Item 3.1 - Resolution Approving 2% Increase in RTCIP Traffic Mitigation Fee FY 14/15G`t l OF POIY� J
City ®f Poway
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CIT Y IN THE T CO COUNCIL AGENDA REPORT
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APPROVED
APPROVED AS AMENDED O
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REMOVED O
CONTINUED
RESOLUTION NO. It-01
DATE: April 1, 2014
TO: Honorable Mayor and Members of the City Council
FROM: Tina M. White, Interim City Managerro
INITIATED BY: Robert J. Manis, Director of Development Services
Steve Crosby, City Engineersv
Melody Rocco, Senior Civil Engineer)Ag-
SUBJECT: A Resolution Approving a 2% Increase in the Regional
Transportation Congestion Improvement Program (RTCIP)
Traffic Mitigation Fee for Fiscal Year 2014/2015, as required
by the TransNet Ordinance
Summary:
On April 1, 2008, the City Council adopted the Regional Transportation Congestion
Improvement Program (RTCIP) Traffic Mitigation Fee pursuant to the TransNet
Ordinance. The Ordinance calls for the fee to be adjusted annually on July 1 of each
year to reflect increases in construction costs. SANDAG has informed all the Cities and
the County of San Diego that the increase in the RTCIP fee for Fiscal Year 2014/2015
is set at 2 %. This will increase the City's RTCIP Traffic Mitigation Fee from $2,209 to
$2,254 per residential unit starting on July 1, 2014.
Recommended Action:
It is recommended that the City Council adopt the Resolution (Attachment A) approving
a 2% increase in the RTCIP Traffic Mitigation Fee for residential dwelling units from
$2,209 to $2,254 for Fiscal Year 2014/2015, as required by the TransNet Ordinance,
starting July 1, 2014.
Background:
In November 2004, voters in San Diego County approved a 40 -year extension to the
existing TransNet program, which was first initiated in 1987. The TransNet program
was designed to fund improvements to the region's transportation system through a
half -cent sales tax. In addition to the sales tax extension, the TransNet Ordinance
mandates implementation of a local traffic mitigation fee to fund missing improvements
on the Regional Arterial System (RAS). The local traffic mitigation fee, also known as
the RTCIP Traffic Mitigation Fee, was set at $2,000 per residential dwelling unit starting
on July 1, 2008. Funds collected from this fee will be used for roadway and traffic
signal improvements on Espola Road, Poway Road, Pomerado Road, Twin Peaks
Road, Community Road, Ted Williams Parkway, Camino Del Norte, and Scripps Poway
Parkway.
1 of 6 April 1, 2014, Item #-L-L
Resolution for RTCIP Increase
April 1, 2014
Page 2
On April 1, 2008, the City Council adopted the RTCIP Traffic Mitigation Fee pursuant to
the TransNet Ordinance. The Ordinance also calls for the fee to be adjusted annually
on July 1 of each year to reflect increases in construction costs, but requires a minimum
2% annual increase. The fee was increased by 2% in 2009, 2010, 2011, 2012, and
2013, and is currently at $2,209 per residential dwelling unit.
Findings:
The TransNet Ordinance mandates that the adopted RTCIP Traffic Mitigation Fee for
residential dwelling units be adjusted annually for construction cost inflation, based on
the construction -cost index-, but requires a minimum 2% annual increase. SANDAG has
informed all the Cities and the County of San Diego (Attachment B) that the percentage
increase for Fiscal Year 2014/2015 is set at 2 %, the minimum rate increase required by
the TransNet Ordinance. This will increase the City's RTCIP Traffic Mitigation Fee from
$2,209 to $2,254 per residential unit starting July 1, 2014, for Fiscal Year 2014/2015.
Fiscal Impact:
The projected revenue from the RTCIP Traffic Mitigation Fee increase is estimated at
$59,580 from future residential dwelling units based on the City's build -out General Plan
land use.
Environmental Review:
This item is exempt from the requirements of the California Environmental Quality
Act (CEQA), pursuant to Section 15061(b)(3) of the 2014 CEQA Guidelines, as it entails
State - mandated updates to current City regulations, and there is no possibility that this
will have a significant effect on the environment.
Public Notification:
Notice of the public hearing was published twice in the Poway News Chieftain.
Attachments:
A. Resolution
B. SANDAG Agenda Item No. 14 -02 -6 dated February 28, 2014
M.\engsery \traffic\Agenda 14\RTCIP-- Transnet\Agenda Report.docx
2 of 6 April 1, 2014, Item # V
RESOLUTION NO. 14-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA,
APPROVING A 2% INCREASE IN THE REGIONAL TRANSPORTATION
CONGESTION IMPROVEMENT PROGRAM (RTCIP) TRAFFIC MITIGATION FEE
FOR FISCAL YEAR 2014/2015, AS REQUIRED BY THE TRANSNET ORDINANCE
WHEREAS, in November 2004, voters in San Diego County approved a 40 -year
extension to the existing TransNet program to fund improvements to the region's
transportation system; and
WHEREAS, the extension Ordinance requires local agencies to collect traffic
mitigation fees, starting July 1, 2008, from residential dwelling units to fund the Regional
Transportation Congestion Improvement Program (RTCIP) to ensure that new
development directly invests in the region's transportation system to offset the negative
impact of growth on congestion and mobility; and
WHEREAS, on April 1, 2008, the City Council adopted the RTCIP Traffic Mitigation
Fee of $2,000 per residential dwelling unit pursuant to Section 9A of the TransNet
Ordinance; and
WHEREAS, Section 9A of the TransNet Ordinance also mandates that the RTCIP
Traffic Mitigation Fee shall be increased annually, in an amount not to exceed the
percentage increase set forth in the Engineering Construction Cost Index published
by the Engineering News Record or similar cost of construction index with a minimum
increase of 2 %; and
WHEREAS, the City Council has adopted annual increases to the RTCIP Traffic
Mitigation Fee and the current fee is $2,209 per residential dwelling unit, pursuant to
Section 9A of the TransNet Ordinance; and
WHEREAS, SANDAG has informed the City that the percentage increase in
the RTCIP Traffic Mitigation Fee for Fiscal Year 2014/2015 is set at 2 %, the minimum
annual increase in the fee set by the TransNet Ordinance; and
WHEREAS, the City Council intends by this Resolution to increase the
City's RTCIP Traffic Mitigation Fee from $2,209 to $2,254 per residential dwelling unit
to meet the requirement of Section 9A of the TransNet Ordinance.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway
as follows:
Section 1: The City Council finds that the adoption of this Resolution is exempt
from the requirements of the California Environmental Quality Act (CEQA), pursuant
to Section 15061(b)(3) of the CEQA Guidelines, as it entails State - mandated updates to
current City regulations, and there is no possibility that this will have a significant
effect on the environment.
3 of 6 ATTACHMENT A April 1, 2014 Item # ,3. I
Resolution No.
Page 2
Section 2: The City Council, starting July 1, 2014, hereby increases the RTCIP Traffic
Mitigation Fee from $2,209 to $2,254 per residential dwelling unit, regardless of type,
to fund roadway and traffic signal improvements on Espola Road, Poway Road, Pomerado
Road, Twin Peaks Road, Community Road, Ted Williams Parkway, Camino Del Norte, and
Scripps Poway Parkway considered part of the Regional Arterial System.
PASSED, ADOPTED AND APPROVED by the City Council of the City of Poway
at a regular meeting, this 1 st day of April 2014.
Don Higginson, Mayor
ATTEST:
Sheila R. Cobian, CMC, City Clerk
STATE OF CALIFORNIA )
) SS
COUNTY OF SAN DIEGO )
I, Sheila R. Cobian, City Clerk, of the City of Poway, do hereby certify under penalty of
perjury that the foregoing Resolution No. 14- was duly adopted by the City Council
at a meeting of said City Council held on the 1st day of April 2014, and that it was so
adopted by the following vote:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
Sheila R. Cobian, CMC, City Clerk
City of Poway
4 of 6 April 1, 2014 Item #3.%
BOARD OF DIRECTORS
FEBRUARY 28, 2014
REGIONAL TRANSPORTATION CONGESTION
IMPROVEMENT PROGRAM: PROPOSED FEE
ADJUSTMENT
AGENDA ITEM NO. 14 -02 -6
ACTION REQUESTED - APPROVE
Introduction Recommendation
File Number 1500100
The Regional Transportation Congestion Improvement The Board of Directors is asked to approve
Program ( RTCIP), an element of the TransNet Extension a 2 percent adjustment to the Regional
Ordinance, requires the 18 cities and the County of Transportation Congestion Improvement
San Diego to collect an exaction from the private sector Program, raising the minimum fee from
for each new housing unit constructed in their $2,209 to $2,254, beginning July 1, 2014. j
jurisdiction. The RTCIP has been implemented in the This is the minimum adjustment required
San Diego region since July 1, 2008. The TransNet by the TransNet Extension Ordinance. __I
Extension Ordinance requires SANDAG to adjust the - - - --
RTCIP fee amount on July 1 of each year. The purpose of this annual adjustment is to ensure the RTCIP
retains its purchasing power to improve the regional arterial system.
The most recent annual adjustment to the RTCIP was approved by the Board of Directors on February 22,
2013, raising the exaction by 2 percent, from $2,165 to $2,209 beginning July 1, 2013. Staff has evaluated
construction cost trends and relevant indices, and based on this analysis, a 2 percent fee adjustment is
recommended. This would raise the minimum RTCIP exaction from $2,209 to $2,254 beginning July 1, 2014.
Discussion
Background
The purpose of the RTCIP is to help ensure future development contributes its proportional share of
the funding needed to pay for the regional arterial system and related regional transportation facility
improvements, as defined in the most recent Regional Transportation Plan adopted by SANDAG. The
RTCIP funding programs fall under the responsibility of the 19 local jurisdictions, which have
established these programs under the state's Mitigation Fee Act. The jurisdictions must maintain their
RTCIP funding programs and comply with specific administrative requirements in order to remain
eligible for their TransNet local streets and road funding.
Section 9 of the TransNet Extension Ordinance requires the RTCIP exaction to be adjusted annually in
an amount not to exceed the percentage increase set forth in the Engineering Construction Cost Index
(CCI) published by the Engineering News Record (ENR), or a similar CCI. However, the ordinance also
states that in no event shall the adjustment be less than 2 percent per year.
5 of 6 ATTACHMENT B April 1, 2014 Item # 3.1
Analysis of Construction Cost Indices
The TransNet Extension Ordinance allows for flexibility in choosing an appropriate index; one that
most closely reflects price trends experienced by the TransNet construction program over the past year.
SANDAG staff evaluated changes recorded in the ENR CCI and the Caltrans statewide CCI. Each index
collects a different set of cost factors to determine construction cost trends. The ENR CCI represents an
average from 20 cities across the nation and is based on monthly price changes in four areas: lumber,
cement, structural steel, and labor. During 2013, the national ENR CCI rose 2.6 percent. One of the
20 cities tracked in the national index is Los Angeles. Los Angeles may reflect construction cost trends
more similar to those in San Diego, which increased by 4.6 percent through December 2013 over the
previous year. However, for Los Angeles most all of this change occurred during the last quarter of
calendar year 2013 due to a 9.8 percent spike in construction cost trends recorded between September
and October 2013. In other words, through the first three quarters of 2013, the ENR index for
Los Angeles increased only 0.2 percent. In addition, since spiking in October 2013, the index has since
declined by more than 5.1 percent.
The Caltrans CCI is based on quarterly price changes gathered from transportation project bids from
throughout the state for earthwork, aggregate, concrete, asphalt, and steel. The Caltrans CCI rose
13.3 percent over the past year. The Caltrans CCI exhibited a similar, although more volatile, trend than
the ENR CCI for Los Angeles. Through the third quarter of 2013, the Caltrans CCI had increased
6.6 percent, and then spiked 30 percent in the last quarter of 2013. Therefore, both the ENR and
Caltrans CCI indicate increasing construction cost volatility beginning to occur in the state and nation.
Based on staff's evaluation, the Caltrans CCI has experienced significant fluctuations based on large
swings in the price bids for excavation, aggregate, and cement. The ENR CCI for Los Angeles is being
driven up somewhat by a 4 percent increase in lumber costs, while the costs'of other materials (steel,
cement) have risen about 1 percent in the last year, and labor costs have been rising about 2 percent
on a year- over -year basis. According to the ENR analysis of these construction cost trends, there may be
some price rise spillover occurring from the rebounding housing market for materials and labor that
are relied on by various areas of construction. These overlapping trends could be what caused the
Los Angeles CCI to spike during October 2013. The general consensus is that the accelerating
construction cost trends picked up in both the Los Angeles and Caltrans CCI will not continue, but
instead moderate during the coming year (2014).
In light of this evaluation of construction cost trends during 2013, staff's recommendation reflects
using the ENR CCI for Los Angeles through the third quarter of 2013 to adjust the RTCIP fee, as
required by the TransNet Extension Ordinance. During the first three quarters of 2013, the ENR CCI for
Los Angeles increased 0.2 percent; however, the Ordinance requires a minimum annual fee adjustment
of 2 percent.
GARY L. GALLEGOS
Executive Director
Key Staff Contacts: Marney Cox, (619) 699 -1930, marney.cox@sandag.org
Ariana zur Nieden, (619) 699 -6961, ariana.zurnieden@sandag.org
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