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, 2025
Staffreport
SUMMARY
Annual Development Impact Fee reports for the fiscal year ending June 30, 2025, required as part of AB 1600.
RECOMMENDATIONS
Staff recommend 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, 2025.
BACKGROUND
The legal requirements for enacting development impact fees are set forth in Government Code Sections 66000-66025 (Mitigation Fee Act) and are commonly referred to as AB 1600 and SB 1693 requirements. These fees are generally intended to mitigate 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, and the total percentage of the cost of the public improvement funded with development impact fees.
6. A description of each interfund transfer or loan, including 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 must 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 Reports (Attachments A & B) present 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 Development Impact Fee. The attached report includes revenues collected and project costs incurred through fiscal year ending June 30, 2025.
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 FY 2025, DFSI fund revenue totaled $210,180, which included $96,529 in Development impact fees, and $113,651 in interest earnings and other revenue. Projects expenditures amounted to $148,474, with an ending DFSI fund balance of $1,667,623.
Park Facilities Development Impact Fees pay for public park and recreation facility acquisition and development. Funds are directed toward the study, design, acquisition, and construction of park and recreation facilities. In FY 2025, the total fund revenue amounted to $840,993, with Park Development Impact Fees totaling $491,433, and $349,560 in interest earnings. Project expenditures amounted to $25,066, with an ending fund balance of $6,862,255.
A full listing of Development Impact Fees can be found on the City’s website, as referenced in Attachment D.
COMMITTEE REVIEW AND ACTIONS
The City Council Finance Committee accepted the Fiscal Year 25 AB 1600 report at the Finance Committee meeting on November 19, 2025, and recommended that the report be forwarded to the full City Council.
FINANCIAL IMPACTS
The annual AB 1600 report is a mandated reporting requirement provided to the City Council for information purposes. There is no direct fiscal impact associated with receiving the annual report.
ATTACHMENT(S)
Attachment A: Draft Resolution
Attachment B: FY 2025 Annual AB 1600 Development Impact Fee Report Fund 120
Attachment C: FY 2025 Annual AB 1600 Development Impact Fee Report Fund 122
Attachment D: Development Fees FY24-25
PREPARED BY: Angie Nichols, Finance Manager, Finance Department