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13 - Traffic and Road Impact Fee OrdinancesOWN F ~4ib Y ~o, ,~ . os COUNCIL AGENDA REPORT S GA` DATE: MARCH 29, 2010 MEETING DATE: 4/5/2010 TTEM NO: I TO: MAYOR AND TOWN COUNCIL FROM: GREG CARSON, TOWN MANAGER SUBJECT: AMENDMENT OF TRAFFIC AND ROAD IMPACT FEE ORDINANCES a. Introduction of an Ordinance of the Town of Los Gatos amending Article VII of Chapter 15 establishing Traffic Impact Mitigation Fees and rescinding resolution 1994-55. b. Introduction of an Ordinance of the Town of Los Gatos amending Article IX of Chapter 15 of the Town Code relating to the Mitigation of Road Impacts Caused by Construction Projects. 1. Direct the Clerk Administrator to read the title. 2. Waive the reading. 3. Introduce the ordinance and instruct the Clerk Administrator to either: a. publish the ordinance no more than five days prior to adoption b. publish a summary no mole than five days prior to adoption BACKGROUND: In 1994, the Town Council adopted a Traffic Impact Mitigation Fee Ordinance (Resolution 1994-55) and fee for Mitigation of Road Impacts Caused by Construction Projects Ordinance 1984. In February 2010, the Town contracted with the Financial Consulting Solutions (FCS) Group, Inc., to update the fees to reflect changes since their initial adoption. These changes include but are not limited to: road construction and renovation costs, trip generation rates and adjustment factors, and generally accepted techniques and methods used in the design and calculation of the impact mitigation fees. A mitigation fee is a one-time fee imposed on new development and some types of redevelopment at the time of development. The fee is intended to recover a fair share of the costs of transportation facilities needed to serve growth. California Government Code 66000 et seq., the Mitigation Fee Act, specifics how mitigation fees shall be calculated, applied, and accounted for. By statue, a mitigation fee is a "monetary exaction other than a tax or special assessment, whether established for a broad class of projects by legislation of general applicability or imposed on a specific ro~ject'on a~n ad hoc basis, that is charged by a local agency to the PREPARED BY: J~i7YlAMA. BUDGET MANAGER N:\FINANCE\Fee Schedule\2010°Comprehensive Fee SmdyUmpact Fees\Ordinance Introdne[ion for TizCficCons[me[ion Activities Staff Report V2.doc ~~ Reviewed by:' 1~~`own Manager l ~ Assistant Town Manager Clerk Administrator Finance -Community Development PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENT OF TRAFFIC AND ROAD IMPACT FEE ORDINANCES March 29, 2010 application in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project." When establishing such fees, the local agency must identify the purpose of the fee and the use to which the fee is to be put. The local agency must also determine how there is a reasonable relationship between the amount of the fee and the cost of the public facility or portion of the public facility attributable to the development on which the fee is imposed. Lastly, mitigation fee calculations cannot include the costs attributable to existing deficiencies in public facilities, but may include costs associated with the increased demand for public facilities related to the development project. DISCUSSION: Attached for Council consideration are two amended ordinances: a Traffic Impact Mitigation Fee (Attachment 1) and fee for Mitigation of Road Impacts Caused by Construction Projects (Attachment 2). The updated ordinances and fees are based on the results of a 2010 Traffic Impact and Construction Activities Mitigation Fee Update Study conducted by the FCS Group. The proposed amendments and rate schedule for each Ordinance aze discussed in detail below. Traffic Impact Mitigation Fee Ordinance and Rate Structure The amended Traffic Mitigation Fee Ordinance includes provisions to modernize and clarify the language included in Article VII of Chapter 15 of the Town Code to help ensure compliance with California Government Code 66000 et seq. The Town's existing Traffic Impact Mitigation Fees are based on the number of Average Daily Trips (ADT) as determined or derived from the most recent edition of Triu Generation, published by the Institute of Transportation Engineers (ITE). The table below reflects the Town's current rate structure. Current Traffic Impact Mitigation Fee Rate Structure Land Use Rate per ADT for Rate per ADT Exemptions Category first ten (10) ADT above ten (10) Residential $600 $600 Secondary dwelling unit with 600 or fewer square feet; and certain housing developments for very low, low and moderate income residents (on a case-by- casebasis). Medical Office $600 $120 None. All Other Uses $600 $60 None. While the current Traffic Mitigation Impact Fees are based on ADT, the proposed fee is based on weekday afternoon (PM) peak-how (PH) trip generation statistics provided in the Trin Generation for each land use type and development size. Weekday PM PH trips are measured dwing the afternoon hours between 4:00 p.m. and 6:00 p.m., and are often considered the busiest part of the evening "rush." Calculations for the trips also include adjustments for pass-by-trips. Transportation engineers commonly use weekday PM PH trips estimates to assess transportation system performance and determine capacity needs because these trips are considered to be a better determinant of needs than ADTs. PAGE3 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENT OF TRAFFIC AND ROAD IMPACT FEE ORDINANCES March 29, 2010 The attached list of proposed FY 2010/11 Traffic Impact Mitigation Fee outlines per unit/square foot cost, based on PH trips for various land uses (Attachment 3). Cost comparisons between the current and proposed mitigation fee reflected a moderate decrease in the total cost for residential land uses as noted in the table below. Traffic Impact Mitigation Cost for Residential Land Use Categories Land Use Cate ory Unit/ S uare Feet Current Miti ation Fee Proposed Miti anon Fee Cost Difference RESIDENTLAL Single Family Home 2500 -1 dwelling unit $5,742 $5,545 $197 Condominium/Townhouse 15 dwelling units $69,720 $56,540 ($13,180) Commercial, general office, and other services, however, reflected sizeable increases. Given the disparity between the current and proposed cost, staff recommends that CouncIl consider phasing in the increased fee for commercial, office, and other non-residential land use services over a period of 6 years. The total increase each year would be one-sixth of the difference between the proposed rate as reflected on attachment 3 and current rate. This phasing will allow Council to accelerate or delay future increases as actual project impacts are identified. The table below reflects this proposed scenario: Traffic Impact Mitigation Cost for Commercial and General Office Land Use Categories Land Use Cate or Unit/ S uare Feet Current Miti ation Fee Adjusted Mitigation Fee Year 1 Cost Difference COMMERCIAL Supermazket 40,000 $461,120 $659,323 $198,203 Drive-In Bank 2,000 $28,578 $39,201 $10,623 Fast Food Restaurant 2,500 $87,918 $125,024 $37,106 Sit-Down Restaurant 4,500 $58,631 $91,827 $33,196 Convenience Market 2,000 $99,359 $120,550 $61,919 Shopping Center 300,000 $2,392,920 2,663,215 $208,376 OFFICE General Office 20,000 $121,212 $124,385 $3,173 The calculation approach for the Traffic Impact Mitigation Fee is a common methodology used by many cities. The calculation of the Traffic Impact Mitigation Fee is the total dollar cost of growth-required capital project costs divided by the capacity they will serve. The unit of capacity used becomes the basis of the fee. Under this approach, the cost of a given project is allocated to growth proportionately by the PAGE4 MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENT OF TRAFFIC AND ROAD IMPACT FEE ORDINANCES March 29, 2010 capacity made available for growth. For example, assume the Town plans to allocate $1 million for the cost of adding a lane to an existing street and that the new lane is needed to meet existing demand and provide for growth. If the new lane provides capacity for 500 trips, and 200 aze needed to meet an existing deficiency, only 300 are available for growth. In this case, the growth-required share allocation to the fee basis would be 300/500 = 60% of $1 million, or $600,000. The attached list of capacity-increasing traffic mitigation projects are eligible to be funded, in whole or in part, from Traffic Impact Fee Mitigation revenues (Attachment 4). These projects, which were selected from the General Plan and Capital Improvement Plan were analyzed to determine the portion of the project costs that could be included in the Traffic Impact Mitigation Fee cost basis. Types ofprojects to be funded include roadway widening, striping, and intersection improvements as well as technology enhancements for signal controller upgrades. To calculate the Traffic Impact Mitigation Fee, the estimated FY 2009/10 year-end fund balance for the Traffic Impact Mitigation Fee Fund of $4.1 million was subtracted from the total mitigation-fee eligible portion of the Town project cost of $26.5 million. This resulted in a net eligible cost of $22.4, which was then divided by the projected increase in PH trips (4,122) to establish the Traffic Impact Mitigation Fee of $5,436 per PH trip. Construction Activities Mitigation Fee Ordinance and Rate Structure The amended Construction Activities Mitigation Fee Ordinance includes provisions to modernize and clarify the language included in Article IX of Chapter 15 of the Town Code to help ensure compliance with California Government Code 66000 et seq. The Town's existing mitigation fee for road impact fee has not been updated since its initial adoption in 1994. The purpose of the fee was to recover the cost for refurbish Town roads and streets due to road deterioration caused by vehicle traffic associated with construction activities. The Town's existing mitigation fee is based on estimates of the weight of the loads to be hauled to or from the project(s) and the weight of heavy vehicles to be used in connection with the project(s). The table below reflects Los Gatos' current Construction Activities Mitigation Fee rates: Existing Construction Activities Mitigation Fee Rates Construction Activity Rates 1. New Buildings, Additions & Demolitions a. Commercial $0.20/square foot b. Residential $0.20/square foot c. Pools/spas/water features $0.25/square foot 2. Alterations/Remodels/Re-roof/Repairs/Decks, etc. $0.02/square foot 3. Landscape/Grading Permits, Encroachment Pernuts; Parking Lot Paving, Retaining Walls, Public Im rovements $1.40 per cubic yard in excess of 15 cubic yards While the current fees are based on estimates of weight, the proposed fees as reflected in the table below, are based on the estimated annual cost of road deterioration caused by construction activities and the average annual increase in the number of square feet of development in Los Gatos. In order to estimate the average annual number of square feet of development by type, generated by growth, the building activity from January 2005 through December 2009 was analyzed to determine the average annual increase in total building square footage per year by type of development (residential and non-residential). PAGES MAYOR AND TOWN COUNCIL SUBJECT: AMENDMENT OF TRAFFIC AND ROAD IIvIPACT FEE ORDINANCES March 29, 2010 The estimated total annual cost of roadway deterioration in Los Gatos due to all types of vehicle activity is $2.6 million, of which an estimated $1.5 million is due to load-related stress. The mitigation fee per squaze foot of residential and non-residential floor space was calculated by first allocating the total annual construction activities costs between residential and non-residential development and then dividing the allocated portions by a projected annual increase in square feet of floor space added. Proposed FY 2010/11 Construction Activities Mitigation Fee Residential Non- Residential Average Annual Square Feet Added 298,640 78,859 Recommended Cost Per Square Foot Added $1.00 $1.00 The ordinance and mitigation fee study reflected aper-square-foot added fee ranging between $1.61 to $2.39 for residential and $1.41 to $2.09 for non-residential; the fee options were based on pavement deterioration due to construction activities for Los Gatos and a mix of neighboring communities, including Sazatoga, Monte Sereno, and Campbell. Given the broad range of costs, staff recommends that Council approve aper-square-foot added fee of $1.00 for both residential and non-residential, with a goal of reaching close to cost recovery over a period of 4 years (Attachment 5). As a result, every year following FY 2010/11 the cost per square foot added would be increased by $.50 until the cost reached $2.00 per square foot. The Town's current mitigation fee also includes a per cubic yard charge for Landscape, Grading and Encroachment Permits and Parking Lot Paving, Retaining Walls and Public Improvements. This fee was not included as part of the proposed Construction Activities Mitigation Fee as the updated fee would be adequate enough to cover the cost of landscape, grading and other applicable activities. CONCLUSION: In 1994, the Town Council adopted a Traffic Impact Mitigation Fee Ordinance (Resolution 1994-55) and fee for Mitigation of Road Impacts Caused by Construction Projects Ordinance 1984. In February 2010, the Town contracted with the Financial Consulting Solutions (FCS) Group, Inc, to update the fees to reflect changes since their initial adoption. Staff recommends that Council approve the proposed ordinance amendments and rate structure as reflected in Attachments No. 3 and 5. All approved mitigation fees would be reflected in the FY 2010/11 Comprehensive Fee Schedule. FISCAL IMPACT: Council approvals of the proposed ordinance amendments and mitigation would enhance the General Fund revenue, offsetting declines in current and future revenue. In addition, approval of the proposed amendments would also fund capacity-increasing traffic mitigation projects eligible to be funded in whole or in part and decrease the cost of road deterioration caused by construction activities, significantly reducing expenses to the General Fund and Capital Improvement Plan. Currently, the Town does not have a dedicated revenue source to support capital projects. Attachments: Attachment l: Ordinance Amending Article VII of Chapter 15 of the Town Code Relating to Traffic impact Mitigation Fees and Rescinding Resolution 1994-55 Attachment 2: Ordinance Amending Article IX of Chapter 15 of the Town Code Relating to Mitigation of Road Impacts Caused by Construction Projects Attachment 3: Proposed FY 2010/l I Traffic Impact Mitigation Fees Attachment 4: Los Gatos Traffic Mitigation Projects Attachment 5: Proposed FY 2010/11 Construction Activities Mitigation Fee ORDINANCE ORDINANCE OF THE TOWN OF LOS GATOS AMENDING ARTICLE VII OF CHAPTER 15 OF THE TOWN CODE RELATING TO TRAFFIC IMPACT MITIGATION FEES AND RESCINING RESOLUTION 1994-55 THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES ORDAIN AS FOLLOWS: SECTION I Section 15.70.015 is hereby amended to read as follows: Sec. 15.70.015. Purpose. (a) The Town Council finds that all new development and expansion of uses contribute to cumulative traffic impacts. These impacts are difficult to measure and mitigate on aproject-by-project basis, yet are cumulatively measurable and mitigabee. Failure to expand the capacity of the existing circulation system will cause unacceptable levels of service and congestion on streets and intersections, traffic accidents, air pollution, noise, and restrictions on access for emergency vehicles. (b) The Town Council finds that the purpose of the Traffic Impact Mitigation Fee is to assure that each new development or expansion of use pays its fair share of the transportation improvements needed to accommodate the cumulative traffic impacts. Existing and known future sources of revenue are inadequate to fund a substantial portion of the transportation improvements necessary to avoid unacceptable levels of service, congestion, and related adverse impacts. (c) The Town Council declares the traffic improvement-area shall be the Town's jurisdictional limits that the Traffic Impact Mitigation Fee is necessary in order to finance transportation and traffic improvements within the traffic improvement area. (d) The Town Council finds and determines that there is a reasonable and rational relationship between the use of the Traffic Impact Mitigation Fee and the type of development projects on which the fees are imposed because the fees will be used to construct the transportation improvements that are necessary for the safety, health and welfare of the residential and non-residential users of the development projects on which the Traffic Impact Mitigation Fee will be levied. (e) The Town Council finds and determines that there is a reasonable and rational relationship between the need for the improvements to the transportation system and the type of development projects on which the Traffic Impact Mitigation Fee is imposed because it will be necessary for the residential and non-residential users of such projects to have access to the transportation system. Such development will benefit from the transportation improvements and the burden of such development will be mitigated in part by the payment of the Traffic Impact Mitigation Fee. ATTACHIVIENT 1 (f) The Town Council further finds and determines that the estimates of transportation facility costs referenced in the Traffic Impact and Construction Activities Impact Mitigation Fee Update Study are reasonable cost estimates for constructing. the transportation system improvements, and that the amount of the Traffic Impact Mitigation Fee expected to be generated by new development will not exceed the total fair share cost to such development. (g) The Town Council further finds that the cost estimates referenced in the Traffic Impact and Construction Activities Impact Mitigation Fees Update Study are reasonable cost estimates for the facilities that comprise the transportation system; and that Traffic Impact Mitigation Fee revenues to be generated by new development will not exceed the total fair share of these costs. (h) The Town Council further finds that the Traffic Impact Mitigation Fees collected pursuant to this Section shall be used to help pay for the construction and acquisition of the transportation improvements referenced in the Traffic Impact and Construction Activities Impact Mitigation Fees Update Study, and that the need' for the improvements is related to new development because such development results in additional traffic; thus creating the demand for the improvements. (i) The Town Council hereby adopts the report entitled "Traffic Impact and Construction Activities Mitigation Fees Update Study"; and incorporates herein by this reference the assumptions, conclusions, findings regarding Traffic Impact Mitigation Fees; and the rates outlined in the report. (j) Except for those ITE Land Use categories where the new rate will be less than the current rate, the rates included in the "Traffic Impact and Construction Activities Mitigation Fees Update Study" shall be phased-in over a period of six (6) years from the effective date of this ordinance. For each affected ITE Land Use category, the amount of increase each year shall be one-sixth of the difference between the rate reflected in the "Traffic Impact and Construction Activities Mitigation Fee Study" and the current rate. SECTION II Section 15.70.025 is hereby amended to read as follows: Sec. 15.70.025. Definitions. The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning: (a) Building~ermit shall mean the permit issued or required by the Town for the construction of any structure pursuant to and as defined by the building code. (b) Development shall mean a building or other land construction, or making a physical change in the use of a structure or land, in a manner that increases the usage of transportation capital improvements or which may contribute to the need for additional or enlarged transportation capital facilities. (c) Development Permit shall mean any zoning entitlement permit or approval from the Town of Los Gatos, including, but not limited to, a general plan amendment, zoning or re- zoning of property, a conditional use permit, subdivision map, development review application, building permit or other permit for construction, reconstruction or remodeling. (d) Site shall mean a plot of ground consisting of one (1) or more lots or parcels on which a common improvement is proposed or exists. (e) Traffic Impact Mitigation Capital Improvement Projects List shall mean the list of projects that identifies facility improvements projected to be funded with Traffic Impact Mitigation Fee revenues, and includes the approximate location, size, time of availability, and estimates of cost for facilities and improvements to be financed with the fees. This list may be modified at any time. (f) Traffic Impact Mitigation improvements shall mean those improvements and related actions necessary to implement the circulation element of the Town's general plan and any applicable specific plan and shall include and not be limited fo: paving, curb and gutter, sidewalks, medians with landscaping, drainage facilities, traffic signals, street lighting, signing, striping, noise walls, right-of-way and other improvements or actions necessary to mitigate significant cumulative traffic impacts. (g) Trip-end shall mean an incoming or outgoing trip going to or coming from anywhere within the Town or outside the Town. (h) Use shall mean the purpose for which a site or structure is arranged, designed, intended, constructed, erected, moved, altered or enlarged or for which either a site or a structure is or maybe occupied or maintained. SECTION III Section 15.70.030 is hereby rescinded. SECTION IV Section 15.70.035 is hereby amended to read as follows: Sec. 15.70.035. Amount and payment of fee. (a) The applicant shall provide information regarding the previous and proposed use(s) of the site, including a description of each of the previous and proposed uses for which a Development Permit is being sought, with sufficient detail to enable the Town to calculate the Institute of Transportation Engineers (ITE) land use and number of units of development under the previous use(s) and for the proposed use(s). (b) Except as maybe otherwise provided in this Ordinance, the amount of-the Traffic Impact Mitigation Fee shall be determined by calculating the amount that would be imposed for the proposed use(s) of the property minus the amount that would have been imposed for the previous use(s) of the property. (c) If a single project or building contains more than one types of ITE land uses (a mixed use), for each land use exceeding ten (10) percent of the project or building a Traffic Impact Mitigation Fee shall be determined by applying the applicable fee for that individual use. Aland use constituting ten (10) percent or less of the project or building shall be considered an ancillary use and a separate fee shall not be such use. (d) Whenever a Traffic Impact Mitigation Fees is imposed pursuant to this Section, the Town shall provide each applicant for a development permit with a notice in writing at the time of the approval of the development permit or at the time of the imposition of the Traffic Impact Mitigation Fees, a statement of the amount of the Fees and notification of the ninety (90) day approval period in which the applicant may protest the Fees. Said notice shall be in substantially the following form: "The conditions o f project approval for your project, identified as ,include certain fees, dedication requirements, reservation requirements and/or other exactions more specifically described as: (identification of the amount of the Impact Fee and/or description of the dedications, reservations or other exactions _. The applicant is hereby notified that the 90-day protest period to challenge such items has begun as of the date of the project approval or the date of the Impact Fee imposition, which was If the applicant fails to file a protest regarding any of the fees, dedications, reservations or other exaction requirements as speci fied in Government Code §66020, the applicant shall be legally barred from later challenges." (e) Notwithstanding any other provision, the dollar amounts of the adopted Traffic Impact Mitigation Fee rates shall be adjusted on July 1 of each year to account for changes in the costs of facilities. The adjustment factor shall be based on the change in the Engineering News Record (ENR) (San Francisco, California) Building Cost Index (BCI) for the preceding twelve (12) month period calculated from February 1 to January 31. If this index should cease publication, the Town shall use any appropriate official index published by the Bureau of Labor Statistics, or successor, or similar agency as may then exist or may then may be most nearly equivalent thereto. The adjustment factor shall be used to adjust the rates of the Traffic Impact Mitigation Fees, unless they are otherwise adjusted based on the adoption of an updated methodology study. (f) Unless earlier payment is permitted pursuant to the provisions of Government Code $66007, or any applicable successor statute, the Traffic Impact Mitigation Fees for residential developments shall be paid on the date of the final inspection or on the date the certificate of occupancy is issued, whichever date occurs first. (g) No final subdivision map, parcel map or certificate of occupancy shall be issued or filed for recording until the traffic impact mitigation fee has been paid in full. (h) If an applicant proposed a housing development which may qualify for a lower fee based on compliance with the criteria set forth in Government Code Section 66005.1, the applicant shall include a request for consideration of the lower fee as part of the application. SECTION IV Section 15.70.045 is hereby amended to read as follows: Sec. 15.70.045. Use of monies in trust fund. (a) Money in the trust fund established in this article shall be used solely for the following: (1) To construct identified traffic and transportation improvement projects. (2) To reimburse the Town of Los Gatos to offset administrative costs associated with administering and updating the Traffic Impact Mitigation Fee. (3) To make refunds if and when required by the applicable sections of Government Code X66000 et seq., or any applicable successor statutes. (b) The monies in the fund shall be eligible for expenditure only for projects related to mitigating the impacts of new development. These funds cannot be used for routine repairs and maintenance. (c) The monies in the fund maybe used for purposes that include, but are not limited to, the following: (1) design and construction plan preparation; (2) permitting; (3) land and materials acquisition, including any costs of acquisition or condemnation; (4) design and construction, refurbishment or reconstruction of transportation capital improvements; (5) design and construction, refurbishment or reconstruction of sanitary sewers, drainage facilities, or other public improvements required by the construction of transportation capital improvements; (6) relocating utilities required by construction, refurbishment or reconstruction; (7) landscaping; (8) construction management and inspection; (9) surveying, soils and material testing; (10) acquisition of capital equipment that is an intrinsic part of a facility; (11)demolition that is part of the construction of any of the improvements on this list; (12)payment of principal and interest, necessary reserves and costs of issuance under any bonds or other indebtedness issued to provide money to construct or acquire traffic mitigation facilities; SECTION V Section 15.70.055 is hereby added as follows: Sec. 15.70.055. Traffic Impact Mitigation Fees in Addition to other Fees and Charges. Payment of the Traffic Impact Mitigation Fees are in addition to the requirements imposed by other laws, policies or regulations of the Town relating to the construction or the financing of public improvements within subdivisions or developments. SECTION VI Section 15.70.060 is hereby added as follows: Sec. 15.70.060. Reporting Requirements for Funds. The Director of Finance or designee shall comply with the public reporting requirements for the Traffic Impact Mitigation Fee Fund and accounts therein within 180 days of the end of each fiscal year as specified in Government Code f66006(b), or any applicable successor statute. The Director of Finance or designee shall also present the public reports to the Town Council for review at the first regular meeting that occurs not more than fifteen (15) days after the reports are made available to the public as specified in Government Code ~66006(b), or any applicable successor statute. SECTION VII Section 15.70.065 is hereby added as follows: Sec. 15.70.065. Findings Requirements for Funds; Refunds. For the fifth fiscal year following the first deposit into the Traffic Impact Mitigation Fee Fund, and every five (5) years thereafter, the Town shall make the findings required by Government Code ~66001(d), or any applicable successor statute, with respect to any monies remaining unexpended in the Funds and the accounts therein. The Town shall also comply with the notice and refund provisions of Government Code ~~ 66001(e) and (f), or any applicable successor statutes. SECTION VIII Section 15.70.070 is hereby added as follows: Sec. 15.70.070. Protest. Any person subject to the Traffic Impact Mitigation Fee established by this Section may protest the imposition of same by complying with the protest provisions in the Government Code ~ 66000, et seq. in effect at the time of the protest. SECTION IX Section 15.70.075 is hereby added as follows: Sec. 15.70.075. Compliance; Enforcement. (a) No person shall fail to pay, when due, any Traffic Impact Mitigation Fee imposed pursuant to this Section. (b) The Traffic Impact Mitigation Fee due pursuant to this Section shall constitute a debt to the Town. An action for the collection thereof may be commenced in the name of the Town in any court having jurisdiction of the cause; however, nothing in this subsection shall prevent a criminal prosecution for any violation of this Section. SECTION X Section 15.70.080 is hereby added as follows: Sec. 15.70.080. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this ordinance or any part thereof is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this ordinance. The Town Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase of this ordinance irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase be declared invalid or unconstitutional. First read at a regular meeting of the Town Council held on the day of 2010 and adopted and ordered published at a regular meeting of said Council held on the day of , 2010. ORDINANCE ORDINANCE OF THE TOWN OF LOS GATOS AMENDING ARTICLE IX OF CHAPTER 15 OF THE TOWN CODE RELATING TO MITIGATION OF ROAD IMPACTS CAUSED BY CONSTRUCTION PROJECTS THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES ORDAIN AS FOLLOWS: SECTION I Section 15.90.010 is hereby amended to read as follows: Sec. 15.90.010. Purpose. (a) The Town Council finds that the roads of this community were built under a variety of agencies and standards. Many of the Town's streets have little base and limited overlay with restricted drainage systems and were never intended to support heavy vehicles or loads. Construction projects have had a serious adverse effect on the Town's street system, and it is only fair and just that there should be an equitable contribution to repair streets that are damaged by hauling and deliveries done in connection with these projects. Because the effects of these projects can be spread across a large area and the Town does not and cannot have the staff or oversight to identify specific items of damage and construction projects accelerate or begin the deterioration of the street system, it is also fair and just to establish a fee to be collected when permits are issued for construction projects that will be deposited in the street repair funds and used to refurbish roads which suffer deterioration due to construction activities. (b) The Town Council finds that the purpose of the Construction Activities Mitigation Fee is to assure that each new development or expansion of use pays its fair share of the refurbishment needed to mitigate the impacts of construction activities. (c) The Town Council declares the road refurbishment area shall be the Town limits to finance refurbishment where such projects have been identified by the Town Council. (d) The Town Council has determined that the Construction Activities Mitigation Fee is necessary in order to finance road refurbishment activities and projects. (e) The Town Council finds and determines that there is a reasonable and rational relationship between the use of the Construction Activities Mitigation Fee and the type of development projects on which the fees are imposed because the fees will be used to refurbish the roads that are necessary for the safety, health and welfare of the residential and non-residential users of the roads on which the Construction Activities Mitigation Fee will be levied. (f) The Town Council finds and determines that there is a reasonable and rational relationship between the need for refurbishment of the transportation system and ATTACHMENT 2 the type of development projects on which the Construction Activities Mitigation Fee is imposed because it will be necessary for the residential and non-residential users of such projects to have access to the transportation system. Such development will benefit from the transportation refurbishments and the burden of such development will be mitigated in part by the payment of the Construction Activities Mitigation Fee. (g) The Town Council further finds and determines that the estimates of road deterioration costs referenced in the Traffic Impact and Construction Activities Impact Mitigation Fee Update Study are reasonable cost estimates, and that the amount of the Construction Activities Mitigation Fee expected to be generated by new development will not exceed the total fair share cost to such development. (h) The Town Council further finds that the cost estimates referenced in the Traffic Impact and Construction Activities Impact Mitigation Fees Update Study are reasonable cost estimates for deterioration of the facilities that comprise the transportation system; and that Construction Activities Mitigation Fee revenues to be generated by new development will not exceed the total fair share of these costs. (i) The Town Council further finds that the Construction Activities Mitigation Fees collected pursuant to this Section shall be used to help pay for refurbishment of the transportation system, and that the need for the refurbishment is related to new development because the equipment excavation and activity traversing public streets during the construction of the development results in deterioration; thus creating the demand for the refurbishment. (j) The Town Council hereby adopts the report entitled "Traffic Impact and Construction Activities Mitigation Fees Update Study" (Study), and incorporates herein by this reference the assumptions, conclusions and findings included in the report regarding Construction Activities Mitigation Fees. The Study includes options for aper-square-foot added fee ranging between $1.61 to $2.39 for residential development, and $1.41 to $2.09 for non-residential. These options were based on pavement deterioration due to construction activities for Los Gatos and a mix of neighboring communities, including Saratoga, Monte Sereno, and Campbell. (k) The Town Council hereby adopts an initial Construction Activities Mitigation Fee of $1.00 per-quare-foot added for both residential and non-residential development effective July 1, 2010. (1) On July 1 of each year through 2012, the Construction Activities Mitigation Fee will be increased by $.50 per-square-foot added. SECTION II Section 15.90.020 is hereby rescinded. SECTION III Section 15.90.025 is hereby added as follows: Sec. 15.90.025. Definitions. The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning: (a) Building permit shall mean the permit issued or required by the Town for the construction of any structure pursuant to and as defined by the building code. (b) Development shall mean building or other land construction activity, or making a physical change in the use of a structure or land, in a manner that makes use of the Town's road system. (c) Development Permit shall mean any zoning entitlement permit or approval from the Town of Los Gatos, including, but not limited to, a general plan amendment, zoning or re- zoning of property, a conditional use permit, subdivision map, development review application, building permit or other permit for construction, reconstruction or remodeling. (d) Site shall mean a plot of ground consisting of one (1) or more lots or parcels on which a common improvement is proposed or exists. SECTION IV Section 15.90.030 is hereby amended to read as follows: Sec. 15.70.030. Usage of fees collected. (a) The fees collected under this article will be deposited in fund accounts. (b) Money in the trust fund established in this article shall be used solely for the following: (1) To design, construct, and refurbish roads within the Town of Los Gatos. (2) To reimburse the Town of Los Gatos to offset administrative costs associated with administering and updating the Construction Activities Mitigation Fee. (3) To make refunds if and when required by the applicable sections of Government Code ~ 66000, et seq., or any applicable successor statutes. (c) The monies in the fund shall be eligible for expenditure only for projects related to mitigating the impacts of new development. These funds cannot be used for routine repairs and maintenance. (d) The monies in the fund maybe used for purposes that include, but are not limited to, the following: (1) design and construction plan preparation; (2) permitting; (3) land and materials acquisition, including any costs of acquisition or condemnation; (4) design and construction, refurbishment or reconstruction of transportation capital improvements; (5) design and construction, refurbishment or reconstruction of sanitary sewers, drainage facilities, or other public improvements required by the construction of transportation capital improvements; (6) relocating utilities required by construction, refurbishment or reconstruction; (7) landscaping; (8) construction management and inspection; (9) surveying, soils and material testing; (10) acquisition of capital equipment that is an intrinsic part of a facility; (11) demolition that is part of the construction of any of the improvements on this list; (12) payment of principal and interest, necessary reserves and costs of issuance under any bonds or other indebtedness issued to provide money to construct or acquire traffic mitigation facilities; SECTION V Section 15.90.035 is hereby added as follows: Sec. 15.90.035. Amount and payment of fee. (a) The applicant shall provide information regarding the previous and proposed use(s) of the site, including a description of the proposed uses for which a Development Permit is being sought, with sufficient detail to enable the Town to calculate the number of square feet of development under the proposed use(s). (b) Except as may be otherwise provided in this Ordinance, the amount of the Construction Activities Mitigation Fee shall be determined by calculating the number of square feet for the proposed use(s). (c) Whenever a Construction Activities Mitigation Fee is imposed pursuant to this Section, the Town shall provide each applicant for a development permit with a notice in writing at the time of the approval of the development permit or at the time of the imposition of the Construction Activities Mitigation Fees, a statement of the amount of the Fees and notification of the ninety (90) day approval period in which the applicant may protest the Fees. Said notice shall be in substantially the following form: "The conditions of project approval for your project, identified as ,include certain fees, dedication requirements, reservation requirements and/or other exactions more specifically described as: (identification of the amount of the Impact Fee and/or description of the dedications, reservations or other exactions .The applicant is hereby notified that the 90-day protest period to challenge such items has begun as of the date of the project approval or the date of the Impact Fee imposition, which was If the applicant fails to file a protest regardingany of the fees, dedications, reservations or other exaction requirements as specified in Government Code §66020, the applicant shall be legally barred from later challenges." (e) Notwithstanding any other provision, the dollar amounts of the adopted Construction Activities Mitigation Fee rates shall be adjusted on July 1 of each year to account for changes in the costs of facilities. The adjustment factor shall be based on the change in the Engineering News Record (ENR) (San Francisco, California) Building Cost Index (BCI) for the preceding twelve (12) month period calculated from February 1 to January 31. If this index should cease publication, the Town shall use any appropriate official index published by the Bureau of Labor Statistics, or successor, or similar agency as may then exist or may then maybe most nearly equivalent thereto. The adjustment factor shall be used to adjust the rates of the Construction Activities Mitigation Fees, unless they are otherwise adjusted based on the adoption of an updated methodology study. (f) Unless earlier payment is permitted pursuant to the provisions of Government Code X66007, or any applicable successor statute, the Construction Activities Mitigation Fees for residential developments shall be paid on the date of the final inspection or on the date the certificate of occupancy is issued, whichever date occurs first. (g) No final subdivision map, parcel map or certificate of occupancy shall be issued or filed for recording until the traffic impact mitigation fee has been paid in full. SECTION VI Section 15.90.040 is hereby added as follows: Sec. 15.90.040. Construction Activities Mitigation Fees in Addition to other Fees and Charges. Payment of the Construction Activities Mitigation Fees are in addition to the requirements imposed by other laws, policies or regulations of the Town relating to the construction or the financing of public improvements within subdivisions or developments. SECTION VII Section 15.90.045 is hereby added as follows: Sec. 15.90.045. Reporting Requirements for Funds. The Director of Finance or designee shall comply with the public reporting requirements for the Construction Activities Mitigation Fee Fund and accounts therein within 180 days of the end of each fiscal year as specified in Government Code ~66006(b), or any applicable successor statute. The Director of Finance or designee shall also present the public reports to the Town Council for review at the first regular meeting that occurs not more than fifteen (15) days after the reports are made available to the public as specified in Government Code 566006(b), or any applicable successor statute. SECTION VIII Section 15.90.050 is hereby added as follows: Sec. 15.90.050. Findings Requirements for Funds; Refunds. For the fifth fiscal year following the first deposit into the Construction Activities Mitigation Fee Fund, and every five (S) years thereafter, the Town shall make the findings required by Government Code ~66001(d), or any applicable successor statute, with respect to any monies remaining unexpended in the Funds and the accounts therein. The Town shall also comply with the notice and refund provisions of Government Code ~~ 66001(e) and (f), or any applicable successor statutes. SECTION IX Section 15.90.055 is hereby added as follows: Sec. 15.90.055. Protest. Any person subject to the Construction Activities Mitigation Fee established by this Section may protest the imposition of same by complying with the protest provisions in the Government Code ~ 66000, et seq. in effect at the time of the protest. SECTION X Section 15.90.060 is hereby added as follows: Sec. 15.90.060. Compliance; Enforcement. (a) No person shall fail to pay, when due, any Construction Activities Mitigation Fee imposed pursuant to this Section. (b) The Construction Activities Mitigation Fee due pursuant to this Section shall constitute a debt to the Town. An action for the collection thereof maybe commenced in the name of the Town in any court having jurisdiction of the cause; however, nothing in this subsection shall prevent a criminal prosecution for any violation of this Section. SECTION XI Section 15.90.065 is hereby added as follows: Sec. 15.90.065. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this ordinance or any part thereof is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this ordinance. The Town Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase of this ordinance irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase be declared invalid or unconstitutional. First read at a regular meeting of the Town Council held on the day of 2010 and adopted and ordered published at a regular meeting of said Council held on the day of , 2010. PROPOSED FY 2010111 TRAFFIC IMPACT MITIGATION FEE RATES PER UNIT OF DEVELOPMENT page 1 of 3 Total Total Traffic Peak- Impact Total Traffic Hour % Net New Mitgation Impact ITE (PH) Trip New PH Trip- Fee Per PH Mitigation CODE LAND USE CATEGORY Ends* Trips Ends Trip-End Fee Per Unit Unit * RESIDENTIAL 210 Single Family Detached 220 Apartment 230 Residential Condominium / Townhouse 240 Manufactured Housing 254 Assisted Living RECREATIONAL 411 City Park 417 Regional Park 430 Golf Course 435 Multipurpose Recreation/Arcade 444 Movie Theater with matinee 492 Health/Fitness Club ~ 495 Recreation/Community Center INSTITUTIONAL 520 Elementary School 522 Middle/Junior High School 530 High School 540 Junior/Community College 560 Church 565 Day Care Center/Preschool 1.02 100% 1.02 $5,435.98 $5,544.70 /dwelling unit 0.67 100% 0.67 $5,435.98 $3,642.11 /dwelling unit 0.52 100% 0.52 $5,435.98 $2,826.71 /dwelling unit 0.60 100% 0.60 $5,435.98 $3,261.59 /dwelling unit 0.38 100% 0.38 $5,435.98 $2,065.67 /bed 0.16 100% 0.26 100% 3.56 100% 3.58 100% 20.22 100% 4.06 100% 2.39 100% 0.28 100% 0.31 .100% 0.29 100% 0.12 100% 0.94 100% 13.91 100% 0.16 $5,435. 98 $864. 32 /acre 0.26 $5,435. 98 $1,413. 36 /acre 3.56 $5,435. 98 $19,352. 10 /hole 3.58 $5,435. 98 $19,460. 82 /T.S.F.G.F.A. 20.22 $5,435. 98 $109,915. 58 /screen 4.06 $5,435. 98 $22,070. 09 /T.S.F.G.F.A. 2.39 $5,435. 98 $12,992. OOIT.S.F.G.F.A. 0.28 $5,435.98 $1,522.08 /student 0.31 $5,435.98 $1,685.15 /student 0.29 $5,435.98 $1,576.44 /student 0.12 $5,435.98 $652.321student 0.94 $5,435.98 $5,109.82 /T.S.F.G.F.A. 13.91 $5,435.98 $75,614.53 /T.S.F.G.F.A. 590 Library 7.20 100% 7.20 591 Lodge/Fraternal Organization 0.03 100% 0.03 610 Hospital 1.45 100% 1.45 620 Nursing Home 0.30 100% 0.30 '* Abbreviations used in the "Unit" column: T.S.F.G.F.A. =Thousand Square Feet Gross Floor Area T.S.F.G.L.A. =Thousand Square Feet Gross Leaseable Area V.F.P. =Vehicle Fueling Position $5,435.98 $39,139.08 /T.S.F.G.F.A. $5,435.98 $163.08 /member $5,435.98 $7,882.18 /bed $5,435.98 $1,630.79 /bed ATTACHMENT3 PROPOSED FY 2010/11 TRAFFIC IMPACT MITIGATION FEE RATES PER UNIT OF DEVELOPMENT 2of31 Total Total Traffic Peak- Impact Total Traffic Hour % Net New Mitgation Impact ITE (PH) Trip New PH Trip- Fee Per PH Mitigation CODE LAND USE CATEGORY Ends* Trips Ends Trip-End Fee Per Unit Unit COMMERCIAL 1 SERVICES 310 Hotel 0.61 100% 0.61 $5,435.98 $3,315.95 /room 320 Motel 0.69 100% 0.69 $5,435.98 $3,750.83 /room 812 Building Materials/ Lumber 5.56 70% 3.89 $5,435.98 $21,156.85/T.S.F.G.F.A. 813 Free-Standing Discount 4.68 68% 3.18 $5,435.98 $17,299.47 /T.S.F.G.F.A. Superstore with Groceries 815 Free-Standing Discount Store 5.57 83% 4.62 $5,435.98 $25,131.09 /T.S.F.G.F.A. Without Groceries 816 Hardware/Paint Stores 4.74 74% 3.51 $5,435.98 $19,067.25 /T.S.F.G.F.A. 817 Nursery/Garden Center 4.97 70% 3.48 $5,435.98 $18,911.79/T.S.F.G.F.A. 820 Shopping Center 3.73 66% 2.46 $5,435.98 $13,382.30IT.S.F.G.L.A. 841 New Car Sales 2.72 70% 1.90 $5,435.98 $10,350.11 /T.S.F.G.F.A. 848 Tire Store 3.26 72% 2.35 $5,435.98 $12,759.34 /T.S.F.G.F.A. 850 Supermarket 11.85 64% 7.58 $5,435.98 $41,226.50/T.S.F.G.F.A. 851 Convenience Market (24 hour) 53.42 39% 20.83 $5,435.98 $113,252.19 /T.S.F.G.F.A. 857 Discount Club 4.76 66% 3.14 $5,435.98 $17,077.69 /T.S.F.G.F.A. 862 Home Improvement Superstore 3.32 66% 2.19 $5,435.98 $11,911.33 /T.S.F.G.F.A. 880 Pharmacy/Drugstore Without 11.07 47% 5.20 $5,435.98 $28,282.88 /T.S.F.G.F.A. Drive-Thru Window 881 Pharmacy/Drugstore With Drive- 9.21 51% 4.70 $5,435.98 $25,533.36 /T.S.F.G.F.A. Thru Window 890 Furniture Store 0.53 47% 0.25 $5,435.98 $1,354.10lT.S.F.G.F.A. 911 Walk-in Bank 12.13 70% 8.49 $5,435.98 $46,156.93 /T.S.F.G.F.A. 912 Drive-In Bank 26.69 53% 14.15 $5,435.98 $76,895.79 /T.S.F.G.F.A. 925 Drinking Place 15.49 100% 15.49 $5,435.98 $84,203.38 /T.S.F.G.F.A. 931 Quality Restaurant (not a chain) 9.02 56% 5.05 $5,435.98 $27,458.24 /T.S.F.G.F.A. * Abbreviations used in the "Unit" column: T.S.F.G.F.A. =Thousand Square Feet Gross Floor Area T.S.F.G.L.A. =Thousand Square Feet Gross Leaseable Area V.F.P. =Vehicle Fueling Position PER UNIT OF DEVELOPMENT 3of31 TE CODE AND USE CATEGORY Total Peak- Hour (PH) Trip Ends* % New Trips Net New PH Trip- Ends Total Traffic Impact Mitgation Fee Per PH Trip-End Total Traffic Impact Mitigation Fee Per Unit nit COMMERCIAL /SERVICES (continued) 932 High Turnover, Sit-Down 18.49 57% 10.54 $5,435.98 $57,291.46/T.S.F.G.F.A. Restaurant (chain or stand alone) 933 Fast Food Restaurant (No Drive- 52.50 50% 26.25 $5,435.98 $142,694.56 /T.S.F.G.F.A. Thru) 934 Fast Food Restaurant (With Drive; 46.14 50% 23.07 $5,435.98 $125,408.13 IT.S.F.G.F.A. Thru) 936 Coffee/Donut Shop (No Drive- 25.81 50% 12.91 $5,435.98 $70,151.36/T.S.F.G.F.A. Thru) 937 Coffee/Donut Shop (With Drive- 36.16 50% 18.08 $5,435.98 $98,282.58/T.S.F.G.F.A. Thru) 938 Coffee/Donut Shop (Drive-Thru 96.00 50% 48.00 $5,435.98 $260,927.20 /T.S.F.G.F.A. Only with No Seating) 944 Gasoline/Service Station (no 15.65 58% 9.08 $5,435.98 $49,342.42 N.F.P. Market or Car Wash) 945 Gasoline/Service Station (With 13.57 44% 5.97 $5,435.98 $32,457.17 N.F.P. Convenience Market) 946 Gasoline/Service Station (With 14.64 70% 10.25 $5,435.98 $55,707.96 N.F.P. Convenience Market and Car Wash) OFFICE 710 General Office 1.29 100% 1.29 $5,435.98 $7,012.42 /T.S.F.G.F.A. 720 Medical-Dental Office 4.45 100% 4.45 $5,435.98 $24,190.13 /T.S.F.G.F.A. 750 Office Park 1.48 100% 1.48 $5,435.98 $8,045.26 /T.S.F.G.F.A. 760 Research & Development Center 1.07 100% 1.07 $5,435.98 $5,816.50 /T.S.F.G.F.A. 770 Business Park 1.29 100% 1.29 $5,435.98 $7,012.42/T.S.F.G.F.A. INDUSTRIAL 110 General Light Industrial 1.08 100% 1.08 $5,435.98 $5,870.86 /T.S.F.G.F.A. 130 Industrial Park 0.86 100% 0.86 $5,435.98 $4,674.95 /T.S.F.G.F.A. 140 Manufacturing 0.75 100% 0.75 $5,435.98 $4,076.99 /T.S.F.G.F.A. 151 Mini-Warehouse 0.29 100% 0.29 $5,435.98 $1,576.44 /T.S.F.G.F.A. Abbreviations used in the "Unit" column : T.S.F.G.F.A. =Thousand Square Feet Gross Floor Area T.S.F.G.L.A. =Thousand Square Feet Gross Leaseable Area V.F.P. =Vehicle Fueling Position LOS GATOS TRAFFIC MITIGATION PROJECTS ESTIMATED NEEDED MITIGATION TOTAL FOR NEEDED IMPACT FEE TYPE OF PROJECT CURRENT FOR ELIGIBLE DESCRIPTION OF PROJECT PROJECT COST USERS GROWTH COST LGB Widening from Samaritan Roadway to Camino del Sol Widening $ 1,750,000 0.00% 100.00% $ 1,750,000 Pollard Road Widening from Roadway Knowles Ave to York Avenue Widening $ 2,000,000 0.00% 100.00% $ 2,000,000 Knowles widening from Pollard to Winchester (4 lanes plus Roadway bike lanes) Widening $ 1,000,000 0.00% 100.00% $ 1,000,000 Union Avenue Widening from Roadway BHR to LG-Almaden Widening $ 2,400,000 0.00% 100.00% $ 2,400,000 Improvement Union /BHR intersection s $ 1,000,000 0.00% 100.00% $ 1,000,000 Hwy 9/Santa Cruz Av. Improvement Intersection Improvements s $ 2,000,000 0.00% 100.00% $ 2,000,000 LGB & Shannon Av. (restripe Striping Shannon to provide longer turn Improvement lanes) s $ 15,000 0.00% 100.00% $ 15,000 Improvements (add left-turn Improvement lane) s $ 750,000 0.00% 100.00% $ 750,000 LGB/Lark Intersection Improvement Improvement s $ 4,000,000 0.00% 100.00% $ 4,000,000 Knowles/Winchester Improvement Improvement s $ 2,000,000 0.00% 100.00% $ 2,000,000 and Roadway Winchester add a northbound Widening recevinglaneforwestbound Improvement right turn from Lark s $ 2,000,000 0.00% 100.00% $ 2,000,000 Intersection Lark/University Signalization Signal $ 500,000 50.00% 50.00% $ 250,000 controller upgrade and central Improvement system s $ 500,000 90.07% 9.93% $ 49,663 LGA widening and Roadway improvement Widening $ 3,000,000 0.00% 100.00% $ 3,000,000 Lark widening east of SR 17 and Roadway northbound ramps -provide Widening two right- turn lanes as storage Improvement for the ramp meter s $ 3,000,000 0.00% 100.00% $ 3,000,000 BHR from Union to Westhill Roadway widening Widening $ 1,300.000 0.00% 100.00% $ 1.300.000 $ 27,215,000 $ 26,514,663 ATTACHMENT 4 PROPOSED FY 2010111 CONSTRUCTION ACTIVITIES MITIGATION FEE Residentia I Non- Residential Average Annual Square Feet Added 298,640 78,859 Recommended Cost Per Square Foot $1.00 $1.00 ATTACHMENT 5