EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: December 6, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Patrick Heisinger, Interim City Manager
BY: Tomohito Oku, Finance Director
Bo-Kyoung Kim, Financial Services Manager
SUBJECT: Annual Development Impact Fee Report (AB 1600 Report) Recommendation
Adopt a Resolution accepting the Annual Development Impact Fee Report (AB 1600 Report) for Fiscal Year 2021-22.
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:
Priority No. 2: Enhance Economic Vitality
Priority No. 4: Improve Public Facilities and Infrastructure Priority No. 5: Improve Communication and Enhance Community Engagement Background
State law authorizes the City of East Palo Alto to collect development impact fees from new development. The City administers a limited number of development impact fee programs that fund the capital infrastructure project costs attributable development impacts. These development impact fees are typically paid at the time of building permit issuance.
California Government Code Section 66006(b) (“AB 1600”) defines the specific reporting requirements for local agencies that impose AB 1600 impact fees on new development.
Annually, for each separate fund established for the collection and expenditure of impact fees, the City is required to make certain required information available to the public within 180 days of the end of each fiscal year. The required reporting is commonly referred as the AB 1600 Report. The City’s AB 1600 Report for the fiscal year ended June 30, 2022 (Attachment 2) provides the information required by Section 66006(b). Broadly, this report provides insight into how specific restricted development impact funds are collected and used.
Analysis
Previously, the City primarily collected fees pursuant to redevelopment agency agreements or statutory development agreements or collected certain in-lieu fees considered zoning-related use restrictions; such fees and collections are not subject to AB 1600 reporting requirements.
Since 2014, the City has adopted Affordable Housing Residential fees, Affordable Housing Commercial Linkage fees, Water Capacity fees, and fees related to storm drainage, transportation, parks, and public facilities. It is notable the City imposed a two-year water connection moratorium effectively halting development from July 2016 to August 2018, accounting for the low volume of fees collected and required to be reported in accordance with AB 1600.
The attached AB 1600 Report provides detailed and comprehensive analysis of the status of each of the fees required to be reported during the fiscal year ended June 30, 2022.
It is also noted that AB1600 requires the City to make specified findings in the event any funds are not expended within five years of collection and every five years after that. The City currently does not hold funds required to be reported under AB 1600 that have been collected and unexpended beyond the five-year period; therefore, no such findings are required or reportable in the current period.
The AB 1600 Report also is required to be available to the public a minimum of 15 days prior to Council review and acceptance of the report. The City posted the AB 1600 Report on November 18, 2022 on the City’s website, as required.
Fiscal Impact
There is no fiscal impact from accepting the report.
Public Notice
The public was provided notice of this agenda item by posting the City Council agenda on the City’s official bulletin board outside City Hall and making the agenda and report available at the City’s website and at the San Mateo County Library located at 2415 University Avenue, East Palo Alto.
The AB1600 Report has been available to the public on the City’s website as of November 18, 2022.
Environmental
The action being considered does not constitute a “Project” within the meaning of the California Environmental Quality Act (CEQA), pursuant to CEQA Guideline section 15378 (b)(5), in that it is a government administrative activity that will not result in direct or indirect changes in the environment.
Attachments
A. Resolution FY 2021-22
B. FY2021-22 AB 1600 Report