Title
Adopt a Resolution to Accept the Annual Report on Receipt and Use of Development Impact Fees and Approving Findings Regarding Unspent Impact Fees for the Year Ended June 30, 2024
Staffreport
COUNCIL PRIORITY
• Infrastructure
• Fiscal Sustainability and Transparency
• Community & Business Development
SUMMARY
Annual Development Impact Fee report for the fiscal year ending June 30, 2024, required as part of AB1600.
RECOMMENDATIONS
Staff recommends City Council approve a resolution accepting the Annual Report on Receipt and Use of Development Impact Fees and approve findings regarding unspent Development Impact Fees for the Year Ended June 30, 2024.
BACKGROUND
The legal requirements for enacting development impact fees are set forth in f) and are commonly referred to as AB 1600 and SB 1693 requirements. These fees are generally intended to mitigate the cost impacts that development projects have on existing City infrastructure and facilities.
Requirements under Government Code Section 66006 are:
1. A brief description of the fee program.
2. The amount of the fee.
3. Beginning and ending balances of the fee program.
4. Amount of fees collected, interest earned, and transfers/loans.
5. An identification of each public improvement. The expenditures on each project. The total percentage of the cost of the public improvement is funded with development impact fees.
6. A description of each interfund transfer or loan. The date the loan will be repaid, the rate of interest, and a description of the public improvement.
7. The estimated date when projects will begin if enough revenues are available to construct the project.
8. The number of refunds made to property owners.
The Annual Report must be reviewed by the City Council at a regularly scheduled public meeting. Notice of the time and place of the meeting shall be mailed at least 15 days prior to the meeting to any interested party having filed a written request with the City.
One of the provisions in the State law regulating development fees is to regularly review funds collected and held for more than five years and to make certain findings to continue to hold those funds.
Analysis
The Government Code requires an annual accounting of all development fees to be made available at the close of the fiscal year. The Annual Report attached to the accompanying City Council resolution presents the revenues, expenditures, and fund balance for the City development fees. Two City fees are subject to AB 1600 requirements-Development Fee for Street Improvement (DFSI) and the Park Facilities Development Impact Fee. The attached report includes revenues collected and project costs incurred from July 1, 2020, to June 30, 2024.
Developer fees are segregated from the General Fund and from other funds and accounts containing fees for other purposes in accordance with accounting standards. Interest earned on each fee is deposited into the fund or account and used only for the purposes of the fee.
Development Fees for Street Improvements (DFSI) are deposited into the Street/Traffic Improvement Special Revenue Fund. This separate fund is used to account for development fee assessments levied to provide street and traffic improvement costs attributable to residential and commercial growth. Fees may be used for improvements to right-of-way, pavement, traffic signals, curbs, gutters, and sidewalks. In 2023-2024, Development fees amounted to $43,368. Project expenditures amounted to $359,500, with an ending DFSI fund balance of $1,506,000.
Park Facilities Development Impact Fees pay public park and recreation facility acquisition and development. Funds are directed toward the study, design, acquisition and construction of park and recreation facilities. In 2023-2024, Park-in-Lieu fees amounted to $117,700. Projects expenditures amounted to $25,100, with an ending Park Development fund balance of $5,939,500.
Financial Impacts
The fee revenue will be used to fund public improvements necessary to meet the demand for services resulting from commercial and residential development in the City. This proposed action will not impact fund balance because there are sufficient funds are included in the Fiscal Year 2023-2024 General Fund budget for the planned projects funded by the developmental fees collected.
ATTACHMENT(S)
Attachment A: Resolution (FY24 Annual AB 1600 Development Impact Fee Report)
Attachment B: FY24 Annual AB 1600 Development Impact Fee Report
PREPARED BY: Susan Nunes, Acting Finance Manager, Finance