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FINANCIAL STATEMENT <br /> The City collected $4.3 million in Development Impact fees in FY 2017/18, based on the <br /> existing fee methodology. The Development Impact Fee revenues make up a significant <br /> portion of the funding sources supporting the City's Capital Improvement Plan (CIP). The <br /> monies are used to fund projects that help mitigate the impacts of development on the <br /> community such as transportation system improvements, building a new park or park <br /> facility and supporting construction of affordable housing. <br /> Staff's recommended Development Impact Fees would result in approximately $7 million <br /> annually based on the current level of development activity. The estimated revenues <br /> collected from the Development Impact fees that result from the 2018 Development <br /> Impact Fee study will depend on the fee levels ultimately chosen by City Council. <br /> BACKGROUND <br /> AB 1600 (California Government Code Section 66000 et. seq.) requires cities to justify <br /> and account for development fees that they enact as a condition of approval on new <br /> development. The justification, or nexus requirement, requires cities to do the following: <br /> 1. Identify the purpose of the fee; <br /> 2. Identify the use or specific project to which the fee will be applied; <br /> 3. Determine how there is a reasonable relationship between the fee's use and type <br /> of development project on which the fee is imposed; and <br /> 4. Determine how there is a reasonable relationship between the need for the public <br /> improvement and the type of development project on which the fee is imposed. <br /> The nexus is based on the premise that new development should pay for its pro rata <br /> share of public improvement costs. Because residents, business and their employees <br /> create the need for and benefit from the availability of public services and infrastructure <br /> improvements, new development should pay its share of public facilities/improvements <br /> impacted by development. <br /> Since the 1980s, the City established several development impact fees to mitigate the <br /> impact of new housing and commercial developments on the City's facilities, <br /> infrastructure, and available affordable housing. The City's development impact fees <br /> were established pursuant to AB 1600. These fees were last restructured in 1998, and <br /> include the Public Facilities Fee, Traffic Development Fee, Park Dedication Fee, Water <br /> and Sewer Connection Fees', and Affordable Housing Fee. These fees were calculated <br /> based on assumptions of: (1) anticipated development at that time, (2) the impact that <br /> development would have on the City's facilities and infrastructure, and (3) specific <br /> projects and project costs required to mitigate those impacts. <br /> The City's current Development Impact Fee schedule is based on the 1998 <br /> Development Impact Fee schedule with annual inflation adjustments. <br /> 1 Staff will review Water and Sewer Connection Fees in 2019 along with an update to Water and Sewer <br /> rates. <br /> Page 2 of 18 <br />