On Friday, May 6, the city of San Clemente announced it will begin the process of refunding Beach Parking Impact Fees (BPIFs), which were reclaimed by property owners in a lawsuit filed in 2014.
The city will mail a notification to property owners, most of whom reside on the east side of Interstate 5, who are eligible for a refund. The city’s staff will propose the City Council pass a resolution at the May 17 meeting to distribute the funds through its financial service company, BNY Mellon.
“The court order dictates who is eligible for the refund and to use the 2014-2015 (county) assessor’s tax roll of property owners during the time the decision was made,” Assistant City Manager Erik Sund said.
People who no longer own properties within the eligible area will not be able to receive a refund, even if they paid into it, according to the court order.
Because the funds gathered interest over time, eligible recipients will have to complete a W-9 tax form, Sund said.
The fund was as large as $10.9 million, but about $2.6 million of it was used to pay legal feeds to the litigants, which was ordered by the court.
Assessment of BPIFs were halted when the Orange County Superior Court ruled in favor of the litigants, Sund said.
“If we were to establish that fee again, we would have to conduct a nexus study that addresses the need of the fee,” Sund said.
The last beachside parking lot that was planned by the city was rejected by the California Coastal Commission, and any projects related to beach parking have been put “on hold,” City Manager James Makshanoff said.
“It’s a unique situation,” Makshanoff said. “It’s kind of uncharted territory.
The BPIFs were collected beginning in 1989 as a way to fund parking at beachside areas in San Clemente. As projects did not materialize and the fund sat stagnant, local attorney Brad Malamud as well as other litigants filed suit in 2012 challenging the necessity of the fees.
“The results of this decision affects all of the state of California in how they address mitigation fees,” Sund said, “and as we approach our next milestone on mitigation fees, we’ll also have to look at nexus studies in terms of updating and revisiting those fees. That will be a large endeavor in itself.”
Sund said there was no deadline for the city to use the fees, but the court decided they had held on to the money for too long to continue assessing and collecting the fee.
Sund said it could take up to five years to distribute all the money if there are people who do not claim their refund. After about five years, the unclaimed funds go into the state’s escheatment fund.
According to Sund, a list of the properties and their eligible refund, as well as a list of legal fees, will be listed on the city’s website, www.san-clemente.org under the News Feed item, “Beach Parking Impact Fees,” by the end of the week.