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CITY COUNCIL AGENDA ITEM NO. 17

Meeting Date: January 25, 2005

Subject/Title: Approve a Resolution of the City Council of the City of Brentwood amending the 2004/05 Master Fee Schedule/Cost Allocation Plan adopted by Resolution No. 2004-222 by revising the in-lieu fees associated with the Affordable Housing Program.

Prepared by: Ellen Bonneville, Housing Manager

Submitted by: Howard Sword, Community Development Director

RECOMMENDATION
Approve the Resolution of the City Council amending the 2004/05 Master Fee Schedule/Cost Allocation Plan adopted by Resolution No. 2004-222 by revising the in-lieu fees associated with the Affordable Housing Program.

PREVIOUS ACTION
The City Council adopted Chapter 17.725 (Affordable Housing) of the Municipal Code, wherein a developer may elect to pay an Affordable Housing In-lieu fee instead of constructing the required affordable single-family dwelling units in October of 2003. The City Council further adopted Resolution 2954 in 2003 which initially established the amount of the housing in-lieu fee.

The City Council adopted Resolution 2004-222 on September 19, 2004 establishing the 2004/05 Master Fee Schedule/cost allocation plan that included the housing in-lieu fees.

At its meeting of December 14, 2004 the City Council waived the first reading of Ordinance 790, amending the City of Brentwood Affordable Housing Program and on January 11, 2005 waived the second reading and adopted Ordinance 790. As part of the economic analysis for this Ordinance, staff and consultants prepared a “Calculation for Ownership Housing In-lieu Fee” which is attached to the Resolution as Exhibit “A”. The analysis shows the actual cost of the development of the standard below-market-rate unit consisting of 1600 square feet on a 3000 square foot lot that was used as the base line for the analysis for the affordable housing program redesign. The analysis was based on Home Builders Association data including the cost of land, improvements, regulatory compliance, administrative costs, very-low and low income affordability and the gap between the construction cost of the unit and the affordable housing purchase price.

This analysis was presented at several meetings to both the development community and affordable housing advocates. The material was also available for review ten (10) days prior to the public hearing conducted on December 14, 2004 for Ordinance 790 and ten (10) days prior to the public hearing tonight.

At the public hearing for Ordinance 790 conducted on December 14, 2004, the City Council considered the information provided to it by those testifying and has reviewed and considered the information provided in the staff report and staff presentation including the in-lieu fee calculations prepared by Seifel consulting.

BACKGROUND
Adoption of the Resolution will allow the City to implement the updated affordable housing in-lieu fees. The studies and testimony presented both tonight and on December 14, 2004 establish that there is a reasonable relationship between the fee’s use and the type of development on which the fee is imposed and that there is a reasonable relationship between the need for the affordable housing and the impacts on the types of development for which the in-lieu fee is charged.

Pursuant to Government Code Section 66007(b)(1), the fees will be collected for assisting in the construction of low and very-low income dwelling units, or helping with other affordable housing opportunities. The fees imposed will be as follows:

Amended In-lieu fee for very-low income unit not constructed - $235,000 (current fee - $106,044)
Amended In-lieu fee for low income unit not constructed - $176,000
(current fee - $75,179)

Within 180 days after the close of each fiscal year, the City Manager or her designee shall prepare a report for the City Council identifying the balance of fees in the account at the beginning and end of the fiscal year. The City shall also have the ability to amend the housing in-lieu fee to reflect inflation and changed conditions in the City and region. The fees shall be automatically amended on July 1 of each year by the same percentage as the percentage of increase or decrease in construction costs for the previous year based upon the Engineering News-Record Construction Costs Index without further action by the City Council.

The new in-lieu fees shall go into effect sixty (60) days from the date this Resolution is adopted and after Ordinance 790 takes effect.

FISCAL IMPACT
Payment of these fees (if approved by City Council as part of each Affordable Housing Agreement) will provide revenue for the Housing Trust Fund 265 which shall be used to fund Housing staff and operational costs and additional affordable housing projects.

Attachments
Resolution

RESOLUTION NO. _____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD AMENDING THE 2004/05 MASTER FEE SCHEDULE/COST ALLOCATION PLAN ADOPTED BY RESOLUTION NO. 2004-222 BY REVISING THE IN-LIEU FEES ASSOCIATED WITH THE AFFORDABLE HOUSING PROGRAM

WHEREAS, the City Council has adopted ordinances and resolutions establishing and revising fees as part of an exercise of its policy power; and

WHEREAS, the City Council has adopted Chapter 17.725 (Affordable Housing) of the Municipal Code, wherein a developer may elect to pay an Affordable Housing In-Lieu Fee instead of constructing the required affordable single-family dwelling units; and

WHEREAS, Chapter 17.725 establishes that the amount of the Housing In-Lieu Fee shall be as set forth by resolution of the City Council, which shall be amended annually to reflect inflation, and changed conditions of the City and the region; and

WHEREAS, City Council Resolution No. 2954 initially established the amount of the Housing In-Lieu Fee; and

WHEREAS, the City Council adopted Resolution 2004-222 establishing the master fee schedule/cost allocation plan for 2004/2205; and

WHEREAS, the City Council wishes to update the amount of the Housing In-Lieu Fee; and

WHEREAS, the City of Brentwood has conducted extensive analysis of the total construction cost of single family dwelling units based on Home Builders Association data, including the cost of land, improvements, regulatory compliance, administrative costs, very low and low-income housing affordability, the gap between construction cost and affordable housing purchase price, maximum dwelling purchase price for very low and low-income households, off-site public improvement acreage, Contra Costa County medial income, the Brentwood School Facilities Needs Analysis, dated March 12, 2002, financing costs, property taxes, homeowners insurance, and utility costs; and

WHEREAS, the City of Brentwood Affordable Housing Program and In-Lieu Fee calculations and supporting data were available for inspection and review for ten (10) days prior to this public hearing; and

WHEREAS, a public hearing has been noticed and held in accordance with Government Code Section 66016, 66017, and 66018; and

WHEREAS, the City Council has considered the information provided to it by those testifying, and has reviewed and considered the information provided in the staff report and staff presentation and has read and considered the affordable housing study and in-lieu fee calculations prepared by Seifel Consulting.

NOW, THEREFORE, 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 these fees is to mitigate the additional demand on rising land prices caused by new market rate housing absorbing the limited supply of available residential land, thus increasing the price of remaining residential land and the cost of building affordable housing creating a barrier to the City retaining a balanced community, with housing available to very low and low-income households; and to assist in the construction of, and increase and improve the supply of, low and very low-income dwelling units, or to help with other affordable housing opportunities, and to reduce the impact caused by future development in the City of Brentwood, in accordance with Municipal Code Chapter 17.725.

B. These fees implement policies of the City of Brentwood General Plan Housing Element, as amended November 1998, including the Action Program that calls for adoption of a mandatory affordable housing program if needed to meet the City's State mandated housing goals. (Housing Element Action Program 3.4.2).

C. There is a need in the City of Brentwood for additional affordable housing consistent with the City's Housing Element of its General Plan.

D. The fees will enable the City to help facilitate the construction of affordable housing for very low and low-income households to meet the needs of existing and new residents and employees in the community.

E. The City has encouraged certain developers in the community to voluntarily construct some affordable dwelling units that are sufficient to serve some existing and/or new residents. As the City has not met its State mandated goals for the production of very low and low-income housing, it is appropriate that new development provide revenue to help the City meets its State housing goals.

F. After considering the studies and analyses prepared by City staff and the testimony received at this public hearing, the Council approves and adopts said studies, and incorporates such herein, and further finds that future development in the City of Brentwood will generate the need for the additional affordable housing, and that this housing is consistent with the City's General Plan.

G. The studies and the testimony establish:

1. That there is a reasonable relationship between the fee's use and the type of development on which the fee is imposed; and

2. That there is a reasonable relationship between the need for the affordable housing and the impacts of the types of development for which the corresponding fee is charged; and

3. That there is a reasonable relationship between the amount of the fee and the cost of the affordable housing attributable to the development on which the fee is imposed; and

4. That the cost estimates set forth in the City of Brentwood Housing Fee Calculations are reasonable cost estimates for constructing these dwelling units, and the fees expected to be generated by future developments will not exceed the total costs of constructing the affordable units.

H. Pursuant to Government Code Section 66007(b)(1), the fees will be collected for assisting in the construction of low and very low-income dwelling units, or helping with other affordable housing opportunities for which an affordable housing in-lieu fund will be established and the City has adopted its Affordable Housing Ordinance prior to collection of in-lieu fees.

I. The method of calculation of the Housing In-Lieu Fee to a particular development bears a fair and reasonable relationship to each development's burden on, and benefit from, and affordable housing to be funded by the fee.

J. The City of Brentwood wishes to implement the provisions of Municipal Code Chapter 17.725 by establishing the amount of the Affordable Housing In-Lieu Fee imposed therein on developers of residential development projects consistent with such Code Chapter.

Section 2. Fees Imposed:

A. As provided in Chapter 17.725 of the Municipal Code, new development in the City of Brentwood shall pay Housing In-Lieu Fees as set forth in Exhibit A to this Resolution at the time of building permit issuance.

B. The City has calculated the costs of administering a program and will impose an administrative charge to defray these costs, as included in the Housing In-Lieu Fee adopted by this Resolution.

C. In the use of any inconsistency between the text of this Resolution and the text of Chapter 17.725 of the Municipal Code, the provisions of this Resolution shall control.

Section 3. Collection of Fees:

The applicable Housing In-Lieu Fee shall be determined on the basis of the fee schedule in effect at the time of the building permit, or other applicable permit is issued.

Section 4. Periodic Review and Adjustments to Fees

A. Within one hundred eighty (180) days after the close of each fiscal year, the City Manager or his designee shall prepare a report for the City Council, pursuant to Government Code Section 66006, identifying the balance of fees in the account at the beginning and end of the fiscal year, the fee, interest, and other income, and the amount of expenditure, any refunds, and other expenditures.

B. The City shall make the periodic report available to the public, and the City Council shall review the report at a regularly scheduled meeting in accordance with Section 66006.

C. The City shall similarly conduct the periodic review under Government Code Section 66001(d) every five (5) years.

D. Pursuant to Municipal Code Section 17.725.004 A., the City Council may also from time to time amend the Housing In-Lieu Fee to reflect inflation, and changed conditions in the City and the region.

E. Those fees established by this Resolution shall on July 1 of each year be automatically increased or decreased from the amount then applicable by the same percentage as the percentage of increase or decrease in construction costs between June 1 of the calendar year immediately preceding and June 1 of the current calendar year, based on the Engineering News-Record Construction Costs Index, without further action of the City Council.

Section 5. Severability:

Each component of the Housing In-Lieu 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 6. Exemption from California Environmental Quality Act (CEQA):

The City Council finds that CEQA does not apply to the adoption of this Resolution, pursuant to Section 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 affordable housing necessary to enable the City to meet its State mandate for the provision of affordable housing.

B. To the extent that any fees authorized by this Resolution will be used to fund new dwellings, the construction of those dwellings will not take place until there has been CEQA review of the development projects that will pay the fees, and the construction of each dwelling will be subject to CEQA review. Therefore, it can be seen with certainty that the adoption of this Resolution establishing Housing In-Lieu Fees will not have a significant effect on the environment.

Section 7. Statute of Limitations:

Any judicial action or proceeding to attack, review, set aside, void, or annul the fees established by this Resolution shall be commenced within one hundred twenty (120) days of the passage of this Resolution. Any action to attack an increase adopted pursuant to Section 4 shall be commenced within one hundred twenty (120) days of the increase.

Section 8. Amend Resolution No. 2954:

Exhibit A of Resolution No. 2954, setting forth the amounts of the City's Housing In-Lieu Fees, is replaced with Exhibit A to this Resolution.

Section 9. Amend the 2004/05 Master Fee Schedule/Cost Allocation Plan adopted by Resolution No. 2004-222:

The amounts set forth in Exhibit A replace the amounts shown in the 2004/2005 Master Fee Schedule/Cost Allocation Plan adopted by Resolution No. 2004-222:

Section 10. Effective Date of Updated Fees:

The fees provided in this Resolution shall take effect sixty (60) days from the date this Resolution is adopted or after the Ordinance amending Chapter 17.725 of the Brentwood Municipal Code takes effect whichever is the later.


PASSED, APPROVED AND ADOPTED this 25th day of January 2005 by the following vote:
 

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