HomeMy WebLinkAboutCC 2025-01-28_09b Adjustment of Development Impact FeesItem 9.b.
MEMORANDUM
TO: City Council
FROM: Nicole Valentine, Director of Administrative Services
SUBJECT: Annual Adjustment of Development Impact Fees
DATE: January 28, 2025
RECOMMENDATION:
1) Adopt a Resolution approving the annual adjustment of Development Impact Fees to
increase by 1.6%, consistent with the Engineering News Record (ENR) Construction Cost
Index (CCI); and
2) Make findings as included in the attached Resolution that establishing development
impact fees are not a project subject to the California Environmental Quality Act (“CEQA”)
because the action has no potential to result in either a direct, or reasonably foreseeable
indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060, subd.
(c)(2)-(3), 15378.).
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
Adoption of the Resolution will increase the Development Impact Fees charged for new
development projects, effective February 18, 2025. The revenue generated from this
increase is dependent on the amount of new development in the community during the
coming year.
BACKGROUND:
Section 3.36.040 of the Arroyo Grande Municipal Code states that De velopment Impact
Fees shall be adopted by resolution and shall be adjusted each year in accordance with
the percentage increase based on changes in the annual average Engineering News
Record (ENR) Construction Cost Index (CCI).
The following is a list of the Development Impact Fees that are included in the annual
adjustment:
Fire Protection Facilities
Police Facilities
Park Facilities
Recreation facilities
Water Facilities
Page 64 of 462
Item 9.b.
City Council
Annual Adjustment of Development Impact Fees
January 28, 2025
Page 2
Transportation Facilities
Storm Drain Facilities
Wastewater facilities
The Development Impact Fee Nexus Study was updated on January 29, 2024, and
presented to the City Council on February 13, 2024. The fees associated with the study
went into effect on April 15, 2024.
ANALYSIS OF ISSUES:
The calculation shown below provides documentation that the ENR CCI warrants a 1.6%
increase in the City’s Development Impact Fees.
The calculation adjusts the fees as follows:
1 + Current Index – Base Index for Date of Adoption = Factor
Base Index for Date of Adoption
For the current year, the calculation is as follows:
1 + 13,571 – 13,358 = 1.016 = 1.6%
13,358
The existing and proposed fees implementing a 1.6% ENR CCI increase are set forth in
Exhibit A to the attached Resolution. If approved, the effective date of the new fees will
be March 31, 2025.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Adopt a Resolution approving the annual adjustment of Development Impact Fees
to increase fees by 1.6%, consistent with the Engineering News Record (ENR)
Construction Cost Index (CCI); and Make findings as included in the attached
Resolution that establishing sewer connection fees are not a project subject to the
California Environmental Quality Act (“CEQA”) because the action has no potential
to result in either a direct, or reasonably foreseeable indirect, physical change in
the environment. (State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.);
2. Do not adopt the Resolution and request further information; or
3. Provide other direction to staff.
ADVANTAGES:
By approving the recommended fees, the City will be able to recover the estimated cost
of providing infrastructure and services to new development.
DISADVANTAGES:
Implementing the recommended fees will result in an increased cost to new development.
Page 65 of 462
Item 9.b.
City Council
Annual Adjustment of Development Impact Fees
January 28, 2025
Page 3
ENVIRONMENTAL REVIEW:
Adopting the Resolution establishing development impact fees are not a project subject
to the California Environmental Quality Act (“CEQA”) because the action has no potential
to result in either a direct, or reasonably foreseeable indirect, physical change in the
environment. (State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.).
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2.
ATTACHMENTS:
1. Proposed Resolution
Page 66 of 462
ATTACHMENT 1
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARROYO GRANDE APPROVING THE ANNUAL
ADJUSTMENT OF DEVELOPMENT IMPACT FEES TO
INCREASE BY 1.6%, CONSISTENT WITH THE
ENGINEERING NEWS RECORD CONSTRUCTION COST
INDEX
WHEREAS, pursuant to Section 3.36.040 of the Municipal Code, Development Impact
Fees are to be adjusted annually by modifying the adopted value up or down in
conformance with the Engineering News Record Construction Cost Index.
WHEREAS, Resolution No. 5346 authorizes an annual adjustment in the development
impact fees based on the changes in the annual average Engineering News Record
(ENR) Construction Cost Index (CCI).
WHEREAS, it is determined that an increase of 1.6% of the ENR CCI has been
calculated to warrant an adjustment to the City sewer connection fees, effective March
31, 2025.
NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Arroyo
Grande hereby implements the CCI increase, authorized by Resolution No. 5346 to the
development impact fees set forth in Exhibit “A” attached hereto and incorporated
herein by this reference as though set forth in full. The adjusted development impact
fees shall take effect on February 18, 2025.
On motion of Council Member __________________ seconded by Council Member
__________________ and on the following roll call vote, to wit:
AYES:
NOES:
ABSENT:
The foregoing Resolution was passed and adopted this 28th day of January, 2025.
Page 67 of 462
RESOLUTION NO.
PAGE 2
_____________________________________
CAREN RAY RUSSOM, MAYOR
ATTEST:
JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:
_____________________________________
MATTHEW DOWNING, CITY MANAGER
APPROVED AS TO FORM:
_____________________________________
ISAAC ROSEN, CITY ATTORNEY
Page 68 of 462
Fire
Protection Police Parks Recreation Transportation Storm Drain Wastewater Total
Residential - per Sq. Ft.0.24$ 0.17$ 3.27$ 0.17$ 1.39$ 0.03$ 0.60$ 5.88$
Nonresidential - per Sq. Ft.
Commercial 0.21$ 0.15$ -$ -$ 7.05$ 0.01$ 0.26$ 7.69$
Office 0.33 0.23 - - 7.39 0.01 0.29 8.25
Meter Size
Water Impact
Fee per Meter
5/8 inch 2,629$
3/4 inch 3,943
1 inch 6,573
1-1/2 inch 13,145
2 inch 21,032
3 inch 39,435
4 inch 65,725
6 inch 131,450
Land Use
EXHIBIT A
DEVELOPMENT IMPACT FEES
EFFECTIVE 2/18/2025
Page 69 of 462