Chapter 15.20
CAPITAL IMPROVEMENT IMPACT FEES
Sections:
15.20.010 Purpose of provisions.
15.20.030 Capital improvement plan.
15.20.040 Determinations – Expenditures.
15.20.050 Localized expenditure – Accounting methods.
15.20.010 Purpose of provisions.
This chapter codifies the principle that new development should fund the cost of the capital improvements required to serve it. This chapter seeks to prevent local government from forcing developers and builders to pay more than their fair or proportionate share of the cost. (Ord. 90-09 § 1, 1990)
15.20.020 Definitions.
As used in this chapter:
A. “Capital improvement” means the following public facilities, services or assets:
1. Water treatment and distribution facilities;
2. Wastewater treatment facilities;
3. Sanitary sewers;
4. Storm and flood control facilities;
5. Road systems;
6. Park and recreation facilities;
7. City administration services;
8. Police services;
9. Fire protection services;
10. Other public facilities, services, the need for which may be substantially attributed to new development.
“Capital improvement,” as described in subsections (A)(1) through (10) of this section, includes improvements that are treated as capitalized expenses according to generally accepted accounting principles.
“Capital improvement,” as described in subsections (A)(1) through (10) of this section, includes costs associated with the administration or replacement of capital improvements, including administrative facilities.
B. “Impact fee” means any charge, fee or assessment levied as a condition of issuance of a building permit or development approval when any portion of the revenues collected is intended to fund any portion of the costs of capital improvements. (Ord. 90-09 § 1, 1990)
15.20.030 Capital improvement plan.
A. The city shall prepare a capital improvement plan including:
1. The area of subareas within the jurisdiction having an aggregation of sites with development potential that could create the need for new capital improvements;
2. Standards for level of service for the capital facilities and infrastructure to be fully or partially funded with impact fees;
3. Proposed area or subarea project lists, cost and estimates and funding sources.
B. Capital improvement plans may include provisions to spread impact fees to their best advantage if those fees will be used as part of the financing for a particular capital improvement, and where expenditure of the funds may be out of the complete control of the governing body. (Ord. 90-09 § 1, 1990)
15.20.040 Determinations – Expenditures.
A. Except as provided for in HMC 15.20.020 and 15.20.030, impact fees shall not exceed the estimated cost of providing capital improvements for which the need is reasonably attributable to those developments that pay the fees. The fees shall be spent on new or enlarged capital improvements that reasonably benefit those developments that pay the fees.
B. Notwithstanding other provisions of this chapter, impact fees may also include a proportionate assessment (or “buy-in” charge) for the cost of existing capital improvements serving new development to determine an equitable assessment for such existing capital improvements, the following factors shall be considered:
1. The need for new capital improvements to serve new development based on a capital improvements plan that shows any deficiencies in existing capital improvements that serve existing development and the means by which existing development will be assessed and assessments used to make up such deficiencies, and any additional demands that are placed on specified capital improvements by new development;
2. The availability of other means to fund capital improvements including, but not limited to, user charges, taxes, intergovernmental transfers, other revenue, and special taxation or assessment districts;
3. The cost of existing capital improvements;
4. The method by which the existing capital improvements were financed;
5. The extent to which developments paying the impact fee have already contributed to the cost of the existing capital improvements and the credit against impact fees that may be due therefrom;
6. The extent to which new development will contribute to the cost of the existing capital improvements in the future (i.e., user fees, debt payments, or proportion of future taxes reasonably expected to be used for future capital costs) and the credit against impact fees that may be due therefrom;
7. The extent to which new development is required as a condition of approval to construct capital improvements that substantially benefit other development and the credit against impact fees that may be due therefrom; and
8. The time-price differential inherent in comparisons of amounts paid and benefits received at different times and the credit against or reduction in impact fees that may be due therefrom.
C. That portion of impact fee revenues attributable to the equitable assessment described in subsection B of this section may be spent on new or enlarged capital improvements that will substantially benefit anticipated future development rather than those developments which have paid the fee.
D. Impact fees that are assessed against new development shall be assessed in such a manner that any new development having the same impacts on capital improvements shall be assessed the same impact fee. This provision notwithstanding, the city may contribute from the general fund any part or all of the impact fee assessed against certain new development that achieves other policies including, but not limited to, the provision of affordable housing and the retention of existing employment or the generation of new employment.
E. Notwithstanding any other provisions of this chapter, impact fees may be established, or may include amounts, for the maintenance and operation of an improvement, provided such fees meet the requirement of California Government Code Section 65913.8, as it is now or may hereafter be amended. (Ord. 90-09 § 1, 1990)
15.20.050 Localized expenditure – Accounting methods.
A. Except as provided in HMC 15.20.040(C), to ensure that those developments paying impact fees receive reasonable benefits, the expenditure of funds shall be localized according to subareas or some other geographical limitation that provides a nexus between those paying the fees and benefits they receive. Fees shall only be spent on those projects specified in the capital improvement plan developed pursuant to HMC 15.20.030.
B. Impact fees shall be deposited in accounts designated solely for such funds. The city shall provide an annual accounting for each impact fee account showing the source and amount of all funds collected and the projects that were funded. (Ord. 90-09 § 1, 1990)
15.20.060 Payment.
To minimize the effect of impact fees on the cost of new development, payment of required fees shall occur on the date of final inspection or the date the certificate of occupancy is issued, whichever is first. However, the city reserves the ability to impose fee collection at an earlier time. (Ord. 90-09 § 1, 1990)
15.20.070 Annual review.
On or about July of each year, the city staff shall review the estimated cost of the described capital improvements, the continued need for those improvements, and the reasonable relationship between such need and the impacts of the various types of development pending or anticipated and for which this fee is charged. The city staff shall report its findings to the city council at a noticed public hearing and recommend any adjustment to this fee or other action as may be needed. (Ord. 90-09 § 1, 1990)