 Non -Residential Per 10" meter $ 372,068 Non -Residential Per 12" meter $ 513,197 Sewer Facilities d Single -Family Dwelling Unit $ 462 Multi -Family Dwellin Unit $ 462 Non -Residential Dwelling Unit TBD Affordable Housing In -Lieu Sin le-Famil Not to exceed $3,500 per unit $ is 1/Sq. Ft. Multi-FamilyNot to exceed $1,000 per unit 1/S . Ft. Fees in effect during fiscal year 2016-17 b New impact fee adopted in fiscal year 2016-17. Imposed at time of connection. d Not imposed if septic system is used. 113/201 167/211 SECTION 2 CITY OF CHINO HILLS PARKS & RECREATION FACILITIES FEE DEVELOPMENT IMPACT FEE STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Beginning fund balance Revenues: Parks & recreation facilities fee Parks & recreation facilities fee credits Apportioned interest Total Revenues Expenditures: Debt service payments Impact fee credits Administrative overhead (7.5%) Total Expenditures Ending fund balance June 30, 2017 $ (1,116,248) 1,688,134 162,274 a 4,398 1,854,806 20,200 162,274 a 138,781 321,255 3 417,303 b Interfund Loan Notes: During fiscal year 2016-17, the Parks and Recreation Facilities Fee fund paid off $1,000,000 of the interfund obligation for the New Community Park. As of June 30, 2017, the balance of the outstanding interfund obligation totaled $385,750. Notes: a A total of $162,274 Parks & Recreation Facilities Fee Credits were assigned to CalAtlantic Homes in fiscal year 2016-17 based on Agreement A15-140 for the construction of the Pinehurst Park. b The ending balance in the Parks & Recreation Facilities Fee Fund is designated for the construction of the Los Serranos Park (also known as 'Bird Farm Park") in fiscal year 2017-18. 0 114/201 168/211 SECTION 2 CITY OF CHINO HILLS EXISTING INFRASTRUCTURE FEE DEVELOPMENT IMPACT FEE STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Beginning fund balance Revenues: Existing infrastructure fee Assessment district credits & lien payoff Developer agreement credits Transfer eligible funding from CFD No. 4 for interfund loan repayment Total Revenues Expenditures: Developer reimbursement agreement Assessment district credits Interest on interfund loans Administrative overhead Total Expenditures Ending fund balance June 30, 2017 $ (5,917,134) 7,074,657 1,871,240 b 105,144 4,295,579 13,346,620 25,572 a 1,965,045 b 64,153 ° 671,006 2,725,776 d $ 4,703,710 Interfund Loan Notes: As of June 30, 2017, all Existing Infrastructure Fee fund interfund obligations have been paid in full. Below is a detail of the payments made in fiscal year 2016-17 which total $8,282,501. Agreement 99-176 (Richland/Pinehurst), 00-48 (Rhodes) and 00-49 (Griffin): Water Facilities Fee Sewer Facilities Fee Interfund Obligation paid off in fiscal year 2016-17 Agreement 95-34 (LaBand): Storm Drain Facilities Fee Water Facilities Fee Sewer Facilities Fee Interfund Obligation paid off in fiscal year 2016-17 Repayment of the Assessment Districts Credits to the Great Indoors: Sewer Utility Fund Sewer Facilities Fee Interfund Obligation paid off in fiscal year 2016-17 $ 3,560,977 97,193 12,719 38,544 1,865 1,136,418 476,214 Legal settlement agreements to JPR Homes (Al2-14), Hunters Hill, L.P. (Al2-15), McBray, LLC (Al2-16), and Richland Pinehurst, L.P. (Al2-17): Sewer Facilities Fee 2,958,571 Total $ 8,282,501 Notes: a This amount represents the developer credits given to Santa Barbara WLPX Eastvale T18875 according to agreement 93-21. b These amounts represent the assessment district credits taken by the developers at the time when permits were pulled. As a result, outstanding development related obligations were reduced by the credits taken. This amount represents the interfund loan interest paid on money borrowed to cover a portion of the legal settlements for agreement Al2-17, and for payment of the assessment district credits to the Great Indoors. d The ending balance of the Existing Infrastructure Fee fund is restricted for the Soquel Canyon Parkway construction in the amount of $898,445, and developer debt obligations which total $16,324,914. 7 115/201 169/211 SECTION 2 CITY OF CHINO HILLS GENERAL CITY FACILITIES FEE DEVELOPMENT IMPACT FEE STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Beginning fund balance Revenues: General city facilities fee Apportioned interest Total Revenues Expenditures: Administrative overhead Total Expenditures Ending fund balance June 30, 2017 $ 2,670,579 1,368,324 14,543 1,382,867 102,624 102,624 $ 3,950,822 Note: a The 1998 Public Facilities Implementation plan prepared by Keyser Marston Associates, Inc (KMA), designated General Facilities Fee funds for a Fire Facilities project that is scheduled to commence in fiscal year 2022-23. The estimate for the Fire Facilities project is $4,360,000. 3 a 116/201 170/211 SECTION 2 CITY OF CHINO HILLS TRAFFIC FACILITIES FEE DEVELOPMENT IMPACT FEE STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Beginning fund balance Revenues: Traffic facilities fee Apportioned interest Total Revenues Expenditures: Administrative overhead Total Expenditures Ending fund balance June 30, 2017 $ 2,219,761 171,640 586 172,226 12,873 12,873 S 2,379,114 a Note: a The 2014 Traffic, Water, Sewer and Storm Drain Facilities Fee Evaluation completed by Keyser - Marston Associates, Inc., designated these funds for the Pine Ave Extension project that is scheduled to commence in fiscal year 2021-22. The estimate for the Pine Ave Extension is $4,201,000. N 117/201 171/211 SECTION 2 CITY OF CHINO HILLS STORM DRAIN FACILITIES FEE DEVELOPMENT IMPACT FEE STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Beginning fund balance $ 5,836,961 Revenues: Storm drain facilities fee 1,017,893 Apportioned interest 6,476 Total Revenues 1,024,369 Expenditures: Administrative overhead 76,730 Total Expenditures 76,730 Ending fund balance June 30, 2017 5 6,784,600 a Note: a The 2014 Traffic, Water, Sewer and Storm Drain Facilities Fee Evaluation completed by Keyser - Marston Associates, Inc., designated these funds for three different projects: the English Creek Channel, Little Chino Creek at Peyton, and Eucalyptus from Peyton to City limits. 10 118/201 172/211 SECTION 2 CITY OF CHINO HILLS TRAFFIC IMPACT FEE DEVELOPMENT IMPACT FEE STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Beginning fund balance Revenues: Traffic facilities fee Total Revenues Expenditures: Total Expenditures 4,437 4,437 Ending fund balance June 30, 2017 4,437 Note: The Traffic Impact Fee was adopted by City Council on April 11, 2017. 11 119/201 173/211 SECTION 2 CITY OF CHINO HILLS WATER FACILITIES FEE DEVELOPMENT IMPACT FEE STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Beginning fund balance Revenues: Water facilities fee Apportioned interest Fire flow testing Total Revenues Expenditures: Administrative overhead Capital improvement projects: Intermediate zone recycled water reservoir Reservoir No. 18 Total Expenditures Ending fund balance June 30, 2017 $ 10,484,533 4,559,606 19,607 7,557 4,586,770 342,692 296 34,972 377,960 $ 14,693,343 a Interfund Loan Notes: As of June 30, 2017, all Water Facilities Fee interfund obligations have been paid in full, Below is a detail of the payments received in fiscal year 2016-17 which total $3,599,521. Agreement 99-176 (Richland/Pinehurst), 00-48 (Rhodes) and $ 3,560,977 00-49 (Griffin) Agreement 95-34 (LaBand) 38,544 Total $ 3,599,521 Notes: a The 2014 Traffic, Water, Sewer and Storm Drain Facilities Fee Evaluation completed by Keyser -Marston Associates, Inc., designated these funds for three projects: the Reservoir No. 18, the upgrade to the Supervisory Control & Data Acquisition System, and the Intermediate Zone Recycled Water Reservoir. 12 120/201 174/211 SECTION 2 CITY OF CHINO HILLS SEWER FACILITIES FEE DEVELOPMENT IMPACT FEE STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Beginning fund balance $ 4,304,415 Revenues: Sewer facilities fee 224,825 Apportioned interest 53,125 Total Revenues 277,950 Expenditures: Administrative overhead 16,512 Capital improvement project: Supervisory Control & Data Acquisition System (SCADA) 8,398 Total Expenditures 24,910 Ending fund balance June 30, 2017 $ 4,557,455 a Interfund Loan Notes: As of June 30, 2017, all Sewer Facilities Fee interfund obligations have been paid in full. Below is a detail of the payments received in fiscal year 2016-17 which total $99,058. Agreement 99-176 (Richland/Pinehurst), 00-48 (Rhodes) $ 97,193 and 00-49 (Griffin) Agreement 95-34 (LaBand) 1,865 Total $ 99,058 Note: a The 2014 Traffic, Water, Sewer and Storm Drain Facilities Fee Evaluation completed by Keyser -Marston Associates, Inc., desginated these funds for three projects: the Supervisory Control & Data Acquisition System (sewer), the Grand Ave / Highway 71 Trunk Relief, and two lift stations on the Carbon Canyon Trunk Line. 13 121/201 175/211 SECTION 2 CITY OF CHINO HILLS TRAFFIC SIGNAL FEE DEVELOPMENT IMPACT FEE STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Beginning fund balance $ 394,419 Revenues: Apportioned Interest (1,204) Total Revenues (1,204) Expenditures: Capital improvement projects: ISNS replacement @SR -71 off -ramps 12,775 Right turn overlap- Grand Ave. & Boys Republic Dr. 7,696 Traffic mitigation fee study 50,971 Total Expenditures 71,442 Ending fund balance June 30, 2017 S 321,773 a Note: a A total of $50,000 of these funds have been designated for the Illuminated Street Name Signs (ISNS) replacement project at SR -71. This project was included in the fiscal year 2017-18 adopted budget. The amount remaining will be designated to fund future projects once sufficient monies have been accumulated. 14 122/201 176/211 SECTION 2 CITY OF CHINO HILLS AFFORDABLE HOUSING IN -LIEU FEE DEVELOPMENT IMPACT FEE STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Beginning fund balance Revenues: Affordable housing in -Lieu fee Apportioned interest Total Revenues Expenditures: Total Expenditures Ending fund balance June 30, 2017 1,340,598 899,881 4,955 904,836 S 2,245,434 a Note: a The City has committed to donate two lots to the Habitat for Humanity in the Los Serranos Area. These lots will be used in the Veteran Build Homes Program. The fair market value of these lots including the related permit fees and costs are estimated to be around $400,000. For the remaining funds, the City is considering programs such as assistance to first time home buyer, housing rehabilitation, rental subsidy and possible contributions toward construction of new affordable units. 15 123/201 177/211 TRAFFIC SIGNAL FEE ISMS Replacement c@SR-71 Off -Ramps $ 50,000 FY 16/17 FY 17/18 Traffic Signal Fee 100% $ 50,000 $ 12,775 AFFORDABLE HOUSING IN -LIEU FEE Two City Lots in the Los Serranos Area donated to Habitat $ 400,000 FY 17/18 To be determined Affordable Housing In -Lieu Fee 100% $ 400,000 $ - for Humanity Veteran Build Homes Program; Including Permit Fees and Related Costs (Estimated) PARKLAND (QUIMBY IN -LIEU) FEE Los Serranos Park (Formerly Bird Farm Park) $ 3,668,800 FY 98/99 FY 18/19 Parkland (Quimby In -Lieu) Fee 20% $ 750,000 $ 124/201 16 178/211 SECTION 3 CITY OF CHINO HILLS DEVELOPMENT IMPACT FEE STATEMENT CURRENT AND FUTURE CAPITAL PROJECTS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 PROJECTED DATE TO DATE OF FUNDING EXPENDED DESCRIPTION TOTAL COST COMMENCE COMPLETION SOURCE PERCENT AMOUNT AS OF 6/30/17 PARKS & RECREATION FACILITIES FEE Los Serranos Park (Formerly Bird Farm Park) $ 3,668,800 FY 98/99 FY 18/19 Parks & Recreation Facilities Fee 20% $ 750,000 $ - GENERAL FACILITIES FEE Fire Facilities $ 4,360,000 FY 22/23 FY 26/27 General Facilities Fee 48% $ 2,071,000 $ - TRAFFIC FACILITIES FEE Pine Ave Extension $ 4,201,000 FY 21/22 FY 27/28 Traffic Facilities Fee 60% $ 2,500,000 $ - STORM DRAIN FACILITIES FEE English Creek Channel $ 2,750,000 FY 01/02 FY 18/19 Storm Drain Facilities Fee 100% $ 2,750,000 $ - Little Chino Creek @ Peyton $ 1,450,000 FY 22/23 FY 23/24 Storm Drain Facilities Fee 100% $ 1,450,000 $ - Eucalyptus from Peyton to City limits $ 1,600,000 FY 22/23 FY 23/24 Storm Drain Facilities Fee 100% $ 1,600,000 $ - WATER FACILITIES FEE Reservoir No. 18 $ 7,524,700 FY 03/04 FY 18/19 Water Facilities Fee 100% $ 7,524,700 $ 34,972 Supervisory Control & Data Acquisition System $ 766,100 FY 99/00 FY 19/20 Water Facilities Fee 100% $ 766,100 $ - Intermediate Zone Recycled Water Reservoir $ 2,588,400 FY 07/08 FY 19/20 Water Facilities Fee 100% $ 2,588,400 $ 296 SEWER FACILITIES FEE Supervisory Control & Data Acquisition System -Sewer $ 1,210,100 FY 10/11 FY 19/20 Sewer Facilities Fee 100% $ 1,210,100 $ 8,398 Grand Ave / Highway 71 Trunk Relief $ 194,400 FY 22/23 FY 23/24 Sewer Facilities Fee 100% $ 194,400 $ - Carbon Canyon Trunk- Two Lift Stations $ 4,350,000 FY 22/23 FY 23/24 Sewer Facilities Fee 100% $ 4,350,000 $ TRAFFIC SIGNAL FEE ISMS Replacement c@SR-71 Off -Ramps $ 50,000 FY 16/17 FY 17/18 Traffic Signal Fee 100% $ 50,000 $ 12,775 AFFORDABLE HOUSING IN -LIEU FEE Two City Lots in the Los Serranos Area donated to Habitat $ 400,000 FY 17/18 To be determined Affordable Housing In -Lieu Fee 100% $ 400,000 $ - for Humanity Veteran Build Homes Program; Including Permit Fees and Related Costs (Estimated) PARKLAND (QUIMBY IN -LIEU) FEE Los Serranos Park (Formerly Bird Farm Park) $ 3,668,800 FY 98/99 FY 18/19 Parkland (Quimby In -Lieu) Fee 20% $ 750,000 $ 124/201 16 178/211 SECTION 4 CITY OF CHINO HILLS PARKLAND (QUIMBY IN -LIEU) FEES DEVELOPMENT IMPACT FEE STATEMENT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 Beginning fund balance $ 1,542,681 Revenues: Quimby in -lieu fees collected 588,693 Quimby in -lieu fees credits 58,116 Apportioned interest (1,683) Total Revenues 645,126 Expenditures: Quimby in -lieu fee credits 58,116 Administrative overhead 48,511 Total Expenditures 106,627 Ending fund balance June 30, 2017 $ 2,081,180 a Note: a The City has committed a total of $916,984 of the Parkland (Quimby In -lieu) Fees ending fund balance for fee reimbursement and construction of the Pinehurst Park which is anticipated to be completed in fiscal year 2017-18. The developer of the project will be reimbursed for all approved costs of construction following the completion of an audit of construction costs, as per agreement No. A14-34. Additionally, $750,000 of the Parkland Fees have been designated for the construction of Los Serranos Park (also known as Bird Farm Park) in fiscal year 2017-18. 17 125/201 179/211 Public 1"1I1allce Public Private Partnerships l l -ball 1". mmilllcs Exhibit B CITY OF CHINO HILLS 1 N C 4 R P U R A T M ll 1 9 9 3 CITY OF CHINO HILLS DEVELOPMENT IMPACT FEE PROGRAM EVALUATION PREPARED BY DAVID TAUSSIG & ASSOCIATES, INC. 5000 Birch Street, Suite 6000 Newport Beach, California 92660 (800) 969-4382 Newport Beach Riverside San Francisco San Jose Dallas Houston 180/211 rDAUIb TAUSSIG J ASSOCIATES CITY CITY OF CHINO HILLS DEVELOPMENT IMPACT FEE PROGRAM EVALUATION Prepared for: City of Chino Hills 14000 City Center Drive Chino Hills, CA 91709 August 21, 2018 181/211 rDAUIb TAUSSIG J ASSOCIATES TABLE TABLE OF CONTENTS SECTION PAGE EXECUTIVE SUMMARY........................................................................................................... I I. INTRODUCTION..............................................................................................................1 II. LEGAL REQUIREMENTS..............................................................................................5 III. DEVELOPMENT PROJECTION...................................................................................8 IV. NEEDS LIST AND FACILITY COSTS........................................................................10 V. METHODOLOGY AND FEE REVENUE CALCULATIONS..................................14 VI. MONITORING AND ADMINISTRATION.................................................................19 182/211 1DAVID �rnussic J & ASSOCIATES EXECUTIVE SUMMARY 1. INTRODUCTION The City of Chino Hills (the "City"), in order to adequately plan for the public facilities needs of anticipated future development within its jurisdiction through the horizon year, Fiscal Year ("FY") 2026/27, has hired David Taussig & Associates, Inc. ("DTA") to evaluate the City's existing citywide development impact fee ("DIF") programs for traffic, water, sewer, storm drain, parks and recreation, and general City facilities (collectively, the "DIF Programs"). Notably, the analysis prepared by DTA is intended to satisfy the three-year monitoring report requirement mandated by Section 3.40.120 of the City Municipal Code, and the five-year monitoring report requirement delineated in Section 66001 of the California Government Code. Specifically, DTA's analysis ("Fee Evaluation" or "Study") will enumerate the additional or expanded facilities required through FY 2026/27 ("Future Facilities"), as previously identified by the City in each of the six (6) facilities categories, and estimate the revised costs of these Future Facilities in 2018 dollars. These Future Facilities include several of the remaining facilities that have been contemplated by the City's existing Public Facilities Implementation Plan ("PFIP") but have not yet been constructed, as well as other facilities that have been added to the list, or substituted for other projects, at the direction of the City. After accounting for the current existing account balances (i.e., DIF revenues not yet committed) and projecting new development's "fair share" of these Future Facilities, the Fee Evaluation will then determine whether the revenues from the current level of fees that are imposed will be sufficient to fund the required Future Facilities. 2. ORGANIZATION OF THE FEE EVALUATION Section I provides an introduction to the Study, including a brief description of City surroundings and background information on development fee financing. Section II provides an overview of the legal requirements associated with implementing and imposing such fees. Section III includes a discussion of projected future development and demand variables such as future development by land use type assuming current growth trends in housing, commercial, and industrial development extrapolated through FY 2026/27. Projections of future development are based on data provided by the City's Community Development Department. Section IV includes a description of the Needs List, which identifies the Future Facilities needed to serve development that has occurred since the DIFs were first imposed through FY 2026/27, that are eligible for funding under the DIF Programs. The Needs List provides the total estimated Future Facilities costs in 2018 dollars, current account balance of DIF revenues for each DIF Program, and the resulting net cost to the City. Section V contains the methodology used to apportion the costs of each type of Future Facilities between existing and new development, and summarizes the existing fee levels imposed for each of the residential and non-residential land use categories ("Land Use Category"), based on the relative benefit received by each Land Use Category. The current Land Use Categories are as follows: Single -Family Residential, Multi -Family Residential, Commercial, Business Park, Private Institutional, Public Institutional, and Commercial Recreation. (Note, however, that fees for Commercial Recreation have not yet been City of Chino Hills Page i Development Impact Fee Prozram Evaluation Au,-ust 21, 2018 183/211 � DAVID Tnussic J & ASSOCIATES established by the City and are listed as "TBD".) Section VI includes a summary of the funding gap for each DIF Program (i.e. the difference between facilities costs and DIF Program revenues identified by this Fee Evaluation). This section will discuss recommendations for future increases in fees to be implemented and imposed in compliance with the California Mitigation Fee Act (California Government Code 66000 et. seq) so that the required public facilities construction projects shall be adequately funded, as will administrative and monitoring requirements for the DIFs that have been, or will be, adopted by the City. 3. DEVELOPMENT IMPACT FEE METHODOLOGY AND SUMMARY DTA utilized demographic projections provided by the City's Community Development Department ("City Community Development") to determine the future development, by Land Use Category, that is anticipated to occur within the City by FY 2026/27. Additionally, by conducting interviews with City staff, DTA was able to determine future development's fair share of Future Facilities costs on a facility -by -facility basis, as further explained below. The Future Facilities and their costs were identified by the City's Department of Community Services ("City Community Services") and Department of Public Works ("City Public Works") as being necessary to meet the needs of future development within the City through FY 2026/27. In collaboration with City staff, DTA determined the appropriate facilities by reviewing a number of City documents, including the 1998 Public Facilities Implementation Plan prepared by Keyser Marston Associates ("HIP"), the City's General Plan, the 2014 Fee Evaluation Study also prepared by Keyser Marston Associates, and the City's annual public disclosure statements for 2005 through 2017. Future Facilities include (but are not limited to) projects such as fire facilities, reservoir improvements, pipelines, telemetry, relief sewers, storm drain facilities, improvements to Los Serranos Park and the Galstian Park Site/Community Center, and the extensions of Pine Avenue and Soquel Canyon Parkway. These Future Facilities have been included on the Needs List and therefore are eligible for funding through the DIF Programs. The total cost of the facilities selected for the Needs List by City Community Services and City Public Works (net of the current existing fund balance) is $53,572,373 in 2018 dollars, of which 42.41% (i.e., $22,720,219) is allocated to future development. Utilizing data provided by the City, DTA was able to evaluate whether impact fees imposed on forecasted future development from 2018 through 2027 by Land Use Category, as listed in Table ES -1, would be sufficient to fund the construction of Future Facilities. City of Chino Hills Page ii Development Impact Fee Prozram Evaluation Au,-ust 21, 2018 184/211 � DAVID Tnussic JI&& ASSOCIATES TABLE ES -1: CITYWIDE FUTURE DEVELOPMENT SUMMARY BY LAND USE CATEGORY (FY 2017/18 THROUGH FY 2026/27) Land Residenti Non -Residential Use (DUs) 1(1,000 sq. ft.) Single Mui Business Private Public Commerci Category Commercial Family Family Park InstitutionaJAL Institutional Recreation DUs or 1 1 1,000 sq. ft. Development Impact Fees for all Land Use Categories are listed in Table ES -2, below. Table ES -2: CITY OF CHINO HILLS FY 2017/18 DEVELOPMENT IMPACT FEE SCHEDULE Notes: [ 1 ] Non-residential fee levels are based on Dwelling Unit Equivalent (DUE) assumptions utilized in the 2014 fee evaluation study prepared by Keyser Marston Associates, Inc. [2] Water facilities fees for Non -Residential uses are $6,415 per 1" meter; $9,623 per 1.5" meter; $20,527 per 2" meter; $44,905 per 3" meter; $76,979 per 4" meter; $160,374 per 6" meter; $230,938 per 8" meter; $372,068 per 10" meter; and $513,197 per 12" meter, according to the City's existing Development Impact Fee Schedule (updated 12/21/17). [3] Sewer fee ratios for Non-residential uses are listed in Section 3.40.110 of the Chino Hills Municipal Code. [4] The determination of whether a land use category is subject to a specific DIF is based on the PFIP. These DIFs include future development's fair share of the costs of the Future Facilities on the Needs List. Out of the fees collected, a 7.5% charge is expensed for the City's cost of administering the program and collecting the DIFs. The total revenue that will be generated by City of Chino Hills Page iii Development Impact Fee Prozram Evaluation August 21, 2018 185/211 Residential Non -Residential' (per DU) (per 1,000 sq. ft.) Single Multi- Business Private Public Commercial Commercial amily Family park Institutio stitutional Recreation Traffic m® ater'°� .' 1 1• 1• 1• 1 eW1d=0===== Storm Drain Mm�===== Parks and®® Recreation General City Facilities ®® A ..--dl$698 .� Notes: [ 1 ] Non-residential fee levels are based on Dwelling Unit Equivalent (DUE) assumptions utilized in the 2014 fee evaluation study prepared by Keyser Marston Associates, Inc. [2] Water facilities fees for Non -Residential uses are $6,415 per 1" meter; $9,623 per 1.5" meter; $20,527 per 2" meter; $44,905 per 3" meter; $76,979 per 4" meter; $160,374 per 6" meter; $230,938 per 8" meter; $372,068 per 10" meter; and $513,197 per 12" meter, according to the City's existing Development Impact Fee Schedule (updated 12/21/17). [3] Sewer fee ratios for Non-residential uses are listed in Section 3.40.110 of the Chino Hills Municipal Code. [4] The determination of whether a land use category is subject to a specific DIF is based on the PFIP. These DIFs include future development's fair share of the costs of the Future Facilities on the Needs List. Out of the fees collected, a 7.5% charge is expensed for the City's cost of administering the program and collecting the DIFs. The total revenue that will be generated by City of Chino Hills Page iii Development Impact Fee Prozram Evaluation August 21, 2018 185/211 DAVID Tnussic �J &ASSOCIATES the DIF Programs through FY 2026/27, based on the assumptions incorporated into the Fee Evaluation, is $23,586,831 in 2018 dollars, which is equal to the projected growth (in dwelling units for residential land uses, and 1,000 square feet of building space for non-residential land uses) multiplied by the FY 2017/18 development impact fee per unit or per 1,000 square feet, for each Land Use Category. Future Facilities costs of $22,720,219 allocated to new development (discussed above and listed in Table IV -A, below) would make up 93.60% of the total projected expenditures of $24,489,231, with the remaining 7.22% (i.e., $1,769,012) applied to administration and fee collection purposes. Therefore, the gap between projected revenues and costs is a deficit of $902,400 across the six (6) DIF Programs evaluated in this Study. The amount of money needed to close the gap is expected to come from grants. City of Chino Hills Page iv Development Impact Fee Prozram Evaluation August 21, 2018 186/211 � DAVID Tnussic J & ASSOCIATES I. INTRODUCTION The City of Chino Hills (the "City") is located within the County of San Bernardino ("County") and benefits from a strategic location in the rapidly growing Inland Empire. Situated at the intersection of four counties (San Bernardino, Riverside, Los Angeles, and Orange), the City is comprised of a variety of land uses such as residential neighborhoods, public and private institutions, as well as commercial, recreational, and industrial uses. In order to adequately plan for new development through build -out of the City and identify the public facilities costs associated with mitigating the direct and cumulative impacts of this new development, David Taussig & Associates, Inc. ("DTA") was retained by the City to evaluate the existing Development Impact Fee ("DIF") programs for traffic, water, sewer, storm drain, parks and recreation, and general City facilities (collectively, the "DIF Programs"). In August 1998, the City engaged Keyser Marston Associates, Inc., to develop a Public Facilities Implementation Plan ("PFIP") and thereby revise the City's DIF program. The main purpose of the revised program was to ensure that the City would receive sufficient impact fee revenues from new development to cover the costs of citywide infrastructure attributable to growth through the horizon year 2015. As explained in Section I of the PFIP report, "Since 1995, the City has embarked on a program of engineering and financing studies leading to master plans for the water, sewer, and drainage systems. These studies ... have generated new facility programs and accompanying cost estimates based on build out of the General Plan." In addition to Keyser Marston Associates, the following firms contributed to the revised program: LSA Associates (traffic engineering), RBF Engineers (water, sewer, and drainage master plans), The Julian Company (Analysis of Development Agreements), and Thompson-Hysell Engineers (Cost of Transportation Improvements). Keyser Marston also completed an updated analysis in April 2014 to determine the status of the traffic, water, sewer, and storm drain facilities fee programs. The 2014 Keyser Marston study evaluated the programs' ability to pay for the remaining infrastructure projects from the PFIP that had not yet been constructed. While the study proposed that the water facilities fee for multi- family units be adjusted to 70% of the single-family rate, the report did not recommend any increases in the fees: The analysis indicated that the funds generated by the DIF Programs would be sufficient to cover the costs of outstanding projects. At the same time, the 2014 study recommended that the City perform a periodic evaluation of these development impact fee programs at least every three years. DTA's study (the "Fee Evaluation" of "Study") is designed to assist the City in performing a periodic evaluation of its DIF Programs. The Fee Evaluation lists the specific new or expanded public facilities that will be required as a result of development that has occurred since the DIFs were first imposed ("Future Facilities"). The Future Facilities include a wide array of improvements, including (but not limited to) fire facilities, reservoir improvements, pipelines, telemetry, relief sewers, storm drain facilities, improvements to Los Serranos Park and the Galstian Park Site/Community Center, and the extension of Pine Avenue. These facilities improvement projects were selected by the City's Department of Community Services ("City Community Services") and Department of Public Works ("City Public Works"). The costs of City of Chino Hills Page I Development Impact Fee Prozram Evaluation Au,-ust 21, 2018 187/211 � DAVID Tnussic J & ASSOCIATES constructing the improvements selected are totaled and apportioned to either anticipated future development or development that has occurred since the DIFs were first imposed, depending on the relative amounts of benefit received by specific Land Use Categories within each of these two development categories (i.e., existing versus future development). The City's residential and non-residential Land Use categories utilized in its DIF Programs are presented in Table I -A, below. TABLE I -A CITY OF CHINO HILLS LAND USE CATEGORIES Single Family Residential Multi -Family Residential Commercial Business Park Private Institutional Public Institutional Commercial Recreation Fee amounts are then calculated based on the current fee levels for each DIF Program to determine future development's contribution to the cost of Future Facilities. These amounts were then compared to the "fair share" cost of Future Facilities included in each respective DIF Program through FY 2026/27, to determine the surplus or gap in funding for that DIF Program. The demographic projections for the City utilized in this Study, by Land Use Category, were provided by the City and are discussed in Section III. The Future Facilities and associated construction costs are identified in the Needs List, which is incorporated in Section IV. The methodology and computations utilized to project the DIF revenues are included in Section V, while issues related to the implementation and administration of the DIFs are incorporated in Section VI. A map of the City's boundaries is shown below. City of Chino Hills Page 2 Development Impact Fee Prozram Evaluation Au,-ust 21, 2018 188/211 � DAVID Tnussic JI&& ASSOCIATES OVERVIEW OF DEVELOPMENT IMPACT FEE PROGRAMS AND FACILITIES FEE FUNDS Following is a brief description of the facilities project categories from the original 1998 PFIP that form the basis of the City's DIF Programs. A. TRAFFIC The traffic facilities program includes the extension of Soquel Canyon Parkway and Pine Avenue, which will provide enhanced emergency access to the southern and central portions of the City. B. WATER Water facilities financed by the DIF program include reservoirs, wells, and pipelines to enable the water supply and distribution system to operate seamlessly, accommodating future development. C. SEWER This program is comprised of outstanding pieces of the sewer system, such as the Carbon Canyon, Rincon and Grand Avenue / Highway 71 trunk relief sewers. These improvements will ensure the sewer network has adequate capacity to serve a growing community. D. STORM DRAIN Outstanding storm drain facilities improvements are the Little Chino Creek, Lower Los Serranos, and English Creek/Channel projects. These improvements are necessary to accommodate demand generated by new development. City of Chino Hills Page 3 Development Impact Fee Prozram Evaluation Au,-ust 21, 2018 189/211 lDAVID �rnussic J & ASSOCIATES E. PARKS & RECREATION Parks and Recreation projects consist of improvements to Los Serranos Park (formerly Bird Farm Park) as well as the Galstian Park Site and Community Center. F. GENERAL CITY FACILITIES The General City Facilities fee program funds new development's share of fire protection facilities, City entry monuments, and the City Yard. City of Chino Hills Page 4 Development Impact Fee Prozram Evaluation Au,-ust 21, 2018 190/211 lDAVID �rnussic J & ASSOCIATGS II. LEGAL REQUIREMENTS TO JUSTIFY IMPACT FEES Prior to World War II, development in California was held responsible for very little of the cost of public infrastructure. Public improvements were financed primarily through jurisdictional general funds and utility charges. It was not uncommon during this period for speculators to subdivide tracts of land without providing any public improvements, expecting the closest city to eventually annex a project and provide public improvements and services. Starting in the late 1940s, however, the use of impact fees grew with the increased planning and regulation of new development. During the 1960s and 1970s, the California Courts broadened the right of local government to impose fees on developers for public improvements that were not located on project sites. Beginning in 1978, with the passage of Proposition 13, the reductions in local government revenues available for new infrastructure have resulted in new development being held responsible for a greater share of public improvements, and both the use and levels of impact fees have grown substantially. Higher fee levels were undoubtedly driven in part by a need to offset the decline in funds for infrastructure development from other sources. The need for additional funding Statewide for transportation and transit facilities was documented by the California Transportation Commission (CTC) in 2011. The CTC's "Statewide Transportation System Needs Analysis" forecasted a ten-year transportation funding need of $536.2 billion. The funding need included about $341 billion for system preservation, defined as rehabilitation and maintenance, and about $195 billion for system expansion. The total funding revenue for this same ten-year period was forecasted to be only about $242.4 billion. As a result, the CTC recognizes a transportation infrastructure funding shortfall of $293.8 billion consisting of about $99 billion for system preservation (about $10 billion per year) and $195 billion for system expansion (about $20 billion per year). The levy of impact fees by local governments in California is one authorized method of financing the traffic, water, sewer, storm drain, parks and recreation, and general City facilities necessary to mitigate the impacts of new development, as the levy of such fees provides funding to maintain an agency's service standard required for an increased service population. A fee is "a monetary exaction, other than a tax or special assessment, which is charged by a local agency to the applicant in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project..." (California Government Code, Section 66000). A fee may be levied for each type of capital improvement required for new development, with the payment of the fee occurring prior to the beginning of construction of a dwelling unit or non-residential building (or prior to the expansion of existing buildings of these types). Fees are often levied at final map recordation, issuance of a certificate of occupancy, or more commonly, at building permit issuance. As explained in detail below, the City has identified the need to levy DIFs to pay for traffic, water, sewer, storm drain, parks and recreation, and general City facilities infrastructure. A detailed list of required Future Facilities (the "Needs List") is contained within Section IV of this Study. The DIF Programs analyzed in this Fee Evaluation will finance facilities on the Needs List at levels identified by the City as appropriate to mitigate the impacts of development through FY 2026/27. All new development is required to pay its "fair share" of the cost of City of Chino Hills Page 5 Development Impact Fee Prozram Evaluation Au,-ust 21, 2018 191/211 DAVID Tnussic �J &ASSOCIATES facilities on the Needs List through these fees at rate structures set in the adopted ordinances (Nos. 109, 111, and 128, as amended). Section 66000 et seq. of the Government Code mandates that there is a nexus between fees imposed, the use of the fees, and the development projects on which the fees are imposed. Furthermore, there must be a relationship between the amount of the fee and the cost of the improvements. To impose a fee as a condition for a development project, a public agency must do the following: • Identify the purpose of the fee. • Identify the use to which the fee is to be applied. If the use is financing public facilities, the facilities must be identified. • Determine how there is a reasonable relationship between the fee's use and the type of development project on which the fee is imposed. • Determine how there is a reasonable relationship between the need for a public facility and the type of development project on which the fee is being imposed. Addressing these items will enable an impact fee to meet the nexus and rough proportionality requirements established by Dolan versus City of Tigard, Koontz versus St. Johns River Management District and other court cases. These findings and the nexus test for the DIFs are presented in Section V of the Study. As mentioned previously, current State financing and fee assessment requirements only allow future development to pay its fair share of facilities' costs. Any current deficiencies resulting from the needs of development that has occurred since the DIFs were first imposed, must be funded through other sources. Therefore, a key element to establishing legally defensible impact fees is to determine what share of the benefit or cost of a particular improvement can be equitably assigned to existing development, even if that improvement has not yet been constructed. By removing this factor, the true impact of new development can be assessed and equitable fees assigned. A. PURPOSE OF THE FEE (GOVERNMENT CODE SECTION 66001(A)(1)) The purpose of the City's DIF Programs is to fund Future Facilities required as a result of development occurring within the City since the DIF Programs were first imposed through FY 2026/27 ("Development Period"). As further explained in Section III below, the City has collected DIFs for each DIF Program through FY 2017/18 and these DIF revenues are available to finance a portion of the Future Facilities costs. Additionally, the City projects the construction of 1,951 residential units and approximately 513,535 square feet of non- residential building space. The future residents and workers housed within this future development will create an additional demand for public facilities. In brief, to mitigate the effects of development over the Development Period in an orderly manner while maintaining the current quality of life in the City, the City will need to continue to collect DIFs to fund Future Facilities. The DIF revenues will be used for the acquisition, installation, and construction of the Future Facilities identified on the Needs Lists to mitigate the direct and City of Chino Hills Page 6 Development Impact Fee Prozram Evaluation Au,-ust 21, 2018 192/211 %DAVID Tnussic �J &ASSOCIATES cumulative impacts of development in the City over the Development Period through FY 2026/27. B. THE USE TO WHICH THE FEE IS TO BE PUT (GOVERNMENT CODE SECTION 66001(A)(2)) The DIFs will be used for the acquisition, installation, and construction of the Future Facilities identified on the Needs List included in Section IV of the Study. The DIFs will continue to provide a source of revenue to the City to fund such facilities, which in turn will both preserve the quality of life in the City and protect the health, safety, and welfare of its existing and future residents and employees. C. DETERMINE THAT THERE IS A REASONABLE RELATIONSHIP BETWEEN THE FEE'S USE AND THE TYPE OF DEVELOPMENT PROJECT UPON WHICH THE FEE IS IMPOSED (BENEFIT RELATIONSHIP) (GOVERNMENT CODE SECTION 66001(A)(3)) The development occurring over the Development Period will continue to increase the burden on infrastructure in the form of increased demand and usage. In order to maintain existing service standards, the DIFs that have been imposed through each DIF Program mitigate the impacts caused by such development. The types of development that will be paying these fees include new residential, commercial, and industrial projects within the City. The DIFs collected from these land uses will be used for the construction of Future Facilities within the City. D. DETERMINE HOW THERE IS A REASONABLE RELATIONSHIP BETWEEN THE NEED FOR THE PUBLIC FACILITY AND THE TYPE OF DEVELOPMENT PROJECT UPON WHICH THE FEE IS IMPOSED (IMPACT RELATIONSHIP) (GOVERNMENT CODE SECTION 66001(A)(4)) The benefit to each Land Use Category from the Future Facilities listed in Section IV was calculated so that it would correspond directly to the impact generated by new development. For example, the projected growth of residential homes ("dwelling units") and the growth of retail, office and industrial development ("non-residential square footage") translate to additional traffic on City streets, such as Pine Avenue. As determined in the 1998 PFIP, the extension of Pine Avenue is required because it provides benefits to public and private developments within the City and provides enhanced emergency access to the southern and central portions of the City. E. THE RELATIONSHIP BETWEEN THE AMOUNT OF THE FEE AND THE COST OF THE PUBLIC FACILITIES ATTRIBUTABLE TO THE DEVELOPMENT UPON WHICH THE FEE IS IMPOSED ("ROUGH PROPORTIONALITY" RELATIONSHIP) (GOVERNMENT CODE 66001(A) Various methodologies were utilized to apportion the cost of the Future Facilities to development occurring within the Development Period, according to the magnitude of the impacts that drive the need for these facilities. Fee amounts for the various Land Use Categories were determined by apportioning such costs according to their appropriate demand factors, which vary depending on the facilities category. City of Chino Hills Page 7 Development Impact Fee Prozram Evaluation Au,-ust 21, 2018 193/211 1DAVID �rnussic J & ASSOCIATES III. DEVELOPMENT PROJECTION In order to estimate the cost of public facilities needed to serve new development as well as project fee revenues available to fund such facilities, the Fee Evaluation must quantify the residential dwelling units ("DUs") and non-residential square footages for projected future development. Estimates of future residential dwelling units and non-residential square footages through FY 2026/27 were provided by City Community Development. Tables III -A and III -B depict the anticipated growth data, which was utilized by DTA to calculate projected revenues based on the current level of DIFs imposed on new development in the City, as described in Section V of this Fee Evaluation. Lastly, Table III -C summarizes total estimated growth in each Land Use Category over the planning period. TABLE III -A PROJECTED FUTURE RESIDENTIAL DEVELOPMENT FY 2017/18 — FY 2026/27 Residential (DUs) Land Use Cateory Single - Family Multi- Family FY 17/18 : • L Y 18/19 I'Y 19/20 1 • [[FY 20/21 ® ' • FFY 21/22 FY 22/23 FY 23/24 `FY 24/25 LLY 25/26 26/27 83 0 City of Chino Hills Page 8 Development Impact Fee Prozram Evaluation Au,-ust 21, 2018 194/211 � DAVID Tnussic JI&& ASSOCIATES TABLE III—B PROJECTED FUTURE NON-RESIDENTIAL DEVELOPMENT FY 2017/18 — FY 2026/27 Land CategoryUse mmercial' Non -Residential (1,000 sq. ft.) Business Private Public Park Institutional Institutional Commercia Recreation FY 17/18 0 1 1 1 FY 18/19 © 1 1 1 FY 19/20 1 0 1 1 1 FY 20/21 ,FY 21/22 1 ® 1 1 Y 22/23 1 1 Y 23/24 0 1 1 Y 24/25 1 0 1 1 FY 25/26 1 0 1 1 1 FY 26/27 1 0 1 1 1 TOTAL I 1 Notes: [1] Includes Commercial General, Neighborhood Commercial, and Freeway Commercial. TABLE III—C CITYWIDE FUTURE DEVELOPMENT SUMMARY BY LAND USE (FY 2017/18 THROUGH FY 2026/27) Residential Non -Residential (1,000 sq. ft.) (DUs) Single Multi- Business Private Public ommerci 1 Family Family Commercial Park` stitutionalII InstitutionalRecreation DUs or 1,000 sq. ft. City of Chino Hills Page 9 Development Impact Fee Prozram Evaluation Au,-ust 21, 2018 195/211 lDAVID �rnussic J & ASSOCIATES IV. THE NEEDS LIST AND FACILITY COSTS Identification of the public facilities to be financed is a critical component of any development impact fee program. In the broadest sense, the purpose of impact fees is to protect the public health, safety, and general welfare by providing for adequate public facilities. "Public Facilities" per Government Code 66000 et seq. include "public improvements, public services, and community amenities." Fees imposed for a public capital facility improvement cannot be used for maintenance or services. Government Code 66000 et seq. requires that if impact fees are going to be used to finance public facilities, those facilities must be identified. Identification of the facilities may be made in an applicable general or specific plan, other public documents, or by reference to a Capital Improvement Program ("CIP"). For purposes of the City's DIF Programs, the Needs List is intended to be the official public document identifying the facilities eligible to be financed, in whole or in part, through the levy of a uniform development impact fee on future development in the City. Future Facilities included in this Study will serve the entire City, so the service area within which the DIFs are levied is the entire City. DTA worked with the City's Community Services and Public Works staff to review and update the existing Needs List, which was based on information obtained from the following sources: • Public Facilities Implementation Plan ("1998 PFIP") prepared by Keyser Marston Associates • Capital Improvement Program ("CIP") • Annual Public Disclosures • 2014 Keyser Marston Associates Study • 2007 Park Master Plan • General Plan 2015 Update At the direction of the City, DTA has added certain facilities to the Needs List that were not included in the 1998 PFIP. The addition of these facilities, shown in Exhibit A, was necessitated by updates to various facilities' master plans including: • 2003 SCADA System Upgrade Study • 2005 Water & Recycled Water Master Plan • 2005 Wastewater Master Plan • 2008 Storm Drain Master Plan • 2007 Park Master Plan • General Plan 2015 Update Table I on Exhibit A sets forth the percentage of costs allocated to development that has occurred since the DIFs were first imposed vs. development that occurred prior to when DIFs were first imposed, for each project, in accordance with the methodology utilized in the 1998 Public Facilities Implementation Plan ("1998 PFIP") prepared by Keyser Marston Associates. City of Chino Hills Page 10 Development Impact Fee Prozram Evaluation Aumust 21, 2018 196/211 1DAVID TAllSSIC J & ASSOCIATES As noted in the Demographics section of this Study (Section III), the period beginning FY 2017/18 and ending FY 2026/27 was selected for planning purposes. The Needs List (Table IV - A) identifies all the facilities selected by City Community Services and City Public Works staff that will be needed to serve future development during that period, as well as the costs of these facilities. As future development is only required to pay its fair share of Future Facilities costs, the net costs listed in the Needs List will be bifurcated in Table IV -A to identify the costs of the facilities that are the responsibility of future development. City of Chino Hills Page 11 Development Impact Fee Program Evaluation Auzust 21, 2018 197/211 � DAVID Tnussic JI&& ASSOCIATES TABLE IV -A FACILITIES NEEDS LIST (1) (2} (3} (4} {5) (6) (7) (8} Percent of Cost Current Cost Allocated to Total Cost for Allocated to Cost Allocated to Other Funding Facility Name Facility Fund Net Cost to City New New Development Existing Sources Policy Background or Objective Balance Development Development A. TRAFFIC FACILITIES 1 Pine Ave. Extension $4,201,000 $0 $4,201,000 33.59% $1,411,116 $2,789,884 Grant Circulation Element of the General Plan 2 Soquel Canyon Pkwy Extension $5,000,000 $0 $5,000,000 33.59% $1,679,500 $3,320,500 Grant Circulation Element of the General Plan 3 Current Fund Balance ($2,379,114) ($2,379,114) ($2,379,114) TOTAL TRAFFIC FACILITIES $9,201,000 ($2,379,114) $6,821,886 10.43% $711,502 $6,110,384 B. WATER FACILITIES 1 Reservoir R-18 (5mg) $8,277,170 $0 $8,277,170 60.90% $5,040,797 $3,236,373 Water Utility Fund Water, Recycled Water and Sewer Master Plan 2 Reservoir R-43 (2mg) - Intermediate Zone $6,000,000 $0 $6,000,000 60.90% $3,654,000 $2,346,000 Water Utility Fund Water, Recycled Water and Sewer Master Plan 3 Reservoir R-43 Feeder Pipeline $880,000 $0 $880,000 60.90% $535,920 $344,080 Water Utility Fund Water, Recycled Water and Sewer Master Plan 4 Soquel Canyon Recycled (inter.) - Water Distribution Main $1,100,000 $0 $1,100,000 100.00% $1,100,000 $0 Water, Recycled Water and Sewer Master Plan 5 High Zone Recycled (Western Hills) $1,500,000 $0 $1,500,000 100.00% $1,500,000 $0 Water, Recycled Water and Sewer Master Plan 6 Reservoir R-46 Replacement (4mg) $6,600,000 $0 $6,600,000 60.90% $4,019,400 $2,580,600 Water Utility Fund Water, Recycled Water and Sewer Master Plan 7 Well 18 Equipment $825,000 $0 $825,000 80.00% $660,000 $165,000 Water Utility Fund Water, Recycled Water and Sewer Master Plan 8 Telemetry - (SCADA- Water) $825,000 $0 $825,000 80.00% $660,000 $165,000 Water Utility Fund Water, Recycled Water and Sewer Master Plan 9 Reservoir R-25 Tonner Canyon (2.5mg) $5,000,000 $0 $5,000,000 60.90% $3,045,000 $1,955,000 Water Utility Fund Water, Recycled Water and Sewer Master Plan 10 Tonner Canyon Pipeline $1,452,000 $0 $1,452,000 100.00% $1,452,000 $0 Water, Recycled Water and Sewer Master Plan 11 Reservoir R-2 $5,000,000 $0 $5,000,000 60.90% $3,045,000 $1,955,000 Water Utility Fund Water, Recycled Water and Sewer Master Plan 12 City-wide Water & Recycled Water Master Plan Study $600,000 $0 $600,000 33.59% $201,540 $398,460 Water Utility Fund Water, Recycled Water and Sewer Master Plan 13 Current Fund Balance ($14,693,343) ($14,693,343) ($14,693,343) TOTAL WATER FACILITIES $38,059,170 ($14,693,343) $23,365,827 43.74% $10,220,314 $13,145,513 C. SEWER FACILITIES 1 Grand Avenue / Highway 71 Trunk Relief: E -P1 810 ft of 18 -inch relief sewer $213,840 $0 $213,840 73.00% $156,103 $57,737 Sewer Utility Fund Water, Recycled Water and Sewer Master Plan 2 Carbon Canyon Trunk: H -P2 One lift station, etc. $1,850,000 $0 $1,850,000 100.00% $1,850,000 $0 Water, Recycled Water and Sewer Master Plan 3 Telemetry - (SCADA- Sewer) $1,331,000 $0 $1,331,000 100.00% $1,331,000 $0 Water, Recycled Water and Sewer Master Plan 4 Rincon Trunk Relief Sewer: C -P3 1,034 LF of 15 -inch sewer $500,000 $0 $500,000 100.00% $500,000 $0 Water, Recycled Water and Sewer Master Plan 5 Rincon Trunk Relief Sewer: C -P4 Upgrade pumps for lift stations $400,000 $0 $400,000 100.00% $400,000 $0 Water, Recycled Water and Sewer Master Plan 6 Carbon Canyon Trunk: H -P1 2,480 ft of 8 -inch relief sewer $500,000 $0 $500,000 100.00% $500,000 $0 Water, Recycled Water and Sewer Master Plan 7 Country Club Trunk: J -P1 1,350 It of 15 -inch relief sewer $650,000 $0 $650,000 100.00% $650,000 $0 Water, Recycled Water and Sewer Master Plan 8 City-wide Wastewater Master Plan Study $500,000 $0 $500,000 33.59% $167,950 $332,050 Sewer Utility Fund Water, Recycled Water and Sewer Master Plan 9 Current Fund Balance ($4,557,455) ($4,557,455) ($4,557,455) TOTAL SEWER FACILITIES $5,944,840 ($4,557,455) $1,387,385 71.90% $997,598 $389,787 City of Chino Hills Page 12 Development Impact Fee Program Evaluation August 21, 2018 198/211 � DAVID Tnussic JI&& ASSOCIATGS TABLE IV -A FACILITIES NEEDS LIST (CONTINUED) (1) (2) (3) {4) {5) {6) (7) {8) 100.00% Current Percent of Cost Cost Allocated to Total Cost for $4,050,000 Allocated to Cost Allocated to Other Funding Facility Name Facility Fund Net Cost to City New New Development Existing policy Background or Objective Sources 3 Lower Los Serranos (Upper Soquel) Balance Development Development D. STORM DRAIN FACILITIES 1 Little Chino Creek: D-4-1 Little Chino Cr. @ Peyton $1,700,000 $0 $1,700,000 100.00% $1,700,000 $0 Storm Drain Master Plan 2 Little Chino Creek: D-6-1 Eucalyptus from Peyton to City limits $4,050,000 $0 $4,050,000 100.00% $4,050,000 $0 Storm Drain Master Plan 3 Lower Los Serranos (Upper Soquel) $1,600,000 $0 $1,600,000 100.00% $1,600,000 $0 Storm Drain Master Plan 4 City-wide Storm Drain Master Plan Study $600,000 $0 $600,000 33.59% $201,540 $398,460 General Fund Storm Drain Master Plan 5 English Creek/Channel $2,000,000 $0 $2,000,000 100.00% $2,000,000 $0 Storm Drain Master Plan 6 Current Fund Balance ($6,784,600) ($6,784,600) ($6,784,600) TOTAL STORM DRAIN FACILITIES $9,950,000 ($6,784,600) $3,165,400 87.41% $2,766,940 $398,460 E. PARKS AND RECREATION FACILITIES 1 Los Serranos Park (formerly Bird Farm Park) $4,000,000 $0 $4,000,000 55.92% $2,236,800 $1,763,200 Quimby In -Lieu, CFD 5 Parks, Recreation and Open Space Element 2 Galstian Park Site and Community Center $4,700,000 $0 $4,700,000 55.92% $2,628,240 $2,071,760 General Fund Parks, Recreation and Open Space Element 3 Current Fund Balance ($417,303) ($417,303) ($417,303) TOTAL PARKS AND RECREATION FACILITIES $8,700,000 ($417,303) $8,282,697 53.70% $4,447,737 $3,834,960 F. GENERAL CITY FACILITIES 1 Fire Facilities at Soquel Canyon Pkwy & Pipeline Ave $4,000,000 $0 $4,000,000 100.00% $4,000,000 $0 General Plan 2 City Entry Monuments (10 Locations) $1,500,000 $0 $1,500,000 33.59% $503,850 $996,150 General Fund, Gas Tax General Plan 3 City Yard & Transfer Station $9,000,000 $0 $9,000,000 33.59% $3,023,100 $5,976,900 General Fund General Plan 4 Current Fund Balance ($3,950,822) ($3,950,822) ($3,950,822) TOTAL GENERAL CITY FACILITIES $14,500,000 ($3,950,822) $10,549,178 33.90% $3,576,128 $6,973,050 TOTAL ALL FACILITIES $86,355,010 ($32,782,637) $53,572,373 42.41% $22,720,219 $30,852,154 City of Chino Hills Page 13 Development Impact Fee Program Evaluation August 21, 2018 199/211 1DAVID �rnussic J & ASSOCIATES V. METHODOLOGY UTILIZED TO CALCULATE THE IMPACT FEE REVENUES TABLE V-A: CITY OF CHINO HILLS FY 2017/18 DEVELOPMENT IMPACT FEE SCHEDULE Notes: [1] Non-residential fee levels are based on Dwelling Unit Equivalent (DUE) assumptions in the 2014 fee evaluation study prepared by Keyser Marston Associates, Inc. [2] Water facilities fees for Non-residential uses are $6,415 per V meter; $9,623 per 1.5" meter; $20,527 per 2" meter; $44,905 per 3" meter; $76,979 per 4" meter; $160,374 per 6" meter; $230,938 per 8" meter; $372,068 per 10" meter; and $513,197 per 12" meter, according to the City's existing Development Impact Fee Schedule (updated 12/21/17). [3] Sewer fee ratios for Non-residential uses are listed in Section 3.40.110 of the Chino Hills Municipal Code. [4] The determination of whether a land use category is subject to a specific DIF is based on the PFIP. Additionally, a summary of the specific types of land uses associated with each of the Land Use Categories is shown in Table V -B, below. City of Chino Hills Page 14 Development Impact Fee Program Evaluation August 21, 2018 200/211 Residential Non -Residential' (per DU) JJ (per 1,000 sq. ft.) ' ingl MultiLmmercial Business Private Public Commercia FamilyFamilyPark Institutional Institutional Recreation ra Watery •• 1 1• 1• 1• 1 Sewer' 3 • • Storm • ®® • ': 1 • ': 1 ': 1 : � Drain Parks and Recreation General City Facilities • Notes: [1] Non-residential fee levels are based on Dwelling Unit Equivalent (DUE) assumptions in the 2014 fee evaluation study prepared by Keyser Marston Associates, Inc. [2] Water facilities fees for Non-residential uses are $6,415 per V meter; $9,623 per 1.5" meter; $20,527 per 2" meter; $44,905 per 3" meter; $76,979 per 4" meter; $160,374 per 6" meter; $230,938 per 8" meter; $372,068 per 10" meter; and $513,197 per 12" meter, according to the City's existing Development Impact Fee Schedule (updated 12/21/17). [3] Sewer fee ratios for Non-residential uses are listed in Section 3.40.110 of the Chino Hills Municipal Code. [4] The determination of whether a land use category is subject to a specific DIF is based on the PFIP. Additionally, a summary of the specific types of land uses associated with each of the Land Use Categories is shown in Table V -B, below. City of Chino Hills Page 14 Development Impact Fee Program Evaluation August 21, 2018 200/211 I&DAVID Tnussic & ASSOCIATES TABLE V -B: LAND USE CATEGORIES UTILIZED IN CITY DIF PROGRAMS Table V -C, below, presents DTA's methodology for calculating the estimated impact fee revenues over the period FY 2017/18 through FY 2026/27, based on the current fee levels per unit as listed in Table V-A and the development projections, in land use units, presented in Section III above. City of Chino Hills Page 15 Development Impact Fee Program Evaluation Auzust 21, 2018 201/211 Land Use Categories Multi- P�,ivate Public Commercir Single Family Family Commercial Business Park Institutional Institutional Recreati0q, - Single-family - Multi- - Retail - Research and - Religious - Public - Golf courses homes family - Restaurants development facilities schools - Tennis clubs units - Clothing - Light - Other private - Community - Sports - Pharmaceuticals manufacturing institutions centers facilities - Professional offices - Distribution (e.g., Boys - Public - Related uses - Medical/dental - Support services Republic) utilities (e.g., pro - offices - Offices - Government shops or - Hardware stores - Ancillary retail properties restaurants - Automotive uses if part of a supplies recreation - Hotels complex) - Appliance outlets - Theaters - Personal services Table V -C, below, presents DTA's methodology for calculating the estimated impact fee revenues over the period FY 2017/18 through FY 2026/27, based on the current fee levels per unit as listed in Table V-A and the development projections, in land use units, presented in Section III above. City of Chino Hills Page 15 Development Impact Fee Program Evaluation Auzust 21, 2018 201/211 j %DAVID TAUSS]C J & ASSOCIATES TABLE V -C: DEVELOPMENT IMPACT FEE REVENUES: FY 2017/18 - FY 2026/27 Land Use Category {1} {2} RESIDENTIAL Single Family Multi -Family {3} Commercial {4} Business Park {5} {6} NON-RESIDENTIAL Private Institutional Public Institutional {7} Commercial Recreation TOTAL Unit Dwelling Unit 1,000 Square Feet Acre A TRAFFIC FACILITIES Amount of Fee Projected Number of DUs or 1,000 sq. ft. $228 822 $228 1,129 416 56 41 - TOTAL TRAFFIC FACILITIES $187,416 $257,412 $0 $0 $0 $0 $0 1 $444,828 B. WATER FACILITIES Amount of Fee Projected Number of DUs or 1,000 sq. ft. $6,415 822 $4,490 1,129 $1,283 416 $1,091 56 $1,091 41 $1,091 - $21,170 - TOTAL WATER FACILITIES $5,273,130 $5,069,210 $534,273 $61,071 $44,833 $0 $0 $101982,517 C. SEWER FACILITIES Amount of Fee Projected Number of DUs or 1,000 sq. ft. $462 822 $462 1,129 $235 416 $175 56 $175 41 $175 - TOTAL SEWER FACILITIES $379,764 $521,598 $97,920 $9,804 $7,197 $0 $0 1 $1,016,282 D. STORM DRAIN FACILITIES Amount of Fee Projected Number of DUs or 1,000 sq. ft. $1,261 822 $1,261 1,129 $870 416 $655 56 $870 41 $870 - TOTAL STORM DRAIN FACILITIES $1,036,542 $1,423,669 $362,290 $36,680 $35,766 $0 $0 1 $2,894,946 E. PARKS AND RECREATION FACILITIES Amount of Fee Projected Number of DUs or 1,000 sq. ft. $2,422 822 $2,422 1,129 416 56 41 TOTAL PARKS AND RECREATION FACILITIES $1,990,884 $2,734,438 $0 $0 $0 $0 $0 $4,725,322 F. GENERAL CITY FACILITIES Amount of Fee Projected Number of DUs or 1,000 sq. ft. $1,791 822 $1,791 1,129 416 56 $698 41 TOTAL GENERAL CITY FACILITIES $1,472,202 $2,022,039 $0 $0 $28,695 $0 $0 $3,522,936 TOTAL ALL FACILITIES $10,339,938 $12,028,366 $994,483 $107,554 $116,490 $0 $0 $23,586,831 City of Chino Hills Page 16 Development Impact Fee Program Evaluation August 21, 2018 202/211 1DAVID �rnussic J & ASSOCIATES The total revenue that will be generated by the DIF Programs through FY 2026/27, based on the assumptions incorporated into the Fee Evaluation, is $23,586,831 in 2018 dollars. Please note that this revenue includes the 7.5% share that is allocated toward administrative/collection costs. As reflected in Table IV -A, above, the total Future Facilities costs assigned to future development in the City equal $22,720,219 in 2018 dollars. Including a charge equal to $1,769,012 for administration and fee collection purposes (equal to 7.5% of the $23,586,831 in fees levied), the total cost allocated to new development is $24,489,231. Lastly, Table V -D on the following page sets forth the gaps between Needs List costs and DIF revenues when accounting for other sources of revenue. The calculations show that the categories of Traffic, Water, Sewer, Storm Drain, Parks and Recreation Facilities, and General City Facilities are all expected to incur deficits at the end of FY 2026/27. The City plans to identify funding sources outside the facilities fee funds, including grants, to fully fund the projects (i.e., to make up the difference between total facilities project costs, and anticipated fee collection and existing balance funding sources). City of Chino Hills Page 17 Development Impact Fee Program Evaluation August 21, 2018 203/211 I %DAVID TAllSSIC J & ASSOCIATES TABLE V -D: PROJECTED GAPS BETWEEN FACILITIES COSTS AND REVENUES LAND USE CATEGORY TOTAL A. TRAFFIC FACILITIES Revenues $444 Admin Fee (7.5% of Revenues) ($33 Costs Allocated to New Development ($711 TOTAL TRAFFIC FACILITIES 1 ($300,036)1 B. WATER FACILITIES Revenues $10,982,517 Admin Fee (7.5% of Revenues) ($823,689 Costs Allocated to New Development ($10,220,314 TOTAL WATER FACILITIES ($61,486 C. SEWER FACILITIES Revenues $1,016,282 Admin Fee (7.5% of Revenues) ($76,221 Costs Allocated to New Development ($997,598 TOTAL SEWER FACILITIES ($57,537 D. STORM DRAIN FACILITIES Revenues $2,894,94E Admin Fee (7.5% of Revenues) ($217,121 Costs Allocated to New Development ($2,766,94a TOTAL STORM DRAIN FACILITIES ($89.11E E. PARKS AND RECREATION FACILITIES Revenues $4,725,322 Admin Fee (7.5% of Revenues) ($354,399 Costs Allocated to New Development ($4,447,737 TOTAL PARKS AND RECREATION FACILITIES ($76,814 F. GENERAL CITY FACILITIES Revenues $3,522,936 Admin Fee (7.5% of Revenues) ($264,220) Costs Allocated to New Development ($3,576,128) TOTAL GENERAL CITY FACILITIES ($317,412) TOTAL ALL FACILITIES ($902,400) City of Chino Hills Page 18 Development Impact Fee Program Evaluation Auzust 21, 2018 204/211 �bAV[b TAUSSIG J & ASSOCIATES VI. DEVELOPMENT IMPACT FEE PROGRAM MONITORING AND ADMINISTRATION 1. DIF PROGRAM ADMINISTRATION FEATURES AND COSTS As recently confirmed by the State of California's Fourth Appellate District in Daniel Walker vs. City of San Clemente, the City may include a reasonable charge for the collection and administration of the DIF Programs. As a result, the City has implemented a 7.5% administration charge, included in the total DIF rates reflected in Table V-A above. In other words, for every $10,000 the City collects in DIF revenues, $750 is expensed for DIF program administration. Please note that the DIFs examined in this Fee Evaluation are based on Future Facilities costs in 2018 dollars. Municipal Code 3.40.120.0 requires the City to review the traffic, water, sewer, and storm drain facilities fees annually and apply an annual escalator to these fee levels to account for inflation in acquisition and construction costs. An escalator equal to the change in the Engineering News Record's 20 -City Average Construction Cost Index, for each January 1 of the prior year to January 1 of the current year, is proposed to be added to the imposed DIF levels for parks and recreation facilities as well as general City facilities, at the City's discretion to be effective each July 1. 2. DIF PROGRAM MONITORING The California Mitigation Fee Act requires all municipalities to complete both an annual public report and a five-year public report summarizing the status of their fee programs. In addition, Municipal Code 3.40.120 requires the City to complete three-year reports for each of the six fee program categories; the City is proposing amending the Municipal Code and changing the three- year cycle to a five-year cycle. Please note that this Fee Evaluation report fulfills both the five- year reporting requirements pursuant to the California Mitigation Fee Act and the three-year evaluation/update required under Municipal Code 3.40.120. (a) Annual Report An annual report is required to be prepared between July 1 and January 1 each year and submitted to the City Council as an informational item. The annual report must include: (1) A brief description of the impact fees; (2) The amount of the impact fees; (3) The impact fee account balance at the beginning and end of the fiscal year; (4) The amount of fees collected and interest earned over the previous year; (5) An identification of each expenditure from the account, including a brief description of the expenditure and the percentage of the total cost funded by the fees; (6) An approximate date when construction will begin if the municipality determines it has sufficient funds to complete a public improvement; (7) A description of any interfund transfer or loan made from the impact fee accounts; and (8) The amount of any refunds made from the accounts. City of Chino Hills Page 19 Development Impact Fee Prozram Evaluation August 21, 2018 205/211 � J ADAVID TAUSSIG &ASSOCIATES (b) Three -Year Report A Three -Year Report is required pursuant to Municipal Code 3.40.120 for each of the following fee program categories: Traffic, Water, Sewer, Storm Drain, Parks and Recreation, and General City Facilities. This report was to be submitted to the City Council for review after July 1 of every third year, in connection with the annual City audit, or as soon thereafter as possible. The purpose of the three-year DIF evaluation/update cycle was to ensure that the City Council would periodically review the degree to which the fees collected were mitigating the impacts of new development projects. Fees may be adjusted by ordinance, following a noticed public hearing. Notably, the City intends to change the three-year DIF evaluation/update cycle to a five- year cycle. I.e., the City will amend the ordinance in the course of approving this Fee Evaluation, and also amend Section 3.40.120 of the Municipal Code to make this reporting requirement consistent with the five-year statutory requirement, described in the following paragraphs. (c) Five -Year Report Under the Mitigation Fee Act, the City Council is required to make all of the following findings with respect to that portion of the account or fund remaining unexpended, whether committed or uncommitted for the fifth fiscal year following the first deposit into the fund, and every five years thereafter: (1) Identify the purpose of imposing the fee; (2) Demonstrate a reasonable relationship between the fee and the purpose for which it is charged; (3) Identify all sources and amounts of funding anticipated to complete financing any incomplete improvements that were identified when enacting the fee; and (4) Identify the approximate dates when the anticipated funds are expected to be received. (Government Code Section 66001(d)) 3. PROJECTED DIF PROGRAM CASHFLOWS Based on the results of this Study, the total revenue that could be generated by the DIF Programs through FY 2026/27 is $23,586,831 in 2018 dollars, which is equal to the projected growth (in dwelling units for residential land uses, and 1,000 square feet of building space for non-residential land uses) multiplied by the FY 2017/18 development impact fee per unit or per 1,000 square feet, for each Land Use Category. Furthermore, the total expenditure allocated to new development, which includes an administrative charge equal to 7.5% of the revenue fees projected to be generated by future development, is $24,489,231. Therefore, the gap between projected revenues and costs is a deficit of $902,400 across the six (6) DIF Programs evaluated in this Study. Of course, with variations occurring in the economy on a year-to-year basis, both nationally and locally, as well as political and other issues that may arise, the actual revenue generated each year will vary depending on factors that are difficult to predict. In addition, it is anticipated that the City will revise its DIF Programs from time to time as Future Facilities are constructed and new infrastructure needs arise. City of Chino Hills Page 20 Development Impact Fee Prozram Evaluation Aumust 21.2018 206/211 r DAVID TAUSSIG J & ASSOCIATES EXHIBIT A CITY OF CHINO HILLS - COST ALLOCATION METHODOLOGY The table below (Table I) sets forth the percentage of costs allocated to development that has occurred since the DIFs were first imposed ("Percent to New Development") vs. development that occurred prior to when DIFs were first imposed ("Percent to Existing Development"), for each project, in accordance with the methodology utilized in the 1998 Public Facilities Implementation Plan ("1998 PFIP") prepared by Keyser Marston Associates. As previously discussed in Section IV, DTA has added certain facilities to the Needs List that were not included in the 1998 PFIP. DTA also deleted those projects from the 1998 PFIP list that have already been constructed. With respect to the added projects (highlighted in yellow in the table below), the City has applied the allocation percentages based on facility category as stated in the 1998 PFIP. City of Chino Hills Page A-1 Development Impact Fee Program Evaluation August 21, 2018 207/211 DAVID TAUSSIG �J & A550CIATES TABLE L• Allocation Percentages ' Basis New Existing Allocation Additions/Substitutions Development Development Percentages to Needs List Traffic 1998 PFIP Pine Ave. Extension 33.59% 66.41% N/A Table III -A-1 Soquel Canyon Pkwy 1998 PFIP 33.59% 66.41% Added to Needs List. Extension Table III -A-1 Water 1998 PFIP Reservoir R-18 (5mg) 60.9% 39.1% N/A Table III -B-1 Reservoir R-43 (2mg) 1998 PFIP 60.9% 39.1% N/A - Intermediate Zone Table III -B-1 Reservoir R-43 Feeder 1998 PFIP 60.9% 39.1% N/A Pipeline Table III -B-1 Soquel Canyon Recycled (inter.) - 1998 PFIP 100% 0% N/A Water Distribution Table III -B-1 Main High Zone Recycled 1998 PFIP 100% 0% N/A Western Hills Table III -B-1 Reservoir R-46 1998 PFIP 60.9% 39.1% N/A Replacement (4 g) Table III -B-1 1998 PFIP Well 18 Equipment 80% 20% N/A Table III -B-1 Telemetry - (SCADA 1998 PFIP 80% 20% N/A - Water) Table III -B-1 Reservoir R-25 1998 PFIP Tonner Canyon 60.9% 39.1% N/A Table III -B-1 2.5m Tonner Canyon 1998 PFIP 100% 0% N/A Pipe ne Table III -B-1 Reservoir R-2 60.9% 39.1% 1998 PFIP Added to Needs List. Table III -B-1 City of Chino Hills Page A-2 Development Impact Fee Program Evaluation August 21, 2018 208/211 � J 9kDAVID TAUSSIG &ASSOCIATES City of Chino Hills Page A-3 Development Impact Fee Prozram Evaluation Aumust 21, 2018 209/211 Percentto Percentto Basis ExistingNew Allocation • dd Development opPercentages Added to Needs List per City-wide Water & 1998 PFIP 2005 Water and Recycled Water 33.59% 64.41% Master Plan Study Table III -B-1 Recycled Water Master Plan Sewer Grand Avenue / Highway 71 Trunk 73% 27% 1998 PFIP N/A Relief. E -P1 810 ft of Table III -C-1 18 -inch relief sewer Carbon Canyon Trunk: H -P2 One lift 100% 0% 1998 PFIP N/A Table III -C-1 station, etc. Added to Needs List per Telemetry - (SCADA 1998 PFIP - Sewer) 100% 0% Table III -C-1 2003 SCADA System Upgrade Stud Rincon Trunk Relief Sewer: C -P3 1,034 100% 0% 1998 PFIP N/A LF of 12 -inch sewer Table III -C-1 Rincon Trunk Relief Sewer: C -P4 Upgrade 100% 0% 1998 PFIP N/A Table III -C-1 pumps for lift stations Carbon Canyon Trunk: H -PI 2,480 ft 100% 0% 1998 PFIP N/A of 8 -inch relief sewer Table III -C-1 Country Club Trunk: J -P1 1,350 ft of 8- 100% 0% 1998 PFIP N/A Table III -C-1 inch relief sewer City-wide Wastewater 1998 PFIP Added to Needs List per Master Plan Study 33.59% 66.41% Table III -C-1 2005 Wastewater Master Plan Storm Drain Little Chino Creek: D- 4-1 Little Chino Cr. @ 100% 0% 1998 PFIP N/A Table III -D-1 Peyton Little Chino Creek: D- 6-1 Eucalyptus from 100% 0% 1998 PFIP N/A Table III -D-1 Peyton to City limits Lower Los Serranos 100% 0% 1998 PFIP N/A (Upper So uel Table III -D-1 City of Chino Hills Page A-3 Development Impact Fee Prozram Evaluation Aumust 21, 2018 209/211 � J 9kDAVID TAUSSIG &ASSOCIATES City of Chino Hills Page A-4 Development Impact Fee Prozram Evaluation Aumust 21.2018 210/211 Percentto Percentto Basis ExistingNew Allocation • dd Development opPercentages Added to Needs List per City-wide Storm Drain Master Plan 33.59% 66.41% 19e PFIP 2008 Storm Drain Study Table II1I-D1-D-1 Master Plan English 100% 0% 1998 PFIP N/A Creek/Channel Table III -D-1 Parks and Recreation Los Serranos Park 1998 PFIP (formerly Bird Farm 55.92% 44.08% Table III -E-1, and N/A Park) Table II -3 Galstian Park Site and 1998 PFIP Added to Needs List per Community Center 5592% . 4408% . Table III -E-1 and 2007 Park Master Plan Table II, General City Facilities Fire Facilities at Soquel Canyon Pkwy 100% 0% 1998 PFIP N/A and Pipeline Avenue Table III -F-1 Station 11 City Entry 33.59%% 66.41% 1998 PFIP N/A Monuments Table III -F-1 City Yard and Transfer Station 33.59%% 66.41% 1998 PFIP N/A (Additional Building Table III -F-1 Sq. Ft. and Acreage) City of Chino Hills Page A-4 Development Impact Fee Prozram Evaluation Aumust 21.2018 210/211 Table A Approximate Dates Funding For Incomplete Improvements Expected to be Deposited into the Appropriated Account or Fund Facility Name Approximate Dates Funding Complete A. TRAFFIC FACILITIES 1 Pine Ave. Extension FY 18/19 2 Soquel Canyon Pkwy Extension FY 27/28" B. WATER FACILITIES 1 Reservoir R-18 (5mg) FY 18/19 2 Reservoir R-43 (2mg) - Intermediate Zone FY 18/19 3 Reservoir R-43 Feeder Pipeline FY 18/19 4 Soquel Canyon Recycled (inter.) - Water Distribution Main FY 18/19 5 High Zone Recycled (Western Hills) FY 18/19 6 Reservoir R-46 Replacement (4mg) FY 20/21 7 Well 18 Equipment FY 21/22 8 Telemetry - (SCADA - Water) FY 18/19 9 Reservoir R-25 Tonner Canyon (2.5mg) FY 24/25" 10 Tonner Canyon Pipeline FY 27/28" 11 Reservoir R-2 FY 18/19 12 City-wide Water & Recycled Water Master Plan Study FY 18/19 C. SEWER FACILITIES 1 Grand Avenue / Highway 71 Trunk Relief: E -P1 810 ft of 18 -inch relief sewer FY 18/19 2 Carbon Canyon Trunk: H -P2 One lift station, etc. FY 18/19 3 Telemetry - (SCADA - Sewer) FY 18/19 4 Rincon Trunk Relief Sewer: C -P3 1,034 LF of 15 -inch sewer FY 18/19 5 Rincon Trunk Relief Sewer: C -P4 Upgrade pumps for lift stations FY 18/19 6 Carbon Canyon Trunk: H -P1 2,480 ft of 8 -inch relief sewer FY 19/20 7 Country Club Trunk: J -P1 1,350 ft of 15 -inch relief sewer FY 27/28" 8 City-wide Wastewater Master Plan Study FY 18/19 D. STORM DRAIN FACILITIES 1 Little Chino Creek: D-4-1 Little Chino Cr. @ Peyton FY 18/19 2 Little Chino Creek: D-6-1 Eucalyptus from Peyton to City limits FY 19/20 3 Lower Los Serranos (Upper Soquel) FY 27/28' 4 City-wide Storm Drain Master Plan Study FY 18/19 5 English Creek/Channel FY 18/19 E. PARKS AND RECREATION FACILITIES 1 Los Serranos Park (formerly Bird Farm Park) FY 19/20 2 Galstian Park Site and Community Center FY 27/28' F. GENERAL CITY FACILITIES 1 Fire Facilities at Soquel Canyon Pkwy & Pipeline Ave FY 27/28" 2 City Entry Monuments (10 Locations) FY 18/19 3 City Yard & Transfer Station FY 18/19 *Given the variability of the City's funding streams, particularly with development fee funds which decrease significantly during periods of economic downturn, it is difficult to provide estimates for the dates of projects that are expected to be funded 5 or more years in the future. Thus, the above estimated dates assume that revenues will remain the same as they have in the recent past. In the event of an economic downturn or some other interruption in the City's funding streams, the dates may be delayed from those noted. 211/211 Date: 11-13-2018 Cheryl Balz Item No.: 22 From: Joann Lombardo This item was received after the Sent: Friday, November 09, 2018 6:31 PM publication of the agenda packet. To: Gordon Nichols Cc: Nadeem Majaj; Joe Dyer; Cheryl Balz Subject: Re: BIA - Notice of Public Hearing re; Fees Update Yes Gordon. There will be sufficient funds without the need to increase funds. Let us know if you have other questions. Thank you. Sent from my Whone On Nov 9, 2018; at 5:20" PM, Gordon Nichols <Gordon@biabuild.com> wrote: Hi Joann, BIA has reviewed the DIF report prepared by Taussig and scheduled for next week's City Council Agenda (Item #22). I'd just like to confirm, that per DTA's recommendations (that the current DIF would be sufficient to fund the construction of future facilities) there is no changes proposed to the DIF schedule. Can you please confirm? Thank you, Building Industry Association of Southern California •- Baldy View GlTapter "The Voice of the Horne Building Indu.sfry" AM AFFILIATE of NAHB WASHINGTON D.0',. & CB.I.A. SACRAMENTO <IMAGE002.PNG>909.942.2072 <IMAGE003.PNG>909.942.2009<IMAGE004.PNG>byww.blabuild.conl <IMAGEOOS.JPG><IMAGEO06.JPG><IMAGE007.JPG><IMAGE008.JPG><IMAGEOO9.JPG> <IMAGEO I O.JPG> ■ Hills |n ■ ■ ■ City Council e 4 ■g - ■ 0 ;k . ;.� 6� , Ij.. iQNa 0 @. &. ■ 4J C w a CIO■ ■ 9 0 w 0 Q , =CU■ OW■ ■,• Q ■ 12■ a ■ C?■ :. ■ 12o ■ ■ = a I%■ ■ = e .: � Ib 10 1210 ■ ■ 0 ■ o■ ■ r3 - e ' C : • ti 0 0 a ilk C�Eko■ D , !. ■ c � � . ■ � � � November 13, 2018 Q a 0 ■ Qq 9,_ q Cw ■ It -dc� CM -b:b M DOC? , ■ : ; am ■ e • nUNCIL F • VID TAUSSIG �JIVA ASSOCIATES • lli E: CITY OF CHINO HILLS 11 KUDA WEKWETE SENIOR VICE PRESIDENT DAVID TAUSSIG & ASSOCIATES 5000 BIRCH ST., SUITE 6000 NEWPORT BEACH, CA 92660 PURPOSE OF IMPACT FEE EVALUATION 20 STEPS TO COMPLETE EVALUATION 21 EXISTING IMPACT FEE PROGRAM PAP 0 Traffic Facilities $9,201,000 $6,821,886 $711,502 $6,110,384 Water Facilities $38,059,170 $23,365,827 $10,220,314 $13,145,513 Sewer Facilities $5,944,840 $1,387,385 $997,598 $389,787 Storm Drain Facilities $9,950,000 $3,165,400 $2,766,940 $398,460 Parks and Recreation Facilities General City Facilities $8,700,000 $14,500,000 $8,282,697 $10,549,178 Total 1 $86,355,010 1 $53,572,373 $4,447,737 $3,576,128 $22,720,219 $3,834,960 $6,973,050 $30,852,154 Grants Water Utility Fund Sewer Utility Fund General Fund Quimby in -lieu, CFD, General Fund Gas Tax, General Fund N/A 0 raffic Facilities $444,828 ($33,362) ($711,502) ($300,036) Vater Facilities $10,982,517 ($823,689) ($10,220,314) ($61,486) ewer Facilities $1,016,282 ($76,221) ($997,598) ($57,537) torm Drain Facilities $2,894,946 ($217,121) ($2,766,940) ($89,115) arks and Recreation Facilities $4,725,322 ($354,399) ($4,447,737) ($76,814) general Facilities $3,522,936 ($264,220) ($3,576,128) ($317,412) .al $23,586,831 ($1,769,012) ($22,720,219) ($902,400) CONCLUSIONS 25 26 ■ Hills |n ■ ■ ■ City Council e 4 ■g - ■ 0 ;k . ;.� 6� , Ij.. iQNa 0 @. &. ■ 4J C w a CIO■ ■ 9 0 w 0 Q , =CU■ OW■ ■,• Q ■ 12■ a ■ C?■ :. ■ 12o ■ ■ = a I%■ ■ = e .: � Ib 10 1210 ■ ■ 0 ■ o■ ■ r3 - e ' C : • ti 0 0 a ilk C�Eko■ D , !. ■ c � � . ■ � � � November 13, 2018 Q a 0 ■ Qq 9,_ q Cw ■ It -dc� CM -b:b M DOC? , ■ : ; am ■ e