Staff Report
City Council
Item No. 5.C
Meeting Date: December 10, 2025
From: Kevin Biersack, Financial Services Director
Title: AB 1600 Commitments FY 2025/2026
RECOMMENDATION:
Staff recommends reallocating $175,834 of expenditures incurred and $383,442 in encumbered purchase orders to align with SCIP-generated impact fee revenue.
BACKGROUND:
On March 25, 2015, the City of Cathedral City joined the Statewide Community Infrastructure Program (SCIP), administered by the California Statewide Communities Development Authority (the CSCDA). In doing so, City Council approved Resolution 2015-
17. CSCDA is a joint powers authority sponsored by the League of California Cities (the League of Cities) and the California State Association of Counties (CSAC). Membership in CSCDA is open to every California City, County and local agencies. SCIP allows developers to finance impact fees and certain eligible public improvements through tax-exempt bonds for Assessment District (AD) impact fees. This mechanism accelerates the construction of infrastructure while reducing the upfront financial burden on developers.
On February 28, 2024, the City of Cathedral City amended Resolution 2015-17 with an update by approving Resolution 2024-11 to allow not only for AD formation, but also for Community Facilities District (CFD) formation in financing impact fees through taxable and/or tax-exempt bonds.
During FY 2024-2025, two development projects in Cathedral City, Escena 52 and Nirvana Estates, identified their intent to secure SCIP bond financing through CSCDA, Escena 52 has been funded in the SCIP bond issue, 2025A. Nirvana Estates is planned to be funded in the upcoming SCIP bond issue, 2026A.
As part of the City’s SCIP participation, impact fees paid through the program are remitted to the City by the developer when they pull building permits. As an agency makes SCIP qualified expenditures, the agency reports those expenditures to CSCDA on a periodic basis and is then able to reimburse the developer for those eligible impact fees. The reimbursement period is three years from the date of bond financing/permits being pulled.
In addition, there is a lookback period (from two (2) months to 18 months) for each project to identify qualified expenditures. These reimbursements are for our AB 1600 Development Impact Fees, which must be used for new infrastructure projects consistent with the City’s adopted Nexus Fee Program from September 2023 and implemented on January 1, 2024.
CSCDA has calculated future dollars from these two SCIP-participating development projects. In doing so, we have identified the potential for additional AB 1600 funding that can be applied to some of our Capital Improvement Projects. Staff have reviewed the City’s current CIP Plan and identified seven (7) projects currently programmed with other funding sources that are eligible for AB 1600 funding. As a result, those funds will become available and can be reallocated for future needs.
DISCUSSION:
The City currently has several CIP projects funded through various funding sources to include the General Fund, Measure A, Transfer Station, and CIP–other monies. With the availability of new AB 1600 Development Impact Fee revenue from SCIP, staff recommends shifting the funding for these projects to AB 1600 funding, thereby freeing up non-restricted funds for other projects/priorities.
Through the SCIP process, the City will derive up to $2,045,292 in AB 1600 impact fees across multiple fee categories, including park, transportation, general government, fire, and police facilities. The fees are outlined in the table below:
When the SCIP bonds were funded for the Escena 52 development, a “lookback period” of 10/11/2024 – 05/29/2025 was determined for expenses previously incurred to be applied toward the impact fees collected. After accounting for $61,359 in allowable administrative expenses for both Escena 52 and Nirvana Estates and eligible expenses of $175,834 leaves a balance of $1,808,099 available for allocation to current and upcoming CIP projects. The following table illustrates the seven (7) current projects and the remaining encumbered amounts for the proposed reallocation to use impact fee funding:
This reallocation does not change project scope, schedules, or priorities. These projects are currently active and in either the design or construction phase. The funding shift simply aligns project resources with revenue sources.
In addition to the projects recommended for immediate reallocation, the City will continue to have AB 1600 funds available for future use. For example, the Downtown Dog Park and Community center feasibility study are approved for AB 1600 funding and will count towards the SCIP revenue.
Remaining balances will be programmed as eligible projects proceed into the construction phase. Unspent funds may also be allocated to new or emerging projects that address infrastructure needs.
FISCAL IMPACT:
As a result of this reallocation, there is 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.