TITLE
Recommendation to adopt resolution approving the Annual and Five-Year Reports for the Transportation Improvement Fee, Parks and Recreation Facilities Fee, Fire Facilities Impact Fee, and Police Facilities Impact Fee. (Citywide)
DISCUSSION
New development affects the level of services provided through the City’s facilities, infrastructure, land, and equipment. To accommodate the needs of the new residents and businesses, the City imposes impact fees to expand these resources as follows:
• Transportation Improvement Fee
• Parks and Recreation Facilities Fee
• Fire Facilities Impact Fee
• Police Facilities Impact Fee
The Annual and Five-Year Reports provide information to the City Council and the public and fulfills State Government Code and Long Beach Municipal Code (LBMC) mandated reporting and disclosure requirements. The attached Resolution contains the reports on each impact fee as Exhibits.
This report reflects the City’s Fiscal Year 2020 (FY 20) actual performance and fund balance information based on preliminary close information.
Annual Reports
The California Government Code requires that local agencies that impose fees in connection with the approval of development projects make information available to the public on an annual basis. The LBMC adds other elements to these requirements. Essentially, the reports provide what the fees are, the fund balance of each fund, and how the money was spent in the prior fiscal year.
Five-Year Reports
Government Code Section 66001 mandates additional disclosure requirements with respect to any fees collected and remaining unexpended in the fifth year after collection. To ensure the City Council is fully informed of the status of unexpended funds, five-year reports are submitted annually.
This matter was reviewed by Deputy City Attorney Sarah E. Green on February 11, 2021 and by Revenue Management Officer Geraldine Alejo on February 9, 2021.
TIMING CONSIDERATIONS
City Council action is requested on March 16, 2021, as State law requires the information contained in these reports be made available to the public within 180 days after the last day of the fiscal year, or by March 29, 2021.
FISCAL IMPACT
The amount of impact fees collected each year is dependent on the amount and type of new development and its relationship to the purpose of the fee. The impact fee revenue, including interest, for FY 20 was $7,187,444. Impact fee expenditures in FY 20 totaled $3,290,425. These fees can only be used to offset the impact of new development. The five-year reports provide information on revenue unexpended in the various impact fee funds during FY 16 through FY 20.
Transportation Improvement Fee Report (Exhibit A to the Resolution)
The Transportation Improvement Fee Report summarizes the status of implementation of the Citywide Traffic Mitigation Program (TMP). The TMP is the City’s program for implementing transportation improvements needed to meet increased traffic resulting from economic growth. Funding for the program is derived from a combination of public funds, such as Gas Tax, federal grants, and impact fees from new development. The TMP was designed as the mechanism by which the City could implement its basic access strategy to support economic growth and maintain mobility.
In FY 20, the City issued building permits for 1,610,974 gross square feet of residential units and 1,918,442 gross square feet of commercial development, which generated an estimated increase of 1,288 evening peak hour car trips each day. In FY 20, the fund had a beginning balance of $4,596,429. The Traffic Mitigation Fee Fund received $2,428,776 in fee revenue and interest during FY 20. Total expense for the same year totaled $459,750, leaving an ending fund balance of $6,565,455. These funds may only be used to provide transportation improvements needed to serve new development. In FY 20, Transportation Improvement Fees funded the 91/605/405 Corridor Needs Assessment, Citywide Parking Guidance and Wayfinding Systems, I-710 Freeway Corridor, Traffic Management Center (TMC) relocation to the new Civic Center, and Traffic Impact Analysis Guidelines studies. A summary of projects funded using Transportation Improvement Fee revenues is included in Exhibit A.
Parks and Recreation Facilities Fee Report (Exhibit B to the Resolution)
In February 1989, the City Council established the Parks and Recreation Facilities Fee (PRFF). This fee on new development is designed to maintain the existing level of service for existing and new residents. New residential development increases the population of the City by providing more places to live. This adversely impacts parks and recreational resources through crowding and overuse, lowering the quality of life for all existing and new residents. In FY 20, the City issued building permits for 1,631,487 gross square feet of residential units and no building permits issued for nonresidential development.
In FY 20, the fund had a beginning balance of $3,624,707. A total of $3,247,145 in PRFF revenue, including interest, was received in FY 20 and $2,782,361 was expended, leaving an ending fund balance of $4,089,491. The ending fund balance will be spent in future years on eligible projects. In FY 20, PRFF funds were used for 14th Street Park Expansion, Davenport Park Expansion, Lincoln Park, and for interest payments on the Open Space Bond. A summary of projects funded using PRFF revenues is included in Exhibit B.
According to the PRFF Ordinance included in LBMC Section 18.18, the PRFF must be revised annually through an automatic adjustment based on the average percentage change over the previous calendar year in the Construction Cost Index for the Los Angeles metropolitan area. There have been no changes to the PRFF rates since 2015. The LBMC requires that the continued validity of the fee be evaluated every five years by a Nexus Study. In accordance with the LBMC, staff completed the required evaluation in 2018.
Fire Facilities Impact Fee Report (Exhibit C to the Resolution)
In April 2007, the City Council established the Fire Facilities Impact Fee, a fee imposed on new development to mitigate the impact of new development on fire facilities. New development increases the demand for public safety facilities and impact fees help defray the costs for these facilities. In FY 20, the City issued building permits for 1,607,956 gross square feet of residential units and 1,941,105 gross square feet of nonresidential development.
In FY 20, the fund had a beginning balance of $860,542. A total of $598,429 in Fire Facilities Impact Fee revenue, including interest, were collected in FY 20, with $48,314 expended on projects, leaving an ending fund balance of $1,410,658. These funds may only be used to acquire property, construct new buildings, furnish buildings, purchase equipment, apparatus or vehicles or finance any of the above that will support additional fire services attributable to new residential or nonresidential construction. In FY 20, Fire Facilities Impact Fee funds were used to support an expansion of the Captain David Rosa Regional Training Center, which included construction of a building for storage of equipment, apparatus, training props, and materials. Funds were also used to purchase software and hardware for the Electronic Patient Care System. Future projects to be funded with Fire Facilities Impact Fees include completing the Captain David Rosa Regional Training Center, as well as furnishing and equipment at Fire Stations 15 and 20. A summary of projects funded using Fire Facilities Fee revenues is included in Exhibit C.
Police Facilities Impact Fee Report (Exhibit D to the Resolution)
In April 2007, the City Council also established the Police Facilities Impact Fee to mitigate the impact of new development on police facilities. New development increases the demand for public safety facilities and impact fees help defray the costs for these facilities. Funds collected from the Police Facilities Impact Fee can be used to fund the acquisition of additional property for law enforcement facilities; construction of new buildings for law enforcement services; furnishing of new buildings or facilities for law enforcement services; purchasing of equipment and vehicles for law enforcement services; and, funding of a master plan to identify capital facilities to serve new Police Department development. In FY 20, the City issued building permits for 1,607,956 gross square feet of residential units and 1,941,105 gross square feet of nonresidential development.
In FY 20, the fund had a beginning balance of $1,703,205. A total of $913,094 in Police Facilities Impact Fee revenue, including interest, were collected in FY 20, with $0 expended on projects, leaving an ending fund balance of $2,616,299. Fund balances generated from Police Facilities Impact Fees will be used to help furnish the new Police Academy building, which is currently under design for construction, as well as a potential new facility for a Forensic Science laboratory and evidence storage warehouse.
SUGGESTED ACTION
Approve recommendation.
BODY
[Enter Body Here]
Respectfully Submitted,
JOHN GROSS
INTERIM DIRECTOR OF FINANCIAL MANAGEMENT
APPROVED:
THOMAS B. MODICA
CITY MANAGER