Consideration of an Urgency Ordinance waiving the provision of Section 1318 of Ordinance No. 122 C.S. to adopt an annual resolution setting the value of improved off-street parking facilities.

1. Request a reading of the title of the Ordinance.

2. Motion to waive further reading and adopt Urgency Ordinance No. 2020-003, waiving the provision of Section 1318 of Ordinance No. 122 C.S. for annual resolution setting the value of improved off-street parking facilities.

On December 8, 1965, the City Council adopted Ordinance No. 122 C.S. (Attachment 1) which established off-street parking requirements for the commercial districts of the City. The current parking requirements are listed below in Table 1. The reason for adopting Ordinance No. 122 C.S. was to require and develop off-street parking in the City’s commercial zones for business owners and their employees. Creating more off-street parking would allow curbside spaces to remain available to customers and would reduce the impacts of employee parking in adjacent residential neighborhoods.

Table 1. Current Minimum Off-Street Parking Requirements

In addition to creating minimum parking requirements, Ordinance No. 122 C.S. established a formula for calculating the value of a parking in-lieu fee for properties that could not provide the required number of off-street parking spaces.

The Ordinance further established that, no less frequently than annually, the City Council shall establish by Resolution the value of the parking in-lieu fee based on the value of improved parking facilities on a per stall basis. The funds collected are deposited into a special fund to be used by the city to develop off-street public parking in or near the business district. The current parking in-lieu fee fund balance is $714,000.

Historically, as property values and construction costs have increased, the parking in-lieu fee has also increased. Table 2 below provides a history of those increases.

Table 2. Historical Data on Adopted In-Lieu Parking Fees

The formula for calculating the value of the in-lieu parking fee has been codified in Section 17.38.040 of the City’s Municipal Code (Attachment 2) and is also part of the City’s certified Local Coastal Plan. The in-lieu parking fee formula is summarized as follows:

• Current construction costs of public parking garages with a Type I or Type II fire resistance (refer to Attachment 3);

• Multiplied by the regional modifier for the San Francisco area (1.75 has been used historically in Carmel); and

• Increased by 50 percent to reflect land costs.

The resulting factor is multiplied by 400 square feet per in-lieu parking stall to determine the total amount of the fee to be charged. A fee reduction of 25 percent is granted for parking spaces required for newly established residential dwelling units.

The parking in-lieu fee is adjusted based on the adopted Building Codes in effect at the time of review. On March 3, 2020 the City Council adopted the 2019 editions of the California Building Codes. Based on staff’s review, it appears that the parking in-lieu fee has not been updated since the 2001 edition of the California Building Codes.

Proposed Parking In-Lieu Fee

Staff calculated the cost per square foot for a parking structure based on the February 2020 Building Valuation Data table published by the International Code Council (ICC). A parking structure with an S-2 Group Occupancy has an average Type I/II construction cost of $100.04 per square foot. The following is a summary of the calculation:

Construction Cost/Square Foot for a Type I/Type II Parking Garage ($100.04) x Regional Modifier (1.75) + Land Cost (50%) x 400 Square Feet = Cost of In-Lieu Fee/parking space

$100.04 x 1.75 = $175.07 x 50% = $87.54

$175.07 + $87.54 = $262.61

$262.61 x 400 SF = $105,044 per parking space

Table 3 provides the amount of parking in-lieu fees for up to 5 stalls based on the updated value of the fee. The in-lieu fee is collected at the time a building permit is issued for the project or at issuance of a business license if no building permit is required.

Table 3. Parking In-Lieu Fees

May 5, 2020 City Council Meeting

At the May meeting the City Council was provided with five options regarding the current parking in-lieu fee program:

Option No. 1. Consider adopting a Resolution updating the parking in-lieu fee based on the 2019 California Building Codes. This option would have increased the in-lieu fee from the current rate of $54,080 per space to $105,044 per space.

Option No. 2. Consider adopting an urgency ordinance to defer updating the fee and maintain the current rate of $54,080 per space.

Option No. 3. Consider modifications to the current formula to change the way the fee is calculated. 

Option No. 4. Consider eliminating the parking in-lieu fee altogether. 

Option No. 5. Provide other direction, as determined by the Council.

The City Council chose option 2 and directed staff to return with an urgency ordinance to defer taking action on updating the value of the parking in-lieu fee. The current fee of $54,080 will remain in place.

Draft Urgency Ordinance

The draft Urgency Ordinance (Attachment 4) suspends the provisions of Section 1318 of Ordinance No. 122 C.S. (Attachment 1) which states, “Not less often than annually the City Council shall establish by resolution the value of improved off-street parking facilities in the city on a per parking stall basis.” The suspension of Section 1318 under this urgency ordinance would remain in place until such time that the City Council determines that adoption of annual resolutions are in the best interests of the city. Approval of the urgency ordinance requires approval by four-fifths of the council.

Environmental Review

Staff recommends that this urgency ordinance be found exempt from the California Environmental Quality Act (CEQA) pursuant to the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, sections: 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment); 15060(c)(3) (the activity is not a project as defined in Section 15378); and 15061(b)(3), because the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. The proposed Urgency Ordinance maintains the status quo and prevents changes in the environment pending the completion of the contemplated municipal code review. Because there is no possibility that this Urgency Ordinance may have a significant adverse effect on the environment, the adoption of this Urgency Ordinance is exempt from CEQA.

The parking in-lieu fees collected are placed in a dedicated fund to be used by the city to develop off-street parking available to the general public in or near the business district.  Updating the fee based on the 2019 California Building Codes would have resulted in the in-lieu fee increasing from $54,080 to $105,044 per parking space.  Deferring the fee update may result in fewer fees collected during the deferment period.

The City Council adopted Resolution 2003-72 on June 3, 2003 establishing the parking in-lieu fee at $54,080 based on the 2001 California Building Codes. On May 5, 2020, the City Council directed staff to prepare an Urgency Ordinance that would defer taking action on updating the value of the parking in-lieu fee.