Chapter 16.60
DEFERRAL OR WAIVER OF CERTAIN RESIDENTIAL DEVELOPMENT FEES

Sections:

16.60.010    Title.

16.60.020    Purpose.

16.60.030    Definitions.

16.60.040    Impact fee deferral and processing fee waiver program.

16.60.050    Security.

16.60.060    Deferral, waiver and subordination agreements.

16.60.070    Processing fee waiver cap.

16.60.080    Interest and penalties.

16.60.090    Fee increases.

16.60.110    Fee deferral/waiver application and administrative processing fees.

16.60.120    Recordation costs.

16.60.010 Title.

This chapter shall be known and cited as the “Deferral or Waiver of Certain residential Development Fees.” (Ord. 960 § 1 (part), 2002)

16.60.020 Purpose.

The city council of the city of Folsom desires to encourage the construction of residential projects which will provide units with affordable rents or affordable housing costs for low and very low income households in the city of Folsom. The city council finds that the early payment of certain impact fees for residential development may create a barrier to such development and desires, by the adoption of this chapter, to ease such barrier by deferring the time for payment of certain impact fees. To create further incentive to construct residential projects for very low income households, the city council also desires to waive the payment of certain processing fees or a portion of such fees as set forth in this chapter. The city council finds that this deferral and waiver program is consistent with the policies and goals of the housing element of the General Plan of the city of Folsom and necessary for the health and welfare of the city’s residents. (Ord. 960 § 1 (part), 2002)

16.60.030 Definitions.

“Affordability covenant” means a covenant restricting all low income and very low income units to remain affordable to low income and very low income households for no less than 55 years for rental units and no less than 45 years for owner-occupied units.

“Affordable housing cost” refers to the definition contained in Health & Safety Code section 50052.5, including but not limited to cost limits for low and very low income households in owner-occupied housing, as further defined in Volume 25 of the California Code of Regulations.

“Affordable rent” refers to the definition contained in Health & Safety Code Section 50023, including but not limited to cost limits for low and very low income households in rental housing, as further defined in Volume 25 of the California Code of Regulations.

“Applicant” means the owner or owners of record of the real property for which a fee deferral or fee waiver or combination fee deferral and waiver is sought pursuant to this chapter.

“Director” means the director of the planning, inspections and permitting department or his or her designee.

“Fee deferral agreement” refers to the agreement by and between the applicant and the city of Folsom that is required for approval of any fee deferral under this chapter and which is in accordance with Section 16.60.070.

“Fee deferral and waiver agreement” refers to the agreement by and between the applicant and the city of Folsom that is required for approval of a request for both a fee deferral and a fee waiver under this chapter and which is in accordance with Section 16.60.070.

“Fee waiver agreement” refers to the agreement by and between the applicant and the city of Folsom that is required for approval of any fee waiver under this chapter and which is in accordance with Section 16.60.070.

“Fee waiver funds” means redevelopment affordable housing 20% set aside funds which have been specifically reserved by resolution of the redevelopment agency to facilitate fee waivers for qualified residential projects.

“Impact fees” refers to city fees imposed for the purpose of defraying all or a portion of the cost of public facilities related to a development project as required by code, ordinance, resolution or other law to be paid as a condition of, or prerequisite to, development of residential uses, as those codes, ordinances, resolutions or other laws may be amended from time to time.

“Interest” means interest equal to the annual rate of interest earned by the city on the investment of pooled funds computed from the date the impact fees or processing fees, as applicable, would have been due and payable in the absence of a deferral and/or waiver pursuant to this chapter.

“Low income households” refers to the definition contained in Health & Safety Code section 50079.5, including but not limited to an income limit of 80 percent of area median income, adjusted for family size and revised annually.

“Maximum fee deferral period” means 15 months from the date of issuance of a building permit for a very low income or low income unit within the qualified residential project for which a fee deferral was approved.

“Maximum fee waiver period” means 15 months from the date of issuance of a building permit for a very low income or low income unit within the qualified residential project for which a fee waiver was approved.

“Penalties” means an amount equal to one $100 per unit per month computed from the date deferred fees are due and payable or the date units with an approved waiver are required to be constructed.

“Processing fees” refers to development processing and administrative fees including, but not limited to, application, processing, plan check and inspection fees required by code, ordinance, resolution or other law to be paid as a condition of, or prerequisite to, development of residential uses, as those codes, ordinances, resolutions or other laws may be amended from time to time.

“Qualified residential project” means a residential development project which has received all required discretionary development approvals and entitlements and which has been certified by the director, in writing, as including at least 10% of units with affordable rents or affordable housing costs for very low income households or at least 30% of units with affordable rents or affordable housing costs for low income households.

“Security instruments” means a promissory note secured by a deed of trust encumbering each parcel of record owned by the applicant that is included in the qualified residential project and which has been approved by the city council for a fee deferral, fee waiver or fee deferral and waiver.

“Very low income households” refers to the definition contained in Health & Safety Code Section 50105, including but not limited to an income limit of 50% of area median income, adjusted for family size and revised annually. (Ord. 960 § 1 (part), 2002)

16.60.040 Impact fee deferral and processing fee waiver program.

A.    An applicant with a qualified residential project may file an application with the planning, inspections and permitting department to request deferral of impact fees included in the qualified residential project. The application shall be in a form approved by the director and shall include the following:

1.    Copies of all approvals and entitlements for the development of the project;

2.    A preliminary title report;

3.    A copy of the tentative or final subdivision or parcel map identifying all units for which a deferral and/or waiver is sought (applies to single-family qualified residential projects which plan to sell or rent units both at market rate and for very low income households); and

4.    Any other data and information which may be deemed necessary by the director for proper consideration of the application.

B.    The city council shall approve or deny all applications for impact fee deferrals and/or processing fee waivers. In reviewing the applications, the city council may consider:

1.    The effect of an impact fee deferral on public improvements and planned capital facilities;

2.    The extent to which a deferral or waiver of fees affects the feasibility of a project; and

3.    The demonstrated need for a deferral and/or waiver of fees. Special consideration shall be given to projects including student housing and to mixed use, and to transit-oriented and infill development.

C.    Only impact fees imposed by the city may be approved for deferral. All impact fees imposed by other entities or agencies shall be paid in accordance with applicable statutes, resolutions, ordinances, and regulations. Approved impact fee deferrals for a qualified residential project shall not exceed 75% of the total amount of impact fees applicable to the low income and/or very low income units included in the qualified residential project. Impact fees for each individual low income and/or very low income unit which are not approved for deferral shall be paid at the time of building permit issuance. Said payment shall be in addition to any and all required application, processing, inspection, fee deferral application and administrative processing fees.

D.    Approval of any processing fee waiver is subject to the availability of fee waiver funds as set forth in Section 16.60.070. Approved processing fee waivers for a qualified residential project shall not exceed the total amount of processing fees applicable to the low income and/or very low income units included in the qualified residential project. Processing fees for each individual low income and/or very low income unit shall be paid at the same time as all other processing fees for the project. Said payment shall be in addition to any and all required impact, fee waiver application and administrative processing fees. Processing fees which are approved for waiver shall be refunded to the applicant on a unit by unit basis upon:

1.    Recordation of the documents set forth in subsection E, below;

2.    The issuance of a building permit for each unit approved for a waiver. No impact fees may be waived under this chapter.

E.    Impact fee deferrals and/or processing fee waiver approved by the city council shall be conditional and subject to the recordation, prior to the issuance of any building permits for the qualified residential project or within 60 days of approval, whichever is earlier, of the following documents:

1.    The required security instruments;

2.    The agreement required pursuant to Section 16.60.060; and

3.    The affordability covenants.

F.    Fees that are approved for deferral for a single-family qualified residential project shall be due and payable at the close of escrow of each individual very low income or low income units within the project or upon the expiration of the maximum fee deferral period, whichever is earlier. Fees that are approved for deferral for a multi-family qualified residential project pursuant to this chapter shall be due and payable upon the close of permanent loan financing or upon the expiration of the maximum fee deferral period, whichever is earlier. If the deferred fees are not paid when due, interest and penalties shall apply pursuant to Section 16.60.080.

G.    A fee waiver shall be valid for the maximum fee waiver period. If the very low or low income units of a qualified residential project are not constructed and certificates of occupancy issued within the maximum fee waiver period, all waived fees shall be immediately due and payable and interest and penalties shall apply pursuant to Section 16.60.080.

H.    The approval of an impact fee deferral and/or a processing fee waiver for a qualified residential project shall not be transferable to another project regardless of whether the applicant is the same for both projects or whether the other project is also a qualified residential project. (Ord. 960 § 1 (part), 2002)

16.60.050 Security.

Execution and recordation of security instruments, in a form satisfactory to and approved by the city attorney, shall be required for all impact fee deferrals and/or processing fee waivers. The security instruments shall secure the total amount of deferred and/waived fees, including interest and penalties. Said security instruments shall be recorded prior to the issuance of any building permits for the qualified residential project and shall be secondary only to deeds of trust associated with acquisition or construction financing. (Ord. 960 § 1 (part), 2002)

16.60.060 Deferral, waiver and subordination agreements.

The applicant shall enter into a fee deferral or waiver agreement or a single agreement for both with the city in a form satisfactory to and approved by the city attorney. Such agreement shall, at a minimum, be:

1.    Site and project specific;

2.    Provide for the enforcement of the provisions of this chapter;

3.    Bind applicant’s successors in interest; and

4.    Be recorded with the Sacramento county recorder’s office.

A separate agreement shall be entered into for each qualified residential project whether or not the applicant is the same for multiple projects. In addition, the applicant shall execute a separate subordination agreement for each encumbrance or deed of trust other than one which secures repayment of acquisition or construction financing existing at the time of execution of the deferral or waiver or deferral and waiver agreement. (Ord. 960 § 1 (part), 2002)

16.60.070 Processing fee waiver cap.

A.    The amount of processing fee waivers approved pursuant to this chapter shall not exceed the amount of fee waiver funds reserved and available for use within any given fiscal year. Subject to the redevelopment agency’s adoption of a resolution reserving such funds, the fee waiver funds for the first 5 years (beginning with fiscal year 2002—2003) shall not exceed a total of $1 million with expenditure of such monies being averaged over such 5 year reservation period (average yearly reserved amount—$200,000/year). If the total amount of fee waivers approved in years 1, 2, 3 or 4 is less than the average yearly reserved amount for the given fiscal year, the remaining average yearly reserved amount shall be rolled over to the next fiscal year. If the amount of fee waivers approved in years 1, 2, 3 or 4 exceeds the average yearly reserved amount for the given fiscal year, the amount over and above the average yearly reserved amount for the given fiscal year, the amount over and above the average yearly reserved amount shall be credited to the subsequent years. However, in no event shall the total amount of fee waivers exceed $1 million for such 5 year period. After the expiration of the initial 5 year period, the amount of redevelopment affordable housing 20% set aside funds reserved as fee waiver funds for each fiscal year shall be determined by resolution of the redevelopment agency on an annual basis. Failure to reach the fee waiver fund cap in a particular fiscal year shall not result in a rollover of the surplus fee waiver funds to the next fiscal year.

B.    The date an application for a fee waiver or fee deferral and waiver is deemed complete by the director shall establish application priority for fee waiver funds in any given fiscal year. Applicant’s failure to record the security instruments, fee waiver agreement or fee deferral and waiver agreement, and affordability covenants prior to issuance of any building permits for the project or within 60 days of city council approval of a fee waiver or fee waiver and deferral, whichever is earlier, shall result in the automatic termination of the fee waiver or fee waiver and deferral and the loss of application priority. Any subsequent request by applicant for a fee waiver or fee deferral and waiver for the same project shall require the resubmittal of an application for the project including the payment of the application and processing fees set forth in Section 16.60.110. Such resubmitted application shall not be given priority over new applications and shall be subject to the cap on fee waiver funds in the same manner as any other new application in a given fiscal year.

C.    The failure of a particular applicant to satisfy the requirements for a fee waiver or fee deferral and waiver shall not result in the rollover of unused fee waiver funds to the next fiscal year. (Ord. 960 § 1 (part), 2002)

16.60.080 Interest and penalties.

A.    Except as otherwise set forth herein, no interest shall accrue during the period of deferral of impact fees.

B.    Failure of applicant to pay deferred impact fees, when due, shall subject applicant to interest and penalties with such interest and penalties being assessed until such deferred impact fees, including applicable interest and penalties, are paid in full.

C.    Failure of applicant to construct and obtain a certificate of occupancy within the maximum fee waiver period for a very low or low income unit for which a processing fee waiver was approved shall subject applicant to interest and penalties with such interest and penalties being assessed until such unit is constructed; a certificate of occupancy is obtained; and applicable interest and penalties are paid in full. (Ord. 960 § 1 (part), 2002)

16.60.090 Fee increases.

Fees which qualify for a fee deferral or waiver or a combination fee deferral and waiver shall not be subject to fee increases which may occur from the date of recordation of the agreement required pursuant to Section 16.60.060 to the end of the maximum deferral or maximum waiver period. However, subsequent applications for the same qualified residential project shall be subject to the fee rates in effect at the time of submittal of the subsequent application. (Ord. 960 § 1 (part), 2002)

16.60.110 Fee deferral/waiver application and administrative processing fees.

A non-refundable fee deferral/waiver application fee of $200.00 is hereby established and shall be paid at the time of application for a fee deferral or fee waiver or fee deferral and waiver pursuant to this chapter. A non-refundable administrative processing fee of $75.00 is hereby established for payment at the time of each individual building permit issuance for the purpose of funding the costs of administering the fee deferral/waiver program established by this chapter. These fees may from time to time be amended by resolution of the city council. (Ord. 960 § 1 (part), 2002)

16.60.120 Recordation costs.

All costs of recordation of documentation required pursuant to this chapter shall be paid by the applicant. (Ord. 960 § 1 (part), 2002)