STAFF REPORT
Meeting Date:
December 9, 2025
CONSENT
15 SUBJECT: APPROVE RESOLUTION TO RECEIVE AND FILE FISCAL YEAR 2024-25
DEVELOPMENT IMPACT FEE REPORT AND MAKE CERTAIN FINDINGS PURSUANT TO GOVERNMENT CODE SECTION 66000, ET SEQ.
RECOMMENDATION: It is recommended that the City Council:
1. Receive and file the Fiscal Year 2024-25 Annual Development Impact Fee and Sewer Connection Fee Report;
2. Adopt the Resolution titled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH, CALIFORNIA, TO RECEIVE AND FILE THE FISCAL YEAR 2024-25
DEVELOPMENT IMPACT FEE REPORT AND MAKE CERTAIN FINDINGS, AS REQUIRED BY CALIFORNIA GOVERNMENT CODE SECTION 66000 et seq.”
3. Determine that the proposed resolution is not a ”project” under the California Environmental Quality Act pursuant to Section 15378(b)(5).
SUMMARY OF THE MATTER
The Fiscal Year 2024-25 Annual Financial Report of Development Impact Fees (“Fiscal Year 2024-25 Report”) is hereby provided to City Council in Exhibit A to Attachment 1 to this staff report as required by California Government Code Section 66006, which was enacted by Assembly Bill No. 1600 (AB 1600). In addition, the Fiscal Year 2024-25 Report includes information regarding the City’s sewer connection fees that are required to be reported annually in accordance with California Government Code Section 66013.
Staff recommends the City Council approve the Resolution included in Attachment 1 to approve the receipt and filing of the Fiscal Year 2024-25 Report and make certain findings the California Government Code requires the City Council to affirm.
On November 21, 2025, a public notice was published in The Los Angeles Times to notify the public that the Fiscal Year 2024-25 Report was available for public inspection on the City’s website or by contacting the Finance Director. In addition, the City Clerk posted a public notice at City Hall.
DISCUSSION
AB 1600 requires that local agencies annually report certain financial information related to capital improvement projects (streets, transit facilities, parks, sewer, storm drains, etc.) that have been funded by development impact fees. AB 1600 enacted California Government Code Sections 66000-66008 that generally contain four requirements:
1. A local jurisdiction must follow the process set forth in the bill and make certain determinations regarding the purpose and use of each development impact fee and establish a “nexus” or connection between a development project or class of projects and the public improvement being financed with the fee.
APPROVE RESOLUTION TO RECEIVE AND FILE FISCAL YEAR 2024-25 DEVELOPMENT
IMPACT FEE REPORT AND MAKE CERTAIN FINDINGS PURSUANT TO GOVERNMENT CODE SECTION 66000, ET SEQ.
December 9, 2025
2. The fee revenue must be segregated from the General Fund in order to avoid the commingling of public improvement fees and General Fund revenues.
3. If the City has had possession of funds generated by development impact fees for five years or more, and has not spent such funds, or committed such funds to a project, it must make certain findings describing the continuing need to retain those funds. If the local jurisdiction is unable to make the findings required by state law, the City must refund the fees to property owners.
4. An annual report must be made of fees collected, interest earned, projects on which fees were expended, and any transfers or loans from the fee account. The report must be presented to the agency’s governing board within 180 days of the end of the fiscal year.
The Annual Development Impact Fees and Sewer Connection Fees Report presented in Exhibit A summarizes the Fiscal Year 2024-25 fund activity for the following: Library Impact Fees (Fund 110), Parking In-Lieu Certification Fees (Fund 120), Park and Recreation Dedication In-Lieu Fees (Fund 122), Art In-Lieu Fees (Fund 123), Drainage Fees (Fund 124), Housing In-Lieu Fees (Fund 127), and the Sewer Connection Fees (Funds 137/637). The report shows the amount of fees collected during Fiscal Year 2024- 25, interest income, a brief description of the projects funded, the percentage of the projects funded by the development fees, and the beginning and ending balance of the funds. The plan to expend any unexpended funds for the various fees is also outlined in the attached report.” The findings required to be made by AB 1600 with respect to unexpended fees as of June 30, 2025, are set forth below:
1. The purposes for which these fees have been collected are for the projects identified in the Annual Financial Report of Development Impact Fees.
2. There is a reasonable relationship between the fees and the purposes for which they have been collected. The fees are necessary to mitigate the impacts of development.
3. For projects that remain incomplete as of June 30, 2025, the approximate timing for the completion of these projects is set forth in the Annual Financial Report of Development Impact Fees. The source of funding to complete these projects are existing reserves of the related funds and development impact fees anticipated to be collected in future fiscal years in amounts enough to complete these projects.
4. The City Council finds that although not yet committed to a specific project, the City needs to continue to retain the funds held in the following funds to fund future facility projects once enough funding is accumulated: Library Impact Fees (Fund 110), Parking In-Lieu Certification Fees (Fund 120), Art In-Lieu Fees (Fund 123), Drainage Fees (Fund 124), and Housing In-Lieu Fees (Fund 127).
APPROVE RESOLUTION TO RECEIVE AND FILE FISCAL YEAR 2024-25 DEVELOPMENT
IMPACT FEE REPORT AND MAKE CERTAIN FINDINGS PURSUANT TO GOVERNMENT CODE SECTION 66000, ET SEQ.
December 9, 2025
Based on the foregoing, the City is not required to refund any fees collected pursuant to the requirements of AB 1600.
FINANCIAL ANALYSIS
There is no fiscal impact as a result of this action.
ENVIRONMENTAL ANALYSIS
This item is not a project under the California Environmental Quality Act (“CEQA”) pursuant to Section 15378(b)(5) (Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment).
ATTACHMENTS
1. Resolution (Pgs. 4-8)
2. Exhibit A to Attachment 1–Annual Development Impact Fees and Sewer Connection Fee Report (Pgs. 9-23)
Submitted By: Michelle Bannigan Approved: .David A Kiff Michelle Bannigan, Finance
Director Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Michelle Bannigan, Finance Director, Finance
Jane Abzug, Assistant City Attorney
Matthew Schneider, Director of Community
Development
Louie Lacasella, Senior Administrative Analyst
Mark McAvoy, Director of Public Works & Utilities