Staff Report
PREPARED BY: STEPHEN CONWAY
Finance Director
Reviewed by: Town Manager and Town Attorney
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 12/06/2016
ITEM NO: 3
DATE: NOVEMBER 17, 2016
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: ACCEPT FISCAL YEAR (FY) 2015/16 STATUS REPORT ON RECEIPT AND USE
OF DEVELOPMENT IMPACT FEES
RECOMMENDATION:
Accept Fiscal Year (FY) 2015/16 status report on receipt and use of Development Impact Fees.
BACKGROUND:
To ensure that mitigation fees associated with development are spent in a timely manner and on
projects for which they were being collected, the State Legislature passed a bill known as AB 1600 (the
Mitigation Fee Act). This bill applies to developer fees which were increased or imposed on or after
January 1, 1989.
The Mitigation Fee Act (California Government Code, §66000 et seq.) requires local agencies that
impose Development Impact Fees to present an annual, consolidated report showing the receipt and
use of those fees. The Annual Status Report (Attachment 1) must be reviewed by Council within 180
days after the close of the fiscal year represented.
The Town collects three Development Impact Fees that meet the AB 1600 reporting requirement: the
Traffic Impact Mitigation Fee, Below-Market Priced Housing Program In-Lieu Fee, and the Construction
Activity Impact Fee. Separate balances exist for each of these fees either as individual accounts or in the
case of Traffic Impact Mitigation Fees, separate funds. As required by AB 1600, as of June 30, 2016, all
accounts or funds with unspent balances have been credited interest revenue at the Town’s current
interest rate earned on its total investment portfolio.
PAGE 2 OF 3
SUBJECT: ACCEPT FISCAL YEAR (FY) 2015/16 STATUS REPORT ON RECEIPT AND USE OF
DEVELOPMENT IMPACT FEES
DATE: 11/17/2016
S:\COUNCIL REPORTS\2016\12-06-16\03 AB 1600 - Development Fee Report\03 Staff Report FINAL.docx 12/1/2016 5:02 PM SLL
DISCUSSION:
AB 1600 requires that a status report be prepared annually which must include the following:
A brief description of the fee and the fund into which the fee was deposited;
The amount of the fee;
The associated fund’s beginning and ending balances for the fiscal year;
The total amount of fees collected and interest earned;
Identification of each public improvement on which impact fees were expended and amount of
expenditure on each improvement, including the total percentage of the cost of the public
improvement that was funded with impact fees;
Identification of approximate date by which construction of a public improvement will begin;
Determination that sufficient funds have been collected to complete financing on an incomplete
public improvement;
Description of each inter-fund transfer or loan made from the account or fund, including the
public improvement on which the loaned funds will be expended, and in the case of an inter-
fund loan, the date on which the loan will be repaid and the rate of interest that the account or
fund will receive on the loan; and
Amount of any refunds made due to inability to expend impact fees once a determination is
made that sufficient impact fees have been collected to finance a public improvement, the
improvement remains incomplete, and the City has not determined an approximate date by
which construction will begin.
This information is presented in the attached FY 2015/16 Annual Status Report on Receipt and Use of
Development Impact Fees.
CONCLUSION:
Staff recommends Council accept the FY 2015/16 Annual Status Report on Receipt and Use of
Development Impact Fees as required under the Mitigation Fee Act (AB 1600).
COORDINATION:
This report was coordinated with the Community Development and Park and Public Works
Departments.
FISCAL IMPACT:
There is no fiscal impact from this action.
PAGE 3 OF 3
SUBJECT: ACCEPT FISCAL YEAR (FY) 2015/16 STATUS REPORT ON RECEIPT AND USE OF
DEVELOPMENT IMPACT FEES
DATE: 11/17/2016
S:\COUNCIL REPORTS\2016\12-06-16\03 AB 1600 - Development Fee Report\03 Staff Report FINAL.docx 12/1/2016 5:02 PM SLL
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachments:
1. .FY 2015/16 Annual Status Report on Receipt and Use of Development Impact Fees.
ATTACHMENT 1
TOWN OF LOS GATOS
ANNUAL STATUS REPORT ON RECEIPT AND USE OF DEVELOPMENT IMPACT FEES
JUNE 30, 2016
Traffic Impact Mitigation Fee:
The Traffic Impact Mitigation Fee assures that each new development or expansion of use pays its fair
share of the transportation improvements needed to accommodate the cumulative traffic impacts. The
fee, $902 per new average daily trip generated, is paid in full to the Town Building Department prior to
issuance of the building permit for new development or expansion of use. The collected fee is held in
the Traffic Mitigation Fee Fund. The Traffic Mitigation Fund should be used solely to fund transportation
improvement projects related to mitigating the impacts of new development. The funds cannot be used
for routine repair or maintenance.
Beginning Cash Balance (07/01/2015)$3,139,715
Source of Funds
Fees Collected FY 15/16 22,548
Interest Earned FY 15/16 22,266
Total Source of Funds $3,184,529
Use of Funds
Capital Outlay :
Crosswalk Lighting Upgrade $15,371
Winchester/Lark Intersection 489,377
Intersection Safety/ Traffic Flow 31,962
Cut-Thru Traffic Mitigation 13,695
Town Digital Photo/Map 25,142
Project Overhead Business Service Charge 12,147
Total Use of Funds $587,695
Expenses Occurred in FY 2015/16 , Paid in July of FY 2016/17 13,695
Ending Cash Balance (07/01/2016) Pre-Final Audit $2,610,528
Designated Future Projects:
Per FY15/16 through 20/21 Capital Improvement Plan:
Winchester Lark Intersection Improvements (FY 2016/17)$316,194
Los Gatos Boulevard/Shannon Improvements (FY 2017/17)20,000
Los Gatos Boulevard/Lark Avenue Improvements (FY 2016/17)174,299
Blossom Hill Road/Cherry Avenue Intersection Impvts (FY 2016/17)500,000
Town Digital Aeiral PhotographyTopographic Map (FY 2016/17)25,142
Monument Control Network Upgrade (FY 2016/17)10,000
Intersection Safety and Traffic Flow Improvements (FY 2016/17)8,038
Crosswalk Lighting Upgrade (FY 2016/17)34,629
Crosswalk Improvements- Santa Cruz/Blosssom Hill (FY 2016/17 )50,000
Bicycle and Pedestrian Master Plan (FY 2016/17 )72,500
Cut-Through Traffic Mitigation (FY 2016/17)201,305
Traffic Signal Modernization (FY 2016/17- FY 2020/21)1,185,790
Administration and Program Support (FY 2016/17- FY 2020/21)50,000
Total CIP and Operating Budget Commitments 2,647,897
Potential Project List (Estimates Only) per Unfunded List (Additional Unfunded Projects are Located in the Operating Budget)
Blossom Hill Rd and University Ave Intersection Improvements (Future Project - Pending Funding)$1,080,000
Los Gatos- Almaden Road Improvements (Future Project - Pending Funding)1,500,000
Los Gatos Blvd Widening , New Sidewalks, and Bike Lanes (Future Project - Pending Funding)2,000,000
Total Potential Project List $4,580,000
Total Designated and Unfunded Projects $7,227,897
Current Funding Shortfall ($4,617,369)
TRAFFIC IMPACT MITIGATION FEES FUND
TOWN OF LOS GATOS
ANNUAL STATUS REPORT ON RECEIPT AND USE OF DEVELOPMENT IMPACT FEES
JUNE 30, 2016
(Continued)
Construction Impact Activity Fee:
Construction Impact Activity Fee is assessed on construction projects based on the square foot
size of the project at a rate of $1.14 per square foot. These fees are intended to recover the
damage caused to Town streets by construction traffic. The collected fee is held in the General
Fund Appropriated Reserves.
Beginning Cash Balance (07/01/2015)$0
Source of Funds
Fees Collected FY 15/16 276,229
Interest Earned FY 15/16 (Funds expended upon receipt)-
Total Source of Funds $276,229
Use of Funds
Business Services Charge
Capital Outlay :
Street Repair and Resurfacing Project FY 15/16 $2,335
Total Use of Funds $2,335
Ending Cash Balance (7/01/2016) Pre-Final Audit $273,894
Designated Future Projects
Per FY 16/17 through FY 20/21 Capital Improvement Plan:
Street Repair and Resurfacing Project $3,385,933
Total Designated Future Projects $3,385,933
Current Funding Shortfall ($3,112,039)
CONSTRUCTION IMPACT ACTIVITY FEE
TOWN OF LOS GATOS
ANNUAL STATUS REPORT ON RECEIPT AND USE OF DEVELOPMENT IMPACT FEES
JUNE 30, 2016
(Continued)
Below-Market Priced (BMP) Housing Program In-Lieu Fee:
BMP In-Lieu Fees are collected from residential development projects with five (5) or more
units when the construction of the BMP unit is impractical or there are unusual circumstances
that make the construction of the unit inconsistent with Town policy. The required in-lieu fee is
to be paid to the Town prior to issuance of the certificate of occupancy. The BMP In-Lieu Fee is
equal to the amount of six (6) percent of the building permit valuation for the entire project.
The collected fees are held in the General Fund BMP Housing liability account and are restricted
to be used solely for BMP Housing Program activities.
Beginning Cash Balance (07/01/2015)$2,808,658
Source of Funds
Fees Collected FY 15/16 $610,279
Interest Earned FY 15/16 23,275
Total Source of Funds $3,442,212
Use of Funds
Property Purchase $360,877
Staff Adiministration 30,276
Total Use of Funds $391,153
Ending Cash Balance (7/01/2016) Pre-Final Audit $3,051,059
Potential Future Projects
Extreme Low Income Housing Program (Future Project - Pending Funding)$1,300,000
Reacquisition of Distressed/Foreclosed Properties (Future Project - Pending Funding)600,000
Neighborhood Housing Program Services (Future Project - Pending Funding -5 Year Total)1,200,000
Total Potential Future Projects $3,100,000
Current Funding Shortfall ($48,941)
BELOW-MARKET PRICED HOUSING PROGRAM IN-LIEU FEES
Other Required Disclosures:
As required by law, no inter-fund (loans/transfers) were made doing the reporting period and
no refund were necessary as all fees collected have a current funding short fall status as
presented in the Annual Status Report.