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ADOPT A RESOLUTION APPROVING THE SAN JOAQUIN COUNTY MULTI-SPECIES HABITAT CONSERVATION AND OPEN SPACE PLAN 2024 DEVELOPMENT FEE SCHEDULE
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution approving the San Joaquin County Multi-Species Habitat Conservation and Open Space Plan 2024 development fee schedule.
It is further recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of the resolution.
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Summary
On November 14, 2000, the San Joaquin Council of Governments, Inc. (SJCOG, Inc) established the San Joaquin County Multi-Species Habitat Conservation and Open Space Plan (“Plan” or “SJMSCP”). The Plan provides a strategy for balancing the needs to accommodate new development while encouraging the preservation of open space and agricultural areas as well as protected species habitat in San Joaquin County. Participation in the Plan is voluntary and available to the development community as an option to simply pay a fee to mitigate habitat impacts because of their development projects. Developers can fulfill mitigation obligations more efficiently with Plan participation and avoid negotiating mitigation measures with various Federal and State environmental protection agencies for their individual projects. SJCOG, Inc. collects the fees which are used to purchase permanent habitat preservation areas. Developers who do not participate in the Plan must provide their own project level analysis during the entitlement or construction permit process for proposals that could negatively impact natural resources in the region. Fees are updated on a yearly basis and require adoption by City Council to be effective. On February 20, 2001, the City of Stockton adopted the Plan, while the City Council adopted the last fee update on December 6, 2022.
In August 2023, the SJCOG, Inc. Board of Directors approved the 2024 Plan fee schedule (Attachment A - SJMSCP Staff Report). SJCOG, Inc. proposes an approximate 7.4% overall decrease in the Agricultural and Natural habitat classifications for the Plan, which are the two most common areas impacted by development projects. As shown in Attachment A, the 2023 Fee for the Agricultural and Natural habitat classification was $19,255 and is now proposed to be $17,833. The decrease is primarily due to a decline in the land acquisition component (Category A).
The City Council is requested to approve the proposed fee schedule. Habitat Fee pay zones for Stockton are mostly located on the outer areas of the City where development may or may not be initiated (see Attachment B - Habitat Fee Areas).
DISCUSSION
Background
The City became a participant in the Plan by joining the Joint Powers Authority (JPA) in 2001. As a participant in the JPA, City Council approval of annual fee adjustments is required. This requirement similarly applies to all participating cities in San Joaquin County as well as the County agency. Annual Plan fee rates are determined from a financial model that SJCOG, Inc. maintains and updates at 5-year increments to address land sales market conditions and inflation changes. In the past, delayed fee updates have resulted in lack of funding for the purchase and preservation of areas and resulted in significant fee increases for the development community. To accommodate changing market conditions and to provide clarity in fees, SJCOG has become more proactive in the Plan’s fee assessment. This year requires the 5-year financial model update to determine new fee rates for year 2024. The financial model consists of three main categories:
• Category A - Acquisition
• Category B - Enhancement
• Category C - Land Management/Administration
Over the last six months, SJCOG, Inc.’s Habitat Technical Advisory Committee (HTAC) and Financial Subcommittee engaged in a review of land sales market data and analysis. The HTAC consists of planning staff from local county and city agencies (including Stockton), building industry associations, and State and Federal environmental protection agencies. In August 2023, the SJCOG, Inc. Board of Directors approved the proposed 2024 Development Fee increase based on the 2020 San Joaquin County Multi-Species Habitat Conservation and Open Space Plan (SJMSCP) 5-year Financial Model Update. The Habitat Fee must be adopted by each local jurisdiction to take effect in that community.
The collected fees are used to purchase and preserve land throughout San Joaquin County. Additional costs cover restoration of land, monitoring, reporting, and biological reviews of land subject to the overall Plan.
While there are no preserve areas located within the City of Stockton, the Jacques Family Preserve and the G Torlai Property Preserve are closest to Stockton. Both preserves are located west of Interstate 5, south of Highway 4. Enhancements will support species such as the Swainson’s Hawk, Burrowing Owl, and Valley Elderberry Longhorned Beetle. These lands are protected through land covenants (i.e., easements, restrictions) that prevent development and can also include possible improvements to restore or encourage new habitat. A map of the regional preserve areas is included in Attachment C - Regional Preserve Areas.
On February 20, 2001, the Stockton City Council adopted three Resolutions as follows:
1. Resolution No. 01-0099 -- Certifying the Final Environmental Impact Report/Environmental Impact Statement (Final EIR/EIS), adopting the related California Environmental Quality Act (CEQA) Findings and Mitigation Reporting/Monitoring Program, and adopting the San Joaquin County Multi-Species Habitat Conservation and Open Space Plan;
2. Resolution No. 01-0100 -- Adopting the Implementation Agreement of the San Joaquin County Multi-Species Habitat Conservation and Open Space Plan authorizing the filing of the related Federal Endangered Species Act Section 10(a)(1)(B) Incidental Take Permit application with the U.S. Fish and Wildlife Service; and
3. Resolution No. 01-0101 -- Approving amendments to the JPA Agreement with SJCOG, Inc. authorizing SJCOG, Inc. to assume responsibilities specified in the San Joaquin County Multi-Species Habitat Conservation and Open Space Plan.
Applicants that participate in the Plan benefit from a pre-determined streamlined process. By participating in the Plan, the applicant may choose from a menu of options to mitigate impacts:
1. Pay the Plan Fee;
2. Redesign the project to avoid/minimize impacts;
3. Provide land in lieu of the Plan Fee; or
4. Any combination of the above options.
Alternatively, a project can choose not to participate in the Plan and fulfill mitigation requirements on its own with the respective permitting agencies. Based on City Staff’s experience, this option is very rarely chosen by developers.
Originally, the City collected Plan fees at the time of building permit issuance, like other development impact fees in the City’s Public Facilities Fee Program. Plan fees for individual projects (e.g., house on a single parcel) are adjusted to ensure that the per-acre fee as established by SJCOG, Inc. is collected for the entire (gross) project area. For example, a house built on a parcel within a large subdivision relies on additional land to support the residential use (e.g., road in front of the house). The adjusted development fee includes this supporting land so that all the acreage is accounted for within a given project area, and the appropriate Plan fee is paid.
On December 15, 2009, City Council adopted Resolution Number 09-409, which authorized an amendment to the Public Facility Fee Program’s Administrative Guidelines to establish SJCOG, Inc. as the entity responsible for the collection of the Development Fee. This change was made to increase administrative efficiency in the calculation and collection of Plan fees.
Each year, SJCOG, Inc. uses comparable agricultural land sales within San Joaquin County that meet certain criteria adopted by the Board. Easement acquisition costs are a primary consideration, as are comparable land sale costs. As shown in Table 1 below, Plan fees can vary from year to year. The rise and fall of Plan fees is primarily a result of the land acquisition category component of the fee calculation model.
Table 1 - Plan Fees 2017-2023 (Rate per acre)
|
TYPE/ YEAR |
2017 |
2018 |
2019 |
2020 |
2021 |
2022 |
2023 |
|
Other Open Space |
$8,905 |
$9,701 |
$6,700 |
$6,412 |
$8,682 |
$9,781 |
$9,629 |
|
Natural/Ag |
$17,808 |
$19,400 |
$13,399 |
$12,822 |
$17,363 |
$19,561 |
$19,255 |
|
Vernal Pool Grasslands |
$66,437 |
$72,523 |
$54,576 |
$52,833 |
$71,544 |
$80,453 |
$75,320 |
|
Vernal Pool Wetted |
$109,737 |
$116,871 |
$101,033 |
$100,788 |
$161,286 |
$174,040 |
$176,878 |
Present Situation
In August 2023, the SJCOG, Inc. Board of Directors approved the proposed 2024 Development Fee increase based on the 2020 San Joaquin County Multi-Species Habitat Conservation and Open Space Plan (SJMSCP) 5-year Financial Model Update. The fee model uses three main categories: Category A - Acquisition; Category B - Assessment and Enhancement; and Category C - Management, Monitoring and Administration to calculate fee rates.
I. Category A (Acquisition) - Comparable:
This category is directly related to land valuation based on comparable land sales in San Joaquin County in specific zones of the plan area (Central Zone, Central Southwest Transition Zone, and Delta Zone) over an established two-year period meeting the established criteria (e.g. “sales not less than 40 acres” and “no parcels with vineyard or orchard (except SJCOG, Inc. transactions for special needs”) used for comparable land sales. Cost estimates for this category will continue to be evaluated on a yearly basis by taking all qualified fee title comparable sales in each zone to set a weighted cost per acre. The fee model analysis update results in a 13.5% decrease in the Agricultural/Natural Habitat types of Category A (Acquisition) component to be $11,003. The reason for the decrease is the decline in overall comparable fee title land sale values from prior year values.
II. Category B (Assessment & Enhancement) - Refined Cost Factors/Redistribution of Habitat/Consumer Price Index
The unit cost factors (per acre or per year for some items) are adjusted only by the California Consumer Price Index (CPI), (the California CPI calculation was an increase of 2.88%). But the total cost for Category B is also a function of the SJMSCP Annual Report data updated annually (acres remaining to be acquired and the number of years remaining in the permit term; the fee per acre is a function of those total calculated costs and the land conversion acres remaining). These factors all feed into the fee model. The fee model update results in a 4.7% increase in the Agricultural/Natural Habitat types of Category B (Assessment and Enhancement) component to be $6,038.
III. Category C (Management, Monitoring and Administration) - Refined Cost Factors/Long Term Investment/Consumer Price Index
Annual cost updates will continue to use the California Consumer Price Index, as reported by the California Department of Finance, for the preceding 12-month fiscal year (e.g., July - June) to keep up with inflation annually. The fee model update results in a 2.88% increase in the Agricultural/Natural Habitat types of Category C (Management, Monitoring and Administration) component from prior years to be $792.15.
Plan Mitigation Fee Formula = Proposed 2023 Plan Fees
The formula for fee calculation is categorized into three distinct components (discussed above) to calculate a supported fee per acre [FEE = Category A (acquisition) + Category B (assessment & enhancement) + Category C (management & administration)].
For comparison purposes, the 2023 SJMSCP Fees and calculations are shown in Table 2, and the proposed 2024 Plan Fees and calculations are shown in Table 3. Compared to 2023, the proposed 2024 Plan Fees reflect an overall decrease of 7.4% in the most impacted Agricultural and Natural habitat classification fees. Staff analysis of the financial model results concluded that the differences in fees are due primarily to land sale prices increasing in Category A land acquisition costs. It should be noted that the Vernal Pool area for Stockton is very small and located on peripheral properties that may never be developed.
Table 2 - 2023 SJMSCP Development Fees
|
Habitat Type |
Category A |
Category B |
Category C |
Total Fee |
Rounded Fee |
|
Other Open Space |
$6,358.00 |
$2,885.00 |
$385.55 |
$9,628.55 |
$9,629 |
|
Natural/Ag |
$12,716.00 |
$5,769.00 |
$769.97 |
$19,254.97 |
$19,255 |
|
Vernal Pool Grasslands |
$58,927.00 |
$14,491.00 |
$1,901.76 |
$75,319.76 |
$75,320 |
|
Vernal Pool Wetted |
$57,912.00 |
$117,102.00 |
$1,864.45 |
$176,878.45 |
$176,878 |
Table 3 - Proposed 2024 SJMSCP Development Fees
|
Habitat Type |
Category A |
Category B |
Category C |
Total Fee |
Rounded Fee |
|
Other Open Space |
$5,502.00 |
$3,019.00 |
$396.66 |
$8,917.66 |
$8,918 |
|
Natural/Ag |
$11,003.00 |
$6,038.00 |
$792.15 |
$17,833.15 |
$17,833 |
|
Vernal Pool Grasslands |
$52,545.00 |
$14,906.00 |
$1,956.753 |
$69,407.53 |
$69,408 |
|
Vernal Pool Wetted |
$52,748.00 |
$123,058.00 |
$1,918.14 |
$177,724.14 |
$177,724 |
Although the City adopted several public facility fee reduction programs and a fee deferral program for specified fees within the City’s control, fees such as this Countywide Habitat Conservation Plan (HCP) Fee are subject to a regional agreement that was promulgated by the Federal and State Endangered Species Act. The administration of this fee is detailed in the Countywide HCP, where SJCOG Inc. is the designated Administrator. Methodologies and fee analyses are overseen by SJCOG HTAC and Financial subcommittees. As a result, these “development fees” are not subject to reduction and deferral programs.
PUBLIC NOTICE
A Public Notice of this hearing was published in the Record on November 30, 2023.
FINANCIAL SUMMARY
There is no direct financial impact to the City of Stockton, as this Development Fee is collected directly by SJCOG, Inc.
Attachment A - SJMSCP 8/23 Staff Report
Attachment B - Habitat Fee Areas
Attachment C - Regional Preserve Areas