TO: Board of Supervisors
FROM: Ryan J. Alsop, County Executive Officer
REPORT BY: Becky Craig, Assistant County Executive Officer
SUBJECT: Development Impact Fees Study
RECOMMENDATION
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Approve and authorize Agreement No. 250100B with Willdan Financial Services to conduct a nexus study for Affordable Housing, Traffic, Utility Connections, and Small Woodland Conversion mitigation projects. (Fiscal Impact: $68,460 Expense; General Fund; Budgeted; Discretionary)
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BACKGROUND
A development impact fee is a monetary exaction other than a tax or special assessment that is charged by a local governmental agency to an applicant in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project. (Gov. Code § 66000(b).) The legal requirements for enactment of development impact fee programs are set forth in Government Code §§ 66000-66025 (the "Mitigation Fee Act"), the bulk of which were adopted as 1987’s AB 1600 and thus are commonly referred to as “AB 1600 requirements.” A development impact fee is not a tax or special assessment; by its definition, a fee is voluntary and must be reasonably related to the cost of the service provided by the local agency. If a development impact fee does not relate to the impact created by development or exceeds the reasonable cost of providing the public service, then the fee may be declared a special tax and must then be subject to two-thirds voter approval. (Cal. Const., Art. XIII A, § 4.)
Napa County currently administers two development impact fee programs - Napa Valley Business Park Traffic Mitigation Fee (TMF) and the Affordable Housing Fee. The TMF was adopted in 1990 and last updated in November 2021. This program is operating as intended and is not proposed for review this year.
The County adopted an Affordable Housing Trust Fund Ordinance in 1992, which created a Housing Trust Fund to assist with the development of affordable housing in Napa County. The Ordinance was based upon a Jobs-Housing Nexus Study conducted by the County and established a housing impact fee on non-residential construction and an inclusionary housing requirement on residential construction. The non-residential component of the program was updated and revised in 2004 and again in 2014; the residential component was revised in 2009. The current inclusionary program has an in-lieu fee option available to all new construction and virtually all residential projects have paid the in-lieu fee. The purpose of a nexus study is to quantify and document the linkages among construction of new workplace buildings, the employees that work in them, and the demand for affordable housing. Likewise, nexus studies explore the linkages between new residential construction, the expenditures of new households in Napa, new jobs generated by the expenditures, and the demand for additional affordable housing units. The nexus analysis will need to demonstrate a reasonable relationship between the fee and the demand for affordable housing created by new residential and commercial development.
The Board of Supervisors recently discussed an interest to review and update this fee program. Additionally, the County’s approved and HCD-certified Housing Element contains a program requiring that the Affordable Housing Fee be updated.
Staff solicited consultant proposals to study the Affordably Housing fee program and additional possible developer impact fee programs, including Traffic and Small Woodland Conversion. Staff also recommends updating the water and sewer utility connections in LBRID and NBRID. Each program will ensure nexus of development impact with potential projects consistent with the County’s General Plan and cannot mitigate any existing deficiencies, as required by established and recent case law. Community input and comparisons with other jurisdictions will be incorporated. Fee adoption will provide developers an alternative for mitigating their fair share of impacts.
Requested Action:
1. Approve agreement
FISCAL & STRATEGIC PLAN IMPACT
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Is there a Fiscal Impact? |
Yes |
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Is it currently budgeted? |
Yes |
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Where is it budgeted? |
Central Services |
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Is it Mandatory or Discretionary? |
Discretionary |
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Discretionary Justification: |
Provide developers with a mechanism to address impacts through fee nexus. |
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Is the general fund affected? |
Yes |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The proposed action is not a project as defined by 14 California Code of Regulations 15378 (State CEQA Guidelines) and therefore CEQA is not applicable.