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Home My WebLink About01 MILLS ACT 10-20-97DATE' OCTOBER 20, 1997 NO. 1 10-20-97 lnter-Com .TO: FROM: SUBJECT: WILLIAM A. HUSTON, CITY MANAGER COMMUNITY DEVELOPMENT DEPARTMENT ESTABLISHMENT OF A FEE FOR THE CITY'S MILLS ACT PROGILa. M ?'S~'.Y~!iTh~.':;Mill~'"~'ct is state legislAtiOn that prov~ fo~ redUcedproperty taxeS' tlt~ owner'agrees to' ptai#tain a~d-.preserve' the prope~?. a:.. mmtmum. !.: years. On June .'16, "1997,'i'th'e:::~' City.::~:): Coujtcil ~i~tprograth iti. Tustin and'es~abl~li~d [t pO~for historic .(a~O. ~Called. Mi!~ Act c°ntrac~) b~ad°pti~g ~ Coutt'Cil R~o~ti6~i: ~i;:~i[O'jVS' i~C~l:~bo~n',ten6::lb~:'co~i~ki:' a fee:?iiht does n'ot '~eed tkO'. ~i~3 ~ tlte.:~ana'`'':A~aklt~:e~t~::':~:' Of tli'~?~Port ~. a fee atta~s~ .... -~ ~::-.:......~ h~ ~d'St~ff r~q~ir~dfo~?OcesSih'~-a~:Milb 3ct contFaet::; RECOMMENDATION That the City Council adopt Resolution No. 97-95 authorizing the establishment of an application fee for the City's Mills Act program. FISCAL IMPACT The establishment of a $500.00 application fee for the City's Mills Act pro,am will offset staff costs in administering the program. These costs are estimated to average approximately $880.00 per application for the development and approval of the contract and approximately $60.00. annually for monitoring. For the minimum contract period of ten (10) years, the monitoring costs would total $600.00. Based on a total cost of $1,480.00 minus the $500.00 application fee, the total fiscal impact related to the administration of a Mills Act contract for the minimum contract period is $980.00 in staff costs. BACKGROUND/DISCUSSION On June 16~ 1997, the City Council authorized the implementation of a Mills Act program in Tustin and established a policy for historic property preservation agreements (called Mills Act contracts) by adopting City Council Resolution No. 97-50. This resolution provides that: 1) The Mills Act program in Tustin will be made available to the owuers of residential properties with an "A", "B,, or "C" rating in the Tustin Historical Resources Survey. 2) Commercial properties will be excluded because they are eligible for other pro,ams such as the Commercial Rehabilitation program. City Council Report Mills Act Fee October 20, 1997 Page 2 The Mills Act will not apply in Tustin's Redevelopment areas because there would be impacts to the Redevelopment Agency. Adopted by the California LegislatUre in 1976, the Mills Act gives local governments the authority to grant property tax relief to owners of qualified historic properties, including owner-occupied single family residences and income producing properties. In exchange.for.this relief, the property owners must agree by contract (a Mills Act contract) to maintain the properties in accordance with specific historic preservation standards and conditions. The Mills Act allows local governments to collect a fee that does not exceed the reasonable cost of administering the program. This fee may be collected upon application submittal, once the contract is executed, or at any other time. The specific tasks required of staff in processing a Mills Act application are identified in Attachment A. Also included are estimates of the staffhours required for comple/ion of each task. As shown in Attachment A, approximately 22.0 hours of staff time would be required initially, resulting in staff costs of about $880.00 'per application. Annual costs associated with the monitoring of a Mills Act contract would average about $60.00 per contract. According to an informal survey of other cities with active Mills Act programs, most cities charge nominal fees to offset program administration costs or charge no fees. If fees are charged, they usually do not fully recover costs, because higher fees may discourage property owners from participating in the program. Given the positive community benefits of an active Mills Act program, staff recommends art. application fee of $500.00 for the City of Tustin Mills Act program. This fee should be collected upon the acceptance of the application. Scott Reekstin Associate Planner Attachments: SR:br:huillsfce.scr A- Fee Analysis Resolution No. 97-95 Elizabeth A. Binsack Director, Community Dex/elopment · ' ATTACHMENT A- FEE ANALYSIS INITIAL COSTS Task Pre-application meeting with applicant Calculate estimated property tax savings Preliminary review of application Review ten-year improvement schedule Second meeting With applicant Accept application Create project file Review of application for completeness Property inspection Customize standard contract Contract review by City Attorney Third meeting with applicant to review draft contract City Council report and resolution preparation. Typing City Council meeting Execute contract Record executed contract/mail to Assessor Total Initial Processing Time (AP 12.25 hrs/ADCD 6.25 hrs/CDD .75 hr/BI 1.0 hr/OSS .75 hr) Average cost per staff hour Total Initial Costs StaffHours 3.0 0.5 0.5 0.5 3.0 0.5 0.5 0.5 3.0 1.0 1.0 3-.0 3.0 0.5 0.5 '0.5 0.5 22.0 hrs $ 40.00 s88oi0o Staff AP, ADCD AP AP AP AP, ADCD AP AP, OSS AP AP, BI, ADCD AP, ADCD, CDD CA AP, ADCD AP, ADCD, CDD OSS AP AP AP ON-GOING ANNUAL COSTS Task Annual property inspections Review annual reports Total Annual Processing Time ( AP 1.25 hr/ADCD .25 hr/BI .50 hr.) Average Cost per staff hour Total On-going Annual Costs Task Staff Hours 1.0 2.0 hrs $ 30.00 $ 60.00 AP, BI AP, ADCD Legend CDD ADCD AP CA BI OSS Community Development Director Assistant Director, Community Development Associate Planner City Attorney Building Inspector Office Support Specialist l0 11 12 13 14 15 17 18 2O 23. 22 23 24 25 26 27 28 RESOLUTION NO. 97-95 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, ESTABLISHING AN APPLICATION FEE FOR THE CITY OF TUSTIN MILLS ACT PROGRAM. The City Council of the City of Tustin does hereby resolve as follows: WHEREAS, the State of California enacted the Mills Act (California Government Code section 50820 et seq.), which authorizes cities to enter into contracts with the owners of qualified historic properties to provide for the use, maintenance, and restoration of such historical properties so as to retain their characteristics as properties of historical significance; and WHEREAS, on June 16, 1997, the City Council authorized the implementation of a Mills Act program in the City of Tustin and the establishment of a policy for historic property preservation agreements (Mills Act contracts); and WHEREAS, the Planning Division of the Community Development. Department is responsible for processing Mills Act apPlications and providing certain services which result in the Department incurring certain processing, administrative and 'production costs; and WHEREAS, California Government Code Section 50281.1 allows the city council to establish a fee not to exceed the reasonable cost of administering the Mills Act program; and WHEREAS, California Government Code Section 66016 requires notice to be published and data made available concerning fees and charges prior to conducting a public hearing with respect to the adoption of new fees for which no other procedure ~s provided by law; and WHEREAS, the City ,Council has conducted a duly noticed public hearing with respect to the proposed fee prior to the adoption of this Resolution. NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Tustin hereby .establishes an application fee for the City of Tustin Mills Act program that shall be applied uniformly except where, in the discretion of.the City Manager, reduced fees are justified by special circumstances. PASSED AND ADOPTED at a regular meeting of the Tustin City Council, held on the 20th day 'of October, 1997. Jeffery M. Thomas Mayor Pamela Stoker, City Clerk