Development Impact Fee Nexus Study
& Fee Update Workshop
February 20, 2024, City Council Workshop
Presented by
Ivan Holler, Assistant City Manager
Javier Carcamo, Finance Director
Paige Hartman, Management Analyst
Willdan Financial Consultants:
James Edison – Managing Principal
Carlos Villarreal – Project Manager
Received After Agenda Printed
2/20/2024 - Workshop
Item WS1 - Staff Presentation
2 • Kick-off Meeting – June 23, 2023
Citywide representation
• Evaluated each department’s facilities needs
• Created planned project lists based on priority
• Draft Nexus Study Published – February 17, 2024
• Workshop – February 20, 2024
• Nexus Study & Fee Update Adoption – March 19, 2024
Project Timeline
3 Purpose
• New Legislation – Assembly Bill 602
• Inflation (CCCI – 47.7% since 2016)
• Planned Projects
4 Fire Department
• Regional Training Center
• Police Station Expansion
Police Department
• Regional Training Center
• Fire Station 5
• Fire Station 6 and garage bay
- S6 Engine & upfitting
- S6 Rescue Truck & upfitting
- S6 Polaris & upfitting
- S6 Brush Truck & upfitting
Community Services Department
• CSD Offices
• Library expansion, book lockers, and
mobile library
Planned Projects
Development Impact Fee Update Study
City of Murrieta
February 20, 2024
What is a Development Impact Fee?
One-time charge 1
Imposed at building permit stage
Imposed on all development projects
within a defined geographic area
Funds facilities to serve new development
Mitigation Fee Act Findings (Govt. Code §66001)
• Key findings
– Need: Development ≈ Need for facilities
– Benefit: Development ≈ Use of revenue
– Rough proportionality: Fee amount ≈ development’s share of facility costs
• Other findings
– Purpose of fee
– Use of fee revenue
Requires local jurisdictions to make certain
information available on website:
Current impact fee schedule
Nexus studies
Annual AB1600 reports
Five-Year AB1600 reports
Changes to impact fee adoption process:
Prior to adoption of development fees,
an impact fee nexus study needs to be
adopted with 30 days notice
Technical changes:
Residential fees should be charged
per square foot, unless findings are
supported that justify another
metric
Large jurisdictions shall adopt a
capital improvement plan as a part
of the nexus study
Nexus study should identify level of
service
If fees are increasing, review the
assumptions of the original nexus
study and evaluate the amount of
fees collected under the original fee
AB 602
Impact Fees – Basic Methodology
ESTIMATE
EXISTING
DEVELOPMENT
AND FUTURE
GROWTH
IDENTIFY FACILITY
STANDARDS
DETERMINE NEW
FACILITY NEEDS
AND COSTS
ALLOCATE SHARE
TO
ACCOMMODATE
GROWTH
IDENTIFY
ALTERNATIVE
FUNDING NEEDS
CALCULATE FEE BY
ALLOCATING
COSTS PER UNIT
OF NEW
DEVELOPMENT
Impact Fee Categories
Law Enforcement
Fire Protection
Streets, Minor Bridges &
Culverts
Traffic Signals
Storm Drainage
General Facilities
Park Facilities
Community Centers
Public Library
Growth Projections
2023 2035 Increase
Residents 109,998 135,774 25,776
Dwelling Units 37,205 47,993 10,788
Employment 26,240 111,280 85,040
Sources: CA DOF; OnTheMap; American Community Survey; Murrieta General Plan.
Cost Allocation Methods:
WHAT Facilities Serve WHO
PLANNED FACILITIES
Planned Facilities
New Demand
SYSTEM PLAN
Existing + Planned Facilities
Existing + New Demand
EXISTING INVENTORY
Existing Facilities
Existing Demand
Fee Program Methodologies
Law Enforcement
Fire Protection
Open Space
Park Facilities
Community Centers
General Facilities
Existing Standard
Library Facilities
System Plan
Streets, Minor Bridges &
Culverts
Traffic Signals
Storm Drain
Planned Facilities
Projected Impact Fee Revenue
Fee Category Total Project Cost
Projected Impact
Fee Revenue
Additional Funding
Required
Law Enforcement $ 59,670,000 $ 59,670,000 $ -
Fire Protection 85,521,000 85,521,000 -
Streets, Minor Bridges & Culverts 355,740,973 286,035,438 69,705,535 Traffic Signals 67,872,382 41,977,526 25,894,856
Storm Drainage 12,983,598 7,850,999 5,132,599
General Facilities 18,131,000 18,131,000 -
Park Facilities 97,204,000 97,204,000 -
Community Centers 2,288,000 2,288,000 -
Public Library 7,100,000 3,325,104 3,774,896
Total $ 706,510,953 $ 602,003,068 $ 104,507,886
Current vs Proposed Fees
2016 Fee Schedule
2024 Proposed Fee Schedule
Table E.1: Maximim Justified Impact Facilities Fee Summary Land Use
Law
Enforcement
Fire
Protection
Streets,
Minor
Bridges &
Culverts
Traffic
Signals
Storm
Drainage
General
Facilities
Parkland
Facilities
Community
Centers
Public
Library
Grand
Total
Residential - Fee Per Dwelling Unit
Single Family $ 597 $ 634 $ 5,481 $ 1,051 $ 334 $ 241 $ 4,363 $ 764 $ 388 $ 13,853 Multifamily 417 444 3,809 730 304 168 3,049 533 270 9,724 Equivalent Fee per Square Foot
Single Family $ 0.23 $ 0.25 $ 2.15 $ 0.41 $ 0.13 $ 0.09 $ 1.71 $ 0.30 $ 0.15 $ 5.42 Multifamily 0.35 0.37 3.18 0.61 0.25 0.14 2.55 0.44 0.23 8.12 Nonresidential - Fee per 1,000 Square Feet
Commercial $ 130 $ 307 $ 9,089 $ 1,742 $ 173 $ 51 $ - $ - $ - $ 11,492 Office 168 401 6,932 1,329 90 67 - - - 8,987
Industrial 62 149 991 190 217 24 - - - 1,633
Equivalent Fee per Square Foot
Commercial $ 0.13 $ 0.31 $ 9.09 $ 1.74 $ 0.17 $ 0.05 $ - $ - $ - $ 11.49 Office 0.17 0.40 6.93 1.33 0.09 0.07 - - - $ 8.99
Industrial 0.06 0.15 0.99 0.19 0.22 0.02 - - - $ 1.63
Table E.1: Maximum Justified Impact Facilities Fee Summary Land Use
Law
Enforcement
Fire
Protection
Streets,
Minor
Bridges &
Culverts
Traffic
Signals
Storm
Drainage
General
Facilities
Parkland
Facilities
Community
Centers
Public
Library Total
Residential - Fee per Square Foot
Single Family $ 0.40 $ 0.28 $ 2.38 $ 0.35 $ 0.15 $ 0.45 $ 4.89 $ 0.12 $ 0.17 $ 9.19 Multifamily 0.54 0.38 3.63 0.54 0.29 0.61 6.65 0.16 0.23 13.03 Nonresidential - Fee per Square Foot
Commercial $ 1.20 $ 1.85 $ 8.82 $ 1.30 $ 0.20 $ 0.21 $ - $ - $ - $ 13.58 Office 1.93 2.98 7.69 1.13 0.10 0.34 - - - 14.18
Industrial 0.64 0.99 2.51 0.37 0.25 0.11 - - - 4.87
Proposed Fees vs Local Jurisdictions
Single Family
Single Family Residential - 2,555 Square Feet
Fee Category
Murrieta
(Current)
DRAFT
Murrieta
Lake
Elsinore
(Low)
Lake
Elsinore
(High)
Menifee
(Low)
Menifee
(High)
Moreno
Valley
Temecula
(Low)
Temecula
(High)
City Hall & Public Works - 809 809 - - 450 - -
Community Rec Center 764 307 545 545 - - 753 - -
Developer Impact Fees - - - - - - - 12,628 12,628
Fire Facilities 634 715 751 751 647 647 1,314 - -
General Government 241 1,150 - - 1,176 1,176 - - -
Lakeside Facilities - - 779 779 - - - - -
Library 388 434 150 150 - - 569 - -
Maintenance Equipment - - - - - - 240 - -
Parks 4,363 8,457 1,600 1,600 1,723 1,723 5,867 4,627 4,627 Police 597 1,022 - - 925 925 910 - -
Public Art - - - - - - 4,233 323 323
Railroad Canyon Road Fee - - - 505 - - - - -
Storm Drain 334 383 - 868 139 9,995 - - -
Streets, Minor Bridges & Culverts 5481 6,081 - - - - 5,674 - - Traffic Signals and Controllers 1051 894 - - - - 748 - - Transportation/Traffic/Interchange - - 1,369 1,369 7,097 7,097 2,584 - - Workforce Development - - - - - - 332 - -
Uptown Temecula New Streets - - - - - - - - 6,923
Total $ 13,853 $ 19,444 $ 6,351 $ 7,723 $ 11,801 $21,657 $ 24,567 $ 17,578 $ 24,501 Proposed Fees vs Local Jurisdictions
Multifamily
Multifamily Residential - 1,198 Square Feet
Fee Category
Murrieta
(Current)
DRAFT
Murrieta
Lake
Elsinore
(Low)
Lake
Elsinore
(High)
Menifee
(Low)
Menifee
(High)
Moreno
Valley
Temecula
(Low)
Temecula
(High)
Animal Shelter $ - $ - $ 174 $ 299 $ 74 $ 74 $ 49 $ - $ - City Hall & Public Works - - 404 696 - - 245 - -
Community Rec Center 533 192 272 469 - - 478 - -
Corporate Yard - - - - - - 397 - -
Developer Impact Fees - - - - - - - 9,041 9,041
Fire Facilities 444 455 612 612 506 506 611 - -
General Government 168 731 - - 920 920 - - -
Lakeside Facilities - - 389 671 - - - - -
Library 270 276 150 150 - - 406 - -
Maintenance Equipment - - - - - - 117 - -
Parks 3,049 5,391 1,400 1,500 1,348 1,348 4,100 3,805 3,805 Police 417 647 - - 724 724 503 - -
Public Art - - - - - - 1,849 85 85
Railroad Canyon Road Fee - - - 353 - - - - -
Storm Drain 304 347 - 607 50 3,621 - - -
Streets, Minor Bridges & Culverts 3,809 4,349 - - - - 4,043 - - Traffic Signals and Controllers 730 647 - - - - 534 - - Transportation/Traffic/Interchange - - 959 959 3,585 3,585 1,841 - - Workforce Development - - - - - - 156 - -
Uptown Temecula New Streets - - - - - - - - 6,923
Total $ 9,724 $13,034 $ 4,360 $ 6,316 $ 7,207 $10,778 $15,326 $ 12,931 $ 19,854 Proposed Fees vs Local Jurisdictions
Commercial
Commercial - 1,000 Square Feet
Fee Category
Murrieta
(Current)
DRAFT
Murrieta
Lake
Elsinore
(Low)
Lake
Elsinore
(High)
Menifee
(Low)
Menifee
(High)
Moreno
Valley
(General)
Moreno
Valley
(Regional)
Temecula
(Low)
Temecula
(High)
City Hall & Public Works - - 108 108 - - 101 101 - -
Community Rec Center - - - - - - 16 16 - -
Corporate Yard - - - - - - 170 170 - -
Developer Impact Fees - - - - - - - - 9,540 13,740
Fire Facilities 307 1,850 489 489 850 850 502 502 - -
General Government 51 210 - - 680 680 - - - -
Library - - - - - - 21 21 - -
Maintenance Equipment - - - - - - 51 51 - -
Parks - - 100 100 - - 318 318 - -
Police 130 1,200 - - 470 470 1,032 1,032 - -
Public Art - - - - - - 1,849 1,849 85 85
Railroad Canyon Road Fee - - - 454 - - - - - -
Storm Drain 173 200 - 781 - 8,360 - - - -
Streets, Minor Bridges & Culverts 9,089 8,820 - - - - 11,650 12,592 - - Traffic Signals and Controllers 1,742 1,300 - - - - 1,337 1,262 - - Transportation/Traffic/Interchange - - 3,840 3,840 17,290 17,290 9,008 8,938 - - Workforce Development - - - - - - 230 230 - -
Uptown Temecula New Streets - - - - - - - - - 11,180
Total $11,492 $ 13,580 $ 4,537 $ 5,772 $19,290 $27,650 $ 26,284 $ 27,080 $ 9,625 $ 25,005 Proposed Fees vs Local Jurisdictions
Industrial
Industrial - 1,000 Square Feet
Fee Category
Murrieta
(Current)
DRAFT
Murrieta
Lake
Elsinore
(Low)
Lake
Elsinore
(High)
Menifee
(Low)
Menifee
(High)
Moreno
Valley
Temecula
(Low)
Temecula
(High)
City Hall & Public Works - - 360 360 - - 57 - -
Community Rec Center - - - - - - 8 - -
Corporate Yard - - - - - - 83 - -
Developer Impact Fees - - - - - - 4,910 4,910
Fire Facilities 149 990 159 159 320 320 271 - -
General Government 24 110 - - 250 250 - - -
Library - - - - - - 10 - -
Maintenance Equipment - - - - - - 24 - -
Parks - - 100 100 - - 155 - -
Police 62 640 - - 170 170 104 - -
Public Art - - - - - - 1,174 17 17
Railroad Canyon Road Fee - - - 303 - - - - -
Storm Drain 217 250 - 521 - 310 - - -
Streets, Minor Bridges & Culverts 991 2,510 - - - - 2,720 - - Traffic Signals and Controllers 190 370 - - - - 341 - - Transportation/Traffic/Interchange - - 810 810 4,660 4,660 1,392 - - Workforce Development - - - - - - 110 - -
Uptown Temecula New Streets - - - - - - - - 3,150
Total $ 1,633 $ 4,870 $ 1,429 $ 2,252 $ 5,400 $ 5,710 $ 6,448 $ 4,927 $ 8,077 Proposed Fees vs Local Jurisdictions
Office
Office - 1,000 Square Feet
Fee Category
Murrieta
(Current)
DRAFT
Murrieta
Lake
Elsinore
(Low)
Lake
Elsinore
(High)
Menifee
(Low)
Menifee
(High)
Moreno
Valley
Temecula
(Low)
Temecula
(High)
City Hall & Public Works - - 180 180 - - 112 - -
Community Rec Center - - - - - - 21 - -
Corporate Yard - - - - - - 214 - -
Developer Impact Fees - - - - - - - 7,920 7,920
Fire Facilities 401 2,980 337 337 2,360 2,360 550 - -
General Government 67 340 - - 1,870 1,870 - - -
Library - - - - - - 28 - -
Maintenance Equipment - - - - - - 63 - -
Parks - - 100 100 - - 416 - -
Police 168 1,930 - - 1,320 1,320 281 - -
Public Art - - - - - - 2,419 142 142
Railroad Canyon Road Fee - - - 202 - - - - -
Storm Drain 90 104 - 347 - 2,610 - - -
Streets, Minor Bridges & Culverts 6,932 7,690 - - - - 5,582 - - Traffic Signals and Controllers 1,329 1,130 - - - - 744 - - Transportation/Traffic/Interchange - - 1,450 1,450 8,240 8,240 2,866 - - Workforce Development - - - - - - 300 - -
Uptown Temecula New Streets - - - - - - - - 4,580
Total $ 8,987 $ 14,174 $ 2,067 $ 2,616 $13,790 $16,400 $13,593 $ 8,062 $ 12,642 21 Implementation Scenarios
Multiple Year Phasing
Type SQ FT Current DIF Fees 5-Year 4-Year 3-Year Proposed Fee Commercial 9,900 $ 113,751 $ 134,442
Industrial 136,837 $ 223,044 $ 89,218 $ 110,838 $ 147,784 $ 669,133 Single Family 2,500 $ 13,853 $ 19,025
Multi Family 1,450 $ 9,724 $ 15,776
Office 60,674 $ 545,459 $ 62,858 $ 78,573 $ 104,764 $ 859,751 Increases Per Year
Potential Phasing Plans
22 Implementation Scenarios
Employee Incentive Program –
Industrial & Office
Option 1
• Defer DIF until
occupancy issuance
• Discount based on
number of jobs
generated
• Each employee $1k
reduction in DIF
Option 2
• DIF reduction during permit
process
• Discount based on estimated
range number of jobs
• Range of jobs:
- 0-10 Jobs = $25K credit
- 11-25 Jobs = $50K credit
23 Implementation Scenarios
Incentive Programs
Examples:
Stanislaus County – Industrial Incentive Program: minimum square footage of 150K, additional size discount, percentage discount, and point generated system.
City of Chowchilla – Business Incentive Program: Retail and Commercial waive of sewer DIF, DIF deferred until certificate of occupancy is issued, waiver of building permit fees, and certain zones waiver of all DIF.
City of San Diego – Fee Payment Incentive Program: Based on fulltime jobs created, sales tax revenue generated, and/or capital investment, reimbursements up to $10,000 can be issued.
Public Hearing for adoption on March 19, 2024