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BACKGROUND Beginning in 1984, public entities were required to provide an annual accounting concerning the collection and use of all development impact fees. Effective January 1, 1989, AB1600 (Government Code Section 66000 et seq.) established new accounting guidelines regarding the imposition and use of development impact fees. Effective January 1, 1997, SB1693 made certain changes to AB1600 and clarified and expanded the responsibilities of local agencies. In February 1998, SB1760 further clarified the development impact fees that are subject to AB1600 and excluded water and sewer connection fees from the requirements to expend these fees within five years. Water and sewer connection fees are included in this report in order to provide the requisite information on the receipt and utilization of these funds as required by SB1760. One of the mandated accounting guidelines, as stated in Government Code Section 66006(a), provides that a local agency shall establish separate capital facility accounts for each improvement funded by development impact fees. Any interest income earned by funds in such an account shall also be deposited in that account. Each local agency is required within 180 days after the financial year is closed (for the City this is December 31) to make available to the public the following information for each separate account: (1) the account's beginning and ending balance; (2) the amount of fees, interest, and other income in the account; (3) the amount of expenditure for each public facility or improvement made from the account; (4) the total percentage of the cost of the improvement that was funded with the fees; (5) the date construction will commence if sufficient funds have been collected; (6) a description of any interfund transfers or loans made from an account; and (7) the amount of refunds made from the account. Appendix A provides this information for funds held on June 30, 2013. Appendix C provides the Master Fee Schedule for the development impact fees that are subject to AB1600, SB1693 and SB1760. In addition, Government Code 66006 Section (b)(2) requires the report to be included on the agenda at a public meeting not less than fifteen (15) days after the information was made available to the public. Staff made the information available to the public starting on November 15, 2013 and published the public hearing notice in the Valley Times on November 16, 2013. Staff also mailed the notice of the public hearing and a copy of the report to interested parties who had filed a written request with the City for the mailed notice. DISCUSSION The City uses Fund Accounting to segregate development impact fees subject to AB1600 and SB1760 from other City funds. Interest income is allocated to each individual fund based on its own cash balance. Funds Subiect to AB1600 The City utilizes the following funds to track development related revenues subject to AB1600: Page 2 of 7