Title
North Natomas Public Facilities Land Acquisition Fee Update 2024 (Noticed 04/19/2024 and 04/25/2024)
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FileID
File ID: 2024-00546
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Location
Location: Districts 1, Represented by Councilmember Kaplan; District 3, Represented by Mayor Pro Tem Talamantes
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Recommendation
Recommendation: Conduct a Public Hearing and upon conclusion, adopt a Resolution increasing the Public Facilities Land Acquisition Fee for the North Natomas Land Acquisition Program.
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Contact
Contact: Mary Jean Rodriguez, Senior Development Project Manager, (916) 808-1980, mrodriguez@cityofsacramento.org; Sheri Smith, Special Districts Manager, (916) 808-7204, ssmith@cityofsacramento.org, Department of Finance
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Presenter
Presenter: Mary Jean Rodriguez, Senior Development Project Manager, (916) 808-1980, mrodriguez@cityofsacramento.org
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Attachments
Attachments:
1-Description/Analysis
2-Background
3-Current and Proposed Fee Schedule
4-Resolution
5-Exhibit A (Fee Update)
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Description/Analysis
IssueDetail
Issue Detail: The North Natomas Financing Plan (NNFP) adopted by Council Resolution No. 1994-0495 and updated on several subsequent occasions, includes a land acquisition program (LAP) to ensure the City’s timely acquisition of public land for installation of infrastructure and other public facilities. Additional information on the LAP is included in the Background section of the report.
Since 1997, the North Natomas Public Facilities Land Acquisition Fee (Fee) has been paid into the LAP by developers who pull building permits, and credits have been issued to developers as compensation for lands they dedicate to the City. Under the California Mitigation Fee Act (Government Code § 66000 et seq.) and City Code Chapter 18.24, Article III, Fee revenues must be used either to acquire land or to purchase outstanding fee credits when the City determines that it no longer needs the revenues to acquire LAP lands. Landowners dedicating more than their fair share of public land are reimbursed or given fee credits for excess dedication through the LAP with advance approval by the City and execution of a Reimbursement/Credit Agreement with the City. If cash reimbursement is requested, such reimbursement will be limited to funds received by the City from the LAP. The right to reimbursement through cash requires Council action and execution of a Waiver and Release Agreement. Alternatively, if fee credits are requested, such fee credits will be applicable only against the Fee at 92%. The City will retain a 3% administrative fee and 5% land value contingency.
The amounts of the Fee paid into this program and the Public Land Acquisition Value (PLAV) used to acquire public land are reviewed annually and may be updated based on the results of an independent land valuation study, in accordance with City Code section 18.24.400. The Department of Finance Infrastructure Finance Division is recommending adjustment of the Fee amount. To establish assigned values and balance the effects of wide swings in land values, an independent appraisal is completed annually to determine the weighted average land value for properties in the NNFP area over the last three years. The 2024 Appraisal Report determined that as of November 1, 2023, the PLAV of developable land per acre has increased by 9.58%, from $375,058 per acre to $410,984 per acre. The increase in the PLAV is mostly attributed to higher residential land values.
As such, staff is recommending a 9.58% increase in the Fee. The Updated North Natomas Public Facilities Land Acquisition Fee Schedule, Exhibit A to the Resolution, breaks down the updated Fee by specific land use. Such an increase would be effective July 1, 2024. The Fee includes a 3% administration fee to pay for the City’s time and expense in acquiring the land and managing the program plus a 5% land value contingency (to account for potential further increases in the PLAV over the next year). There are no additional changes recommended for the LAP aside from an increase in the Fee amount.
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PolicyConsideratons
Policy Considerations: The recommended actions are consistent with City Code Chapter 18.24.400, the LAP annual update procedures, and the Mitigation Fee Act.
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EconomicImpacts
Economic Impacts: None.
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EnviornmentalConsiderations
Environmental Considerations:
California Environmental Quality Act (CEQA): Approval of the recommended action is not a “project” subject to CEQA because it consists solely of administrative and financial activities that (a) do not involve a commitment to a specific project that might result in a potentially significant physical impact on the environment and (b) will not result in direct or indirect physical changes in the environment. (14 Cal. Code Regs. §§ 15378(b)(2), 15378(b)(4), and 15378(b)(5). Infrastructure projects or other public facility projects funded by Fee revenue will be evaluated under CEQA before construction is authorized.
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Sustainability
Sustainability: Not applicable.
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Commission/CommitteeAction
Commission/Committee Action: Not applicable.
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RationaleforRecommendation
Rationale for Recommendation: Adoption of the revised Fee amount is consistent with the NNFP adopted in 1994 and updated in 1999, 2002, 2005, 2009, and 2017, and with all associated development and credit agreements. It is also consistent with the City’s Strategic Plan to achieve sustainability and enhance livability.
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FinancialConsiderations
Financial Considerations: North Natomas developers pay the Fee at the time building permits are issued. The collection of Fees and its associated interest are accounted for in a separate fund (Fund 3208). The Fee revenues and interest are also restricted by the Mitigation Fee Act and the LAP to the purchase of credits or to acquire needed public lands.
The recommended actions do not affect the General Fund or any City funds.
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LocalBusinessEnterprise(LBE)
Local Business Enterprise (LBE): Not applicable.
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