(A) Exemptions. The following projects are exempt from the requirement to pay DIFs:
(1) Demolition of one existing residential structure and the building of one new residential structure on the same site where no additional dwelling units are created provided the demolished structure was in use as a residential dwelling within two years prior to the issuance of the building permit for the new residential structure.
(2) Alteration, remodeling or reconstruction of a nonresidential structure which does not increase the gross floor area above what was in existence and in use on the effective date of this chapter.
(3) A project which the applicant establishes to the city's satisfaction will not generate any additional need for public facilities, services or amenities, or any other impact for which mitigation and/or a fee is otherwise required. The burden of establishing, by factual proof to the satisfaction of the Director, the applicability and elements of this subsection shall be on the applicant. No exemption or limit shall be granted pursuant to this section unless a finding is made by the Director, based on satisfactory factual proof provided by the applicant, that the requirements of this section have been satisfied.
(4) There are no other exemptions to the DIF.
(B) Credits. The Director may, in conformance with any city credit and reimbursement policies, grant in favor of an applicant subject to the requirements of this chapter a credit against the obligation to pay DIFs, as provided below.
(1) For a project that involves the demolition of an existing structure and the construction of a new structure, the applicant shall be entitled to a credit in the amount of the applicable DIFs for the structure to be demolished, provided that such structure has been in use in the past two years, and provided that no DIF shall be reduced below $0.
(2) An applicant may be entitled to a credit against DIFs required by this chapter to the extent that the applicant constructs, pursuant to city standards and requirements, public facilities included in the project list used to determine the amount of the DIFs, as provided below:
(a) No credit may be granted unless and until the applicant has entered into an improvement agreement with the city to construct such public facilities. The city is not obligated to enter into such improvement agreement with any applicant.
(b) A credit for construction of public facilities shall only apply to the DIF that would otherwise have been used to fund the construction of such public facilities.
(c) The credit amount shall not exceed the total of the engineering and construction costs, plus the applicable inflation adjustment, that would be reasonably incurred by the city in building the public facilities. If the total adjusted cost of the public facilities exceeds the total value of all the DIFs due from the applicant and subject to the credit, the applicant may be eligible for reimbursement of such excess costs from other building permit applicants whose properties will benefit from the public improvement, in conformance with any city credit and reimbursement policies. However, under no circumstances will the city:
1. Grant a credit for construction of public facilities that exceeds the total value of all of the DIFs due from the applicant and subject to the credit; or
2. Be obligated to reimburse an applicant for any costs of constructing a public facility under an improvement agreement required by § 9-3.70(B)(2)(a).
(d) Upon a default under an improvement agreement, the applicant shall lose all unused DIF credits and shall compensate the city for all used DIF credits. The amount of the compensation shall be equal to the total of: (i) 100% of the dollar amount of the DIF credits used; plus (ii) accrued interest from the date that the credit was used, compounded at an annual rate of 6%; plus (iii) liquidated damages in an amount equal to 20% of the dollar amount of the DIF credits used. The applicant shall pay the full amount of such compensation to the city within 30 days of the notice of default under the improvement agreement.
(e) Any credit earned by an applicant shall be applied by city only to building permits issued for projects specifically described in the improvement agreement required by § 9-3.70(B)(2)(a) above. Credits may not be transferred to other development projects unless explicitly approved by the city. The city may establish a reasonable fee for such transfer via resolution, following issuance of proper notice required by the Government Code.
(3) Credits granted under this chapter may not be combined with other city credits for oversized water or sanitary sewer utilities.
(C) Interest. No interest shall be deemed accrued nor be paid on account of any claim for award or payment of a credit under this chapter.
(Ord. 2079-C-S, passed 3-25-14)