BACKGROUND:
Following the passage of Proposition 13 in 1978, many cities began charging fees on new development to fund public improvements and services. These fees are commonly known as development impact fees. In order to ensure these fees are spent in a timely manner and on projects for which they were being collected, the State Legislature passed a bill known as AB 1600, the Mitigation Fee Act. This bill applies to developer fees imposed or increased on or after January 1, 1989.
DISCUSSION:
State law, Government Codes 66000 through 66006, requires agencies to annually review the status of development impact fees they collect and file in the AB 1600, Development Impact Fee Report. Development fees are defined by the State as a “monetary exaction, other than a tax or special assessment, charged by a local agency to the applicant in connection with the approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project, but does not include fees” such as application fees, building permit fees, etc. The AB 1600 report must include the beginning and ending balances, fees collected, interest earned, other income (if any) and expenditures made for each established fee. The report also identifies the capital projects to be funded by the respective development fees.
The City currently collects fourteen (14) such fees subject to review under State law.
The fees are collected as follows:
Project Area Fee Title / Purpose Fee
Citywide Master Underground Plan
(MUP)
$0.15 per sq. ft. of Building Area
Citywide Fire and Police Facilities Fund 66.67% of $150 to $450 per 1,000 sq. ft. of Building Area
Citywide Traffic Signalization 33.33% of $150 to $450 per 1,000 sq. ft. of Building Area
Citywide City Yard Vehicle Storage Res. $95/unit
Retail Comm. $587/acre
Non-Retail Comm./Ind. $454/acre
Citywide Police Community Center Res. $21/unit
Retail Comm. $132/acre
Non-Retail Comm./Ind. $102/acre
Citywide Public Safety Training Site Res. $18/unit
Retail Comm. $110/acre
Non-Retail Comm./Ind. $85/acre
Citywide Public Safety Facilities Res. $570/unit
Retail Comm. $3,513 per acre
Non-Retail Comm./Ind. $2,714/acre
Citywide Road and Traffic Facilities Res. $987/unit
Retail Comm. $30,066/acre
Non-Retail Comm./Ind. $10,165/acre
Citywide Interchange and Bridges Res. $86/unit
Retail Comm. $4,145/acre
Non-Retail Comm./Ind. $1,500/acre
Citywide Bikeways Facilities Res. $51/unit
Retail Comm. $167/acre
Non-Retail Comm./Ind. $129/acre
Citywide Trail Facilities Res. $53/unit
Retail Comm. $173/acre
Non-Retail Comm./Ind. $134/acre
Citywide Park and Recreation Facilities Res. $1,577/unit Retail Comm. $5,141/acre
Non-Retail Comm./Ind. $3,973/acre
Citywide Transit Development Fee $5.00/lineal foot for arterial streets Citywide Art in Public Places In-lieu Fee is 1% of 90% of Project Valuation
The draft AB 1600 report was provided to the Executive Director of the Desert Valley Builders Association (DVBA) for review and comment. DVBA provided feedback and City staff has responded accordingly.
The law requires the City provide a public notice no less than 15 days prior to holding a public meeting to review the accounts. The public notice was published on November 10, 2022. The attached report provides the details of the AB 1600 report.
FISCAL IMPACT:
Development Impact Fees totaling $ 204,342 were collected during FY 2021/2022.
In publishing the City’s annual financial report, the Government Auditing Standards Board (GASB) Statement No. 31 requires a snapshot at the end of the fiscal year (a June 30th temporary journal entry with a reversing journal entry on July 1st to capture the status of the City’s investments held at that specific moment in time. If the City was in a position where we had to cash in all our investments at that specific moment, this adjustment reflects either an increase or decrease based on the current fair market value (FMV) of the investments. With the general conditions of the investment market positions on 6/30/2022, it turns out this fiscal year the City had to record negative interest; whereas, in the previous fiscal years we have been recording an increase in interest.
It is important to note, the City holds investments until maturity. In doing so, the value of each investment is the (secure) value published in the quarterly report our City Treasurer provides to our City Council. As a result, the City will not be in a position of recording a loss as each investment reaches its maturity date.