City staff to study if millions in fees should have been collected
CITY HALL As city officials continue to blast a measure that would limit commercial development, arguing Proposition T on the November ballot would result in lost revenue, those in support have in recent days unearthed information that they believe prevented $45 million in development fees from being collected.
The claims by proponents of Prop. T were brought to light during a City Council discussion on Tuesday about ways in which City Hall could measure the performance of the transportation system and evaluate traffic growth in the community.
City staff brought the matter before the council to ask permission to impose a traffic impact fee on developers and conduct a study that would establish the rate.
It was then that several members of Santa Monica Coalition for a Livable City, which authored Prop. T, criticized the latest move toward developing a mitigation fee and conducting a study, pointing out that while the council took a similar action in the 1990s, no fees were ever collected.
The issue concerns the adoption of an ordinance in 1991 that established a traffic mitigation fee and the council’s authorization of a study in early 1992 that would’ve set the amount. While the council permitted the city manager at the time to prepare a nexus study — which looks at the relationship between the assessment of a fee and its impact — whether or not that report was ever conducted remains unclear.
“They couldn’t have done anything with the ordinance because they would have had to have done a study of what were all the improvements in the city,” Planning and Community Development Director Eileen Fogarty,who was not with City Hall in the ‘90s, said.
Supporters of Prop. T reached the $45 million figure based on an estimate of more than 9 million square feet of development taking place since the time the ordinance would’ve been activated. The group calculated that City Hall might have charged about $5 a square feet, modeling after a similar developer impact fee in the city of San Francisco.
“How can we believe that City Hall needs more development money when it hasn’t even collected the $45 million it is entitled to?” Diana Gordon, the co-chair of the coalition, said. “How can you tell voters that (the measure) will hurt us in the future when you have more commercial growth and you never collected the $45 million from all the growth approved which generated all the horrible traffic?”
City Hall is currently looking into whether the nexus study was ever done, and is evaluating the group’s estimate. Kate Vernez, assistant to the city manager on governmental relations, pointed out that a nexus study takes several years to conduct and it would’ve coincided with the Northridge Earthquake, which could have monopolized city staff’s time.
“The focus for the next two years was on all of the recovery effort,”Vernez said.
Fogarty calculated that City Hall has collected about $11 million through development agreements since 1996. The figure doesn’t include traffic and other improvements that developers are obligated to make under the agreements.
“Hopefully, we can shed light on the other numbers that have come up,” Fogarty said.
City officials, including most of the coun-cilmembers, have claimed that Prop. T, which would limit commercial growth in the city to 75,000 square feet a year, would hurt city revenues. City officials are also backing a ballot measure that would expand and update the telecommunications portion of the Utility User’s Tax. If the UUT update is not approved, city officials argue that millions in revenue could be at risk.
During the council meeting, Councilmember Ken Genser refuted that the amount of foregone fees would be so high, pointing out that a bulk of the biggest projects in the city — the Water Garden and Plaza at the Arboretum — was approved before the ordinance was enacted.
But Gordon said the ordinance states that developers could not receive a certificate of occupancy unless it paid the fee.
“Those developers got off free and those are some of the biggest developments in the city’s history,” she said.
Mayor Pro Tem Richard Bloom spoke against using staff time to dig up the past,saying the council should instead look to the future.
“Sure we could talk ourselves silly over what happened in the past,” he said at the meeting. “We need to put our effort into this community.”
The intent of the meeting was for the staff to present tools to measure the performance of the city’s transportation system and craft impact fees to ensure developers pay their fair share. Fogarty during the meeting likened the performance tools to the Sustainable City Report Card, which grades how City Hall is doing with working toward achieving its goals.
“We can come back annually to the city where we are on measurement of traffic and transportation goals,” she said. “It will also enable the city to identify a threshold and significance criteria.”
The program will also allow City Hall to put into place a braking mechanism when the thresholds are exceeded. The model will also look at peak traffic hours as well as how traffic is affecting the character of the neighborhood.
“Traffic strategies are important only in so far as they coexist with development,” Fogarty said. “If something is not in accordance to the plan that council has laid out, brakes can be put on future development.”
Originally published in the Santa Monica Daily Press print edition on September 25, 2008. Read the original PDF.