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Item 6e Proposed Interim Ad, iustment to the Tri-VaHey Transportation Development Fee (SR 03:054) Jeff Knowles presented the staff report. Mayor Pico had a question of increasing the fee on all commercial development. He did not see any schedules on how the increase in fees matches with proposed projected development of property and how much money was going to be raised. It basically says that we are going to raise an additional amount, but still be short of what is needed. He keeps hearing from the commercial real estate developers that we have a ten year oversupply of office space that is not going to be absorbed. Are we only fooling ourselves by saying we are going to increase the fee for commercial office and leaving the rest of the fee the same? Where are those projections, where is that development anticipated to be, and how does that recommendation fit with the downturn of the economy? Mr. Knowles replied that there are two components when dealing with the need for these particular projects. One happens to be just the way traffic in general is increasing through the Tri-Valley as residential development occurs in San Joaquin. When you look at this particular fee and the fact that it is a form of a traffic impact fee, if you have a reduction or a slowing of the rate at which commercial property is developed, then you are also having that same reduction in traffic that would potentially be generated by those projects. This is calculated to partially offset the impacts in the Th-Valley. If the development does not occur, then the trips that are associated with that development are not occurring. Mayor Pico replied that we know that virtually all of these projects on the top ten list are really high priority projects and absolutely have to happen if we are going to see the circulation improve at all. He had a difficult time with the recommended proposal because not enough money is being raised. He felt the TVTC is not prepared to take a much stronger stand. He understood that when the fee was raised it puts an additional burden and cost on residential development and office development, and potentially puts us at a disadvantage with other regions, but if it were done across the board within our region, then everyone within our region would be on the same footing. As he recalled, when we created this fee and by charging this fee, we basically let all of the development community off the hook in terms of the potential mitigation requirements that their projects need to pay. Mr. Knowles said the projects in Pleasanton still pay the Pleasanton fee and are required to go through the traffic impact process to make sure their impacts are mitigated. He mentioned that one of the reasons this is called the proposed interim adjustment is because we saw the shortfall immediately. Staff was recommending to the TVTC that we do a new nexus study because project costs have gone up, development floor costs have changed, and it is time to redo that study. The question was do we wait for a year or two to finish that study or do we do something to address the shortfall right now. Pleasanton City Council 21 Minutes 03/04/03