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BACKGROUND The City's development impact fees were established pursuant to AB 1600 (California Government Code Section 66000 et. Seq.). AB 1600 requires cities to justify and account for development fees that they enact as a condition of approval on new development. The justification, or nexus requirement, requires cities to do the following: 1. Identify the purpose of the fee; 2. Identify the use or specific project to which the fee will be applied; 3. Determine how there is a reasonable relationship between the fee's use and type of development project on which the fee is imposed; and 4. Determine how there is a reasonable relationship between the need for the public improvement and the type of development project on which the fee is imposed. The nexus is based on the premise that new and existing development should each pay for its' pro rata share of public improvement costs. Because residents, business and their employees create the need for and benefit from the availability of public services and infrastructure improvements, new development should pay its share of public facilities/improvements impacted by development. As noted above, most of the City's current development impact fees were last restructured in 1998 or 17 years ago. The methodology for establishing the City's development impact fees established in 1998 included reviewing: (1) the City's 1996 General Plan; (2) projects planned in the City's Public Facilities Master Plan; (3) required park land to meet the community's needs; (4) 1998 land values; and (5) 1998 construction cost estimates. At the time these fees were adopted, staff had recommended that the fees be periodically reviewed to reflect inflation and changes in the City's General Plan. Inflation adjustments have been occurring. The proposed contract with EPS will result in an update of all of the City's development impact fees based on the City's current General Plan. It will identify capital projects that will mitigate the impact of future development, quantify their estimated costs, and set forth an equitable allocation of those costs to future development. DISCUSSION On July 17, 2015, staff issued a RFP for Development Impact Fee studies. The RFP was sent to 11 firms with experience in conducting development impact fee studies, as well as posted on the City's website and on the California Society for Municipal Finance Officers' website. Proposals were due August 14, 2015. Staff received two responses to the RFP from EPS and Willdan. Both firms are equally well qualified to perform the development impact fee study. Staff could not identify substantive differences in the work scope, schedule, or staff qualifications between EPS and Willdan. However, EPS proposed budget of$135,070 is $70,640 less than Willdan's proposed budget of $205,710. In addition, EPS is familiar with Pleasanton as EPS previously assisted with the 1998 restructuring of the Affordable Housing fee. Thus, staff is recommending to award the development impact fee study contract to EPS. Assuming the City Council approves the proposed contract with EPS, the project will begin in the middle of October. After City staff and the consultant prepare initial data, staff Page 2 of 3