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HomeMy WebLinkAboutAgenda Report - January 18, 2023 H-01 PH40 , 01 co Z, r COUNCIL COMMUNICATION AGENDA ITEM ko I AGENDA TITLE: Public Hearing to consider a Resolution Adopting and Implementing the Collection of San Joaquin County Facilities Fees, CEQA Determination: Exempt per Section 15061(b)(3) of the CEQA Guidelines, 2022. MEETING DATE: January 18, 2023 PREPARED BY: Community Development Director RECOMMENDED ACTION: Public Hearing to consider a resolution adopting San Joaquin County's ("County") County Facilities Fees ("CFF") findings and 2022-2023 CFF fee schedule for future development within the City of Lodi ("City") and approving City collection of the CFF as authorized under Lodi Municipal Code ("LMC")Chapter 15.66. BACKGROUND INFORMATION: In 2003, San Joaquin County published the initial CFF Nexus Report, which documented the relationship (nexus) between new development in San Joaquin County and the need for region -serving facilities and improvements. In order to mitigate impacts caused by new development within San Joaquin County, the countywide collection of CFF by the County and cities within the County, including Lodi, began on August 15, 2005. However, the City ceased collection of CFF in June 2012, when the Master Annexation Agreement between the City and the County expired. With the recent update of the City's Municipal Service Review ("MSR") and Sphere of Influence ("SOI") the City has begun negotiating terms for a new Annexation Agreement with the County which would require that the City reestablish collection of CFF and reenact LMC Chapter 15.66, which authorizes the collection. On March 20, 2018, the County Board of Supervisors approved the most recent CFF Nexus Study Update documenting the relationship between new development and the need for additional or larger County facilities and authorized implementation of a revised fee schedule, effective April 2, 2018. The Nexus Study findings and the CFF fee schedule rates are review annually as required by the CFF Program. Most recently, on October 18, 2022, the County completed its annual review of CFF program and approved an update to the 2022-2023 CFF fee schedule to take effect January 1, 2023. As shown below, the County's 2023 CFF fee per single family residential unit is $3,249. Multi -family residential is $2,408 per unit. Retail commercial is $0.54 per square foot. Commercial office is $0.80 per square foot. Industrial is $0.15 per square foot. CFF Categories Incorporated Areas Residential Single Family (per unit $3,249 Multi -Family (per unit $2,408 Non -Residential Retail/Commercial(per square foot $0.54 Office(per square foot $0.80 Industrial/Other(per square foot $0.15 APPROVED: /I Stephen Schwabauer, City Manager Fees collected from the CFF Program can be used to offset only the growth -related portion of the cost of County public facilities. The CFF cannot be used for the operation of these facilities, and is limited to their initial construction only. Examples of capital facilities that can be funded by the CFF include: 1) Regional Projects — Expansion of San Joaquin County Jail Facilities, Probation/Juvenile Hall Expansion, Law and Justice Facilities, General Government Facilities (County Administration Building); and 2) Unincorporated Projects — San Joaquin County Sheriff's Office expansion, including Animal Services, San Joaquin County Public Works expansion, and San Joaquin County Community Development Department expansion. CURRENT CFF FEE: The 2022-2023 CFF fee schedule was last adopted in October and is effective January 1, 2023. The CFF fee schedule is automatically adjusted for inflation, based on changes to the California Construction Cost Index (CCCI), which is published by the California Department of General Services. Annual inflationary adjustments are to ensure CFF fees collected are adequate to offset the costs of future growth - related facility needs. The building cost index produced by Engineering News Record provides the basis for the CCCI and reflects cost trends for construction trade labor and materials in the California market. Over the prior year, the CCCI changed from 7712 to 8604, an 11.57% increase. This is a significant increase, especially when compared to the average annual increase for the preceding five-year period of 4.38% and is reflective of costs impacted by the increase in demand for construction services and supply chain disruptions related to the 2019 Novel Coronavirus (COVID-19) pandemic. The County's recommended adjustments to the fiscal year 2022-2023 CFF schedule are shown in the following table. Regional and Unincorporated Fees Residential Single Family Multi Family Non- Residential Retail Commercial Commercial Office Industrial CFF - Regional CFF - Unincorporated County Total Current Adjusted Current Adjusted Current _ Adjusted Per Unit Per Unit Per Unit $2,911 $3,249 $1,431 $1,597 $4,342 $4,846 $2,158 $2,408 $1,063 $1,186 $3,221 $3,594 Per SgFt Per SgFt Per SgFt $0.48 $0.54 $0.22 $0.24 $0.70 $0.78 $0.72 $0.80 $0.36 $0.40 $1.08 $1.20 $0.13 $0.15 $0.07 $0.08 $0.20 $0.23 Per agreements for the administration of the CFF program, cities in the county are requested to approve the revised fee schedule that will take effect on January 1, 2023, and annually each year following. Government Code Section 66018 requires local agencies to hold a public hearing, at which oral or written presentations can be made, as part of a regularly scheduled meeting prior to approving an increase in an existing fee, and to publish notice of the time and place of the meeting, in accordance with Government Code Section 6062a. EFFECTIVE DATE: The City's authority to collect the CFF will become effective the 31St day following City Council adoption of the Ordinance reenacting LMC Chapter 15.66. Once LMC Chapter 15.66 is effective,,the City will once again be able to collect CFF fees before issuance of building permits, or at approval of any discretionary permit if no building permit is required. Therefore, an approval of this Resolution finding a reasonable relationship between the CFF uses and the type of region -serving capital facilities in which the fees are imposed, and adoption of the County's 2022-2023 CFF fee schedule, will take effect concurrently with the effective date of the ordinance reenacting LMC Chapter 15.66. ENVIRONMENTAL ASSESSMENT: The project is Categorically Exempt per the California Environmental Quality Act, Section 15061 (b) (3). This is the "Common Sense" exemption, which applies to projects as follows: "The activity is covered by the "Common Sense" exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. " [CEQA 15061(b)(3)] The proposed resolution would allow the collection of CFF fees, each project would be separately analyzed for their potential environmental impacts. Because no significant environmental impacts from the collection of fees alone are anticipated, the so-called "common-sense" exemption can be used. FISCAL IMPACT: With the acceptance of the County's CFF Program schedule and adoption and implementation of the CFF Program schedule, revenues collected at the issuance of building and/or discretionary permits will be passed on to development applicants. Per State law, Accessory Dwelling Units (ADUs) of less than seven hundred fifty (750) square feet are exempt from CFF Program fees. No direct fiscal impact on the City. FUNDING AVAILABLE: None required. John q. Della Monica, Jr. Community Development Dire or Attachments: 1) 2018 CFF Audit Report 2) 2018 CFF Nexus Study Update 3) 2022 SJC Annual CFF Public Hearing and Report Letter 4) 2022 SJC Resolution Approving CFF Program Fees -R �i San Joaquin County County Facilities Fees Program Compliance Audit For the Period: July 1, 2012 through June 30, 2017 Report Date: December 13, 2017 Issue Date: February 1, 2018 Jerome C. Wilverding Auditor -Controller San Joaquin County County Facilities Fees Program Compliance Audit For the Period July 1, 2012 through June 30, 2017 Internal Auditor's Report Table of Contents Contents Summary......................................................................................................................................................... 3 Findings and Recommendations............................................................................................................ 7 I. GENERAL.................................................................................................................................................7 a. Limited Review of Building Permits........................................................................................................7 II. CITY OF LATHROP....................................................................................................................................7 a. Non -Compliance with Annual Reporting................................................................................................7 b. Non -Compliance with Quarterly Remittance.........................................................................................8 III. CITY OF MANTECA..................................................................................................................................9 a. Non -Compliance with Annual Reporting................................................................................................9 IV. CITY OF STOCKTON.................................................................................................................................9 a. Non -Compliance with Annual Reporting................................................................................................9 b. Non -Compliance with Quarterly Remittance...................................................................................... 10 c. Non -Compliance with Fee Credit......................................................................................................... 10 V. COUNTY CDD........................................................................................................................................ 11 a. Non -Compliance with Annual Reporting............................................................................................. 11 Supplemental Information....................................................................................................................12 I. Statement of Net Position................................................................................................................... 12 II. Statement of Revenues, Expenditures and Changes in Net Position .................................................. 13 County Facilities Fee Program 2 1 P a g e Summary Background In accordance with Government Code Section 66000 et seq, the San Joaquin County (County) Board of Supervisors adopted Ordinance No. 4252 and Resolution No. R-05-314 establishing the County Facilities Fee Program. Under this program, County Facilities Fees (CFF) are to be collected upon each new residential or non-residential building permit issued within San Joaquin County for the purpose of providing funds for the construction of countywide public capital facilities. Each of the cities in the County also adopted their own ordinance and resolution establishing the CFF program and collecting CFF within their respective jurisdictions in accordance with the Agreement for the Administration of the County Facilities Fee Program (Agreements) with the County. In October 2003, Economic & Planning Systems published the CFF Nexus Report which documented the nexus between new development in San Joaquin County and the need for the county regional and unincorporated area facilities and improvements. The regional and unincorporated area capital facilities identified by this Nexus Report are presented below: Regional: General Government Facilities County Jail Expansion Probation/Juvenile Hall Expansion County General Hospital Expansion Metropolitan Airport Extension Unincorporated: Sheriff Department Facilities Community Development (CDD) Facilities Public Works Facilities Motor Pool Facilities General Government Facilities The CFF schedule established by resolution of the Board of Supervisors shall be automatically adjusted annually by an amount determined by the prior year's increase in the Engineering Construction Cost Index as published by the Engineering News Record. The following is the adjusted fee schedule effective July 1, 2012, 2013, 2014, 2015 and 2016: County Facilities Fee Program 3 1 P a g e FY 2012-13 FY2013-14 FY 2014-15 FY2015-16 FY 2016-17 Regional Unincorp Regional Unincorp Regional Unincorp Regional Unincorp Regional Unincorp Facilities Facilities Facilities Facilities Facilities Facilities Facilities Facilities Facilities Facilities Land Use Fee Fee Fee Fee Fee Fee Fee Fee Fee Fee Residential (Per Unit) Single Family $ 1,826 $ 2,296 $ 1,839 $ 2,312 $ 1,890 $ 2,376 $ 1,926 $ 2,421 $ 1,981 $ 2,490 Multi Family $ 1,564 $ 1,968 $ 1,575 $ 1,982 $ 1,620 $ 2,038 $ 1,651 $ 2,078 $ 1,698 $ 2,137 Non -Residential (Per Sq. Ft.) Commercial -Retail $ 0.42 $ 0.51 $ 0.42 $ 0.51 $ 0.43 $ 0.53 $ 0.4 $ 0.55 $ 0.45 $ 0.56 Commercial -Office $ 0.38 $ 0.47 $ 0.38 $ 0.47 $ 0.38 $ 0.47 $ 0.39 $ 0.49 $ 0.40 $ 0.50 Industrial $ 0.21 $ 0.26 $ 0.21 $ 0.26 $ 0.22 $ 0.27 $ 0.22 $ 0.28 $ 0.23 $ 0.29 County Facilities Fee Program 3 1 P a g e If necessary, the County may also conduct a review of the projects within the CFF Program and update the Nexus Report. If a higher or lower funding requirement is identified, the County may formally request that cities amend the fee schedule consistent with the Nexus Report. The County Administrator's Office (CAO) takes the administration and accounting responsibility in administering the program. The responsibilities include the annual appropriation of fees, maintenance of the countywide regional facilities model, and preparation of annual reviews and periodic updates. The County has also established a trust fund (Fund No. 21094) in the County Treasury to account for the financial activities of the CFF program. Objectives The main objective of this audit was to determine if the participating cities of Escalon, Lathrop, Manteca, Ripon, Stockton, and Tracy and County CDD were in full compliance with the terms of the Agreement for the Administration of the County Facilities Fee (CFF) Program. To achieve this objective, the following was verified: Appropriate County Facilities Fees (CFF) were collected on all building permits issued that are subject to CFF. 2. Quarterly remittances of CFF collections to the County Treasurer were accurate and timely. 3. Annual collection reports submitted by the cities and the County CDD were in agreement with the actual quarterly remittances made to the County Treasurer. The secondary objective of this audit was to determine the amount of CFF that could have been collected from the City of Lodi during the audit period had it continued participating in the CFF Program. Scope & Methodology Our audit scope was limited to the collection and remittance of the County facilities fees made by the cities and the County CDD for the period July 1, 2012 through June 30, 2017. However, the Agreement for the Administration of the County Facilities Fee (CFF) Program states that "audits shall be conducted at City and shall occur within 180 days of the date that City provides County with an annual statement of collections." We, therefore, limited the period of review for objective item #1 listed above to July 1, 2016 through June 30, 2017. The period of review for objective item #2 and #3 was from July 1, 2012 through June 30, 2017, consistent with the requested scope of work. However, should the County and cities agree to change the CFF Administration Agreement program time frame to conduct audits from 180 days to a longer time period such as three to five years, it would provide flexibility for more comprehensive audits of building permit collections in the future rather than just the immediate past fiscal year. County Facilities Fee Program 4 1 P a g e We performed field visits at the Cities of Lathrop, Manteca, Ripon, Stockton and Tracy and the County CDD. We did not perform a field visit at the City of Escalon, as it had very minimal CFF collected for FY 2016-17. Prior to or during field visits, the following were performed: Interview of fiscal personnel responsible for the CFF Program fee collections, accounting, remittance, and reporting to obtain assurance that control over the CFF Program fees was adequate; 2. Review of the daily and monthly financial records to ensure accuracy of quarterly remittances and annual reports submitted to the County; and 3. Review of building permits issued for applicable CFF assessment and collections for the period July 1, 2016 through June 30, 2017. For all the other cities and the County CDD, the accuracy of quarterly remittances posted to the County Accounting & Personnel System (CAPS) was verified against the annual reports submitted to the County Auditor -Controller's Office (ACO). In addition, the timeliness in submitting the quarterly and annual reports was determined by the ACO's "date received" stamp on those reports. Results Except as reported in the "Findings and Recommendations" section: CFF has been collected on all building permits issued during the period July 1, 2016 through June 30, 2017 that were subject to CFF; 2. Quarterly remittances of CFF collections to the County Treasurer were submitted timely; and 3. Annual reports are accurate and were submitted to the ACO timely. To provide an overview of the CFF accounted for in Fund No. 21094, we have included this fund's financial statements for the fiscal years ended June 30, 2013, 2014, 2015, 2016 and 2017, in the "Supplemental Information" section. Based on information obtained, had the City of Lodi continued participating in the CFF Program, the County could have received $1,370,843.68 during the five-year period of fiscal years 2012- 13 through 2016-17. See the amounts per fiscal year below: County Facilities Fee Program 5 1 P a g e FY 12-13 FY 13-14 FY 14-15 FY 15-16 FY 16-17 Total SFD 14,608.00 31,263.00 64,260.00 227,268.00 396,200.00 733,599.00 MFD - - - 135,382.00 278,472.00 413,854.00 RET - - 1,158.85 93,649.16 1,449.90 96,257.91 OFF - - - - - - IND 1 94,504.83 1 336.00 1 440.66 1 25,270.52 1 6,580.76 1 127,132.77 Total 1 109,112.83 1 31,599.00 1 65,859.51 1 481,569.68 1 682,702.66 1 1,370,843.68 County Facilities Fee Program 5 1 P a g e Conclusion Based on our audit, the cities in the County and the County CDD are substantially in compliance with their contract agreements with the County regarding the administration of the County Facilities Fee Program. Please see the "Findings and Recommendations" section for further information. County Facilities Fee Program 6 1 P a g e Findings and Recommendations I. GENERAL a. Limited Review of Building Permits Observation The Agreement for the Administration of the County Facilities Fee (CFF) Program states that "audits shall be conducted at City and shall occur within 180 days of the date that City provides County with an annual statement of collections." We, therefore, were limited to the review of fees collected on building permits issued to the period July 1, 2016 through June 30, 2017. Recommendation To ensure a more comprehensive audit and flexibility in future audits, the Agreement for the Administration of the County Facilities Fee (CFF) Program between the CAO and the cities should contain a longer time period to conduct audits, such as three to five years rather than just the immediate past fiscal year. Il. CITY OF LATHROP a. Non -Compliance with Annual Reporting Finding Per the Annual Fee Adjustments & Statement Memorandum from the County Administrator's Office (CAO), entities participating in the CFF Program are requested to file an annual report with County Auditor -Controller within 60 days from fiscal year end (June 30th). Therefore, when the County Administrator's Office (CAO) disseminates the new fiscal year CFF rates, the cities are notified of the filing due date of the annual CFF statement to be submitted to the ACO. The annual CFF statements for fiscal years ending June 30, 2014, 2016 and 2017 were submitted late by the City of Lathrop to the ACO as follows: FY 2013-14 Submitted 09/02/14 FY 2015-16 Submitted 09/05/17 FY 2016-17 Submitted 09/05/17 64 days after 06/30/14 432 days after 06/30/16 67 days after 06/30/17 County Facilities Fee Program 7 1 P a g e Recommendation To ensure timely filing of the annual CFF statement, the City of Lathrop may want to consider including in their reporting schedule the deadline for submission (60 days after June 30th) of the annual CFF statement to the ACO. Management's Response During the period noted above, the City experienced an organizational restructure transitioning several tasks between new and experienced personnel resulting in the oversight of the CFF reports. Currently, the City has successfully overcome the challenges of such transitions with highly eager and trained personnel. The City is cognizant of the importance of timely reporting and going forward, the timely submittal of CFF reports will be a priority. b. Non -Compliance with Quarterly Remittance Finding Per the Agreement for the Administration of the County Facilities Fee (CFF) Program, "City shall remit any CFF proceeds to County no less than once each calendar quarter." The CFF Program quarterly collections were not remitted to County timely as follows: Recommendation The quarterly remittance of CFF collections by the City of Lathrop should be made within 90 days of each quarter -end. Management's Response During the period noted above, the City experienced an organizational restructure transitioning several tasks between new and experienced personnel resulting in the oversight of the CFF reports. Currently, the City has successfully overcome the challenges of such transitions with highly eager and trained personnel. The City is cognizant of the importance of timely reporting and going forward, the timely submittal of CFF remittances will be a priority. County Facilities Fee Program 8 1 P a g e No. of Days from Date Received by Quarter End to Quarter End Amount County Treasury Date Received 09/30/16 $11,869.30 09/05/17 340 12/31/16 $143,280.57 09/05/17 248 03/31/17 $17,656.30 09/05/17 158 Recommendation The quarterly remittance of CFF collections by the City of Lathrop should be made within 90 days of each quarter -end. Management's Response During the period noted above, the City experienced an organizational restructure transitioning several tasks between new and experienced personnel resulting in the oversight of the CFF reports. Currently, the City has successfully overcome the challenges of such transitions with highly eager and trained personnel. The City is cognizant of the importance of timely reporting and going forward, the timely submittal of CFF remittances will be a priority. County Facilities Fee Program 8 1 P a g e III. CITY OF MANTECA a. Non -Compliance with Annual Reporting Finding (See first paragraph under the City of Lathrop) The annual CFF statement for fiscal year ending June 30, 2017 was submitted late by the City of Manteca to the ACO as follows: FY 2016-17 Submitted 09/27/17 89 days after 06/30/17 Recommendation To ensure timely filing of the annual CFF statement, the City of Manteca may want to consider including in their reporting schedule the deadline for submission (60 days after June 30th) of the annual CFF statement to the ACO. Management's Response The City understands the importance of submitting all reports on time to the County. This report was mistakenly missed during transitions that were occurring within the department. The City does not anticipate this to be a problem in the future. IV. CITY OF STOCKTON a. Non -Compliance with Annual Reporting Finding (See first paragraph under the City of Lathrop) The annual CFF statement for fiscal year ending June 30, 2015 was submitted late by the City of Stockton to the ACO as follows: FY 2014-15 Submitted 11/16/17 870 days after 06/30/15 Recommendation To ensure timely filing of the annual CFF statement, the City of Stockton may want to consider including in their reporting schedule the deadline for submission (60 days after June 30th) of the annual CFF statement to the ACO. County Facilities Fee Program 9 1 P a g e Management's Response The City agrees that the annual CFF statement must be included in the Administrative Services Reporting Schedule. This has been done and the appropriate Accounting staff have been assigned to complete this report annually. In addition, notification of reports and audits should be addressed to City of Stockton, Accounting Manager. b. Non -Compliance with Quarterly Remittance Finding Per the Agreement for the Administration of the County Facilities Fee (CFF) Program, "City shall remit any CFF proceeds to County no less than once each calendar quarter." The CFF Program quarterly collections were not remitted to County timely as follows: Date Received by Quarter End Amount County Treasury No. of Days from Quarter End to Date Received 09/30/16 $350,373.25 02/08/17 131 Recommendation The quarterly remittance of CFF collections by the City of Stockton should be made within 90 days of each quarter -end. Management's Response The City agrees and is committed to remitting CFF collections quarterly. During November 2016 through January 2017, the City's Accounting Division experienced 60% vacancies causing significant delays in normal operations. For the year before that time, the vacancy rate ranged between 34% and 50%. Since that time, management has taken aggressive steps to fill all vacancies within the Accounting Division with qualified accounting professionals. The City does not expect a reoccurrence of this situation and expects to make CFF payments quarterly. c. Non -Compliance with Fee Credit Finding Per the Agreement for the Administration of the County Facilities Fee (CFF) Program, "County must approve any fee credits or reimbursements to be granted to specific development projects." The City issued a fee credit for demolition of a building without the approval from the CAO as follows: County Facilities Fee Program 10 1 P a g e Building permit no. BP16-06214 issued on March 14, 2017 was granted a credit in the amount of $2,615.20 for demolition of 8,410 sq. ft. Recommendation Fee credits granted for CFF must be approved by the CAO. Management's Response The City of Stockton agrees with this finding. Although the City does have procedures in place to notify the County of a request for credit towards the County's Facility Fee, in the specific case noted in this report the documentation was not found after a thorough internal investigative review. The City will be conducting training for staff to ensure the proper procedures are followed in the future. V. COUNTY CDD a. Non -Compliance with Annual Reporting Finding (See first paragraph under the City of Lathrop) The annual CFF statement for fiscal year ending June 30, 2015 was submitted late by SJC CDD to the ACO as follows: FY 2014-15 Submitted 09/27/17 820 days after 06/30/15 Recommendation To ensure timely filing of the annual CFF statement, the SJC CDD may want to consider including in their reporting schedule the deadline for submission (60 days after June 30th) of the annual CFF statement to the ACO. Management's Response Carla Raborn believes that she had submitted the CFF statement in 2015, but was unable to access e-mail records from that timeframe in order to verify the submission. For the future, she will utilize her monthly report schedule/check list to add the annual CFF report to the list to ensure that the report will be submitted in a timely manner. County Facilities Fee Program 111 P a g e Supplemental Information I. Statement of Net Position County of San Joaquin County Facilities Fee Program Statement of Net Position (Accrual Basis) As of June 30, 2013, 2014, 2015, 2016 and 2017 County Facilities Fee Program 12 1 P a g e Asof6/30/2013 Asof6/30/2014 Asof6/30/2015 Asof6/30/2016 Asof6/30/2017 Assets Cash and investments $ 15,410,195 $ 16,287,548 $ 18,062,831 $ 20,584,252 $ 24,033,137 Accounts Receivable: County Community Development Department $ 60,060 $ 25,432 $ 26,472 $ 66,546 $ 30,869 City of Stockton 73,338 85,260 127,082 338,043 172,169 City of Lodi - - - - - City of Manteca 140,837 285,564 516,057 354,870 412,638 City of Tracy 228,398 75,658 104,490 614,117 206,294 City of Escalon 16,434 29,669 - 3,580 674 City of Ripon 18,149 5,517 82,620 23,112 33,677 City of Lathrop 9,118 167,550 169,454 370,457 Total Accounts Receivable 537,215 516,218 1,024,271 1,569,722 1,226,779 Interest Receivable 9,474 11,009 14,685 31,378 64,566 Total Assets $15,956,884 $16,814,775 $19,101,787 $ 22,185,352 $ 25,324,482 Liabilities Accounts Payable $ 418 $ $ $ 3 Total Liabilities 418 - - - Net Position $15,956,466 $16,814,775 $19,101,787 $ 22,185,352 $ 25,324,482 County Facilities Fee Program 12 1 P a g e H. Statement of Revenues, Expenditures and Changes in Net Position County of San Joaquin County Facilities Fee Program Statement of Revenues, Expenditures and Changes in Net Position (Accrual Basis) For The Fiscal Years Ended June 30, 2013, 2014, 2015, 2016 and 2017 Revenues: County Facilities Fees collected by: County Community Development Department City of Stockton City of Lodi City of Manteca City of Tracy City of Escalon City of Ripon City of Lathrop CFF -Processing Fees Total County Facilities Fees Miscellaneous Revenue Interest Income Total Revenues Expenditures: Excess of Revenues Over Expenditures OTHER FINANCING SOURCES (USES): Transfers in (out) to General Fund Net Position, beginning Net Position, ending FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 (1,413,099) (1,413,099) (1,216,324) (1,412,577) (1,402,307) $ 1,642,433 $ 1,021,688 $ 1,064,920 $ 1,237,853 $ 1,123,007 304,379 242,604 400,443 1,021,504 756,924 (3,724) (1,789) - - - 531,261 686,859 869,693 980,731 1,383,750 228,398 133,996 833,354 976,584 913,441 16,434 93,477 5,965 3,705 13,979 49,191 39,206 107,689 147,385 87,700 5,601 9,168 173,008 5,413 201,003 2,773,973 2,225,210 3,455,072 4,373,174 4,479,804 15,122 26,646 46,198 48,264 122,968 61,633 2,815,741 2,271,408 3,503,336 4,496,142 4,541,437 2,815,741 2,271,408 3,503,336 4,496,142 4,541,437 (1,413,099) (1,413,099) (1,216,324) (1,412,577) (1,402,307) 14,553,824 15,956,466 16,814,775 19,101,787 22,185,352 $ 15,956,466 $ 16,814,775 $ 19,101,787 $ 22,185,352 $ 25,324,482 County Facilities Fee Program 13 1 P a g e =°Pau+ ry SAN sisJOAQUIN COUNTY c9(jOpe��P Greatness grows here. March 6, 2018 Board of Supervisors County Administration Building Stockton, CA 95202 Dear Board Members: Office of the County Administrator Monica Nino, County Administrator Approve County Capital Facilities Fee Nexus Study Update and Conduct Public Hearing to Implement Revised Fee Schedule Effective April 2, 2018 Recommendation It is recommended that the Board of Supervisors approve the County Capital Facilities Fee Nexus Study Update and conduct a public hearing to implement a revised fee schedule, effective April 2, 2018. Reason for Recommendation Background On June 14, 2005, the Board of Supervisors enacted an ordinance (#4252) establishing the County Capital Facilities Fee (CFF) Program and adopted a resolution establishing fees for new development (R-05-314). The Board also approved agreements with each City in the County to administer the Program and collect the CFF on behalf of the County, in conjunction with master annexation agreements providing cities a greater share of property taxes for annexed properties. The CFF was implemented countywide in August 2005. The CFF Program provides a mechanism to fund a portion of the capital cost of facilities supporting increased County services that are needed as a result of growth. As stated in the Ordinance, the program is needed to finance County facilities "that are used by the residents and businesses within each city as well as the unincorporated area and to assure that new development pays its proportional share for these improvements." The CFF was supported by a "nexus" study that documented the relationship between new development and the need for additional or larger County facilities. The study identified: ➢ Purpose of the fee ➢ How the fee was to be used r Relationship between use of the fee and the type of projects on which the fee was to be imposed 44 N. San Joaquin Street, Suite 640 1 Stockton, California 95202 1 T 209 468 3203 1 F 209 468 2875 Board of Supervisors March 6, 2018 CAO - Approve CCFF Nexus Study Update and Page 2 Conduct Public Hearing Relationship between the amount of the fee and portion of the needed facilities to be funded Program Overview CFF revenue must be used only to address the impacts of growth, and not to address existing space deficiencies or enhancements in service levels. CFF revenue is collected along with other fees at the time building permits are issued, either by the respective City Planning Department in which the project is to be located or by the County Community Development Department for development in unincorporated areas. If the project is located within City boundaries, only the regional CFF amount is collected to support facilities needed for growth in countywide services; however, if the project is located in an unincorporated area, an unincorporated area "surcharge" is also collected. This surcharge is intended to address facility costs for growth in services that are provided specifically to unincorporated residents and businesses (e.g., Community Development, Public Works, and Sheriff -Animal Services), and is therefore not applied to projects located within incorporated areas. In addition to location criteria, the CFF is also divided into categories based on the type of development (e.g., Residential -Single Family and Multi -Family; and Non-Residential- Retail/Commercial, Office, and Industrial/Other). The CFF is adjusted annually based on the California Construction Cost Index. As of July 1, 2017, CFF amounts are: CFF Categories (as of July 1, 2017) Regional (incorporated) Unincorporated Surcharge Unincorporated Residential Single Family (per unit) $2,049 + $527 = $2,576 Multi Family (per unit) $1,756 + $454 = $2,210 Non -Residential Retail/Commercial (per square foot) $0.47 + $0.12 = $0.59 Office (per square foot) $0.41 + $0.10 = $0.51 Industrial/Other (per square foot) $0.23 + $0.06 = $0.29 (:FF Fi incl Consistent with California Government Code Section 66006, CFF funds are held in a separate, interest-bearing fund (#21094) and the Board annually approves a report describing fee amounts, revenues, expenditures, and anticipated future uses. In December 2017, the Board received the CFF annual report for 2016-2017 (B-17-733) which indicated that as of June 30, 2017, a total of $37,952,657 in CFF revenue and interest has been collected since implementation, of which $13,803,240 has been used to offset a portion of debt service payments on the County Administration Building (29.85% based on the amount of growth space provided when the project was constructed). To date, CFF funds have not been used to reimburse the County General Fund for any of the administration or consultant costs, although those costs are also allowable CFF expenditures. On June 30, 2017, the County was in the process of refinancing the outstanding debt on the Administration Building. Based on market conditions at the time, the estimated Board of Supervisors March 6, 2018 CAO - Approve CCFF Nexus Study Update and Page 3 Conduct Public Hearing remaining debt service totaled $116,015,875, of which $34,630,739 (29.85%) represented the growth -related portion to be funded by CFF revenue. When the actual refinancing transaction was completed on August 3, 2017, improved market conditions allowed a reduction in the remaining growth -related debt amount from $34,630,739 to $31,244,683, a reduction of $3,386,056. As of December 31, 2017, the CFF fund balance was $27,735,055. Remaining County Administration Building debt service payments through 2032 total $103,831,700, including the growth -related portion of $30,993,762. Since the available fund balance amount of $27,735,055 is less than the committed outstanding growth -related obligation of $30,993,762, the remaining balance will be provided from CFF revenue yet to be collected. Future CFF revenue will also provide a funding source for the growth -related portion of other County capital facilities projects in the years to come. A countywide master planning project was initiated in 2017-2018 and will provide further details on future capital facilities projects and the proportionate share of costs related to growth that are eligible to be funded by future CFF revenue. Nexus Study Update Although CFF amounts are adjusted annually for inflation based on the California Construction Cost Index, the nexus study has not been updated since the fees were adopted in 2005. Consequently, the base amount of the fees as related to future growth -related facility costs has not been adjusted since inception. Over the past several years, County staff initiated the process of revising the nexus study to reflect updated population and employee projections, anticipated capital facility needs, and cost/revenue estimates. The study update was delayed due to: economic changes that impacted both the overall economy and County capital programming; significant changes in demand for space, especially at the Jail, Juvenile Hall, and Hospital; and staffing turnover within the County Administrator's Office. To assist with the update, the County enlisted the services of Economic & Planning Systems, Inc. (EPS), the consulting firm that prepared the initial CFF nexus study. After several discussions between staff and the consultants regarding study methodology, available facility data, and practices in other jurisdictions with development fees, the nexus study update was completed in October 2017. Methodology Essentially, the process for analyzing the CFF consisted of: a) Projecting how much growth will occur through 2035; b) Estimating how much additional space will be needed to accommodate the growth in "a"; c) Calculating the cost of providing the additional growth -related space reflected in «b,,. d) Deducting the value of currently vacant space that could accommodate some of the growth in "c"; and e) Determining how much revenue per unit (i.e., fee amount) over the study period is needed to offset the net cost of "c" and "d." Board of Supervisors CAO - Approve CCFF Nexus Study Update and Conduct Public Hearing March 6, 2018 Page 4 The EPS study calculated the ratio of current County space needed per resident in order to establish a baseline existing service level, and then applied population growth projections to estimate future facility space needs. Cost estimates were applied to space projections to determine future costs, which were partially offset by currently vacant space. Resulting net costs were then apportioned into regional and unincorporated shares, and combined with household census and employee space standard data in order to calculate maximum allowable fee amounts for each of the CFF categories. Methodology highlights include: • Growth in County population and total number of employees over the 18 -year period from 2017 to 2035 is estimated at 200,321 (+26.8%) and 56,595 (+23.3%), respectively. 2017 1 2035 Changel Growth Population 747,514 947,835 200,321 +26.8% Employees 243,323 299,918 56,595 +23.3% • A preliminary space inventory totaling 6,160,975 square feet (sf) of current County -owned and leased space was compiled using multiple data sources, from which staff identified 1,482,372 sf that would likely be impacted by growth. Impacted space was categorized into facilities that provide either "Regional" services (i.e., countywide) or "Unincorporated Only." Impacted Space % Regional (countywide) 1,407,848 sf 94.97% Unincorporated Only 74,524s 5.03% TOTAL 1,482,372 sf 100.0% An additional 10,348 sf was identified as "Unallocated" and assumed to be available for future growth, thus reducing overall costs (see * below). • Some of the facilities not placed on the growth -impacted list include: Airport hangars and industrial park Records storage building Community centers Grape Festival facilities Water well and lift station buildings Parking garage and lots Courthouses Children's shelter Park buildings Ferry houses and landfill buildings In addition, Hospital space and custodial facilities such as Juvenile Hall and the Jail were excluded from the impacted list for purposes of the current study due to both specialized space requirements/costs and wide fluctuations in demand. These facilities, as well as County library space, parking facilities, and health and mental health space needs will be reevaluated for possible inclusion in the next nexus study update. Board of Supervisors March 6, 2018 CAO - Approve CCFF Nexus Study Update and Page 5 Conduct Public Hearing • Using current facility space and population totals, a ratio of 1,983 sf per 1,000 population was calculated. For projection purposes, the ratio was reduced** to 1,905 sf per 1,000 population to account for space types that would not necessarily increase with growth (e.g., department heads, file/equipment rooms, etc.) and also in anticipation of increased efficiencies through use of technology. Using the reduced ratio and projected population growth from 2017 to 2035, an estimated 323,186 sf of additional space will be needed over the next 18 years. 2017 2035 Change Space (sf) 1,482,372 1,805,558 323,186 Population 747,514 947,835 200,321 Space Per 1,000 Population 1,983 1,905** (78) ** Ratio reduced to account for space types that will not necessarily increase with growth and increased efficiencies due to use of technology. • Cost to construct the 323,186 sf of growth -related space over the next 18 years is estimated at $158,361,140, based on a recent consultant cost estimate of $490/sf for general government facilities. As noted above, some of the future space need could be offset by currently vacant* space, reducing the net cost to $153,290,620. As of June 30, 2017, remaining debt service for the Administration Building totaled $116,015,875, of which $34,630,739 (29.85%) represented the growth -related portion to be funded with CFF revenue. (Note: the nexus study update was performed during 2017 while the refinancing effort was occurring, so debt service amounts reflected in the consultant's report are based on estimates as of June 30, 2017.) The CFF fund balance of $24,149,416 only partially offsets the $34,630,739 obligation, leaving a balance of $10,481,323. In total, $163,771,943 ($10,481,323 + $153,290,620) in CFF revenue will need to be generated over the next 18 years to address growth -related space needs. • Based on the current proportions of space allocated for regional services (94.97%) and unincorporated only services (5.03%), the $163,771,943 in CFF to be collected is assigned to the regional portion and the unincorporated surcharge. Cost Growth -related Space Needs (323,186 sf @ $490/sf) $158,361,140 Less: Vacant Space Available 10,348 sf @ $490/sf * (5,070,520) Net Space Needs $153,290,620 Admin. Building Debt Service (growth -related portion only, 06/30/17) 34,630,739 Costs to be Funded by CFF $187,921,359 Less: CFF Fund Balance (as of 06/30/17) (24,149,416) Net Costs to be Funded by CFF 2017-2035) $163,771,943 • Based on the current proportions of space allocated for regional services (94.97%) and unincorporated only services (5.03%), the $163,771,943 in CFF to be collected is assigned to the regional portion and the unincorporated surcharge. Allocated Cost Regional Portion (94.97%) $155,538,557 Unincorporated Surcharge (5.03%) 8,233,386 Total CFF Generated $163,771,943 Board of Supervisors March 6, 2018 CAO - Approve CCFF Nexus Study Update and Page 6 Conduct Public Hearing • User equivalents are calculated for both the regional facilities portion and the unincorporated surcharge based on the estimated growth in population (200,321) and employees (56,595). The allocation methodology assumes: 1 Resident = 1 User; 1 Employee = 0.25 User (based on a work schedule of 5 out of 7 days a week, 8.5 hours out of 24 hours a day). The unincorporated surcharge methodology uses the proportionate share of population and employee growth projected in the unincorporated area, respectively 10.536% and 13.990%. Regional Facilities Equivalent Users New Residents (populationgrowth) 200,321 New Employees (employee growth x 0.25 14,149 Total Equivalent Regional Facilities Users 214,470 Facilities E uivalent Users —Unincorporated New Residents pop. growth x 10.536% unincorp. growth % 21,106 New Em I. em I. growth x 0.25 x 13.990% unincorp. growth %) 1,980 Total Equivalent Unincorporated Facilities Users 23,086 • Dividing the regional portion and unincorporated surcharge costs by user equivalents results in allocated costs per user of $725 and $357, respectively. Allocated Cost Per User Regional Facilities Portion $155,538,557 / 214,470 $725 —Unincorporated Surcharge $8,233,386 / 23,086) $357 • Maximum allowable CFF amounts for the regional portion and unincorporated surcharge for the various fee categories were calculated using residential census data for persons per unit (PPU) and non-residential industry standards for employees per 1,000 sf of building space (EE/1Ksf) to calculate the allocated cost per user, plus a nominal 0.5% for administrative costs. Regional Portion CFF Categories PPU or EE/1 Ksf Alloc. Cost per User Alloc. Cost Admin. Cost Max. Amount Residential Residential -Family 3.34 x $725 = $2,422 + $12 = $2,434 —Single Multi -Family 2.48 x $725 = $1,798 + $9 = $1,807 Non -Residential $885 + $4 = $890 Non -Residential Retail/Commercial 2.22 x $181 = $402 + $2 = $0.40 Office 3.33 x $181 = $603 + $3 = $0.61 Industrial/Other 0.63 x $181 = $113 + $1 = $0.11 Uninc. Surcharge CFF Categories PPU or EE/1 Ksf Alloc. Cost per User Alloc. Cost Admin. Cost Max. Amount Residential -Family 3.34 x $357 = $1,192 + $6 = $1,198 —Single Multi -Family 2.48 x $357 = $885 + $4 = $890 Non -Residential Retail/Commercial 2.22 x $89 = $198 + $1 = $0.20 Office 3.33 x $89 = $298 + $1 = $0.30 Industrial/Other 0.63 x $89 = $56 + $0 = $0.06 Board of Supervisors March 6, 2018 CAO - Approve CCFF Nexus Study Update and Page 7 Conduct Public Hearing Max. Allowable Amount CFF Categories Regional (incorporated) Unincorporated Surcharge Unincorporated Residential Solano per unit $2,434 + $1,198 = $3,632 -Single-Family Multi -Family per unit $1,807 + $890 = $2,697 Non -Residential Area 1 Area 2 Area 3 Retail/Commercial per sf $0.40 + $0.20 = $0.60 Office per sf $0.61 + $0.30 = $0.91 Industrial/Other per sf $0.11 + $0.06 = $0.17 Cost Burden Feasibility Analysis The study includes an analysis of a theoretical residential single-family scenario in each of the cities within the County and the unincorporated area reflecting the burden from development fees and incremental CFF impact. Using a general overall infrastructure burden benchmark of 15-20% of average sales price as a measure of feasibility, only one of the scenarios was categorized as possibly not financially feasible due to a large existing bond debt for that particular development. Regarding the CFF, even at the maximum allowable amount, the change in the fee amount would represent an increase in the overall infrastructure fee burden of less than 0.3% (except for the City of Lodi where the percentage increase is higher because they ceased collecting CFF entirely in 2012). Overall, the maximum CFF represents approximately 0.5-0.7% of the average sales price in each of the scenarios. Comparison of CFF with Other Counties EPS researched several other California counties in an effort to compare their countywide facility fees with San Joaquin County's CFF. Four counties were found to have both a similar fee and a nexus study available for review (Butte, Fresno, Solano, and Stanislaus), but one (Fresno) has suspended fee collection since 2010. For the three remaining counties, the consultants compared both residential and non-residential scenarios to the study's maximum allowable CFF amount (incorporated and unincorporated scenarios) and found the San Joaquin County maximum amounts to be well within range of the comparative scenarios in the other counties as shown below. Outreach Process San Joaquin Butte Stanislaus Solano Incor . Uninc. Uninc. Area 1 Uninc. Area 2 1 Area 3 Area 1 Area 2 Area 3 Residential Single -Family $2,434 $3,632 $4,966 $4,286 $9,429 $7,559 $7,631 $8,962 $9,316 $7,349 Multifamily $1,807 $2,697 $3,804 $3,272 $6,203 $4,898 $4,949 $6,726 $7,424 $5,471 Non-residential Retail $400 $600 $2,130 $1,930 $3,663 $3,358 $3,358 $859 $983 $859 Office $610 $910 1 $2,530 1 $2,260 1 $4,598 $4,236 $4,236 $1,430 1 1,637 $519 Industrial $110 $170 1 $1,270 1 $1,180 1 $2,132 $2,086 $2,086 $181 1 $208 $181 Outreach Process Board of Supervisors March 6, 2018 CAO - Approve CCFF Nexus Study Update and Page 8 Conduct Public Hearing Following completion of the nexus study update, County staff conducted an informational meeting in December 2017 with various stakeholders such as City and County permit agencies and building industry representatives to review the report methodology and findings, and receive comments for consideration in developing staff recommendations. Questions/comments from meeting attendees and responses are attached to this staff report. Stakeholders received a copy of the staff report and recommendations, and were advised of the scheduled presentation to the Board. Public notices of the fee hearing were published by the Clerk of the Board as required. Summary The nexus study update was prepared using the best available information regarding County facilities, occupants, estimated growth, and costs. The methodology summarized above indicates the process by which the consultants and staff analyzed the CFF and developed maximum allowable amounts for each CFF category. Most of the maximum amounts represent an increase from the current CFF, but some amounts decrease. Some of the factors relating to the calculated differences include changes from the previous nexus study for Persons per Unit and Employees per 1,000 square feet, and lower projected new growth in residents/employees. By comparison, the CFF represents a very small portion of the overall amount of development fees charged to projects and even at the maximum allowable amount is comparable to or lower than similar fees in other counties. Furthermore, CFF revenue is an integral component to addressing growth -related facility costs that would otherwise need to be funded with County General Purpose Revenues or other sources. The following tables compare the current CFF amounts to the maximum allowable amounts: Regional CFF CFF Categories Current Amount (July 1, 2017 Max. Amount proposed Increase/ Decrease % Residential Single -Family per unit $2,049 $2,434 $385 19% Multi -Family per unit $1,756 $1,807 $51 3% Non -Residential Retail/Commercial per square foot $0.47 $0.40 $0.07 -15% Office per square foot $0.41 $0.61 $0.20 49% Industrial/Other per square foot $0.23 $0.11 $0.12 -52% Unincorporated Surcharge CFF Categories Current Amount (July 1, 2017 Max. Amount proposed Increase/ Decrease % Residential Single -Family per unit $527 $1,198 $671 127% Multi -Family per unit $454 $890 $436 96% Non -Residential Retail/Commercial per square foot $0.12 $0.20 $0.08 67% Office per square foot $0.10 $0.30 $0.20 200% Industrial/Other per square foot $0.06 $0.06 $0.00 0% Board of Supervisors March 6, 2018 CAO - Approve CCFF Nexus Study Update and Page 9 Conduct Public Hearing Unincorporated CFF CFF Categories Current Amount (July1, 2017 Max. Amount proposed Increase/ Decrease % Residential Single -Family per unit $2,576 $3,632 $1,056 41% Multi -Family per unit $2,210 $2,697 $487 22% Non -Residential Retail/Commercial per square foot $0.59 $0.60 $0.01 2% Office per square foot $0.51 $0.91 $0.40 78% Industrial/Other per square foot $0.29 $0.17 $0.12 -41% Therefore, staff's recommendation is to accept the nexus study update and conduct a fee hearing to consider implementing the CFF schedule as presented, both increases and decreases, effective April 2, 2018. Cost index adjustments would continue to be implemented annually on July 1. In addition, following completion of the countywide facility inventory and master plan project currently being performed, staff will update the nexus study to include revised information, such as current space data, occupant information, future facility projects/costs, and growth -related proportions, with further CFF adjustments proposed as appropriate. Alternatively, if the Board approves the proposed CFF adjustments, but wishes to provide a transition period for implementation, it may direct that fee increases be "phased -in" over a multi-year period (e.g., three years). The consultants indicate this practice is not uncommon and is intended to reduce the immediate impact of fee changes on pending development projects. In this particular case, incremental increases could allow time for completion of the master plan project to potentially coincide with the next nexus study update, tentatively scheduled for 2022. If a phased approach is preferred by the Board, staff would recommend that only proposed increases be phased -in, but that fee decreases become effective April 2, 2018 to avoid collecting fees in excess of the calculated maximum allowable amount. Fiscal Impact Based on the nexus study calculations, CFF revenue to be generated over the next 18 years (2017-2035) is projected at $163,771,943, which would be used to offset remaining growth -related debt service for the County Administration Building and future growth -related facility needs. Action To Be Taken Following Approval The County Administrator's Office (CAO) will distribute the revised fee schedule to City/County permit agencies with direction to implement beginning April 2, 2018. Fees will continue to be adjusted annually per the California Construction Cost Index. CAO staff will update the nexus study following completion of the countywide facility inventory and master plan project, and propose CFF adjustments as appropriate. Board of Supervisors March 6, 2018 CAO - Approve CCFF Nexus Study Update and Page 10 Conduct Public Hearing Sincerely, Monica Nino County Administrator LTA I0iiC7:/ Attachments — County CFF Nexus Study Update (10/12/17), Stakeholder Comments c: County Counsel Community Development Department City Building Departments (Escalon, Lathrop, Lodi, Manteca, Ripon, Stockton, Tracy) Building Industry Association of the Greater Valley San Joaquin Partnership Builders' Exchange of Stockton Board Clerk for Agenda 03/20/18 :311iX1 1111 Reviewed by County Counsel's Office: rk YAyIes, County unset 3/12/2018 Before the Board of Supervisors County of San Joaquin, State of California B-18-179 MOTION: Miller/Patti 5-0 Approve County Capital Facilities Fee Nexus Study Update and Conduct Public Hearing to Implement Revised Fee Schedule Effective April 2, 2018 THIS BOARD OF SUPERVISORS DOES HEREBY approve the County Capital Facilities Fee Nexus Study Update. FURTHER, authorizes implementation of a revised fee schedule, effective April 2, 2018. CFF Categories Regional incorporated Unincorporated Surcharge Unincorporated Residential Single Family (per unit $2,434 + $1,198 = $3,632 Multi Family per unit $1,807 + $890 = $2,697 Non -Residential Retail/Commercial (per square foot) $0.40 + $0.20 = $0.60 Office (per square foot) $0.61 + $0.30 = $0.91 Industrial/Other (per square foot) $0.11 + $0.06 = $0.17 I HEREBY CERTIFY that the above order was passed and adopted on 03/20/2018 by the following vote of the Board of Supervisors, to wit: AYES: Villapudua, Miller, Patti, Winn, Elliott NOES: None ABSENT: None ABSTAIN: None Pquly 2.' C��iFORa`P MIMI DUZENSKI Clerk of the Board of Supervisors County of San Joaquin State of California Mind Dl enski ATTACHMENT 1 Public Review Draft Report 1 San Joaquin County Countywide Capital Facilities Fee Nexus Study (Qr Prepared for: County of San Joaquin Prepared by: Economic & Planning Systems, Inc. October 12, 2017 Economic & Planning Systems, Inc. 400 Capitol Mall, 28th Floor Sacramento, CA 95814 916 649 8010 tel 916 649 2070 fax Oakland EPS #162056 Sacramento Denver Lo: Angeles www.epsys.corn Table of Contents 1. INTRODUCTION AND EXECUTIVE SUMMARY.................................................................... 1 Background.............................................................................................................. 1 Purposeof Report ..................................................................................................... 1 Authority................................................................................................................. 1 NexusStudy Review..................................................................................................2 Principles for Establishing the CFF...............................................................................6 Basis for Determining Facilities Required for New Growth...............................................6 Countywide Facilities and Unincorporated Facilities Development Impact Fee ................... 7 NexusMethodology................................................................................................... 7 Summary................................................................................................................. 8 Structureof the Report............................................................................................ 10 2. OVERVIEW: COUNTY FACILITIES DEVELOPMENT PROGRAM ............................................... 11 Population and Employment Growth Estimates........................................................... 13 3. REGIONAL FACILITIES DEVELOPMENT AND COST ESTIMATES .............................................. 15 Countywide Regional Facilities Service Standards........................................................ 15 4. REGIONAL GOVERNMENT SERVICES FACILITY NEXUS ...................................................... 20 Summary of Methodology........................................................................................ 20 Allocation of Countywide Regional Facilities Development Costs .................................... 20 Findings for Countywide Regional Facilities Fee........................................................... 21 FeeCalculation....................................................................................................... 23 5. IMPLEMENTATION............................................................................................... 27 Adjustments to the CFF........................................................................................... 27 Fee Reimbursements and Fee Credits........................................................................ 27 LocalImplementation.............................................................................................. 27 Ongoing Administration of the CFF Program............................................................... 27 6. UNINCORPORATED FACILITIES DEVELOPMENT SURCHARGE ................................................ 28 Unincorporated Facilities Development and Cost Estimates ........................................... 28 Allocation to Residential and Nonresidential Development ............................................ 28 FeeCalculation....................................................................................................... 28 7. FEASIBILITY ANALYSIS OF CFF................................................................................ 32 Summary of Infrastructure Cost Burden Feasibility Test ............................................... 32 Appendices: Appendix A: County Growth Detail Appendix B: Single -Family Residential Development Infrastructure Burden Cost Detail List of Tables and Map Table 1 County Capital Facilities Fee (CFF) Program Survey—Comparison Counties ......... 3 Table 2 Summary of Maximum Justifiable Countywide Capital Facility Fees.....................9 Table 3 Projected New Development Through 2035 ................................................... 14 Table 4 Summary of Countywide Regional Facilities Service -Level Standards to Serve New Development Through 2035 ........................................................ 16 Table 5 Estimate of Eligible Countywide Regional Facilities to Serve New Development Through 2035........................................................................ 17 Table 6 Estimate of Regional Development Costs by Category .................................... 18 Table 7 Population per Household Estimate.............................................................. 22 Table 8 Countywide Facilities Development Cost per Facility User ................................ 24 Table 9 CFF Development Impact Fee by Land Use .................................................... 25 Table 10 Unincorporated Facilities Development Cost per Facility User ........................... 29 Table 11 Unincorporated CFF Surcharge by Land Use .................................................. 30 Table 12 Feasibility Summary byJurisdiction.............................................................. 34 Table 13 Countywide CFF Comparison—FY 2017-2018 (2 pages) .................................. 37 Map 1 San Joaquin County................................................................................... 12 1, INTRODUCTION AND EXECUTIVE SUMMARY Background The County of San Joaquin (County) approved its first Capital Facilities Fee (CFF) in 2005. This CFF Nexus Study (Nexus Study Update or Nexus Report Update) updates the 2003 Nexus Study to reflect changes to the CFF Program resulting from updated facility space requirements and associated costs for included space needs. This Nexus Report provides the County with the necessary technical documentation to support the adoption of the updated CFF Program, which will apply to future development within the County. This report calculates the maximum justifiable impact fees that may be levied for each land use based on the proportionate share of the total facility use that each land use represents. Purpose of Report The purpose of this Nexus Report is to document the nexus between new development in the County and the need for county regional and unincorporated area improvements and facilities. The CFF contributes to the development of critical countywide facilities related to growth in cities and the unincorporated county. The Unincorporated Facilities Surcharge contributes a proportionate share of costs related to serving the needs of the unincorporated area. The current fees were established in the 2003 Nexus Study. The County has requested that a Nexus Study be completed for the purpose of updating the CFF program that will adequately fund the required county regional and unincorporated area capital facilities in the County through 2035. After establishing the nexus, this report calculates the CFF, including the Unincorporated Facilities Surcharge, to be levied for each land use, based on the estimated proportionate share of the total facility use for each land use. Annual reports will be prepared on the status of the CFF program, as has been done in previous years. It is anticipated that periodic reviews of the assumptions in the Nexus Report and updates of the Nexus Report will be conducted as needed, or approximately every 5 years. Authority The CFF, including the Unincorporated Facilities Surcharge, has been developed in accordance with the procedural guidelines established in Assembly Bill (AB) 1600, which is codified in the California Government Code. Title 7, Division 1, Chapter 1, Section 66000 et. seq. provides that a CFF may be enacted and imposed on development projects. This code section sets forth the procedural requirements for establishing and collecting development impact fees. These procedures require that "a reasonable relationship or nexus must exist between a governmental exaction and the purpose of the condition." Specifically, each local agency imposing a fee must: Economic & Planning Systems, Inc. 1 =— , ...... .....=-,,ear San Joaquin County Countywide Capital Facilities Fee Nexus Study Public Review Draft Report October 12, 2017 • Identify the purpose of the fee. • Identify how the fee is to be used. • Determine how a reasonable relationship exists between the fee's use and the type of development project on which the fee is imposed. • Determine how a reasonable relationship exists between the need for the public facility and the type of development project on which the fee is imposed. • Demonstrate a reasonable relationship between the amount of the fee and the cost of public facility or portion of the public facility attributable to the development on which the fee is imposed. CFF findings and recommendations for this Nexus Report are presented in Chapter 4 and Chapter 6. Nexus Study Review EPS reviewed capital or public facility fee nexus studies prepared by or for other counties in California. The key takeaways for producing a nexus study report were summarized in a Technical Memorandum prepared in September of 2016. The Technical Memorandum describes the allowable uses for a CFF, and an overview of nexus methodologies and assumptions. EPS initially reviewed 17 counties to identify if a countywide CFF is charged. The counties originally researched by EPS are listed below. • Alameda • Butte • Contra Costa • EI Dorado • Fresno • Kern • Merced • Monterey • Placer • Sacramento • Santa Clara • Solano • Sonoma • Stanislaus • Tulare • Ventura • Yolo Of the 17 counties listed above, only 6 counties charge a countywide CFF, and of those 6 counties, only 4 counties had a nexus study available for review. These 4 counties are Butte County, Fresno County, Solano County, and Stanislaus County. Table 1 provides a summary of the counties with an existing CFF, counties which have a supporting nexus study for the fee program, and a matrix that provides the CFF program components. Allowable Uses for the CFF In general, the CFF may be collected to fund the construction of facilities required to serve new development with a useful life of at least 5 years. "Public facilities" is loosely defined and can be broadly interpreted. In nexus studies prepared by EPS, it states there is a "reasonable" nexus between the identified public facilities and the need to charge a CFF to new development. Depending on the type of public facility, the nexus for reasonableness may be clearer for public facilities such as administration buildings, libraries, fire station, sheriff's facilities, and animal services. Economic & Planning Systems, Inc. 2 =— , ...... .....=-,,ear Table 1 San Joaquin County Capital Facilities Development Impact Fee Nexus Study County Capital Facilities Fee (CFF) Program Survey - Comparison Counties DRAFT CFF Program Survey - Comparison Counties Item Existing CFF Yes No Available Nexus Study Countywide Public Protection Animal Services Behavioral Criminal Emergency Health Justice Detention Services Countywide CFF Components [1] Other General County Fire Government Facilities Library Transportation Health & Human Services Sheriff Patrol & Investigation Countywide IT County Parks [2] Admin. County Alameda X Butte X X X X X X X X X X Contra Costa X EI Dorado X Fresno [3] X X X X X X X X X Kern X Merced X Monterey X Placer X X X X X X X Sacramento X Santa Clara X Solano X X X X X X X X Sonoma X Stanislaus X X X X X X X X X X X X X X X Tulare X Ventura X Yolo X X X X X X X X X X "county_ survey" Source: Various county departments; EPS. [1 ] In most cases, many fee categories are not charged to development in incorporated cities within each county, as cities provide such services. [2] Stanislaus County: Includes neighborhood and regional parks. [3] Fresno County Board of Supervisors imposed successive temporary suspensions of collecting County facilities impact fees (November 10, 2010 through November 9, 2012; then November 10, 2012 through November 9, 2015; and then November 10, 2015 through November 9, 2017). Prepared by EPS 10/11/2017 3 F.IActive Projects11620001162056 San Joaquin County Tech Support FY 2016-171 Task 1 -Prepare CCFF UpdatelModelsII62056 CCFF Model6 10-11-2017 San Joaquin County Countywide Capital Facilities Fee Nexus Study Public Review Draft Report October 12, 2017 Overview of Nexus Methodologies and Key Assumptions The results of a CFF analysis are based on a variety of assumptions regarding population and employment growth in a municipality, service standards and facility demand, and corresponding costs. These are key issues that may warrant consideration in conjunction with a CFF nexus study or update: • Socio -Economic Data and Projections. Impact fee calculations should be based on projections related to population and employment in the municipality through a mid-term forecast (e.g., 20 years), often in connection with a general plan forecast. These growth assumptions should be developed with input from the client municipality based on a range of available data sources. Common sources for baseline population and growth projections are based on average growth rate estimates from various sources, such as growth rate estimates from a Metropolitan Planning Organization (MPO) or Regional Transportation Planning Agency (RTPA), CalTrans, the California Department of Finance (DOF), and other research firms or organizations that may provide unique insight in the socio-economic data and projections. Using a combination of sources may be useful in better identifying 20 -year trends in a geographical region. • Identify Capital Facility Needs. It is necessary to estimate the type and amount of new or expanded capital facilities and infrastructure to be provided by the municipality (correlated to population and employment growth mentioned above) that will be needed either in part or in whole to accommodate new development. This information shall be provided by client staff through analysis of existing levels of service and articulated service standards relative to future growth projections. Service standards relate capital facility or infrastructure requirements to the development categories that represent the primary source of demand for the capital facility or infrastructure improvement in question. Alterations in these service standard assumptions can affect the fee calculation and the allocation of costs between land use categories. Trends in the development of public facilities required to serve new development is a consideration of how technology may reduce space required to house a future county employee population. Will technology allow employees to be more productive without increasing the workforce? New trends in building designs also may make it possible to reduce work space requirements per employee. Such trends as collaborative work space and flextime scheduling may make it possible for employees to share less space in future buildings. • Cost Allocation between New and Existing Development. This analysis allocates the cost of future capital improvements and facilities between new and existing development, as required by AB 1600, based on a variety of methodologies (discussed further below). In cases where new or expanded facilities or infrastructure improvements are determined to be needed entirely to accommodate new growth (e.g., there are no existing deficiencies), 100 percent of the costs are attributed to future development. In cases where new or expanded facilities are determined to serve or benefit both existing and new residents or employees in a relatively proportional manner, the costs are allocated as such. Finally, in cases where municipal staff or approved planning documents articulate specific service standards or ratios, such standards are used to allocate costs to new development. Economic & Planning Systems, Inc. 4 ...... .....=-,,ear San Joaquin County Countywide Capital Facilities Fee Nexus Study Public Review Draft Report October 12, 2017 The County Administration Building was built with space to serve future growth. With the Great Recession, the County had to reduce the workforce. There will need to be a careful evaluation of the available work space in the building during the CFF update to determine the reasonable amount of available work space required to service new growth. • Cost Allocation to Land Use Categories. The cost allocations to various land use categories (e.g., residential, commercial, industrial, etc.) are based on the relative demand or "fair -share" contribution of each land use category to the need for the facilities included. For example, in many cases, nexus study reports rely on a factor that assumes one employee has an impact on capital facilities equal to about 25 percent of one resident. For many fee categories, the facility costs are allocated to residential land uses only, based on the determination that these facilities primarily are designed to serve residents (i.e., the usage by nonresident employees is determined to be negligible or incidental). Nexus Methodologies Several approaches are used to identify needs and costs to serve new development. The first step is to identify total facility needs, and then to allocate new development its fair share of those needs. This section provides common methods for determining new development's fair share of planned facility costs: • Existing Facility Level of Service. This method allocates future costs for services based on a jurisdiction's current Level of Service (LOS) for that service. Under this method, new development funds the expansion of facilities at the same standard currently serving existing development. This method results in no facility deficiencies attributable to existing development. The Existing Facility LOS method often is used when a long-range plan for new facilities is not available. • Plan -Based Fee Method. This method allocates costs based on the ratio of planned facility costs to demand from new development. This method is appropriate when specific planned facilities can be identified that only benefit new development, such as new roadways, interchanges, or an extended sewer trunk line that serves new development. Under this method, new development funds the expansion of facilities at the standards used in a master facility plan. • System Plan Method. This method considers the value of existing facilities plus the cost of planned facilities in relation to existing and new development. This method is useful when planned facilities need to be analyzed as part of a system that benefits both existing and new development. The System Plan Method ensures that new development does not pay for existing deficiencies. Often facility standards based on policies such as those found in General Plans are higher than existing facility standards. This method enables the calculation of the existing deficiency required to bring existing development up to the policy -based standard. The local agency must secure non -fee funding for that portion of planned facilities required to correct the deficiency to ensure that new development receives the LOS funded by the impact fee. This Nexus Study Update identifies new County facility needs and allocates the fair share of associated costs to new residential and nonresidential development based on the Existing Facility Level of Service methodology. Economic & Planning Systems, Inc. 5 --,""I'll, ,o 1—— 1-1 ­­­­ "I'll " San Joaquin County Countywide Capital Facilities Fee Nexus Study Public Review Draft Report October 12, 2017 Principles for Establishing the CFF The CFF was first implemented in 2005 for the purpose of providing a funding source for the construction of new County facilities needed to serve residents and employees coming from new development, in both the cities and unincorporated areas of the County. As part of the implementation process, County staff met with representatives of the incorporated cities in the County to explain the fee program and to get feedback from each city. County staff also met with representatives from the building industry to get feedback before implementing the fee program. Economic & Planning Systems, Inc. (EPS) prepared the 2003 Nexus Study, which justified the amount of the development impact fee to be charged to new residential and nonresidential development. The fee implemented in 2005 has been increased each fiscal year since by the California Construction Cost Index. In 2012, the County initiated an update of the Facilities Master Plan and felt it was the appropriate time to review the original principles for establishing the CFF, to review facility cost assumptions, and update growth projections. The following principles were used to guide the development of the CFF in 2003, and remain the principles used to guide the CFF for this Nexus Report Update: 1. Reasonable Amount of Regional Facilities Constructed. The CFF will fund the initial construction of core regional county facilities to serve new development. An effort was made to target only major countywide facilities that are central to the health and well-being of all County residents. Eligible countywide regional facilities are determined by deducting the existing space deficiencies and increases to the service levels. 2. Required Regional Facilities Benefit Residents and Employees Living and Working in the County. Residential and nonresidential development should therefore contribute funding based on relative benefit received. 3. Regional Facilities Funded is Comparable to Those Funded in Other 3urisdictions. Fee funding of regional county improvements is consistent with the level of development funded by other jurisdictions, such as Stanislaus County. 4. Maintain Development Feasibility in the County. The level of the CFF has been considered in the context of all applicable fees in the County to ensure that overall fee levels do not impinge on development feasibility. This update was conducted adhering to the same principles to maintain consistency with the original study. Basis for Determining Facilities Required for New Growth The 2003 Nexus Study used a then -recently completed Capital Facility Master Plan (2003) as the basis of establishing capital facilities needed to serve new growth through 2035. For this Nexus Study, current facility capacities were used to determine facility needs per 1,000 population for General Government facilities. Custodial facilities such as the County Jail and Juvenile Hall, as well as the County Hospital, have not been included in this Nexus Study due to their specialized space requirements and recent fluctuation in demand, largely due to legislative changes. Economic & Planning Systems, Inc. 6 la , "11=-n ,o, ra=., _­1_.1t_'__1s,o=s"I' ll_,,ear San Joaquin County Countywide Capital Facilities Fee Nexus Study Public Review Draft Report October 12, 2017 Facility needs per 1,000 populations were projected through 2035, using population projections prepared by University of the Pacific Eberhardt School of Business' Center for Business and Policy Research (Eberhardt), to determine space needed to serve new growth through 2035. Countywide Facilities and Unincorporated Facilities Development Impact Fee The costs of major facilities, discussed further in Chapter 3 are allocated to new development in the County. Fees are payable at the time of building permit. No fee is to be collected from existing development unless the existing development was subject to prior agreements requiring fee funding for future improvements. The County and developers may agree to have certain developers build certain facilities contained in the fee program or to fund County facilities through financing districts. In the case of an agreement to construct facilities, the County will require and must approve a specific cost estimate based on the approved design standards for the facilities proposed to be constructed by the developer. The developer may receive a fee credit or reimbursement based on the portion of their fee obligation that is met through the direct construction of facilities or through financing districts. Developers may or may not receive fee credits or reimbursements for constructing improvements that are beyond the required standards. The CFF, including the Unincorporated Facilities Surcharge, is based on the best available cost estimates and residential and nonresidential growth data available at this time. If costs change significantly, or if other funding to construct the facilities identified in the study becomes available, the fees would be adjusted accordingly. The County periodically will conduct a review of facility costs and building trends in the County. Based on these reviews, the County will make necessary adjustments to its fee programs. The section below describes the nexus methodology and how EPS calculated each land uses' allocable share of facility costs for the CFF. Nexus Methodology EPS calculated the CFF for each land use based on five key steps, as described below. 1. Estimate New Development. New development, residential and nonresidential, to occur in the County in the next 18 years is estimated based on data provided by Eberhardt. New development projections are presented in Chapter 2 of this Nexus Study. 2. Determine the Recommended Levels of Service for Facilities Development. The recommended levels of service are based on the historical service standards expressed as the total square footage of countywide regional facilities per 1,000 population in 2017. Eligible countywide regional facilities are determined by deducting the existing space deficiencies and increases to the service levels. Levels of service for the countywide regional facilities in the County are discussed in Chapter 3 of this report. 3. Estimate Facilities Development Costs. Facilities included and costs of development are based on the information provided by the County and research conducted by EPS. Development costs for regional facilities are presented in Chapter 3 of this report. Economic & Planning Systems, Inc. 7 11=-1-o, ,I -1m—t-1--1111=sos,o-„_,,ear San Joaquin County Countywide Capital Facilities Fee Nexus Study Public Review Draft Report October 12, 2017 Development costs for facilities that benefit the unincorporated County region are presented in Chapter 6 of this Nexus Study. 4. Allocate Facilities Development Cost to New Development. Capital facilities development costs are allocated to both residential and nonresidential development based on benefit received from new facilities. The costs are allocated on a per -facility -user basis (residents and employees). Costs for facilities are allocated to residential users and to employees based on the estimated amount of facility benefit received by an employee relative to a resident. Cost allocations for regional facilities are presented in Chapter 4, and cost allocations for facilities benefiting residents and employees in the unincorporated County region are presented in Chapter 6. 5. Determine Facilities Fee per Land Use. The cost per facility user for residents and employees is multiplied by "common use factors" to determine the CFF. For residents, the common use factor is "persons per household" (PPH). For employees, the common use factor is the number of employees per 1,000 building square feet by nonresidential use. The CFF for each residential and nonresidential land use for regional facilities and the Unincorporated Facilities Surcharge are presented in Chapter 4 and Chapter 6, respectively. The resulting maximum allowable CFF by land use for new residential and nonresidential development in the County is provided below. In addition, Table 2 provides a summary of the maximum allowable CFF by land use and a comparison of the maximum allowable CFF to the existing Fiscal Year 2017-2018 CFF. Summary As new development continues to occur in the County, additional public facilities will be required to serve future residents and employees. The capital facility costs allocated to new development reflect public facility improvements that are needed to accommodate future development. This Nexus Study computes future development's share of future public facility improvement costs based on level -of -service standards as determined by the County. The CFF will not fund the construction of capital facility improvements required to cure existing level of service deficiencies. Economic & Planning Systems, Inc. 8 --,--_111—t-11-1111111111 1= 11.11 Unincorporated Facilities Surcharge Total CFF for CFF (Charged to All (Charged to Unincorporated County Unincorporated County Land Use Development) Development Only) Development Single -Family Residential per Unit $2,434 $1,198 $3,632 Multifamily Residential per Unit $1,807 $890 $2,697 Retail/Commercial per Bldg. Sq. Ft. $0.40 $0.20 $0.60 Office per Bldg. Sq. Ft. $0.61 $0.30 $0.91 Industrial/Other per Bldg. Sq. Ft. $0.11 $0.06 $0.17 Summary As new development continues to occur in the County, additional public facilities will be required to serve future residents and employees. The capital facility costs allocated to new development reflect public facility improvements that are needed to accommodate future development. This Nexus Study computes future development's share of future public facility improvement costs based on level -of -service standards as determined by the County. The CFF will not fund the construction of capital facility improvements required to cure existing level of service deficiencies. Economic & Planning Systems, Inc. 8 --,--_111—t-11-1111111111 1= 11.11 0 x1011121 Table 2 San Joaquin County Capital Facilities Development Impact Fee Nexus Study Summary of Maximum Justifiable Countywide Capital Facility Fees Item Countywide Capital Facilities Fee (CFF) (Charged to All County Development) Maximum Justifiable Difference [1] Current Amount Percentage Unincorporated Facilities Surcharge (Charged to Unincorporated Development Only) Maximum Justifiable Difference [2] Current Amount Percentage Total CFF for Unincorporated County Development Maximum Justifiable Difference [3] Current Amount Percentage Fee per Unit FY 2017-18 Single -Family Residential $2,434 $2,049 $385 19% $1,198 $527 $671 127% $3,632 $2,576 $1,056 41% Multifamily Residential $1,807 $1,756 $51 3% $890 $454 $436 96% $2,697 $2,210 $487 22% Fee per Bldg. Sq. Ft. FY 2017-18 Retail/Commercial $0.40 $0.47 ($0.07) -15% $0.20 $0.12 $0.08 67% $0.60 $0.59 $0.01 2% Office $0.61 $0.41 $0.20 49% $0.30 $0.10 $0.20 200% $0.91 $0.51 $0.40 78% Industrial/Other $0.11 $0.23 ($0.12) -52% $0.06 $0.06 $0.00 0% $0.17 $0.29 ($0.12) -41% "fee summ" [1] See Table 9. [2] See Table 11. [3] New development in the Unincorporated County is charged the Countywide Capital Facilities Fee and the Unincorporated Facilities Surcharge. Prepared by EPS 10/12/2017 1 Boas, m1s.—l-111.11­ .111120 I'll." I. �'ll�1.1.....,,,,�ll-1 1.1s,o-,_21„�„ San Joaquin County Countywide Capital Facilities Fee Nexus Study Public Review Draft Report October 12, 2017 Structure of the Report The Nexus Study has been prepared by EPS in conjunction with the staff from the County Administrator's Office. The report is divided into seven chapters, including this introduction as Chapter 1: • Chapter 2 provides an overview of the countywide facilities development program, as well as the estimated new population to be served by future facilities development. • Chapter 3 discusses the countywide regional facilities needed to serve new development and provides a cost estimate for those facilities. • Chapter 4 shows the methodology used in calculating the CFF; presents the required AB 1600 findings, specifically (1) the purpose of the fee, (2) the use of the fee, (3) the relationship between the use of the fee and type of development, (4) the relationship between the need for the facility and the type of project, and (5) the relationship between the amount of the fee and the cost portion attributed to new development; and shows the fee calculation. • Chapter 5 discusses how the fee will be implemented, including how the fee should be annually adjusted, how fee credits and reimbursements will be administered, and how other administration activities should be implemented. • Chapter 6 discusses the facilities needed to serve new development that will occur in the unincorporated area of the County and the resulting development impact fee surcharge. • Chapter 7 discusses the impacts the maximum justifiable CFF has on the overall infrastructure cost burden, and how those impacts may affect the development feasibility of various land uses. In addition, this section compares the maximum justifiable CFF to other countywide facility fees in nearby counties that may be in competition for residential and nonresidential development projects. Economic & Planning Systems, Inc. 10 =— , ...... .....=-,,ear 2, OVERVIEW; COUNTY FACILITIES DEVELOPMENT PROGRAM The County has been providing countywide regional services to its citizens since 1850. The County covers an area of more than 1,400 square miles and is the 15th most populous county in California, with a 2017 population estimate of 747,514 residents, according to information produced by Eberhardt. The County is governed by a 5 -member Board that sets policy, enacts ordinances and regulations, and oversees activities of County departments. The role of county government, as a political subdivision of the state, is to deliver the services mandated by the State and federal governments. San Joaquin County government consists of about 21 departments or major divisions, from the Agricultural Commissioner to the Treasurer -Tax Collector, and approximately 7,000 full-time equivalent employees. The County is organized into seven incorporated cities and the unincorporated region, as shown in Map 1. Substantial population and employment growth will occur throughout the incorporated cities and the unincorporated County over the 18 -year period from 2017 to 2035. Population growth is forecasted by Eberhardt to grow from 747,514 to approximately 947,835, representing an increase of approximately 27 percent. Eberhardt estimates countywide employment will grow from approximately 243,323 in 2017 to approximately 299,918 in 2035, representing an increase of 23 percent.' The County provides the following primary regional governmental services equally to all residents and employees of the County, regardless of whether they are located either in the seven incorporated cities or in the unincorporated County region: • Countywide Governance • Elections • Property Tax Administration • Water Resources/Flood Protection • Parks and Recreation • Regional Planning • Health Services • Human Services • District Attorney • Public Defender • Adult and Juvenile Detention • Adult and Juvenile Probation • Sheriff -Coroner -Public Administrator The County also provides the following primary governmental services to all residents and employees of the unincorporated County region: • Community Development and Code Enforcement • Road Construction/Maintenance and Utility Services • Animal Control Given the level of expected population and employment growth over the next 18 years, the CFF must be established to enable the County to develop the required regional and unincorporated facilities to serve new development. 1 San Joaquin County Forecast Summary. University of the Pacific Eberhardt School of Business, Center for Business and Policy Research. July 7, 2016. Economic & Planning Systems, Inc. ...... .....=_,,°or Map 1 San Joaquin County Legend., County Limit c�p City Limit Miles Street 0 0.5 1 2s 3 4 Water .. .... 1:120,000 'J� 1 inch = 10,000 feet SAN JOAQUIN COUNTY BASE MAP ----- - - - - - - 12 lig IN s- m"Milli �;! Stock IS Alm * AlOW at W, Legend., County Limit c�p City Limit Miles Street 0 0.5 1 2s 3 4 Water .. .... 1:120,000 'J� 1 inch = 10,000 feet SAN JOAQUIN COUNTY BASE MAP ----- - - - - - - 12 San Joaquin County Countywide Capital Facilities Fee Nexus Study Public Review Draft Report October 12, 2017 The nexus findings for the CFF, including the Unincorporated Facilities Surcharge, are based on the direct benefit new development receives from the new countywide regional facilities and the unincorporated area facilities during the 18 -year period from 2017 to 2035. Based on the population projections prepared by Eberhardt, the County is expected to grow by approximately 200,321 persons during the 18 -year period from 2017 to 2035. The increase in population will require development of new regional government service facilities and improvements to service the demand stemming from new growth. Based on the projected growth, future County facilities will need to provide for the construction of approximately 323,000 square feet of building space. The estimated cost of $490 per net square foot is derived by reviewing the Solano County Master Plan construction costs estimates for administrative buildings, prepared in April 2016. Population and Employment Growth Estimates Table 3 identifies the projected population increase, as well as new employees projected for the County by 2035. According to data produced by Eberhardt, the County's 2017 population is estimated to be 747,514. This population is estimated by Eberhardt to increase by 200,321 persons by 2035, to realize an estimated total population of 947,835. As one of the San Joaquin Valley's important regional centers for employment, employees are significant users of the County's regional facilities, so the Nexus Study allocates a portion of the costs of future development to new employees projected over the next 18 years. Based on data provided by Eberhardt, EPS estimates that 243,323 persons are employed in the County in 2017.2 This number is projected to reach 299,918 by 2035, representing an increase of approximately 56,595 employees. The 2003 study used a projection of new residential units and an assumed "persons per household" (PPH) to estimate the projected population. This Nexus Study uses data provided by the US Census Bureau for population by housing unit type, and the number of households by unit type to estimate the PPH, as shown in Chapter 4. The 2003 study made similar assumptions regarding increases in nonresidential growth, on an employee "per -square -foot" basis, to project new employees. This Nexus Study will not translate estimated increases in nonresidential uses to project new employees through 2035, but rather, will use the 56,595 projected new employees to determine facility requirements to serve new employees through 2035. 2 Ibid. Economic & Planning Systems, Inc. 13 1—- - ra=., s,o_„_l ear DRAFT Table 3 San Joaquin County Capital Facilities Development Impact Fee Nexus Study Projected New Development Through 2035 [1 ] Eberhardt provides population and employee data in 5 -year increments. The population and employee estimate for 2017 is calculated by adding the annual average growth between 2015 and 2020 to establish a 2017 baseline figure. Population: 2015-2020 Annual Average Growth - 9,435 Employment: 2015-2020 Annual Average Growth - 4,232 Prepared by EPS 8/23/2017 Total Est. Growth Population/Employees (2017-2035) Land Use 2015 2017 [1] 2020 2025 2030 2035 Amount Percentage Residential Development (New Residents) County Population 728,644 747,514 775,819 829,426 883,484 947,835 200,321 26.8% Nonresidential Development (New Employees) Employees 234,859 243,323 256,019 270,185 285,072 299,918 56,595 23.3% "growth" Source: "San Joaquin County Forecast Summary," University of the Pacific Eberhardt School of Business - Center for Business and Policy Research, July 7, 2016. [1 ] Eberhardt provides population and employee data in 5 -year increments. The population and employee estimate for 2017 is calculated by adding the annual average growth between 2015 and 2020 to establish a 2017 baseline figure. Population: 2015-2020 Annual Average Growth - 9,435 Employment: 2015-2020 Annual Average Growth - 4,232 Prepared by EPS 8/23/2017 3. REGIONAL FACILITIES DEVELOPMENT AND COST ESTIMATES This chapter discusses the need for additional regional facilities to meet the needs of new population and employee growth in the County. It also discusses the estimated costs associated with the County's development of these regional facilities through 2035. Countywide Regional Facilities Service Standards Service standards are expressed as the total square footage per 1,000 population, based on current population estimates and existing facilities. Based on the projected population and employment growth covered in Chapter 2 of this Nexus Study, and historical service standards per 1,000 population, expansion requirements for regional facilities needed by 2035 are calculated in Table 4. The ratio of square feet per 1,000 population was determined by using 2017 population assumptions and current space used for major General Government facilities to develop an assumed 1,983 square foot per 1,000 population for major General Government facilities. This ratio is reduced slowly through 2035 to account for facilities that may be constructed. A factor of 0.99 is used to approximate the impacts of new technologies and service delivery efficiencies that are anticipated to occur over the study period, reducing future staffing projection levels and associated space that would be needed. Table 5 shows eligible countywide regional facilities to be funded through the CFF. Total new space for General Government services required to serve new development is 323,186 square feet. County staff has identified 10,348 square feet of existing space surplus that can be used to house employees required to serve new development. Using an assumed per square foot cost for new building space, General Government facilities costs are approximately $158.4 million. The associated cost of the existing space is used to reduce required facilities costs. These are facilities that would be otherwise constructed if surplus space were not available for housing new employees. This reduces General Government facilities costs by $5.1 million. The net costs of constructing new General Government facilities are reduced to $153.3 million. The County issued Certificates of Participation (COPs) to build the County Administration Building. The total remaining debt service payments for the COPS is approximately $116.0 million. County staff has determined that approximately 29.85 percent of the debt service is attributable to new development, with the remainder of the debt service benefiting existing development. Therefore, approximately $34.6 million of the remaining debt service is assigned to new development. The total new facility construction costs and existing debt service for the Administration Building attributable to new development is approximately $187.9 million (see Table 5 for details). Table 6 shows the costs developed in Table S. There is an existing fund balance as of June 30, 2017, in the CFF Fund of approximately $24.1 million. These fees have been collected to construct facilities required to serve new development, but have not been expended to date. They should be used to reduce the total costs of providing new facilities required to serve new development. This reduces the costs to be funded by the CFF to approximately $163.8 million. Economic & Planning Systems, Inc. 15 =— , ...... .....=-,,ear Table 4 San Joaquin County Capital Facilities Development Impact Fee Nexus Study Summary of Countywide Regional Facilities Service Level Standards to Serve New Development Through 2035 Item County Population Estimates [1] Major General Government Facilities Required Net Square Footage [2] Ratio of Sq. Ft. per 1,000 Population [3] 2017 2020 747,514 775,819 2025 2030 829,426 883,484 2035 947,835 1,482,372 1,523,118 1,612,077 1,699,973 1,805,558 1,983 1,963 1,944 1,924 1,905 DRAFT "nexus facilities" [1] Source: "San Joaquin County Forecast Summary", Eberhardt School of Business - Center for Business and Policy Research, July 7, 2016. [2] 2017 total existing square footage for major general government facilities likely impacted by new growth. [3] Current square footage to per 1,000 population ratio. This is assumed to be the required new general government facility space per 1,000 population. The ratio is reduced over the study period to account for space types within the existing facility inventory that will not necessarily increase with growth (e.g., department head, file/equipment rooms, etc.) and increased use of technology that could alleviate the need for additional staff. The proposed ratio is 0.99 over the study period. Prepared by EPS 8/23/2017 r v DRAFT Table 5 San Joaquin County Capital Facilities Development Impact Fee Nexus Study Estimate of Eligible Countywide Regional Facilities to Serve New Development Through 2035 (2017$) Facility Cost Components (2016$) Major General Government Facilities (Square Feet) Administration Building Debt Service [4] Estimated New Facility Construction Costs/Existing Debt Service Total Estimated Unit Cost [3] Cost --New Space Estimated Construction Cost $490 $158,361,140 ($5,070,520) $153,290,620 n/a $116,015,875 ($81,385,136) $34,630,739 $274,377,015 ($86,455,656) $187,921,359 "CCF costs" [1 ] See Table 4. [2] Existing space surplus provided by County staff, as of August 2017. [3] Major general government facilities costs based on the Solano County Master Plan construction cost estimates for administrative buildings, prepared April 22, 2016. [4] Administration Building debt service allocable to new development provided by County staff. Prepared by EPS 8/23/2017 Space Total Needed To Space Total Existing Service Requirements Existing New Space New Facilities Space Component 2035 Space Space Surplus Development [1] [1l [2] Major General Government Facilities (Square Feet) 1,805,558 1,482,372 323,186 (10,348) 312,838 Facility Cost Components (2016$) Major General Government Facilities (Square Feet) Administration Building Debt Service [4] Estimated New Facility Construction Costs/Existing Debt Service Total Estimated Unit Cost [3] Cost --New Space Estimated Construction Cost $490 $158,361,140 ($5,070,520) $153,290,620 n/a $116,015,875 ($81,385,136) $34,630,739 $274,377,015 ($86,455,656) $187,921,359 "CCF costs" [1 ] See Table 4. [2] Existing space surplus provided by County staff, as of August 2017. [3] Major general government facilities costs based on the Solano County Master Plan construction cost estimates for administrative buildings, prepared April 22, 2016. [4] Administration Building debt service allocable to new development provided by County staff. Prepared by EPS 8/23/2017 DRAFT Table 6 San Joaquin County Capital Facilities Development Impact Fee Nexus Study Estimate of Regional Development Costs by Category (2017$) Total Net Costs Funded by CFF $163,771,943 r 00 CFF Cost Allocation to Regional Fees [3] 94.97% $155,538,557 CFF Cost Allocation to Unincorporated Fees 5.03% $8,233,386 Estimated Funding Sources CFF Current Fund Balance [2] County General Purpose Revenues Development Impact Fees Total Funding Sources $24,149,416 $0 $24,149,416 $86,455,656 $86,455,656 $163,771,943 $0 $163,771,943 $274,377,015 $86,455,656 $187,921,359 "nexus costs" [1 ] See Table 5. [2] Reflects the current CFF fund balance as of June 30, 2017. [3] Percentages apply to the current county facility space occupied by staff that provide primarily regional and unincorporated - related services (rounded). Prepared by EPS 10/11/2017 162056 CCFF Mode16 10-11-2017 Total Allocated Construction Cost Estimated Existing Service Cost --New Space New Regional Facility Cost Components Space Deficiency Development [i] Major General Government Facilities $158,361,140 ($5,070,520) $153,290,620 Administration Building Debt Service $116,015,875 ($81,385,136) $34,630,739 Total Estimated New Facility Construction Costs/Existing Debt Service $274,377,015 ($86,455,656) $187,921,359 Less Current CFF Fund Balance [2] ($24,149,416) Total Net Costs Funded by CFF $163,771,943 r 00 CFF Cost Allocation to Regional Fees [3] 94.97% $155,538,557 CFF Cost Allocation to Unincorporated Fees 5.03% $8,233,386 Estimated Funding Sources CFF Current Fund Balance [2] County General Purpose Revenues Development Impact Fees Total Funding Sources $24,149,416 $0 $24,149,416 $86,455,656 $86,455,656 $163,771,943 $0 $163,771,943 $274,377,015 $86,455,656 $187,921,359 "nexus costs" [1 ] See Table 5. [2] Reflects the current CFF fund balance as of June 30, 2017. [3] Percentages apply to the current county facility space occupied by staff that provide primarily regional and unincorporated - related services (rounded). Prepared by EPS 10/11/2017 162056 CCFF Mode16 10-11-2017 San Joaquin County Countywide Capital Facilities Fee Nexus Study Public Review Draft Report October 12, 2017 The $163.8 million new facility costs (and debt service on the Administration Building) will construct facilities for departments providing countywide services and departments that provide services almost exclusively to the unincorporated areas of the County. The County identified the existing space housing functions providing countywide and unincorporated services. Approximately 95 percent of the space provides countywide services and 5 percent provides unincorporated services. The $163.8 million is allocated to regional fees and unincorporated fees based upon these percentages. The total costs assigned to regional fees are approximately $155.5 million and to unincorporated fees are approximately $8.2 million (see Table 6 for details). Economic & Planning Systems, Inc. 19 =— , ...... .....=-,,ear 4, REGIONAL GOVERNMENT SERVICES FACILITY NEXUS This chapter describes nexus methodologies and findings required to establish the CFF and calculate the fee by land use, building on the previous regional facilities development discussion. Summary of Methodology The methodology used to determine the recommended CFF is as follows: • Estimate New Development. New development, residential and nonresidential, to occur in the County in the next 18 years is estimated based on data provided by the County and Eberhardt. New development projections were presented in Chapter 2 of this Nexus Study. • Determine the Recommended Levels of Service for Regional Facilities Development. The recommended levels of service are based on the historical service standards expressed as the total square footage of countywide regional facilities per 1,000 population in 2017. Eligible countywide regional facilities are determined by deducting the existing space surpluses discussed in Chapter 3 of this report. • Estimate Regional Facilities Development Costs. Facilities included are based on the information provided by the County. Development costs were presented in Chapter 3 of this report. • Allocate Regional Facilities Development Cost to New Development. Countywide regional facilities development costs are allocated to both residential and nonresidential development based on benefit received from new facilities. The costs are allocated on a per - regional -facility -user basis (residents and employees). Costs for regional facilities are allocated to residential users and to employees based on the estimated amount of facility benefit received by an employee relative to a resident, as presented in this chapter. • Determine Regional Facilities Fee. The cost per regional facility user for residents and employees is multiplied by "common use factors" to determine the CFF. For residents, the common use factor is PPH. For employees, the common use factor is the number of employees per 1,000 building square feet by nonresidential land use. Nonresidential employees per 1,000 square feet were provided by EPS based on internal data and professional judgment. Allocation of Countywide Regional Facilities Development Costs Residential vs. Nonresidential Allocations Countywide facility development costs are allocated to land uses based on their projected use of the facilities. While residents are the primary beneficiaries of countywide regional facilities, businesses also benefit from the use of these regional facilities. For example, employees in the County benefit from access to regional facilities. Economic & Planning Systems, Inc. 20 la—o , ,111 1 "I'll_,,.ear San Joaquin County Countywide Capital Facilities Fee Nexus Study Public Review Draft Report October 12, 2017 Because detailed service records associated with regional facilities were not available to guide the cost allocations among new residential and nonresidential uses, the relative time an employee is present at the work site is applied as a proxy to estimate benefits received by businesses. Specifically, this methodology is based on an assumed typical employee work week: 5 days out of 7 and 8.5 hours3 out of 24: (5/7)*(8.5/24) = 0.25. Using this logic, each worker receives approximately 25 percent of the benefit received by a resident. This weighting factor of 25 percent is applied to the total new employment projection of 56,595 through 2035 to produce a pro -rata allocation of benefits to 14,149 employees during the period. Total countywide equivalent facility users represent the sum of new population growth through 2035, plus 25 percent of projected new employees through the same period. Allocation in Land Uses Once the countywide regional facilities development cost per user is determined, it is applied to the appropriate common use factor to determine the CFF by land use. For residential land uses, the common use factor is the PPH for each single-family and multifamily unit (including duplexes and mobile homes). The estimated PPH per unit is based on the data from US Census Bureau. Based on the data provided in Table 7, EPS applied PPH factors of 3.34 for single-family uses and 2.48 for multifamily uses. The density of employees in each nonresidential land use is used to determine the relative level of benefits among businesses from countywide facilities. For nonresidential development, the common use factor is based on the estimated average building square feet per employee. These factors are used by EPS based on employee density analyses prepared by the Energy Information Administration, Institute of Transportation Engineers, the San Diego Association of Governments, and the US Department of Energy. The assumptions by land use are shown below: • Retail/Commercial: 450 square feet per employee • Office: 300 square feet per employee • Industrial: 1,600 square feet per employee Findings for Countywide Regional Facilities Fee This section of the Nexus Study presents the findings necessary to establish the CFF in accordance with AB 1600. The findings state (1) the purpose of the fee, (2) the use of the fee, (3) the relationship between the use of the fee and type of development, (4) the relationship between the need for the facility and the type of project, and (5) the relationship between the amount of the fee and the cost portion attributed to new development. The Nexus Study provides a basis for CFF funding of both regional facilities and program administration costs, including the expenses associated with Nexus Study preparation. Specific findings are as follows: 3 The estimated employee hours at the work site includes a factor for break -time or lunch. Economic & Planning Systems, Inc. 21 =— , ...... .....=-,,ear N N DRAFT Table 7 San Joaquin County Capital Facilities Development Impact Fee Nexus Study Population per Household Estimate Persons Population Number of Units per Owner Renter Owner Renter Household Unit Type [1] Occupied Occupied Total Occupied Occupied Total [2] Single Unit (Attached or Detached) Multi -Unit 2 to 4 Units 5+ Units Subtotal Multi -Unit Total 372,083 206,711 578,794 117,901 55,636 173,537 3.34 1,511 34,338 35,849 688 12,090 12,778 2.81 1,599 56,485 58,084 722 24,357 25,079 2.32 3,110 90,823 93,933 1,410 36,447 37,857 2.48 375,193 297,534 672,727 119,311 92,083 211,394 3.18 Source: US Census - Total Population in Occupied Housing Units by Tenure and Units in Structure, ACS 2011-2015. [1] Analysis excludes Mobile Homes, Boats, RVs, and Cars as residential units. [2] Rounded to the nearest hundredth. Prepared by EPS 8/23/2017 ,pph,1 San Joaquin County Countywide Capital Facilities Fee Nexus Study Public Review Draft Report October 12, 2017 • Purpose of Fee: Develop countywide regional facilities to meet the needs of the new residential and employee population in the County. • Use of Fee: The fee will be used to construct various eligible countywide regional facilities as shown in Table 6. The fee also will fund the studies and administration to support the development of countywide regional facilities. • Relationship between Use of Fee and Type of Development: The development of new residential and nonresidential land uses in the County will generate additional need for countywide regional facilities. The fees will be used to develop the user capacity for countywide regional facilities to serve new residential and nonresidential development. • Relationship between Need for Facility and Type of Project: Each new residential and nonresidential development project will generate additional demand for countywide regional facilities. Under the County's historical countywide regional facilities construction program, a service standard expressed as the total square footage per 1,000 population has been set. • Relationship between Amount of Fee and Cost of Portion of Facility Attributed to New Development: This criterion requires that the fee amount to be charged to new development be proportional to the cost of facilities needed to maintain service standards and avoid adverse impacts. Fees cannot be used to improve existing service standards or meet current service deficiencies. Fee Calculation Table 8 summarizes the countywide regional facilities development cost per regional facility user. The total new facility construction costs of approximately $155.5 million, calculated in Table 6, are divided by the sum of projected new residents through 2035 (200,321) and 25 percent of new employees (14,149) to derive the cost for new facilities needed to serve new development per regional facilities user. This cost per facilities user is $725 (rounded to the nearest dollar). Table 9 calculates the CFF per land use. The CFF for a single-family residential unit is $2,434 per unit and $1,807 for a multifamily unit (rounded to the nearest dollar). The CFF is calculated by multiplying the equivalent facility use factor for residential uses (3.34 PPH for single family and 2.48 PPH for multifamily) discussed previously by the cost per facilities user ($725 per user). The nonresidential CFF land use categories are based on the County Zoning Code for retail/commercial, office, and industrial land uses. As shown in Table 9, the CFF is $0.40 per building square foot for retail/commercial, $0.61 per building square foot for office, and $0.11 per building square foot for industrial/other development (rounded to the nearest cent). If a building has more than one land use, such as retail/commercial and office, the CFF will be pro- rated based on the building square footage of each land use. Economic & Planning Systems, Inc. 23 --,""I'll ",111,000n­os_,,,.a= _-1--t-__1 "I'll" DRAFT Table 8 San Joaquin County Capital Facilities Development Impact Fee Nexus Study Countywide Facilities Development Cost per Facility User (2017$) Item Amount Estimated Total Eligible Regional Facilities Development Costs [1] a $155,538,557 Estimated Total New Regional Facilities Users New Residents [2] b 200,321 Total New Employees [2] C 56,595 25% of Employees [3] d = c *25% 14,149 ry Total Equivalent Countywide Regional Facilities Users e = b + d 214,470 Development Cost per Equivalent Facility User (Rounded) [4] f=ale $725 "nexus user fee" [1] See Table 6. [2] See Table 3. [3] New employees may have opportunities for potential County facility usage during regular work hours. This study estimates that time opportunity for facility usage is 25% of the regular work week. [4] Rounded to the nearest whole dollar. Prepared by EPS 8/23/2017 DRAFT Table 9 San Joaquin County Capital Facilities Development Impact Fee Nexus Study CFF Development Impact Fee by Land Use (2017$) Land Use Category Persons per Unit or 1,000 SF [1] Cost per Equivalent Facility User [2] Facilities Cost per Unit or 1,000 SF Admin. Cost per Unit or 1,000 SF [3] CFF Impact Fee per Unit or per SF [4] Residential Development a b c= a' b d= c" 0.5% e= c+ d per unit Single -Family Residential 3.34 $725 $2,422 $12 $2,434 Multifamily Residential 2.48 $725 $1,798 $9 $1,807 Nonresidential Development f g = b *25% h = f "g i = h . 0.5% j = (h + i)/1, 000 Ln [5] per bldg. sq. ft. Retail/Commercial 2.22 $181 $402 $2 $0.40 Office 3.33 $181 $603 $3 $0.61 Industrial/Other 0.63 $181 $113 $1 $0.11 "nexus fee" [1] See Table 7 for persons per unit assumptions. [2] See Table 8. [3] 0.5 percent of the facilities cost per unit/building sq. ft. is the cost of administering the fee program. [4] Residential: Rounded to the nearest whole dollar. Nonresidential: Rounded to the nearest whole cent. [5] Based on EPS analyses and supported by standards used by sources such as the Institute of Transportation Engineers, US Department of Energy, and the San Diego Association of Governments. Analysis assumes the following building square footage per employee. Retail: 450 Office: 300 Industrial: 1,600 Prepared by EPS 8/23/2017 San Joaquin County Countywide Capital Facilities Fee Nexus Study Public Review Draft Report October 12, 2017 The CFF program includes the cost of preparing the Nexus Study, periodic updates, and funding of the administrative costs such as the costs of accounting and audits, investing, and planning. The administrative component of the CFF is calculated at 0.5 percent of eligible CFF facility costs. The fees are payable at the time of building permit issuance for new development. No fees are to be collected from existing development unless the existing development was subject to prior agreements requiring fee funding for future improvements. Economic & Planning Systems, Inc. 26 =— , ...... .....=-,,ear 5. IMPLEMENTATION Adjustments to the CFF The CFF is based on the best development cost estimate and land use information available at this time. If costs change significantly, or if other funding becomes available, the fees should be adjusted periodically. The cost estimates presented in this report are in 2017 dollars. Each year the County applies an appropriate inflation adjustment factor to the CFF (California Construction Cost Index prepared by the California Department of General Services) to reflect changes in construction costs. Fee Reimbursements and Fee Credits The County and developers may agree to have certain developers build certain facilities contained in the fee program or to fund County facilities through financing districts (e.g., Mello - Roos Community Facilities Districts). In the case of an agreement to construct facilities, the County will require, and must approve, a specific cost estimate based on the approved design standards for the facilities proposed to be constructed by the developer. Based on negotiated agreements, the developer may receive a fee credit or reimbursement based on the portion of their fee obligation that is met through the direct construction of facilities or through financing districts. Developers may or may not receive fee credits or reimbursements for constructing improvements that are beyond the required standards. Local Implementation The CFF is implemented through adoption of ordinances by the individual city councils and the Board of Supervisors. Ongoing Administration of the CFF Program The County is responsible for ongoing administration of the CFF program, including annual appropriation of fees, maintaining the countywide regional facilities model, preparing annual reviews, and providing periodic updates. An administrative charge is included in the fee amount to fund this ongoing administrative activity. Economic & Planning Systems, Inc. 27 1-1111111111111"a',o ,111 1 -,..... ....„_,,ear 6. UNINCORPORATED FACILITIES DEVELOPMENT SURCHARGE There may be several required County facilities that are needed solely to service unincorporated growth in the County. To assist in funding these facilities, a surcharge will continue to be administered to new development that occurs in the unincorporated areas of the County. This chapter provides an overview of the facilities in this category, nexus findings, and the resulting surcharge to the CFF to be paid by unincorporated development. Unless otherwise specified, the principles and methodologies applied in this section are the same as those described in the preceding sections. Unincorporated Facilities Development and Cost Estimates Table 10 shows the estimated eligible County unincorporated facilities costs from Table 6. The total cost of $8.2 million, is calculated in Table 6. These costs are to be applied only to new development in the unincorporated areas of the County. Allocation to Residential and Nonresidential Development The cost of constructing new public facilities required to serve new residents and employees living or working in the unincorporated areas of the County will be divided by the total facility users to be added between 2017 and 2035. Table 10 shows that 21,106 new residents will live in the unincorporated area of the County by 2035. In addition to the new residents, there will be 1,980 employee facility users by 2035. The total cost of new public facilities needed to serve unincorporated facility users is divided by the sum of new resident and employee facility users to determine the development cost per equivalent unincorporated facility user in Table 10. Total costs are $8.2 million. Total unincorporated facility users are 23,086. The development cost per equivalent unincorporated facility user is $357, rounded to the nearest dollar. Fee Calculation Based on the findings, costs, and calculations discussed in this study, the unincorporated CFF Development Impact Fee surcharge for each land use in the County has been calculated using the methodology described at the beginning of this chapter. Table 10 summarizes the County unincorporated facilities development cost per equivalent facility user, and Table 11 calculates the unincorporated CFF Development Impact Fee surcharge per land use. The unincorporated CFF Development Impact Fee surcharge for a single-family residential unit is $1,198 per unit and $890 for a multifamily unit (rounded to the nearest dollar). The fees shown include a 0.5 percent allowance for the cost of administering the fee program. Economic & Planning Systems, Inc. 28 =— ,...... .....=_,,°or N Table 10 San Joaquin County Capital Facilities Development Impact Fee Nexus Study Unincorporated Facilities Development Cost per Facility User (2017$) Item Estimated Total Eligible Unincorporated Facilities Development Costs [1] Estimated Total New Unincorporated Facilities Users Total New Residents in County [2] New Residents Residing in Unincorporated Areas [3] [4] [5] Total New Employees in County [2] New Employees Working in Unincorporated Areas [3] [4] [5] 25% of New Employees Working in Unincorporated Areas [4] Total Equivalent Unincorporated Facilities Users Development Cost per Equivalent Unincorporated Facility User [4] DRAFT Amount a $8,233,386 b 200,321 c=b*10.536% 21,106 d 56,595 e = d * 13.990% 7,918 f = e 25.00% 1,980 g = C + f 23,086 h = a /g $357 "unincorp_nexus_user fee" [1] See Table 6. [2] See Table 3. [3] Based on the percentage of total growth in the unincorporated areas of County from 2015 to 2035. See Table A-1 for details. [4] Rounded to the nearest whole number. [5] Allocation factors not rounded. Prepared by EPS 8/23/2017 W 0 DRAFT Table 11 San Joaquin County Capital Facilities Development Impact Fee Nexus Study Unincorporated CFF Surcharge by Land Use (2017$) Persons Cost per Facilities Admin. Cost CFF Impact per Unit or Equivalent Cost per Unit or per Unit or Fee per Unit or Land Use Category 1,000 SF Facility User 1,000 SF 1,000 SF per SF [11 [21 [31 [41 Residential Development a b c= a' b d= c' 0.5/ e= c+ d per unit Single -Family Residential 3.34 $357 $1,192 $6 $1,198 Multifamily Residential 2.48 $357 $885 $4 $890 Nonresidential Development f g =b *25% h = f "g i = h *0.5% j = (h + i)/1,000 [5] per bldg. sq. ft. Retail/Commercial 2.22 $89 $198 $1 $0.20 Office 3.33 $89 $298 $1 $0.30 Industrial/Other 0.63 $89 $56 $0 $0.06 "unincorp_nexus_fee" [1] See Table 7 for persons per unit assumptions. [2] See Table 10. [3] 0.5 percent of the facilities cost per unit/building sq. ft. is the cost of administering the fee program. [4] Residential: Rounded to the nearest whole dollar. Nonresidential: Rounded to the nearest whole cent. [5] Based on EPS analyses and supported by standards used by sources such as the Institute of Transportation Engineers, US Department of Energy, and the San Diego Association of Governments. Analysis assumes the following building square footage per employee. Retail: 450 Office: 300 Industrial: 1,600 Prepared by EPS 8/23/2017 San Joaquin County Countywide Capital Facilities Fee Nexus Study Public Review Draft Report October 12, 2017 As shown in Table 11, the unincorporated CFF Development Impact Fee surcharge is $0.20 per building square foot for retail/commercial, $0.30 per building square foot for office development and $0.06 per building square foot for industrial/other development (rounded to the nearest cent). Economic & Planning Systems, Inc. 31 s,o_„_,,ear 7, FEASIBILITY ANALYSIS OF CFF The CFF has a direct impact on the feasibility of new residential and nonresidential development. The CFF, along with development fees imposed by each incorporated city and other public agencies such as school districts, typically range from 10 percent to 20 percent of the total development costs of a project. New development in incorporated cities and unincorporated County communities, such as Mountain House, is competitive with other development projects in the Central Valley. Impact fees in the County must remain competitive and not create a financial burden that causes projects to be infeasible. This section analyzes the financial feasibility of a range of new development project prototypes, given the current development impact fees in incorporated cities and unincorporated communities in the County. The financial feasibility of a development project to home builders and nonresidential commercial builders can be assessed by examining the total infrastructure burden for each developable land use. The Infrastructure Cost Burden Feasibility Tests are tools to determine the maximum financial burden a development can carry and potentially maintain profitability. Summary of Infrastructure Cost Burden Feasibility Test EPS has developed an infrastructure cost burden test for single-family residential projects. Similar types of feasibility tests could be developed for commercial and industrial product types; however, developing feasibility models for such a broad spectrum of projects is difficult, considering the sensitivity of fees exacted on a development at plan detail. While this analysis highly scrutinizes the Infrastructure Cost Burden Feasibility of single-family residential development, this analysis also illustrates how the maximum justifiable CFF compares to countywide facilities fees charged by competitive jurisdictions for retail, office, and industrial development prototypes. Single -Family Residential Infrastructure Cost Burden Test The infrastructure cost burden to a project developer/builder can be used to assess the financial feasibility for development of the finished products of a project. The total infrastructure cost burden consists of all backbone infrastructure and public facilities costs allocated to the development plus applicable fees, including building permit processing fees, County and regional fees, and school district fees. EPS uses the Infrastructure Cost Burden Feasibility Test as a performance indicator of project feasibility for single-family residential development. In general, for each residential land use, if the total cost burden per dwelling unit is less than 15 percent of the finished home price, then a project is considered to be financially feasible: Economic & Planning Systems, Inc. 32 o„s,""I'll,' o- 1-"111-11-1 '11,11 ou„s,o_„_,,ear San Joaquin County Countywide Capital Facilities Fee Nexus Study Public Review Draft Report October 12, 2017 • Residential units with a cost burden percentage below 15 percent clearly are financially feasible. • Residential units with a cost burden percentage between 15 and 20 percent may be financially feasible. • Residential units with a cost burden percentage above 20 percent may not be financially feasible. These feasibility benchmarks are based on EPS's experience in conducting financial feasibility analyses for numerous projects throughout the Central Valley and Sacramento Region over the last 2 decades. The 15 to 20 percent test is merely a tool that can be used—along with other tools—as a general measure of financial feasibility. This measure should not be taken to mean that if the threshold is exceeded, the project definitely is infeasible. There are ways in which a development project can mitigate against a high cost burden, such as reallocating some of the cost burden to other land uses. In addition, the infrastructure costs will be fine-tuned and possibly reduced as engineering studies are completed closer to actual construction. Also, future development projects could be required to contribute to funding off-site costs currently assigned to a project, thus reducing that project's obligation. The analytical framework used to evaluate feasibility is based on the assumption a homebuilder is able to generate a 10 percent return on total development costs, which EPS considers the minimum threshold for feasibility. If the infrastructure burden is greater than 20 percent, it is unlikely the builder will generate the required 10 percent to make the project feasible, unless major cost reductions can be made in the land acquisition price or the cost of unit construction. Similar feasibility tests can be performed for commercial and industrial product types, although developing feasibility models for the many different types of commercial and industrial projects is difficult. For these types of projects, EPS compares the maximum justifiable CFF to countywide facility fees for nearby counties. Single -Family Residential Infrastructure Burden Test Results Table 12 demonstrates the impacts of the maximum justifiable CFF on new single-family residential development in the County. This analysis is based on the infrastructure burden costs to develop a 2,000 -square -foot, 3 -bedroom, 2 -bathroom home with a 450 -square -foot garage in new development areas in the County.4 4 This analysis compares the feasibility of the net impacts of the maximum justifiable CFF. All development areas in the County included in this analysis, except the City of Lodi, collect the current CFF. This analysis is based on the assumption the maximum justifiable CFF will be collected on development projects in all areas of the County. Economic & Planning Systems, Inc. 33 o„s,""I'll,1 o- , ra ­««<„­,o.:,s,o=sos,o_„_l ear W Prepared by EPS 12/7/2017 Table 12 San Joaquin County Capital Facilities Development Impact Fee Nexus Study Single -Family Residential Infrastructure Cost Burden Comparison 2,000 Sq. Ft. Home, 450 Sq. Ft. Garage, 3 Bedrooms, 2 Bathrooms, 8.0 Units per Net Acre Feasibility Summary by Jurisdiction Item Escalon Citywide Lathrop Stanford Crossing Lodi Citywide San Joaquin County Manteca Ripon Citywide Citywide Stockton Westside Project A Tracy Plan C Unincorporated Mountain House Infrastructure Fee Burden [1] City/County/Agency Fees per Unit $54,162 $26,542 $16,119 $36,660 $63,624 $51,518 $54,060 $35,479 School District Mitigation per Unit $6,720 $23,479 $6,720 $6,720 $6,720 $6,720 $15,724 $5,954 Estimated Bond Debt Infrastructure per Unit [2] - $57,168 - - - - - - Total Existing Infrastructure Burden Costs per Unit $60,882 $107,189 $22,839 $43,380 $70,344 $58,238 $69,784 $41,433 Net San Joaquin County CFF Increase per Unit $385 $385 $2,434 $385 $385 $385 $385 $1,056 Potential Total Infrastructure Burden per Unit $61,267 $107,574 $25,273 $43,765 $70,729 $58,623 $70,169 $42,489 Average New Home Sales Price [3] $350,000 $405,000 $397,500 $387,500 $420,000 $337,500 $455,000 $515,000 Fee Burden as a % of Home Price (Existing) 7.4% 26.5% 5.M16.7 % 1 7.3 % 15.3% 8.0% Fee Burden as a / of Home Price (Max. Justified CFF) 1 17.5 % 26.6 % 6.4 % 16.8 % 17.4 % Key: Feasible - May Be Feasible May Not Be Feasible $120,000 $100,000 $80,000 r c y $60,000 a m IL $40,000 $20,000 $0 111iiiiiCity/County/Agency Fees per Unit 11iiiiiiSchool District Mitigation per Unit ttiiiiii Estimated Bond Debt Infrastructure per Unit we Max. Justfiable San Joaquin CFF Net Increase -4i--Fees as a % of Sales Price (Max. Justified CFF) [1 ] This analysis evaluated potential Plan Area Development Impact Fees that may be applicable to the development areas shown above. Research concluded that none of the development areas included in this analysis are subject to Plan Area Fees. [2] Stanford Crossing: Estimated bond debt for infrastructure includes costs that overlap with City fees that lower the net bond debt per unit, but cannot be reconciled at this time. [3] Data compiled from new home sales information attained from home builders sites, Gregory Group, and Zillow for homes built since 2015, and between 1,800 to 2,200 square feet in size. "sfr sum" 28.0% 26.0% 24.0% 22.0% 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% DRAFT San Joaquin County Countywide Capital Facilities Fee Nexus Study Public Review Draft Report October 12, 2017 Detailed calculations of the information presented in Table 12 can be found in Appendix B of this Nexus Study. As shown in Table 12, the maximum justifiable CFF does not significantly impact the feasibility of new residential development in the County. Depending on jurisdiction, the maximum justifiable CFF has the potential to increase overall development impact fee burdens up to approximately 0.6 percentage points. In addition, this analysis shows that the increase in infrastructure burden caused by the maximum justifiable CFF is unlikely to make new single- family residential development infeasible. These results are highly influenced by factors that are described below: • Proximity to Tri -Valley Area Valuation: In general, this analysis shows a correlation between the proximity and access to the Tri -Valley area and Silicon Valley with higher home sales prices. Development areas closer to the Interstate 580 corridor, with greater access to job centers such as Livermore and the East Bay Area, demand a higher home sales price, as shown in Tracy and Mountain House. • New Home Pricing: This analysis is based on new home sales for homes constructed and sold since 2015 for each analyzed development area. -5 Home sales prices in the analyzed communities and throughout California have consistently been on the rise in the past 3 years. The results of the Infrastructure Cost Burden Feasibility test are reliant on new home sales prices. These outcomes are sensitive to market forces that may reduce or increase home sales prices. Countywide Facility Fee Comparison EPS compared the current and maximum justifiable CFF for single-family residential, multifamily residential, retail, office, and industrial development in the County to countywide facility fees charged by other counties in California. EPS's initial research included the counties listed below. • Alameda • Butte • Contra Costa • EI Dorado • Fresno • Kern • Merced • Monterey • Placer • Sacramento • Santa Clara • Solano • Sonoma • Stanislaus • Tulare • Ventura • Yolo 5 New home sales information was retrieved in December 2016 from The Gregory Group—a real estate research company that specializes in new home sales in California and other western US states—residential real estate Web sites such as Zillow and Redfin, and new home community sales Web sites. Economic & Planning Systems, Inc. 35 San Joaquin County Countywide Capital Facilities Fee Nexus Study Public Review Draft Report October 12, 2017 EPS only compared the existing and maximum justified CFF to other county capital/public facility fees for those counties that had a similar fee that is justified by a nexus study. Of all the counties shown above, only Butte, Stanislaus, and Solano Counties collect a countywide impact fee for public or capital facilities that is based on a supportable nexus study.6 Table 13 compares the existing and maximum justified CFF to development areas in Butte, Stanislaus and Solano counties. As shown in Table 13, the maximum justifiable CFF is well within range of competitive locations for residential, retail, office, and industrial development. Compared to the areas included in this analysis, the impacts of the maximum justifiable CFF may not significantly impact development siting in the County. 6 Fresno County temporarily suspended the collection of its Countywide Public Facilities Impact Fee for a three-year period from November 2012 to November 2015. Fresno County has passed year-to-year resolutions that have continued to suspend the collection of such fees, and therefore has been excluded from this comparison. Economic & Planning Systems, Inc. 36 =— , ...... .....=-,,ear Table 13 San Joaquin County Capital Facilities Development Impact Fee Nexus Study Countywide CFF Comparison - FY 2017-2018 DRAFT Page 1 of 2 San Joaquin County Butte County Stanislaus County Solano County Incorporated Cities Unincorporated Area Unincorp. EI Medio Fire Fee Area 1 Fee Area 2 Fee Area 3 Fee Area 1 Fee Area 2 Fee Area 3 Maximum Maximum County [1] District [2] Fee per Unit Current Justified Current Justified [3] [4] [5] [6] [7] [8] Single -Family Residential $2,049 $2,434 $2,576 $3,632 $4,966 $4,286 $9,429 $7,559 $7,631 $8,962 $9,316 $7,349 Multifamily Residential $1,756 $1,807 $2,210 $2,697 $3,804 $3,272 $6,203 $4,898 $4,949 $6,726 $7,424 $5,471 $10,000 $9,000 $8,000 $7,000 - $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 Incorp. Cities - Incorp. Cities - Unincorp. Area - Unincorp. Area - Unincorp. EI Medio Fire F Current Max. Justified Current Max. Justified County [1] District [2] San Joaquin San Joaquin San Joaquin San Joaquin Butte County Butte County County County County County ■ Single -Family Residential ■ Multifamily Residential Fee Area 1 Fee Area 2 Fee Area 3 Fee Area 1 Fee Area 2 Fee Area 3 [3] [4] [5] [6] [7] [8] Stanislaus Stanislaus Stanislaus Solano Solano Solano County County County County County County Footnotes on Page 2. 37 Prepared by EPS 9/6/2017 Footnotes on Page 2. 37 Prepared by EPS 9/6/2017 Table 13 San Joaquin County Capital Facilities Development Impact Fee Nexus Study Countywide CFF Comparison - FY 2017-2018 DRAFT Page 2 of 2 San Joaquin County Butte County Stanislaus County Solano County Incorporated Cities Unincorporated Area Unincorp. EI Medio Fire Fee Area 1 Fee Area 2 Fee Area 3 Fee Area 1 Fee Area 2 Fee Area 3 Maximum Maximum County [1] District [2] Fee per 1,000 Bldg. Sq. Ft. Current Justified Current Justified [3] [4] [5] [6] [7] [8] Retail [9] $470 $400 $590 $600 $2,130 $1,930 $3,663 $3,358 $3,358 $859 $983 $859 Office $410 $610 $510 $910 $2,530 $2,260 $4,598 $4,236 $4,236 $1,430 $1,637 $519 Industrial [10] $230 $110 $290 $170 $1,270 $1,180 $2,132 $2,086 $2,086 $181 $208 $181 $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 Incorp. Cities - Incorp. Cities - Unincorp. Area - Unincorp. Area - Unincorp. EI Medio Fire Fee Area 1 Fee Area 2 Fee Area 3 Fee Area 1 Fee Area 2 Fee Area 3 Current Max. Justified Current Max. Justified County [1] District [2] [3] [4] [5] [6] [7] [8] San Joaquin San Joaquin San Joaquin San Joaquin Butte County Butte County Stanislaus Stanislaus Stanislaus Solano Solano Solano County County County County County County County County County County ■ Retail ■ Office Industrial Source: San Joaquin County; Butte County; Stanislaus County; Solano County; EPS. [1] Butte County does not collect fees for countywide facilities from development within the five incorporated cities in the County. [2] Unincorporated Butte County development in EI Medio Fire District does not pay fees for Butte County Fire Department facilities, which is reflected by a lower PFF for this area. [3] Includes unincorporated area of Stanislaus County. [4] Includes cities of Turlock, Oakdale, Newman, and Riverbank. [5] Includes cities of Ceres, Hughson, Modesto, Patterson and Waterford. [6] Includes incorporated and unincorporated areas of Solano, excluding the City of Benicia and areas within the Dixon Public Library District, which includes City of Dixon. [7] Includes the unincorporated area of Solano County within Dixon Public Library District and City of Dixon. [8] Includes the City of Benicia. [9] Stanislaus County: Commercial Shopping Center rate. [10] Stanislaus County: Industrial Distribution rate. Solano County: Industrial Warehouse/Distribution rate. Prepared by EPS 9/6/2017 � �oew�n counH recn swuuKFvm+o-+nrexx,. vrepere ��� "cff comp" 38 APPENDICES: Appendix A: County Growth Detail Appendix B: Single -Family Residential —� Development Infrastructure Burden Cost Detail �� ' ' 1 , �� County Growth Detail Table A-1 County Growth by Community.........................................A-1 ■ DRAFT Table A-1 San Joaquin County Capital Facilities Development Impact Fee Nexus Study County Growth by Community Item 2015 2035 Growth Percentage Amount of Total Population Incorporated Cities Escalon 7,369 8,501 1,132 0.5% Lathrop 23,107 50,007 26,900 12.3% Lodi 65,543 82,626 17,083 7.8% Manteca 71,831 95,930 24,099 11.0% Ripon 15,359 20,777 5,418 2.5% Stockton 309,919 401,961 92,042 42.0% Tracy 88,707 118,130 29,423 13.4% Subtotal Incorporated Cities 581,835 777,932 196,097 89.5% Unincorporated Communities 146,809 169,903 23,094 10.5% Total 728,644 947,835 219,191 100.0% Employment Incorporated Cities Escalon 1,838 2,255 417 0.6% Lathrop 5,984 10,756 4,772 7.3% Lodi 23,605 29,858 6,253 9.6% Manteca 16,231 20,968 4,737 7.3% Ripon 3,653 4,802 1,149 1.8% Stockton 112,225 144,228 32,003 49.2% Tracy 21,702 28,328 6,626 10.2% Subtotal Incorporated Cities 185,238 241,195 55,957 86.0% Unincorporated Communities 49,621 58,723 9,102 14.0% Total 234,859 299,918 65,059 100.0% "unincorp_growth" Source: Eberhardt. Prepared by EPS 8/23/2017 A-1 �Wff , rol M ;3 Single -Family Residential Development Infrastructure Burden Cost Detail Table B-1 City/County/Agency Development Impact Fees (2 pages) .... B-1 (to, Table B-2 School Impact Fees ........................................................ B-3 Table B-3 Special Taxes and Assessments per Unit ............................ B-4 Table B-1 San Joaquin County Capital Facilities Development Impact Fee Nexus Study Single -Family Residential Infrastructure Cost Burden Comparison 2,000 Sq. Ft. Home, 450 Sq. Ft. Garage, 3 Bedrooms, 2 Bathrooms, 8.0 Units per Net Acre City/County/Agency Development Impact Fees [1] DRAFT Page 1 of 2 City/County/Agency Development Impact Fees per Unit: These are fees charged by the City, County, or Other Agency and do not include fees for a special plan area. Escalon Citywide Lathrop Stanford Crossing Lodi Citywide San Joaquin County Manteca Ripon Citywide Citywide Stockton Westside Project A Tracy Plan C Unincorporated Mountain House Current as of Sep -16 Sep -16 Sep -16 Sep -16 Sep -16 Sep -16 Sep -16 Sep -16 CITY/COUNTY/AGENCY FEES PER UNIT [2] Processing Fees per Unit Building Permit [3] $2,046 $1,652 $2,821 $1,084 $1,602 $2,050 $2,289 $2,824 Plan Check [3] $1,178 $1,156 $1,693 $171 $1,041 $861 $1,488 $1,836 Energy Plan Check $160 $413 $282 - - - - $424 Technology Surcharge - - - $158 $154 - $169 Seismic/Strong Motion $32 $32 $32 $32 $32 $32 $36 $32 California Building Standards Commission Fee $10 $10 $10 $10 $10 $10 $11 $10 Fire Review Fee [3] $762 $1,695 $1,128 $518 - $528 $370 $1,836 Disabled Access Plan Check - $248 $282 - - - - Other Building Permit or Processing Fees - - - $963 - $1,222 - $603 Total Processing Fees per Unit $4,188 $5,205 $89248 $29777 $2,843 $4,855 $4,194 $7,733 Development Impact Fees per Unit Sewer [4] $5,998 - $1,152 $7,370 $4,127 $5,486 $9,132 - Water $9,391 $6,854 $1,563 $7,600 $9,957 $11,759 $11,998 $796 Traffic $6,170 $3,597 $289 $2,723 $7,088 $13,803 $5,186 $8,678 Regional Traffic $3,223 $3,223 $3,223 $3,223 $3,223 $3,336 $3,223 $3,223 Transit - - - - - - - - Drainage [5] $3,804 $942 $2,638 $4,469 Parks - Neighborhood - - - - - - - - Parks - Citywide $11,569 $5,805 $1,584 $2,447 $14,174 $2,896 $7,557 $6,360 Library $525 - - - $471 $934 - $825 Fire - $620 $157 $540 $2,942 $808 - - Police $2,011 - $307 - $540 $612 $1,349 $1,979 In -Lieu Flood Protection - - - - - - - Habitat/Greenbelt Preservation [6] $976 - $976 $976 $976 $1,950 $1,950 $1,950 Agricultural Land Mitigation - $485 - $330 - $1,857 - $1,084 Affordable Housing - - - - - - - - Public Facilities/Capital Facilities $1,697 $3,236 $251 $4,433 $2,660 $981 $2,953 - Other General Fees/One-Time Taxes $2,562 - $369 $1,250 $9,935 $194 - $275 Countywide Fees [7] $2,049 $2,049 - $2,049 $2,049 $2,049 $2,049 $2,576 City of Lathrop CFF Creditable Costs [8] - ($4,532) - - - - - - Total Development Impact Fees per Unit $49,975 $21,337 $9,871 $33,883 $605781 $46,662 $49,866 $275746 TOTAL CITY/COUNTY/AGENCY FEES PER UNIT $54,162 $26,542 $165119 $36,660 $635624 $515518 $54,060 $355479 Prepared by EPS 12/7/2017 Table B-1 San Joaquin County Capital Facilities Development Impact Fee Nexus Study Single -Family Residential Infrastructure Cost Burden Comparison 2,000 Sq. Ft. Home, 450 Sq. Ft. Garage, 3 Bedrooms, 2 Bathrooms, 8.0 Units per Net Acre City/County/Agency Development Impact Fees [1] DRAFT Page 2 of 2 San Joaquin County City/County/Agency Development Impact Fees Escalon Lathrop Lodi Manteca Ripon Stockton Tracy per Unit: These are fees charged by the City, County, or Stanford Westside Other Agency and do not include fees for a special plan area. Citywide Crossing Citywide Citywide Citywide Project A Plan C Unincorporated Mountain House Plan Area Fees per Unit - - - - - - - - School District Fees per Unit $6,720 $23,479 $6,720 $6,720 $6,720 $6,720 $15,724 $5,954 Estimated Bond Debt (Infrastructure) per Unit - $57,168 - - - - - - Total Infrastructure Burden (City, County, Schools and Plan Area Fees, and Estimated Bond Debt) per Unit $60,882 $107,189 $22,839 $43,380 $70,344 $58,238 $69,784 $41,433 "sfr impact" [1] Amounts shown in this table are not rounded, therefore, totals may not sum as a result. [2] Processing fees exclude mechanical, electrical, plumbing and other similar review fees. [3] Escalon: Building permit, plan check, and fire review fees could not be obtained from City staff. This analysis assumes these fees to be the average of all other comparison areas. [4] Manteca: Assumes Sewer Zone 24. N Mountain House: Capital reimbursement to developer may be required based upon size of site acquired. Tracy: Assumes east conveyance. [5] Escalon: Assumes Drainage Area 11 -Future. Manteca: Assumes Storm Drainage Zone 36. Lodi: Drainage facilities in new growth area are to be funded by the developer. No fee is established in new growth areas. Mountain House: Capital reimbursement to developer may be required based upon size of site acquired. Tracy: Assumes South MacArthur Sub -Basin. [6] Lathrop: San Joaquin County Multi -Species Habitat Conservation and Open Space Plan (SJMSCP) Mitigation Fee has been paid. Escalon, Lodi, Manteca, Ripon: SJMSCP collected at Multi -Purpose Open Space rate ($7,807 per acre). Stockton, Tracy and Mountain House: SJMSCP collected at Agricultural rate ($15,596 per acre). All San Joaquin County Projects: Assumes "Natural" habitat type for San Joaquin County Multi -Species Habitat Conservation and Open Space Plan Development Fee. [7] The Countywide Fee is for FY 2017-18. All other fees in this table are for FY 2016-17. Lodi: The City of Lodi does not collect the County of San Joaquin CFF. [8] Reflects the allocation of City of Lathrop CFF creditable costs for facility improvements by land use, per the Central Lathrop Specific Plan (Stanford Crossing development area) Development Agreement, dated December 6, 2016. Prepared by EPS 12/7/2017 Table B-2 San Joaquin County Capital Facilities Development Impact Fee Nexus Study Single -Family Residential Infrastructure Cost Burden Comparison 21000 Sq. Ft. Home, 450 Sq. Ft. Garage, 3 Bedrooms, 2 Bathrooms, 8.0 Units per Net Acre School Impact Fees Estimated School Mitigation per Unit Current as of School District A. Annual School Mello -Roos CFD Taxes B. Present Value of School CFD Tax C. School Fee per Sq. Ft.: Level 1 Fees w Level 2 (or 3) SB50 Fee Mitigation Agreement D. Total School Fee Stirling Fee Level 2 (or 3) SB50 Fee Mitigation Agreement DRAFT $6,720 $6,720 $6,720 $6,720 $6,720 $6,720 - - - - - - - - $15,724 $5,954 E. Total School Mitigation (B+D) $6,720 $23,479 $6,720 $6,720 $6,720 $6,720 $15,724 $5,954 "sfr school" Prepared by EPS 812312017 San Joaquin County Escalon Lathrop Lodi Manteca Ripon Stockton Tracy Unincorporated Stanford Westside Mountain Citywide Crossing Citywide Citywide Citywide Project A Plan C House Sep -16 Sep -16 Sep -16 Sep -16 Sep -16 Sep -16 Sep -16 Sep -16 Escalon Manteca Lodi Manteca Ripon Lodi Tracy Lammersville USD USD USD USD USD USD USD USD $1,638 $16,759 $3.36 $3.36 $3.36 $3.36 $3.36 $3.36 $6,720 $6,720 $6,720 $6,720 $6,720 $6,720 - - - - - - - - $15,724 $5,954 E. Total School Mitigation (B+D) $6,720 $23,479 $6,720 $6,720 $6,720 $6,720 $15,724 $5,954 "sfr school" Prepared by EPS 812312017 DRAFT Table B-3 San Joaquin County Capital Facilities Development Impact Fee Nexus Study Single -Family Residential Infrastructure Cost Burden Comparison 21000 Sq. Ft. Home, 450 Sq. Ft. Garage, 3 Bedrooms, 2 Bathrooms, 8.0 Units per Net Acre Special Taxes and Assessments per Unit San Joaquin County Escalon Lathrop Lodi Manteca Ripon Stockton Tracy Unincorporated Special Taxes and Assessments per Unit Stanford Westside Mountain for Infrastructure [1] Citywide Crossing Citywide Citywide Citywide Project A Plan C House Current as of Annual Special Taxes and Assessments per Unit Infrastructure CFD $4,876 Infrastructure Assessment District - Total Annual Taxes and Assessments - $4,876 - - - - - - Estimated Bond Debt of Special Taxes and Assessments Infrastructure CFD $57,168 Infrastructure Assessment District - Total Estimated Bond Debt - $57,168 - - - - - - "sfr tax" Prepared by EPS 8/23/2017 ATTACHMENT 2 Comments/Responses from CFF Nexus Study Meeting —12/11/17 Attendees: City of Lathrop (Sandra Frias, Vanessa Portillo), City of Stockton (Ariana Ayala), BIA (John Beckman), SJ Partnership (Brad Ecker), Mountain House CSD (Ed Pattison, Sarah Ragsdale), CAO (Rod Kawano, Sandy Regalo, Les Tyler). Question/Comment: Countywide average Persons Per Unit (PPU) of 3.34 for residential -single family seems high. The group discussed how PPU probably differs between the different communities. For example, Mountain House Community Services District (MHCSD) uses a PPU figure of about 4 for its development fees. Response: PPU was not developed for each city/community as part of this study. Attached for reference (Attachment A) is Census info used by EPS to determine PPU. Question/Comment: MHCSD cost burden comparison amount is probably low as it doesn't include the various utility infrastructure costs. Response: Acknowledged. There will be differences between communities depending on specific infrastructure funding mechanisms that may not be reflected in the study. Question/Comment: How are other counties without facility fees able to pay for the growth - related portion of facilities? Response: Undetermined. Some of the counties that do not have such fees may not be anticipating significant growth, so facility projects could be based more on replacement needs than growth -related. As a result, they may be using County discretionary revenue or program - specific funds such as Federal, State, or grant funds. Question/Comment: MHCSD pays County departments to provide certain services. By charging projects within their jurisdiction the unincorporated surcharge, are the projects being "double - charged"? Response: Based on inquiries with the County departments (Public Works, Community Development), it appears the services provided to MHCSD are generally consistent with those provided to other unincorporated areas, although occasionally there may be specific requests that are handled on a case-by-case basis. Following is a summary breakdown of the unincorporated surcharge methodology described on attached slides 13-15 (Attachment B): 1) Unincorporated Surcharge Portion of Overall CFF = $8,233,386 (5.03% of $163,771,943) 2) Unincorporated Facilities Users = 23,086 (new residents x 10.536% unincorporated resident growth % = 21,106 + new employees x 0.25 x 13.990% unincorporated employee growth % _ 1,980) 3) Allocated Cost Per User = $357 ($8,233,386/23,086) 4) Maximum Allowable CFF calculation on Slide 15 shows PPU or Employee per 1,000 square feet multiplied by $357 or $89 ($357 x 0.25), plus 0.5% admin fee Question/Comment: Why do the maximum amounts reflect such a large change in the non- residential categories? The group discussed that it might be a result of differences in the employee space standard amounts between the initial nexus study and the current update. Response: Correct, the large differences in the non-residential amounts are primarily based on changes in the employee space standards that have occurred since the initial nexus study was completed. The employee per 1,000 square feet standards were based on EPS' experience and analysis of applicable rates for San Joaquin County. Question/Comment: In Appendix A-1, what proportion of the unincorporated growth reflects Mountain House vs the rest of the unincorporated area? Response: Unknown. A breakdown of unincorporated growth by community was not available for the study. Attachment A f isXinder B25032 I TENURE BY UNITS IN STRUCTURE Universe: Occupied housing units 2011-2015 American Community Survey 5 -Year Estimates Supporting documentation on code lists, subject definitions, data accuracy, and statistical testing can be found on the American Community Survey website in the Data and Documentation section. Sample size and data quality measures (including coverage rates, allocation rates, and response rates) can be found on the American Community Survey website in the Methodology section. Tell us what you think. Provide feedback to help make American Community Survey data more useful for you. Although the American Community Survey (ACS) produces population, demographic and housing unit estimates, it is the Census Bureau's Population Estimates Program that produces and disseminates the official estimates of the population for the nation, states, counties, cities and towns and estimates of housing units for states and counties. Data are based on a sample and are subject to sampling variability. The degree of uncertainty for an estimate arising from sampling variability is represented through the use of a margin of error. The value shown here is the 90 percent margin of error. The margin of error can be interpreted roughly as providing a 90 percent probability that the interval defined by the estimate minus the margin of error and the estimate plus the margin of error (the lower and upper confidence bounds) contains the true value. In addition to sampling variability, the ACS estimates are subject to nonsampling error (for a discussion of nonsampling variability, see Accuracy of the Data). The effect of nonsampling error is not represented in these tables. While the 2011-2015 American Community Survey (ACS) data generally reflect the February 2013 Office of Management and Budget (OMB) definitions of metropolitan and micropolitan statistical areas; in certain instances the names, codes, and boundaries of the 1 of 2 01/09/2018 San Joaquin County, California Estimate Margin of Error Total: 219,073 +/-1,110 Owner -occupied housing units: 124,087 +/-1,583 1, detached 114,860 +/-1,455 1, attached 3,041 +/-290 2 276 +/-149 3 or 4 412 +/-147 5 to 9 .371 +/-141 10 to 19 93 +/-36 20 to 49 71 +/-44 50 or more 187 +/-67 Mobile home 4,486 +/-402 Boat, RV, van, etc. 290 +/-92 Renter -occupied housing units: 94,986 +/-1,600 1, detached 47,382 +/-1,276 1, attached 8,254 +/-500 2 3,772 +/-404 3 or 4 8,318 +/-645 5 to 9 8,275 +/-601 10 to 19 5,582 +/-529 20 to 49 3,988 +/-384 50 or more 6,512 +/-463 Mobile home 2,827 +/-402 Boat, RV, van, etc. 76 +/-55 Data are based on a sample and are subject to sampling variability. The degree of uncertainty for an estimate arising from sampling variability is represented through the use of a margin of error. The value shown here is the 90 percent margin of error. The margin of error can be interpreted roughly as providing a 90 percent probability that the interval defined by the estimate minus the margin of error and the estimate plus the margin of error (the lower and upper confidence bounds) contains the true value. In addition to sampling variability, the ACS estimates are subject to nonsampling error (for a discussion of nonsampling variability, see Accuracy of the Data). The effect of nonsampling error is not represented in these tables. While the 2011-2015 American Community Survey (ACS) data generally reflect the February 2013 Office of Management and Budget (OMB) definitions of metropolitan and micropolitan statistical areas; in certain instances the names, codes, and boundaries of the 1 of 2 01/09/2018 principal cities shown in ACS tables may differ from the OMB definitions due to differences in the effective dates of the geographic entities. Estimates of urban and rural population, housing units, and characteristics reflect boundaries of urban areas defined based on Census 2010 data. As a result, data for urban and rural areas from the ACS do not necessarily reflect the results of ongoing urbanization. Source: U.S. Census Bureau, 2011-2015 American Community Survey 5 -Year Estimates Explanation of Symbols: 1. An'**' entry in the margin of error column indicates that either no sample observations or too few sample observations were available to compute a standard error and thus the margin of error. A statistical test is not appropriate. 2. An -' entry in the estimate column indicates that either no sample observations or too few sample observations were available to compute an estimate, or a ratio of medians cannot be calculated because one or both of the median estimates falls in the lowest interval or upper interval of an open-ended distribution. 3. An '-' following a median estimate means the median falls in the lowest interval of an open-ended distribution. 4. An '+' following a median estimate means the median falls in the upper interval of an open-ended distribution. 5. An'***' entry in the margin of error column indicates that the median falls in the lowest interval or upper interval of an open-ended distribution. A statistical test is not appropriate. 6. An '*****' entry in the margin of error column indicates that the estimate is controlled. A statistical test for sampling variability is not appropriate. 7. An 'N' entry in the estimate and margin of error columns indicates that data for this geographic area cannot be displayed because the number of sample cases is too small. 8. An '(X)' means that the estimate is not applicable or not available. i t ac-tFi*nder _ -�, i rh11SL B25033 I TOTAL POPULATION IN OCCUPIED HOUSING UNITS BY TENURE BY UNITS IN STRUCTURE Universe: Total population in occupied housing units 2011-2015 American Community Survey 5 -Year Estimates Supporting documentation on code lists, subject definitions, data accuracy, and statistical testing can be found on the American Community Survey website in the Data and Documentation section. Sample size and data quality measures (including coverage rates, allocation rates, and response rates) can be found on the American Community Survey website in the Methodology section. Tell us what you think. Provide feedback to help make American Community Survey data more useful for you. Although the American Community Survey (ACS) produces population, demographic and housing unit estimates, it is the Census Bureau's Population Estimates Program that produces and disseminates the official estimates of the population for the nation, states, counties, cities and towns and estimates of housing units for states and counties. Data are based on a sample and are subject to sampling variability. The degree of uncertainty for an estimate arising from sampling variability is represented through the use of a margin of error. The value shown here is the 90 percent margin of error. The margin of error can be interpreted roughly as providing a 90 percent probability that the interval defined by the estimate minus the margin of error and the estimate plus the margin of error (the lower and upper confidence bounds) contains the true value. In addition to sampling variability, the ACS estimates are subject to nonsampling error (for a discussion of nonsampling variability, see Accuracy of the Data). The effect of nonsampling error is not represented in these tables. While the 2011-2015 American Community Survey (ACS) data generally reflect the February 2013 Office of Management and Budget (OMB) definitions of metropolitan and micropolitan statistical areas; in certain instances the names, codes, and boundaries of the principal cities shown in ACS tables may differ from the OMB definitions due to differences in the effective dates of the geographic entities. Estimates of urban and rural population, housing units, and characteristics reflect boundaries of urban areas defined based on Census 2010 data. As a result, data for urban and rural areas from the ACS do not necessarily reflect the results of ongoing urbanization. Source: U.S. Census Bureau, 2011-2015 American Community Survey 5 -Year Estimates Explanation of Symbols: 1 of 2 01/09/2018 San Joaquin „County, Estimate California, Margin of Error I Total: - --------- - 693,001 +/-1,085 Owner occupied. 386,119,�+1-5,716 N i 1 detached or attached 372,083 +/-5,381 2 to 4 1,511 +/-574 5 or more 1,599 +/-582 Mobile home 10,462 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,�,,,�,,,�,,,,,,,,,,,,_„�.v�.�.,,,,,,,,,,�,,,,,�.,,,F,,,,,,,,,,_„_,,,,,,,,,�,,,,,,,.,,,� Boat, RV, �van, etc. 464,_+/-161 Renter occupied: 306,882 +/-5,738 } 1, detached or attached ,,,,,,,,,,.,------,,,,,,.,,..,.,..,,,.,,._, 206,711 +/-4,994 2 to 4 34,338 ! +/-2,536 5 or more 567485 +/-2,634 Mobile home9,162 i +/-1,399 Boat,„RV�„van, etc.,,,,,,,,,,.,,,,,,,,,,I,,,,,,,..-.,,,.,,,,,,,-----------,,.,,,,,,,,_,,,,,186,,..h+/-160 Data are based on a sample and are subject to sampling variability. The degree of uncertainty for an estimate arising from sampling variability is represented through the use of a margin of error. The value shown here is the 90 percent margin of error. The margin of error can be interpreted roughly as providing a 90 percent probability that the interval defined by the estimate minus the margin of error and the estimate plus the margin of error (the lower and upper confidence bounds) contains the true value. In addition to sampling variability, the ACS estimates are subject to nonsampling error (for a discussion of nonsampling variability, see Accuracy of the Data). The effect of nonsampling error is not represented in these tables. While the 2011-2015 American Community Survey (ACS) data generally reflect the February 2013 Office of Management and Budget (OMB) definitions of metropolitan and micropolitan statistical areas; in certain instances the names, codes, and boundaries of the principal cities shown in ACS tables may differ from the OMB definitions due to differences in the effective dates of the geographic entities. Estimates of urban and rural population, housing units, and characteristics reflect boundaries of urban areas defined based on Census 2010 data. As a result, data for urban and rural areas from the ACS do not necessarily reflect the results of ongoing urbanization. Source: U.S. Census Bureau, 2011-2015 American Community Survey 5 -Year Estimates Explanation of Symbols: 1 of 2 01/09/2018 1. An'**' entry in the margin of error column indicates that either no sample observations or too few sample observations were available to compute a standard error and thus the margin of error. A statistical test is not appropriate. 2. An -' entry in the estimate column indicates that either no sample observations or too few sample observations were available to compute an estimate, or a ratio of medians cannot be calculated because one or both of the median estimates falls in the lowest interval or upper interval of an open-ended distribution. 3. An '-' following a median estimate means the median falls in the lowest interval of an open-ended distribution. 4. An '+' following a median estimate means the median falls in the upper interval of an open-ended distribution. 5. An***' entry in the margin of error column indicates that the median falls in the lowest interval or upper interval of an open-ended distribution. A statistical test is not appropriate. 6. An'*****' entry in the margin of error column indicates that the estimate is controlled. A statistical test for sampling variability is not appropriate. 7. An 'N' entry in the estimate and margin of error columns indicates that data for this geographic area cannot be displayed because the number of sample cases is too small. 8. An '(X)' means that the estimate is not applicable or not available. 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(R to N N co U O' Q z o � Z U Board of Supervisors County Administration Building Stockton, CA Dear Board Members: 9:00 a.m. — Public Hearing to Consider Adjustment of the County Facilities Fee Schedule for Fiscal Year 2022-2023 and Accept Report for Fiscal Year 2021-2022 RECOMMENDATION It is recommended that the Board of Supervisors: 1. Conduct a public hearing to consider the annual adjustment of the County Facilities Fee (CFF) schedule for fiscal year 2022-2023; and 2. Accept and file the CFF Program Annual Report for fiscal year 2021-2022. REASON FOR RECOMMENDATION On June 14, 2005, the Board of Supervisors adopted the CFF Program (Ordinance No. 4252 and Resolution No. R-05-314) in conformance with Government Code Section 66000 et seq. The primary purpose of the CFF is to "finance region -serving capital facilities located throughout the County that are used by the residents and businesses within each city as well as the unincorporated area and to assure that new development pays its proportional share for these improvements." In addition, in the unincorporated County, a fee surcharge is collected that will "contribute to the development of vital County facilities serving the needs of the unincorporated area only." Fees collected from the CFF Program can be used to offset only the growth -related portion of the cost of County regional and unincorporated area public facilities. Some of the examples of capital facilities that could fall into the broad categories include: 1) Regional Projects — Expansion of Jail Facilities, Probation/Juvenile Hall Expansion, Law and Justice Facilities, General Government Facilities (Administration Building); and 2) Unincorporated Projects — Sheriff's Office expansion, including Animal Services, Public Works expansion, and Community Development Department expansion. CFF Program fees are collected in conjunction with the issuance of a building permit by the County and those cities with current Master Annexation Agreements listed in the following table along with the corresponding agreement expiration date. The City of Lodi ceased collection of the fees in June 2012, with the expiration of the Master Annexation Agreement. Master Annexation Agreements (City/Expiration Date) Escalon July 2026 Ripon October 2036 Lathrop July 2029 Stockton July 2025 Manteca December 2028 Tracy July 2026 CFF Schedule - Annual Adjustment The Countywide collection of CFF Program fees began on August 15, 2005. On March 20, 2018, the Board of Supervisors approved the CFF Nexus Study Update documenting the relationship between new development and the need for additional or larger County facilities and authorized implementation of a revised fee schedule, effective April 2, 2018 (B-18-179). Although CFF amounts automatically adjust for inflation annually based on the California Construction Cost Index (CCCI), the Nexus Study had not been updated since the fees were originally adopted in 2005. Annual inflationary adjustments are to ensure CFF fees collected are adequate to offset the costs of future growth -related facility needs. The building cost index produced by Engineering News Record provides the basis for the CCCI and reflects cost trends for construction trade labor and materials in the California market. Over the prior year, the CCCI changed from 7712 to 8604, an 11.57% increase. This is a significant increase, especially when compared to the average annual increase for the preceding five-year period of 4.38% and is reflective of costs impacted by the increase in demand for construction services and supply chain disruptions related to the 2019 Novel Coronavirus (COVID-19) pandemic. The recommended adjustments to the fiscal year 2022-2023 CFF schedule are shown in the following table. Regional and Unincorporated Fees Residential Single Family Multi Family Non- Residential Retail Commercial Commercial Office Industrial Count CFF - Regional CFF - Unincorporated County Total Current Adjusted Current Adjusted Current Adjusted Per Unit Per Unit Per Unit $2,911 $3,249 $1,431 $1,597 $4,342 $4,846 $2,158 $2,408 $1,063 $1,186 $3,221 $3,594 Per SgFt Per SgFt Per SgFt $0.48 $0.54 $0.22 $0.24 $0.70 $0.78 $0.72 $0.80 $0.36 $0.40 $1.08 $1.20 $0.13 $0.15 $0.07 $0.08 $0.20 $0.23 CFF Program - Annual Report A specific requirement of the enabling legislation is the publication and review of an annual report. Pursuant to Government Code Section 66006, the CFF Program Annual Report for 2021-2022 was filed with the Clerk of the Board for public review on October 3, 2022, at least 15 days prior to today's Board meeting, as required (attached). Revenues and interest posted to the CFF Program fund during the current reporting period July 1, 2021 through June 30, 2022 totaled $9,313,085.18 and $191,822, respectively. In 2021-2022, there was an inter -fund transfer totaling $1,017,466 for the portion of debt service payments related to growth for the County Administration Building project allocated to the CFF Program that will continue through 2032. The net increase in fund balance for the current reporting period was $8,487,441. The table below displays total revenues and total expenses for the CFF Program from 2005-2006 through 2021-2022. County Facilities Fee Program Revenues and Expenses Fiscal Fee Total Expenses/ Revenues Over Year Collection Interest Revenues Transfers Expenses 2005-06 $3,939,717 $31,218 $3,970,935 $0 $3,970,935 2006-07 4,912,044 261,952 5,173,996 0 5,173,996 2007-08 3,883,512 503,117 4,386,629 (1,322,675) 3,063,954 2008-09 2,247,743 312,228 2,559,971 (1,413,099) 1,146,872 2009-10 1,468,720 104,839 1,573,559 (1,362,156) 211,403 2010-11 1,678,134 81,589 1,759,723 (1,413,099) 346,624 2011-12 1,669,505 51,058 1,720,563 (1,434,805) 285,758 2012-13 2,812,770 36,993 2,849,763 (1,413,099) 1,436,664 2013-14 2,017,391 40,488 2,057,879 (1,413,099) 644,780 2014-15 2,947,019 46,888 2,993,907 (1,216,324) 1,777,583 2015-16 3,827,723 92,213 3,919,936 (1,412,577) 2,507,359 2016-17 4,822,748 163,048 4,985,796 (1,402,307) 3,583,488 2017-18 7,931,465 330,754 8,262,219 (1,467,695) 6,794,524 2018-19 8,183,659 632,654 8,816,313 (1,411,383) 7,404,930 2019-20 8,132,776 806,500 8,939,276 (1,715,043) 7,224,233 2020-21 10,529,768 360,376 10,890,144 (1,624,869) 9,265,275 2021-22 9,313,085 191,822 9,504,907 (1,017,466) 8,487,441 Total $80,317,779 $4,047,737 $84,365,516 ($21,039,696) $63,325,820 The fund balance as of June 30, 2022 was $63,325,820. The Annual Report includes a priority project list as of fiscal year 2022-2023. FISCAL IMPACT Annual inflationary adjustments to the CFF fee schedule ensure CFF revenues collected are sufficient to offset the growth -related facility needs of the County. The acceptance of the 2021-2022 Annual Report has no fiscal impact beyond staff time for preparation of this report. Since the inception of the Program in 2005-2006, revenues, interest, and expenditures/transfers through 2021-2022, totaling $84,365,516, $4,047,737, and $21,039,696, respectively, have been posted to the CFF fund. ACTION TO BE TAKEN FOLLOWING APPROVAL In accordance with Government Code Section 66019, the fee increase shall be effective no earlier than 60 days following the final action of the Board of Supervisors. The County Administrator's Office will forward copies of the fiscal year 2021-2022 CFF Annual Report and the adjusted fiscal year 2022-2023 CFF fee schedule, to become effective January 1, 2023, to each of the cities in San Joaquin County and the Building Industry Association (BIA) of the Greater Valley. Very truly yours, Jerome C. Wilverding County Administrator JW:AB Attachment: County Facilities Fee Program Annual Report for Fiscal Year 2021-2022 c: Auditor -Controller Community Development County Counsel General Services City Managers BIA of the Greater Valley Board Clerk for Agenda 10/18/22 BL10-03 BEFORE THE BOARD OF SUPERVISORS OF THE COUNTY OF SAN JOAQUIN STATE OF CALIFORNIA RESOLUTION R-22-186 PUBLIC HEARING TO CONSIDER ADJUSTMENT OF THE COUNTY FACILITIES FEE SCHEDULE EFFECTIVE JANUARY 1, 2023 WHEREAS, on June 14, 2005, the Board of Supervisors adopted the County Facilities Fee (CFF) Program (Ordinance No. 4252 and Resolution No. R-05-314) in conformance with Government Code Section 66000 et seq; WHEREAS, the primary purpose of the CFF is to "finance region -serving capital facilities located throughout the County that are used by the residents and businesses within each city as well as the unincorporated area and to assure that new development pays its proportional share for these improvements." In addition, in the unincorporated County, a fee surcharge is collected that will "contribute to the development of vital County facilities serving the needs of the unincorporated area only;" WHEREAS, fees collected from the CFF Program can be used to offset only the growth - related portion of the cost of County regional and unincorporated area public facilities; WHEREAS, on March 20, 2018, the Board of Supervisors approved the CFF Nexus Study Update documenting the relationship between new development and the need for additional or larger County facilities and authorized implementation of a revised fee schedule, effective April 2, 2018 (B-18-179); WHEREAS, pursuant to the Ordinance, the CFF fee schedule is to be automatically adjusted for inflation annually, based upon changes to the California Construction Cost Index; WHEREAS, Government Code Section 66018 requires local agencies to hold a public hearing, at which oral or written presentations can be made, as part of a regularly scheduled meeting prior to approving an increase in an existing fee, and to publish notice of the time and place of the meeting, in accordance with Government Code Section 6062a; and WHEREAS, on October 18, 2022, the Board of Supervisors conducted a public hearing to consider the annual adjustment of the CFF fee schedule, effective January 1, 2023; NOW, THEREFORE, BE IT RESOLVED that the Board of Supervisors of the County of San Joaquin hereby authorizes implementation of a revised CFF fee schedule, effective January 1, 2023, as follows: Resolution Template 12/2020 CFF Categories Regional (incorporated) Unincorporated Surcharge Unincorporated Residential Single Family per unit $3,249 + $1,597 = $4,846 Multi -Family (per unit $2,408 + $1,186 = $3,594 Non -Residential Retail/Commercial(per square foot $0.54 + $0.24 = $0.78 Office(per square foot $0.80 + $0.40 = $1.20 Industrial/Other(per square foot $0.15 + $0.08 = $0.23 PASSED AND ADOPTED October 18, 2022 , by the following vote of the Board of Supervisors, to wit: AYES: Villapudua, Miller, Patti, Rickman, Winn NOES: None ABSENT: None ABSTAIN: None ATTEST: RACHEL DeBORD Clerk of the Board of Supervisors County of San Joaquin Pqu�M State of California = i Q: By - che"1 D B rd Resolution Template 12/2020 Charles Winn CHARLES WINN Chairman, Board of Supervisors County of San Joaquin State of California RESOLUTION NO. 2023-20 A RESOLUTION OF THE LODI CITY COUNCIL ADOPTING AND IMPLEMENTING THE COLLECTION OF SAN JOAQUIN COUNTY FACILITIES FEES WHEREAS, in 2005, the City Council of the City of Lodi adopted Chapter 15.66 of the Lodi Municipal Code ("LMC"), which established the authority for collection of County Facilities Fees for new development pursuant to the San Joaquin County ("County") Facilities Fee ("CFF") Schedule within the City of Lodi; and WHEREAS, on June 14, 2005, the San Joaquin County Board of Supervisors adopted the CFF Program in conformance with Government Code Section 66000 et seq.; and WHEREAS, the purpose of the CFF Program is to "finance region -serving capital facilities located throughout the County that are used by the residents and businesses within each city as well as the unincorporated area and to assure that new development pays its proportional share for these improvements;" and WHEREAS, fees collected from the CFF Program can be used to offset only the growth - related portion of the cost of County regional and unincorporated area public facilities; and WHEREAS, on March 20, 2018, the County Board of Supervisors approved the CFF Nexus Study Update documenting the relationship between new development and the need for additional or larger County facilities and authorized implementation of a revised fee schedule, effective April 2, 2018; and WHEREAS, on October 18, 2022, the County Board of Supervisors reviewed and approved the County's 2021-2022 CFF Annual Report and adjusted the 2022-2023 CFF fee schedule, to become effective January 1, 2023; and WHEREAS, the City's authority to collect the CFF granted in LMC Chapter 15.66 was repealed when the prior Master Annexation Agreement between the City and the County expired in June 2012; and WHEREAS, because of the recent update to the City's Municipal Service Review ("MSR") and Sphere of Influence ("SOI"), the City has renegotiated an agreement with the County regarding annexations which was approved on January 4, 2023, and these actions led the City to adopt an ordinance on January 18, 2023, reenacting LMC Chapter 15.66 to reestablish the collection of CFF fees; and WHEREAS, pursuant to the provisions of the reenacted LMC Chapter 15.66, the City will adopt the County's CFF Program and the corresponding fee schedule, which is to be automatically adjusted for inflation annually, based upon changes to the California Construction Cost Index; and WHEREAS, Government Code Section 66018 requires local agencies to hold a public hearing, at which oral or written presentations can be made, as part of a regularly -scheduled meeting prior to approving an increase in an existing fee, and to publish notice of the time and place of the meeting, in accordance with Government Code Section 6062a; and WHEREAS, on January 18, 2023, the City Council of the City of Lodi conducted a public hearing to consider the adoption and implementation of the County CFF Nexus Study and the corresponding 2022-2023 CFF fee schedule, with an effective date of January 1, 2023; and WHEREAS, the CFF Program fees listed in the 2022-2023 fee schedule are divided into residential and non-residential categories, as shown in the table below: CFF Categories Incorporated Areas Residential Single Family (per unit $3,249 Multi -Family er unit $2,408 Non -Residential Retail/Commercial(per s uare foot) $0.54 Office(per square foot Industrial/Other(per square foot) $0.80 $0.15 WHEREAS, the CFF Program and the proposed 2022-2023 fee schedule were available for public inspection and review in the office of the City Clerk for more than ten days prior to the date of this Public Hearing. NOW, THEREFORE, BE IT RESOLVED AND DETERMINED by the City Council of the City of Lodi as follows: 1. The City has the authority to collect a capital facility fee pursuant to California Government Code Sections 66000 et. seq. in accordance with City ordinance adoption of the reenacted Lodi Municipal Code Chapter 15.66, once it becomes effective. 2. The City provided the statutory notice, held a public hearing, and maintained documentation of the proposed CFF Program and the 2022-2023 fee schedule for public inspection and review in the office of the City Clerk for more than ten days prior to the date of this Public Hearing. 3. The City Council hereby declares that the purposes and uses of the CFF Program fees, and the determination that there is reasonable relationship between the fees' uses and the type of region -serving capital facilities in which the fees are imposed, are all established in the San Joaquin County CFF Nexus Study, the corresponding annual review, and the 2022-2023 CFF fee schedule update effective January 1, 2023, and remain valid, and the City Council therefore finds and adopts such determinations. 4. The Lodi City Council hereby approves and adopts the proposed San Joaquin County Facilities 2022-2023 Fee Schedule. 5. This Resolution and the findings and Fees adopted herein shall take effect concurrently with the effective date of the reenacted Lodi Municipal Code Chapter 15.66, which shall occur thirty (30) days after adoption of Ordinance 2014. Dated: January 18, 2023 ------------------------------------------------------------------------ ------------------------------------------------------------------------ I hereby certify that Resolution No. 2023-20 was passed and adopted by the City Council of the City of Lodi in a regular meeting held January 18, 2023, by the following vote: AYES: COUNCIL MEMBERS — Craig, Khan, and Nakanishi NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — Bregman and Mayor Hothi ABSTAIN: COUNCIL MEMBERS — None GUkd�. OLIVIA NASHED City Clerk 2023-20 Presentation to City Council to Adopt and Implement Collection of San Joaquin County Facilities Fees January 18, 2023 San Joaquin County Facilities Fees (CFF) Collection • 2005: City began collection of CFF for County. • 2012: Master Annexation Agreement between City and County expired. • 2012: City ceased collection of CFF due to Municipal Code Section 15.66.160 Sunset Provision. • 2022: City's Municipal Service Review (MSR) and Sphere of Influence (SOI) updated; County requests City reestablish collection of CFF. • 2023: SJC new CFF schedule effective. • January 4, 2023: Lodi City Council waived first reading of Municipal Code Chapter 15.66 approving collection of CFF. • January 18, 2023: Lodi City Council heard second reading of Municipal Code Chapter 15.66 approving collection of CFF. San Joaquin County Facilities Fees (CFF) • Purpose: to "finance region -serving capital facilities located throughout the County that are used by the residents and businesses within each city as well as the unincorporated area and to assure that new development pays its proportional share for these improvements." • Use: fees collected through the CFF Program can be used to offset only the growth -related portion of the cost of County regional and unincorporated area public facilities. 2023 CFF Fee Schedule Adopted by Board of Supervisors on October 18, 2022 CFF Categories g Incorporated Areas Residential Single Family (per unit) $3,249 Multi -Family (per unit) $27408 Non -Residential Retail/Commercial (per square foot) $0.54 Office (per square foot) $0.80 Industrial/Other (per square foot) $0.15 *Adjusted annually for inflation Proposed Resolution: Staff recommends City Council resolve to adopt San Joaquin County's County Facilities Fees findings and the 2022-2023 County Facilities Fees schedule for future development within the City of Lodi and approve City collection of these County Facilities Fees as authorized under Lodi Municipal Code Chapter 15.66. End presentation. Please immediately confirm receipt of this fax by calling 333-6702 CITY OF LODI P. O. BOX 3006 LODI, CALIFORNIA 95241-1910 ADVERTISING INSTRUCTIONS SUBJECT: NOTICE OF PUBLIC HEARING TO CONSIDER RESOLUTION REVISING GROWTH MANAGEMENT PROGRAM PROCEDURES TO ALLOW ISSUING GROWTH ALLOCATIONS FOR PROJECTS ON LAND NOT YET ANNEXED PUBLISH DATE: SATURDAY, JANUARY 7, 2023 TEAR SHEETS WANTED: One (1) please SEND AFFIDAVIT AND BILL TO: OLIVIA NASHED, CITY CLERK LNS ACCT. #5100152 City of Lodi P.O. Box 3006 Lodi, CA 95241-1910 DATED: THURSDAY, JANUARY 5, 2023 ORDERED BY: OLIVIA NASHED CITY CLERK PAMELA M, FARRIS V ASSISTANT CITY CLERK KAYLEE CLAYTON ADMINISTRATIVE CLERK Emailed to the Sentinel at legals@lodinews.com aton 1 date) (pages) forms\advins.doc yfOF G oro]""11 C DECLARATION OF POSTING NOTICE OF PUBLIC HEARING TO CONSIDER RESOLUTION REVISING GROWTH MANAGEMENT PROGRAM PROCEDURES TO ALLOW ISSUING GROWTH ALLOCATIONS FOR PROJECTS ON LAND NOT YET ANNEXED On Thursday, January 5, 2023, in the City of Lodi, San Joaquin County, California, a copy of a Notice of Public Hearing to consider resolution revising Growth Management Program procedures to allow issuing Growth Allocations for projects on land not yet annexed (attached hereto, marked Exhibit "A") was posted at the following locations: Lodi City Clerk's Office Lodi City Hall Lobby Lodi Carnegie Forum WorkNet Office I declare under penalty of perjury that the foregoing is true and correct. Executed on January 5, 2023, at Lodi, California. PAMELA M. FARRIS ASSISTANT CITY CLERK ORDERED BY: OLIVIA NASHED CITY CLERK - Lk/111KAYL E LAYTON ADMINISTRATIVE CLERK \\cvcfilv0I\administration$\Administration\CLERK\Agenda\City Council\Public Hearings\AFFADAVITS\DECPOST 1. DOC CITY OF LODI Carnegie Forum 305 West Pine Street, Lodi NOTICE OF PUBLIC HEARING Date: January 18, 2023 Time: 7:00 p.m. For information regarding this notice please contact: Olivia Nashed City Clerk Telephone: (209) 333-6702 NOTICE OF PUBLIC HEARING Ef'-1 - I--- - - NOTICE IS HEREBY GIVEN that on Wednesday, January 18, 2023, at the hour of 7:00 p.m., or as soon thereafter as the matter may be heard, the City Council will conduct a public hearing at the Carnegie Forum, 305 West Pine Street, Lodi, to consider the following item: a) Resolution adopting and implementing collection of San Joaquin County Facilities Fees. Information regarding this item may be obtained in the Community Development Department, 221 West Pine Street, Lodi, (209) 333-6711. All interested persons are invited to present their views and comments on this matter. Written statements may be filed with the City Clerk, City Hall, 221 West Pine Street, 2n' Floor, Lodi, 95240, at any time prior to the hearing scheduled herein, and oral statements may be made at said hearing. Comments may be made in person or via the following link: https://LisOBweb.zoom, uslj18201337706617pwd=N2xoOXE2bmVJUFg5ODFZRkVH UIJ52z09 If you challenge the subject matter in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice or in written correspondence delivered to the City Clerk, 221 West Pine Street, at or prior to the close of the public hearing. By Order of the Lodi City Council: Olivia Nashed City Clerk Dated: January 4, 2023 Approved as to form e ).7Magdich City Attorney AVISO: Para obtener ayuda interpretativa con esta noticia, por favor Ilame a la oficina de la Secretaria Municipal, a las (209) 333-6702. nolcdd_CounlyFaciI!liesFeesCollection 12/29/22