Development Impact Fee Study 2000-03-30 DMG-MAXIMUS I
CITY OF
ENCINITA5
IMPACT Fff STUDY
FINAL DRAFT
MARCH 30, 2000
�w
DMG- NIAXIMUS
- - - - 4320 Auburn Boulevard, Suite 2000
Sacramento, CA 95841
916.485.8102
I �-3
City of Encinitas - Impact fee Study Table of Contents
TABLE OF CONTFNT5
Executive Summary
Organization of the Report S -1
Facilities Addressed in This Report S -1
Development Data S -1
Impact Fee Analysis S -2
Summary of Impact Fees S -3
Implementation S -5
Recovery of Study Cost S -5
Section I - Introduction
Legal Framework 1 -1
Impact Fee Calculation Methodology 1 -5
Facilities Addressed in This Study 1-8
Section 2 - Development Data
Background and Setting 2 -1
Study Area and Time Frame 2 -2
Land Use Categories 2 -2
Units of Development 2 -4
Demand Variables and Impact Factors 2-4
Development Data 2 -7
Section 3 - Street System
Service Area and Time Frame 3 -1
Demand Variable 3 -1
Level of Service 3 -2
Facility Needs 3 -3
Impact Fee Calculation 3 -4
i
P 3 -6
Projected Revenue
Section 4 - Parks and Recreation
Service Area and Time Frame 4 -1
Demand, Variable 4 -1
Level of Service 4 -1
Facility Needs
4 -3
li Impact Fee Calculations
4 -4
Projected Revenue 4 -10
Implementation of In -lieu Fees 4 -13
March 30, 2000 DMG -M"MUS Page i
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City of Encinitas - Impact fee Study Table of Contents
TABLE Of CONTENTS (Continued)
Section 5 - implementation
Adoption 5 -1
Administration 5 -1
Training and Public Information 5 -7
Recovery of Study Cost 5 -7
March 30, 2000
DMG- AIIWMUS Page il
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City of Encinitas - impact fee Study
Executive Summary
EXECUTIVE SUMMARY
The City of Encinitas retained DMG - MAXIMUS to prepar s t hi s
and stu tocalcul analy
e
the impacts of development on certain capita
development impact fees based on that analysis. This report documents the data,
methodology, and results of that impact fee study. The methods used to calculate
impact fees in this study are intended to satisfy all legal requirements governing
such fees, including provisions of the U. S. Constitution, the California
Constitution, and the California Mitigation Fee Act (Government Code Sections
66000 et seq.).
ORGANIZATION OF THE REPORT
Section 1 of this report provides an overview of impact fees. It discusses legal
requirements for establishing and imposing such fees as well as methods used in
this study to calculate the fees. Section 2 contains information on existing and
planned land uses and development in Encinitas, and organizes that data in a form
that can be used in the impact fee analysis. Sections 3 and 4 analyze the impacts of
development on specific types of facilities. Those sections identify facilities eligible
4 W for im act fee funding and calculate recommended impact fees for each type of
p
facility. Section 5 discusses procedures and legal requirements for implementing an
impact fee program under California law. It addresses adoption, administration,
and training.
FACILITIES ADDRESSED IN THIS REPORT
The types of public facilities covered in this report are listed below, along with the
report sections in which they are addressed.
■ Street System (Section 3)
■ Parks and Recreation (Section 4)
DEVELOPMENT DATA
d in this stud are intended to represent all
Forecasts of future development use Y
additional development in Encinitas from not necessary � of this study
City under the current General Plan. it is Y for purposes o
to forecast the time at which buildout will occur. Information on existing
development and development potential in the study area was provided by the
Encinitas Department of Community Development and the San Diego Association
March 30, 2000
DMG- Al"MUS Page S -1
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4L City of Encinitas - impact fee Study Executive Summary
of Governme nts ( SANDAG and is based on the Encinitas General Plan as
),
amended in 1998. Other data on development and demographics were taken
from the 1990 Census and California Department of Finance Population estimates.
As shown in Section 2 of this report, the population of Encinitas is projected to
increase by 17% from the current level of about 61,000 to approximately 73,000
at buildout. Developed acreage will increase by 24 %, and traffic generated in the
City is projected to increase by 16 %. This report addresses improvements needed
to serve that future development.
IMPACT Fff ANALY5I5
Each type of facility addressed in this report was analyzed individually. In each
case, the relationship between development and the need for additional facilities
was quantified in a way that allows impact fees to be calculated for various
categories of development. For each type of capital facility, a specific, measurable
attribute of development was used to represent the impact of development on the
need for facilities. For example, in the case of street system improvements, the
number of additional peak hour vehicle trips generated by new development is
used to measure the impact of that development. Impact fees calculated in this
study are shown in summary tables on page S -4. Those fees cover only capital
�r costs. Impact fees may not include costs for maintenance or operations. The
following paragraphs briefly discuss factors considered in the aalysis of each type
of facility
Section 3 — Street System Improvements. The impact fees calculated in Section 3
are based on the unfunded portion of the cost of certain street improvements that
are needed to serve future development. The City's Engineering Services
Department has estimated that $101 million in improvements are needed to
complete the primary circulation system identified in the Circulation Element of
the General Plan. Of that total, $49.8 million in improvements are attributed to
traffic that will be generated by future development. Funds from federal, state and
Transnet sources are expected to cover about $32.2 million of those costs, leaving
$17.65 million to be funded by impact fees. Specific improvements attributed to
future development are listed in Section 3. The relationship between development
and the need for additional street capacity is defined in this study as a function of
peak hour trips (PHT) generated by new development. Impact fees calculated in
this report for street system improvements are shown in the summary tables on
page e S -4.
Section
4 - Parks and Recreation. This section addresses impact fees for park
active arks and
� ents and land ac p
s trail im rovem 9
i , ac quisition for both
rovem P
imp ,
pass ive o p en
s
Most of the impact fees calculated in Section 4 are based on
spa ce. P
March 30, 2000 DMG -M"MUS Page 5-2
151
i
City of Encinitas - impact Fee Study Executive Summary
le, since the City currently has 1.9
of service. For exam
the City's existing level P
acres of developed park land per 1,000 residents, the impact fees for park
improvements are based on the cost to provide 1.9 acres of park improvements for
each 1,000 residents added by new development. A similar approach was used to
calculate impact fees for trail improvements, open space land acquisition, and park
land acquisition for non - subdivision projects.
Fees in lieu of park land dedication for new subdivisions were calculated on a
different basis. The Quimby Act (Gov't. Code 66477) allows the City to charge in-
lieu fees based on a population ratio of 3.0 acres per 1,000 residents, regardless of
the existing level of service. That standard was used to calculate the in -lieu fees
which may be charged only if a subdivider does not actually dedicate park land to
satisfy the requirement.
Impact fees calculated in Section 4 are projected to produce approximately $2.83
million for park improvements and $99 thousand for trail improvements through
buildout. Impact fees and in -lieu fees for park land acquisition could produce $9.8
million and fees for open space acquisition could produce revenue of $911
thousand. Total proposed fees for parks and recreation facilities are shown in
summary tables on page S -4.
OW SUMMARY Of IMPACT FEES
The total cost of future facilities allocated to future development in this study
amounts to approximately $32 million in current dollars. Tables S -1 and S -2, on
the following page, summarize the impact fees calculated in later sections of this
report. Fees are shown for one unit of development, by facility type and land use
category. In order to calculate equitable fees, a share of the cost for street
improvements identified in this study was allocated to public land uses. Those
costs cannot be collected as impact fees, and total revenue from impact fees
calculated in this report is proj 3 0.3 million.
e approxim $
ro'ecte
dtob Y
� pp
Tables S -1 S -2, and S -3 on the following page show impact fees by development
category and facility type. Table S -1 shows fees for residential development
involving a subdivision. Table S -2 shows fees for residential development non
involving a new subdivision. Table S -3 shows fees for non - residential
development.
1 development es, as shown in the summary tables, are for one
Fees for residentia p types,
dwelling unit. Fees shown for commercial,. industrial, _ and office development
types are for one thousand gross square feet (KSF) of building area.
March 30, 2000 DMG -M"MUS page 5-3
City of Encinitas - Impact Fee Study Executive Summary
Table S -1
Impact Fees Per Unit of Development - Residential Development (Subdivisions)
Development Dev Street System Parks & Rec Total
Type Units 1 Impact Fees Impact Fees Impact Fees
Residential (0.125 -0.25 du /ac) DU 2,670.97 3,568.03 6,239.00
Residential (0.25 -0.5 du /ac) DU 2,670.97 3,568.03 6,239.00
Residential (0.5 -1.0 du /ac) DU 2,670.97 3,568.03 6,239.00
Residential (1.0 -2.0 du /ac) DU 2,670.97 3,568.03 6,239.00
Residential (2.0 -3.0 du /ac) DU 2,225.81 3,568.03 5,793.84
Residential (3.0 -5.0 du /ac) DU 2,225.81 3,568.03 5,793.84
Residential (5.0 -8.0 du /ac) DU 2,225.81 3,326.13 5,551.94
Residential (8.0 -11.0 du /ac) DU 2,225.81 2,902.80 5,128.61
Residential (11.0 -15.0 du/ac) DU 1,780.65 2,660.90 4,441.55
Residential (15.0 -25.0 du /ac) DU 1,201.94 2,660.90 3,862.84
Mobile Home Park DU 1,224.20 1,935.20 3,159.40
1 DU = dwelling unit.
Table S -2
Impact Fees Per Unit of Development - Residential Development (Existing Parcels)
Development Dev Street System Parks & Rec Total
Type Units I---y 2,670.99 mpact Fees Impact Fees Impact Fees
#4& Residential (0.125 -0.25 du/ac) DU 7 2,727.28 5,398.25
Residential (0.25 -0.5 du /ac) DU 2,670.97 2,727.28 5,398.25
Residential (0.5 -1.0 du /ac) DU 2,670.97 2,727.28 5,398.25
Residential (1.0 -2.0 du /ac) DU 2,670.97 2,727.28 5,398.25
Residential (2.0 -3.0 du /ac) DU 2,225.81 2,727.28 4,953.09
Residential (3.0 -5.0 du /ac) DU 2,225.81 2,727.28 4,953.09
Residential (5.0 -8.0 du /ac) DU 2,225.81 2,542.38 4,768.19
Residential (8.0 -11.0 du /ac) DU 2,225.81 2,218.80 4,444.61
Residential (11.0 -15.0 du /ac) DU 1,780.65 2,033.90 3,814.55
Residential (15.0 -25.0 du /ac) DU 1,201.94 2,033.90 3,235.84
Mobile Home Park DU 1,224.20 1,479.20 2,703.40
1 DU =dwelling unit.
Table S -3
Impact Fees Per Unit of Development - Non Residential Development
Development Dev Street System Parks & Rec Total
Type Units 1 Impact Fees Impact Fees Impact Fees
Office - Professional KSF 8,680.66 0 8,680.66
Com mercial -Local KSF 9,348.40 0 9,348.40
- - - 0 12 820.67
Commercial- Visitor Serving KSF 12,820.67 0 7,011.30
Commercial- General KSF 7,011.30 0 4,273.56
Industrial -Light KSF 4,273.56
1 KSF = 1,000 gross square feet of building area.
March 30, 2000 DMG- AILWMIIS Page 5-4
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City of Encinitas - impact Fee Study
Executive Summary
IMPLEMENTATION
Implementation of an impact fee program raises both practical and policy issues.
Section 5 of this report points out many practical and procedural issues related to
the implementation of the City's impact fee program, and outlines administrative
procedures mandated by the Government Code with respect to impact fees. Topics
covered in that section include adoption and collection of fees, accountability for
fee revenues, expenditure time limits, reporting and refunding requirements,
updating of fees, and staff training.
From the point of view of the City Council, important policy choices must be made
regarding the share of facility costs to be funded by impact fees, and other sources
of funding to be used for those facilities not funded by the fees. The development
impact fees calculated in this report are intended to represent the maximum impact
fee amount justified by this analysis. Of course, the City Council may choose to
adopt fees lower than those calculated in the study. In that event, it is important
that the Council identify which facilities are to be funded by the reduced impact
fees, and the share of total cost to be recovered through the fees.
It should also be emphasized that all costs used escalate over
report
time, the dollars.
To the extent that costs for capital improvem ents
fees should be adjusted to keep pace with that inflation. We recommend annual
adjustments based on changes in the Engineering News Record Building Cost
Index. If the fees are not escalated for inflation, the City could experience a
significant shortfall in anticipated funding over several years.
RECOVERY OF STUDY COST
We do not recommend adding an administrative fee to impact fees to cover the
costs of administering the impact fee program. Those costs should be included in
the processing fees charged to developers and builders. However, it is reasonable
e
act fee program. Once
h the impact g
' stud throw p p
' to recover the cost of this y g
for the Cit
the City Council decides what impact fees to impose, it is a relatively simpl e matter
to calculate an adjustment to cover the cost of the study.
Assuming the impact fee study will be updated every five years, the cost of this
study can be divided by the amount of revenue increased the next
the e of the
determine the percentage by which fees should be i
study. Th at e typically amounts to a fraction of 1 %. For example, if the
Y
percentage g p million per year in impact
and the City
expects
to collect $1.5 mi p y P
study costs $30 000 a t}' p
fccs, the fees shown own in Table S -1 would be have to be increased by 0.4% to recover
the cost of the study over five years [30,000 / (1,500,000 x 5) = 0.0041. That
increase would equate to $0.40 per hundred dollars on the impact fees.
March 30, 2000
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City of Encinitas - impact Fee Study introduction
SECTION I
INTRODUCTION
The City of Encinitas has retained DMG- MAXIMUS to prepare a study analyzing
the impacts of development on certain types of capital facilities, and calculating de-
velopment impact fees based on that analysis. This report documents the data,
methodology, and results of the impact fee study. The methods used to calculate
impact fees in this study are intended to satisfy all legal requirements governing
such fees, including provisions of the U. S. Constitution, the California Constitu-
tion, and the California Mitigation Fee Act (Gov't Code Sections 66000 et seq.).
LEGAL FRAMEWORK
In general, the legal authority to impose fees on development may be specifically
granted by statute, or it may be found in the police power or home rule powers ex-
ercised by local governments under state constitutions. California's impact fee stat-
enabling
s ecific e
tain
of c
on g so cities and counties in this state
utes don p heir
depend on the police power for authority to establish and impose such fees.
4 W U. S. Constitution. Like all land use regulations, development exactions, including
impact fees, are subject to the Fifth Amendment prohibition on taking of private
property for public use without just compensation. Both state and federal courts
have recognized the imposition of impact fees on development as a legitimate form
of land use regulation, provided the fees meet standards intended to protect against
regulatory takings. To comply with the Fifth Amendment, development regulations
must be shown to substantially advance a legitimate governmental interest. In the
case of impact fees, that interest is in the protection of public health, safety, and
welfare by ensuring that development is not detrimental to the quality of essential
public services.
The U. S. Supreme Court has found that a government agency imposing exactions
on development must demonstrate an "essential nexus between the exaction and
the interest being protected (See Nollan v. California Coastal Commission, 1987).
In a more recent case (Dolan v. City of Tigard, 1994), the Court made clear that an
agency also must show that an exaction is "roughly proportional" to the burden cre-
ated by development. Dolan is less significant for impact fees than for some other
types of exactions (e.g. mandatory dedication of land) because proportionality is
inherent in the proper calculation of impact fees. In addition, the Dolan decision
appeared to set a higher standard of
review for mandatory dedications of land than
for monetary exactions.
rch 30, 2000 DMG - MAX /MUS Page J -J
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City of Encinitas - impact fee Study Introduction
California Constitution. The California Constitution grants broad police power to
local governments, including the authority to regulate land use and development.
Some impact fees have been challenged on grounds that they are special taxes im-
posed without voter approval in violation of Article XIIIA. That objection could be
the valid if fees exceeded the cost of providing capital facilities needed to serve new
development. If that were, the case, however, then the fees would also run afoul of
the U. S. Constitution and the Mitigation Fee Act.
The Mitigation Fee Act. California's impact fee statutes originated in Assembly Bill
1600 during the 1987 session of the Legislature, and took effect in January, 1989.
AB 1600 added several sections to the Government Code, beginning with Section
66000. Since that time the impact fee statutes have been amended from time to
time, and in 1997 were officially designated the "Mitigation Fee Act." Unless oth-
erwise noted, code sections referenced in this report are from the Government
Code.
The Act does not limit the types of capital improvements for which impact fees may
be 'charged. It defines public facilities very broadly to include "public improve-
ments, public services and community amenities." Although the issue is not specifi-
cally addressed in the Mitigation Fee Act, other provisions of the Government
Code (see Section 65913.8) prohibit the use of impact fees for maintenance or op-
erating costs. Consequently, the fees calculated in this report are based on capital
costs only.
The Mitigation Fee Act does not use the term "mitigation fee" except in its recently
added official title. Nor does it use the more common term "impact fee." The Act
simply uses the word "fee," which is defined as "a monetary exaction, other than a
tax or special assessment, ... that is charged by a local agency to the applicant in
connection with approval of a development project for the purpose of defraying all
or a portion of the cost of public facilities related to the development project ....
To avoid confusion with other types of fees, this report uses the widely- accepted
term "impact fee," which should be understood to mean "fee" as defined in the
Mitigation Fee Act.
The Mitigation Fee Act contains requirements for establishing, increasing and im-
posing impact fees. They are summarized below. It also contains provisions which
govern the collection and expenditure of fees, and require annual reports and peri-
odic re- evaluation of impact fee programs. Those administrative requirements are
discussed in the Implementation Section of this report. Certain fees or charges re-
lated to development are exempted from the requirements of the Mitigation Fee
Act. Among them are fees in lieu of park land dedication as authorized by the
March 30, 2000 DMG- MAXIMUS page 1 -2
City of Encinitas - impact fee Study introduction
Quimby uimb Act (Section 66477), fees collected pursuant to a reimbursement agreement
or developer agreement, and fees for processing development applications.
Required Findings. Section 66001 requires that an agency establishing, increasing
or imposing impact fees, must make findings to:
1. Identify the purpose of the fee;
2. Identify the use of the fee; and,
3. Determine that there is a reasonable relationship between:
a. The use of the fee and the development type on which it is imposed;
b. The need for the facility and the type of development on which the
fee is imposed; and
c. The amount of the fee and the facility cost attributable to the devel-
opment project. (Applies only upon imposition of fees.)
IL Each of those requirements is discussed in more detail below.
Identifying th e Purpose of the Fees. The broad purpose of impact fees is to protect
the public health, safety and general welfare by providing for adequate public fa-
cilities. The specific purpose of the fees calculated in this study is to fund the con-
struction of certain capital improvements identified in this report. Those im-
provements are needed to mitigate the impacts of expected development in the
City, and thereby prevent deterioration in public services that would result from
additional development if impact fee revenues were not available to fund the
needed improvements. Findings with respect to the purpose of a fee are probably
sufficient if they state the purpose as financing development- related public facilities
in a broad category, such as transportation or water supply.
Identifying the Use of the Fees. According to Section 66001, if a fee is used to fi-
nance public facilities, those facilities must be identified. A capital improvement
plan may be used for that purpose, but is not mandatory if the facilities are identi-
fied in the General Plan, a Specific Plan, or in other public documents. If a capital
improvement plan is used to identify the use of the fees, it must be updated annu-
ally by resolution of the governing body at a noticed public hearing. Impact fees
calculated in this study are based on specific capital facilities identified elsewhere in
this report, which is intended to serve as the public document identifying the use of
the fees.
March 30, 2000
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City of Encinitas - Impact fee Study
Introduction
Reasonable Relationship Requirement. As discussed above, Section 66001 requires
that, for fees subject to its provisions, a reasonable relationship" must be demon-
strated between:
1. the use of the fee and the type of development on which it is imposed;
2. the need for a public facility and the type of development on which a
fee is imposed; and,
3. the amount of the fee and the facility cost attributable to the develop-
ment on which the fee is imposed.
These three reasonable relationship requirements as defined in the statute parallel
the three elements of the "rational nexus" standard which has evolved in the courts
to test the constitutional validity of development exactions. Those elements are,
"benefit," "impact, and proportionality, respectively. The reasonable relationship
language of the statute is considered less strict than the rational nexus standard
used by the courts. Of course, the higher standard controls. We will use the nexus
terminology in this report for two reasons: because it is more concise and descrip-
tive, and also to signify that the methods used to calculate impact fees in this study
are intended to satisfy the more demanding constitutional standard. Individual
elements of the nexus standard are discussed further in the following paragraphs.
Demonstrating an Impact. All new development in a community creates additional
demands on some, or all, public facilities provided by local government. If the
supply of facilities is not increased to satisfy that additional demand, the quality of
public services for the entire community will deteriorate. Impact fees may be used
to recover the cost of development- related facilities, but only to the extent that the
need for facilities is a consequence of development that is subject to the fees. The
Nollan decision reinforced the principle that development exactions may be used
only to mitigate conditions created by the developments upon which they are im
posed. That principle le clearl applies to impact fees. In this study, the impact of
r P y pp
development on improvement needs is analyzed in terms of quantifiable relation -
ships between various types of development and the demand for specific facilities,
based on applicable level -of- service standards. This report contains all information
needed to demonstrate this element of the nexus.
Demonstrating a Benefit. A sufficient benefit relationship requires theat impact
for
revenues be segregated from other funds and expended only on
which the fees were charged. Fees must be expended in a timely manner and the
facilities funded b the fees must serve the development paying the fees. Nothing
March 30, 2000
DMG- MAX /MC/S page 1 -4
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City of Encinitas - Impact Fee Study Introduction
in the U.S. Constitution or California law requires that facilities paid for with im-
pact fee revenues be available exclusively to developments paying the fees.
Procedures for earmarking and expenditure of fee revenues are mandated by the
Mitigation Fees Act, as are procedures to ensure that the fees are expended expedi-
tiously or refunded. All of those requirements are intended to ensure that devel-
opments benefit from the impact. fees they are required to pay. Thus an adequate
showing of benefit must address procedural as well as substantive issues.
Demonstrating Proportionality. The requirement that exactions be proportional to
the impacts of development was clearly stated by the U.S. Supreme Court in the
Dolan case and is logically necessary to establish a proper nexus. Proportionality is
established through the procedures used to identify development- related facility
costs, and in the methods used to calculate impact fees for various types of facilities
and categories of development. In this study, the demand for facilities is measured
in terms of relevant and measurable attributes of development. For example, the
need for police facilities is measured by the number of police calls for service gen-
erated by a particular type and quantity of development.
In calculating impact fees, costs for development- related facilities are allocated in
(awl proportion to the service needs created by different types and quantities of devel-
opment. The following section describes methods used to allocate facility costs and
calculate impact fees in ways that meet the proportionality standard.
Impact Fees for Existing Facilities. It is important to note that impact fees may be
used to pay for existing facilities, provided that those facilities are needed to serve
additional development and have the capacity to do so, given relevant level -of-
service standards. In other words, it must be possible to show that the fees meet
i
the need and benefit elements of the nexus.
IMPACT fEE CALCULATION METHODOLOGY
Any one of several legitimate methods may be used to calculate impact fees. The
choice of a particular method depends primarily on the service characteristics and
planning requirements for the facility type being addressed. Each method has ad-
vantages and disadvantages in a particular situation, and to a limited extent they are
interchangeable.
Reduced to its simplest terms, the process of calculating impact fees involves only
two steps: determining the cost of development- related improvements, and allo-
March 30 2000 DMG -M"MUS Page 1 -5
t5 -Is
City of Encinitas - Impact fee Study
Introduction
cating those costs equitably to various types of development. In practice, though,
the calculation of impact fees can become quite complicated because of the many
variables involved in defining the relationship between development and the need
for facilities.
The following paragraphs discuss three methods for calculating impact fees and
how those methods can be applied.
Plan -based Impact Fee Calculation. The plan -based method allocates costs for a
specified set of improvements to a specified set of developments. The improve-
ments are identified by a facility plan and the development is identified by a land
use plan. Facility costs are allocated to various categories of development in pro-
portion to the amount of development and the relative intensity of demand for
each category. Demand is represented by an appropriate, quantifiable indicator.
For example, demand for street improvements is typically measured by the number
of vehicle trips generated by development.
In this method, the total cost of relevant facilities is divided by total demand to cal-
culate a cost per unit of demand. Then, that cost per unit of demand is multiplied
by the amount of demand per unit of development (e.g. dwelling units or square
IL feet of building area) in each category to arrive at a cost per unit of development.
This method implicitly assumes that the entire service capacity of the specified fa-
cilities will be absorbed by the planned development, or that any excess capacity is
unavoidably related to serving that development. For example, it may be necessary
to widen a street from two lanes to four lanes to serve planned development, but
that development may not use all of the added capacity. Assuming that the im-
provements in question are needed only to serve the new development paying the
fees, it is legitimate to recover the full cost of the improvements through impact
fees.
The plan -based method is often the most workable approach where actual service
usage is difficult to measure as is the case with administrative facilities), or does
not directly drive the need for added facilities (as is the case with fire stations). It is
also useful for facilities, such as streets, where capacity cannot always be matched
closely to demand. This method is relatively inflexible in the sense that it is based
articu lar land use p lan.
! on the relationship between a particular facility plan and a p
Consequently, if the land use plan changes significantly, the fees may have to be re-
calculated. -- - - -- _ - - -_ -
Capacity -based Impact Fee Calculation. This method can be used only where the
capacity of a facility or system is known, and the amount of capacity used by a par -
Page 1 -G
March 30, 2000
DMG- MAX /MUS
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City of Encinitas - Impact Fee Study Introduction
IL ticular tYP a and quantity of development can be measured or estimated. This
method calculates a rate, or cost per unit of capacity based on the relationship be-
tween total cost and total capacity. It can be applied to any type or amount of de-
velopment, provided the capacity demand created by that development can be es-
timated and the facility has adequate capacity available to serve the development.
Since the fee calculation does not depend on the type or quantity of development
to be served, this method is flexible with respect to changing development plans.
Under this method, the cost of unused capacity is not allocated to development, so
unused capacity would not be covered by impact fees if it is not absorbed by devel-
opment. Capacity -based fees are most commonly used for water and wastewater
systems.
To calculate a capacity -based impact fee rate, facility cost is divided by facility ca-
pacity to arrive at a cost per unit of service. To determine the fee for a particular
development project, the cost per unit of capacity is multiplied by the amount of
capacity needed by that project. To produce a schedule of impact fees based on
standardized units of development (e.g. dwelling units or square feet of building
area), the rate is multiplied by the amount of service needed, on average, by those
units of development.
Standard -based Impact Fee Calculation. The standard -based method is related to
the capacity -based approach in the sense that it is based on a rate, or cost per unit
of service. The difference is that with this method, costs are defined from the out -
set on a generic unit -cost basis and then applied to development according to a
standard that sets the amount of service or capacity to be provided for each unit of
development.
The standard -based method is useful where facility needs are defined directly by a
service standard, and where unit costs can be determined without reference to the
total size or capacity of a facility or system. Parks fit that description. It is com-
mon for cities or counties to establish a ser vice standard for parks in terms of acres
say, neighborhoo arks
for, p
per ac g
In addition, the
cost � Y
per thousand residents. P
can usually be estimated without knowing the size of a particular park or the total
acreage of parks in the system.
This approach is also useful for facilities such as libraries, where it is possible to es-
timate ageneric cost per square foot before a building is
s established without
One
advantage of the standard -based method is that a fee can e
committing to a particular size of facility. Facility size can be adjusted based on the
amount of development that actually occurs, thereby avoiding excess capacity.
March 30, 2000 DMG- MAnMUS Page 1 -7
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City of Encinitas - Impact Fee Study Introduction
It should be noted that this method is not well suited to specialized recreation fa-
cilities such as swimming pools, gymnasiums, or ball diamonds, which have fairly
rigid size requirements.
FACILITIES ADDRESSED IN THIS STUDY
Impact fees for the following types of facilities and improvements are addressed in
this report:
• Street System Improvements
• Park and Trail Improvements, Park Land Acquisition, Open
Space.
Initially, this study was intended to address fire protection and drainage facilities, as
well as those listed above. As the study progressed, we were unable to identify any
fire protection facilities eligible for impact fee funding. In the case of drainage, we
found that it would be necessary for the City to complete an update of the drainage
master plan before those fees could be calculated, and that update has not yet been
completed.
i
(age
March 30 2
000
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City of Encinitas - Impact Fee Study
Land Use and Development
SECTION 2
DEVELOPMENT DATA
This section of the report compiles and organizes development data needed to
support the impact fee analysis contained in subsequent sections sof the an p
Both existing and planned development must be addressed p a
and this section contains estimates of existing development and projections of
future development by development type. That information forms a basis for
defining levels of service, analyzing facility needs, and allocating the cost of capital
facilities between existing and future development, and among various types of new
development.
Land use and development data used in this study were provided by the City of
Encinitas Department of Community De velopmen t thedEncinitas D
G eneral Plan as
of Governments (SANDAG), and are based on
amended in 1998. Demographic information from the 1990 Census and the
California Department of Finance Demographic Research Unit are also used. Data
on existing and planned development used in this study represent the best available
estimate of existing and planned development as of January, 1999.
�
BACIIGROUND AND SETTING
Encinitas stretches along six miles of Pacific coast in Northern San Diego County.
The City was incorporated in 1986 and encompasses the commu
by- the -Sea, Encinitas, Old Encinitas, Leucadia, and Olivenhain Encinitas borders
Carlsbad on the north and Solana Beach on the south.
The official January 1999 pop - Figure 2 -A
ulation estimate for Encinitas, Encinitas Population (1990 -1998)
as prepared by the California [75,000
Department of Finance (DOF) ,000
Demographic Research Unit
was 60,419 up from 53,519 45,000
at the time of the 1990 30,000
Census. As of January 1999, 15,000
DOF estimated that approx- o
imately 97% of the City's 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
population lived in house- Year
holds, with the rest in group
quarters.
March 30, 2000
DMG- A4"MUS page 2 -1
15 ��
- City of Encinitas - impact fee Study Land Use and Development
The chart in Figure 2 -A, on the previous page, depicts the City's population year -
by -year from the 1990 Census through the DOF estimate for January 1, 1999.
Overall population growth was relatively slow during that period, totaling 9 %, with
a compounded annual growth rate of just under 1 %. However, the year -to -year
picture varies from a decrease of O.S% in 1995 to an increase of 2.6% from January
1998 to January 1999.
STUDYAREA AND TIME FRAME
The study area addressed in this report encompasses the City and its sphere of
influence. The time frame for this study extends from the present to buildout of
the study area. The term "buildout" is used to describe a condition in which all
currently undeveloped land in the study area has been developed as indicated in the
Land Use Element of the General Plan.
The five separate communities that existed before incorporation, Old Encinitas,
New Encinitas, Cardiff, Leucadia, and Olivenhain, retain their identities within the
City, but their boundaries are not significant for purposes of calculating impact
fees.
The time required for buildout to occur depends, obviously, on the rate at which
development occurs. This study does not project a target date for buildout,
because, in general, the rate and timing of development do not affect the impact fee
analysis. An exception is the situation where debt financing has been, or will be,
used for facilities funded by impact fees. Where such cases arise, the rate of
development during the financing period will be addressed in the impact fee
analysis.
DEVELOPMENT TYPES
The development types used in this study are based on land use categories defined
in the Encinitas General Plan. However, it is important to note that where actual
development differs from General Plan land use designations, the data in this
section are intended to represent actual development.
Res idential Development. The City's land use plan classifies residential
o P me ty
development into a number of categories, which are distinguished primarily by the
maximum allowable density and whether or not units must be located on individual
lots. The categories used in this study are listed below.
• Residential, 0.125 -0.25 DU /Ac [R]
• Residential, 0.2S -O.S DU /Ac [RR]
March 30, 2000 DMG -M"MUS Page 2-2
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City of Encinitas - Impact Fee Study Land Use and Development
0 1 • Residential, 0.5 -1.0 DU /Ac [RR1]
• Residential, 1.0 -2.0 DU /Ac [RR2]
Residential, 2.0 -3.0 DU /Ac [R3]
• Residential, 3.0- 5.ODU /Ac [R5]
• Residential, 5.0- 8.ODU /Ac [R8]
• Residential, 8.0 -11.0 DU /Ac [R11]
• Residential, 11.0 -15.0 DU /Ac [R15]
• Residential, 15 -25 DU /Ac [R25]
• Residential, Mobile Home Park [MHP]
Private Non- residential Development. As with residential development, private
non - residential development is broken down into categories. Those categories are
distinguished by the types of commercial and industrial development allowed.
They are listed below.
• Office — Professional [OP]
• Commercial -Local [LC]
• Commercial- Visitor Serving [VSC]
• Commercial- General [GC]
Industrial -Light [IL]
Public /Semi - public Facilities. In some cases, to calculate reasonable impact fees, it
is necessary to account for the fact that public or quasi - public facilities such as
schools, hospitals, government buildings, parks, and even open space may place a
demand on other public facilities, such as streets, for which impact fees are being
calculated in this report. Although the City may not actually recover the share of
costs associated with that capacity, the demand related to those uses must be
accounted for in certain types of fee calculations to ensure a fair allocation of costs.
That is specifically the case when the plan -based method is used to calculate impact
fees. The other methods described in Section 1 are not affected by demand
attributable to public facilities, because they calculate impact fees using only the
cost of capacity atrributed to the development paying the fees. Two categories of
public and semi - public facilities are used in this study. They are listed below. It
should be noted that road, freeway, and railroad rights -of -way have been excluded
from this analysis.
• Public /Semi - Public [P /SP]
• Ecological Resource /Open Space /Parks [ER/OS /P]
III Pa
March 30,__2000_ DMG- MAX /MUS e 2 -3 g
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City of Encinitas - Impact Fee Study Land Use and Development
UNITS OF DEVELOPMENT
For purposes of calculating impact fees, development can be measured in terms of
various units, such as acreage, dwelling units or building area. The following
paragraphs describe the units of development used in this study, and how they are
applied.
Acreage. Acreage is a fundamental attribute of development and is applied to all
types of development. In this study, acreage is defined as gross acreage (i.e., the
total acreage of a development site before rights -of -way are dedicated).
Dwelling Units. The dwelling unit (DU) is a commonly used measure of residential
development, and is the standard unit of residential development in this study. The
relationship between dwelling units and acreage is referred to as "density," and is
defined as the average number of dwelling units per gross acre for a particular type
of residential development. That relationship can be used to calculate either units-
per -acre or acres - per -unit if needed to calculate impact fees.
Building Area. Building area is a commonly used as a measure of private non -
residential (commercial,industrial, and office) development. In this study, building
area in thousands of square feet (KSF), is the standard unit of development for
commercial, industrial, and office uses. The relationship between building area and
acreage is commonly defined in terms of the "floor area ratio" (FAR), which is the
ratio of gross building area to gross site area. If the FAR for a particular
development type is 0.25, the average building area per acre for that development
type would be 10,890 square feet (0.25 x 43,560 square feet per acre), or 10.89
KSF.
DEMAND VARIABLES AND DEMAND FACTORS
In calculating impact fees, the relationship between facility needs and development
must be quantified in cost allocation formulas. Certain measurable attributes of
development (e.g., population, vehicle trip generation) are used in those formulas
as "demand variables" to reflect the impact of different types and amounts of
development on the demand for specific public services and the facilities that
support them. Demand variables are selected either because they directly measure
service demand created by various types of development, or because they are
reasonably correlated with demand.
For example, the service standard for in a community is typically defined as a
ratio of park acreage to population. As population grows, more parks are needed
to maintain the desired standard. Logically, then, population is an appropriate
March 30, 2000 DMG- Al"MUS Page 2 -4
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I
City of Encinitas - Impact fee Study Land Use and Development
yardstick for P
r measuring the i m p acts of development on the need for parks, and
would be an appropriate demand variable for that facility type. Similarly, the need
for capacity in a street system depends on the volume of traffic the system must
handle. Thus, trip generation (the number of vehicle trips generated by each unit
of development) is an appropriate demand variable to represent the impact of
development on the street system.
Each demand variable has a specific value per unit of development for each
development category. Those values . are referred to in this study as "demand
factors ". For example, one single - family residential development generates 1 peak
hour vehicle trip (PHT) per day. Consequently, the demand factor for single family
residential development is 1 PHT per dwelling unit. Other land use categories
would have different impact factors. Some of the impact factors used in this study
are based on widely- accepted standards (e.g.; trip generation rates), while others are
based on local conditions (e.g., population per dwelling unit).
The specific demand variables used in this study are discussed below. Actual values
of impact factors for each development type are shown in Table 2.1 on the next
page.
Population per Unit of Development. Population per unit of development is used
as a demand variable to calculate impact fees for population- dependent facilities.
Since dwelling units are used as the standard units of development for residential
development in this study, it is also correct to refer to this variable as population
per dwelling unit. The number of persons per dwelling unit varies by development
type, and the figures used in this study are based on an analysis of data from the
1990 Census. Because population is related only to residential development, the
value of this variable for non - residential development is zero.
It is important to emphasize that, rather than using official population estimates,
this study uses estimated "full- occupancy" population figures. That approach is
intended to account for the fact that actual population estimates for existing
development are affected by a vacancy factor. The "full- occupancy" projections
better reflect the service demand placed on the City by additional development,
because they reflect the fact that once a residence is constructed, the City is
committed to serving it and must commit the service capacity needed to do so.
Future population is also projected on a full- occupancy basis. Full- occupancy
population estimates are established by applying an average persons - per - dwelling
factor to the actual number of existing dwelling units, or the projected future
dwelling units, for each residential development type.
For certain public facilities, such as parks and libraries, population is a useful
measure of service demand, and can be used in setting service levels and allo catin g
March 30, 2000 DMG- MAX/MUS Page 2 -5
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City of Encinitas - impact fee Study Land Use and Development
(W facility costs. However, for most public facilities, resident population alone
accounts for only a portion of demand, and is not useful in representing the impact
of all types of development on those facilities.
Table 2.1
Demand Factors
Development Dev. Pop/Dev Pk Trips/
Type Units Unit 2 Unit 3
Residential (0.125 -0.25 du /ac) DU 2.95 1.20
Residential (0.25 -0.5 du /ac) DU 2.95 1.20
Residential (0.5 -1.0 du/ac) DU 2.95 1.20
Residential (1.0 -2.0 du /ac) DU 2.95 1.20
Residential (2.0 -3.0 du/ac) DU 2.95 1.00
Residential (3.0 -5.0 du /ac) DU 2.95 1.00
Residential (5.0 -8.0 du/ac) DU 2.75 1.00
Residential (8.0 -11.0 du /ac) DU 2.40 1.00
Residential (11.0 -15.0 du /ac) DU 2.20 0.80
Residential (15.0 -25.0 du /ac) DU 2.20 0.54
Mobile Home Park DU 1.60 0.55
Office- Professional KSF N/A 3.90
Commercial -Local KSF N/A 4.20
Commercial- Visitor Serving KSF N/A 5.76
Commercial- General KSF N/A 3.15
Industrial -Light KSF N/A 1.92
Public /Semi - Public Acres N/A 14.40
Eco Resource /Open Space /Parks Acres I N/A 1 1.50
1 Typical density is shown for residential development types in dwelling units per acre. Typical FAR is
shown for office, commercial, and industrial development types as a factor represent the ratio of floor
area to site area. These factors are typical for new development but actual factors may vary.
2 Population per unit of development applies only to residential development. Numbers are based on
analysis of 1990 Census data.
3 Peak Hour Trips based on SANDAG Traffic Generators. Factors adjusted for pass -by trips
j
Peak Hour Trips per Unit of Development. The demand variable used to represent
the impact of development on the City's street system is Peak Hour Trips per Unit
of f Develo ment. Peak hour traffic volumes, rather than average daily volumes, are
used in this study because peak volumes determine the need for street capacity.
Trip generation rates for defined categories of development are based on the p.m.
peak -hour rates in the San Diego Association of Governments (SANDAG)
lied t
o the peak hour trip Discounts area p P factors
tion Tr Generators. Dis pp
p
ublica ff
for some development types to adjust for "pass -by trips". That adjustment is
appropriate because, trip generation rates are based on "driveway counts," that is,
arrivals and departures from a location. As a result, - intermediate stops made as
part of a single trip are reflected in the rates as separate trips, even though they do
not add traffic to the street system. Certain types of commercial development
generate a high volume of "trips" that are intercepted while passing the site or are
March 30, 2000
DMG- MAX /MUS Page 2 -6
15 --)A
City of Encinitas - impact Fee Study Land Use and Development
diverted only a short distance from their primary path. Using trip generation rates
based on driveway counts, without adjusting for pass -by trips, would, be unfair to
development types that attract a high percentage of those intercepted trips.
DEVELOPMENT DATA
Tables 2.2 through 2.4, on the following pages, present data on existing and
planned development in the City, by development type. Table 2.2 shows existing
development as of January, 1999. Table 2.3 presents future development potential
to buildout. And Table 2.4, which includes all development in the other two tables,
represents a forecast of ultimate development at buildout.
Data on existing and future development were provided by the Encinitas
Community Development Department and SANDAL. Although the City's General
Plan land use categories are used to identify development types in the following
tables, figures in those tables are intended to represent estimates of actual existing
and future development, irrespective of the land use designation on the property
where the development is, or will be, located. Estimates of future development
include expected redevelopment and intensification of property in the North 101
and Downtown Specific Plan Areas.
Table 2.2
Existing Development in Study Area (As of January, 1999)
Development Land Use Dev Residential Comm/Ind Popu- Pk Hr
Type Code Units Acres (DU) (KSF) 1 lation z Trips 3
Residential (0.125 0.25 du/ac) R DU 310 39 115 47
603 1,779 724
Residential (0.25 -0.5 du/ac) RR DU 1,609 454
Residential (0.5 -1.0 du/ac) RR1 DU 504 378 1,3,115 115 1,310
Residential (1.0 -2.0 du/ac) RR2 DU 728 1,092 9,136 3,097
Residential (2.0 -3.0 du/ac) R3 DU 1,239 3,097 ,915
Residential (3.0 -5.0 du/ac) R5 DU 467 1,915 5,649 20,037 1 1,286
Residential (5.0 -8.0 du/ac) R8 DU 1,104 7,286 13,711 5,713
Residential (8.0 -11.0 du/ac) R11 DU 589 5,713
Residential (11.0 -15.0 du/ac) R15 DU 59 767 1,687 614
Residential (15.0 -25.0 du/ac) R25 DU 78 1,551 3,412 838
Mobile Home Park MHP DU 40 722 1,155 397
Office- Professional OP KSF 33 825 3,218
Commercial -Local LC KSF 6 110 462
Commercial- Visitor Serving VSC KSF 33
4 50
2,592
Commercial- General GC KSF 315 3,8888 8 12,247
Industrial -Light LI KSF 25 587 1,127
Public/Semi- Public P /SP Acres 367 5,285
Eco Resource /Open Space /Parks ER/OS /P Acres 1,380 2,070
I
Totals 8,885 23,163 5,860 61,017 49,394
i
1 Estimates of existing development provided by the Encinitas Community Development Dept. and SANDAG
2 "Full- occupancy" population based on persons per household factors in Table 2.1
3 Estimated peak hour trips include adjustment for intercepted trips. See text, above.
DMG- MAMMUS Page 2 -7
March 30, 2000
1�-A5
City of Encinitas - impact fee Study
Land Use and Development
Table 2.3
Potential Development in Study Area (As of January 1999)
Development Land Use Dev Residential Comm/Ind Popu- Pk Hr
Type Code Units Acres (DU) (KSF) lat
2 ion 2 Trips 3
6 2 .
Residential (0.125 -0.25 du/ac) R DU 15 879 358
Residential (0.25 -0.5 du/ac) RR DU 795 256 755 307
Residential (0.5 -1.0 du/ac) RR1 DU 341 1,165 474
Residential (1.0 -2.0 du/ac) RR2 DU 263 395
DU 464 1,289 3,803 1,289
Residential (2.0 -3.0 du/ac) R3 DU 61 265 782 265
Residential (3.0 -5.0 du/ac) RS 354 974 354
Residential (5.0 -8.0 du/ac) R8 DU 39
370 888 370
Residential (8.0 -11.0 du/ac) R11 DU 7 413 909 330
Residential (11.0 -15.0 du/ac) R15 DU 1 2,235 549
Residential (15.0 -25.0 du/ac) R25 DU 14 1,0166 0 0
Mobile Home Park MHP DU 0 1,638
OP KSF 32 420
Office- Professional 11 46
Commercial -Local LC KSF 1, 188
Commercial- Visitor Serving VSC KSF 3 33 240 755
Commercial- General GC KSF 25 240
LI KSF 12 125
Industrial -Light 720
Public/Semi- Public P /SP Acres 50 45
Eco Resource /Open Space /Parks. I ER/OS Acres 2,150 4,658 828 1 12,396 1 7,930
Totals
Note: See footnotes at Table 2.2.
Table 2.4
Ultimate Development in Study Area (At Buildout)
Development Land Use Dev 7,a Comm/Ind Popu- Pk Hr
-t Code Units Acres I (KSF) � lation 2 Trips 3
121 4
Residential (0.125 -0.25 du/ac) R DU 325 2,658 1,0 9
81
Residential (0.25 -0.5 du/ac) RR DU 2,404 1, 761
Residential (0.5 -1.0 du/ac) RR1 DU 845
RR2 DU 991 4,386 1,784 8 70
Residential (1.0 -2.0 du/ac) 12,939 4, 2, 386
Residential (2.0 -3.0 du/ac) R3 DU 1,703 R5 DU 528 6,431 180 Residential (3:0 -5.0 du/ac) 21,011 7,640
Residential (5.0 -8.0 du/ac) R8 DU 1,143 14,599 6,083
Residential (8.0 -11.0 du/ac) R11 DU 596 2,596 944
92
Residential (11.0 -15.0 du/ac) R15 DU 60 2,567 5,647 1,386
Residential (15.0 -25.0 du/ac) R25 DU 1,155 397
Mobile Home Park MHP DU 40 722
OP KSF 65 1,245 4,856
' Office- Professional 121 508
Commercial -Local LC KSF 7 2,780
Commercial- Visitor Serving VSC KSF 36 483 4,128 13,002
Commercial- General GC KSF 340 712 1,367
Industrial -Light LI KSF 37 6,005
Public/Semi-Public P /SP Acres 417 2,115
Eco Resource /Open Space /Parks EROS /P Acres 1,410
- -
038 27,821 6,68 73,413 57,324
Totals '
Note: See footnotes at Table 2.2.
I
March 30, 2000
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City of Encinitas - impact Fee Study Street System
SECTION 3
STREET SYSTEM
This section of the report addresses street improvements required to serve future
development in Encinitas. Development- related street improvements used in this
analysis were identified by the City of Encinitas Engineering Services Department
based on the primary circulation system shown in the City's General Plan
Circulation Element.
That system includes the Interstate 5 freeway, as well as a hierarchy of prime
arterial streets, major arterial streets, collector streets, and certain designated
augmented local streets. The impact fees calculated in this section of the report
include only costs for street improvements that are part of that designated system,
and are needed to serve future development. This study assumes that local streets
not designated as part of that primary circulation system, if they are needed to serve
future development, will be provided as off -site project 'improvements by
developers. Except for interchanges, freeway improvements are not addressed in
this study.
SERVICE AREA AND TIME FRAME
The overall study area addressed by this analysis encompasses the City of Encinitas
and its sphere of influence. Because this analysis deals only with the City's primary
circulation system, the entire study area will be treated as a single service area.
The primary circulation system defined in the Circulation Element is intended to
serve traffic projected out to 2020. Because the rate of development varies, this
analysis is not tied to a specific time frame. Rather, it assumes that the designated
circulation system is capable of accommodating all additional development
contemplated in the Encinitas General Plan to buildout. Variations in the timing of
calculation of impact
do not affect the act fees, except where debt p
development
financing is used to pay for improvements. That is not the c ase here.
DEMAND VARIABLE
As discussed in Section 2, the demand variable used to allocate improvement costs
for street im rovements in this study is peak -hour trips (PHT) per unit of
P
ips (ADT) because
development. Peak -hour trips are used instead of average daily tr
peak traffic determines the amount of system capacity required to maintain a
certain level of service. Trip generation rates for defined categories of development
are based on the p.m. peak -hour rates in the San Diego Association of Governments
March 30, 2000 DMG- MAX/MUS Page 3 -1
City of Encinitas - impact Fee Study Street System
(SANDAG) publication, Traffic Generators. Those rates are shown in Table 2.1, in
Section 2 of this report.
The rates shown in Table 2.1 for various categories of development are intended to
reflect the trip generation characteristics of all development in a category, and do
not necessarily correspond to any specific development type. Those rates are used
in this study primarily to project the number of peak -hour trips that will be
generated by all future development. In calculating impact fees, that trip total is
divided into the total cost of eligible street improvements to determine the cost
impact of each added peak -hour trip. The impact fee charged to a particular
development project is then determined by the number of peak -hour trips
generated by that project. This method. results in a proportional allocation of costs,
so that the share of street improvement costs charged to a particular development
project equals the share of new traffic generated by that project. Thus, a project
that generates 1% of the traffic added by new development will pay a fee
equivalent to 1% of the cost of improvements needed to serve new development.
It should be emphasized that the trip generation rate assigned to any category of
development in this study may be quite different from the rate for a specific type of
development in that category. That is especially true of commercial development.
When imposing impact fees on a particular project, the City should use a rate that
reflects, as nearly as possible, the actual trip generation characteristics, which is to
say the actual impact, of that project.
F SERVICE
L
L
EVE O
Level of service for streets and intersections is described by transportation planners
in terms of traffic flow characteristics. Level of service (LOS) categories range from
A to F. LOS A, the ideal, is characterized by free - flowing traffic with no delays. At
the other extreme, LOS F is characterized by severe congestion and long delays at
intersections. The level -of- service standard is significant because it determines the
amount of street capacity, and thus the cost of improvements, needed to
accommodate a certain volume of traffic. The standard adopted in the Encinitas
General Plan Circulation Element is LOS D. At LOS D, roadways reach the upper
limit of stable flow conditions, with average travel speeds at about 40% of free flow
speeds. The street system identified in the Circulation Element is designed to
maintain LOS D for traffic volumes projected out to 2020. As indicated
previously, this study assumes that the planned circulation system is capable of
serving all future development contemplated in the General Plan.
— The level of service provided by existing components of the primary circulation
system is LOS D or better, so the City currently has no existing deficiencies relative
to the adopted standard.
Page 3
-2
March 30 2000 DMG- MAX /M(JS g
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City of Encinitas - Impact Fee Study Street System
FACILITYMMS
The Encinitas Engineering Services Department has developed a list of
improvements needed to complete the primary circulation system specified in the
Circulation Element. Cost estimates for those improvements have also been
prepared. Table 3.1 summarizes those costs, which. are broken down by
community within the City. A detailed breakdown is provided in Appendix A.
Table 3.1
Estimated Street Improvement Costs by Community
Estimated Street
Community Improvement Costs
Cardiff 29,623,344
New Encinitas 17,754,010
Olivenhain 6,0.14,170
Leucadia 12,663,584
Old Encinitas 34,872,684
Total Cost $ 100,927,792
Source: Encinitas Engineering Services Department.
Of the more than $100 million in improvements needed to complete the primary
circulation system, the Engineering Service Department has identified $49.84
million of improvements that are needed to serve future development in Encinitas.
Table 3.2 provides a list of those improvements, along with estimates, of individual
project costs and available funding.
Table 3.2
Street Improvements and Costs
Improvement/ Available
Street Location Cost Funds
Manchester Ave Widen to 6- lanes/I -5 to El Camino Real 2,400,000 0
Manchester Ave Realign,Widen/EI Camino Reatto Encinitas Blvd 2,190,000 2,190,000
Encinitas Blvd Widen to 6-lanes/El Camino Real to Calle Magdalena 10,000,000 0
Olivenhain Rd Widen to 6- lanes /East of Amargosa 500,000 0
La Costa Ave Widen to 4- lanes /Coast Hwy 101 to I -5 2,000,000 0
La Costa Ave Widen NCTD railroad bridge to 4 -lanes 3,000,000 0
Encinitas Blvd/I -5 Reconstruct Interchange & realign Saxony Rd 13,000,000 13,000,000
Manchester Ave /I -5 Reconstruct Interchange 13,000,000 7,000,000
Coast Hwy 101 /La Costa Ave Reconstruct intersection w/ added SBL
,WBL turn lanes 250,000 0
Leucadia Blvd/Vulcan Ave Add NBL, SBL, and WBR turn lanes at intersection 250,000 0
El Camino Real/Encinitas Blvd Add NBR, SBR, EBR, WBR turn lanes at intersection 2,000,000 0
El Camino ReaUM
to Vista Dr Add NBR turn lane at intersection 250,000 0
Coast Hwy 101 /Encinitas Blvd Add SBL turn lane at intersection 250,000 0
Manchester Ave /El Camino Real Add WBL turn lane at intersection 250,000 0
Traffic Signals Five locations 500,000 0
Future Transnet/GrantFunds 10,000,000
49,840,000 32,190,0 00
Totals 0 0
176500
Net Cost '
Source: Encinitas Engineering Services Department.
March 30, 2000
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City of Encinitas - Impact fee Study Street System
As shown in Table 3.2, about $22 million of the $49.84 million cost of
d improvements identified in this study has already been funded,
and an estimated $10 million more will be funded in the future with grants and
Transnet money. That leaves $17.65 million, or about 35% of the full cost, to be
recovered through impact fees.
IMPACT Fff CALCULATION
Impact fees for street improvements are calculated in this report using the plan -
based method described in Section 1. The net development - related improvement
cost identified in Table 3.2 is allocated to future development, on the basis of peak-
hour trips generated.
Some portion of the traffic using the City's circulation system is generated
elsewhere in the region, and passes through Encinitas while traveling to and from
I -5 or other destinations. Traffic passing through Encinitas on I -5 is not relevant to
this study because freeway construction, other than interchange improvements, is
not included in the City's street improvement program. However, even excluding
I -5 flows, up to 20% of the traffic on the City's primary circulation system may
merely as h Encinitas. The cost of
passes through is that g
of regional traffic y P
consist g
providing improvements for that regional traffic is properly funde d by federal, state
and regional sources. As shown in Table 3.2, approximately 65% of the cost of
improvements needed to serve new development will be funded from such sources.
That share of funding far exceeds the estimated 20% impact of regional pass -
through traffic on the City's street system, so the impact fees calculated in this
section clearly will not be used to fund improvements unrelated to development in
the City.
The next step in the impact fee calculation is to divide the net cost of future street
improvements by the sum of all peak hour trips associated with future
development. That calculation is shown in Table 3.3.
Table 3.3
Cost per Peak Hour Trip (PHT)
Net Cost of Future Demand Cost per
Street Improvements 1 in PHT z PHT
$17,650,000 7,930 $2,225.81
1 See Table 3.2
2 See Table 2.3.
I
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City of Encinitas - Impact Fee Study Street System
The cost per peak -hour trip, from Table 3.3 is used to calculate the impact fee per
unit of development for each type of development. Table 3.4 shows the average
number of peak -hour trips per unit of development for each category of
development. It also shows the impact fee obtained by multiplying the per -trip cost
by the number of trips per unit for each category.
Table 3.4
Impact Fees per Unit of Development - Street Improvements
Development Dev PHT Cost Per Fee
Type Units Per Unit 1 PHT 2 Per Unit
Residential (0.125 -0.25 du /ac) DU 1.20 2,225.81 2,6707
Residential (0.25 -0.5 du /ac) DU 1.20 2,225.81 2,670.97
Residential (0.5 -1.0 du/ac) DU 1.20 2,225.81 2,670.97
Residential (1.0 -2.0 du /ac) DU 1.20 2,225.81 2,670.97
Residential (2.0 -3.0 du /ac) DU 1.00 2,225.81 2,225.81
Residential (3.0 -5.0 du /ac) DU 1.00 2,225.81 2,225.81
Residential (5.0 -8.0 du /ac) DU 1.00 2,225.81 2,225.81
Residential (8.0 -11.0 du /ac) DU 1.00 2,225.81 2,225.81
Residential (11.0 -15.0 du /ac) DU 0.80 2,225.81 1,780.65
Residential (15.0 -25.0 du/ac) DU 0.54 2,225.81 1,201.94
Mobile Home Park DU 0.55 2,225.81 1,224.20
Office - Professional KSF 3.90 2,225.81 8,680.66
Commercial -Local KSF 4.20 2,225.81 9,348.40
Commercial- Visitor Serving KSF 5.76 2,225.81 12,820.67
Commercial - General KSF 3.15 2,225.81 7,011.30
Industrial- Light KSF 1.92 2,225.81 4,273.56
Public /Semi- Public Acres 14.40 2,225.81 32,051.67
Eco Resource /Open Space /Parks Acres 1.50 2,225.81 3,338.72
1 See Table 2.1
2 See Table 3.3.
As previously noted, the peak hour trip generation rate assigned to a particular
category of development in this study is intended to represent the entire category,
based on the expected mix of development types in that category. For the
residential categories, the fees shown in Table 3.4 should be appropriate for
virtually all projects in a category. But for non - residential categories, because they
cover a wide range of potential development types, the fees shown in Table 3.4
may not be appropriate for a particular project.
When applying the fees to an actual project, if the City staff feels that the average
l tri generation characteristics of that
fees from Table 3.4 are inconsistent with the p g
development, aproject- specific impact fee_ can be-calculated _for_ that project (See
the Implementation Section for recommendations on adoption of fees to facilitate
this approach).
March 30, 2000
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City of Encinitas - Impact Fee Study Street System
4W The formula for calculating a project- specific impact fee is as follows:
No. of Development Units in Project x PHT Rate per Dev. Unit' x Cost per PHT
From SANDAG Traffic Generators. Rates for commercial development should be discounted for
pass -by trips.
2 See Table 3.3.
PROJECTED REVENUE
Finally, the impact fees shown in Table 3.4 can be applied to estimates of future
development to project the revenue potential of those fees through buildout --
assuming that future development occurs as projected in this study. Table 3.5
shows the revenue projections for the fees calculated in this section. We have
assumed that the City will be unable to collect any fees within the Public /Semi-
Public or Open Space categories, so no revenue is shown in Table 3.5 for land in
those categories.
Table 3.5
Projected Impact Fee Revenue for Street Improvements
Development Dev Fee =Ujnits cted Projected
Type Units Per Unit' z Revenue
Residential (0.125 -0.25 du /ac) DU 2,670.97 2 5,342
Residential (0.25 -0.5 du /ac) DU 2,670.97 298 795,950
Residential (0.5 -1.0 du/ac) DU 2,670.97 256 683,769
Residential (1.0 -2.0 du /ac) DU 2,670.97 395 1,055,034
Residential (2.0 -3.0 du /ac) DU 2,225.81 1,289 2,869,070
Residential (3.0 -5.0 du/ac) DU 2,225.81 265 589,840
.0 -8.0 du /ac
' 1 5 ) DU 2,225.81 354 787,937
Residential (
370 823,550
Residential (8.0 -11.0 du /ac) DU 2'225'81 413 735,408
Residential (11.0 -15.0 du /ac) _ DU 1,780.65
Residential (15.0 -25.0 du /ac) DU 1,201.94 1,016 1,221,169
Mobile Home Park DU 1,224.20 0 0
Office- Professional KSF 8,680.66 420 3,646,225
Commercial -Local KSF 9,348.40 11 101,804
Commercial- Visitor Serving KSF 12,820.67 33 418,851
Commercial- General KSF 7,011.30 240 1,679,779
KSF 4,273.56 125 534,195
Industrial -Light 50 0
� Public /Semi - Public Acres 32,051.67
Eco Resource /Open Space /Parks Acres 3,338.72 30 0
Total $ 15,947,923
l 1 See Table 3.4
z See Table 2.3
I Page 3 -6
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City of Encinitas - impact fee Study Street System
As shown in Table 3.5, the impact fees calculated in this section have the potential
to produce about $15.95 million for street improvements. The costs used in this
report are given in current dollars. To keep pace with changing price levels, the
fees calculated above should be indexed, or adjusted annually for inflation. See the
Implementation Section for more on indexing of fees.
In the event that developers dedicate right- of - wgy for, or construct any of the
improvements listed in Table 3.2, the cost of that right -of -way and /or construction
should be credited against the traffic impact fees charged to that project. If the
credit exceeds the amount of the traffic impact fees due from the project, the City
should negotiate a reimbursement agreement with the developer, providing for
repayment of the difference from impact fee funds, when those funds are available.
See the Implementation Section for more on offsets, credits and administration of
impact fees.
I
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City of Encinitas - impact Fee Study Parks and Recreation
SECTION 4
PARKS AND RECREATION
This section of the report addresses parks and recreation facilities, including trails,
needed to serve future development in Encinitas. The fees calculated in this section
of the report include cover the cost of park land, open space, park improvements,
and trail improvements. Fees for park land acquisition include fees in lieu of park
land dedication as authorized by the Quimby Act (Government Code 66477).
SER VICE AREA AND TIME FRAME
The overall study area addressed by this analysis encompasses the City of Encinitas
and its sphere of influence. Because level -of- service standards are set on a citywide
basis, and all parks are available to all residents, the impact fees for park and
recreation improvements will be calculated on a citywide basis and applied to new
development in all parts of the City.
The time frame for this study is not defined as a fixed number of years, but as the
time required to build out all additional development planned for the study area.
No time frame is needed for this analysis, because the method used to calculate
these fees does not depend on the timing of development or the total amount of
development to be served.
DEMAND VARIABLE
The need for parks and recreation facilities is almost universally defined in terms of
population, and that is the case in Encinitas. The level -of- service standards defined
in the City's general plan are based on ratios of park acreage to population.
Consequently, population is used as the demand variable in this analysis. Actual
population factors. (persons per dwelling unit) used in the impact fee calculations
are shown in Section 2 of this report and in the summary of impact fee calculations
later in this section.
III LEVEL OF SERVICE
The City's level -of- service standards for parks are adopted as part of the Recreation
Element of the General Plan. The general standard is 15 acres of open space,
includin parks, per thousand residents. More specific standards are given for
g
various types of parks. Those standards, which are base d on National Recreation
and Park Association (NRPA) recommendations, are shown in Table 4.1.
March 30, 2000 DMG- AVWMUS Page 4 -1
City of Encinitas - Impact Fee Study Parks and Recreation
Table 4.1
Standards for Parks
Park Acres /1000 Size Service
Classification Population Range Area
Mini -Park 0.25 -0.5 1 1 Acre or less 1 /4 mile radius
Neighborhood Parks 1-2 3 - 5 Acres 1 /2 mile radius
Community Parks 5-8 10 - 20 Acres 1 -2 mile radius
Special Use Parks 5-8 No Standard Citywide
Re ional Parks No Standard No Standard 1 1 -3 Hours Travel
Source: Encinitas General Plan, Recreation Element
1 Depends on other available facilities. Used when space is not available for neighborhood parks.
For purposes of the impact fee analysis, we must consider not only the adopted
standards, but the existing level of service in the City. Table 4.2 lists the City's
existing parks and park sites, showing city -owned acreage and improved acreage.
Table 4.2
Existing Parks and Park Sites
Vista Points City -owned City - Improved Neighborhood City -owned City- Improved
and Mini -Parks Acres Acres Parks Acres Acres
D Street Vista Point 0.10 0.10 George Berkich Park' 0.00 3.76
H Street Vista Point 0.10 0.10 Hawkview Park 4.16 1.40
I Street Vista Point 0.18 0.18 Encinitas Viewpoint 2.43 2.43
J Street Vista Point 0.58 0.58 ESD Park Site 8.17 8.17
San Elijo Bluff Parcels 0.41 0.41 Glen Park 3.50 3.50
Leucadia Roadside 0.30 0.30 James McPherson 2.00 0.00
Mildred McPherson 0.94 0.94 Leo Mullen Sports Park 5.84 5.84
Wiro 1.03 1.03 Quail Gardens Park Site 9.46 0.00
Scott Valley 2.00 2.00
Orpheus 2.69 2.69
Sun Vista 4.10 4.10
Subtotal 3.64 3.64 44.35 33.89
Community and City -owned City - Improved City -owned City - Improved
Special Use Parks Acres Acres Beaches Acres Acres
Cardiff Sports Park 11.02 11.02 Beacon's Beach/Access 4 0.00 2.03
Ecke Sports Park 2 0.00 9.29 D Street Beach/Access 0.10 0.10
Indian Head Canyon 12.00 0.00 Encinitas Beach 2.36 0.00
Manchester Sports Park 7 18.90 18.90 Grandview Beach/Access 4 0.00 1.00
Oakcrest Park 20.39 20.39 Moonlight Beach 4 0.00 12.70
Little Oaks Equestrian 0.80 0.80 Stonesteps Beach/Access 9.85 0.38
Swami's Beach/Access 1 1.55 1 1.55
60.40 13.86 17.76
L �T�otalA 124.96 Total Acres of Improved Park Land J 115.69
t The City is in negotiations to purchase this site ' Land owned and operated by School District
2 Land owned by YMCA and leased by City 4 Land owned by State and leased by City
5 Site also includes 50 acres of passive open space 6 Site also includes 10 acres of passive open space
7 Treated as an existing park -- funding committed and construction scheduled to begin August, 2000
II \
Page 4 -2
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City of Encinitas - impact Fee Study Parks and Recreation
Table 4.3, below, shows ratios of population to existing facilities for improved park
land in Encinitas. It also shows the current ratios of population to acres of city -
owned park land suitable for active recreation, acres of city -owned park land
suitable for passive open space, and miles of developed trails. City -owned park
land suitable only for passive open space is identified in footnotes to Table 4.2 on
the previous page.
The level of service calculations in Table 4.3 are based on a current population of
61,018, as shown in Table 2.2. That figure varies slightly from the official
Department of Finance population estimate for Encinitas, because this study uses an
estimated full occupancy population (See explanation in Section 2).
Table 4.3
Existing Level of Service — Parks and Trails
Facility Existing Current Facilities /1000
Type Facilities ' Po ulation 3 Population
Improved Acres — Parks 115.69 Ac. 61,018 1.90 Ac.
City -Owned Acres — Active Park Sites' 124.96 Ac. 61 2.05 Ac.
City -Owned Acres — Passive Open Space 2 60.00 Ac. 61,018 0.98 Ac.
Trails (Miles) 2 11.91 Mi. 61,018 0.20 Mi.
' See Table 4.2.
2 Source: Encinitas Community Services Department
�r 3 See Table 2.2. Population figures used in this study are based on 100% occupancy
of all existing dwelling units.
FACILITY NEEDS
Because of differences in the service standards used to establish fees for different
categories of park land and improvements in this section, each component is
discussed separately, below. The need for additional parks and recreation facilities
in the following analysis is based on a projected population increase of 12,396
resulting from future residential development in the City (See Table 2.3).
Park Improvements. The combined standard for neighborhood and community
parks, as adopted in the Recreation Element of the Encinitas General Plan, is 6 -10
acres per thousand. As shown in Table 4.3, the existing level of service, in terms of
improved park acreage in Encinitas, is 1.9 acres per thousand. The fees calculated
in
this study are based on the more conservative existing level of service. Using that
population ratio, 23.5 acres of additional park improvements would be needed to
maintain the existing level of service through buildout. Impact fees for park
improvements are calculated below. - -
j Trail Improvements. Table 4.3 shows that the existing level of service, in terms of
miles of recreational trails in Encinitas, is 0.2 miles per thousand population. At
March 30,
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City of Encinitas - impact fee Study Parks and Recreation
that rate, another 2.48 miles of trails will be needed to maintain the existing level
of service through buildout.
Park Land Dedication or Fees in Lieu. The Quimby Act authorizes the City to
require dedication of park land or payment of fees in lieu of dedication by
residential subdividers in order to acquire land for neighborhood and community
parks. That statute specifies that the City may base dedication requirements and in-
lieu fees on a ratio of 3.0 acres of park land per thousand residents, unless the City
currently has a higher level of service. That is not the case, so 3.0 acres per thousan
will be used in this analysis. The City may choose to require either dedication of
land or payment of in -lieu fees for residential subdivisions exceeding SO lots. For
smaller subdivisions, the City is limited to the imposition of in -lieu fees. In -lieu
fees for residential subdivisions are calculated below.
Park Land for Non - Subdivision Developments. Requirements for park land
dedication or in -lieu fees authorized by the Quimby Act may be imposed only
through the subdivision process. For residential developments that do not involve
a division of land, a separate fee for park land acquisition is calculated below. That
fee will be based on the existing ratio of City -owned park land to population,
rather than the 3.0 acres per thousand standard authorized by the Quimby Act.
Open Space Land. In addition to land for active neighborhood and community
parks, the City acquires land for use as passive open space. Impact fees for open
space will be calculated separately, based on the existing level 'of service shown in
Table 4.3
IMPACT FEE CALCULATION
Impact fees for park and trail improvements as well as fees for park land and open
space acquisition will.be calculated using the standard - based method described in
Section 1 of this report. The fee calculations will use estimated average costs for
park improvements, trail improvements, and land acquisition. Because population
is being used
as the demand variable in calculating i m p act p fees for P arks and
�n
ca
recreation facilities, the fees will be calculated initially on a p er capita b asis usin
the appropriate ratio of facilities to population from Table 4.3. The fees will then
be converted into impact fees per unit of development.
Park Improvements. Based on costs for recent park projects, the Encinitas
Community Services Department estimates that the average cost for typical park
improvements in the City falls into the range from $115,000 to $125,000 per acre.
This study uses a mid -range estimate of $120,000 per acre. Table 4.4 on the
following page establishes the cost per capita for park improvements at the existing
level of service, as discussed above.
MUS Page 4 -4
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March 30, 2000 DMG -MAXI
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City of Encinitas - Impact Fee Study Parks and Recreation
- Table 4.4
Cost per Capita - Park Improvements (All Residential Development)
Acres Acres Improvement Cost Cost
Per Thousand t Per Capita Per Acre 2 Per Capita
1.9 0.0019 $120,000 $228.00
1 See Table 4.3
2 Cost Estimate by the Encinitas Community Services Department.
Trail Improvements. Information contained in the September 1998 draft of the
Encinitas Trails Master Plan indicates that costs for trail construction can range
from $25,000 per mile for a compacted dirt trail with no gradient problems to as
much as $350,000 per mile for an asphalt path on an ungraded corridor with some
retaining walls required. Costs for items such as bridges, rest areas and signs are
additional. The City's policy is to develop trails as naturally as possible, and for
purposes of calculating impact fees for trail development, we will use a conservative
cost estimate of $40,000 per mile for compacted dirt trails. Table 4.5 establishes
the cost per capita to provide trail improvements at the existing level of service, as
shown in Table 4.3.
Table 4.5
Cost per Capita - Trail Improvements
Miles Miles Improvement Cost Cost
Per Thousand t Per Capita Per Mile 2 Per Capita
0.2 0.0002 $40,000 $8.00
1 See Table 4.3
2 Estimated costs provided by the Encinitas Community Services Department.
Park Land Acquisition (Subdivisions). As discussed above, the Quimby Act
authorizes cities to require that residential subdividers dedicate 3.0 acres of land
per thousand residents for neighborhood and community park sites, or pay fees in
lieu of dedication. Table 4.6 calculates the per capita amount of those in -lieu fees,
based on an estimated land cost of $300,000 per acre.
Table 4.6
Cost per Capita - Fees in Lieu of Park Land Dedication (Subdivisions)
Acres Acres Land Cost Cost
Per Thousand t Per Capita Per Acre 2 Per Capita
3.0 0.003 $300,000 $900.00
1 Population ratio authorized by the Quimby Act (Gov't. Code 66477)
2 Estimated costs provided by the Encinitas Financial Services Department.
artment.
8 e 4 -5
March 30, 2000 DMG- MAX /MC/S Pa
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City of Encinitas - impact Fee Study Parks and Recreation
Park Land Acquisition (Existing Parcels). Residential development on existing
parcels that do not involve a division of land are not subject to the Quimby Act
standards for park land dedication or in -lieu fees. However, those developments
still create a need for additional parks. Park land acquisition fees for such projects
are calculated in this study using the existing ratio of park land to population
instead of the 3.0 acres per thousand standard set by Quimby for subdivisions.
Table 4.7 shows the per capita cost calculation for park land acquisition for
residential development that does not involve a new subdivision of land. The per -
acre land cost used in that calculation is the same as for in -lieu fees.
Table 4.7
Cost per Capita - Park Land Acquisition (Existing Parcels)
Acres Acres Land Cost Cost
Per Thousand t Per Capita Per Acre 2 Per Capita
2.05 0.00205 $300,000 $615.00
1 See Table 4.3
2 Estimated costs provided by the Encinitas Community Services Department.
The per -acre land cost used in Tables 4.6 and 4.7 is an estimate based on recent
purchases of park land by the City. The per -acre costs for the three most recent
park sites purchased by the City were $280,000, $300,000, and $430,000. The
weighted average cost per acre was over $303,000, even though a portion of one
site is not useable for active recreation.
Passive Open Space Acquisition. In addition to land for active park sites, the City
has acquired open space to protect environmental values and offer opportunities
for passive recreation in a natural setting. Table 4.8 shows the per capita cost of
acquiring additional open space to maintain the existing ratio of population to
open space acreage (0.98 acres per thousand), using a conservative cost of $75,000
per acre.
Table 4.8
Cost per Capita - Passive open Space Acquisition (All Residential Development)
Acres Acres Land Cost Cost
Per Thousand t Per Capita Per Acre 2 Per Capita
0.98 0.00098 $75,000 $73.50
1 See Table 4.3
2 Cost Estimate by the Encinitas Financial Services Department.
Below, the per- capita costs from Tables 4.4 through 4.8 are converted into impact
fees per unit of development by development type. To make that conversion, per-
capita costs are multiplied by the average number of people per dwelling unit for
each type of development.
Page 4 -6
March 30, 2000 DMG- MAX /MUS Pa 3
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City of Encinitas - impact fee Study Parks and Recreation
Park Improvement Impact Fees. Table 4.9 shows the impact fees per unit of
development for park improvements. These fees will apply to all residential
development in the City.
Table 4.9
Impact Fees per Unit of Development - Park Improvements
Development GP Dev Pop Cost Per Fee
Type Code Units Per DU 1 Capita 2 Per Unit
Residential (0.125 -0.25 du /ac) R DU 2.95 228.00 672.60
Residential (0.25 -0.5 du /ac) RR DU 2.95 .228.00 672.60
Residential (0.5 -1.0 du/ac) RR1 DU 2.95 228.00 672.60
Residential (1.0 -2.0 du /ac) RR2 DU 2.95 228.00 672.60
Residential (2.0 -3.0 du/ac) R3 DU 2.95 228.00 672.60
Residential (3.0 -5.0 du /ac) R5 DU 2.95 228.00 672.60
Residential (5.0 -8.0 du /ac) R8 DU 2.75 228.00 627.00
Residential (8.0 -11.0 du /ac) R11 DU 2.40 228.00 547.20
Residential (11.0 -15.0 du /ac) R15 DU 2.20 228.00 501.60
Residential (15.0 -25.0 du /ac) R25 DU 2.20 228.00 501.60
Mobile Home Park I MHP DU 1.60 228.00 364.80
1 See Table 2.1
2 See Table 4.4.
Trail Improvement Impact Fees. Table 4.10 shows the impact fees for trail
improvements. As with the impact fees for park improvments, these fees will apply
to all residential development in the City.
Table 4.10
Impact Fees per Unit of Development - Trail Improvements
Development GP Dev Pop Cost Per Fee
Type Code Units Per DU 1 Capita 2 Per Unit
Residential (0.125 -0.25 du/ac) R DU 2.95 8.00 23.60
Residential (0.25 -0.5 du/ac) RR DU 2.95 8.00 23.60
Residential (0.5 -1.0 du /ac) RR1 DU 2.95 8.00 23.60
Residential (1.0 -2.0 du/ac) RR2 DU 2.95 8.00 23.60
Residential (2.0 -3.0 du /ac) R3 DU 2.95 8.00 23.60
Residential (3.0 -5.0 du /ac) R5 DU 2.95 8.00 23.60
Residential (5.0 -8.0 du /ac) R8 DU 2.75 8.00 22.00
Residential (8.0 -11.0 du/ac) R11 DU 2.40 8.00 19.20
Residential (11.0 -15.0 du/ac) R15 DU 2.20 8.00 17.60
Residential (15.0 -25.0 du /ac) R25 DU 2.20 8.00 17.60
Mobile Home Park MHP DU 1.60 8.00 12.80
1 See Table 2.1
2 See Table 4.5.
March 30, 2000
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City of Encinitas - Impact Fee Study Parld and Recreation
In -Lieu Fees for Park Land (Subdivisions). Table 4.11 shows the in -lieu fees per
unit of development for park land acquisition as authorized by the Quimby Act.
These fees would apply to new subdivisions only if a developer does not dedicate
land for parks.
Table 4.11
In -Lieu Fees per Unit of Development - Park Land (Subdivisions)
Development GP Dev Pop Cost Per Fee
Type Code Units Per DU 1 Capita 2 Per Unit
Residential (0.125 -0.25 du/ac) R DU 2.95 900.00 2,655.00
Residential (0.25 -0.5 du /ac) RR DU 2.95 900.00 2,655.00
Residential (0.5 -1.0 du /ac) RR1 DU 2.95 900.00 2,655.00
Residential (1.0 -2.0 du/ac) RR2 DU 2.95 900.00 2,655.00
Residential (2.0 -3.0 du/ac) R3 DU 2.95 900.00 2,655.00
Residential (3.0 -5.0 du /ac) R5 DU 2.95 900.00 2,655.00
Residential (5.0 -8.0 du/ac) R8 DU 2.75 900.00 2,475.00
Residential 5.0 -11.0 du /ac R11 DU 2.40 900.00 2,160.00
)
Residential (11.0 -15.0 du /ac) R15 DU 2.20 900.00 1,980.00
Residential (15.0 -25.0 du /ac) R25 DU 2.20 900.00 1,980.00
Mobile Home Park MHP DU 1.60 900.00 1,440.00
1 See Table 2.1
2 See Table 4.6.
Acquisition (Existing Impact Fees for Park Land q ( g Parcels). Table 4.12 shows park
land acquisition fees per unit of development for new residential development
that does not involve a division of land.
Table 4.12
Impact Fees per Unit of Development - Park Land (Existing Parcels)
Development GP Dev Pop Cost Per Fee
Type Code Units Per DU 1 Capita 2 Per Unit
Residential (0.125 -0.25 du/ac) R DU 2.95 615.00 1,814.25
Residential (0.25 -0.5 du /ac) RR DU 2.95 615.00 1,814.25
Residential (0.5=1.0 du/ac) RR1 DU 2.95 615.00 1,814.25
Residential (1.0 -2.0 du /ac) RR2 DU 2.95 615.00 1,814.25
Residential (2.0 -3.0 du/ac) R3 DU 2.95 615.00 1,814.25
Residential (3.0 -5.0 du/ac) R5 DU 2.95 615.00 1,814.25
Residential (5.0 -8.0 du/ac) R8 DU 2.75 615.00 1,691.25
Residential (8.0 -11.0 du/ac) R11 DU 2.40 615.00 1,476.00
1 353.
00
Residential - (11.0 -15.0 du /ac) R15 DU 2.20 615.00 ,
Residential (15.0 -25.0 du /ac) R25 DU 2.20 615.00 1,353.00
I �
Mobile Home Park MHP DU 1.60 1 615.00 1 984.00
1 See Table 2.1
( ,J 2 See Table 4.7.
w
Page 4 -8
March 30, 2000 DMG -M"MUS
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City of Encinitas - Impact fee Study Parks and Recreation
Impact Fees for Open Space Acquisition. Table 4.13 shows open space acquisi-
tion fees per unit of development for all residential development. Fees for acqui-
sition of open space are separate, and in addition to, other fees for acquisition of
park land. These fees would apply to all residential development in the City.
Table 4.13
Impact Fees per Unit of Development - Open Space
Development GP Dev Pop Cost Per Fee
Type Code Units Per DU 1 Capita 2 Per Unit
Residential (0.125 -0.25 du/ac) R DU 2.95 73.50 216.83
Residential (0.25 -0.5 du /ac) RR DU 2.95 73.50 216.83
Residential (0.5 -1.0 du /ac) RR1 DU 2.95 73.50 216.83
Residential (1.0 -2.0 du/ac) RR2 DU 2.95 73.50 216.83
Residential (2.0 -3.0 du/ac) R3 DU 2.95 73.50 216.83
Residential (3.0 -5.0 du /ac) R5 DU 2.95 73.50 216.83
Residential (5.0 -8.0 du /ac) R8 DU 2.75 73.50 202.13
Residential (8.0 -11.0 du/ac) R11 DU 2.40 73.50 176.40
Residential (11.0 -15.0 du /ac) R15 DU 2.20 73.50 161.70
Residential (15.0 -25.0 du /ac) R25 DU 2.20 73.50 161.70
Mobile Home Park MHP DU 1.60 73.50 117.60
1 See Table 2.1
2 See Table 4.8.
Summary of Park and Recreation Impact Fees. Table 4.14 shows the total of the
foregoing fees per unit of development for residential development, both for sub-
divisions and for development on existing parcels. The only difference between
the two categories is the amount of the fee for land acquisition.
Table 4.14
Total Fees Per Development Unit for Parks and Recreation Facilities
Development GP Dev Fees per Unit. Fees per Unit
Type Code Units (Subdivisions) 1 (Existing Parcels) 2
Residential (0.125 -0.25 du /ac) R DU 3,568.03 2,727.28
Residential (0.25 -0.5 du/ac) RR DU 3,568.03 2,727.28
Residential (0.5 -1.0 du /ac) RR1 DU 3,568.03 2,727.28
Residential (1.0 -2.0 du/ac) RR2 DU 3,568.03 2,727.28
Residential (2.0 -3.0 du/ac) R3 DU 3,568.03 2,727.28
Residential (3.0 -5.0 du/ac) R5 DU 3,568.03 2,727.28
Residential (5.0 -8.0 du /ac) R8 DU 3,326.13 2,542.38
Residential (8.0 -11.0 du/ac) R11 DU 2,902.80 2,218.80
Residential (11.0 -15.0 du /ac) R15 DU 2,660.90 2,033.90
Residential (15.0 -25.0 du/ac) R25 DU 2,660.90 2,033.90
Mobile Home Park MHP DU 1,935.20 1,479.20
1 Includes fees from Tables 4.9, 4.10, 4.11, and 4.13
2 Includes fees from Tables 4.9, 4.10, 4.12, and 4.13.
March 30, 2000
DMG -M"MUS Page 4 -9
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City of Encinitas.- Impact Fee Study Parks and Recreation
PROJECTED REVENUE
Finally, the impact fees shown in the previous five tables can be applied to future
development to project the total revenue that will be generated by these fees
through buildout. Tables 4.15 through 4.19 show revenue projections for the fees
calculated in this section, assuming that development occurs as projected in this
report.
Table 4.15
Projected Impact Fee Revenue for Park Improvements
Development GP Dev Fee Projected Projected
Type Code Units Per Unit 1 Units Z Revenue
Residential (0.125 -0.25 du /ac) R DU 672.60 2 1,345
Residential (0.25 -0.5 du /ac) RR DU 672.60 298 200,435
Residential (0.5 -1.0 du /ac) RR1 DU 672.60 256 172,186
Residential (1.0 -2.0 du/ac) RR2 DU 672.60 395 265,677
Residential (2.0 -3.0 du /ac) R3 DU 672.60 1,289 866
Residential (3.0 -5.0 du /ac) R5 DU 672.60 265 178,239
Residential (5.0 -8.0 du /ac) R8 DU 627.00 354 221,958
Residential (8.0 -11.0 du /ac) R11 DU 547.20 370 202,464
Residential (11.0 -15.0 du /ac) R15 DU 501.60 413 207,161
Residential (15.0 -25.0 du/ac) R25 DU 501.60 1,016 509,626
Mobile Home Park I MHP DU 364.80 0 0
(� Total $ 2,826,071
1 See Table 4.9
2 See Table 2.3
As shown in Table 4.15, impact fees calculated in this section have the potential to
produce about $2.83 million in current dollars for park improvements if future
development occurs as anticipated, and the recommended fees are applied to all
future development. Developer agreements that alter the fees for particular
projects would obviously affect total fee revenue.
Table 4.16, on the next page, shows that the potential revenue from trail impact
fees approximately would amount to a roximatel $99,000, through buildout, in current dollars.
may/
March 30, 2000 DMG- MAX /MUS Page 4 -10
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City of Encinitas - Impact Fee Study Parks and Recreation
Table 4.16
Projected Impact Fee Revenue for Trail Improvements
Development GP Dev Fee Projected Projected
Type Code Units Per Unit 1 Units z Revenue
Residential (0.125 -0.25 du /ac) R DU 23.60 2 47
Residential (0.25 -0.5 du /ac) RR DU 23.60 298 7,033
Residential (0.5 -1.0 du /ac) RR1 DU 23.60 256 6,042
Residential (1.0 -2.0 du /ac) RR2 DU 23.60 395 9,322
Residential (2.0 -3.0 du/ac) R3 DU 23.60 1,289 30,420
Residential (3.0 -5.0 du /ac) R5 DU 23.60 265 6,254
Residential (5.0 -8.0 du /ac) R8 DU 22.00 354 7,788
Residential (8.0 -11.0 du/ac) R11 DU 19.20 370 7,104
Residential (11.0 -15.0 du /ac) R15 DU 17.60 413 7,269
Residential (15.0 -25.0 du/ac) R25 DU 17.60 1,016 17,882
Mobile Home Park MHP DU 12.80 0 0
Total $ 99,160
1 See Table 4.10
2 See Table 2.3
Table 4.17 shows projected revenue of $6.86 million from fees in lieu of park land
dedication imposed on new subdivisions. The revenue projection assumes that all
subdivision development pays the fees rather than. dedicating land. It further
4W assumes that 75% of all future units in density categories up to 15 dwelling units
per acre, and none of the units in higher density categories, will occur in new
subdivisions. Those percentages are approximate.
Table 4.17
Projected Impact Fee Revenue for Park Land Acquisitions (Subdivisions)
Development GP Dev Fee Projected Projected
Type Code Units Per Unit t Units 2 Revenue
Residential (0.125 -0.25 du /ac) R DU 2,655.00 2 3,983
Residential (0.25 -0.5 du /ac) RR DU 2,655.00 224 593,393
Residential (0.5 -1.0 du /ac) RR1 DU 2,655.00 192 509,760
Residential (1.0 -2.0 du /ac) RR2 DU 2,655.00 296 786,544
Residential (2.0 -3.0 du /ac) R3 DU 2,655.00 967 2,566,721
Residential (3.0 -5.0 du /ac) R5 DU 2,655.00 199 527,681
Residential (5.0 -8.0 du/ac) R8 DU 2,475.00 266 657,113
Residential (8.0 -11.0 du /ac) R11 DU 2,160.00 278 599,400
Residential (11.0 -15.0 du/ac) R15 DU 1,980.00 310 613,305
Residential (15.0 -25.0 du/ac) R25 DU 1,980.00 0 0
Mobile Home Park MHP DU 1,440.00 0 0
Total $ 6,857,899
1 See. Table 4.11
2 Includes only 75% of units from Table 2.3 in categories up to 15 du/ac.
March 30, ZDDO DMG- MAX /MUS Page 4-11
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City of Encinitas - Impact fee Study Parks and Recreation
� Table 4.18
Projected Impact Fee Revenue for Park Land Acquisitions (Existing Parcels)
Development GP Dev gUnit Projected Projected
Type Code Units Units 2 Revenue
Residential (0 .125 -0.25 du /ac) R DU 1 907
Residential (0.25 -0.5 du /ac) RR DU 75 135,162
Residential (0.5 -1.0 du /ac) RR1 DU ,. 64 116,112
Residential (1.0 -2.0 du /ac) RR2 DU 1,814.25 99 179,157
Residential (2.0 -3.0 du /ac) R3 DU 1,814.25 322 584,642
Residential (3.0 -5.0 du /ac) R5 DU 1,814.25 66 120,194
Residential (5.0 -8.0 du/ac) R8 DU 1,691.25 89 149,676
Residential (8.0 -11.0 du /ac) R11 DU 1,476.00 93 136,530
Residential (11.0 -15.0 du /ac) R15 DU 1,353.00 103 139,697
Residential (15.0 -25.0 du /ac) R25 DU 1,353.00 1,0166 1,374,6488
Mobile Home Park I MHP DU 984.00 0 $ 2,936,725
Total
1 See Table 4.12'
2 Includes 25% of units from Table 2.3 in categories up to 15 du/ac, and all units in
higher density categories.
Table 4.18, above, shows projected revenue of $2.94 million from impact fees for
park land acquisition imposed on residential development on existing parcels. The
revenue projection assumes that 25% of all new units in density categories up to 15
dwelling units per acre, and all of the units in higher density categories, will occur
on existing parcels. Those percentages are approximate.
Table 4.19
Projected Impact Fee Revenue for Open Space Acquisition
Development GP Dev Fee Projected Projected
Type Code Units Per Unit 1 Units z Revenue
Residential (0.125 -0.25 du /ac)
R DU 216.83 2 434
Residential (0.25 -0.5 du /ac) RR DU 216.83 298 64,614
Residential (0.5 -1.0 du /ac) RR1 DU 216.83 256 55,507
Residential (1.0 -2.0 du /ac) RR2 DU 216.83 395 85,646
Residential (2.0 -3.0 du/ac) R3 DU 216.83 1,289 279,487
Residential (3.0 -5.0 du /ac) R5 DU 216.83 265 57,459
Residential (5.0 -8.0 du /ac) R8 DU 202.13 354 71,552
Residential (8.0 -11.0 du/ac) R11 DU 176.40 370 65,268
Residential (11.0 -15.0 du /ac) R15 DU 161.70 413 66,782
Residential (15.0 -25.0 du /ac) R25 DU 161.70 1,016 164,287
Home Park MHP DU 117.60 - 0
Mobile $ 911,036
Total
1 See Table 4.13
2 See Table 2.3
March 30, 2000
DMG- MAX /MC/S Page 4 -12
15 -45
City of Encinitas - Impact Fee Study Parks and Recreation
Table 4.19 on the previous page shows projected revenue of about $911,000 from
impact fees for open space acquisition imposed on residential development. That
revenue would allow the purchase of approximately 12 acres of passive open space
at $75,000 per acre.
All costs used in this report are given in current dollars. To keep pace with
changing price levels, the fees calculated above should be adjusted annually for
inflation. See the Implementation Section for more on indexing of fees.
IMPLEMENTATION OF IN - LIEU FEES
It is important to note that all of the fees calculated in this section, except for the
fees in lieu of park land dedication for residential subdivisions, must comply with
the Mitigation Fee Act. The in -lieu fees are exempt from the .provisions of the
Mitigation Fee Act, but must comply with the provisions of the Quimby Act
(Government Code 66477). It should also be noted that the fees for park land
acquisition for non- subdivision projects, may be collected for residential
development on existing parcels only if no Quimby Act in -lieu fees were collected,
and no park land dedicated, in connection with a previous subdivision approval
involving the parcel.
I
i
March 30, 2000 DMG- M.X/MUS Page 4 -13
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4�p
City of Encinitas - impact fee Study Implementation
SECTION 5
IMPLEMENTATION
This section of the report contains recommendations for adoption and
administration of a development impact fee program based on this study, and for
the interpretation and application of impact fees recommended herein. Statutory
requirements for the adoption and administration of fees imposed as a condition of
development approval are found in the Mitigation Fee Act (Government Code
Sections 66000 et seq.).
ADOPTION
The form in which development impact fees are adopted, whether by ordinance or
resolution, should be determined by the City Attorney. Typically, it is desirable
that specific fee schedules be set by resolution to facilitate periodic adjustments.
Procedures for adoption of fees subject to the Mitigation Fee Act, including notice
and public hearing requirements, are specified in Government Code Section 66016.
Those fees do not become effective until 60 days after final action by the
Governing body. Actions establishing or increasing fees subject to the Mitigation
Act require certain findings, as set forth in Government Code Section 66001 and
discussed below and in Section 1 of this report. It should be noted that all fees
calculated in this report are subject to the provisions of the Mitigation Fee Act,
except for fees in lieu of park land dedication for new subdivisions (See Section 4).
Those in -lieu fees are governed by the Quimby Act (Government Code 66477) and
should be adopted and administered in keeping with the requirements of that
statute.
As discussed below, we recommend that, where possible, impact fees be adopted as
fees per unit of service instead of, or in addition to, being adopted as schedules of
fees per unit of development. For example, an impact fee for street improvements
ted b d evelopment, ment rather
trip g ener ated ,
e adopted as a charge p g Y P
co b p er vehicle g P
P
f development b development per unit o Y type. . P
than as a schedule of flat fees p p
ADMINISTRATION
Several requirements of the California Mitigation Fee Act (Government Code
Sections 66000 et seq.) address the administration of impact fee programs,
including collection and accounting procedures, refunds, updates and reporting..
References to code sections in the following paragraphs pertain to the California
il l
Government Code.
'
March 30 2000 DMG- MAXIMUS Page 5 -1
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City of Encinitas - Impact Fee Study Implementation
Application of Impact Fee Rates. In general, impact fees recommended in this
report are calculated initially in terms of a cost per unit of service, and then
converted into fees per unit of development. Service units are attributes of
development, such as population and trip generation, which are used to represent
demand for various types of public facilities. To implement impact fees, it is
necessary to estimate how many units of service are required by 'a certain
development project. For the administrative convenience of the City, and to
facilitate cost estimating by builders and developers, it is useful to convert impact
fee rates into fees for common units of development- -e.g., dwelling units for
residential development, or building area for commercial development. All impact
fee rates calculated in this study have been converted into fees per unit of
development for the land use categories defined in this study.
For street improvements we recommend that the impact fees calculated in this
report be formally adopted as a charge per peak hour trip instead of being adopted
as a schedule of fees per unit of development (e.g., $7.00 per square foot for
General Commercial development). That approach provides a basis for adjusting
fees in cases where a development project has demand characteristics that vary
significantly from the averages used to characterize the land use categories in this
report. It should be noted, however, that many commercial and industrial
buildings change occupants over time, and we believe that, in most cases, the City
is justified in applying fees based typical demand characteristics for a development
category, regardless of how a new building may be used by its initial occupants.
The fact that the initial user of a new building may have below average demand for
certain services does not ensure that future users will have similarly low demand.
An exception would be buildings designed for a very specific purpose, such as fast
food restaurants.
Fees for Park Land Acquisition. This report calculates fees in lieu of park land
dedication, which may be collected as a condition of approval of residential
subdivisions. The report also calculates impact fees for park land acquisition which
apply to residential development. projects not involving a new division of land.
Caution should be exercised to ensure that the latter type of fee not be imposed on
development on an existing which has already been subject to in -lieu fees or park
land dedication requirements at the time of a previous subdivision approval.
Imposition of Fees. Pursuant to the Mitigation Fee Act, when the City imposes an
impact fee upon a specific development project, it must make findings to
1. Identify the purpose of the fee;
2. Identify the use of the fee; and
3. Determine that there is a reasonable relationship between:
March 30, 2000 DMG MAX /MUS Page 5 -2
1
(5-49
city of Encinitas - Impact fee Study Implementation
a. The use of the fee and the development type on
which it is imposed;
b. The need for the facility and the type of
development on which the fee is imposed; and
C. The amount of the fee and the facility cost
attributable to the development project.
Most of those findings would normally be based on an impact fee study, and this
study is intended to provide a basis for all of the required findings. According to
the statute, the use of the fee (a., above) may be specified in a capital improvement
plan, the General Plan, or other public document. This study is intended to serve
as the public document identifying the use of the fees.
In addition, Section 66006, as amended by SB 1693, provides that a local agency,
at the time it imposes a fee for public improvements on a specific development
project, "... shall identify the public improvement that the fee will be used to
finance." For each type of fee calculated in this report, the improvements to be
funded by the impact fees are identified either as specific projects, or as a class of
projects meeting certain service standards. Consequently, this report provides a
basis for the notification required by the statute.
Collection of Fees. Section 66007, provides that a local agency shall not require
payment of fees by developers of residential projects prior to the date of final
inspection, or issuance of a certificate of occupancy, whichever occurs first.
However, "utility service fees" (not defined) may be collected upon application for
utility service. In a residential development project of more than one dwelling unit,
the agency y
c choose to collect fees either for individual units or for phases upon
g Y ma
final inspection, or for the entire project upon final inspection of the first dwelling
unit completed.
An important exception allows fees to be collected at an earlier time if they will be
used to reimburse the agency for expenditures previously made, or for
improvements or facilities for which money has been appropriated. The agency
have adopted a construction schedule or
I I must also h plan for the improvement. p P
Statutory restrictions on the time at which fees may be collected do not apply to
non - residential development.
Notwithstanding the foregoing restrictions, many cities routinely collect impact fees
for_ all facilities at the time building permits are issued, and builders often find it
convenient to pay the fees at that time. In cases where the fees are not collected
upon issuance of building permits, Section 66007 provides that the city may
March 30, 2000 DMG- MAXIMUS Page 5 -3 -49
5
City of Encinitas - impact fee Study implementation
require the property owner to execute a contract to pay the fee, and to record that
contract as a lien against the property until the fees are paid.
Credit for Improvements provided by Developers. If the City requires a developer,
as a condition of project approval, to construct facilities or improvements for
which impact fees have been, or will be, charged, the impact fee imposed on that
development project, for that type of facility, should be adjusted to reflect a credit
for the cost of those facilities or improvements. If the reimbursement would
exceed the amount of the fee to be paid by the development for that type of
facility, the City may wish to negotiate a reimbursement agreement with the
developer.
Credit for Existing Development. If a project involves replacement, redevelopment
or intensification of previously existing development, impact fees should be applied
only to the portion of the project which represents an increase in demand for City
facilities, as measured by the demand variables used in this study. Since residential
service demand is normally estimated on the basis of demand per dwelling unit, an
addition to a single family dwelling unit typically would not be subject to an impact
fee if it does not increase the number of dwelling units in the structure. If a
dwelling unit is g
added to an existing structure, no impact fee would be charged for
'
the previously existing units. A similar approach can be used for other types of
development.
Earmarking of Fee Revenue. Section 66006 mandates that fees be deposited "with
other fees for the improvement" in a separate capital facilities account or fund in a
manner to avoid any commingling of the fees with other revenues and funds of the
local agency, except for temporary investments. Fees must be expended solely for
the purpose for which they were collected. Interest earned on the fee revenues
must also be placed in the capital account and used for the same purpose.
The language of the law is not clear as to whether depositing fees "with other fees
for the improvement" refers to a specific capital improvement or a class of
improvements (e.g., street improvements). We are not aware of any city that has
interpreted that language to mean that funds must be segregated by individual
projects. As a practical matter, that approach is unworkable because it would mean
that no pay -as- you -go project could be constructed until all benefitting
development had paid the fees. Common practice is to maintain separate funds or
accounts for impact fee revenues by facility category (i.e., streets, park
improvements), but not for individual projects. We recommend that approach.
i
Reporting. As amended by SB 1693 in 1996, Section 66006 requires that once
each year, within 180 days of the close of the fiscal year, the local agency must
' n
atio
for each separate account
i make available to the public the following inform p
established to receive impact fee revenues:
March 30, 2000 DMG- MAX /MILS Page 5 -4
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City of Encinitas - Impact Fee Study Implementation
1. The amount of the fee;
2. The beginning and ending balance of the account or fund;
3. The amount of the fees collected and interest earned;
4. Identification of each public improvement on which fees were expended and
the amount of the expenditures on each improvement, including the per-
centage of the cost of the public improvement that was funded with fees;
5. Identification of the approximate date by which the construction of a public
improvement will commence, if the City determines sufficient funds have
been collected to complete financing of an incomplete public improvement;
6. A description of each inter -fund transfer or loan made from the account or
fund, including interest rates, repayment dates, and a description of the im-
provement on which the transfer or loan will be expended;
7. The amount of any refunds or allocations made pursuant to Section 66001,
paragraphs (e) and (f).
That information must be reviewed by the City Council at its next regularly
scheduled public meeting, but not less than 15 days after the statements are made
public.
Findings and Refunds. Prior to the adoption of Government Code amendments
contained in SB 1693, a local agency collecting impact fees was required to expend
or commit the fee revenue within five years or make findings to justify a continued
need for the money. Otherwise, those funds had to be refunded. SB 1693 changed
that requirement in material ways.
Now, Section 66001 requires that, for the fifth fiscal year following the first
deposit of any impact fee revenue into an account or fund as required by Section
thereafter, the local agency 6006
and
ever five ears g Y shall make all of the
6 Y
Y
followin g findings for any fee revenue that remains unexpended, whether
committed or uncommitted:
1. Identify the purpose to which the fee will be put;
2. Demonstrate the reasonable relationship between the fee and the purpose
for which it is charged;
3. ldentify all sources and amounts of funding anticipated to complete financ-
ing of incomplete improvements for which impact fees are to be used;
' March 30, 2000 DMG- MAXIMUS Page 5 -5
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City of Encinitas - Impact Fee Study implementation
4. Designate the approximate dates on which the funding necessary to com-
plete financing of those improvements will be deposited into the appropriate
account or fund.
Those findings are to be made in conjunction with the annual reports discussed
above. If such findings are not made as required by Section 66001, the local
agency must refund the moneys in the account or fund. Once the agency
determines that sufficient funds have been collected to complete an incomplete
improvement for which impact fee revenue is to be used, it must, within 180 days
of that determination, identify an approximate date by which construction of the
public improvement will be commenced. If the agency fails to comply with that
requirement, it must refund impact fee revenue in the account according to
procedures specified in the statute.
Costs of Implementation. The ongoing cost of implementing the impact fee
program is not included in the fees themselves. Implementation costs would
include the staff time involved in applying the fees to specific projects, accounting
for fee revenues and expenditures, preparing required annual reports, updating the
fees, and preparing forms and public information handouts. We recommend that
those costs be included in user fees charged to applicants for processing
development applications.
Annual Update of the Capital Improvement Plan. Section 66002 provides that if a
local agency adopts a capital improvement plan to identify the use of impact fees,
that plan must be adopted and annually updated by a resolution of the governing
body at a noticed public hearing. The alternative is to identify improvements in
other public documents. Since impact fee calculations in this study include costs
for future facilities to be funded by impact fees, we believe it is to the City's
advantage to use this report as the public document in which the use of impact fees
is identified. In that event, we believe the City would not be required to update its
CIP annually to satisfy Section 66002.
Indexing of Impact Fee Rates. Fees calculated in this report are stated in current
dollars. Fees should be adjusted annually to account for construction cost
escalation. We recommend the Engineering News Record Construction Cost Index
as the basis for indexing the cost of future projects. We also recommend that the
ordinance or resolution establishing the fees include provisions for annual
escalation.
Updates of This Study. The impact fees contained in this report were calculated in
spreadsheets designed specifically for that purpose. Those spreadsheets will be
provided to the City and they can be used to update fees in the event the City's
land use plans and /or facility plans change significantly. The fees should be
Page 5 -6
March 30, 2000 DMG- MAX /MUS Pa 8
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City of Encinitas - Impact fee Study Implementation
reviewed and updated at least every five years, unless significant changes in land
use or facility plans make it necessary to update the fees more often.
TRAINING AND PUBLIC INFORMATION
Administering an impact fee program effectively requires considerable preparation
and training. It is important that those responsible for applying and collecting the
fees, and for explaining them to the public, understand both the details of the fee
program and its supporting rationale. Before fees are imposed, a staff training
workshop is highly desirable if more than a handful of employees will be involved
in collecting or accounting for fees.
It is also useful to pay close attention to handouts which provide information to the
public regarding impact fees. Impact fees should be clearly distinguished from user
fees, such as application and plan review fees, and the purpose and use of particular
impact fees should be made clear.
Finally, anyone who is responsible for accounting, capital budgeting, or project
management for projects involving impact fees must be fully aware of the
restrictions placed on the expenditure of impact fee revenues. The fees
recommended in this report are tied to specific improvements and cost estimates.
Fees must be expended accordingly and the City must be able to show that funds
have been properly expended.
may+
RECOVERY OF STUDY COST
We do not recommend adding an administrative fee to impact fees to cover the
costs of administering the impact fee program. Those costs should be included in
the processing fees charged to developers and builders. However, it is reasonable
for the City to recover the cost of this study through the impact fee program. Once
the City Council decides what impact fees to impose, it is a relatively simple matter
to calculate an adjustment to cover the cost of the study.
Assuming the impact fee study will be updated every five years, the cost of this
study can be divided by the amount of revenue projected over the next five years to
determine the percentage by which fees should be increased to cover the cost of the
study. That percentage typically represents a very small increase in the fees. For
example, if the study cost amounts to $30,000 and the City expects to collect an
average of $1,200,000 per year in impact fees over the next five years, the fees
calculated in this study would be have to be increased by 0.5% to recover the cost
of the study over five years [30,000 / (1,200,000 x 5) = 0.005]. The necessary
adjustment should be made before the fees are actually adopted by the City
Council.
March 30, 2000 DMG- MAX/MUS Page 5 -7
15-3