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THE CITV OF -' -•• !^,:~°'~~' ~~ ~ "" CITY COUNCIL AGENDA REPORT ~L~~S~4NTON~ April 21, 2009 City Manager's Office TITLE: DEFERRED FEE PROGRAM TO ALLOW OWNERS AND BUILDERS OF RESIDENTIAL PROJECTS TO DEFER THE PAYMENT OF CITY DEVELOPMENT IMPACT FEES SUMMARY To increase assessed property values and provide local economic stimulus, a deferred fee program (Deferred Fee Program) is proposed to allow property owners and builders to defer the payment of City development impact fees for their residential projects. A recently adopted State law allows for this type of program. The proposed Deferred Fee Program would require full payment upon the earlier of: (a) final inspection; (b) certificate of occupancy; or (c) close of escrow on a sale. The program would be available until June 2011; and the City Manager will be given the discretion to extend the program in six month increments with notice to the City Council for up to an additional two years. RECOMMENDATION Adopt the proposed Deferred Fee Program to allow owners and builders of residential projects to defer the payment of City development impact fees. FINANCIAL STATEMENT The estimated cost to the City for lost interest income due to the deferred payment of City development impact fees is between $500 and $1,250 annually per $25,000 in deferred payments (depending on interest rates in the next two years). The revenue implication of not adjusting participant's deferred City fees based on revised construction cost indices to account for annual inflation is expected to be negligible in the next 24 month period.