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 CITY COUNCIL AGENDA ITEM NO. 18


Meeting Date: September 24, 2002

Subject/Title: Public Hearing for Benefit District Formation and Agreement for Benefit District No. 4, Subdivision Map No. 8048, Lafferty Homes

Submitted by: Engineering: B. Grewal/B. Bornstein

Approved by: John E. Stevenson, City Manager



RECOMMENDATION
Approve a Resolution approving the establishment of an overlay district for Benefit District No. 4 in the Brentwood Development Fee Program, approving the distribution of costs and method of payment proposed in Benefit District No. 4 and authorizing the City Manager to sign the Benefit District Formation Agreement for Benefit District No. 4, Subdivision No. 8048, Lafferty Homes.

PREVIOUS ACTION
None

BACKGROUND
Lafferty Homes was conditioned to construct certain Sub-Master Planned Facility Improvements for sewer collection to accommodate the development of a portion of the Garin Ranch area. This area is generally within a ¼ mile radius of the intersection of Garin Parkway and Chestnut Street.

Sub-Master Plan Improvements are the portion of the improvements, which are the owner’s obligation to construct without reimbursement from the City, yet which benefit properties in the vicinity of Chestnut Street, which will develop in the future (“Benefiting Properties”). Sub-Master Plan Facilities benefit the Benefiting Properties inasmuch as there is a reasonable relationship between the impacts of the proposed development of those properties and the need for the Sub-Master Plan Improvements.

FISCAL IMPACT
The City bears no obligation for the cost of these improvements, but by the proposed agreement the City agrees to utilize it’s best efforts to impose the pro-rata share of the Sub-Master Plan Improvement costs to be paid by the Benefiting Properties as they develop. Additionally, there is no fiscal impact to the City for the formation of the district as all costs have been born by Lafferty Homes and the proposed agreement also provides for 3.0% of all proceeds collected will remain with the City to cover any associated costs over the life of the district. 

Attachments:
Resolution
Site Map
Agreement
Engineer’s Report 

RESOLUTION NO. 

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING THE ESTABLISHMENT OF AN OVERLAY DISTRICT FOR BENEFIT DISTRICT NO. 4 IN THE BRENTWOOD DEVELOPMENT FEE PROGRAM, APPROVING THE DISTRIBUTION OF COSTS AND METHOD OF PAYMENT PROPOSED IN BENEFIT DISTRICT NO. 4 AND AUTHORIZING THE CITY MANAGER TO SIGN THE BENEFIT DISTRICT FORMATION AGREEMENT FOR BENEFIT DISTRICT NO. 4, SUBDIVISION NO. 8048, LAFFERTY HOMES.


WHEREAS, the oversized public sewer improvements are the owner’s obligation to construct without reimbursement from the City of Brentwood Master Plan Facility Fee Program; and

WHEREAS, the developer constructed oversized, supplemental size, capacity, number, or length public improvements which benefit properties not within the subdivision and that those improvements are to be dedicated to the public in the vicinity of Developer’s Property; and

WHEREAS, the public improvements are further defined in that certain Reimbursement Agreement, adopted pursuant to Government Code section 66485, et seq., between Developer and the City (the “Agreement”) proposed to be approved by the Council concurrently with this Resolution, and which is attached hereto incorporated herein as Exhibit 1; and

WHEREAS, this Resolution and the Agreement are governed by the Brentwood Municipal Code Section 16.120.100; and

WHEREAS, an Engineer’s Report has been prepared, and is attached to the Agreement as required by the B.M.C. §16.120.100; and

WHEREAS, the Engineer’s Report and supporting data were available for public inspection and review for ten (10) days prior to the public hearing on the Resolution and Agreement; and

WHEREAS, the City Council has considered all verbal and written testimony, has considered the staff report presentation and has considered all of the documentation referred to therein and herein.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood does resolve as follows:

Section 1. Findings

The Council makes each of the following findings:

A. The purpose of the Reimbursement Agreement is to establish a new development fee relating to the pro rata share of the costs incurred to construct the supplemental size, capacity, number, or length of the public improvements to be spread between the developer and the properties in the vicinity of the development which will benefit from the improvements (“Benefiting Properties”). These Benefiting Properties are explained in the Engineer’s Report. As set forth in the Agreement, the City is not responsible for payment of the costs incurred to construct the improvements and cannot guarantee the Benefiting Properties will in the future develop.

B. The fee implements policies of the City of Brentwood General Plan as amended November 2001, including the policies that “new development shall contribute its fair share of the cost of on and off-site public infrastructure and services. This shall include installation of public facilities, payment of impact fees, and participation in a Capital Improvement Financing Program. (Growth Management Policy 1.1.6), “[With respect to public safety], the City shall ensure that impact fees are collected and shall work with the developers to establish mitigation measures to ensure that adequate facilities will be available…” (Growth Management Policy 1.4.4) and “[With respect to traffic standards] the City will adopt and implement a development mitigation fee that covers the cost of mitigating the development’s share of improvements on basic and regional routes as well as the cost of maintaining Brentwood’s identified service and/or performance standards.” The fee also is consistent with the City’s other development fee policies.

C. The City approves of the Engineer’s Report.

D. The Engineer’s Report establishes:

1. That there is a reasonable relationship between the fee’s use and the type of development on which the fee is imposed, particularly because the report narrowly defines and applies the fee to just those properties who will benefit from the supplemental size, capacity, number, or length of the public improvements if and when they develop; and

2. That there is a reasonable relationship between the need for these oversized public improvement and the impacts of the type of development anticipated upon the benefiting properties for which the fee is charged; and

3. That there is a reasonable relationship between the amount of the fee and the cost of the oversized public improvements or the portion thereof attributable to the benefiting properties upon which the fee is imposed; and

4. That the cost figures set forth in the Engineer’s Report and other City fee studies and supporting documentation are reasonable for constructing these facilities, and the fees expected to be generated by the benefiting properties in the future will not exceed the total costs of constructing the oversized public improvement, and further that the calculation of the fee takes into account the pro rata share of the costs made by the Developer who constructed the improvements.

E. The method of allocation of the Benefit District Fee to a particular benefiting property bears a fair and reasonable relationship to that property’s future development burden on, and benefit from, the facility to be funded by the fee and the City’s administrative processing burden from implementing the Reimbursement Agreement.

F. Pursuant to Government Code Section 66485, et seq., the fees will be collected for public improvements or facilities are to reimburse the Developer for expenditures previously made.


Section 2. Fees Imposed:

A. In addition to otherwise applicable development fees, the benefiting properties shall pay the Reimbursement Agreement Fee as set forth in the Engineer’s Report, as may be adjusted, without interest or inflation as required by B.M.C. §16.120.100((A)(7). Fees shall be charged and paid in the amounts existing at the time of issuance of a building permit.

B. The Reimbursement Agreement Fee established herein is adopted and implemented by the City Council in reliance on the Engineer’s Report and other studies that have been prepared by the City and consultants to the City. During the coming years, the City will continue to gather additional information that may affect the type and timing of development of the Benefiting Properties, the nature of the Sub-Master Planned Improvement, the relationship between the Sub-Master Planned Improvement and other improvements serving a similar purpose, and other information that may change the fee calculations. Notwithstanding any term or condition of any land use entitlement granted by the City, it is existing policy that the City Council may revise the fees to incorporate the findings and conclusions of further studies and any revisions in the City’s governing documents, including its General Plan, and that such revisions shall apply to any prior approved projects.

Section 3. Effective Date of Benefit District Fee and Expiration Date:

The Reimbursement Agreement Fee provided in this Resolution shall be effective after the adoption of this Resolution. The Reimbursement Agreement fee shall expire ten (10) years after the City Council accepts any or all portions of the oversized public improvements.

Section 4. Severability:

Each component of Reimbursement Agreement and all portions of this Resolution are severable. Should any individual component of the fee or other provision of this Resolution be adjudged to be invalid and unenforceable, the remaining provisions shall be and continue to be fully effective, and the fee shall be fully effective except as to that portion that has been judged to be invalid.

Section 5. Exemption from California Environmental Quality Act (CEQA):

The City Council finds that CEQA does not apply to the adoption of this Resolution, pursuant to Sections 15061 and 15273 of the State CEQA Guidelines because:

A. The fees established by this Resolution will be collected for the purposes of obtaining funds for capital projects necessary to maintain to current levels of service within existing service areas to serve new development.

B. To the extent that any fees authorized by this Resolution will be used to fund new facilities, the construction of those facilities will not take place until there has been CEQA review of the development projects that will pay the fees, and the construction of each public facility will be subject to CEQA review. Therefore, it can be seen with certainty that the adoption of this Resolution establishing a Reimbursement Agreement Fee will not have a significant effect on the environment.

BE IT FURTHER RESOLVED that the City Council of the City of Brentwood does hereby approve the establishment of an overlay district for Benefit District No. 4 in the Brentwood Development Fee Program.

BE IT FURTHER RESOLVED that the City Manager is hereby authorized to sign the Reimbursement Agreement with Lafferty Homes on behalf of the City.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 24th day of September by the following vote:

REIMBURSEMENT AGREEMENT 


THIS REIMBURSEMENT AGREEMENT (“Agreement”) is entered into at Brentwood, California, this 24th day of September 2002, by and between the CITY OF BRENTWOOD, a municipal corporation (“City”) and Lafferty Homes.

A. Developer is the owner of that certain real property located in the City of Brentwood, County of Contra Costa, State of California, commonly known as Subdivision 8048, as shown in the attached Engineer’s Report for Benefit District No. 4, 

B. Public sewer improvements are required to be constructed along Chestnut Street from Subdivision 8048 to Sellers Avenue. The Developer has constructed certain public sewer improvements or facilities (“Improvements”) which are identified in the City’s Infrastructure Master Plan, Instructure Element of the General Plan or Capital Improvement Plan. These Improvements are currently available for public use. The Improvements are more particularly described in the Engineer’s Report for Benefit District No. 4 attached hereto.

C. In connection with the development of the Property, Developer intends to pay for the construction of certain needed public sewer improvements for the Property. The Improvements contain excess capacity, supplemental size, number and length which benefits properties not within the Property.

D. Pursuant to the Subdivision Map Act (Government Code section 66410, et seq.) the Developer has requested and is entitled to reimbursement for that portion of the costs of the Improvements, including amounts attributable to administration costs, in excess of its fee obligation as shown in the City of Brentwood’s Developer Fee Program (“Reimbursable Costs”).

E. City has agreed to administer the reimbursement of costs to Developer as set forth herein.

F. City and Developer agree to abide by the City Council procedure for a Reimbursement Agreement, as set forth in the Brentwood Municipal Code, Chapter 16.120. This Reimbursement Agreement is not governed by any specific duty of the City under State or Federal law, but is an exercise of discretion under its police power to regulate the use land within its jurisdiction. 

NOW, THEREFORE, it is agreed as follows: 

Section 1. Improvements.

The Improvements are to be constructed, installed and financed by Developer and will benefit other properties throughout the City. Pursuant to sections 66485, et seq. of the Subdivision Map Act and Brentwood Municipal Code, Sections 16.130.030 and 16.130.040, Developer is entitled to recover the Reimbursable Costs of the Improvements from the property owners of benefited properties as described in the Engineer’s Report for Benefit District No. 4. The construction of the Improvements and the related work to be performed by Developer, which are subject to reimbursement pursuant to this Agreement, are more fully described in the Engineer’s Report for Benefit District No. 4.

Developer shall be solely responsible for designing, bonding, financing, constructing, installing, permitting, and providing for inspections of the Improvements.

Section 2. City

City has caused an Engineer’s Report to be prepared, which includes an analysis of the benefitted properties, a detailed map showing the benefitted properties, and the distribution of costs of constructing the Improvements among the Developer’s property and Benefitted Properties. Developer has reviewed and approves said Engineer’s Report, which is attached hereto as Engineer’s Report for Benefit District No. 4.
.
The Reimbursement Agreement Fee shall not exceed the reasonable construction costs as approved by the City Engineer and shall not be adjusted over time. The Reimbursement Fee is over and above the otherwise applicable development fee charged against developing property by the City.

Prior to the City’s approval of this Agreement, the City shall provide a notice of public hearing before the City Council, which shall be mailed, to the Developer and the Contra Costa County Assessor’s record owner of the benefitted properties. City Council shall conduct a public hearing prior to its approval of this Reimbursement Agreement.

City shall conduct the public hearing to consider adoption of the Reimbursement Agreement and associated fees, after considering all comments or protests. The City reserves the right to adjust the Engineer’s Report in its sole discretion according to the evidence presented at the public hearing. Certain properties identified as a Benefitted Property in the Engineer’s Report may be excluded or fee reduced or adjusted upward. If certain properties were excluded as Benefitted Properties, the public hearing shall be continued to date specific.

Developer recognize that the Reimbursement Agreement fee is formulated with respect to the type of development anticipated upon the Benefitted Properties based on current General Plan and current zoning, the existence of any City entitlements to develop and non-participation in a City Capital Improvement Financing Program covering the same improvements. Therefore, the inclusion of some properties in the Benefitted Properties in the Reimbursement Agreement are subject to change as the aforementioned formulation criteria change over the term of this Reimbursement Agreement. 

Section 3. Reimbursable Costs.

An estimate of costs for the construction of the improvements and other related items is set forth in the Engineer’s Report attached hereto as the Engineer’s Report for Benefit District No. 4. The total reimbursable amount for Improvements shall be based on actual construction costs as determined by City Engineer based upon such items as submitted invoices and verified payments. The parties acknowledge and agree that the estimated reimbursement under this Agreement shall be $361,619.00.

Section 4. Reimbursement

Developer shall be reimbursed through cash payments, as shown in the Engineer's Report . 

City shall reimburse Developer from appropriate fees from benefited property owners at the time of the final map on the benefitted properties acceptance by the City or building permit issuance, at the sole discretion of the City Engineer. It is understood and agreed that the City shall distribute any Reimbursement Fee, as hereinafter defined, provided by this Agreement to Developer or its successors in interest or assigns.

Section 5. Developer’s Share.

Developer's share of the costs of the Improvements shall be deemed contributed upon the completion of construction of the Improvements and the acceptance thereof by the City, subject to the receipt of the Reimbursable Costs as herein provided.

Section 6. Establishment of Fee.

The City shall attempt to collect from the Benefited Property owners the Reimbursement Agreement Fee, but it is recognized by the parties that the City is not obligated to reimburse the Developer as provided in the Agreement. The City does agree to use its best efforts to collect the Reimbursement Agreement fee, but such efforts are preconditioned upon the Benefitted Properties applying for a subdivision map(s) or applying for and obtaining building permits from the City during the term of this Reimbursement Agreement.

Section 7. City Administration.

Developer agrees to pay City’s reasonable costs incurred in obtaining Reimbursement Agreement at the rate of 3% of the fees collected. City’s costs shall be passed though to the Benefitted Properties.

Section 8. Time of Collection.

The City shall require payment of the Reimbursement Fee as a condition of approval of a tentative map, final parcel map, final subdivision map, or the issuance of a building permit for any development of benefited property, except the Developer at the sole discretion of the City Engineer. The City shall attempt to collect the Reimbursement Fee at the time of the filing of any final subdivision map or parcel map for buildable lots or upon the issuance of a building permit for any development of property within the City that is subject to the Reimbursement Fee, except the Developer. During the term of this Agreement, the City shall tender the Benefit District Fee collected during the fiscal year, if any, to Developer twice annually, the first in December prior to the 31st and the second in June prior to the end of the City’s fiscal year. Developer shall be entitled to reimbursement of actual costs, subject to City Engineer’s review and approval described in this Agreement, and as set forth in the Engineer’s Report for Benefit District No. 4.

Section 9. Manner of Disbursement.

Subject to reimbursement payments as described in Paragraph 2 of this Agreement, the City's payment shall be to Developer and shall continue notwithstanding the subsequent sale or transfer of the Property. Developer shall have the right, in its sole discretion, to assign its interest to the Reimbursement Fees or payments to another person or entity at any time by providing the City written notice of such assignment.

Developer hereby direct that any Reimbursement Fees or payments due to Developer pursuant to this Agreement shall be payable to Developer and mailed to:

Lafferty Homes
Attn: Rick Lafferty
3180 Crow Canyon Place, Ste 255 
San Ramon, CA 94583

Developer may change the payee and/or address of payments by notice in writing to City, such notice to be effective upon receipt by City.

Section 10. Indemnity and Insurance.

Developer shall defend, indemnify and hold City, its elected officials, officers, employees, and agents free and harmless from any and all liability from loss, damage, or injury to or death of persons or property in any manner arising out of or incident to Developer’s performance of this Agreement, including without limitation all consequential damages, attorney’s fees and court costs, whether or not resulting from the negligence of Developer or Developer’s agents. This indemnity shall not extend to any claims arising because Developer has failed to properly secure any necessary easements, land rights, appropriate wages, contracts, and approvals, but shall not extend to any claims arising of the sole negligence or active negligence of the City.

Section 11. Applicable Laws. 

Developer shall insure that all work performed on the Improvements is performed in a manner which complies with all applicable federal, state, county and local governmental laws, regulations, and rules, including all rules and regulations of the City, as these rules and regulations may be modified or changed from time to time. All work performed on the Improvements shall be done only by contractors licensed in the State of California and currently qualified to perform the type of work required. All contractors shall comply with the City’s Business License Ordinance. 


Section 12. Disputes.

Disputes arising under this Agreement shall be filed with the City Engineer, who shall be authorized to resolve such disputes. Any decision or resolution of such dispute made by the City Engineer with respect to this Agreement may be appealed to the City Council. Any such appeal to the City Council must be made in writing and addressed to the City Clerk. A final action or decision of the City Council shall be required before legal action pursuant to this Agreement may be instituted. Notwithstanding the foregoing, either party may, in addition to any other rights or remedies, institute legal action to cure, correct or remedy any default, enforce any covenant or agreement herein, enjoin any threatened or attempted violation or enforce by specific performance the obligations and rights of the parties hereto, subject to the terms of this Agreement. 





Section 13 Successors in Interest.

The terms, covenants, and conditions of this Agreement shall apply to, and shall bind the heirs, successors, executors, administrators, and assigns of the parties, including any of their successors in interest, beneficiaries, or assigns 

Section 14 Costs and Attorney's Fees.

Attorney fees in an amount not exceeding $85 per hour per attorney, and in total amount not exceeding $5000, shall be recoverable as costs (by the filing of a cost bill) by the prevailing party in any action or actions to enforce the provisions of the agreement. The above $5000 limit is the total of attorneys’ fees recoverable whether in the trial court, appellate court, or otherwise, and regardless of the number of attorneys, trials, appeals, or actions. It is the intent of this agreement that neither party shall have to pay the other more than $5000 for attorneys’ fees arising out of an action, or actions to enforce the provisions of this agreement.

Section 15 Mediation.

Should any dispute arise out of this Agreement, any party may request that it be submitted to mediation. The parties shall meet in mediation within 30 days of a request. The mediator shall be agreed to by the mediating parties; in the absence of an agreement, the parties shall each submit one name from mediators listed by either the American Arbitration Association, the California State Board of Mediation and Conciliation, or other agreed-upon service. The mediator shall be selected by a "blindfolded" process.

The cost of mediation shall be borne equally by the parties. Neither party shall be deemed the prevailing party. No party shall be permitted to file a legal action without first meeting in mediation and making a good faith attempt to reach a mediated settlement. The mediation process, once commenced by a meeting with the mediator shall last until agreement is reached by the parties but not more than 60 days, unless the maximum time is extended by the parties.

Section 16 Arbitration. 

After mediation above, and upon agreement of the parties, any dispute or claim arising out of or relating to this agreement may be settled by arbitration in accordance with the Construction Industry Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The costs of arbitration shall be borne equally by the parties.



Section 17 Counterparts and Exhibits.

This Agreement is executed in duplicate counterparts, each of which is deemed to be an original. This Agreement and its Exhibits constitute the entire understanding and agreement of the parties. This Agreement and its Exhibits integrate all of the terms and conditions mentioned herein or incidental hereto, and constitute the entire understanding of the parties with respect to the subject matter hereof, and all prior written agreements, understandings, representations, and statements are terminated and superseded by this Agreement.

THIS AGREEMENT is executed as of the date and year first above written.


CITY OF BRENTWOOD



By: ______________________
John E. Stevenson, 
City Manager

Attest:

__________________________
Karen Diaz, CMC, City Clerk

Approved as to form:


__________________________
Dennis Beougher, City Attorney 

LAFFERTY HOMES



By: _______________________ 
Rick Lafferty
President Lafferty Homes

City Administration
City of Brentwood City Council
150 City Park Way
Brentwood, CA 94513
(925) 516-5440
Fax (925) 516-5441
E-mail allcouncil@brentwoodca.gov