02-04-1992 - Policy for Phasing of Payment of Park Feesi • City of West Covina
TO: City Ma►,..�er and City Council
FROM: Harry W. Thomas. Memorandum
l
SUBJECT: Policy for Phasing of Payment of Park Fee AGENDA
ITEM NO. D-1
Summary: In the current economic conditions, the payment
of the park fee by the subdivider/developer DATE February 4, 1992
is a significant expenditure. To ease the
burden on subdividers/developer while protecting
the interests .of the City, staff is proposing
a policy for the phasing of the payment of the park. fee.
Background:
In accordance with the State Map Act, Section 66477 of the Government Code, and,
Municipal Code Section 20-40, subdivisions are subject to a park dedication requirement, or
in lieu thereof, payment of a fee equivalent.to the value of the otherwise required dedication.
Since the park areas in the City are already established, almost all subdivisions are required
to pay a.fee rather than dedicate land.
The fee is the value of the otherwise. required dedication with the amount of dedication being
three acres per thousand (1000) prospective residents of the subdivision and with the number
of prospective residents being the number of units times the average number of persons per
dwelling unit throughout the City based on the latest available federal census. The 1990
Census indicates 3.3 persons per dwelling unit.
As an example, a 100 lot subdivision would have a prospective 330 residents and based on .
three acres per 1000 residents, the required park dedication would be one acre. Land values
vary from $10 to $15 per square foot depending upon location. Therefore, the in -lieu park
fee would be between $435,000 and $652,000.
Although, the Government. Code provides that all other fees associated with subdivisions and
developments are only payable as they become appropriate, the payment of the park fee is
specifically excluded. However, the Government Code provides that the City may enter .into
agreements covering the phasing. of any payments for amounts owing to the City. Therefore,
the phasing of the payment of park fees is permitted and would be in conformance with the
application of all other fees. Since the phasing of the park fee is not required by law, it is a
discretionary act of the City.
The City has already approved and entered. into an agreement with Lewis Homes for the
phasing of the payment of the park fee for their Sunset Palms subdivision. Taico Properties
Inc. is in the process of preparing a similar agreement for their subdivision at Aroma and
Donna Beth. Also, staff has had telephone inquiries from at least two other subdividers of
small subdivisions (4 to 12 lots) concerning the phasing of their park fees. A City policy is
needed in responding to similar requests.
Analysis:
The park fee is required to be expended on park development/improvement and/or
recreational facilities which benefit the residents of the subdivision. The normal procedure is
that the park fee.is paid at the time of final approval of the subdivision map by the City
Council. This _procedure provided the entire park fee to the City prior to there being any
residents within the subdivision to benefit from the fee. Phasing of the payment of the park
fees in relation to the build -out of the subdivision satisfies the intent of the requirement for
the park fee by matching the payment rate to the increased burden on City park and
recreation facilities.
As long as the phasing agreement has provisions for adjustments in the fee based on changes
in property values and/or unit occupancy over time, the City's revenue stream should be
adequately protected. As long as the agreement provides for payments preceding
construction of related dwelling units, the payments will precede the provision of the benefits
to the prospective residents. Therefore, the City's and residents' interests can be protected
while providing the subdivider with a more realistic and financially acceptable schedule for
payment of the park fee.
fee -phase
City Manager and City C&il i
Policy for Phasing of Payment of Park Fee
February 4, 1992
Page 2
Analysis - contd.:
Also, under Section 26-204 of the Municipal Code, multiple -family residential developments
are subject to park fees in the same manner as subdivisions. Normally multiple -family
developments are not phased and would 'not need a phasing of the payments of park fees.
However, there may be instances where:a developer desires to phase construction and where
a phasing of the payment of the park fee would be appropriate. Therefore,, the proposed
policy is structured so as not to preclude appropriate multiple -family developments from
using the policy.
Fiscal Impact:
The City normally receives the park fee at the time of final subdivision map approval by the
City Council. Phasing of the payment of the park fee results in the City receiving a partial
fee payment at the time of the final map; approval and the remainder of the park fee being
paid as build -out of the subdivision occurs.
The fiscal impact is the loss of the use of the money by the City during the period of time
that the payments .are phased. This loss is at least partially offset by requiring recalculation
of the phased portions of the park fee based on then current land values and/or unit
occupancy.
Alternatives:
The alternative to providing for phasing ,the payments of the park fee is to continue, as
permitted by current state law, the payment in full of the park fee prior to final map approval
by the City Council.
The staff recommended policy for the phasing of payments ofthe park fee could be adjusted
by the City Council: The recommended; policy is attached to this report and the primary
components, which are subject to change, are as follows:.
1) The minimum size of the subdivision/development to qualify for
phasing of payments of park fees is recommended to be 50
parcels/lots/units due to the work involved. The minimum size
could be reduced or increased as desired by the City Council.
2) To encourage the build -out of the subdivision/development in
fair sized increments, the phased payments are recommended to
be at least one third (1/3) of the park fee resulting in a
maximum of three (3) payments. The City Council could adjust
this to a lower percentage with more payments (i.e., 1/4 of fee
= 4 payments), or could adjust it to a higher percentage with
less payments (i.e., 1/2 of fee = 2 payments).
3) To protect the City in the event of rising land values and to
protect the subdivider/developer in the event of falling land
values, the park fee is recommended to be recomputed at the
time of each payment. The City Council could provide for only
applying park fee computed at the time of the final subdivision
map approval by the City Council, or at the time of initial
building permit issuance for multiple -family developments.
fewphasc
City Manager and CityOuncil •
Policy for Phasing of Payment of Park Fee
February 4, 1992
Page 3
Recommendation:
Staff recommends that the City Council approve the Policy for Phasing of Payments of Park
Fees..
W. Thomas
Public Works Division
Manager/City Engineer
HWT/TMM/cn
Prophase
POLICY FOR PHASING OF PAYMENTS OF PARK FEES
.a
1) Phasing of park fees shall only be considered when such phasing
will clearly facilitate the development of housing that would
otherwise not be constructed or where construction would be
significantly delayed.
2) Where the City has constructed or has programmed for
construction park and/or recreation facilities that would benefit
future residents of the development and where funds other than
those dedicated for such purposes have been used or will be
needed if park fees are deferred, request for a park fee phasing
agreement may be denied.
3) The approval of any agreement, including the details therein, for
the phasing of payments of park fees shall be at the discretion of
the City Council. Compliance with the provisions of this policy
is not an assurance of City. Council approval. Consideration
will be given on a case -by -case basis.
4) Due to the work involved in preparing, processing, and
monitoring agreements, this policy may only be applied to
subdivisions/developments exceeding 49 parcels/lots/units.
Subdivisions/developments, consisting of 49 or less
parcels/lots/units will pay the park fee at the time of final map
approval, or at the time of initial building permit issuance for
multiple -family developments unless different provisions are
required by state law.
5) At least one third (1/3) of the park fee shall be paid prior to
final map recordation, and/or initial building permit issuance.
At least another one third (1/3) of the then current park fee shall
be paid prior to the issuance of a building permit for any
dwelling unit that would exceed 29 % of the total dwelling units.
The remainder of the then current park fee shall be paid prior to
the issuance of a building permit for any dwelling unit that
would exceed 59 % of the total dwelling units.
6) The "current park fee" shall be the re -computed park fee at the
time of any payment. The recomputation shall include any
.changes in land values and any changes in average number of
persons per dwelling unit within West Covina. The
recomputation shall only be applicable to the unpaid portion of
the park fee.
fee -phase