CITY OF STOCKTON CITY COUNCIL AGENDA ITEM 9

CITY OF STOCKTON CITY COUNCIL AGENDA ITEM: 9. 02 Agricultural Mitigation Fee DATE: September 12, 2006 PROJECT: City initiated request to establish an Agricultural Mitigation Fee, pursuant to a Nexus Study, by amending the Public Facilities Fee (PFF) to add an Agricultural Mitigation Fee and amending the PFF Administrative Guidelines by adding provisions regarding the Agricultural Mitigation Fee APPLICANT: City of Stockton PRESENTORS: Brian Grattidge (ESA) and Teifion Rice. Evans (EPS)

Agricultural Mitigation Fee Nexus Study City of Stockton City Council Public Hearing September 12, 2006

Introductions • ESA – Brian Grattidge • EPS – Teifion Rice-Evans

Background/Topics • What is an Agricultural Mitigation Fee? • What is a Nexus Study? • Purpose of the Fee • Definition of “Agricultural Land” • Applicability of Fee • Agricultural Mitigation Lands • Nexus • Cost Components

What is an Agricultural Mitigation Fee? • The purpose of the Agricultural Mitigation Fee is to provide a form of mitigation for the loss of farmland through conversion to non-agricultural uses, including residential, commercial and industrial development. • The Fee shall be used by the City and/or a qualifying land trust to purchase agricultural mitigation land from willing sellers. “Agricultural mitigation land” means an easement or fee interest in property that restricts the primary use of the land to agricultural production.

What is a Nexus Study? • Before adopting a development mitigation fee, a city must demonstrate there is a relationship, or “nexus, ” between the proposed fee’s use and the type of development project on which the fee is imposed • The nexus study takes policy decisions concerning the mitigation program along with cost data to estimate the justifiable fee

Purpose of the Fee • To mitigate for the loss of agricultural land in the City of Stockton through conversion to private urban uses, including residential, commercial and industrial development. • To be used by the City or a qualifying land trust to purchase agricultural mitigation lands

Definition of “agricultural land” • “Important Farmland” – Prime farmland – Farmland of statewide importance – Unique farmland • As shown on latest version of Department of Conservation’s Farmland Monitoring and Mapping Program (FMMP) • Same definition of “agricultural land” found in the California Environmental Quality Act (Public Resources Code Section 21060. 1)

Applicability of Fee • Applies to all forms of development that would convert agricultural land to a non-agricultural use, and under the jurisdiction of the City of Stockton. • Does not apply to “no pay” zones identified by the SJMSCP

Agricultural Mitigation Lands • Agricultural conservation easement or fee interest • Agricultural Conservation Easement – – – Voluntary Limits use to agriculture Prohibits subdivision and non-agricultural development Permanent and runs with the land May allow one single family residence (homestead) • Quality of mitigation lands: “Important farmland” • Located within San Joaquin County – Not within SOI of an incorporated city

Nexus • Economic Value • General Plan Policies • Environmental and Aesthetic Values • CEQA Mitigation – Preserving natural resource • Subdivision Map Act • State Policies

Cost Components Cost of agricultural preservation includes: • Agricultural easement costs • Administration and monitoring costs • Contingency

Easement Costs per Preserved Acre * • (a) Unencumbered land value = $12, 000 per acre – based on sales comparables • (b) Encumbered land value = $4, 250 per acre – based on proxies for sales comparables; rural homesite value; income approach to ag. land value • (c) Easement value = $7, 750 per acre – (a) minus (b) • (d) Total easement cost = $8, 150 per acre – Based on easement value plus five percent for transaction costs * assumes preservation outside of Primary Zone of Delta

Administrative/ Monitoring Costs per Acre • (a) Annual preserve mgmt cost = $51 per acre – based on Center for Natural Lands Management Study (CNLM) for all preserve types • (b) Annual admin. / monitor cost = $20. 40 per acre – CNLM Study discounted by 60 percent – Discount for non-agriculture. related activities • (c) Endowment cost = $1, 000 per acre – based on real interest rate of 2 percent and annual cost

Contingency • Purpose – Unexpected land and/ or administrative cost expenses – Landowner outreach and interaction • Contingency - $450 per acre – Set at 5 percent of other costs – Other programs – up to 5 percent

Estimated Mitigation Fee per Acre Scenario 1 0. 5 : 1 ratio Scenario 2 1 : 1 ratio Easement Acquisition $4, 075 $8, 150 Administrative/ Monitoring $500 $1, 000 Contingency $225 $450 Easement + Other Costs $4, 800 $9, 600

Fee Update • Adjusted Annually for Inflation as part of the Public Facilities Fee Process – California Construction Cost index

Other Considerations/Options • Direct Purchase of an Agricultural Easement - review and administration - applicable fees