File #: 21-0571    Version: 1 Name:
Type: Agenda Item Status: Approved
File created: 7/28/2021 In control: City Council
On agenda: 9/14/2021 Final action: 9/14/2021
Title: Request City Council to Accept Public Improvements; Authorize the City Engineer to File the Notice of Completion; and Authorize the Reimbursement to Liberty Property Limited Partnership. (ACTION)
Attachments: 1. Exhibit A.pdf, 2. Exhibit B.pdf, 3. Attachment 1 - Council Report.pdf, 4. Attachment 2 - Fee Credit Agreement.pdf, 5. Attachment 3 - Notice of Completion.pdf, 6. Attachment 4 - GASB34.pdf, 7. Powerpoint _Liberty Properties Valley Blvd Improvements.pdf

For City Council Meeting [September 14, 2021]

TO:                                          Honorable Mayor and City Council

APPROVAL:                     Marcus Fuller, City Manager

FROM:                     Michael Tahan, Interim Public Works Director

 

Title

Request City Council to Accept Public Improvements; Authorize the City Engineer to File the Notice of Completion; and Authorize the Reimbursement to Liberty Property Limited Partnership.

(ACTION)

Body

BACKGROUND

Liberty Property Limited Partnership, ("Developer”) submitted various planning and development applications to develop a warehouse consisting of a 401,000 square foot building on 16.9 acres of land on the south side of Valley Boulevard, between Spruce Avenue and Cactus Avenue (Assessor Parcel Number’s 0253-251-01,2,3,4, & 7) (the "Project”). The Project Location Map is attached as Exhibit A and the Project Site Plan is attached as Exhibit B.

 

On November 1, 2017, the Transportation Commission approved the Focused Traffic Impact Analysis for the Project and set related conditions of approval. On January 31, 2018, the Planning Commission approved Tentative Parcel Map 2017-0008, Conditional Development Permit 2017-0040, and Variance 2017-0011 after adoption of a Mitigated Negative Declaration (EAR 2017-0076). On December 19, 2018, the Development Review Committee (DRC) approved Precise Plan of Design No. 2017-0089 subject to Conditions of Approval The Conditions of Approval for the Project required the Developer to construct specified off-site improvements:

 

1.                     Widen and reconstruct the south side of Valley Boulevard along the Project’s frontage from Cactus Avenue to Spruce Avenue (Conditions #51-58) ("Valley Improvements”); and,

2.                     Install a traffic signal at the intersection of Valley Boulevard and Spruce Avenue (75% of this intersection is in the City of Rialto and 25% in unincorporated San Bernardino County) (Condition #96) ("Spruce Signal”); and,

3.                     Modify and relocate a traffic signal at the intersection of Valley Boulevard and Cactus Avenue (Condition #96) ("Cactus Signal”); and

4.                     Install a storm drain within the southerly half-width of Valley Boulevard to connect to the existing 42” storm drain in Cactus Avenue (Condition #88-89) ("Valley Storm Drain”).

 

Developer agreed to construct the Off-Site Improvements subject to a Construction Fee Credit and Reimbursement Agreement Section 3.33.100 of the Rialto Municipal Code (Fee Credits) states that:

...if as a condition of approval of a development project a Developer constructs a public facility identified in a Nexus Report for which a development impact fee is imposed, then the Developer shall be eligible to receive a fee credit toward the development impact fee imposed on the development project for the same type of public facility so constructed. The Developer shall not be entitled to reimbursement for any excess in the costs to construct the public facility over the amount of the Developer's obligation to pay the development impact fee for the type of public facility constructed, unless a separate reimbursement agreement is approved by the City Council.

 

The site location imagery before and after of the development is as shown below.

 

Before Construction

 

 

After Construction

 

Reimbursement Agreement

On September 24, 2019, City Council Adopted Resolution No. 7562 approving a Construction Fee Credit and Reimbursement Agreement by and between the City of Rialto and Liberty Property Limited Partnership.

 

The Council Report (excluding attachments) is included as Attachment 1.

 

The executed Construction Fee Credit and Reimbursement Agreement is included as Attachment 2.

 

Prior to building permit issuance, the Project paid a total of $1,123,096.80 in Regional Traffic Development Impact Fees based upon the current fee schedule. The originally estimated construction cost for the eligible Valley Improvements was $1,171,422 and exceeded the Project’s Regional Traffic Impact Fees.  On this basis, the Developer requested a full fee credit, and reimbursement for the actual costs exceeding the Project’s Regional Traffic Impact Fee. The City‘s originally estimated reimbursement obligation from Regional Traffic Fees was $48,325.20.

 

The Drainage Impact Fees paid by the Developer of $801,366 exceed the originally estimated Valley Storm Drain cost of $348,819. On this basis, the Developer requested a fee credit in the amount of the cost of the Valley Storm Drain. An initial reimbursement of $348,819 was processed in the amount of the estimated cost of the Valley Storm Drain leaving a remaining fee credit of $452,547.  An additional fee credit reimbursement is allowed to the extent the actual cost of the valley Storm Drain exceeded the original estimate.

 

 

 

Table 1 below summarizes the estimated public improvement costs, estimated fee credits, and reimbursements for the eligible improvements as outlined on the agreement:

 

Table 1

 

ANALYSIS/DISCUSSION

On April 8, 2021, the Developer completed construction of the Valley Boulevard Improvements and Valley Storm Drain. On May 12, 2021, the Developer submitted the final reimbursement request under the Construction Fee Credit and Reimbursement Agreement for the storm drain improvements.

 

A copy of the Notice of Completion is included as Attachment 3.

 

Conditions Precedent to Final Credit or Reimbursement

Upon submittal of the final reimbursement request, staff completed a review of the construction costs, invoices, and other pertinent documents submitted by the Developer to confirm the final improvements costs and compliance conditions precedent to final credit or reimbursement as stipulated in the Reimbursement Agreement.

 

Required Off-Site Improvements

Staff reviewed and compared the original estimate to the actual costs.  The actual cost of the fee credit-eligible work for the Valley Boulevard Improvements was $1,379,517 inclusive of hard costs of $1,199,580 and soft costs of $179,937. The Fee Credit Agreement limits soft costs to a maximum of 15% of the hard costs of construction, but in no event, greater than $350,000.  This limitation resulted in a reduction of $43,119 in soft costs allowed in the determination of the Valley Boulevard Improvements.

 

The actual costs of $1,379,517 for the Valley Boulevard Improvements exceeds the original estimate of $1,171,422 by $208,095.

 

The actual cost of the fee credit-eligible work for the Valley Storm Drain Improvements  was $507,876 inclusive of hard costs of $445,177 and soft costs of $62,699 exceeding the original estimate of $348,819 by $159,057. On this basis, the Developer is owed a further fee credit reimbursement in this amount.

 

Original construction estimates to actual construction costs variance for the Valley Boulevard and Valley Storm Drain Improvements is summarized in Table 2 below.

 

Table 2: Original Contruction Budget and Actual Construction Costs Variance

 

Final Fee Credit Reconciliation

The City’s obligation for reimbursement under the terms of the Reimbursement Agreement for the construction of the Valley Boulevard improvements is $1,379,517 and Storm Drain Improvements is $507,876 for a total amount of $1,887,393.

 

The Regional Traffic Fees due for the project are $1,123,097 and the actual construction costs for the Valley Boulevard improvements came in at $1,379,517 a difference of $256,421. In accordance with the terms of the Reimbursement Agreement, the Developer will separately seek reimbursement from the County of San Bernardino for $100,290.52 for their share of the improvements, resulting in a net reimbursement from the City of Rialto to Developer of $156,130.14 for the Valley Boulevard Improvements. 

 

The Storm Drain Fees due and paid for the project were $801,365.67. The Developer previously received a Storm Drain Fees credit reimbursement of $348,819 for the originally estimated cost of the Valley Storm Drain.  However, the final construction cost was $507,876 allowing for a further fee credit reimbursement of $159,057.  In this way, the Developer will have spent $507,876 on construction of the regional storm drain improvements and paid the balance of $293,490 to the City for other regional storm drain improvements in the Drainage Fund for a total payment of $801,366.

 

See Table 3 below for a summary of the final reconciliation amounts.

 

 

Table 3 - Final Credit Reconciliation

 

On July 27, 2021, Public Works staff and the Developer concurred with the final reconciliation in the amount of $315,187.24.

 

ENVIRONMENTAL IMPACT

On January 31,2018, the Planning Commission adopted Resolution No. 18-09 approving a Mitigated Negative Declaration (EAR 2017-0076) for the Project. This environmental review analyzed the construction of the on-site private and off-site public improvements. No further environmental review is warranted.

 

Approval of the Construction Fee Credit and Reimbursement Agreement is an administrative or fiscal action by the legislative body that will not result in any additional a direct or indirect physical change in the environment than what was already analyzed (Section 15378(b) of the California Environmental Quality Act (CEQA) Guidelines).

 

GENERAL PLAN CONSISTENCY

The City of Rialto has identified several goals and objectives within the City’s recently adopted General Plan through which the City looks to improve the community. The proposed action to acquire right-of-way is consistent with the following goals and objectives contained in the General Plan:

 

Goal 3-1:                     Strengthen and diversify the economic base and employment opportunities and maintain a positive business climate.

 

Goal 3-6:                     Require that all developed areas within Rialto are adequately served with essential public services and infrastructure.

 

Goal 3-7:                     Upgrade public infrastructure as an inducement to promote private investment.

 

LEGAL REVIEW

The City Attorney has reviewed and supports this staff report.

 

FINANCIAL IMPACT

Operating Budget Impact

There are no immediate impacts to operating budget. The additional roadway improvements will increase street maintenance expenditures in the future.

Capital Improvement Budget Impact

There are sufficient funds available in the Traffic Development Impact Fund Account No. 250-500-4312-3001 in the amount of $156,130.14, and in Storm Drain Fund Account No. 230-500-4720-3001 in the amount of $159,057.10 for the final reimbursement in the total amount of $315,187.24 payable to Liberty Property Limited Partnership for public improvements constructed under the Construction Fee Credit and Reimbursement Agreement.

 

The Finance Department will add the improvements to the City’s fixed asset system in compliance with Governmental Accounting Standard Board (GASB) 34 Standards for Financial Reporting of Infrastructure Assets included as Attachment 4.

 

Licensing

No business license or applicable fees are required under this action.

 

RECOMMENDATION

Staff recommends that the City Council:

 

•                     Accept the Public Improvements.

•                     Authorize the City Engineer to File the Notice of Completion.

•                     Authorize the Reimbursement to Liberty Property Limited Partnership from the Traffic Development Impact Fund in the amount of $156,130.14, and from the Storm Drain Fund Account in the amount of $159,057.10 for the final reimbursement in the total amount of $315,187.24 in Accordance with PPD 2017-0089 by and between the City of Rialto and Liberty Property Limited Partnership.