City Council Public Hearing—
February 7, 2022
Kim Espinosa, Planning Manager
ATTACHMENT 8--Page 1
Sewer and Water Impact Fees since the 1980s
“Public Facilities Impact Fees” (PFFP) since 1998
PFFP Fees Updated in 2003, 2006, and 2009
Most Recent PFFP Fee Update (2012)
Fees were reduced by 55%
In 2019, City hired Economic Planning Systems
(EPS) to prepare the Update of the Fees
Merced Fee History
ATTACHMENT 8--Page 2
Fire Stations
Police Facilities
Parks &
Bikeways
Roads, Bridges,
& Railroad
Crossings
Traffic Signals
Types of Projects
Financed by Fees
ATTACHMENT 8--Page 3
G Street Undercrossing
Fire Station 55
Gardner Road Widening
Campus Parkway (Phase 1)
G Street (Cardella to Bellevue)
Parsons Frontage Rd
(Mission to Childs)
M/Cottonwood Creek
Bridge
Completed Projects (Examples)
ATTACHMENT 8--Page 4
Capital Project costs only
(physical infrastructure)
Fees cannot pay for operations,
maintenance, or staffing
“Existing Deficiency”: Growth pays for
growth impacts, not existing problems
City-built projects and reimbursement to
developers for eligible projects
Fees Pay for:
ATTACHMENT 8--Page 5
Decide on the Community Vision (General Plan
Establishes the Desired Levels of Service)
Determine Projects needed to carry out the Vision
Estimate the Project Costs
Divide the Costs among Properties to be Developed
• New Residential Dwelling Units
• Square Feet of New Commercial/Industrial Projects
• Based on Historic Trends
How Fees are Determined
ATTACHMENT 8--Page 6
Per Dwelling Per 1,000 Sq. Ft. of Building Space
Residential Commercial
Single
Family
Multi-
Family
Institut
ional
Retail Less
Than
50,000 SF
Retail
Greater
Than
50,000 SF
Office/
Comm-
ercial
Indust-
rial
$5,938 $4,107 $4,079 $11,927 $8,996 $7,810 $2,233
Current Fees
Development Impact Fees By Project Category
(Effective January 1, 2022)
ATTACHMENT 8--Page 7
Update Process (2019-22)
Updated Population & Growth Assumptions
Updated Project List and Costs
Added Projects that were Deleted from Project List in 2012 (Were Outside 20-Year Time Frame)
Added Neighborhood Parks (would replace current
Park Fees), New Corporation Yard, and Smart City
Technology Infrastructure
Held Three Stakeholder Meetings (June, August, &
September 2021)
Published Draft Nexus Report as Required by State
Law (December 2021)
ATTACHMENT 8--Page 8
Per Dwelling Per 1,000 Sq. Ft. of Building Space
Residential Per
Room
Commercial
Single
Family
Multi-
Family
Lodging
(NEW)
Retail Less
Than
50,000 SF
Retail
Greater
Than
50,000 SF
Office/
Comm-
ercial
Indust-
rial
$11,671 $8,520 $3,293 $13,940 $13,940 $12,420 $5,400
Compared with 2022 Fees
$5,938 $4,107 $4,107 $11,927 $8,996 $7,810 $2,233
+96% +107% -19% +17% +55% +59% +141%
Maximum Justified Fees (2022)
ATTACHMENT 8--Page 9
City Council Direction (Jan 18)
Fee Options
Adopt the Maximum Justified Fee with No Phasing
Policy Options
Offer Reduced Fee for Infill of 50 Percent
Determine Fees for Affordable Housing Case by Case
Offer Reduced Proportional Fee for Homes Smaller Than Average (1,920 SF) by at Least 20 Percent
Existing Park Credits can be used for Public Facilities Impact Fees (Addresses Inquiry from the Public)
ATTACHMENT 8--Page 10
Completed & Next Steps
January 18, 2022—Public Meeting
Staff Drafts Modified Ordinance and
Admin Policy Based on Council
Direction from January 18
February 7, 2022—Public Hearing;
Ordinance Introduced
February 22, 2022—Ordinance
Adopted (Effective 30 Days Later)
March 26, 2022—New Fees
Effective
ATTACHMENT 8--Page 11
City Council Action
After the public hearing, the City Council should
adopting a motion:
A. Introducing Ordinance No. ______, An Ordinance of
the City Council of the City of Merced, California,
Amending Chapter 17.62, “Public Facilities Impact Fees,” And Repealing Chapter 17.38 “Park And Recreation
Facilities Fee” And Chapter 18.40, “Park Dedication,” Of The Merced Municipal Code; and,
B. Approving Resolution No. _____, A Resolution of the
City Council of the City of Merced, California,
Amending Administrative Policy and Procedure A-32
Regarding Public Facilities Impact Fees
.
Questions?
ATTACHMENT 8--Page 12