Stockton Economic Stimulus Plan (SESP) David Kwong Director of Community Development
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1 Economic Stimulus Plan (SESP) David Kwong Director of Community Development November 3, 2015
2 Introduction On October 13, 2015, the City Council conducted a Study Session on the Economic Stimulus Plan. At the Study Session, City staff made a presentation on the impacts of the SESP and provided an update on the General Plan. City Council directed the SESP to be placed on the November 3, 2015 agenda for consideration and directed staff to provide recommendations to encourage development in Downtown and South. On October 20, 2015, Councilmember Zapien requested that an alternate proposal be placed on the next Council agenda for consideration, and Council concurred. The meeting tonight was noticed as a public hearing to allow City Council more flexibility to act given the different proposals.
3 Why are PFF s established? New development projects cause the need for construction, expansion or improvement of Public Facilities within the City of. California law Cities typically use a combination of specific project conditions and a PFF program to mitigate development impacts. Cities balance project conditions and PFF amounts differently.
4 What is the background of PFF s? PFF s are known as Development Impact Fees. Cities construct PFF programs based on local preferences. General Plan was adopted in City established PFF program in 1991 based on service standards identified in the 1990 General Plan for new development.
5 Community Development Department November 2015 Single Family Home in, CA 2,070 square foot area & $322,000 Valuation in Lodi Unified School District Permit Fee % by Category 3% 7% PFFs Permit, Plan Check, Processing Fees Special Fees 90%
6 What are the three categories of permit fees in the City? Processing Fees: charges to issue and approve permits, such as Plan Check services and inspection services. Special Fees: charges dedicated to a specific function or program within the Community Development Department such as Flood Plain Management, Technology, and General Plan Maintenance and Implementation. PFFs: charges to offset increased City capital project costs caused by new development.
7 Community Development Department November 2015 Single Family Home in, CA 2,070 square foot area & $322,000 Valuation in Lodi Unified School District PFF's by % 33.5% 28% Public Buildings, Street Improvements, Parks Utilities.5% Mitigation 39% Other Agency/Pass Through
8 What is a PFF in? They include: Public Buildings, Street Improvements, & Parks Utilities Delta Water Supply, Water Surface Fee, Water Connection Fee, Wastewater, & Administration Fees Mitigation Air Quality & Agricultural Land Pass Through/Other Agency County Facility Fee, School District Fees, Habitat Mitigation Fees, & Regional Transportation Impact Fee
9 How have PFF s changed since 1991? 2003 Inflationary Adjustments 2005 Amended Nexus 2007 General Plan 2035 Adopted 2008 Infrastructure Studies for General Plan 2035 (not adopted) 2010 PFF Reduction Program Established
10 The Current PFF Reduction Program Resolution # authorized the current PFF reduction program in residential and nonresidential projects in September Resolution # authorized the current PFF reduction program in multi family projects in November Resolution # extended the PFF reduction program through December 31, 2015.
11
12 Figure 1 Residential v. Industrial/Commercial Last 5 Years Permit Valuation 140,000, ,000, ,000,000 Permit Valuation 80,000,000 60,000,000 40,000,000 20,000,000 FY FY FY FY FY Residential Industrial/Commercial NOTE: Total building permit valuation increased from FY to FY by 103% (from $105.9 million to $214.9 million).
13 The UOP Study A study of the economic impact of the construction of 1,000 homes in a year. The projected economic output of 1,000 homes generates a potential benefit of $492 million to San Joaquin County. The study does not estimate the impact to City revenues. The study does not estimate the increased cost to mitigate the impact of development. The study does not estimate the increased cost of ongoing services associated with increased housing and population. The study does not estimate baseline conditions for the housing market or projected changes in the market absent a stimulus package.
14 DISTRICT # OF VACANT RESIDENTIAL LOTS (filtered by greater than 5,000 square foot lots) District District 2 59 District 3 17 District District District TOTAL 2,165
15 Figure 2 University of Pacific March 2015 Study % of Permit Fee for Single Family Home Square Footage = 2,070 & Valuation = $322,000 Note: Blue fields = PFF components Special Fees 4% Pass Through/Other Agency 25% Permit/Plan Check/Processing Fees 7% Public Buildings, Street Improvements, & Parks 23% Public Buildings, Street Improvements, & Parks Utilities Mitigation Pass Through/Other Agency Special Fees Mitigation 4% Utilities 37% Permit/Plan Check/Processing Fees
16 Figure 3 University of Pacific Study March 2015 Single Family Home in, CA 2,070 square foot area & $322,000 Valuation Fee Type Fee Amount Without Reduction Program Fee Amount With Reduction Program (Used in Study) Economic Stimulus Proposal (SESP) Total Reduction Per Unit Public Buildings, Street $20,173 $20,173 $20,173 $0 Improvements, & Parks Utilities $20,874 $20,874 $20,874 $0 Mitigation $2,246 $2,246 $2,246 $0 Pass Through/Other Agency $14,058 $14,058 $14,058 $0 Current PFF Reduction Program (Public Buildings, Street Improvements, & Parks Only) $0 $7,650 $7,650 $7,650 SUB TOTAL $57,351 $49,701 $49,701 $0 SESP PFF Reduction $0 $0 $17,000 $17,000 GRAND TOTAL $57,351 $49,701 $32,701 $24,650 * Information compiled by Dr. Michael using BIA estimates, City on line fee estimator, SJCOG, and Lodi USD website.
17 Community Development Department November 2015 Single Family Home in, CA 2,070 square foot area & $322,000 Valuation in Lodi Unified School District klk Permit Fee Category Permit Fee Amount with Current Reduction 2,070 square foot area & $322,000 Valuation Permit, Plan Check, & Processing Fees 3,704 Special Fees 1,291 Public Buildings, Street Improvements, & Parks 19,997 Current PFF Reduction Program 7,538 Economic Stimulus Proposal (SESP) Remaining Public Buildings, Street 12,459 $17,000 Improvements, & Parks Utilities 17,237 Mitigation 187 Pass Through/Other Agency 14,644 GRAND TOTAL $49,522 $37,076
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19 Geographic Based Permit Fee Scenarios Permit Fee Scenario Characteristics: 2,070 square foot home $322,000 valuation all permit fee categories included such as PFFs, school fees, habitat, processing fees, etc. 4 Permit Fee Scenarios Developed: 2 Scenarios in North Identical permits with the exception of different school fees between Lodi Unified School District and Unified School District. 1 Scenario in Downtown 1 Scenario in South
20 Scenario Summary Table Single Family Home in, CA Scenario 1: Single Family Residence 2,070 square foot $322,000 Valuation North North 2 Central South Lodi USD fees USD fees USD fees USD fees Permit, Plan Check, Processing Fees 3,704 3,704 3,704 3,704 Special Fees 1,291 1,291 1,291 1,291 Public Buildings, Street Improvements, Parks 12,459 12, ,459 Utilities 17,237 17,237 7,337 7,337 Mitigation Other Agency/Pass Through 14,644 19,198 16,528 16,528 TOTAL 49,522 54,076 29,047 41,506
21 Scenario Summary Table Single Family Home in, CA Scenario 1: Single Family Residence 2,070 square foot $322,000 Valuation North North 2 Central South Lodi USD fees USD fees USD fees USD fees Permit, Plan Check, Processing Fees 3,704 3,704 3,704 3,704 Special Fees 1,291 1,291 1,291 1,291 Public Buildings, Street Improvements, Parks 12,459 12, ,459 Utilities 17,237 17,237 7,337 7,337 Mitigation Other Agency/Pass Through 14,644 19,198 16,528 16,528 TOTAL 49,522 54,076 29,047 41,506
22 What are the financial impacts of PFF reductions? Existing PFF Reduction Program reduced revenues by $4.8 million to date The SESP would reduce revenues another $22.10 million The cumulative revenue reduction would be $27 million
23 Conclusion City Council expressed interest in encouraging development in by waiving the collection of Public Facilities Fees and asking staff to propose specific additional fee reductions for South and Downtown. The existing PFF Reduction program has not overcome prevailing economic factors or resulted in a significant increase in development. The options presented would have potential financial impacts depending on the City Council action taken. Establishing a fee waiver program based on existing infrastructure in anticipation of PFF program revisions after completion of the General Plan process and associated nexus study would be reasonable. City staff recommend that the Council only consider reductions to the PFFs identified as Public Buildings, Street Improvements, and Parks to maximum amount of $12,459.
24
25 Single Family Home in, CA Lodi Unified School District with 2,070 square foot area & $322,000 Valuation Permit Fee Category LODI FEES Per unit fees* STOCKTON FEES with Current Reduction Economic Stimulus Proposal (SESP) STOCKTON FEES with Current Reduction (minus DWSP/Surface Water) Permit, Plan Check, & Processing Fees 5,856 3,704 3,704 Special Fees n/a 1,291 1,291 Public Buildings, Street Improvements, & Parks 5,903 20,173 20,173 Current PFF Reduction Program 3,282 7,650 7,650 Remaining Public Buildings, Street Improvements, & Parks 2,621 12,523 $17,000 12,523 Utilities 8,687 17,237 17,237 Utility Reductions 5,368 0 $9,333 Remaining Utility Fees 3,319 17,237 7,904 Mitigation n/a Pass Through/Other Agency 14,049 14,644 14,644 GRAND TOTAL $25,845 $49,586 $32,586 $40,253 *Source: City of Lodi, Development Impact Fee Summary Sheet. Pass Through = RTIF/Strong Motion/LUSD/SJCo Facility Fees/Habitat
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