2010041910 - Introduce ordinance amending mitigation of road impacts caused by construction projects***.~pW N OF
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~os,oGA~oS COUNCIL AGENDA REPORT
DATE: APRIL 12, 2010
MEETING DATE: 4/19/2010
ITEM NO:
TO: MAYOR AND TOWN COUNCIL i~
FROM: GREG CARSON, TOWN MANAGER
SUBJECT: INTRODUCTION OF AN ORDINANCE OF THE TOWN OF LOS GATOS AMENDING
ARTICLE IX OF CHAPTER 15 OF THE TOWN CODE RELATING TO THE MITIGATION
OF ROAD IMPACTS CAUSED BY CONSTRUCTION PROJECTS
RECOMMENDATION:
1. Direct the Clerk Administrator to read the title.
2. Waive the reading.
3. Introduce the ordinance and instruct the Clerk Administrator to either:
a. publish the ordinance no more than five days prior to adoption
b. publish a summary no more than five days prior to adoption
BACKGROUND:
On Apri15, 2010 the concept of updating the Town's traffic and road impact fee ordinances was presented to
Council for consideration. Council requested that the road impact fee as described in the Apri15, 2010 staff
report be brought forward for consideration on April 19, 2010. The update of the traffic impact fee was deferred
given the complexity involved in its calculation and implementation. Staff will bring this item back to Council in
Fa112010 once additional analysis and research have been completed.
DISCUSSION:
In 1994, the Town Council adopted a road impact fee via the Mitigation of Road Impacts Caused by Construction
Projects Ordinance-1984. In February 2010, the Town contracted with the Financial Consulting Solutions (FCS)
Group, Inc., to update the fee to reflect changes since its initial adoption. These changes include changes in road
maintenance and renovation costs and generally accepted techniques and methods used in the design and
calculation of the impact mitigation fee.
Construction Activities Mitigation Fee Ordinance and Rate Structure
The amended Construction Activities Mitigation Fee Ordinance includes provisions to modernize and clarify the
language included in Article IX of Chapter 15 of the Town Code to help ensure compliance with California
Government Code 66000 et seq. The Town's existing mitigation fee for road impact fee has not been updated
PREPARED BY: J HAR YAMA, FINANCE/BUDGET .MANAGER
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N:\FINANCE\Fee Schedule~2010 Ce~~rehensive Fee Study\Lr pact Fees\12oad Impact Fee Ordinance Update April 19, 2010.doc
Reviewed by: Assistant Town Manager wn Attorney
Clerk Administrator .Finance Community Development
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MAYOR AND TOWN COUNCIL
SUBJECT: INTRODUCTION OF AN ORDINANCE OF THE TOWN OF LOS GATOS AMENDING
ARTICLE IX OF CHAPTER 15 OF THE TOWN CODE RELATING TO THE MITIGATION
OF ROAD IMPACTS CAUSED BY CONSTRUCTION PROJECTS
April 12, 2010
since its initial adoption in 1994. The purpose of the fee was to recover the cost to refurbish Town roads and
streets due to road deterioration caused by vehicle traffic associated with construction activities.
The Town's existing mitigation fee is based on estimates of the weight of the loads to be hauled to or from the
project(s) and the weight of heavy vehicles to be used in connection with the project(s). The table below reflects
Los Gatos' current Construction Activities Mitigation Fee rates:
Existing Construction Activities Mitigation Fee Rates
Construction Activity Rates
1. New Buildings, Additions & Demolitions
a. Commercial $0.20/square foot
b. Residential $0.20/square foot
c. Pools/spas/water features $0.25/square foot
2. Alterations/Remodels/Re-roof/Repairs/Decks,
etc. $0.02/square foot
3. Landscape/Grading Permits, Encroachment
Permits; Parking Lot Paving, Retaining Walls,
Public Itn rovements $1.40-per cubic yard in
excess of 15 cubic yards
While the current fees are based on estimates of weight, the proposed fees as reflected in the table above are based
on the estimated annual cost of road deterioration caused by construction activities and the average annual
increase in the number of square feet of development in Los Gatos. In order to estimate the average annual
number of square feet of development by type, generated by .growth, the building activity from January 2005
through December 2009 was analyzed to determine the average annual increase in total building square footage
per year by type of development (residential and non-residential).
The estimated total annual cost of roadway deterioration in Los Gatos due to all types of vehicle activity is $2.6
million, of which an estimated $1.5 million is due to load-related stress. The mitigation fee per square foot of
residential and non-residential floor space was calculated by first allocating the total annual construction activities
costs between residential and non-residential development and then dividing the allocated portions by a projected
annual increase in square feet of floor space added.
Proposed FY 2010/11 Construction Activities Mitigation Fee
Residential Non-
Residential
Average Annual Square Feet Added 298,640 78,859
Recommended Cost Per Square Foot $1.00 $1.00
The ordinance and mitigation fee study reflectedapersquare-foot added fee ranging between $1.61 to $2.39 for
residential and $1.41 to $2.09 for non-residential; the fee options were based on pavement deterioration due to
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MAYOR AND TOWN COUNCIL
SUBJECT: INTRODUCTION OF AN ORDINANCE OF THE TOWN OF LOS GATOS AMENDING
ARTICLE IX OF CHAPTER 15 OF THE TOWN CODE RELATING TO THE MITIGATION
OF ROAD IMPACTS CAUSED BY CONSTRUCTION PROJECTS
April l2, 2010
construction activities for Los Gatos and a mix of neighboring communities, including Saratoga, Monte Sereno,
and Campbell. Given the broad range of costs, staff recommends that Council approve aper-square-foot added
fee of $1.00 for both residential and non-residential, with a goal of reaching close to cost recovery over a period
of 2 years (The attached staff report incorrectly indicates 4 years). As a result, every year following FY 2010/11
the cost per square foot added would be increased by $.50 until the cost reached $2.0"0 per square foot. .
West Valley Cities that currently have a road impact fee include the Cities of Saratoga and Campbell, which have
not been updated in recent years. The City of Monte Sereno currently has a Construction Excise Tax and the City
of Cupertino is considering adopting a road .impact fee.
The Town's current mitigation fee also includes a per cubic yard charge for Landscape, Grading and
Encroachment Permits and Parking Lot Paving, Retaining Walls and Public Improvements. This fee was not
included as part of the proposed Construction Activities Mitigation Fee as the updated fee would be adequate
enough to cover the cost of landscape, grading and other applicable activities.
CONCLUSION:
In 1994, the Town Council adopted a fee via the Mitigation of Road Impacts Caused by Construction Projects
Ordinance-1984. In February 2010, the Town contracted with the Financial Consulting Solutions (FCS) Group,
Inc., to update the fee to reflect changes since its initial adoption. Staff recommends that Council approve the
proposed amendment updating the Road Impact Fee Ordinance and rate as reflected in the Apri15, 2010 staff
report. All approved mitigation fees would be reflected in the FY 2010/11 Comprehensive Fee Schedule.
FISCAL IMPACT:
Council approval of the proposed ordinance amendment would generate roughly $375,000 next year, depending
on the level of construction activity, which would be used for, road repairs necessitated by the construction
activity. In addition, the updated fee would enhance the Town's Pavement Condition Index (PCI) level, which
has. declined modestly in recent years. Currently, the Town does not have other dedicated revenue sources to
support this and other capital projects.
Attachments:
Attachment 1: Ordinance Amending Article IX of Chapter 15 of the Town Code Relating to Mitigation of Road
Impacts Caused by Construction Projects
ORDINANCE
ORDINANCE OF THE TOWN OF LOS GATOS AMENDING ARTICLE IX OF CHAPTER
15 OF THE TOWN CODE RELATING TO MITIGATION OF ROAD IMPACTS CAUSED
BY CONSTRUCTION PROJECTS
THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES ORDAIN AS
FOLLOWS:
SECTION I
Section 15.90.010 is hereby amended to read as follows:
Sec. 15.90.010. Purpose.
(a) The Town Council finds that the roads of this community were built under a variety of
agencies and standards. Many of the Town's streets have little base and limited overlay with
restricted drainage systems and were never intended to support heavy vehicles or loads.
Construction projects have had a serious. adverse effect on the Town's street system, and it is
only fair and just that there should be an equitable contribution to repair streets that are damaged
by hauling and deliveries done in connection with these projects. Because the effects of these
projects can be .spread across alarge -area and the Town does not and cannot have the staff or
oversight to identify specific items of damage and construction projects accelerate or begin the
deterioration of the street system, it is also fair and just to establish a fee to be collected when
permits are issued for construction projects that will be deposited in the street repair funds and
used to refurbish roads which suffer deterioration due to construction activities.
(b) The Town Council finds that the purpose of the, Construction Activities Mitigation Fee is to
assure that each new development or expansion of use pays its fair share of the refurbishment
needed to mitigate the impacts of construction activities.
(c) The Town Council declares the road refurbishment area shall be the Town limits to finance .
refurbishment where such projects have been identified by the Town Council.
(d) The Town Council has determined that the Construction Activities Mitigation Fee is
necessary in order to finance road. refurbishment activities and projects.
(e) The Town Council finds and determines that there is a reasonable and rational relationship
between the use of the Construction Activities Mitigation Fee and the type of development
projects on which the fees are imposed because the fees will be used to refurbish the roads that
are necessary for the safety, health and welfare of the residential and non-residential users of the
roads on which the Construction Activities Mitigation Fee will be levied.
(f) The Town Council finds and determines that there is a reasonable and rational relationship
between the need for refurbishment of the transportation system and the type of development
projects on which the Construction Activities Mitigation Fee is imposed because it will be
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necessary for the residential and non-residential users of such projects to have access to the
transportation system. Such development will benefit from the transportation refurbishments and
the burden of such development will be mitigated in part by the payment of the Construction
Activities Mitigation Fee.
(g) The Town .Council further finds and determines that the estimates of road deterioration .costs
referenced in the Traffic Impact and Construction Activities Impact .Mitigation Fee Update Study
are reasonable cost estimates, and that the amount of the Construction Activities Mitigation Fee
expected to be generated by new development will not exceed the total fair share-cost to such
development.
(h) The Town Council further finds that the cost estimates referenced in the Traffic Impact and
Construction Activities Impact Mitigation Fees Update Study are reasonable cost estimates for
deterioration of the facilities that comprise the transportation system; and that Construction
Activities Mitigation Fee revenues to be generated by new development will not exceed the total
fair share of these costs.
(i) The Town Council further finds that the Construction Activities Mitigation Fees collected
pursuant to this Section shall be used to help pay for refurbishment of the transportation system,
and that the need .for the refurbishment is related to new development because the equipment
excavation .and activity traversing public streets during the construction of the development
results in deterioration; thus creating the demand for the refurbishment.
(j) The Town Council hereby adopts the report entitled "Traffic Impact and Construction
Activities Mitigation Fees Update Study" (Study), and incorporates herein by this reference the
assumptions, conclusions and findings included in the report regarding Construction Activities
Mitigation Fees. The Study includes options for aper-square-foot added fee ranging between
$1.61 to $2.39 for residential development, and $1.41 to $2.09 for non-residential. These options
were based on pavement deterioration due to construction activities for Los Gatos and a mix of
neighboring communities, including Saratoga, Monte Sereno, and Campbell.
(k) The Town Council hereby adopts an initial Construction Activities Mitigation Fee of $1.00
per-square-foot added for both residential and non-.residential development effective July 1,
2010.
(1) On July 1 of each year through 2012, the Construction Activities Mitigation Fee will be
increased by $.SOpey-square-foot added.
SECTION II
Section 15.90.020 is hereby rescinded.
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SECTION III
Section 15.90.025 is hereby added as follows:
Sec. 15.90.025. Definitions.
The following words, terms and phrases, when used in this article, shall have the meanings
ascribed to them in this section, except where the context clearly indicates a different meaning:
(a) Building_permit shall mean the permit issued. or required by the Town for the construction
of any structure pursuant to and as defined by the building code.
(b) Development shall- mean building or other land construction activity, or making a physical
change in the use of a structure or land, in a manner that makes use of the Town's road system.
(c) Development Permit shall mean any zoning entitlement permit or approval from the Town
of Los Gatos, including, but not limited to, a general plan amendment, zoning or re- zoning of
property, a conditional use permit, subdivision map, development review application, building
permit or other permit for construction, reconstruction or remodeling.
(d) Site shall mean a plot of ground consisting of one (1) or more lots or parcels on.which a
common improvement is proposed or exists. '
SECTION IV
Section 15.90.030 is hereby amended to read as follows:
Sec. 15.70.030. Usage of fees collected.
{a) The fees collected under this article will be deposited in .fund accounts.
(b) Money in the trust fund established in this article shall be used solely for the following:
(1) To design, construct, and refurbish roads within the Town of Los Gatos.
(2) To reimburse the Town of Los Gatos to offset administrative costs associated with
administering and updating the Construction Activities Mitigation Fee.
{3) To make refunds if and when required by the applicable sections of Government Code §
66000, et seq., or any applicable successor statutes.
(c) The monies in the fund shall be eligible for expenditure only for projects related to
mitigating the impacts of new development. These funds cannot be used for routine repairs and
maintenance.
(d) The monies in the fund may be used for purposes that include, but are not limited to, the
following:
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(1) design and construction plan preparation;
(2) permitting;
(3) land and materials acquisition, including any costs of acquisition or condemnation;
(4) design and construction, refurbishment or reconstruction of transportation capital
improvements;
(5) design and construction, refurbishment or reconstruction of sanitary sewers, drainage
facilities, or other public improvements required by the construction of transportation
capital improvements;
(6) relocating utilities required by construction, refurbislunent or reconstruction;
(7) landscaping;
(8) construction management and inspection;
(9) surveying, soils and material testing;
(10) acquisition of capital equipment that is an intrinsic part of a facility;
(11) demolition that is part of the construction of any of the improvements on this list;
(12) payment of principal and interest, necessary reserves and costs of issuance under any
bonds or other indebtedness issued to provide money to construct or acquire traffic
mitigation facilities;
SECTION V
.Section 15.90.035 is hereby added as follows:
Sec. 15.90.035. Amount and payment of fee.
(a) The applicant shall provide information regarding the previous and proposed use(s) of the
site, including a description of the proposed uses for which a Development Permit is being
sought, with sufficient detail to enable the Town to calculate the number of square feet of
development under the proposed use(s).
(b) Except as maybe otherwise provided in this Ordinance, the amount of the Construction
Activities Mitigation Fee shall be determined by calculating the number of square feet for the
proposed use(s).
(c) Whenever a Construction Activities Mitigation Fee is imposed pursuant to this Section, the.
Town shall provide each applicant for a development permit with a notice in writing at the time
of the approval of the development permit or at the time of the imposition of the Construction
.Activities Mitigation Fees, a statement of the amount of the Fees and notification of the ninety
(90) day approval period in which the applicant may protest the Fees. Said notice shall be in
substantially the following form:
"The conditions of project appr^oval for your project, identified as
include certain fees, dedication requirements, reservation
requirements and/or other exactions more specifically described as: (identification of.
the amount of the Impact Fee and/or description of the dedications, reservations or other
exactions _. The. applicant is hereby notified that the 90-day protest period to challenge such
items has begun as of the date of the project approval or the date of the Impact Fee imposition,
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which was . If the applicant fails to file a protest regarding any of the fees,
dedications, reservations or other exaction requirements as specified in Government Code
X66020, the applicant shall be legally barred from later challenges. "
(d) Notwithstanding any other provision, the dollar amounts of the adopted Construction
Activities Mitigation Fee rates shall be adjusted on July 1 of each year to account for changes in
the costs of facilities. The adjustment factor shall be based. on the change in the Engineering
News Record (ENR) (San Francisco, California) Building Cost Index (BCI) for the preceding
twelve (12) month period calculated from February 1 to January 31. If this index should cease
publication, the Town shall use any appropriate official index published by the Bureau of Labor
Statistics, or successor, or similar agency as may then exist or may then may be most nearly
equivalent thereto. The adjustment factor shall be used to adjust the rates of the Construction
Activities Mitigation Fees, unless they are otherwise adjusted based on the adoption of an
updated methodology study.
(e) Unless earlier payment is permitted pursuant to the provisions of Government Code §66007,
or any applicable successor statute, the Construction Activities Mitigation Fees for residential
developments shall be paid on the date of the final inspection or on the date the certificate of
occupancy is issued, whichever date occurs first.
(f) No final subdivision map, parcel map. or certificate of occupancy shall be issued or filed for
recording until the traffic impact mitigation fee has been paid in full.
SECTION VI
Section 15..90.040 is hereby added as follows:
Sec. 15.90.040. Construction Activities Mitigation Fees in Addition to other .Fees and Charges.
Payment of the Construction Activities Mitigation Fees are in addition to the requirements
imposed by other laws, policies or regulations of the Town relating to the construction or the
financing of public improvements within subdivisions or developments.
SECTION VII
Section 15.90.045 is hereby added as follows:
Sec. 15.90.045. Reporting Requirements for Funds.
The Director of Finance or designee shall comply with the public reporting requirements for the
Construction Activities Mitigation Fee Fund and accounts therein within 180 days of the end of
each fiscal year as specified in Government Code §66006(b), or any applicable successor statute.
The Director of Finance or designee shall also present the public reports to the Town Council for
review at the first regular meeting that occurs not more than fifteen (15) days .after the reports are
made available to the public as specified in Government Code §66006(b), or any applicable
successor statute.
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SECTION VIII
Section 15.90.050 is hereby added as follows:
Sec. 15..90.050. Findings Requirements for Funds; .Refunds.
For the fifth fiscal year following the first deposit into the Construction Activities Mitigation Fee
Fund, and every five (5) years thereafter, the Town shall .make the findings required by
Government Code §66001(d), or any applicable successor statute, with respect to any monies
remaining unexpended in the Funds and the accounts therein. The Town shall also comply with
the notice and refund provisions of Government Code §§ 66001(e) and (f), or any applicable
successor statutes.
SECTION IX
Section 15.90.055 is hereby added as follows:
Sec. 15:90.055. Protest.
Any person subject to the Construction Activities Mitigation Fee established by this Section may
protest the imposition of same by complying with the protest provisions.in the Government Code
§ 66000, et seq.. in effect at the time of the protest.
SECTION X
Section 15.90.060 is hereby added as follows:
Sec. 15.90.060. Compliance; Enforcement.
(a) No person shall fail to pay, when due, any Construction Activities Mitigation Fee imposed
pursuant to this Section.
(b) The Construction Activities Mitigation Fee due pursuant to this Section shall constitute a
debt to the Town. An action for the collection thereof maybe commenced in the name of the
Town in any court having jurisdiction of the cause; however, nothing in this subsection shall
prevent a criminal prosecution for any violation of this Section.
SECTION XI
Section 15.90.065 is hereby added as follows:
Sec. 15.90.065. Severability.
If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this ordinance or
any part thereof is for any reason held to be invalid or unconstitutional, such decision shall not
affect the validity of the remaining portions of this ordinance. The Town Council hereby declares
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that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or
phrase of this ordinance irrespective of the fact that any one or more section, subsection,
subdivision, paragraph, sentence, clause or phrase be declared invalid or unconstitutional.
SECTION XII
This ordinance was introduced at a regular meeting of the Town Council of the Town of
Los Gatos on , 20_ and adopted by the following vote as an ordinance of the
Town of Los Gatos at a regular meeting of the Town Council of the Town of Los Gatos on
20_ This ordinance takes effect 30 days after it is adopted.
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
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