REPORT TO THE PLANNING COMMISSION May 20, 2020 FROM: DANIEL ZACK, Assistant Director Development Services Division THROUGH: WILL TACKETT, Planning Manager Development Services Division BY: ISRAEL TREJO, Supervising Planner Development Services Division SUBJECT ..Title Consideration of request for a discretionary six-month extension of time to the expiration date for Vesting Tentative Tract Map No. 5434/UGM pertaining to approximately 28.81 acres of property located on the northeast corner of North Temperance and East McKinley Avenues (Council District 4) 1. APPROVE the request for a discretionary six-month extension of time for the expiration date for Vesting Tentative Tract Map No. 5434, extending vesting rights, subject to compliance with the original conditions of approval as contained in Planning Commission Resolution No. 13470, and the attached current Development Impact Fees dated May 6, 2020. ..Body EXECUTIVE SUMMARY In a letter dated February 14, 2020, Zach Gomes, on behalf of KB Homes, timely filed a request for a discretionary six-month time extension of Vesting Tentative Tract Map No. 5434/UGM, pertaining to approximately 28.81 acres of property on the northeast corner of North Temperance and East McKinley Avenues. The subject application includes a request for an extension to the original Development Impact Fees prepared in 2006. The City has previously granted applicant a six-month discretionary extension. The currently requested extension may only be granted if the required findings codified in Fresno Municipal Code (FMC) Section 15-3316(C)(2) can be made. Staff has determined that said findings cannot be made unless current Development Impact Fees are applied. If the request is approved as recommended by staff, the tentative map expiration date will be extended to August 17, 2020, with the application subject to current fees. BACKGROUND / PROJECT ANALYSIS 2017 Approval of VTM 5434: Vesting Tentative Tract Map No. 5434/UGM proposes a 140 lot single-family residential subdivision on approximately 28.81 acres at a density of 4.85 dwelling units per acre. Vesting Tentative Tract Map No. 5434/UGM was accepted for processing on March 14, 2006, though the project did not go before the Planning Commission/City Council until 2017 for recommendation. However, since the project was accepted for processing on March 14, 2006, the Development Impact Fees current in 2006 were applied to the project pursuant to Section 66498.1 of the Government Code. On July 5, 2017, the Fresno City Planning Commission, by a vote of 5-0, recommended approval of Vesting Tentative Tract Map No. 5434/UGM, subject to the conditions noted in Planning Commission Resolution No. 13470 (Exhibit C), to the Fresno City Council. The Fresno City Council at its meeting on August 17, 2017, approved Vesting Tentative Tract Map No. 5434/UGM. Pursuant to Government Code Section 66452.6(a)(1) and the provisions of the Fresno Municipal Code, an approved or conditionally approved tentative map shall expire 24 months after its approval or conditional approval. Therefore, the original expiration date of the subject vesting tentative map was August 17, 2019. 2019 Request for First Discretionary Extension: In a letter dated August 12, 2019 (Exhibit E), applicant requested a five month extension of time. In its letter, applicant explained that it needed more time to complete the sewer design and work through issues with the required lift station, prior to submittal of a final map. On October 15, 2019, the Planning and Development Department approved a six-month extension, extending the expiration of the map to February 17, 2020. Department of Public Works and Planning staff recommended an extra one month (providing a six month extension instead of the requested five months) so applicant had ample time to fulfill conditions. 2020 (Current) Request for Second Discretionary Extension: In a letter dated February 14, 2020 (Exhibit F), applicant requested a second extension of time extending expiration by six months from the (previously extended) expiration date of February 17, 2020. In his extension request, Mr. Gomes acknowledged that the delays are not the fault of the City; Mr. Gomes explained that delays due to the complexity of designing the required lift station have prevented him from obtaining a final recorded map. Zach Gomes also requests in his letter that the Development Impact Fees associated with the project be vested. Planning and Public Works Department staff do not support further extensions of time for any tentative maps unless current fees are applied. As such, staff recommends approval of requested extension subject to the payment of current Development Impact Fees. Vested Rights, Development Impact Fees & Capacity Charges. Section 66498.1 of the Government Code provides, when a local agency approves or conditionally approves a vesting tentative map, that approval shall confer a vested right to proceed with development in substantial compliance with the ordinances, policies, and standards in effect at the date the local agency has determined that the vesting tentative map application is complete pursuant to Section 65943 of the Government Code. Vesting Tentative Tract Map No. 5434/UGM was accepted for processing on March 14, 2006, as such 2006 fees were applied. The vested (2006) development impact fees apply until the Vesting Tentative Tract Map 5434/UGM expires. Upon expiration, any filed (but unrecorded) final map becomes subject to current impact fees. The final map for this vesting tentative map has been filed, but applicant has yet to complete all requirements for recordation. The development impact fees in 2006 were significantly lower ($8,000 less) than they are today. The difference in fees is shown below: Development Impact Fees (per house) 2006 Current Wastewater $2,119.00 $2,119.00 Water Capacity $2,177.00 $4,481.00 Fire Facilities $1,893.00 $1,893.00 Police Facilities $624.00 $618.00 Park $3,398.00 $4,027.00 New Growth Street N/A $4,553.00 Major Bridge & Major Street $712.00 N/A Regional Street N/A $1,654.00 Traffic Signal $450.00 $501.00 Total (per House) $11,373 $19,846.00 The above fees are estimates, based on preliminary conceptual information, for an average lot in Vesting Tentative Tract Map No. 5434/UGM. It should be noted that the City of Fresno reimburses developers for the improvements that they make on arterial and collector streets, so the net cost to the developer may be much lower than shown in fee estimates. Development impact fees are designed so that development projects pay their fair and proportional share of costs associated with development.. Likewise, capacity charges contribute to the City's ability to recover the costs of infrastructure, assets, and water supply that benefit new development. Development impact fees are governed by California Government Code Section 66000 et. seq. The fees from 2006, which were conditioned with the project approval, will not mitigate current development impacts - including the impacts from the new residents and the additional vehicles miles traveled generated by the subject tract map. Below are some examples of how development impact fees will be spent from this project. Water Capacity - This fee is significantly higher than in 2006. This fee will go towards paying for the construction of the Southeast Fresno Surface Water Treatment Plant which will provide water for this project. Fire Facilities - The City is preparing land for a new fire station on Armstrong south of Clinton. Land cost and construction costs have increased significantly from 2006. The cost of a new fire station exceeds $5 million. The $1,893 per unit Fire Facility applies to the project regardless of approval year. Police Facilities - This fee has actually decreased since 2006. The City has purchased property on Tulare and Argyle for a new police station that will serve these houses. The police station has been designed and advertised for construction bids. Park Facilities - The Fresno General Plan set a goal of providing one acre of park space per 1,000 residents; the impact fee, a modest increase from 2006, was raised to try and meet this goal for all new housing. The revenue generated by the 2006 fees is not adequate to meet the goals of the General Plan. It is noted that the proposed tract does not include any park or open space dedications. New Growth Street - This fee is made up of the old "Major Bridge and Major Street Fee". This fee is significantly higher than the 2006 Major Bridge and Major Street Fee (combined). However, the City now reimburses the developers for the improvements that they make on arterial and collector streets, so the net cost to the developer may not be as high as shown in the "Current Rates" fee estimate. The subject tract will be improving McKinley Avenue and may get substantial fee credits for this work. The New Growth Street funds will also be used to mitigate the traffic impacts on Armstrong and Fowler. The City is currently working on widening the existing bridges where Fowler and Armstrong cross Mill Ditch. Major Bridge and Major Street - These fees are now called the "New Growth Street Fee". As noted under "New Growth Street", this fee is significantly higher than in 2006. However, the City now reimburses the developers for the improvements that they make on arterial and collector streets, so the net cost to the developer may not be as high as shown in the "Current Rates" fee estimate. Regional Streets - This fee is only used for streets that are designated in the General Plan as an Expressway or Super Arterial. In the subject area, Temperance Avenue is designated as a Super Arterial and is eligible for funds from the Regional Street Impact fee. Tract 5434 has Temperance frontage and may receive substantial fee credits for the work needed on Temperance. The Regional funds could also be used to widen the Temperance Bridge over Mill Creek (just north of McKinley Ave.). Traffic Signals - This fee has not increased substantially since 2006. The City of Fresno has adopted its contemporary development impact fee and capacity charges in recognition that a fiscal sustainability balance cannot be achieved or maintained due to the infrastructure and service expansion obligations that accompany substantial growth; especially, given the pace the City of Fresno has experienced prior to and over the life of the tentative map and future development. The City of Fresno's past development impact fees and capacity charges have been previously found to (a) only recover costs for some infrastructure benefitting new development; (b) not recover cost for future infrastructure and water supply projects that the City has identified as necessary to meet the demands of growth; (c) fail to recover any cost from non-UGM areas; and, (d) be administratively burdensome. The City's current development impact fee and capacity charges have been adopted and are designed to ensure that the City tax and/or rate payers are not required to subsidize the costs of facilities benefitting new development and that all parties pay a proportionate share of costs for public systems, infrastructure and assets. Therefore, Planning and Development Department and Public Works Department staff do not support further extensions of time for any tentative maps which are protected by vesting rights against payment of any and all contemporary impact fees and capacity charges. Final Map Activity and Processing: The final map for Tract 5434 was timely submitted (prior to vesting map expiration) on February 11, 2019. The map is required to be annexed into a Community Facility District (CFD). A final map cannot be approved until after a Tract is annexed into a CFD. Two Council meetings are required for a tract to annex into a CFD. The first Council meeting is for a Resolution of Intention and was approved on April 23, 2020. The second Council meeting is required to be a Public Hearing and currently scheduled for June 11, 2020. Typical processing time for annexation to a CFD is 120 days. The CFD documents for Tract 5434 were submitted on February 26, 2020. CFD documents were not submitted with enough time to allow annexation to the CDF and the Final Map to be processed before the current expiration date on February 17, 2020 (including the automatic 60 day extension following receipt of the discretionary extension request). Land Use Plans and Policies: One of the 17 goals outlined within the Fresno General Plan includes resolving existing public infrastructure and service deficiencies, making full use of existing infrastructure, and investment in improvements to increase competitiveness and promote economic growth. Achieving this goal will require placing emphasis on the fair and necessary costs of maintaining sustainable water, sewer, street, and other public infrastructure and service systems in rates, fees, financing and public investment to implement the General Plan. In addition, the City is required to address accumulated deferred maintenance, aging infrastructure, risks to services continuity, desired standards of service to meet quality-of-life goals, and required infrastructure to support growth, economic competitiveness and business development. The Fresno General Plan also acknowledges that essential City services are at a minimum level, and further reductions could have an adverse impact on the overall health and safety of residents. Less-essential City programs have been eliminated or severely curtailed, including parks maintenance and operations that come out of the City's General Fund. Many of these changes are likely for the foreseeable future. Similarly, Fresno's aging utility infrastructure has suffered from deferred maintenance. Utility rates had not been kept current to help cover costs. At the time that Vesting Tentative Tract Map No. 5434/UGM was approved, the subject property remained in the unincorporated area of Fresno County and required annexation to the City of Fresno. Although the subject property has since been annexed and is now party of the City, it should be noted that when originally approved, this project was considered new growth and City expansion. Current General Plan Policy LU-1-e pertaining to Annexation Requirements directs adoption of implementing policies and requirements that achieve annexations to the City that conform to the General Plan Land Use Designations and open space and park system, and are revenue neutral and cover all costs for public infrastructure, public facilities, and public services on an ongoing basis consistent with the requirements of ED-5-b. Policy ED-5-b requires new residential and commercial development that requires annexation to the City to pay its fair and proportional share of needed community improvements through impact fees, assessment districts, and other mechanisms. Approve new residential and commercial development projects that require annexation to the City only after making findings that all of the following conditions are met: * No City revenue will be used to replace or provide developer funding that has or would have been committed to any mitigation project; * The development project will fully fund public facilities and infrastructure as necessary to mitigate any impacts arising from the new development; * The development project will pay for public facilities and infrastructure improvements in proportion to the development's neighborhood and citywide impacts; and, * The development will fully fund ongoing public facility and infrastructure maintenance and public service cost. It is important to recognize the strong testament that the adopted policies make with respect to their purpose (i.e., the absolute need for new growth and development to achieve revenue neutrality and to cover costs for public infrastructure, public facilities, and public services over the life of the project and in perpetuity). Policy MT-2-l of the Fresno General Plan provides that the City of Fresno should continue to support the implementation of metropolitan-wide and region-wide transportation impact fees sufficient to cover the proportional share of a development's impacts and need for a comprehensive multi-modal transportation system that is not funded by other sources. Work with the Council of Fresno County Governments, transportation agencies (e.g. Caltrans, Federal Transportation Agency) and other jurisdictions in the region to develop a method for determining: * Regional transportation impacts of new development; * Regional highways, streets, rail, trails, public transportation, and goods movement system components, consistent with the General Plan, necessary to mitigate those impacts and serve projected demands; * Projected full lifetime costs of the regional transportation system components, including construction, operation, and maintenance; and, * Costs covered by established funding sources. This policy is consistent with and supports policies and objectives for fiscal sustainability in the Economic Development and Fiscal Sustainability Element. The discrepancy between developments north and south of Shaw Avenue also demonstrates the effectiveness of park and open space fees and other policies in providing park space to the residents of newer residential developments as compared to past policies, although the city as a whole still remains well below other similar-sized cities. Existing deficits of pocket, neighborhood and community parks within established neighborhoods south of Shaw, may not be considered proximate to developing areas. Thus, additional funding is needed to provide parks in these areas with deficits to equitably distribute the City's parks and open space among all Fresnans. More recent revisions to the Quimby Act through AB 1359 (2013) allows fees, paid pursuant to the act, to be used in a neighborhood other than the neighborhood being developed if specific conditions can be met. This may allow some flexibility but will not resolve the ongoing issue of limited park space in established neighborhoods. Objective PU-3 of the General Plan calls for enhancement to the level of fire protection to meet the increasing demand for services from an increasing population. Implementing Policy PU-3-g Cost Recovery, encourages the City to continue to evaluate appropriate codes, policies, and methods to generate fees or other sources of revenue to offset the ongoing personnel and maintenance costs of providing fire prevention and response services. Therefore, it is the City staff's opinion and position that the requested extension of time for the tentative map will not support nor will it be consistent with the goals, objective and policies of the Fresno General Plan as referenced herein above unless subjected to and required to pay all current and contemporary impact fees and capacity charges, which have been adopted for purposes of providing essential public services and facilities to meet quality-of-life goals, and required infrastructure to support growth, economic competitiveness and business development. FRESNO MUNICIPAL CODE FINDINGS Based upon analysis of the application staff concludes that the required findings contained within FMC 15-3316(C)(2) (Extensions of Time) can only be supported if applicant pays all current and contemporary impact fees and capacity charges. The required findings are set forth below and explained within Exhibit H attached to this report: a) No Change to General Plan. There have been no changes to the provisions of the General Plan or any operative plan, or development plan that would cause the map to no longer be in conformity with the General Plan, operative plan, or development plan. b) No Material Change to Development Code. There have been no changes to the provisions of this Development Code that would cause the map to no longer be in conformity with this Development Code. c) No Changes Affecting Application of the General Plan and Development Code. There have been no changes in the character of the site or its surroundings that affect how the policies of the General Plan or other standards of this Development Code apply to the project. d) No Change Detrimentally Affecting Availability of Public Facilities to Serve Project. There have been no changes to the capacities of community resources, including roads, schools, sewage treatment or disposal facilities, or water supply, so that there is no longer sufficient remaining capacity to serve the project. ENVIRONMENTAL FINDINGS A Mitigated Negative Declaration, as prepared for Environmental Assessment No. R-04-098/T-5434/ANX-17-002, dated May 5, 2017, was adopted by the City Council on August 17, 2017, relative to the approval of Vesting Tentative Tract Map No. 5434/UGM. No further environmental analysis is needed. ANALYSIS OF THE CORRESPONDENCE RECEIVED In response to the Planning Commission report dated May 6, 2020, the applicant submitted a letter to the City dated May 5, 2020. The regularly scheduled May 6, 2020, Planning Commission hearing was continued to allow staff to address the issues raised in the applicant's letter. Below are the issues raised in applicant's May 5, 2020, letter (Exhibit I) along with staff's responses: Issue #1: KB Home and the project engineer Precision Civil Engineering (PCE) have been diligently working towards finalizing plans and documents needed to record the final map. There have been unexpected delays due to the complexity of designing the required lift station and creating a specialized CFD. Please see attached timeline that demonstrates the efforts made by the applicant to continuously keep the project moving. The applicant should not be penalized due to unforeseen circumstances (Exhibit I). Staff Response: The conditions and any associated complexities were known to KB Homes at the time the first extension was granted, as the extension was based upon the same facts. Applicant has retained expert consultants to assist it in fulfilling such conditions. Further, the City has been working with applicant and its consultant as requested. However, one of the major conditions needing to be fulfilled for recordation of the final map (annexation to a CFD) was not commenced until after the six-month extension expired. Applicant acknowledges that delays were not caused by the City. This project was accepted for processing 14 years ago, in which time circumstances involving development impacts have changed - occasioning a need for current fees. The City's current development impact fee and capacity charges have been adopted and are designed to ensure that the City tax and/or rate payers are not required to subsidize the costs of facilities benefitting new development and that all parties pay a proportionate share of costs for public systems, infrastructure and assets. Staff does not support further extensions to allow vesting of 2006 fees. Issue #2: A map extension should not have been required in the first place since the Final Map was filed in February of 2019 (within 24 months of Tentative Map approval). Staff Response: First, pursuant to Subdivision Map Act section 66498.1, because applicant's final map was not approved prior to expiration of the vesting tentative map, an extension is required. FMC 15-3316(B) is subject to the limitations of the Subdivision Map Act. Second, 15-3316.B. clearly indicates that an extension of time must be obtained to preserve vesting rights. Third, FMC 15-3316.C. (which must be read in concert with section 15-3316(B)) requires that an extension must be obtained by an applicant, if tentative map conditions of approval have not been fulfilled. Although, the final map has been filed, the conditions of approval have not been met, including: the project has not annexed into the required Community Facilities District (CFD). Issue #3: The evidence used to make the findings contained in Section 15-3316-C-2(c & d) to support the imposition of new fees are based on a comparison to 2006 conditions, even though the map was approved in 2017. This is not the intent of the ordinance. Staff Response: Because the project is subject to 2006 fees, the findings required by FMC 15-2216.C. must consider the difference in circumstances since 2006. Any other reading would result in other rate payers subsidizing applicant's project. At issue are two findings (c) and (d): Finding C (FMC 15-3316.C-2.c) requires that: There have been no changes in the character of the site or its surroundings that affect how the policies of the General Plan or other standards of this Development Code apply to the project. Staff is unable to make this finding because there have been substantial changes in the surroundings since 2006, including the development of 860 houses within 1 mile of the subject site and considerable adjacent development. The surrounding area of the subject site is vastly different in every way than what it was in 2006. Finding D (FMC 15-3316.C-2.d) requires that: There have been no changes to the capacities of community resources, including roads, schools, sewage treatment or disposal facilities, or water supply, so that there is no longer sufficient remaining capacity to serve the project. There have been substantial changes to infrastructure and resources in the area since 2006, to address the substantial development which has taken place in the subject area. With the addition of 860 homes in the immediate area and attendant resources, roads, schools, sewage and disposal facilities, water supply have all been impacted greatly. As such infrastructure has been added and fees have increases greatly to account for the changed circumstances. The extension of vested rights and the requirement to pay contemporary development impact fee and capacity charge obligations will contribute to the achieving the City of Fresno's goals for fiscal sustainability and revenue neutrality and to cover costs for public infrastructure, public facilities, and public services expansions and connections resultant from substantial new growth in the area over the life of the project and future projects. Finding D can only be confirmed if the project is subject to and required to pay all current and contemporary impact fees and capacity charges, as necessary to achieve a fiscal sustainability balance through recuperation of costs for the expansion of the public facilities, services and infrastructure as necessary to support growth. CONCLUSION The appropriateness of the proposed request for an extension of time has been examined with respect to its conformity with the goals, objectives and policies of the Fresno General Plan and the Citywide Development Code; its continued compatibility with surrounding existing or proposed uses and character of the site and its surrounding; and with respect to any changes to capacities of community resources which may have occurred since the tentative map was originally approved. These factors have been evaluated as described herein above. Upon consideration of this evaluation, it can be concluded that the additional six-month extension of time to the expiration date of the Vesting Tentative Tract Map No. 5434/UGM can be supported subject to the requirement to pay all current and contemporary impact fees and capacity charges. Attachments: Exhibit A - Vicinity Map Exhibit B - Current Aerial Photograph Exhibit C - Planning Commission Resolution No. 13470 Exhibit D - Vesting Tentative Tract Map No. 5434/UGM dated February 24, 2017 Exhibit E - Subdivider Request for Extension of Time dated August 12, 2019 Exhibit F - Subdivider Request for Extension of Time dated February 14, 2020 Exhibit G - Development Impact Fees dated May 6, 2020 Exhibit H - Fresno Municipal Code Findings Exhibit I - Letter received from applicant dated May 5, 2020