1. Department of Public Works Recommended Residential Impact Fee Distribution Methodology Change October 26, 2015

2. Department of Public Works Recommendations 1.Find proposed amendments exempt from environmental review per CEQA 2.Adopt resolution governing Residential Impact Fee (RIF) a.20% of each fee placed in a reserve to fund projects in any RIF park zone b.If Recreation & Parks Commission (RPC) & Council approve, allow for 100% RIF balance to fund park acquisition and/or projects of citywide significance 3.Direct City Attorney to prepare ordinance amending section 4.17.030 of PMC to add definition of “projects of citywide significance.” 2

3. Department of Public Works 1.20% of each fee placed in a reserve to fund projects in any RIF park zone 2.If RPC & Council approve, allow for 100% RIF balance to fund park acquisition and/or projects of citywide significance 3.Projects of Citywide Significance – > Acquire &/or develop new park space in gap areas > Identify park/recreation deficiency & serve broad section of population > Create/enhance a one-of-a-kind recreation facility 3 Recreation & Parks Commission Recommendations

4. Department of Public Works RIF History 4 DATEDESCRIPTIONISSUESOLUTION/CHANGE 1988RIF createdNeed to mitigate impact of increased population on parks Est. RIF at $650 per unit. 60% to neighborhood park 30% to community park 10% to citywide parks (Arroyo) 1992RIF increasedFee increase due$650 $756 per unit based on increased land value 2000RIF distribution methodology changed Took too long to amass sufficient funds to complete a park project 3 park zones established. Fee distribution changed: 90% remains in park zone 10% to citywide parks

5. Department of Public Works RIF Park Zone Map 5

6. Department of Public Works RIF History & Background 6 DATEDESCRIPTIONISSUESOLUTION/CHANGE 2002Fee increasedFee not generating much revenue & not reviewed since 1992 Increased from $756 to $1,604 per unit based on increased land value 2003Fee increasedFee calculation evaluated RIF increased from $1,604 to $3,659 per unit due to updated data 2004Fee increasedRIF Nexus Study conducted Based on findings of Nexus Study, fee increased from $3,659 to $19,743 per unit as follows: Year 1 - $10,977 Year 2 - $19,743 Affordable - $756

7. Department of Public Works RIF History & Background 7 DATEDESCRIPTIONISSUESOLUTION/CHANGE 2005Fee restructured High fee could harm construction of affordable housing New fee structure based on # of bedrooms: Studio - $14,588 1 Bed - $15,395 2 Bed - $17,098 3 Bed - $19,662 4 Bed - $23,890 5+ Bed - $27,003 Affordable units & student housing - $756 2007Fee modifiedHigh fee could harm construction of care facilities for elderly $756 fee set for skilled nursing units in residential care facilities for elderly

8. Department of Public Works RIF History & Background 8 DATEDESCRIPTIONISSUESOLUTION/CHANGE 2014Nexus Study Updated Nexus Study not done since 2004 New Nexus Study justifies 41.6% increase to RIF. Staff recommended and Council approved 5% increase 2015Current FY 2016 fee amounts New fee amounts approved July 1, 2015 Studio - $17,562 1 Bed - $18,533 2 Bed - $20,583 3 Bed - $23,670 4 Bed - $28,760 5+ Bed - $32,507 Affordable, student housing & RCFE - $910

9. Department of Public Works RIF History & Background 9 DATEDESCRIPTIONISSUESOLUTION/CHANGE 2014Expanded allowable use of RIF Needed mechanism to allow RIF to purchase land for pocket parks Pocket park classification added to PMC allowing RIF to be used to acquire land for pocket parks 2014Develop flexibility in RIF use Use of RIF bound by zones Council requested staff & Recreation & Parks Commission to develop RIF distribution method to provide flexibility in use

10. Department of Public Works Flexibility Objectives 1.Provide more flexibility in where, geographically, RIF funds may be used 2.Fund & build larger, more expensive projects with costs that exceed available revenue in single zone 3.Address General Plan, Open Space & Conservation Element’s implementation measure to “Develop plan to establish fixed ratio for spending the RIF so that it emphasizes acquisition…” 10

11. Department of Public Works Allocation Methods Considered Option 1 - 20% Flexible Reserve Option 2 - Parkland Acquisition &/or Projects of Citywide Significance Option 3 - Status Quo 11

12. Department of Public Works 20% Flexible Reserve 20% of each RIF set aside & available to fund any project irrespective of park zone where the fee originated 12

13. Department of Public Works Acquisition/Significant Projects Entire RIF balance could be used to acquire land for parks or for projects of citywide significance Citywide significance definition: 1.Acquires &/or develops new park space in an identified gap area 2.Addresses identified park/recreation deficiency & serves broad section of residents 3.Creates or enhances a one-of-a-kind park facility 13

14. Department of Public Works Park Gap Analysis Map 14

15. Department of Public Works RIF Balances as of 6/30/15 15 Park Zone RIF Balance 6/30/15 West $383,657 Central $6,393,436 East $1,448,298 Citywide (Arroyo) $713,765 Sub-Total $8,939,156 Interest $638,439 Total $9,577,595

16. Department of Public Works Hybrid Option Selected Combines both Flexible Reserve and Park Acquisition &/or Projects of Citywide Significance options Hybrid option addresses the 3 RIF Allocation Analysis Objectives by adding flexibility & providing mechanism to acquire additional parkland 16

17. Department of Public Works Fiscal Impact This change in policy will not affect the amount of RIF collected but will provide greater flexibility in how the money can be spent on park projects 17

18. Department of Public Works Pocket Park Update New project in FY 2016 CIP budget, Pocket Park Planning – Citywide FY 2016 – 2020 Project provides for detailed studies & planning for potential pocket park locations, over 70 of which have been identified to date All sites have been or will be evaluated based on following criteria established City Council: parcel size; proximity to other parks; park development potential; & public access 18

19. Department of Public Works Questions Questions? 19

20. Department of Public Works RIF Options Matrix 20