Joint Special Council/BFPD
03/3/26 06:00 PM
City Manager Department
Matthew Summers
Other
Doc ID: 6320
COUNCIL RESOLUTION
AGENDA MATTER:
REVIEW AND DISCUSS 1. PROPOSED RESOLUTION APPROVING BOTH A DEVELOPMENT IMPACT FEE NEXUS STUDY AND THE FEES RECOMMENDED IN THAT STUDY, 2. PROPOSED
RESOLUTION APPROVING DISCOUNTED RATES FOR ELIGIBLE RESIDENTIAL DEVELOPMENT PROJECTS, AND 3. FIRST READING OF ORDINANCE AMENDING CHAPTER 12.40 OF THE
BARSTOW MUNICIPAL CODE, CONCERNING DEVELOPMENT IMPACT FEES EXECUTIVE SUMMARY:
The proposed development impact fees will help the City fund new facilities and infrastructure to absorb the impacts of new development. Along with the new rates, staff propose a discount on development impact fees that apply to residential developments that include at least five dwelling units. Finally, the proposed amendments to Chapter 12.40 of the Barstow Municipal Code update its language to permit the Council to adopt new development impact fees via resolution without causing potential conflicts or confusion. These items are offered for discussion ahead of the hearing to potentially adopt them on March 17, 2026.
DISCUSSION:
The City has authority to impose development impact fees (“DIFs”) to help it absorb the impacts of new development. DIFs may not reimburse the City for all such impacts (e.g., environmental mitigation), but they may cover costs to construct new or expanded physical facilities and infrastructure. For example, a new housing or commercial development requires the City to expand its public safety departments, its capacity to process wastewater, etc., so the City may raise revenue from DIFs to fund those expansions.
Under the Mitigation Fee Act (Gov. Code, § 66000 et seq.), DIFs must be supported by a nexus study that shows how these fees are connected to new development both qualitatively and quantitatively - how new development creates the need for certain additional public infrastructure, and to what extent.
This item is to review and discuss three proposals for the City’s DIFs:
An increase in DIF rates, supported by the required nexus study. A discount on DIF rates for residential developments that involve at least five dwelling units. An amendment to Chapter 12.40 of the Barstow Municipal Code, which covers DIFs.
After the discussion, staff will take the Council’s feedback and incorporate it into a proposal to present at a hearing on March 17, 2026. A separate staff report in the agenda discusses how that hearing has been continued from its original date in February 2026.
New Rates
The City retained the consultant Revenue & Cost Specialists to prepare such a nexus study, with a focus on impacts stemming from the Barstow International Gateway project. The result, after months of work, is the report dated February 9, 2026, attached to the proposed resolution below (the “Nexus Study”). As detailed in that study, the DIFs it proposes meet all of the requirements of the Mitigation Fee Act:
Joint Special Council/BFPD
03/3/26 06:00 PM
City Manager Department
Matthew Summers
Other
Doc ID: 6320
COUNCIL RESOLUTION
They serve the valid purpose of expanding the City’s facilities and infrastructure, so it can maintain the same levels of service as new development imposes additional demands on that service.
They will only be used to fund those expanded facilities and infrastructure. There is a reasonable relationship between expanding the City’s facilities and infrastructure and the types of development projects that will be subject to these DIFs. There is a reasonable relationship between the need for the amount of expanded City facilities and infrastructure and the types of development projects that will be subject to these DIFs.
Once the Council approves the proposed Nexus Study and DIFs, the latter will go into effect 60 days thereafter.
Proposed Discount on Eligible Residential Projects
As a companion to the DIF rate adjustment discussed above, staff have also prepared a draft resolution providing a discount on the default DIF rate for eligible residential development projects, defined as projects with at least five dwelling units. Under the Mitigation Fee Act (Gov. Code, § 66000 et seq.) and other applicable law, the City may impose any DIF rate up to the amounts it approved in the noticed public hearing. To avoid “rate shock” that might hinder the construction of needed housing, however, this alternative phases in the increases to residential DIFs based on the level of new development that occurs over the coming years.
Specifically, the proposed resolution takes the new DIF rates, subtracts the current DIF rates in the City’s master fee schedule, and applies a percent to the difference on the following schedule:
Until the City approves projections providing 1,000 new dwelling units, eligible projects will pay 0% of the proposed increase - effectively, the City’s current DIF rate will apply. When the City has approved between 1,001 and 2,000 new dwelling units, eligible projects will pay 25% of the proposed increase.
When the City has approved between 2,001 and 3,000 new dwelling units, eligible projects with pay 50% of the proposed increase.
When the City has approved between 3,001 and 4,000 new dwelling units, eligible projects with pay 75% of the proposed increase.
Once the City has approved more than 4,000 new dwelling units, the full proposed increase will apply.
Because there is no guarantee that new housing development will occur on any particular schedule, the proposed resolution also includes a sunset date of December 31, 2033, after which the full increased rate for eligible projects will go into effect regardless of how many new dwelling units have been approved between now and then. The resolution directs the Council to review these discounts at least annually to Joint Special Council/BFPD
03/3/26 06:00 PM
City Manager Department
Matthew Summers
Other
Doc ID: 6320
COUNCIL RESOLUTION
determine whether it should extend that sunset or otherwise adjust the discounts at issue based on market activity or other relevant metrics that show such an adjustment is in the City’s interest.
Amendment to Barstow Municipal Code, Ch. 12.40
DIFs are governed at the state level by the Mitigation Fee Act (Gov. Code, § 66000 et seq.), and at the local level by Chapter 12.40 of the Barstow Municipal Code. Both state law and the City’s code permit the Council to set DIF rates by resolution. (Gov. Code, §§ 66004, 66018; Barstow Muni. Code, §
12.40.040(d).)
However, Chapter 12.40 also includes language specific to the City’s current schedule of DIF rates - it is not limited to generally governing the City’s DIF program. For example, it requires rates to adjust annually according to a particular formula in place since 2008. (Barstow Muni. Code, § 12.40.040(f).) And it restricts the kinds of projects the City may support with DIF revenues by limiting the special funds in which that revenue may be held. (Id., §§ 12.40.050(a), 12.40.110.) As components of the City’s Code, these provisions can only be amended by ordinance - not by resolution.
The result is a potential for confusion or even conflict if the Council adopts new DIF rates via resolution, but it does not simultaneously amend Chapter 12.40 via ordinance to edit or eliminate language designed to apply to previous rates. The two most straightforward solutions to this issue are:
Ensure the Council only adjusts DIF rates via an ordinance that also amends Chapter 12.40 as needed, or
Amend Chapter 12.40 to remove language that is specific to any particular rate schedule.
On balance, staff recommends the second option because it eliminates the need to revisit the Code itself each time the Council adjusts DIF rates, and because both the Mitigation Fee Act and an amended Chapter 12.40 provide sufficient guidance and boundaries for those adjustments.
The proposed ordinance attached to this report therefore amends Chapter 12.40 to remove provisions more helpfully included in the rate resolution, such as the kinds of DIFs to impose (e.g., police, fire, circulation), their rates, and whether / how they should automatically adjust annually. It retains more general provisions that will apply to any rate structure, such as the process to administratively appeal an allegedly invalid DIF.
Attachment 1 - Nexus Study and DIF Resolution
Attachment 2 - Residential Discount Resolution
Attachment 3 - Ordinance Amending Barstow Muni. Code, Ch. 12.40 FISCAL IMPACT:
There is no fiscal impact from this discussion.
RECOMMENDED ACTION:
Review, discuss, and provide direction to staff concerning proposed DIF actions.