CHAPTER 8
CREDITS AND REIMBURSEMENTS
Sections:
§ 11800 Fee Credits (Based on Demolition and New Construction).
§ 11801 Fee Credits (Based on Construction of Public Facilities).
§ 11803 Requirements for Construction of Public Facilities.
§ 11804 Improvements Not Eligible for Credit or Reimbursement.
11800 Fee Credits (Based on Demolition and New Construction).
The amount of interim development impact fee which would otherwise be due and payable in accordance with the provisions of this Article may be reduced by interim development impact fee credits (“fee credits”) described in this Chapter.
A. General Provisions of Fee Credits for Demolitions.
1. Eligibility. A developer may be eligible for fee credits if a development project meets both of these criteria:
a. The development project includes demolition of an existing permitted structure or structures at the development project site prior to construction of the new development project; and
b. The development project is subject to interim development impact fees pursuant to this Article, payable in an amount determined by City Council resolution setting the interim development impact fees.
2. Applying for a Fee Credit.
a. A developer may apply for a fee credit by applying for a demolition permit for the existing permitted structure(s) on the development project site. On the demolition permit application, the developer shall specify in writing if the developer requests a fee credit.
b. The demolition permit application shall include the prior use, the floor area, and other information necessary to determine the amount of fee credits available. If the existing permitted structure or the development project’s new construction, or both, consist of industrial/business parks or recreational projects, then the demolition permit application shall also include building volume of the existing permitted structure and the proposed new structure(s). All information submitted in a demolition permit application is subject to review and verification by the Director or his/her designees.
c. The Building Official will require additional inspections, subject to additional fees, if the City determines that the developer provided inaccurate information on its demolition permit application.
d. If a developer is eligible for fee credits, then the fee credits shall be calculated based on approved and verified information on the demolition permit application, and according to the formulas and procedures described in this Chapter.
e. The amount of the fee credit shall be determined at the time of demolition permit issuance, or prior to issuance. The Director shall provide written approval of a fee credit and the amount of the fee credit.
3. Applying Fee Credits to Interim Development Impact Fees.
a. Fee credits shall apply when interim development impact fees are due. Unused fee credits shall be forfeited. Fee credits cannot be transferred to another development project, whether on the same site or different site than the development project for which the fee credits are approved.
b. Fee credits shall not apply to the administrative fee.
c. Fee credits shall not exceed interim development impact fee minus the administrative fee.
d. After deducting applicable fee credits and administrative fees, the remaining IDIF shall be distributed into the six (6) IDIF categories in accordance with their respective percentages. See Table A.
4. Fee Credits for Demolition (Same Development Project Type). Interim development impact fee balance (interim development impact fees including administrative fees less any fee credits) for development projects replacing an existing permitted structure with a new structure of the same development project type (e.g., residential development project replacing existing permitted residential) shall be calculated based on the following:
a. For residential MFR studio/one (1) bedroom and residential MFR all other, dormitory, hotel, truck yard (permanent structure(s) on truck yards are only eligible for industrial credits), commercial, and office project types, the following steps will determine the interim development impact fee balance:
i. Determine the total IDIF of the new development project, which includes IDIF administrative fees.
ii. Determine the fee credit amount. The fee credit shall be the “existing structure net IDIF,” which is the hypothetical total IDIF of the existing permitted structure (i.e., the total IDIF for which the existing permitted structure would be responsible if the existing permitted structure was a new development project subject to the IDIF) minus the administrative fee.
iii. Subtract the fee credit (i.e., the existing structure net IDIF) from the total IDIF of the new development project to determine the IDIF balance due.
[(Total IDIF of new development project) – (existing structure net IDIF)] = IDIF balance due.
b. For recreational and industrial/business park project types, the following steps will determine the interim development impact fee balance:
i. Determine the building volume of existing permitted structure as specified on the City’s fee credit approval letter from the demolition permit application.
ii. Calculate building volume of new development project. In general, this means multiply the total building footprint by the average weighted building height to most accurately determine actual building volume. Final volume is measured in cubic feet.
iii. Determine the net building volume (i.e., the increase in building volume, if any) arising from the new development project by subtracting the building volume of existing permitted structure from the building volume of the new development project:
New development project building volume – existing structure building volume = net building volume.
iv. Divide the net building volume by the average weighted new building height to get the IDIF applicable floor area of the building footprint (i.e., the increase in square footage of the first floor).
v. Add the IDIF applicable floor area of the building footprint to all other building areas (“other building areas” meaning second floor and above, including any mezzanine areas) to obtain total IDIF applicable square footage.
vi. Multiply total IDIF applicable square footage by IDIF rates to obtain final total IDIF balance.
5. Fee Credits Calculations for Demolition (Change in Development Project Type). Interim development impact fee balance (total interim development impact fees including administrative fees, less any fee credits) for development projects replacing an existing permitted structure with a development project type that is different from the existing permitted structure (e.g., industrial building converting to commercial) shall be calculated based on the following steps:
a. Determine the total IDIF of the new development project, which includes IDIF administrative fees.
b. Determine the fee credit amount. The fee credit shall be the “existing structure net IDIF,” which is the hypothetical total IDIF of the existing permitted structure (i.e., the total IDIF for which the existing permitted structure would be responsible if the existing structure was a new development project subject to the IDIF) minus the administrative fee.
c. Subtract the fee credit (i.e., the existing structure net IDIF) from the total IDIF of the new development project to determine the IDIF balance due.
[(Total IDIF of new development project) – (existing structure net IDIF)] = IDIF balance due. (Ord. 19-1931, § 2)
11801 Fee Credits (Based on Construction of Public Facilities).
If a developer constructs public facilities to satisfy a condition of approval on a development project for which an interim development impact fee is imposed, then the developer may be eligible to receive a fee credit toward the interim development impact fee imposed on the development project. The credit shall be limited to the fee category applicable to the constructed public facility. For example, construction of a park facility may be eligible for a credit against interim development impact fees for parks, but shall not apply as a credit against other fee categories. Fee credits shall be issued in accordance with the following requirements:
A. The developer must enter into a credit agreement with the City prior to receiving credits. If a credit agreement is not in place at the time the interim development impact fees are due to the City, the developer shall pay its interim development impact fee obligation in full or will not receive building permits.
B. The amount of the credit shall be the developer’s reasonable and actual costs of construction, as determined by the City Engineer. The reasonable and actual costs of construction shall not, however, exceed the City’s engineering cost estimates. Notwithstanding the above, the credit shall not be greater than the amount of the fee owed for the relevant fee category. If the credit is less than the fee owed for the relevant fee category, then the developer shall pay the balance of the fee to the City.
C. Credits earned for the construction of a public facility can only be applied to the interim development impact fee category for which the public facility is programmed. Credits shall not apply outside the category for which the public facility is programmed.
D. Credits cannot be applied to the administrative fee.
E. Credits shall accrue when the developer has completed the construction of a creditable improvement and the improvement has been accepted by the City, or when the developer has bonded for the construction of the improvement per the credit agreement with the City and to the satisfaction of the City Engineer.
F. All rights to fee credits shall be personal to the property owner that was financially responsible for building or funding the improvement. The constructing property owner may transfer and/or assign its rights upon sale of the property to the new owner with a written document approved in form and acknowledged by the City. Fee credits shall not be sold and/or transferred to other property owners or guest builders, unless otherwise agreed upon in a written document that has been reviewed and approved by the City Council. Project credits shall not be sold and/or transferred. (Ord. 19-1931, § 2)
11802 Reimbursements.
If a developer constructs public facilities to satisfy a condition of approval on a development project for which an interim development impact fee is imposed, and the cost of constructing the public facility exceeds the amount of the interim development impact fee for the relevant fee category, then the developer may be entitled to a reimbursement for the difference between the cost of construction and the relevant interim development impact fee. Cost reimbursement shall be made in accordance with the following requirements:
A. The developer shall enter into a reimbursement agreement prior to commencing construction of a public facility.
B. The amount of the reimbursement shall be the difference between the fees owed and the developer’s reasonable and actual costs of construction, as determined by the City Engineer; provided, that the reasonable and actual costs of construction shall not exceed the engineering cost estimates included in the reports, unless approved by City Council.
C. The agreement shall set forth the amount to be reimbursed, the time and manner in which payments are to be made, and shall require the City to reimburse the developer from the applicable fund when funds are available.
D. The City’s general fund shall not be used for payment of any obligations rising from a reimbursement agreement under this Section.
E. Reimbursement priority will be determined on a first-in and first-out basis. When funds are available, and no high priority projects need to be financed (as determined by the City Manager), reimbursements will be paid to the developer that first became eligible for reimbursement. Once that developer is paid in full, the developer that next became eligible for reimbursement will be paid until paid in full. A developer will only become eligible for reimbursement after the public facility constructed by that developer is formally accepted by the City Council.
F. The developer shall submit a request for reimbursement in accordance with the reimbursement agreement, including full documentation therefor, no later than one (1) year after the public facility is accepted by the City Council. The time to apply for reimbursement may be extended up to one (1) additional year by the City Council for good cause shown. Failure to submit a timely request for reimbursement shall constitute a waiver of the developer’s right to reimbursement. (Ord. 19-1931, § 2)
11803 Requirements for Construction of Public Facilities.
The construction of public facilities under this Section shall comply with the following requirements. A developer that fails to comply with these requirements shall not be eligible for a credit or reimbursement under this Section.
A. Contracts for the construction of public facilities shall be advertised and awarded in accordance with the requirements of the Public Contract Code and City’s purchasing ordinance (Chapter 6 of Article II) relating to public works projects, or as otherwise directed by City staff.
B. Developer shall ensure compliance with all provisions of the Labor Code regarding payment of prevailing wages and similar provisions, including Labor Code Sections 1720 et seq. and 1810 et seq.
C. Prior to soliciting bids for any portion of the public facilities, developer shall submit to the City for review and approval the bid packet and a set of construction drawings signed by developer or another authorized representative designated by developer for the work being bid. The City’s approval shall be granted or denied within fifteen (15) calendar days after submission of such bid packet. If the City denies approval of such bid packet and construction drawings, the City shall specify the reasons for such disapproval and developer shall resubmit a revised bid packet for review and approval until such approval is obtained.
D. Developer shall provide the City with copies of all bids received from contractors and a bid summary in a form approved by the City to assure that the contractor/subcontractors adhere to the applicable legal requirements for public works projects. The contract or contracts for the construction of the public facilities shall be awarded to the responsible bidder(s) submitting the lowest responsive bid(s) for the construction of the public facilities. Developer shall enter into a construction contract with each contractor selected to perform work on the public facilities (after competitive bidding as set forth above), for the performance of the work set forth in the selected bid, and the terms of each construction contract entered into by developer and each contractor/subcontractor shall be reasonably acceptable to the City. Developer shall submit to City a copy of each executed construction contract for the public facilities within fifteen (15) days after execution thereof.
E. All work shall be done and the public facilities completed as shown on the plans and specifications, as well as any subsequent alterations thereto, mutually agreed upon by City and developer. If developer desires to make any alterations to the plans and specifications resulting in a change order to the contract, it shall provide written notice to the City of such proposed alterations. City shall have ten (10) business days after receipt of such written notice for change or work to administratively approve or disapprove such alterations, which approval shall not be unreasonably withheld, conditioned or delayed. If City fails to provide written notice to developer of its approval or disapproval of the alterations within such ten (10) business day period, City will be deemed to have disapproved such alterations to the plans and specifications.
F. Developer shall complete construction of the public facilities in accordance with the City-approved plans and specifications within one (1) year of the issuance of a building permit, unless both the City and developer agree to an extension in writing.
G. City shall not be responsible or liable for the maintenance or care of, and shall exercise no control over, the public facilities until such public facilities are accepted by City. Developer shall have no obligation to make the public facilities available for public use at any time before the public facilities are accepted by City. Any use by any person of the public facilities, or any portion thereof, shall be at the sole and exclusive risk of developer at all times prior to City’s acceptance of the improvements. (Ord. 19-1931, § 2)
11804 Improvements Not Eligible for Credit or Reimbursement.
Unless otherwise negotiated in the credit or reimbursement agreement between the City and the developer, the developer shall not receive interim development impact fee credits or reimbursements for the following improvements:
A. Interim Public Facilities. A developer may elect, with the approval of the City, to construct interim public facilities pending the construction of needed improvements included in the reports. No credits or reimbursement shall be available for such interim or temporary improvements.
B. Frontage Improvements. Unless otherwise specified in the reports, developers shall not be entitled to credits or reimbursement for the construction of frontage improvements, including concrete curbs, gutters, asphalt concrete street pavement, landscaping, and sidewalks.
C. Utility Undergrounding and Utility Poles. Developers shall be not entitled to credits or reimbursement for the undergrounding of utility devices or relocation of utility poles. (Ord. 19-1931, § 2)