Report 2018-110 Recommendation 17 Responses

Report 2018-110: City of Lincoln: Financial Mismanagement, Insufficient Accountability, and Lax Oversight Threaten the City's Stability (Release Date: March 2019)

Recommendation #17 To: Lincoln, City of

To ensure that it applies the correct fee credits to developers, Lincoln should develop policies and procedures by September 2019 for establishing fee credits and maintaining adequate documentation to justify modifications to fee credits, including credits it awards based on changes in fee schedules and updated development agreements.

Annual Follow-Up Agency Response From September 2023

On June 28, 2022 the City Council adopted Resolution 2022-162, adopting the Public Facilities Element Update, dated June 10, 2022. At that time the adoption of the new fee schedule as identified within the PFE was deferred while staff continued to work with the development community to craft an implementation schedule for the new fee schedule and to answer questions by the development community with regards to the list of facilities and cost estimates. In interact process and discussion between city staff and the development community resulted in minor changes with and updated Public Facility Element Fee Study adopted by City Council on October 25,2022. This study provides the justification and Nexus study required for these fees. The City agreed to a phased in approach for the change in fees with fees implemented January 1, 2023. On January 10, 2023 the City Council adopted a resolution accepting the Mitigation Fee Act annual and 5-year reporting of the Public Facilities Element fees.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Although we commend Lincoln for conducting a fee study and updating its fees, the city has yet to update its policies and procedures for establishing fee credits and maintaining adequate documentation to justify modifications to fee credits. As a result, it has not demonstrated that it has fully implemented our recommendation.

Annual Follow-Up Agency Response From October 2022

PARTIALLY IMPLEMENTED The Public Facility Element Fee Study has been completed and adopted by City Council on October 25,2022. This study provides the justification and Nexus study required for these fees. Additionally, the City has engaged a consultant to evaluate existing developer fee credits. The City anticipates the to fully implement this recommendation by 06/30/2023

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Lincoln did not provide documentation of its implementation efforts, so we have assessed the status of this response as pending. We will reassess the city's progress upon receiving evidence of full implementation, either during the next annual follow-up or sooner.

Annual Follow-Up Agency Response From September 2021

The draft PFE (Developer Impact Fee Study) has been completed and is under final review. As a relatively new Interim City Manager (and Acting Finance Director), I have not yet had time to fully review the progress on this effort. I will be doing so during my time of employment.

The previous response is still current:

The draft Public Facility Element Fee Study is in progress. Once adopted, this Fee Study will provide the required justification for all fees and a more straightforward process for tracking fees. As an interim measure, all fee credits have been included as liabilities on the City's financials based on information contained in the associated development agreements.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

We look forward to reviewing Lincoln's progress in addressing this recommendation.

Annual Follow-Up Agency Response From October 2020

The draft Public Facility Element Fee Study is in progress. Once adopted, this Fee Study will provide the required justification for all fees and a more straightforward process for tracking fees. As an interim measure, all fee credits have been included as liabilities on the City's financials based on information contained in the associated development agreements.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

1-Year Agency Response

The draft Public Facility Element Fee Study is in progress. Once adopted, this Fee Study will provide the required justification for all fees and a more straightforward process for tracking fees. As an interim measure, all fee credits have been included as liabilities on the City's financials based on information contained in the associated development agreements.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

The draft Public Facility Element Fee Study is in progress. This Fee Study will provide the required justification for all fees and a more straightforward process for tracking fees. As an interim measure, all fee credits have been included as liabilities on the City's financials based on information contained in the associated development agreements.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

This implementation of this recommendation has been initiated; however, completion of full implementation is not anticipated until September 2019. Full implementation will include adoption of a new Public Facility Element (PFE) Study and the development and implementation of processes to track and record impacts credits. The PFE study update is underway and staff expects to present the item to City Council by July 2019.

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2018-110

Agency responses received are posted verbatim.