Staff Report
City Council
Item No. 4.A
Meeting Date: December 10, 2025
From: Kevin Biersack, Financial Service Director
Title: AB 1600 Annual Report FY 2024/2025
RECOMMENDATION:
Recommend City Council approve a resolution accepting the Annual AB 1600 Development Fee Report for the Fiscal Year (FY) 2024/2025
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. 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.
During FY 2023/2024, the City underwent a Nexus Study to review the AB 1600 fee structure and rates. The rates were effective for the period January 1, 2024 through June 30, 2025.
Under the study, the following structure/funds were established:
Park Facilities,
Transportation,
General Government Facilities,
Fire Facilities, and
Police Facilities.
Separately, there are three existing/remaining impact fees:
Transit Development,
Art in Public Places, and
Master Underground Plan
In total, there are now eight (8) impact fees included subject to review under State law.
DISCUSSION:
State law, Government Codes 66000 through 66006, requires agencies to annually review the status of development impact fees collected and filed 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 law requires the City provide public notice no less than 15 days prior to holding a public meeting to review the accounts. The public notice was published on November 30, 2025, in the local newspaper. The draft AB 1600 report has been provided for review and comment to:
1. Desert Valley Builders Association
2. Riverside County Building Association
3. Agua Caliente Band of Cahuilla Indians
4. Southern California Edison
5. Southern California Gas
The attached report provides the details of the AB 1600 report and the accompanying resolution.
FISCAL IMPACT:
No fiscal impact.
FIVE-YEAR STRATEGIC PLAN:
Goal C: Fiscal Stability and Sustainability
Objective: Cathedral City has economically prospered by facilitating the investment of private dollars in high quality development which benefits the community. We remain financially solvent by instituting prudent fiscal policies and transparent financial practices ATTACHMENTS:
1. AB 1600 Resolution
2. AB 1600 Annual Report