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and the cost of the Phase II improvements described above is at least $13.36 million, Public Facilities Fees have not been adequate to meet its share of the cost for improving this park or other park projects developed since 1998. Further, it is doubtful that current and funds projected to be collected in the future will be adequate to meet Bernal Property and/or other City park/facility projects. In view of this situation, in addition to the Public Facilities Fees used for the Bernal property, a significant amount of General Fund money has been used as a funding source for the Bernal Park and use of this and other sources is anticipated to increase in the future. Note that this funding gap has not been significantly impacted as a result of the annual adjustment made to the Public Facilities Fee to reflect changes in the Consumer Price Index (CPI). When considering revenue sources for the Bernal park development, staff has identified the CIP's New Community Park: Site Acquisition Reserve (037028), which is funded exclusively with In-Lieu Park Dedication Fees, and an existing fund balance of $1,828,623 as a possible source. This existing reserve represents 20% of the approximately $9 million that has been collected from this source since 1998 when the new development impact fees were implemented. Based on estimates included in this Mid-Term CIP, it is estimated that this reserve will grow by approximately $3,668,472. All in-lieu park dedication fee revenues collected prior to 1998 has been spent on parkland acquisition and park related improvements as allowed by State law. While recognizing that the current In-Lieu Park Dedication Fee is to be used exclusively for park acquisition based on City policy articulated in 1998, staff is recommending that it be (1) authorized to study expanding the use of In-Lieu Park Dedication Fees collected in the future to include both development of new parkland as well as acquisition of parkland; and (2) that the City Council authorize a transfer of the existing $1,882,623 from the New Community Park: Site Acquisition Reserve (037028) to the Bernal Property Improvements Reserve (017045) for the purpose of offsetting the cost of the Oak Woodland Area as identified in the Phase II design work included in Attachment 3. Staff is proposing this move based on the following: • The Quimby Act, which sets forth the parameters for the uses of in-lieu park dedication fees statewide, does not restrict the use of these funds for park property acquisition only. These fees can properly be used for park facility development as well (1). This restriction has been set by City policy to segregate uses between the Public Facility Fee and In-Lieu Park Dedication Fee revenue. Further, the proposed transfer represents only a small portion of the total fees collected since 1998 with the rest being used for parkland acquisition as anticipated. . The City's analysis for the Public Facility Fee was developed prior to the acquisition and planning of the Bernal property and therefore significantly undervalued the revenue needed to develop the Bernal property. 1 California Government Code§66477(b) allows for such fees to be used for"...the purpose of developing new or rehabilitating existing neighborhood or community park or recreational facilities_ Page 4 of 5