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    11.    
City Council Regular
Meeting Date: 01/26/2021  

SUBJECT:
PROPERTY TRANSFER AND GENERAL CITY FACILITIES DEVELOPMENT IMPACT FEE PAYMENT AGREEMENT
RECOMMENDATION:
It is recommended that the City Council: 
  1. Approve a Property Transfer and General City Facilities Development Impact Fee Payment Agreement (“Agreement”) with the Chino Valley Independent Fire District (“CVIFD”) regarding: the potential transfer of approximately four acres of property located at the intersection of Soquel Canyon Parkway and Pipeline Avenue relating to the possible construction of a new fire station (“Fire Station 68”); and, a future development impact fee for fire facilities, and

  2. Take such additional, related action that may be desirable.
BACKGROUND/ANALYSIS:
In October 2020, the City entered into a Letter of Intent (“LOI”) with CVIFD with regard to the transfer of property for Fire Station 68, transfer of development impact fees for the design and construction costs of Fire Station 68, and the creation of a future development impact fee for fire facilities. The proposed Agreement is a follow up to the LOI and provides the framework and understanding as to how these actions may be implemented.
 
The Agreement provides for the transfer of approximately four acres of City owned property located on the south side of Soquel Canyon Parkway immediately adjacent to where Pipeline Avenue intersects with and terminates with Soquel Canyon Parkway.  CVIFD will be working with its architect and consultants to develop the exact legal description of the property which will be approved by the Fire Chief and City Manager.
 
As part of the Agreement, CVIFD will be transferring to the City .62 acres of property that CVIFD owns at 4040 Eucalyptus Avenue which is improved with a former fire station facility. The City has no specific plans currently for the property but will publicly review potential uses for it in the future. 
 
The Agreement provides for the processes for both the City and CVIFD to conduct their own respective due diligence of the properties such as potential environmental contamination (soils studies) and review of property title reports. The parties also have to conduct their own respective California Environmental Quality Act review of their proposed uses for the property as well as obtaining whatever land use entitlements/approvals that may be needed for the use of the properties.
 
If the properties are transferred, the City will be making a payment of $8 million to CVIFD from its development impact fees, or any other permissible funding source, for design and construction costs associated with the construction of Fire Station 68. $4 million to be paid upon the close of escrow and the other $4 million to be paid upon the CVIFD’s award of the construction contract for Fire Station 68. CVIFD will be assuming the costs associated with Wildland Fire Protection costs through the state, or otherwise, which cost the City $148,798 in Fiscal Year 20/21.
 
The City and CVIFD will be working together to potentially establish a new and separate development impact fee for fire facilities. This process will be folded in with the City’s future review and study of existing impact fees. No date is currently scheduled for the commencement of this process.
 
Finally, given there are a number of issues that need to be resolved (property description, due diligence, CEQA review, etc.), the Agreement provides that the City Manager and Fire Chief can extend deadlines and make non-substantive revisions to the Agreement for purposes of its implementation.
ENVIRONMENTAL (CEQA) REVIEW:
The California Environmental Quality Act (CEQA) review process will be commenced and completed prior to any potential development of the properties. The Agreement is only intended to provide the process for the potential property transfers.
FISCAL IMPACT:
This agreement will reduce fund balance in the Development Impact Fee Program General Facilities Fee Fund by $7 million and various Community Facilities Districts by $1 million. An advance from the Water Fund may be needed depending on the cash balances at the time payment is needed.  Upon the close of Escrow, the General Fund would begin to realize an annual savings of approximately $150,000 for the Wildland Fire Protection costs.  Based on the anticipated timing of the close of escrow, staff will include a budget for the $4 million initial payout in the FY 21/22 budget and the final $4 million payout in the FY 22/23 budget.
REVIEWED BY OTHERS:
This item has been reviewed by the City Attorney and Finance Director.
Attachments
Draft Agreement

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