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BACKGROUND AB 2604 (Torrico), which was adopted in August 2008, modified State law regarding the timing for payment of development impact fees for residential projects. It gives local agencies flexibility in deferring payment of such fees until close of escrow for residential projects. This legislation was adopted in response to homebuilder concerns that buyers initially placed orders for the construction of a new home, then later cancelled their contracts, leaving the homebuilder with the expense of the building permit with development impact fees and construction costs, but without a buyer. In adopting AB 2604, the State legislature noted that economic benefits of such a program include: (a) accelerating increases in property values based on assessment as improved land, or increased fair market value through the sale of the property; (b) collection of sales taxes on building materials purchased locally; (c) revenue from business license taxes from contractors and design professionals; (d) employment of construction personnel and their spending in the local area; and (e) increased business activity when owners and purchasers seek to furnish their new home prior to occupancy. This type of program is also being considered by Dublin San Ramon Services District and was recently implemented in the cities of Livermore and Brentwood, as well as other jurisdictions in the State. DISCUSSION In Pleasanton, development impact fees are collected at the time of issuing a building permit, as allowed by State law. For a sample 3,500 square foot detached single family home with a 500 square foot garage, City development impact fees include: Amount Fee Type $ 4,238 Public Facilities Fee $ 4,218 Traffic Development Fee $10,053 Lower Income Housing Fee $ 1,600 Water Connection and Meter Fee $ 500 Sewer Connection Fee $20,609 Subtotal -City's Development Impact & Connection Fees [Note: Park dedication in-lieu fees are already paid upon recording subdivision map.] Page 2 of 4