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Traffic Impact Mitigation Fee Follow-Upwe MEETING DATE: 08/19/14 ITEM NO: Y I �osYsA�oe COUNCIL AGENDA REPORT I DATE: AUGUST 8, 2014 TO: MAYOR AND TOWN COUNCIL ,e FROM: GREG LARSON, TOWN MANAGER SUBJECT: TRAFFIC IMPACT MITIGATION FEE FOLLOW -UP A. NOTE AND FILE STAFF'S RESPONSE TO QUESTIONS RAISED BY THE TOWN COUNCIL IN CONJUNCTION WITH THE MAY 19, 2014 AMENDMENT OF TRAFFIC IMPACT MITIGATION FEES. B. ADOPT A RESOLUTION AMENDING THE TOWN OF LOS GATOS TRAFFIC IMPACT POLICY. C. AUTHORIZE THE TOWN MANAGER TO EXECUTE A ONE YEAR EXTENSION TO THE AGREEMENT WITH TJKM TRANSPORTATION CONSULTANTS FOR TRAFFIC ENGINEERING CONSULTANT SERVICES. RECOMMENDATION 1. Note and file staff's response to questions raised by the Town Council in conjunction with the May 19, 2014 amendment of traffic impact mitigation fees. 2. Adopt a resolution amending the Town of Los Gatos Traffic Impact Policy (Attachment 1). 3. Authorize the Town Manager to execute a one year extension to the agreement with TJKM Transportation Consultants for traffic engineering consultant services. BACKGROUND: At a Special Meeting on March 24, 2014, the Town Council held a Public Hearing to consider increasing the Town's existing Traffic Impact Mitigation Fees. On May 19, 2014, the Town Council adopted Resolution 2014 -017 (Attachment 2) approving an increase in Traffic Impact Mitigation Fees. The Town Council also approved a number of additional provisions related to the assessment of the fees, including: classification of specialty retail uses; trip credit for existing or former uses; definition of Average Daily Trips; secondary dwelling units and low income housing exemptions; and credit for construction or payment of Traffic Mitigation Improvement Projects. Resolution 1994 -55, which established the prior Traffic Impact Mitigation Fees, was also rescinded as part of the Town Council's action. PREPARED BY: MATT MORLEY .y t, - Director of Parks and Public Works Reviewed by: IRLbssistant Town Manager Town Attomey ----�- Finance PAGE AUGUST 8, 2014 MAYOR AND TOWN COUNCIL SUBJECT: TRAFFIC IMPACT MITIGATION FEE FOLLOW -UP BACKGROUND (cont'd): The new fee and associated provisions became effective on July 18, 2014, 60 days following the adoption of the resolution enacting the fee increase. In conjunction with the approval of the Traffic Impact Mitigation Fee increase, the Town Council provided the following direction to staff: 1. The Traffic Impact Fee resolution identified walk -in and other impulse businesses as "specialty retail." The same term has an alternate definition in relation to land use issues. Town Council asked for further review and clarification of "specialty retail" as it relates to land use. 2. Return to the Town Council in August with more detailed information on: • when a credit is appropriate • how it is calculated • how much needs to be done by a developer • whether there is a difference between a required improvement and a voluntary improvement Review of Traffic Impact Fees Traffic impact fees provide a method for recovering the costs of the impacts on the transportation network caused by new developments or changes in existing uses. Impact fees are an accepted means of charging fees when applied appropriately. When applied improperly, the fees can be considered taxes and are subject to legal challenge as to their validity. To avoid this, the fees must be established through a nexus with the increased traffic impact on the transportation network. Part of retaining the nexus between the fees and the impact is ensuring that the Town collects only for the actual impact and only collects once from each project for the established fee and impact. The Institute of Traffic Engineers (ITE) studies traffic throughout the country and provides standardized data on vehicle trips generated in association with specific uses. These data are utilized in conjunction with an analysis of projected growth in traffic needs in a community. For Los Gatos, that study was completed and presented to Council on March 24, 2014 and followed up with a confirming resolution on May 19, 2014. The study considered the identified capital improvement project needs from the five year Capital Improvement Program and the General Plan as well as the projected growth in Los Gatos based on Association of Bay Area Government's (ABAG) job growth projections and population forecasts. From this, the cost per vehicle trip on the transportation network is generated and applied to each new generated trip. An important element of traffic data is ensuring that the analysis addresses the actual impact. This is commonly referred to as a "nexus." By establishing and retaining the nexus, the fees are impact fees and not taxes. Impact fees can be implemented by the governing body while taxes PAGE AUGUST 8, 2014 MAYOR AND TOWN COUNCIL SUBJECT: TRAFFIC IMPACT MITIGATION FEE FOLLOW -UP BACKGROUND (cont'd): must be approved by a vote of the people. In establishing that nexus, the analysis adjusts for various aspects of a project. These are discussed further below in terms of credits. DISCUSSION- Specialty Retail Resolution 2014 -017, which adopted the new Traffic Impact Mitigation Fee, carried forward several provisions from the prior 1994 Traffic Impact Fee resolution, including the following: Walk -in, impulse business, such as juice bars, yogurt shops and donut shops, which do not serve meals, shall be considered Specialty Retail for purposes of traffic impacts only. This provision allows for the application of the ITE Trip Generation rate for Specialty Retail Center, which is lower than that for a free - standing donut or coffee shop type establishment, and is only meant for this rate calculation and not for other land use purposes. Because there is not currently a corresponding land use category of specialty retail for these types of establishments in the Town Zoning Code, staff will bring forward to the Council at a future date a more comprehensive discussion of the land use issues related to specialty retail, both within the context of new developments as well as new occupancies within existing buildings. Credits The recently adopted Traffic Impact Mitigation Fee resolution includes provisions for two types of credits, a Traffic Credit ( "Trip Credit ") and a Traffic Impact Mitigation Fee Credit ( "Fee Credit "). Trip Credit A Trip Credit is based on the number of existing or former trips generated by the previous land uses (using ITE Trip Generation Rates), and is deducted from trips that will be generated from the new or proposed uses in order to determine the number of net new trips. Trip Credit is used both for determining whether or not a proposed use is required to complete a Traffic Impact Analysis (TIA) report (20 or more new Peak Hour Trips), as well as to calculate the amount of Traffic Impact Mitigation Fees due. A Trip Credit is only granted for uses that currently exist, or existed within the five years prior to the submittal of a project application pursuant to the recently adopted Resolution 2014 -17. For example, a restaurant proposing to occupy an existing or recently vacated retail would space get credit for the trip generation of the most recent occupancy within the past five years. d restaurant generates more vehicle trips than retail, and the fee is calculated on the net new trips. Likewise, a restaurant occupying a new building would get trip credit for prior uses at the development site within the past five years. PAGE 4 AUGUST 8, 2014 MAYOR AND TOWN COUNCIL SUBJECT: TRAFFIC IMPACT MITIGATION FEE FOLLOW -UP DISCUSSION fcont'dl: Fee Credit Projects with significant traffic impacts identified through the environmental review process are typically approved with conditions requiring mitigation of the specific project related traffic impacts, either through the installation of identified traffic improvements, or paying their fair share for the improvements through the Traffic Impact Mitigation Fee. These mechanisms ensure that the approved development is mitigating its own impacts. As set forth in the resolution approved by Council on May 19, a Traffic Impact Mitigation Fee Credit would be granted for any improvements constructed or paid for by the developer as a condition of approval that are also included in the Council adopted Traffic Mitigation Improvement Project List. The Fee Credit would be either the amount paid by the developer to the Town as a share of improvement costs, or the amount shown in the Estimated Project Cost column of the Improvement Project List if the developer constructs the improvements. In no case would the credit exceed the amount of Traffic Impact Mitigation Fee due. The intent of the Fee Credit provision is to ensure that developers are not being "double - charged" for these improvements when a condition of approval requires construction or payment for an improvement, and when that improvement is also included on the Traffic Mitigation Improvement Project List, as this list provides the basis for the calculation of the recently approved Traffic Mitigation Improvement Fee. Double charging could subject the Town's Traffic Mitigation Impact Fees to legal challenge. The Fee Credit provisions included in Resolution 2014 -017 do not specifically differentiate between required mitigations and voluntary traffic improvements. However, the intent of the Fee Credit is to ensure that developers are not being charged twice when required to construct improvements that were also part of the basis for calculating Town -wide traffic impact mitigation fees. Credit would not typically be granted for voluntary improvements that a developer chooses to install as a part of the development approval process without specific Council authorization. Credit would also not be given for Town- required frontage or access improvements, or any dedication of right -of -way. Traffic Impact Policy The current Town of Los Gatos Traffic Impact Policy was adopted in August, 1991 (Resolution 1991 -174 — Attachment 3). Along with the Town of Los Gatos Municipal Code, Chapter 15, Article VII, Traffic Impact Mitigation Fees, it provides the framework for evaluating and mitigating traffic impacts associated with new development, including the process for establishing and assessing Traffic Impact Mitigation Fees. Following Council's recent adoption of the new Traffic Impact Mitigation Fee structure where all trips pay the same per trip fee, staff reviewed the existing Traffic Impact Policy and is recommending a comprehensive update of the policy to strengthen the nexus between the new PAGE 5 AUGUST 8, 2014 MAYOR AND TOWN COUNCIL SUBJECT: TRAFFIC IMPACT MITIGATION FEE FOLLOW -UP fees, and the calculation and assessment of traffic impacts. The revised policy is attached for Council's review (see Attachment 1) and key aspects of the policy are discussed below. General Conditions and Applicability The proposed and updated Traffic Impact Policy maintains the "one or more net new trip" threshold for applicability and payment of Traffic Impact Mitigation Fees contained in the previous Traffic Policy. Also maintained is the 20 or more trip threshold for requiring a Traffic Impact Analysis report. This is more stringent than the 100 new trip threshold required by VTA's Traffic Impact Analysis (TIA) Guidelines. The primary source cited in the Traffic Impact Policy for determining trip generation rates is ITE's Trip Generation Manual. The new Policy lists alternative sources of trip data that may be used when ITE data are unavailable or not applicable. Consistent with ITE's Users Guide and Handbook to the Trip Generation Manual, and standard industry practice, the Traffic Impact Policy also allows for the application of Pass -By Trip credits where applicable, as discussed below. Pass -By Trips Pass -By Trips are vehicle trips generated by a proposed project that are attracted from traffic already passing the project site on an adjacent street that contains direct access to the project. Examples include: stopping at a gas station on the way to the freeway or another destination; a trip to the grocery store on the way home from work; a trip to the dry cleaner on the way to a lunch meeting; or a stop for a cup of coffee on the way to or from school. Prior to the recent adjustment of Traffic Impact Mitigation Fees, the Town did not apply a Pass - By Trip credit when calculating fees, although these credits were typically included in evaluating traffic impacts in Traffic Impact Analysis reports. Because the Town's Traffic Impact Mitigation Fee now fully captures the allocated cost of traffic impacts for each new trip, Pass -By Trips need to be accounted for to ensure that developments are charged only for the net new trips that they produce, and not trips that are already on the Town's roadway network. The proposed Traffic Impact Policy includes provisions for applying Pass -By Trip credit in support of the full - cost recovery fee model, as is the industry standard for such calculations. Both the ITE Trip Generation Manual and VTA's Traffic Impact Analysis (TIA) Guidelines Provide for the application of Pass -By Trips in recognition that many trips are already travelling local streets and roads. The proposed Traffic Impact Policy specifically references the ITE Trip Generation Manual methodology for applying Pass -By Trips in determining trip generation rates. Consistent with VTA's TIA Guidelines, the proposed Traffic Impact Policy also excludes the use of Pass -By Trips in determining whether a project is required to prepare a Traffic Impact Analysis, limiting Pass -By credit to the calculation of actual traffic impacts and fees due. The impact of a Pass -By Trip credit on a sample of actual and theoretical projects is shown in Table 1. Consistent with ITE's data and methodology, no Pass -By Trip credit is given for residential or office uses, as these are viewed as primary trip generators. Retail uses are the PAGE 6 AUGUST 8, 2014 MAYOR AND TOWN COUNCIL SUBJECT: TRAFFIC IMPACT MITIGATION FEE FOLLOW -UP DISCUSSION (cont'd): greatest beneficiary of the application of a Pass -By Trip credit. For illustrative purposes, the table includes developments that have already been approved and paid their required fees. Other projects are pending and may benefit from this modification, if approved by Council. Table 1 -- Impact of Pass -By Trip Credit da Stmgk Family Rcsidemal Ressential 9,57 0% 9.57 S 8,173 $ 8,173 nla da 40 wt apartmem couglea Residential 260 0% 2 $ 222610 S 222040 da da New s@ -down msto=a (4500 940 Commercial 168 43% 96 S 143,472 $ 81,779 nla 1✓a Feet Food wkh DtN *.mO (2500 sgft) C —octal .� 5001. 399 $ 674 $ 340703 da de Daycare (3500 sgft) Commercial 191 MK 191 $ 163,114 $ 163,114 nla 375 Kmwks (at Capn) 45 unt new siigle family suhdivisbn Resilendid 428 0% 428 $ 365 12 Pending Mixed Use 25 sing@ family Mmes & 29,000 Residential 198 00/ 198 $ 169,092 Approved 16005 LGB (Swanson) sgft co rekl ( Swansoa Fool) Comnwmkl 738 34% 487 $ 415966 /70 NSC (Snfewa Safeway Supermmimt(19,19390) Comimicisl 1 36% 1256 $ 1072 51 Appmed Demolish auto dealer and construct 22 smgk Residemul V2111 da nla 16213 LGB (Horde) fan* Mmss No Increase da da 15600I.GB (CVS) Demolish arm dealer am construct 20,000 Commercial 2473. 53% 1162 $ 992,613 Peoding s commerckt AbrigM Abright Dewbpmm (235,000 sgft kcMase Com nw 98 0% 2398 $ 2,047,892 AFProed in offrce conmem® Nmth 40 Pmjxt Mdmd Use Residential and Coa dal Mixed Use 14,7161 14716 $1 7464 1 $12,567,464 Pending North 40 new trip mntion based on qpct 77A whkh ake.41 takes pass- by am other cmdas into accowt. Payment of Fees The proposed Traffic Impact Policy clarifies that new trip calculations will be done at the time of project application, with actual fees calculated based on the Council approved rate in effect at the time that the fees are paid, typically at the issuance of the building permit. For projects that are pending, if the Council approves the Policy, the Town will recalculate their fees accordingly. Credit for Existing Trips Consistent with Council direction in adopting new Traffic Impact Mitigation Fees, and as described in more detail earlier in this report, the new Policy limits credit for existing trips to existing or prior uses within the past five years. PAGE 7 AUGUST 8, 2014 MAYOR AND TOWN COUNCIL SUBJECT: TRAFFIC IMPACT MITIGATION FEE FOLLOW -UP DISCUSSION (cont'd)• Credit for Traffic Mitigation Improvements The proposed Policy includes specific language addressing how and when credit is to be granted for payment or construction of Traffic Mitigation Improvements, as discussed in more detail earlier in this report. Council Discretion The proposed Traffic Impact Policy includes reference to the Town Municipal Code, Section 15.70.030 (c) (5) wherein the Town reserves the right to enter into an agreement to deviate from the Traffic Impact Policy upon approval by the Town Council. Community Benefit A joint study session with the Town Council and Planning Commission was held on August 22, 2011 to discuss potential amendments to the Town's In -Fill and Traffic Policies regarding community benefit. A follow -up Information Report was provided to Council at the October 21, 2013 Council Meeting. At that time, staff proposed: 1) amending the Traffic Impact Policy and studying traffic impact fee increases; 2) requiring community benefit/amenities for Planned Developments; and, 3) eliminating the term "Community Benefit." Because the Traffic Impact Mitigation Fees are now charged at full cost recovery, staff is recommending elimination of the requirement that a Community Benefit offering be proposed for any project generating five or more new trips. Language addressing this issue is included in the attached resolution approving the new Traffic Impact Policy. At a future date, and in combination with the Planned Development discussion, staff will bring forward for Council consideration proposed modifications to the In -Fill and Community Benefit Policies to align with the elimination of Community Benefit for traffic purposes. Extension of Aereement with TJKM for Transportation Consulting Services The consulting firm of TJKM Transportation Consultants has been providing traffic engineering consultant services to the Town since 2004, including preparation of traffic impact analysis reports for private development, peer review of traffic studies, and traffic engineering for public works projects. The cost of traffic impact analyses and peer review of traffic studies are covered by developers; the cost of other traffic engineering projects are charged to Capital Improvement Projects or to the Parks and Public Works Operating Budget for traffic engineering not specifically associated with a Capital Project. The most recent contract between TJKM and the Town was approved by the Town Council on June 18, 2012, and expired on June 30, 2014. Staff is recommending that the Town Manager be authorized to execute a one -year extension to the contract with TJKM for transportation PAGE AUGUST 8, 2014 MAYOR AND TOWN COUNCIL SUBJECT: TRAFFIC IMPACT MITIGATION FEE FOLLOW -UP consulting and traffic engineering services. Consistent with the procedures set forth in the proposed Traffic Impact Policy, staff will issue a request for proposals for traffic engineering consultant services in early 2015 and establish a list of firms that are qualified to conduct private development related traffic engineering services for the Town. CONCLUSION: Staff recommends that the Town Council note and file staff s response to questions raised by the Town Council in conjunction with the May 19, 2014 amendment of traffic impact mitigation fees; adopt a resolution amending the Town of Los Gatos Traffic Impact Policy; and authorize the Town Manager to execute a one year extension to the agreement with TJKM Transportation Consultants for traffic engineering consultant services. FISCAL IMPACT The amended Traffic Impact Mitigation Fee became effective on July 18, 2014, and is included in the Town's 2014/15 Comprehensive Fee Schedule. The revised Traffic Impact Policy provides for Pass -By and prior use Trip Credits as well as guidance for granting a Fee Credit where a project is required to construct or pay for transportation improvements that were used in calculating the per -trip Traffic Impact Mitigation Fee. Trip Credits ensure that there is a clear nexus between the fees assessed and collected and the actual new trip generation. Fee Credit provisions ensure that project applicants are not "double- charged" for traffic impacts through both fees and required mitigations. Attachments: 1. Resolution Amending the Traffic Impact Policy (including Exhibit A, Revised Traffic Impact Policy and Exhibit B, Traffic Mitigation Improvement Project List) 2. Resolution 2014 - 017 — Amending Traffic Impact Mitigation Fees 3. Resolution 1991 - 174 — Concerning the Traffic Impact Policy 4. May 19, 2014 Council Report 5. May 19, 2014 Council Report Minutes RESOLUTION 2014- RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS AMENDING THE TRAFFIC IMPACT POLICY AND RESCINDING RESOLUTION 1991 -174 WHEREAS, on August 5, 1991, the Town of Los Gatos adopted Resolution 1991 -174 adopting a Traffic Impact Policy, and WHEREAS, Chapter 15, Article VII of the Town of Los Gatos Town Code provides for the establishment of Traffic Impact Mitigation Fees; and WHEREAS, on March 24, 2014, the Town Council at a duly noticed Public Hearing considered and took action on the specific amount to be charged for traffic mitigation fees; and WHEREAS, on May 19, 2014, the Town Council adopted Resolution 2014 -017 confirming actions taken by the Council on March 24, 2014 amending the Town's Traffic Impact Mitigation Fees; and WHEREAS, on May 19, 2014, the Town Council, in conjunction with amending the Town's Traffic Impact Mitigation Fees also adopted a number of additional provisions related to the assessment of Traffic Impact Mitigation Fees, including provisions related to specialty retail uses, traffic credit for existing or former uses, secondary dwelling units, low income housing, and credit for payment and construction of Traffic Mitigation Improvement Projects (Exhibit B); and WHEREAS, a revision of the 1991 Traffic Impact Policy (Exhibit A) is needed to conform the Town's Traffic Impact Policy with the recent changes to the Town's Traffic Impact Mitigation Fees enacted with the adoption of Resolution 2014 -017. NOW, THEREFORE, BE IT RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa Clara, State of California that the attached Traffic Impact Policy, dated August 19, 2014 is hereby adopted. FURTHER RESOLVED, this resolution rescinds provisions of Resolution No. 2002- 175 related to Community Benefit offerings for projects generating more than five new peak hour trips. FURTHER RESOLVED, this resolution rescinds Resolution No. 1991 -174. ATTACHMENT PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos held on the 19th day of August, 2014 by the following vote: 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 TOWN OF LOS GATOS TRAFFIC IMPACT POLICY Draft August 19, 2014 (Resolution 2014 -xxx) I. DEFINITIONS Average Daily Trips. Average Daily Trips (ADT) are the total number of trips, both in -bound and out- bound, within a 24 hour weekday period, generated by a particular use or development. Pass -By Trip. Trips generated by the proposed Project that would be attracted from traffic passing the proposed project site on an adjacent street that contains direct access to the Project. Peak Hour Trip. Peak Hour Trips are vehicle trips, both in -bound and out - bound, occurring during a one hour period either during the A.M. Peak (7 A.M. to 9 A.M.) or the P.M. Peak (4 P.M. to 6 P.M.), generated by a particular use or Project. Project. A Project subject to this policy encompasses all land use development projects affecting the built environment, including changes in occupancy or intensification of existing uses, over which the Town has administrative or legislative authority, that require review and approval and issuance of a building permit, certificate of use or occupancy, or other land use approval by Town staff, Commissions, or Council. Specialty Retail. Specialty Retail uses are defined as walk -in and impulse businesses such as juice bars, yogurt shops, coffee shops, donut shops, and similar uses which do not generally serve meals and have limited or no seating. Specialty Retail uses are defined under this policy for purposes of establishing trip generation data and this definition does not provide any land use or zoning guidance. II. GENERAL CONDITIONS AND APPLICABILITY 1. This policy is intended to provide guidance to Town staff and the development community in implementing the provisions of the Town Municipal Code, Chapter 15, Article VII, Traffic Impact Mitigation Fees. 2. Projects that are determined by the Town to generate one or more new net Average Daily Trips are subject to this policy. 3. Projects that will generate 20 or more new Peak Hour Trips shall be required to complete a comprehensive traffic impact analysis report as described in more detail in Section VI TRAFFIC IMPACT MITIGATION REPORT. 4. Consistent with Transportation Impact Analysis (TIA) Guidelines adopted by the Santa Clara County Transportation Authority (VTA) Congestion Management Program, Pass -by Trips shall not be considered in calculating the 20 new Peak Hour Trip threshold that triggers the requirement for conducting a comprehensive traffic impact analysis report. 5. In order to determine how much new traffic a Project will generate, the Town will use applicable trip generation rates and pass -by trip data from the most recent edition of the Institute of Traffic Engineers (ITE) Trip Generation Manual. Alternatively, trip generation rates from the following EXHIBIT A Town of Los Gatos Traffic Impact Policy August 19, 2014 Page 2 resources may be used if determined by the Town to be more appropriate than the available ITE rates: San Diego Association of Governments (SanDAG); California Department of Transportation (Caltrans); or the City of San Jose. A Town- sponsored or peer- reviewed traffic study may also be used to determine trip generation rates. 6. Nothing in this Policy shall prohibit or restrict a Project applicant from completing a traffic study for a Project anticipated to generate less than 20 new Peak Hour trips. III. TRAFFIC IMPACT MITIGATION FEES 1. All Projects that generate one or more new Average Daily Trips are required to pay Traffic Impact Mitigation Fees. 2. All required Traffic Impact Mitigation Fees shall be paid in full to the Town in association with and prior to issuance of a building permit. If no building permit is required, the fee shall be paid in full prior to issuance of a certificate of use and occupancy, or similar entitlement. The amount due shall be calculated based on the fee in place as approved by the Town Council by resolution at the time the fee is paid. 3. The per trip amount of the fee shall be as set forth by the Town Council by resolution, pursuant to Town Municipal Code, Chapter 15, Article VII, Traffic Impact Mitigation Fees. 4. Fees shall be calculated by multiplying net new ADT by the per trip amount in place at the time the fees are paid. S. ADT shall be determined by using the applicable trip generation rate and pass -by trip data from the most recent edition of the Institute of Traffic Engineers (ITE) Trip Generation Manual. When a use is not listed in the ITE Trip Generation Manual, or where ADT data is not available, the Town Traffic Engineer shall use available Peak Hour Trip data or select the most appropriate trip generation rate and pass -by trip classification for use in calculating ADT. Trip generation rates from alternate sources may be used if determined by the Town Traffic Engineer to be more appropriate than the available ITE rates. Examples of alternate sources of data include: San Diego Association of Governments (SanDAG); California Department of Transportation (Caltrans); City of San Jose; comparable store /business traffic studies. IV. CREDIT FOR EXISTING TRIPS 1. In calculating new Peak Hour Trips for purposes of determining whether or not a traffic impact analysis report is required pursuant to this Policy, trip credit shall be granted for an existing use or the most recent former use within the past five years prior to submittal of a Project application. 2. In calculating new Average Daily Trips for purposes of determining the amount of the Traffic Impact Mitigation Fee due, trip credit shall be granted for an existing use or the most recent former use within the past five years prior to submission of a Project application. Town of Los Gatos Traffic Impact Policy August 19, 2014 Page 3 3. Where the property is vacant, the most recent former use within the past five years prior to submission of a Project application shall be used. If the property has been vacant for more than five years, no credit shall be given. Vacancy for purposes of Fee Credit shall include any vacant or unoccupied property, structure or building where no active, approved use is currently present. 4. Where a portion of the space is changing use, credit will apply to the proportionate square footage of the space under review. 5. Where the change in use results in fewer trips than the existing or former use, no credit or refund will be due the applicant. V. CREDIT FOR TRAFFIC MITIGATION IMPROVEMENTS I. Credit against Traffic Impact Mitigation Fees due shall be granted up to the amount of the Estimated Project Cost shown on Attachment 1, Town of Los Gatos Traffic Mitigation Improvements Project List, for any listed projects for which the developer, as a condition of approval, is required to either construct at the developer's sole cost, or contribute a fixed or percentage amount of funding toward future construction of the listed improvement. Where construction is fully funded and completed by the developer, said credit shall be equal to the Project Cost as shown in Attachment 1. Where payment is a fixed amount or a percentage of Project Cost, credit shall be equal to the actual amount due, whether the project is constructed by the developer or others. 2. No credit shall be given for any public right -of -way dedication required for completion of projects listed on Attachment 1. 3. Credit will be given on a case -by -case basis and shall not exceed the impact fee payable. Any request for credit shall be made prior to the payment of the Traffic Impact Mitigation Fees. No credit shall be given for installation of Town - standard frontage improvements, Project access improvements, or internal circulation improvements. 4. Credit shall only be granted for payment of costs or construction of projects listed in Attachment 1, unless otherwise approved by the Town Council. VI. TRAFFIC IMPACT ANALYSIS REPORT 1. Traffic impact analysis reports required pursuant to this policy shall be prepared consistent with the Transportation Impact Analysis (TIA) Guidelines adopted by the Santa Clara County Transportation Authority (VTA) Congestion Management Program (August 2009), or as such Guidelines may be amended or updated from time to time, except that the threshold for preparation of a traffic report under this policy is 20 new Peak Hour trips, whereas the VTA TIA threshold is 100 new Peak Hour Trips. 2. Traffic impact analysis reports shall be funded in full by the project applicant. Project applicants shall deposit funds with the Town in an amount deemed necessary to cover the cost of an independent consultant report, plus staff administrative and review costs. Following deposit of funds, the Town will hire a professional transportation consultant to complete the required study. Town of Los Gatos Traffic Impact Policy August 19, 2014 Page 4 Alternatively, the project applicant may hire their own professional engineering or transportation consultant to complete a traffic study, in which case they must deposit with the Town funds sufficient for the Town to hire a professional firm to conduct a peer review of the applicant - prepared traffic report, plus staff administrative and review costs. 3. The Town shall conduct an open, competitive process to establish a list of firms which are qualified to prepare traffic reports and /or conduct peer review of traffic studies under contract to the Town. The list of firms shall be selected in accordance with the Town Purchasing Policy. A new list shall be created at a minimum of once every five years. VII. OTHER PROVISIONS 1. The Institute of Traffic Engineers (ITE) Trip Generation Manual trip generation rates for Specialty Retail Center shall apply to all Specialty Retail uses as defined in this policy. 2. A secondary dwelling unit with a floor area of six hundred square feet or less shall be exempt from this policy. 3. The Town Council may exempt housing developments for very low, low and moderate income residents (as defined by Town Ordinance, General Plan, or statute) from all or a portion of the traffic impact mitigation fee upon making a finding that the development provides a significant community benefit by meeting current needs for affordable housing. 4. As provided for in the Town Municipal Code, Chapter 15, Article VII, Traffic Impact Mitigation Fees, Section 15.70.030 (c) (5), it is recognized that unusual circumstances may result in this policy placing an undue burden on a developer or landowner and in such cases, the Town reserves the right to enter into an agreement to deviate from this policy as may be approved by the Town Council. Town of Los Gatos Traffic M bike new - Barn from haroen Mill to - SR 9 from Univeristy to Improvements - to over Lion Improvements Project List VTP = Valley Transportation Plan, 2035 by Santa Clara Valley Transportation Authority. Totaly4 Town CIP = Town of Los Gatos, Capital Improvement Program and pending construction project list. Source: Town of Los Gatos. EXHIBIT B This Page Intentionally Left Blank RESOLUTION 2014 -017 RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS AMENDING TRAFFIC IMPACT MITIGATION FEES AND RESCINDING RESOLUTION 1994 -55 WHEREAS, Chapter 15, Article VII of the Town of Los Gatos Town Code provides for the establishment of Traffic Impact Mitigation Fees; and WHEREAS, the purpose of these fees is to assure that each new development or expansion of use pays its fair share of the transportation improvements needed to accommodate cumulative traffic impacts associated with development as anticipated in the Town's adopted General Plan; and WHEREAS, the Traffic Impact Mitigation Fees currently in place have been unchanged since their approval by the Council on April 4, 1994 with the adoption of Resolution 1994 -55; and WHEREAS, the Town has determined the estimated cost of the transportation improvements necessary to implement the circulation element of the Town's General Plan: and WHEREAS, the Town has determined the current and anticipated funding available to pay for the cost of construction of the transportation improvements, including the amount of' funding currently available in the Town's Traffic Impact Mitigation Fee Fund; and WHEREAS, Section 15.70.035 (a) of the Town Code provides for periodic review of these fees; and WHEREAS, Section 15.70.035 (a) of the Town Code also sets forth that the Town Council shall by resolution set the specific amount of traffic impact mitigation fees; and WHEREAS, on March 24, 2014, the Town Council at a duly noticed Public Hearing considered and took action on the specific amount to be charged for traffic mitigation fees which shall be incorporated in the Town of Los Gatos 2014/15 Comprehensive Fee Schedule. NOW, THEREFORE, BE IT RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa Clara, State of California that the following Traffic Mitigation Fees, adopted by the Town Council on March 24, 2014, shall be payable as set forth in Chapter 15, Article VII of the Town Code: A. The fee for all uses shall be calculated at $854 per new Average Daily Trip (ADT). ATTACHMENT2 FURTHER RESOLVED, that the following provisions, previously included as part of Resolution 1994 -55 adopted on April 4, 1994, shall remain in effect: A. Walk -in, impulse businesses, such as juice bars, yogurt shops and donut shops. which do not serve meals, shall be considered Specialty Retail for purposes of traffic impacts only. B. Traffic credit may be granted for an existing or former use within the past five years prior to project approval. When applicable, existing or former use traffic (ADT) shall be subtracted from the project traffic prior to calculating the fee. C. ADT is defined as the number of average daily trips associated with an identified land use as determined or derived from the most recent edition of Trip Generation by the Institute of Transportation Engineers or a Town sponsored traffic study. The Town approved traffic study will be paid for by the applicant. D. A secondary dwelling unit with a floor area of six hundred square feet or less shall be exempt from this fee. E. The Town Council may exempt housing developments for very low, low and moderate income residents (as defined by Town Ordinance, General Plan, or statue) from all or a portion of the traffic impact mitigation fee upon making a finding that the development provides a significant community benefit by meeting current needs for affordable housing. The exempted fees will be made up from other sources of revenue. Traffic mitigation fees paid by other developers will not be used to subsidize the exempted projects. Each year the Town will identify how much money is to be allocated in the Capital improvement Program for traffic improvement projects. Additional revenue sources will be identified to cover exempted fees. FURTHER RESOLVED, that credit against Traffic Impact Mitigation Fees due shall be granted up to the amount of the Estimated Project Cost shown on Attachment 1, Town of Los Gatos Traffic Mitigation Improvements Project List, for any listed projects for which the developer either constructs at his own cost, or contributes a fixed or percentage amount. Where construction is fully funded and completed by the developer, said credit shall be equal to the Project Cost as shown in Attachment 1. Where payment is a fixed amount or a percentage of Project Cost, credit shall be equal to the actual amount due, whether the project is constructed by the developer or others. FURTHER RESOLVED, that on an annual basis, or before as needed or indicated by staff or the Council, that the structure of the Traffic Mitigation Fee be reviewed to determine that it is doing what is intended and does not have unintended consequences: and FURTHER RESOLVED, that on an annual basis, the Traffic Mitigation Fee be reviewed for a Cost of Living Adjustment (COLA) or other appropriate adjustment. FURTHER RESOLVED, this resolution rescinds Resolution No. 1994 -55. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos held on the 19`h day of May, 2014 by the following vote: COUNCIL MEMBERS: AYES: Marcia Jensen, Barbara Spector, Mayor Steven Leonardis NAYS: Diane McNutt, Joe Pirzymski ABSENT: ABSTAIN: MAYOR OF THE TOWN O?'`S.Q$ t TOS LOS GATOS. CALIFORNIA ATTEST: CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA d L V 1+ Q 00 0 0 0 0 0 0 0 0 0 0 0 0 o 0 o 0 0 0 o 0 0 0 0$ 0 00 0008 0 0 0 00 O O co 0 0 0 1 0 0 0 0 0 0 0 0 0 0 O 0 0 O 0 0 c 0 O 0 0 N O 0 0 0 0 nj 0 0 0 0 0 6 0 f0 a 0 0 r N e7 � N N sq yf H3 b9 di E9 b3 fA lfl Vi 4! f9 fA fA Vf H3 IA fR f9 fR fA D � 8 c O O 00 0-000000.0 Boa 0 0000 0 0 0 00 0$�0000$Como ��o OQ ��m0o°��m�m� �� 0u 0 0 o 0 O 0 o 0 O 0 o 0 o 0 O 0 o 0 o 0 O 0 c 0 o 0 o 0 00 0 0 0 0 0 0 0 O 0 O 0 000000000000 0 O 00 0 0 0 0 0 00 0 0 O 0 O 0 1 0 0 0 0 0 0 0 0 666 0 0 0 0 9 0 0 0 0 (50- 0 0 0 0 0 0 0 01 O O O N 0 . 6 r N �- � O �- N M N •- tV N W A O r Hi Vi E9 �A iN to iA (ff t9 fH W b3 M f9 M) Ni f9 f9 H3 1A Yf Yi Y @ a B O j Q @ yyi d 0 @ 0 y O2 J O N N c C N Cy O N a O O 0 O a 0 j 3 @ 6�. d =5E y to 4 i y N N a L a U p Z o ryry Y y C Q O o o o c o m 4@ 4 c 3 5 E c@> E v o y y O c d c 0 m 0 c rn 3 E D O n 3 t�5 Vl U C« p. in w 'a "m �t - 5 N N m c d > `2 d > G C d m �— i2 J c @ Dci 3@ c O g Q N> c' c 3 S rn d @> N a o > o > 0 > 0 4 p d aS d m hhO o @@ a m 3 m 3 aOC� y �—L > J m adi R c m V "�a ug N ) UN 'P N7 N CNAN 7 O � d¢ d NQ d Y C O > Z E 3 1O ] C N C�a i C C t N nn S 811a832) try 4 8m 8 =i8mN 3 nr� �j n c� idC n cam Nt`) �m in � 0 0 V NNa 0 O O 0 O n O O a as aaaa aNNaaNapNaNaaga(}aa U(�UUU v d O Q ]. O U t� Q C C O O U 0 iD c N Q c ti m >E m @ }D� N L Ud @E fij OL O N � cU @ Q. y 0 roy@ O (1+ Cw y C O J @ ~0 mR_ti U o 0. o _�tiy RESOLUTION 1991 -174 RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS CONCERNING THE TRAFFIC IMPACT POLICY WHEREAS, it is the intention of the Town Council of the Town of Los Gatos to amend the policy requiring developers whose projects are shown to generate additional traffic in the Town of Los Gatos to establish the community benefits that would result from the project and to participate in the cost of constructing capacity enhancing and transit improvement projects to reduce traffic congestion. RESOLVED, that the Town Council of the Town of Los Gatos does hereby adopt the Policy Statement as shown on the attached Exhibit "A" as the Town of Los Gatos Traffic Impact Policy. FURTHER RESOLVED, this Resolution rescinds Resolution No. 1990 -147. PASSED AND ADOPTED by the Town Council of the Town of Los Gatos at a regular meeting held this 5th day of August 1991, by the following vote: COUNCIL MEMBERS: AYES: Randy Attaway, Joanne Benjamin, Steven Blanton NAYS: Mayor Brent N. Ventura ABSENT: Eric D. Carlson ABSTAIN: None SIGNED: a� MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA ATTEST: CLERK OF THE TOWN OFt_'OS GATOS LOS GATOS, CALIFORNIA c9\HISC\T"FF1C.4 ATTACHMENT3 I_� TOWN OF LOS GATOS TRAFFIC IMPACT POLICY POLICY STATEMENT 1. The deciding body may approve a project with a minor traffic impact (one or more and less than five additional AM or PM peak hour trips) subject to payment of a traffic mitigation fee 2. The deciding body may approve a project with a traffic impact of five to nineteen additional A.M. or P.M. peak hour trips only if it is determined that the benefits of the project to the Town outweigh the impact of increased traffic and subject to payment of a traffic mitigation fee 3. The deciding body may approve a project with twenty or more additional A.M. or P.M. peak hour trips only if it is determined that the benefits of the project to the Town outweigh the impact of increased traffic and subject to: a. preparation of a comprehensive traffic report. b. Payment of a traffic mitigation fee C. Payment of a proportionate share of the cost of the construction of circulation improvements in the immediate area. C Where benefits to the Town are required to be shown, applicants shall submit a letter of justification which clearly states housing or economic benefits and/or specific sections of the General Plan and any applicable Specific Plan which show that the type of project will benefit the community (See Section 2.5.6 of the General Plan). The burden of proof of community benefit is on the applicant. 5. In order to determine if a project will generate additional traffic, the Town will use composite trip generation rates derived from the following sources and updated from time to time: ■ Institute of Transportation Engineers (IM) ■ San Diego Association of Governments (San DAG) * California Department of Transportation (CalTrans) ■ Other Municipalities such as the City of San Jose TRAFFIC IMPACT POLICY The specific mitigation measure(s) required would be based on the magnitude of the project's traffic impact which would also establish the procedure for processing the project as set forth below. B. REVIEW PRO E C 1. Staff will initially determine whether a proposed project generates a net increase in traffic. If the project does not generate a net increase in traffic, the traffic policy does not apply. Therefore, the project will be recommended for approval or denial based on the merits of the project. 2. If there is a net increase in traffic, staff will review the applicant's proposal and determine if the project will create minor traffic impacts or major traffic impacts. a. Minor traffic impact is defined as one or more and less than twenty additional AM or PM peak hour trips. b. Major traffic impact is defined as twenty or more additional AM or PM peak hour trips. C. The determination of whether a project has a minor or major traffic impact is based on a traffic analysis prepared by the Town Engineering Department based on standardized trip generation rates. 3. If a project is determined to have a major traffic impact, a traffic report shall be prepared by a private consultant, hired by the Town at the applicant's expense. The report will include an analysis of generated trips and any linked trips. If an applicant does not agree with the results of the Town's traffic analysis or the traffic report prepared by the Town's consultant, the applicant may have an independent traffic report prepared at the applicant's expense. 4. Projects that generate additional traffic of five or more peak hour trips may only be recommended for approval if the project's benefits to the community override the traffic impacts as determined by specific sections of the General Plan and /or any Specific Plan. If a project generates additional traffic of five C9 \MISC(TRAFFIC.6 2 TRAFFIC IMPACT POLICY or more peak hour trips the burden is on the applicant to cite economic or housing benefits to the Town and /or specific sections of the General Plan and any applicable Specific Plan that demonstrate the project's benefit to the Community which outweighs the traffic impact. The deciding body must make specific findings which demonstrate that the benefit(s) of the project outweigh the impact in order to approve the project. 3. If a project is determined to have a major traffic impact, a traffic report shall be prepared by a private consultant, hired by the Town at the applicant's expense. The report will include an analysis of generated trips and any linked trips. C. MITIGATION OF TRAFFIC �IMP ACTS If a project with a traffic impact is recommended for approval by staff and /or subsequently approved by the Planning Commission and /or Town Council, traffic mitigation measures shall be imposed. The traffic mitigation shall be in the form of an in -lieu traffic impact mitigation fee. The mitigation for projects with major traffic impacts will be the required payment of a traffic impact mitigation fee and a proportionate share or construction of intersection and /or roadway improvements within a specified distance from the project. D. FEE Based on a traffic analysis required in A above, any project which is found to cause a net increase in traffic shall pay a traffic impact mitigation fee, as established by separate resolution. The traffic impact mitigation fee and any proportionate share of intersection improvements shall be due prior to Final Map approval, issuance of a Building Permit, or occupancy permit as applicable. The traffic impact mitigation fee shall C9 \M15C \TRAFFIC.4 3 TRAFFIC IMPACT POLICY be used to construct capacity enhancing projects (i.e., signals, street widening, etc.) that are listed in the Capital Improvement Program and transit improvement projects that are identified by the Town as a means of reducing traffic congestion. E. RIGHT TO DEVELOP NOT GI JARANTEE D Compliance with the provisions of the Traffic Impact Policy is not to be construed to be a right of development. The Town specifically retains the right of review and approval (or denial) of each project based on its merits. C9 \MISC \i NAFFIC.4 4 This Page Intentionally Left Blank � WN i COUNCIL AGENDA REPORT DATE: MAY 9, 2014 TO: MAYOR AND TOWN COUNCIL FROM: GREG LARSON, TOWN MANAGER SUBJECT: MEETING DATE: 05/19/14 ITEM NO: r AMENDMENT OF TRAFFIC IMPACT MITIGATION FEES ADOPT A RESOLUTION CONFIRMING ACTION TAKEN BY THE TOWN COUNCIL AT A SPECIAL METING HELD ON MARCH 24, 2014, AMENDING THE TOWN OF LOS GATOS TRAFFIC IMPACT MITIGATION FEES AS PROVIDED FOR IN SECTION 15.70.035 OF THE TOWN CODE. RECOMMENDATION: Adopt a resolution (Attachment 1) confirming action taken by the Town Council at a Special Meeting held on March 24, 2014, amending the Town of Los Gatos Traffic Impact Mitigation Fees as provided for in Section 15.70.035 of the Town Code. DISC — U— S— SIGN: At a Special Meeting held on March 24, 2014, the Town Council held a Public Hearing to consider increasing the Town's existing Traffic Impact Mitigation Fees, which had not been adjusted since 1994. Following a presentation by staff and receipt of public testimony at the March 24, 2014 Public Hearing, the Council took the following actions: A. The fee for all uses shall be calculated at $854 per new Average Daily Trip (ADT), with no discount for trips over 10 new ADT. B. On an annual basis, or sooner as needed or indicated by staff or the Council, the structure of the Traffic Mitigation Fee shall be reviewed to ensure it is doing what was intended and that there have been no unintended consequences. C. On an annual basis, the Traffic Mitigation Fee shall be reviewed for a Cost of Living Adjustment (COLA) or other appropriate adjustment. PREPARED Reviewed by: MATTMORLEY 2,714i' o Director of Parks and Public Work - Town Manager I Town Attorney ATTACHMENT PAGE 2 MAY 9, 2014 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENT OF TRAFFIC IMPACT MITIGATION FEES DISCUSSION (cont'd): The attached resolution confirms the above actions taken by the Town Council at the Special Meeting on March 24, 2014. Adoption of the attached resolution also rescinds Resolution 1994- 55 (Attachment 2), which established the existing Traffic Impact Mitigation Fees. Resolution 1994 -55 contained several additional provisions. The text of each provision and the corresponding staff recommendation, based on what staff believes was previous Council direction, are listed below. A. A secondary dwelling unit with a floor area of six hundred square feet or less shall be exempt from this fee. Recommendation: Remove this provision to be consistent with Council direction to remove the previously existing discounts. B. The Town Council may exempt housing developments for very low, low and moderate income residents (as defined by Town Ordinance, General Plan, or statue) from all or a portion of the traffic impact mitigation fee upon making a finding that the development provides a significant community benefit by meeting current needs for affordable housing. The exempted fees will be made up from other sources of revenue. Traffic mitigation fees paid by other developers will not be used to subsidize the exempted projects. Each year the Town will identify how much money is to be allocated in the Capital Improvement Program for traffic improvement projects. Additional revenue sources will be identified to cover exempted fees. Recommendation: Remove this provision to be consistent with Council direction to remove the previously existing discounts. C. Walk -in, impulse businesses such as juice bars, yogurt shops and donut shops, which do not serve meals, shall be considered Specialty Retail for purposes of traffic impacts only. Recommendation: Retain this provision as it provides clarity to staff on handling some unique classifications of business. D. Traffic credit may be granted for an existing or former use. When applicable, existing or former use traffic (ADT) shall be subtracted from the project traffic prior to calculating the fee. Recommendation: Retain this provision. Discussion at the March 24, 2014 meeting on this item included a review of best practices for credits that ensure double charging associated with traffic impact does not occur. PAGE 3 MAY 9, 2014 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENT OF TRAFFIC IMPACT MITIGATION FEES DISCUSSION (cont'd)• E. ADT is defined as the number of average daily trips associated with an identified land use as determined or derived from the most recent edition of Trin Generation by the Institute of Transportation Engineers or a Town sponsored traffic study, whichever is less. Any Town approved traffic study will be paid for by the applicant. Recommendation: Retain this provision as it provides clarity on standards for the calculation and application of fees. Any of the above provisions which the Council wishes to adjust from the staff recommendation can be added to or removed from the attached resolution at the direction of the Council. Staff is also recommending the inclusion of specific language in the implementing resou onto completion of projects by a developer that lti clarify when mitigation fee credit will be granted f are listed on the Town of Los Gatos Traffic Mitigation Improvement Project List (Attachment 3). The inclusion of this provision will address concerns that have been raised since the Council's March 24, 2014 action on Traffic Impact Mitigation Fees regarding the potential for "double charging" for transportation improvements identified on the Traffic Mitigation Improve Project List that are also required to be completed as ment part of project's environmental mitigations or conditions of approval. The language proposed for inclusion in the resolution is as follows: Credit against Traffic Impact Mitigation Fees due shall be granted up to the amount of the Estimated Project Cost shown on Attachment 1, Town of Los Gatos T c raffi Mitigation Improvements Project List, for any listed projects for which the developer either constructs at the developer's own cost, or contributes a fixed or percentage amount. Where construction is fully funded and completed by the developer, said credit shall be equal to the Project Cost as shown in Attachment 1. Where payment is a fixed amount or a percentage of Project Cost, credit shall be equal to the actual amount due, whether the Project is constructed by the developer or others. FISCAL IMPACT: The new fees will be included in the Town of Los Gatos 2014/15 Comprehensive Fee Schedule but will not become effective until 60 days following adoption of the attached resolution. Depending on the level of development activity and changes in land use and building occupancy, a significant increase in Traffic Impact Mitigation Fee revenue should be realized by the Town with the adoption of this adjusted fee. PAGE MAY 9, 2014 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENT OF TRAFFIC IMPACT MITIGATION FEES Attachments: 1. Resolution Amending Traffic Mitigation Impact Fees 2. Resolution 1994 -55 3. Traffic Mitigation Improvement Project List 4. March 24, 2014 Council Report 5. March 24, 2014 Council Report Minutes 6. Communication from the Public RESOLUTION 2014- RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS AMENDING TRAFFIC IMPACT MITIGATION FEES AND RESCINDING RESOLUTION 1994 -55 WHEREAS, Chapter 15, Article VII of the Town of Los Gatos Town Code provides for the establishment of Traffic Impact Mitigation Fees; and WHEREAS, the purpose of these fees is to assure that each new development or expansion of use pays its fair share of the transportation improvements needed to accommodate cumulative traffic impacts associated with development as anticipated in the Town's adopted General Plan; and WHEREAS, the Traffic Impact Mitigation Fees currently in place have been unchanged since their approval by the Council on April 4, 1994 with the adoption of Resolution 1994 -55; and WHEREAS, the Town has determined the estimated cost of the transportation improvements necessary to implement the circulation element of the Town's General Plan; and WHEREAS, the Town has determined the current and anticipated funding available to pay for the cost of construction of the transportation improvements, including the amount of funding currently available in the Town's Traffic Impact Mitigation Fee Fund; and WHEREAS, Section 15.70.035 (a) of the Town Code provides for periodic review of these fees; and WHEREAS, Section 15.70.035 (a) of the Town Code also sets forth that the Town Council shall by resolution set the specific amount of traffic impact mitigation fees; and WHEREAS, on March 24, 2014, the Town Council at a duly noticed Public Hearing considered and took action on the specific amount to be charged for traffic mitigation fees which shall be incorporated in the Town of Los Gatos 2014/15 Comprehensive Fee Schedule. NOW, THEREFORE, BE IT RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa Clara, State of California that the following Traffic Mitigation Fees, adopted by the Town Council on March 24, 2014, shall be payable as set forth in Chapter 15, Article VII of the Town Code: A. The fee for all uses shall be calculated at 5854 per new Average Daily Trip (ADT). ATTACHMENT 1 FURTHER RESOLVED, that the following provisions, previously included as part of Resolution 1994 -55 adopted on April 4, 1994, shall remain in effect: A. Walk -in, impulse businesses, such as juice bars, yogurt shops and donut shops, which do not serve meals, shall be considered Specialty Retail for purposes of traffic impacts only. B. Traffic credit may be granted for an existing or former use. When applicable, existing or former use traffic (ADT) shall be subtracted from the project traffic prior to calculating the fee. C. ADT is defined as the number of average daily trips associated with an identified land use as determined or derived from the most recent edition of Trio Generation by the Institute of Transportation Engineers or a Town sponsored traffic study. The Town approved traffic study will be paid for by the applicant. FURTHER RESOLVED, that credit against Traffic Impact Mitigation Fees due shall be granted up to the amount of the Estimated Project Cost shown on Attachment 1, Town of Los Gatos Traffic Mitigation Improvements Project List, for any listed projects for which the developer either constructs at his own cost, or contributes a fixed or percentage amount. Where construction is fully funded and completed by the developer, said credit shall be equal to the Project Cost as shown in Attachment 1. Where payment is a fixed amount or a percentage of Project Cost, credit shall be equal to the actual amount due, whether the project is constructed by the developer or others. FURTHER RESOLVED, that on an annual basis, or before as needed or indicated by staff or the Council, that the structure of the Traffic Mitigation Fee be reviewed to determine that it is doing what is intended and does not have unintended consequences; and FURTHER RESOLVED, that on an annual basis, the Traffic Mitigation Fee be reviewed for a Cost of Living Adjustment (COLA) or other appropriate adjustment. FURTHER RESOLVED, this resolution rescinds Resolution No. 1994 -55. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos held on the 10 day of May, 2014 by the following vote: 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 THIS PAGE INTENTIONALLY LEFT BLANK C d s v x El J t i m G m N L j• F U U m rr��U o° C N D O L m 0 2 d J J O « O «° O 1 y C C U) 4c (J� _ O E y y y ai m m �� w e to b LF vs CL �o �m ao 0 >E� mm 'dam 8e tim m a m 'C ¢ m° m �p ]x ESA mro Q 0 mt p °y °m c mQ �E E •moo• m��t °ov oCrnQ c'Qam`¢° >,p m o °E t d O OZ in OD N Q 4mp�Vy CO y =c mm mm y� G ` NyF ¢ m m C C N.(° F 9 m U R > >> Z >> d m a m o 0 �1 G `o . U m 0 > 0 E w O m c� m: U qp p a E m .° w m y �¢ m c; • E > a m° N Q m � � o CJ � y h N O (n w z v O •y (9 C7 mcatQi O�'yc mLg$ °yd 3�woarmom' ��U' " D m m .D O +gy+�p ppC�� }}T .jT L �pp yC_ >N �121pp m pt ppE ptp ppt pG Yggm�� pUR N O O O 000 coo r S rd3 UC�5000(� (� 00 y 11 U L9o(D I mad, Z�tiy coo 0 O O O o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 g 0 O 0 o O O D 0 0 0 0 0 0 0 = 000 0 0 o 0 0 0 o o 0 0 0 0 0 0 0 0 ww�� pp O O a 000000000000 0 00 000pp y �y • N O O O O N O O O O O N N O O O N O N O o O O O 10 O t i m G m N L j• F U U m rr��U o° C N D O L m 0 2 d J J O « O «° O 1 y C C U) 4c (J� _ O E y y y ai m m �� w e to b LF vs CL �o �m ao 0 >E� mm 'dam 8e tim m a m 'C ¢ m° m �p ]x ESA mro Q 0 mt p °y °m c mQ �E E •moo• m��t °ov oCrnQ c'Qam`¢° >,p m o °E t d O OZ in OD N Q 4mp�Vy CO y =c mm mm y� G ` NyF ¢ m m C C N.(° F 9 m U R > >> Z >> d m a m o 0 �1 G `o . U m 0 > 0 E w O m c� m: U qp p a E m .° w m y �¢ m c; • E > a m° N Q m � � o CJ � y h N O (n w z v O •y (9 C7 mcatQi O�'yc mLg$ °yd 3�woarmom' ��U' " D m m .D O +gy+�p ppC�� }}T .jT L �pp yC_ >N �121pp m pt ppE ptp ppt pG Yggm�� pUR N O O O 000 coo r S rd3 UC�5000(� (� 00 y 11 U L9o(D I mad, Z�tiy THIS PAGE INTENTIONALLY LEFT BLANK Id RESOLUTION 1994.55 RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS AMENDING TRAFFIC IMPACT MITIGATION FEES AND RESCINDING RESOLUTIONS 1990 -144 AND 1993 -134 RESOLVED, the Town Council hereby establishes a traffic impact fee payable Pursuant to Chapter 37 of the Town Code as follows: A. The fee for residential uses shall be calculated at $600 per Average Daily Trip (ADT), except that a secondary dwelling unit with a floor area of six hundred (600) SCUM feet or less shall be exempt from this fee. B. The fee for medical office use shall be calculated at 5600 per ADT for the first ten (10) trips and 3'120 per ADT thereafter. C. The fee for all other uses shall be calculated at $600 per ADT for the first ten (10) trips and S60 per ADT thereafter. D. The Town Council may exempt housing developments for very low, low, and moderate income residents (as defined by Town Ordinance, General Plan, or statute) from all or a portion of the traffic impact mitigation fee upon making a finding that the development provides a sigrnficam community benefit by meeting current needs for affordable housing. The exempted fees will be made up from other sources of revenue. Traffic mitigation fees paid by other developers will not be used to subsidize the exempted projects. Each year the Town will identify how much money is to be allocated in the Capital Improvement Program for traffic improvement projects. Additional revenue sources will be identified to cover exempted fees. E. Walk -in, impulse businesses, such asjuice bars, voeurt shops and donut shops, which do not serve meals, shall be considered Specialty Retail for purposes Of traffic impacts only. ATTACHMENT 2 0 r � F. Traffic credit may be granted for an existing or former use. When applicable, existing or former use traffic (ADT) shall be subtracted from the project traffic prior to calculating the fee. The first ten trips of the difference will be charged at the higher $600 per trip rate. G. ADT is defined as the number of average daily trips associated with an identified land use as determined or derived from the most recent edition of Trip Generation by the Institute of Transportation Engineers or a Town sponsored traffic study • whichever is less. The Town approved traffic study will be paid for by the applicant. FURTHER RESOLVED, this Resolution rescinds Resolution No. 1990 -144 and Resolution No, 1993 -134. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 4'^ day of April, 1994, by the following vote, TOWN COUNCIL MEMBERS: AYES: Joanne Benjamin, Steven Blanton, Linda Lubeck, Patrick O'Laughlin, and Mayor Randy Attaway. NAYS: None ABSENT: None ABSTAIN: None SIGNED: /s/ Randy Attaway MAYOR OF THE TOWN OF LOS GATOS ATTEST: /s/ Marian V. Cosgrove CLERK OF THE TOWN OF LOS GATOS 2 GPNTP 2035 Dr to Attachment 3 $ 4,000,0001 50.00% I $ 2,000,000 I GP P Add Third Left Tuso Lanes for Eastbound and Northbound A roaches $ 1.200,000 90.00% $ 1,080.000 GP Complete Street Improvements - Lark from Garden Hill to Los Gatos Blvd $ 2,100,000 50.00% S 1,050,000 GP Cam fete Street Inn rovements - SR 9 from Univerist to Los Gatos Blvd GP Complete Street Improvements - Blossom Hill Road from Old Blossom Hill Road $ 0,000 50.00% $ 325p00 to Regent Drive $ 3100000,000 50.00% $ 1,500,000 f:P to In VTP = Valley Transportation Plan, 2035 by Santa Clara li I otal Town CIP = Town of Los Gatos, Capital Improvement Progrlom arnd pend ng construction project Ust. Source: Tory +n of Los Gatos. Attachment 3 Lark/Los Gatos Intersection Improvements . to In VTP = Valley Transportation Plan, 2035 by Santa Clara li I otal Town CIP = Town of Los Gatos, Capital Improvement Progrlom arnd pend ng construction project Ust. Source: Tory +n of Los Gatos. Attachment 3 THIS PAGE INTENTIONALLY LEFT BLANK M � MEETING DATE: 3124114 1 ITEM NO: 3 � s COUNCIL AGENDA REPORT DATE: MARCH 13, 2014 Tai MAYOR AND TOWN COUNCIL FROM: GREG LARSON, TOWN MANAGER SUBJECT: AMENDMENT OF TRAFFIC AND CONSTRUCTION ACTIVITY IMPACT MITIGATION FEES a. ADOPT A RESOLUTION AMENDING THE TOWN OF LOS GATOS TRAFFIC IMPACT MITIGATION FEES AS PROVIDED FOR IN SECTION 15.70.035 OF THE TOWN CODE. b. ADOPT A RESOLUTION AMENDING THE TOWN OF LOS GATOS CONSTRUCTION ACTIVITY IMPACT MITIGATION FEES PURSUANT TO SECTION 15.90.035 (d) OF THE TOWN CODE. RECOMMENDATION: L Adopt a resolution amending the Town of Los Gatos Traffic Impact Mitigation Fees as provided for in Section 15.70.035 of the Town Code, increasing the per trip fee to $854 and retaining the current percentage discount structure (Option I below). 2. Adopt a resolution amending the Town of Los Gatos Construction Activity Impact Mitigation Fees pursuant to Section 15.90.035 (d) of the Town Code. BACKGROUND: In April 2010, staff presented a repon to the Town Council recommending increases to both the Town's existing Traffic Impact Mitigation Fee and Construction Activity Impact Mitigation Fee, as neither of these fees had been adjusted since their adoption in 1994. The recommendation for the fee adjustments was supported by a fee study prepared by FCS Group, a consulting firm with broad experience in user and impact fee analysis. The Town Council approved changes to the Construction Activity Impact Fee with the adoption of Ordinance 2189 on May 3, 2010, increasing the fee to its current level of $1.00 per square foot Of new construction. No action was taken on recommended modifications to the Traffic Impact Fees, with consideration of any adjustments deferred to a future date. The Construction Activity Impact Fee recovers the cost of damage to roadways caused by construction traffic associated with new construction projects. PREPARED BY: MATT MORLEY /Y� Director Mop and Pub is ork Reviewed b Y Assistant Town Manager Town Attorney Attachment 4 PAGE MARCH 13, 2014 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENT OF TRAFFIC AND CONSTRUCTION ACTIVITY IMPACT MITIGATION FEES BACKGROUND (cont'd): With the improvement in the economy at both the State and local levels since the initial fee consideration in 2010 and with a noticeable increase in development activity and corresponding local traffic impacts, staff is recommending that the Town Council reconsider modifications to the Traffic Impact Mitigation Fee. In addition, staff is recommending a minor adjustment to the Construction Impact Fee as provided for in the Town Code. Traffic Impact Mitigation Fees capture the cumulative impact of development projects on the Town's roadways beyond the immediate vicinity of the development. As an example, a project may increase traffic at an intersection some distance away that adds to the need to make upgrades to that intersection. The fees are held and aggregated across development projects to address Town -wide transportation needs as identified in the Town's General Plan. Authority to assess Traffic Impact Fees is codified in Chapter 15, Article VII of the Los Gatos Town Code. The process for establishing the fee is set forth in Section 15.70.030, Fee Determination. The Town Code further provides in Section 15.70.035 (a) that the Town Council shall periodically review the traffic impact mitigation fees, and shall by resolution, set forth the specific amount of the fees. The Town's existing Traffic Impact Mitigation Fees have not changed since 1994, and are calculated based on the number of new Average Daily Trips (ADT) that are projected to be generated from a new development or a change in use, as set forth in the most recent edition of Trip Generation, published by the Institute of Transportation Engineers (ITE). New trip generation is based on the net increase in square footage of new development, and use, with credit given for existing trips from previous or existing uses. Table I below reflects the Town's current rate structure. Table I Current Traffic Impact Mitigation Fee Rates PAGE 3 MARCH 13, 2014 MAYOR AND TOWN COUNCIL SUBJECT; AMFN1 Upxrr nn m MITIGATION FEES DISCUSSION (cont'd)- In 2010, when revisions to the Traffic Impact and Construction Activities hnpact Mitigation fees were last evaluated, the Town retained FCS Group, a consulting firm with extensive experience in user and impact fee analysis. FCS Group prepared a report in 2010 that provided the basis for the Construction Activities Fee approved by Council, ecommendations for as well as for the r modifying the Town's Traffic Impact Mitigation Fees which were not approved. In conjunction with Parks and Public Works staff, FCS recently completed an update of the Traffic Impact Mitigation Fee portions of the 2010 report, utilizing the Town Code stipulated methodology for calculating traffic impact fees. In summary, this methodology looks at the cost Of implementing transportation improvements needed to accommodate vehicle trip growth resulting from "build out" as set forth in the Town's adopted 2020 General Plan. A growth - related percentage is then assigned to each identified transportation traffic mitigation fee eligible cost of project to determine the each project. The detailed list of projects and growth - related calculations are provided in Appendix A. The total cost of these improvements is then reduced by the existing Traffic Impact Mitigation Fee Fund Balance to determine the current unfunded cost of traffic improvements. This unfunded cost is then divided by the projected number of new trips which will result fro m development provided for in the Gen eral plan i order to derive a new calculated cost per trip. n As shown in Table 2 below, using the total new trip number and the cost of mitigation fee eligible improvements, a new rate of $854 per trip was calculated. This represents an increase of approximately 42.4% over the existing fee of $600 per trip. This increase is consistent with the growth in construction costs as reflected in the industry - standard Engineering News Report (ENR) Building Cost Index for the San Francisco region which increased 43.5% from 1994 to 2013, reflective of the time period since the current fee was put in place. gation Impact Fee Eligible Costs (see Appendix A) 22,299,000 s Existnrg Mitigation Fee Fund Balance (21137492' improvement fee cost basis $ 20,661,508 Daily Vehicle trips to be added sportationmiti� txrn fee 24,191 Illntrwwis�per net new avg. dar7v $ 854.10 A significant feature of the Town's current Traffic Impact Mitigation Fee calculation is the significant cost per new trip discount for uses that generate more than 10 new trips (see Table 1). This discount has been a component of the Traffic Impact Fee methodology in place since 1994, and along with credit for existing trips from previous uses, often results in lower average cost per trip for large traffic generators. This discount results in the Town collecting less than is needed PAGE 4 MARCH 13, 2014 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENT OF TRAFFIC AND CONSTRUCTION ACTIVITY IMPACT MITIGATION FEES DISCUSSION (cont'd): to implement the traffic improvements which these developments require. The Town ultimately must seek other funding sources or accept increased traffic impacts. Stab' considered several options for adjusting the Traffic Impact Fee as described below. Qption 1-Increase Cost Per D-ip to Marker No Change in Methodologv Option I is the most straightforward alternative and simply uses the new cost per trip of $854 (instead of the current fee of $600) as the basis for the new fee calculation as outlined in Table 1, maintaining the existing discount methodology, where trips over 10 are charged at either 10% or 20% of the initial trip charge, depending on use. Option 2 —Flat Rate Mitigation Fee This option eliminates the discount provisions of the existing rate structure, charging a Flat Rate for all new trips, eliminating the discount for trips over 10 new trips. Under a Flat Rate scenario, the rate could be set at the calculated cost of $854 per trip, could be phased in over time, or could be set at a lower amount than the maximum allowable rate. The calculation in Table 4 assumes the use of the $854 rate. This means that the cost for a development that generates 10 new trips would be $8,400 (10 x $840), the cost for a development that generates 100 new trips would be $84,000, and so on. This option would produce the most revenue over time and would have the greatest impact on uses that generate a substantial number of new trips. Qption 3-Progressive Fee with Minimum This option creates a progressive fee structure that charges an increasingly greater amount per trip as the total number of trips increase. The adjustment points were established by referencing both the Town's Traffic Policy, which sets thresholds for when a Traffic Impact Analysis must be conducted, and the Countywide Congestion Management Agency (CMA) Traffic Impact Analysis Methodology. The progressive fee structure is shown below on Table 3: Table 3 P oposed Prozomusive Fee Stricture 0 -10 1000/0 $854 11 -50 25% $214 51 -200 50° /n $427 201 -1000 75% $640 Over 1000 100% $854 PAGE 5 MARCH 13, 2014 MAYOR AND TOWN COUNCIL SUBJECT. AMFN -r)KA r.r,, „-T MITIGATION FEES DISCUSSION (cont'd): This fee structure would continue to capture 100% of the per trip cost of traffic impacts for new smge family residential uses and other small developments, while providing a discount for moderate and larger developments. Large projects with significant traffic impacts would pay the higher! amount. The impact of the three options on a sample of actual and existing traffic fee, are shown below in Table 4. benchmark projects, along with the Table 4 Sample Project Traffic Impact Fees lgk Fam7y Residential [olio aparonem co a kx w sit-down restawan[ (4500 sgf,) r Food with Drive - through (250o sgft) UM (3500 sgfr) uni new single famly subdnuion Resider cad Use 25 single famiy lames a- 29,000 commcrsial(Swanson Ford) Residem :way upe -'t93 aqa) Commen iatsh auto dealer and construct 22 salgle tames Res iienti afish auto dealer and co+lsrrllct 20000 Allmlerclal CemmCle., ghr Developme,g (295,000 sgft increase ice commercial Conlmemi i Use Residential and Commercial n1140 pmie�•� Mired Use -� -• -_- oa,r�o 5 12309,076 Fees fora sample Fees selected Santa .Clara County and other nearby cities that have a Traffic Mitigation Impact Fees in place are presented in Table 5. It is worth noting, however, that not all jurisdictions have a Traffic Mitigation Impact Fee. For example, within Santa Cl t County, Campbell, Cupertino, Saratoga, Monte Sereno; Mountain View and Saratoga do not have a citywide Traffic Mitigation Impact Fee. It is also important to recognize that comparing development fees across jurisdictions for only one impact fee (in this case, traffic) may not reflect the true impact mitigation burden on a development. For example, Gilroy assesses a Traffic Impact Fee of 5mitig for single family residential alto' a Public Facilities Impact Fee of S1(,948 per unit along with additional fees for PAGE 6 MARCH 13, 2014 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENT OF TRAFFIC AND CONSTRUCTION ACTIVITY IMPACT MITIGATION FEES DISCUSSION (cont'd): storm drainage, water, sewer and street trees. Campbell, which does not have a Traffic Impact Fee, has a Park Impact Fee of $15,750 per new single family home. Los Gatos has neither a Public Facilities Impact Fee nor a Park Impact Fee. Table 5 A t (235,000 f0 E a aa�ec .m 149 0 arvn rte. .. $ 1169000 S 1,443750 $ 2 b0000 $ 92,990 S 758500 Da are 3500 fl S 19,860 da 1Ja E 30720 rJa $ 33102 Restaurant 4500 ) $ 15,480 S 39150 $ 4 750 S 080 f 67478 S 49 53 Fast Food wdh Drive 71w 2500 s k E 52,800 S 75,945 $ 91,500 $ 51 00 $ 93 94 S 55 723 SF Residential S 5,742 $ 379 S 3850 $ 5155 $ 1704 $ 9973 "[.os Gatos Fee is current fee t { {. ___.____.I. -., _.------ — '.._...___-- __l.. --- ... ...___..i RECOMMENDATION: Traffic Impact Mitigation Fee Recommendation At this time, staff is recommending that the Town Council approve Option 1, an adjustment to market, without making any further changes in the Traffic Mitigation Fee methodology or formula. Staff' is further recommending that a more comprehensive review of existing and potential new development impact fees be considered as a strategic goal in the upcoming goal setting for the FY 15116 Fiscal Year. More detailed analysis of the impact of any subsequent adjustment to traffic fees can then be evaluated within the context of potential new fees that would provide much - needed revenue for Town services that currently receive no dedicated funding from new development. Specific examples to be considered might include a parks impact fee or a Town -wide landscaping and lighting assessment. Construction Activities Mitigation Fee The current Construction Activities Mitigation Fee Ordinance was adopted in 2010 and is codified in Article IX of Chapter 15 of the Town Code. At the time that the Ordinance was adopted, the fee was set at $1.00 per square foot of new development. Section 15.90.035 (d) of the Town Code provides that the mitigation fee rate shall be adjusted on July 1 of each year to account for changes in the cost of construction of facilities, which is tied to the Engineering News Record (ENR) Building Cost Index (BCI) for the San Francisco Bay Area region. The recommended adjustment to the Construction Activities Mitigation Fee, based on changes to the ENR BCI, is 11.52 %. This will bring the rate up from the existing fee of $1.00 per square foot, to $1.12 per square foot, consistent with provisions of the Town Code. The change in the ENR Building Cost Index since the 2010 adoption of the $1.00 per square foot fee is shown below in Table 6. In future years, the ENR Index will be tracked annually and changes included as part of the Town's annual fee update. PAGE 7 MARCH 13, 2014 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENT OF TRAFFIC AND CONSTRUCTION ACTIVITY IMPACT MITIGATION FEES RECOMMENDATION tconfd 1- _ ... _.... ___..._..__. . -Table 6 - ---------- - -.. .... _ ENR Bu"q. Cost Index (San Francisco)_ j 1 2009 + fan 1 55.10.811 n/a J 2011 I Jan 5LM.77F 7.30% 1- Jul -11 I 2013 1 Jan 1 6018.52 1.11% 1 -1u113 Jan Catch Up 2010 to 2014 - -- — o_ -. 11.52 /°i CONCLUSION: I In 1994, the Town Council adopted both a Traffic Impact Mitigation Fee and a fee for Mitigation of Road Impacts Caused by Construction Projects, In February 2010, the Town approved changes to the Construction Activity Mitigation Fee but deferred action on adjustment of the Traffic Impact Fee. An update of the 2010 analysis was conducted by FCS Group, the consultants that prepared the 2010 recommendations. Any approved adjustments to the Construction Activity Impact or Traffic Impact fees would be reflected in the FY 2014/15 Comprehensive Fee Schedule. The recommended adjustments to the Traffic Impact Mitigation Fee and the Construction Impact Fee are consistent with Council's adopted Core Values for Fiscal Stability ( "Maintain ongoing fiscal stability to provide cost effective core services that meet the needs of the community ") and Quality Public Infrastructure ( "Maintain the condition and availability of public facilities, transportation systems, and other public infrastructure "). The increase in the Construction Impact Fee also meets the Council's 2014 -2016 Strategic Goal to "Explore and present funding mechanisms to provide ongoing funding for street maintenance." FISCAL IMPACT: Construction Activity Impact Fees are a direct function of development and construction activity, which is in turn linked to regional economic conditions. For the past three fiscal years, Construction Activity Impact Fee revenue has averaged around $280,000 annually. Revenue for the current fiscal year should be substantially higher, with $240,000 in revenue already received through the first half of the fiscal year. This total does not include revenue that will be received PAGE 8 MARCH 13, 2014 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENT OF TRAFFIC AND CONSTRUCTION ACTIVITY IMPACT MITIGATION FEES FISCAL IMPACT (cont'd): from the Albright development in conjunction with the issuance of building pemuts for the offices and parking garage, which will exceed $500,000. Traffic Impact Fee revenue also trends with underlying economic conditions and development activity, but has historically been more volatile than the Construction Activity Impact Fee, as the fee calculation will vary significantly based on use and credit for existing trips. Over the past five years, annual revenue has ranged from a low of $58,000 to a high of $324,000, with a five year average of $248,000. Revenue received through the first six months of the current fiscal year totals $371,000. As with the Construction Impact Fee, the current FY total does not yet include revenue from the Albright development. Any increase in Traffic Impact Fees would only apply to projects that have not yet applied for building permits. Approval of the proposed changes to the Traffic Impact Mitigation Fee would increase revenue for transportation improvements and traffic mitigation projects. The adjustment to the Construction Activities Impact Fee would contribute to funding available for street maintenance. Attachments: 1. Resolution Amending the Town of Los Gatos Construction Activity Impact Mitigation Fees 2. Resolution Amending Traffic Mitigation Impact Fees 3. Appendix A -Town of Los Gatos Traffic Mitigation Improvements List RESOLUTION 2014- RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS AMENDING THE TOWN OF LOS GATOS CONSTRUCTION ACTIVITY IMPACT MITIGATION FEES WHEREAS, Chapter 15, Article DX of the Town of Los Gatos Town Code provides for the mitigation of road impacts caused by construction projects; and WHEREAS, the purpose of these fees 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; and WHEREAS, the Town Council adopted by resolution a construction activities mitigation fee of one dollar per square foot added for both residential and non - residential development effective July 1, 2010; and WHEREAS, Section 15.90.035 (d) of the Town Code states that the dollar amount of the adopted construction activities mitigation fee rates shall be adjusted on July 1 of each year to account for changes in the cost of facilities; and WHEREAS, no changes have been made since July 1, 2010 in the approved rates; and WHEREAS, the increase in the Engineering News Record (ENR) Building Cost Index for the San Francisco Region since July 2010 is 11.52 %; and WHEREAS, Section 15.90.035 (d) of the Town Code cites the ENR Building Cost index as the benclunark for adjusting the Construction Activity Impact Mitigation Fee. NOR', THEREFORE, BE IT RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa Clara, State of California that the Construction Activity Impact Mitigation Fee shall be set at 11.12 per square foot added for new residential or non - residential development_ ATTACHMENT PASSED AND ADOPTED at a special meeting of the Town Council of the Town of Los Gatos held on the 24 "' day of March, 2014 by the following vote: 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 RESOLUTION 2014- RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS AMENDING TRAFFIC MITIGATION IMPACT FEES WHEREAS, Chapter 15, Article VII of the Town of Los Gatos Town Code provides for the establishment of Traffic Impact Mitigation Fees; and WHEREAS, the purpose of these fees is to assure that each new development or expansion of use pays its fair share of the transportation improvements needed to accommodate cumulative traffic impacts associated with development as anticipated in the Town's adopted General Plan_ and WHEREAS, the Traffic Impact Mitigation Fees currently in place have been unchanged since their original establishment and approval by the Council in 1994; and WHEREAS, the Town Engineer has determined the estimated cost of the transportation improvements necessary to implement the circulation element of the Town's General Plan; and WHEREAS, the Town Engineer in conjunction with the Town Finance Manager has determined the current and anticipated funding available to pay for the cost of construction the transportation improvements, including the amount of funding currently available in the Town's Traffic Impact Mitigation Fee Fund; and WHEREAS, Section 15.70.035 (a) of the Town Code provides for periodic review of these fees, and WHEREAS, Section 15.70.035 (a) of the Town Code also sets forth that the Town Council shall by resolution set the specific amount of traffic impact mitigation fees. NOW, THEREFORE, BE IT RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa Clara, State of California that the following Traffic Mitigation Fees shall be set, payable as set forth in Chapter 15, Article VII of the Town Code: A. The fee for residential uses shall be calculated at $854 per Average Daily Trip (ADT), except that a secondary dwelling unit with a floor area of six hundred square feet or less shall be exempt from this fee, ATTACHMENT2 B. The fee for medical office use shall be calculated at $854 per ADT for the first ten trips, and $171 for each trip thereafter. C. The fee for all other uses shall be calculated at $854 per ADT for the first ten trips, and $85 for each trip thereafter. PASSED AND ADOPTED at a special meeting of the Town Council of the Town of Los Gatos held on the 20 day of March, 2014 by the following vote: COUNCIL MEMBERS: AYES: NAYS: ABSENT: ABSTAIN: SIGNED: MAYOR OF THE TOWN OF LOS GATOS LAS GATOS, CALIFORNIA ATTEST: CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA GP/VTP 2035 5] Appendix A Del GP Lark/Los Gatos Intetsectioa Improvements - Add Third Left Tut, Lanes for Eastbound and Northbound Approaches Gp Complete Street Improvements •Lark from Garden Hill to Los Gatos Blvd GP Complete Street Im rovemems - SR 9 from Univeris to Los Gatos Diva GP Complete Street hiryrovements - blossom Hill Road from Old Blossom Hill �n D....... rt -._ IM" = Valley Transportation Plan, 2033 by Santa Clara Valley o o rran oJali uihoriry. Totai Town C/P = TO jdos Garos, C A Source: To,m ojL os Gaos. apa! lmprvemenl Program and pending conouclon projeci fs. $ 4,000,000 1 50.00% + $ 2,000,D00 S 5 1,200,000 90,00% $ 1,060,000 S 2,100,000 50.00% $ 1,050,000 S 3,000,0001 50.00% I $ 1,500,000 S. 22,799,0( ATTACHMEINT3 THIS PAGE INTENTIONALLY LEFT BLANK Public Hearings — continued 4 Requesting approval to operate a tasting room on property zoned C -2. APN 529- 04 -043. RESOLUTION 2014.016 Jennifer Savage, Associate Planner, presented the staff report. Matt Oetinger, applicant, spoke on the project. Opened the Public Hearing at 8:05 p.m. Ed Burke - Spoke in favor of the project. Maria Ristow - Spoke in favor of the project. Matt Oetinger, applicant, addressed comments. Closed the Public Hearing at 8:10 p.m. Council discussed the matter. MOTION: Motion by Council Member Joe Pirzynski to make the required findings in Attachment 1 and approve Conditional Use Permit U -13- 023 with modifications as recommended by the Planning Commission and adopt a resolution of approval with recommended conditions for a Conditional Use Permit (CUP) to operate a tasting room, inclusive of language on page 4 of the staff report under Number and Size of Tastings. Seconded by Vice Mayor Marcia Jensen. VOTE: Motion passed unanimously. 3. Adopt a resolution amending the Town of Los Gatos Traffic Impact itigation Fees as provided for in Section 15.70.035 of the Town Code SOLUTION 2014 -017 Town Council /Parking Authority March 24, 2014 Attachment 5 Public Hearing #3a — continued (2) Adopt a resolution amending the Town of Los Gatos Construction Activity Impact Mitigation Fees pursuant to Section 15.90.035(d) of the Town Code RESOLUTION 2014 -018 Matt Morley, Director of Parks and Public Works, presented the staff report. Opened the Public Hearing at 8:56 p.m. Cecil Anison - Spoke in favor of recommendation #2. Jeff Loughridge - Spoke in favor of recommendation #2. Jak Van Nada - Spoke in favor of recommendation #2. Closed the Public Hearing at 9:04 p.m. Council discussed the matter. MOTION: Motion by Council Member Diane McNutt to adopt a resolution amending the Town of Los Gatos traffic impact fees using option 3 as the structure. Seconded by Council Member Joe Pirzynski. VOTE: Motion failed 2/3. Council Members Diane McNutt and Joe Pirzynski voting yes. Mayor Steven Leonardis, Vice Mayor Marcia Jensen, and Council Member Barbara Spector voting no. MOTION: Motion by Vice Mayor Marcia Jensen to adopt a resolution amending the traffic impact mitigation fees as provided for in Section 15.70.035 of the Town Code increasing the per trip fee to $854 and adopting the method indicated in Option 2, and on an annual basis, or before as needed or indicated by staff or by Council members, that the structure is reviewed to determine it is doing what is intended and doesn't have unintended consequences; and that at the annual review a cost of living increase or other appropriate increase be considered. Seconded by Mayor Steve Leonardis. Town Council /Parking Authority March 24, 2014 VOTE: Motion passed 3/2. Council Members Diane McNutt and Joe Pirzynski voting no. Public Hearings Item 43b - continued b. Adopt resolution approving the Comprehensive Fee and Fine Schedule FY 2014/15, to continue and amend various Town fees, rates, fines anc charges for FY 2014/15 RESOLUTION 2014.019 Jennifer Callaway, Budget and Finance Manager, presented the staff report. Opened and Closed the Public Hearing at 9:32 p.m. Council discussed the matter. MOTION: Motion by Vice Mayor Marcia Jensen to adopt the comprehensive fee schedule with the changes that are incorporated and highlighted with the modification to Development Services Fees on page 18, F. Appeals, #2, to be edited to remove "where no error was made by Planning Commission" and change "50% of original application fee" to say "Fees based on actual cost of time and materials." Staff to review fines for weapons, explosives, alcohol, and illegal dumping and bring back to Council for possible increases. Seconded by Mayor Steven Leonardis. VOTE: Motion passed unanimously. MOTION: Motion by Vice Mayor Marcia Jensen to increase the credit card fee to 2% as recommended by staff. Seconded by Mayor Steve Leonardis. VOTE: Motion passed unanimously. OTHER BUSINESS There was no other business. ADJOURNMENT The meeting adjourned at 9:38 p.m. Attest: /s/ Shelley Neis, Interim Clerk Administrator Town Council /Parking Authority o March 24, 2014 THIS PAGE INTENTIONALLY LEFT BLANK ANDREW'L FABER KEVINF. KELLEY SANYORDA BERLINER RALPH) SW'ANSON' MARK MAKI£WICL DORIS A. KAELIN PEOGY L. SPRINGGAV JOSEPH F M-OK" ROBERTA S HAYASHI TEN ALMADEN BOULEVARD AMIU£LLNFA JEFFREYS.KAUFMAN JOVE HOUSTON ELEVENTH FLOOR PNNFlt BRIAN L.SNETLFJt SAN JOSE, CALIFORNIA 95113.2233 LINDA LINDAA CALLOA' JOHN EDUMINGUE JAMI PCASHMAN HARRY A. LOPEZ TELEPHONE: (408 )286.5800 STEVEN I. CASAD NANCI'I. JOHNSON CHARLES W' L'OLPE MICHAEL VIOIANTI FACSIMILE: (409) 998 -5368 IEROLDA.RERON CURISTINEH LONG ROBERT CHOKTEK AARON VALENTI W'W'W.bCFIiIJ[f.wm JONATHAND. W'DU CHRIMANE PICON'E BrauA DIR.. KATHLEEKK.MPLE M..d, CA - MP ,CA RETIRED SAMUEL) COHEN' ROBERT W. HUMPHREYS HUGH L. ISG4 April 2, 2014 VIA EMAIL AND U.S. MAIL Mayor Steven Leonardis Town Council Members Town Hall 110 E. Main Street Los Gatos, CA 95030 sleonardisQa losaatosca gov council(cr)-los atosca-gov Re: Request for continuance Traffic Impact Fee increase Our File No.: 09427 -065 Dear Mayor Leonardis and Members of the Town Council: TUOMAE P. MURPHY THOMAS D. MORELL SETH L COUDN LAURA PALA=oL0 KARA L ARGUELLO ANDREW) GIORGIATNI EDALINA M. MENOONCA MATTHEW A.TAYLOR DAWN C, 5 VEATT KATHLEENF SHERMAN SANDRA G SEPULVE W MASONL BRAW'LEY JENNIFER Y. LEUNG MAZAIUNA. VAKHARIA TYLER SHEW'EY VIVIANF WANG H SHINNY LIU SARA L POLLOCK BEAU CORREIA MARY E LOUDEN' OFCOUNSEL SANYORDA BERLINER JUDY JENSEN STEVEKL.HALLORMSON DORIS A. KAELIN FRANK R UBHAUS SVSANE 1115901 ERIC WONG LFSLIEKALIMAYHUGH NANCYL BRANDT ANTHONY IOHNMN THOMAS ARMSTRONG This Office represents the interests of the potential developers of the North Forty Project, Grosvenor Americas and SummerHill Homes. By this letter we are requesting that the matter of adoption of the increase in traffic impact fees not be heard at your April 7, 2014 meeting, but rather be continued at least two weeks, to the April 21, 2014 meeting. From the viewpoint of Grosvenor and SummerHill, the tentative action taken by the Council at its meeting on March 24, 2014 was precipitous, and can end up having an enormous impact on the future viability of any project to be built on the North Forty Property. As shown in the Staff PowerPoint presentation, the current fee for an estimated North Forty Project is $2,298,300. Under the tentative action, this fee would increase by a factor of nearly 600 %, to be in excess of $12,000,000! There are a number of concerns that Grosvenor and SummerHill have with respect to this enormous increase. The first, of course is the effect it will have on the viability of the project itself. 48246077- 7434v1 ALF0427065 ATTACHMENT Steven Leonardis April 2, 2014 In addition, there are uncertainties as to how the fee would be applied to the project. For example, how are reimbursements and credits to be handled? To what extent are fee credits allowed for traffic improvements performed by Grosvenor and SummerHill on the North Forty Project itself? Furthermore, there are certain traffic improvements that Grosvenor and SummerHill had considered performing (and which they have been told by staff would effectively be required) that are not environmental mitigations for traffic cause by the project. The continuing ability to perform those improvements is in question as is, if they are performed, how those costs should be credited against traffic improvement fees. In order to understand these issues, there must be a very clear policy on both credits and reimbursements that would apply to the very large sums of money that are being requested from this project. Because of the unexpected nature of the Council's actions on March 24 (when the staff had been recommending merely a fee increase but not this completely new approach to setting the fees), Grosvenor and Summerl-lill also need additional time to study the traffic report itself and the allocations of improvement costs that have been made by the consultants. There is not sufficient time to do this in advance of the April 7 meeting. This letter is not intended to be exhaustive as to all concerns that Grosvenor and SummerHill have with regard to the fee proposal, and is not intended to waive any legal rights that Grosvenor or SummerHill may have with respect to this fee if it is ultimately approved. We look forward to working with the Town with regard to traffic impact fees, but there is quite a bit of clarity that is needed before we can understand the full effect. Thank you very much for your consideration of this request. Very truly yours, BERLINER C EN ANDREW L. FABER E -Mail: andrew.faber@berliner.com ALF:tah cc: Greg Larson, Town Manager (manager @losgatosm.gov) Robert Schultz, Town Attorney (attorney @losgatosea.gov) Shelley Neis, Interim Clerk Administrator (Clerk @LosGatosCA.gov) Don Capobres, Grosvenor (Don.Capobres@grosvenor.com) Wendi Baker, SummerHill (WBaker@shhomes.com) 4824.6017.7434,v. I 48244017- 7431v1 -2- ALF109427065 COUNCIL AGENDA REPORT DATE: MAY 16, 2014 TO: FROM: MAYOR AND TOWN COUNCIL GREG LARSON, TOWN MANAGER MEETING DATE: 05/19/14 ITEM NO: Jr ADDENDUM SUBJECT: AMENDMENT OF TRAFFIC IMPACT MITIGATION FEES ADOPT A RESOLUTION CONFIRMING ACTION TAKEN BY THE TOWN COUNCIL AT A SPECIAL METING HELD ON MARCH 24, 2014, AMENDING THE TOWN OF LOS GATOS TRAFFIC IMPACT MITIGATION FEES AS PROVIDED FOR IN SECTION 15.70.035 OF THE TOWN CODE. REMARKS: After the staff report was prepared for distribution, additional correspondence (Attachments 7 -9) was received. Attachments 1 -6 Previously Received with Staff Report• 1. Resolution Amending Traffic Mitigation Impact Fees 2. Resolution 1994 -55 3. Traffic Mitigation Improvement Project List 4. March 24, 2014 Council Report 5. March 24, 2014 Council Report Minutes 6. Communication from the Public Attachments 7 -9 Received with Addendum: 7. Letter from Berliner Cohen dated May 9 8. Letter from Grosvenor dated May 15 9. Letter from Matt Morley to Andrew Faber (Berliner Cohen) PREPARED BY: MATT MORLEY(� Director of Parks and Public Work Reviewed by: Assistant Town Manager _5 own Attorney y Finance THIS PAGE INTENTIONALLY LEFT BLANK ANDREWL FABER KIlVINF KELLEY TIIOAfAS P. Ml1RN1Y SANDRA G. SEPOLNLUA RALPHJ SBANSON MARK MAKIIEWICZ THOMAS O. MORELL MASON BRAWLEY MWYL SMINGGAY ROBERTA S. HAYASBI TEN ALMADF.N BOULFVARD SEMI COHEN H:NNWER Y. LEUNG 16SFFHE DWORAK JEFFREYS. KAUFMAN' ELEVENTH FLOOR LAURA PAWJ.OID M.ATARINA VM01ARIA SAMI.L].L FARB KH.01 HOUSTON CALIFORNIA KARA L AROUW.O TYLER A. SHEWEV ALAN PINNEK IIRIANLSHETLER SAN JOSE, 951.13 -2233 ANDRT:WLGIORGIANNI VIVI.INF.IVANO LINDA CALLON JOHNF DOMWGUE EDALINA M. MFNDDNCA H.SIJINNYLIU JAMES CASHMAN IMnpYA.wPPz M- -LEPHONE:(409) 286.3800 MATTHEW A. TAYLOR SARA L POLTOCK STEVEN]CAAAO CIIAKLESW. VOLPE FACSIMILE: (409) 999 -5385 DARR:f SR'EATr BEAUC, CORREIA NANCYI JOHNSON NOCHAFl YLDUNTI KAIIRI NF SInFRMAN MARYE LOUDEN JEROLDA RE TON CHRISTINE LONG ~vlerliner"m ROBERTI. CHORTFK AARONM VALE'NFI JONATHAN M WOLF CJ urVAN E PICONE ph OlBm yk KATHLEEN KS @LE A1ncN. CA I MPdmP CA RETIRED OF COLINSEL SAMUFI.r. EDWIN SANFORDA, BERLINER My FOb6Rr W.HUMPHREYS STEVEN I. HALLGRiMSON DOMSA KAELIN ;MVIL ISOLA MAW R"BABE SUSANE. BISHOP MICW0\Yr. LFSUE KALIM XURUGH NANCY L. BRANDT ANHmNYD JOHNSTON THOMAS ARMSTRONG May 9, 2014 Matt Morley Director of Parks & Public Works Town of Los Gatos 110 Fast Main Street Los Gatos, CA 95030 Re: Proposed Traffic Impact Fee Increase Our File No.: 09427 -065 Dear Mr. Morley, We represent the interests of Grosvenor Americas and Summerllill homes with regard to their interests in the North 40 property. As you know, They have been working very closely with the Town in the development of the Specific Plan for the North 40 region for the past several years. Grosvenor and SummerHill were shocked to see the proposal that would increase the total North 40 traffic fees from $2;298,300 to $12,568,936; a 547% increase. In addition to this enormous additional expense that would be difficult for any project to bear, there are two general categories of legal concerns that we have with regard to the proposed fee. Both of these relate to the apparent failure of the fee to comply with the governing State statute, the Mitigation Fee Act, Government Code § 66000 et seq. These concerns will be outlined in the rest of this letter. We have reviewed the Nexus study (the "AB 1600 Report ") prepared by FCS dated March 18.2014 entitled Traffic Impact Mitigation Fee Update. As you know, for a development impact fee to be valid, it must be based upon a study showing a reasonable nexus between the projects that are proposed to be constructed with the fee and the burdens upon the city infrastructure caused by the 4872 -0280A7630 ALFM27055 ATTACHMENT 7 Matt Morley May 9, 2014 new development to which the fee is to be applied. See Gov't Code § 66001; Shappell Industries, Inc. v. Governing Board (6`h Dist. 199 1) 1 CA4th 218.8. In our review, we have reviewed the Nexus study and have also had it reviewed by a traffic engineering firm. Their conclusion is that the study that was made public lacks sufficient information and detail to verify that in fact it is a valid study. In particular, it cannot be determined from the public documentation: • How average daily trip rates were developed, since they were not taken directly from the ITE Trip Generation Manual. The average daily trip rates are based on households and jobs; ITE does not generally provide trip rates in terms of jobs. How the particular infrastructure needs were determined to be "capacity- increasing." Several of the projects listed do not appear to be capacity- increasing, such as adding infill sidewalks and unfunded deferred street maintenance. There is no analysis to explain whether any such improvements are necessary to accommodate future traffic needs, and thus if there is any nexus to require new development to contribute to the improvement. • How the construction costs for each improvement were developed. The methodology for allocating a percentage of each improvement to a new development vs. the percentage that should home by existing development (that is, paid for from sources other than the traffic mitigation fee). A second major concern is the apparent lack of policy for credits and reimbursements from the traffic impact fund. Such a policy is necessary for the common occurrence where, as part of a development, a developer constructs an improvement that is on the list of traffic impact fee projects. As an example, in the North 40 project, it is expected that the developer will construct several of these improvements, including certain widening of Los Gatos Boulevard, intersection improvements at Lark and Los Gatos Blvd., the widening and improvements on Lark, and the addition of a second right turn lane onto the northbound Highway 17 ramp. Some of these may or may not be required as mitigation measures for traffic impacts analyzed in the North 40 EIR as a result of the North 40 traffic impact assessment ( "TIA" ). Ifthese projects are on the list of traffic improvements used as a basis for calculating the traffic impact fee, then if they are in fact funded by a private developer, that developer must receive either a credit against its own traffic impact fees, or reimbursements from the fund. Failure to do so would result, in effect, in the Town "double- dipping" or collecting twice for the same improvement, once through the traffic impact fee assessment and once by having the developer fund the improvement. If a developer is required to construct one of these improvements, then it cannot also be assessed a traffic impact fee to pay for a portion of the same improvement. A fee cannot exceed the cost of providing the service or improvements for which it is collected. See Ehrlich Y. City of Culver City (1996) 12 C.4'h 854; Bixel Associates v. City of Los Angeles (1989) 216 CA3d 1208. 4W 0260A7630 -2- ALFl09427065 Matt Morley May 9, 2014 SummerHill and Grosvenor have always been willing, and remain willing, to pay a fair share of traffic impact fees, and to provide appropriate traffic improvements that may be necessary for buildout of development on the North 40 Specific Plan area. However, due to the inadequacies and uncertainties of the present Nexus study, we request that any consideration of increasing the traffic impact fee be continued until, at the very least; • Our traffic engineers have been able to access data that establishes the validity of the nexus study, particularly concerning the points bulleted above; and • The Town develops a legally adequate reimbursement and credit policy for traffic improvements that may be installed by a developer. Thant: you for your consideration. Very truly yours, BERLINER COHEN 77. ANDREW L. FABER E -Mail: andrew.faberaberliner.com ALF:cem cc: Rob Schultz, Esq. Wendi Baker, SHH Don Capobres, Grosvenor 4572 -0250 -4763v1 _3_ ALF09427065 This Page Intentionally Left Blank )ai GROSVENOR EDEN COMMUNITIES OI: DISTINCTION HOUSING May 15, 2014 VIA EMAIL AND U.S. MAIL Mayor Steven Leonardis Town Council Members Town Hall 110 E. Main Street Los Gatos, CA 95030 sleonard isPloseatosca.eov council Ploseatosca.eov Re: Council Agenda, May 19, 2014 Traffic Impact Mitigation Fee Increase Dear Mayor Leonardis and Members of the Town Council: Grosvenor Americas and SummerHill Homes are proud to have worked with the community with the North 40 portion of the 2010 General Plan and now the Specific Plan for the past few years. At this time, we are quite concerned about the sudden appearance of a proposal to increase the traffic impact mitigation fees that would be applicable to a potential project at the North 40 from $2,298,300 to $12,568,936, a 547% increase. Our attorney, Andrew Faber, wrote a letter to you on April 2, 2014, initially expressing our concern. He wrote a further letter addressed to Matt Morley on May 9, 2014. We have met with Staff to discuss our concerns about the fee, and are pleased with the cooperation that Staff have shown us. We do, however, continue to have concern in two respects. Our first concern is with the vague and possibly legally inadequate definition of the projects for which the fee is being assessed. In addition, although our understanding is that the draft resolution now calls for credits to be paid to developers who put in an improvement that is on the Town's list, there is no reimbursement policy to cover the eventuality where a developer puts in improvements that cost more than the fees that are then due. Without both a policy for credits and reimbursements, the Town could end up collecting fees twice for the same improvements, and such "double dipping' would clearly not be consistent with the statutory limitation of such fees (the Mitigation Fee Act), Government Code §66000, et seq. To focus on the nexus study and the definition of the fee, we have shown the study to our traffic engineers and they are unable to evaluate its adequacy due to lack of supporting data. Staff has indicated it will share the data but we have not yet received it. In particular, the definition of the various traffic improvements that are listed in Appendix A to the study is not known. Accordingly, there is no way to know whether a traffic improvement that may be either imposed upon a North 40 ATTACHMENT developer, or volunteered by them, would match up with the improvement as listed in the fee. In addition, it is not possible to tell how the percentage allocation to new development was made in the nexus study, nor why those particular projects are deemed to be "capacity increasing" projects. In order to determine the continued financial viability of our interest in the North 40, we must be able to calculate exactly what the fees will be, what improvements we will be required to put in, and what credits and reimbursements we will be entitled to. It is not possible to make these calculations at this time based upon the data that has been provided by the Town. Accordingly, we ask you to put off consideration of adoption of the fee increase until the fee is further defined in a manner adequate to allow us to make such calculation and to determine, incidentally, that the fee is legally adequate and can be applied to development in the North 40. Andy Faber will be representing Grosvenor and SummerHill Homes at the hearing and would be happy to explain these issues further. Thank you for your consideration. 5 =11i A. Don Capobres Senior Vice President Very truly yours, GROSVENOR AMERICAS /SUMMERHILL HOMES �I Wendi Baker Vice President of Development Grosvenor SummerHill Homes cc: Greg Larson, Town Manager (manager@ losgatosca.gov) Robert Schultz, Town Attorney (attorney @losgatosca.gov) Shelley Neis, Interim Clerk Administrator (Clerk@LosGatosCA.eov) Matt Morley, Park and Public Works Director (mmorley @losgatosca.gov) Andrew L. Faber, Berliner Cohen (alf @berliner.com) Wendi Baker, SummerHill (WBaker @shhomes.com) TOWN OF LOS GATOS PARKS & PUBLIC WORKS DEPARTMENT ENVIRONMENTAL SERVICES 41 MILES AVENUE Los GATOS, CA 95030 408.399.5770 Andrew L. Faber Berliner Cohen 10 Almaden Boulevard San Jose, CA 95113 Dear Andy: In response to your letter of May 9, 2014, and as a follow -up to our meeting on Monday, May 12, 2014, we are providing you with requested information regarding the proposed amendment of the Town's Traffic Impact Mitigation Fee. Amendment of the Town Traffic Impact Mitigation Fee was considered by the Town Council at a Public Hearing on March 24, 2014 and is scheduled for confirming action by the Town Council at its regular meeting on May 19, 2014. As stated in our March 24, 2014, Council Report, the Town retained FCS Group, a consulting firm with extensive experience in user and impact fee analysis, to update the Traffic Impact Mitigation Fee Study which they had previously prepared for the Town in 2010. The results of this most recent update were then used to calculate the new Traffic Impact Mitigation Fee, which had not been updated since it was put in place 20 years ago. Our responses to the specific concerns outlined in your letter are provided below: How were average daily trip rates developed The average daily trip rate factors were developed by the consultant by averaging employee related trip rates published by ITE for specific business categories and land use types to create a summary by general land use classifications (residential, retail, office, service, institutional, etc.). These average rates were then applied to the most recently adopted ABAG job growth projections for the Town of Los Gatos. This is consistent with the approach that was used to generate growth projections for the Town's 2020 General Plan Update. A summary table showing the consultant's calculation of trip generation rates is provided in Attachment 1. How were the particular infrastructure needs determined to be "capacitwincreasing "2 Currently, all of the Town's intersections and roadway segments operate at Level of Service (LOS) D or better.' Based on the traffic modelling that was done in conjunction with the 2020 General Plan update, the transportation improvements identified in the General Plan have been deemed necessary to ensure that planned growth in jobs and housing through the General Plan planning horizon will not result in a degradation of traffic conditions and/or transportation system operations. ATTACHMENT Andy Faber —Page 2 May 14, 2014 The projects used for the calculation of the Traffic Mitigation Impact Fee (Town of Los Gatos Traffic Mitigation Improvements Project List) all have capacity enhancing attributes, whether directly, such as the addition of turning lanes or intersection improvements, or indirectly, such as the construction of sidewalk infill improvements or the installation of bicycle improvements. Sidewalk infrll projects and bicycle improvements increase capacity by diverting existing motorized trips from the existing roadway system to non - motorized alternatives, thereby freeing up capacity to accommodate new growth related trips. Deferred street maintenance, which you also inquired about, is only assessed a 9.68% growth related cost share, which captures the impact of growth related vehicle trips on the Town's street network. A well maintained roadway system preserves existing network capacity by minimizing roadway condition related delay (both construction delay and incident delay); optimizes travel time; and supports multi -modal trip diversion. How were the construction costs for each improvement developed? Cost estimates for the improvements are "planning level" cost estimates, and were developed by staff using estimates included in the Transportation Element of the 2020 General Plan Update; the adopted 2013/14 — 2017/18 Capital Improvement Program (CIP); actual project cost information for similar projects; and other available data. Both the 2020 General Plan Transportation Element and the CIP can be found on the Town's website (www.los¢atosca.eov). Viat was the methodology used for- allocating a percentage of each improvement to a new development vs the percentage that should be borne by existing development? The project cost percentages that were allocated to new development vs. existing development were developed by Public Works Engineering and Traffic Engineering staff. Five projects were assessed a 90% share; 15 projects were assessed a 50% share, and one project was assigned a 9.68% share. Because the Town's intersections all currently operate at LOS D or better, all of the projects will mitigate traffic impacts associated with new trips. The 90% share projects are those facilities that will be most significantly impacted by new trips due either to their geographic location, or the condition of the existing facilities. The 50% share projects, while also necessary to accommodate new trips, also provide benefits to existing developments, for instance by addressing multi -modal capacity or operational issues. Unfunded Deferred Street Maintenance was allocated a 9.68% cost share, which is based on the number of new trips as a percentage of total trips in through the 2030 forecast year. The Town should develop a reimbursement and credit policy for traffic improvements that may be installed by a developer. As we discussed at our meeting, we are recommending the inclusion of specific credit language in the resolution implementing the adjustment of the Traffic Impact Mitigation Fee. The proposed language is as follows: Andy Faber —Page 3 May 14, 2014 "Credit against Traffic Impact Mitigation Fees due shall be granted up to the amount of the Estimated Project Cost shown on Attachment 1, Town of Los Gatos Traffic Mitigation Improvements Project List, for any listed projects for which the developer either constructs at his own cost, or contributes a fixed or percentage amount. Where construction is fully funded and completed by the developer, said credit shall be equal to the Project Cost as shown in Attachment 1. Where payment is a fixed amount or a percentage of Project Cost, credit shall be equal to the actual amount due, whether the project is constructed by the developer or others. " As we also mentioned to you in our meeting, we also expect to return to the Council with an updated Traffic Impact Policy in late summer or early fall, that we anticipate will address any outstanding issues related to the implementation of the Town's Traffic Impact Mitigation Fees. Sincerely, '� Y9�/ � / L — Matt Morley Parks and Public Works Director Attachment —Los Gatos Trip Generation Assumptions cc: Rob Schultz, Town Attorney Wendi Baker, Summer Hill Homes Don Capobres, Grosvenor Andy Faber —Page 4 May 14, 2014 Attachment 1 Los Gatos !Residential 801ki Single Family i 1.02 Per DU 20 %' Muliifomily & Townhomes I 0.60 Per DU 9.45'Per DU 6.10 Per Du 100%! Avg. Residential 0.94 Per DU 8.781Per DU Retail 2.69; Per Job 23.841 Per Job j Avg. Retail 2.69 Per Job 23.84, Per Job !Non - Retail 267. Service _ _ 0.66 Per Job 0.09 Per Job 30 %' Office 0.55 Per Job 4.51,!Per Job 20 %, Medical 0.86 Per Job 6.50'Per Job 15% Light Industrial 0.51 Per Job 3.42; Per Job 9% Institutional 4.29 Per Job 22.45;Per Job 100% Ava. Non - Retail 0.97,Per Job 5.21 Per Jab j Residential 0.935 Per DU I 8.1111Per DU Ref a- il 2.690 Per Job 23.8 Per Job Non- Retail 0.971 Per Job 5.2 Per Job Notes: weights assigned based on dwelling unit counts by type; and jobs by type: derived from US Census, On The Map database for Town of Los Gatos, 2010._ ' trip data are derived from the ITE Trip Generation Manual. 1wNPF t !ps GASOS DATE: MAY 19, 2014 TO: MAYOR AND TOWN COUNCIL FROM: GREG LARSON, TOWN MANAGER MEETING DATE: 05/19/2014 ITEM NO: 5 DESK ITEM SUBJECT: AMENDMENT OF TRAFFIC IMPACT MITIGATION FEES ADOPT A RESOLUTION CONFIRMING ACTION TAKEN BY THE TOWN COUNCIL AT A SPECIAL MEETING HELD ON MARCH 24, 2014, AMENDING THE TOWN OF LOS GATOS TRAFFIC IMPACT MITIGATION FEES AS PROVIDED FOR IN SECTION 15.70.035 OF THE TOWN CODE. REMARKS: After the distribution of the May 19, 2014 Town Council agenda, staff received inquiries from Council, and is providing the following information: What is the existing practice, if any, with respect to granting credits against Tragic Mitigation Impact fees when a developer takes an action with respect to the Project List? The current practice does not include providing credits against Traffic Mitigation Impact fees. This has not been an issue for several reasons, including the discount that has been applied to the fees and the lack of an established list of projects that would apply. Generally, is the choice to undertake a project on the list voluntary or is it more often required as mitigation under the EIR or other condition of approval? Projects may be listed under an EIR, and in that case their completion is required. The calculation of impact fees is separate and also non - discretionary. Because there is not a current list of projects to credit against, both the payment of the fees and the completion of the mitigation measure have been required. Also, there have often been "community benefit' contributions that have funded additional projects. Finally, staff at times has required completion of specific projects as part of the conditions of approval, outside of other payments or construction of traffic mitigation projects. These latter two items have not been an issue as the established discount in fees has offset these costs to the developers. PREPARED BY: MATT MORLEY Director of Parks a15d Public Works Reviewed by: hILAssistant Town Manager Town Attorney Finance N :TI'MMANAGEMENTCOUNCIL1000NCIL REPORTS12014 Repom%D51914tTIMFTowm Co il.De k Itan.doex PAGE 2 MAY 19, 2014 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENT OF TRAFFIC IMPACT MITIGATION FEES REMARKS (cont'd): If there has been credit granted in the past, how has it been done -- by dollars contributed whether the project is completed or not, or is actual completion of the project required? Credits are not currently issued. If the proposed credit is a new practice, what is the answer to the above question? The credit is a new element of the fee structure to avoid double charging for the same improvement. If the developer completes the project, the developer will receive credit for the cost of the project as listed on the Town's project list with the credit applied to the total traffic impact fee due for the project. This is likely to be the case where the project is completed as mitigation under an EIR. Otherwise the developer would pay the impact fee. AJ ._ .e O V 3 0 F- 0 ca O J d' r N r c� c Ax t; a M 3 0 ;r r i� !; i > v N (D _ •� AMA 0 LOW i = O 'a V O ca ._ O .Lm > ma Lm CL L C.L O •v > Lm O ._ O ; a O E O E 0 • • O V O U. i .Q 3 y s v O .Q d G O E y 0 V O LL V � O t LO + a co 69). = o O ,CL O C: V s O n O E �a _ o y �.. oo 0 y i D i v D Q 0. co O V O i i t .0 CL .o O RW i> O 'j ccnn •� Q E O 0 OIL alftft i o o m c i � A , CL Eco z o MENEM a� vct 0� cam co Cl) -� • • - L� I +ow E L 0 6� I� W V M L2 •� i � � a O � � 3 O LO �O um M g Q O o .� .� a 0 U • *0 O � 9 00 . _ o 0 C i C 0 � ( y a VD • • • acc a� .o L 0 h V r., O t y.r O O O V V W i co CO %tv Town Council Meeting 06/02/14 Item #1 MINUTES OF THE TOWN COUNCIL /PARKING AUTHORITY MEETING MAY 19, 2014 The Town Council of the Town of Los Gatos conducted a Special Meeting on Monday, May 19, 2014, to hold a Study Session at.5:45 p.m., and a Regular Meeting at 7:00 p.m. STUDY SESSION — 5:45 P.M. Los Gatos -Monte Sereno Police Department Budget. Scott Seaman, Chief of Police, presented the staff report. Council discussed the matter. Jonathan Knowles - Commented on the quality of the Los Gatos -Monte Sereno Police Department. Sue Farwell - Commented on the professionalism of the Los Gatos -Monte Sereno Police Department. STUDY SESSION ADJOURNED Study session adjourned at 6:53 p.m. BUSINESS MEETING CALLED TO ORDER AT 7:00 P.M. ROLL CALL Present: Mayor Steven Leonardis, Vice Mayor Marcia Jensen, Council Member Joe Pirzynski, Council Member Diane McNutt, Council Member Barbara Spector. Absent: None PLEDGE OF ALLEGIANCE Dr. Clyde Horn led the Pledge of Allegiance. The audience was invited to participate. PRESENTATIONS Mayor Leonardis introduced Erica Goss, Town of Los Gatos Poet Laureate, to present a commendation to Ray Pendleton, recipient of the 2014 Los Gatos Poet Laureate Scholarship for Creative Writing. Mayor Leonardis presented the Small Business, Big Applause commendation to Birdwatcher of Los Gatos. Mayor Leonardis presented the Government Finance Officers Association Distinguished Budget Presentation award to Steve Conway, Finance Director. ATTACHMENT 5 CLOSED SESSION REPORT Robert Schultz, Town Attorney, stated there was no Closed Session and there is no report. COUNCIL /TOWN MANAGER REPORTS Council Matters - Council Member Joe Pirzynski stated he attended the Cities Association Board of Directors, Metropolitan Transportation Commission, Valley Transportation Authority, Congestion Management Program and Planning Committee, Alcohol and Entertainment Ad Hoc Committee, and ABAG Executive Board meetings; St. Mary's Sobrato Junior High School Science Building opening, and the State of Our Town. - Vice Mayor Marcia Jensen stated she attended the Valley Transportation Authority Policy Advisory Committee, and the Planned Development Ad Hoc Committee meetings; the Live Oak Senior Nutrition Center celebration and the State of Our Town. - Council Member Diane McNutt stated she attended the Chamber of Commerce North 40 Awareness meeting and the State of Our Town. - Council Member Barbara Spector stated she attended the Planned Development Ad Hoc Committee meeting, the Live Oak Senior Nutrition Center celebration, and the State of Our Town. - Mayor Steven Leonardis stated he attended the Alcohol and Entertainment Ad Hoc Committee, West Valley Sanitation District Board of Directors, and the Chamber of Commerce North 40 Awareness meetings; the Turn Around Scholarship presentation by the Kiwanis Club, St. Mary's Science Building opening, and the State of Our Town. Manager Matters - Acknowledged and thanked staff for their work on the State of Our Town. - Announced as part of National Public Works Week, the Parks and Public Works Department will be hosting an Open House on Wednesday, May 20 from 9 a.m. to 12 p.m. - Acknowledged Police Corporal Greg Borromeo in attendance. - Announced Captain Matt Frisby has been appointed the new Police Chief effective August 1, 2014. Town Council /Parking Authority May 19, 2014 CONSENT ITEMS (TO BE ACTED UPON BY A SINGLE MOTION) 1. Approve Council minutes of May 5, 2014. 2. Accept the donation from Spansion Inc., of emergency preparedness equipment and supplies for the Los Gatos Community Emergency Response Team (CERT) Program, valued at approximately $30,000. 3. Accept donations in the aggregate amount of $39,765.13 from Los Gatos /Monte Sereno Police Foundation of equipment, supplies, and support for the Los Gatos /Monte Sereno Police Department. 4. Authorize Town Manager to execute agreement with Chavan & Associates, LLP to provide professional auditing services for The Town of Los Gatos with annual audit amounts not to exceed $38,000 for FY 2014/15, $38,000 for FY 2015/16, and $38,000 for FY 2016/17. MOTION: Motion by Vice Mayor Marcia Jensen to approve Consent Items #1 -4. Seconded by Council Member Joe Pirzynski. VOTE: Motion passed unanimously. VERBAL COMMUNICATIONS John Shepardson - Thanked Council and the Police Department for their service; read a short poem; inquired if there is a State requirement for matching residential and commercial square footage development. John Lochner - Provided an update on the Veterans Memorial Support Foundation and requested Council consider adding an amount of $20,000 to the budget for seed money for the memorial. Andy Wu - Commented on the length of police officer shifts and oath of office for public servants. PUBLIC HEARINGS 5. Amendment of Traffic Impact Mitigation Fees Adopt a resolution confirming action taken by the Town Council at a Special Meeting held on March 24, 2014, amending the Town of Los Gatos Traffic Impact Mitigation Fees as provided for in Section 15.70.035 of the Town Code RESOLUTION 2014 -017 Matt Morley, Parks and Public Works Director, presented the staff report. Opened the Public Hearing at 7:53 p.m. Town Council /Parking Authority May 19, 2014 Public Hearing #5 — continued Andy Wu - Spoke in favor of the increase. Maria Ristow - Spoke in favor of the increase. Jeff Loughridge - Spoke in favor of the increase. John Shepardson - Spoke in favor of the increase. Andrew Lifabor - Spoke against the increase. Jak Van Nada - Spoke in favor of the increase. Jennifer Grewal - Spoke in favor of the increase. Lee Quintana - Spoke in favor of the increase and requested clarification on the difference between the traffic impact mitigation fee, construction road impact fee, and the direct traffic impact fee for a project. Larry Arzie - Spoke in favor of the increase. Anne Robinson - Spoke in favor of the increase and suggested a portion of the fee be used for development of a trail connecting the Los Gatos Creek Trail to the North 40 property. Closed the Public Hearing at 8:17 p.m. Council discussed the matter. Town Council /Parking Authority May 19, 2014 Public Hearing Item #5 — continued MOTION: Motion by Council Member Barbara Spector that the exemption for secondary dwelling units with a floor area of six hundred square feet or less not be removed. Seconded by Council Member Diane McNutt. VOTE: Motion passed unanimously. MOTION: Motion by Council Member Barbara Spector to remove the provision for low income housing. Seconded by Mayor Steven Leonardis. VOTE: Motion failed. Vice Mayor Marcia Jensen, Council Members Diane McNutt and Joe Pirzynski voting no. MOTION: Motion by Council Member Barbara Spector to not remove the exemption for low income housing. Seconded by Council Member Joe Pirzynski. VOTE: Motion passed unanimously. MOTION: Motion by Council Member Barbara Spector to retain the provision for walk -in impulse businesses as recommended by staff and to provide separate direction to staff to bring consideration of this issue back with the land use issue of specialty retail to council. Seconded by Vice Mayor Marcia Jensen. VOTE: Motion passed unanimously. MOTION: Motion by Council Member Barbara Spector to continue to give traffic credit for existing or former use if that use existed within 5 years prior to project approval. Seconded by Vice Mayor Marcia Jensen. VOTE: Motion passed 4/1. Council Member Diane McNutt voted no. Town Council /Parking Authority May 19, 2014 Public Hearing Item #5 — continued MOTION: Motion by Council Member Barbara Spector to follow staff recommendation regarding the definition of Average Daily Trip (ADT). Seconded by Council Member Diane McNutt. VOTE: Motion passed unanimously. MOTION: Motion by Council Member Barbara Spector to adopt the resolution amending traffic mitigation impact fees as contained in Attachment 1 that includes the credit and include all prior motions - a new Section D adding secondary dwelling unit language, a new Section E adding affordable housing developments language, and modify Section B to include the language "within the past 5 years prior to project approval." Direction to staff to return in August with more detailed information on when a credit is appropriate, how it's calculated, how much needs to be done by a developer, whether there is a difference between a required improvement and a voluntary improvement. Seconded by Vice Mayor Marcia Jensen. VOTE: Motion passed 3/2. Council Members Diane McNutt and Joe Pirzynski voted no. Mayor Leonardis called a recess at 9:10 p.m. The meeting resumed at 9:18 p.m. 6. Operating and Capital Budgets a. Consider the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2014/2015 b. Consider the Town of Los Gatos Proposed Capital Improvement Program for Fiscal Years 2014 -2019 Provide direction regarding any changes to the Fiscal Year 2014/15 Operating and Capital Budget or the 2014 -2019 Capital Improvement Program Budget Greg Larson, Town Manager, Stephen Conway, Finance Director, and Jennifer Callaway, Budget & Finance Manager presented the staff report. Opened the Public Hearing at 9:55 p.m. Town Council /Parking Authority May 19, 2014 Public Hearing Item #6 — continued Shiloh Ballard, Silicon Valley Leadership Group - Spoke in support of funding for affordable housing. Kevin Zwick, Housing Trust Silicon Valley - Spoke in support of funding for affordable housing. Closed the Public Hearing at 10:01 p.m. Council discussed the matter. Direction to Staff: Bring back the proposed budget with the following changes included and described on June 2, 2014: 1. Half time Police Community Services Officer (CSO) for after hours enforcement of noise and nuisance. 2. Set aside of $100k for school area traffic study and improvements subject to participation by the school districts. 3. Set aside of funds for affordable housing with explanation of where and how the funds will be used for each of the proposed amounts. OTHER BUSINESS There was no other business. ADJOURNMENT The meeting adjourned at 11:16 P.M. Attest: /s/ Shelley Neis, Clerk Administrator Town Council /Parking Authority May 19, 2014 THIS PAGE INTENTIONALLY LEFT BLANK