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

2. 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 by establishing the basis for imposition of fees on new development;
Amend Municipal Code Section (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;

3. Recommendations- Continued
Replace Municipal Code Sections (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 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.

4. 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

5. 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

6. 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

7. 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

8. 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.

9. Methodology – Fee Calc
Fee = Future Facilities Cost x New Development VMT
$127,482, ,101 VMT =$ per daily VMT
New Development VMT

10. 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

11. 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.

12. 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

13. 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.

14. 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 by establishing the basis for imposition of fees on new development;
Amend Municipal Code Section (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;

15. Recommendations- Continued
Replace Municipal Code Sections (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 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.

16. 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, New Residential Units: Commercial Retail Square Footage: 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

17. 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, Commercial Office Square Footage: 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

18. Project scenario du
Please note:  This is only an estimate.  Actual fees and requirements will be determined upon submittal of application.
Project 3- Valuation: $5,500, New Residential Units: 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