CC 11-07-2023 Item No. 11. Mitigation Fee Act_Supplemental Report
CITY COUNCIL STAFF REPORT
SUPPLEMENTAL 1
Meeting: November 7, 2023
Agenda Item #11
Subject
Mitigation Fee Act ‐ an Annual & Five‐Year Report for Fiscal Year (FY) 2022‐2023
Recommended Action
Adopt Resolution No. 23‐121 entitled ʺA Resolution of the City of Cupertino City
Council approving the Annual & Five ‐Year Mitigation Fee Report for Fiscal Year
ending June 30, 2023 and making required findingsʺ to:
1. Make the required findings; and
2. Approve the Annual & Five‐Year Mitigation Fee Report for the Fiscal Year ending
June 30, 2023, as required by Government Code Section 66000 et seq.
Background:
Staff’s responses to questions received from councilmember are shown in italics.
Q1: Traffic Impact is Special Revenue Fund 272 which had a June 30, 2023 ending
balance of $776,311 which does not match the $802,090 shown in Attachment A page
7. What accounts for this difference?
There is an estimated cost of $59,780,125 for projects in the Transportation Impact Fee
Nexus Study. What are these projects? (Moore)
Staff response:
Two points of clarification, first the City doesn’t have a fund 272. This response assumes you
are referring to fund 271 Traffic Impact. In addition, the $776,311 is not the June 30, 2023,
ending cash balance but the September 2023 ending cash balance. The variance is primarily
due to mark‐to‐market adjustments, a paper loss/gain generated through the sale of a security;
for this reason, they are not included in the balance for the mitigation report as the
adjustments are never realized.
The Transportation Fee Nexus Study can be found on the City’s website below. Please refer to
Appendix A for the project list.
https://www.cupertino.org/home/showpublisheddocument/16824/636462621556300000
Q2: Page 2 of the Report shows our BMR RHNA total of 356 VLI, 207 LI, and 231 MI
for a total of$160.3 M. Our 2023‐2031 allocation is:
Very Low Income 1,193 x $241k/unit = $287,513,000
Low Income 687 x $213k/unit = $146,331,000
Moderate Income 755 x $123k/unit = $92,865,000
Total using the City estimated costs: $526,709,000
How were the costs per unit derived?
Would the city please show the new RHNA numbers we need to meet to improve the
transparency of the report? (Moore)
Staff response:
The costs per unit were derived from the Residential Below Market Rate Housing Nexus
Analysis which can be found here:
https://www.cupertino.org/home/showpublisheddocument/16828/636463473592570000.
The 2023‐31 RHNA numbers are as follows: 1,193 very low‐income units, 687 low‐income
units, 755 moderate‐income units, and 1,953 above moderate‐income units.
Q3: This year the June 30, 2023 ending fund balance for Special Revenue Fund 280
Park Dedication is $18,706,898 and does not match the $7,984,137 fund balance shown
on page 5 of the report.
How is the $11M discrepancy accounted for? What projects are the $11M going
towards?
Should they be added in the report?
This item has the opposite problem of Traffic Impact, there are unknown projects
with a high cost shown and insufficient funds, but it is fairly consistent with the June
30, 2023 balance provided to the public, but for the Park fee, there continues to be a
much greater balance shown to the public in the June 30, 2023 fund balance report
than the Development Impact fee report shows, which is a repeat of last year, and
part of why I wanted the subcommittee formed, to work on understanding this issue
and see if it is a discrepancy or not. (Moore)
Staff response:
As noted by the “***” in the Annual Report section on Page 5, the balance reflects the
unreserved funds. The reserved funds account for the $11M discrepancy, which include the
purchase and construction of Lawrence‐Mitty Park and the Memorial Park Pond Repurposing
Project.
Q4: May we know how much is in the liability account since these are items which
will need to be funded? (Moore)
Staff response:
There is an accounts payable (liability) for about $81,000 for fiscal year 2023 for retention and
vendor payments for the memorial park project and Lawernce Mitty Park and Trail
Masterplan. The remaining variance reflects unreserved funds.
Q5: Thank you, this (3 accounts) is a little confusing as was seen regarding the SCB
emergency 54” pipe repair as to which account should be paying and I know Staff is
working on resolving which account should pay, and that the SCB drain will come
back to council with an update as to which account is being debited. (Moore)
Staff response:
Comment acknowledged.
Q6: Are Art in‐lieu of fees or the public art program requirements considered
Development Impact Fees? Should either of these amounts, particularly the in‐lieu of
fees, be included in this report? There may be some new guidance on this? (Moore)
Staff response:
Generally art in‐lieu fees are considered to be imposed under the City’s police power to
regulate development and are not considered impact fees for purposes of the Mitigation Fee
Act.
Attachments Provided with Original Staff Report:
A. Annual & Five‐Year Report for FY 2023
B. Draft Resolution
Attachments Provided with Supplemental 1:
None