MILLER STARR 1331 N. California Blvd. 925 935 9400 REGALIA Fifth Floor 925 933 4126 Walnut Creek. CA 94596 George B. Speir bill.speir@msriegal.com December 18, 2017 VIA EMAIL AND OVERNIGHT MAIL The Honorable Sean Morgan, Mayor Members of the City Council City of Chico 411 Main Street Chico, CA 95928 Re: Proposed Revised Development Impact Fees December 19. 2017 City Council Agenda item 4.1 Dear Mayor Morgan and Members of the Council: This office represents Discovery Builders and related entities, as owner and/or developer of the Creekside Landing residential subdivision project, among other projects, in Chico, California. This letter is submitted in opposition to the proposed update of the City of Chico (?City") Development Impact Fees, to be considered at the December 19, 2017 City Council meeting as Agenda item 4.1. Since your August 15, 2017 meeting, we have reviewed the staff reports prepared for the City Council and the Finance Committee, including the report prepared for the December 19, 2017 City Council meeting, the November 29, 2017 Finance Committee meeting, and Revision #3 to Technical Memoranda #11 prepared by Omni-Means and New Economics Advisory. We have also reviewed documents provided by Public Works Director Brendan Ottoboni, including spreadsheets of the Development Impact Fee Program Update Fee Breakdown circulated on or about December 6, 2017, and a revised spreadsheet circulated on December 8, 2017. It appears that no revisions to the Street Facilities Fee are proposed. That fee is fatally flawed, as described in our August 14, 2017 letter and the Abrams Report enclosed with that letter. As set forth there, the City of Chico (?City?) has not established, and cannot establish the necessary relationship between the services and facilities to be funded by the proposed Street Facility Fee and the impacts resulting from future development in the City. The claim that the fee does not include all facilities that could have been included does not excuse the errors in calculations of the facilities that do form the basis of the fee. As a result, the new proposed Street Facilities Fee fails to satisfy the requirements of the Mitigation Fee Act, Government Code section 66000, at seq. and the due process, equal protection, and takings provisions of the United States and California Constitutions. The Urbanization Fee has been revised by eliminating certain projects from the facilities to be funded by that fee, which reduces the proposed fee from the amount Offices: Walnut Creek I San Francisco! Newport Beach The Honorable Sean Morgan, Mayor Members of the City Council December 18, 2017 Page 2 previously proposed. However, that reduction fails to address any of the flaws in the calculation of the fee. The Urbanization Fee is described in the November 6, 2017 Omni-Means Technical Memorandum 11, Revision Although some minor revisions to the memo have been made, the flaws in the fee calculation remain. These road reconstruction projects "do not include capacity expansion measures such as widening roadways to construct additional travel lanes.? They have been split from the Street Facilities Fee calculation specifically "because they are not capacity enhancing projects?. Each project is largely just a repaving of existing roads. These projects are not made necessary by growth. By definition, the capacity of these roads are not being increased they are just being upgraded and maintained. Yet the Fee Study proposes to make new residents pay the full cost of these maintenance projects. In the new section on ?Proportionality? added to Technical Memorandum #11, the City?s consultant tries to imply that these roadways need to be rebuilt because of new traffic from development. The memo even states that the fee is needed to ?refurbish existing facilities to maintain an existing level of service." But this is nonsense. The memo acknowledges that the repaving will not add lanes, and will not add capacity to the roads. As such, the ?level of service" of such roadways is not, and cannot be, impacted. The level of service of a roadway or intersection is based on the number of vehicles that can be accommodated within certain time frames. That is, level of service is based on the capacity of the roadway. This proposed work does not enhance the capacity of the roadway, and therefore does not impact the level of service. The Urbanization fee fails to comply with legal requirements, and must be completely eliminated. For the reasons explained above, and as previously described in our August 14, 2017 letter to the Council in the Abrams Report accompanying that letter, and in our November 28, 2017 letter to the Finance Committee, the traffic related fees being considered at the December 19, 2017 meeting are replete with errors, inconsistent methodology, and false assumptions. The proposed revised fees should be rejected. In addition, the proposed variable rate for residential units should be rejected here, as it was by the Finance Committee. Very truly yours, ER STARR REGALIA Georg eir GBS:mlj The Honorable Sean Morgan, Mayor Members of the City Council December 18, 2017 Page 3 co: Mark Orme, City Manager (via email only) Vincent Ewing, City Attorney (via email only) Brendan Ottoboni, Public Works Director (via email only) Client