HomeMy WebLinkAbout06/07/2011
Staff: Rhonda Smiley, Harold Hanson, Chair Assistant to the City Manager Sue Benham Ken Weir REGULAR MEETING OF THE PLANNING AND DEVELOPMENT COMMITTEE of the City Council -City of Bakersfield
Tuesday, June 7, 2011 12:00 p.m. City Hall North 1600 Truxtun Avenue, Bakersfield, CA 93301 First Floor -Conference Room A A G E N D A 1. ROLL CALL 2. ADOPTION OF MAY 6, 2011 AGENDA
SUMMARY 3. PUBLIC STATEMENTS 4. DEFERRED BUSINESS A. Discussion and Committee Recommendation Regarding Newly Constructed Home Purchase Credit – Tandy /Teglia B. Discussion and Committee
Recommendation Regarding the 2011 Committee Meeting Schedule -Smiley 5. COMMITTEE COMMENTS 6. ADJOURNMENT
B A K E R S F I E L D Committee Members: Staff: Rhonda smiley, Harold Hanson, Chair Assistant to the City Manager Sue Benham Ken Weir AGENDA SUMMARY REPORT REGULAR MEETING OF THE PLANNING
AND DEVELOPMENT COMMITTEE Monday, May 6,201 1 12:OO p.m. City Hall North -Conference Room A 1600 Truxtun Avenue Bakersfield, CA 93301 The meeting was called to order at 12:01 PM 1. ROLL
CALL Committee members present: Councilmember Harold Hanson, Chair Councilmember Sue Benham Councilmember Ken Weir Staff ~resent: Alan Tandy, City Manager Ginny Gennaro, City Attorney
Rhonda Smiley, Asst. to the City Manager Justin Crumley, Associate Attorney Steve Teglia, Asst. to the City Manager Nelson Smith, Finance Director Chris Huot, Administrative Analyst
Phil Burns, Building Director Raul Rojas, Public Works Director Marian Shaw, PW Civil Engineer Brad Underwood, Asst. Public Works Director Others ~resent: Warren Maxwell, K.C. Roads
Eileen Carroll, D.C.S. David Cates, Lenox Homes Donna Carpenter, H.B.A. Matt Towery, Towery Homes Roger Mclntosh, Mclntosh & Assoc. Scott Thayer, Castle & Cooke Christine Bedell, Bakersfield
Californian Mike Makes, Premier Planning John Giumarra, Giumarra Vineyards 2. ADOPT MARCH 14,201 1 AGENDA SUMMARY REPORT Adopted as submitted
3. PUBLlC STATEMENTS None AGENDA SUMMARY REPORT Planningand DevelopmentCommittee Monday, May 6,201 1 Page 2 4. CLOSED SESSION A. Conference with Legal Counsel Regarding Potential Litigation
-Closed session pursuant to subdivision (b)(3)(A) of Government Code Section 54956.9 (One Matter) ~-~~ ~~~ ~ ~ ~ ~ -Gennaro ---------------------------------. -~ ---~ ~ -~ ~ -~ ~ ~ ~
--------.-------~-----City Attorney Ginny Gernnaro stated there was no reportable action. 5. DEFERRED BUSINESS A. Discussion and Committee Recommendation Regarding the Feasibility of
reducing Fees during the Economic Downturn-Tandy /Gennaro City Manager Alan Tandy provided an overview of the information provided to the Committee at the March 14, 2011 meeting regarding
the most recent update of the traffic impact fees which took two years to complete. Mr. Tandy stated It is extremely difficult to devise a plan to spur economic development while overcoming
the current economical constraints related to the funding of scheduled road projects. Public Works Director Raul Rojas provided an overview of the research staff conducted in response
to Committee questions from the March 14, 2011 meeting as detailed below: Mr. Rojas stated there are currently approximately 1,450 homes for sale in Metropolitan Bakersfield of which
274 are foreclosures and 536 are short sales for 55 percent of the total available. Since the first of the year, 1,719 homes have been sold of which 765 were foreclosed properties and
365 were short sales for 65 percent of the total sales. The City faces potential exposure to litigation by implementing a TIF feelcredit outside of the framework provided in the Mitigation
Fee Act due to Proposition 218 as this type of concept has not been adjudicated. The County of Kern charges a documentary transfer tax of 0.1 1 percent of assessed valuation for each
transfer of ownership, since the City of Bakersfield does not have a similar tax imposed the Recorder allocates the entire amount of the tax collected to the County of Kern. Based on
the data previously stated, as of the beginning of this year, the County of Kern has received approximately $260,944.20 in the form of documentary Astrsaonscfiear #taoxn orefvReenaulteo.n
D.-ata based on information provided by the Bakersfield ---------------~ -~ ---~ ~ ~ ~ -~ ~ Mr. Rojas also stated that the city receives one percent of sales tax for material costs which
are purchased in the City of Bakersfield. A $170,000 home that has a material cost of $28,000 would result in a total of $280 generated for the city, if all materials were purchase within
the City limits. In comparison, a $1 million highway construction project, of which approximately 40 percent is materials, would result in the City receiving a total of $4,000 in sales
tax.
AGENDA SUMMARY REPORT Planning and Development Committee Monday, May 6,201 1 Page 3 Mr. Rojas stated that as of March 21, 2011, nine final tract maps and five parcel maps would lose
their vested rights. Suspending the City's current policy, to allow for an addition year of vesting rights for final maps, would affect 321 residential lots in the nine final tract maps
and 18 lots in the five final parcel maps. If all 321 residential lots have building permits pulled before the end of the extended vesting rights period, it would result in a loss of
approximately $1, 644,483.00 in the Transportation Development Fund. For commercial or industrial zoning, the impact fee varies depending on the project size so the potential loss of
revenue would vary. There is currently a proposed bill to extend approved tentative maps or vesting maps that have not expired and will expire prior to January 1, 2014. This would affect
28,000 tentative maps. A change in the funding projections for the Transportation Impact Fee would require a change in KernCOG's Regional Transportation Plan. It would change metro Bakersfield's
funding opportunities for state and federal funding. City Attorney Ginny Gennaro stated that the TIF fees should not be changed unless a full nexus document is prepared in conjunctionwith
the County. Scott Thayer with Castle and Cooke stated extending the vesting rights for recorded maps would greatly assist developers by allowing an extra 12 months for construction.
City Civil Engineer Marian Shaw stated developers would have to complete an application to extend vesting rights and submit it to the Planning Commission. Then it would be brought before
the City Council for approval. Committeemember Ken Weir made a motion to extend vesting rights for recorded maps for 12 months, applicable to maps that expire through April 30, 2012.
The motionwas unanimously approved. B. Discussion and Committee Recommendation Regarding the 2011 Committee MeetingSchedule -Smiley The Committee requested staff provide alternative
dates for the remaining meetings to be scheduled on Tuesday or Wednesday due to scheduling conflicts. 6. COMMITTEE COMMENTS Committeemember Ken Weir proposed that a pilot program be
established for new homes to subsidize $3,000 in costs imposed by the City on the home. The subsidy would phase out over time when economic indicators indicate an up rise in the economy.
Staff will meet with Committeemember Weir for additional details. 7. ADJOURNMENT The meetingadjourned at 1 :06 PM
OFFICE OF THE CITY MANAGER MEMORANDUM June 3, 2011 TO: Alan Tandy, City Manager FROM: Steven Teglia, Assistant to the City Manager SUBJECT: Planning and Development Committee: Newly
Constructed Home Purchase Credit _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Background:
During the May 6, 2011 Planning and Development Committee meeting, Councilmember Weir requested staff look into developing a pilot program designed to provide purchasers of newly constructed
homes with a cash subsidy. The stated intent of this pilot program is to spur economic activity and the creation of local jobs that result from the construction of new singlefammil residences.
Councilmember Weir conveyed that the City benefits from the economic activity that is generated by the construction of new homes in several ways, including: ? Increased property tax
as the result of home construction on vacant lots; ? Revenue from sales tax generated through the purchase of building materials; ? Revenue generated through the payment of building
related fees (which are designed to mitigate the impacts of new development); and ? Revenue generated from the circulation of payroll and other economic activity resulting from those
who are employed and provide services related to new home construction. As discussed in previous Planning and Development meetings, the City imposes fees related to new development in
order to mitigate the costs associated with that new development. These fees include Traffic Impact Fees, Building Fees, Park Development Fees and Habitat Conservation Fees, among others.
Instead of arbitrarily reducing any of these specific fees, and thus subjecting them to challenge, Councilmember Weir has proposed providing a cash incentive which is offset by the positive
revenue that is generated for the City, as discussed above.
Planning & Development Committee Meeting Tuesday, June 7, 2011 Page 2 Amount of Subsidy: Identifying the exact economic impact and local government revenue generation is not an exact
science. However, staff was able to locate two separate reports that attempted to quantify the economic benefit brought on by the construction of new homes. Both reports attempt to calculate
the ripple effect of economic activity as well as the value of local government revenues from both a one-time and ongoing perspective. The first report, which was produced by the National
Association of Home Builders in June 2009 and entitled “The Local Impact of Home Building in a Typical Metro Area”, presents estimates of the local impacts of building 100 single-family
units in a typical metropolitan area in the United States. The report identifies several phases of economic impact related to the construction of 100 single-family units, which are discussed
below. Staff focused on the revenue generated for local government in these phases: phases: ? Phase I – Direct and Indirect Impact: -General Sales Taxes: $102,900 per 100 units = $1,029
per unit ? Phase II – Induced Effect of Spending Income and Tax Revenue from Phase I: -General Sales Taxes: $76,200 per 100 units = $762 per unit ? Phase III – Ongoing, Annual Effect
that Occurs due to Units Being Occupied: -General Sales Taxes: $33,600 per 100 units = $336 per unit -Residential Property Taxes: $281,000 per 100 units = $50,580 (City share per 100)
$506 (City share per unit) Estimated total impact to local government per unit = $2,633 The second report, which was prepared for the California Department of Real Estate, the California
Department of Housing and Community Development, and the California Housing Finance Agency in July 2010, and entitled “Building California’s Future: An Economic and Fiscal Analysis of
Housing Construction in the Golden State,” also discusses the fiscal impact of new home construction at the state and local levels. This report also attempts to provide the “net impact”
of new home construction when weighed against the cost to provide services to these new homes.
Planning & Development Committee Meeting Tuesday, June 7, 2011 Page 3 According to the report, permitting and building a median-priced home is estimated to have a positive fiscal impact
above the identified costs associated with providing services to these new homes of: One-time = $759 Ongoing = $262 Total = $1,021 Again, as you can see from the difference in the two
reports, estimating the true economic impact of new home construction is very difficult and has many variables that can change depending on the area studied. What the two reports seem
to agree on is that there is an economic benefit when a new single-family home is constructed in a community; the hard part is identifying exactly what that benefit is and any number
relies on an educated estimate of many factors. Potential Issues: Equity Concerns While it appears that there are valid arguments to support the positive economic impact that new home
construction can have, it can also be argued that other industries have the ability to spur local economic activity and create jobs when they are prosperous. Staff has concerns that
providing a subsidy of this kind may result in the call for similar subsidies designed to benefit consumers of other products. For example, commercial construction has a similar economic
impact as home construction; oil, agriculture and other industries generate taxes in various forms and could ask for the same kind of rebate or subsidy as a result of the taxes they
generate. In addition, allocating City revenues to provide a benefit to purchasers of newly constructed homes may also create an inequality between these consumers and those who choose
to purchase an existing home. Purchasing an existing home, which may require remodeling or other expenditures, also impacts the local economy in a positive way. Budget Impacts Proceeding
with a program such as this will require the City Council to identify a budgeted amount of funds that are to be set aside for this purpose. In addition, staff will need to be provided
with direction as as to the specific amount that should be provided for each new home purchase and the method by which such funds should be dispersed. Setting aside funding for this
program may also require the reprioritization of budget allocations already identified in the proposed budget presented to the City Council.
Planning & Development Committee Meeting Tuesday, June 7, 2011 Page 4 Summary: The economic downturn of the past few years has been the most significant since the Great Depression. Markets
in all sectors have been impacted with the resetting of lending standards and the reduction of available capital. These factors have stifled economic activity throughout the world and
we only now see signs of rebound. Staff understands the desire to artificially stimulate a sector of our economy through a program of this nature. However, due to the reasons stated
above, staff does not believe that providing taxpayer dollars to benefit a select few individuals is the most appropriate action. Please remember that the Committee recently recommended
and Council recently approved a more appropriate action for local government to take to assist during these tough economic times.
Planning and Development Committee Calendar * * * DRAFT * * * January 2011 Through December 2011 All meetings will be held at City Hall North, First Floor, Conference Room A Approved:
Planning and Development City Council Meetings -5:15 p.m. Committee Meetings 12:00 p.m. Holidays -City Hall Closed S M T W TH F S S M T W TH F S S M T W TH F S 1 1 2 3 4 5 1 2 3 4 5
2 3 4 5 6 7 8 6 7 8 9 10 11 12 6 7 8 9 10 11 12 9 10 11 12 13 14 15 13 14 15 16 17 18 19 13 14 15 16 17 18 19 16 17 18 19 20 21 22 20 21 22 23 24 25 26 20 21 22 23 24 25 26 23 24 25
26 27 28 29 27 28 27 28 29 30 31 30 31 S M T W TH F S S M T W TH F S S M T W TH F S 1 2 1 2 3 4 5 6 7 1 2 3 4 3 4 5 6 7 8 9 8 9 10 11 12 13 14 5 6 7 8 9 10 11 10 11 12 13 14 15 16 15
16 17 18 19 20 21 12 13 14 15 16 17 18 17 18 19 20 21 22 23 22 23 24 25 26 27 28 19 20 21 22 23 24 25 24 25 26 27 28 29 30 29 30 31 26 27 28 29 30 S M T W TH F S S M T W TH F S S M T
W TH F S 1 2 1 6 1 2 3 3 4 5 6 7 8 9 7 8 9 10 11 12 13 4 5 6 7 8 9 10 10 11 12 13 14 15 16 14 15 16 17 18 19 19 20 11 12 13 14 15 16 17 17 18 19 20 21 22 23 21 22 23 24 25 26 27 18 19
20 21 22 23 24 24 25 26 27 28 29 30 28 29 30 31 25 26 27 28 29 30 31 S M T W TH F S S M T W TH F S S M T W TH F S 1 1 2 3 4 5 1 2 3 2 3 4 5 6 7 8 6 7 8 9 10 11 12 4 5 6 7 8 9 10 9 10
11 12 13 14 15 13 14 15 16 17 18 29 11 12 13 14 15 16 17 16 17 18 19 20 21 22 20 21 22 23 24 25 26 18 19 20 21 22 23 24 23 24 25 26 27 28 29 27 28 29 30 25 26 27 28 29 30 31 30 31 July
August September October November December January February March April May June
PLANNING AND DEVELOPMENT COMMITTEE MEETING TUESDAY, JUNE 7,2011 ATTENDANCE LIST Contact: Phone/E-mail I