GRASS VALLEY TRANSPORTATION IMPACT FEE PROGRAM NEXUS STUDY

Transcription

1 HEARING REPORT GRASS VALLEY TRANSPORTATION IMPACT FEE PROGRAM NEXUS STUDY Prepared for: City of Grass Valley Prepared by: Economic & Planning Systems, Inc. March 2008 EPS #17525 S A C R A M E N T O 2150 River Plaza Drive, Suite 400 Sacramento, CA phone: fax: B E R K E L E Y phone: fax: D E N V E R phone: fax:

2 TABLE OF CONTENTS I. EXECUTIVE SUMMARY... 1 Background...1 Purpose of this 2008 Nexus Study... 2 Supporting Documents... 2 GVTIF Program... 2 Authority... 3 Summary of GVTIF Program... 3 Organization of Report... 6 II. FUTURE DEVELOPMENT AND LAND USES... 7 Future Development... 7 Land Uses... 8 III. TRANSPORTATION IMPROVEMENTS Facility Standards Facilities and Costs IV. AB1600 NEXUS FINDINGS Authority Summary of Nexus Findings V. SUMMARY OF NEXUS METHODOLOGY AND DEVELOPMENT IMPACT FEES Nexus Methodology and Fee Allocation Cost Allocation Factors GVTIF Program Administration Charge VI. IMPLEMENTATION Implementing Ordinances/Resolutions Fee Administration GVTIF Exemptions, Reimbursements, and Credits Fee Program Update... 31

3 Appendices Appendix A: Appendix B: Roadway Capital Improvement Program Traffic Model Data and Calculations LIST OF TABLES Table 1 Summary of New Development by Land Use ( )...4 Table 2 Summary of GVTIF Schedule for Table 3 Development by Land Use, Table 4 Case Study: Dorsey Drive Interchange...16 Table 5 Calculation of Equivalent Dwelling Units...21 Table 6 Summary of Grass Valley Traffic Fees by Land Use...24 Table 7 Summary of Grass Valley Traffic Fee Revenue by Land Use...25 Table 8 General and Specific Land Use Categories...29 LIST OF FIGURES Figure 1 Analysis of Projects included in GVTIF Program...13

4 I. EXECUTIVE SUMMARY BACKGROUND New development brings influences and impacts to existing communities. These influences include significant impact on the existing public facilities including the roadway system. Additional growth requires improved roadway facilities and associated funding mechanisms to finance these improvements. In March 2006, the City of Grass Valley (City) initiated the process of implementing a traffic fee program designed to fund required improvements to accommodate new development anticipated to occur through the buildout of the current 2020 General Plan Update (General Plan) and beyond The City hired Fehr & Peers, a traffic engineering consulting firm, to develop a traffic model to forecast the traffic demand that would support traffic impact studies and future impact fee programs. In July 2006, City Council approved an interim citywide Local Circulation Impact Fee (LCIF) funding local traffic and circulation improvements until the City s Traffic Model could be developed to identify critical roadway segments and intersections impacted by future development. In addition, the Nevada County Transportation Commission (NCTC) has a regional transportation fee called the Nevada County Regional Transportation Mitigation Fee (NCRTMF). Currently, all new development in the City is subject to both the LCIF and the NCRTMF. In April 2007, Fehr & Peers delivered the Grass Valley Travel Demand Model Development Report, which outlined the predicted traffic demand placed on the City s transportation system by growth throughout the City and identified critical required roadway improvements. At that time, the City agreed to re evaluate the City s existing traffic impact fee methodology and nexus to ensure future development is funding their fair share of future traffic improvements. The City has retained the services of Fehr & Peers, Inc., and Economic & Planning Systems, Inc., (EPS) to develop the Grass Valley Transportation Impact Fee (GVTIF) Program, which will replace both the LCIF and the NCRTMF. The currently proposed Roadway Capital Improvement Program (CIP) includes significant new growth serving roadway infrastructure (e.g., collectors, arterials, and other roadway improvements), freeway interchange, on and off ramps, and traffic signaling improvements required to mitigate the impacts of new development in the City. A summary of the specific CIP projects to be included in the GVTIF Program are listed in Appendix A. 1

5 Hearing Report Grass Valley Transportation Impact Fee Program Nexus Study March 2008 This GVTIF Program Nexus Study 2008 (2008 Nexus Study) provides the City with the necessary technical documentation to support adoption of the GVTIF Program that will replace the existing LCIF and the NCRTMF for development in the City and the City s Sphere of Influence (SOI). PURPOSE OF THIS 2008 NEXUS STUDY The purpose of this 2008 Nexus Study is to establish the nexus between new development that occurs in the City and the need for new, improved, and expanded street facilities. After establishing the nexus, this 2008 Nexus Study calculates the development impact fees to be levied for each land use subject to the fee, based on the proportionate share of the total facility use for each type of development. SUPPORTING DOCUMENTS Several documents produced by or for the City are referenced and used to inform this analysis. Several consulting firms were used to develop and refine each document and are identified as follows. Grass Valley Traffic Demand Model Development Report (Traffic Model), prepared by Fehr & Peers in April City Development Impact Fee Study (Interim Fee Nexus Study), Chapter 10. Traffic and Circulation Improvements (Local Fee Projects), prepared by the firm Maximus/TischlerBise in March Economic and Fiscal Conditions Study for the City (Economic Report), prepared by Applied Development Economics in September Street System Master Plan for the City (Streets Master Plan), prepared by Prism Engineering in October General Plan Update, Chapter 8. Transportation/Circulation, prepared by Quad Knopf in November GVTIF PROGRAM The GVTIF Program will fund all roadway improvements determined necessary to accommodate new growth including, but not limited to, collector and arterial roads, traffic signals, and expanded roadway facilities as identified in the CIP (Appendix A). The GVTIF Program will not be used to fund the construction of identified existing roadway deficiencies. 2

6 Hearing Report Grass Valley Transportation Impact Fee Program Nexus Study March 2008 All projects included in the CIP are necessary to serve the additional demand resulting from new development. Roadway costs include all improvements associated with each CIP project (including, but not limited to, curb, gutter, parking lanes, bike lanes, sidewalks, utilities, street lights, and minimum landscaping). AUTHORITY This study serves as the basis for requiring development impact fees under Assembly Bill (AB) 1600 legislation, as codified by the Mitigation Fee Act (California Government Code sections et seq.). This section of the Mitigation Fee Act sets forth the procedural requirements for establishing and collecting development impact fees. These procedures require that a reasonable relationship, or nexus, must exist between a governmental exaction and the purpose of the condition. Required Nexus Findings Identify the purpose of the fee; Identify how the fee is to be used; Determine how a reasonable relationship exists between the fee s use and the type of development project on which the fee is imposed; Determine how a reasonable relationship exists between the need for the public facility and the type of development project on which the fee is imposed; and Demonstrate a reasonable relationship between the amount of the fee and the cost of the public facility attributable to the development on which the fee is imposed. SUMMARY OF GVTIF PROGRAM The necessary findings and calculations for the GVTIF Program are presented in the following chapters and appendices. LAND USE The land uses supporting this 2008 Nexus Study represent the anticipated growth the City will experience between Year 2005 and 2030 in the City and the City s SOI currently located in unincorporated Nevada County (County). The SOI currently consists of four Special Development Areas (SDAs) representing the majority of anticipated growth over the next 25 years: Southhill Village; Loma Rica; 3

7 Hearing Report Grass Valley Transportation Impact Fee Program Nexus Study March 2008 Northstar; and Kenny Ranch (Currently proposed in the County as a housing project, but has agreed to a Memorandum of Understanding [MOU] to pay the GVTIF). The Traffic Model analyzed traffic patterns through buildout of the General Plan, and extended forecasts to year 2030 to provide a 25 year horizon for California Environmental Quality Act (CEQA) and general planning purposes. The land uses included in this study were derived from the Traffic Model and were informed by the Economic Report with consultation with City Planning staff. Table 1 summarizes the land uses included in this study. Table 1 Summary of New Development by Land Use ( ) Bldg Sq. Ft. Land Use Category Units (in 1,000's) Residential Single-Family 3,814 Multifamily 157 Subtotal 3,971 Nonresidential Retail 1,053.2 Office 1,822.2 Lt Industrial Subtotal 3,291.4 TOTAL 3,971 3,291.4 "lu_summ" Source: Grass Valley, Grass Valley Travel Demand Development Model Report, Fehr & Peers TRAFFIC IMPROVEMENTS AND COSTS The City s traffic consultant, Fehr & Peers, provided a CIP based on the results of the Traffic Model. The list of roadway facility improvements required to accommodate new growth includes all roadway segments, arterials, collectors, traffic signals, and freeway interchanges. 4

8 Hearing Report Grass Valley Transportation Impact Fee Program Nexus Study March 2008 The total cost of these projects is approximately $76.7 million and was developed by the City s Public Works Department, Engineering Division. These costs are based on CalTrans Contract Item Cost Data where applicable and other sources. The GVTIF Program is designed to fund new growth projects, or improvements needed to accommodate future development. After undergoing a deficiency analysis based on the City s accepted minimum Level of Service (LOS) D, each project s proportion of facility costs attributable to new growth are included in the fee program. Of particular interest is the Dorsey Drive Interchange, which represents a large portion of the CIP. After accounting for existing deficiencies and consideration of additional funding sources, the total cost attributable to new growth is $43.4 million. COST ALLOCATION AND FEE SCHEDULE The City has determined average daily trips (ADT) to be the appropriate factor for allocating costs to each land use. The use of ADT is consistent with the Transportation/Circulation Element of the current General Plan and provides an appropriate estimate of the relative impact each land use has on the roadway system. Chapter IV of the study elaborates on the allocation methodology. Roadway cost allocation factors provided by Fehr & Peers are derived from the Traffic Model and the National Cooperative Highway Research Program (NCHRP) Report 365. These factors are shown in Appendix B. A total amount of ADT is calculated by applying the cost allocation factors to the anticipated land use growth. The capital costs were divided by the total ADT to generate a roadway cost per equivalent dwelling unit (EDU). Then the rate of cost per EDU is multiplied by each land use s EDU factor to estimate a fee for each land use. Finally, an administration charge is applied to fund costs of developing, administering and updating the GVTIF Program. Table 2 shows the estimated fee rates for each land use category included in this 2008 Nexus Study. Detailed information for calculating the fees are shown in Chapter V of the study. The development impact fees presented in the GVTIF Program are based on the best available cost estimates and land use information at this time. If costs change significantly in either direction, or if other funding to construct the facilities becomes available, the fees may be adjusted accordingly. The City periodically will conduct a 5

9 Hearing Report Grass Valley Transportation Impact Fee Program Nexus Study March 2008 review of improvement costs and will make necessary adjustments to the GVTIF Program, including the application of an appropriate inflation adjustment factor to the fees to reflect changes in project costs. Table 2 Summary of GVTIF Schedule for Land Use Category Traffic Fee [1] Residential Single-Family $4,043 Multifamily $2,694 Mobile Home $3,145 Senior Housing $2,021 Nonresidential Retail $17,293 High Intensity Retail $28,282 Office $5,129 Light Industrial $2,127 Source: Grass Valley, Fehr & Peers, and EPS. "lu_summ" [1] Includes 3.0% administration charge. ORGANIZATION OF REPORT This report is divided into six chapters including this Executive Summary. Chapter II describes the future development and land uses analyzed in this report. Chapter III describes the transportation capital needs and costs to be funded by the GVTIF Program. Chapter IV provides the nexus findings for the development impact fees. Chapter V provides the cost allocation methodology and calculates the improvement fees. Chapter VI describes how the GVTIF Program will be implemented. In addition, the following appendices are provided in this report: Appendix A Roadway CIP; and Appendix B Traffic Model Data and Calculations. 6

10 II. FUTURE DEVELOPMENT AND LAND USES Estimates of future development are a significant variable used in traffic modeling and in this 2008 Nexus Study. The land uses included in this 2008 Nexus Study represent the projected growth the City is anticipated to experience between 2005 and This chapter summarizes the projection of residential and nonresidential land uses that influence the GVTIF. Land use estimates are based on reports commissioned by and prepared for the City. FUTURE DEVELOPMENT The GVTIF Program is a citywide fee program; therefore, all new development in the City will be subject to the GVTIF. New development used in this study is intended to represent future development in the City and its SOI from 2005 to The City s General Plan designates much of the unincorporated area surrounding the existing City as being within the boundaries of the City s SOI, thereby capturing areas outside the City in the General Plan, which: Are likely to be candidates for annexation during the life of the General Plan; Affect, and are affected by, City actions; and Receive, or might reasonably be expected to receive, City services. The SOI currently includes the following four SDAs: Southhill Village; Loma Rica; Northstar; and Kenny Ranch (Currently proposed in the County as a housing project, but has agreed to a MOU to pay the GVTIF). The County, the Local Agency Formation Commission SOI Plan, and the City all require each SDA to annex into the City before obtaining entitlements. In response to increased demand activity in new development located in the SOI, the City commissioned a series of comprehensive studies to analyze the City s baseline and projected economic and infrastructure condition. Land use growth between 2005 and 2030 used in this analysis was derived from the following two documents: Traffic Model, prepared by Fehr & Peers in April 2007; and 7

11 Hearing Report Grass Valley Transportation Impact Fee Program Nexus Study March 2008 Economic Report, prepared by Applied Development Economics in September The Economic Report analyzed proposed land uses in the SDAs, the jobs/housing balance, and fiscal impacts of anticipated development s land uses given several growth alternatives to 2020, the buildout of the current General Plan. Based on the alternative growth scenarios presented in the Economic Report, projected land uses were refined with consultation of the City s Community Development Department. The Traffic Model was developed to analyze the transportation needs of future development. The City and the its traffic consultant, Fehr & Peers, determined that year 2005 was most representative of the existing land use conditions in the City. Projecting from this base year, the Traffic Model analyzed traffic patterns to the terminus of the 2020 General Plan, and extended forecasts to year 2030 to provide a 25 year horizon for CEQA and general planning purposes. Given the impact that new development will have on the demand for City services, the 2008 Nexus Study uses the land use inputs from the Traffic Model to support the fee allocation methodology. LAND USES The land uses derived from the Traffic Model include residential and nonresidential land uses in the following subcategories varying by type: Residential Single-Family Multifamily Mobile Home Senior Housing Nonresidential Retail Office Office Medical Hospital Light Industrial Mini Warehousing Table 3 shows the base year (2005) and projected development estimates (2030) for each of the above land uses. As shown, several land use categories are not anticipated to experience any growth. 8

12 Table 3 Grass Valley Transportation Fee Nexus Study Development by Land Use, [1] DRAFT Base Year Estimates Est. New Development Bldg. Sq. Ft. Bldg. Sq. Ft. Bldg. Sq. Ft. Land Use Category Units (in 1,000's) Units (in 1,000's) Units (in 1,000's) Residential Single-Family 5,260 9,074 3,814 Multifamily 1,859 2, Mobile Home Senior Housing Subtotal 8,093 12,064 3,971 Nonresidential Retail 2, , ,053.2 High Intensity Retail Office , ,822.2 Office - Medical Hospital Light Industrial 1, , Mini Warehousing Subtotal 5, , ,291.4 TOTAL 8,093 5, ,064 8, ,971 3,291.4 Source: City of Grass Valley, Fehr & Peers, and Grass Valley Travel Demand Development Model Report "lu" [1] Data derived from the Grass Valley Travel Demand Development Model Report. Prepared by EPS model1.xls 3/6/2008 9

13 III. TRANSPORTATION IMPROVEMENTS The City s traffic engineering consultant, Fehr & Peers, provided a roadway CIP based on the results of the Traffic Model. This chapter provides a general description of the improvements to be funded with the proposed GVTIF. Please refer to Appendix A for a summary description of each of the projects included in the CIP. The City s CIP includes all street types (e.g., arterials, collectors), appropriate right of way components, and associated engineering, plan check, and inspection costs associated with each project. FACILITY STANDARDS The use of facility standards is appropriate because the traffic facilities identified by the traffic model support the nexus between new development and the need for such facilities. Facility standards such as LOS determine whether roadway facilities may be included in a development fee program. Facility standards determine new development s total need for new facilities and help to estimate each development project s proportionate share of those needs. Facility standards also ensure that new development does not fund deficiencies associated with existing development. The policy set forth in the City s Street System Master Plan and supported by the City s 2020 General Plan and Transportation/Circulation Element currently uses LOS D as the threshold above which mitigation measures must be implemented; thereby, the maximum acceptable level of traffic congestion on streets is a LOS D. 1 The City s traffic model identifies roadway and transportation projects necessary to maintain acceptable levels of service as new development occurs between the years 2005 and The identified facilities and associated costs are described in more detail in the following section of this report. 1 According to the General Plan, LOS D is defined in terms of signalized and un signalized intersections. Signalized intersections experience significant congestions of critical approaches but intersection functional; cars required to wait through more than one cycle during short peaks; no long queues formed; and a volume to capacity ratio (V/C) of 0.81 to Un signalized intersections typically experience long traffic delays (delay greater than 20 to 30 seconds per vehicle). (2020 Grass Valley General Plan Background Report, Transportation/Circulation Element, pages 8.2 to 8.6). 10

14 Hearing Report Grass Valley Transportation Impact Fee Program Nexus Study March 2008 FACILITIES AND COSTS The City s traffic consultant, Fehr & Peers, provided a roadway CIP based on the results of the Traffic Model. The list of roadway facility improvements required to accommodate new growth includes roadway segments, arterials, collectors, traffic signals, and freeway interchanges. The CIP lists capital improvement projects that are necessary to meet future transportation requirements in the City and its SOI (see Appendix A). The total cost of these projects is approximately $76.7 million. The costs were developed by the City s Public Works Department, Engineering Division. The costs are based on CalTrans Contract Item Cost Data where applicable or other sources. DEFICIENCY ANALYSIS This 2008 Nexus Study provides an impact fee analysis for projects designated as new growth serving projects, which are improvements needed to accommodate future development. In general, new growth projects are those not required were it not for new development and associated traffic demand. For instance, an existing roadway facility may be adequate to serve existing traffic demand. New development may require the roadway to be extended or improved to maintain an adequate roadway LOS. In these examples, the full cost of the improvement represents the mitigation of traffic impacts on the transportation system. Consequently, the full cost is included in the GVTIF Program. The Mitigation Fee Act precludes a fee program from requiring new development to pay to remedy existing deficiencies. An existing deficiency is a segment of the proposed road network that presently operates below the City s LOS for the facility. For instance, the City s facility standard is established as LOS D ; consequently, any road segment or intersection currently operating below LOS D would be considered an existing deficiency. If this existing roadway deficiency is completely attributable to existing development, the costs to cure the existing deficiency are excluded from GVTIF Program. Other funding sources are required to correct these deficiencies. Potential sources to fund existing deficiencies are numerous and include state or federal funding, sales tax overrides (e.g., Measure A in Sacramento County), tax increment financing, private funding (such as exactions through development agreements), or payment from the City s General Fund or other funds. 11

15 Hearing Report Grass Valley Transportation Impact Fee Program Nexus Study March 2008 For this 2008 Nexus Study, each needed roadway improvement identified in the Traffic Model was analyzed on an individual case basis. All new projects required to accommodate new development are included in the GVTIF Program. All expanded or improved facilities were further analyzed to determine whether the project s or segment s current LOS indicates an existing deficiency, future deficiency, or whether new development will create or worsen a deficiency. Roadway facilities that currently operate at a LOS D or better are considered acceptable. If the Traffic Model indicates a roadway project or segment will operate at an acceptable LOS while accommodating anticipated growth, no mitigation measures are required. Some specific roadway projects or segments are operating at a LOS of E or F (existing deficiency). New development cannot be 100 percent responsible for curing these deficiencies. However, new anticipated development may cause the facility s operation to worsen. In these instances, it is acceptable to require new development to fund the costs of mitigation up to, but not beyond, current operating levels. The analysis of roadway facilities results in several scenarios illustrated in Figure 1: 1. Scenario 1: New facility needed by new development. By definition, facilities required to mitigate for new development are included in the GVTIF Program; 2. Scenario 2A: Existing facility is acceptable and will remain acceptable. Roadway Project is operating at LOS D or better and is projected to continue operating at LOS D or better. In these cases, no mitigation is required and no costs are included in the GVTIF Program; 3. Scenario 2B: Existing facility will require expansion or improvement to accommodate new development. A project or segment is operating at an acceptable LOS, but new development causes the operation standards to degrade below acceptable LOS standards. Therefore, the full cost of mitigation is included in the GVTIF Program; and 4. Scenario 2C: Existing facility is operating at LOS E or F and will remain LOS E or F following the improved or expanded roadway project. In these cases, an existing deficiency is further negatively impacted by new development. Required facility costs are analyzed on an individual case basis as described in the section Existing Deficiency Impacted by New Development that follows. A portion of mitigation costs are included in the GVTIF Program. 12

16 Figure 1 Grass Valley Transportation Fee Nexus Study Analysis of Projects Included in GVTIF Program DRAFT Type of Roadway Project Identified in Traffic Model [1] Existing 2005 Level Of Service Year 2030 Level Of Service GVTIF Cost to New Development Scenario 1: New Roadway Project Scenario 1: 100% to New Development 13 Scenario 2: Existing Roadway Project (Improved or Expanded) Acceptable LOS "A" LOS "B" LOS "C" LOS "D" Acceptable LOS "A" LOS "B" LOS "C" LOS "D" Below Standard LOS "E" LOS "F" Scenario 2A: Improvement Not Needed - 0% to New Development Scenario 2B: 100% to New Development Below Standard LOS "E" LOS "F" Below Standard LOS "E" LOS "F" Scenario 2C: Portion of Cost to New Development [2] NOTES: [1] Excludes existing deficiencies that can be 100% attributable to existing development and are not anticipated to be improved through a new or expanded roadway project. [2] Percent share attributable to New Development is New Growth (Current Operation Level - LOS "D" Threshold) = 1 shown in formula to the right. Remaining cost % Share (Year 2030 Operation Level - LOS "D" Threshold) is considered an existing deficiency and excluded from GVTIF Program. Prepared by EPS model1.xls 3/6/2008

17 Hearing Report Grass Valley Transportation Impact Fee Program Nexus Study March 2008 In summary, Scenario 1 includes new projects required by new development; therefore facility costs are included in the GVTIF Program. Scenario 2A generally includes acceptable projects that require no additional mitigation; thus, no costs are included are in the GVTIF Program. In Scenario 2B, the need for new, improved, or expanded facilities are caused by new development; thus, 100 percent of mitigation costs are GVTIF funded. Finally in Scenario 2C, a deficiency is created by existing development but new development will further degrade the LOS; thus, a percentage of the facility s cost is included in the program. Existing Deficiency Impacted by New Development As summarized above, Scenario 2C includes projects that currently operate at a LOS indicating an existing deficiency, which will be further degraded by new development (currently operating LOS E or F and will remain LOS E or F ). In these instances, a proportionate share of the improvement s mitigation cost is included in the fee program. To determine total cost allocated to new growth, the Year 2005 deficiency is compared to the Year 2030 deficiency to determine percentage of new growth s demand and contribution to unacceptable operations. The formula used to allocate costs when a current existing deficiency exists is below: New Growth Percent Share = 1 - (Existing Operation Level - LOS D Threshold) (Year 2030 Operation Level - LOS D Threshold) Dorsey Drive Interchange The Dorsey Drive Interchange (Appendix A, Item Number 5), located at State Route 20/49 and Dorsey Drive, is an exception to the above deficiency analysis. A particularly significant project, CalTrans now estimates its cost at $34.95 million representing 45.6 percent of the entire GVTIF Program. While the interchange does not exist, the entire cost cannot be fully attributed to new growth. To estimate the new development s proportionate share of the cost of Dorsey Drive Interchange, the following analysis determined the proportionate share of the cost of interchange s construction attributable to new development. The Dorsey Drive Interchange Project will require funding from multiple sources including state funding, development impact fees, and other regional contributions. Once constructed, new development in the City and the City s SOI will impact the project s operating levels. The calculation to allocate the cost of the Dorsey Drive Interchange to new development is described below and shown in Table 4. 14

18 Hearing Report Grass Valley Transportation Impact Fee Program Nexus Study March 2008 Based on the Traffic Model, total Year 2030 volume on the interchange is estimated at approximately 15,000 ADT. An additional sensitivity analysis was conducted to model the predicted amount of existing traffic on the interchange if it existed today. This analysis estimates current demand at approximately 10,000 ADT. Therefore, new development would be responsible for approximately 5,000 ADT, or 33 percent of the total cost of the improvement. The base year model indicates construction of the interchange would also shift additional traffic volume from the Idaho Maryland Road and Brunswick interchanges. The shift of traffic volume thereby creates additional capacity at those locations for use by future development. The analysis indicates that approximately 1,000 additional ADT would be available at the other interchanges for new development. Therefore, the total amount of additional capacity at the Dorsey Drive Interchange attributed to new growth is 6,000 ADT (5,000 ADT on the Dorsey Interchange) plus 1,000 ADT (available at other interchanges). This calculation results in a proportionate share for new development of the new interchange of 40 percent and approximately $14.0 million of the cost of the new interchange, which is included in the GVTIF program. After developing the CIP and undergoing a deficiency analysis using the parameters previously described, each project s proportion of facility costs attributable to new growth are included in the fee program. After accounting for existing deficiencies and consideration of additional funding sources, the total cost attributable to new growth is $43.4 million. 15

19 Table 4 Grass Valley Transportation Fee Nexus Study Case Study: Dorsey Drive Interchange DRAFT Average Percent Total Item Formula Daily Trips Share Cost 2030 Volume At Interchange A 15, % Less: Current Demand [1] B 10, % Remaining Volume Available for New Development C = A - B 5, % Plus: Demand From Other Interchanges [2] D 1, % Total Dorsey Capacity Available for New Development E = C + D 6, % Total Estimated Cost of Interchange [3] F $34,950,000 New Development Percent Share of Cost of Interchange G = E 40.0% New Development Share of Cost of Interchange H = F x G $13,980,000 Source: Grass Valley Traffic Model, Fehr & Peers, CalTrans, and Grass Valley. "dorsey" [1] Represents the predicted volume of existing development traffic demand if the interchange existed in Year [2] Traffic demand that shifts from existing interchanges to Dorsey Drive creating additional capacity. [3] Current cost estimates provided by CalTrans. Prepared by EPS model1.xls 3/6/

20 IV. AB1600 NEXUS FINDINGS AUTHORITY This report has been prepared to establish the GVTIF in accordance with the procedural guidelines established in AB1600, which is codified in California Government Section et seq. This code section sets forth the procedural requirements for establishing and collecting development impact fees. The procedures require that a reasonable relationship or nexus must exist between a governmental exaction and the purpose of the condition. 2 Specifically, each local agency imposing a fee must: Identify the purpose of the fee; Identify how the fee is to be used; Determine how a reasonable relationship exists between the fee s use and the type of development project on which the fee is imposed; Determine how a reasonable relationship exists between the need for the public facility and the type of development project on which the fee is imposed; and Demonstrate a reasonable relationship between the amount of the fee and the cost of the public facility or portion of the public facility attributable to the development on which the fee is imposed. SUMMARY OF NEXUS FINDINGS The development impact fee to be collected for each land use is calculated based on the proportionate share of the total facility use that each land use represents. With this approach, the following findings are made concerning the City s GVTIF Program. PURPOSE OF FEE The purpose of the GVTIF Program is to a provide a funding mechanism to help the City maintain adequate levels of services on its street system by funding the construction of new streets and transportation improvements, and widening or improving existing roadway improvements as identified in the City s Traffic Model and CIP. 2 Public Needs & Private Dollars; (July 1993), William Abbott, Marian E. Moe, and Marilee Hanson, page

21 Hearing Report Grass Valley Transportation Impact Fee Program Nexus Study March 2008 USE OF FEES The GVTIF charged to new development will be used to fund needed additions and improvements to roadways to accommodate future traffic volumes projected as a result of new development. Roadway additions and improvements include road widening and reconstruction, intersection signalization, interchange improvements. RELATIONSHIP BETWEEN USE OF FEES AND TYPE OF DEVELOPMENT New development in the City will have both a direct and a cumulative impact through increased roadway trips on all streets and highways. Completion of the necessary street improvements will ensure that the greater traffic volume on the City s roads and highways caused by new development will not result in decreased service levels or increased public safety hazards. RELATIONSHIP BETWEEN NEED FOR FACILITY AND TYPE OF PROJECT Each new residential and nonresidential development project in the City will add to the incremental need for roadway capacity, and each new project will benefit from the new roadway capacity. For new development to occur during the planning horizon of the City s current General Plan, street improvements identified by the City s Traffic Model will be necessary to maintain an acceptable LOS. RELATIONSHIP BETWEEN AMOUNT OF FEES AND COST OF OR PORTION OF FACILITY ATTRIBUTED TO DEVELOPMENT ON WHICH FEE IS IMPOSED The City s Traffic Model identified transportation improvements necessary to serve new development. City staff and traffic consultant developed the roadway CIP and City staff estimated the cost of these improvements. Construction of the roadway and intersection improvements will serve new development in the City. The cost of these improvements to be funded by new development in the City are allocated to each benefiting land use using a cost allocation method that measures the relative benefit for each land use. The costs were allocated using ADT, which is an acceptable methodology to allocate trafficrelated costs. The result is a fee for each unit of new residential development and for each 1,000 square feet of new nonresidential development that reflects the relative traffic impact on the street system. 18

22 V. SUMMARY OF NEXUS METHODOLOGY AND DEVELOPMENT IMPACT FEES This 2008 Nexus Study presents a methodology that allocates the required facility capital costs to all land uses based on relative benefit received from such improvements. This chapter provides an overview of the nexus methodology, a summary of the facility costs, and the proposed GVTIF Program. The proposed fee program funds street improvements needed to serve new development and is based on a nexus between the facilities to be funded and the benefit received by new development. The City s General Plan, Chapter 8. Transportation/Circulation, defines LOS and roadway capacity in terms of ADT. The ADT methodology determines the average number of vehicle trips in a 24 hour period expressed as the maximum traffic volume utilizing a designated portion of the roadway. ADT is a commonly used factor to allocate the costs of a roadway capital improvement projects to the benefiting land use and as such, is acceptable to satisfy the nexus findings. To maintain consistency with the City s General Plan, as well as the Traffic Model, the basis for assigning costs to land uses is based on ADT by land use. The methodology that follows results in a fee schedule with a fee per unit for residential land uses and per 1,000 square feet for nonresidential land uses charged to all new development in the City and the City s SOI. NEXUS METHODOLOGY AND FEE ALLOCATION The methodology for calculating the amount of the GVTIF is summarized below: 1. Determine the projected amount of new development (discussed in Chapter II). 2. Determine the improvements needed to serve the new development (identified by the City and discussed in Chapter III). 3. Determine the net cost of the street improvements to be funded by the GVTIF Program after accounting for adjustments such as infrastructure deficiencies and other funding sources, if applicable (identified by the City and discussed in Chapter III). 4. Determine the proportionate impact and the appropriate share of costs attributable to each land. 19

23 Hearing Report Grass Valley Transportation Impact Fee Program Nexus Study March 2008 a. Determine the appropriate allocation factor to allocate the cost of required traffic improvements (presented in this chapter). b. Apply the appropriate allocation factor to the anticipated land uses to determine the total number of EDUs (see Table 5). c. Divide the total capital costs by total number of EDU to calculate a cost per EDU (Table 5). d. Multiple the EDU factor for each land use by the cost per EDU to determine the appropriate fee per unit (residential) or fee per 1,000 square feet (for nonresidential). 5. Add a GVTIF Program administration cost to the allocated costs. 6. Determine the GVTIF for new residential and nonresidential development (summarized in this chapter). COST ALLOCATION FACTORS The purpose of allocating certain improvement costs among the various land uses is to provide an equitable method of funding required infrastructure. The apportionment methodology reflects these requirements: 1. Demands placed on public facilities are related to each land use paying the fee; and 2. Such demands are stated in relative terms for all affected land uses. It is by relating demand for facilities to land use types that a reasonable nexus, or relationship, can be established to apportion the proportionate share costs to given land uses. The methodology in this 2008 Nexus Study uses ADT as an estimate of each land use s comparative road facility usage. ADT are estimated based on the number of trips generated by a particular land use over a 24 hour period. The City s engineering consultant, Fehr & Peers, and the City s Public Works Department believe that ADT is an appropriate estimate of facility usage. In addition, the use of ADT is consistent with the existing LCIF and the City s General Plan. This 2008 Nexus Study uses a common use factor called EDU, which relates the average daily demand for each land use in terms of a single family unit. By definition, the EDU factor for a single family unit is Other land uses are relative to the single family 20

24 Table 5 Grass Valley Transportation Fee Nexus Study Calculation of Equivalent Dwelling Units (EDU) DRAFT Est. New Avg. Daily Percent Adj. Avg. EDU Total EDUs Item Development Trips New Trips Daily Trips Factor Qty % Source Table 3 Appendix B Appendix B Formula a b c d = b x c e = d / 9.00 f = a x e g = f / 10,955.1 RESIDENTIAL Units Single-Family - Detached 3, % , % Multifamily % % Mobile Home % % Senior Housing % % Subtotal 3,971 3, % NONRESIDENTIAL 1K Sq. Ft. Retail/Commercial 1, % , % High-Intensity Retail % % Office 1, % , % Industrial % % Subtotal 3,291 7, % TOTAL 10, % Source: Grass Valley Traffic Model, Fehr & Peers, and EPS. "edu" Prepared by EPS model1.xls 3/6/

25 Hearing Report Grass Valley Transportation Impact Fee Program Nexus Study March 2008 EDU factor of For instance, if a multifamily unit has an ADT of 6.0 trips per unit and a single family unit has an ADT of 9.0, the multifamily EDU factor will be 0.67 (6.0 ADT / 9.0 ADT = 0.67 EDU Factor). Table 5 summarizes the ADT assumptions provided by Fehr & Peers and calculates the EDU factors used in this 2008 Nexus Study. The trip generation data was derived from the Traffic Model or from the NCHRP Report 365. PASS BY ADJUSTMENT Typically, retail based trips often involve multiple stops. To recognize this traffic pattern, a pass by adjustment, or percent of new trip adjustment, takes into account vehicle trips using the adjacent roadway that enter a site as an intermediate stop on the way to another destination. For example, some drivers will stop for fuel on their way home from work. The pass by adjustment reduces total number of vehicle trips to account for the sharing of the one trip for two destinations (fuel and then home). The adjustment often ranges by land use type and by local development and traffic patterns and ranges from 60 to 95 percent (5 to 40 percent of all retail trips are new trips). This 2008 Nexus Study includes a 70 percent pass by adjustment factor, or 30 percent reduction to total trips, on all retail land uses as provided by the City s traffic engineering consultant, Fehr & Peers. Pass by adjustments are calculated before calculating the relative EDU factor as shown in Table 5. GVTIF PROGRAM ADMINISTRATION CHARGE Development impact fee programs may include the cost of administering the program that funds the construction of public facilities necessary to serve new development, including these: The administrative costs of assessing, collecting, cost accounting, and public reporting of the GVTIF Program; The cost of justification analyses, legal support, and other costs of annual, periodic and five year updates to the GVTIF Program; Costs associated with the establishment and on going administration of an effective system of fee credits and cash reimbursements; 22

26 Hearing Report Grass Valley Transportation Impact Fee Program Nexus Study March 2008 Costs of capital planning, programming, including project management costs associated with the share of projects funded by the impact fee; and Costs associated with any Geographic Information Systems (GIS) application to the GVTIF Program. Administration charges typically range from 1.0 percent up to 5.0 percent. This 2008 Nexus Study applies a 3.0 percent allowance to fund administration costs. The methodology described above results in a fee schedule including an administration charge of 3.0 percent shown in Table 6. A summary of the estimated revenues generated by each land use is shown in Table 7. 23

27 Table 6 Grass Valley Transportation Fee Nexus Study Calculation of Grass Valley Traffic Fees DRAFT EDU Total Admin. Charge Total Fee Item Assumption Factor Fee (at 3.0%) w/ Admin. [1] Total Roadway CIP - New Growth [2] $43,354,783 (Less) Existing Fund Cash Balance [3] ($359,173) Total CIP $42,995,610 Total EDU [1] 10,955.1 Per EDU Per EDU Per EDU Cost per EDU $3,925 $118 $4,043 RESIDENTIAL Per Unit Per Unit Per Unit Single-Family - Detached 1.00 $3,925 $118 $4,043 Multifamily 0.67 $2,616 $78 $2,694 Mobile Home 0.78 $3,053 $92 $3,145 Senior Housing 0.50 $1,962 $59 $2,021 NONRESIDENTIAL Per 1K Sq. Ft. Per 1K Sq. Ft. Per 1K Sq. Ft. Retail/Commercial 4.28 $16,789 $504 $17,293 High-Intensity Retail 7.00 $27,458 $824 $28,282 Office 1.27 $4,980 $149 $5,129 Industrial 0.53 $2,065 $62 $2,127 Source: Grass Valley Traffic Model, Fehr & Peers, Grass Valley Department of Public Works, and EPS. "fee" [1] See Table 5. [2] See Appendix A. [3] Provided by the City includes a cash traffic fee fund balance of $172,876 and an additional $186,297 allocated to GVTIF-funded improvements in FY2007/08. Prepared by EPS model1.xls3/7/2008

28 Table 7 Grass Valley Transportation Fee Nexus Study Calculation of Fee Program Revenue by Land Use DRAFT Land Use Total Fee Total Percentage of Item Assumption Excl. Admin. Revenue [1] Revenue Source Table 3 Table 6 Residential Units Per Unit Single-Family 3,814 $3,925 $14,968, % Multifamily 157 $2,616 $410, % Mobile Home 0 $3,053 $0 0.0% Senior Housing 0 $1,962 $0 0.0% Subtotal 3,971 $15,379, % Nonresidential 1K Sq. Ft. Per 1K Sq. Ft. Retail 1,053 $16,789 $17,682, % High Intensity Retail 0 $27,458 $0 0.0% Office 1,822 $4,980 $9,074, % Lt Industrial 416 $2,065 $858, % Subtotal 3,291 $27,615, % TOTAL $42,995, % Source: Grass Valley, Fehr & Peers, and EPS. "revenue" [1] Estimated total revenue does not include the 3.0% administration charge. Prepared by EPS model1.xls 3/7/2008

29 VI. IMPLEMENTATION The GVTIF Program presented in this report is based on the best roadway improvement cost estimates, administrative cost estimates, and land use information available at this time. If costs change significantly, if the type or amount of new development changes, if other assumptions significantly change, or if other funding becomes available (as a result of legislative action on state and local government finance, for example), the fee program should be updated accordingly. After the fees presented in this report are established, the City should conduct periodic reviews of roadway improvement costs and other assumptions used as the basis of this nexus study. Based on these reviews, the City may make necessary adjustments to the fee program through subsequent fee program updates. The cost estimates presented in this report are in constant 2008 dollars. The City may automatically adjust the costs and fees for inflation each year as outlined in this chapter. IMPLEMENTING ORDINANCES/RESOLUTIONS The proposed fee would be adopted by the City through one or more ordinances authorizing collection of the fee and through one or more fee resolutions establishing the fee. The fee will be effective 60 days following the City s final action on the ordinances authorizing collection of the fee and on the fee resolutions establishing the fee. The new ordinances or resolutions should reference the automatic inflation adjustment factor discussed in this chapter. FEE ADMINISTRATION The GVTIF Program will be collected from new development in areas subject to the fee at the time of the building permit issuance; use of these funds may need to wait until a sufficient fund balance can be accrued. According to Government Code Section 66000, the City is required to deposit, invest, account for, and expend the fees in a prescribed manner. New development located in any of the four SDAs will require annexation to the City before entitlement and development. The fee will be collected at the time of the building permit issuance. The City intends to request traffic mitigation from new development located in the City s SOI, but not currently in the City limits, through the County or mitigation efforts where possible. 26

30 Hearing Report Grass Valley Transportation Impact Fee Program Nexus Study March 2008 GVTIF EXEMPTIONS, REIMBURSEMENTS, AND CREDITS EXEMPTIONS FROM THE FEE The GVTIF Program may be reduced under certain circumstances. Any exemptions or reduction in fees will be based on the City s independent analysis and review of the subject property. The City Council may waive any and all portions of the Fee if it can be determined that a proposed project will not impact any facility for which the Fee is collected. Exemption criteria will be established by the City at the time of enactment of the fee ordinance(s) or resolution(s). Examples of the types of development that may be fully or partially exempted from the Fee include: Additions to residential and nonresidential structures; Replacement of damaged or destroyed structures as a result of fire, flood, explosion, wind, earthquake, riot, or other calamity, or act of God; Square footage of a multifamily project used for purposes of supporting the project s operation, such as the office, restrooms, or recreation room; Public facilities; and Agricultural storage facilities. The GVTIF Program excludes public facilities from the fee because the City does not have the authority to impose fees on local or state owned property. The Mitigation Fee Act coupled with California Government Code restricts the City from assessing fees or collecting revenue from public facilities (e.g., State buildings, County buildings, or Stateregulated public schools) for the construction of roadway facilities. It is generally accepted that public land uses such as school, park, fire, and other public facilities is a result of the growth in residential and nonresidential development. Were it not for new development, public facilities would not be necessary and thus the impact of the public facilities on the street system is considered incidental. Under certain conditions, the City may be able to collect funds from the agencies in development of a public facility because of mitigation requirements. As necessary, a case study approach will be used to estimate the impact on the roadway system. If any additional funding to construct the projects listed in the CIP becomes available, the GVTIF Program will be adjusted at the time of its next periodic adjustment. 27