Staff Report re FY 2023-24 Development Impact Fee Page 1 of 4
STAFF REPORT
TO: Mayor and Members of the City Council
FROM: Nathan Bassett, Administrative Services Director VIA: Dan Barros, City Manager
MEETING DATE: January 14, 2025
SUBJECT: FY 2024-25 Development Impact Fee Report
(AB1600)
RECOMMENDATION
Staff recommends that the City Council make the following motion:
APPROVE AND ACCEPT THE ANNUAL DEVELOPMENT IMPACT FEE REPORT FOR FISCAL YEAR ENDING JUNE 30, 2025, PURSUANT TO THE MITIGATION FEE ACT PURSUANT TO CEQA GUIDELINE 15378
COUNCIL ADOPTED VALUES
By accepting and publishing this report on the Town’s website, the Town is showing its commitment to being transparent and accountable in its use of development impact fees. This is in alignment with the fairness and responsibility attributes of the City Council adopted value-based code of conduct.
BACKGROUND
Development impact fees are charged by local governmental agencies in connection with approved development projects. The purpose of these fees is to defray all or a portion of the cost of public facilities related to the development projects, implementing the projects’ “fair share” of the cost of the capital improvements project consistent with the general plan. The legal requirements for enactment of a development impact fee program are set forth in Government Code Sections 66000-66025 (the “Mitigation Fee Act” or “Act”), the bulk of which was adopted in 1987 as Assembly Bill (AB) 1600.
The Mitigation Fee Act regulates how public agencies collect, maintain and spend impact charges and fees imposed on developers for the purpose of defraying costs of public facilities.
The Act includes requirements for accounting, expending and reporting charges, fees and related interest earnings.
The Town collects the following types of fees in connection with development:
Date of Adoption Ordinance No. Fee authorized
March 14, 2006 641 Park Land Dedication (Park In-Lieu)
September 28, 2016 639 Housing In-Lieu Fee/Housing Impact Fee AGENDA ITEM #6
Staff Report re FY 2023-24 Development Impact Fee Page 2 of 4 The Housing Impact Fee is the only fee that is subject to annual reporting under the Mitigation Fee Act. The Park In-Lieu fee is classified as a "Quimby Act" fee (Government Code §§ 66477) and is expressly excluded from the Mitigation Fee Act per Section 66000(b). The Town’s inclusionary (affordable) housing requirement for for-sale residential development provides developers’ a voluntary option to pay the Housing In-Lieu Fee (CMC Section 5.12.040). As such, the Housing In-Lieu Fee is not an exaction and is not subject to the Mitigation Fee Act. (616 Croft Ave., LLC v. City of West Hollywood, 3 Cal.App.5th 621, 630 (2016); see also Hamilton & High, LLC v. City of Palo Alto (2023) 89 Cal.App.5th 528, 553 [affordable housing requirements, including voluntary election to pay in-lieu fees, do not defray costs of increased demand on public facilities and therefore not subject to Mitigation Fee Act].) The Park In-Lieu Fee and Housing In-Lieu Fee are included in this staff report for informational purposes only and are not subject to annual reporting requirements under the Mitigation Fee Act.
This Annual Report must also be reviewed by the City Council at a regularly scheduled public meeting. In addition, notice of the time and place of the meeting shall be mailed at least 15 days prior to the meeting to any interested party who files a written request with the local agency. The attached annual report consists of Attachment A that presents the revenues, expenditures, and fund balances for the Housing Impact Fee.
ANALYSIS
As required by the Mitigation Fee Act, impact fees must be segregated from the General Fund and accounted for in special revenue funds. Government Code Section 66006 requires that the City make available to the public information regarding development impact fees for each fund within 180 days after the end of each fiscal year:
•A brief description of the fee and the fund into which the fee was deposited; •The amount of the fee;
•The associated fund's beginning and ending balances for the fiscal year; •The total amount of fees collected, and interest earned; •Identification of each public improvement on which impact fees were expended and the amount of expenditure on each improvement, including the total percentage of the cost of the public improvement that was funded with impact fees; •Identification of the approximate date by which construction of a public improvement will commence if the local agency determined that sufficient funds have been collected to complete financing on an incomplete public improvement and the public improvement remains incomplete;
•An identification of each public improvement identified in a previous report and whether construction began on the approximate date noted in the previous report; •For a project identified above for which construction did not commence by the approximate date provided in the previous report, the reason for the delay and a revised approximate date that the local agency will commence construction. •A description of each interfund transfer or loan made from an account or fund; and •The amount of refunds made, including the number of persons or entities identified to receive such funds, and any allocations pursuant to subdivision (f) of Section 66001. (Attachment A)
Staff Report re FY 2023-24 Development Impact Fee Page 3 of 4 Further, Government Code Section 66001(d) also requires that findings describing the continuing need for impact fees be made the fifth fiscal year following the first deposit into the account or fund, and every five years thereafter, specifying the intended use of any unexpended impact fees, regardless of whether the fees are committed or uncommitted. Five Year Findings were provided with the FY24 report in compliance with the Mitigation Fee Act.
In 2024-25, the Town collected $0 of Park In-Lieu Fees, $0 of Housing In-Lieu Fees and $0 of Housing Impact Fees. For reference, below is the fund information for the Park In-Lieu Fee and the Housing In-Lieu Fee. Information regarding the Housing Impact Fee is included in the FY 2024-25 Development Impact Fee Report (Attachment A).
PARK LAND DEDICATION (PARK IN-LIEU)
Balance at 7/1/2024 $ 0
2024-25 Fee Revenues 0
2024-25 Capital Spending/Encumbrance Project Budget
Actual
Spending
None 0
Interfund Transfers 0
Balance at 6/30/2025 $ 0
HOUSING IN-LIEU FEE
Balance at 7/1/20241 $ 217,993
2024-25 Fee Revenues 0
2024-25 Interest Revenue 7,334
2024-25 Spending/Encumbrance Project Budget
Actual
Spending
None 0 0
Interfund Transfers 0
Balance at 6/30/2025 $ 225,327
1 FY24 Ending Fund Balance has been adjusted to reflect a $451 increase in interest income on the Housing In-Lieu Funds in FY23-24, relative to the FY24 Mitigation Fee Report.
Staff Report re FY 2023-24 Development Impact Fee Page 4 of 4
FISCAL IMPACT
This is for reporting purposes and does not have a fiscal impact. However, noncompliance of the Mitigation Fee Act’s five-year reporting may result in refunds of funds.
ENVIRONMENTAL
The City Council’s decision to accept the development impact fee report is exempt from environmental review under the California Environmental Quality Act pursuant to CEQA Guideline 15378 as it is more akin to a report on government activity, which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.
ALTERNATIVES
1.Make alterations to the report for understandability. Please note, the amounts cannot be altered.
2.Direct staff to post the report in additional public locations.
CONCLUSION
Staff recommends the City Council approve and accept the report.
ATTACHMENTS
A.FY 2024-25 Development Impact Fee Report
25977.00100\44463387.1
DEVELOPMENT IMPACT FEE REPORT
FOR FISCAL YEAR ENDED JUNE 30, 2025
FY 2024-25 Development Impact Fee Report Page 1 of 2
December 10, 2025 City Council Meeting
This report provides an overview and summarized information on the Town’s Development Impact Fees for Fiscal Year Ending June 30, 2025.
HOUSING IMPACT FEE
FEE DESCRIPTION: The Housing Impact Fee is required to be paid by a developer of for sale single- family residence, for-rent residential development of five or more units, and for non- residential/commercial development over 5,000 square feet (CMC Sections 5.12.050 and 5.12.060). In accordance with CMC Sections 5.12.010 and 5.12.030, monies deposited in the Housing Fund along with any interest earnings on such monies shall be used solely to increase and improve the supply of housing affordable to households of moderate-, low- and very low-income households in the Town and in northern San Mateo County.
FEE AMOUNT: The impact fees can be found in Subchapter 1.10 of the Colma Administrative Code, Master Fee Schedule, and are listed below for each of the different types of development.
Residential Use Fee per Square Foot of Net
New Floor Area
Single Family Detached Home $10.00
Townhouses, Duplexes and Triplexes $ 15.00
Apartments and Condominiums $ 15.00
Non-Residential Use
(Only applies to developments over 5,000 sf)
Fee per Square Foot of Net
New Floor Area
Hotel $5.00
Retail, Restaurants and Services $5.00
Office, Medical Office and Research and Development Uses $5.00 FUND BALANCE*
Balance at 7/1/20241 $ 69,104
2024-25 Fee Revenues -
2024-25 Interest Revenue 2,325
2024-25 Spending/Encumbrance Project Budget
Actual
Spending
None - -
Interfund Transfers -
Balance at 6/30/2025 $ 71,429
1 FY24 Ending Fund Balance has been adjusted to reflect a $147 increase in interest income on the Housing Impact Funds in FY23-24, relative to the FY24 Mitigation Fee Report.
ATTACHMENT A
25977.00100\44463387.1
FY 2024-25 Development Impact Fee Annual Report (AB 1600) Page 2 of 2 December 10, 2025 City Council Meeting
PUBLIC IMPROVEMENTS:
The fund balance has not been expended on any public improvements during the fiscal year ended June 30, 2025.
APPROXIMATE DATE THE CONSTRUCTION OF THE PUBLIC IMPROVEMENT WILL COMMENCE:
The approximate date by which the construction of the public improvements identified in Colma Municipal Code Section 5.12.030 will commence is unknown at this time as sufficient funds have not been collected to complete financing on the incomplete public improvements. Additionally, no findings are required as detailed in Government Code Section 66006(b)(1)(F) subsection ( ii) and (iii), as no public improvements, nor a date when construction would commence, was identified in the previous report from the prior financial year.
INTERFUND TRANSFERS OR LOANS:
No interfund transfer or loan from the fund has occurred this financial year.
REFUNDS/ALLOCATIONS:
No refunds or allocations have been made this financial year.