COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Public Works

DATE:

June 15, 2007

BOARD MEETING DATE:

June 26, 2007

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

James C. Porter, Director of Public Works

SUBJECT:

Annual Report on County-Wide Mitigation Fees for County Public Road Reconstruction and Adjustment of Fees for Fiscal Year 2007-08

Recommendation

Adopt resolutions:

1.

accepting the report on county-wide mitigation fees and finding that fees held over five years are necessary for the reconstruction of county roads in the area of benefit where they were collected; and

2.

authorizing an increase in the fees of 4.76% for residential and commercial uses excluding commercial – self storage and 6.19% for commercial – self storage as provided in the ordinance that established the fees.

Vision Alignment

Commitment: Ensure the basic health and safety for all.

Goal 7: Maintain and enhance the public safety of all residents and visitors.

The collection of mitigation fees will aid in funding the reconstruction of roads and drainage facilities that are a benefit to residents and the general public.

Background

Previous Board Action

Adopted an ordinance and resolutions in previous years authorizing the collection of county-wide mitigation fees, accepting reports on the status of the collected funds and increasing the rates used to calculate the fees.

History

Your Board instituted mitigation fees in 1991 as a means of having developers of property contribute funds to construct and reconstruct County roads that are used by the occupants of their developments. The enabling legislation - Government Code Sections 66484, et seq. - requires that funds be collected and used in the same areas (zones) where the funds are collected. The ordinance adopted by your Board which established mitigation fees, also established the various zones in the County, and:

1.

requires that a report on the status of the mitigation fees by zone be prepared each year;

2.

requires that findings be made on fees held over five years that have not been expended; and

3.

allows for adjustments in the mitigation fees based on the change in the Construction Cost Index as published by the Engineering News Record.

Discussion

Status of Funds

The attached summary indicates the amount of funds that have been collected together with interest from inception of the fees in January 1991 through December 31, 2006 (Exhibit “A”).

The original ordinance establishing the fees requires that the funds be used within five years from when they were collected. A total of $79,321 collected in the Mid-Coast Urban Area (Montara, Moss Beach, El Granada and Princeton), are over five years old and have not yet been used to finance roadway or drainage facility improvement projects. This is the only area where the five-year limit has been exceeded. We are currently moving forward with resurfacing and drainage projects which will expend these funds, and recommend that your Board determine that these funds be retained and be used for these projects.

Some of the projects in the other areas that will be constructed in fiscal year 2007-08 with these funds include the reconstruction of various roads in Emerald Lake, North Fair Oaks, West Menlo Park, and unincorporated areas in North County.

Adjustment of Fees

The fees as established use the residential fee as the base. Commercial and industrial fees are calculated as multiples of the residential fee, based on the type of use of the property with the exception of the Commercial – Self-Storage fee, which was established in 1999. The ordinance provides for adjusting the mitigation fee based on changes in the Engineering News Record Construction Cost Index, which has increased over fifty-four percent (54%) since inception of the fees (with the exception of the Commercial – Self-Storage fee, which has increased over twenty-nine percent (29%) since inception). We are recommending that the residential fee be increased from $1.47 to $1.54 per square foot of assessable space, or 4.76%, and that the Commercial – Self-Storage fee be increased from $0.97 to $1.03 per square foot of assessable space or 6.19%. Commercial and industrial fees are also recommended to be adjusted proportionately to reflect the change in the Construction Cost Index. The following is a summary of the recommended adjusted fees (per square foot of improved area):

Initial Fee

Existing Fee

Total Change Since 1991

Proposed Fee

Percent Increase

Residential

$1.00

$1.47

+54.0%

$1.54

4.76%

Industrial

$1.00

$1.47

+54.0%

$1.54

4.76%

Commercial – Self Storage*

$0.80

$0.97

+29.0%

$1.03

6.19%

Commercial – Lodging

$1.00

$1.47

+54.0%

$1.54

4.76%

Commercial – Retail

$2.00

$2.94

+54.0%

$3.08

4.76%

Commercial – Office

$2.00

$2.94

+54.0%

$3.08

4.76%

*fee established – February 1999

Resolutions accepting the report and authorizing an increase in the fees have been approved as to form by County Counsel.

Fiscal Impact

Specific projects to be financed with Mitigation Fees will be recommended for budgeting through the normal budget process.

There is no impact to the General Fund.

Attachments:

Exhibit “A” - Countywide Mitigation Fee Account Activity 1991-2006

Exhibit “B” - Description of Areas of Benefit