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Item No. 26 Local Devel. Mitigation Fee Update MSHCP
City Council Agenda Report City of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 www.lake-elsinore.org File Number: ID# 21-161 Agenda Date: 4/27/2021 Status: Approval FinalVersion: 1 File Type: Council Public Hearing In Control: City Council / Successor Agency Agenda Number: 26) Local Development Mitigation Fee Update for Funding the Preservation of Natural Ecosystems in accordance with the Western Riverside County MSHCP 1.Adopt by title only and waive further reading AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AMENDING AND RESTATING CHAPTER 16.85 OF TITLE 16 OF THE LAKE ELSINORE MUNICIPAL CODE TO UPDATE THE LOCAL DEVELOPMENT MITIGATION FEE FOR FUNDING THE PRESERVATION OF NATURAL ECOSYSTEMS IN ACCORDANCE WITH THE WESTERN RIVERSIDE COUNTY MULTIPLE SPECIES HABITAT CONSERVATION PLAN; and 2.Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ESTABLISHING THE WESTERN RIVERSIDE COUNTY MULTIPLE SPECIES HABITAT CONSERVATION PLAN LOCAL DEVELOPMENT MITIGATION FEE PURSUANT TO CHAPTER 16.85 OF THE LAKE ELSINORE MUNICIPAL CODE. Page 1 City of Lake Elsinore Printed on 4/22/2021 REPORT TO CITY COUNCIL To: Honorable Mayor and Members of the City Council From: Jason Simpson, City Manager Prepared by: Barbara Leibold, City Attorney Date: April 27, 2021 Subject: ORDINANCE TO UPDATE THE LOCAL DEVELOPMENT MITIGATION FEE FOR FUNDING THE PRESERVATION OF NATURAL ECOSYSTEMS IN ACCORDANCE WITH THE WESTERN RIVERSIDE COUNTY MSHCP and LOCAL DEVELOPMENT MITIGATION FEE RESOLUTION Recommendation Adopt by title only and waive further reading an ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AMENDING AND RESTATING CHAPTER 16.85 OF TITLE 16 OF THE LAKE ELSINORE MUNICIPAL CODE TO UPDATE THE LOCAL DEVELOPMENT MITIGATION FEE FOR FUNDING THE PRESERVATION OF NATURAL ECOSYSTEMS IN ACCORDANCE WITH THE WESTERN RIVERSIDE COUNTY MULTIPLE SPECIES HABITAT CONSERVATION PLAN; and Adopt RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA ESTABLISHING THE WESTERN RIVERSIDE COUNTY MULTIPLE SPECIES HABITAT CONSERVATION PLAN LOCAL DEVELOPMENT MITIGATION FEE PURSUANT TO CHAPTER 16.85 OF THE LAKE ELSINORE MUNICIPAL CODE. Background The City of Lake Elsinore is a Member Agency of the Western Riverside County Regional Conservation Authority (RCA), a joint powers authority comprised of the County of Riverside and the eighteen (18) cities located in western Riverside County. The RCA was formed to acquire, administer, operate, and maintain land and facilities to establish habitat reserves for the conservation and protection of species covered by the Western Riverside County Multiple Species Habitat Conservation Plan (MSHCP or Plan). The Western Riverside County MSHCP, originally adopted in 2004, is a comprehensive, multi- jurisdictional Habitat Conservation Plan (HCP) focusing on the permanent conservation of 500,000 acres and the protection of 146 species, including 33 that are currently listed as threatened or endangered. The MSHCP was developed in response to the need for future growth opportunities in western Riverside County, from housing developments to transportation and infrastructure, while addressing the requirements of the State and federal Endangered Species Acts (ESA). The MSHCP serves as an HCP pursuant to Section 10(a)(1)(B) of the federal Endangered Species Act of 1973 as well as a Natural Communities Conservation Plan (NCCP) under California’s NCCP Act of 2001. The MSHCP streamlines environmental permitting processes by allowing the participating jurisdictions such as the City to authorize the “take” of Ordinance Updating MSHCP Resolution Adopting LDMF April 27, 2021 plant and wildlife species identified within the Plan Area. Without the MSHCP, each development and transportation project would need to conduct an individual assessment and mitigation for impacts to endangered species, an approach that would be less efficient and effective, and more costly. The City receipt of local Measure A sales tax funds for local streets and roads is conditioned upon the City participation in the MSHCP. This condition of funding is memorialized in the voter-adopted ordinance that authorizes Measure A. The MSHCP required a Nexus Study under the Mitigation Fee Act (Gov. Code §§ 66000 et seq.) to establish a Local Development Mitigation Fee (LDMF) that would then be adopted by each jurisdiction participating in the MSHCP. The LDMF pays for acquisition of Additional Reserve Lands (ARL) to meet the target conservation acreage that local governments are responsible to acquire per the Plan. The original Nexus Study was completed in 2003 coinciding with the adoption of the MSHCP, Implementing Agreement, and signing of the Permits. Section 8.5.1 of the MSHCP allows the fee to be reevaluated and revised should it be found to insufficiently cover mitigation of new development. Based on the 2003 Nexus Study, the City Council approve Ordinance No. 1124 in 2004 as part of the adoption of the MSHCP and authorizing the imposition of the LDMF. Pursuant to the Mitigation Fee Act, RCA prepared a new nexus study (“2020 Nexus Study”) to update the fees for the first time since original adoption. On December 7, 2020, the RCA Board of Directors adopted the 2020 Nexus Study. On December 31, 2020 RCA transmitted a model ordinance and model resolution to the City. The RCA Board of Directors also approved the use of the MSHCP Mitigation Fee Implementation Manual to assist Member Agencies with LDMF collection questions. An updated Nexus Study was needed to ensure adequate funding to complete reserve acquisition to fulfill local governments’ responsibilities under the MSHCP. Over the last 16 years, many of the assumptions underlying the original Nexus Study were not borne out by reality. Forces contributing to the unmet expectation include the Great Recession, less acreage dedicated to RCA by private landowners, and less state and federal funding than expected. The 2020 Nexus Study calculated the expected costs to complete ARL acquisition, manage the conservation lands in perpetuity via an endowment, and administration of the MSHCP. The Nexus Study extended the reserve acquisition period by an additional fifteen years. Currently, the acquisition period ends in 2029. By extending the acquisition period, the LDMF increase is lower because it covers more development over a longer period. The RCA Board also adopted a phased increase of the new fee, with 50 percent of the fee increase taking effect on July 1, 2021 and the remainder of the increase taking effect on January 1, 2022. Public deliberation over the 2020 Nexus Study stretched over a year in multiple public meetings. On April 13, 2021, the City Council introduced the proposed Ordinance and directed staff to set a duly noticed public hearing for the April 27, 2021 regular City Council meeting at which time oral or written presentations can be made regarding the proposed increase in the Local Development Mitigation Fee for funding the preservation of natural ecosystems in accordance with the W estern Riverside County MSHCP and otherwise comply with the requirements of Government Code sections 66016, 66017, and 66018. Notice of the hearing was published and provided in accordance with these statutory requirements. Ordinance Updating MSHCP Resolution Adopting LDMF April 27, 2021 Discussion The proposed Ordinance provides the legal basis for a revised MSHCP LDMF schedule. The actual MSHCP LDMF schedule is established by the proposed Resolution. In accordance with the Mitigation Fee Act, the proposed Ordinance and 2020 Nexus Study: (i) identifies the purpose of the revised fees; (ii) identifies the use to which the revised fees is to be put, including identification of any facilities to be financed; (iii) determines how there is a reasonable relationship between the fee’s use and the type of development project on which the fee is imposed; (iv) determines how there is a reasonable relationship between the need for the public facilities and the type of development project upon which the fee is imposed; and (v) determines how there is a reasonable relationship between the amount of the fee and the cost of the public facility or portion or the public facility attributable to the development on which the fee is imposed. Recognizing the current economic situation, the RCA Board, in consultation with the Building Industry Association (BIA), adopted the lowest possible fee evaluated in the Nexus Study, along with a phase-in of the increase. 50% of the increase will take effect on July 1, 2021, with the remaining 50% taking effect on January 1, 2022. Upon adoption of the Ordinance and the Resolution setting the Local Development Mitigation Fee, the Fee Schedule for the MSHCP mitigation is proposed to increase as shown on the following chart: Category Current July 1, 2021 – Dec 31, 2021 Jan 1, 2022 – June 30, 2022 Residential, density less than 8.0 dwelling units per acre (fee per dwelling unit) $2,234 $2,935 $3,635 Residential, density between 8.0 and 14.0 dwelling units per acre (fee per dwelling unit) $1,430 $1,473 $1,515 Residential density greater than 14.0 dwelling units per acre (fee per dwelling unit) $1,161 $670 $670 Commercial (fee per acre) $7,606 $11,982 $16,358 Industrial (fee per acre) $7,606 $11,982 $16,358 The City may accept prepayment of fees at its own discretion for applicants wishing to pay current fee levels prior to July 1, 2021. Generally, a fee increase does not go into effect until 60 days following approval of the required legislative enactments. Accordingly, the City must adopt the updated MSHCP mitigation fee before May 2, 2021 to remain compliant with the MSHCP. Fiscal Impact No fiscal impact as all fees collected are passed through to the Western Riverside County Regional Conservation Authority. Ordinance Updating MSHCP Resolution Adopting LDMF April 27, 2021 Exhibits A – Ordinance No. 2021-___ B - Resolution C – Nexus Study Background Summary D – MSHCP LDMF Implementation Frequently Asked Questions E – MSHCP Nexus Study F – MSHCP Mitigation Fee Implementation Manual ORDINANCE NO. 2021-___ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AMENDING AND RESTATING CHAPTER 16.85 OF TITLE 16 OF THE LAKE ELSINORE MUNICIPAL CODE TO UPDATE THE LOCAL DEVELOPMENT MITIGATION FEE FOR FUNDING THE PRESERVATI ON OF NATURAL ECOSYSTEMS IN ACCORDANCE WITH THE WESTERN RIVERSIDE COUNTY MULTIPLE SPECIES HABITAT CONSERVATION PLAN WHEREAS, the City Council of the City of Lake Elsinore (“City”) finds that the ecosystems of the City and western Riverside County, and the vegetation communities and sensitive species they support are fragile, irreplaceable resources that are vital to the general welfare of all residents; and WHEREAS, these vegetation communities and natural areas contain habitat value which contributes to the City’s and the region’s environmental resources; and WHEREAS, special protections for these vegetation communities and natural areas are being established to prevent fu ture endangerment of the plant and animal species that are dependent upon them; and WHEREAS, adoption and implementation of this Ordinance will help t o enable the City to achieve the conservation goals set forth in the Western Riverside County Multiple Spe cies Habitat Conservation Plan (“MSHCP”), adopted by the City Council on July 27, 2004, to implement the associated Implementing Agreement approved by the City Council on January 13, 2004, and to preserve the ability of affected property owners to make rea sonable use of their land consistent with the requirements of the National Environme ntal Policy Act (“NEPA”), the California Environmental Quality Act (“CEQA”), the Federal Endangered Species Act (“FESA”), the California Endangered Species Act (“CESA”), the California Natural Community Conservation Planning Act (“NCCP Act”), and other applicable laws; and WHEREAS, the purpose and intent of this Ordinance is to update the City’s Local Development Mitigation Fee to assist in the maintenance of biological diversity a nd the natural ecosystem processes that support this diversity; to protect vegetation communities and natural areas within the City and western Riverside County which are known to support threatened, endangered, or key sensitive populations of plant and wildlife species; to maintain economic development within the City by providing a streamlined regulatory process from which development can proceed in an orderly process; and to protect the existing character of the City and the region through the implementation of a system of reserves which will provide for perma nent open space, community edges, and habitat conservation for species covered by the MSHCP; and WHEREAS, the findings set forth herein are based on the MSHCP and the 2020 Nexus Study, and the estimated implementation costs of the MSHCP as set forth in the 20 20 Nexus Study, a copy of which is on file in the City Clerk’s office; and WHEREAS, The Western Riverside County Regional Conservation Authority (“RCA”) has prepared an updated nexus study entitled “WESTERN RIVERSIDE COUNTY MULTIPLE SPECIES HABITAT CONSERVATION PLAN NEXUS FEE STUDY UPDATE” (2020 Nexus Study”) pursuant to California Government code sections 66000 et seq. for the purpose of updating the Local Development Mitigation Fee (“LDMF”). On December 7, 2020, the RCA Board of Directors reviewed the 2020 Nexus Study and directed RCA Permittees to adopt this updated MSHCP fee ordinance ; and WHEREAS, pursuant to Article 11, Section 7 of the California Constitution, the City is authorized to enact measures that protect the health, safety, and welfare of its citizens; and WHEREAS, pursuant to Government Code Sections 66000 et seq., the City is empowered to impose fees and other exactions to provide necessary funding and public fa cilities required to mitigate the negative effect of new development projects; and WHEREAS, on July 27, 2004 the City Council took action on the MSHCP and the associated Implementing Agreement and adopted the original LDMF, and made appropriate findings pu rsuant to CEQA; and WHEREAS, the levying of LDMF has been reviewed by the City Council and staff in accordance with the California Environmental Quality Act (“CEQA”) and the State CEQA Guidelines and it has been determined that the adoption of this ordinan ce is exempt from CEQA pursuant to Section 21080(b)(8) of the California Public Resources Code and Sections 15273 and 15378(b)(4) of the State CEQA Guidelines; and WHEREAS, pursuant to Government Code sections 66016, 66017, and 66018, the City has: (a) made available to the public, at least ten (10) days prior to its public hearing, data indicating the estimated cost required to provide the facilities and infrastructure for which these development fees are levied and the revenue sources anticipated to prov ide those facilities and infrastructure; (b) mailed notice at least fourteen (14) days prior to this meeting to all interested parties that have requested notice of new or increased development fees; and (c) held a duly noticed, regularly scheduled public hearing at which oral and written testimony was received regarding the proposed fees. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WALNUT, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. The above recitals are true and correct and incorporated fully herein. SECTION 2. Chapter 16.85 of Title 16 of the Lake Elsinore Municipal Code is hereby amended and restated in its entirety as follows: 16.85.010 Findings. The City Council finds and determines as follows: A. The preservation of vegetation communities and natural areas within the City and western Riverside County which support species covered by the MSHCP is necessary to protect and promote the health, safety, and welfare of all the citizens of the City by reducing the adverse direct, indirect, and cumulative effects of urbanization and development and providing for permanent conservation of h abitat for species covered by the MSHCP. B. It is necessary to update certain development impact fees to ensure that all new development within the City pays its fair share of the costs of acquiring and preserving vegetation communities and natural areas within the City and the region which are known to support plant and wildlife species covered by the MSHCP. C. A proper funding source to pay the costs associated with mitigating the direct, indirect, and cumulative impacts of development to the natural ecosystems within the City and the region, as identified in the MSHCP, is a development impact fee for residential, commercial, and industrial development. The amount of the fee is determined by the nature and extent of the impacts from the development to the identified natural ecosystems and or the relative cost of mitigating such impacts. D. The MSHCP and the 2020 Nexus Study, a copy of which is on file in the City Clerk’s office, provides a basis for the imposition of development impact fees on new construction. E. The use of the development impact fees to mitigate the impacts to the City’s and the region’s natural ecosystems is reasonably related to the type and extent of impacts caused by development within the City. F. The costs of funding the proper mitigation of natural ecosystems and biological resources impacted by development within the City and the region are apportioned relative to the type and extent of impacts ca used by the development. G. The facts and evidence provided to the City establish that there is a reasonable relationship between the need for preserving the natural ecosystems in the City and the region, as defined in the MSHCP, and the direct, indirect, and cumulative impacts to such natural ecosystems and biological resources created by the types of development on which the fee will be imposed, and that there is a reasonable relationship between the fee’s use and the types of development for which the fee is charged. This reasonable relationship is desc ribed in more detail in the MSHCP and the 2020 Nexus Study. H. The cost estimates for mitigating the impact of development on the City’s and the region’s natural ecosystem and biological resources, as set f orth in the MSHCP, are reasonable and will not exceed the reasonably estimated total o f these costs. I. The fee set forth herein does not reflect the entire cost of the lands which need to be acquired in order to implement the MSHCP and mitigate the impact caused by new development. Additional revenues will be required from other sources. The City Council finds that the benefit to each development project is greater than the amount of the fee to be paid by the project. J. The fees collected pursuant to this Chapter shall be used to finance the acquisition and perpetual conservation of the natural ecosystems and certain improvements necessary to implement the goals and objectives of the MSHCP. 16.85.020 Administrative Responsibility. The RCA is hereby reaffirmed as the Administrator of the MSHCP Local Development Mitigation Fee Program pursuant to pursuant to this Chapter. The RCA is hereby authorized to receive all fees generated pursuant to this Chapter from the Local Development Mitigation Fee within the City and to invest, account for, and expend such fees in accordance with the provisions of the MSHCP, MSHCP Implementing Ordinance, this Chapter, and the MSHCP Mitigation Fee Implementation Manual. The detailed administrative procedures concerning the implementation of this Chapter shall be contained in the MSHCP Mitigation Fee Implementation Manual adopted December 7, 2020 and as may be amended from time to time. The RCA Board of Directors may adopt a policy that will allow the City to authorize the RCA to calculate the fees due and collect those amounts directly from property owners. If such a p olicy is adopted, it will be included in the MSHCP Mitigation Fee Implementation Manual. 16.85.030 Definitions. As used in this Chapter, the following terms shall have the following meanings: “Accessory Dwelling Unit” means an accessory dwelling unit as defined by California Government Code section 65852.2(j)(1), or as defined in any successor statute. “City” means the City of Lake Elsinore, California. “City Council” means the City Council of the City of Lake Elsinore, California. “Credit” means a credit allowed pursuant to Section 16.85.100 of this Chapter, which may be applied against the development impact fee paid. “Development” means a human-created change to improved or unimproved real estate, including buildings or other structures, mining, dredging, filling, grading, paving, excavating, and drilling. “Development Project” or “Project” means any project undertaken for the purpose of development pursuant to the issuance of a building permit by the City pursuant to all applicable ordinances, regulations, and rules of the City and state law. “Junior Accessory Dwelling Unit” means a junior accessory dwelling unit as defined by California Government Code section 65852.22(h)(1), or as defined in any successor statute. “Local Development Mitigation Fee” or “Fee” means the development impact fee imposed pursuant to the provisions of this Chapter. “Multiple Species Habitat Conservation Plan” or “MSHCP” means the Western Riverside County Multiple Species Habitat Conservation Plan, adopted by the City Council on January 13, 2004. “MSHCP Conservation Area” has the same meaning and intent as such term is defined and utilized in the MSHCP. “Chapter” means Chapter 16.85 of the Lake Elsinore Municipal Code. “Project Area” means the area, measured in acres, within the Development Project including, without limitation, any areas to be developed as a condition of the Development Project. Except as otherwise provided herein, the Project Area is the area upon which the project will be assessed the Local Development Mitigation Fee. See the MSHCP Mitigation Fee Implementation Manual for additional guidance for calculating the Project Area. “Revenue” or “Revenues” means any funds received by the City pursuant to the provisions of this Chapter for the purpose of defraying all or a portion of the cost of acquiring and preserving vegetation communities and natural areas within the City and the region which are known to support threatened, endangered , or key sensitive populations of plant and wildlife species. “Western Riverside County Regional Conservation Authority” or “RCA” means the governing body established pursuant to the MSHCP that is delegated the authority to oversee and implement the provisions of the MSHCP. Any capitalized term not otherwise defined herein shall carry the same meaning and definition as that term is used and defined in the MSHCP. 16.85.040 Development Mitigation and Local Infrastructure Fee. A. Adoption of Local Development Mitigation Fee Schedule. The City Council shall adopt an applicable Local Development Mitigation Fee schedule provided by the RCA through a separate resolution, which may be amended from time to time. B. Public Projects. The City is required to mitigate the impacts of Public Projects pursuant to the MSHCP and the MSHCP Impleme nting Agreement. The definition of Public Project and the method for mitigating Public Projects will be set forth in the MSHCP Mitigation Fee Implementation Manual. C. Periodic Fee Adjustment. The Local Development Mitigation Fee schedule set forth in the fee resolution referenced above may be periodically reviewed and the amounts adjusted as set forth in the MSHCP Mitigation Fee Implementation Manual. D. Automatic Annual Fee Adjustment. In addition to the Periodic Fee Adjustment mentioned above, the RCA shall provide the City with an automatic annual fee adjustment for the Local Development Mitigation Fee established by this Chapter as set forth in the MSHCP Mitigation Fee Implementation Manual. 16.85.050 Imposition of the Local Development Mitigation Fee. A. The Local Development Mitigation Fee will be paid no later than at the issuance of a building permit. Notwithstanding any other provision of the City’s Municipal Code, no building permit shall be issued for any Development Project unless the Local Development Mitigation Fee applicable to such Development Project has been paid. The amount of the Fee shall be calculated in accordance with the MSHCP Mitigation Fee Implementation Manual. B. In lieu of the payment of the Local Development Mitigation Fee as pr ovided above, the Fee for a Development may be paid through a Community F acilities District, provided that such arrangement is approved by the RCA in writing. 16.85.060 Payment of Local Development Mitigation Fee. A. The Local Development Mitigation Fee shall be paid in full in accordance with applicable law. B. The Local Development Mitigation Fee required to be paid under this Chapter shall be the fee in effect at the time the fee is paid for which the Local Development Mitigation Fee is assessed; provided, however, that Housing Development Projects as defined by California Government Code section 65589.5(h)(2) may be en titled to pay the fee in effect at the time the preliminary application was submitted. C. Notwithstanding anything in the City’s Municipal Code, or any other written documentation to the contrary, the Local Development Mitigation Fee shall be paid whether or not the Development Project is subject to conditions of approval by the City imposing the requirement to pay the fee. D. If all or part of the Development Project is sold prior to payment of the Local Development Mitigation Fee, the Project shall continue to be subject to the requirement to pay the fee as provided herein. E. The fee title owner(s) of the Property is responsible for the payment of the Local Development Mitigation Fee. 16.85.070 Refunds. Under certain circumstances, such as double paymen t, expiration of a building permit, or fee miscalculation due to clerical error as set forth below, an applicant may be entitled to a refund. Refunds will be reimbursed by the end of the fiscal year on a first come, first served basis, depending upon the net revenue stream. Refunds will only be considered reimbursable if requested within 3 years of the original LDMF payment. In all cases, the applicant must promptly submit a refund request with proof of LDMF payment to the RCA if RCA collected the LDMF, or if collected by a local jurisdiction, the refund request shall be submitted to that local jurisdiction, which will subsequently forward the request to RCA for verification, review, and possible action. 1. Expiration of Building Permits - if a building permit should expire, is revoked, or is voluntarily surrendered and is, therefore voided and no construction or improvement of land has commenced, then the applicant may be entitled to a refund of the LDMF collected which was paid as a condition of approval, less administration costs. Any refund must be requested within three (3) years of the original payment. The applicant shall pay the current LDMF in effect at the time in full if s/he reapplies for the permit. 2. Double Payments – on occasion due to a clerical error, a developer may have paid all or a portion of the required LDMF for project twice. In such cases, a refund of the double payment may be required. 3. Balance Due – when LDMF is incorrectly calculated due to City clerical error, it is the City’s responsibility to remit the balance due to RCA. The error must be discovered within three (3) years of the original payment for the City to be held accountable. The amount due can be remitted through alternate me thods agreed to by the RCA Executive Committee. If first approved through RCA staff in writing, the calculation is not subject to additional review. 16.85.080 Accounting and Disbursement of Collected Local Development Mitigation Fees. A. All fees paid pursuant to this Chapter shall be deposited, invested, accounted for, and expended in accordance with Section 66006 of the Government Code and all other applicable provisions of law. B. Subject to the provisions of this section, all fees collected pursuant to this Chapter shall be remitted to the Western Riverside County Regional Conservation Authority at least quarterly. C. In the resolution referenced in Section 16.85.040(A), the City may also add an additional cost to the Local Development Mitigation Fee schedule to cover the costs of collecting the fees from project proponents. Any amounts collected by the City shall not reduce the amount collected and remitted to the RCA under this Chapter. 16.85.090 Exemptions. The following types of construction shall be exempt from the provisions of this Chapter: A. Reconstruction or improvements that were damaged or destroyed by fire or other natural causes, provided that the reconstruction or improvements do not result in additional usable square footage. B. Rehabilitation or remodeling to an existing Development Project, provided that the rehabilitation or remodeling does not result in additional usable square footage . C. Accessory Dwelling Units, but only to the extent such fee is exempted under state law. D. Junior Accessory Dwelling Units, but only to the extent such fee is exempted under state law. E. Existing structures where the use is changed from an existing permitted use to a different permitted use, provided that no additional improvements are constructed and the changed use does not result in additional usable square footage. F. Certain Agricultural Operations as allowed by the MSHCP, as amended. G. Vesting Tentative Tract Maps entered into purs uant to Government Code section 66452 et seq. (also, Government Code section 66498.1 et seq.) and Development Projects which are the subject of a development agreement entered into pursuant to Government Code sec tion 65864 et seq., prior to the effective date of Ordinance No. 1124, wherein the imposition of new fees are expressly prohibited, provided that if the term of such a vesting map or development agreement is extended by amendment or by any other manner after the effective date of Ordinance No. 1124, the MSHCP Fee shall be imposed. Except as exempted above, all projects are required to make a mitigation payment/ contribution and where no mitigation payment process is specified, the project will pay the updated per acre mitigation fee. 16.85.100 Fee Credits. Any Local Development Mitigation Fee credit that may be applicable to a Development Project shall be determined by the City and approved by the RCA. All Fee Credits shall comply with the resolutions, ordinances , Implementing Agreement, and policies of the Western Riverside County Regional Conservation Authority including, without limitation, the MSHCP Mitigation Fee Implementation Manual. SECTION 3. Severability. This Ordinance and the various parts, sections, and clauses thereof, are hereby declared to be severable. If any part, sentence, paragraph, section, or clause is adjudged unconstitutional or invalid, the remainder of this Ordinance shall not be affected thereby. If any part, sentence, paragraph, section, or clause of this Ordinance, or its a pplication to any person entity is adjudged unconstitutional or invalid, such unconstitutionality or invalidity shall affect only such part, sentence, paragraph, section, or clause of this Ordinance, or such person or entity; and shall not affect or impair any of the remaining provisions, parts, sentences, paragraphs, sections, or clauses of this Ordinance, or its application to other persons or entities. The City Council hereby declares that this Ordinance would have been adopted had such u nconstitutional or invalid part, sentence, paragraph, section, or clause of t his Ordinance not been included herein; or had such person or entity been expressly exempted from the application of this Ordinance. SECTION 4. CEQA Findings. The City Council hereby finds that in accordance with CEQA and the CEQA Guidelines the adoption of this Ordinance is exempt from CEQA pursuant to Section 21080(b)(8) of the California Public Resources Code and Sections 15273 and 15378(b)(4) of the State CEQA Guidelines. SECTION 5. Ordinance Superseded. This Ordinance supersedes the provisions of Ordinance No. 1124 provided this Ordinance is not declared invalid or unenforceable by a court of competent jurisdiction. If, for whatever reason, this Ordinance is declared invalid or unenforceable by a court of competent jurisdiction, Ordinance No. 1124 and all other related ordinances and policies shall remain in full force and effect. SECTION 6. Effective Date. The Mayor shall sign this Ordinance and the City Clerk shall attest thereto and shall within fifteen (15) days of its adoption cause it, or a summary of it, to be published in the Press Enterprise, a newspaper published and circulated in t he City of Lake Elsinore, and thereupon and thereafter this Ordinance shall take effect and be in force according to law, but in no event earlier than July 1, 2021 . Pursuant to Section 13.2(A) of the MSHCP Implementing Agreement, the City Clerk shall send a copy of this Ordinance to RCA within 30 days of the date of adoption. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, on this ___ day of ____________ 2021. ____________________________ Robert E. Magee, Mayor Attest: Candice Alavarez, MMC City Clerk STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LAKE ELSINORE ) I, Candice Alvarez, MMC, City Clerk, of the City of Lake Elsinore, do hereby certify that the foregoing Ordinance No. 2021-_____ was introduced at the Regular meeting of April 13, 2021, and adopted by the City Council of the City of Lake Elsinore at its Regular meeting of April __, 2021, by the following vote: AYES: NOES: ABSENT: ABSTAIN: I further certify that a summary of said Ordinance was published as required by law in a newspaper of general circulation in the City of Lake Elsinore, California on the _____day of __________, 2021, and on the ______day of _________, 2021. ____________________________ Candice Alavarez, MMC City Clerk RESOLUTION NO. 2021-__ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA ESTABLISHING THE WESTERN RIVERSIDE COUNTY MULTIPLE SPECIES HABITAT CONSERVATION PLAN LOCAL DEVELOPMENT MITIGATION FEE PURSUANT TO CHAPTER 16.85 OF THE LAKE ELSINORE MUNICIPAL CODE WHEREAS, the City of Lake Elsinore (“City”) is a member agency of the Western Riverside County Regional Conservation Authority (“RCA”), a joint powers agency comprised of the County of Riverside and the 18 cities located in western Riverside County; and WHEREAS, the member agencies of RCA recognized that a habitat conservation plan is necessary to provide special protections for vegetation communities and natural areas containing habitat values to prevent future endangerment of the plant and animal species impacted by new development in western Riverside County; and WHEREAS, in order to address these issues, the member agencies formulated a plan called the Western Riverside County Multiple Species Habitat Conservation Plan (the “MSHCP”) whereby a mitigation fee would be assessed on new development and would be used to fund the implementation of the MSHCP; and WHEREAS, in furtherance of the MSHCP, the City is approving and adopting the updated “Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study”, dated October 2020 (the “2020 Nexus Study”) attached hereto and incorporated herein by this reference as Exhibit “A;” and WHEREAS, based on the 2020 Nexus Study, the City adopted Ordinance No. 2021-___ on April 27, 2021 (the “2021 Local Development Mitigation Fee Ordinance”) pursuant to California Government Code sections 66000 et seq. authorizing the County to impose the Local Development Mitigation Fee upon new development; and WHEREAS, section 16.85.040(A) of the 2021 Local Development Mitigation Fee Ordinance authorizes the City to adopt an applicable Local Development Mitigation Fee schedule by resolution; and WHEREAS, the fees collected pursuant to this Resolution shall be used to finance the public facilities described or identified in the 2020 Nexus Study; and WHEREAS, the levying of the Local Development Mitigation Fee has been reviewed by the City Council and staff in accordance with the California Environmental Quality Act (“CEQA”) and the State CEQA Guidelines and it has been determined that the adoption of this resolution is exempt from CEQA pursuant to Section 21080(b)(8) of the California Public Resources Code and Sections 15273 and 15378(b)(4) of the State CEQA Guidelines. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. Findings. The City Council finds and determines as follows: CITY COUNCIL RESOLUTION NO. 2021-__ PAGE 2 OF 5 A. The preservation of vegetation communities and natural areas within western Riverside County which support species covered by the MSHCP is necessary to protect and promote the health, safety, and welfare of all the residents of the City by reducing the adverse direct, indirect, and cumulative effects of urbanization and development and providing for permanent conservation of habitat for species covered by the MSHCP. B. It is necessary to establish a mitigation fee to ensure that all new development within the City pays its fair share of the costs of acquiring and preserving vegetation communities and natural areas within the City and the region which are known to support plant and wildlife species covered by the MSHCP. C. A proper funding source to pay the costs associated with mitigating the direct, indirect and cumulative impacts of development to the natural ecosystems within the City and the region, as identified in the MSHCP, is a development impact fee for residential, commercial, and industrial development. The amount of the fee is determined by the nature and extent of the impacts from the development to the identified natural ecosystems and/or the relative cost of mitigating such impacts. D. The MSHCP and the 2020 Nexus Study, a copy of which is on file in the City Clerk’s office, provides a basis for the imposition of development impact fees on new construction. E. The use of the development impact fees to mitigate the impacts to the City’s and the region’s natural ecosystems is reasonably related to the type and extent of impacts caused by development within the City. F. The costs of funding the proper mitigation of natural ecosystems and biological resources impacted by development within the City and the region are apportioned relative to the type and extent of impacts caused by the development. G. The facts and evidence provided to the City establish that there is a reasonable relationship between the need for preserving the natural ecosystems in the City and the region, as defined in the MSHCP, and the direct, indirect and cumulative impacts to such natural ecosystems and biological resources created by the types of development on which the fee will be imposed, and that there is a reasonable relationship between the fee’s use and the types of development for which the fee is charged. This reasonable relationship is described in more detail in the MSHCP and the 2020 Nexus Study. H. The cost estimates for mitigating the impact of development on the City’s and the region’s natural ecosystem and biological resources, as set forth in the MSHCP, are reasonable and will not exceed the reasonably estimated total of these costs. I. The fee set forth herein does not reflect the entire cost of the lands which need to be acquired in order to implement the MSHCP and mitigate the impact caused by new development. Additional revenues will be required from other sources. The City Council finds that the benefit to each development project is greater than the amount of the fee to be paid by the project. J. The fees collected pursuant to this Resolution shall be used to finance the acquisition and perpetual conservation of the natural ecosystems and certain improvements necessary to implement the goals and objectives of the MSHCP. CITY COUNCIL RESOLUTION NO. 2021-__ PAGE 3 OF 5 SECTION 2. Local Development Mitigation Fee. There is hereby adopted the Local Development Mitigation Fee schedule as set forth below: MSHCP Local Development Mitigation Fee Schedule Effective July 1, 2021 through December 31, 2021 Fee Category Fee Residential density less than 8.0 dwelling units per acre (fee per dwelling unit) $2,935 Residential density between 8.0 and 14.0 dwelling units per acre (fee per dwelling unit) $1,473 Residential density greater than 14.0 dwelling units per acre (fee per dwelling unit) $670 Non-Residential/Commercial (fee per acre) $11,982 Industrial (fee per acre) $11,982 MSHCP Local Development Mitigation Fee Schedule Effective January 1, 2022 Fee Category Fee Residential density less than 8.0 dwelling units per acre (fee per dwelling unit) $3,635 Residential density between 8.0 and 14.0 dwelling units per acre (fee per dwelling unit) $1,515 Residential density greater than 14.0 dwelling units per acre (fee per dwelling unit) $670 Non-Residential/Commercial (fee per acre) $16,358 Industrial (fee per acre) $16,358 SECTION 3: Periodic Fee Adjustment. The Local Development Mitigation Fee schedule set forth above may be periodically reviewed and the amounts adjusted as set forth in the MSHCP Mitigation Fee Implementation Manual adopted pursuant to the Local Development Mitigation Fee Ordinance. CITY COUNCIL RESOLUTION NO. 2021-__ PAGE 4 OF 5 SECTION 4. Automatic Annual Fee Adjustment. In addition to the Periodic Fee Adjustment mentioned above, the RCA shall provide the City with an automatic annual fee adjustment for the Local Development Mitigation Fee established by this Ordinance as set forth in the MSHCP Mitigation Fee Implementation Manual adopted pursuant to the Local Development Mitigation Fee Ordinance. SECTION 5. Adoption of 2020 Nexus Study. The City Council hereby adopts the 2020 Nexus Study and its findings. SECTION 6. CEQA Findings. The City Council hereby finds that in accordance with CEQA and the State CEQA Guidelines the adoption of this Resolution is exempt from CEQA pursuant to Section 21080(b)(8) of the California Public Resources Code and Sections 15273 and 15378(b)(4) of the State CEQA Guidelines. SECTION 7. Severability. This Resolution and the various parts, sections, and clauses thereof, are hereby declared to be severable. If any part, sentence, paragraph, section, or clause is adjudged unconstitutional or invalid, the remainder of this Resolution shall not be affected thereby. If any part, sentence, paragraph, section, or clause of this Resolution, or its application to any person entity is adjudged unconstitutional or invalid, such unconstitutionality or invalidity shall affect only such part, sentence, paragraph, section, or clause of this Resolution, or person or entity; and shall not affect or impair any of the remaining provision, parts, sentences, paragraphs, sections, or clauses of this Resolution, or its application to other persons or entities. The City Council hereby declares that this Resolution would have been adopted had such unconstitutional or invalid part, sentence, paragraph, section, or clause of this Resolution not been included herein; or had such person or entity been expressly exempted from the application of this Resolution. If the fees collected for the conservation of the land, including the monitoring and management thereof, are later adjudged by a final unappealable judgment of a court of competent jurisdiction to be unconstitutional or invalid, the prior Local Development Mitigation Fee adopted under the prior 2003 Local Development Mitigation Fee Nexus Study and the corresponding Ordinance No. 1124, shall each be revived and shall continue for the life of the MSHCP. SECTION 8. Effective Date. This Resolution shall become effective on July 1, 2021. PASSED, APPROVED AND ADOPTED this ____ day of April, 2021. ____________________________________ Robert E. Magee, Mayor City of Lake Elsinore City Council ATTEST: ______________________________ Candice Alvarez, MMC, City Clerk CITY COUNCIL RESOLUTION NO. 2021-__ PAGE 5 OF 5 APPROVED AS TO FORM: _____________________________ Barbara Leibold, City Attorney STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LAKE ELSINORE ) I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that Resolution No. 2021-__was adopted by the City Council of the City of Lake Elsinore, California, at the regular meeting of April __, 2021, and that the same was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: Candice Alvarez, MMC City Clerk Nexus Study Background Summary March 3, 2021 For more information, contact: Anne Mayer (amayer@rctc.org) or Aaron Hake (ahake@rctc.org) Multiple Species Habitat Conservation Plan (MSHCP) – Originally adopted in 2004, the MSHCP is a comprehensive plan focusing on permanent conservation of 500,000 acres and protection of 146 species in Western Riverside County. Contribute to the economy – Implementation of the MSHCP accelerates construction of infrastructure and development, reduces project costs, and provides permitting efficiencies that lead to economic growth. Ensure financial stability – The MSHCP fee has not been increased (other than CPI adjustments) since inception in 2004. •Several assumptions in the original 2004 nexus study did not occur, causing a revenue gap that would only get wider by further delaying the implementation of a new nexus study. •RCA must demonstrate full funding of the MSHCP to the state and federal wildlife agencies who provide the permits for the MSHCP. Without these permits, the MSHCP cannot provide coverage for private development and public infrastructure projects under the federal and state Endangered Species Acts. Without this coverage, each project would be responsible for mitigating their own impacts pursuant to these laws, which could be very costly and uncertain. Mindful implementation – Recognizing the current economic situation, the RCA Board, in consultation with the BIA, adopted the lowest possible fee evaluated in the Nexus Study, along with a phase-in of the increase. 50% of the increase will take effect on July 1, 2021, with the remaining 50% taking effect on January 1, 2022. •The lower fee increase is made possible by extending the land acquisition period by an additional 15 years. Adding this time for development to occur spreads the fee and mitigates the increase. •The Nexus Study identified an equitable distribution of the fee where each acre developed is treated roughly the same. Prepayment allowed – Cities and the County may accept prepayment of fees at their own discretion for applicants wishing to pay current fee levels prior to July 1, 2021. Transparent decision making – The RCA Board, consisting of elected officials representing 18 cities and the County Board of Supervisors, adopted the Nexus Study on December 7, 2020 at its public meeting. The RCA Executive Committee discussed the Nexus Study in six Brown Act public meetings over the course of a year (November 2019 - November 2020). On November 2, 2020, the draft Nexus Study was posted on the RCA website, more than 30 days before the full Board of Directors’ consideration, in excess of minimum transparency requirements. Legacy Home Rebate Pilot Program – The RCA board adopted the program on March 1, 2021, allowing those who owned their land before the implementation of the MSHCP to apply to RCA for a rebate for the difference between the LDMF at the time of payment and LDMF as of June 30, 2021 (adjusted for CPI). Meeting the commitment – Cities and the County must adopt the updated MSHCP fee before May 2, 2021 to remain compliant with the MSHCP and be eligible to receive the Plan’s benefits. RCA has transmitted the model ordinance and resolution to adopt the updated fee to city and county staffs. RCA staff is available to assist with implementation questions. New management, enhanced services – RCA is now under the management of RCTC. RCTC is committed to enhancing its service to the private sector through joint project reviews and to public agencies seeking to build infrastructure . Nexus Study LDMF Fee Schedule Category Current fee per unit or per acre Effective July 1, 2021 Effective Jan.1, 2022 Residential: Up to 8.0 dwelling units/acre (DUAC) $2,234 $2,935 $3,635 Residential: 8.0-14 DUAC $1,430 $1,473 $1,515 Residential: 14.0+ DUAC $1,161 $670 $670 Commercial (per acre) $7,606 $11,982 $16,358 Industrial (per acre) $7,606 $11,982 $16,358 MSHCP LDMF Implementation Frequently Asked Questions February 5, 2021 For more information, contact: Anne Mayer (amayer@rctc.org) or Aaron Hake (ahake@rctc.org) 1.What is the Multiple Species Habitat Conservation Plan (MSHCP)? The Western Riverside County MSHCP, originally adopted in 2004, is a comprehensive, multi -jurisdictional Habitat Conservation Plan (HCP) focusing on the permanent conservation of 500,000 acres and the protection of 146 species, including 33 that are currently listed as threatened or endangered. The MSHCP was developed in response to the need for future growth opportunities in western Riverside County, from housing developments to transportation and infrastructure, while addressing the requirements of the State and federal Endangered Species Acts (ESA). The MSHCP serves as an HCP pursuant to Section 10(a)(1)(B) of the federal Endangered Species Act of 1973 as well as a Natural Communities Conservation Plan (NCCP) under California’s NCCP Act of 2001. The MSHCP streamlines these environmental permitting processes by allowing the participating jurisdictions to authorize “take” of plant and wildlife species identified within the Plan Area and has saved taxpayers by expediting the construction of more than 30 major freeway and road improvements in Riverside County valued at more than $5 billion. 2.What is the Local Development Mitigation Fee (LDMF)? Funding of the MSHCP is derived from federal, state, and local sources. However, the main funding source for local acquisitions is the imposition and collection of the LDMF. The LDMF is a fee imposed on new local residential, commercial, and industrial development and infrastructure and civic projects and contributes to the overall funding required to implement the MSHCP. The LDMF is imposed pursuant to California Government Code Section 66000 et seq. (“The Mitigation Fee Act”). The fee is administered by the Western Riverside County Regional Conservation Authority (RCA) but collected by the Local Permittees. Imposition of the LDMF is an express commitment of local agencies that signed the MSCHP and Implementing Agreement (IA). 3.What is the Implementing Agreement (IA)? The IA was entered into by signatories to the MSHCP in June 2004 to ensure implementation of and compliance with each of the terms of the MSHCP and for the benefit of the 146 Covered Species, while allowing for future economic growth. In addition, the IA: •Provides remedies and recourse should any Party fail to perform its obligations, responsibilities, and tasks as set forth in the MSHCP, the Permits, and the IA; •Provides assurances to Permittees and others participating in the MSHCP that implementation of the IA and the MSHCP will adequately provide for the conservation and protection of Covered Species Adequately Conserved in their habitats in the Plan Area; and •Provides that if the terms of the MSHCP, the IA, and the Permits are properly implemented, the Wildlife Agencies will not require additional mitigation from Permittees with respect to Covered Species Adequately Conserved. Signatories to the IA include the 18 western Riverside County cities of Banning, Beaumont, Calimesa, Canyon Lake, Corona, Eastvale, Hemet, Jurupa Valley, Lake Elsinore, Menifee, Moreno Valley, Murrieta, Norco, Perris, Riverside, San Jacinto, Temecula, and Wildomar; the County of Riverside; County Flood Control and Water Conservation District; County Regional Park and Open-Space District; County Department of Waste Resources; the Riverside County Transportation Commission; the California Department of Transportation; the California Department of Parks and Recreation; the United States Fish and Wildlife Service; and the California Department of Fish and Wildlife. 4.Who are Local Permittees? Local Permittees are the local agencies which are signers of the federal Endangered Species Act permit issued by the United States Fish and Wildlife Service. They include the 18 western Riverside County cities of Banning, Beaumont, Calimesa, Canyon Lake, Corona, Eastvale, Hemet, Jurupa Valley, Lake Elsinore, Menifee, Moreno Valley, Murrieta, Norco, Perris, Riverside, San Jacinto, Temecula, and Wildomar; the County of Riverside; County Flood Control and Water Conservation District; County Regional Park and Open-Space District; County Department of Waste Resources; and the Riverside County Transportation Commission. The California Departments of Transportation and Parks and Recreation are also signers of the permit; however, those organizations are not considered local permittees. Per Section 6 of the MSHCP, local jurisdictions will implement the MSHCP through their normal land use, planning, and approval process as described in Sectio n 6.1.1 as well as through management of contributed public lands. By fulfilling their requirements under the MSHCP, including imposition of the LDMF, Local Permittees retain the benefits of the MSHCP, ranging from ESA coverage for projects within their jurisdiction and Measure A transportation funding. 5.Who are Member Agencies of the RCA? Member Agencies are the signatories to the Joint Exercise of Powers Agreement forming the Western Riverside County Regional Conservation Authority (RCA). They include the 18 western Riverside County cities of Banning, Beaumont, Calimesa, Canyon Lake, Corona, Eastvale, Hemet, Jurupa Valley, Lake Elsinore, Menifee, Moreno Valley, Murrieta, Norco, Perris, Riverside, San Jacinto, Temecula, and Wildomar and the County of Riverside. The Member Agencies form the independent RCA Board of Directors to acquire, administer, operate, and maintain land and facilities to establish habitat reserves for the conservation and protection of species covered by the MSHCP and to implement the MSHCP. 6.What other Funding Sources Contribute to the MSHCP? •Measure A •Regional Transportation Funding (Public contributions from regional transportation infrastructure projects) •Landfill Tipping Fees •Mitigation Fees, including private development mitigation fees •Federal and State grants 7.What is the 2020 Nexus Study? The Western Riverside County MSHCP 2020 Nexus Study establishes the legal and policy basis by which a mitigation fee, pursuant to "The Mitigation Fee Act" (California Government Code Section 66000, et seq.), contributes to finance habitat acquisition and other appropriate uses in connection with new development in the MSHCP Plan Area. The 2020 Nexus Study provides a thorough analysis of costs, funding sources, and forecasts future development in western Riverside County. It also provides the financial and technical justification for changes to the LDMF. The full 2020 Nexus Study can be reviewed at www.wrc-rca.org. 8.Why was a Nexus Study update needed? An updated Nexus Study was needed to ensure adequate funding to complete the MSHCP and fulfill the responsibilities of Local Permittees as required by the MSHCP Implementing Agreement. A Nexus Study was completed in 2003 coinciding with the adoption of the MSHCP, Implementing Agreement, and the signing of the Permits. Section 8.5.1 of the MSHCP allows the fee to be reevaluated and revised should it be found to insufficiently cover mitigation of new development. The 2020 Nexus Study represents the first reevaluation of the LDMF since originally implemented. 9.What were the results of the 2020 Nexus Study? The 2020 Nexus Study determined the fee level required to provide sufficient revenues to support the full implementation of the MSHCP, including the completion of all land acquisition and the funding for the Plan endowment, by 2044 (Year 40 of Plan implementation). The endowment will cover the administration and land management and monitoring after the completion of land acquisition. This represents a 15-year extension of the acquisition period as approved by the RCA Board of Directors at its December 2020 board meeting. As noted on pages 6 and 7 of the 2020 Nexus Study and discussed in detail in Chapters 2 through 7, the key drivers of the fee change are: 2 • Lower-than-expected land dedications through the Habitat Evaluation and Acquisition Negotiation Strategy (HANS); • Lower than expected regional infrastructure public contributions; and • Desire to implement a “per gross acre” fee which provides a more consistent and equitable approach for all land use development types. 10. Why is the LDMF Changing? As a result of lower-than-expected land dedications, regional infrastructure public contributions, and the desire to implement a “per gross acre” fee, the 2020 Nexus Study determined the LDMF will increase on all categories except for high-density residential, to provide the financial certainty to complete the MSHCP and maintain the habitat in perpetuity. The LDMF increases will support the continued implementation of the MSHCP and the streamlining of endangered species incidental take permitting for new western Riverside County development provided under the MSHCP, while providing the funding necessary to acquire, monitor, and manage the 500,000 acres required by the MSHCP. Also, the LDMF increases will ensure long-term protection and maintenance of the habitats. Without updating the LDMF, Local Permittees would be unlikely to meet their commitments as agreed to in the Implementing Agreement, the ultimate consequence of which would be revocation of the endangered species incidental take permits by state and federal agencies. 11. How is the LDMF Changing? Nexus Study LDMF Fee Schedule Category Current fee per unit or per acre Effective July 1, 2021 Effective January 1, 2022 Residential: Up to 8.0 dwelling units/acre (DUAC) $2,234 $2,935 $3,635 Residential: 8.0-14 DUAC $1,430 $1,473 $1,515 Residential: 14.0+ DUAC $1,161 $670 $670 Commercial (per acre) $7,606 $11,982 $16,358 Industrial (per acre) $7,606 $11,982 $16,358 12. Who Approved the Nexus Study and LDMF Increase? The RCA Board of Directors adopted the 2020 Nexus Study and increase in LDMF at its December 7, 2020 public board meeting by a 17-1 vote. 13. When is the LDMF increase effective? The LDMF increase is effective in two phases. The first phase, an increase of 50%, is effective July 1, 2021. The second phase, full implementation, is effective January 1, 2022. 14. What is needed from Member Agencies regarding the Ordinance and Resolution? Member Agencies must prepare the ordinance and resolution to be considered and approved by the City Council (Board of Supervisors in the case of the County of Riverside) in time to implement the new fee by July 1, 2021. Final action of the city council/Board of Supervisors must be no later than May 2, 2021 to ensure the new Ordinance takes effect by July 1, 2021. California Government Code Section 66017 states that the fee “shall be effective no sooner than 60 days following the final action on the adoption of the fee or charge or increase in the fee or charge.” Per the Implementing Agreement which cities and the County of Riverside signed, the cities and County must adopt the Ordinance, “in substantially the same form or at a minimum, containing the same requirements as the model ordinance,” adopted by the RCA Board of Directors. 3 15. Why was the Resolution added separately from the Ordinance? The Resolution was added in addition to the Ordinance to allow for a more efficient process to update future fee changes. 16. What changes are in the Ordinance? The original model ordinance for Member Agencies to implement the LDMF was included in the Implementing Agreement which was approved in June 2004. Several changes are made to the model Ordinance including: • Language is added to the Ordinance reaffirming RCA as the administrator of the Ordinance; authorizing the RCA to receive all fees generated; and to invest, account for, and expend such fees in accordance with the MSHCP. These functions are consistent with current practices; • Additional clarification is added with respect to refunds; • Exemptions are clarified; • Language is added to clarify that the LDMF will be paid no later than at the issuance of a building permit; • Language was added concerning the mitigation of public projects and fee credits allowing the RCA Board of Directors to rescind Resolution Nos. 2007-04 and 2016-003 and the “Tenets Relating to Local Infrastructure Contribution” adopted on February 5, 2007. 17. What is the MSHCP Mitigation Fee Implementation Manual? The MSHCP Mitigation Fee Implementation Manual (Manual) is an administrative document that provides direction to local jurisdictions under the MSHCP concerning their obligations under the MSHCP and the incidental take permits regarding the imposition, collection, accounting, remittance, and calculation of the LDMF. The Manual sets the rules for fee implementation, discusses collection and remittance of fees, outlines the appropriate methods for calculating mitigation fee payments for different types of projects, and provides multiple examples of how to apply the LDMF. The Manual can be updated by the RCA Board of Directors to address ongoing concerns at any time. Changes to the LDMF can only be made by Resolution and not through an update to the Manual. 18. How are Measure A transportation sales tax funds related to the LDMF? To be eligible for Measure A transportation funds, Member Agencies are required to implement and remit the LDMF in accordance with the MSHCP. This is a requirement of the Measure A Ordinance adopted by Riverside County voters. Annually, RCA certifies Member Agency compliance to RCTC. 19. Who should I contact with questions about implementation of the LDMF? Jennifer Fuller Financial Administration Manager jfuller@rctc.org (951) 787-7141 4 Final Report Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Prepared for: Western Riverside County Regional Conservation Authority Prepared by: Economic & Planning Systems, Inc. October 2020 EPS #171034 Table of Contents 1. INTRODUCTION AND KEY FINDINGS .............................................................................. 1 Background ............................................................................................................ 1 Original and Existing Fee Schedule ............................................................................ 2 Updated Mitigation Fee Schedules ............................................................................. 3 Key Drivers of Fee Change ....................................................................................... 6 Organization of Report ............................................................................................. 8 2. MSHCP POLICIES, GOALS, AND FINANCING STRATEGY ....................................................... 9 MSHCP Purpose, Basis, and Goals.............................................................................. 9 MSHCP Financing Strategy ..................................................................................... 11 MSHCP Implementation Costs and Funding Sources ................................................... 13 Development Mitigation Fees and Calculation ............................................................ 16 3. HABITAT PROTECTION TO DATE AND FUTURE CONSERVATION SCENARIO ................................. 18 Habitat Protection Accomplishments Through 2019 .................................................... 18 Conservation Goals and Progress ............................................................................ 18 Land Dedications .................................................................................................. 20 Future Conservation Scenario ................................................................................. 21 4. FORECASTS OF DEVELOPMENT, DEDICATION, FEE PAYMENT ................................................ 25 Historic Development and HCP Fees ......................................................................... 25 Growth Projections ................................................................................................ 26 5. MSHCP IMPLEMENTATION COSTS .............................................................................. 31 Land Costs ........................................................................................................... 31 Other Costs—Administration, Management, and Monitoring ......................................... 35 Endowment Funding .............................................................................................. 38 Total Implementation Costs .................................................................................... 40 6. RCA NON-FEE REVENUES ....................................................................................... 43 MSHCP Forecast of Non-Fee Revenues ..................................................................... 43 New Forecast of Non-Fee Revenues ......................................................................... 44 7. MITIGATION FEE CALCULATION ................................................................................. 46 8. MITIGATION FEE ACT (NEXUS) FINDINGS ..................................................................... 52 Purpose of Fee ..................................................................................................... 52 Use of Fee Revenues ............................................................................................. 53 Relationship ......................................................................................................... 53 Need ................................................................................................................... 54 Proportionality ...................................................................................................... 54 9. FEE IMPLEMENTATION ............................................................................................ 56 Adoption of Revised LDMF ...................................................................................... 56 Securing Supplemental Funding .............................................................................. 56 Annual Review ...................................................................................................... 56 Surplus Funds ...................................................................................................... 57 Annual and Periodic Updates................................................................................... 57 Appendix I: Detailed Time Series of Implementation Costs, Excluding Endowment Funding Appendix II: Detailed Time Series of Endowment Funding List of Tables Table 1 2004 and 2021 MSHCP Fee Schedule ............................................................ 3 Table 2 Updated MSHCP Implementation Costs and Per Acre Mitigation Fees .................. 4 Table 3 Updated Mitigation Fee Schedule by Extension Scenario ................................... 6 Table 4 MSHCP Goals by Area Plan ........................................................................ 11 Table 5 2004 Estimates: MSHCP Implementation Costs and Funding Sources ............... 14 Table 6 2004 and 2021 MSHCP Fee Schedule .......................................................... 17 Table 7 Conservation Through End of 2019 ............................................................. 18 Table 8 Required Acquisition Acres to Achieve ARL Goals .......................................... 24 Table 9 Projected Growth in Western Riverside County, through 2050 ......................... 29 Table 10 Projected Developed Acres in Western Riverside County, by Extension Scenario ................................................................................... 30 Table 11 Per-Acre Land Value Estimates—2003 Dollars (2003 Nexus Study) .................. 32 Table 12 Local Conservation Costs Through 2018 ...................................................... 32 Table 13 Planning Level Per Acre Land Value Estimates by Category ............................. 33 Table 14 Illustrative Distribution of Land Acquisitions by Land Use and Size................... 34 Table 15 Aggregate Land Value of Remaining Areas (2017 dollars) ............................... 34 Table 16 Administrative and Professional Services Costs ............................................. 36 Table 17 Management and Monitoring Anticipated Costs in 2004 and 2019 Dollars ........ 38 Table 18 Annual Implementation Cost Estimate (2019$) ............................................. 39 Table 19 Endowment Funding (2019$), by Extension Scenario .................................... 40 Table 20 Total Implementation Costs (2019$*), by Extension Scenario ......................... 41 Table 21 Average Annual Implementation Costs (2019$), by Extension Scenario ............ 42 Table 22 2004 MSHCP Anticipated Funding Sources ................................................... 44 Table 23 Annual Non-Fee Revenue Projection (2019$s) .............................................. 45 Table 24 MSHCP Implementation Costs and Per Acre Mitigation Fees ............................ 47 Table 25 Recommended Fee Level—No Extension ...................................................... 48 Table 26 Recommended Fee Level—5-Year Extension ................................................. 49 Table 27 Recommended Fee Level—10-Year Extension ............................................... 50 Table 28 Recommended Fee Level—15-Year Extension ............................................... 51 List of Figures Figure 1 State of Conservation in 2003: Conserved Land, Additional Reserve Land to be Acquired, and Total MSHCP Conservation Area Needed .................. 10 Figure 2 MSHCP Estimated Annual Costs in Millions, 2004 Dollars ................................ 15 Figure 3 MSHCP Estimated Annual Revenues in Millions, 2004 Dollars .......................... 16 Figure 4 MSHCP Conservation Goals, 2019 and 2029 Goals Highlighted ........................ 19 Figure 5 Progress Towards ARL Through End of 2019 ................................................ 20 Figure 6 Residential Unit Development, Western Riverside County, 2005-2019 .............. 25 Figure 7 New Housing Units per Year, SCAG and MSHCP Projections and Historic Production (2005-2019) ................................................................. 27 Figure 8 Newly Developed Commercial Acres per Year ............................................... 27 Figure 9 Comparison of Costs by Category ............................................................... 40 Figure 10 2004 MSHCP Anticipated Funding Sources ................................................... 44 Economic & Planning Systems, Inc. 1 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx 1. INTRODUCTION AND KEY FINDINGS This Updated Nexus Study (2020 Nexus Study) provides the technical justification for changes to the Local Development Mitigation Fee schedule that applies to Local Permittee participants in the Western Riverside County Multiple Species Habitat Conservation Plan (MSHCP or Plan). These changes are necessary to ensure adequate funding of the obligations of the Local Permittees under the MSHCP and the associated Incidental Take Permit and Implementing Agreement. The resulting increased fee revenues will support the continued implementation of the MSHCP and the streamlining of endangered species incidental take permitting for new Western Riverside County development provided under the MSHCP. This Nexus Study is consistent with the requirements of California Government Code 66000 et seq. (the Mitigation Fee Act) that requires specific findings (as well as administration and implementation procedures) for “any action establishing, increasing, or imposing a fee as a condition of approval of a development project by a local agency.” Background The Western Riverside County Multiple Species Habitat Conservation Plan (MSHCP or Plan), originally adopted in 2004, is a comprehensive, multi-jurisdictional Habitat Conservation Plan (HCP) focusing on the conservation of species and their associated habitats in Western Riverside County. The MSHCP was developed in response to the need for future growth opportunities in Western Riverside County while addressing the requirements of the State and federal Endangered Species Acts. The MSHCP serves as an HCP pursuant to Section 10(a)(1)(B) of the federal Endangered Species Act of 1973 as well as a Natural Communities Conservation Plan under the NCCP Act of 2001. The MSHCP streamlines these environmental permitting processes by allowing the participating jurisdictions to authorize “take” of plant and wildlife species identified within the Plan Area. At the same time, Plan implementation provides a coordinated MSHCP Conservation Area and implementation program to preserve biological diversity and maintain the region’s quality of life. The MSHCP and the associated Implementing Agreement and Incidental Take Permit collectively determine a set of conservation actions that must be taken to meet the terms of the Incidental Take Permit and benefit from the regulatory streamlining and other benefits of the MSHCP. This includes the identification of the responsible parties, including the responsibilities of the Local Permittees.1 One of the key requirements of the MSHCP, Implementing Agreement, and Incidental Take Permit (consistent with the requirements of the federal Endangered Species Act) is the provision of adequate funding by Local Permittees to the Implementing Entity (the Western Riverside County Regional Conservation Authority 2) to conduct their portion of the conservation actions identified in the MSHCP. 1 Local Permittees include the Western Riverside cities, the County of Riverside, County Flood Control and Water Conservation District, County Regional Park and Open-Space District, County Department of Waste Resources, and Riverside County Transportation Commission. 2 The Western Riverside County Regional Conservation Agency is a Joint Powers Authority established in 2004 to implement the MSHCP. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 2 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Section 8.0 of the MSHCP outlines the MSHCP funding/financing approach. It also identified best estimates of Plan implementation costs at the time of Plan adoption, including the local funding commitment that represents a portion of the overall land acquisition, management and monitoring, and Plan administration costs. The Local Funding Program included a mix of funding sources to provide “an equitable distribution of the cost for local mitigation under the MSHCP.” The proposed funding sources included Local Development Mitigation Fees (and land dedications), regional infrastructure project public contributions (including contributions to mitigate for transportation infrastructure, regional utility projects, local public capital construction projects, and regional flood control projects), and landfill tipping fees. Participating cities and the County were each required to implement a Local Development Mitigation Fee under California Government Code Section 66000 et seq. (the “Mitigation Fee Act”) and supported by the separate “Final Mitigation Fee Nexus Study Report for the Western Riverside County Multiple Species Habitat Conservation Plan,” July 1, 2003 (Original or 2003 Nexus Study). The MSHCP funding chapter notes the need for frequent evaluations of the performance of the funding mechanisms and assessments of the funding plan and the need to make any necessary modifications to the funding mechanisms. The MSHCP also notes that the mitigation fee will need to be “reevaluated and revised should it be found to insufficiently cover mitigation of new development.” In addition to the common practice of updating mitigation fees periodically to account for changing circumstances, the Western Riverside County Regional Conservation Authority (RCA) has determined that significant changes have occurred and/or circumstances have arisen that justify an update to the mitigation fees. These changes include, but are not limited to, the following: • The need to acquire more land than originally forecast due to the lower than expected land dedication. • The lower-than-expected levels of non-fee funding from local and regional funding sources. • The lower than expected levels of residential development. • The need to diversify land acquisitions away from a focus on the larger, more remote parcels to also acquiring parcels closer to urbanized areas, consistent with the reserve assembly requirements of the MSHCP. Original and Existing Fee Schedule All local jurisdictions participating in the MSHCP and obtaining coverage for public and private take in their jurisdictions were required to adopt and implement the 2004 Mitigation Fee Schedule through ordinance and resolution and then to pass through the fee funding (except for any additional administrative charges added by the jurisdictions) to the RCA to fund MSHCP implementation. The ordinances allowed for periodic inflationary increases based on the annual change in the Consumer Price Index for the Los Angeles-Anaheim-Riverside area. In 2018 the Bureau of Labor Statistics implemented a geographic revision, establishing Riverside as its own Core Based Statistical Area. As a result, Riverside was removed from the Consumer Price Index encompassing Los Angeles and Anaheim. Going forward, inflationary increases will be based on the annual change in the Consumer Price Index for the newly established Riverside-San Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 3 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Bernardino-Ontario area. As outlined in the 2003 Nexus Study (Original Nexus Study), all new development in Western Riverside County is required to pay the mitigation fee. Table 1 shows the original 2004 Local Development Mitigation Fee schedule and the current 2021 Fee Schedule that reflects periodic inflationary fee adjustments using the indexing process that collectively increased the fees by 35 percent between 2004 and 2020 (this was below the overall inflation index increase over this period). Table 1 2004 and 2021 MSHCP Fee Schedule Fee Category 2004 Fee per unit or per acre 2021 Fee per unit or per acre 3 Residential: Up to 8.0 dwelling units per acre (DUAC) $1,651 $2,234 Residential: 8.0-14.0 DUAC $1,057 $1,430 Residential: 14.0+ DUAC $859 $1,161 Commercial (per acre) $5,620 $7,606 Industrial (per acre) $5,620 $7,606 Updated Mitigation Fee Schedules This 2020 Nexus Study has estimated the increased fee level that would be required to provide sufficient revenues, based on the best available forecasts of future growth, to support the full implementation of the MSHCP, including the completion of all land acquisition and the establishment of the necessary endowment, by 2029 (Year 25 of Plan implementation).4 Because, as shown below, this would require a major increase in the fee levels, three other scenarios are also considered where different time extensions provide more time for land acquisition.5 These extensions allow for the costs of Plan implementation (including land acquisitions) to be spread across more development and, as a result, moderate the level of mitigation fee increase required. In addition, the longer extension scenarios require a pace of land acquisition that is more consistent with what has proven to be achievable. All of these fee 3 Note it is RCA procedure to refer to fees during, for example, Fiscal Year 2020/2021, as the 2021 fee. The 2021 fee became effective July 1, 2020, and applies for the fiscal year of 2020-21 (i.e., until June 30, 2021 when the 2022 Fee begins). 4 The MSHCP provided a 25-year period of the required land acquisition with the larger 75-year permit term. This is labelled the “No Extension” or “Baseline Scenario” in this Update Study. 5 The baseline scenario as well as the extension scenarios assume that all land acquisition as well as the full endowment will be completed/ established by the end of the specified implementation/ land acquisition period. Interest from the non-depleting endowment will fund all ongoing costs thereafter. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 4 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx increases would be consistent with the Mitigation Fee Act and the MSHCP and associated Incidental Take Permit and Implementing Agreement. The mitigation fee levels shown for each extension scenario are the fee levels required to cover the appropriate portion of the Local Permittee MSHCP implementation costs based on the best information available at this time. The revised mitigation fee levels reflect changes in estimated costs, expected levels of land dedication, and non-fee funding. Consistent with the MSHCP and Original Nexus Study, it is assumed that all new development in Western Riverside County will pay the mitigation fee because, as noted in the MSHCP, “new development affects the environment through construction activity and cumulatively through population bases that result from such development.”6 Importantly, the revised mitigation fee levels also reflect the decision to determine the mitigation fee that applies to different land uses on a consistent per gross acre basis. This approach is considered to provide a clear, consistent, and proportionate method for determining mitigation fees on new development.7 The 2020 Nexus Study does convert the overarching per gross acre fee into per unit residential fees for different density ranges; this conversion was conducted to provide implementation/administrative consistency for member jurisdictions. Table 2 Updated MSHCP Implementation Costs and Per Acre Mitigation Fees 6 Consistent with the Original Nexus Study and the technical analysis in this study update (and as described in more detail in the Fee Implementation Handbook), certain types of public improvements/ infrastructure projects will make mitigation payments calculated as a percent of total improvement cost. All projects are required to make a mitigation payment/contribution (except where exempted as specified in the Ordinance); where no mitigation payment process is specified, the project will pay the updated per acre mitigation fee. 7 This is the approach taken by the majority of regional Habitat Conservation Plans in California, including the Coachella Valley Multiple Species Habitat Conservation Plan mitigation fee. Fee Per Acre No Extension 5-Year Extension 10-Year Extension 15-Year Extension Net Cost $912,756,583 $902,353,150 $892,767,438 $883,987,805 Acres of Development Residential 14,026 21,818 29,611 37,403 Nonresidential 6,239 9,705 13,171 16,637 Total 20,265 31,523 42,782 54,040 Mitigation Fee per Acre $45,041 $28,625 $20,868 $16,358 Sources: Southern California Association of Governments; Western Riverside County RCA; Economic & Planning Systems, Inc. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 5 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx As shown in Table 2, the required mitigation fee per gross acre of development varies substantially based on level of extension as follows: • No Extension. Under the current structure, where all land acquisition must occur by the end of Year 25 of MSHCP implementation (2029), a mitigation fee of $45,041 per acre of development would be required. • 5-Year Extension. With a 5-year extension, where all land acquisition must occur by the end of Year 30 of MSHCP implementation (2034), a mitigation fee of $28,625 per acre of development would be required. • 10-Year Extension. With a 10-year extension, where all land acquisition must occur by the end of Year 35 of MSHCP implementation (2039), a mitigation fee of $20,868 per acre of development would be required. • 15-Year Extension. With a 15-year extension, where all land acquisition must occur by the end of Year 40 of MSHCP implementation (2044), a mitigation fee of $16,358 per acre of development would be required. For residential development, the per gross acre fee is translated into per residential unit fees by density category to provide for a fee framework that is consistent with the current fee structure. The per residential unit fees are calculated by dividing the per gross acre fee by an assumed typical/ average density for each of the three density ranges (low, medium, and high).8 The full mitigation fee schedule (for each extension scenario) is shown in Table 3, including the per unit residential fees by density category and per gross acre fees for non-residential development. The typical/ average residential densities used to calculate the per-unit residential fees are the same as the density assumptions in the Original Nexus Study.9 8 For example, the $3,635 per unit Residential – Low fee under the 15-year extension is derived by dividing the overall per gross acre mitigation fee of $16,358 (shown in Figure 2) by the assumed typical/average density of Residential Low of 4.5 units/acre. 9 The Fee Implementation Handbook provides more specifics on how to determine a project’s residential density and therefore the appropriate per unit residential fee that applies. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 6 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 3 Updated Mitigation Fee Schedule by Extension Scenario Key Drivers of Fee Change The change in Local Development Mitigation Fee is the result of a number of different contributing factors (“moving parts”), fully documented and detailed in Chapters 2 through 7. This Nexus Study is based on the most current information available including, for some inputs, recent years of experience from MSHCP implementation. The factors that have had the most significant effect on the Local Development Mitigation Fee calculations are summarized below. 1. Lower-than-expected land dedications substantially increase the Local Permittee habitat acquisition cost component of MSHCP implementation. The MSHCP assumed that 41,000 of the 97,000 acres (42 percent) to be conserved by Local Permittee action/funding would be provided at no cost through land dedication associated with development inside the Criteria Cells. Through the first sixteen years of Plan implementation, less than 1,000 acres of the Local Permittee habitat conservation obligations have been generated through these dedications. An additional 10,000 acres of land dedication requirements have been required as part of proposed developments that have yet to occur. Beyond the dedication associated with previously proposed projects, additional land dedication is not expected.10 As a result, the 2020 Nexus Study assumes the noted 10,000 acres of land dedication is formalized over the next eight years (an average annual land dedication of 1,250 acres per year) prior to the end of the current land acquisition period. No additional land dedication is assumed, even if the acquisition period is extended. As a result, at the end of the current habitat acquisition period (Year 25 of Plan 10 In September 2016, the RCA revised its fee credit and waiver policy, limiting the likelihood of projects paying fees and dedicating land. Fee Per Unit No Extension 5-Year Extension 10-Year Extension 15-Year Extension Residential - Low (Up to 8.0 DUAC)2 3 $2,234 $10,009 $6,361 $4,637 $3,635 Residential - Medium (8.0-14.0 DUAC)2 3 $1,430 $4,170 $2,650 $1,932 $1,515 Residential - High (14.0+ DUAC) 2 3 $1,161 $1,846 $1,173 $855 $670 Commercial / Industrial (per acre)$7,606 $45,041 $28,625 $20,868 $16,358 Sources: Southern California Association of Governments; Western Riverside County RCA; Economic & Planning Systems, Inc. 3. DUAC stands for Dwelling Units per Acre. Current Fee 20211 1. Western Riverside County Multiple Species Conservation. Local Development Mitigation Fee Schedule for FY 2020-21 (Effective July 1, 2020 – June 30, 2021), annually adjusted using the Consumer Price Index. 2. Per acre mitigation fees translated into per unit fees based on the following residential densities: for low density, 4.5 units per acre; for medium density, 10.8 units per acre; for high density, 24.4 units per acre, consistent with the assumptions used in Appendix E of the original Nexus Study. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 7 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx implementation), total land dedication is expected to represent about 11,000 acres and about 11 percent of the Local Permittee land conservation requirement. The RCA therefore needs to directly acquire an additional 30,000 acres of land relative to the expectations of the Original Nexus Study. 2. Lower than expected regional infrastructure public contributions have reduced the non-fee funding available, increasing the costs to be funded through the mitigation fee. The MSHCP assumed a substantial level of funding from regional infrastructure project public contributions, including transportation infrastructure, regional utility projects, local public capital construction projects, and regional flood control projects, as well as from landfill tipping fees. While the Measure A sales tax has provided substantial funding as expected, other revenue sources, on aggregate, have provided (and are expected to continue to provide) substantially less funding than forecast in the 2003 Nexus Study. As a result, mitigation fees will need to cover about 91 percent of Local Permittee MSHCP implementation costs relative to the original assumption of about 56 percent. 3. The change towards a consistent “per gross developed acre” fee basis provides a more consistent approach for all land use development types. The 2003 Nexus Study used an “Equivalent Benefit Unit” approach to distributing mitigation costs between different land use categories. This Nexus Study adjusts the fee calculation to the more commonly used per gross acre basis. Under this approach, the new Local Development Mitigation Fees are all based on one “across the board” per gross acre fee determination. Non-residential development then pays this per acre fee, while per unit residential fees by density category are derived from this common per gross acre fee.11 This change evens out some of the prior differences in mitigation fee levels. 4. The estimates of average per acre land values have not changed substantially, so they have had a limited effect on the change in mitigation fees. The original MSHCP implementation cost estimate was based on an average land value of about $13,100 per acre. This was based on research on land transactions of parcels with different land use designations and sizes in 2001/2002. The land valuation analysis conducted for this Nexus Study estimated a planning-level land value of about $14,300 per acre based on land transactions primarily in the 2014 to 2017 period (inflated to 2019-dollar terms). As a result, land value estimates have not changed substantially in nominal dollar terms since the Original Nexus Study. This estimated per acre land value is above the cost of most RCA transactions to date, though the average land values of future RCA land acquisition are expected to increase due to the increasing need to purchase more expensive land in “linkage” areas. 11 Similar to the Original Nexus Study, all new development in Western Riverside County is required to pay the mitigation fee (or otherwise provide the necessary mitigation). The conversion from per gross acre to per unit fees for residential development is conducted to provide administrative continuity for member agencies. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 8 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx O rganization of Report This Nexus Study includes several chapters. Chapter 1, this chapter, describes the purpose and need for this Nexus Study, the recommended changes in the Local Development Mitigation Fee, and the key drivers of these changes. Chapters 2 through 7 provide the technical analysis that supports the updated fees and nexus findings. Chapter 2 summarizes the purpose of and basis for the MSHCP, the conservation requirements of the MSHCP, and the financing strategy and approach developed to implement the MSHCP in 2004. Chapter 3 describes the conservation achievements to date, identifies the remaining conservation requirements, and identifies expected land dedication. Chapter 4 provides the development forecast used in the calculation of the updated mitigation fees. Chapter 5 provides the estimates of MSHCP implementation costs, including land acquisition, management and monitoring, program administration, and endowment. Chapter 6 describes the historical levels of non-fee revenues available to help fund Local Permittee MSHCP implementation costs. Chapter 7 brings together the technical analysis in Chapters 2 through 6 to estimate the updated 2020 Local Development Mitigation Fees. Chapter 8 provides the nexus findings required under the Mitigation Fee Act as require to establish the updated fees. Finally, Chapter 9 highlights some of the administration and implementation requirements under the Mitigation Fee Act, recognizing that the Fee Implementation Handbook provides more specific guidance to the RCA and its partner agencies on the implementation of the mitigation fee program. Economic & Planning Systems, Inc. 9 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx 2. MSHCP POLICIES, GOALS, AND FINANCING STRATEGY MSHCP Purpose, Basis, and Goals In response to the need to maintain future growth opportunities in Western Riverside County while addressing the requirements of the state and federal Endangered Species Acts, the County and the Riverside County Transportation Commission initiated the Riverside County Integrated Project (RCIP) in 1999. The Western Riverside County Multiple Species Habitat Conservation Plan (MSHCP) is one part of the RCIP that includes: • Updated County General Plan. Addresses the required general plan elements such as land use, circulation, housing and open space, and conservation and includes programs to implement the MSHCP, enhance transit alternatives, and encourage development of mixed- use centers. • Community and Environment Transportation Acceptability Process. Identifies future transportation corridors in Western Riverside and provides needed environmental documentation to allow preservation of future right-of-ways. • MSHCP. The Western Riverside County Multiple Species Habitat Conservation Plan (MSHCP or Plan) is a comprehensive, multi-jurisdictional Habitat Conservation Plan (HCP) focusing on the conservation of species and their associated habitats in Western Riverside County. The MSHCP conserves vulnerable plant and animal species and their associated habitats in Western Riverside County and supports economic development. The MSHCP was adopted in 2003 by the Riverside County Board of Supervisors. Subsequently, all of the Western Riverside cities, the County of Riverside, County Flood Control and Water Conservation District, County Regional Parks and Open-Space District, County Department of Waste Resources, Riverside County Transportation Commission, California Department of Transportation, California Department of Parks and Recreation, California Department of Fish and Game, the US Fish and Wildlife Service and the RCA signed an Implementing Agreement for the MSHCP. The Implementing Agreement includes terms to ensure MSHCP-implementation, defines remedies and recourses should any of the parties of the Agreement fail to perform obligations, and provides assurances that, as long as the MSHCP is being implemented, the Wildlife Agencies will not require additional mitigation from the Permittees.12 The MSHCP serves as an HCP pursuant to Section 10(a)(1)(B) of the federal Endangered Species Act of 1973 as well as a Natural Communities Conservation Plan under the NCCP Act of 2001. The MSHCP streamlines these environmental permitting processes by allowing the participating jurisdictions to authorize “take” of plant and wildlife species identified within the Plan Area. At the same time, Plan implementation provides a coordinated MSHCP Conservation Area and implementation program to preserve biological diversity and maintain the region’s quality of life. 12 The Wildlife Agencies include the US Fish and Wildlife Service and the California Department of Fish and Wildlife and the Permittees include all of the other parties to the Implementing Agreement. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 10 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx The MSHCP and the associated Implementing Agreement and Incidental Take Permit collectively determine a set of conservation actions, and the associated responsible parties, that must be taken to meet the terms of the Incidental Take Permit and benefit from the regulatory streamlining and other benefits of the MSHCP. This includes the identification of the responsibilities of the Local Permittees.13 MSHCP Conservation Requirements The goal of the MSHCP is to enhance and maintain biological diversity and ecosystems processes while allowing future economic growth. The MSHCP calls for an MSHCP Conservation Area of 500,000 acres and focuses on the conservation of 146 species. Figure 1 State of Conservation in 2003: Conserved Land, Additional Reserve Land to be Acquired, and Total MSHCP Conservation Area Needed e County Regional As shown in Figure 1, when the MSHCP was adopted, existing public and quasi-public conservation lands covered 347,000 acres, leaving a need for 153,000 acres of land, called Additional Reserve Land (ARL), to meet the goals of the MSHCP (see Figure 1). The MSHCP specifies that responsibility for the conservation of the 153,000-acre Additional Reserve Lands is shared by the local development process (97,000 acres) and state and federal purchases (56,000). 13 Local Permittees include the Western Riverside cities, the County of Riverside, County Flood Control and Water Conservation District, County Regional Park and Open Space District, County Department of Waste Resources, and Riverside County Transportation Commission. 282,000 56,000 338,000 65,000 97,000 162,000347,000 153,000 500,000 0 100,000 200,000 300,000 400,000 500,000 600,000 2004 Existing Public/Quasi Public Land Acquire: Additional Reserve Land Total Acres Federal/State Local Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 11 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 4 MSHCP Goals by Area Plan The MSHCP includes methods to determine whether the goals of the Plan are being met. One of the methods is measuring the extent to which conservation acquisitions are moving toward acquisition goals by each Area Plan.14 Area Plans are established in the County’s General Plan and are used in the MSHCP as a common geographic unit in Western Riverside County. The MSHCP established low, high, and midpoint acquisition goals for each Area Plan based on biological needs. The midpoint acquisition goals for each Area Plan range from 165 to nearly 49,935 acres, as shown in Table 4. The midpoint goals sum to 158,605 which represents 5,605 acres more than are needed to fulfill the MSHCP goals. As a result, acquisitions in some Area Plans can fall below the mid-point targets while the total ARL can still achieve the 153,000-acre goal. MSHCP Financing Strategy One of the key requirements of the MSHCP, Implementing Agreement, and Incidental Take Permit (consistent with the requirements of the federal Endangered Species Act) is the provision of adequate funding by Local Permittees to the Implementing Entity (the Regional Conservation Authority) to conduct the conservation actions identified in the MSHCP as the responsibility of the Local Permittees. 14 Other geographic units include Rough Steps, city jurisdictions, and Area Plan subunits. For the purposes of this analysis, Area Plans have been selected as the primary unit of analysis because they are the middle-sized unit (smaller than Rough Steps and larger than Area Plan subunits) and have not changed over time (unlike jurisdictions, several of which have incorporated since the adoption of the MSHCP. Cities of Riverside and Norco 1,756 90 240 165 Eastvale 665 145 290 220 Elsinore 28,946 11,700 18,515 15,110 Harvest Valley / Winchester 820 430 605 515 Highgrove 1,452 345 675 510 Jurupa 5,476 890 1,870 1,380 Lake Mathews / Woodcrest 11,673 3,215 5,470 4,340 Lakeview / Nuevo 14,682 6,650 10,235 8,445 Mead Valley 7,703 1,885 3,635 2,760 Reche Canyon / Badlands 26,000 10,520 15,610 13,065 REMAP 78,423 41,400 58,470 49,935 San Jacinto Valley 32,828 11,540 19,465 15,500 Southwest Area 66,076 22,500 36,360 29,430 Sun City / Menifee Valley 2,059 1,120 1,585 1,355 Temescal Canyon 10,007 3,485 5,800 4,645 The Pass 22,652 8,540 13,925 11,230 Total 311,218 124,455 192,750 158,605 Area Plan Total Area of Criteria Cells Low End of Goal High End of Goal Midpoint Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 12 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Section 8.0 of the MSHCP addresses “MSHCP Funding/Financing of Reserve Assembly and Management.” This section provides best estimates of Plan implementation costs at the time of Plan adoption, including the local funding commitment – the portion of Plan implementation costs that represents the Local Permittees’ portion of the overall land acquisition, management, monitoring, adaptive management, and Plan administration costs. Section 8.5 describes the Local Funding Program. The Local Funding Program included a mix of funding sources to provide “an equitable distribution of the cost for local mitigation under the MSHCP.” The proposed funding sources included Local Development Mitigation Fees, density bonus fees, regional infrastructure project public contributions (including transportation infrastructure, regional utility projects, local public capital construction projects, and regional flood control projects), and landfill tipping fees. Key components of the overall MSHCP implementation and funding strategy are highlighted below: • The Regional Conservation Authority would implement the MSHCP with funding from different sources. • The permanent protection of 97,000 acres in Additional Reserve Lands by Year 25 of the Plan (2029) would be achieved through direct purchase of habitat lands by the RCA using local funding and through the HANS dedication process.15 • Local funding sources would fund the ongoing management and maintenance costs of the local portion of the Additional Reserve Lands acquired through local funding (97,000 acres by end of acquisition period). • Local funding sources would fund monitoring activities on the pre-Plan local conservation and all the new Additional Reserve Lands (500,000 acers by end of acquisition period). • The permanent protection of 56,000 acres in Additional Reserve Lands by Year 25 would be achieved using state/federal funding sources or contributions. • State and federal funding sources would fund the management and maintenance costs of the State/federal portion of the required Additional Reserve Lands. • Local Development Mitigation Fees (on private development) would fund the Local Permittee MSHCP implementation costs that were not funded by other local/regional funding sources or public contributions for public development project mitigation. • The overall permit period was set at 75 years. Once habitat acquisition was completed by Year 25, remaining funds along with newly created revenue sources were to be used to fund 15 Section 6.1.1 of the MSHCP describes the HANS process. The Habitat Evaluation and Acquisition Negotiation Strategy (HANS) process applied to any property owner applying for a discretionary permit for land within a Criteria Area/Criteria Cell. Under the process, the County determined whether portions of the property are needed for conservation and then may send their evaluation to the RCA for Joint Project Review (JPR). During JPR, the project applicant negotiated the terms of the development and conservation of the project. The applicant also paid fees on the new development. This approach was refined when a new fee credit policy, adopted in 2016, provided for fee credits where appropriate lands are dedicated. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 13 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx monitoring and management as well as to fund the establishment of an endowment to cover ongoing post-permit costs (beyond Year 75). Importantly, the MSHCP funding chapter notes that frequent evaluations of the performance of the funding mechanisms and assessments of the funding plan will occur and that any necessary modifications to the funding mechanisms will be developed. MSHC P Implementation Costs and Funding Sources The original estimated costs and proposed funding sources were documented in the MSHCP and are summarized in Table 5. These were developed based on research and analysis conducted as part of MSHCP development. As shown, Plan implementation costs over the first 25 years of implementation were estimated at about $950 million in 2004-dollar terms. Key assumptions driving the implementation cost estimates included: • Dedications. Direct acquisition using local funding sources would be required to acquire 56,000 acres, with 41,000 acres (or 42 percent) of the required local habitat protection coming through HANS dedication. • Land Cost. Average land value of $13,100 per acre for Additional Reserve Lands purchased by the RCA. • Management and Monitoring: Management and monitoring costs included three key components as follows: Reserve Management, Adaptive Management, and Biological Monitoring.16 • Program Administration. RCA program administration costs would average about $1.2 million each year in 2004 dollars during the 25-year period where land acquisition was required. • Cost Distribution. Overall, land acquisition costs were estimated at 77 percent of total implementation costs, with management and monitoring at 20 percent, and program administration at 3 percent (see Figure 2). 16 See Chapter 5 of the MSHCP for a description of these activities. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 14 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 5 2004 Estimates: MSHCP Implementation Costs and Funding Sources Total for % of 2004 - 2028 Average Total Cost/ Item (Years 1 - 25)Annual Funding Need Local Permittee Land Requirements Preservation Requirement 97,000 acres 3,880 acres na HANS Dedication 41,000 acres 1,640 acres na Local Permittee Acquisition 56,000 acres 2,240 acres na Local Permittee MSHCP Implementation Costs Land (1)$733,600,000 $29,344,000 76.91% Management & Monitoring $190,200,000 $7,608,000 19.94% RCA Staff $30,000,000 $1,200,000 3.15% Other Costs na na na Endowment not included not included na Total Costs $953,800,000 $38,152,000 100.0% Local Revenues Private Development Mitigation Fees $539,600,000 $21,584,000 50.1% Density Bonus Fees $66,000,000 $2,640,000 6.1% Regional Transportation Infra. (2)$250,000,000 $10,000,000 23.2% Local Roads (Measure A) $121,000,000 $4,840,000 (3)11.2% Tipping Fees (4)$100,000,000 $4,000,000 9.3% Miscellaneous Revenues (5)$0 $0 0.0% Total Revenues $1,076,600,000 $43,064,000 100% (1) Average land value per acre assumed to be $13,100 per acre. (2) Public contributions at specificed % of new road construction. (3) $121 million to be provided over 10 years, so $12.1 million annually over that period. (4) Includes $90 million from El Sobrante Landfill and $10 million from other County landfills. (5) Other potential revenues, including public contributions from other public projects, tipping fees from Eagle Mountain Landfill, and potential new voter-approved regional funding were noted but not estimated. Source: Chapter 8 of MSHCP; Economic & Planning Systems. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 15 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Figure 2 MSHCP Estimated Annual Costs in Millions, 2004 Dollars As also shown in Table 5, MSHCP funding from local/regional sources was estimated to be about $1.0 billion in 2004 dollars through Year 25, sufficient to cover the implementation costs over this period. Key assumptions driving the funding estimates included: • Measure A. Measure A (local sales tax transportation funding measure) would provide $121 million over 10 years in 2004-dollar terms. • Regional Transportation Funding. Public contributions from regional transportation infrastructure projects would provide an average of $10 million each year or $250 million through Year 25. • Tipping Fees. Landfill tipping fees would provide about $100 million in revenue over 25 years, about $4 million each year, primarily from the El Sobrante landfill. • Mitigation Fees. Private development fees, including private development mitigation fees and density bonus fees, would generate over $600 million over the first 25 years, about $24 million annually. • Development Forecast and Participation. The forecast of private development fees was based on a preliminary fee schedule and the forecast of 336,000 new residential units (13,440 units each year) and 371 acres each year of commercial and industrial development. All new development was assumed to pay the private development mitigation fee with a portion paying the density bonus fee. • Other Funding Options. Potential additional funding might come through contributions from other local/regional public entities, other landfills, or new voter-approved funding initiatives. • Funding Distribution. Overall, about 55 percent of the estimated funding was expected to be generated by private development fees, with 45 percent from other funding sources. Land, $29.3, 77% Mangmnt. & Monitoring $7.6 , 20% RCA Staff, $1.2 , 3% $38.1 million total Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 16 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Figure 3 MSHCP Estimated Annual Revenues in Millions, 2004 Dollars Development Mitigation Fees and Calculation The MSHCP notes that “new development affects the environment directly through construction activity and cumulatively through population bases that result from Development.” As a result, the cities and County are required to implement a Local Development Mitigation Fee that was expected to represent one of the primary sources of funding for the implementation of the MSHCP. The MSHCP indicates that the Local Development Mitigation Fee will be adopted under California Government Code Section 66000 et seq. (the “Mitigation Fee Act”) that “allows cities and counties to charge new development for the costs of mitigating the impacts of new development.” The MSHCP identified preliminary estimates of Local Development Mitigation Fees and indicated that these mitigation fees were expected to generate the majority of funding for Local Permittee obligations. The MSHCP noted that, under the Mitigation Fee Act, “a nexus study is required to demonstrate that the proposed fee is proportionate to the impacts of new development.” The Mitigation Fee Act also includes a number of reviewing and reporting requirements. The MSHCP also notes that the fee will need to be “reevaluated and revised should it be found to insufficiently cover mitigation of new development.” A nexus study entitled “Final Mitigation Fee Nexus Study Report for the Western Riverside County Multiple Species Habitat Conservation Plan” was completed on July 1, 2003 (2003/Original Nexus Study). This nexus study conducted a detailed analysis of the costs of implementing the Plan, identified the Local Permittee funding obligations, determined the portion to be funded through the Local Development Mitigation Fee, and made the necessary nexus findings under the Mitigation Fee Act. The MSHCP and 2003 Nexus Study both indicated that all new development in the Western Riverside County Plan Area affects covered species and habitat and so the Local Development Mitigation Fees would apply to all new development in participating jurisdictions in Western Riverside County. Private Dev. Mit. Fees, $21.6, 50% Density Bonus Fees, $2.6 , 6% Regional Transp. Infra., $10.0 , 23% Local Roads (Meas. A) , $4.8 , 11% Tipping Fees, $4.0 , 10% $43.3 million total Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 17 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Mitigation Fee Schedule and Adjustments All local jurisdictions participating in the MSHCP and obtaining coverage for public and private take in their jurisdictions were required to adopt and implement this mitigation fee schedule through ordinance and resolution and then to pass through the fee funding (minus any additional administrative charges) to the RCA to fund MSHCP implementation. Indexed-increases based on the annual change in the Consumer Price Index for the Los Angeles-Anaheim-Riverside area were provided for in the ordinances to allow modest adjustments in mitigation fees to respond to inflationary cost increases. Due to the geographic revision implemented by the Bureau of Labor Statistics, going forward indexed-adjustments will be based on the annual change in the Consumer Price Index for the Riverside-San Bernardino-Ontario area. Table 6 shows the original 2004 Local Development Mitigation Fee schedule and current 2021 Fee schedule that reflects periodic inflationary fee adjustments using the indexing process. Table 6 2004 and 2021 MSHCP Fee Schedule Fee Category 2004 Fee per unit or per acre 2021 Fee per unit or per acre Residential: Up to 8.0 dwelling units per acre (DUAC) $1,651 $2,234 Residential: 8.0-14.0 DUAC $1,057 $1,430 Residential: 14.0+ DUAC $859 $1,161 Commercial (per acre) $5,620 $7,606 Industrial (per acre) $5,620 $7,606 Economic & Planning Systems, Inc. 18 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx 3. HABITAT PROTECTION TO DATE AND FUTURE CONSERVATION SCENARIO The RCA has achieved substantial levels of habitat protection to date using the funding sources established and the associated variable flows of incoming revenues. The level of habitat protection achieved, because of lower levels of funding and land dedication than expected, has however fallen behind the pace of protection forecast in the Original Nexus Study. This chapter summarizes the achieved protection to (1) establish both the scale of future acquisitions required to meet the overall Additional Reserve Land (ARL) goals, (2) consider the annual pace of habitat protection through acquisitions and dedications in absolute terms and relative to the original MSHCP forecasts, and (3) inform the development of the Conservation Scenario that forms the baseline (project description) for estimating future MSHCP implementation costs and associated funding requirements and updated mitigation fees. Habitat Protection Accomplishments Through 2019 Between the start of the MSHCP program and the end of 2019, the most recent full calendar year, about 40 percent of the 153,000-acre ARL target has been achieved, totaling almost 62,000 acres in acquisitions, easements, or dedications (see Table 7).17 As shown of the 97,000 acres in Local Permittee ARL obligation about 40,200 acres had been protected by the end of 2019. Of the 56,000 acres in State/Federal ARL obligation, about 21,600 acres have been protected to date. Table 7 Conservation Through End of 2019 Sources: Western Riverside County Regional Conservation Authority MSHCP Annual Reports; RCA information on 2019 purchases; Economic & Planning Systems, Inc. Conservation Goals and Progress The MSHCP anticipated that acquisition would take place for 25 years, through the end of 2029, with 97,000 acres conserved through local means and 56,000 acres conserved with State/federal funding. To achieve this goal, an average of 6,120 acres of conservation is required each year, 17 Note that while the MSHCP was adopted in 2004, certain conservation which took place between 2000 and 2003 was counted toward the MSHCP reserve. Total Party Need Conserved Conserved Conserved Remaining Need 2000-2003 2004 - 2019 2000 - 2019 2020-2043 Local 97,000 4,531 35,681 40,212 56,788 State + Fed 56,000 12,408 9,200 21,608 34,392 Total 153,000 16,939 44,881 61,820 91,180 Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 19 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx including an average of 3,880 annually from local funding sources/dedications and 2,240 annually from State and federal conservation. Figure 4 illustrates how steady progress would result in achievement of the ARL goals by 2029. Figure 5 shows actual progress toward the goals, through 2019. More than 21,000 acres have been conserved through State/federal means, and over 40,000 acres have been conserved through local actions. These totals sum to about 40 percent of the total ARL goal of 153,000 acres. As shown in Figure 5, with 16 years of the 25-year acquisition period completed, the ARL acquisitions have fallen behind the pace forecast in the Original Nexus Study. Protection through the end of 2019 represents 63 percent of the original forecast (65 percent for Local obligations and 60 percent for State/federal obligations). For the Local Permittee obligations, as discussed further below, the lower level of land dedication relative to the original forecasts account for much of the habitat protection gap that has emerged over the last 16 years. Figure 4 MSHCP Conservation Goals, 2019 and 2029 Goals Highlighted 62,080 97,000 35,840 56,000 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 2004200520062007200820092010201120122013201420152016201720182019202020212022202320242025202620272028MSHCP Goals, 2019 and 2028 Highlighted Local State/Fed Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 20 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Figure 5 Progress Towards ARL Through End of 2019 Sources: Western Riverside County Regional Conservation Authority; Economic & Planning Systems, Inc. Land Dedications The MSHCP envisioned a conservation program where land and easements would be purchased by the RCA and land would be dedicated to the RCA through the development process.18 In addition, the potential for no-cost and low-cost donations for tax benefit purposes was also created. The MSHCP did not assume donations or conservation easement acquisitions as part of its financial analysis (this is appropriate given the limited number of such transactions). The MSHCP did, however, anticipate that 41,000 acres would be conserved through dedications, 56,000 acres through purchases on behalf of local permittees, and 56,000 acres through purchases conducted by or funded by federal and State agencies/sources for a total of 153,000 acres. For the local portion of the goal (97,000 acres), this translates into about 42 percent of the goal conserved via dedications associated with the development review process—called Habitat Evaluation and Acquisition Negotiation Strategy (HANS)—and the other 58 percent purchased by the RCA from willing sellers. The level of dedication is a key assumption for the MSHCP implementation cost estimate as each acre dedicated through HANS is one fewer acre which must be conserved through land acquisitions at market values. The HANS process was established to apply to developments proposed within the Criteria Cells of the MSHCP Study Area. The Criteria Cells represent areas with high conservation values relative to the areas outside of the Criteria Cells. The HANS process was designed to indicate what conservation (dedication) may be needed from new development from a biological needs 18 This process is known as the Habitat Evaluation and Acquisition Negotiation Strategy (HANS). Fed+State Local Total Acqu. through 2019 21,608 40,212 61,820 Remaining Need 34,392 56,788 91,180 % of 2019 Expected Goal Achieved 60%65%63% % of Total Goal Achieved 39%41%40% 60%65%63% 39%41%40% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 Acres153,000 97,000 56,000 Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 21 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx perspective. Subsequent to that technical analysis, applicants could then proceed to the Joint Project Review (JPR) process during which the parties negotiate an implementation plan for the project, consistent with the HANS findings. The applicants would also pay mitigation fees on the actual development. To date, a modest amount of land (less than 1,000 acres) has been conserved via the HANS/JPR method compared to the 26,000 acres that was forecast to have occurred by this point in the MSHCP implementation. While very little land has been dedicated to the RCA through HANS/JPR, several projects went through the HANS/JPR process and have agreements in place for dedication/conservation of lands, but the start date (if any) for these projects is unknown (i.e., may be far in the future). These projects cover about 35,000 acres in the Criteria Cells and, under the JPR agreements, have set aside about 30 percent of that total or about 10,000 acres for conservation/dedication. The adoption of Resolution No. 2016-003 in September 2016 revised the RCA’s fee credit and waiver policy. This resolution indicated that MSHCP fee credit should be provided in exchange for land that contributes to reserve assembly. As a result, after the adoption of this resolution, new development is not be expected to pay mitigation fees and dedicate land in the manner originally envisioned in the MSHCP limiting the likelihood of the types of dedications envisioned in the Original Nexus Study. Future Conservation Scenario This updated financial analysis, nexus study, and mitigation fees estimate require a base description of the additional habitat protection required. In subsequent chapters, cost estimates are developed in reference to, and in application to, this conservation scenario to develop the overall implementation costs and the associated funding required, both in aggregate and through time during the land acquisition period of the program. Four questions are of particular importance: 1. Remaining Habitat Protection. The amount of habitat protection required to meet the MSHCP requirements. 2. Dedications. The amount of land dedication assumed to occur through the HANS/JPR process over the habitat protection period and the associated amount of habitat that must be acquired. 3. Time Frame. The period over which habitat protection goals must be met. 4. Land Characteristics. The characteristics of the land to be protected to meet MSHCP requirements (e.g., goals by Area Plan, habitat cores and linkages etc., land use designations and parcel sizes). The answers to question 1 are provided in the data above (see Table 7). The answer to question 4 is provided in the subsequent chapter on land costs, with illustrative answers coming from RCA data and GIS analysis. The answer to question 2 is addressed below and is based on information on accomplishments to date (described above), discussions with RCA staff, the current Fee Waiver and Credit Policy, and an assessment of realistic opportunities and expectations. Finally, question 3 raises the issue of whether an extension to the MSHCP land acquisition implementation period should be provided. As described below, three different Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 22 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx extension scenarios (5-, 10-, and 15-year extension scenarios) are evaluated, as well as the baseline, “No Extension Scenario,” to indicate the outcomes under different scenarios. Habitat Protection, Land Dedication, and Conservation Scenarios As shown in Table 8, there is a total of about 91,200 acres of land protection still required to complete the land protection obligations under the MSHCP and to bring the Additional Reserve Lands to 153,000 acres. Of this, the State/federal requirements is for about 34,400 acres, while the Local Permittee requirement is for about 56,800 acres. The experience of the last 16 years indicates that the MSHCP was overly optimistic in terms of land dedications, assuming that 41,000 acres would be dedicated to the RCA. As noted above, about 10,000 acres of potential future land dedication is associated with a range of previously proposed projects. Based on historical information on actual, dedications agreements on proposed projects, current RCA policy, and consultations with RCA staff, minimal additional dedication is expected or assumed. This analysis, therefore, assumes that the prior agreement concerning dedications, summing to about 10,000 acres, will be secured over the next eight years and prior to the end of the current habitat protection period. Even if the implementation period were extended, no extra land dedication is forecast to occur. As a result, and as shown in Table 8, a total of about 46,800 acres of Additional Reserve Land acquisition is required by Local Permittees for MSHCP implementation once the forecast of dedications is incorporated. As shown in Table 8, the required average annual pace of habitat protection varies considerably under the different acquisition period extension scenarios, as described below: 19 • Baseline/No Extension Scenario. As currently structured, RCA is required to complete land acquisition by the end of Year 25 of Plan implementation in 2029. This provides nine (9) years to protect the 47,000 acres through direct land acquisition (distinct from the assumed dedications), an average annual acquisition pace of about 5,200 acres each year. • 5-Year Extension. With a 5-year extension to the acquisition period, the RCA would be required to complete land acquisitions by the end of Year 30 of Plan implementation in 2034. This provides fourteen (14) years to protect the 47,000 acres through direct land acquisition (distinct from the assumed dedications), an average annual acquisition pace of about 3,300 acres each year. • 10-Year Extension. With a 10-year extension to the acquisition period, the RCA would be required to complete land acquisitions by the end of Year 35 of Plan implementation in 2039. This provides nineteen (19) years to protect the 47,000 acres through direct land acquisition (distinct from the assumed dedications), an average annual acquisition pace of about 2,500 acres each year. 19 As a point of reference, the historical pace of Local Permittee-driven habitat protection has been somewhat above 2,000 acres each year with availability of funding being an important determinant of the pace of acquisition. The pace of State/federal-driven acquisition has averaged about 1,000 acres each year. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 23 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx • 15-Year Extension. With a 15-year extension to the acquisition period, the RCA would be required to complete land acquisitions by the end of Year 40 of Plan implementation in 2044. This provides twenty-four (24) years to protect the 47,000 acres through direct land acquisition (distinct from the assumed dedications), an average annual acquisition pace of about 2,000 acres each year. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 24 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 8 Required Acquisition Acres to Achieve ARL Goals Sources: Western Riverside County Regional Conservation Authority; and Economic & Planning Systems, Inc. Entity/Item Through 2019 2020-End of Acquisition Period Years Remaining Annual Conservation Acres Required Total Acres State/Federal 21,608 34,392 9 3,821 56,000 Local HANS Dedication (1)715 10,000 9 1,111 10,715 Net Local Acquisition 39,497 46,788 9 5,199 86,285 Total Local Conservation 40,212 56,788 9 6,310 97,000 State/Federal + Local = ARL Goal 61,820 91,180 9 10,131 153,000 State/Federal 14 2,457 56,000 Local HANS Dedication 14 714 10,715 Net Local Acquisition 14 3,342 86,285 Total Local Conservation 14 4,056 97,000 State/Federal + Local = ARL Goal 14 6,513 153,000 State/Federal 19 1,810 56,000 Local HANS Dedication 19 526 10,715 Net Local Acquisition 19 2,463 86,285 Total Local Conservation 19 2,989 97,000 State/Federal + Local = ARL Goal 19 4,799 153,000 State/Federal 24 1,433 56,000 Local HANS Dedication 24 417 10,715 Net Local Acquisition 24 1,950 86,285 Total Local Conservation 24 2,366 97,000 State/Federal + Local = ARL Goal 24 3,799 153,000 State/Federal 29 1,186 56,000 Local HANS Dedication 29 345 10,715 Net Local Acquisition 29 1,613 86,285 Total Local Conservation 29 1,958 97,000 State/Federal + Local = ARL Goal 29 3,144 153,000 NO EXTENSION 10 YEAR EXTENSION 15 YEAR EXTENSION 20 YEAR EXTENSION 5 YEAR EXTENSION Shading indicates acreage to be acquired with fee revenue. See above See above See above See above 1. About 10,000 acres of potential future land dedication is associated with a range of previously proposed projects. Based on historical information on actual, dedications agreements on proposed projects, current RCA policy, and consultations with RCA staff, minimal additional dedication is expected or assumed beyond these agreements. This analysis, therefore, assumes that the prior agreements concerning dedications will occur with future dedications summing to about 10,000 acres. The precise timing of these dedications is uncertain, but are assumed to occur over the next eight years. Average annual numbers in this table are shown distributed across the full remaining acquisition period of each extension scenario. Economic & Planning Systems, Inc. 25 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx 4. FORECASTS OF DEVELOPMENT, DEDICATION, FEE PAYMENT Future development within Western Riverside County will both reduce land available for conservation while also serving as a primary funding mechanism for habitat acquisitions. This chapter identifies forecasts of future growth in Western Riverside County and develops an associated forecast of land development that is a key component of the fee calculation. Historic Development and HCP Fees The MSHCP anticipated that 13,000 to 14,000 residential units and about 370 commercial and industrial acres would be developed on average annually. Specifically, between 2005 and 2019, 206,000 residential units were expected in the Plan Area. A review of new units in the Plan Area indicates about 130,000 units were developed over the period (see Figure 6), about 37 percent below the forecast.20 While the substantial volatility in the real estate market over the period (including the housing boom, deep recession, and modest recovery) may explain some of this difference, the slower pace of development means that fee revenues have been similarly constrained relative to the original revenue projections. Figure 6 Residential Unit Development, Western Riverside County, 2005-2019 Source: California Department of Finance; MSHCP Projections 20 Actual units developed have been derived from the California Department of Finance (DOF), Demographics Unit information through January 1, 2019. Note that the DOF reports data by city and for the entire Riverside County unincorporated area. Western Riverside’s portion of the total unincorporated area has been derived based on the area’s historic share of unincorporated County, taking into account the incorporations of new cities that occurred in Western Riverside County since MSHCP Plan adoption (Eastvale, Jurupa Valley, Menifee, and Wildomar). 0 50,000 100,000 150,000 200,000 250,000 Number of Residential UnitsProjected Actual 76,000 Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 26 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Growth Projections SCAG Forecasts in Context The Southern California Association of Governments (SCAG) is a Metropolitan Planning Organization (MPO)21 representing six counties, 191 cities and more than 18 million residents. MPOs, such as SCAG are charged under California Senate Bill 375 with developing Sustainable Community Strategies (SCSs) as part of regional transportation plans. SCAG’s SCS includes population, household, and job projections through 2040 by city and unincorporated area. SCAG consults with local governments within the region, including the Western Riverside Council of Governments (WRCOG) which represents Western Riverside County, to develop the projections. SCAG adopted the 2012-2040 Regional Transportation Plan/Sustainable Community Strategy (RTP/SCS) in 2016. The 2016 RTP/SCS forms the basis of the SCAG projections; EPS extrapolated an annual growth rate from the SCAG projections and, assuming consistent development trends through 2050, applied the rate in order to estimate development projections through 2050. SCAG forecasts for the future, on an annualized basis, were compared with the MSHCP’s original forecast along with historical information (when available) as described further below: • Residential Development Forecast. Figure 7 shows, for Western Riverside County, the annual residential unit count for SCAG projections through 2050, MSHCP projections through 2029, and residential units produced in Western Riverside County between 2005 and 2019. As shown, the SCAG projections suggest about 8,750 units each. This is similar to the average annual historic pace of growth between 2005 and 2019 of about 9,260 units, but well below the original MSHCP projections of about 13,400 units each year. Based on the similarity between the historical average and the SCAG forecast, the SCAG forecast is considered a reasonable basis for determining the future pace of residential development and associated residential land development (based on assumed densities of development). • Commercial Development Forecast. The SCAG jobs forecast of about 15,000 jobs each year was converted into an annual gross amount of commercial/industrial development using the employment density and FAR assumptions used in the most recent Transportation Uniform Mitigation Fee (TUMF) update documents. As shown in Figure 8, this results in a forecast of about 690 acres of commercial/industrial land development each year (representing an overall average of about 21 jobs per acre of development), considerably above the original MSHCP projections of about 370 acres each year. The higher SCAG number, however, appears reasonable given recent and ongoing trends in Western Riverside County where substantial amounts of new logistics/distribution development have occurred covering substantial land areas and, as such, is considered reasonable as the basis of the future forecast of commercial/industrial land development. 21 Federal law requires that an urbanized area with a population of at least 50,000 be guided by a regional entity known as an MPO. California’s Senate Bill 375 expands the role of the State’s 18 MPOs to include regional plans that help the State reach its greenhouse gas reduction targets by encouraging compact development and new development near public transit. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 27 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Figure 7 New Housing Units per Year, SCAG and MSHCP Projections and Historic Production (2005-2019) SCAG (2012-2040) and MSHCP Projections (2004-2029) and Historic Production (2005-2019) Figure 8 Newly Developed Commercial Acres per Year SCAG (2012-2040) and MSHCP Projections Note: SCAG job projections converted into acres by EPS 8,747 13,440 9,262 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 SCAG MSHCP Historic 693 371 0 100 200 300 400 500 600 700 800 SCAG MSHCP Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 28 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Forecasts for Fee Calculation For this fee program update, the SCAG projections are considered a reasonable basis for forecasting future land development. Because all new development is expected to pay the mitigation fee, all of the forecasted household and job growth is converted into a land development forecast that is, in turn, used to calculate the mitigation fees. Table 9 shows SCAG’s overall projections for households and employment in Western Riverside County between 2012 and 2050, and Table 10 shows the implied average annual land development rates, and, in turn, the overall level of residential and commercial/industrial land development that would be expected to occur through the end of the land acquisition period for each of the extension scenarios.22 As shown, all scenarios assume an overall average annual land development of 2,252 acres each year, including 693 acres in commercial/industrial land development and 1,558 acres in annual residential land development.23 • Baseline/No Extension Scenario. Under the no extension scenario, a total of 20,265 acres of land development is expected to occur during the remaining Plan implementation period of nine (9) years and would pay the mitigation fees. • 5-Year Extension. Under the 5-year extension to the acquisition period, a total of 31,523 acres of land development is expected to occur during the remaining Plan implementation period of 14 years and would pay the mitigation fees. • 10-Year Extension. Under the 10-year extension to the acquisition period, a total of 42,782 acres of land development is expected to occur during the remaining Plan implementation period of 19 years and would pay the mitigation fees. • 15-Year Extension. Under the 15-year extension to the acquisition period, a total of 54,040 acres of land development is expected to occur during the remaining Plan implementation period of 24 years and would pay the mitigation fees. 22 Under the MSHCP, all new development is required to pay the mitigation fee and contribute to funding the implementation of the MSHCP except where specifically exempted in the Ordinance. 23 The 1,558 acres of residential land development was derived based on the forecasted 8,747 residential units each year and assumptions concerning distribution by density category and an average density level. More specifically, consistent with the recent TUMF analysis assumptions, 70 percent of new residential units are assumed to be in the low density category (less than 8 units per acre) with an average of 4.5 units/acre, 20 percent are assumed to be the medium density category (8 to 16 units per acre) with an average of 10.8 units/acre, and 10 percent are assumed to be the high density category (over 16 units per acre) with an average of 24.4 units/acre. The unit per acre factors are consistent with those indicated in the Original Nexus Study. The overall implied average residential density is 5.6 units/gross acre. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 29 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 9 Projected Growth in Western Riverside County, through 2050 SCAG Households Employment 2012 530,970 463,833 2040 Projection 775,882 869,792 2050 Projection (1)863,350 1,014,777 New Households/Jobs Expected by 2050 332,380 550,944 Average Annual 8,747 14,499 Western Riverside MSHCP Plan Area (1) SCAG projections forecast growth through 2040. EPS assumes the annual growth rate from 2012 to 2040 remains constant through 2050 and applies the rate to an additional 10 years in order to project growth through 2050. Sources: Southern California Association of Governments; Economic & Planning Systems, Inc. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 30 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 10 Projected Developed Acres in Western Riverside County, by Extension Scenario Proportionate Share 2020-20281 78,722 Households 130,487 Jobs New Development to Acres2 Acres of New Development Through 2028 14,026 Acres 6,239 Acres 20,265 Acres Acres per Year 1,558 Acres 693 Acres 2,252 Acres Proportionate Share 2020-20341 122,456 Households 202,979 Jobs New Development to Acres2 Acres of New Development Through 2034 21,818 Acres 9,705 Acres 31,523 Acres Acres per Year 1,558 Acres 693 Acres 2,252 Acres Proportionate Share 2020-20381 166,190 Households 275,472 Jobs New Development to Acres2 Acres of New Development Through 2038 29,611 Acres 13,171 Acres 42,782 Acres Acres per Year 1,558 Acres 693 Acres 2,252 Acres Proportionate Share 2020-20431 209,924 Households 347,965 Jobs New Development to Acres2 Acres of New Development Through 2043 37,403 Acres 16,637 Acres 54,040 Acres Acres per Year 1,558 Acres 693 Acres 2,252 Acres Sources: California Department of Finance; US Census Bureau; Southern California Association of Governments; Economic & Planning Systems, Inc. Western Riverside MSHCP Plan Area 5 Year Extension 10 Year Extension 15 Year Extension (1) SCAG forecasts from the 2016 Report have been used for all cities in Western Riverside County. The projections for the entire unincorporated area in Riverside have been split into just the Western part of the County through a review of WRCOG's recent proportion of unincorporated growth, compared to the whole County. (2) Conversion from household projections to residential acres of developed land is based on expected development mix and average residential density by land use type, with an average residential density of 5.6 DUAC. Similarly, conversion from job projections to nonresidential acres of developed land is based on distribution of jobs by workspace type and average employment density by land use type, with an average nonresidential density of 21 jobs per land acre. Residential density assumptions are based on data from the Census and California Department of Finance; Employment density assumptions are based on SCAG data. Total No Extension Residential Non ResidentialSCAG Economic & Planning Systems, Inc. 31 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx 5. MSHCP IMPLEMENTATION COSTS This chapter describes the analysis and assumptions that underpin the estimation of the total remaining MSHCP implementation costs in 2019 dollars. Key cost factors evaluated include land costs, management and monitoring costs, administration and professional services costs, and endowment costs. Together these cost components form the total MSHCP implementation costs. Because the duration allowed for land acquisition and endowment establishment affect several of these cost items, distinct total implementation cost estimates are provided for all scenarios (i.e., Baseline/ No Extension and the three extension scenarios). Land Costs Planning-level estimates of the per acre values associated with potential Additional Reserve Land (ARL) acquisitions are a critical input into the estimation of total land acquisition costs associated with Plan implementation. Land acquisition costs represented the majority of the original estimates of MSHCP implementation costs. This chapter provides planning-level estimates of per acre land conservation costs in 2019-dollar terms based on available information. In combination with assumptions concerning the characteristics of the Additional Reserve Lands to be acquired and potential levels of dedication, the per acre land value estimates drive the estimate of overall land acquisition costs. Actual per acre habitat conservation costs may vary from the average planning-level estimates presented in this chapter for a number of reasons, including differences in the specific characteristics of the actual parcels acquired as well as fluctuations in economic, real estate, and land market conditions over time. Individual transactions will require appraisals to establish their value at the time of acquisition based on parcel characteristics and pertinent market conditions at the time of appraisal. Over time, per acre and overall cost estimates typically change for a number of reasons as discussed further in Chapter 9. MSHCP/Original Nexus Study The initial adoption of the mitigation fees was based on a nexus study completed in July 2003 that included a land valuation analysis that was completed in December 2002. The land valuation analysis assumed the acquisition of vacant and unentitled lands in the Criteria Cells. The land value analysis provided planning-level estimates of per acre land values by grouped land use designation and by Area Plan. Planning-level land value estimates were based on sales comparables. The land value estimates indicated per acre land values that were primarily driven by differentiation in land use category. The land use designation categories represent groupings of the broad number of land use designations present in the Study Area. Table 11 summarizes the per-acre land value ranges and resulting averages. Based on this analysis, an overall weighted average of $13,100 per acre was applied in the MSHCP financial sections in the Original Nexus Study. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 32 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 11 Per-Acre Land Value Estimates—2003 Dollars (2003 Nexus Study) Land Use Designation Value Range Resulting Average * Open Space $2,500 to $10,000 per acre $ 8,000 per acre Rural/Agricultural $5,000 to $25,000 per acre $11,000 per acre Community Development $20,000 to $80,000 per acre $45,000 per acre Overall (1) $2,500 to $80,000 per acre Varied (1) * Per acre values rounded to the nearest 1,000. (1) Reported overall average land value per acre depends on mix of land types. Number varies by documents, though $13,100 per acre was overall value applied in the MSHCP financing sections. Source: Original 2003 Nexus Study RCA Experience to Date Table 12 summarizes average RCA land acquisition costs to date. Including land purchased shortly before the MSHCP was adopted through the end of 2018, costs for Local Permittee land acquisitions summed to $352.5 million in nominal dollar terms, an average of $9,400 per acre. However, for the year 2018, about 2,100 acres were acquired at the higher average per acre cost of $13,200 per acre. Table 12 Local Conservation Costs Through 2018 Item Pre-MSHCP through 2018 2018 Total Acres Acquired (1) 37,547 2,066 Total Cost (millions) $352.5 $27.4 Cost per Acre (Nominal $s) $9,400 $13,200 (1) Includes all acres purchased; does not include acres conserved via easement. Sources: Western Riverside County Regional Conservation Authority MSHCP Annual Report 2018; Economic & Planning Systems, Inc. To date, the overall historical level of per acre land acquisition expenditures is well below the original 2004 per acre land value estimates. The cost of RCA acquisitions during this timeframe were kept relatively low by concentrating more on lower cost parcels (larger parcels in remote areas with limited development potential). In 2018, as in the future, the average cost per acre is expected to be higher than this historical average due to the characteristics of land still needing to be acquired. New Land Value Analysis and Conclusions New 2019 per acre land value estimates were developed based on recent historical transactions as reported in the sales comparables sections of appraisals conducted for RCA acquisitions. This data set provided a substantial inventory of over 150 land sales between 2012 and 2017 that supported conclusions concerning per acre land values by key land value characteristic. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 33 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Similar to the Original Nexus Study, land values were determined to be substantially affected by land use designation and by parcel size. Land values were developed for twelve different value categories based on combinations of three land use designations and four different size ranges. Based on the land valuation data and detailed GIS analysis by RCA staff, parcels were divided into three groups of development potential based on their land use designation:24 • Open Space. Low development potential land use designations included open space, rural mountainous, and rural residential. • Rural. Medium development potential land use designations include agriculture and rural communities land use designations. • Community Development. High development potential land use designations include all community development designations, including residential, non-residential, and other community development designations. In addition to these three land use designation groupings reflecting different levels of development potential, parcels were also divided by parcel size. The land value information indicated a per acre value distinction between the following parcels sizes: • Parcels less than 5 acres. • Parcels between 5 and 20 acres. • Parcels between 20 and 80 acers. • Parcels over 80 acres. Based on the analysis of the sales comparables, Table 13 shows the planning level per acre land value by land use designation grouping/size range in 2017 dollars. Table 13 Planning Level Per Acre Land Value Estimates by Category 24 RCA staff developed a consistent set of land use designation categories across different jurisdictions in the Study Area for the purposes of this study. These formed the basis of the development potential categories. Land Use Designation Less than 5 Acres 5 - 19.99 Acres 20 - 79.99 Acres 80 + Acres Open Space $11,761 $5,091 $3,949 $1,866 Rural $33,363 $11,553 $8,337 $5,531 Community Development $177,414 $76,050 $72,369 $24,335 Sources: Economic & Planning Systems, Inc. Per Acre Land Value ($ / Acre)1 1. Most land sale comparables used for pricing are from 2013 to 2017 and were converted to 2017 dollars using BLS CPI adjustments for the Los Angeles-Riverside-Orange County area. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 34 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx The average land value per acre for future RCA acquisitions is dependent on the different land values per acre as well as the expected distribution of future acquisitions. The actual land to be acquired is uncertain and is dependent on the availability of land through willing sellers. However, based on the conservation needs by Area Plan, the suitable land available for protection, as well as the specific linkages that must be created between the core reserve areas, RCA staff provided sufficient information for EPS to develop a general expression of parcels by characteristic to support the land value analysis. An illustration of the expected distribution of acres by land use designation and size range is provided in Table 14. Table 14 Illustrative Distribution of Land Acquisitions by Land Use and Size Applying the per acre land values in Table 13 to the illustrative land conservation distribution in Table 14 provides an estimate of the aggregate land value, supporting the estimate of the average planning level land value per acre in 2017-dollar terms (see Table 15). Table 15 Aggregate Land Value of Remaining Areas (2017 dollars) Land Use Designation Less than 5 Acres 5 - 19.99 Acres 20 - 79.99 Acres 80 + Acres Open Space 535 1,531 3,626 4,654 10,346 Rural 1,901 17,241 26,802 29,428 75,371 Community Development 638 1,707 3,613 4,384 10,342 Total Purchases by Acreage 3,074 20,479 34,041 38,466 96,059 1. Conservation scenario analysis was conducted in 2017 so overall acres acquired more than those required as of end of 2019. Sources: RCA; Economic & Planning Systems, Inc. Total Conservation Scenario (Acres) (1) Land Use Designation Less than 5 Acres 5 - 19.99 Acres 20 - 79.99 Acres 80 + Acres Open Space $6,292,633 $7,795,633 $14,319,467 $8,682,942 $37,090,674 Rural $63,411,345 $199,183,566 $223,437,526 $162,777,034 $648,809,470 Community Development $113,198,910 $129,817,405 $261,456,200 $106,682,740 $611,155,254 Total Cost of Purchases $182,902,887 $336,796,603 $499,213,192 $278,142,716 $1,297,055,399 % of Total 14%26%38%21%100% 1. This table is the average land value per acre multiplied by the Conservation Scenario. See Table E-1 and E-2. Sources: RCA; Economic & Planning Systems, Inc. Total Land Comparables by Acres Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 35 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx As shown in Table 15, the aggregate land value of the approximately 96,000 acres remaining to be protected as part of the MSHCP as of 2017 is estimated at about $1.3 billion in 2017 dollars. This represents an average land value of about $13,500 per acre. To convert this land value into 2019 dollars terms (similar to the rest of the analysis), EPS indexed the value to about $14,300 per acre in 2019-dollar terms.25 Other Costs—Administration, Management, and Monitoring Program administration, reserve management, and reserve monitoring are required functions that require annual funding. The forecasts for each of these cost categories are described below. Administration and Professional Service Costs The Western Riverside County Regional Conservation Authority is responsible for implementing the MSHCP. Since 2004, RCA staff members have directed the acquisition, management, and monitoring of the local portion of the Additional Reserve Land (ARL) required by the MSHCP, monitored State and federal Public/Quasi-Public lands and the State and federal portions of the ARL, and undertook all of the administrative tasks associated with maintaining the permit. Costs categorized in this fee study under MSHCP administration include all RCA staff costs and other costs like building rents and average expenditures on non-acquisition related professional services that are not anticipated to vary as the size of the ARL increases. The forecast for the acquisition period assumes that these costs will remain at approximately $4.2 million in constant 2019 dollars, increasing with inflation but not increasing as the size of the ARL grows (see Table 16). This includes salaries and benefits of about $2.3 million annually and about $1.5 million in professional services, supplies, and other costs. 25 Two years of inflation (2017 – 2019) based on by BLS CPI adjustment for Riverside-San Bernardino-Ontario Metro Area. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 36 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 16 Administrative and Professional Services Costs Management and Monitoring Reserve Management The MSHCP describes reserve management activities focused on maintaining and improving habitat conditions and ecosystem functions including habitat and landscape-based activities and species-specific activities. For the purposes of this analysis, the average per acre cost estimate for Reserve Management as reported in the RCA actual spending for FY 2018-19 has been used to inform cost projections through the full acquisition period. Because RCA staff and relevant contractors have indicated that the current spending on staff capacity is not adequate to accomplish necessary management with existing land holdings, additional staffing and associated expenditures have been added to the current reserve management expenditures. Specifically, three new full time equivalent (FTE) positions are added to the current 2019 spending for reserve management. Overall, the 2019 per acre reserve management cost of $25.39 per acre was adjusted to $32.70 per acre (2019 dollars) to account for three new mid-level park ranger FTEs. While as of the end of 2019 about 40,200 acres were under management, ultimately, reserve management activities will cover the entire 97,000 acres to be acquired by the RCA. Biological Monitoring The purpose of biological monitoring is to provide Reserve Managers with information and data upon which reserve management decisions will be made. According to the MSHCP, the monitoring program must provide “sufficient, scientifically reliable data for Reserve Managers to assess the MSHCP’s effectiveness at meeting resource objectives and achieving or maintaining a Expenditures RCA FY16/17- 18/19 3-Year Average of Actuals CPI Adjusted to 2019$1 Total Salaries and Employee Benefits $2,219,261 $2,288,495 Professional Services and Supplies Environmental Legal $394,320 $406,621 Auditing, Accounting & Financial Services $101,717 $104,891 GIS Services $10,000 $10,312 Personnel Services $13,920 $14,354 Real Estate Services $653,774 $674,169 Other Services $247,979 $255,715 Subtotal $1,421,710 $1,466,062 Other Charges $388,145 $400,254 Total $4,029,116 $4,154,811 Sources: Western Riverside County Regional Conservation Authority; Bureau of Labor Statistics; (1) Three year average CPI-adjusted by one year, the average of the annual CPI adjustments for the three years. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 37 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx healthy MSHCP Conservation Area in perpetuity.” Unlike the RCA’s reserve management activities which are limited to local ARL acres, the RCA will ultimately be responsible for monitoring all 500,000 acres of the reserve lands mandated under the MSHCP. The acreage currently being monitored totals roughly 408,000 acres. For the purposes of this analysis, the $1.1 million annual cost estimate based on FY 2018-19 actual spending was used to inform cost projections through the full acquisition period. Because current staff capacity is not adequate to accomplish necessary biological monitoring with existing land holdings, to address the additional land acquisitions, two new full time equivalent (FTE) positions are added to the current 2019 spending for reserve monitoring. The 2019 per acre reserve monitoring cost of $2.67 was adjusted to $3.01 (2019 dollars) to account for two new entry-level biologist FTEs. (see Table 17). This constant dollar per acre cost was assumed to apply throughout the period of implementation. Reserve Management and Biological Monitoring Costs Table 17 summarizes estimated per acre costs for reserve management and monitoring in 2019 dollars. Applying these per acre costs (in 2019 dollars) to current acreage under management and monitoring projects results in annual costs of $1.32 million and $1.23 million, respectively. The annual reserve management and biological monitoring costs increase as new acquisitions occur. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 38 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 17 Management and Monitoring Anticipated Costs in 2004 and 2019 Dollars Endowment Funding The overall permit period was set at 75 years, ending in 2079. To cover ongoing management and monitoring costs beyond the duration when mitigation fees will be collected, the establishment of a non-depleting endowment is required. In other words, the endowment must be sufficient such that expected average interest revenues (after inflation and transaction costs) can cover the ongoing costs associated with administration, management and monitoring in perpetuity. This section summarizes the estimated cost of establishing this endowment under the different scenarios. A key assumption is that the endowment must be fully established by Reserve Management1 Acres under Management 40,212 Existing Reserve Management Expenses $1,021,000 Additional Staff Capacity Required3 $294,000 Total Reserve Management Expenses $1,315,000 $/Acre $32.70 $/Acre without additional staff capacity $25.39 Biological Monitoring2 Acres being Monitored 408,820 Existing Biological Monitoring Expenses $1,092,000 Additional Staff Capacity Required3 $140,000 Total Biological Monitoring Expenses $1,232,000 $/Acre $3.01 $/Acre without additional staff capacity $2.67 Item Actual FY 2019 Spending 3. Current staff capacity is not sufficient to accomplish necessary management and monitoring. An Expanded staff capacity scenario envisions adding 3 FTE mid- level park rangers to Reserve Management and 2 FTE entry-level biologists to Reserve Monitoring, with salaries and benfits of $98,000 and $70,000 ti l Sources: Western Riverside County Regional Conservation Authority; and Economic & Planning Systems, Inc. 1. Reserve Management costs include Parks & Open Space contract fees, maintenance of motor vehicles, and HOA dues. 2. Biological Monitoring costs include SAWA contract fees, office and computer supplies, training, private mileage reimbursement, building rent, and rental vehicles/fuel. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 39 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx the end of the land acquisition period as it is assumed that no more mitigation fees will be collected at that time.26 For the purposes of this analysis, we have assumed that habitat management and habitat monitoring costs continue in full, while administration costs are reduced by half following the end of the land acquisition period. All of these costs then continue in perpetuity. As a result and as shown in Table 18, the endowment is sized to cover the expected annual management and monitoring costs and 50 percent of the administration costs, totaling $6.8 million (2019 dollars) once all lands have been acquired. Table 18 Annual Implementation Cost Estimate (2019$) Consistent with many regional habitat conservations plans, the average annual net, real (allowing for inflation and institutional fees) interest rate is assumed to be three (3) percent.27 Under all extension scenarios, the total required endowment funding is $225.2 million. Because the longer extension periods provide more time for the accrual of interest revenues, the net endowment cost (that must be funded by mitigation fees) is different for each scenario. Table 19 shows the consistent total endowment funding required by scenario as well as the different levels of aggregate endowment interest and associated net endowment funding requirement. For a detailed time-series accounting of endowment funding by extension scenario, see Appendix II. 26 It is important to note that the RCA has collected a distinct set of endowment funds for situations where specific conservation activities are required over-and-above the core activities covered by this endowment calculation. 27 This assumes that the implementing entity can use investment vehicles that may be not be typical for Riverside County. Annual Cost Cost Categories by Last Year of Land Acquisition Period Adjustment Ongoing Habitat Management $3,172,063 100%$3,172,063 Ongoing Habitat Monitoring $1,506,776 100%$1,506,776 Administration1 $4,154,811 50%$2,077,406 Total $8,833,650 $6,756,244 1. Adminsitration includes salaries and benefits, accounting, auditing and reporting, contracts, etc.. Assumes less administration is needed following the land acquisition period; ongoing adminsitrative needs include oversight, auditing and reporting, and board staffing. Sources: Western Riverside County Regional Conservation Authority; and Economic & Planning Systems, Inc. Annual Post-Land Acquisition Cost Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 40 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 19 Endowment Funding (2019$), by Extension Scenario Total Implementation Costs Implementation costs include land costs, administrative and professional services expenses, management and monitoring costs, and the required net endowment funding. The remaining MSHCP implementation costs, as described in detail in the preceding sections, are all estimated in 2019 constant dollar terms. Under the Baseline/ No Extension scenario, as shown in Figure 9, the $702 million in estimated land acquisition costs make up 72 percent of the total implementation cost of $974 million. Administrative costs total about 4 percent of total costs, management and monitoring sum to 3 percent of total implementation costs, and the endowment constitutes 21 percent of total costs. Figure 9 Comparison of Costs by Category Total implementation costs vary by extension scenario. Land acquisition costs are the same for all scenarios. Administrative, management and monitoring costs increase the longer the acquisition period is extended, but the endowment funding required decreases the longer the No Extension 5-Year Extension 10-Year Extension 15-Year Extension Total Endowment Funding Required $225,208,133 $225,208,133 $225,208,133 $225,208,133 (Less) Endowment Interest ($25,695,187)($40,679,628)($54,846,349)($68,206,990) Net Endowment Funding Required $199,512,947 $184,528,506 $170,361,785 $157,001,144 Item Sources: Western Riverside County Regional Conservation Authority; and Economic & Planning Systems, Inc. Land Acqusition 72% M&M 3% RCA Staff 2% Prof Svcs+Misc 2% Endowment 21% Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 41 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx acquisition period is extended. As shown in Table 20, total implementation costs range from $890 million to $967 million depending on the extension period. Although total costs over time increase with longer extension periods the per-year implementation costs decrease with longer extension periods, as shown in Table 21. For a detailed time-series of all implementation costs excepting the endowment, see Appendix I. Table 20 Total Implementation Costs (2019$*), by Extension Scenario * All costs are provided in constant 2019 dollar terms. Costs will change over time due to inflation and other factors. These changes will be addressed through the fee indexing/ updating process that will include automatic inflation-indexed fee changes annually based on the regional Consumer Price Index and periodic comprehensive updates to the Nexus Study. Total for Total for Total for Total for 2020 - 2028 2020 - 2033 2020 - 2038 2020 - 2043 No Extension 5-Yr Extension 10-Yr Extension 15-Yr Extension Land 1 $701,931,902 $701,931,902 $701,931,902 $701,931,902 Management & Monitoring $33,582,193 $51,646,790 $69,711,387 $87,775,983 RCA Staff 2 $20,596,453 $32,038,927 $43,481,401 $54,923,875 Professional Services and Supplies 2 $13,194,561 $20,524,873 $27,855,185 $35,185,497 Loan Repayment 3 $2,000,000 $2,000,000 $2,000,000 $2,000,000 Other Costs 2 4 $3,602,285 $5,603,554 $7,604,824 $9,606,093 Net Endowment Funding Required $199,512,947 $184,528,506 $170,361,785 $157,001,144 Total Costs $974,420,341 $998,274,552 $1,022,946,483 $1,048,424,494 Sources: Western Riverside County RCA; Economic & Planning Systems, Inc. Local Permittee MSHCP Implementation Costs 1. Land value estimates at $14,288 per acre in 2019 dollar terms. 2. RCA Administrative Costs are based on a three year average of FY 2016-17 through FY 2018-19 actual costs, adjusted to 2019 dollars. 3. RCA has “Other Long Term Obligations” totaling $5 million, which was a loan received from the County in FY 2012/13 and is now payable in increments of $1 million starting in FY 2018. 4. Includes rents and all other miscellaneous expenses. NOTE: In some cases numbers may not perfectly sum due to rounding. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 42 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 21 Average Annual Implementation Costs (2019$), by Extension Scenario 2020 - 2028 2020 - 2033 2020 - 2038 2020 - 2043 No Extension 5-Yr Extension 10-Yr Extension 15-Yr Extension Land 1 $77,992,434 $50,137,993 $36,943,784 $29,247,163 Management & Monitoring $3,731,355 $3,689,056 $3,669,020 $3,657,333 RCA Staff 2 $2,288,495 $2,288,495 $2,288,495 $2,288,495 Professional Services and Supplies 2 $1,466,062 $1,466,062 $1,466,062 $1,466,062 Loan Repayment 3 $222,222 $142,857 $105,263 $83,333 Other Costs 2 4 $400,254 $400,254 $400,254 $400,254 Net Endowment Funding Required $22,168,105 $13,180,608 $8,966,410 $6,541,714 Total Costs $108,268,927 $71,305,325 $53,839,289 $43,684,354 3. RCA has “Other Long Term Obligations” totaling $5 million, which was a loan received from the County in FY 2012/13 and is now payable in increments of $1 million starting in FY 2018. 4. Includes rents and all other miscellaneous expenses. Average AnnualLocal Permittee MSHCP Implementation Costs Sources: Western Riverside County RCA; Economic & Planning Systems, Inc. 1. Land value estimates at $14,288 per acre in 2019 dollar terms. 2. RCA Administrative Costs are based on a three year average of FY 2016-17 through FY 2018-19 actual costs, adjusted to 2019 dollars. NOTE: In some cases numbers may not perfectly sum due to rounding. Economic & Planning Systems, Inc. 43 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx 6. RCA NON-FEE REVENUES MSHCP Forecast of Non-Fee Revenues The MSHCP forecast an array of revenue sources, in addition to fee revenue, supporting the conservation program. These sources were anticipated to total about 44 percent of the revenue for the program, including: • Transportation funding – includes the Measure A sales tax which is authorized through 2039 and other transportation funding sources such as the Transportation Uniform Mitigation Fees (TUMF) charged on new development. Note that the MSHCP envisioned up to $121 million of Measure A money to the HCP. • Other infrastructure projects – funding from this source was not quantified in the MSHCP but reflected the expectation that local public construction projects such as schools, administrative facilities, libraries, jails, and other projects like flood control and utility projects would mitigate the construction through the payment of a per-acre fee.28 Since MSHCP adoption, the standard contribution has been three to five percent of total project costs. • Landfill contributions – Landfill tipping fees have been used in the County since the 1990 for conservation programs. Under county permitting of landfills, the County has committed to divert portions of tipping fees to MSHCP implementation. Table 22 and Figure 10 summarizes the revenue forecasts under the MSHCP. Including the fee revenues, these sources totaled $1.07 billion or an estimated average almost $43 million per year for 25-years (in 2004 dollars). Excluding fee revenues, a total of $18.84 million in annual revenues were forecast, including Measure A funding, $10 million each year from other transportation projects, and $4.0 million from land fill contributions. As described further below, at this point, the average annual funding from non-fee revenues sources are well below the MSCHP forecast. Measure A, a voter-approved ½ cent sales tax measure did provide substantial funding as envisioned (though is now fully used/ allocated) and, collectively, the other non-fee funding sources are well beyond what was originally envisioned. 28 See Chapter 8.5.1 Funding Sources in the MSHCP. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 44 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 22 2004 MSHCP Anticipated Funding Sources Figure 10 2004 MSHCP Anticipated Funding Sources New Forecast of Non-Fee Revenues Non-fee revenues to the RCA are projected to be $6.85 million annually in 2019 dollars. This estimate was derived from a line by line review of the major revenue items for a 3-year period from FY 2016-17 to FY 2018-19, projections by collection entities (e.g., TUMF revenue), and recent dynamics likely to affect the revenue source (e.g., greater diversion of trash to recycling MSHCP Anticipated Funding Source Estimate (millions) % of Total Avg/Yr (millions over 25 years) Fee Funded Sources: Cities and County Development Mitigation Fees $539.6 50%$21,584,000 Density Bonus Fees $66.0 6%$2,640,000 Non-Fee Funded Sources $605.6 $24,224,000.0 Public Funding Sources Local Roads (Measure A)$121.0 11%$4,840,000 Other Transportation $250.0 23%$10,000,000 Other infrastructure Projects unknown 0%$0 El Sobrante Landfill $90.0 8%$3,600,000 County Landfills $10.0 1%$400,000 Eagle Mountain Landfill unknown 0%$0 New Regional funding unknown 0%$0 Non-Fee Funded Sources $471.0 $18,840,000 Total, Local Funds $1,076.6 100%$43,064,000 Fee funded 56% Local Roads 11% Other Transportation 23% El Sobrante/Other County Landfills 10% Non-Fee Funded 44% Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 45 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx will likely reduce tipping fees). The estimates have been inflated from a three-year average to 2019 dollars, as detailed in Table 23. Table 23 Annual Non-Fee Revenue Projection (2019$s) Non-Fee Revenue Item RCA FY16/17- 18/19 3-Year Average of Actuals CPI Adjusted to 2019$ Transportation Mitigation1 TUMF Revenue-Developer Fees $950,000 $979,637 Subtotal $950,000 $979,637 Tipping Fee $3,865,728 $3,986,326 Public Project Mitigation PSE Mitigation Fee2 NA $500,000 Other Gov MSHCP Infrastructure $284,570 $293,448 Other Gov MSHCP Civic Projects $93,629 $96,550 Flood Control District $293,084 $302,227 Subtotal $671,283 $1,192,225 Other Revenue Interest and Other Sources $467,073 $481,644 Rents $80,531 $83,043 Joint Project Review Fees $124,762 $128,654 Subtotal $672,365 $693,341 Total Revenue NA $6,851,529 1. All Measure A funding was provided prior to 2020 and the associated obligations have been met. 2. Participating Special Entities fees. This does not include Developer Mitigation Fees. These fees vary widely year over year, $500,000 is used as an annual average per the recommendation of RCA staff. Sources: Western Riverside County Regional Conservation Authority; Economic & Planning Systems, Inc. Economic & Planning Systems, Inc. 46 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx 7. MITIGATION FEE CALCULATION The revised Local Development Mitigation Fee is based on a generally similar methodology to the Original Nexus Study that ensures the fee level is proportional to the development impact. This methodology looks at the remaining conservation requirements associated with Local Permittee obligations under the MSHCP and associated Incidental Take Permit and Implementing Agreement, determines the remaining Local Permittee implementation cost, subtracts out reasonable estimates of non-fee revenues and other contributions, to determine the overall fee- funding obligation. This obligation is then divided among the new development forecast to determine the required mitigation fee. In others words, the original 2003 and updated 2020 Local Development Mitigation Fee estimates are the outcome of the following formula (the 2003 and 2020 Nexus Studies differ in their process of allocating funding required between land uses): 1. Implementation Costs minus 2. Non-Fee Funding equals 3. Outstanding Funding Required divided by 4. Development Forecast equals 5. Local Development Mitigation Fee Schedule Table 24 summarizes the estimated Net Implementation Costs, Expected Acres of Development, and the associated per gross acre mitigation fee. As shown, the average mitigation fee per gross acre decreases with each extension as similar levels of net implementation costs are spread across more development. Tables 25 through 28 provide the detailed calculations that determine the total net MSHCP implementation costs shown in Table 24. As noted in Chapter 1, for residential development, the per-gross-acre fee is translated into a per-unit fee schedule for administrative continuity. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 47 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 24 MSHCP Implementation Costs and Per Acre Mitigation Fees Fee Per Acre No Extension 5-Year Extension 10-Year Extension 15-Year Extension Net Cost $912,756,583 $902,353,150 $892,767,438 $883,987,805 Acres of Development Residential 14,026 21,818 29,611 37,403 Nonresidential 6,239 9,705 13,171 16,637 Total 20,265 31,523 42,782 54,040 Mitigation Fee per Acre $45,041 $28,625 $20,868 $16,358 Sources: Southern California Association of Governments; Western Riverside County RCA; Economic & Planning Systems, Inc. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 48 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 25 Recommended Fee Level—No Extension Total for 2020 - 2029 Item (Years 17 - 25)9 yrs Local Permittee Land Requirements Preservation Requirement 56,788 acres 6,310 acres na (less) HANS Dedication 10,000 acres 1,111 acres na Local Permittee Acquisition 46,788 acres 5,199 acres na Local Permittee MSHCP Implementation Costs Land (1)$701,931,902 $77,992,434 72.0% Management & Monitoring $33,582,193 $3,731,355 3.4% RCA Staff (2)$20,596,453 $2,288,495 2.1% Professional Services and Supplies (2)$13,194,561 $1,466,062 1.4% Loan Repayment (3)$2,000,000 $222,222 0.2% Other Costs (2) (4)$3,602,285 $400,254 0.4% Net Endowment Funding Required $199,512,947 $22,168,105 20.5% Total Costs $974,420,341 $108,268,927 100.0% Offsetting Revenues (5) (exc. Private Development Mitigation) Public Project Mitigation (6)$10,730,025 $1,192,225 1.4% Transportation Mitigation (7)$8,816,731 $979,637 1.1% Tipping Fees $35,876,934 $3,986,326 4.6% Other Revenues (8)$6,240,068 $693,341 0.8% Total Selected Revenues $61,663,758 $6,851,529 8.0% Funding Required from Private Development Mitigation Net Cost $912,756,583 $101,417,398 93.7% Mitigation Fee Estimates (per gross acre of development) Growth Projection: Development 2020 - 2028 Annual Residential Units 79,000 8,778 Residential Acres 14,026 1,558 Non-Residential Acres 6,239 693 Total Acres 20,265 2,252 Mitigation Fee $45,041 per acre (1) Land value estimates at $14,288 per acre in 2019 dollar terms plus a 5% transaction cost. (4) Includes rents and all other miscellaneous expenses. (5) RCA Revenues are based on a three year average of FY 2016-17 through FY 2018-19 actual costs, adjusted to 2019 dollars. (7) Includes TUMF fees. (8) Includes interest and other sources, rents, and joint project review fees. Sources: MSHCP; RCA; Economic & Planning Systems, Inc. % of Total Cost/ Funding Need Average Annual (6) Includes Flood Control District, PSE mitigation payments, and other government MSHCP infrastructure & civic project revenues. (3) RCA has “Other Long Term Obligations” totaling $2 million, which was a loan received from the County in FY 2012/13 and is now payable in increments of $1 million over the course of two years. (2) RCA Administrative Costs are based on a three year average of FY 2016-17 through FY 2018-19 actual costs, adjusted to 2019 dollars. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 49 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 26 Recommended Fee Level—5-Year Extension Total for 2020 - 2034 Item (Years 17 - 30)14 yrs Local Permittee Land Requirements Preservation Requirement 56,788 acres 4,056 acres na (less) HANS Dedication 10,000 acres 714 acres na Local Permittee Acquisition 46,788 acres 3,342 acres na Local Permittee MSHCP Implementation Costs Land (1)$701,931,902 $50,137,993 70.3% Management & Monitoring $51,646,790 $3,689,056 5.2% RCA Staff (2)$32,038,927 $2,288,495 3.2% Professional Services and Supplies (2)$20,524,873 $1,466,062 2.1% Loan Repayment (3)$2,000,000 $142,857 0.2% Other Costs (2) (4)$5,603,554 $400,254 0.6% Net Endowment Funding Required $184,528,506 $13,180,608 18.5% Total Costs $998,274,552 $71,305,325 100.0% Offsetting Revenues (5) (exc. Private Development Mitigation) Public Project Mitigation (6)$16,691,150 $1,192,225 2.1% Transportation Mitigation (7)$13,714,915 $979,637 1.7% Tipping Fees $55,808,564 $3,986,326 6.9% Other Revenues (8)$9,706,772 $693,341 1.2% Total Selected Revenues $95,921,402 $6,851,529 11.8% Funding Required from Private Development Mitigation Net Cost $902,353,150 $64,453,796 90.4% Mitigation Fee Estimates (per gross acre of development) Growth Projection: Development 2020 - 2033 Annual Residential Units (4.2 DU/Acres)122,456 8,747 Residential Acres 21,818 1,558 Non-Residential Acres 9,705 693 Total Acres 31,523 2,252 Mitigation Fee $28,625 per acre (1) Land value estimates at $14,288 per acre in 2019 dollar terms plus a 5% transaction cost. (4) Includes rents and all other miscellaneous expenses. (5) RCA Revenues are based on a three year average of FY 2016-17 through FY 2018-19 actual costs, adjusted to 2019 dollars. (7) Includes TUMF fees. (8) Includes interest and other sources, rents, and joint project review fees. Sources: MSHCP; RCA; Economic & Planning Systems, Inc. % of Total Cost/ Funding Need Average Annual (6) Includes Flood Control District, PSE mitigation payments, and other government MSHCP infrastructure & civic project revenues. (3) RCA has “Other Long Term Obligations” totaling $2 million, which was a loan received from the County in FY 2012/13 and is now payable in increments of $1 million over the course of two years. (2) RCA Administrative Costs are based on a three year average of FY 2016-17 through FY 2018-19 actual costs, adjusted to 2019 dollars. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 50 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 27 Recommended Fee Level—10-Year Extension Total for 2020 - 2039 Item (Years 17 - 35)19 yrs Local Permittee Land Requirements Preservation Requirement 56,788 acres 2,989 acres na (less) HANS Dedication 10,000 acres 526 acres na Local Permittee Acquisition 46,788 acres 2,463 acres na Local Permittee MSHCP Implementation Costs Land (1)$701,931,902 $36,943,784 68.6% Management & Monitoring $69,711,387 $3,669,020 6.8% RCA Staff (2)$43,481,401 $2,288,495 4.3% Professional Services and Supplies (2)$27,855,185 $1,466,062 2.7% Loan Repayment (3)$2,000,000 $105,263 0.2% Other Costs (2) (4)$7,604,824 $400,254 0.7% Net Endowment Funding Required $170,361,785 $8,966,410 16.7% Total Costs $1,022,946,483 $53,839,289 100.0% Offsetting Revenues (5) (exc. Private Development Mitigation) Public Project Mitigation (6)$22,652,275 $1,192,225 2.7% Transportation Mitigation (7)$18,613,099 $979,637 2.2% Tipping Fees $75,740,195 $3,986,326 8.9% Other Revenues (8)$13,173,476 $693,341 1.5% Total Selected Revenues $130,179,045 $6,851,529 15.3% Funding Required from Private Development Mitigation Net Cost $892,767,438 $46,987,760 87.3% Mitigation Fee Estimates (per gross acre of development) Growth Projection: Development 2020 - 2038 Annual Residential Units (4.2 DU/Acres)166,000 8,737 Residential Acres 29,611 1,558 Non-Residential Acres 13,171 693 Total Acres 42,782 2,252 Mitigation Fee $20,868 per acre (1) Land value estimates at $14,288 per acre in 2019 dollar terms plus a 5% transaction cost. (4) Includes rents and all other miscellaneous expenses. (5) RCA Revenues are based on a three year average of FY 2016-17 through FY 2018-19 actual costs, adjusted to 2019 dollars. (7) Includes TUMF fees. (8) Includes interest and other sources, rents, and joint project review fees. Sources: MSHCP; RCA; Economic & Planning Systems, Inc. (6) Includes Flood Control District, PSE mitigation payments, and other government MSHCP infrastructure & civic project revenues. Average Annual (2) RCA Administrative Costs are based on a three year average of FY 2016-17 through FY 2018-19 actual costs, adjusted to 2019 dollars. % of Total Cost/ Funding Need (3) RCA has “Other Long Term Obligations” totaling $2 million, which was a loan received from the County in FY 2012/13 and is now payable in increments of $1 million over the course of two years. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 51 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx Table 28 Recommended Fee Level—15-Year Extension Total for 2020 - 2044 Item (Years 17 - 40)24 yrs Local Permittee Land Requirements Preservation Requirement 56,788 acres 2,366 acres na (less) HANS Dedication 10,000 acres 417 acres na Local Permittee Acquisition 46,788 acres 1,950 acres na Local Permittee MSHCP Implementation Costs Land (1)$701,931,902 $29,247,163 67.0% Management & Monitoring $87,775,983 $3,657,333 8.4% RCA Staff (2)$54,923,875 $2,288,495 5.2% Professional Services and Supplies (2)$35,185,497 $1,466,062 3.4% Loan Repayment (3)$2,000,000 $83,333 0.2% Other Costs (2) (4)$9,606,093 $400,254 0.9% Net Endowment Funding Required $157,001,144 $6,541,714 15.0% Total Costs $1,048,424,494 $43,684,354 100.0% Offsetting Revenues (5) (exc. Private Development Mitigation) Public Project Mitigation (6)$28,613,400 $1,192,225 3.2% Transportation Mitigation (7)$23,511,283 $979,637 2.6% Tipping Fees $95,671,825 $3,986,326 10.7% Other Revenues (8)$16,640,181 $693,341 1.9% Total Selected Revenues $164,436,689 $6,851,529 18.4% Funding Required from Private Development Mitigation Net Cost $883,987,805 $36,832,825 84.3% Mitigation Fee Estimates (per gross acre of development) Growth Projection: Development 2020 - 2043 Annual Residential Units 210,000 8,750 Residential Acres 37,403 1,558 Non-Residential Acres 16,637 693 Total Acres 54,040 2,252 Mitigation Fee $16,358 per acre (1) Land value estimates at $14,288 per acre in 2019 dollar terms plus a 5% transaction cost. (4) Includes rents and all other miscellaneous expenses. (5) RCA Revenues are based on a three year average of FY 2016-17 through FY 2018-19 actual costs, adjusted to 2019 dollars. (7) Includes TUMF fees. (8) Includes interest and other sources, rents, and joint project review fees. Sources: MSHCP; RCA; Economic & Planning Systems, Inc. (6) Includes Flood Control District, PSE mitigation payments, and other government MSHCP infrastructure & civic project revenues. (3) RCA has “Other Long Term Obligations” totaling $2 million, which was a loan received from the County in FY 2012/13 and is now payable in increments of $1 million over the course of two years. (2) RCA Administrative Costs are based on a three year average of FY 2016-17 through FY 2018-19 actual costs, adjusted to 2019 dollars. Average Annual % of Total Cost/ Funding Need Economic & Planning Systems, Inc. 52 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx 8. MITIGATION FEE ACT (NEXUS) FINDINGS Mitigation fees are utilized in California to finance public facilities necessary to mitigate impacts stemming from new development. In 1987, the California Legislature adopted the Mitigation Fee Act to provide a framework for the application and administration of such fees. Current prevailing practice among the majority of approved and permitted regional multiple-species Habitat Conservation Plans is that any habitat mitigation fees are to be adopted by the relevant jurisdictions (cities and Counties) consistent with the Mitigation Fee Act.29 As discussed further in Chapter 9, the adoption of fees under the Mitigation Fee Act includes a number of auditing and reporting requirements. The Mitigation Fee Act, defined in California Government Code Sections 66000 to 66025, requires all public agencies to document five findings when establishing or increasing a fee as a condition for new development. These findings were made when the Western Riverside County MSHCP Local Development Mitigation Fees were first justified and established.30 This Chapter of the Western Riverside Habitat Conservation Plan Nexus Fee Study was prepared to describe how the proposed increase in the Local Development Mitigation Fee satisfies the five statutory findings required by the Mitigation Fee Act and is based on the appropriate nexus between new development and the imposition of a mitigation fee. The five statutory findings required for the establishment of a mitigation fee are summarized in the sections below and supported by the technical analysis in the prior chapters of this Study. Purpose of Fee Identify the purpose of the fee. (66001(a)(1)) The purpose of the Local Development Mitigation Fee is to contribute to the funding required to implement the MSCHP and, as a result, help maintain the incidental take permits for new private and public development in Western Riverside County under the federal and State Endangered Species Acts. Maintaining the incidental take permit is necessary to allow for future development, and without the development community paying for the cost of the MSHCP, individual applicants will need to apply independently for development approval under federal and State law if the project impacts a threaten or endangered species. The federal Endangered Species Act specifically requires that the applicant for incidental take permit “ensure that adequate funding for the plan will be provided.”31 In addition, the Local Development Mitigation Fee helps provide the regional benefit of streamlined economic development in Western Riverside County as well as 29 In addition to the current Western Riverside County habitat mitigation fee, see also the Coachella Valley habitat mitigation fee, the San Joaquin County Multi-Species Habitat Conservation and Open Space Fee, and the East Contra Costa County HCP/NCCP mitigation fee. 30 See the Final Mitigation Nexus Report for the Western Riverside County Multiple Species Habitat Conservation Plan, published July 1, 2003. 31 See Section 1539(a)(2)Biii of the federal Endangered Species Act. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 53 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx the provision of contiguous open spaces that will serve as a community amenity to residents, workers, and visitors. Use of Fee Revenues Identify the use to which the fee is to be put. If the use is financing public facilities, the facilities shall be identified. That identification may, but need not, be made by reference to a capital improvement plan as specific in Section 65403 or 66002, may be made in applicable general or specific plan requirements, or may be made in other public documents that identify the public facilities for which the fee is charged. (66001(a)(2)). The MSHCP is the public document that outlines the actions required as a whole and the particular set of actions required by the Local Permittees (and the Regional Conservation Agency as their agent) to obtain incidental take permits—associated with State and federal Endangered Species Act requirements—for new public and private development in Western Riverside County. Failure to meet the requirements of the MSHCP will result in an inability to obtain or maintain incidental take permits through the MSHCP, which would require future development to secure individual take authorization if the project impacts a threaten or endangered species. Revenues from the Local Development Mitigation Fee will be used, in conjunction with other local and regional funding sources, to fund the conservation actions identified as the responsibility of Local Permittees in the MSHCP. The revenue from the Local Development Mitigation Fee will be used to help fund the appropriate habitat acquisition (land acquisition and associated transaction costs), maintenance and monitoring of habitat land (preserve management, monitoring, and adaptive management), and program management, administration, and oversight activities and costs.32 Chapter 3 of this report describes the Local Permittee conservation requirements, progress to date, and the remaining actions required under the MSHCP. Relationship Determine how there is a reasonable relationship between the fee’s use and the type of development project on which the fee is imposed. (66001(a)(3)). The implementation of the MSHCP, and the mitigation fee as a fundamental part of it, will benefit all new development by mitigating their collective impacts on covered species and associated habitat. All new public and private development in the Plan area will affect habitat and species either directly, indirectly, or as a cumulative effect. New infrastructure development, for example, in addition to its direct effects, will support new development on other parcels and other locations in the Plan Area. Similarly, new private development will require new infrastructure and also result in additional demand for new developments through linkages—for 32 Consistent with the interpretation applied to the majority of permitted and approved regional, multiple-species Habitat Conservation Plans in California and guidance from RCA Counsel, the Local Development Mitigation Fee is assumed to fund its proportionate share (as determined by the technical analysis and constrained by the statutory requirements) of applicable MSHCP implementation costs including, but also limited to, habitat acquisition costs (and associated transaction costs), the costs of managing and monitoring the habitat preserves in perpetuity, and the administrative and other costs of managing the overall program. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 54 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx example, the need for new housing to accommodate new workers at commercial developments or the need for new retail developments to serve new residents at residential developments. In other words, all new development in Western Riverside County will benefit from the incidental take permits obtained through the MSHCP and via the use of the mitigation fee revenues. In addition, the incidental take permits are necessary to permit any future development within the Plan Area, and in order to obtain or maintain such incidental take permits, the MSHCP must be fully funded. Because funding the MSHCP is required in order to allow for future development under the MSHCP, there is a direct relationship between the proposed use of the mitigation fee and development within the Plan Area. Need Determine how there is a reasonable relationship between the need for the public facility and the type of development project on which the fee is imposed. (66001(a)(4)). Without new development, no MSHCP would be necessary and no further habitat conservation would be required under the federal and State Endangered Species Acts. To allow for any future development under the Plan, the MSHCP must be fully funded. New development in the Plan Area, as noted above, will directly, indirectly, or cumulatively affect species and habitat in Western Riverside County. Because of this, development of the MSHCP was undertaken to provide a regional, streamlined approach to benefit future development of all types in Western Riverside County, including the development and improvements envisioned under the numerous General Plans and the Regional Transportation Improvement Program. The requirements of the MSHCP (habitat acquisition, management and monitoring, program administration) are a direct result of the regional approach to mitigation that is engendered by all new development in the Plan Area under the pertinent environmental regulations. Meeting the requirements of the MSHCP is necessary to obtain the necessary federal authorization to develop within the Plan Area. Proportionality Determine how there is a reasonable relationship between the amount of the fee and the cost of the public facility or portion of the public facility attributable to the development on which the fee is imposed. (66001(b)). The MSHCP includes detailed conservation requirements based on the scientific evaluations that form the basis of the MSHCP. Based on these evaluations, conservation responsibilities were allocated between the Local Permittees and other agencies, such as the State and federal governments. The Local Development Mitigation Fee appropriately provides funding towards the fulfillment of the Local Permittee conservation requirements. Furthermore, the Local Permittee obligations are not fully funded through the Local Development Mitigation Fee revenues. Other local and regional funding sources, such as the Measure A sales tax and tipping fees, provide additional mitigation and/or offsetting revenues that reduce the overall cost allocation to the Local Development Mitigation Fee Program. In addition, consistent with the relationship between new development in Western Riverside County and the need for the public facilities (conservation program) described above, proportional attribution between new development is ensured Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 55 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx through the determination of a consistent per gross acre Local Development Mitigation Fee.33 As a result, the Local Development Mitigation Fee level calculations are carefully determined to fund only the proportionate (or less than) conservation costs attributable to the new development on which the fee is imposed and to allocate the fee levels proportionally across all new development. It is this process of careful calculation based on the requirements of the MSHCP that is the subject of a substantial portion of this Nexus Study (see Chapters 2 through 7). 33 Determining habitat mitigation fees on a gross acre basis is the clearest way of ensuring proportionate cost allocations among new developments and is a common practice among adopted Habitat Conservation Plans. For purposes of implementation/administrative consistency, for residential uses, the per-gross-acre fee is translated into per unit fees for different density categories. Economic & Planning Systems, Inc. 56 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx 9. FEE IMPLEMENTATION The revised Local Development Mitigation Fee must be implemented consistent with the MSHCP (and associated Incidental Take Permit and Implementing Agreement) as well as the California Mitigation Fee Act. A detailed set of guidance is included in the Fee Implementation Handbook to support clarity and specificity in the implementation of the updated fee program by Local Permittees. The sections below summarize some of the key implementation and administration actions to be consistent with the requirements. Adoption of Revised LDMF • Consistent with the MSHCP and associated documents, each Local Permittee (i.e., all participating jurisdictions) must adopt an updated LDMF ordinance and a fee resolution establishing the revised fee level as prescribed by the Mitigation Fee Act. • Consistent with the Mitigation Fee Act, the revised ordinance and associated fee resolution will become effective after a public hearing and 60 days. • RCA Legal Counsel will prepare a Fee Update Ordinance and Resolution to facilitate the consistent adoption of the updated LDMF by Local Permittees. Securing Supplemental Funding The revised Local Development Mitigation Fee is set at the level that would cover the Local Permittee cost obligations once expected non-fee revenues are subtracted out. To the extent any discounts/exemptions are provided to new Western Riverside County development below the updated fee level, additional funding will be required to backfill the fee revenue losses. To the extent, these revenues do not make up for any fee discounts provided, other sources of funding will need to be sought by the RCA and the Local Permittees to fulfill their Plan obligations. At the same time, if new substantial funding sources become available to the RCA for Local Permittee obligations, the funding required through fees may decrease, in turn reducing the required fee levels through a new update. Annual Review The Mitigation Fee Act (at Gov. C. §§ 66001(c), 66006(b)(1)) stipulates that each local agency that requires payment of a fee make specific information available to the public annually within 180 days of the last day of the fiscal year. In this case, the RCA can play this role on behalf of the Local Permittees. This information includes the following: • A description of the type of fee in the account. • The amount of the fee (the mitigation fee schedule). • The beginning and ending balance of the fund. • The amount of fees collected and interest earned. • Identification of the improvements constructed. • The total cost of the improvements constructed. • The fees expended to construct the improvement. • The percentage of total costs funded by the fee. Western Riverside County Multiple Species Habitat Conservation Plan Nexus Fee Study Update Final Report October 2020 Economic & Planning Systems, Inc. 57 C:\Users\ktraynor\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\YAAP6MDD\NexusStudy_Final_23Oct2020.docx If sufficient fees have been collected to fund specific improvement cost, the agency must specify the approximate date for the cost of that improvement. Because of the dynamic nature of growth and MSHCP implementation costs and consistent with current practice, the RCA should continue to monitor progress towards MSHCP goals. The overall adequacy of the fee revenues and other available funding in meeting these goals should be reviewed annually. Surplus Funds The Mitigation Fee Act also requires that if any portion of a fee remains unexpended or uncommitted in an account for 5 years or more after deposit of the fee, the RCA, acting for the Local Permittees, shall make findings once each year (1) to identify the purpose to which the fee is to be put, (2) to demonstrate a reasonable relationship between the fee and the purpose for which it was charged, (3) to identify all sources and amounts of funding anticipated to complete financing of incomplete improvements, and (4) to designate the approximate dates on which the funding identified in (3) is expected to be deposited into the appropriate fund (§66001(d)). If adequate funding has been collected for specific investments, an approximate date must be specified as to when the cost of the investment will be incurred. If the findings show no need for the unspent funds, or if the conditions discussed above are not met, and the administrative costs of the refund do not exceed the refund itself, the local agency that has collected the funds must refund them (Gov. C §66001(e)(f)). Annual and Periodic Updates Consistent with the current practice, the Fee Ordinance should allow an automatic annual adjustment to the fees based on the Riverside-San Bernardino-Ontario, CA Consumer Price Index (CPI) or a similar inflation factor. In addition, a more comprehensive update should be conducted required periodically. The Nexus Study and the technical information it contains should be reviewed periodically by the RCA (every five years is recommended) to identify any necessary refinements to the Local Development Mitigation Fees to ensure adequate funding to implement the MSHCP. Under certain circumstances, the RCA may wish to conduct a Nexus Study update sooner than after five years. For example, to the extent there are significant and unexpected changes in implementation costs, in the level of non-fee funding, and/ or the level of fee-paying private development over time, a more immediate fee update may be appropriate. APPENDIX I: Detailed Time Series of Implementation Costs All Implementation Costs Over Time – No Extension Factors 17 18 19 20 21 22 23 24 25 Cost Items 2020 2021 2022 2023 2024 2025 2026 2027 2028 ACRES Land Acuisition Costs Land Acquisition (Annual) Local 6,310 6,310 6,310 6,310 6,310 6,310 6,310 6,310 6,310 (less) HANS/JPR Dedications -1,250 -1,250 -1,250 -1,250 -1,250 -1,250 -1,250 -1,250 0 Total Local 5,060 5,060 5,060 5,060 5,060 5,060 5,060 5,060 6,310 State/Fed 3,821 3,821 3,821 3,821 3,821 3,821 3,821 3,821 3,821 Total 8,881 8,881 8,881 8,881 8,881 8,881 8,881 8,881 10,131 Land Acquisition (Cumulative) Local 1 45,272 50,332 55,391 60,451 65,511 70,571 75,630 80,690 87,000 State/Fed 25,429 29,251 33,072 36,893 40,715 44,536 48,357 52,179 56,000 Local - HANS/JPR Dedications 1,250 2,500 3,750 5,000 6,250 7,500 8,750 10,000 10,000 Total 71,951 82,082 92,213 102,344 112,476 122,607 132,738 142,869 153,000 Management and Monitoring Costs Monitoring Management State/ Federal PQP RCA State/ Fed 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 ARL RCA State 25,429 29,251 33,072 36,893 40,715 44,536 48,357 52,179 56,000 Total 307,429 311,251 315,072 318,893 322,715 326,536 330,357 334,179 338,000 Local PQP RCA Non-RCA Local 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 ARL RCA RCA 46,522 52,832 59,141 65,451 71,761 78,071 84,380 90,690 97,000 Total 111,522 117,832 124,141 130,451 136,761 143,071 149,380 155,690 162,000 Total Acres under RCA Management 46,522 52,832 59,141 65,451 71,761 78,071 84,380 90,690 97,000 Total Acres under RCA Monitoring 418,951 429,082 439,213 449,344 459,476 469,607 479,738 489,869 500,000 COSTS (all constant 2019 dollars) Land Acquisition Costs Local, ARL, Annual $14,288 $/Acre $72,294,065 $72,294,065 $72,294,065 $72,294,065 $72,294,065 $72,294,065 $72,294,065 $72,294,065 $90,154,055 Land Transaction Costs 5%of acquisition costs $3,614,703 $3,614,703 $3,614,703 $3,614,703 $3,614,703 $3,614,703 $3,614,703 $3,614,703 $4,507,703 Total, Land Acquisition Costs $75,908,768 $75,908,768 $75,908,768 $75,908,768 $75,908,768 $75,908,768 $75,908,768 $75,908,768 $94,661,758 Local, ARL, Cumulative $75,908,768 $151,817,536 $227,726,304 $303,635,072 $379,543,840 $455,452,608 $531,361,376 $607,270,144 $701,931,902 Management and Monitoring Costs Management, Annual $32.70 $/Acre $1,521,340 $1,727,681 $1,934,021 $2,140,361 $2,346,702 $2,553,042 $2,759,382 $2,965,723 $3,172,063 Management Cumulative $1,521,340 $3,249,021 $5,183,042 $7,323,403 $9,670,105 $12,223,147 $14,982,530 $17,948,252 $21,120,315 Monitoring, Annual $3.01 $/Acre $1,262,531 $1,293,061 $1,323,592 $1,354,122 $1,384,653 $1,415,184 $1,445,714 $1,476,245 $1,506,776 Monitoring Cumulative $1,262,531 $2,555,592 $3,879,184 $5,233,306 $6,617,959 $8,033,143 $9,478,857 $10,955,102 $12,461,878 Endowment Costs Net Endowment Funding, Annual $22,168,105 $22,168,105 $22,168,105 $22,168,105 $22,168,105 $22,168,105 $22,168,105 $22,168,105 $22,168,105 Net Endowment Funding, Cumulative $22,168,105 $44,336,210 $66,504,316 $88,672,421 $110,840,526 $133,008,631 $155,176,736 $177,344,842 $199,512,947 Administrative Costs 2 RCA Staff Costs $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 Professional Services $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 Loan Repayment 3 $1,000,000 $1,000,000 $0 $0 $0 $0 $0 $0 $0 Other $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 Total Annual $5,154,811 $5,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 Cumulative Costs $5,154,811 $10,309,622 $14,464,433 $18,619,244 $22,774,055 $26,928,866 $31,083,677 $35,238,488 $39,393,299 TOTAL ALL COSTS TOTAL Annual $106,015,555 $106,252,426 $105,489,297 $105,726,168 $105,963,039 $106,199,910 $106,436,781 $106,673,652 $125,663,513 TOTAL Cumulative $106,015,555 $212,267,981 $317,757,279 $423,483,447 $529,446,486 $635,646,396 $742,083,177 $848,756,829 $974,420,341 1. All local land conserved to date, including all HANS dedications to date, are captured in the year 17 number. 3. Annual administrative costs decrease in year 19 due to assumption that loan repayment is completed. End of: Reserve Summary Financial Responsibility Habitat Lands/ 2. RCA Administrative Costs are based on a three year average of FY 2016-17 through FY 2018-19 actual costs, adjusted to 2019 dollars. All Implementation Costs Over Time – 5 Year Extension Factors 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Cost Items 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 ACRES Land Acuisition Costs Land Acquisition (Annual) Local 4,056 4,056 4,056 4,056 4,056 4,056 4,056 4,056 4,056 4,056 4,056 4,056 4,056 4,056 (less) HANS/JPR Dedications -1,250 -1,250 -1,250 -1,250 -1,250 -1,250 -1,250 -1,250 0 0 0 0 0 0 Total Local 2,806 2,806 2,806 2,806 2,806 2,806 2,806 2,806 4,056 4,056 4,056 4,056 4,056 4,056 State/Fed 2,457 2,457 2,457 2,457 2,457 2,457 2,457 2,457 2,457 2,457 2,457 2,457 2,457 2,457 Total 5,263 5,263 5,263 5,263 5,263 5,263 5,263 5,263 6,513 6,513 6,513 6,513 6,513 6,513 Land Acquisition (Cumulative) Local 1 43,018 45,825 48,631 51,437 54,243 57,050 59,856 62,662 66,719 70,775 74,831 78,887 82,944 87,000 State/Fed 24,065 26,521 28,978 31,434 33,891 36,347 38,804 41,261 43,717 46,174 48,630 51,087 53,543 56,000 Local - HANS/JPR Dedications 1,250 2,500 3,750 5,000 6,250 7,500 8,750 10,000 10,000 10,000 10,000 10,000 10,000 10,000 Total 68,333 74,846 81,359 87,871 94,384 100,897 107,410 113,923 120,436 126,949 133,461 139,974 146,487 153,000 Management and Monitoring Costs Monitoring Management State/ Federal PQP RCA State/ Fed 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 ARL RCA State 24,065 26,521 28,978 31,434 33,891 36,347 38,804 41,261 43,717 46,174 48,630 51,087 53,543 56,000 Total 306,065 308,521 310,978 313,434 315,891 318,347 320,804 323,261 325,717 328,174 330,630 333,087 335,543 338,000 Local PQP RCA Non-RCA Local 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 ARL RCA RCA 44,268 48,325 52,381 56,437 60,493 64,550 68,606 72,662 76,719 80,775 84,831 88,887 92,944 97,000 Total 109,268 113,325 117,381 121,437 125,493 129,550 133,606 137,662 141,719 145,775 149,831 153,887 157,944 162,000 Total Acres under RCA Management 44,268 48,325 52,381 56,437 60,493 64,550 68,606 72,662 76,719 80,775 84,831 88,887 92,944 97,000 Total Acres under RCA Monitoring 415,333 421,846 428,359 434,871 441,384 447,897 454,410 460,923 467,436 473,949 480,461 486,974 493,487 500,000 COSTS (all constant 2019 dollars) Land Acquisition Costs Local, ARL, Annual $14,288 $/Acre $40,096,188 $40,096,188 $40,096,188 $40,096,188 $40,096,188 $40,096,188 $40,096,188 $40,096,188 $57,956,178 $57,956,178 $57,956,178 $57,956,178 $57,956,178 $57,956,178 Land Transaction Costs 5%of acquisition costs $2,004,809 $2,004,809 $2,004,809 $2,004,809 $2,004,809 $2,004,809 $2,004,809 $2,004,809 $2,897,809 $2,897,809 $2,897,809 $2,897,809 $2,897,809 $2,897,809 Total, Land Acquisition Costs $42,100,997 $42,100,997 $42,100,997 $42,100,997 $42,100,997 $42,100,997 $42,100,997 $42,100,997 $60,853,987 $60,853,987 $60,853,987 $60,853,987 $60,853,987 $60,853,987 Local, ARL, Cumulative $42,100,997 $84,201,995 $126,302,992 $168,403,990 $210,504,987 $252,605,985 $294,706,982 $336,807,979 $397,661,967 $458,515,954 $519,369,941 $580,223,928 $641,077,915 $701,931,902 Management and Monitoring Costs Management, Annual $32.70 $/Acre $1,447,647 $1,580,295 $1,712,942 $1,845,589 $1,978,237 $2,110,884 $2,243,532 $2,376,179 $2,508,826 $2,641,474 $2,774,121 $2,906,768 $3,039,416 $3,172,063 Management Cumulative $1,447,647 $3,027,942 $4,740,884 $6,586,474 $8,564,710 $10,675,595 $12,919,126 $15,295,305 $17,804,131 $20,445,605 $23,219,726 $26,126,494 $29,165,910 $32,337,973 Monitoring, Annual $3.01 $/Acre $1,251,627 $1,271,254 $1,290,880 $1,310,507 $1,330,134 $1,349,761 $1,369,388 $1,389,015 $1,408,641 $1,428,268 $1,447,895 $1,467,522 $1,487,149 $1,506,776 Monitoring Cumulative $1,251,627 $2,522,880 $3,813,761 $5,124,268 $6,454,402 $7,804,163 $9,173,551 $10,562,566 $11,971,207 $13,399,476 $14,847,371 $16,314,893 $17,802,041 $19,308,817 Endowment Costs Net Endowment Funding, Annual $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 Net Endowment Funding, Cumulative $13,180,608 $26,361,215 $39,541,823 $52,722,430 $65,903,038 $79,083,645 $92,264,253 $105,444,860 $118,625,468 $131,806,076 $144,986,683 $158,167,291 $171,347,898 $184,528,506 Administrative Costs 2 RCA Staff Costs $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 Professional Services $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 Loan Repayment 3 $1,000,000 $1,000,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 Total Annual Costs $5,154,811 $5,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 Cumulative Costs $5,154,811 $10,309,622 $14,464,433 $18,619,244 $22,774,055 $26,928,866 $31,083,677 $35,238,488 $39,393,299 $43,548,111 $47,702,922 $51,857,733 $56,012,544 $60,167,355 TOTAL ALL COSTS TOTAL Annual $63,135,690 $63,287,964 $62,440,239 $62,592,513 $62,744,787 $62,897,061 $63,049,335 $63,201,610 $82,106,873 $82,259,148 $82,411,422 $82,563,696 $82,715,970 $82,868,244 TOTAL Cumulative $63,135,690 $126,423,655 $188,863,893 $251,456,406 $314,201,193 $377,098,254 $440,147,590 $503,349,199 $585,456,073 $667,715,220 $750,126,642 $832,690,338 $915,406,308 $998,274,552 1. All local land conserved to date, including all HANS dedications to date, are captured in the year 17 number. 3. Annual administrative costs decrease in year 19 due to assumption that loan repayment is completed. End of: Reserve Summary Financial Responsibility Habitat Lands/ 2. RCA Administrative Costs are based on a three year average of FY 2016-17 through FY 2018-19 actual costs, adjusted to 2019 dollars. All Implementation Costs Over Time – 10 Year Extension Factors 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Cost Items 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 ACRES Land Acuisition Costs Land Acquisition (Annual) Local 2,989 2,989 2,989 2,989 2,989 2,989 2,989 2,989 2,989 2,989 2,989 2,989 2,989 2,989 2,989 2,989 2,989 2,989 2,989 (less) Anheuser Busch purchase 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (less) HANS/JPR Dedications -1,250 -1,250 -1,250 -1,250 -1,250 -1,250 -1,250 -1,250 0 0 0 0 0 0 0 0 0 0 0 Total Local 1,739 1,739 1,739 1,739 1,739 1,739 1,739 1,739 2,989 2,989 2,989 2,989 2,989 2,989 2,989 2,989 2,989 2,989 2,989 State/Fed 1,810 1,810 1,810 1,810 1,810 1,810 1,810 1,810 1,810 1,810 1,810 1,810 1,810 1,810 1,810 1,810 1,810 1,810 1,810 Total 3,549 3,549 3,549 3,549 3,549 3,549 3,549 3,549 4,799 4,799 4,799 4,799 4,799 4,799 4,799 4,799 4,799 4,799 4,799 Land Acquisition (Cumulative) Local 1 41,951 43,690 45,429 47,167 48,906 50,645 52,384 54,123 57,112 60,100 63,089 66,078 69,067 72,056 75,045 78,033 81,022 84,011 87,000 State/Fed 23,418 25,228 27,038 28,848 30,659 32,469 34,279 36,089 37,899 39,709 41,519 43,329 45,139 46,949 48,760 50,570 52,380 54,190 56,000 Local - HANS/JPR Dedications 1,250 2,500 3,750 5,000 6,250 7,500 8,750 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 Total 66,619 71,418 76,217 81,016 85,815 90,614 95,413 100,212 105,011 109,809 114,608 119,407 124,206 129,005 133,804 138,603 143,402 148,201 153,000 Management and Monitoring Costs Monitoring Management State/ Federal PQP RCA State/ Fed 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 ARL RCA State 23,418 25,228 27,038 28,848 30,659 32,469 34,279 36,089 37,899 39,709 41,519 43,329 45,139 46,949 48,760 50,570 52,380 54,190 56,000 Total 305,418 307,228 309,038 310,848 312,659 314,469 316,279 318,089 319,899 321,709 323,519 325,329 327,139 328,949 330,760 332,570 334,380 336,190 338,000 Local PQP RCA Non-RCA Local 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 ARL RCA RCA 43,201 46,190 49,179 52,167 55,156 58,145 61,134 64,123 67,112 70,100 73,089 76,078 79,067 82,056 85,045 88,033 91,022 94,011 97,000 Total 108,201 111,190 114,179 117,167 120,156 123,145 126,134 129,123 132,112 135,100 138,089 141,078 144,067 147,056 150,045 153,033 156,022 159,011 162,000 Total Acres under RCA Management 43,201 46,190 49,179 52,167 55,156 58,145 61,134 64,123 67,112 70,100 73,089 76,078 79,067 82,056 85,045 88,033 91,022 94,011 97,000 Total Acres under RCA Monitoring 413,619 418,418 423,217 428,016 432,815 437,614 442,413 447,212 452,011 456,809 461,608 466,407 471,206 476,005 480,804 485,603 490,402 495,201 500,000 COSTS (all constant 2019 dollars) Land Acquisition Costs Local, ARL, Annual $14,288 $/Acre $24,844,562 $24,844,562 $24,844,562 $24,844,562 $24,844,562 $24,844,562 $24,844,562 $24,844,562 $42,704,552 $42,704,552 $42,704,552 $42,704,552 $42,704,552 $42,704,552 $42,704,552 $42,704,552 $42,704,552 $42,704,552 $42,704,552 Land Transaction Costs 5%of acquisition costs $1,242,228 $1,242,228 $1,242,228 $1,242,228 $1,242,228 $1,242,228 $1,242,228 $1,242,228 $2,135,228 $2,135,228 $2,135,228 $2,135,228 $2,135,228 $2,135,228 $2,135,228 $2,135,228 $2,135,228 $2,135,228 $2,135,228 Total, Land Acquisition Costs $26,086,790 $26,086,790 $26,086,790 $26,086,790 $26,086,790 $26,086,790 $26,086,790 $26,086,790 $44,839,780 $44,839,780 $44,839,780 $44,839,780 $44,839,780 $44,839,780 $44,839,780 $44,839,780 $44,839,780 $44,839,780 $44,839,780 Local, ARL, Cumulative $26,086,790 $52,173,581 $78,260,371 $104,347,161 $130,433,952 $156,520,742 $182,607,532 $208,694,323 $253,534,102 $298,373,882 $343,213,662 $388,053,442 $432,893,222 $477,733,002 $522,572,782 $567,412,562 $612,252,342 $657,092,122 $701,931,902 Management and Monitoring Costs Management, Annual $32.70 $/Acre $1,412,740 $1,510,480 $1,608,220 $1,705,961 $1,803,701 $1,901,441 $1,999,181 $2,096,921 $2,194,661 $2,292,402 $2,390,142 $2,487,882 $2,585,622 $2,683,362 $2,781,102 $2,878,843 $2,976,583 $3,074,323 $3,172,063 Management Cumulative $1,412,740 $2,923,220 $4,531,441 $6,237,402 $8,041,102 $9,942,543 $11,941,725 $14,038,646 $16,233,307 $18,525,709 $20,915,851 $23,403,733 $25,989,355 $28,672,717 $31,453,819 $34,332,662 $37,309,245 $40,383,568 $43,555,631 Monitoring, Annual $3.01 $/Acre $1,246,462 $1,260,924 $1,275,386 $1,289,847 $1,304,309 $1,318,771 $1,333,233 $1,347,695 $1,362,157 $1,376,619 $1,391,081 $1,405,542 $1,420,004 $1,434,466 $1,448,928 $1,463,390 $1,477,852 $1,492,314 $1,506,776 Monitoring Cumulative $1,246,462 $2,507,386 $3,782,771 $5,072,619 $6,376,928 $7,695,699 $9,028,932 $10,376,627 $11,738,784 $13,115,403 $14,506,484 $15,912,026 $17,332,030 $18,766,497 $20,215,425 $21,678,815 $23,156,667 $24,648,980 $26,155,756 Endowment Costs Net Endowment Funding, Annual $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 Net Endowment Funding, Cumulative $8,966,410 $17,932,819 $26,899,229 $35,865,639 $44,832,049 $53,798,458 $62,764,868 $71,731,278 $80,697,687 $89,664,097 $98,630,507 $107,596,917 $116,563,326 $125,529,736 $134,496,146 $143,462,556 $152,428,965 $161,395,375 $170,361,785 Administrative Costs 2 RCA Staff Costs $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 Professional Services $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 Loan Repayment 3 $1,000,000 $1,000,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 Total Annual Costs $5,154,811 $5,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 Cumulative Costs $5,154,811 $10,309,622 $14,464,433 $18,619,244 $22,774,055 $26,928,866 $31,083,677 $35,238,488 $39,393,299 $43,548,111 $47,702,922 $51,857,733 $56,012,544 $60,167,355 $64,322,166 $68,476,977 $72,631,788 $76,786,599 $80,941,410 TOTAL ALL COSTS TOTAL Annual $42,867,213 $42,979,415 $42,091,617 $42,203,819 $42,316,021 $42,428,223 $42,540,425 $42,652,627 $61,517,819 $61,630,021 $61,742,223 $61,854,425 $61,966,627 $62,078,829 $62,191,031 $62,303,233 $62,415,435 $62,527,637 $62,639,839 TOTAL Cumulative $42,867,213 $85,846,628 $127,938,245 $170,142,065 $212,458,086 $254,886,309 $297,426,735 $340,079,362 $401,597,181 $463,227,202 $524,969,425 $586,823,850 $648,790,477 $710,869,307 $773,060,338 $835,363,571 $897,779,006 $960,306,644 $1,022,946,483 1. All local land conserved to date, including all HANS dedications to date, are captured in the year 17 number. 3. Annual administrative costs decrease in year 19 due to assumption that loan repayment is completed. Habitat Lands/ End of: Reserve Summary Financial Responsibility 2. RCA Administrative Costs are based on a three year average of FY 2016-17 through FY 2018-19 actual costs, adjusted to 2019 dollars. All Implementation Costs Over Time – 15 Year Extension Factors 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Cost Items 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 ACRES Land Acuisition Costs Land Acquisition (Annual) Local 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 (less) HANS/JPR Dedications -1,250 -1,250 -1,250 -1,250 -1,250 -1,250 -1,250 -1,250 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Local 1,116 1,116 1,116 1,116 1,116 1,116 1,116 1,116 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 2,366 State/Fed 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 1,433 Total 2,549 2,549 2,549 2,549 2,549 2,549 2,549 2,549 3,799 3,799 3,799 3,799 3,799 3,799 3,799 3,799 3,799 3,799 3,799 3,799 3,799 3,799 3,799 3,799 Land Acquisition (Cumulative) Local 1 41,328 42,444 43,561 44,677 45,793 46,909 48,025 49,141 51,508 53,874 56,240 58,606 60,972 63,338 65,705 68,071 70,437 72,803 75,169 77,535 79,902 82,268 84,634 87,000 State/Fed 23,041 24,474 25,907 27,340 28,773 30,206 31,639 33,072 34,505 35,938 37,371 38,804 40,237 41,670 43,103 44,536 45,969 47,402 48,835 50,268 51,701 53,134 54,567 56,000 Local - HANS/JPR Dedications 1,250 2,500 3,750 5,000 6,250 7,500 8,750 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 Total 65,619 69,418 73,218 77,017 80,816 84,615 88,414 92,213 96,013 99,812 103,611 107,410 111,209 115,008 118,808 122,607 126,406 130,205 134,004 137,803 141,603 145,402 149,201 153,000 Management and Monitoring Costs Monitoring Management State/ Federal PQP RCA State/ Fed 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 282,000 ARL RCA State 23,041 24,474 25,907 27,340 28,773 30,206 31,639 33,072 34,505 35,938 37,371 38,804 40,237 41,670 43,103 44,536 45,969 47,402 48,835 50,268 51,701 53,134 54,567 56,000 Total 305,041 306,474 307,907 309,340 310,773 312,206 313,639 315,072 316,505 317,938 319,371 320,804 322,237 323,670 325,103 326,536 327,969 329,402 330,835 332,268 333,701 335,134 336,567 338,000 Local PQP RCA Non-RCA Local 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 65,000 ARL RCA RCA 42,578 44,944 47,311 49,677 52,043 54,409 56,775 59,141 61,508 63,874 66,240 68,606 70,972 73,338 75,705 78,071 80,437 82,803 85,169 87,535 89,902 92,268 94,634 97,000 Total 107,578 109,944 112,311 114,677 117,043 119,409 121,775 124,141 126,508 128,874 131,240 133,606 135,972 138,338 140,705 143,071 145,437 147,803 150,169 152,535 154,902 157,268 159,634 162,000 Total Acres under RCA Management 42,578 44,944 47,311 49,677 52,043 54,409 56,775 59,141 61,508 63,874 66,240 68,606 70,972 73,338 75,705 78,071 80,437 82,803 85,169 87,535 89,902 92,268 94,634 97,000 Total Acres under RCA Monitoring 412,619 416,418 420,218 424,017 427,816 431,615 435,414 439,213 443,013 446,812 450,611 454,410 458,209 462,008 465,808 469,607 473,406 477,205 481,004 484,803 488,603 492,402 496,201 500,000 COSTS (all constant 2019 dollars) Land Acquisition Costs Local, ARL, Annual $14,288 $/Acre $15,947,780 $15,947,780 $15,947,780 $15,947,780 $15,947,780 $15,947,780 $15,947,780 $15,947,780 $33,807,771 $33,807,771 $33,807,771 $33,807,771 $33,807,771 $33,807,771 $33,807,771 $33,807,771 $33,807,771 $33,807,771 $33,807,771 $33,807,771 $33,807,771 $33,807,771 $33,807,771 $33,807,771 Land Transaction Costs 5%of acquisition costs $797,389 $797,389 $797,389 $797,389 $797,389 $797,389 $797,389 $797,389 $1,690,389 $1,690,389 $1,690,389 $1,690,389 $1,690,389 $1,690,389 $1,690,389 $1,690,389 $1,690,389 $1,690,389 $1,690,389 $1,690,389 $1,690,389 $1,690,389 $1,690,389 $1,690,389 Total, Land Acquisition Costs $16,745,170 $16,745,170 $16,745,170 $16,745,170 $16,745,170 $16,745,170 $16,745,170 $16,745,170 $35,498,159 $35,498,159 $35,498,159 $35,498,159 $35,498,159 $35,498,159 $35,498,159 $35,498,159 $35,498,159 $35,498,159 $35,498,159 $35,498,159 $35,498,159 $35,498,159 $35,498,159 $35,498,159 Local, ARL, Cumulative $16,745,170 $33,490,339 $50,235,509 $66,980,678 $83,725,848 $100,471,017 $117,216,187 $133,961,356 $169,459,515 $204,957,674 $240,455,833 $275,953,992 $311,452,152 $346,950,311 $382,448,470 $417,946,629 $453,444,788 $488,942,947 $524,441,106 $559,939,265 $595,437,424 $630,935,583 $666,433,743 $701,931,902 Management and Monitoring Costs Management, Annual $32.70 $/Acre $1,392,378 $1,469,755 $1,547,133 $1,624,511 $1,701,888 $1,779,266 $1,856,643 $1,934,021 $2,011,399 $2,088,776 $2,166,154 $2,243,532 $2,320,909 $2,398,287 $2,475,664 $2,553,042 $2,630,420 $2,707,797 $2,785,175 $2,862,553 $2,939,930 $3,017,308 $3,094,685 $3,172,063 Management Cumulative $1,392,378 $2,862,133 $4,409,266 $6,033,776 $7,735,664 $9,514,930 $11,371,574 $13,305,595 $15,316,993 $17,405,770 $19,571,923 $21,815,455 $24,136,364 $26,534,651 $29,010,315 $31,563,357 $34,193,777 $36,901,574 $39,686,749 $42,549,302 $45,489,232 $48,506,540 $51,601,225 $54,773,288 Monitoring, Annual $3.01 $/Acre $1,243,449 $1,254,898 $1,266,347 $1,277,796 $1,289,245 $1,300,694 $1,312,143 $1,323,592 $1,335,041 $1,346,490 $1,357,939 $1,369,388 $1,380,837 $1,392,286 $1,403,735 $1,415,184 $1,426,633 $1,438,082 $1,449,531 $1,460,980 $1,472,429 $1,483,878 $1,495,327 $1,506,776 Monitoring Cumulative $1,243,449 $2,498,347 $3,764,694 $5,042,490 $6,331,735 $7,632,429 $8,944,572 $10,268,163 $11,603,204 $12,949,694 $14,307,633 $15,677,021 $17,057,857 $18,450,143 $19,853,878 $21,269,062 $22,695,694 $24,133,776 $25,583,307 $27,044,286 $28,516,715 $30,000,593 $31,495,919 $33,002,695 Endowment Costs Net Endowment Funding, Annual $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 Net Endowment Funding, Cumulative $6,541,714 $13,083,429 $19,625,143 $26,166,857 $32,708,572 $39,250,286 $45,792,000 $52,333,715 $58,875,429 $65,417,143 $71,958,858 $78,500,572 $85,042,286 $91,584,001 $98,125,715 $104,667,429 $111,209,144 $117,750,858 $124,292,572 $130,834,286 $137,376,001 $143,917,715 $150,459,429 $157,001,144 Administrative Costs 2 RCA Staff Costs $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 $2,288,495 Professional Services $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 $1,466,062 Loan Repayment 3 $1,000,000 $1,000,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 $400,254 Total Annual Costs $5,154,811 $5,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 $4,154,811 Cumulative Costs $5,154,811 $10,309,622 $14,464,433 $18,619,244 $22,774,055 $26,928,866 $31,083,677 $35,238,488 $39,393,299 $43,548,111 $47,702,922 $51,857,733 $56,012,544 $60,167,355 $64,322,166 $68,476,977 $72,631,788 $76,786,599 $80,941,410 $85,096,221 $89,251,032 $93,405,843 $97,560,654 $101,715,465 TOTAL ALL COSTS TOTAL Annual $31,077,521 $31,166,348 $30,255,175 $30,344,001 $30,432,828 $30,521,655 $30,610,481 $30,699,308 $49,541,124 $49,629,951 $49,718,777 $49,807,604 $49,896,430 $49,985,257 $50,074,084 $50,162,910 $50,251,737 $50,340,563 $50,429,390 $50,518,217 $50,607,043 $50,695,870 $50,784,697 $50,873,523 TOTAL Cumulative $31,077,521 $62,243,870 $92,499,044 $122,843,046 $153,275,874 $183,797,528 $214,408,009 $245,107,317 $294,648,441 $344,278,392 $393,997,169 $443,804,773 $493,701,203 $543,686,460 $593,760,544 $643,923,454 $694,175,191 $744,515,754 $794,945,144 $845,463,361 $896,070,404 $946,766,274 $997,550,971 $1,048,424,494 1. All local land conserved to date, including all HANS dedications to date, are captured in the year 17 number. 3. Annual administrative costs decrease in year 19 due to assumption that loan repayment is completed. Habitat Lands/ End of: Reserve Summary Financial Responsibility 2. RCA Administrative Costs are based on a three year average of FY 2016-17 through FY 2018-19 actual costs, adjusted to 2019 dollars. APPENDIX II: Detailed Time Series of Endowment Funding Annual Cost Estimate for Management and Monitoring, Constant 2019$ Annual Cost Cost Categories by Last Year of Land Acquisition Period Adjustment Ongoing Habitat Management $3,172,063 100%$3,172,063 Ongoing Habitat Monitoring $1,506,776 100%$1,506,776 Administration1 $4,154,811 50%$2,077,406 Total $8,833,650 $6,756,244 1. Adminsitration includes salaries and benefits, accounting, auditing and reporting, contracts, etc.. Assumes less administration is needed following the land acquisition period; ongoing adminsitrative needs include oversight, auditing and reporting, and board staffing. Sources: Western Riverside County Regional Conservation Authority; and Economic & Planning Systems, Inc. Annual Post-Land Acquisition Cost Endowment Funding – No Extension Scenario Item 1 2 3 4 5 6 7 8 9 Post-Permit New Impact Acres (avg. annual)2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 Average Per Acre $9,845 $9,845 $9,845 $9,845 $9,845 $9,845 $9,845 $9,845 $9,845 Endowment Fee Annual Endowment Funding $22,168,105 $22,168,105 $22,168,105 $22,168,105 $22,168,105 $22,168,105 $22,168,105 $22,168,105 $22,168,105 Endowment Balance $22,168,105 $44,336,210 $67,169,359 $90,687,502 $114,911,189 $139,861,586 $165,560,496 $192,030,373 $219,294,346 Annual Interest $0 $665,043 $1,350,038 $2,055,582 $2,782,293 $3,530,804 $4,301,772 $5,095,868 $5,913,787 Cumulative Interest Earnings $0 $665,043 $2,015,081 $4,070,663 $6,852,955 $10,383,760 $14,685,531 $19,781,399 $25,695,187 Total Endowment $22,168,105 $45,001,254 $68,519,396 $92,743,083 $117,693,481 $143,392,391 $169,862,268 $197,126,241 $225,208,133 Average Annual Post Permit Interest $6,756,244 Assumptions 20,265 impact acres developed 9 year plan 3%interest rate (real, net) $6,756,244 annual post-permit cost estimate $9,845 Endowment Funding Per Acre of Conservation (1) Endowment fee set to ensure that, at the end of the permit term, the total endowment (Including endowment fee revenues and interest) are sufficient to provide annual interest revenues equal to the post-permit annual cost. The real interest rate is assumed to be 3 percent annually. Endowment Funding – 5 Year Extension Scenario Item 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Post-Permit New Impact Acres (avg. annual)2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 Average Per Acre $5,854 $5,854 $5,854 $5,854 $5,854 $5,854 $5,854 $5,854 $5,854 $5,854 $5,854 $5,854 $5,854 $5,854 Endowment Fee Annual Endowment Funding $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 $13,180,608 Endowment Balance $13,180,608 $26,361,215 $39,937,241 $53,920,547 $68,323,353 $83,158,243 $98,438,180 $114,176,514 $130,386,999 $147,083,799 $164,281,502 $181,995,136 $200,240,180 $219,032,574 Annual Interest $0 $395,418 $802,699 $1,222,198 $1,654,282 $2,099,329 $2,557,727 $3,029,877 $3,516,192 $4,017,096 $4,533,027 $5,064,436 $5,611,787 $6,175,559 Cumulative Interest Earnings $0 $395,418 $1,198,117 $2,420,315 $4,074,598 $6,173,927 $8,731,654 $11,761,531 $15,277,723 $19,294,819 $23,827,846 $28,892,281 $34,504,069 $40,679,628 Total Endowment $13,180,608 $26,756,633 $40,739,940 $55,142,746 $69,977,636 $85,257,572 $100,995,907 $117,206,392 $133,903,191 $151,100,894 $168,814,529 $187,059,572 $205,851,967 $225,208,133 Average Annual Post Permit Interest $6,756,244 Assumptions 31,523 impact acres developed 14 year plan 3%interest rate (real, net) $6,756,244 annual post-permit cost estimate $5,854 Endowment Funding Per Acre of Conservation (1) Endowment fee set to ensure that, at the end of the permit term, the total endowment (Including endowment fee revenues and interest) are sufficient to provide annual interest revenues equal to the post-permit annual cost. The real interest rate is assumed to be 3 percent annually. Endowment Funding – 10 Year Extension Scenario Item 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Post-Permit New Impact Acres (avg. annual)2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 Average Per Acre $3,982 $3,982 $3,982 $3,982 $3,982 $3,982 $3,982 $3,982 $3,982 $3,982 $3,982 $3,982 $3,982 $3,982 $3,982 $3,982 $3,982 $3,982 $3,982 Endowment Fee Annual Endowment Funding $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 $8,966,410 Endowment Balance $8,966,410 $17,932,819 $27,168,221 $36,680,686 $46,478,524 $56,570,297 $66,964,823 $77,671,185 $88,698,738 $100,057,118 $111,756,249 $123,806,354 $136,217,962 $149,001,918 $162,169,393 $175,731,892 $189,701,266 $204,089,722 $218,909,831 Annual Interest $0 $268,992 $546,054 $831,428 $1,125,363 $1,428,117 $1,739,952 $2,061,143 $2,391,970 $2,732,721 $3,083,695 $3,445,198 $3,817,547 $4,201,065 $4,596,089 $5,002,964 $5,422,046 $5,853,699 $6,298,303 Cumulative Interest Earnings $0 $268,992 $815,047 $1,646,475 $2,771,838 $4,199,955 $5,939,907 $8,001,051 $10,393,020 $13,125,742 $16,209,437 $19,654,635 $23,472,182 $27,673,247 $32,269,336 $37,272,301 $42,694,347 $48,548,046 $54,846,349 Total Endowment $8,966,410 $18,201,812 $27,714,276 $37,512,114 $47,603,887 $57,998,413 $68,704,775 $79,732,328 $91,090,708 $102,789,839 $114,839,944 $127,251,552 $140,035,508 $153,202,983 $166,765,482 $180,734,856 $195,123,312 $209,943,421 $225,208,133 Average Annual Post Permit Interest $6,756,244 Assumptions 42,782 impact acres developed 19 year plan 3%interest rate (real, net) $6,756,244 annual post-permit cost estimate $3,982 Endowment Funding Per Acre of Conservation (1) Endowment fee set to ensure that, at the end of the permit term, the total endowment (Including endowment fee revenues and interest) are sufficient to provide annual interest revenues equal to the post-permit annual cost. The real interest rate is assumed to be 3 percent annually. Endowment Funding – 15 Year Extension Scenario Item 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 New Impact Acres (avg. annual)2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 Average Per Acre $2,905 $2,905 $2,905 $2,905 $2,905 $2,905 $2,905 $2,905 $2,905 $2,905 $2,905 $2,905 $2,905 $2,905 $2,905 Endowment Fee Annual Endowment Funding $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 Endowment Balance $6,541,714 $13,083,429 $19,821,394 $26,761,499 $33,909,807 $41,272,564 $48,856,204 $56,667,353 $64,712,836 $72,999,684 $81,535,138 $90,326,655 $99,381,917 $108,708,838 $118,315,566 Annual Interest $0 $196,251 $398,390 $606,594 $821,043 $1,041,925 $1,269,435 $1,503,769 $1,745,134 $1,993,739 $2,249,803 $2,513,548 $2,785,206 $3,065,014 $3,353,216 Cumulative Interest Earnings $0 $196,251 $594,642 $1,201,235 $2,022,278 $3,064,204 $4,333,638 $5,837,407 $7,582,541 $9,576,280 $11,826,083 $14,339,631 $17,124,837 $20,189,851 $23,543,067 Total Endowment $6,541,714 $13,279,680 $20,219,785 $27,368,093 $34,730,850 $42,314,490 $50,125,639 $58,171,122 $66,457,970 $74,993,424 $83,784,941 $92,840,203 $102,167,123 $111,773,852 $121,668,781 Average Annual Post Permit Interest 16 17 18 19 20 21 22 23 24 Post-Permit 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 2,252 $2,905 $2,905 $2,905 $2,905 $2,905 $2,905 $2,905 $2,905 $2,905 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $6,541,714 $128,210,496 $138,402,273 $148,899,805 $159,712,262 $170,849,092 $182,320,028 $194,135,092 $206,304,607 $218,839,209 $3,650,063 $3,955,817 $4,270,743 $4,595,116 $4,929,221 $5,273,349 $5,627,801 $5,992,887 $6,368,925 $27,193,130 $31,148,947 $35,419,689 $40,014,806 $44,944,027 $50,217,377 $55,845,178 $61,838,065 $68,206,990 $131,860,559 $142,358,090 $153,170,547 $164,307,378 $175,778,314 $187,593,377 $199,762,893 $212,297,494 $225,208,133 $6,756,244 (1) Endowment fee set to ensure that, at the end of the permit term, the total endowment (Including endowment fee revenues and interest) are sufficient to provide annual interest revenues equal to the post-permit annual cost. The real interest rate is assumed to be 3 percent annually. Assumptions 54,040 impact acres developed 24 year plan 3%interest rate (real, net) $6,756,244 annual post-permit cost estimate $2,905 Endowment Funding Per Acre of Conservation egional Conservation Authority Western Riverside County MSHCP Mitigation Fee Implementation Manual December 2020 I RCA's MSHCP MITIGATION FEE IMPLEMENTATION MANUAL The Western Riverside County Regional Conservation Authority ("RCA") was formed in 2004 to achieve one of America's most ambitious environmental efforts, the Western Riverside County Multiple Species Habitat Conservation Plan ("MSHCP" or the "Plan"). As the nation's largest habitat conservation plan of its kind, the MSHCP strengthens the sustainability and quality of life in western Riverside County by nurturing economic development opportunities, alleviating traffic congestion, protecting natural resources, and improving air quality. This MSHCP Mitigation Fee Implementation Manual ("Manual") provides direction to Local Jurisdictions under the MSHCP concerning their obligations under the MSHCP and Permits regarding the imposition, collection, accounting, remittance and calculation of the Local Development Mitigation Fee. The Local Development Mitigation Fee Program is administered by the RCA. The instructions in this Manual are intended to be consistent with and based on the MSHCP, the Implementing Agreement (IA), and the 2020 Nexus Study. The Manual is also intended to provide direction to Member Agencies concerning their Fee Ordinances and any related Resolutions. For questions and clarifications, please contact the RCA. 1 TABLE OF CONTENTS Page Chapter I. INTRODUCTION...................................................................................... 4 A. Background on MSHCP and Implementation Agreements ....................... 4 B. Purpose of MSHCP and Local Development Mitigation Fee ..................... 4 C. Public Projects.......................................................................................... 5 D. RCA Administration of Fee Program......................................................... 5 E. Purpose of Implementation Manual.......................................................... 6 Chapter II. LOCAL JURISDICTION INSTRUCTIONS ................................................ 7 A. Legal Authority.......................................................................................... 7 B. Member Agency Obligations under MSHCP and Implementation Agreements.............................................................................................. 7 C. Fee Credits and Fee Credit Agreements .................................................. 9 D. Fee Exemptions...................................................................................... 11 E. Project Area............................................................................................ 12 F. Developer Refunds and Appeals............................................................ 12 G. Options for Administrative Add -On Costs to Fees .................................. 13 H. Public Project Fees................................................................................. 13 I. Monthly Payment.................................................................................... 14 J. No Withholding....................................................................................... 14 K. Audit........................................................................................................14 L. Late Payments........................................................................................ 14 M. No Effect on Withdrawal......................................................................... 15 N. Periodic Fee Adjustment......................................................................... 15 O. Automatic Annual Fee Adjustment.......................................................... 15 P. Authority..................................................................................................15 Chapter III. MITIGATION PAYMENT REQUIREMENTS ........................................... 16 A. General Project Categories..................................................................... 16 B. Private Projects....................................................................................... 17 C. Public Projects........................................................................................ 22 D. Participating Special Entity Projects....................................................... 26 E TABLE OF CONTENTS (continued) Page Chapter IV. MITIGATION PAYMENT EXAMPLES .................................................... 28 A. Private Projects: Residential/Mixed Use Examples ................................ 28 Example 1 - All Residential — Low Density........................................................ 28 Example 2 — All Residential — Low Density — Including Backbone Road Construction............................................................................................ 32 Example 3 — All Residential — High Density — Including Backbone Road Construction............................................................................................ 35 Example 4 — All Residential — Combination of Densities ................................... 37 Example 5 — Horizontal Mixed Use — Residential and Commercial — Including Backbone Road Construction..................................................40 Example 6 — Vertical Mixed Use — Residential and Commercial ....................... 43 B. Public Project Examples......................................................................... 48 Example 7 — Member Agency Civic Project....................................................... 49 Example 8 — Road Widening with No Measure A or TUMF Funding ................. 50 Example 9 — Road Widening Project with 20% Measure A/ TUMF Funding ..... 52 Example 10 — Combined New Road/ Road Rehabilitation Project with 50% Measure A / TUMF Funding.................................................................... 54 Chapter V. DEFINITIONS......................................................................................... 57 3 ��• ��� � ' ,' . � .� .,, (� ro��� � �F :�A • 1 � '� ;lu ' j' � dd i�� f � I L i � � '�. �� •� I% � ^-'�L� � 1 _�� �,►' CHAPTER L INTRODUCTION A. Background on MSHCP and Implementation Agreements The MSHCP, originally adopted in 2004, is a comprehensive, multi -jurisdictional Habitat Conservation Plan focusing on the permanent conservation of 500,000 acres and the protection of 146 species, including 33 that are currently listed as threatened or endangered. The MSHCP was developed in response to the need for future growth opportunities in western Riverside County while addressing the requirements of the State and federal Endangered Species Acts. The MSHCP serves as an HCP pursuant to Section 10(a)(1)(13) of the federal Endangered Species Act of 1973 as well as a Natural Communities Conservation Plan under the NCCP Act of 2001. The MSHCP streamlines these environmental permitting processes by allowing the participating jurisdictions to authorize "take" of plant and wildlife species identified within the Plan Area and has saved taxpayers more than $500 million by expediting the construction of more than 30 major freeway and road improvements in Riverside County valued at more than $5 billion. At the same time, Plan implementation provides a coordinated MSHCP Conservation Area and implementation program to preserve biological diversity and maintain the region's quality of life. The MSHCP and the associated Implementing Agreement ("IA") and Incidental Take Permit collectively determine a set of conservation actions that must be taken to meet the terms of the Incidental Take Permit and benefit from the regulatory streamlining and other benefits of the MSHCP. This includes the identification of the responsible parties, including the responsibilities of the Local Permittees.1 One of the key requirements of the MSHCP, IA , and Incidental Take Permit (consistent with the requirements of the federal Endangered Species Act) is the provision of adequate funding by Local Permittees to the Implementing Entity (the Western Riverside County Regional Conservation Authority2) ("RCA") to conduct their portion of the conservation actions identified in the MSHCP. B. Purpose of MSHCP and Local Development Mitigation Fee The purpose of the Local Development Mitigation Fee ("LDMF") is to contribute to the funding required to implement the MSHCP and, as a result, help maintain the Incidental Take Permit for new private and public development in western Riverside County under the federal and State Endangered Species Acts. Maintaining the Incidental Take Permit is necessary to allow for future development, and without the development community paying for the cost of the MSHCP, individual applicants would need to apply 1 Local Permittees include the western Riverside Cities, the County of Riverside, County Flood Control and Water Conservation District, County Regional Park and Open -Space District, County Department of Waste Resources, and Riverside County Transportation Commission. 2The Western Riverside County Regional Conservation Authority is a joint powers authority established in 2004 to implement the MSHCP. ii independently for development approval under federal and State law if the project impacts a threatened or endangered species. The Federal Endangered Species Act specifically requires that the applicant for Incidental Take Permit "ensure that adequate funding for the [MSHCP] will be provided."3 In addition, the LDMF helps provide the regional benefit of streamlined economic development in western Riverside County as well as the provision of contiguous open spaces that will serve as a community amenity to residents, workers, and visitors. New development in the MSHCP Area will directly, indirectly, or cumulatively affect species and habitat in western Riverside County. Because of this, the County of Riverside along with several other agencies prepared and adopted the MSHCP to provide a regional, streamlined approach to benefit future development of all types in western Riverside County, including the development and improvements envisioned under the numerous General Plans and the Regional Transportation Improvement Program. The requirements of the MSHCP (habitat acquisition, management and monitoring, and program administration) are a direct result of the regional approach to mitigation that is engendered by all new development in the Plan Area under the pertinent environmental regulations. Consequently, the LDMF applies to all new development in western Riverside County whether or not the development is within a Criteria Cell. The overall permit period was set at 75 years, ending in 2079. To cover ongoing management and monitoring costs beyond the duration when mitigation fees will be collected, the establishment of a non -depleting endowment is required. In other words, the endowment must be sufficient such that expected average interest revenues (after inflation and transaction costs) can cover the ongoing costs associated with management and monitoring in perpetuity. The endowment must be fully established by the end of the land acquisition period as it is assumed that no more mitigation fees will be collected after that time. Finally, the LDMF is required by the MSHCP and the IA (IA §13.2(A); MSHCP § 8.5.1). C. Public Projects A number of Public Projects also pay fees related to the MSHCP in order to mitigate the impact of public projects in accordance with the terms of the IA. These different types of Public Projects and the fees related to them are discussed more in the later chapters of this Manual. D. RCA Administration of Fee Program Section 2 of the Member Agencies' Fee Ordinance provides that the RCA is appointed as the Administrator of the Fee Ordinance. The RCA is authorized to receive all fees generated from the LDMF within the Cities or County, and to invest, account for, and expend such fees in accordance with the provisions of the Plan, IA, and Fee Ordinances. 3See Section 1539(a)(2)(B)(iii) of the federal Endangered Species Act. The RCA's Executive Director or his/her designee is authorized to act on behalf of the RCA as the Administrator of the LDMF Program. Furthermore, the RCA shall have the final determination regarding collection of the fee, the appropriate methodology to calculate the fee based on the information provided, and the interpretation of this Manual. E. Purpose of Implementation Manual The purpose of this Manual is to provide those jurisdictions and agencies that are participants in the MSHCP and IA with direction and policies for implementation of the LDMF Ordinance and Resolution adopted by each of the member jurisdictions. The Manual specifies implementation and responsibilities for the LDMF Ordinance and Resolution. The instructions in this Manual shall control the administration of the Local Development Mitigation Fee except where directly in conflict with the adopting Ordinance. Capitalized terms in this Manual shall have the same meaning as in the adopting Ordinance. The RCA may, from time to time, amend this Manual as necessary to add additional direction, clarification, or guidance regarding implementation of the LDMF Ordinance. It L -1 AL CHAPTER II. LOCAL JURISDICTION INSTRUCTIONS A. Legal Authority Any capitalized terms used within this Manual which are not defined herein are the same as those defined in the LDMF Ordinances. The MSHCP notes that "new development affects the environment directly through construction activity and cumulatively through population bases that result from Development." As a result, the Member Agencies are required to implement a LDMF that was expected to represent one of the primary sources of funding for the implementation of the MSHCP. The LDMF has been developed in accordance with California Government Code Section 66000 et seq. (the "Mitigation Fee Act") that "allows cities and counties to charge new development for the costs of mitigating the impacts of new development." Fees charged to Public Projects have been imposed pursuant to the MSHCP IA. B. Member Agency Obligations under MSHCP and Implementation Agreements. As set forth in Section 11.1 of the MSHCP Implementing Agreement, the Member Agencies and the RCA have selected legal mechanisms to ensure implementation of the terms of the MSHCP and the IA. 1. Enactment of Fee Ordinance and Resolution. Pursuant to Sections 11.1.1 and 11.1.2 of the MSHCP IA, the Member Agencies shall adopt an Ordinance imposing the LDMF in substantially the form proposed by the RCA and the related Resolution within 90 days' notice from the RCA. The Member Agencies shall also adopt any updated Fee Ordinance or Resolution within 90 days' notice from the RCA. 2. Imposition of Fee. a. The LDMF will be paid no later than at the issuance of a building permit. Notwithstanding any other provision of the Municipal or County Ordinance, as relevant, no building permit shall be issued for any Development Project unless the LDMF applicable to such Development Project has been paid. The amount of the Fee shall be calculated in accordance with this Manual. b. In lieu of the payment of the LDMF as provided above, the Fee for a Development may be paid through a Community Facilities District, provided that such arrangement is approved by the RCA in writing. rA 3. Remittance of Fees to the RCA a. Timing. The Member Agencies shall remit all LDMFs which are collected or should have been collected for any Development, as defined in the MSHCP, and contributions for Public Projects to the RCA on a monthly basis to be expended to fulfill the terms of the MSHCP. Payment to the RCA shall be made no later than 90 days after the LDMFs were collected. Payment to the RCA shall be made no later than 90 days after the construction contract for the Public Project is approved by the Member Agency. b. Documentation and Records Requirements. The Member Agencies shall maintain complete and accurate records with respect to all LDMF revenues collected under their LDMF Ordinances and the calculation of contributions for all Public Projects. All such records shall be clearly identifiable. C. Annual audits. The Member Agencies shall allow a representative of the RCA during normal business hours to examine, audit, and make transcripts or copies of such records. 4. Imposition of CPI increases and other Fee Adjustments a. Automatic Annual Fee Adjustment. The RCA will provide the Member Agencies with an automatic annual fee adjustment for the fee established by Resolution based on the average percentage change over the previous calendar year set forth in the Consumer Price Index for the Riverside -San Bernardino -Ontario metropolitan area or a replacement CPI index issued by the federal government. The Member Agencies shall adopt a resolution implementing the fee adjustment no later than 60 days after receiving notice from the RCA. b. Periodic Fee Adjustment. The fee schedule may be periodically reviewed, and the amounts adjusted by the RCA Board of Directors. By amendment to the fee Resolution referenced in the Fee Ordinance, the fees may be increased or decreased to reflect the changes in actual and estimated costs of the MSHCP including, but not limited to, management and monitoring, endowment, and acquisition costs. The adjustment of the fees may also reflect changes in the facilities required to be acquired, in estimated revenues received pursuant to the Fee Ordinances, as well as the availability or lack thereof of other funds with which to E:3 implement the MSHCP. The Member Agencies shall adopt a resolution implementing the fee adjustment no later than 60 days after receiving notice from the RCA. C. Fee Credits and Fee Credit Agreements 1. Fee Credits When a Member Agency determines that a request for a fee credit ("Fee Credit") is appropriate for on -site conservation which meets the standards in Section II below, the Member Agency shall notify the RCA's Executive Director ("Executive Director") in writing as part of the Joint Project Review ("JPR") Application. This notification shall include all relevant documentation related to the project, including project description, map, criteria cells, and designation of land proposed for conservation. Fee Credits shall be applied only to the Project they are associated with in the JPR. Fee Credits shall only be provided to the underlying property owner or development company at the time the LDMF applies and are not transferrable to other entities, individuals, or development projects. Fee Credits shall not be applied retroactively. Fee Credits shall not be granted for on -site conservation that would not be considered developable land in the absence of the MSHCP. Some examples of such undevelopable land include that which could not be developed under the California Environmental Quality Act, land with topography consisting of 50% or greater slopes, land that is in a flood way, or land that could not be developed due to other local ordinance restrictions. In cases where both developable and undevelopable land are included in on -site conservation, only that land that is developable in the absence of the MSHCP shall be considered for Fee Credit. 2. STANDARDS. Fee credits shall meet the following standards: a. Proposed conservation land must be within Criteria Cells and contribute to Reserve Assembly; b. Conservation land must be of a size, configuration, and location such that it can be managed as part of the MSHCP Conservation Area; C. In addition to the exclusions identified in Section I above, fuel modification/hazardous vegetation areas, manufactured slopes, storm drain or detention basin outfalls, constructed slope protection, utility easement areas, and Best Management Practices such as bioswales, infiltration trenches, and basins will be excluded from Fee Credits and will not be accepted for management by the RCA. W 3. APPRAISAL a. The RCA or Member Agency will obtain an appraisal for the property being offered in exchange for the Fee Credit. The cost of the appraisal will be borne by the entity that commissions the appraisal. b. The appraisal shall be prepared by a licensed appraiser and meet the standards in Section 6.1.1 of the MSHCP. The property owner may select the appraiser from an approved list of appraisers used by the RCA. 4. DECISION. a. Member Agency — Approval Authority up to $200,000 A Member Agency may approve Fee Credits up to $200,000. The RCA will assist Member Agency in making a determination on the Fee Credits if requested. Notwithstanding the above, the RCA is authorized to review and audit a Member Agency's approval of Fee Credits hereunder. In the event of a disagreement between RCA and a Member Agency regarding Fee Credits provided under this Section IV.A, the matter shall be referred to the RCA Board of Directors for consideration and further action. b. Board of Directors — ADDroval Authoritv Over $200.000 All Fee Credits over $200,000 require approval of the RCA Board of Directors. The Executive Director shall place the Fee Credit request on the agenda for the next regularly scheduled meeting of the RCA Board of Directors for which an agenda has not been posted. 5. REPORTING. The Member Agency will provide the RCA with a copy of all Fee Credit agreements within 30 days of execution. The Executive Director shall provide monthly reports to the RCA Board of Directors of all notifications concerning Fee Credits. 6. CONVEYANCE OF CONSERVATION LAND. Conservation land associated with approved Fee Credits shall be conveyed in fee title to the RCA or another entity or organization lawfully authorized to acquire and hold conservation easements pursuant to Civil Code Section 815.3. The conservation land shall be free of encumbrances that could adversely impact the ability to manage the conservation land in accordance with the MSHCP. Conveyance of the conserved land must occur prior to the point in time when MSHCP Fee payment is due for the Project, and the Member Agency shall not issue occupancy permits for the Project until such time as the conservation IM land has been conveyed and any Fee balance has been paid to the RCA. If a non-member agency holds title to the land, the entity must enter into a Management MOU with the RCA agreeing to manage the land in accordance with the MSHCP prior to issuance of a grading permit for the Project. D. Fee Exemptions. The following types of construction shall be exempt from the provisions of this Ordinance: 1. Reconstruction or improvements that were damaged or destroyed by fire or other natural causes, provided that the reconstruction or improvements do not result in additional usable square footage. 2. Rehabilitation or remodeling to an existing Development Project, provided that the rehabilitation or remodeling does not result in additional usable square footage. 3. Accessory Dwelling Units, but only to the extent such fee is exempted under state law. 4. Junior Accessory Dwelling Units, but only to the extent such fee is exempted under state law. 5. Existing structures where the use is changed from an existing permitted use to a different permitted use, provided that no additional improvements are constructed and does not result in additional usable square footage. 6. Certain Agricultural Operations as allowed by the MSHCP, as amended. 7. Vesting Tentative Tract Maps entered into pursuant to Government Code section 66452 et seq. (also, Government Code section 66498.1 et seq.) and Development Projects which are the subject of a development agreement entered into pursuant to Government Code section 65864 et seq., prior to the effective date of a Member Agency's original LMDF Ordinance, wherein the imposition of new fees are expressly prohibited, provided that if the term of such a vesting map or development agreement is extended by amendment or by any other manner after the effective date of the Member Agency's original LDMF Ordinance, the Fee shall be imposed. Except as exempted above, all projects are required to make a mitigation payment/ contribution and where no mitigation payment process is specified, the project will pay the updated per acre mitigation fee. 11 E. Project Area. As defined in the Fee Ordinance, the "Project Area" means the area, measured in acres, within the Development Project including, without limitation, any areas to be developed as a condition of the Development Project. The Project Area shall be calculated in accordance with the following guidelines: 1. The Project Area shall be determined by the Member Agency staff based on the subdivision map, plot plan, and other information submitted to or required by the Member Agency. 2. An applicant may elect, at his or her own expense, to have a Project Area dimensioned, calculated, and certified by a registered civil engineer or licensed land surveyor. The engineer or land surveyor shall prepare a wet -stamped letter of certification of the Project Area dimensions and a plot plan exhibit thereto that clearly delineates the Project Area. Upon receipt of the letter of certification and plot plan exhibit, the Member Agency shall calculate the LDMF required to be paid based on the certified Project Area. 3. Where construction or other improvements on Project Area are prohibited due to legal restrictions on the Project Area, such as Federal Emergency Management Agency designated floodways or areas legally required to remain in their natural state, that portion of the Project Area so restricted shall be excluded for the purpose of calculating the LDMF. F. Developer Refunds and Appeals Under certain circumstances, such as double payment, expiration of a building permit, or fee miscalculation due to clerical error, an applicant may be entitled to a refund. Refunds will be reimbursed by the end of the fiscal year on a first come, first served basis, depending upon the net revenue stream. Refunds will only be considered reimbursable if requested within three (3) years of the original LDMF payment. In all cases, the applicant must promptly submit a refund request with proof of LDMF payment to the RCA if the RCA collected the LDMF, or if collected by a local jurisdiction, the refund request shall be submitted to that local jurisdiction, which will subsequently forward the request to the RCA for verification, review, and possible action. 1. Expiration of Building Permits If a building permit should expire, be revoked, or is voluntarily surrendered and is, therefore voided and no construction or improvement of land has commenced, then the applicant may be entitled to a refund of the LDMF collected which was paid as a condition of approval, less administration costs. Any refund must be requested within three (3) years of the original payment. The applicant shall pay the current LDMF in effect at the time in full if s/he reapplies for the permit. `K 2. Double Payments On occasion due to a clerical error, a developer has paid all or a portion of the required LDMF for project twice. In such cases, a refund of the double payment may be required if the request in made within three (3) years of the original payment. 3. Balance Due When LDMF is incorrectly calculated due to a Member Agency's clerical error, it is the Member Agency's responsibility to remit the balance due to the RCA. The error must be discovered within three (3) years of the original payment for the Member Agency to be held accountable. The amount due can be remitted through alternate methods agreed to by the RCA Executive Committee. If first approved through RCA staff in writing, the calculation is not subject to additional review. G. Options for Administrative Add -On Costs to Fees In the Fee Resolution mentioned in the Fee Ordinance, the Member Agencies are permitted to add an additional cost to the LDMF schedule to cover the Member Agency's costs of imposing, administering, collecting, and remitting the fees. H. Public Project Fees 1. City/County Roadways The Member Agencies shall contribute 5% of the facility construction costs for city/County roads for impacts related to City/County roadways to the RCA as set forth herein. a. The 5% contribution shall apply to the construction of new roads, the widening of existing roads, or other improvements which increase roadway throughput. b. Maintenance projects, as defined herein, are exempt from the 5% contribution. C. The 5% does not apply to: Projects, or portions thereof, paid for by the existing Measure A (contribution already paid directly by RCTC); and ii. Projects, or portions thereof, paid for by TUMF (contribution already paid directly by WRCOG). d. The Member Agency will include the payment of MSHCP fees within its grant applications to the Federal Highway Administration. e. Only contributions for the Caltrans-funded portion of a Caltrans highway project shall be exempted from the Public `R3 Project fee. Caltrans contributions are covered pursuant to MSHCP section 8.4.4 (pages 8-11 & 8-12). 2. City/County Civic Projects The Member Agency will contribute a per acre mitigation fee based upon the current commercial/industrial fee for these types of facilities. 3. Riverside County Flood Control District Projects. Riverside County Flood Control District will contribute mitigation through payment of 3% of total capital costs for a Covered Activity. Such payment may be offset through acquisition of replacement habitat or creation of new habitat for the benefit of Covered Species, as appropriate. Such mitigation shall be implemented prior to impacts to Covered Species and their habitats. I. Monthly Payment. Pursuant to Section 8.5 of the MSHCP, Sections 12.2.1 and 12.2.2 of the IA, and Sections 19.A and 19.13 of the Joint Powers Agreement (JPA), the Member Agencies shall remit all LDMFs which are collected or should have been collected for any Development, as defined in the MSHCP, and contributions for Public Projects to the RCA on a monthly basis to be expended to fulfill the terms of the MSHCP. 1. Payment to the RCA shall be made no later than 90 days after the LDMFs were collected. 2. Payment to the RCA shall be made no later than 90 days after the construction contract for the Public Project is approved by the County or the City/County. J. No Withholding. The Member Agencies may not recover the costs of administering the provisions of their LDMF Ordinance using the LDMF revenues generated by them through said Ordinance. K. Audit. Pursuant to the JPA, the Member Agencies shall maintain complete and accurate records with respect to all LDMFs collected under their LDMF Ordinance and the calculation of contributions for all Public Projects. All such records shall be clearly identifiable. The Member Agencies shall allow a representative of the RCA during normal business hours to examine, audit, and make transcripts or copies of such records. L. Late Payments. Starting January 1, 2008, if a Member Agency fails to remit the monthly payment within 90 days as required in Section 2.0 above, any delinquent amounts will be assessed interest at the rate of the RCA's prevailing rate for invested funds. Notwithstanding the prior sentence, no interest shall be assessed on delinquent fees remitted prior to January 1, 2008. M. No Effect on Withdrawal. The obligations imposed under this Article on the Member Agencies shall not affect any more strict obligation imposed on each of them under Section 22.1 of the I A pertaining to withdrawal from the MSHCP. N. Periodic Fee Adjustment. The fee schedule may be periodically reviewed, and the amounts adjusted by the RCA Board of Directors; the LDMF may be increased or decreased to reflect the changes in actual and estimated costs of the MSHCP including, but not limited to, debt service, lease payments, and acquisition costs. The adjustment of the fees may also reflect changes in the facilities required to be acquired, in estimated revenues received pursuant to this Ordinance, as well as the availability or lack thereof of other funds with which to implement the MSHCP. O. Automatic Annual Fee Adjustment. In addition to the Periodic Fee Adjustment mentioned above, the RCA will provide the Member Agencies with an automatic annual fee adjustment for the fee established by this Ordinance based on the average percentage change over the previous calendar year set forth in the Construction Price Index for the Riverside -San Bernardino -Ontario metropolitan area. P. Authority. The RCA shall have final determination regarding the appropriate methodology to calculate the fee based on the information provided. 0Wesegional conservation Authority tern Riverside County III. Mitigation Payment Requirements :-0 CHAPTER W. MITIGATION PAYMENT REQUIREMENTS New private, public, and other development activity in western Riverside County must comply with the MSHCP, IA, Ordinances, and Resolutions to obtain permits and make the appropriate mitigation payment. This Chapter describes the mitigation payment mechanisms and formulae that apply to different types of projects. It first defines three broad project categories and then provides more detail on the different mitigation payment calculations that apply to different types of projects under these broad categories. The subsequent Chapter IV provides illustrative fee calculations for Private and Public Project examples to clarify the appropriate calculation of mitigation payments.4 RCA staff is available to answer questions if there are questions about mitigation payment requirements for a specific project. A. General Project Categories All projects fall into one of three (3) general categories as described below. Local Permittees should first determine which general category any project falls under. 1. Private Projects Private Projects include projects where the primary project purpose is for use by households, businesses, or other private entities (i.e. not accessible to the public except where allowed by private owner/ renter). These projects include homes, apartments, offices, industrial buildings, and retail stores, among others. This category also includes Private Projects that receive public support (e.g., support through direct public investments in infrastructure, ground leases of publicly owned land, or direct investment of public dollars in projects such as affordable housing). Private Projects often require the development of public infrastructure, improvements, and amenities (e.g., streets, parks, and community buildings) by the project developer. In these cases, the Private Project developer will be responsible for making payments for the private and public components of the project. As discussed in more detail in subsequent sections, the mitigation fee payment calculation for privately developed public infrastructure, improvements, and amenities depends on the type of project (residential versus non-residential) and the nature and role of the improvements (whether they solely serve project residents or serve a broader community). 2. Public Projects Public Projects include projects whose primary goal is to provide publicly accessible/ useable infrastructure, improvements, or other amenities. Public Projects include a broad range of project types, including transportation, flood control, water, wastewater, stormwater, parks, community centers and other public buildings, among others. 4AI1 projects are required to make mitigation payments, except where specifically exempted in the Fee Ordinance. liR Some Public Projects will involve the private sector. Private sector involvement could be through design, construction, operation, and/or funding. For mitigation purposes, these projects are considered Public Projects and are treated the same from a mitigation perspective.5 3. Participating Special Entities (PSE) Projects Some types of projects can obtain the MSHCP benefits of permit streamlining by participating as Participating Special Entities ("PSE's"). This is a third category of project and its mitigation payment requirements are described separately, though in many ways PSE projects are treated similarly to Public Projects. B. Private Projects This section categorizes the different types of Private Projects and the associated mitigation payment requirements. Private project mitigation payments are determined by the MSHCP LDMF for the current fiscal year and project characteristics. Chapter IV provides illustrative examples of different types of Private Projects to further clarify and support the calculation of the appropriate mitigation payment. 1. Private Project Types Private Projects are further distinguished into three (3) types (along with some sub -types). In all cases, mitigation occurs through mitigation fee payment, though as described further below the mitigation fee type and calculation varies for these different types. a. Non -Residential The non-residential category of Private Projects encompasses the full and broad range of Private Projects that do not incorporate residential development. Uses include all commercial, industrial, and any other private non-residential projects. b. Residential The residential category of Private Projects covers the full range of residential development projects, including, but not limited to, residential subdivisions, apartment complexes, infill residential projects, affordable housing projects, single homesite developments, and Accessory Dwelling Units ("ADUs"). Mixed -use Private Projects (projects that combine residential and commercial/ industrial uses) are addressed distinctly, as described below. 5As described above under Private Projects and explained in more detail below, when public infrastructure/ improvements/ amenities are part of a Private Project, the mitigation for the public part of the Private Project is incorporated into the Private Project mitigation requirement. liWA Because of the variation in the type and extent of public infrastructure, improvements, and amenities developed as part of private residential projects, distinctions between different types of residential projects are required. Distinctions are also required as State law limits and specifies the application of mitigation fees to ADUs. • Type I. Residential Development with Resident -Serving Public Improvements Only. Residential projects whose public infrastructure, improvements, and amenities only serve project residents (e.g., in -tract roads, resident clubhouses, pocket parks, and parking for project resident/ guest use) and do not provide broader community access or benefits. • Type II. Residential Development with Community -Serving Public Improvements. Residential projects that include the development of public infrastructure, improvements, and amenities that serve more than project residents alone; e.g., backbone infrastructure such as roads that serve beyond the project residents or parks and amenities that serve more than just the new residential units. • Type III. Accessory Dwelling Units. State law restricts the imposition of mitigation fees on ADUs of less than 750 square feet and provides a formula for ADUs above this size. C. Mixed -Use Projects The mixed -use category of Private Projects encompasses projects that include private residential and private non-residential uses. The mixed -use project category is divided into two types because of the two distinct mixed -use project forms — horizontally mixed - use and vertically mixed -use. • Type I. Horizontally Mixed -Use Projects. Mixed -use projects where a distinct portion of the project land area is developed as residential and a distinct portion as non-residential. For example, a project that includes a residential subdivision and neighborhood shopping center. • Type II. Vertically Mixed -Use Projects. Mixed -use projects where one or more land use is developed vertically above another. For example, a project where apartment units are developed above ground floor retail. 2. Private Project Mitigation Fee Schedule The updated 2020 Nexus Study developed a consistent per gross acre mitigation fee. For residential projects, this per gross acre fee was then translated into per residential unit fees for three different residential development density categories (to allow for a continuation of the existing fee structure). The mitigation fee schedule is shown in Table 3-1 and includes the mitigation fees provided under the updated 2020 Nexus Study (actual fee levels will vary with fee phase -in and annual adjustments). `E:3 Table 3-1: Updated Fee Levels (effective January 1, 2022) Development Type Fee Residential Development Low Density (fewer less than or equal to 8.0 units per Gross Residential Project Acre) $3,635 per Unit Medium Density (between 8.0 and 14.0 units per Gross Residential Project Acre) $1,515 per Unit High Density (more than 14.0 units per Gross Residential Project Acre) $670 per Unit Non -Residential Development Commercial/ Industrial/ Non -Residential Mitigation Fee' $16,358 per Gross Project Acre [1] The per gross acre also applies to the public components to private projects and to certain types of public and PSE Projects. Private Project Mitigation Fee Calculations by Project Type `�7 The table below shows the mitigation payment approach for residential projects. Table 3-2: Mitigation Payment Approach for Residential Projects MITIGATION PAYMENT FORMULA FOR DIFFERENT TYPES OF RESIDENTIAL PROJECTS * Residential Developments - Type I Residential Development with Resident -Serving Public Improvements Only Fee Calculation: Fee Payment = Number of Residential Units x Per Unit Mitigation Fee for Appropriate Density Category Notes: 1. Density Category = Total Number of Residential Units / Gross Residential Project Acres 2. Type I Residential Development cannot include any public improvements that serve beyond the project residents (i.e. only resident -serving public improvements; not "community -serving" public improvements) Residential Developments - Type II Residential Development with Community -Serving Public Improvements Fee Calculation: Fee Payment = Number of Residential Units x Per Unit Mitigation Fee for Appropriate Density Category plus Gross Acres of community -serving Public Improvements x Per Gross Acre Fee Notes: 1. Density Category = Total Number of Residential Units / Gross Residential Project Acres 2. Type II Residential Development includes "Community -serving" Public Improvements that serve beyond the project residents and are not covered by the per residential unit mitigation fee 3. Gross Project Acres = Gross Residential Project Acres + Gross Community -Serving Public Improvement Acres Residential Developments - Type III Development of an Accessory Dwelling Unit (ADU) Fee Calculation: Fee Payment for ADUs of less than 750 square feet _ $0 Fee Payment for ADUs of more than 750 square feet = Per Unit Mitigation Fee for Low Density Category x (ADU square feet / Primary Residence square feet) Notes: 1. State Law does not allow charging of mitigation fees to ADUs of less than 750 square feet 2. State law provides the formula for calculating fee payments by larger ADUs * The term "Public Improvements" is used as a collective term for all Public Infrastructure, Improvement, and Amenities. Pill The table below shows the approach for non-residential projects and mixed -use projects. Table 3-3: Mitigation Payment Approach for Non -Residential and Mixed -Use Projects MITIGATION PAYMENT FORMULA FOR NON-RESIDENTIAL AND MIXED USE PROJECTS * Non Residential Projects All Non -Residential Projects Fee Calculation: Fee Payment = Gross Project Acres x Per Gross Acre Fee Notes: 1. Gross Project Acres include all project acres including non-residential development areas and all associated project acreage (i.e. including all parking, landscaping, public improvements etc.) Mixed -Use Project - Type I Horizontally mixed -use project with residential and non-residential private development Fee Calculation: Fee Payment = Number of Residential Units x Per Unit Mitigation Fee for Appropriate Density Category plus Gross Acres of Community -serving Public Improvements x Per Gross Acre Fee plus Gross Acres of Non -Residential Development x Per Gross Acre Fee Notes: 1. Density Category = Total Number of Residential Units / Gross Residential Project Acres 2. All gross project acres outside of the Gross Residential Project Acres contribute through the per gross acre fee Mixed -Use Project -Type II Vertically mixed -use project with residential and non-residential private development Fee Payment is the higher of two (2) calculations: Calculation 1: Fee Payment = Gross Project Acres x Per Gross Acre Fee Calculation 2: Fee Payment = Number of Residential Units x Per Unit Mitigation Fee for Appropriate Density Category plus Gross Acres of Community -serving Public Improvements x Per Gross Acre Fee Notes: 1. Density Category = Total Number of Residential Units / Gross Project Residential Acres (Gross Residential Acres = Gross Project Acres minus Community -serving Public Improvements Acres) * The term "Public Improvements" is used as a collective term for all Public Infrastructure, Improvement, and Amenities. 21 Key definitions associated with the above mitigation formula table include: • Gross Project Area/ Acres. This is the total or gross areas of the project. This overall acreage can only be reduced under unique circumstances.6 • Gross Residential Area/ Acres. This is the total area of the project dedicated to residential land uses and includes residential buildings as well as "Project Resident -Serving" Infrastructure/ Improvements/ Amenities. • Project Resident -Serving Infrastructure/ Improvements/ Amenities. Infrastructure/ improvements, and amenities that only serve project residents and include, but are not limited to, roads, parks, and non-residential buildings that only serve project residents. • Gross "Community -Serving" Area/ Acres. This is the area of residential projects that provide infrastructure, improvements, and amenities that go beyond only serving project residents and hence are "community -serving". This includes, but is not limited to, roads that serve multiple projects, parks that serve more than one residential project, parking that serves other uses/ developments etc. The acreage associated with these improvements/ amenities are part of the gross project acreage but distinct from project resident -serving improvements/ amenities and the gross residential area. For further clarification, mitigation fee payment calculations for illustrative Private Projects are provided in Chapter IV. C. Public Projects This section categorizes the different types of Public Projects and the associated mitigation payment requirements. The MSHCP, Implementing Agreement, and other documents established the mitigation system for Public Projects that includes a mix of approaches typically tied to a percent of capital cost or the adopted per gross acre mitigation fee for non-residential uses. The mitigation payments for road projects are more complex as certain funding sources (Measure A and TUMF) provide direct mitigation payments for the portions of transportation projects they fund. Chapter IV provides illustrative examples of selected Public Projects to further clarify and support the calculation of the appropriate mitigation payment. 1. Public Project Types Public Projects include the full range of projects that provide public infrastructure, improvements, or amenities. This includes, but is not limited to, public roads, parks, libraries, administrative facilities, jails, courts, and flood control projects among others. As 6Specifically, the MSHCP exempts flood control areas that cannot be developed from mitigation fee calculations. PX described in the following section, certain public/ quasi -public improvements are covered as Participating Special Entity projects (the third major project category type). These include public (and private) utility districts/ companies, School Districts, Special Districts, and other quasi -public entities. Per the MSHCP, Implementing Agreement, and other documents, the mitigation payment requirement/ obligation varies between the following Public Project types. • City/ County Road Projects. Includes all City and County road projects. • City/County Civic Projects. Includes all non -road City and County projects, including City/ County administrative facilities, jails, courts, juvenile facilities, parks, libraries, and all other facilities that serve the public. • Riverside County Flood Control District Projects. Includes all Riverside County Flood Control District projects. As noted in the MSHCP and the Implementing Agreement, mitigation contributions for Caltrans Projects are intended to be covered through a combination of Measure A funds, 3,000 acres of land dedication, and support for the endowment and ongoing positions. Mitigation for federal projects (e.g., development of a federal building) occurs through the Section 7 consultation process of the Federal Endangered Species Act; in some cases, these projects might be required to provide mitigation similar to those of other Public Projects under the MSHCP. 2. Mitigation Requirements and Transportation Funding Sources For transportation projects, the mitigation payment calculations are more complicated due to the distinct mitigation payments/ contributions directly incorporated into certain types of transportation funding, as described below: • TUMF Funding. The TUMF includes a small component tied to the mitigation of the portions of projects funded by TUMF revenues. This portion of the TUMF is passed directly from WRCOG to the RCA. As a result, the proportion of transportation projects that are funded by TUMF revenues are netted out from transportation project mitigation payments (described in more detail below). • Measure A Funding. A portion of the Measure A sales tax revenues was collected and provided to the RCA to support MSHCP implementation. This contribution represented the mitigation payment for the portions of projects funded with Measure A dollars. As a result, the proportion of transportation projects that are funded by Measure A funds are netted out from transportation project mitigation payments (described in more detail below). • Federal Funding. Unlike TUMF and Measure A funding, direct mitigation funding has not been provided for the portions of transportation projects that are federally funded. As a result, federal funding is not excluded from the mitigation payment 23 calculation. It is recommended that Local Permittees incorporate the mitigation payment associated with federally funded portions of their transportation projects into any grant applications for federal transportation funding. 3. Public Project Mitigation Payment Approaches There are two primary approaches that underlie the calculation of Public Project mitigation payments, including: • Per Gross Acre Fee Payments. For some Public Projects, the required mitigation payment is based on the application of the per gross acre fee to the gross project acres. The per gross acre fee is the same fee that applies to Private Projects. The fee will vary each year/ periodically and is calculated at $16,358 per Gross Project Acre in the updated 2020 Nexus Study. • Percent of Construction Costs. For some Public Projects, the mitigation payment requirement is three (3) percent or five (5) percent of total construction costs (described in more detail below). 4. Public Project Mitigation Fee Calculations by Project Type The table below shows fee calculations for different Public Projects types. Table 3-4: Mitigation Payment Approach for Public Projects MFF1GATION PAYMENT FORMULA FOR DIFFERENT TYPES OF PU0UC PROJECTS City{ Courrty Road Projects All arty and County Road Profects Fee Cai-culation- Fee Payment = 5% x Total Construction Costs Notes: 1. App=;es to all new road projects, all road widening projects, and other road investments that are not maintenance efforts. Z_ The proportion of total project costs covered byTUMFfun-ding and Measure A funding is discounted from the total construction costs (where appIi-cable) prior to fee payment calculation. 3_TotaI construction -costs are a portion of total project costs. Total -construction -costs include all direct/ hard costs, including contingencies and -change orders. RoW acquisition costs and soft costs are not included sn total construction casts. City{ County Civic Proji-M All arty and County (non -road) pubjc profects, irwtudirrg CYtyl Cour►Yy admiru5trati ve fach ftf es, jQiis, courts, fuverrife farifities, Parks, fibmnes, orotherfacifides that serve the public. Fee Calculation- Fee Payment= Grass Proje-tAcres x Per Gross Acre Fee Notes: 1. No exceptions u n I ess specif ica I IV noted in the Ordinance. 2. 5chool District, Special District, and certain other pub '.c projects are covered as P5E's. Riverside County Flood Control District Projects Air Riverside County Ficou Corrtrof Di5rri-ct projects Fee Calculation Fee Payment = S% x Total Construction Costs Notes 1-Total construction -casts are a portion of total project costs. Total construction costs include all direct/ hard costs, including contingencies and -change orders. ROW acquisition costs and soft costs are nat included sn total construction costs. D. Participating Special Entity Projects Participating Special Entities ("PSE's") are entities that are not formally covered under the MSHCP but are allowed to obtain the same MSHCP streamlined permitting by making the appropriate mitigation payments. This section categorizes the different types of PSE projects and the associated mitigation payment requirements. The mitigation payment system for PSE projects is similar to the one for public projects and includes a mix of approaches typically tied to percent of construction costs or the adopted per gross acre mitigation fee for non-residential uses. 1. PSE Project Types Participating Special Entities includes entities/ agencies such as public and private utility districts/ companies, School Districts, Special Districts, and Quasi -Public entities, among others. Public water districts, private water companies, telecommunication companies, Investor Owned Utilities (IOU's), Schools, Colleges, and Universities would all fall in this project category. The mitigation payment requirement/ obligation varies between the following Public Project types. • Non -Linear Projects. Includes all projects that are non -linear in form. • Linear Projects. Includes all linear projects with differentiation in payment amount between permanent and temporary projects. 2. PSE Mitigation Payment Approaches There are two primary approaches that underlie the calculation of Public Project mitigation payments, including: • Per Gross Acre Fee Payments. For non -linear Public Projects, the required mitigation payment is based on the application of the per gross acre fee to the gross project acres. The per gross acre fee is the same fee that applies to Private Projects. The fee will vary each year/ periodically and is calculated at $16,358 per Gross Project Acre in the updated 2020 Nexus Study. • Percent of Construction Costs. For linear projects, the mitigation payment requirement is 5 percent of total construction costs for permanent impacts and three (3) percent of total construction costs for temporary impacts. 3. PSE Project Mitigation Fee Calculations by Project Type The table below shows fee calculations for different PSE project types. Table 3-5: Mitigation Payment Approach for PSE Projects MITIGATION PAYMENT FORMULA FOR DIFFERENT TYPES OF PSE PROJECTS Non -Linear Projects All PSE projects that are not linear inform Fee Calculation: Fee Payment = Gross Project Acres x Per Gross Acre Fee Linear Projects - Permanent Impacts All PSE projects that are linear in form and permanent Fee Calculation Fee Payment = 5%x Total Construction Costs Linear Projects - Temporary Impacts All PSE projects that are linear inform and temporary Fee Calculation Fee Payment = 3%x Total Construction Costs Notes 1. Total construction costs are a portion of total project costs. Total construction costs include all direct/ hard costs, including contingencies and change orders. ROW acquisition costs and soft costs are not included in total construction costs. PAN ��►- _ �. •. a►"�41,j .rig. �:a�cll y. . >E t A �; } liy - 1Jy �` L cy a - reloo WAN 01i 4( � b la! R CHAPTER IV. MITIGATION PAYMENT EXAMPLES This chapter provides illustrative fee calculations for examples of Private and Public Projects. Building off the comprehensive description of mitigation requirements and formulae by project type in Chapter III, this chapter provides fee calculations for an illustrative set of projects. Illustrative examples were developed for a range of circumstances and are designed to help Local Permittees identify the appropriate approach for estimating mitigation payments. The examples included in this chapter are for illustration purposes only. In the event of a conflict between these examples and the Fee Ordinance of the applicable City/County, the Fee Ordinance shall control the administration of the Local Development Mitigation Fee. Please contact RCA staff if you are unclear on how to conduct the mitigation payment calculation for a particular project. A. Private Projects: Residential/Mixed Use Examples This section contains six (6) examples of private development projects, including four (4) residential projects and two (2) mixed -use projects. More specifically, the include: • Example 1: All Residential — Low Density • Example 2: All Residential —Low Density— including Backbone Road Construction • Example 3: All Residential — High Density - including Backbone Road Construction • Example 4: All Residential — Combination of Densities • Example 5: Horizontal Mixed Use — Residential/ Commercial — including Backbone Road Construction • Example 6: Vertical Mixed Use — Residential/ Commercial These examples are not intended to be all inclusive but rather give permittees guidance on calculating the mitigation fee payment given different project types and characteristics. Included in each example is a narrative of the example project, a figure representation of the project layout, the development program description, and the mitigation fee calculation. No stand-alone commercial project examples are included as the application of the per gross acre mitigation fee to the gross project acres is universal for all non- residential Private Projects. Example 1 - All Residential — Low Density Residential project to be developed on a total of ten acres (area inside red boundary). The project will include residential units, a community building/ area for the residents of the development (project residents only), and streets within the development (in -tract streets). All roads leading to the development have already been built and do not require investments by the developer. A total of 50 residential units are planned within the ten gross acres, resulting in an average residential density of five units per acre. This represents a low -density residential project for the purpose of the fee program. Please K-01 see the visual representation of the project layout (Figure 1-1), the development program data (Table 1-1), and mitigation payment calculation (Table 1-2) below. Figure 1-1: Illustrative Project Layout Love DeiisAy Low Density Low Density Residential Residential Residential i�f?C1 B6UFl�drj+ Low DersiTy Rasidential Low Density Resident -Serving Loup Demo Resdend 5en;npComm ngcen�eT Residential Community Center Residential Future In -Trait Roads Existing BackUane Roads Low Density Low Density Low Density Resrdenbal Residential ResideNial €ii''sting nkklrane Roads M01 Table 1-1: Illustrative Development Program Item Amount Gross Project Area 10 acres Residential Development Area Residential Development Area 8.25 In -Tract/ Project Resident Serving (Residential) 1.75 Total/ Gross Residential Acres 10.00 All Other Development Non -Residential Development Area 0 Backbone/ Area -Serving 0 Total Non -Residential Development 0 Residential Development Low Density (1) 50 Medium Density (1) 0 High Density (1) 0 Total Units 50 units Residential Project Density Residential Project Density 5 units/ acre Residential Fee Density Category (1) LOW (1) Residential density categories as follows: - Low Density - less than or equal to 8 residential units/ gross residential acre. - Medium Density - greater than 8 and less than 16 residential units/ gross residential acre. - High Density - greater than 16 residential units/ gross residential acre. 'CIO] Table 1-2: Mitigation Fee Payment Calculation Per Unit/ Per Acre Mitigation Item Units/ Acres Mitigaiton Fee (1) Fee Payment Residential Development (2) 50 units $3,635 (low density) $181,750 Non -Residential Development (3) 0 acres $16,358 $0 Backbone/ Community -Serving (4) 0 acres $16,358 $0 Total Mitigation Fee Payment (5) $181,750 (1) Fee schedule will be updated periodically. Fee schedule used for Example Calculations as follows: Residential Development Low Density (on average) $3,635 per unit Medium Density (on average) $1,515 per unit High Density (on average) $670 per unit All Other Development $16,358 per gross acre (2) Residential mitigation fee payment covers residential units and associated in -tract infrastructure/ improvements and project resident -serving amenities. All infrastructure, improvements, and amenities that serve beyond the projet residents is covered in separate component of the fee calculation. (3) Includes land area associated with non-residential development, such as commercial/ industrial buildings, parking, and landscaping, among other components. (4) All infrastructure/ improvements/ amenities that serve beyong the project/ project residents and that are not included in the non-residential development fee payment calculation included here. (5) Mitigation fee payment calculation does not include any additional member jurisdiction adminstrative charges. 31 Example 2 — All Residential — Low Density — Including Backbone Road Construction Residential project to be developed on a total of 12.5 acres (inside red boundary). The project will include residential units, a community building/ area for the residents of the development (project residents only), streets within the development (in -tract streets), and new streets leading to the project (backbone/ community -serving streets). The member agency has required the builder to construct backbone roads as a condition of the permit. The backbone roads will be built on an additional 2.5 acres of land distinct from the 10 acres that will incorporate the residential development and project resident -serving improvements/ amenities. A total of 50 residential units are planned within the 10 gross acres (gross residential acres) that exclude the backbone/community-serving infrastructure. This results in an average residential density of five units per acre and represents a low -density residential project for the purpose of the fee program. Please see the visual representation of the project layout (Figure 2-1), the development program data (Table 2-1), and the mitigation payment calculation (Table 2-2) below. Figure 2-1: Illustrative Project Layout Law Densky tow Density Law Density Residential Residential Residenti6 Res�d�l�5elvin� Low Density Communiy Loin Density Residental e"lnr Residential Existing Low Density Law Density Low Density Shopping Residential Residential Residential Pt Center = Pmpa Boundary u 1=ulure In -Tract Roads m Existing Backhorre Roads = Umv Density REvderrbal Ewtmg 5hv*pirrg Center r-1 Ww BacKbone Roads 0 R-Esident-Serving Cemmuntty Cent--r 32 Table 2-1: Illustrative Development Program Item Amount Gross Project Area 12.5 acres Residential Development Area Residential Development Area 8.25 In -Tract/ Project Resident Serving (Residential) 1.75 Total/ Gross Residential Acres 10.00 All Other Development Non -Residential Development Area 0 Backbone/ Area -Serving 2_5 Total Non -Residential Development 2.5 Residential Development Low Density (1) 50 Medium Density (1) 0 High Density (1) 0 Total Units 50 units Residential Project Density Residential Project Density 5 units/ acre Residential Fee Density Category (1) LOW (1) Residential density categories as follows: - Low Density - less than or equal to 8 residential units/ gross residential acre. - Medium Density - greater than 8 and less than 16 residential units/ gross residential acre. - High Density - greater than 16 residential units/ gross residential acre. 33 Table 2-2: Mitigation Payment Calculation Per Unit/ Per Acre Mitigation Item Units/ Acres Mitigaiton Fee (1) Fee Payment Residential Development (2) 50 units $3,635 (low density) $181,750 Non -Residential Development (3) 0 acres $16,358 $0 Backbone/ Community -Serving (4) 2.5 acres $16,358 $40,895 Total Mitigation Fee Payment (5) $222,645 (1) Fee schedule will be updated periodically. Fee schedule used for Example Calculations as follows: Residential Development Low Density (on average) $3,635 per unit Medium Density (on average) $1,515 per unit High Density (on average) $670 per unit All Other Development $16,358 per gross acre (2) Residential mitigation fee payment covers residential units and associated in -tract infrastructure/ improvements and project resident -serving amenities. All infrastructure, improvements, and amenities that serve beyond the projet residents is covered in separate component of the fee calculation. (3) Includes land area associated with non-residential development, such as commercial/ industrial buildings, parking, and landscaping, among other components. (4) All infrastructure/ improvements/ amenities that serve beyong the project/ project residents and that are not included in the non-residential development fee payment calculation included here. (5) Mitigation fee payment calculation does not include any additional member jurisdiction adminstrative charges. 4151 Example 3 — All Residential — High Density — Including Backbone Road Construction Residential project to be developed on a total of 12.5 acres (inside red boundary). The project will include residential units, a community building/area for the residents of the development (project residents only), streets within the development (in -tract streets), and new streets leading to the project (backbone/ community -serving streets). The member agency has required the builder to construct backbone roads as a condition of the permit. The backbone roads will be built on an additional 2.5 acres of land distinct from the 10 acres that will incorporate the residential development and project resident -serving improvements/ amenities. A total of 200 residential units are planned within the 10 gross acres that exclude the backbone/ community -serving infrastructure. This results in an average residential density of 20 units per acre and represents a high -density residential project for the purpose of the fee program. Please see the visual representation of the project layout (Figure 3-1), the illustrative development program data (Table 3-1), and the mitigation payment calculation (Table 3-2) below. Figure 3-1: Project Layout high Density High Density High Density Resident!al Residential Residential High Density `Rde� Se x,n� High Density Residential �ommuni�y Residential tae;1%Er g Existin Hiah Density High Density High Density Existing Shopping Residential Residential Residential Center Nedv 3ackbone Roads istiFu SaeisEane, 0 tec# Boundary u Pulure In -Tract Rtxads m Existing Backbone P=a flgn Density Residential Ewtmiq Shopping Gerner stew 9aCMXMe Roads 0 #issident-Ser*gCorrmunftyCent--r 35 Table 3-1: Illustrative Development Program Item Amount Gross Project Area 12.5 acres Residential Development Area Residential Development Area 8.00 In -Tract/ Project Resident Serving (Residential) 2.00 Total/ Gross Residential Acres 10.00 All Other Development Non -Residential Development Area 0 Backbone/ Area -Serving 2_5 Total Non -Residential Development 2.5 Residential Development Low Density (1) 0 Medium Density (1) 0 High Density (1) 200 Total Units 200 units Residential Project Density Residential Project Density 20 units/ acre Residential Fee Density Category (1) HIGH (1) Residential density categories as follows: - Low Density - less than or equal to 8 residential units/ gross residential acre. - Medium Density - greater than 8 and less than 16 residential units/ gross residential acre. - High Density - greater than 16 residential units/ gross residential acre. Table 3-2: Mitigation Payment Calculation Item Per Unit/ Per Acre Units/ Acres Mitigaiton Fee (1) Mitigation Fee Payment Residential Development (2) 200 units $670 (high density) $134,000 Non -Residential Development (3) 0 acres $16,358 $0 Backbone/ Community -Serving (4) 2.5 acres $16,358 $40,895 Total Mitigation Fee Payment (5) $174,895 (1) Fee schedule will be updated periodically. Fee schedule used for Example Calculations as follows: Residential Development Low Density (on average) $3,635 per unit Medium Density (on average) $1,515 per unit High Density (on average) $670 per unit All Other Development $16,358 per gross acre (2) Residential mitigation fee payment covers residential units and associated in -tract infrastructure/ improvements and project resident -serving amenities. All infrastructure, improvements, and amenities that serve beyond the projet residents is covered in separate component of the fee calculation. (3) Includes land area associated with non-residential development, such as commercial/ industrial buildings, parking, and landscaping, among other components. (4) All infrastructure/ improvements/ amenities that serve beyong the project/ project residents and that are not included in the non-residential development fee payment calculation included here. (5) Mitigation fee payment calculation does not include any additional member jurisdiction adminstrative charges. Example 4 — All Residential — Combination of Densities Residential project to be developed on a total of 7.25 acres (area inside red boundary). The project will include residential units, a community building/area for the residents of the development (project residents only), and streets within the development (in -tract streets). All roads leading to the development have already been built and do not require investments by the developer. A total of 50 residential units are planned within the 7.25 gross acres, including a mix of low- and high -density development. The 50 residential units planned on 7.5 gross acres result in an average residential density of 6.9 units per acre. This represents a low -density residential project for the purpose of the fee program. Please see the visual representation of the project layout (Figure 4-1), the illustrative development program data (Table 4-1), and the mitigation payment calculation (Table 4- 2) below. ON Figure 4-1: Illustrative Project Layout Prq--d 8oul" 0 Lwi aniq Residential High DenAy Resident -Serving Lo'v.- Dvr,s Rgh DensgRewweal Residential Commoin yCenter Re5idpnt:l: Resent-5ervrngCammunrtyi~emer Future In-7wt Roads m Ex sing Baekbme- Roads Law Density Law Density Law Densq Re53denbal Residential Residential 41:3 Table 4-1: Illustrative Development Program Item Amount Gross Project Area 7.25 acres Residential Development Area Residential Development Area 5.75 In -Tract/ Project Resident Serving (Residential) 1.50 Total/ Gross Residential Acres 7.25 All Other Development Non -Residential Development Area 0 Backbone/ Area -Serving 0 Total Non -Residential Development 0 Residential Development Low Density (1) 25 Medium Density (1) 0 High Density (1) 25 Total Units 50 units Residential Project Density Residential Project Density 6.9 units/ acre Residential Fee Density Category (1) LOW (1) Residential density categories as follows: - Low Density - less than or equal to 8 residential units/ gross residential acre. - Medium Density - greater than 8 and less than 16 residential units/ gross residential acre. - High Density - greater than 16 residential units/ gross residential acre. 001 Table 4-2: Mitigation Payment Calculation Per Unit/ Per Acre Mitigation Item Units/ Acres Mitigaiton Fee (1) Fee Payment Residential Development (2) 50 units $3,635 (low density) $181,750 Non -Residential Development (3) 0 acres $16,358 $0 Backbone/ Community -Serving (4) 0 acres $16,358 $0 Total Mitigation Fee Payment (5) $181,750 (1) Fee schedule will be updated periodically. Fee schedule used for Example Calculations as follows: Residential Development Low Density (on average) $3,635 per unit Medium Density (on average) $1,515 per unit High Density (on average) $670 per unit All Other Development $16,358 per gross acre (2) Residential mitigation fee payment covers residential units and associated in -tract infrastructure/ improvements and project resident -serving amenities. All infrastructure, improvements, and amenities that serve beyond the projet residents is covered in separate component of the fee calculation. (3) Includes land area associated with non-residential development, such as commercial/ industrial buildings, parking, and landscaping, among other components. (4) All infrastructure/ improvements/ amenities that serve beyong the project/ project residents and that are not included in the non-residential development fee payment calculation included here. (5) Mitigation fee payment calculation does not include any additional member jurisdiction adminstrative charges. Example 5 — Horizontal Mixed Use — Residential and Commercial — Including Backbone Road Construction Mixed use project to be developed on a total of 22.5 acres (inside red boundary). Residential project to be developed on ten acres. The project will include three components: (1) residential units, a community building/area for the residents of the development (project residents only), and streets within the residential development (in - tract streets); (2) a commercial development (e.g. shopping center) and project -serving improvements (e.g. parking, landscaping, and any other component that is not restricted to use by the residents only); and, (3) backbone/community serving roads on 2.5 acres of land that the member agency has required the builder to construct as a condition of the permit. A total of 50 residential units are planned within the 10 gross residential acres that exclude the backbone/community-serving infrastructure and the commercial development. This results in an average residential density of five units per acre, meaning that the residential component of the project is low density for the purpose of the fee program. Please see the visual representation of the project layout (Figure 5-1), the illustrative development program data (Table 5-1), and the mitigation payment calculation (Table 5-2) below. Figure 5-1: Illustrative Project Layout Low Density Residential Law Density Residential Law Density Residential Lnv� Density Low Density Commercial Residential C°mmunity Residential Retail ue,k r Existing Law Density Law Density Low Density Sbo in �t g Residential Residential Residential Center © P�otec#Boundanj _ml ❑ensiry Residential j ] Cammercial Retail 0 Residegi-5erong Commumly Center 0 Future in -Tracy Roads 0 EKstirg Shopping Center m Existing BacK4one Roads New Backbone Roads 41 Table 5-1: Illustrative Development Program Item Amount Gross Project Area 22.5 acres Residential Development Area Residential Development Area 8.25 In -Tract/ Project Resident Serving (Residential) 1.75 Total/ Gross Residential Acres 10.00 All Other Development Non -Residential Development Area 10.0 Backbone/ Area -Serving 2_5 Total Non -Residential Development 12.5 Residential Development Low Density (1) 50 Medium Density (1) 0 High Density (1) 0 Total Units 50 units Residential Project Density Residential Project Density 5.0 units/ acre Residential Fee Density Category (1) LOW (1) Residential density categories as follows: - Low Density - less than or equal to 8 residential units/ gross residential acre. - Medium Density - greater than 8 and less than 16 residential units/ gross residential acre. - High Density - greater than 16 residential units/ gross residential acre. 11K Table 5-2: Mitigation Fee Payment Calculation Per Unit/ Per Acre Mitigation Item Units/ Acres Mitigaiton Fee (1) Fee Payment Residential Development (2) 50 units $3,635 (low density) $181,750 Non -Residential Development (3) 10 acres $16,358 $163,580 Backbone/ Community -Serving (4) 2.5 acres $16,358 $40,895 Total Mitigation Fee Payment (5) $386,225 (1) Fee schedule will be updated periodically. Residential Development Low Density (on average) Medium Density (on average) Fee schedule used for Example Calculations as follows: $3,635 per unit $1,515 per unit High Density (on average) $670 per unit All Other Development $16,358 per gross acre (2) Residential mitigation fee payment covers residential units and associated in -tract infrastructure/ improvements and project resident -serving amenities. All infrastructure, improvements, and amenities that serve beyond the projet residents is covered in separate component of the fee calculation. (3) Includes land area associated with non-residential development, such as commercial/ industrial buildings, parking, and landscaping, among other components. (4) All infrastructure/ improvements/ amenities that serve beyong the project/ project residents and that are not included in the non-residential development fee payment calculation included here. (5) Mitigation fee payment calculation does not include any additional member jurisdiction adminstrative charges. Example 6 — Vertical Mixed Use — Residential and Commercial Mixed use project to be developed on a total of 3 acres (inside red boundary). The project will include a podium at street level that will include commercial/ retail as well as parking, residential units in the stories above the podium, as well as streets within the project area (in -tract streets). A total of 90 residential units are planned within the 3-acre project area. This results in an average residential density of 30 units per acre, meaning that the residential component of the project is high density for the purpose of the fee program. Please see the visual representations of the project layout (Figures 6-1 and 6-2), the illustrative development program data (Table 6-1), and the mitigation payment calculations (Tables 6-2 and 6-3) below. Two calculations must be conducted for mixed - use vertical projects and the higher of the two calculations must be used. One calculation treats the project like a residential project and the other calculation treats it like a commercial project. In the example below, the mitigation payment is $60,300 under the first method and $49,300 under the second method, so $60,300 payment applies. 1191 Figure 6-1: Illustrative Project Layout — Residential and Commercial Vertical View Figure 6-2: Illustrative Project Layout — Residential and Commercial Horizontal View PMed BDUFKfaFy 0qip DensEly fZasidantial ODMME M. Retail i Mtng Bw-'X ne Roads Table 6-1: Illustrative Development Program Item Gross Project Area Residential Development Area Residential Development Area In -Tract/ Project Resident Serving (Residential) Total/ Gross Residential Acres All Other Development Non -Residential Development Area Backbone/ Area -Serving Total Non -Residential Development Residential Development Low Density (1) Medium Density (1) High Density (1) Total Units Residential Project Density Residential Project Density Residential Fee Density Category (1) Amount 3 acres 2.75 0.25 3.00 I 0 0 90 90 units 30.0 units/ acre HIGH (1) Residential density categories as follows: - Low Density - less than or equal to 8 residential units/ gross residential acre. - Medium Density - greater than 8 and less than 16 residential units/ gross residential acre. - High Density - greater than 16 residential units/ gross residential acre. HO Table 6-2: Mitigation Fee Payment Calculation - Method 1 (Residential Focus) Per Unit/ Per Acre Mitigation Item Units/ Acres Mitigaiton Fee (1) Fee Payment Residential Development (2) 90 units $670 (high density) $60,300 Non -Residential Development (3) 0 acres $16,358 $0 Backbone/ Community -Serving (4) 0 acres $16,358 $0 Total Mitigation Fee Payment (5) $60,300 (1) Fee schedule will be updated periodically. Fee schedule used for Example Calculations as follows: Residential Development Low Density (on average) $3,635 per unit Medium Density (on average) $1,515 per unit High Density (on average) $670 per unit All Other Development $16,358 per gross acre (2) Residential mitigation fee payment covers residential units and associated in -tract infrastructure/ improvements and project resident -serving amenities. All infrastructure, improvements, and amenities that serve beyond the projet residents is covered in separate component of the fee calculation. (3) Includes land area associated with non-residential development, such as commercial/ industrial buildings, parking, and landscaping, among other components. (4) All infrastructure/ improvements/ amenities that serve beyong the project/ project residents and that are not included in the non-residential development fee payment calculation included here. (5) Mitigation fee payment calculation does not include any additional member jurisdiction adminstrative charges. CVl Table 6-3: Mitigation Fee Payment Calculation — Method 2 (Commercial/ Proiect Area Focus) Per Unit/ Per Acre Mitigation Item Units/ Acres Mitigaiton Fee (1) Fee Payment Residential Development (2) 0 units $670 (high density) $0 Non -Residential Development (3) 3 acres $16,358 $49,074 Backbone/ Community -Serving (4) 0 acres $16,358 $0 Total Mitigation Fee Payment (5) $49,074 (1) Fee schedule will be updated periodically. Fee schedule used for Example Calculations as follows: Residential Development Low Density (on average) $3,635 per unit Medium Density (on average) $1,515 per unit High Density (on average) $670 per unit All Other Development $16,358 per gross acre (2) Residential mitigation fee payment covers residential units and associated in -tract infrastructure/ improvements and project resident -serving amenities. All infrastructure, improvements, and amenities that serve beyond the projet residents is covered in separate component of the fee calculation. (3) Includes land area associated with non-residential development, such as commercial/ industrial buildings, parking, and landscaping, among other components. (4) All infrastructure/ improvements/ amenities that serve beyong the project/ project residents and that are not included in the non-residential development fee payment calculation included here. (5) Mitigation fee payment calculation does not include any additional member jurisdiction adminstrative charges. B. Public Project Examples This section contains four (4) examples of public development projects, including one (1) Member Agency Civic Project and three (3) transportation/ road projects. These examples are not intended to be all inclusive but rather give permittees guidance on calculating the mitigation fee payment given different project types, characteristics, and, in the case of road/ transportation projects, different sources of funding. The Member Agency Civic project example provides a brief narrative, a representation of the project layout, the development program description, and the mitigation payment calculation. The road/ transportation examples provide a brief narrative of the project, cost estimates, key funding source information, and the mitigation payment calculation. Graphic layouts for the public road projects are not provided as the mitigation payment calculation is tied to costs and funding sources (not the specific layout of the project.) CE:j As described in Chapter III and illustrated in the private project examples provided above in this chapter, mitigation payments for road and Member Agency Civic Projects that are developed by a private developer as part of a Private Project are calculated and made as part of the Private Project development mitigation payment. Example 7 — Member Agency Civic Project Member Agency Civic Projects includes the development of a library and park with adjacent parking lot. The parking lot will also serve as a park and ride location. The total acreage of the project is 6 acres (area inside red boundary). Please see the visual representation of the project layout (Figure 7-1), the development program data (Table 7- 1), and mitigation payment calculations (Table 7-2) below. Figure 7-1: Project Layout p Prc�xl HOLMdary LPbrary Pa Park a nd Rrde Parking Lot Table 7-1: Illustrative Development Program Item Amount Library Area 1.0 acres Park 2.0 acres Parking Area Park and Ride Area 1.0 acres General Parking Lot 2.0 acres Subotal - Parking 3.0 acres Gross Project Area 6.0 acres Table 7-2: Mitigation Payment Calculation Item Amount Gross Project Acres 6.0 acres Mitigation Fee per Gross Acre (2) $16,358 Total Mitigation Payment $98,148 (1) Fee schedule will be updated periodically. Fee schedule used for Example Calculations as follows: Commerical/ Industrial* $16,358 per gross acre * Per gross acre fee for Local Public Capital Projects is the same as for commerical/ industrial development. Example 8 — Road Widening with No Measure A or TUMF Funding Road widening project with no Measure A or TUMF funding. Whole project is required to mitigate as project falls into the "new road, road widening, and other non -maintenance road projects" category that are required to mitigate (only maintenance projects costs such as road rehabilitation, restriping, and resealing are not required to mitigate). Total project cost is estimated at $5.5 million, including total direct construction costs of $4.4 million (including the construction cost contingency), $1.1 million in soft costs, and no land/ ROW acquisition costs. Please see the example road project cost estimates data :717 (Table 8-1), the funding source information (Table 8-2), and the mitigation payment calculations (Table 8-3) below. Table 8-1: Illustrative Project Costs Cost Item Cost NEW ROAD, ROAD WIDENING, OR OTHER NON -MAINTENANCE PROJECTS (1) Construction Costs Base Construction Costs $4,000,000 Changes Orders/ Contingency $400,000 (3) Total Construction Costs $4,400,000 Soft Costs $1,100,000 (4) Land Acquisition/ ROW Costs $0 Total Capacity -Increasing Cost $5,500,000 MAINTENANCE PROJECTS (2) Total Construction Costs $0 Total Soft Costs $0 Total Non -Capacity -Increasing Cost $0 TOTAL PROJECT COSTS/ USES $5,500,000 (1) Total Construction costs for new roads, road widening, and other non -maintenance projects are included in the mitigation fee payment calculation (see Table 8-3). (2) Examples of maintenance projects include road rehabilitation, re -striping, and resealing. See Ordinance for full list of maintenance projects that are not required to mitigate. (3) Initial fee payment calculations made on construction cost and construction contigency cost estimates. Additional fee payments also due on any change orders that add net costs above -and -beyond the initial construction cost contigency estimates (3) For illustrative purposes shown as 10% of base construction cost. Contigency (and future Change Orders) will vary by project. (4) For illustrative purposes shown as 25% of total construction costs. 51 Table 8-2: Illustrative Funding Sources Cost Item TUMF/ Measue A Funding TUMF Fee Revenues Meaure A Funding Subtotal Other Funding TOTAL PROJECT FUNDING/ SOURCES Table 8-3: Mitigation Payment Calculation Cost Item TOTAL PROJECT COSTS TOTAL NON -MAINTENANCE CONSTRUCTION COSTS % of FUNDING FROM OTHER FUNDING SOURCES (1) Amount % of Total $0 0% 0% $0 0% $5,500,000 100% $5,500,000 100% ELIGIBLE COST BASIS FOR MITIGATION PAYMENT CALCULCATION Amount Source/ Calculation $5,500,000 a See Table 8-1 $4,400,000 b See Table 8-1 100% c See Table 8-2 $4,400,000 d = b *c Calculation MITIGATION FEE PAYMENT DUE FROM LOCAL JURISDICTION (2) $220,000 e = d * 5% Calculation (1) Other funding sources includes all costs not funded by TUMF or Measue A revenues as calculated in Table 8-2. (2) Mitigation fee paymet by permitting agency is 5% of eligible construction cost. Example 9 — Road Widening Project with 20% Measure A/ TUMF Funding Road widening project with 20% of funding from Measure A and TUMF funding. Whole project is required to mitigate as project - new road, road widening, and other non - maintenance road projects are required to mitigate (only maintenance costs are not required to mitigate). However, 20 percent of the project will be mitigated separately through TUMF or Measure A funding. Total projects cost is estimated at $5.5 million, including total direct construction costs of $4.4 million (including the construction cost contingency), $1.1 million in soft costs, and no land/ ROW acquisition costs. Please see the example road project cost estimates data (Table 9-1), the funding source information (Table 9-2), and the mitigation payment calculations (Table 9-3) below. 40% Table 9-1: Illustrative Project Costs Cost Item Cost NEW ROAD, ROAD WIDENING, OR OTHER NON -MAINTENANCE PROJECTS (1) Construction Costs (2) Base Construction Costs $4,000,000 Changes Orders/ Contingency $400,000 (3) Total Construction Costs $4,400,000 Soft Costs $1,100,000 (4) Land Acquisition/ ROW Costs $0 Total Capacity -Increasing Cost $5,500,000 MAINTENANCE PROJECTS (2) Total Construction Costs $0 Total Soft Costs $0 Total Non -Capacity -Increasing Cost $0 TOTAL PROJECT COSTS/ USES $5,500,000 (1) Total Construction costs for new roads, road widening, and other non -maintenance projects are included in the mitigation fee payment calculation (see Table 8-3). (2) Examples of maintenance projects include road rehabilitation, re -striping, and resealing. See Ordinance for full list of maintenance projects that are not required to mitigate. (3) Initial fee payment calculations made on construction cost and construction contigency cost estimates. Additional fee payments also due on any change orders that add net costs above -and -beyond the initial construction cost contigency estimates (4) For illustrative purposes shown as 10% of base construction cost. Contigency (and future Change Orders) will vary by project. (5) For illustrative purposes shown as 25% of total construction costs. 53 Table 9-2: Funding Sources Cost Item Amount % of Total TUMF/ Measue A Funding TUMF Fee Revenues $800,000 15% Meaure A Funding $300,000 5% Subtotal $1,100,000 20% Other Funding $4,400,000 80% TOTAL PROJECT FUNDING/ SOURCES $5,500,000 100% Table 9-3: Mitigation Fee Payment Calculation Cost Item Amount Source/ Calculation TOTAL PROJECT COSTS TOTAL NON -MAINTENANCE CONSTRUCTION COSTS % of FUNDING FROM OTHER FUNDING SOURCES (1) ELIGIBLE COST BASIS FOR MITIGATION PAYMENT CALCULCATION MITIGATION FEE PAYMENT DUE FROM LOCAL JURISDICTION (2) $5,500,000 a See Table 1 $4,400,000 b See Table 1 80% c See Table 2 $3,520,000 d = b *c Calculation $176,000 e = d * 5% Calculation (1) Other funding sources includes all costs not funded by TUMF or Measue A revenues as calculated in Table 9-2. In cases where Measue A/ TUMF funding is allocated for specifc project cost categories, additional calculations and allocations may be appropriate. In these cases, please contact RCA staff and provide documentation of funding restrictions for support on the appriorate mitigation fee payment calcuation. (2) Mitigation fee paymet by permitting agency is 5% of eligible construction cost. Example 10 - Combined New Road/ Road Rehabilitation Project with 50% Measure A / TUMF Funding Road project that includes the development of a new segment of road along with rehabilitation of a segment of existing roadway. Road project is 50% funded through Measure A or TUMF funds. Total project costs are $8 million. About $6 million is associated with the new road, including $4.4 million in direct construction costs (including the construction cost contingency), $1.1 million in soft costs, and $500,000 in land acquisition costs. About $2 million (25% of overall project cost) is associated with rehabilitation of the existing roadway, including $1.6 million in direct construction costs (including the construction cost contingency) and $400,000 in soft costs. Please see the :'il example road project cost estimates data (Table 10-1), the funding source information (Table 10-2), and the mitigation payment calculations (Table 10-3) below. Table 10-1: Cost Estimates Cost Item Cost NEW ROAD, ROAD WIDENING, OR OTHER NON -MAINTENANCE PROJECTS (1) Construction Costs (2) Base Construction Costs $4,000,000 Changes Orders/ Contingency $400,000 (3) Total Construction Costs $4,400,000 Soft Costs $1,100,000 (4) Land Acquisition/ ROW Costs $500,000 Total Capacity -Increasing Cost $6,000,000 MAINTENANCE PROJECTS (2) Total Construction Costs $1,600,000 Total Soft Costs $400,000 (4) Total Non -Capacity -Increasing Cost $2,000,000 TOTAL PROJECT COSTS/ USES $8,000,000 (1) Total Construction costs for new roads, road widening, and other non -maintenance projects are included in the mitigation fee payment calculation (see Table 8-3). (2) Examples of maintenance projects include road rehabilitation, re -striping, and resealing. See Ordinance for full list of maintenance projects that are not required to mitigate. (3) Initial fee payment calculations made on construction cost and construction contigency cost estimates. Additional fee payments also due on any change orders that add net costs above -and -beyond the initial construction cost contigency estimates (4) For illustrative purposes shown as 10% of base construction cost. Contigency (and future Change Orders) will vary by project. (5) For illustrative purposes shown as 25% of total construction costs. Table 10-2: Funding Sources Cost Item Amount % of Total TUMF/ Measue A Funding TUMF Fee Revenues $2,000,000 25% Meaure A Funding $2,000,000 25% Subtotal $4,000,000 50% Other Funding $4,000,000 50% TOTAL PROJECT FUNDING/ SOURCES $8,000,000 100% Table 10-3: Mitigation Payment Calculation Cost Item Amount Source/ Calculation TOTAL PROJECT COSTS $8,000,000 a See Table 1 TOTAL NON -MAINTENANCE CONSTRUCTION COSTS $4,400,000 b See Table 1 % of FUNDING FROM OTHER FUNDING SOURCES (1) 50% c See Table 2 ELIGIBLE COST BASIS FOR MITIGATION PAYMENT CALCULCATION $2,200,000 d = b *c Calculation MITIGATION FEE PAYMENT DUE FROM LOCAL JURISDICTION (2) $110,000 e = d * 5% Calculation (1) Other funding sources includes all costs not funded by TUMF or Measue A revenues as calculated in Table 10-2. In cases where Measue A/ TUMF funding is allocated for specifc project cost categories, additional calculations and allocations may be appropriate. In these cases, please contact RCA staff and provide documentation of funding restrictions for support on the appriorate mitigation fee payment calcuation. (2) Mitigation fee paymet by permitting agency is 5% of eligible construction cost. 74 94 ior oO VA CHAPTER V. DEFINITIONS DEFINITIONS (Including Definitions defined in the Fee Ordinances): "Accessory Dwelling Unit" means an accessory dwelling unit as defined by California Government Code section 65852.20)(1), or as defined in any successor statute. "City/County Civic Projects" means all non -road City and County projects, including City/ County administrative facilities, jails, courts, juvenile facilities, parks, libraries, and all other facilities that serve the public. "City/ County Road Projects" means all City and County road projects. "Construction Cost" means and includes the cost of the entire construction of the roadway project, including all supervision, materials, supplies, labor, tools, equipment, transportation and/or other facilities furnished, used or consumed, without deduction on account of penalties, liquidated damages or other amounts withheld from payment to the contractor or contractors, but such cost shall not include the Consulting Engineer/Architect's fee, or other payments to the Consulting Engineer/Architect and shall not include cost of land or Rights -of -Way and Easement acquisition. "Credit" means a credit allowed pursuant to Section 10 of this Ordinance, which may be applied against the development impact fee paid. "Development" means a human -created change to improved or unimproved real estate, including buildings or other structures, mining, dredging, filing, grading, paving, excavating, and drilling. "Development Project" or "Project" means any project undertaken for the purpose of development pursuant to the issuance of a building permit by the City/County pursuant to all applicable ordinances, regulations, and rules of the City/County and state law. "Fuel modification area" means an area established adjacent to structures or roads in which highly combustible native plants, invasive introduced, or ornamental plants are modified and/or totally replaced with fire resistant or drought resistant alternatives; or areas subject to hazardous abatement orders. "Gross "Community -Serving" Area/ Acres" means the area of residential projects that provide infrastructure, improvements, and amenities that go beyond only serving project residents and hence are "community -serving". This includes, but is not limited to, roads that serve multiple projects, parks that serve more than one residential project, parking that serves other uses/ developments etc. The acreage associated with these improvements/ amenities are part of the gross project acreage but distinct from project resident -serving improvements/ amenities and the gross residential area. :01% "Gross Project Area/ Acres" means is the total or gross areas of the project. This overall acreage can only be reduced under unique circumstances. "Gross Residential Area/ Acres" means the total area of the project dedicated to residential land uses and includes residential buildings as well as "Project Resident - Serving" Infrastructure/ Improvements/ Amenities. "Hazardous vegetation" means vegetation that is flammable and endangers the public safety by creating a fire hazard, including, but not limited to, seasonal and recurrent weeds, stubble, brush, dry leaves, and tumbleweeds. "Junior Accessory Dwelling Unit" means a junior accessory dwelling unit as defined by California Government Code section 65852.22(h)(1), or as defined in any successor statute. "Linear Projects" means all linear PSE projects with differentiation in payment amount between permanent and temporary projects. "Local Development Mitigation Fee" or "Fee" means the development impact fee imposed pursuant to the provisions of this Ordinance. "Maintenance Projects" means projects that include, but are not limited to, pavement repairs, tree trimming, bridge maintenance, and pavement restriping and roadway reconstruction which do not add new lanes. "Manufactured slope" means a slope created by natural landform alteration (grading), by cutting or filling a natural slope, or importing fill material to create a slope. "Member Agency" or "Member Agencies" means those Cities and Counties that are signatories to the RCA Joint Powers Agreement. "Multiple Species Habitat Conservation Plan" or "MSHCP" means the Western Riverside County Multiple Species Habitat Conservation Plan "MSHCP Conservation Area" has the same meaning and intent as such term is defined and utilized in the MSHCP. "Non -Linear Projects" means all PSE projects that are non -linear in form. "Ordinance" means the Fee Ordinance adopted by the Cities and the County to implement the MSHCP Local Development Mitigation Fee. "Private Projects" means those projects where the primary project purpose is for use by households, business, or other private entities (i.e. not accessible to the public except where allowed by private owner/ renter). This category also includes Private Projects that receive public support (e.g., support through direct public investments in infrastructure, ground leases of publicly owned land, or direct investment of public dollars in projects such as affordable housing). 61f:1 "Project Area" means the area, measured in acres, within the Development Project including, without limitation, any areas to be developed as a condition of the Development Project. Except as otherwise provided herein, the Project Area is the area upon which the project will be assessed the Local Development Mitigation Fee. See the RCA Mitigation Fee Implementation Handbook Manual for additional guidance for calculating the Project Area. "Project Resident -Serving Infrastructure/ Improvements/ Amenities" means Infrastructure/ improvements, and amenities that only serve project residents and include, but are not limited to, roads, parks, and non-residential buildings that only serve project residents. "Public Projects" means all City/County Civic Projects and all City/County Road Projects. These Public Projects include infrastructure projects, civic projects and Riverside County Flood Control District projects. "Revenue" or "Revenues" means any funds received by the City/County pursuant to the provisions of this Ordinance for the purpose of defraying all or a portion of the cost of acquiring and preserving vegetation communities and natural areas within the City/County and the region which are known to support threatened, endangered, or key sensitive populations of plant and wildlife species. "Riverside County Flood Control District Projects" means all Riverside County Flood Control District projects. "Western Riverside County Regional Conservation Authority" or "RCA" means the governing body established pursuant to the MSHCP that is delegated the authority to oversee and implement the provisions of the MSHCP. Any capitalized term not otherwise defined herein shall carry the same meaning and definition as that term is used and defined in the MSHCP. 6&0