CC 2024-02-13 Development Impact Fee Nexus Study Update_PPDevelopment Impact Fee Nexus Study Update
Arroyo Grande
February 13, 2024
1
What is a Development Impact Fee?
One-time charge
Imposed at building permit stage
Imposed on all development projects within a defined geographic area
Funds facilities to serve new development
2
Mitigation Fee Act Findings (Govt. Code §66001)
Key findings
Need: Development Need for facilities
Benefit: Development Use of revenue
Rough proportionality: Fee amount development’s share of facility costs
Other findings
Purpose of fee
Use of fee revenue
3
Requires local jurisdictions to make certain information available on website:
Current impact fee schedule
Nexus studies
Annual AB1600 reports
Five-Year AB1600 reports
Changes to impact fee adoption process:
Prior to adoption of development fees, an impact fee nexus study needs to be adopted with 30 days notice
Technical changes:
Residential fees should be charged per square foot, unless findings are supported that justify another metric
Large jurisdictions shall adopt a capital improvement plan as a part of the nexus study
Nexus study should identify level of service
If fees are increasing, review the assumptions of the original nexus study and evaluate the amount of fees collected under the original fee
AB 602
4
Impact Fees – Basic Methodology
5
Impact Fee Categories
Fire Protection
Police
Parks
Recreation
Water
Transportation
Storm Drain
Wastewater
6
Growth Projections
7
Cost Allocation Methods:
WHAT Facilities Serve WHO
PLANNED FACILITIES
Planned Facilities
New Demand
EXISTING INVENTORY
Existing Facilities
Existing Demand
8
Cost Allocation Methodologies
0
10
20
30
40
50
60
70
80
90
100
Facility Demand
Facility Needs
Existing Demand
Future
Demand
Existing Inventory Method
New Facilities
Existing Facilities
Fee $
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
Future
Demand
New Facilities
Demand
Facility Needs
Fee $
Planned Facilities Method
9
9
Fee Program Methodologies
10
10
Projected Impact Fee Revenue
11
Maximum Justified Impact Fee Schedule
12
Policy Options
Implement less than maximum justified fee amounts
Phase in fee increases over time
Exempt or reduce fees for certain land uses
Affordable housing
ADUs
13
Questions
14