CC 2024-02-13_10a PH Development Impact Fee ScheduleItem 10.a.
MEMORANDUM
TO: City Council
FROM: Nicole Valentine, Administrative Services Director
SUBJECT: Hold Public Hearings, Consider Adopting a Resolution Updating the
Development Impact Fee Schedule & Consider the 2024 Development
Impact Fee Nexus Study, & Introduction of an Ordinance Amending
Chapter 3.36 of the AGMC, Development Impact Fees
DATE: February 13, 2024
SUMMARY OF ACTION:
Hold a public hearing and adopt a Resolution updating City Development Impact fees as
set forth in Attachment 1 Exhibit A, and receive and file the 2024 Development Impact
Fee Nexus Study. Hold a public hearing and conduct the first reading, by title only, of an
Ordinance titled: “An Ordinance of the City Council of Arroyo Grande Amending Section
3.36.030 of the Arroyo Grande Municipal Code Regarding Development Impact Fees and
Finding the Ordinance Exempt from the California Environmental Quality Act .” Adoption
of this Ordinance will be at a future City Council meeting.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
The Development Impact Fee Nexus Study Update (“DIF Study”) was included in the FY
2022-23 budget and the City spent approximately $45,8500 on consultant services to
prepare the DIF Study. Development Impact Fees (DIFs) reflect and mitigate impacts of
new development. They do not represent profit making by the City.
RECOMMENDATION:
1) Hold a Public Hearing and Adopt the Resolution updating Development Impact fees
set forth in Attachment 1 Exhibit A;
2)Receive and file the 2024 Development Impact Fee Nexus Study Update;
3) Hold a Public Hearing and Introduce the Ordinance amending Arroyo Grande
Municipal Code Section 3.36.030 Regarding Development Impact Fees; and
4) Make findings that adopting the Resolution updating Development Impact fees and
introducing the proposed Ordinance are not projects subject to the California
Environmental Quality Act (“CEQA”) because they have 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.).
Page 115 of 442
Item 10.a.
City Council
Hold Public Hearings, Consider Adopting a Resolution Updating the Development
Impact Fee Schedule and Consider the 2024 Development Impact Fee Nexus Study,
and Introduction of an Ordinance Amending Chapter 3.36 of the Arroyo Grande
Municipal Code, Development Impact Fees
February 13, 2024
Page 2
BACKGROUND:
In Arroyo Grande, DIFs are collected at the time a building permit is issued. Fees are
used to finance the acquisition, construction and improvement of public facilities needed
as a result of this new development. A separate fund is maintained to account for the
receipt and expense of each category of DIF funds.
The City engaged with Willdan Financial Services to conduct the DIF Study; included as
Attachment 1, Exhibit “B.” Willdan Financial Services worked closely with the
Administrative Services Department, Community Development Department, Public
Works Department, and the City Attorney to update the DIF Study to reflect best practices
and changes in state and federal law that have occurred since the last update.
ANALYSIS OF ISSUES:
DIFs are one-time fees paid by new development to fund the cost of providing municipal
facilities to serve that development. This authorization exists through the enactment of
California Government Code sections 66000 through 66025 (also known as the
“Mitigation Fee Act” and sometimes referred to as “AB1600”). The Mitigation Fee Act is
premised on the concept that new development pays its own way, or, put another way,
new development has to mitigate its own impacts on the City’s public facilities. This
process includes making a determination that there is a reasonable relationship between
the purpose of the fee, the fee’s use and the type of development project on which the
fee is imposed. In order for DIF to be legally enforceable, local governments must conduct
an analysis that identifies anticipated growth that is related to infrastructure costs and
apportion those costs to projected development. This is distributed by type of
development, square foot, dwelling unit, or per trip basis - with the intent that this impact
fee type of distribution equitably mitigates the impact of development on City resources,
amenities and infrastructure.
The primary policy objective of a DIF program is to ensure that new development pays
the capital costs associated with growth. Although growth also imposes operating costs,
there is not a similar system to generate revenue from new development for services. The
primary purpose of the DIF Study is to calculate and present fees that will enable the City
to expand its inventory of public facilities, as new development creates increased
demands on those public facilities.
The City programs DIF-funded capital projects through its Capital Improvement Plan
(CIP). Using a CIP allows the City to identify and direct its fee revenue to public facilitie s
projects that will accommodate future growth. By programming fee revenues to specific
capital projects, the City can help ensure a reasonable relationship between new
development and the use of fee revenues as required by the Mitigation Fee Act.
Page 116 of 442
Item 10.a.
City Council
Hold Public Hearings, Consider Adopting a Resolution Updating the Development
Impact Fee Schedule and Consider the 2024 Development Impact Fee Nexus Study,
and Introduction of an Ordinance Amending Chapter 3.36 of the Arroyo Grande
Municipal Code, Development Impact Fees
February 13, 2024
Page 3
Impact fee revenue must be spent on new facilities or expansion of current facilities to
serve new development. Impact fee revenue can be spent on capital facilities to serve
new development, including but not limited to land acquisition, construction of building s,
construction of infrastructure, the acquisition of vehicles or equipment, information
technology, software licenses and equipment. The proposed DIF unit measurement is
based on Square Foot or Meter Size depending on the type of DIF.
DIF is calculated to fund the cost of facilities required to accommodate growth. The six
steps followed in this DIF Study include:
1. Estimate existing development and future growth ;
2. Identify facility standards;
3. Determine facilities required to serve new development;
4. Determine the cost of facilities required to serve new development;
5. Calculate fee schedule; and
6. Identify alternative funding requirements.
In accordance with the provisions of Section 66000 of the Government Code, there must
be a nexus between the fees imposed, the use of the fees and the development projects
on which the fees are imposed. Furthermore, there must be a relationship between the
amount of the fee and the cost of the improvements.
The DIF Study summarizes an analysis of development impact fees needed to support
future development in the City through 2050. It is the City’s intent that the costs
representing future development’s share of public facilities and capital improvements be
imposed on that development in the form of a DIF. During the DIF Study review we
identified which public facilities would provide the right categories for the City through
2050. The proposed Ordinance will be adopted following the successful public hearing
and adoption of the Resolution. The proposed Ordinance includes the following updated
DIF categories to ensure the City’s municipal code contains the current DIF information.
The public facilities and improvements included in this analysis are divided into the
following fee categories, which are described in detail in the DIF Study, Attachment 1,
Exhibit “B”:
Fire Protection Facilities
Police Facilities
Park Facilities
Recreation Facilities
Water Facilities
Transportation Facilities
Storm Drain Facilities
Wastewater Facilities
Page 117 of 442
Item 10.a.
City Council
Hold Public Hearings, Consider Adopting a Resolution Updating the Development
Impact Fee Schedule and Consider the 2024 Development Impact Fee Nexus Study,
and Introduction of an Ordinance Amending Chapter 3.36 of the Arroyo Grande
Municipal Code, Development Impact Fees
February 13, 2024
Page 4
Growth projects are used as indicators of demand to determine facility needs and allocate
those needs between existing and new development. The growth projections included in
the DIF Study are based on a 2023 base year and a planning horizon of 2050. These
growth estimates are used to allocate facility costs to the projected new development.
Table 1 shows the estimated number of residents, dwelling units, employees, and non-
residential building square footage in Arroyo Grande, both in 2023 and projected for 2050.
The base year estimates of household residents and dwelling units comes from the
California Department Of Finance (DOF). The 2050 projection of residents was identified
in the "Medium" growth scenario from the SLOCOG 2050 Regional Growth Forecast. The
regional growth forecast projected 8,460 households in 2050. Accounting for 7% vacancy
(which is the current vacancy rate reported by the DOF), the projection totals an increase
of 1,016 housing units. It assumes that the same ratio of sing le family to multifamily will
be maintained as development occurs.
Base year employees were estimated based on the latest data from the US Census'
OnTheMap application and exclude 187 local government (public administration)
employees. Total projected workers in 2050 are identified in the regional growth forecast.
The proportion of workers by land use is held consistent with current estimates.
Table 1 – Existing and New Development
The DIF Study details the legal framework that allows the imposition of the DIF, the required
findings, the reasonable relationship requirements, and the methodology used in the DIF
Study.
The DIF Study does not create the DIF rates but rather recommends DIF rates that would
recover the estimated full costs of providing public facilities to mitigate the demands of new
development. The City Council must vote to adopt the DIF rates. Collecting the full costs
needed to provide these future facilities today positions the City to have resources available
when those facilities are needed. For this reason, staff recommends that the attached
proposed Resolution be adopted, to fully recover future development related costs.
2023 Increase 2050
Residents 17,740 2,709 20,449
Dwelling Units 8,086 1,016 9,102
Employment 5,338 2,575 7,913
Sources: CA DOF; OnTheMap; SLOCOG 2050 Regional
Page 118 of 442
Item 10.a.
City Council
Hold Public Hearings, Consider Adopting a Resolution Updating the Development
Impact Fee Schedule and Consider the 2024 Development Impact Fee Nexus Study,
and Introduction of an Ordinance Amending Chapter 3.36 of the Arroyo Grande
Municipal Code, Development Impact Fees
February 13, 2024
Page 5
Next Steps:
The City Council may approve the DIF via the attached Resolution with the attached
Ordinance being subsequently adopted to ensure the proposed DIF categories match the
City’s Municipal Code. In compliance with State law, the updated DIF rate will become
effective 60 days after adoption of the Resolution. An effective date of April 15, 2024,
would result in two and a half months of collecting the new fees during the remainder of
the fiscal year. Finally, a second reading and adoption of the Ordinance is scheduled for
February 27, 2024.
The amount of the DIF shall be modified annually to account for inflation each January 1
based on the change in the Engineering News Record, California Construction Cost Index
each year. Such inflationary increases shall not constitute an increase within the meaning
of the Mitigation Fee Act and may be implemented each year without the requirement to
obtain approval of the City Council.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Adopt the Resolution updating Development Impact fees set forth in Exhibit “A”
and introduce the Ordinance amending Section 3.36.030 of the AGMC; or
2. Modify and adopt the Resolution updating Development Impact fees set forth in
“Exhibit “A” and continue the public hearing to introduce the Ordinance amending
Section 3.36.030 of the AGMC pending legal counsel review of any modifications
applied to the Resolution; or
3. Provide other direction to staff .
ADVANTAGES:
By approving the recommended DIF, the City will be able to recover the estimated cost
of providing infrastructure to offset the impact caused by new development.
DISADVANTAGES:
Implementing the recommended DIF will result in an increased cost to new development.
ENVIRONMENTAL REVIEW:
Adopting the Resolution updating Development Impact fees set forth in the Exhibit “A”
and the Ordinance are not projects subject to the California Environmental Quality Act
(“CEQA”) because they have 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.)
Page 119 of 442
Item 10.a.
City Council
Hold Public Hearings, Consider Adopting a Resolution Updating the Development
Impact Fee Schedule and Consider the 2024 Development Impact Fee Nexus Study,
and Introduction of an Ordinance Amending Chapter 3.36 of the Arroyo Grande
Municipal Code, Development Impact Fees
February 13, 2024
Page 6
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall, on the City’s website, and published in the
newspaper in accordance with the Mitigation Fee Act and Government Code Section
54954.2.
Attachments:
1. Proposed Resolution, including the following exhibits
i. Exhibit A – the DIF Schedule
ii. Exhibit B – the DIF Study
2. Proposed Ordinance: “An Ordinance of the City Council of Arroyo Grande
Amending Section 3.36.030 of the Arroyo Grande Municipal Code Regarding
Development Impact Fees and Finding the Ordinance Exempt from the California
Environmental Quality Act.”
Page 120 of 442
65501.00008\41993952.1
ATTACHMENT 1
RESOLUTION NO. _______
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARROYO GRANDE ADOPTING DEVELOPMENT
IMPACT FEES FOR ALL NEW DEVELOPMENT WITHIN
THE CITY AND TAKING OTHER ACTIONS THERETO
WHEREAS, the City of Arroyo Grande (the “City”), County of San Luis Obispo, State of
California is duly authorized pursuant to the Mitigation Fee Act (the “Act”), commencing
with California Government Code, section 66000 et seq., to impose development impact
fees (“DIF”) for purposes defraying all or a portion of the costs of public facilities related
to new development occurring within the City; and
WHEREAS, in accordance with requirements of the Act, the City Council has directed
staff to conduct a comprehensive review of the City's DIF to determine whether those
fees are adequate to defray the cost of public facilities related to new development
projects; and
WHEREAS, the City contracted with Willdan Financial Services to provide a
comprehensive evaluation of the City's existing DIF; and
WHEREAS, Willdan Financial Services prepared a report, entitled 2024 Development
Impact Fee Nexus Study Update (the “Study”), dated January 30, 2024, attached to this
Resolution as Exhibit “B,” and incorporated herein by this reference, which establishes
amounts of the City's DIF and explains the nexus between the imposition of the fee and
the estimated reasonable cost of constructing certain facilities for which the DIF is
charged; and
WHEREAS, the Study and related documents have been made available for public
review and comment as required by the Act; and
WHEREAS, the Study substantiates the need for DIF amongst eight different categories
of facilities provided by the City; and
WHEREAS, the City provided notice of the public hearing and provided written notice to
any interested parties that have requested such notice pursuant to the notice
requirements of the Act; and
WHEREAS, in compliance with the Act, the City Council held a duly noticed public
hearing on the proposed DIF on February 13, 2024 to hear all oral and written
presentations from the public regarding the proposed DIF; and
WHEREAS, following the adoption of this Resolution, the City Council will adopt
Ordinance No. ___, amending Arroyo Grande Municipal Code section 3.36.030 to
reflect minor changes to the newly adopted DIF categories; and
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65501.00008\41993952.1
RESOLUTION NO.
PAGE 2
WHEREAS, the City Council now desires to adopt the proposed DIF, in accordance
with the nexus calculations and recommendations in the Study.
NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Arroyo
Grande hereby finds as follows:
SECTION 1. Incorporation. The above recitals are true and correct and are incorporated
herein by this reference.
SECTION 2. Findings. The City Council finds and determines that the Study, complies
with the Act by establishing the basis for the imposition of fees on new development.
This finding is based on the fact that the Study:
(a) Identifies the purpose of the fee;
(b) Identifies the use to which the fee will be put;
(c) Shows a reasonable relationship between the use of the fee and the
type of development project on which the fee is imposed;
(d) Demonstrates a reasonable relationship between the need for the
public facilities and the type of development projects on which the fee is
imposed; and
(e) Demonstrates a reasonable relationship between the amount of the fee
and the cost of the public facilities or portion of the public facilities
attributable to the development on which the fee is imposed.
SECTION 3. Fees for Uses Consistent with the Study. The City Council hereby
determines that the fees collected pursuant to this Resolution shall be used to finance
the public facilities described or identified in the Study or other such facility plans as
may be proposed, modified, or amended from time to time by the City Council.
SECTION 4. Approval of Items in Development Impact Fee Study. The City Council has
considered the specific project descriptions and cost estimates identified in the Study
and hereby approves such project descriptions and cost estimates and finds them
reasonable as the basis for calculating and imposing certain DIF.
SECTION 5. Differentiation Among Fees. The City Council finds that the fees
recommended in the Study are separate and different from other fees the City may
impose through the implementation of a specific plan or as a condition of final map
approval, building permit issuance or tentative or parcel map approval pursuant to its
authority under the Subdivision Map Act, the Quimby Act, and the City's implementing
resolutions and ordinances, as may be amended from time to time.
In addition, this Resolution shall not be deemed to affect the imposition or collection of
other fees the City is legally authorized to impose and collect .
Page 122 of 442
65501.00008\41993952.1
RESOLUTION NO.
PAGE 3
SECTION 6. CEQA Finding. The City Council finds that this Resolution is exempt from
the California Environmental Quality Act ("CEQA") because th is Resolution does not
qualify as a “project” under CEQA and because th is Resolution will not result in a direct
or reasonably foreseeable indirect physical change in the environ ment. (State CEQA
Guidelines section 15060, subd. (c)(2), (3).) Section 15378 of the State CEQA
Guidelines defines a project as the whole of an action, which could potentially result in
either a direct physical change, or reasonably foreseeable indirect ph ysical change, in
the environment. Here, this Resolution will not result in any construction or
development, and it will not have any other effect that would physically change the
environment. This Resolution therefore does not qualify as a project subject to CEQA.
SECTION 7. Adoption of Report. The Study is hereby adopted.
SECTION 8. Amount of Fee. The City Council hereby approves and adopts the DIF as
set forth in Exhibit “A” to this Resolution, attached hereto and incorporated herein by
this reference. Exhibit “A” sets forth the aggregate amount imposed as a DIF for
development projects and also sets forth the breakdown of each DIF by category type.
The DIF set forth in Exhibit “A” are consistent with the Study. The amount of the DIF
shall be modified annually to account for inflation each January 1 based on the change
in the Engineering News Record, California Construction Cost Index each year. Such
inflationary increases shall not constitute an increase within the meaning of the Act and
may be implemented each year without the requirement to obtain approval of the City
Council.
SECTION 9. Prior Resolutions Superseded. The DIF approved by this Resolution
supersede previously adopted resolutions that set the amounts of DIF.
SECTION 10. Severability. If any action, subsection, sentence, clause or phrase of this
Resolution or the imposition of the DIF for any project described in the Study or the
application thereof to any person or circumstance shall be held invalid or
unconstitutional by a court of competent jurisdiction, such invalidity shall not affect the
validity of the remaining portions of this Resolution or other DIF levied by this Resolution
that can be given effect without the invalid provisions or application of the DIF.
SECTION 11. Effective Date. Consistent with the Act, the DIF as identified in attached
Exhibit "A" adopted by this Resolution shall take effect on April 15, 2024, a period
longer than the required sixty (60) days following the adoption of this Resolution by the
City Council.
SECTION 12. Records. The documents and materials associated with this Resolution
that constitute the record of proceedings on which the City Council’s findings and
determinations are based are located at 300 E. Branch Street, Arroyo Grande, CA
93420. The City Clerk is the custodian of the record of proceedings.
PASSED AND ADOPTED by the City Council of the City of Arroyo Grande this 13th day
of February 2024 by the following vote:
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65501.00008\41993952.1
RESOLUTION NO.
PAGE 4
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 13th day of February, 2024.
Page 124 of 442
65501.00008\41993952.1
RESOLUTION NO.
PAGE 5
_____________________________________
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 125 of 442
65501.00008\41993952.1
RESOLUTION NO.
PAGE 6
EXHIBIT “A”
2024 DEVELOPMENT IMPACT FEE SCHEDULE
Page 126 of 442
65501.00008\41993952.1
RESOLUTION NO.
PAGE 7
EXHIBIT “B”
2024 DEVELOPMENT IMPACT FEE NEXUS STUDY
Page 127 of 442
CITY OF ARROYO GRANDE
DEVELOPMENT IMPACT FEE NEXUS STUDY
UPDATE
FINAL
JANUARY 29, 2024
Oakland Office Corporate Office Other Regional Offices
66 Franklin Street 27368 Via Industria Aurora, CO
Suite 300 Suite 200 Orlando, FL
Oakland, CA 94607 Temecula, CA 92590 Phoenix, AZ
Tel: (510) 832-0899 Tel: (800) 755-6864 Plano, TX
Fax: (888) 326-6864 Seattle, WA
Washington, DC
www.willdan.com
Exhibit B
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i
TABLE OF CONTENTS
EXECUTIVE SUMMARY .......................................................................... 1
Background and Study Objectives 1
Facility Standards and Costs 1
Use of Fee Revenues 2
Development Impact Fee Schedule Summary 2
Other Funding Needed 4
1. INTRODUCTION ........................................................................... 6
Public Facilities Financing in California 6
Study Objectives 6
Fee Program Maintenance 7
Study Methodology 7
Types of Facility Standards 7
New Development Facility Needs and Costs 8
Organization of the Report 9
2. GROWTH FORECASTS ............................................................... 10
Land Use Types 10
Impact Fees for Accessory Dwelling Units 10
Existing and Future Development 11
Occupant Densities 12
3. FIRE PROTECTION FACILITIES .................................................... 14
Service Population 14
Existing Facility Inventory 15
Planned Facilities 15
Cost Allocation 15
Fee Revenue Projection 16
Fee Schedule 16
4. POLICE FACILITIES .................................................................... 18
Service Population 18
Existing Facility Inventory 18
Planned Facilities 19
Cost Allocation 19
Fee Revenue Projection 20
Fee Schedule 20
5. PARK FACILITIES ....................................................................... 22
Service Population 22
Existing Park Facilities Inventory 22
Parkland and Park Facilities Unit Costs 23
Park Facility Standards 24
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City of Arroyo Grande Development Impact Fee Nexus Study Update
ii
Quimby Act Standard 24
City of Arroyo Grande Park Facilities Standards 25
Facilities Needed to Accommodate New Development 25
Parks and Recreation Facilities Cost per Capita 26
Use of Fee Revenue 27
Fee Schedule 27
6. RECREATION FACILITIES ............................................................ 29
Service Population 29
Existing Facilities Inventory 29
Planned Facilities 30
Cost Allocation 30
Fee Revenue Projection 31
Fee Schedule 31
7. WATER FACILITIES .................................................................... 33
Water Demand 33
EDU Generation by New Development 33
Facility Needs and Costs 34
Cost per EDU 35
Fee Schedule 35
8. TRANSPORTATION FACILITIES ..................................................... 37
Trip Demand 37
Trip Demand Growth 38
Planned Facilities 39
Fee per Trip Demand Unit 41
Fee Schedule 41
9. STORM DRAIN FACILITIES .......................................................... 43
Storm Drain Demand 43
EDU Generation by New Development 43
Planned Facilities 44
Cost per Equivalent Dwelling Unit 44
Fee Schedule 45
10. WASTEWATER FACILITIES .......................................................... 46
Wastewater Demand 46
EDU Generation by New Development 46
Facility Needs and Costs 47
Cost per EDU 47
Fee Schedule 48
11. AB 602 REQUIREMENTS ............................................................ 49
Compliance with AB 602 49
66016.5. (a) (2) - Level of Service 49
66016.5. (a) (4) – Review of Original Fee Assumptions 49
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iii
66016.5. (a) (5) – Residential Fees per Square Foot 52
66016.5. (a) (6) – Capital Improvement Plan 52
12. IMPLEMENTATION ...................................................................... 53
Impact Fee Program Adoption Process 53
Inflation Adjustment 53
Reporting Requirements 53
Programming Revenues and Projects with the CIP 56
13. MITIGATION FEE ACT FINDINGS .................................................. 57
Purpose of Fee 57
Use of Fee Revenues 57
Benefit Relationship 57
Burden Relationship 58
Proportionality 58
APPENDIX ......................................................................................... 59
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1
Executive Summary
This report summarizes an analysis of development impact fees needed to support future
development in the City of Arroyo Grande through 2050. It is the City’s intent that the costs
representing future development’s share of public facilities and capital improvements be imposed
on that development in the form of a development impact fee, also known as a public facilities
fee. The public facilities and improvements included in this analysis are divided into the fee
categories listed below:
▪ Fire Protection Facilities
▪ Police Facilities
▪ Park Facilities
▪ Recreation Facilities
▪ Water Facilities
▪ Transportation Facilities
▪ Storm Drain Facilities
▪ Wastewater Facilities
Background and Study Objectives
The primary policy objective of a development impact fee program is to ensure that new
development pays the capital costs associated with growth. Although growth also imposes
operating costs, there is not a similar system to generate revenue from new development for
services. The primary purpose of this report is to calculate and present fees that will enable the
City to expand its inventory of public facilities, as new development creates increases in service
demands.
The City collects public facilities fees under authority granted by the Mitigation Fee Act (the Act),
contained in California Government Code Sections 66000 et seq. This report provides the
necessary findings required by the Act for adoption of the fees presented in the fee schedules
contained herein.
The City programs development impact fee-funded capital projects through its Capital
Improvement Plan (CIP). Using a CIP allows the City to identify and direct its fee revenue to
public facilities projects that will accommodate future growth. By programming fee revenues to
specific capital projects, the City can help ensure a reasonable relationship between new
development and the use of fee revenues as required by the Mitigation Fee Act.
Facility Standards and Costs
There are three approaches used to calculate facilities standards and allocate the costs of
planned facilities to accommodate growth in compliance with the Mitigation Fee Act requirements
in this study.
The existing inventory approach is based on a facility standard derived from the City’s existing
level of facilities and existing demand for services. This approach results in no facility deficiencies
attributable to existing development. This approach is often used when a long-range plan for new
facilities is not available. Future facilities to serve growth will be identified through the City’s
annual CIP and budget process and/or completion of a new facility master plan. This approach is
used to calculate the fire protection, police, parks and recreation facility fees in this report.
The planned facilities approach allocates costs based on the ratio of planned facilities that serve
new development to the increase in demand associated with new development. This approach is
appropriate when specific planned facilities that only benefit new development can be identified,
or when the specific share of facilities benefiting new development can be identified. Examples
include street improvements to avoid deficient levels of service or a sewer trunk line extension to
a previously undeveloped area. This approach is used for the water, transportation, storm drain
and wastewater facilities fees in this report.
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2
The system plan approach is based on a master facility plan in situations where specific needed
facilities serve both existing and new development. This approach allocates existing and planned
facilities across existing and new development to determ ine new development’s fair share of
facility needs. This approach is used when it is not possible to differentiate the benefits of new
facilities between new and existing development. This approach is not used in this report.
Use of Fee Revenues
Impact fee revenue must be spent on new facilities or expansion of current facilities to serve new
development. Facilities can be generally defined as capital acquisition items with a useful life
greater than five years. Impact fee revenue can be spent on capital facilities to serve new
development, including but not limited to land acquisition, construction of buildings, construction
of infrastructure, the acquisition of vehicles or equipment, information technology, software
licenses and equipment.
In that the City cannot predict with certainty how and when development within the City will occur
during the planning horizon assumed in this study, the City may need to update and revise the
project lists funded by the fees documented in this study. Any substitute projects should be
funded within the same facility category, and the substitute projects must still benefit and have a
relationship to new development. The City could identify any changes to the projects funded by
the impact fees when it updates the CIP. The impact fees could also be updated if significant
changes to the projects funded by the fees are anticipated.
Development Impact Fee Schedule Summary
Table E.1 summarizes the development impact fees that meet the City’s identified needs and
comply with the requirements of the Mitigation Fee Act. Table E.2 displays the maximum justified
water facilities impact fee schedule.
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3
E.1: Maximum Justified Development Impact Fee Schedule
Land Use
Fire
Protection Police Parks1 Recreation Water2 Transportation
Storm
Drain Wastewater Total
Residential - per Sq. Ft.0.24$ 0.17$ 3.22$ 0.17$ -$ 1.37$ 0.03$ 0.59$ 5.79$
Nonresidential - per Sq. Ft.
Commercial 0.21$ 0.15$ -$ -$ -$ 6.94$ 0.01$ 0.26$ 7.57$
Office 0.32 0.23 - - - 7.27 0.01 0.29 8.12
2 Fee schedule based on water meter size. See Table E.2 for water facilities fee schedule.
Sources: Tables 3.5, 4.6, 5.7, 6.6, 7.5, 8.5, 9.5 and 10.5.
1 Mitigation Fee Act fee for infill development shown. Development occurring in subdivisions subject to Quimby Act fee in-lieu of dedication at $2.77 per square foot.
Refer to Table 5.7 for more information.
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Meter Size
Impact Fee per
Meter
5/8 inch 2,588$
3/4 inch 3,881
1 inch 6,469
1-1/2 inch 12,938
2 inch 20,701
3 inch 38,814
4 inch 64,690
6 inch 129,380
1 Includes administrative charge of 2.0 percent for (1) legal, accounting,
and other administrative support and (2) impact fee program
administrative costs including revenue collection, revenue and cost
accounting, mandated public reporting, and fee justification analyses.
Source: Table 7.5.
Table E.2: Maximum Justified Water Impact
Fee Schedule
Other Funding Needed
Impact fees may only fund the share of public facilities related to new development in Arroyo
Grande. They may not be used to fund the share of facility needs generated by existing
development or by development outside of the City. As shown in Table E.3, approximately $4
million in additional funding will be needed to complete the facility projects the City currently plans
to develop if fees are adopted at the maximum justified fee level. The “Additional Funding
Required” column shows non-impact fee funding required to fund a share of the improvements
partially funded by impact fees. Non-fee funding is needed because these facilities are needed
partially to remedy existing deficiencies and partly to accommodate new development. To the
extent that the City adopts fees that are lower than the maximum justified amount, the non-fee
funding requirements may increase, depending on the fee category and methodology.
The City will need to develop alternative funding sources to fund existing development’s share of
the planned facilities. Potential sources of revenue include but are not limited to existing or new
general fund revenues, existing or new taxes, special assessments, and grants.
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Table E.3: Non-Impact Fee Funding Required
Fee Category
Total Project
Cost
Other
Identified
Revenue
Development
Fee Revenue
Additional
Funding
Required
Fire Protection 1,076,649$ -$ 1,076,649$ -$
Police 673,344 - 673,344 -
Parks 10,628,000 - 10,628,000 -
Recreation 574,308 - 574,308 -
Water 9,995,398 - 7,179,581 2,815,817
Transportation 22,554,000 11,014,000 11,540,000 -
Storm Drain 784,000 - 96,432 -
Wastewater 3,266,458 - 2,038,454 1,228,003
Total 49,552,156$ 11,014,000$ 33,806,768$ 4,043,821$
Sources: Tables 3.5, 4.5, 5.5, 6.5, 7.3, 7.4, 8.3, 9.3 and 10.3.
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1. Introduction
This report presents an analysis of the need for public facilities to accommodate new
development in the City of Arroyo Grande. This chapter provides background for the study and
explains the study approach under the following sections:
▪ Public Facilities Financing in California;
▪ Study Objectives;
▪ Fee Program Maintenance;
▪ Study Methodology; and
▪ Organization of the Report.
Public Facilities Financing in California
The changing fiscal landscape in California during the past 45 years has steadily undercut the
financial capacity of local governments to fund infrastructure. Three dominant trends stand out:
▪ The passage of a string of tax limitation measures, starting with Proposition 13 in
1978 and continuing through the passage of Proposition 218 in 1996;
▪ Declining popular support for bond measures to finance infrastructure for the next
generation of residents and businesses; and
▪ Steep reductions in federal and state assistance.
Faced with these trends, many cities and counties have had to adopt a policy of “growth pays its
own way.” This policy shifts the burden of funding infrastructure expansion from existing
ratepayers and taxpayers onto new development. This funding shift has been accomplished
primarily through the imposition of assessments, special taxes, and development impact fees also
known as public facilities fees. Assessments and special taxes require the approval of property
owners and are appropriate when the funded facilities are directly related to the developing
property. Development impact fees, on the other hand, are an appropriate funding source for
facilities that benefit all development jurisdiction-wide. Development impact fees need only a
majority vote of the legislative body for adoption.
Study Objectives
The primary policy objective of a public facilities fee program is to ensure that new development
pays the capital costs associated with growth. The primary purpose of this report is to update the
City’s existing impact fees based on the most current available facility plans and growth
projections. The maximum justified fees will enable the City to expand its inventory of public
facilities as new development leads to increases in service demands.
The City collects public facilities fees under authority granted by the Mitigation Fee Act (the Act),
contained in California Government Code Sections 66000 et seq. This report provides the
necessary findings required by the Act for adoption of the fees presented in the fee schedules
presented in this report.
Arroyo Grande is forecast to see significant growth through this study’s planning horizon of 2050.
This growth will create an increase in demand for public services and the facilities required to
deliver them. Given the revenue challenges described above, Arroyo Grande has decided to
continue to use a development impact fee program to ensure that new development funds its
share of facility costs associated with growth. This report makes use of the most current available
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growth forecasts and facility plans to update the City’s existing fee program to ensure that the fee
program accurately represents the facility needs resulting from new development.
Fee Program Maintenance
Once a fee program has been adopted it must be properly maintained to ensure t hat the revenue
collected adequately funds the facilities needed by new development. To avoid collecting
inadequate revenue, the inventories of existing facilities and costs for planned facilities must be
updated periodically for inflation, and the fees recalculated to reflect the higher costs. The use of
established indices for each facility included in the inventories (land, buildings, and equipment),
such as the California Construction Cost Index, is necessary to accurately adjust the impact fees.
For a list of recommended indices, see Chapter 12.
While fee updates using inflation indices are appropriate for annual or periodic updates to ensure
that fee revenues keep up with increases in the costs of public facilities, it is recommended to
conduct more extensive updates of the fee documentation and calculation (such as this study)
when significant new data on growth forecasts and/or facility plans become available. For further
detail on fee program implementation, see Chapter 12.
Study Methodology
Development impact fees are calculated to fund the cost of facilities required to accommodate
growth. The six steps followed in this development impact fee study include:
1. Estimate existing development and future growth: Identify a base year for
existing development and a growth forecast that reflects increased demand for public
facilities;
2. Identify facility standards: Determine the facility standards used to plan for new
and expanded facilities;
3. Determine facilities required to serve new development: Estimate the total
amount of planned facilities, and identify the share required to accommodate new
development;
4. Determine the cost of facilities required to serve new development: Estimate the
total amount and the share of the cost of planned facilities required to accommodate
new development;
5. Calculate fee schedule: Allocate facilities costs per unit of new development to
calculate the development impact fee schedule; and
6. Identify alternative funding requirements: Determine if any non-fee funding is
required to complete projects.
The key public policy issue in development impact fee studies is the identification of facility
standards (step #2, above). Facility standards document a reasonable relationship between new
development and the need for new facilities. Standards ensure that new development does not
fund deficiencies associated with existing development.
Types of Facility Standards
There are three separate components of facility standards:
▪ Demand standards determine the amount of facilities required to accommodate
growth, for example, park acres per thousand residents, square feet of library space
per capita, or gallons of water per day. Demand standards may also reflect a level of
service such as the vehicle volume-to-capacity (V/C) ratio used in traffic planning.
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▪ Design standards determine how a facility should be designed to meet expected
demand, for example, park improvement requirements and technology infrastructure
for City office space. Design standards are typically not explicitly evaluated as part of
an impact fee analysis but can have a significant impact on the cost of facilities. Our
approach incorporates the cost of planned facilities built to satisfy the City’s facility
design standards.
▪ Cost standards are an alternate method for determining the amount of facilities
required to accommodate growth based on facility costs per unit of demand. Cost
standards are useful when demand standards were not explicitly developed for the
facility planning process. Cost standards also enable different types of facilities to be
analyzed based on a single measure (cost or value) and are useful when different
facilities are funded by a single fee program. Examples include facility costs per
capita, cost per vehicle trip, or cost per gallon of water per day.
New Development Facility Needs and Costs
A number of approaches are used to identify facility needs and costs to serve new development.
This is often a two-step process: (1) identify total facility needs, and (2) allocate to new
development its fair share of those needs.
There are three common methods for determining new development’s fair share of planned
facilities costs in this study: the existing inventory method, the planned facilities method, and
the system plan method. Often the method selected depends on the degree to which the
community has engaged in comprehensive facility master planning to identify facility needs.
The formula used by each approach and the advantages and disadvantages of each method is
summarized below:
Existing Inventory Method
The existing inventory method allocates costs based on the ratio of existing facilities to demand
from existing development as follows:
Current Value of Existing Facilities
Existing Development Demand
Under this method new development will fund the expansion of facilities at the same standard
currently serving existing development. The existing inventory method results in no facility
deficiencies attributable to existing development. This method is often used when a long-range
plan for new facilities is not available. Future facilities to serve growth are identified through an
annual CIP and budget process, possibly after completion of a new facility master plan. This
approach is used to calculate the fire protection, police, parks, and recreation facility fees in this
report.
Planned Facilities Method
The planned facilities method allocates costs based on the ratio of planned facility costs to
demand from new development as follows:
Cost of Planned Facilities
New Development Demand
This method is appropriate when planned facilities will entirely serve new development, or when a
fair share allocation of planned facilities to new development can be estimated. An example of the
former is a Wastewater trunk line extension to a previously undeveloped area. An example of the
latter is expansion of an existing library building and book collection, which will be needed only if
new development occurs, but which, if built, will in part benefit existing development, as well.
Under this method new development will fund the expansion of facilities at the standards used in
= cost per unit of demand
= cost per unit of demand
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the applicable planning documents. This approach is used for the water, transportation, storm
drain and wastewater facilities fees in this report.
System Plan Method
This method calculates the fee based on the value of existing facilities plus the cost of planned
facilities, divided by demand from existing plus new development:
Value of Existing Facilities + Cost of Planned Facilities
Existing + New Development Demand
This method is useful when planned facilities need to be analyzed as part of a system that
benefits both existing and new development. It is difficult, for example, to allocate a new fire
station solely to new development when that station will operate as part of an integrated system
of fire stations that together achieve the desired level of service.
The system plan method ensures that new development does not pay for existing deficiencies.
Often facility standards based on policies such as those found in Comprehensive Plans are
higher than the existing facility standards. This method enables the calculation of the existing
deficiency required to bring existing development up to the policy-based standard. The local
agency must secure non-fee funding for that portion of planned facilities required to correct the
deficiency to ensure that new development receives the level of service funded by the impact fee.
This approach is not used in this report.
Organization of the Report
The determination of a public facilities fee begins with the selection of a planning horizon and
development of growth projections for population and employment. These projections are used
throughout the analysis of different facility categories and are summarized in Chapter 2.
Chapters 3 through 10 identify facility standards and planned facilities, allocate the cost of
planned facilities between new development and other development, and identify the appropriate
development impact fee for each of the following facility categories:
▪ Fire Protection Facilities
▪ Police Facilities
▪ Park Facilities
▪ Recreation Facilities
▪ Water Facilities
▪ Transportation Facilities
▪ Storm Drain Facilities
▪ Wastewater Facilities
Chapter 11 describes how this nexus study complies with the requirements of AB 602.
Chapter 12 details the procedures that the City must follow when implementing a development
impact fee program. Impact fee program adoption procedures are found in California Government
Code Sections 66016 through 66018.
The five statutory findings required for adoption of the maximum justified public facilities fees in
accordance with the Mitigation Fee Act are documented in Chapter 13.
= cost per unit of demand
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2. Growth Forecasts
Growth projections are used as indicators of demand to determine facility needs and allocate
those needs between existing and new development. This chapter explains the source for the
growth projections used in this study based on a 2023 base year and a planning horizon of 2050.
Estimates of existing development and projections of future growth are critical assumptions used
throughout this report. These estimates are used as follows:
▪ The estimate of existing development in 2023 is used as an indicator of existing
facility demand and to determine existing facility standards.
▪ The estimate of total development at the 2050 planning horizon is used as an
indicator of future demand to determine total facilities needed to accommodate
growth and remedy existing facility deficiencies, if any.
▪ Estimates of growth from 2023 through 2050 are used to (1) allocate facility costs
between new development and existing development, and (2) estimate total fee
revenues.
The demand for public facilities is based on the service population, dwelling units or
nonresidential development creating the need for the facilities.
Land Use Types
To ensure a reasonable relationship between each fee and the type of development paying the
fee, growth projections distinguish between different land use types. The land use types for which
impact fees have been calculated for are defined below.
▪ Residential Dwelling Units: All residential dwelling units, including detached and
attached one-unit dwellings and all multifamily dwellings including apartments,
duplexes and condominiums.
▪ Commercial: All commercial, retail, educational, and service development.
▪ Office: All general, professional, and medical office development.
Some developments may include more than one land use type, such as a mixed-use
development with both multifamily and commercial uses. In those cases, the facilities fee would
be calculated separately for each land use type.
The City has the discretion to determine which land use type best reflects a development
project’s characteristics for purposes of imposing an impact fee and may adjust fees for special or
unique uses to reflect the impact characteristics of the use. If a project results in the
intensification of use, at its discretion, the City can charge the project the difference in fees
between the existing low intensity use and the future high intensity use.
Impact Fees for Accessory Dwelling Units
The California State Legislature recently amended requirements on local agencies for the
imposition of development impact fees on accessory dwelling units (ADU) with Assembly Bill AB
68 in 2021. The amendment to California Government Code §65852.2(f)(2) stipulates that local
agencies may not impose any impact fees on ADU less than 750 square feet. ADU greater than
750 square feet can be charged impact fees in proportion to the size of the primary dwelling unit.
Calculating Impact Fees for Accessory Dwelling Units
For ADUs greater than 750 square feet, impact fees can be charged as a percentage of the
single family impact fee. The formula is:
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𝐴𝐷𝑈 𝑅𝑝𝑝𝑎𝑝𝑐 𝐹𝑐𝑐𝑝
𝑃𝑝𝑖𝑙𝑎𝑝𝑦 𝑅𝑐𝑝𝑖𝑐𝑐𝑙𝑐𝑐 𝑅𝑝𝑝𝑎𝑝𝑐 𝐹𝑐𝑐𝑝 × 𝑅𝑖𝑙𝑔𝑙𝑐 𝐹𝑎𝑙𝑖𝑙𝑦 𝐼𝑙𝑝𝑎𝑐𝑝 𝐹𝑐𝑐 = 𝐴𝐷𝑈 𝐼𝑙𝑝𝑎𝑐𝑝 𝐹𝑐𝑐
In the case of an 800 square foot ADU and a 1,600 square foot primary residence, the impact
fees would be 50 percent (800 square feet / 1,600 square feet = 50%) of the single family
dwelling unit fee.
Existing and Future Development
Table 2.1 shows the estimated number of residents, dwelling units, employees, and building
square feet in Arroyo Grande, both in 2023 and in 2050. The base year estimates of household
residents and dwelling units comes from the California Department of Finance (DOF). The 2050
projection of residents was identified in the “Meduim” growth scenario from the SLOCOG 2050
Regional Growth Forecast. The regional growth forecast projected 8,460 households in 2050.
Accounting for 7% vacancy (which is the current vacancy rate reported by the DOF), the
projection totals an increase of 1,016 housing units. It assumes that the same ratio of single
family to multifamily will be maintained as development occurs.
Base year employees were estimated based on the latest data from the US Census’ OnTheMap
application and exclude 187 local government (public administration) employees. Total projected
workers in 2050 are identified the regional growth forecast. The proportion of workers by land use
is held consistent with current estimates. The estimates of nonresidential building square feet
were estimated by dividing employee counts by the occupancy density factors presented in the
following table.
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Table 2.1: Existing and New Development
2023 Increase 2050
Residents 1 17,740 2,709 20,449
Dwelling Units 2
Single Family 6,233 783 7,016
Multifamily 1,853 233 2,086
Total 8,086 1,016 9,102
Employment 3
Commercial 3,696 1,783 5,479
Office 1,642 792 2,434
Total 5,338 2,575 7,913
Building Square Feet (000s)4
Commercial 1,743 841 2,584
Office 504 243 747
Total 2,247 1,084 3,331
1 Current household population from California Department of Finance.
Projection based on SLOCOG 2050 Regional Growth Forecast, Medium
Scenario.
2 Current values from California Department of Finance. Projection of 9,102
housing units for 2050 from SLOCOG Regional Growth Forecast. Assumes
7.0% vacancy and a total of 8,460 households. Assumes same ratio of
single family to multifamily will be maintained as development occurs.
4 Estimated building square feet calculated based on increase of employees
and density factors in Table 2.2.
3 Current estimates of primary jobs from the US Census' OnTheMap.
Projection based on SLOCOG 2050 Regional Growth Forecast. Assumes
current ratio among land uses will be maintained.
Sources: California Department of Finance, Table E-5, SLOCOG 2050
Regional Growth Forecast; OnTheMap Application,
http://onthemap.ces.census.gov; Table 2.2, Willdan Financial Services.
Occupant Densities
All fees in this report are calculated based on dwelling units or building square feet. Occupant
density assumptions ensure a reasonable relationship between the size of a development project,
the increase in service population associated with the project, and the amount of the fee.
Occupant densities (residents per dwelling unit or workers per building square foot) are the most
appropriate characteristics to use for most impact fees. The fee imposed should be based on the
land use type that most closely represents the probable occupant density of the development.
The occupancy factors are shown in Table 2.2. The residential density factors are based on data
for Arroyo Grande from the 2021 U.S. Census’ American Community Survey, the most recent
data available. The nonresidential occupancy factors are derived from data from the Institute of
Traffic Engineers Trip Generation Manual, 11th Edition.
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Table 2.2: Occupant Density Assumptions
Residential - All Units 2.27 Residents per dwelling unit
Nonresidential
Commercial 2.12 Employees per 1,000 square feet
Office 3.26 Employees per 1,000 square feet
Sources: U.S. Census Bureau, 2021 American Community Survey 5-Year
Estimates, Tables B25024 and B25033; ITE Trip Generation Manual, 11th Edition;
Willdan Financial Services.
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3. Fire Protection Facilities
The purpose of this fee is to ensure that new development funds its fair share of fire protection
facilities. A fee schedule is presented based on the existing facilities standard of fire protection
facilities in the City of Arroyo Grande to ensure that new development provides adequate funding
to meet its needs.
Service Population
Fire protection facilities serve both residents and businesses. Therefore, demand for services and
associated facilities are based on the City’s service population including residents and workers.
Table 3.1 shows the existing and future projected service population for fire protection facilities.
While specific data is not available to estimate the actual ratio of demand per resident to demand
by businesses (per worker) for this service, it is reasonable to assume that demand for these
services is less for one employee compared to one resident, because nonresidential buildings are
typically occupied less intensively than dwelling units. The 0.31-weighting factor for workers is
based on a 40-hour workweek divided by the total number of non-work hours in a week (128) and
reflects the degree to which nonresidential development yields a lesser demand for police
facilities.
Table 3.1: Fire Protection Facilities Service Population
A B A x B = C
Persons
Weighting
Factor
Service
Population
Residents
Existing (2023)17,740 1.00 17,740
New Development 2,709 1.00 2,709
Total (2050)20,449 20,449
Workers
Existing (2023)5,338 0.31 1,655
New Development 2,575 0.31 798
Total (2050)7,913 2,453
Combined Residents and Weighted Workers
Existing (2023)19,395
New Development 3,507
Total (2050)22,902
Sources: Table 2.1; Willdan Financial Services.
1 Workers are weighted at 0.31 of residents based on a 40 hour work week out of a
possible 128 non-work hours in a week (40/128 = 0.31)
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Existing Facility Inventory
The City owns a single fire station. The rep lacement cost of the station and canopy are listed in
the City’s insured property schedule. The land that the station is sited on is valued at $566,400
per acre, based on an analysis of land sales comparisons in Arroyo Grande since 2018, as
reported by CoStar. In total, the City owns approximately $6 million worth of fire facilities, which
are summarized in Table 3.2.
Table 3.2: Existing Facility Inventory
Quantity Units Unit Cost
Replacement
Cost
Fire Station - 140 Traffic Way
Land 1.05 acres 566,400$ 594,720$
Fire Station 12,698 sq. ft.420 5,332,554
Canopy 880 sq. ft.29 25,397
Total Value - Existing Facilities 5,952,671$
Sources: City of Arroyo Grande; CJPIA Property Schedule, March 7, 2023; Willdan Financial Services.
Planned Facilities
The City is planning to spend future fire facilities fee revenue on an expansion and
reconfiguration of the sleeping quarters at the fire station. This will allow the Five Cities Fire
Authority to increase staffing and service capacity as the City grows.
Cost Allocation
Table 3.3 expresses the City’s current fire facilities level of service in terms of an existing cost per
capita, by dividing the replacement cost of the City’s existing facilities by the existing service
population. The resulting cost per capita drives the fee calculation. The cost per capita is
multiplied by the worker weighting factor to determine the cost per worker.
Table 3.3: Fire Protection Facilities Existing
Standard
Value of Existing Facilities 5,952,671$
Existing Service Population 19,395
Cost per Capita 307$
Facility Standard per Resident 307$
Facility Standard per Worker1 95
1 Based on a weighing factor of 0.31.
Sources: Tables 3.1 and 3.2.
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Fee Revenue Projection
The City plans to use fire protection facilities fee revenue to construct improvements and acquire
capital facilities and equipment to add to the system of fire facilities to serve new development.
Table 3.4 details a projection of fee revenue, based on the service population growth increment
identified in Table 3.1.
Table 3.4: Revenue Projection - Existing Standard
Cost per Capita 307$
Growth in Service Population (2023 to 2050)3,507
Fee Revenue 1,076,649$
Sources: Tables 3.1 and 3.4.
Fee Schedule
Table 3.5 shows the maximum justified fire protection facilities fee schedule. The City can adopt
any fee up to this amount. The cost per capita is converted to a fee per unit of new development
based on dwelling unit and employment densities (persons per dwelling unit or employees per
1,000 square feet of nonresidential building space). The fee per dwelling unit is converted into a
fee per square foot by dividing the fee per dwelling unit by the assumed average square footage
of a dwelling unit.
The total fee includes a two percent (2.0%) administrative charge to fund costs that include: a
standard overhead charge applied to City programs for legal, accounting, and other departmental
and administrative support, and fee program administrative costs including revenue collection,
revenue and cost accounting and mandated public reporting.
In Willdan’s experience with impact fee programs, two percent of the base fee adequately covers
the cost of fee program administration. The administrative charge should be reviewed and
adjusted during comprehensive impact fee updates to ensure that revenue generated from the
charge sufficiently covers, but does not exceed, the administrative costs associated with the fee
program.
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Table 3.5: Maximum Justified Fire Protection Facilities Fee Schedule
A B C = A x B D = C x 0.02 E = C + D F = E / Average
Cost Per Admin Fee per
Land Use Capita Density Base Fee 1 Charge 1, 2 Total Fee 1 Sq. Ft.3
Residential Dwelling Unit 307$ 2.27 697$ 14$ 711$ 0.24$
Nonresidential - per 1,000 Sq. Ft.
Commercial 95$ 2.12 201$ 4$ 205$ 0.21$
Office 95 3.26 310 6 316 0.32
Sources: Tables 2.2 and 3.3.
2 Administrative charge of 2.0 percent for (1) legal, accounting, and other administrative support and (2) impact fee
program administrative costs including revenue collection, revenue and cost accounting, mandated public reporting,
and fee justification analyses.
1 Fee per average sized dwelling unit or per 1,000 square feet of nonresidential building space.
3 Assumes an average of 2,974 square feet per dwelling unit in Arroyo Grande, based on an analysis of recent
building permits.
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4. Police Facilities
The purpose of this fee is to ensure that new development funds its fair share of police facilities.
A fee schedule is presented based on the existing standard of police facilities in the City of Arroyo
Grande to ensure that new development provides adequate funding to meet its needs.
Service Population
Police facilities serve both residents and businesses. Therefore, demand for services and
associated facilities are based on the City’s service population including residents and workers.
Table 4.1 shows the existing and future projected service population for police facilities. While
specific data is not available to estimate the actual ratio of demand per resident to demand by
businesses (per worker) for this service, it is reasonable to assume that demand for these
services is less for one employee compared to one resident, because nonresidential buildings are
typically occupied less intensively than dwelling units. The 0.31-weighting factor for workers is
based on a 40-hour workweek divided by the total number of non-work hours in a week (128) and
reflects the degree to which nonresidential development yields a lesser demand for police
facilities.
Table 4.1: Police Facilities Service Population
A B A x B = C
Persons
Weighting
Factor
Service
Population
Residents
Existing (2023)17,740 1.00 17,740
New Development 2,709 1.00 2,709
Total (2050)20,449 20,449
Workers
Existing (2023)5,338 0.31 1,655
New Development 2,575 0.31 798
Total (2050)7,913 2,453
Combined Residents and Weighted Workers
Existing (2023)19,395
New Development 3,507
Total (2050)22,902
Sources: Table 2.1; Willdan Financial Services.
1 Workers are weighted at 0.31 of residents based on a 40 hour work
week out of a possible 128 non-work hours in a week (40/128 = 0.31)
Existing Facility Inventory
The City’s police facilities inventory is comprised of a police station, garage and police vehicles.
The replacement cost of the buildings of these facilities was identified in the City’s insurance
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property schedule. The land that the station is sited on is valued at $566,400 per acre, based on
an analysis of land sales comparisons in Arroyo Grande since 2018, as reported by CoStar. In
total, the City owns $4.2 million worth of police facilities. Table 4.2 displays the City’s existing
inventory of police facilities.
Table 4.2: Existing Police Facilities Inventory
Quantity Units Unit Cost
Replacement
Cost
Police Station - 200 North Halycon Road
Land 0.69 acres 566,400$ 390,816$
Station 7,528 sq. ft.357 2,686,425
Garage 1,000 sq. ft.91 90,864
Subtotal 3,168,105$
Vehicles 1,056,204$
Total Value - Existing Facilities 4,224,309$
Sources: City of Arroyo Grande; CJPIA Property Schedule, March 7, 2023; Appendix Table A.1; Willdan
Financial Services.
Planned Facilities
Table 4.3 displays the planned police facilities, including upgrades to its records management
system, upgrades to property and evidence storage, and new community safety cameras. In total,
the City has identified $175,000 of planned police facilities.
Table 4.3: Planned Police Facilities
Cost
Report Management System (RMS) Upgrade at PD 150,000$
Property and Evidence Storage System Upgrade 25,000
Total Cost of Planned Facilities 175,000$
Source: City of Arroyo Grande FY 2023-25 Biennial Budget.
Cost Allocation
Table 4.4 expresses the City’s current police facilities level of service in terms of an existing cost
per capita, by dividing the replacement cost of the City’s existing facilities by the existing service
population. The resulting cost per capita drives the fee calculation. The cost per capita is
multiplied by the worker weighting factor to determine the cost per worker.
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Table 4.4: Police Facilities Existing Standard
Value of Existing Facilities 4,224,309$
Existing Service Population 19,395
Cost per Capita 218$
Facility Standard per Resident 218$
Facility Standard per Worker1 68
1 Based on a weighing factor of 0.31.
Sources: Tables 4.1 and 4.2.
Fee Revenue Projection
The City plans to use police facilities fee revenue to construct improvements and acquire capital
facilities and equipment to add to the system of police facilities to serve new development. Table
4.5 details a projection of fee revenue, based on the service population growth increment
identified in Table 4.1. When setting fees to maintain the existing level of service, the resulting fee
revenue will fully fund the identified planned facilities, and the City will need to identify additional
facilities to maintain the level of service as new development adds demand for police services
and facilities through the planning horizon.
Table 4.5: Revenue Projection - Existing Standard
Cost per Capita 218$
Growth in Service Population (2023 to 2050)3,507
Fee Revenue 764,526$
Sources: Tables 4.1 and 4.4.
Fee Schedule
Table 4.6 shows the maximum justified police facilities fee schedule. The City can adopt any fee
up to this amount. The cost per capita is converted to a fee per unit of new development based
on dwelling unit and employment densities (persons per dwelling unit or employees per 1,000
square feet of nonresidential building space). The fee per dwelling unit is converted into a fee per
square foot by dividing the fee per dwelling unit by the assumed average square footage of a
dwelling unit.
The total fee includes a two percent (2.0%) administrative charge to fund costs that include: a
standard overhead charge applied to City programs for legal, accounting, and other departmental
and administrative support, and fee program administrative costs including revenue collection,
revenue and cost accounting and mandated public reporting.
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In Willdan’s experience with impact fee programs, two percent of the base fee adequately covers
the cost of fee program administration. The administrative charge should be reviewed and
adjusted during comprehensive impact fee updates to ensure that revenue generated from the
charge sufficiently covers, but does not exceed, the administrative costs associated with the fee
program.
Table 4.6: Maximum Justified Police Facilities Fee Schedule
A B C = A x B D = C x 0.02 E = C + D F = E / Average
Cost Per Admin Fee per
Land Use Capita Density Base Fee 1 Charge 1, 2 Total Fee 1 Sq. Ft.3
Residential Dwelling Unit 218$ 2.27 495$ 10$ 505$ 0.17$
Nonresidential - per 1,000 Sq. Ft.
Commercial 68$ 2.12 144$ 3$ 147$ 0.15$
Office 68 3.26 222 4 226 0.23
Sources: Tables 2.2 and 4.4.
1 Fee per average sized dwelling unit or per 1,000 square feet of nonresidential building space.
2 Administrative charge of 2.0 percent for (1) legal, accounting, and other administrative support and (2) impact fee
program administrative costs including revenue collection, revenue and cost accounting, mandated public reporting,
and fee justification analyses.
3 Assumes an average of 2,974 square feet per dwelling unit in Arroyo Grande, based on an analysis of recent
building permits.
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5. Park Facilities
The purpose of the park facilities impact fee is to fund the park facilities needed to serve new
development. The maximum justified impact fee is presented based on the existing standard of
park facilities per capita.
Service Population
Park facilities in Arroyo Grande primarily serve residents. Therefore, demand for services and
associated facilities is based on the City’s residential population. Table 5.1 shows the existing
and future projected service population for park and recreation facilities.
Table 5.1: Park Facilities Service
Population
Residents
Existing (2023)17,740
New Development 2,709
Total (2050)20,449
Source: Table 2.1.
Existing Park Facilities Inventory
The City of Arroyo Grande owns and maintains several parks throughout the city. Table 5.2
summarizes the City’s existing parkland inventory in 2023. All facilities are located within the City
limits. In total, the inventory includes a total of 43.9 acres of improved parkland.
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Table 5.2: Parkland Inventory
Name
Developed
Acres
Unimproved
Open Space Total
Neighborhood and Community Parks
Soto Sports Complex 18.00 - 18.00
Rancho Grande Park 8.00 - 8.00
Strother Park 8.14 - 8.14
Terra De Oro Park 3.94 - 3.94
Elm Street Park 5.00 - 5.00
Heritage Square Park 2.12 - 2.12
Health Fitness Park 0.51 - 0.51
Kingo Park 0.80 - 0.80
Kiwanis Park 3.30 - 3.30
Parque Pequeno 0.58 - 0.58
Hoosegow Park 0.31 - 0.31
Hart-Collett Firefighters Memorial Park 0.36 - 0.36
Village Gazebo 0.25 - 0.25
Dower Way Side Park 0.10 - 0.10
Tiger Tail Park 1.22 - 1.22
Total 52.63 - 52.63
Open Space
James Way Oak Habitat & Wildlife Preserve - 75.02 75.02
Total 52.63 75.02 127.65
Source: City of Arroyo Grande.
Parkland and Park Facilities Unit Costs
Table 5.3 displays the unit costs necessary to develop parkland in Arroyo Grande. The land cost
assumption was based on an analysis of recent land sales within the City of Arroyo Grande using
data from CoStar. An estimate of $750,000 per acre for standard parkland improvements is
based on Willdan’s recent experience with other clients in California. Parkland acquisition is
valued at $566,400 per acre, based on an analysis of land sales comparisons in Arroyo Grande
since 2018, as reported by CoStar. In total, it is assumed to cost approximately $1.3 million to
acquire and improve an acre of parkland in Arroyo Grande. Also shown in the table is an estimate
for open space acquisition. This assumption is based on land sales comparisons of agricultural
land, also reported by CoStar.
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Table 5.3: Park Facilities Unit Costs
Cost
Per Acre
Share of
Total Costs
Standard Park Improvements 750,000$
Vehicles (See Appendix Table A.2)3,757
Total Park Improvements 753,757$ 57%
Land Acquisition 566,400 43%
Total Cost per Acre 1,320,157$ 100%
Open Space Acquisition 52,800$
Sources: City of Arroyo Grande; CoStar; Willdan Financial Services.
Park Facility Standards
Park facility standards establish a reasonable relationship between new development and the
need for expanded park facilities. Information regarding the City’s existing inventory of existing
parks facilities was obtained from City staff.
The most common measure in calculating new development’s demand for parks is the ratio of
park acres per resident. In general, facility standards may be based on a jurisdiction’s existing
inventory of park facilities, or an adopted policy standard contained in a master facility plan or
general plan. Facility standards may also be based on a land dedication standard established by
the Quimby Act.1
Quimby Act Standard
The Quimby Act specifies that the dedication requirement must be a minimum of 3.0 acres and a
maximum of 5.0 acres per 1,000 residents. A jurisdiction can require residential developers to
dedicate above the three-acre minimum if the jurisdiction’s existing park standard at the time it
adopted its Quimby Act ordinance justifies the higher level (up to five acres per 1,000 residents).
The standard used must also conform to the jurisdiction’s adopted general or specific plan
standards.
The Quimby Act only applies to land subdivisions. The Quimby Act would not apply to residential
development on future approved projects on single parcels, such as apartment complexes and
other multifamily development.
The Quimby Act allows payment of a fee in lieu of land dedication. The fee is calculated to fund
acquisition of the same amount of land that would have been dedicated.
The Quimby Act allows use of in-lieu fee revenue for any park or recreation facility purpose.
Allowable uses of this revenue include land acquisition, park improvements including recreation
facilities, and rehabilitation of existing park and recreation facilities. The Quimby Act generally
requires that fees be used for neighb orhood and community park acreage to serve the
subdivision, except in limited circumstances.
1 California Government Code §66477.
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City of Arroyo Grande Park Facilities Standards
Table 5.4 shows the existing standard for improved park acreage per 1,000 residents based on
the type of parkland. In total the City has an existing parkland standard of 2.97 acres per 1,000
residents, which is less than the minimum Quimby standard of 3.0 acres per 1,000 residents..
The impact fee analysis in this report will be based on maintaining the City’s 2.97 acre per 1,000
resident standard as new development adds demand for parks in Arroyo Grande. Fees in-lieu of
land dedication for subdivisions are calculated at the minimum Quimby standard of 3.0 acres of
developed parkland per 1,000 residents.
Table 5.4 also shows the City’s existing open space standard. This is calculat ed separately from
the parkland standard. The current open space standard is 4.23 acres per 1,000 residents.
Table 5.4: Parkland Standards
Developed Park Acreage 52.63
Existing Service Population (2023)17,740
Existing Standard (Acres per 1,000 Residents)2.97
Quimby Act Standard (Acres per 1,000 Residents)3.00
Open Space Acreage 75.02
Existing Service Population (2023)17,740
Existing Standard (Acres per 1,000 Residents)4.23
Sources: Tables 5.1 and 5.2.
Facilities Needed to Accommodate New Development
Table 5.5 shows the park facilities needed to accommodate new development at the existing
standard. To achieve the standard by the planning horizon, depending on the amount of
development subject to the Quimby Act, new development must fund the purchase and
improvement of between 8.05 and 8.13 parkland acres.
The facility standards and resulting fees under the Quimby Act are higher because development
will be charged to provide 3.0 acres of parkland per 1,000 residents, and 2.97 acres of
improvements, whereas development not subject to the Quimby Act will be charged to provide
only 2.97 acres of parkland and improvements per 1,000 residents. Since the exact amount of
development that will be subject to the Quimby fees is unknown at this time, Table 5.5 presents
the range of total facility costs that may be incurred depending on the amount of development
subject to the Quimby Act.
Table 5.5 also displays the cost necessary to maintain the City ’s existing open space standard.
The City would need to acquire 11.46 acres of open space to maintain this standard.
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Table 5.5: Park Facilities to Accommodate New Development
Calculation Parkland Improvements Total Range 1
Parkland (Quimby Act), Improvements (Mitigation Fee Act)2
Facility Standard (acres/1,000 capita)A 3.00 2.97
Growth in Service Population (2023 to 2050)B 2,709 2,709
Facility Needs (acres)C = A x B/1000 8.13 8.05
Average Unit Cost (per acre)D $ 566,400 $ 753,757
Total Cost of Facilities E = C x D $4,605,000 $ 6,068,000 $10,673,000
Parkland and Improvements - Mitigation Fee Act 3
Facility Standard (acres/1,000 capita)A 2.97 2.97
Growth in Service Population (2023 to 2050)B 2,709 2,709
Facility Needs (acres)C = A x B/1000 8.05 8.05
Average Unit Cost (per acre)D $ 566,400 $ 753,757
Total Cost of Facilities E = C x D $4,560,000 $ 6,068,000 $10,628,000
Open Space
Facility Standard (acres/1,000 capita)A 4.23 -
Growth in Service Population (2023 to 2050)B 2,709 -
Facility Needs (acres)C = A x B/1000 11.46 -
Average Unit Cost (per acre)D $ 52,800 -
Total Cost of Facilities E = C x D $ 605,000 $ - $ 605,000
Note: Totals have been rounded to the thousands.
1 Values in this column show the range of the cost of parkland acquisition and development should all development be either
subject to the Quimby Act, or to the Mitigation Fee Act, respectively.
2 Cost of parkland to serve new development shown if all development is subject to the Quimby Act (Subdivisions of 50 units or
more). Parkland charged at 3.0 acres per 1,000 residents; improvements charged at the existing standard.
3 Cost of parkland to serve new development shown if all development is subject to the Mitigation Fee Act. Parkland and
improvements are charged at the existing standard.
Sources: Tables 5.1, 5.3, and 5.4.
Parks and Recreation Facilities Cost per Capita
Table 5.6 shows the cost per capita of providing new park facilities at the Quimby standard, and
the existing facility standard. The cost per capita is shown separately for land and improvements.
The costs per capita in this table will serve as the basis of four fees:
• A Quimby Act Fee in-lieu of parkland dedication. This fee is payable by residential
development occurring in subdivisions.
• A Mitigation Fee Act Fee for parkland acquisition. This fee is payable by residential
development not occurring in subdivisions.
• A Mitigation Fee Act Fee for parkland improvements. This fee is payable by all residential
development.
• A Mitigation Fee Act Fee for open space acquisition. This fee is payable by all residential
development.
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A development project pays either the Quimby Act Fee in-lieu of land dedication, or the Mitigation
Fee Act Fee for land acquisition, not both. All development projects pay the Mitigation Fee Act
Fees for park improvements and open space.
Table 5.6: Park Facilities Investment per Capita
Improvements Open Space
Calculation Quimby Fee OR Impact Fee AND Impact Fee AND Impact Fee
Parkland Investment (per acre) A 566,400$ 566,400$ 753,757$ 52,800$
Existing Standard (acres per 1,000 capita) B 3.00 2.97 2.97 4.23
Total Cost per 1,000 capita C = A x B 1,699,200$ 1,682,200$ 2,238,700$ 223,300$
Cost per Resident D = C / 1,000 1,699$ 1,682$ 2,239$ 223$
Sources: Tables 5.3 and 5.4.
Land
Use of Fee Revenue
The City plans to use park and recreation facilities fee revenue to purchase parkland and open
space and construct improvements to add to the system of park facilities that serves new
development. The City may only use impact fee revenue to provide facilities and intensify usage
of existing facilities needed to serve new development. The City should program fee revenue to
capacity expanding projects annually through its CIP and budget process.
Fee Schedule
To calculate fees by land use type, the investment in park facilities is determined on a per
resident basis for parkland acquisition, open space acquisition and parkland improvements.
These investment factors (shown in Table 5.6) are based on the unit cost estimates and the City’s
existing facility standards.
Table 5.7 shows the maximum justified park and recreation facilities fee based on the existing
standard per capita under the Quimby Act and under the existing park standard under the
Mitigation Fee Act, respectively. The cost per resident is converted to a fee per dwelling unit
using the occupancy density factor from Table 2.2. The fee per dwelling unit is converted into a
fee per square foot by dividing the fee per dwelling unit by the assumed average square footage
of a dwelling unit.
The total fee includes a two percent (2.0%) administrative charge to fund costs that include: a
standard overhead charge applied to City programs for legal, accounting, and other departmental
and administrative support, and fee program administrative costs including revenue collection,
revenue and cost accounting and mandated public reporting.
In Willdan’s experience with impact fee programs, two percent of the base fee adequately covers
the cost of fee program administration. The administrative charge should be reviewed and
adjusted during comprehensive impact fee updates to ensure that revenue generated from the
charge sufficiently covers, but does not exceed, the administrative costs associated with the fee
program.
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Table 5.7: Maximum Justified Park and Recreation Facilities Fee Schedule
A B C = A x B D = C x 0.02 E = C + D F = E / Average
Cost Per Base Admin Fee per
Land Use Capita Density Fee 1 Charge 1, 2 Total Fee Sq. Ft.3
Quimby Act - Subdivisions
Parkland 1,699$ 2.27 3,857$ 77$ 3,934$ 1.32$
Improvements 2,239 2.27 5,083 102 5,185 1.74
Open Space 223 2.27 506 10 516 0.17
Total 4,161$ 9,446$ 189$ 9,635$ 3.23$
Mitigation Fee Act - Infill
Parkland 1,682$ 2.27 3,818$ 76$ 3,894$ 1.31$
Improvements 2,239 2.27 5,083 102 5,185 1.74
Open Space 223 2.27 506 10 516 0.17
Total 4,144$ 9,407$ 188$ 9,595$ 3.22$
Sources: Tables 2.2 and 5.6.
2 Administrative charge of 2.0 percent for (1) legal, accounting, and other administrative support and (2) impact fee
program administrative costs including revenue collection, revenue and cost accounting, mandated public reporting,
and fee justification analyses.
1 Fee per average sized dwelling unit or per 1,000 square feet of nonresidential building space.
3 Assumes an average of 2,974 square feet per dwelling unit in Arroyo Grande, based on an analysis of recent
building permits.
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6. Recreation Facilities
The purpose of this fee is to ensure that new development funds its fair share of recreation
facilities. A fee schedule is presented based on the existing facilities standard of recreation
facilities in the City of Arroyo Grande to ensure that new development provides adequate funding
to meet its needs.
Service Population
Park facilities in Arroyo Grande primarily serve residents. Therefore, demand for services and
associated facilities is based on the City’s residential population. Table 6.1 shows the existing
and future projected service population for recreation facilities.
Table 6.1: Recreation Facilities
Service Population
Residents
Existing (2023)17,740
New Development 2,709
Total (2050)20,449
Sources: Table 2.1; Willdan Financial Services.
Existing Facilities Inventory
The City’s recreation facilities inventory is comprised of the Community Center/Woman’s Club,
Historical Society Complex, and Mark M. Millis Community Center. The replacement cost of the
buildings was identified in the City’s insured property schedule. The assumed land costs is valued
at $566,400 per acre, based on an analysis of land sales comparisons in Arroyo Grande since
2018, as reported by CoStar. In total the City owns $3.8 million worth of recreation facilities. The
recreation facilities inventory is displayed in Table 6.2.
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Table 6.2: Existing Recreation Facilities Inventory
Quantity Units Unit Cost
Replacement
Cost
Land (acres)
Community Center/Womans Club 2.05 acres 566,400$ 1,161,120$
Historical Society Complex 1.21 acres 566,400 685,344
Subtotal - Land 3.26 1,846,464$
Buildings (square feet)
Community Center/Womans Club 4,477 sq. ft.251$ 1,125,815$
Mark M. Millis Community Center1 5,600 sq. ft.- -
Historical Society Complex - House, Single Family 1,371 sq. ft.201 275,528
Historical Society Complex - Museum 864 sq. ft.195 168,748
Historical Society Complex - Barn 2,400 sq. ft.81 194,145
Historical Society Complex - House, Single Family 780 sq. ft.187 146,173
Historical Society Complex - 100% Garage 160 sq. ft.49 7,901
Subtotal - Buildings 15,652 1,918,310$
Total Value - Existing Facilities 3,764,774$
1 No value is shown for this facility because it will be replaced by the planned facility.
Sources: City of Arroyo Grande; CJPIA Property Schedule, March 7, 2023; CoStar; Willdan Financial Services.
Planned Facilities
The City plans to construct a new community center to replace the Millis Community Center. The
total cost of the planned facility is $6.2 million. This planned facility cost does not drive the fee
calculation, rather, the fees are set to maintain the existing level of service.
Table 6.3: Planned Facilities
Cost
Recreation Services / Community Center Building 6,150,000$
Total 6,150,000$
Source: City of Arroyo Grande FY 2023-25 Biennial Budget.
Cost Allocation
Table 6.4 expresses the City’s current recreation facilities level of service in terms of an existing
cost per capita, by dividing the replacement cost of the City’s existing facilities by the existing
service population. The resulting cost per capita drives the fee calculation.
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Table 6.4: Existing Standard
Value of Existing Facilities 3,764,774$
Existing Service Population 17,740
Cost per Resident 212$
Sources: Tables 6.1 and 6.3.
Fee Revenue Projection
The City plans to use recreation facilities fee revenue to construct improvements and acquire
capital facilities and equipment to add to the system of recreation facilities to serve new
development. While the City plans to construct the facilities in Table 6.3 the costs in that table do
not drive the fee calculation. Table 6.5 details a projection of fee revenue, based on the service
population growth increment identified in Table 6.1 and the existing facility standard identified in
Table 6.4. The City will have spent the fee revenue appropriately so long as the fee revenue is
spent on new or expanded recreation facilities that benefit new development.
Table 6.5: Revenue Projection - Existing Standard
Cost per Capita 212$
Growth in Service Population (2023 to 2050)2,709
Projected Fee Revenue 574,308$
Sources: Tables 6.1 and 6.4.
Fee Schedule
Table 6.6 shows the maximum justified recreation facilities fee schedule. The cost per capita is
converted to a fee per unit of new development based on dwelling unit densities (persons per
dwelling unit). The fee per dwelling unit is converted into a fee per square foot by dividing the fee
per dwelling unit by the assumed average square footage of a dwelling unit.
The total fee includes a two percent (2.0%) administrative charge to fund costs that include: a
standard overhead charge applied to City programs for legal, accounting, and other departmental
and administrative support, and fee program administrative costs including revenue collection,
revenue and cost accounting and mandated public reporting.
In Willdan’s experience with impact fee programs, two percent of the base fee adequately covers
the cost of fee program administration. The administrative charge should be reviewed and
adjusted during comprehensive impact fee updates to ensure that revenue generated from the
charge sufficiently covers, but does not exceed, the administrative costs associated with the fee
program.
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Table 6.6: Maximum Justified Recreation Facilities Fee Schedule
A B C = A x B D = C x 0.02 E = C + D F = E / Average
Cost Per Admin Fee per
Land Use Capita Density Base Fee 1 Charge 1, 2 Total Fee 1 Sq. Ft.3
Residential Dwelling Unit 212$ 2.27 481$ 10$ 491$ 0.17$
Sources: Tables 2.2 and 6.4.
1 Fee per average sized dwelling unit.
2 Administrative charge of 2.0 percent for (1) legal, accounting, and other administrative support and (2) impact fee
program administrative costs including revenue collection, revenue and cost accounting, mandated public reporting,
and fee justification analyses.
3 Assumes an average of 2,974 square feet per dwelling unit in Arroyo Grande, based on an analysis of recent
building permits.
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7. Water Facilities
This chapter details an analysis of the need for water facilities to accommodate growth within the
City of Arroyo Grande. The projects and associated costs in this chapter were identified in the
City’s Water System Master Plan. This chapter documents a reasonable relationship between
new development and a water facilities impact fee to fund facilities that serve new development.
Water Demand
Estimates of new development and its consequent increased water demand provide the basis for
calculating the water facilities fee. The need for water facilities improvements is based on the
water demand placed on the system by development. A typical measure of demand is a flow
generation rate, expressed as the number of gallons per day generated by a specific type of land
use. Flow generation rates are a reasonable measure of demand for the City’s system of water
improvements because they represent the average rate of demand that will be placed on the
system per land use designation.
Table 7.1 shows the calculation of equivalent dwelling unit (EDU) demand factors based on flow
generation by land use category. The residential flow generation estimates are based on 2023
actual usage data from the City. The nonresidential flow generation f actors per acre are based on
data from the City’s Water System Master Plan. EDU factors express water flow from each land
use in terms of the flow generated by a single family dwelling unit.
Table 7.1: Water Demand by Land Use
Land Use Type
Flow
Generation1 Density2
Average Flow
Generation per
DU or 1,000 Sq.
Ft.3
Equivalent
Dwelling Unit
(EDU)
Residential Dwelling Unit
Single Family 178 1.00
Multifamily 148 0.83
Nonresidential - per 1,000 Sq. Ft.
Commercial 1,102 43.56 25.30 0.14
Office 1,243 43.56 28.54 0.16
Sources: Table 3-2, City of Arroyo Grande Water System Master Plan; Willdan Financial Services.
1 Gallons per acre per day.
2 1,000 square feet per acre for nonresidential. Nonresidential densities are based on typical densities for each
land use from the City's zoning code. Nonresidential densities are based on floor-area-ratios of 1.0 for
commercial and 1.0 for office.
3 Residential flow generation by unit type provided by the City for use in this analysis. Nonresidential flow
generation calculated using flow generation per acre and density assumptions shown in this table.
EDU Generation by New Development
Table 7.2 shows the estimated EDU generation from new development through 2050. The EDU
factors from Table 7.1 are multiplied by the land use assumptions from Table 2.1 to estimate total
EDUs in the base year, at the planning horizon and for new development. New development will
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generate approximately 1,132 new EDUs through 2050, comprising 12.3% of water demand in
the City at that time.
Table 7.2: Water Facilities Equivalent Dwelling Units
Land Use
EDU
Factor
Units /
1,000 SF EDUs
Units /
1,000 SF EDUs
Units /
1,000 SF EDUs
Residential - per Dwelling Unit
Single Family 1.00 6,233 6,233 783 783 7,016 7,016
Multifamily 0.83 1,853 1,538 233 193 2,086 1,731
Subtotal 8,086 7,771 1,016 976 9,102 8,747
Nonresidential - per 1,000 Sq. Ft.
Commercial 0.14 1,743 244 841 118 2,584 362
Office 0.16 504 81 243 38 747 119
Subtotal 2,247 325 1,084 156 3,331 481
Total 8,096 1,132 9,228
87.7%12.3%100%
Sources: Tables 2.1 and 7.1.
2023 Growth 2023 to 2050 Total - 2050
Facility Needs and Costs
Table 7.3 identifies the planned water facilities to be funded by the fee. Project costs from the
2012 Water System Master Plan have been adjusted for inflation into 2023 dollars, using the
Engineering News Record’s Construction Cost Index (CCI). Those projects that have already
been completed, or that do not benefit new development have been excluded from the table.
Projects that are needed to serve both existing and new development are allocated to the impact
fee based on the increase in capacity associated with e ach improvement. For project C-3, the
impact fee is allocated a portion of the costs based on new development’s share of EDUs in 2050
(12.3%), identified in Table 7.2. Projects that are needed solely to serve new development are
allocated 100% to new development through this impact fee.
Table 7.3: Water Facilities Costs to Serve New Development
No.Description Size
Total Cost
(2012)
Total Cost
(2023)
Allocation to
New
Development
Cost Allocated
to New
Development
B‐4 Highway 101 Crossing Upgrade – El Camino Real to West Brach St.1 415‐LF 454,600$ 659,852$ 57.3%377,864$
B‐5 Highway 101 Crossing Upgrade – West Cherry Avenue1 280‐LF 358,600 520,508 57.3%298,069
B‐6 Phased Mains Replacement1 3,865‐LF 1,018,050 1,477,700 57.3%846,205
B‐10 Lierly Lane to Coach Road Upgrade2 3,245‐LF 288,800 419,193 75.0%314,395
C‐1 New Well 800‐gpm 1,134,900 1,647,308 100.0%1,647,308
C‐2 Miller Way Booster Zone Upgrade 75‐gpm 136,600 198,275 50.0%99,138
C‐3 Security Upgrades N/A 47,100 68,366 12.3%8,409
C‐4 Coach Road and Greenwood Drive Upgrades 1,385‐LF 267,600 388,422 100.0%388,422
C‐7 4‐inch Mains Upgrades2 11,600‐LF 2,162,000 3,138,145 75.0%2,353,609
C‐8 Phased Mains Replacement1 3,865‐LF 1,018,000 1,477,628 57.3%846,163
Total 6,886,250$ 9,995,398$ 7,179,581$
1 Upgrading 8" cast iron mains to 8" PVC mains will increase capacity by 234%.
2 Larger mains represent 400% increase in capacity.
Sources: City of Arroyo Grande Water System Master Plan, 2012; Engineering News Record's Construction Cost Index (CCI); Table 7.2, Willdan Financial Services.
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Cost per EDU
Table 7.4 calculates a cost per EDU associated by dividing the total cost of projects allocated to
new development identified in Table 7.3 by the growth in EDUs identified in Table 7.2.
Table 7.4: Cost per EDU
Cost Allocated to New Development 7,179,581$
Growth in EDUs (2023 to 2050)1,132
Cost per EDU 6,342$
2% Fee Program Administration 127
Total Fee per EDU 6,469$
Sources: Tables 7.2 and 7.3.
Fee Schedule
The maximum justified fee for water facilities is shown in Table 7.5. The cost per EDU is
converted to a fee per unit of new development based on capacity of a 1” meter relative to the
capacity of other meter sizes. Using water meter size to drive the fee schedule is reasonable and
directly proportional to the amount of water that can be accommodated by a connection.
The total fee includes a two percent (2.0%) administrative charge to fund costs that include: a
standard overhead charge applied to City programs for legal, accounting, and other departmental
and administrative support, and fee program administrative costs including revenue collection,
revenue and cost accounting and mandated public reporting.
In Willdan’s experience with impact fee programs, two percent of the base fee adequately covers
the cost of fee program administration. The administrative charge should be reviewed and
adjusted during comprehensive impact fee updates to ensure that revenue generated from the
charge sufficiently covers, but does not exceed, the administrative costs associated with the fee
program.
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Table 7.5: Maximum Justified Water Facilities Fee Schedule
Meter Size
AWWA
Capacity
Factor
based on
1" Meter
Impact Fee
per EDU1
Impact Fee
per Meter
5/8 inch 20 0.40 6,469$ 2,588$
3/4 inch 30 0.60 6,469 3,881
1 inch 50 1.00 6,469 6,469
1-1/2 inch 100 2.00 6,469 12,938
2 inch 160 3.20 6,469 20,701
3 inch 300 6.00 6,469 38,814
4 inch 500 10.00 6,469 64,690
6 inch 1,000 20.00 6,469 129,380
Sources: Table 7.4, AWWA; Willdan Financial Services.
1 Includes administrative charge of 2.0 percent for (1) legal, accounting, and other
administrative support and (2) impact fee program administrative costs including revenue
collection, revenue and cost accounting, mandated public reporting, and fee justification
analyses.
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8. Transportation Facilities
This chapter details an analysis of the need for transportation facilities to accommodate new
development. The chapter documents a reasonable relationship between new development and
the impact fee for funding of these facilities.
Trip Demand
The need for transportation facilities is based on the trip demand placed on the system by
development. A reasonable measure of demand is the number of average daily vehicle trips,
adjusted for the type of trip. Vehicle trip generation rates are a reasonable measure of demand on
the City’s system of street improvements across all modes because alternate modes (transit,
bicycle, pedestrian) often substitute for vehicle trips.
The two types of trips adjustments made to trip generation rates to calculate trip demand are
described below:
▪ Pass-by trips are deducted from the trip generation rate. Pass-by trips are
intermediates stops between an origin and a destination that require no diversion
from the route, such as stopping to get gas on the way to work.
▪ The trip generation rate is adjusted by the average length of trips for a specific land
use category compared to the average length of all trips on the street system.
These adjustments allow for a holistic quantification of trip demand that takes trip purpose
and length into account for fee calculation purposes.
Table 8.1 shows the calculation of trip demand factors by land use category based on the
adjustments described above. Data is based on extensive and detailed trip surveys
conducted in the Institute of Traffic Engineers (ITE), and by the San Diego Association of
Governments (SANDAG). The trip rates and pass-by trip assumptions come from ITE. The
trip length assumptions come from SANDAG. The surveys provide some of the most
comprehensive databases available of trip generation rates, pass-by trips factors, and
average trip length for a wide range of land uses.
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Table 8.1: Trip Rate Adjustment Factors
Pass-by
Trips1
Primary
and
Diverted
Trips
Average
Trip
Length2
Adjust-
ment
Factor3 ITE Category
PM Peak
Hour
Trips4
Trip
Demand
Factor5
A B = 1 - A C
D = B x C
/ Avg.E F = D x E
Residential - per Dwelling Unit
Single Family 3%97%7.9 1.11 Single Family Housing (210)0.99 1.10
Multifamily 3%97%7.9 1.11 Multifamily Housing (Low-Rise) (220)0.57 0.63
Nonresidential - per 1,000 Sq. Ft.
Commercial 22%78%3.6 0.41 Shopping Center (820)4.09 1.68
Office 4%96%8.8 1.22 General Office (710)1.44 1.76
Sources: Institute of Traffic Engineers, Trip Generation Manual, 11th Edition; San Diego Association of Governments, Brief Guide of Vehicular
Traffic Generation Rates for the San Diego Region, April 2002; Willdan Financial Services.
1 Percent of total trips. A pass-by trip is made as an intermediate stop on the way from an origin to a primary trip destination without a route
diversion. Pass-by trips are not considered to add traffic to the road network. Based on SANDAG data.
2 In miles. Based on SANDAG data.
3 The trip adjustment factor equals the percent of non-pass-by trips multiplied by the average trip length and divided by the systemwide average
trip length of 6.9 miles.
4 Trips per dwelling unit or per 1,000 building square feet.
5 The trip demand factor is the product of the trip adjustment factor and the trip rate.
Trip Demand Growth
The planning horizon for this analysis is 2050. Table 8.2 lists the 2023 and 2050 land use
assumptions used in this study. The trip demand factors calculated in are multiplied by the
existing and future dwelling units and building square feet to determine the increase in trip
demand attributable to new development.
Table 8.2: Land Use Scenario and Trip Demand
Trip
Land Use
Demand
Factor
Units /
1,000 SF Trips
Units /
1,000 SF Trips
Units /
1,000 SF Trips
Residential - per Dwelling Unit
Single Family 1.10 6,233 6,856 783 862 7,016 7,718
Multifamily 0.63 1,853 1,167 233 147 2,086 1,314
Subtotal 8,086 8,023 1,016 1,009 9,102 9,032
Nonresidential - per 1,000 Sq. Ft.
Commercial 1.68 1,743 2,929 841 1,413 2,584 4,342
Office 1.76 504 886 243 428 747 1,314
Subtotal 2,247 3,815 1,084 1,841 3,331 5,656
Total 11,838 2,850 14,688
80.6%19.4%100%
Sources: Tables 2.1 and 8.1.
2023
Growth 2023 to
2050 Total - 2050
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Planned Facilities
Table 8.3 lists the transportation projects included in this analysis. The projects and allocation to
new development were identified in the Draft Arroyo Grande Citywide Circulation Study
(“circulation study”), 2021, prepared by GHD Engineering. The circulation study identified
improvements needed to mitigate new development’s impact on traffic level of service (LOS) as
new development added trips to the City ’s circulation network. The City has a LOS standard of
LOS D.
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Table 8.3: Planned Transportation Facilities and Cost Allocation
Project
Number Improvement Type Road To/ From Recommended Improvement
Allocation to
New
Development
Total Project
Cost (2021)
Outside
Funding
Other
Local
Funds
Cost Allocated
to New
Development
1 Intersection Improvements East Branch Street Bridge Street/Nevada Street
Intersection improvements (convert to one-
way and restrict turns)100%250,000$ -$ -$ 250,000$
2 Intersection Improvements East Branch Street at Huasna Road and Corbett Canyon Road Install Traffic Signal or Roundabout 100%400,000 - - 400,000
4 Intersection Improvements East Grand Avenue El Camino Real Intersection Improvement 100%200,000 - - 200,000
10 Intersection Improvements Elm Street at Farroll Avenue
Install Traffic Signal, Roundabout, or orther
intersection improvement 100%400,000 - - 400,000
11a Roundabout Halcyon Road Fair Oaks Avenue Install a single-lane roundabout 50%2,420,000 1,210,000 - 1,210,000
12a Planning and Design Fair Oaks Avenue Valley Road to Traffic Way
Roundabout at Fair Oaks/SB 101
Ramp/Orchard Way; Road Diet 4 lanes to
3) to Enhance Multi Modal Safety 10%666,400 281,200 318,200 66,640
12b Right of Way Fair Oaks Avenue Valley Road to Traffic Way
Roundabout at Fair Oaks/SB 101
Ramp/Orchard Way; Road Diet 4 lanes to
3) to Enhance Multi Modal Safety 10%144,000 130,000 - 14,000
12c Construction Fair Oaks Avenue Valley Road to Traffic Way
Roundabout at Fair Oaks/SB 101
Ramp/Orchard Way; Road Diet 4 lanes to
3) to Enhance Multi Modal Safety 10%3,790,000 3,411,000 - 379,000
13 Corridor Enhancement El Camino Real Oak Park Blvd to Brisco Rd Widen to 3 Lanes 100%300,000 - - 300,000
14a Corridor Enhancement East Grand Avenue at US 101 NB Ramps
Raised Median and Roundabout at US 101
NB Ramps 54%5,380,000 2,381,000 119,000 2,880,000
14b Corridor Enhancement East Branch Street at Traffic Way
Raised Median and Roundabout at Traffic
Way 59%4,870,000 1,772,000 228,000 2,870,000
16a PID Fair Oaks Avenue/South Traffic Way Valley Road to South Traffic Way
Project Initiation for new interchange with
US 101 in vicinity of existing Traffic Way
ramps. 100%1,006,000 - - 1,006,000
16b PA/ED Fair Oaks Avenue/South Traffic Way Valley Road to South Traffic Way
Planning and environmental for new
interchange with US 101 in vicinity of
existing Traffic Way ramps. 50%2,127,600 1,063,600 - 1,063,800
23 Plan Future update of the Circulation Element 100%200,000 - - 200,000
24 Plan Active Transportation Plan 50%200,000 - 100,000 100,000
25 Plan Future Updates Local Roadway Safety Plan 100%200,000 - - 200,000
Total 22,554,000$ 10,248,800$ 765,200$ 11,539,440$
Source: Draft Arroyo Grande Circulation Study, 2021.
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Fee per Trip Demand Unit
Every impact fee consists of a dollar amount, representing the value of facilities, divided by a
measure of demand. In this case, all fees are first calculated as a cost per trip demand unit. Then
these amounts are translated into housing unit (cost per unit) and employment space (cost per
1,000 square feet or room) fees by multiplying the cost per trip by the trip generation rate for each
land use category. These amounts become the fee schedule.
Table 8.4 displays the calculation of the cost the cost per trip demand unit. The project costs
allocated to new development are divided by the increase in trip demand from 2023 to 2050 from
Table 8.2 to determine the cost per trip attributable to new development. This figure drives the fee
calculation.
Table 8.4: Cost per Trip to Accommodate Growth
Costs Allocated to New Development 11,539,440$
Growth in Trip Demand (2023 to 2050)2,850
Cost per Trip 4,049$
Sources: Tables 8.2 and 8.3.
Fee Schedule
Table 8.5 shows the maximum justified transportation facilities fee schedule. The City can adopt
any fee up to these amounts. The maximum justified fees are based on the cost per trip identified
in. Table 8.4. The cost per trip is multiplied by the trip demand factors in Table 8.1 to determine a
fee per unit of new development. The fee per dwelling unit is converted into a fee per square foot
by dividing the fee per dwelling unit by the assumed average square footage of a dwelling unit.
The total fee includes a two percent (2.0%) administrative charge to fund costs that include: a
standard overhead charge applied to City programs for legal, accounting, and other departmental
and administrative support, and fee program administrative costs including revenue collection,
revenue and cost accounting and mandated public reporting.
In Willdan’s experience with impact fee programs, two percent of the base fee adequately covers
the cost of fee program administration. The administrative charge should be reviewed and
adjusted during comprehensive impact fee updates to ensure that revenue generated from the
charge sufficiently covers, but does not exceed, the administrative costs associated with the fee
program.
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Table 8.5: Maximum Justified Transportation Facilities Impact Fee
Schedule
A B C = A x B D = C x 0.02 E = C + D E / 1,000
Trip Fee
Land Use
Cost Per
Trip
Demand
Factor Base Fee 1
Admin
Charge 1, 2 Total Fee 1
per Sq.
Ft.
Residential Dwelling Unit 4 4,049$ 0.99 4,009$ 80$ 4,089$ 1.37$
Nonresidential - per 1,000 Sq. Ft.
Commercial 4,049$ 1.68 6,802$ 136$ 6,938$ 6.94$
Office 4,049 1.76 7,126 143 7,269 7.27
1 Fee per average sized dwelling unit or per 1,000 square feet of nonresidential.
Sources: Tables 8.1 and 8.4.
2 Administrative charge of 2.0 percent for (1) legal, accounting, and other administrative support and (2) impact fee
program administrative costs including revenue collection, revenue and cost accounting, mandated public reporting, and
fee justification analyses.
3 Assumes an average of 2,974 square feet per dwelling unit in Arroyo Grande, based on an analysis of recent building
permits.
4 Average trip demand factor per residential dwelling unit weighted by projected single family and multifamily development.
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9. Storm Drain Facilities
This chapter summarizes an analysis of the need for stor m drain facilities to accommodate
growth within Arroyo Grande. This projects and associated costs in this chapter were identified it
the City’s CIP from the FY2023-25 Biennial Budget. This chapter documents a reasonable
relationship between new development and an impact to fund storm drain facilities that serve new
development.
Storm Drain Demand
Most new development generates storm water runoff that must be controlled through storm drain
facilities by increasing the amount of land that is i mpervious to precipitation. Table 9.1 shows the
calculation of equivalent dwelling unit (EDU) d emand factors based on impervious surface
coefficient by land use category. The impervious surface coefficients are base d data from the
California Environmental Protection Agency. EDU factors relate demand for storm drain facilities
in terms of the demand created by a single-family dwelling unit.
Table 9.1: Storm Drain Facilities Equivalent Dwelling Units
A B C = (43,560 / A) x B D = C / Single Family
Land Use Type
DU, 1,000
Sq. Ft. or
per acre 1
Average
Percent
Impervious
per Acre 2
Impervious
Square feet per
DU or 1,000 Sq.
Ft.
Equivalent
Dwelling Unit
(EDU)3
Residential Dwelling Unit
Single Family 4.50 70%6,776 1.00
Multifamily 14.00 81%2,520 0.37
Nonresidential - per 1,000 Sq. Ft.
Commercial 43.56 86%860 0.13
Office 43.56 85%850 0.13
2 Based on California Environmental Protection Agency data.
1 Dwelling units for residential and thousand building square feet for non-residential. Nonresidential densities are
based on floor-area-ratios of 1.0 for commercial, 1.0 for office and institutional, and 0.45 for industrial.
3 EDUs per dwelling unit for residential development and per thousand square feet for nonresidential development .
Sources: User’s Guide for the California Impervious Surface Coefficients, Office of Environmental Health Hazard
Assessment California Environmental Protection Agency; Willdan Financial Services.
EDU Generation by New Development
Table 9.2 shows the estimated EDU generation from new development through 2050. New
development will generate 1,010 new EDUs, representing 12.3% percent of total storm drain
demand in 2050.
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Table 9.2: Storm Drain Facilities Equivalent Dwelling Units
Land Use
EDU
Factor
Units /
1,000 SF EDUs
Units /
1,000 SF EDUs
Units /
1,000 SF EDUs
Residential - per Dwelling Unit
Single Family 1.00 6,233 6,233 783 783 7,016 7,016
Multifamily 0.37 1,853 686 233 86 2,086 772
Subtotal 8,086 6,919 1,016 869 9,102 7,788
Nonresidential - per 1,000 Sq. Ft.
Commercial 0.13 1,743 227 841 109 2,584 336
Office 0.13 504 65 243 32 747 97
Subtotal 2,247 292 1,084 141 3,331 433
Total 7,211 1,010 8,221
87.7%12.3%100%
Sources: Tables 2.1 and 9.1.
2023 Growth 2023 to 2050 Total - 2050
Planned Facilities
Table 9.3 identifies the planned storm drain facilities to be funded by the fee. The new storm
drain facilities were identified in the City’s FY2023-25 Biennial Budget, and by City staff. Projects
that are needed to serve both existing and new development are allocated to the impact fee
based on new development’s share of EDUs in 2050 (12.3%), identified in Table 9.2.
Table 9.3: Storm Drain Projects and Allocation to New Development
Description
Total Cost
(2023)
Allocation to
New
Development
Cost Allocated
to New
Development
Corrugated Metal Pipe (CMP) Investigation
and Repair 400,000$ 12.3%49,200$
Trash Capture Devices 214,000 12.3%26,322
Halcyon Road Storm Drain 170,000 12.3%20,910
Total 784,000$ 96,432$
Sources: City of Arroyo Grande FY 2023-25 Biennial Budget; Table 9.2, Willdan Financial Servces.
Cost per Equivalent Dwelling Unit
This chapter uses the planned facilities approach to calculate the storm drain facilities cost
standard. The cost of planned facilities allocated to new development is divided by the growth in
EDUs to determine a cost standard per EDU. Table 9.4 shows the facility cost standard for storm
drain facilities.
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Table 9.4: Cost per Equivalent Dwelling
Unit
Cost Allocated to New Development 96,432$
Growth in EDUs (2023 to 2050)1,010
Cost per EDU 95$
Sources: Tables 9.2 and 9.3.
Fee Schedule
The maximum justified fee for storm drain facilities is shown in Table 9.5. The City can adopt any
fee up to this amount. The cost per EDU from Table 9.4 is converted to a fee per unit of new
development based on the EDU factors shown in Table 9.1. The fee per dwelling unit is
converted into a fee per square foot by dividing the fee per dwelling unit by the assumed average
square footage of a dwelling unit.
The total fee includes a two percent (2.0%) administrative charge to fund costs that include: a
standard overhead charge applied to City programs for legal, accounting, and other departmental
and administrative support, and fee program administrative costs including revenue collection,
revenue and cost accounting and mandated public reporting.
In Willdan’s experience with impact fee programs, two percent of the base fee adequately covers
the cost of fee program administration. The administrative charge should be reviewed and
adjusted during comprehensive impact fee updates to ensure that revenue generated from the
charge sufficiently covers, but does not exceed, the administrative costs associated with the fee
program.
Table 9.5: Storm Drain Facilities Impact Fee Schedule
A B C = A x B D = C x 0.02 E = C + D E / Average
Cost Per
EDU
EDU
Factor
Base
Fee 1
Admin
Charge 1, 2 Total Fee 1
Fee per
Sq. Ft.3
Residential Dwelling Unit 4 95$ 0.86 82$ 2$ 84$ 0.03$
Nonresidential - per 1,000 Sq. Ft.
Commercial 95$ 0.13 12$ -$ 12$ 0.01$
Office 95 0.13 12 - 12 0.01
1 Fee per dwelling unit or per 1,000 square feet of nonresidential building space.
Sources: Tables 9.1 and 9.4.
2 Administrative charge of 2.0 percent for (1) legal, accounting, and other administrative support and (2) impact
fee program administrative costs including revenue collection, revenue and cost accounting, mandated public
reporting, and fee justification analyses.
3 Assumes an average of 2,974 square feet per dwelling unit in Arroyo Grande, based on an analysis of recent
building permits.
4 Average EDU factor per residential dwelling unit weighted by projected single family and multifamily
development.
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10. Wastewater Facilities
This chapter details an analysis of the need for wastewater facilities to accommodate growth
within the City of Arroyo Grande. This projects and associated costs in this chapter were
identified it the City’s Wastewater System Master Plan, 2012. It documents a reasonable
relationship between new development and an impact fee to fund wastewater facilities that serve
new development.
Wastewater Demand
Estimates of new development and its consequent increased wastewater demand provide the
basis for calculating the wastewater facilities fee. The need for wastewater facilities
improvements is based on the wastewater demand placed on the system by development. A
typical measure of demand is a flow generation rate, expressed as the number of gallons per day
generated by a specific type of land use. Flow generation rates are a reasonable measure of
demand on the City’s system of wastewater improvements because they represent the average
rate of demand that will be placed on the system per land use designation.
Table 10.1 shows the calculation of equivalent dwelling unit (EDU) demand factors based on flow
generation by land use category. The water flow generation estimates used in Chapter 7 are
multiplied by a return flow rate of 51% based on City data to estimate the amount of wastewater
flow, by land use. EDU factors express water flow from each land use in terms of the flow
generated by a single family dwelling unit.
Table 10.1: Wastewater Demand by Land Use
Land Use Type
Average Water
Flow Generation
per DU or
1,000 Sq. Ft.1
Return Flow
Rate 2
Average Sewer
Flow
Generation per
DU or
1,000 Sq. Ft.3
Equivalent
Dwelling Unit
(EDU)
Residential Dwelling Unit
Single Family 178.00 51%90.78 1.00
Multifamily 148.00 51%75.48 0.83
Nonresidential - per 1,000 Sq. Ft.
Commercial 25.30 51%12.90 0.14
Office 28.54 51%14.56 0.16
Sources: City of Arroyo Grande; Table 7.1, Willdan Financial Services.
1 See Table 7.1.
2 Share of water flow generated that is returned in sewer.
3 Sewer flow generation is equal to water flow generation multiplied by return flow rate.
EDU Generation by New Development
Table 10.2 shows the estimated EDU generation from new development through 2050. The EDU
factors from Table 10.1 are multiplied by the land use assumptions from Table 2.1 to estimate
total EDUs in the base year, at the planning horizon and for new development. New development
will generate 1,132 new EDUs through 2050, comprising 12.3% of wastewater demand in the City
at that time.
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Table 10.2: Wastewater Facilities Equivalent Dwelling Units
Land Use
EDU
Factor
Units /
1,000 SF EDUs
Units /
1,000 SF EDUs
Units /
1,000 SF EDUs
Residential - per Dwelling Unit
Single Family 1.00 6,233 6,233 783 783 7,016 7,016
Multifamily 0.83 1,853 1,538 233 193 2,086 1,731
Subtotal 8,086 7,771 1,016 976 9,102 8,747
Nonresidential - per 1,000 Sq. Ft.
Commercial 0.14 1,743 244 841 118 2,584 362
Office 0.16 504 81 243 38 747 119
Subtotal 2,247 325 1,084 156 3,331 481
Total 8,096 1,132 9,228
87.7%12.3%100%
Sources: Tables 2.1 and 10.1.
2023 Growth 2023 to 2050 Total - 2050
Facility Needs and Costs
Table 10.3 identifies the planned water facilities to be funded by the fee. Project costs from the
2012 Wastewater System Master Plan have been adjusted for inflation into 2023 dollars, using
the Engineering News Record’s Construction Cost Index (CCI). Those projects that have already
been completed, or that do not benefit new development have been excluded from the table.
Projects that are needed to serve both existing and new development are allocated to the impact
fee based on the increase in capacity associated with each improvement. Projects that are
needed solely to serve new development are allocated 100% to new development through this
impact fee.
Table 10.3: Wastewater Facilities Allocation to New Development
No.Description Size
Total Cost
(2012)
Total Cost
(2023)
Allocation to
New
Development
Cost Allocated
to New
Development
A‐2 Trenchless Sewer Rehabilitation1 N/A 719,900$ 1,044,935$ 49.2%514,108$
B‐2 Huasna Road Sewer Upgrade N/A 585,000 849,128 100.0%849,128
B‐3 Backyard Sewer Replacement 1 650‐LF 945,500 1,372,394 49.2%675,218
Total 2,250,400$ 3,266,458$ 2,038,454$
1 Upgrading clay sewers to smooth wall pipe will increase capacity by 197% at a 1% slope.
Sources: City of Arroyo Grande Wastewater System Master Plan, 2013; Engineering News Record's Construction Cost Index (CCI); Table 10.2,
Willdan Financial Services.
Cost per EDU
The cost of planned facilities allocated to new development in Table 10.3 is divided by the total
growth in EDUs to determine a cost per EDU. Table 10.4 displays this calculation.
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Table 10.4: Cost per EDU
Cost Allocated to New Development 2,038,454$
Growth in EDUs (2023 to 2050)1,132
Cost per EDU 1,801$
Sources: Tables 10.2 and 10.3.
Fee Schedule
The maximum justified fee for wastewater facilities is shown in Table 10.5. The cost per EDU is
converted to a fee per unit of new development based on the EDU facto rs shown in Table 10.1.
The fee per dwelling unit is converted into a fee per square foot by dividing the fee per dwelling
unit by the assumed average square footage of a dwelling unit.
The total fee includes a two percent (2.0%) administrative charge to fund costs that include: a
standard overhead charge applied to City programs for legal, accounting, and other departmental
and administrative support, and fee program administrative costs including revenue collection,
revenue and cost accounting and mandated public reporting.
In Willdan’s experience with impact fee programs, two percent of the base fee adequately covers
the cost of fee program administration. The administrative charge should be reviewed and
adjusted during comprehensive impact fee updates to ensure that revenue generated from the
charge sufficiently covers, but does not exceed, the administrative costs associated with the fee
program.
Table 10.5: Maximum Justified Wastewater Facilities Fee Schedule
A B C = A x B D = C x 0.02 E = C + D E / Average
Cost Per
EDU
EDU
Factor
Base
Fee 1
Admin
Charge 1, 2 Total Fee 1
Fee per
Sq. Ft.3
Residential Dwelling Unit 4 1,801$ 0.96 1,729$ 35$ 1,764$ 0.59$
Nonresidential - per 1,000 Sq. Ft.
Commercial 1,801$ 0.14 252$ 5$ 257$ 0.26$
Office 1,801 0.16 288 6 294 0.29
1 Fee per dwelling unit or per 1,000 square feet of nonresidential building space.
Sources: Tables 10.1 and 10.4.
2 Administrative charge of 2.0 percent for (1) legal, accounting, and other administrative support and (2) impact
fee program administrative costs including revenue collection, revenue and cost accounting, mandated public
reporting, and fee justification analyses.
3 Assumes an average of 2,974 square feet per dwelling unit in Arroyo Grande, based on an analysis of recent
building permits.
4 Average EDU factor per residential dwelling unit weighted by projected single family and multifamily
development.
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11. AB 602 Requirements
On January 1, 2022, new requirements went into effect for California jurisdictions implementing
impact fees. Among other changes, AB 602 added Section 66016.5 to, the Government Code,
which set guidelines for impact fee nexus studies. Four key requirements from that section which
concern the nexus study are reproduced here:
66016.5. (a) (2) When applicable, the nexus study shall identify the existing level of service for
each public facility, identify the proposed new level of service, and include an explanation of why
the new level of service is appropriate.
66016.5. (a) (4) If a nexus study supports the increase of an existing fee, the local agency shall
review the assumptions of the nexus study supporting the original fee and evaluate the amount of
fees collected under the original fee.
66016.5. (a) (5) A nexus study adopted after July 1, 2022, shall calculate a fee imposed on a
housing development project proportionately to the square footage of proposed units of the
development. A local agency that imposes a fee proportionately to the square footage of the
proposed units of the development shall be deemed to have used a valid method to establish a
reasonable relationship between the fee charged and the burden posed by the development.
66016.5. (a) (6) Large jurisdictions shall adopt a capital improvement plan as a part of the nexus
study.
Compliance with AB 602
The following sections describe this study’s compliance with the new requirements of AB 602.
66016.5. (a) (2) - Level of Service
1. For fees calculated under the existing standard methodology, the fees are calculated such that
new development funds facilities at the existing level of service. These fee categories are: fire
protection, police, parks and recreation. The existing level service in terms of the existing facility
cost per capita is shown in each corresponding chapter.
2. For fees calculated under the planned facilities methodology, the fees are calculated to ensur e
that the level of service does not fall to unacceptable levels and are based on Citywide facility
master planning documents. The fees calculated under this approach are the water,
transportation, storm drain and wastewater facilities impact fees.
66016.5. (a) (4) – Review of Original Fee Assumptions
The original fee schedules and corresponding revenue generated were reviewed by the City and
Willdan prior to conducting the nexus study analysis. The planning and cost assumptions from the
City’s prior Impact Fee Study (2000), were out of date and in need of update. Table 11.1
summarizes the review of the prior impact fee study’s assumptions. Table 11.2 displays annual
fee revenue collected, by impact fee fund.
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Table 11.1: Review of Prior Fee Study Assumptions
2000 Study 2024 Study
Planning Horizon Buildout 2050
Population at Planning Horizon 18,231 20,449
Projected Fee Revenue
Traffic Signals and Street Improvements 7,431,919$ 15,359,440$
Fire Protection 494,699 1,231,623
Parks 888,014 8,837,000
Community/Recreation Centers 51,142 574,308
Police Facilities 351,863 764,526
Sources: City of Arroyo Grande, Impact Fee Study, 2000; Willdan Financial Services.
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Table 11.2: Annual Collected Impact Fee Revenue
FY 13-14 FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 Annual
Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Average
Traffic Signal Assessments 26,976$ 23,338$ 117,309$ 130,872$ 47,232$ 28,799$ 90,770$ 57,348$ 7,888$ 26,396$ 55,693$
Transportation Impact Fees 76,857 74,358 188,488 366,924 133,226 72,178 248,720 151,834 23,657 70,925 140,717
Drainage Fees - - - - - - - - - - -
Water Neutralization Fee 37,207 85,497 17,777 185,779 84,671 91,014 58,019 21,214 17,964 43,783 64,292
Fire Protection Facilities 28,404 31,542 14,298 121,797 27,801 50,550 99,473 21,430 17,767 24,340 43,740
Police Facilities 3,900 7,448 8,927 10,280 7,170 4,729 12,275 7,249 1,616 3,731 6,732
Community Center 2,036 4,858 859 8,686 1,859 4,488 7,188 1,364 1,601 1,741 3,468
Park Improvement 34,936 83,790 14,693 148,754 31,837 77,076 124,003 23,557 27,723 30,294 59,666
Source: City of Arroyo Grande.
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66016.5. (a) (5) – Residential Fees per Square Foot
Impact fees for residential land uses are calculated per square foot for all fee categories except
for water facilities and comply with AB 602. Water facilities fees are calculated based on the
water meter size, which scales based on the capacity accommodated by different sized meters.
Thus the water facilities fees are proportionate to the burden placed on the water system by new
development.
66016.5. (a) (6) – Capital Improvement Plan
A description of the planned facilities that the City expects to fund with impact fee revenue is
included in each chapter in this report. Adoption of this nexus study would approve the planned
facilities identified herein as the Capital Improvement Plan for this nexus study.
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12. Implementation
Impact Fee Program Adoption Process
Impact fee program adoption procedures are found in the California Government Code section
66016. Adoption of an impact fee program requires the City Council to follow certain procedures
including holding a public hearing. Data, such as an impact fee report, must be made available at
least 10 days prior to the public hearing. The City’s legal counsel should be consulted for any
other procedural requirements as well as advice regarding adoption of an enabling ordinance
and/or a resolution. After adoption there is a mandatory 60-day waiting period before the fees go
into effect.
Inflation Adjustment
The City can keep its impact fee program up to date by periodically adjusting the fees for inflat ion.
Such adjustments should be completed regularly to ensure that new development will fully fund
its share of needed facilities. We recommend that the California Construction Cost Index
(https://www.dgs.ca.gov/RESD/Resources/Page-Content/Real-Estate-Services-Division-
Resources-List-Folder/DGS-California-Construction-Cost-Index-CCCI) be used for adjusting fees
for inflation. The California Construction Cost Index is based on data from the Engineering News
Record and is aggregated and made available for free by the State of California.
The fee amounts can be adjusted based on the change in the index compared to the index in the
base year of this study (2023).
While fee updates using inflation indices are appropriate for periodic updates to ensure that fe e
revenues keep up with increases in the costs of public facilities, the City will also need to conduct
more extensive updates of the fee documentation and calculation (such as this study) when
significant new data on growth forecasts and/or facility plans become available. Note that
decreases in index value will result in decreases to fee amounts.
Reporting Requirements
The City will comply with the annual and five-year reporting requirements of the Mitigation Fee
Act. For facilities to be funded by a combination of public fees and other revenues, identification
of the source and amount of these non-fee revenues is essential. Identification of the timing of
receipt of other revenues to fund the facilities is also important.
There is no time limit by which impact fee revenue must be spent. However, if the City is accruing
impact fee revenue to fund new development’s share of a project, then it must make certain
findings with respect to unexpended impact fee fund balances after five years. Among other
requirements, the five-year report requires the City to “Identify all sources and amounts of funding
anticipated to complete financing in incomplete improvements,” and to “Designate the
approximate dates on which supplemental funding is expected to be deposited into the
appropriate account or fund.”2
On October 13, 2023 AB 516 was signed into law by the Governor of California, and will go into
effect on January 1, 2024. This the bill requires local agencies to:
2 California Government Code § 66001(d).
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• Include information on projects noted in prior reports and whether construction began on
the approximate date noted in the previous report.
• Explain the reason for any delay in the start of the project and provide a new approximate
date construction will begin.
• Identify the number of people or entities that receive refunds of Mitigation Fee Act fees.
The bill also requires local agencies to inform people paying mitigation fees that they:
• Can request an audit to determine if the fees charged by a local agency are more than
the amount of money needed to cover the cost of the public improvements.
• Can receive information by mail about when the local agency will meet to review its
annual Mitigation Fee Act report.
• Can access and review mitigation fee information on the local agency’s website, and how
to do so.
Table 12.1 summarizes the annual and five-year reporting requirements identified in the
Mitigation Fee Act.
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Table 12.1: Annual and Five-Year Reporting Requirements
CA Gov't Code
Section Timing Reporting Requirements1
Recommended
Fee Adjustment
66001.(d)
The fifth fiscal year following the
first deposit into the account or
fund, and every five years
thereafter
(A) Identify the purpose to which the fee is to be put. (B)
Demonstrate a reasonable relationship between the fee and thepurpose for
which it is charged.
(C) Identify all sources and amounts of funding anticipated tocomplete
financing in incomplete improvements.
(D) Designate the approximate dates on which supplemental funding is
expected to be deposited into the appropriate account or fund.
Comprehensive
Update
66006. (b) Within 180 days after the last
day of each fiscal year
(A) A brief description of the type of fee in the account or fund.
(B) The amount of the fee.
(C) The beginning and ending balance of the account or fund.
(D) The amount of the fees collected and the interest earned.
(E) An identification of each public improvement on which fees were expended
including share funded by fees.
(F) (i) An identification of an approximate date by which the construction of
the public improvement will commence if the local agency determines
that sufficient funds have been collected to complete financing on an
incomplete public improvement and the public improvement remains
incomplete.
(ii) An identification of each public improvement identified in a previous report
pursuant to clause (i) and whether construction began on the approximate
date noted in the previous report.
(iii) For a project identified pursuant to clause (ii) for which construction did
not commence by the approximate date provided in the previous report, the
reason for the delay and a revised approximate date that the local agency will
commence construction.
(G) A description of any potential interfund transfers.
(H) The amount of refunds made (if any).
Inflationary
Adjustment
1 Edited for brevity. Refer to the government code for full description.
Sources: California Government Code §66001 and §66006.
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Programming Revenues and Projects with the CIP
The City maintains a Capital Improvement Program (CIP) to plan for future infrastructure needs.
The CIP identifies costs and phasing for specific capital projects. The use of the CIP in this
manner documents a reasonable relationship betwee n new development and the use of those
revenues.
The City may decide to alter the scope of the planned projects or to substitute new projects if
those new projects continue to represent an expansion of the City’s facilities and provide benefit
to new development. If the total cost of facilities varies from the total cost used as a basis for the
fees, the City should consider revising the fees accordingly.
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13. Mitigation Fee Act Findings
Public facilities fees are one-time fees typically paid when a building permit is issued and
imposed on development projects by local agencies responsible for regulating land use (cities
and counties). To guide the widespread imposition of public facilities fees the State Legislature
adopted the Mitigation Fee Act (the Act) with Assembly Bill 1600 in 1987 and subsequent
amendments. The Act, contained in California Government Code Sections 66000 through 66025,
establishes requirements on local agencies for the imposition and administration of fee programs.
The Act requires local agencies to document five findings when adopting a fee.
The five statutory findings required for adoption of the public facilities fees documented in this
report are presented in this chapter and supported in detail by the preceding chapters. All
statutory references are to the Act.
Purpose of Fee
▪ Identify the purpose of the fee (§66001(a)(1) of the Act).
Development impact fees are designed to ensure that new development will not burden the
existing service population with the cost of facilities required to accommodate growth. The
purpose of the fees documented by this report is to provide a funding source from new
development for capital improvements to serve that development. The fees advance a legitimate
City interest by enabling the City to provide public facilities for new development.
Use of Fee Revenues
▪ Identify the use to which the fees will be put. If the use is financing facilities, the facilities
shall be identified. That identification may, but need not, be made by reference to a
capital improvement plan as specified in §65403 or §66002, may be made in applicable
general or specific plan requirements, or may be made in other public documents that
identify the facilities for which the fees are charged (§66001(a)(2) of the Act).
Fees documented in this report, if enacted by the City, would be used to fund expanded facilities
to serve new development. Facilities funded by these fees are designated to be located within the
City’s sphere of influence. Fees addressed in this report have been identified by the City to be
restricted to funding the following facility categories: fire protection, police, parks, recreation,
water, transportation, storm drain and wastewater facilities.
Benefit Relationship
▪ Determine the reasonable relationship between the fees' use and the type of
development project on which the fees are imposed (§66001(a)(3) of the Act).
The City will restrict fee revenue to the acquisition of land, construction of facilities, infrastructure
and buildings, and purchase of related equipment, furnishings, vehicles, and services used to
serve new development. Facilities funded by the fees are expected to provide a citywide network
of facilities accessible to the additional residents and workers associated with new development.
Under the Act, fees are not intended to fund planned facilities needed to correct existing
deficiencies. Thus, a reasonable relationship can be shown between the use of fee revenue and
the new development residential and non-residential use classifications that will pay the fees.
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Burden Relationship
▪ Determine the reasonable relationship between the need for the public facilities and the
types of development on which the fees are imposed (§66001(a)(4) of the Act).
Facilities need is based on a facility standard that represents the demand generated by new
development for those facilities. For each facility category, demand is measured by a single
facility standard that can be applied across land use types to ensure a reasonable relationship to
the type of development. For some facility categories service population standards are calculated
based upon the number of residents associated with residential development and the number of
workers associated with non-residential development. To calculate a single, per capita standard,
one worker is weighted differently than one resident based on an analysis of the relative use
demand between residential and non-residential development.
The standards used to identify growth needs are also used to determine if planned facilities will
partially serve the existing service population by correcting existing deficiencies. This approach
ensures that new development will only be responsible for its fair share of planned facilities, and
that the fees will not unfairly burden new development with the cost of facilities associated with
serving the existing service population.
Chapter 2, Growth Forecasts provides a description of how service population and growth
forecasts are calculated. Facility standards are described in the Facility Standard sections of each
facility category chapter.
Proportionality
▪ Determine how there is a r easonable relationship between the fees amount and the cost
of the facilities or portion of the facilities attributable to the development on which the fee
is imposed (§66001(b) of the Act).
The reasonable relationship between each facilities fee for a specific new development project
and the cost of the facilities attributable to that project is based on the estimated new
development growth the project will accommodate. Fees for a specific project are based on the
project’s size. Larger new development projects can result in a higher service population resulting
in higher fee revenue than smaller projects in the same land use classification. Thus, the fees
ensure a reasonable relationship between a specific new development project and the cost of the
facilities attributable to that project.
See Chapter 2, Growth Forecasts, or the Service Population sections in each facility category
chapter for a description of how service populations or other factors are determined for different
types of land uses. See the Fee Schedule section of each facility category chapter for a
presentation of the maximum justified facilities fees.
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Appendix
Appendix Table A.1: Police Vehicle Inventory
Vehicle #Type Year Make Model
Current
Valuation
4602 Police 2017 Ford Explorer Interceptor 40,000$
4604 Private Passenger 2017 Ford Explorer Interceptor 40,000
PD-Trailer 2006 Haulm Carrier 20,000
PD-4621 Motorcycle 2022 BMW RS 29,985
PD-4649 Police 2021 Ford Explorer 37,000
4605 Police 2017 Ford Explorer Interceptor 40,000
4601 Police 2017 Ford Explorer Interceptor 40,000
4603 Police 2017 Ford Explorer Interceptor 40,000
4604 Private Passenger 2013 DODGE CHARGER 26,500
4605 Private Passenger 2013 DODGE CHARGER 26,500
4606 Police 2017 Ford Explorer Interceptor 40,000
4607 Police 2017 Ford Explorer Interceptor 40,000
4608 Police 2017 Ford Explorer Interceptor 40,000
4609 Police 2017 Ford Explorer Interceptor 40,000
4613 Light Truck 2016 DODGE RAM CREW CAB 4X4 23,000
4614 Private Passenger 2016 DODGE CHARGER 29,700
4615 Private Passenger 2016 DODGE CHARGER 29,700
4616 Private Passenger 2016 DODGE CHARGER 29,700
4617 Private Passenger 2016 DODGE CHARGER 29,700
4618 Private Passenger 2016 DODGE CHARGER 29,700
4620 Motorcycle 2009 Honda Motorcycle 22,982
4623 Trailer 1988 SPCNS FLAT BED TRAILER 1
4625 Private Passenger 1962 FORD 4 DOOR PD CAR 25,000
4626 Private Passenger 2002 CHEVROLETPICK-UP - CSO 27,000
4630 Trailer 2001 PACAM UTILITY TRAILER (DARE)2,300
4637 Trailer 2015 PJMFG Trailer 15,000
PD-4616 Police 2021 Ford Explorer 37,000
PD-4617 Police 2021 Ford Explorer 37,000
PD-4620 Motorcycle 2022 BMW RS 29,985
PD-4614 Police 2021 Ford Explorer 37,000
PD-4615 Police 2021 Ford Explorer 37,000
PD-4618 Police 2021 Ford Explorer 37,000
4619 Private Passenger 2016 DODGE CHARGER 29,700
4621 Motorcycle 2009 Honda Motorcycle 22,982
4624 Police 1998 TRAILER RADAR TRAILER 16,000
4628 Trailer 1993 LCHIH TRAILER 1
4636 Private Passenger 2006 Chevrolet Impala 8,768
Total 1,056,204$
Source: City of Arroyo Grande.
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Appendix Table A.2: Park Vehicle Inventory
Vehicle #Type Year Make Model
Current
Valuation
P13 Private Passenger 2006 FORD RANGER 17,334$
P-16 Light Truck 1997 FORD RANGER 18,000
PW-61 Light Truck 2003 FORD F-150 XL 25,000
PW–7 Medium Truck 2014 FORD F-550 38,717
P17 Private Passenger 2006 FORD F250 20,575
P-3 Light Truck 2006 FORD F250 20,000
P-26 Light Truck 1989 DAIHATSUHIGH JET 9,540
P-57 Light Truck 2001 FORD F-150 TRUCK 30,000
PW–14 Light Truck 2013 FORD F-150 18,566
Total 197,732$
Developed Park Acres 52.77
Vehicle Cost per Acre 3,747$
Sources: City of Arroyo Grade; Table 5.2, Willdan Financial Services.
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65501.00008\41993949.1
ATTACHMENT 2
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
ARROYO GRANDE AMENDING SECTION 3.36.030 OF THE
ARROYO GRANDE MUNICIPAL CODE REGARDING
DEVELOPMENT IMPACT FEES AND FINDING THE
ORDINANCE EXEMPT FROM THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT
WHEREAS, the City of Arroyo Grande (the “City”) has conducted an updated nexus fee
study (the “Nexus Study”) for its development impact fees (“DIF”) in connection with the
approval of development projects for the purpose of defraying all or part of the costs of
providing public facilities related to said development projects in compliance with the
Mitigation Fee Act, commencing with California Government Code section 66000; and
WHEREAS, the City Council has adopted the Nexus Study and the 2024 DIF schedule
related to the Nexus Study by resolution; and
WHEREAS, the Nexus Study has created different and/or additional categories of DIF
than is currently provided for in the Arroyo Grande, California Municipal Code (“AGMC”);
and
WHEREAS, on February 13, 2024, the City Council conducted noticed public hearings
to receive input on the Nexus Study and the adoption of the 2024 DIF schedule and
adopted a Resolution approving the 2024 DIF schedule; and
WHEREAS, without a change to the AGMC, City regulations are inconsistent with the DIF
categories included in the newly adopted 2024 DIF schedule; and
WHEREAS, the City Council now desires to amend the AGMC section 3.36.030 to reflect
the newly adopted 2024 DIF categories.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE DOES
ORDAIN AS FOLLOWS:
SECTION 1. Incorporation. The above recitals are true and correct and are
incorporated herein by this reference.
SECTION 2. Environmental. The City Council finds that this Ordinance is exempt
from the California Environmental Quality Act ("CEQA") because the Ordinance does not
qualify as a “project” under CEQA and because the Ordinance will not result in a direct or
reasonably foreseeable indirect physical change in the environment. (State CEQA
Guidelines section 15060, subd. (c)(2), (3).) Section 15378 of the State CEQA Guidelines
defines a project as the whole of an action, which could potentially result in either a direct
physical change, or reasonably foreseeable indirect physical change, in the environment.
Here, the Ordinance will not result in any construction or development, and it will not have
any other effect that would physically change the environment. The Ordinance therefore
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ORDINANCE NO.
PAGE 2
-2- 65501.00008\41993949.1
does not qualify as a project subject to CEQA.
SECTION 3. Code Amendment. Section 3.36.030 of the AGMC is hereby
amended to read as follows (additions shown in underline and deletions shown in
strikethrough), all other provisions of Chapter 3.36 of the AGMC remain in effect:
“This chapter establishes development impact fees which are imposed as a condition of
approval upon all development projects for which a building permit is issued on or after
the effective date of the ordinance codified in this chapter. Those impact fees are
established for the following public facilities:
A.Fire Protection feesFacilities;
B.Police Facilities fees;
C.Community center feesPark Facilities;
D.Park improvement feesRecreation Facilities;
E.Water Facilities fees;
F.Traffic signalization feesTransportation Facilities;
G.TransportationStorm Drain Facilities fees.;
H. Wastewater Facilities.
These impact fees are established in order to pay for the capital costs of public facilities
reasonably related to the needs of new development in the city. At least once every five
years, the council shall review the basis for the impact fees to determine whether the
fees are still reasonably related to the needs of new development. In establishing these
fees, the council has considered the effect of the fees with respect to the city's housing
needs as established in the housing element of the general plan.”
SECTION 4. Publication. A summary of this Ordinance shall be published in a
newspaper published and circulated in the City of Arroyo Grande at least ten days prior
to the City Council meeting at which the proposed ordinance is to be adopted. A certified
copy of the full text of the proposed ordinance shall be posted in the office of the City
Clerk. W ithin 15 days after adoption of the Ordinance, the summary with the names of
those City Council members voting for and against the Ordinance shall be published
again, and the City Clerk shall post a certified copy of the full text of such adopted
Ordinance.
SECTION 5. Effective Date. This Ordinance shall become effective 30 days after
adoption.
SECTION 6. Severability. Should any provision of this Ordinance, or its
application to any person or circumstance, be determined by a court of competent
jurisdiction to be unlawful, unenforceable or otherwise void, that determination shall have
no effect on any other provision of this Ordinance or the application of this Ordinance to
any other person or circumstance, and, to that end, the provisions hereof are severable.
The City Council declares that it would have adopted all the provisions of this Ordinance
that remain valid if any provisions of this Ordinance are declared invalid.
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ORDINANCE NO.
PAGE 3
-3- 65501.00008\41993949.1
SECTION 7. Records. The documents and materials associated with this
Ordinance that constitute the record of proceedings on which the City Council’s findings
and determinations are based are located at 300 E. Branch Street, Arroyo Grande, CA
93420. The City Clerk is the custodian of the record of proceedings.
On motion by Council Member , seconded by Council Member , and by
the following roll call vote to wit:
AYES:
NOES:
ABSENT:
This Ordinance was adopted at its second reading on the ____ day of ____________, 2024.
Page 195 of 442
ORDINANCE NO.
PAGE 4
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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
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