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Home My WebLink AboutRESOLUTION 2024-009 N.C.S. 01/22/2024 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Resolution No. 2024-009 N.C.S. of the City of Petaluma, California RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PETALUMA ACCEPTING THE FISCAL YEAR 2023 ANNUAL DEVELOPMENT IMPACT FEE REPORT AND MAKING FIVE-YEAR FINDINGS PURSUANT TO THE MITIGATION FEE ACT WHEREAS, the City of Petaluma imposes fees to mitigate the impacts of development, pursuant to Government Code §§66000 et seq. (the "Mitigation Fee Act"); and WHEREAS, fees collected are deposited into a separate fund for each type of development impact fee; and WHEREAS, the Mitigation Fee Act requires the City of Petaluma to make available to the public certain information regarding the fees and regarding each fund on an annual basis within 180 days of the end of the fiscal year(i.e. June 30, 2023); and WHEREAS, the Development Impact Fee Report — Fiscal Year 2022-2023 and Development Impact Fee Program Five-Year Findings Report attached to the concurrent Staff Report as Exhibit A and incorporated herein by reference ("the Report") provides the information required by the Mitigation Fee Act, specifically all information required by Government Code Section 66006(b)(1) and 66001(d); and WHEREAS, the Report was made available to the public on the City's website on December 29, 2023 in accordance of the noticing requirements of Government Code Section 66006(b)(2); and WHEREAS, the City's review and acceptance of the Report is not a project under the California Environmental Quality Act pursuant to Public Resources Code sections 21065 and 21080 and CEQA Guidelines Sections 15378 and 15061(b)(3) as reviewing and accepting the Report will not result in any direct or indirect physical change in the environment; and WHEREAS, the City Council has reviewed the Report at its regularly scheduled meeting on January 22, 2024. NOW, THEREFORE,BE IT RESOLVED,by the City Council of the City of Petaluma as follows: 1. The recitals stated herein are true and correct and adopted as findings of the City Council. 2. Finds that the City's review and acceptance of the Report is not a project under the California Environmental Quality Act pursuant to Public Resources Code sections 21065 and 21080 and CEQA Guidelines Sections 15378 and 15061(b)(3) as reviewing and accepting the Report will not result in any direct or indirect physical change in the environment. 3. The City Council has received and reviewed and hereby accepts the Development Impact Fee Report—Fiscal Year 2022-2023 attached hereto as Exhibit A and incorporated herein by reference ("the Report"). Resolution No. 2024-009 N.C.S. Page 1 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 4. In accordance with Government Code section 66001(d)(1), the City Council hereby finds that its various development impact fee accounts include sums which the City has held for more than five years, as further explained in detail in the Development Impact Fee Program Five- Year Findings dated November 17, 2023, which is attached as Exhibit E to the Annual Development Impact Fee Report for Fiscal Year 2022-23. These development impact fee accounts include the City Facilities Development Impact Fee (Fund 2152), the Parkland Development Impact Fee (Fund 2142), the Parkland Acquisition Impact Fee (Fund 2141), the Open Space Acquisition Impact Fee (Fund 2143), and the Traffic Development Impact Fee (Funds 2160 and 2161). The City continues to need the funds in each of these accounts to complete public infrastructure that is necessary to serve the development projects on which these fees have been imposed, as further detailed in the Development Impact Fee Program Five-Year Findings. Thus, with respect to each of these development fee accounts, the Council further makes all the following findings: a. The Development Impact Fee Program Five-Year Findings adequately identify the purposes of each of the development fees identified above; and b. The Development Impact Fee Program Five-Year Findings adequately demonstrate a reasonable relationship between each of the development fees identified above and the purposes for which they were charged; and c. The Development Impact Fee Program Five-Year Findings adequately identify all sources and amounts of funding the City anticipates to complete financing incomplete improvements for which the City has collected each of the development impact fees identified above; and d. The Development Impact Fee Program Five-Year Findings adequately designates the approximate dates by which the sources and amounts of funding referred to in subparagraph 4(c) above are expected to be deposited into the appropriate accounts or funds. Under the power and authority conferred upon this Council by the Charter of said City. REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Approved as to Council of the City of Petaluma at a Regular meeting on the 22nd day of January oocusignea��crn: 2024,by the following vote: City Attorney AYES: McDonnell,Barnacle,Cader Thompson,Healy,Nau,Pocekay NOES: None ABSENT: Shribbs ABSTAIN: Noocusigned by: DocuSigned by: f A, ,- II � 67- ATTEST: FE316 City Clerk Mayor Resolution No. 2024-009 N.C.S. Page 2 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Exhibit A n - �uu x CITY OF PETALUMA, CALIFORNIA ANNUAL DEVELOPMENT IMPACT FEE REPORT FISCAL YEAR 2022-23 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 City of Petaluma Annual Development Impact Fee Report Fiscal Year 2022-23 Background The Mitigation Fee Act, Government Code §§66000 et seq. (the"Act"),governs the establishment and administration of development impact fees paid by development projects which defray all or a portion of the cost of public facilities related to those projects. Fees must be separately accounted for and used for the specific purpose for which they are imposed. The City's adopted development impact fees are listed in the attached exhibits. Expenditures of collected fees are generally authorized through the annual Capital and Operating Budgets and the City's Capital Improvement Program. The annual adopted City Budget is on file with the City Clerk. Annual and Five-Year Development Fee Reporting The Act requires that the City prepare an annual report on all of its development impact fees after the end of each fiscal year. Government Code section 66006(b)(2)requires the annual report to be reviewed by the City Council at its next regular meeting not less than 15 days after the report is made available to the public. This Fiscal Year 2022-2023 annual report("Report")was made available to the public on the City of Petaluma website on December 29,2023,posted at City Hall,and a copy of the Report also was mailed to all persons who had requested mailed notice relating to city fees on December 29, 2023. Excluded from this Report are developer fees which are not subject to the reporting requirements of the Act. For example,the City collects the following fees pursuant to the City's zoning powers rather than pursuant to the Act: in-lieu housing fees, commercial linkage fees (which are the non-residential equivalent of the in-lieu housing fees),public art in-lieu fees, and the fee related to the Central Petaluma Specific Plan area. Water capacity fees and wastewater capacity fees also are not development impact fees as defined in Sections 66006 and 66001 of the Act. Finally,the Quimby Act parkland acquisition fee for residential subdivisions is imposed pursuant to the Subdivision Map Act(Gov't. Code §66477)and is also not included in the Act's reporting requirements. The Storm Drainage Fee was last updated in 1986,prior to the January 1, 1989 effective date of AB 1600, but is nevertheless included in this Report for informational purposes. The City Council is also required to adopt by resolution certain findings for any fund accounts which contain unexpended funds as of the fifth fiscal year following the first deposit into those funds and every five years thereafter. (Gov't. Code §66001(d).) The effected accounts are shown on Exhibit E to this report and are the City Facilities Development Impact Fee,Parkland Development Impact Fee, Parkland Acquisition Impact Fee, Open Space Acquisition Fee, and Traffic Development Impact Fee. The report is organized as follows: Exhibit A: A brief description of each development impact fee, its purpose, and its authorizing legislation (Gov't. Code §66006(b)(1)(A).) DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Exhibit B: Summary of the July 1,2022 beginning balance, annual fee revenue collected, interest earned, returned unused funds from projects and loan repayments, identification of public improvements on which fees were expended,percentage of the improvements funded by fees, and the ending balance as of June 30,2023 for each fee(Gov't. Code §66006(b)(1)(C)-(E).)Excess funds from capital project funds were returned to the originating revenue funds. Exhibit C: Identifies the amount of each development impact fee. (Gov't. Code §66006(b)(1)(B).) Exhibit D: Identifies interfund loans,transfers, refunds or reallocation of funds in lieu of refunds in Fiscal Year 2022-2023 (Gov't. Code §66006(b)(1)(G)-(H)). Exhibit E: Documents the findings required every five years including: identifying the purpose to which the fee is to be put, demonstrating a reasonable relationship between the fee and the purpose for which it is charged, identifying all sources and amounts of funding anticipated to complete financing in incomplete improvements,and designating the approximate dates on which this funding is expected to be available(Gov't. Code§66001(d)). DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Exhibit A City of Petaluma Development Impact Fee Summary Fee# Impact Fee Name Fee Authority Brief Description of the Type of Fee 1 Parkland Acquisition Reso. 2022-182 The Parkland Acquisition Fee is imposed on development Fee N.C.S; Reso. 2020- projects that are not subject to the Quimby Act. It funds 009 N.C.S, January acquisition of and payment for parkland necessary to 6, 2020; Reso. 2014- maintain the standard established in the city's General 038 N.C.S.,March 3, Plan,based on a ratio of parkland acreage to population, 2014; Reso. 2012- including employees of new commercial development, as 124 N.C.S.,August new residents and employees are added by new 27,2012; Reso. development. 2008-092 N.C.S., May 19,2008 2 Parkland Development Reso. 2022-182 The Parkland Development Fee funds public facilities Impact Fee N.C.S; Reso. 2020- which improve neighborhood and community parklands 009 N.C.S, January as needed to serve new development. 6, 2020; Reso. 2016- 160 N.C.S; October 3, 2016;Reso. 2014- 037 N.C.S.,March 3, 2014; Reso. 2012- 122 N.C.S.,August 27,2012; Reso. 2008-093 N.C.S., May 19,2008 3 Open Space Acquisition Reso. 2022-182 The Open Space Acquisition Fee funds acquisition of and Impact Fee N.C.S; Reso. 2020- payment for open space necessary to maintain the city's 009 N.C.S, January standard established in its General Plan based on a ratio 6, 2020;Reso. 2014- of open space acreage to population,including employees 039 N.C.S.,March 3, of new commercial development,as new residents and 2014; Reso. 2012- employees are added by new development. 123 N.C.S.,August 27,2012; Reso. 2008-091 N.C.S., May 19,2008 4 City Facilities Reso. 2022-182 The City Facilities Development Impact Fee funds Development Impact N.C.S; Reso. 2020- design, engineering,right-of-way and reasonable costs of Fee 009 N.C.S, January outside consultant studies related thereto,reimburse the 6,2020;Reso. 2014- City for the Facilities constructed by the City with funds 036 N.C.S.,March 3, from other sources including funds from other public 2014; Reso. 2012- entities,reimburse developers who have designed and 121 N.C.S.,August constructed any of the facilities with prior City approval 27,2012 and have entered into an agreement and pay for and/or reimburse costs of program development and ongoing DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 administration and maintenance for the Fee program, including,but not limited to,the cost of studies,legal costs, and other costs of updating the Fee. 5 Storm Drainage Impact Ord. 1530 N.C.S., The Storm Drainage Impact Fee funds the construction of Fee eff. Sept. 20, 1982; storm drainage improvements needed to control increases Ord. 1653 N.C.S., in run-off created by new development projects. The eff. June 2, 1986 Storm Drainage Impact Fee was adopted and last updated (Petaluma Municipal before the enactment and effective date of AB 1600,but is Code Chapter 17.30); included in this report for informational purposes. Reso. 9751 N.C.S., June 2, 1986 6 Traffic Development Reso. 2022-182 The Traffic Development Impact Fee funds construction Impact Fee N.C.S; Reso. 2020- and implementation of improvements to key elements of 009 N.C.S, January the citywide transportation system sufficient to 6,2020; Reso.2016- accommodate future traffic demand generated by new 76 development. N.C.S. May 16,2016 Reso 2015-191 N.C.S.,Dec 7,2015; Reso 2014-112 N.C.S.,July 7,2014 Reso. 2014-040 N.C.S.,March 3, 2014; Reso. 2012- 125 N.C.S.,August 27,2012; Reso. 2008-095 N.C.S., May 19,2008 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Exhibit B Development Impact Fee Report Fiscal Year 2022-23 Fund Balance Fee lnterest/Gain/Losa Return Unused Expenditures/ Est%funded Ending Balance Fund Fund Title/Project Title 7/l/2022 Revenue Revenue Funds/loan repymt Transfers by Impact Fees 6/30/2023 2141 Parkland Acquisition Impact Fees-08 2,032,513.73 585,119.00 61,723.78 11,702.38 2,667,654.13 City administrative costs 11,702.38 100.0% 2142 Parkland Development Impact Fees-08 3,256,655.75 1,930,645.00 123,386.16 4,975,612.90 335,074.01 04501607 Petaluma Comm Sports Fields 4,926,000.00 100.0% 04502012 Schollenberger Improvements 11,000.00 100.0% City administrative costs 38,612.90 100.0% 2143 Open Space Acquisition Impact Fees-08 498,797.25 162,037.00 11,738.18 3,240.74 668,831.69 City administrative costs 3,240.74 100.0% 2152 City Facilities Development Impact Fees 5,726,722.61 2,309,540.00 106,625.59 437,890.80 7,704,997.40 c11202019 Council Chambers Improvements 56,000.00 56.0% c11202328 Fire Stations 1,2,3 Remodel 116,700.00 100.0% e11502236 Public Safety Facilities Assessment 132,000.00 52.0% e 11202026 27 Howard St Improvements 3,000.00 100.0% c11202116 Community Cntr Emergency Power Bkup&Bld 67,000.00 23.0% c11502015 Electrical Vehicle Chargers 17,000.00 24.0% City administrative costs 46,190.80 100.0% 2155 Storm Drainage Impact Fees 2,690,820.07 56,712.22 198,086.70 2,549,445.59 c 16302255 960 Lakeville Storm Drain 123,000.00 100.0% c16502254 Wilson Stormwater Pump Station Upgrades 57,750.00 100.0% 06301722 Petaluma River Flood Mgmt Denman 4 17,336.70 2.00/6 2156 Storm Drainage Impact Fees-08 624,661.48 12,629.71 12,775.28 252.59 649,313.88 City administrative costs 252.59 100.0% 2160 Traffic Impact Fees 3,115,843.60 584,317.89 2,428,460.00 1,271,701.49 c14501607 Petaluma Comm Sports Fields 200,000.00 5.0% e16402252 Pedestrian Bridge Renovations 3,500.00 100.0% c 16102146 Traffic Calming&Bike Boulevards 42,000.00 53.0% c14502114 Lych Creek Trail 10,000.00 23.0% 06102250 Traffic Signal Timing Upgrades 34,000.00 14.0% e16402238 Pedestrian Bridge Assessment 12,500.00 34.0% e16502134 Active Transportation Plan 7,000.00 32.0% c 16101601 Petaluma Blvd. South Rd Diet Extension 505,000.00 13.0% c65502211 Bus Stop Improvements 14,000.00 21.0% 06402141 1st and F St Bridge Replacement 168,000.00 8.0% c16102251 D Street Improvements 7,460.00 12.0% c 16102147 North McDowell Blvd Complete St 1,300,000.00 23.0% c16102032 Pedestrian Improvements Citywide 125,000.00 53.0% City administrative costs - 2161 Traffic Impact Fees-08 29,189,708.52 3,737,663.00 543,162.15 74,753.26 33,395,780.41 City administrative costs 74,753.26 100.0% DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Exhibit C FY 22/23 Development Impact Fee Schedule FEE TYPE LAND USE TYPE FEE UNIT OF MEASUREMENT City Facilities Development Impact Fee) Single Family Residential $7,419 Unit Multifamily Residential $4,995 Unit Accessory Dwelling $2,545 Unit Commercial $1,404 1,000 sq ft of building space Office $1,341 1,000 sq ft of building space Industrial $855 1,000 sq ft of building space Commercial Development Housing Linkage Fee Commercial $3.36 Square Foot Retail $5.81 Square Foot Industrial $3.46 Square Foot Open Space Acquisition Fee Single Family Residential $522 Unit Multifamily Residential $350 Unit Accessory Dwelling $179 Unit Commercial $100 1,000 sq ft of building space Office $95 1,000 sq ft of building space Industrial $61 1,000 sq ft of building space Park Land Acquisition Fee(Quimby and Non- Quimby Act Projects)(`') Single Family Residential $2,291 Unit Multifamily Residential $1,501 Unit Accessory Dwelling $761 Unit Commercial $421 1,000 sq ft of building space Office $402 1,000 sq ft of building space Industrial $255 1,000 sq ft of building space Park Land Development Impact Fee Single Family Residential $7,341 Unit Multifamily residential $4,943 Unit Accessory Dwelling $2,517 Unit Commercial $1,391 1,000 sq ft of building space Office $1,330 1,000 sq ft of building space Industrial $848 1,000 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Exhibit C FY 22/23 Development Impact Fee Schedule FEE TYPE LAND USE TYPE FEE UNIT OF MEASUREMENT Traffic Development Single Family Residential $18,656 Unit Impact Fee Multifamily Residential $11,453 Unit Accessory Dwelling * $5,172 Unit Senior Housing $4,986 Unit Office $24,643 1,000 sq ft of building space Hotel/Motel $7,349 Room Commercial/Shopping Commercial/Shopping $36,049 1,000 sq ft of building space Industrial/Warehouse $14,592 1,000 sq ft of building space Education $1,837 Student Institution $7,560 1,000 sq ft of building space Gas/Service Station $60,348 Fuel Position Wastewater Capacity Fee(B) Single Family Residential $9,846 Unit Multifamily Residential $6,519 Unit Accessory Dwelling $3,624 Unit $20.87 Per gallon daily flow Non-Residential Customers $4,742 Per daily pound of BOD $5,437 Per daily pound of TSS Water Capacity METER SIZE FEE Fee (per meter size) 3/4 $4,794 1" residential $4,794 1" non-residential $8,004 1 '/z $15,960 2" $25,546 3" $47,927 4" $79,894 6" $158,157 >6 Case by Case basis *Accessory dwelling units less than 750 square feet are exempt from development impact fees. For accessory dwelling units exceeding 34%of the square footage of a primary single-family dwelling or 51%of a primary multi-family dwelling,the ADU fees listed here shall apply. Accessory dwelling units not exceeding these thresholds,but over 750 square feet shall be prorated based on the proportion of the ADU size as it relates to the primary dwelling. (a) The Quimby Act applies only to fees and/or dedications imposed on certain subdivisions subject to the Subdivision Map Act to fund land acquisition costs for park or recreational purposes. (b) The wastewater capacity fee for non-residential users is based on the daily flow,biological oxygen demand and the total suspended solids of the wastewater being discharged. Please contact the Department of Public Works&Utilities at 707-776-3777 for a quote. DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 STORM DRAIN IMPACT FEE Calculation of Fee Runoff computation: The increase in runoff created by a given project is calculated for a 100-year storm, utilizing runoff coefficients based upon the portion of vegetated area to impervious surfaces, and expressed in acre-feet. Runoff coefficients are based upon the type of use, slope of the land, and percent of vegetation coverage. Commercial/Industrial: Projects pay a fee of$30,000 per acre foot of additional runoff. The amount of incremental runoff created is directly linked to the amount of landscaping provided. The maximum fee possible is $9,000 per acre of land. This would apply to a project with 20% or less landscaping. A project with 25% landscaping can expect a fee of$6,750 per acre, 30%would pay$6,300 per acre,and so on. Residential: Projects pay a fee of$15,000 per acre foot of additional runoff. Incremental runoff is dependent upon the density of a project and the amount of landscaping and open space provided. A high-density project with 20%or less area in landscaping could expect to pay$4,500 per acre. A type detached single-family subdivision would pay approximately$1,500 per acre. DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Exhibit D Status of Interfund Loans,Transfers,Refunds or Reallocation of Funds Fiscal Year 2022-23 Interfund Loans The Storm Drainage Impact Fee fund loaned the Storm Water Utility Operations fund$690,230 to cover storm water maintenance costs from January 1,2012 through June 30,2013. Payment of principal and interest for FY 22-23 was $45,990. The balance as of June 30,2023 is $294,087. This loan is scheduled to be repaid by June 30,2026. There were no Transfers,Refunds or Reallocation of Funds during FY 22-23. DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Exhibit E DEVELOPMENT IMPACT FEE PROGRAM FIVE -YEAR FINDINGS Final Report November 17, 2023 Prepared for: City of Petaluma Prepared by: Urban Economics Urban Economics. DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma TABLE OF CONTENTS 1. Introduction ...............................................................................................................1 Methodology............................................................................................................................2 Development Capacity and Growth Projections................................................................3 2. City Facilities Development Impact Fee...................................................................5 3. Parkland Development Impact Fee......................................................................... 12 4. Parkland Acquisition Impact Fee............................................................................ 15 5. Open Space Acquisition Impact Fee....................................................................... 17 6. Traffic Development Impact Fee ............................................................................ 19 LIST OF TABLES Table 1: City Facilities Development Impact Fee Project Summary........................................... 6 Table 2: City Facilities Development Impact Fee ($000s)........................................................... 10 Table 3: Parkland Development Impact Fee ($000s)................................................................... 14 Table 4: Parkland Acquisition Impact Fee ($000s)....................................................................... 16 Table 5: Open Space Acquisition Impact Fee ($000s) ................................................................. 18 Table 6:Traffic Development Impact Fee Project Summary..................................................... 19 Table 7:Traffic Mitigation Fee ($000s)...........................................................................................24 November 17,2023 i DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma 1 . INTRODUCTION The purpose of this report is to support the findings required by the Mitigation Fee Act (MFA) that local agencies shall make every five years for each development impact fee that an agency imposes on development projects.This report provides the information and analysis required to make these findings for the following City of Petaluma (City) development impact fees: ❑ City Facilities Development Impact Fee ❑ Parkland Development Impact Fee ❑ Parkland Acquisition Impact Fee ❑ Open Space Acquisition Impact Fee ❑ Traffic Development Impact Fee The five-year findings required by the MFA are shown below:' For the fifth fiscal year following the first deposit into the account or fund, and every five years thereafter, the local agency shall make all of the following findings with respect to that portion of the account or fund remaining unexpended,whether committed or uncommitted: (A) Identify the purpose to which the fee is to be put. (B) Demonstrate a reasonable relationship between the fee and the purpose for which it is charged. (C) Identify all sources and amounts of funding anticipated to complete financing in incomplete improvements identified in paragraph (2) of subdivision (a). (D) Designate the approximate dates on which the funding referred to in subparagraph (C) is expected to be deposited into the appropriate account or fund. The City imposes two other capital facilities fees on development projects that are not subject to the MFA. The Quimby Act Dedication and In-Lieu Fee is specifically exempt from the MFA.2 The Storm Drainage Impact Fee was adopted in 1982 pursuant to the Subdivision Map Act and has not been updated since the effective date of the MFA on January 1, 198V 1 California Government Code,sections 66000 through 66025,specifically section 66001(d)(1). 2 Ibid,section 66005(b). 3 Ibid,section 66483. November 17,2023 1 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma Methodology To make the MFA statutory findings noted above,this report relies on the two nexus studies used to justify adoption of each impact fee. The first study, City of Petaluma Mitigation Fee Act Nexus Report&,Quimby Act In-Lieu Fee Report,was completed by Municipal Resource Group in 2012 (MRG Nexus Study). This study provided documentation to adopt the City Facilities, Parkland Development,Parkland Acquisition,and Open Space Acquisition impact fees. The second study, TraffcMitigation Fee Program Update,was completed by Fehr &Peers also in 2012 (F&P Nexus Study).This study provided documentation to adopt the Traffic Mitigation Impact Fee. The F&P Nexus Study was updated in a memorandum from Willdan Financial Services to the City of Petaluma dated May 10, 2016 (Willdan Memorandum). This report also relies on the City's latest five-year capital improvement plan included in the Adopted Operating & Capital Improvement Budget;FY 2023-2024 adopted in June 2023 (CIP). The CIP covers the period FY 2023-24 through FY 2027-2028. The MFA findings stated above are to be made "with respect to that portion of the account or fund remaining unexpended, whether committed or uncommitted." For the purposes of this report those funds are the FY 2023-24 beginning fund balance for each fee account shown in the CIP.4 Total sources of funding over the five-year horizon are derived from estimated FY 2023-24 fee revenue and total sources by fee account.' Additional information was also provided by city staff when necessary. To comply with the reasonable relationship finding stated above (paragraph B of section 66001(d)(1)),this report examines the programming of the FY 2023- 24 beginning fund balance for each fee account to specific capital projects. First,CIP project descriptions are evaluated for compliance with the applicable nexus study. Second, total expenditures over the five-year CIP period (thus excluding expenditures to date) are compared to the beginning fund balance. If expenditures are greater than the beginning fund balance, there remains a reasonable relationship between the fee and the purpose for which it is charged because funds are not being held for unidentified uses. This report also uses the capital project information in the CIP to comply with the findings regarding alternative funding (paragraphs C and D of section 66001(d)(1)).The CIP identifies non-impact fee funding if needed to fully fund 4 City of Petaluma,Adopted Operating dam'Capital Improvement Budget;FY 2023-2024(2023),p.31. 5 Ibid., p. 31 and p. CIP-9. "Budgeted Expenditures"in the table on p. 31 reflect fee program administrative costs for FY 2023-24,while"Budgeted Transfers Out"reflect FY 2023-24 capital project funding.Total sources of funding from each fee account(beginning balance and future revenue)that are funding capital projects within the CIP five-year horizon are shown in the table on p.CIP-9. November 17,2023 2 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma a capital project that is also funded by impact fees, and the timing of that funding. Several CIP projects include undetermined funding when the City fully anticipates sufficient funding for a capital project,but specific sources have yet to be authorized. This approach is not unusual in capital improvement planning for two reasons: • The long time horizon for the planning, permitting, environmental compliance, and construction of public capital projects requires initiation of the project before a complete funding plan is developed. Otherwise, many potential projects would be deferred indefinitely. • The time needed to access specific funding sources, particularly intergovernmental grants,other intergovernmental funding programs,and private donations, as well as the time it takes to plan for the issuance of long-term debt to fund large capital projects, limits a local agency's ability to include then in a funding plan until authorization for the funding source has occurred. Project funding will be updated in the CIP and future five-year development impact fee program reports as specific sources are identified. Development Capacity and Growth Projections Urban Economics examined the amount of future development that may be reasonably anticipated within the City given available capacity, and therefore the continuing need for a development impact fee program. The latest 2023 estimates from the California Department of Finance indicate the City currently has a household population of 57,659.The latest estimate of jobs from the U.S. Census Bureau's OnTheMap estimates shows 27,131 primary jobs in Petaluma as of 2020.As further explained below,there remains significant development demand and available capacity to meet that demand within the City. Growth projections for the San Francisco Bay region are prepared by the Association of Bay Area Governments (ABAG).6 The most recent ABAG projections are for 2050. The ABAG growth projections did not identify specific figures for the City but rather for the South Sonoma County super district.The super district encompasses the cities of Petaluma,Cotati,Sonoma, and Rohnert Park,plus surrounding unincorporated areas.From the 2015 base year of the projections to 2050, super district households are projected to increase by 30 percent and jobs by 11 percent. G Association of Bay Area Governments,Plan Bay Area 2050 Final Blueprint Growth Pattern,updated January 21, 2021. November 17,2023 3 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma The City of Petaluma comprised approximately 36 percent of the households and 35 percent of the jobs within the super district in 2015.Applying the City's share of super district 2015 land use to the ABAG projections suggests approximately 71,000 residents and 28,000 jobs in 2050 within the City.Jobs grow by the same rate as the super district(11 percent)while population grows at a slower rate than households (20 percent versus 30 percent) because of declining household size (persons per household). The General Plan has a total buildout capacity of 72,707 residents and 46,540 jobs within City limits as reported in the MRG Nexus Study. The ABAG projections allocated to the City suggest that the City will be nearing residential buildout by 2050 while substantial nonresidential (job) capacity will remain. The City's Housing Element, recently adopted in May 2023 demonstrates the City's capacity for near term growth. The City's Regional Housing Needs Allocation (RHNA) is 1,910 new units and the Housing Element estimates that the City can accommodate 3,241 new housing units by 2031. Given the City's current average household size of 2.45 persons per household (based on California Department of Finance estimates) this represents a population growth of between 4,680 to 7,940 new residents within the next eight years,or a total population by 2031 of between 62,339 and 65,599.This pace of growth would result in achieving the ABAG projections and buildout before 2050. The pace of development and total population within the City will be affected by periodic swings in the real estate development cycle and other factors. For example, the City is currently experiencing a dip in population due to higher vacancy rates and lower persons per household.These factors are not constant and change over time. Based on this analysis of General Plan capacity and ABAG's regional projections, this report finds that overall, the City's population is expected to grow for several decades. Furthermore, the City has existing capacity to accommodate that growth. Therefore, this report concludes that the City has an ongoing need for a development impact fee program. November 17,2023 4 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma 2. CITY FACILITIES DEVELOPMENT IMPACT FEE Finding: Purpose of Fee The Capital Facilities Development Impact Fee funds several types of facilities including city administration, public safety, and community service facilities (library, community center, etc.). The purpose of the fee is to provide funding to achieve the City's goal of either maintaining existing or achieving desired service levels (depending on the facility type) as new development occurs.The MRG Nexus Study identifies the specific purposes of each of the facility types funded by the Fee and the share funded by the fee.' The MRG Nexus Study identifies the maximum fair share of each capital project that can be funded by the fee program based on the nexus methodology. The nexus allocates 100 percent of costs to the fee if the fee is based on existing standards or levels of service, and fee revenues are used to expand facility capacity and/or capabilities. The nexus allocates 21.1 percent of costs to the fee if the capital project serves both existing and new development by raising existing standards or level of service.These maximum funding shares remains unchanged until the nexus study is updated. Table 1 displays a summary of the 2012 project list, and the overall allocation to new development by project.These figures have not been updated for construction cost inflation to 2023. Finding: Reasonable Relationship The Capital Facilities Development Impact Fee bears a reasonable relationship to the purpose for which it is charged for the reasons explained below. These findings are based on the current CIP and additional information provided by city staff. • The CIP programs the beginning fee account fund balance and future revenue to projects identified in the MRG Nexus Study, as revised, that remain incomplete. • The CIP shows that the fee funds no more than the maximum funding share of each capital project based on the nexus methodology described above and additional information provided by city staff. • The CIP shows that fee program expenditures over the five-year horizon are greater than the FY 2023-24 beginning fee account fund balance, Municipal Resources Group, City of Petaluma Mitigation Fee Act Nexus Report 'Quimby Act In-Lieu Fee Report, Aug. 14,2012,pp.9-31. November 17,2023 5 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma indicating that fee revenues are not being accumulated for unidentified purposes. Table 1: City Facilities Development Impact Fee Project Summary Total Fee Program Funding Project Cost Percent Amount Construct City Hall $ 15,043,280 21.1% $ 3,174,132 Construct corporation yard 7,664,300 21.1% 1,617,167 Purchase VOIP system 200,000 21.1% 42,200 Purchase vehicles 556,250 100.0% 556,250 Purchase technology equipment 36,000 100.0% 36,000 Relocate and construct Fire Station#1 15,528,049 21.1% 3,276,418 Refurbish Fire Stations #2 and #3 6,344,000 21.1% 1,338,584 Purchase ALS ambulance 298,104 50.0% 149,052 Purchase firefighter protective equipment 98,175 100.0% 98,175 Construct Police Station 25,491,130 21.1% 5,378,628 Install communication tower 165,000 21.1% 34,815 Purchase Police officer equipment 90,666 100.0% 90,666 Purchase patrol vehicles 486,774 100.0% 486,774 Construct aquatic facility 9,787,382 21.1% 2,065,138 Expand library facility 4,600,340 100.0% 4,600,340 Expand community center 9,229,605 100.0% 9,229,605 Total $ 95,619,055 33.6% $ 32,173,945 Sources: Municipal Resources Group, LLC, City of Petaluma Mitigation Fee Act Nexus Report and Quimby Act In-Lieu Fee Report,Aug. 14,2012. A brief description of the reasonable relationship of each project in the CIP to the fee is described below. Based on the CIP, total expenditures and funding by funding source for each project are shown in Table 2 at the end of this section. Total uses of funds are consolidated into a single annual figure and the CIP provides more detail. • Reserve Apparatus Storage & Security Gate Installation: This project supports expansion of the fire apparatus fleet. The project reflects a more detailed specification of the vehicles and fire safety equipment projects included in the 2012 project list. Consistent with projects that expand facility capacity and/or capabilities, up to 100 percent of costs can be allocated to new development and the impact fee program. The fee funds 100 percent of project costs. • City Hall West Wing Space Remodel: This project creates a new City permit center and consolidates all building permit related departments into a single counter to facilitate the issuance of permits. The space being remodeled was previously rented by County, and the November 17,2023 6 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma project is converting this space for City uses.This conversion increases the City's permitting capacity. The project reflects a more detailed specification of the city hall and related general administrative facility projects included in the 2012 project list. Consistent with projects that expand facility capacity and/or capabilities,up to 100 percent of costs can be allocated to new development and the impact fee program.The fee funds 60.4 percent of project costs. • Electrical Vehicle Chargers: This project will support additional planning,investigation,and design documentation of existing building electrical capacity to prioritize electric vehicle charger installation at city facilities. The project reflects a more detailed specification of the new vehicles project included in the 2012 project list. Consistent with projects that expand facility capacity and/or capabilities, up to 100 percent of costs can be allocated to new development and the impact fee program based on in the 2012 nexus study. The fee funds 7.4 percent of project costs. • Library Facility Enhancement and Expansion: This project is a joint venture between Sonoma County and the City of Petaluma. The project will improve and enhance the Petaluma branch of the Sonoma County Library. Major elements of the project include improving access to the facility, expanding public areas, and upgrading the fire suppression system. The project reflects a more detailed specification of the library project included in the 2012 project list. Consistent with projects that expand facility capacity and/or capabilities, up to 100 percent of costs can be allocated to new development and the impact fee program.The fee funds 16.1 percent of project costs. • HVAC & Energy Efficiency Upgrades: This project will improve the efficiency of HVAC at most city owned facilities and include upgrades and replacements where necessary. The project reflects a more detailed specification of the city hall and related general administrative facility projects included in the 2012 project list. Consistent with projects that expand facility capacity and/or capabilities, up to 100 percent of costs can be allocated to new development and the impact fee program.The fee funds 35 percent of project costs. • Fire Station #4 / Public Safety Building: The Public Safety Facilities Assessment, completing in FY 22/23, is informing the construction and siting of a new fire headquarters that will include space for some integral police/public safety operations as well. The assessment is creating a roadmap for next steps including planning and funding needs. The existing facilities do not meet the departments' collective operational needs. The new facility will provide space for current and future needs, accommodate a diverse workforce, and November 17,2023 7 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma comply with current seismic and other public safety facility standards. The project reflects an expansion of the 2012 project list based on the recent facilities assessment. Consistent with projects that serve both existing and new development, up to 21.1 percent of costs can be allocated to new development and the impact fee program based on in the 2012 nexus study. The fee funds 20.8 percent of project costs. The CIP includes undetermined funding sources for this project. The City uses this designation when a capital project has adequate funding to proceed and full funding is anticipated, but the complete funding plan is under development (see Methodology section in the Introduction for more explanation). Project funding will be updated as specific sources are identified. • Fire Stations 11 2, and 3 Remodel:Identified by the Fire Department as needed to continue service to the community and to accommodate growth in both population and building density. The project reflects a more detailed specification of the two fire station projects included in the 2012 project list. Consistent with projects that serve both existing and new development, up to 21.1 percent of costs could be allocated to new development and the impact fee program based on in the 2012 nexus study.The fee funds 21.1 percent of project costs. The CIP includes undetermined funding sources for this project. The City uses this designation when a capital project has adequate funding to proceed and full funding is anticipated, but the complete funding plan is under development (see Methodology section in the Introduction for more explanation). Project funding will be updated as specific sources are identified. • Police Department Facility Remodel: This project will expand the capacity of the police station. This is considered part of the total cost of new police station listed in the MRG Nexus Study. The allocation of$4.6 million to the City Facilities Impact Fee is less than the $5.4 million allocated to the impact fee in the 2012 nexus study (not adjusted for inflation). The project reflects a more detailed specification of the police facility project included in the 2012 project list. Consistent with projects that serve both existing and new development, up to 21.1 percent of costs could be allocated to new development and the impact fee program based on in the 2012 nexus study. The fee funds 91.3 percent of project costs. However, city staff indicates that considering all police facility capital projects, either completed since the 2012 nexus study, under construction, or anticipated, particularly the estimate of $102 mil. for a new police headquarters that is outside the current five-year CIP planning horizon, fee funding for all projects will be less than 21.1 percent. November 17,2023 8 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma Of the projects identified in the MRG Nexus Study (see Table 1), the City is still pursuing projects which are not anticipated to be initiated until after the current five-year CIP. Below is a list of those projects: • Construct New City Hall • Construct Corp Yard • Expand Community Center Fee revenue also may be used for costs to comply with the MFA such as costs for fee collection and accounting, plus costs for administration and management of capital improvement projects funded by fee revenues. Findings: Alternative Funding Sources and Timing See Table 2 for the identified funding sources needed to complete each project and the timing of those sources. Sources of funds are differentiated by source and year. November 17,2023 9 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma Table 2: City Facilities Development Impact Fee ($000s) Estimate Adopted DIF Fee Life to Date Budget Funding Project No. Description thru FY 23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Total Share C11501911 Reserve Apparatus Storage&Security Gate Installation Total Uses 28 247 - - - - 275 Sources City Facilities DIF 50 225 275 100.0% Total Sources 50 225 275 C11202017 City Hall West Wing Space Remodel&Permit Center Total Uses 371 449 820 Sources City Facilities DIF 238 257 495 60.4% American Rescue Plan Act(ARPA) 160 - 160 Grants-SB2 165 165 Total Sources 563 257 820 C11502015 Electrical Vehicle Chargers Total Uses 394 301 181 181 181 142 1,380 Sources City Facilities DIF 17 17 17 17 17 17 102 7.4% General Fund 17 - - - - - 17 General Fund-Measure U 300 200 135 135 135 125 1,030 BayAreaAirOualityMgtDistrict Grant 15 - - - - - 15 Water Capital 76 76 Waste Water Capital 59 59 Donation-Green Building 22 22 Steet Maintenance 59 59 Total Sources 565 217 152 152 152 142 1,380 C11202121 Library Facility Enhancement and Expansion C11502224 Total Uses 88 4,293 - - - - 4,381 Sources City Facilities DIF 175 530 705 16.1 i General Fund-Measure U 600 268 868 Transient Occupancy Tax 12 - 12 ARPA 192 - 192 Library Infrastructure Grant - 1,110 1,110 Sonoma County Contribution 1,494 1,494 Total Sources 979 3,402 4,381 C11202223 HVAC&Energy Efficiency Upgrades Total Uses 307 1,877 214 2,398 Sources City Facilities DIF - 440 400 840 35.0% General Fund-Measure U 50 - - 50 American Rescue Plan Act(ARPA) 1,508 1,508 Total Sources 1,558 440 400 2,398 New Fire Station#4/Public Safety Building Total Uses - 750 750 8,900 16,525 26,925 Sources City Facilities DIF 250 750 - 4,600 5,600 20.8% Infrastructure Bond-Measure U - - 8,900 6,100 15,000 Developer Contributions/Donations 500 - - 500 Undetermined' z 5,825 5,825 Total Sources 750 750 8,900 16,525 26,925 New Fire Stations 1,2&3 Remodel Total Uses 101 - - 236 2,833 2,830 6,000 Sources City Facilities DIF 101 236 929 - 1,266 21.1/ Undetermined' 1,904 2,830 4,734 Total Sources 101 236 2,833 2,830 6,000 C11202225 Police Department Facility Remodel Total Uses 20 353 2,339 2,288 - - 5,000 Sources City Facilities DIF - - 2,279 2,288 4,567 91.3% American Rescue Plan Act(ARPA) 433 433 Total Sources 433 2,279 2,288 5,000 November 17,2023 10 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma Table 2: City Facilities Development Impact Fee ($000s) (continued) Estimate Adopted DIF Fee Life to Date Budget Funding Project No. Description thru FY 23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Total Share City Facilities Development Impact Fee Account Beginning Fund Balance NA 7,705 7,133 4,834 3,440 (959) 7,705 Estimated Fee Revenue2 581 1,147 1,147 1,147 1,147 1,147 6,316 Expenditures3 (581) (1,719 (3,446 (2,541 (5,546 17 (13,850) Estimated Ending Fund Balance NA 7,133 4,834 3,440 (959) 171 171 '"Undetermined funding"as a source is used when a project has adequate funding to proceed and full funding is anticipated,but the complete funding plan is under development(see Methodology section in the Introduction for more explanation).Project funding will be updated as specific sources are identified. CIP does not estimate fee revenue beyond FY 2023-2024 so future annual revenue assumed to equal revenue for FY 2023-2024. 'Expenditures do not include fee program administration costs. November 97, 2023 11 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma 3. PARKLAND DEVELOPMENT IMPACT FEE Finding: Purpose of Fee The Parkland Development Impact Fee provides funding to achieve the City's General Plan standards for construction of neighborhood and community parks. Parkland acquisition is funded separately by the Parkland Acquisition Impact Fee. The MRG Nexus Study applies General Plan standards for community and neighborhood parks to future development to determine the funding required by the fee.' New development can fund up to 100 percent of associated costs if new development is the primary beneficiary of the additional parks,or up to 21.1 percent if both existing and new development benefit (see Finding.•Purpose of Fee section in Chapter 2, City Facilities Development Impact Fee). Finding: Reasonable Relationship The Parkland Development Impact Fee bears a reasonable relationship to the purpose for which it is charged for the reasons explained below.These findings are based on the current CIP. • The CIP programs the beginning fee account fund balance and future revenue to projects that expand neighborhood and community parks as identified in the MRG Nexus Study. • The CIP shows that the fee funds no more than the maximum funding share of each capital project based on the nexus methodology described above. • The CIP shows that fee program expenditures over the five-year horizon are greater than the FY 2023-24 beginning fee account fund balance, indicating that fee revenues are not being accumulated for unidentified purposes. A brief description of the reasonable relationship of each project in the CIP to the fee is described below. Based on the CIP, total expenditures and funding by funding source for each project are shown in Table 2 at the end of this section. Total uses of funds are consolidated into a single annual figure and the CIP provides more detail. • Petaluma Community Baseball Field: This project expands the City's capacity of park amenities. The fee funds 77 percent of project costs. All fee funding occurred in prior years and no funds are allocated in the CIP. s Ibid.,pp. 32-41. November 17,2023 12 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma • Lucchesi Skate Park:This project adds capacity to the existing skatepark by identifying and adding elements that would encourage participation and skills progression from a broader range of ages, ability levels, and user groups.The fee funds 23.1 percent of project costs. The CIP includes undetermined funding sources for this project.The City uses this designation when a capital project has adequate funding to proceed and full funding is anticipated, but the complete funding plan is under development (see Methodology section in the Introduction for more explanation). Project funding will be updated as specific sources are identified. • Marina, Turning Basin Dredging & Dock Upgrades: This project benefits both existing and new development. The primary goal of this project is to recover the full operational water depth for boating safety, navigation, and (state-leased) Marina operations. The project includes removal of dredged material from Shollenberger Park for beneficial reuse at an adjacent wetland area. The fee funds 3.6 percent of project costs. The CIP includes undetermined funding sources for this project.The City uses this designation when a capital project has adequate funding to proceed and full funding is anticipated, but the complete funding plan is under development (see Methodology section in the Introduction for more explanation). Project funding will be updated as specific sources are identified. • Shollenberger Amphitheater and Kiosk Improvements: This project will expand park facilities by constructing an environmental educational kiosk and an outdoor amphitheater at Shollenberger Park. The fee funds 13.5 percent of project costs. Fee revenue also may be used for costs to comply with the MFA such as costs for fee collection and accounting, plus costs for administration and management of capital improvement projects funded by fee revenues. Findings: Alternative Funding Sources and Timing See Table 3 for the identified funding sources needed to complete each project and the timing of those sources. Sources of funds are differentiated by source and year. November 17,2023 13 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma Table 3: Parkland Development Impact Fee ($000s) Estimate Adopted DIF Fee Life to Date Budget Funding Project No. Description thru FY 23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Total Share C14501607 Petaluma Community Baseball Field Total Uses 6,284 913 - - - - 7,197 Sources Parkland DIF 5,543 - - 5,543 77.0% Donations/Developer 100 - 400 500 Contrib. Measure M-Parks - 300 - 300 General Fund Measure U 154 - 154 Transient Occupancy Tax - 500 500 Traffic Impact Fees 200 200 Total Sources 5,997 800 400 7,197 C14402215 Lucchesi Skate Park Total Uses 110 1,528 1,175 2,813 Sources Parkland DIF - 650 - 650 23.1% Measure M-Parks 150 - 400 550 American Rescue Plan Act 313 - 313 (ARPA) General Fund 525 - 525 Transient Occupancy Tax - 500 500 (TOT) Undetermined' 275 275 Total Sources 988 650 1,175 2,813 c14402010 Marina Dredging&Dock Upgrades Total Uses 2,070 5,259 6,418 13,747 Sources Parkland DIF 387 - 107 494 3.6% General Fund 1,100 - - 1,100 General Fund-Measure U - 700 700 1,400 Transient Occupancy Tax(TO 573 - - 573 Storm Drainage Utility 50 - - 50 Undetermined' - 4,559 5,571 10,130 Total Sources 2,110 5,259 6,378 13,747 C14502012 Shollenberger Amphitheater&Kiosk Improvements Total Uses 26 249 - 275 Sources Parkland DIF 27 10 37 13.5% Measure M-Parks - 25 25 California State Parks Grant _ 213 213 Total Sources 27 248 - 275 Parkland Development Impact Fee Account Beginning Fund Balance NA 335 289 796 1,410 2,024 335 Estimated Fee Revenue2 5,957 614 614 614 614 614 9,027 ExpenditureS2,3 (5,957) (660) (107) - - - (6,724) Ending Fund Balance NA 289 796 1,410 2,024 2,638 2,638 '"Undetermined funding"as a source is used when a project has adequate funding to proceed and full funding is anticipated,but the complete funding plan is underdevelopment(see Methodology section in the Introduction for more explanation). Project funding will be updated as specific sources are identified. 2 CIP does not estimate fee revenue beyond FY 2023-2024 so future annual revenue assumed to equal revenue for FY 2023-2024."Life To Date"expenditures and revenue exclude $105,000 for a playground replacements project not included in this table because no future funding is allocated. 3 Expenditures do not include fee program administration costs. November 17,2023 14 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma 4. PARKLAND ACQUISITION IMPACT FEE Finding: Purpose of Fee The purpose of the Park Land Acquisition Fee is to provide funding to achieve the City's goal of acquiring the neighborhood and community parks identified in its General Plan. Park construction is funded separately by the Parkland Development Impact Fee. The MRG Nexus Study calculates the remaining parkland necessary to purchase to meet the level of park development proposed by the General Plan and allocates those costs to the fee. The implied standard for purposes of the fee (new park acres per 1,000 residents) is less than the existing standard so new development can fund up to 100 percent of parkland acquisition costs. Finding: Reasonable Relationship The Parkland Acquisition Impact Fee bears a reasonable relationship to the purpose for which it is charged for the reasons explained below. City staff has been exploring the acquisition of land to become Cedar Grove Park. According to city staff, this project is not reflected in the current CIP because acquisition is not anticipated during the current five-year CIP horizon. With adoption of this report the City is establishing a capital project reserve account for this project. See Table 4 at the end of this section for detail.Based on the information in Table 4: • City staff program the beginning fee account fund balance and future revenue to projects that expand parkland as identified in the MRG Nexus Study. • The CIP shows that the fee funds no more than the maximum funding share of each capital project based on the nexus methodology described above. • The CIP shows that fee program expenditures over the five-year horizon are greater than the FY 2023-24 beginning fee account fund balance, indicating that fee revenues are not being accumulated for unidentified purposes. Fee revenue also may be used for costs to comply with the MFA such as costs for fee collection and accounting, plus costs for administration and management of capital improvement projects funded by fee revenues. November 17,2023 15 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma Findings: Alternative Funding Sources and Timing As shown in Table 4, no additional funding sources are anticipated to complete this project. Table 4: Parkland Acquisition Impact Fee ($000s) Estimate Adopted DIF Fee Project Life to Date Budget Funding No. Description thru FY 23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Total Share N/A Cedar Grove Park(reserve to complete)' Total Uses - 3,057 195 195 195 3,641 Sources Parkland Acquisition DIF 3,057 195 195 195 3,641 100% Total Sources - 3,057 195 195 195 3,641 Parkland Acquisition Impact Fee Account Beginning Fund Balance NA 2,668 2,862 - - - 2,668 Estimated Fee Revenue 195 195 195 195 195 973 Expenditures (3,057 195 195 195 3,641) Ending Fund Balance NA 2,862 - - - - 'This project is not in the City's CIP. Funds are being accumulated in a capital project reserve account for future acquisition anticipated to occur beyond the CIP five-year planning horizon. 2 CIP does not estimate fee revenue beyond FY 2023-2024 so future annual revenue assumed to equal revenue for FY 2023-2024. J Expenditures do not include fee program administration costs. November 17,2023 16 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma 5. OPEN SPACE ACQUISITION IMPACT FEE Finding: Purpose of Fee The purpose of the Open Space Acquisition Fee is to provide funding to acquire sufficient open space to achieve the City's General Plan standard. Unlike neighborhood and community parks, there are no construction costs associated with open space. The MRG Nexus Study calculates the remaining open space necessary to purchase to achieve the General Plan standard and allocates those costs to the fee. The implied standard for purposes of the fee (open space acres per 1,000 residents) is less than the existing standard so new development can fund up to 100 percent of open space acquisition costs. Finding: Reasonable Relationship The Open Space Acquisition Impact Fee bears a reasonable relationship to the purpose for which it is charged for the reasons explained below. City staff has been exploring two open space acquisition projects, La Questa Ridge and Denman Reach Phase V. According to city staff, these projects are not reflected in the current CIP because acquisition is not anticipated during the current five-year CIP horizon. With adoption of this report the City is establishing a capital project reserve account for each project. • City staff program the beginning fee account fund balance and future revenue to projects that expand open space as identified in the MRG Nexus Study. • The fee funds no more than the maximum funding share of each capital project based on the nexus methodology described above. • Fee program expenditures over the five-year horizon are greater than the FY 2023-24 beginning fee account fund balance, indicating that fee revenues are not being accumulated for unidentified purposes. A brief description of the reasonable relationship of each project to the fee is described below. Total expenditures and funding by funding source for each project are shown in Table 5 at the end of this section. • La Cresta Ridge Open Space: This project seeks to acquire open space at La Cresta Ridge. The City estimates that fees will fund 46 percent of project costs. The project includes undetermined funding sources. The City uses this designation when a capital project has adequate funding to proceed and full funding is anticipated, but the complete funding plan is under November 17,2023 17 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma development (see Methodology section in the Introduction for more explanation). Project funding will be updated as specific sources are identified. • Denman Reach Phase V:This project consists of the acquisition of land and/or an easement so that the Denman Reach trail can connect to Petaluma Boulevard North at Industrial Drive.The City estimates that fees will fund 100 percent of project costs. Fee revenue also may be used for costs to comply with the MFA such as costs for fee collection and accounting, plus costs for administration and management of capital improvement projects funded by fee revenues. Findings: Alternative Funding Sources and Timing See Table 5 for the identified funding sources needed to complete each project and the timing of those sources. Sources of funds are differentiated by source and year. Table 5: Open Space Acquisition Impact Fee ($000s) Estimate Adopted DIF Fee Project Life to Date Budget Funding No. Description thru FY 23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Total Share N/A La Cresta Ridge Open Space(reserve to complete)' Total Uses - 532 82 82 1,705 2,400 Sources Open Space Acquisition Impact Fee 532 82 82 82 776 32% Undetermined - 1,624 1,624 Total Sources 532 82 82 1,705 2,400 N/A Denman Reach Phase V(reserve to complete)' Total Uses - - - 300 300 Sources Open Space Acquisition Impact Fee 300 300 100% Total Sources 300 300 Open Space Development Impact Fee Account Beginning Fund Balance N/A 669 750 300 300 300 669 Estimated Fee Revenue - 82 82 82 82 82 408 Expenditures' - (5321 (821 (82) (382 (1,076) Ending Fund Balance N/A 750 300 300 300 - 'This project is not in the City's CIP.Funds are being accumulated in a capital project reserve account for future acquisition anticipated to occur beyond the CIP five-year planning horizon. 2"Undetermined funding"as a source is used when a project has adequate funding to proceed and full funding is anticipated,but the complete funding plan is underdevelopment(see Methodology section in the Introduction for more explanation). Project funding will be updated as specific sources are identified. 3 CIP does not estimate fee revenue beyond FY 2023-2024 so future annual revenue assumed to equal revenue for FY 20232024. °Expenditures do not include fee program administration costs. November 17,2023 18 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma 6. TRAFFIC DEVELOPMENT IMPACT FEE Finding: Purpose of Fee The purpose of the Traffic Development Impact Fee is to fund improvements and expansion to the City's citywide transportation infrastructure to address and manage the impacts of additional travel demand from new development. Strategies may include not only managing vehicle impacts, but also shifting vehicle trip demand to transit, biking, and walking. The F&P Nexus Study identifies the specific purposes of each of the facility types funded by the fee. The Willdan Memorandum (2016 update to the F&P Nexus Study) updated the maximum fair share of each capital project that can be funded by the fee based on the F&P Nexus Study methodology. That study allocated a share of the cost of each project to the fee based on the results of a traffic modeling analysis that identified the impacts of new development. These maximum funding shares remains unchanged until the nexus study is updated. Table 6 displays a summary of the F&P Nexus Study project list as updated by the Willdan Memorandum, and the cost allocation to new development. These figures have not been updated for construction cost inflation to 2023. Table 6: Traffic Development Impact Fee Project Summary Maximum Fee Funding (Nexus Analysis) Project cost Fair Share Amount Rainier Avenue Extension and Interchange $ 89,725,097 100.0% $ 89,725,097 Caulfield Lane Extension 54,561,194 100.0% 54,561,194 Old Redwood Highway Interchange Improvements 2,879,990 100.0% 2,879,990 Caulfield Lane/Payran Street Intersection Improvements 500,000 100.0% 500,000 Petaluma Blvd./Magnolia Ave.—Payran St. Intersection 500,000 100.0% 500,000 Construction of New Intersections Throughout the City 2,250,000 74.1% 1,668,224 Traffic Signal Upgrades Throughout the City 1,885,000 22.4% 422,803 Pedestrian/Bicycle Improvements Throughout the City 27,389,000 32.8% 8,978,853 Transit Improvements Throughout the City 2,500,000 22.4% 560,746 Redevelopment Supplement 9,972,739 100.0% 9,972,739 SMART Station (350 Parking Spaces) 10,500,000 22.4% 2,355,134 Administration 1,278,262 100.0% 1,278,262 Total $203,941,282 85.0% $173,403,042 Costs exclude previously identified funding for Rainier Avenue,Caulfield Land,and Old Redwood Highway projects shown in the F&P Nexus Study. 2 Represents the funding disputed by the California Department of Finance in former Petaluma Community Development Commission(PCDC) (redevelopment agency)agreements for the Rainier Aveue and Old Redwood Highway projects.The City will collect this supplement pending resolution of the status of these funds.If the PCDC agreements are recognized the project list and fee will be adjusted to remove the Redevelopment Supplement. Sources: Willdan Financial Services,memorandum to City of Petaluma,May 10,2016. November 17,2023 19 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma Finding: Reasonable Relationship The Traffic Mitigation Fee bears a reasonable relationship to the purpose for which it is charged for the reasons explained below: • The fee funds no more than the maximum funding share of each capital project based on the nexus methodology described above. • The fee is programmed to projects identified in the 2016 nexus study, as revised, that remain incomplete. These projects are documented in the CIP. • The CIP shows that fee program expenditures over the five-year horizon are greater than the FY 2023-24 beginning fee account fund balance, indicating that fee revenues are not being accumulated for unidentified purposes A brief description of the reasonable relationship of each project in the CIP to the Fee is described below. Based on the CIP, total expenditures and funding by funding source for each project are shown in Table 7. Total uses of funds are consolidated into a single annual figure and the CIP provides more detail. • Rivertrail — 101/Crossing, Crosstown Connector- The Rivertrail- 101/Crossing, included in the Petaluma River Access and Enhancement Plan, provides a critical Rivertrail gap linkage with access to the river as well as the downtown transit area. It is a Crosstown Connector linking the southern, central, and eastern portions of the City. The project reflects a more detailed specification of the pedestrian/bicycle improvements project included in the 2016 project list. Up to 32.8 percent of costs can be allocated to new development and the impact fee program. The fee funds 27.6 percent of project costs. The CIP includes undetermined funding sources for this project. The City uses this designation when a capital project has adequate funding to proceed and full funding is anticipated, but the complete funding plan is under development (see Methodology section in the Introduction for more explanation). Project funding will be updated as specific sources are identified. • North McDowell Boulevard Complete Streets: This project expands bike and pedestrian capacity. This design will improve safety for all modes of transportation and encourage more bicycle and pedestrian use by adding bicycle lanes, improving sidewalks, and installing ADA accessibility improvements.The project reflects a more detailed specification of the pedestrian/bicycle improvements project included in the 2016 project list. Up to 32.8 percent of costs can be allocated to new development and the impact fee program. The fee funds 11.8 percent of project costs. November 17,2023 20 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma • Caulfield Bridge Crosstown Connector: Project (listed as Caulfield Lane Extension in the 2016 project list) will connect east and west Petaluma via Caulfield Lane over the Petaluma River to Petaluma Blvd. South near the Hwy 101 bridge at the southern end of the city. Up to 100 percent of costs can be allocated to new development and the impact fee program. The fee funds 48.9 percent of project costs. The CIP includes undetermined funding sources for this project. The City uses this designation when a capital project has adequate funding to proceed and full funding is anticipated, but the complete funding plan is under development (see Methodology section in the Introduction for more explanation). Project funding will be updated as specific sources are identified. • Pedestrian Improvements Citywide:This program delivers roadway and multi-use trail improvements focused on safety and accessibility. Priority will be given to areas with high pedestrian activity, including areas surrounding schools and parks, as well as streets and intersections with higher collision rates. The project reflects a more detailed specification of the pedestrian/bicycle improvements project included in the 2016 project list. Up to 32.8 percent of costs can be allocated to new development and the impact fee program. The fee funds 32.8 percent of project costs. • 1st and F St Bridge Replacement: Street maintenance funds will fund most project costs. Traffic impact fees will fund the pedestrian elements including a new sidewalk.The project reflects a more detailed specification of the pedestrian/bicycle improvements project included in the 2016 project list. Up to 32.8 percent of costs can be allocated to new development and the impact fee program. The fee funds 8.2 percent of project costs. • Traffic Signal Improvements — Citywide: This multi-year, multi- phased project will modernize the City's Traffic Signal Timing System to deliver continuous and reliable communications with a central management system. Up to 22.4 percent of costs can be allocated to new development and the impact fee program. The fee funds 16.4 percent of project costs. • Traffic Calming & Bike Boulevards: This project targets safer walking and biking,particularly around schools and parks.The project reflects a more detailed specification of the pedestrian/bicycle improvements project included in the 2016 project list. Up to 32.8 percent of costs can be allocated to new development and the impact fee program. The fee funds 32.7 percent of project costs. • D Street Improvements: This Complete Streets project will include reconstruction of D Street from the city limits to Petaluma Boulevard November 17,2023 21 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma South along with traffic calming and bike and pedestrian improvements to address safety and equity. Traffic impact fees will fund the bike and pedestrian elements. The project reflects a more detailed specification of the pedestrian/bicycle improvements project included in the 2016 project list. Up to 32.8 percent of costs can be allocated to new development and the impact fee program. The fee funds 11.5 percent of project costs. The CIP includes undetermined funding sources for this project. The City uses this designation when a capital project has adequate funding to proceed and full funding is anticipated, but the complete funding plan is under development (see Methodology section in the Introduction for more explanation). Project funding will be updated as specific sources are identified. • Pedestrian Bridge Renovations: New development is funding the share of this project that will add capacity. The project reflects a more detailed specification of the pedestrian/bicycle improvements project included in the 2016 project list. Up to 32.8 percent of costs can be allocated to new development and the impact fee program. The fee funds 32.8 percent of project costs. • Active Transportation Plan & Wayfinding: New development is funding a share of the implementation of this master plan.The project reflects a more detailed specification of the pedestrian/bicycle improvements project included in the 2016 project list. Up to 32.8 percent of costs can be allocated to new development and the impact fee program. The fee funds 32.6 percent of project costs. • Pavement Restoration & Reconstruction Citywide: The fee will fund the parts of this project associated with expansion of the City's bike, pedestrian, and active transportation infrastructure. The project reflects a more detailed specification of the pedestrian/bicycle improvements project included in the 2016 project list. Up to 32.8 percent of costs can be allocated to new development and the impact fee program. The fee funds 10.8 percent of project costs. • Bicycle/Pedestrian Wayfinding and Bicycle Parking:This project will implement bicycle and pedestrian directional/wayfinding signage and bike racks throughout Petaluma on an ongoing basis. The project reflects a more detailed specification of the pedestrian/bicycle improvements project included in the 2016 project list. Up to 32.8 percent of costs can be allocated to new development and the impact fee program. The fee funds 33.0 percent of project costs. • Lynch Creek Trail / Crosstown Connector: This project is a vital non-motorized east-west connection in the heart of Petaluma.The trail will expand the capacity of the City's parks and transportation November 17,2023 22 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma amenities and facilities. The project reflects a more detailed specification of the pedestrian/bicycle improvements project included in the 2016 project list. Up to 32.8 percent of costs can be allocated to new development and the impact fee program. The fee funds 32.8 percent of project costs. The CIP includes undetermined funding sources for this project. The City uses this designation when a capital project has adequate funding to proceed and full funding is anticipated, but the complete funding plan is under development (see Methodology section in the Introduction for more explanation). The City is currently seeking grant revenue to fully fund this project. If grants cannot be secured to fund this project, the City may use the fee. Project funding will be updated as specific sources are identified. • Bus Stop Improvements:This project expands the sidewalk width in front of bus stops to improve accessibility for wheelchair users and adds features for passenger comfort like shelters, benches, trash cans, and bike racks.The project reflects a more detailed specification of the transit improvements project included in the 2016 project list. Up to 22.4 percent of costs can be allocated to new development and the impact fee program. The fee funds 22.3 percent of project costs. Of the projects identified in the Willdan Memorandum (see Table 6), the City is still pursuing projects which are not anticipated to be initiated until after the current five-year CIP. Below is a list of those projects: • Rainier Avenue Extension • Old Redwood Highway Interchange Improvements • Caulfield Lane/Payran Street Intersection Improvements • Petaluma Blvd./Magnolia Ave.—Payran St. Intersection • Construction of New Intersections Throughout the City • SMART Station (350 Parking Spaces) Fee revenue also may be used for costs to comply with the MFA such as costs for fee collection and accounting, plus costs for administration and management of capital improvement projects funded by fee revenues. Findings: Alternative Funding Sources and Timing See Table 7 for the identified funding sources needed to complete each project and the timing of those sources. Sources of funds are differentiated by source and year. November 17,2023 23 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma Table 7: Traffic Mitigation Fee ($000s) Estimate Adopted DIF Fee Life to Date Budget Funding Project No. Description thru FY 23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Total Share C16101519 Rivertrail-101/Crossing,Crosstown Connector Total Uses 53 150 - 4,520 - - 4,723 Sources Traffic DIF 3 155 1,146 1,304 27.6% Developer contributions 50 - - 50 Undetermined' 3,369 3,369 Total Sources 53 155 4,515 4,723 C16102147 North McDowell Boulevard Complete Streets Total Uses 8,868 5,235 - 14,103 Sources Traffic DIF 1,300 364 1,664 11.8% Street Maintenance 719 3,320 4,039 Bond-Measure U Sales Tax 5,000 3,400 8,400 Total Sources 7,019 7,084 14,103 C16401824 Caulfield Bridge Crosstown Connector Total Uses 570 341 6,199 51,335 58,445 Sources Traffic DIF - - 5,784 22,789 28,573 48.9% Developer contributions 1,326 - - 1,326 Undetermined" 28,546 28,546 Total Sources 1,326 5,784 51,335 58,445 C16102032 Pedestrian Improvements Citywide Total Uses 314 440 273 221 221 221 1,690 Sources Traffic DIF 77 287 136 20 20 14 554 32.8% Street Maintenance 193 164 137 201 201 202 1,098 Measure M Parks 38 38 Total Sources 308 451 273 221 221 216 1,690 C16402141 1st and F St Bridge Replacement Total Uses 2,101 422 - - - 2,523 Sources Traffic DIF 168 39 207 8.2% Street Maintenance 2,022 294 2,316 Total Sources 2,190 333 2,523 C16102250 Traffic Signal Improvements-Citywide Total Uses 512 153 153 153 153 153 1,277 Sources Traffic DIF 34 35 35 35 35 35 209 16.4% Street Maintenance 478 118 118 118 118 118 1,068 Total Sources 512 153 153 153 153 153 1,277 C16102146 Traffic Calming&Bike Boulevards Total Uses 246 200 200 200 200 200 1,246 Sources Traffic DIF 115 66 66 66 66 29 408 32.7% Street Maintenance 90 134 134 134 134 212 838 Total Sources 205 200 200 200 200 241 1,246 C16102251 D Street Improvements Total Uses 177 500 1,348 2,762 - - 4,787 Sources Traffic DIF 11 102 264 172 549 11.5% Street Maintenance 92 103 - - 195 Undetermined' 369 1,084 2,590 4,043 Total Sources 103 574 1,348 2,762 4,787 C16402252 Pedestrian Bridge Renovations Total Uses 22 248 1,730 - 2,000 Sources Traffic DIF 21 80 555 656 32.8% Street Maintenance 190 1,154 1,344 Total Sources 21 270 1,709 2,000 November 17,2023 24 DocuSign Envelope ID:66766FDF-4404-4685-9549-CEDF85614766 Development Impact Fee Program Five-Year Findings City of Petaluma Table 7: Traffic Mitigation Fee ($000s) (continued) Estimate Adopted DIF Fee Life to Date Budget Funding Project No. Description thru FY 23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Total Share E16502134 Active Transportation Plan&Wayfinding Total Uses 223 10 - - - - 233 Sources Traffic DIF 60 16 76 32.6% Street Maintenance 123 34 157 Total Sources 183 50 233 C16102248 Pavement Restoration&Reconstruction Citywide Total Uses 1,923 6,719 5,197 3,198 3,198 3,198 23,433 Sources Traffic DIF - - 1,200 561 561 213 2,535 10.8% Road Maint&Rehab Acct(RMRA) - - - 1,878 2,000 420 4,298 Bond-Measure U Sales Tax 2,000 7,000 7,600 16,600 Total Sources 2,000 7,000 8,800 2,439 2,561 633 23,433 New Bicycle/Pedestrian Wayfinding and Bicycle Parking Total Uses 120 62 - 182 Sources Traffic DIF 30 30 - 60 33.0% Street Maintenance/Highway Users - - 26 62 88 BAAQMD TFCA 34 34 Total Sources 34 30 56 62 182 C14502114 Lynch Creek Trail/Crosstown Connector Total Uses 539 577 311 311 1,738 Sources Donations/Developer Contrib. 30 30 TFCA 173 - - - 173 SCTA TDA 3 213 - 213 Traffic DIF 143 427 - - 570 32.8% Undeterminedl'2 236 311 205 752 Total Sources 559 663 311 205 1,738 C65502211 Bus Stop Improvements Total Uses 66 80 80 80 80 80 466 Sources Traffic DIF 14 18 18 18 18 18 104 22.3% TDA Transit Capital 52 62 62 62 62 62 362 Total Sources 66 80 80 80 80 80 466 Traffic Development Impact Fee Account Beginning Fund Balance NA 34,667 36,723 32,310 11,178 14,153 34,667 Estimated Fee Revenue3 1,946 3,6751 3,675 3,675 3,675 3,675 20,321 Expenditures° (1,946) 1,619) 8,088) 24,807) 700) 309) 37,469) Estimated Ending Fund Balance NA 36,723 32,310 11,178 14,153 17,519 17,519 '"Undetermined funding"as a source is used when a project has adequate lunding to proceed and full funding is anficipated,but the complete funding plan is under development(see Methodology section in the Introduction for more explanation).Project funding will be updated as specific sources are identified. 3 The City is currently seeking grant revenue to fully fund this project.If grants cannot be secured to fund this project,the City may use the traffic development impact fee fund. a CIP does not estimate fee revenue beyond FY 2023-2024 so future annual revenue assumed to equal revenue for FY 2023-2024.'fife To Date'expenditures and revenue exclude$200,000 for a Petaluma Community Baseball Field project not included in this table because no future funding is allocated. Expenditures do not include fee program administration costs. November 17,2023 25