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 CITY COUNCIL AGENDA ITEM NO. 25


Meeting Date: October 22, 2002

Subject/Title: Approve the establishment of an overlay district for Benefit District No. 4 in the Brentwood Development Fee Program

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 with Lafferty Homes.

PREVIOUS ACTION
On April 1, 1997, the City of Brentwood Planning Commission adopted Resolution No. 97-16, which required Lafferty Homes to construct certain Sub-Master Plan Facilities for sewer collection on Chestnut Street which benefits properties in the vicinity of their project that will develop in the future.

BACKGROUND
In April 1997, Lafferty Homes was conditioned to construct certain Chestnut Street Sub-Master Planned Facility Improvements for sewer collection as part of the approval process for their project. Sub-Master Plan Improvements are the portion of improvements that are the Owner’s obligation to construct without reimbursement from the City, yet which benefit properties in the vicinity of the project that will in the future develop (“Benefiting Properties”). Sub-Master Plan Facilities benefit the Benefiting Properties inasmuch as there is a reasonable relationship between the impacts of proposed development of those properties and the need for the Sub-Master Plan Improvements. The City bears no obligation for the cost of the improvements, but by the proposed agreement agrees to use it’s best efforts to impose the pro-rata share of the Sub-Master Plan Improvement costs as a Development Fee to be paid by the benefiting properties as they develop. 

FISCAL IMPACT
There is no fiscal impact to the City. Lafferty Homes paid the costs associated with the District Formation and the City retains 3% of the funds collected to cover administration costs. 

Attachments:
Resolution
Site Map
Agreement
Engineer’s Report

RESOLUTION NO. 

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING BENEFIT DISTRICT NO. 4 TO ESTABLISH A DEVELOPMENT FEE IN ORDER TO OFFSET THE COSTS FOR CERTAIN SUB-MASTER PLAN IMPROVEMENTS BETWEEN THE DEVELOPER WHO CONSTRUCTED THE IMPROVEMENTS AND ADJACENT PROPERTIES WHICH BENEFIT FROM THE IMPROVEMENTS; AND AUTHORIZING THE CITY MANAGER TO SIGN THE BENEFIT DISTRICT FORMATION AGREEMENT WITH LAFFERTY HOMES. 


WHEREAS, in 1997 the City of Brentwood Planning Commission adopted Resolution No. 97-16, which required Lafferty Homes, developers of Subdivision No. 8048, to make certain Chestnut Street Sub-master Plan Sewer Collection Facility Improvements; and 

WHEREAS, certain Sewer Collection Sub-Master Plan Facility Improvements are the Owner’s obligation to construct without reimbursement from the City of Brentwood Master Plan Facility Development Fee Program; and 

WHEREAS, the Developer constructed improvements which benefit properties in the vicinity of Subdivision No. 8048; and

WHEREAS, the Sub-Master Plan Improvements are further defined in that certain Benefit District Formation Agreement between Lafferty Homes and the City 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 City of Brentwood City Council’s policy for Benefit Districts set forth in Appendix L of Resolution 2629 (July 23, 2002, Development Fee Program); and 

WHEREAS, an Engineer’s Report has been prepared, and is attached to the Agreement. The Engineer’s Report contains the analysis required Under AB 1600 (Government Code 66000 et seq.), the Appendix L Policy and all other applicable laws; 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, a public hearing has been noticed and held in accordance with Government Code Section 66017; 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 Benefit District is to establish a new development fee which meets the criteria of AB 1600 and relates to the pro rata share of the costs incurred to construct the Sub-Master Planned 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 that the benefiting properties will in the future develop.

B. The fee implements policies of the City of Brentwood General Plan as adopted 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, including without limitation those set forth in Resolution No. 2629 adopted July 23, 2002.

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 Sub-Master Planned Improvements if and when they develop; and

2. That there is a reasonable relationship between the need for these Sub-Master Planned 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 Sub-Master Planned 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 Sub-Master Planned Improvements, 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 Benefit District Fee.

F. Pursuant to Government Code Section 66485, et seq., the fees will be collected for public improvements or facilities for which an account has been established and the funds from the fee 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 Benefit District 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, except that the Benefit District Fee shall be paid at recordation of the final map.

B. The Benefit District 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 Benefit District Fee provided in this Resolution shall be effective sixty (60) days after the adoption of this Resolution. The Benefit District Fee shall expire ten (10) years after the effective date.

Section 4. Severability:

Each component of the Benefit District Fee 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 Benefit District 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 authorize the City Manager to sign the Benefit District Formation Agreement 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 22nd day of October 2002 by the following vote:


BENEFIT DISTRICT FORMATION AGREEMENT FOR
BENEFIT DISTRICT NO. 4 


THIS AGREEMENT (“Agreement”) is entered into at Brentwood, California, this 22nd day of October 2002, by and between the CITY OF BRENTWOOD, a municipal corporation (“City”) and Lafferty Homes (“Owner”).

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. 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 Program. These Improvements are currently available for public use. The Improvements are generally described as the Chestnut Street Sewer line and are more particularly described in the Engineer’s Report for Benefit District No. 4 attached hereto.

C. This agreement is intended to address that portion of the improvements not considered to be Master Plan Improvements and yet not considered to be the exclusive obligation of the Owner to construct. In other words, this Agreement addresses that portion of the improvements referred to herein as the “Sub-Master Plan Improvements”, more particularly described in the Engineers Report. Sub-Master Plan Improvement 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 the project, which will in the future develop (“Benefiting Properties”). The Sub-Master Plan Improvements benefit the Benefiting Properties inasmuch as there is a reasonable relationship between the impacts of proposed development of those properties and the need for the Sub-Master Plan Improvements.

D. Through this Agreement, the City agrees to commence proceedings to form a Benefit District and to impose a development fee (“Benefit District Fee”) upon those Benefiting Properties pursuant to the requirements of AB 1600 (Government Code Sections 66000 et seq.), to defray the cost incurred by the Owner of constructing Sub-Master Plan Improvements.

E. This agreement is governed by, and City and Owner agree to abide by, the City Council procedure for Benefit Districts set forth in Appendix L of the 2002/03 Development Fee Program adopted by Resolution No. 2629 on July 23, 2002, as may be amended. This Agreement is not governed by any specific duty of the City under State or Federal law, but is an exercise of its discretion under its police power to regulate the use of land within its jurisdiction. 

NOW, THEREFORE, IN CONSIDERATION OF THE FAITHFUL PERFORMANCE OF THE TERMS AND CONDITIONS SET FORTH HEREIN, THE PARTIES AGREE AS FOLLOWS:

1. The foregoing Recitals are true and correct.

2. In connection with Owner’s written application to City requesting formation of a Benefit District, Owner has deposited with City $6500 to pay for the City’s processing costs associated with forming the Benefit District. The parties acknowledge that the deposit may be insufficient to cover the City’s actual processing costs, and Owner agrees to pay City’s reasonable actual costs incurred in forming the Benefit District. Such costs shall not be passed through to the Benefiting Properties. 

3. The City has caused an Engineer’s Report to be prepared which includes an analysis of the legal requirements of AB 1600 (Government Code Sections 66000 et seq.) and the requirements set forth in 2002/03 Appendix L, including but not limited to, a detailed Benefit District Map showing Benefiting Properties and the distribution of the costs of construction the Sub-Master Plan Improvements among the Benefiting Properties and the Owner’s Subdivision, and the proposed Benefit District Fee to be imposed. Owner has reviewed and approves said Engineer’s Report, which is attached hereto Exhibit 3.

4. The proposed Benefit District Fee shall not exceed the reasonable construction costs of the Sub-Master Plan Improvements and shall not be adjusted over time except by an amount equal to the annual rate of inflation set forth in the Engineering News Records Construction Cost Index. The proposed Benefit District Fee is over and above the otherwise applicable development fees charged against developing property by the City. 

5. The City shall provide a notice of public hearing before the City Council, which shall be mailed to Owner, the Benefiting Properties, and those requesting written notice of AB 1600 proceedings. Notice shall also be published in accordance with AB 1600. Owner acknowledges City’s obligations to follow the notice and public hearing requirements of AB 1600. 

6. The City shall conduct the public hearing to consider adoption of the Benefit District and Benefit District Fee, 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 Benefiting Properties, in the Engineer’s Report may be excluded on AB 1600 grounds and similarly, the Benefit District Fee may be adjusted. If certain properties were excluded as Benefiting Properties, the public hearing shall be continued and notice provided to such properties. Owner acknowledges that any City action to adopt the Benefit District Fee does not take effect until 60 Days after the final Council action.

7. The parties recognize that the Benefit District and the Benefit District Fee are formulated with respect to the type of development anticipated upon the Benefiting properties based on the current zoning and General Plan designations of such properties, the existence of any City entitlements to develop and non-participation in a City Capital Improvement Financing Program covering the same Sub-Master Plan Improvements. Therefore, the inclusion of some properties in the Benefit District or the amount of the Benefit District Fee are subject to change as the aforementioned formulation criteria change over the term of this Agreement.

8. Notwithstanding any other provision of this Agreement, this Agreement and any Benefit District and Benefit District Fee shall expire upon the tenth (10th) anniversary of the effective date of the Benefit District fee, unless sooner terminated in accordance with Section 15 below.

9. Upon the effective date of the Benefit District and Benefit District Fee, the City shall administer the collection of the fee from the Benefiting Properties if and when these properties file a final map with the City. The parties recognize that there is no guarantee that the Benefiting Properties will file a final map during the term of this agreement. The City shall use its best efforts, but does not guarantee the collection of the fee from each of the Benefiting Properties. 

10. At the end of each fiscal year during the term of this Agreement, the City shall tender the Benefit District Fees collected during the fiscal year, if any, to the Owner. Deductions are authorized for the 3% City administration fee allowed by this Agreement, and for other offsets representing amounts the City is owed from Owner, provided written notice is provided to Owner by City prior to the end of the fiscal year. 

11. It is recognized by the parties that the City is not obligated to reimburse the Owner the amount of the construction costs incurred for the Sub-Master Plan Improvements. The City shall use its best efforts to collect the Benefit District fee, but such efforts are pre-conditioned upon the Benefiting Properties applying for and filing a final map form the City during the term of this Agreement. 

12. The parties agree that the sole remedies for enforcement of any term of this Agreement shall be equitable in nature, such as injunctive relief or mandamus. No monetary damages, however construed, are recoverable from any party against the other, except for the City’s rights under the indemnity provision below. This constitutes a waiver of the parties’ rights to monetary damages, subject to the City’s rights under the indemnity provision below. Should any party bring a legal action or proceeding relating to this Agreement, and the City prevails, the City shall be entitled to recover its reasonable attorneys’ fees and court costs.

13. Owner agrees to defend, indemnify and hold the City harmless from any and all claims, protests, actions or proceedings (collectively “actions”) for loss, damage, injury or liability (collectively “liabilities”) as defined in this section. 

a. As used in this section “City” means the City of Brentwood and its elective and appointive boards, commissions, officers, employees, consultants and agents.

b. The liabilities protected against are those allegedly suffered because of the actions defined below, including monetary damages, personal injury, death, property damage, or any combination of these, and including the defense of any action including claims for any recovery of attorneys’ fees and costs.

c. The actions causing the liabilities are any act or omission (negligent or non-negligent) in connection with the matters covered by this Agreement, including without limitation actions taken by City to approve or amend this Agreement, the Benefit District and the Benefit District Fee or subsequent actions involving the City’s actions to collect or tender the Benefit District Fee. The indemnification in this section is not conditioned or dependent on whether or not the City has insurance or other indemnification covering any of these matters. 

d. In any action brought against the City, the City reserves the right to suspend its duties under this Agreement until a final adjudication or dismissal of the action is concluded. 

e. In any action brought against the City, City shall consent to counsel and must pre-approve any course of action, including settlement, where the City’s performance or participation is require. 

14. This Agreement does not affect the Owner’s other obligations to the City in connection with its Subdivision or the Improvements, including without limitation compliance with conditions of approval, requirements to maintain Comprehensive Liability Insurance protecting the City from incidents as to bodily injury liability and property damage liability that may occur as a result of the Improvement work and Subdivision work and the maintenance of Workers’ Compensation Insurance. 

15. The parties may mutually agree to terminate this Agreement upon written notice signed by authorized representatives of the parties. 

16. The covenants of this Agreement inure solely to the benefit and burden of the Owner. No assignment pledge, hypothecation or transfer by Owner is effective unless and until prior written notice is provided the City and the written consent of the City is obtained, which consent shall not be unreasonably withheld. 

17. All notices required shall be in writing, and delivered in person or sent by U.S. mail, postage prepaid. A party may change the address by notice in writing to the other party and thereafter notices shall be addressed and transmitted to the new address. 

A. Notices to the City shall be addressed as follows:

CITY OF BRENTWOOD
Attn: City Engineer
150 City Park Way
Brentwood, ca 94513-1396


B. Notices to the Owner shall be addressed as follows:

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

18. The following miscellaneous terms are incorporated into this Agreement:

A. This writing contains a full, final and exclusive statement of the understanding of the parties regarding the matters set forth herein.

B. If any provision of this Agreement is adjudged invalid, the remaining provisions of it are not affected.

C. If there is more than one signer of this Agreement as Owner, their obligations are join and several.



IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year above written.

CITY OF BRENTWOOD OWNER – Lafferty Homes




____________________________ ________________________________
John E. Stevenson, City Manager Rick Lafferty, President, Lafferty Homes




Attest:




___________________________
Karen Diaz, CMC, City Clerk





Attachments: Exhibit 1 – Description of Benefit District No. 4 Sub-Master Plan Improvements 
and fee chart. 
Exhibit 2 – Map showing location of Benefit District No. 4
Exhibit 3 – Engineer’s Report for Benefit District
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