Carlsbad Municipal Code Ch. 3.40 Carlsbad Reimbursement Fee

This chapter shall be known as the "Carlsbad Reimbursement Fee."

(Ord. CS-281 § 1, 2015)

Chapter 21.90 of the Carlsbad Municipal Code requires the preparation of a local facilities management plan for each local facilities management zone within the city to include, among other provisions, a financing plan establishing various methods of funding the public facilities and improvements identified in such local facilities master plan needed to accommodate development within the related local facilities management zone to fairly allocate the cost of construction of such public facilities and improvements to the various properties within such local facilities management zone.

A local facilities management plan may provide that an owner or developer of property within the related local facilities management zone fund and construct certain required LFMP improvements prior to or concurrent with development of such owner's or developer's property to comply with the phasing schedule and performance standards for such LFMP improvements provided for in the LFMP.

The purpose of this chapter is to establish, in accordance with the freedom afforded to charter cities generally and by the Charter of the City of Carlsbad, a mechanism by which the costs of the construction of LFMP improvements (defined in Section 3.40.030 herein) and certain appurtenant improvements, defined in Section 3.40.030 herein collectively as "eligible improvements," incurred by an owner or developer of property within a local facilities management zone may, as required pursuant to Chapter 21.90, be fairly allocated among the properties within such local facilities management zone and the owner or developer that originally incurred such costs may be reimbursed by the owners of the other properties within the local facilities management zone that would otherwise have been responsible for financing and/or constructing all or some portion of such eligible improvements as a condition of approval of the development of such properties.

(Ord. CS-281 § 1, 2015)

As used in this chapter, the following terms shall have the following meanings:

"Administrative Services Director"

shall mean the Administrative Services Director of the city or designee.

"Building permit"

means a permit required by and issued pursuant to Chapter 18.04 of the Carlsbad Municipal Code.

"Chapter 21.90"

means Chapter 21.90 of the Carlsbad Municipal Code as it may be amended from time to time.

"City"

shall mean the City of Carlsbad.

"City Council"

shall mean the City Council of the city.

"City Engineer"

shall mean the City Engineer or designee.

"Eligible improvements"

shall mean those improvements for which the cost of construction thereof may be eligible for reimbursement pursuant to this chapter.

"Eligible incidental costs"

shall mean those incidental costs that may be eligible for reimbursement pursuant to this chapter and which the City Engineer determines are reasonable and customary for the work performed or services provided.

"LFMP improvements"

means those public facilities and improvements identified in an LFMP that are needed to accommodate development with the LFMZ for which such LFMP was prepared pursuant to Chapter 21.90.

"LFMZ property" or "LFMZ properties"

means a property or the properties, as applicable, within a local facilities management zone.

"Local facilities management plan" or "LFMP"

shall have the meaning given such term in Chapter 21.90.

"Local facilities management zone" or "LFMZ"

means a local facilities management zone established pursuant to Chapter 21.90.

"Occupancy permit"

means a permit required by and issued pursuant to Chapter 21.60 of the Carlsbad Municipal Code.

"Project"

means any project undertaken on LFMZ properties for the purpose of development. "Project" includes a project involving the issuance of a permit for construction or reconstruction, but not a permit to operate.

"Public agency"

shall mean any city or county, whether general law or chartered, special district, school district or any other municipal corporation, district, or political subdivision of the State of California.

"Reimbursement fee"

means a fee adopted pursuant to the Charter of the City of Carlsbad, this chapter and any City Council resolution adopted pursuant to this chapter.

"Reimbursement fee study"

means a study prepared or caused to be prepared by the City Engineer pursuant to Section 3.40.090 hereto pertaining to a request for establishment of a reimbursement fee.

"Requesting party"

means the owner or developer of LFMZ property within an LFMZ that has filed a request pursuant to Section 3.40.050 hereto that the city establish a reimbursement fee pursuant to the provisions of this chapter. "Requesting party" also means, collectively, the owners and/or developers of LFMZ properties within an LFMZ that have jointly filed such a request.

(Ord. CS-281 § 1, 2015; Ord. CS-389 § 5, 2021)

Whenever a requesting party is required by the city to construct eligible improvements the cost of which such requesting party believes will exceed the cost fairly allocable to the requesting party's LFMZ property, the requesting party may file a written request with the City Engineer requesting that the city undertake proceedings pursuant to this chapter to consider the establishment by the city of a reimbursement fee to be imposed on those LFMZ properties located within such LFMZ upon which a portion of the cost of such eligible improvements should be fairly allocated as a condition of approval of the development of such LFMZ properties. Such request must be received by the City Engineer prior to the construction of the eligible improvements for which reimbursement is being requested.

Such a request shall include a description of each eligible improvement in sufficient detail to enable the City Engineer to identify each such improvement and a detailed plat of the applicable LFMZ showing the precise location of each such eligible improvement with respect to each of the LFMZ properties. Such request must also include an engineer's estimate of the cost of construction of such eligible improvements, together with an estimate of the eligible incidental costs for which reimbursement is requested. For any request for which the requesting party consists of multiple owners and/or developers that are jointly filing such request, such request must be executed by all such owners and developers and must include the designation of one party to whom the city is authorized and directed to make all reimbursement payments, together with an acknowledgment that the city shall have no responsibility whatsoever for determining the allocation of reimbursements among such owners and/or developers or making such allocation to such owners and developers. The requesting party shall, at such requesting party's expense, also mail a copy of such request to the owner of each LFMZ property and the requesting party shall file proof of such mailing satisfactory to the City Engineer.

The request of such requesting party shall not be deemed to be complete until:

A. The City Engineer has received satisfactory proof of the mailing of the requesting party's request for establishment of a reimbursement fee; and

B. The Administrative Services Director has received the initial deposit from the requesting party as required pursuant to Section 3.40.050 below.

(Ord. CS-281 § 1, 2015)

All city and consultant costs incurred in the implementation of a request for the establishment of a reimbursement fee pursuant to the provisions of this chapter, the preparation of the reimbursement fee study for such reimbursement fee request, the proceedings to establish a reimbursement fee, the amendment of the reimbursement fee study pursuant to Section 3.40.120 and the proceedings to consider the adjustment of a reimbursement fee pursuant to Section 3.40.120 will be paid by the requesting party by advance deposit with the city of monies sufficient to pay all such costs.

Each request for the establishment of a reimbursement fee shall be accompanied by an initial deposit in an amount to be determined by the Administrative Services Director to be adequate to fund the initial review of the request, preparation of the reimbursement fee study and the proceedings to implement the reimbursement fee request. If additional funds are required to pay implementation costs, the Administrative Services Director may make written demand upon the requesting party for such additional funds and the requesting party shall deposit such additional funds with the city within five working days of the date of receipt of such demand. Upon the depletion of the funds deposited by the requesting party for such costs, all work related to the preparation of the reimbursement fee study and all proceedings related to the establishment of such reimbursement fee shall be suspended until receipt by the city of such additional funds as the Administrative Services Director may demand.

The deposits shall be used by the city to pay for costs and expenses incurred by the city incident to the initial review of the reimbursement fee request, preparation of the reimbursement fee study, proceedings for the consideration of the reimbursement fee request, and the review of the actual costs of construction of the eligible improvements and the eligible incidental costs and proceedings for the consideration of the adjustment of the reimbursement fee pursuant to Section 3.40.120, including, but not limited to, legal, reimbursement fee consulting, engineering, administration and staff costs and expenses, required notifications, printing, and publication costs.

The city shall refund any unexpended portion of the deposits if the requesting party files a written request with the City Engineer that the requesting party is terminating its reimbursement request.

(Ord. CS-281 § 1, 2015)

Eligible improvements must be LFMP improvements or other additional public improvements identified in this section that will be owned, operated, or maintained by the city or another public agency and that are constructed pursuant to and in compliance with all applicable requirements of the city, including, without limitation, this chapter, or such other public agency that will own, operate or maintain such eligible improvements. The City Council shall have the final determination as to the eligibility of any improvements for reimbursement. Such eligible improvements may include, but are not limited to:

A. Streets and Highways. Arterial streets, highways, major bridges, and freeway interchanges constituting LFMP improvements for an LFMZ. If the primary purpose of completing a circulation link is met, and overriding public interest is shown, then public facilities increasing traffic capacity for a circulation element may be considered. Right-of-way must be dedicated or acquired prior to submission of a request for reimbursement. The value of right-of-way required to be dedicated by the owner thereof is generally not eligible for reimbursement except under special circumstances as recommended by the City Engineer.

B. Additional Public Improvements. If appurtenant to the types of street and highway improvements described in subsection A, the following additional improvements may be considered for reimbursement:

1. Sewer Lines or Other Sewer Facilities. Sewer lines must be located within the rights-of-way of the arterial streets when the City Engineer has determined it is necessary that they be so located.

2. Water Lines and Other Water Facilities. Water lines must be located within the public rights-of-way of the arterial streets when the City Engineer has determined it is necessary that they be so located.

3. Drainage facilities.

4. Landscape and irrigation facilities.

5. Recycled water facilities.

6. Grading for eligible public streets.

7. The construction of environmental mitigation required for eligible improvements.

8. Bicycle and pedestrian facilities, if located on land or easements owned or dedicated to the city and accepted as part of the city-wide trail system.

9. Such other improvements as may be authorized by law and which the City Council determines are consistent with Chapter 21.90 and the applicable LFMP.

(Ord. CS-281 § 1, 2015)

Costs of an eligible improvement that shall be eligible for reimbursement pursuant to the provisions of this chapter shall include the following:

A. The actual costs of construction as determined by the City Engineer to be reasonable and customary costs of the work performed. Costs incurred to expedite the completion of the construction of any eligible improvement within a time period not required by the city or the public agency that will own such eligible improvement will not be eligible for reimbursement.

B. Eligible incidental costs, as determined by the City Engineer to be reasonable and customary for such incidental costs, that are directly related to eligible improvements the costs of construction of which shall be reimbursed from the related reimbursement fees and that are identified in the "Administrative Procedures for Reimbursable Public Works Projects" as issued by the City Engineer from time to time as eligible incidental costs for public works projects.

The following incidental costs are considered ineligible to be reimbursed from reimbursement fees established pursuant to this chapter:

1. Development impact fees.

2. Administrative or overhead expenses, financial consultant, or legal fees incurred by a requesting party for the establishment of a reimbursement fee. This limitation does not apply to amounts advanced by the requesting party to the city pursuant to the provisions of this chapter to pay for costs incurred by the city to undertake the proceedings to establish reimbursement fees pursuant to this chapter.

3. Land-use planning and subdivision costs and environmental review costs related to such land use planning and subdivision.

4. Environmental impact studies, unless directly related to the project and done separately for the project.

5. Maintenance, monitoring and endowment costs for mitigation land.

6. Construction loan interest.

7. Subdivision financial analysis.

8. Attorney's fees incurred by the property owners or their agents, except as recommended by the City Attorney related to condemnation proceedings.

(Ord. CS-281 § 1, 2015)

A requesting party shall solicit at least three bids from licensed contractors for the construction of any eligible improvements for which the requesting party is seeking reimbursement and shall award the contract for the construction of such eligible improvements to the lowest responsible bidder. Nothing in the preceding sentence shall prohibit a requesting party from including more than one such eligible improvement in a single solicitation for bids. In the case where the requesting party does include more than one such eligible improvement in a single solicitation for bids, the requesting party shall award the contract for the construction of such eligible improvements to the bidder submitting the lowest aggregate bid for the construction of all such eligible improvements included in such solicitation.

Following the award of a contract for the construction of an eligible improvement or eligible improvements, the requesting party shall provide to the City Engineer copies of the bid solicitation documents, the names of the contractors from whom such bids were solicited, the results of the bid solicitation including the response provided by each contractor submitting a bid or declining to submit a bid if provided and copies of the executed construction contracts.

Following completion of the construction of the eligible improvements, the requesting party shall submit to the City Engineer: (a) copies of all change orders to the construction contracts, all invoices for the construction of the eligible improvements for which the requesting party is seeking reimbursement and documents satisfactory to the City Engineer evidencing payment for the construction of the eligible improvements; and (b) copies of all contracts related to eligible incidental costs for which the requesting party is seeking reimbursement, all change orders related to such contracts, all invoices for such eligible incidental costs and documents satisfactory to the City Engineer evidencing payment of such eligible incidental costs. All such invoices must be submitted to the City Engineer no later than 60 calendar days following acceptance by the city of the last of the eligible improvements for which the requesting party is seeking reimbursement. Costs represented by invoices received beyond this period of time shall not be eligible for reimbursement.

Following the receipt of such invoices, the City Engineer shall review the invoices and shall determine whether or not the costs represented thereby are reasonable and customary costs for the work performed or the costs incurred. If, in the opinion of the City Engineer, the costs represented by the invoices are higher than that which are customary and reasonable for such work performed or costs incurred, the City Engineer may deny reimbursement for that portion of such costs deemed to be excessive.

(Ord. CS-281 § 1, 2015)

The City Engineer will, following receipt of the documents required to be provided to the City Engineer pursuant to Section 3.40.040 hereto, in the exercise of his or her independent professional judgment, prepare or cause to be prepared a reimbursement fee study for the requested reimbursement fee that will include the following:

A. A legal description or list of the assessor's parcel numbers of each parcel within the applicable LFMZ, including the properties owned or being developed by the requesting party, upon which the City Engineer determines that a portion of the eligible costs of eligible improvements and eligible incidental costs should be fairly allocated, the name of the owner thereof, street address thereof each such parcel, if any, and the acreage thereof;

B. A detailed plat showing the precise locations of all of the eligible improvements for which the requesting party has requested reimbursement shown in relation to the parcels identified pursuant to subsection A;

C. A list of each of the eligible improvements and the estimated cost of the construction of the eligible improvements and each of the estimated eligible incidental costs, as determined by the City Engineer to be reasonable and customary for such eligible improvements and eligible incidental costs;

D. A determination whether any portion of the cost of the construction of any eligible improvements and related eligible incidental costs may be subject to reimbursement from any existing city impact fee program. If and to the extent that any portion of such costs is subject to reimbursement from such impact fee program, such amount shall be deducted from estimated cost of the construction of such eligible improvements and the related eligible incidental costs;

E. A report identifying the burden which the development of each parcel, including the parcels owned or being developed by the requesting party, identified pursuant to subsection A in accordance with its zoning and general plan designation and other existing land use entitlements, if any, will impose upon the eligible improvements and the extent to which the development of each such parcel will contribute to the need for or burden upon such eligible improvements;

F. An explanation of how there is a reasonable relationship between the reimbursement fee's use and the types of projects on which the reimbursement fee may be imposed;

G. A detailed description of the method of reimbursement fee allocation;

H. A reimbursement schedule to include a list of all LFMZ properties determined by the City Engineer to be subject to the proposed reimbursement fee with current assessor's parcel number, owner's name, property's street address, and the acreage of such parcels and the proposed reimbursement fee applicable to each such LFMZ property.

(Ord. CS-281 § 1, 2015; Ord. CS-286 § 2, 2015)

Upon completion of the reimbursement fee study pursuant to Section 3.40.080 hereto, the time and place for a public hearing of the City Council shall be set, as part of a regularly scheduled meeting of the City Council, at which oral or written presentations can be made regarding the proposed reimbursement fee. Notice of such public hearing shall be published pursuant to Government Code Section 6062a and such notice shall be mailed to the requesting party and the owner of each parcel that may be subject to the imposition of the proposed reimbursement fee at least 15 calendar days prior to the date set for such public hearing.

(Ord. CS-281 § 1, 2015)

The City Council shall hold a public hearing to determine the types of projects that shall be subject to the reimbursement fee and the reimbursement fee that shall be imposed on each project. This reimbursement fee shall only be established if the City Council can make the following findings:

A. The purpose and use of the reimbursement fee.

B. Determine how there is a reasonable relationship between the use of the reimbursement fee and the type of project on which the reimbursement fee is imposed.

C. Determine how there is a reasonable relationship between the need for the eligible improvement and the type of project on which the reimbursement fee is imposed.

(Ord. CS-281 § 1, 2015; Ord. CS-286 § 3, 2015)

Upon completion of the construction of the eligible improvements for which a reimbursement fee has been established and acceptance of such eligible improvements by the city or the other public agency that will own, operate and maintain such eligible improvements and receipt by the City Engineer of the information and documents required to be submitted by the requesting party, the City Engineer shall prepare or cause an amendment to the reimbursement fee study to be prepared to incorporate such actual costs of the eligible improvements and the related eligible incidental costs that are determined by the City Engineer pursuant to Section 3.40.070 to be eligible costs. As to the reimbursement fee applicable to properties owned or developed by the requesting party, the City Engineer shall apply the eligible costs allocated to such properties as a credit against the reimbursement fee applicable to such properties. If and to the extent that the eligible costs allocated to any such properties are less than the reimbursement fee applicable to such properties, the amount of the eligible costs allocable to such properties that shall be subject to reimbursement shall be reduced by the difference between the reimbursement fee applicable to such properties and such eligible costs.

Upon completion of the amendment to the reimbursement fee study, the City Engineer shall mail a copy of such amendment to the requesting party and the owner of each property subject to the reimbursement fee, together with the notice of the date, time and place of a property owner informational meeting at which the City Engineer or designee shall be available to answer questions regarding the amendment to the reimbursement fee study. Such notice shall be given at no less than 10 days before the date of such meeting. Such meeting shall be scheduled to occur not less than 20 days prior to the public hearing required to be held pursuant to this section.

The existing reimbursement fee shall be subject to increase or decrease, as applicable, to reflect differences between the estimated costs of the eligible improvements and the eligible incidental costs utilized to establish the reimbursement fee and the eligible costs of such eligible improvements and eligible improvement costs. Such adjustments may be considered for approval by the City Council following a public hearing thereon for which notice is given pursuant to Section 3.40.100 hereto. At such public hearing oral or written presentations may be made regarding the proposed adjustment in the reimbursement fee. At the conclusion of such public hearing, adjustments to the reimbursement fee may be made by resolution of the City Council.

(Ord. CS-281 § 1, 2015)

Upon application filed with the city for approval of the land use entitlements to permit development and construction of a project to be developed on property subject to a reimbursement fee established pursuant to this chapter, the City Engineer shall prepare or cause to be prepared an analysis of the project based upon the land used entitlements reflected in such application and whether there is a reasonable relationship between the amount of the reimbursement fee to which such project would be subject and the cost of the eligible improvements attributable to such project. The City Engineer shall mail a copy of such analysis to the applicant for the entitlement and the owner of such property, if other than the applicant, and the requesting party entitled to reimbursement from the proceeds of the reimbursement fee not less than 20 days prior to the public hearing described in the following paragraph.

The City Council shall, prior to imposing the payment of such reimbursement fee as a condition of approval of such project, hold a public hearing for the purpose of determining whether there is a reasonable relationship between the amount of the reimbursement fee to which such project would be subject and the cost of the eligible improvements attributable to such project. Such public hearing may be consolidated with any public hearing to consider the approval of the land use entitlements for such project. In addition to any other notice of such public hearing required by law, notice of such public hearing shall be mailed to the owner of the property on which such project is proposed to be developed and the requesting party entitled to reimbursement from the proceeds of the reimbursement fee not less than 15 days prior to the date of such public hearing.

At such public hearing oral or written presentations may be made regarding whether there is a reasonable relationship between the amount of such reimbursement fee and the cost of the eligible improvements attributable to such project.

Upon the conclusion of such public hearing, the City Council shall determine whether there is a reasonable relationship between the amount of the reimbursement fee to which such project would be subject and the cost of the eligible improvements attributable to such project. If the City Council determines that there is such a reasonable relationship, the approval of such project may be conditioned with the requirement for the payment of the reimbursement fee. If the City Council determines that there is not a reasonable relationship between the amount of the reimbursement fee to which such project would be subject and the eligible cost of the eligible improvements attributable to the project, the City Council shall adopt a resolution modifying the reimbursement fee so that there is a reasonable relationship between the reimbursement fee, as modified, to which such project will be subject and the eligible cost of the eligible improvements attributable to such project.

(Ord. CS-281 § 1, 2015)

Notwithstanding any provisions of the Carlsbad Municipal Code, no permit shall be issued for any project subject to a reimbursement fee established pursuant to this chapter except upon the condition that the reimbursement fee applicable to such project shall be paid in accordance with the provisions of this chapter. The obligation for the payment of a reimbursement fee for any project shall attach at the time the initial grading permit for such project is issued. Such obligation shall continue to apply to such project for a period not to exceed 10 years beyond the term of such reimbursement fee established pursuant to Section 3.40.110.

(Ord. CS-281 § 1, 2015; Ord. CS-286 § 4, 2015)

The owner or developer of a project subject to the payment of a reimbursement fee established by the City Council pursuant to this chapter shall pay such reimbursement fee prior to issuance of any building permit or occupancy permit for such project; provided, however, that if the Carlsbad Municipal Code provides for development impact fees assessed by the city pursuant to the Charter of the City of Carlsbad or the Mitigation Fee Act (Chapter 5 of Division 1 of Title 7 of the California Government Code) to be collected at a later time, then a reimbursement fee collected pursuant to this chapter shall be collected at the same time as that mandated by the Carlsbad Municipal Code for the payment of such other fees.

In no event shall a final inspection or an occupancy permit be issued for any project subject to a reimbursement fee prior to the payment of such reimbursement fee in full.

A reimbursement fee required to be paid pursuant to this chapter shall be the reimbursement fee in effect at the time of payment.

Notwithstanding anything in the Carlsbad Municipal Code or any other written documentation to the contrary, the reimbursement fee applicable to a project shall be paid whether or not such project is subject to conditions of approval by the city.

For projects for which the city does not require a permit, final inspection or issuance of an occupancy permit, the reimbursement fee applicable to a project shall be paid prior to use or occupancy of such project.

(Ord. CS-281 § 1, 2015)

Reimbursement fees collected under this chapter shall be segregated into a reimbursement fee fund with separate accounts established for each separate reimbursement fee established pursuant to this chapter. Reimbursement fees deposited in such an account may be disbursed solely to reimburse the applicable requesting party for eligible improvements and eligible incidental costs as approved by the City Council in the establishment of such reimbursement fee.

No reimbursement payment shall be made to any requesting party until the construction of all eligible improvements has been completed and such eligible improvements have been accepted by the city or the other public agency that will own such eligible improvements and the adjustment, if any, to the applicable reimbursement fee pursuant to Section 3.40.120 has been approved. If a reimbursement fee shall have paid at the rate initially established pursuant to Section 3.40.110 and such reimbursement fee is reduced pursuant to Section 3.40.120, the city shall refund to the payee of such reimbursement fee the amount by which such reimbursement fee shall have been reduced prior to disbursing any funds on deposit in the applicable account of the reimbursement fee fund to the requesting party.

(Ord. CS-281 § 1, 2015)

Notwithstanding anything to the contrary in this chapter, this chapter may not be used to impose a reimbursement fee on certain LFMZ properties to provide for the reimbursement of the costs of construction of eligible improvements allocable to such LFMZ properties in combination with the levy of special taxes pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, or special assessments pursuant to the Municipal Improvement Act of 1913 against other LFMZ properties to secure the payment of special tax bonds or limited obligation improvement bonds, as applicable, issued to fund the costs of construction of such eligible improvements allocable to such other LFMZ properties.

(Ord. CS-281 § 1, 2015; Ord. CS-286 § 5, 2015)