Updates to the Traffic Reduction and Transportation Improvements Fee (TR/TIF) City Council July 24, 2017

Recommendations It is recommended that the City Council: Find that the action proposed herein is exempt from environmental review under the California Environmental Quality Act, pursuant to State CEQA Guidelines Section 15378(b)(4) (definition of “project” does not include funding which does not commit to a project);   Find that the Transportation Development Impact Fee Study complies with California Government Code Section 66001 by establishing the basis for imposition of fees on new development; Amend Municipal Code Section 4.19.040 (A)- Fees of Chapter 4.19 – Traffic Reduction and Transportation Improvement Fee to set the following fee at:   $1.13 per square of net new Industrial Use, $10.79 per square foot of net new retail use, $8.13 per square foot for net new office use, $3,448 per net new unit multi-family residential, $8,905 per net new of single family residential;

Recommendations- Continued Replace Municipal Code Sections 4.19.050 (B) and (C) with an exemption that provides a transition period of six months for development projects to pay at a level equivalent to the current fees; Amend Municipal Code Section 4.19.060 to enumerate the list of transportation improvements funded through the fee as set forth in Attachment “A” hereto; and Direct the City Attorney to prepare an ordinance within 60 days amending Municipal Code Sections 4.19 as set forth above.

What is the TR/TIF (PMC 4.19)? The Traffic Reduction and Transportation Impact Fee was established in 2006 The fee is applied to net new industrial, office, retail, and residential development The fee is calculated on the basis of capital improvements necessary to address impact on the City's transportation system of new development allowed by the 2004 General Plan Update The fee insures that the costs are equitably shared by all new development Complies with California Government Code Section 66001

Exceptions in the TR/TIF Replacement structures that do not increase floor area or unit count; Parking structures, facilities and areas; Affordable Housing Incentives The fee is waived for all on-site for-sale or rental affordable housing units and off-site affordable units receive a 50% discount For-sale or rental workforce housing units with at least 15% of the units at the following levels receive discounts 50% if unit price is 121 to 150% of LA County AMI 35% if unit price is 151 to 180% of LA County AMI

Why update the TR/TIF? The infrastructure needs of the development allowable under the 2015 General Plan differ from those identified for the 2004 General Plan The future infrastructure needs identified in the 2015 General Plan update Continue the transit and traffic management (ITS) facilities identified in the 2004 General Plan Include bicycle and pedestrian facilities not identified in the 2004 General Plan Some of the improvements that the 2006 TR/TIF is based on have been implemented

Updated Fee Elements Updated TR/TIF is (VMT)-based VMT associated with different types of land-uses varies For example, Retail VMT/sq ft is higher than Office VMT/sq ft, hence, higher fees for retail use Elements retained from the 2006 TR/TIF CPI inflation factor for annual adjustment Current fee waivers and discounts for affordable and workforce housing Modified transition provision Allows for six months after adoption for projects in the pipeline to pay a level equivalent to the current fee

Public Facilities Costs To 2035 Facility Category Net Cost Of Facilities % Cost Allocated to New Development* Cost Allocated to New Development Local Transit Improvements (New Development Only) $118,872,426 100% Complete Streets $1,796,000 (New & Existing Development) $3,170,000 8.6% $272,866 Traffic Ops $37,061,630 $3,190,174 Bike Plan $12,300,000 $1,058,754 Pedestrian Improvements $26,628,740 $2,292,135 Total Transportation Improvement Project Costs $199,828,796 63.8% $127,482,356 *Fees can not be used to address existing deficiencies. Allocation represents proportion of costs that are solely attributable to new development.

Methodology – Fee Calc Fee = Future Facilities Cost x New Development VMT $127,482,356 313,101 VMT =$407.16 per daily VMT New Development VMT

Methodology – Fair Share The public facilities (Transit & Complete Streets) with 100% cost allocation directly mitigate impacts of growth by new development The public facilities with 8.6% cost allocation are those improvements that are only partially attributable to new development Based on 265,562 VMTs assigned to future development out of 3,085,150 VMTs total projected for all developments in 2035

Comparison with Current TR/TIF Land Use Category Current Fees Proposed Fees Single Family (per dwelling unit) $2,889.70 $8,905 Multi-family (per dwelling unit) $3,448 Retail (per square foot) $10.01 $10.79 Office (per square foot) $4.31 $8.13 Industrial (per square foot) $3.60 $1.13 Current SF rate is not differentiated from MF rate.

Outreach The Department has been working collaboratively with the business industry associations to review the methodology used to calculate the proposed fee. Pasadena Foothill Association of Realtors (April 12, 2017) Pasadena Chamber of Commerce Legislative Committee (May 16, 2017) Property Managers and developers (May 22, 2017) PDA Economic Enhancement Committee (June 8, 2017) Transportation Advisory Commission (May 25, 2017) for action Planning Commission (June 14, 2017) for information

Commission Recommendations On May 25, 2017, Transportation Advisory Commission (TAC) unanimously approved staff recommendation and recommended that for-profit educational institutions be subject to the updated fee. Staff did not recommend that For-profit educational institutions be subject to the fee On June 14, 2017, staff presented the updated fee to the Planning Commission. Staff’s response to Commission’s comments has been provided in the staff report.

Recommendations It is recommended that the City Council: Find that the action proposed herein is exempt from environmental review under the California Environmental Quality Act, pursuant to State CEQA Guidelines Section 15378(b)(4) (definition of “project” does not include funding which does not commit to a project);   Find that the Report complies with California Government Code Section 66001 by establishing the basis for imposition of fees on new development; Amend Municipal Code Section 4.19.040 (A)- Fees of Chapter 4.19 – Traffic Reduction and Transportation Improvement Fee (TR/TIF) to set the Fee at:   $1.13 per square of net new Industrial Use, $10.79 per square foot of net new retail use, $8.13 per square foot for net new office use, $3,448 per net new unit multi-family residential, $8,905 per net new of single family residential;

Recommendations- Continued Replace Municipal Code Sections 4.19.050 (B) and (C) with an exemption that provides a transition period for development projects to pay at a level equivalent to the current fees for six months following implementation of the recommended fees; Amend Municipal Code Section 4.19.060 to enumerate the list of transportation improvements funded through the fee as set forth in Attachment “A” hereto; and Direct the City Attorney to prepare an ordinance within 60 days amending Municipal Code Sections 4.19 as set forth above.

Project Scenario 1- 131 du/ 5K Retail Please note:  This is only an estimate.  Actual fees and requirements will be determined upon submittal of application. Project 1- Valuation: $21,700,000.00 --- New Residential Units: 131 --- Commercial Retail Square Footage: 5000 --- 2 bed units: 131 Plan Check:   Building: $196,315.00 Zoning: $21,749.00 Design & Historic Preservation: $21,632.00 Code Compliance: $21,776.00 Fire Dept.: $43,574.00 Public Works: $21,839.00      Sub Total: $326,885.00 Permit,_Taxes_,Impact_Fees: $130,878.00 Construction Tax: $416,640.00 SMIP Tax: $4,557.00 Transportation Improvement Fee: $417,306.71 (Proposed fees add $77,000) New Residential Impact Fee: $2,761,409.26 Pasadena Unified School Dist: $1,800.00 CA Building Standards Fee: $868.00 $3,733,458.97      Records Mgmt: $13,732.89      Technology Fee: $108,500.00      Gen Plan Maint Fee: $54,250.00      Processing Fee: $60.00 ESTIMATED FEES $4,236,886.86

Project Scenario 2- 96k Office/16k Retail Please note:  This is only an estimate.  Actual fees and requirements will be determined upon submittal of application. Project 2 - Valuation: $20,000,000.00 Commercial Office Square Footage: 96000 --- Commercial Retail Square Footage: 16000 Plan Check:   Building: $181,015.00 Zoning: $20,049.00 Design & Historic Preservation: $19,932.00 Code Compliance: $20,076.00 Fire Dept.: $40,174.00 Public Works: $20,139.00      Sub Total: $301,385.00 Permit, Taxes, Impact Fees: $120,678.00 Construction Tax: $384,000.00 SMIP Tax: $4,200.00 Transportation Improvement Fee: $559,200.00 (Proposed fees add $380,000) New Residential Impact Fee: $0.00 Pasadena Unified School Dist: $40,320.00 CA Building Standards Fee: $800.00 $1,109,198.00      Records Mgmt: $12,661.89      Technology Fee: $100,000.00      Gen Plan Maint Fee: $50,000.00      Processing Fee: $60.00 ESTIMATED FEES $1,573,304.89

Project scenario 3- 34 du Please note:  This is only an estimate.  Actual fees and requirements will be determined upon submittal of application. Project 3- Valuation: $5,500,000.00 --- New Residential Units: 34 --- 2 bed units: 34 Plan Check:   Building: $50,515.00 Zoning: $5,549.00 Design & Historic Preservation: $5,432.00 Code Compliance: $5,576.00 Fire Dept.: $11,174.00 Public Works: $5,639.00      Sub Total: $83,885.00 Permit,_Taxes_,Impact_Fees: $33,678.00 Construction Tax: $105,600.00 SMIP Tax: $1,155.00 Transportation Improvement Fee: $95,655.94 (Proposed fee adds $19,000) New Residential Impact Fee: $716,701.64 Pasadena Unified School Dist: $0.00 CA Building Standards Fee: $220.00 $953,010.58      Records Mgmt: $3,526.89      Technology Fee: $27,500.00      Gen Plan Maint Fee: $13,750.00      Processing Fee: $60.00 ESTIMATED FEES $1,081,732.47