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CITY COUNCIL AGENDA ITEM NO. 24

Meeting Date: July 24, 2007

Subject/Title: Adopt a Resolution approving and forming the Lone Oak Road Benefit District No. 5, and authorizing the collection of funds for repayment to the Redevelopment Agency of the City of Brentwood for utility improvements previously constructed.

Prepared by: Paul Eldredge, Assistant Director of Public Works/Assistant City Engineer

Submitted by: Bailey Grewal, Director of Public Works/City Engineer

RECOMMENDATION
Adopt a Resolution approving and forming the Lone Oak Road Water and Sewer Benefit District No. 5, and authorizing the collection of funds for repayment to the Redevelopment Agency of the City of Brentwood (“Redevelopment Agency”) for utility improvements previously constructed.

PREVIOUS ACTION
On September 12, 2006, by Resolution RDA-115 and on February 28, 2006, by Resolution RDA-107, the Redevelopment Agency authorized the Agency Treasurer to appropriate funds from the Redevelopment Agency of the City of Brentwood Tax Allocation Bonds, Series 2001, to fund Reimbursement Agreements with Brentwood Sand Creek Partners, LLC (“Lennar Homes”), Subdivision No. 8788, for the southern and northern phases of Lone Oak Road Utility Improvements in the combined amount of $2,285,000.

On April 11, 2006, the Redevelopment Agency approved its annual project priorities to be funded by its 2001 Tax Allocation Bond Proceeds with deliberate coordination with the City’s Capital Improvement Program. The Agency’s approved project priorities included the Lone Oak Utility Improvements in the amount of $2,285,000.

On May 23, 2006, by Resolution No. 2006-126, City Council adopted the City’s 2006/07– 2010/11 Capital Improvement Program (“CIP”) that included the Lone Oak Utility Improvements in the amount of $2,285,000. This project is entirely funded by the Redevelopment Agency of the City of Brentwood.

On June 27, 2006, by Resolution RDA-112, the Redevelopment Agency amended its two-year operating budget, which included a budget amount of $2,285,000, for the Lone Oak Utility Improvements, southern and northern phases.

BACKGROUND
The homes along Lone Oak Road, Lone Oak Court, Gracie Lane and Saddle Creek Court had historically experienced problems with existing well and septic systems. The area has high water tables and winter weather causes problems for the existing well and septic systems. Subdivision No. 8788, developed by Lennar Homes (“Developer”), was conditioned to construct certain off-site water and sewer improvements to this existing neighborhood concurrently with construction of their adjacent development. The condition provided for improvements to be constructed in two phases (north and south), and for the City to reimburse the Developer for the costs associated with extending utility services to the existing properties. Installation of the improvements is now complete, and total reimbursement has been provided to the Developer in the amount of $2,282,095.38. Full funding has been provided by the Redevelopment Agency.

Council/Administrative Policy No. 10-5, Section 1.2.1 identifies public improvements in existing neighborhoods shall be the financial responsibility of the benefiting parcels. The policy further states if the improvements are desired by the property owners, they shall enter into a financing mechanism to recover the costs incurred by the City. The best mechanism for recovery is through the formation of a benefit district, whereby, any future subdivision or development of the parcels benefiting from the installed water and sewer improvements will be required to pay their fair share of the costs. The attached Benefit District Report identifies the improvements and costs of construction, and calculates a proportionate share based upon zoning and land use of the benefiting parcels. The level of recovered costs can only be estimated at this time, and should not be considered a guarantee of 100% recovery due to potential changes in zoning, densities or various other land use changes that could occur in the future that will affect this benefit district. The fair share is to be collected when, and if, the parcels subdivide or develop additional dwellings or structures that will take service from the installed improvements. The Redevelopment Agency has funded the portion servicing existing homes only, to eliminate health and safety concerns for current residents. Following approval and formation of the Benefit District, the property owners shall contribute their proportionate share for any new or additional parcels or structures resulting from subdivision or development of their property.

FISCAL IMPACT
The total cost of improvements reimbursed by the Redevelopment Agency’s Tax Allocation Bonds, Series 2001 is $2,282,095.38. Formation of the Benefit District will provide the means for Redevelopment Agency funds to be recouped. The level of estimated cost recovery is unknown at this time, and is dependant upon subdivision and/or development of the benefiting parcels, and should not be considered a guarantee of 100% recovery.

Attachment:
Resolution
Engineer’s Report, Lone Oak Road Water and Sewer Benefit District No.5

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING AND FORMING THE LONE OAK ROAD WATER AND SEWER BENEFIT DISTRICT NO. 5, AND AUTHORIZING THE COLLECTION OF FUNDS FOR REPAYMENT TO THE REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD FOR UTILITY IMPROVEMENTS PREVIOUSLY CONSTRUCTED.


WHEREAS, the existing homes along Lone Oak Road, Lone Oak Court, Saddle Creek Court and Gracie Lane are currently using well and septic systems. This area has high water tables and winter weather causes problems for already overtaxed well and septic systems; and

WHEREAS, on March 2, 2004, the Planning Commission of the City of Brentwood adopted Planning Commission Resolution No. 04-10, approving Vesting Tentative Subdivision Map (VSTM) No. 8788, with conditions to construct certain off-site water and sewer improvements on Lone Oak Road, Lone Oak Court, Saddle Creek Court and Gracie Lane, located in the north Brentwood Redevelopment Project Area; and

WHEREAS, on May 23, 2006, by Resolution No. 2006-126, City Council adopted the City’s 2006/07 – 2010/11 Capital Improvement Program, which included the Lone Oak Road Utility Improvements; and

WHEREAS, on September 12, 2006, by Resolution RDA-115 and on February 28, 2006, by Resolution RDA-107, the Redevelopment Agency of the City of Brentwood authorized the Agency Treasurer to appropriate funds from the Redevelopment Agency Tax Allocation Bonds, Series 2001, to fund Reimbursement Agreements with Brentwood Sand Creek Partners, LLC (“Lennar Homes”), Subdivision No. 8788, for the southern and northern phases of Lone Oak Road Utility Improvements in the combined amount of $2,285,000; and

WHEREAS, an Engineer’s Report has been prepared containing the benefit analysis required under Government Code § 66000 et seq (AB 1600) to proportionately distribute the fair share cost of the constructed improvements to all identified parcels benefiting from the service.

NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Brentwood 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 properties which will benefit from the improvements (“Benefiting Properties”). These Benefiting Properties are identified in the Engineer’s Report.

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 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 Improvements 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 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.

F. Pursuant to Government Code Section 66485, et seq., the fees will be collected for public improvements and facilities and the funds from the fee are to reimburse the Redevelopment Agency 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. Fees shall be charged and paid in the amounts existing at the time of issuance of subdivision of property or issuance of building permit, which ever occurs first.

B. The Benefit District Fee established herein is adopted and implemented by the City Council in reliance on the Engineer’s Report that has been prepared by 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. Notwithstanding the expiration date, the amount of fees collected shall be reviewed prior to expiration, and the Benefit District may be extended dependant upon cost recovery.

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 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.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 24th day of July 2007 by the following vote:

 

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