Agriculture, Business, Communities – El Dorado Report

El Dorado Hills Town Center Apartments

Introduction

The El Dorado Hills Apartment (Town Center) project proposes 214 apartments in two four-story buildings, an adjacent five-level parking structure, plus hardscape and landscaping on a 4.7-acre site in the El Dorado Hills Town Center.  The project site is surrounded on three sides (north, east and south) by existing or planned future commercial development, and adjacent to the Town Center lake and drainage corridor on the west.  The upscale market-rate apartments include a mix of studio, 1- and 2-bedroom units, along with other amenities such as a clubhouse and fitness center, meeting rooms and outdoor areas. 

Although the proposed project is not characterized as mixed use, it satisfies criteria for horizontal mixed-use development.[1]  In fact, it is difficult to imagine a site anywhere in El Dorado County that is better suited for mixed-use commercial and housing development than the El Dorado Hills Town Center.  The proposed housing project is an infill development, located within easy walking distance of employment, retail, dining and entertainment opportunities.  It is also within a block of an El Dorado Transit commuter bus stop providing service into downtown Sacramento and connecting to the Folsom Iron Point light rail station, Folsom Lake College, Intel and Kaiser offices in Folsom.  Most Town Center planned commercial development has already been built, alleviating a common concern with mixed-use development that the housing will be built, but never followed up with promised commercial uses. 

This proposed development is in the right location, and will provide a type of housing not currently available in the area, to serve professionals, singles, and empty nesters interested in a walkable living environment in a safe community with easy access to employment locations, medical facilities and transit hubs. 

Background

The El Dorado Hills Town Center is a part of the approximate 4,000 acre El Dorado Hills Specific Plan (EDHSP), approved by the County in 1988. As with many suburban master-planned communities designed during that period, its focus was primarily single-family housing, although the plan originally authorized some lower density for-sale townhomes and clustered housing units.[2]  The 256 acres of the EDHSP south of Highway 50 at Latrobe Road was designated as regional commercial to serve the needs of regional residents as well as travelers along Highway 50.  Two development plans, one for Town Center West and one for Town Center East (west and east of Latrobe Road, respectively) have been approved by the County.  

The original Town Center East Development Plan (TCE PD), where the apartment site is located, was approved by the County in 1995.   Although the original plan did not include housing, it contains all of the other attributes of a mixed-use development – retail, office, hotel, dining, entertainment and transit opportunities.  The proposed apartment site was originally designated as a location for a future hotel and retail shops. 

Both the El Dorado Hills Specific Plan (1988) and the Town Center East Development Plan (1995) predate adoption of the 2004 General Plan, 2009 Commercial/Mixed-Use Development standards, and the 2015 Targeted General Plan Amendment and Zoning Ordinance Update (TGPA/ZOU).  All of these plans allow and encourage mixed-use development, with densities of up to 20 units per acre within Community Regions.  Because the EDH SP and TCE PD were the subject of development agreements between the County and landowners, they were incorporated into the General Plan and other later-adopted plans without modification. 

A previous proposal to allow construction of 250 housing units in buildings up to five stories on this site was approved by the Board of Supervisors on December 2, 2014 by a 4-1 vote[3].  A lawsuit challenging that approval[4] led the El Dorado County Superior Court to rule that the County had failed to conduct a proper CEQA analysis of the project.  That decision is currently on appeal.

The Proposed Apartment Project

Meanwhile, the applicant has submitted an application for a new apartment project at the same site.[5]  This time, CEQA review of the project includes a full environmental impact report (EIR) rather than a mitigated negative declaration.  The new project has a lower density than the prior 250-unit project and contains 214 units in two four-story buildings, with a contiguous parking structure.  The application requests the following approvals:  1) a General Plan Amendment adding a site-specific policy increasing the residential density for this site onlyfrom 24 units per acre to 47 units per acre; 2) an amendment to the El Dorado Hills Specific Plan adding an “Urban Infill Residential” land use within the Town Center East village; 3) approval of a rezone to Residential Multi-Family Planned Development (RM-PD) with appropriate standards to implement the proposed project; 4) revisions to the Town Center East Development Plan to incorporate standards for this residential project. 

The proposed apartment project is treated as a residential development within a commercial property rather than a component of a mixed-use development.  However, by adding housing to the existing Town Center, all of the elements of mixed-use development are met.  If analyzed as a mixed- use project, the addition of 214 apartments to the 130-acre Town Center East Planned Development represents a residential density of fewer than 2 units per acre – substantially less than the density allowed by the adopted General Plan.

The new project with upscale market-rate rental housing, including a mix of studio, 1- and 2-bedroom units, provides a housing alternative not currently available in the area.  It includes a clubhouse, fitness center, and other amenities.  With an El Dorado Transit commuter bus stop providing service into Folsom and Sacramento, and a range of retail, employment, dining and entertainment options within easy walking distance from site, the proposed project would be expected to attract professionals and empty-nesters seeking a safe, walkable, pedestrian oriented community.

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WHAT IS PROPOSITION 218?

Proposition 218 is “The Right to Vote on Taxes Act.”  It was written and sponsored by the Howard Jarvis Taxpayers Association (HJTA) and approved by California voters in 1996 to expand on HJTA’s landmark Proposition 13.  The next year, the state legislature passed a law to help implement Proposition 218, using language approved by the HJTA.  Many court rulings have interpreted Proposition 218.

WHAT DOES 218 COVER?

Proposition 218 applies to three kinds of government actions:  taxes on the value of real property; property assessments for public improvements that only benefit specific properties; and fees and charges for property-related purposes.  Most people hear about Proposition 218 in the last context – typically, when a local government wants to increase water or sewer rates.  That will be the focus here.

For the first decade after Proposition 218 became law, the conventional wisdom was that water and sewer rates were not subject to Proposition 218.  In two 2001 cases, the California Supreme Court ruled that:  i) Proposition 218 does not apply if the charge results from an owner’s voluntary decision to use their property in a particular way, and ii) Proposition 218 does not apply to the one-time “hook-up” fees that a new water or sewer customer pays.

However, in 2006 the California Supreme Court ruled that ordinary metered water charges paid by existing customers are “property-related fees and charges” covered under Proposition 218. Since then, local agencies have been required to comply with Proposition 218 before raising water or sewer rates.

WHAT DOES 218 REQUIRE FOR WATER AND SEWER RATE INCREASES?

Proposition 218 imposes requirements on how water and sewer rates are raised.  It also imposes requirements on what the rates can be.

PROCEDURES

First, the how.  Before a local agency can raise rates, it must do three things:  1) Provide written notice of the increase; 2) Hold a public hearing on the proposal; and 3) Consider all protests against it.

The written notice must be mailed to the owner of every parcel affected by the proposal.  Why property owners?  Because Proposition 218 applies to charges that arise from the ownership of property.  Some agencies send their notices to both the owner and any tenants who actually receive the utility’s bill.

The notice must show the per-parcel cost of the increase.  This requirement is infeasible for consumption-based rates, since every customer is different and no one can predict their future usage.  Court rulings have allowed the notice simply to identify the changes in consumption-based rates, so that a customer can calculate the impact on them.

The notice must also explain the basis and rationale for the increase.  Finally, it must state the time, date, and location of the required public hearing – at least 45 days after the notice is mailed.

Proposition 218 does not require the notice to describe the right to protest, or to include a protest form.  Notices almost always explain how to protest, and some notices include protest forms.

At the public hearing, the agency considers all protests submitted.  If written protests are submitted by a majority of the affected property owners (or bill-paying tenants), the rate increase cannot be enacted.  One protest per parcel is allowed – again, because Proposition 218 is all about property-related fees.

The protest procedure is not an election.  Although Proposition 218 requires most property-related fees and charges to also be approved in an election, the HJTA specifically exempted water, sewer, and garbage rates from this requirement.

SUBSTANCE

Now, the what.  Proposition 218 imposes three limitations on how high water and sewer rates can be.  First, total revenues cannot exceed the costs of providing service.  This calculation need not be exact, so long as it is reasonable.

Second, revenues must be used to provide service, not for any other purpose.

Third, the cost to any person or property cannot exceed the proportional costs attributable to providing service to them.  Because it is infeasible to calculate and charge a “tailored” rate for each customer, court rulings allow agencies to group similar customers together and charge everyone in that group the same rate.  Different rate classes can be charged very differently, if each rate is cost-justified.

The California Environmental Quality Act exempts rate-making from its environmental review requirements.

In a court challenge, the local agency has the burden of proving that it has complied with these three limitations.  However, these rules apply only to rate revenues – not other income, like property taxes, power sales, and investment earnings.

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