It is recommended that the City Council review the attached “Final Draft Report, Development Impact Fee Study” (Study) and direct staff to prepare an ordinance and accompanying resolution implementing the following measures:

1. Imposing the Park Improvement Impact Fee at the amount proposed in the Study.

2. Establishing a separate stand-alone Trails Impact Fee, and imposing the Trails Impact Fee at the amount proposed in the Study.

3. Establishing a separate Community and Recreation Facilities Impact Fee, and imposing the Community and Recreation Facilities Impact Fee at the amount proposed in the Study.

4. Imposing the Public Facilities Impact Fee at the amount proposed in the Study.

5. Elimination of the “link” between the City Construction Tax and the Public Facilities Impact Fee.

Development impact fees are imposed on new development projects in the City in order to generate revenue to build the facilities needed to serve the people that will live in the new projects.  The City of Rocklin charges impact fees for several types of facilities, including such facilities as transportation infrastructure, parks and recreation facilities, police stations and fire stations.

This presentation focuses primarily on parks and recreation facilities, with a secondary focus on general government facilities.

New park facilities in the City of Rocklin are currently financed through the following mechanism.  First, developers dedicate land for new parks, or pay an in lieu fee.  This fee is referred to as the Park Development Fee, or the “Quimby” fee.  Generally, larger development projects dedicate land, and small projects pay an in lieu fee.  This particular fee is not technically an “impact fee”, but is established pursuant to a statute in the Subdivision Map Act.

Secondly, developers pay to build facilities on the dedicated land. This fee is referred to currently as the Community Park Fee, and is a development impact fee.  The City Council adopted the current Community Park Fee by Resolution 99-82 on May 30, 1999.  That Resolution set the fee at $711 per single family residence and $569 per multi-family residence which is the same amount that is being charged today.

The two-part program referenced above has not been updated in over twenty years. General best practices recommend an update of impact fee programs at least every five years.  The failure to update the Quimby fee and the Community Park Fee has resulted in several problems: (1) the City has accepted the dedication of more park property than it can afford to develop (total park acreage, excluding Quarry Park Adventure and the Sunset Whitney Recreation Area is 426 acres, of which 120 acres is undeveloped); (2) the Community Park Fee is set at a level far below the actual cost of developing park land; and (3) there is no identified source of funding for the development of trails. 

In addition to community and neighborhood parks, the City has several community recreational facilities, such as the Rocklin Event Center and the Rocklin Community Center. These facilities are enhanced and/or maintained, in part, through the payment of Public Facilities Impact Fees.  This impact fee was adopted by the City Council by Resolution 2005-59 on March 8, 2005.  That Resolution set the fee at $4,187 per single family residence and $2,130 per multi-family residence which is the same amount that is being charged today.  This fee is also used to enhance and/or maintain other public facilities, such as police, fire and public service facilities.

In order to strengthen the City’s ability to continue to offer high quality parks and recreation amenities to existing and new residents, it is recommended that the City Council:

1. Update the Community Park Fee, and rename it the Park Improvement Fee.

2. Establish a new Trails Impact Fee.

3. Restructure the existing Public Facilities Impact Fee into two separate fees – the Community and Recreation Facilities Impact Fee (for recreational facilities), and the Public Facilities Impact Fee (for general government facilities).   

The “Final Draft Report – Development Impact Fee Study”, which is attached to this staff report, addresses the above matters in more detail, and provides the legal support for making the recommended changes. 

The Study is organized into six chapters.  Chapter 1 provides an overview of the legal requirements for establishing and imposing impact fees, and methods that can be used to calculate impact fees.  Chapter 2 contains data on existing and future development that is used in the Study. 

Chapters 3 through 5 analyze the impacts of development on specific types of facilities and calculate impact fees for those facilities. (Chapter 3. Park Improvements and Trails; Chapter 4. Community and Recreation Facilities; Chapter 5. Police, Fire and General Government Facilities).

Chapter 6 contains recommendations for adopting and implementing impact fees.

Construction Tax

Under existing policies, Rocklin’s Public Facilities Impact Fee is coordinated with the City’s Construction Tax.  Currently, if the Public Facilities Impact Fee for a project is lower than the Construction Tax, no Public Facilities Impact Fee is collected.  If the Public Facilities Impact Fee is higher than the Construction Tax, the difference is collected as the Public Facilities Impact Fee.

As an example of the coordination between the Public Facilities Impact Fee and the Construction Tax, the Construction Tax for a 5 unit townhome project with a value of $1,020,264 would be $14,253.  The existing Public Facilities Impact Fee for the project would be $10,260.  In this example, since the Public Facilities Impact Fee is lower than the Construction Tax, no Public Facilities Impact Fee would be charged. 

It is recommended that the coordination between the Construction Tax and the Public Facilities Impact Fee be eliminated, so that development projects would pay the full amount of both charges.  The Construction Tax was established prior to Prop 13, and has no relationship with the impact fee program. The coordination of the two programs results in an underfunding of the impact fee program.

Proposed Schedule:

Subject to the City Council providing guidance at the July 14, 2020 meeting, it is anticipated that the proposed ordinance and accompanying resolution would be presented for Council action at the August 11, 2020 meeting.

The Environmental Coordinator has reviewed the Study and determined that it is not subject to the California Environmental Quality Act (CEQA) because, pursuant to CEQA Guidelines Section 15060 (c)(2), the activity (project) will not result in a direct or reasonably foreseeable indirect physical change in the environment, and pursuant to CEQA Guidelines Section 15061 (b)(3), the activity (project) is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. The Study does not approve any specific development plan or activity, and it does not, itself, authorize the future construction of a development; therefore, the project does not have the potential for causing a significant effect on the environment nor will it result in a direct or reasonably foreseeable indirect physical change in the environment. 

The Development Impact Fee Study estimates that:

1. The projected revenue from Park Improvement Impact Fees would be $29,342,451.

2. The projected revenue from Trails Impact Fees would be $7,645,502.

3. The projected revenue from Community Recreation Facilities Fees would be $6,887,543.

4. The projected revenue from Public Facilities Impact Fee would be $22,558,292.

Elimination of the “link” between the City Construction Tax and the Public Facilities Impact Fee would result in substantial additional revenue under both categories, but cannot be quantified without specific details of the projects.