CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
8/25/2025
1 SUBJECT:
Resolution to authorize the City Manager to execute an agreement for Financial Services for Development Impact Fee Study, Cost Allocation Plan, and Comprehensive User Fee Study with Willdan Financial Services
RECOMMENDED ACTION:
Adopt the attached resolution authorizing the City Manager to execute an agreement with Willdan Financial Services in the amount of $93,260, to provide consulting services for the preparation of a Development Impact Fee Study, Cost Allocation Plan, and Comprehensive User Fee Study.
STAFF CONTACT:
Marisol Gómez, Director of Finance and Administrative Services (650) 501-0257
[email protected]
Lucy Xie, Deputy Finance Director
(650) 501-6014
[email protected]
BACKGROUND/DISCUSSION:
The City of Pacifica’s development impact fees, user fees, and internal cost allocation plan have not undergone a comprehensive update in many years. The last Cost Allocation Plan and User Fee Study was completed in 2013, based on FY 2011 budget data. Best practices in California recommend that jurisdictions update these studies every 5 to 8 years to ensure fees accurately reflect current service delivery costs, legal requirements, and community expectations. The significant time lapse since the City’s last study means the current fee structures are likely to result in under-recovery of costs across many departments.
To ensure that the City’s fees are aligned with current service levels, legal standards, and support long-term financial sustainability goals, the Finance Department issued a Request for Proposals (RFP) in May 2025 for the following services:
• A Development Impact Fee (DIF) Study
• A Full Cost Allocation Plan (CAP)
• A Comprehensive User Fee Study
The City received six proposals that were evaluated against the following criteria:
• Quality of Proposal: clarity, conciseness, organization, and completeness of the proposal and responses
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• Experience: experience conducting similar work for municipal agencies, particularly in California.
• Team Qualifications: qualifications and expertise of key personnel assigned to this project
• Understanding of Objectives: demonstrated understanding of the City’s needs and a thoughtful approach to delivering services
• Pricing: reasonableness and transparency of proposed fees, hourly rates, and total cost Following the initial evaluation, three firms, Willdan Financial Services, Baker Tilly, and Matrix Consulting Group, were invited to participate in the second round presentation and interview.
Based on demonstrated understanding of the project scope, approach and methodology, team expertise and experience, communication and presentation skills, responsiveness during the interview process, and clarity of the proposed project management and timeline, Willdan Financial Services was selected as the most qualified firm.
Willdan Financial Services is a nationally recognized public finance consulting firm with over 30 years of experience providing complex financial, economic, and capital planning services to local governments.
The firm specializes in cost recovery, rate and cost of services studies, impact fee programs, utility rate studies, funding strategies and capital planning, debt issuance support, and fiscal analysis, with a strong track record of work throughout California. Willdan’s approach emphasizes powerful, yet user-friendly analytical models designed to run multiple scenarios and produce clear, actionable financial insights. All models are supported by interactive user assistance to ensure clarity and usability. Their consultants work closely with agency staff to translate data into meaningful narratives that inform decision-making.
Willdan’s proposal highlighted the following strengths:
• Deep expertise and extensive experience conducting CAP, DIF, and User Fee Studies across California jurisdictions, including cities similar in size and complexity to Pacifica; • A collaborative approach with City staff to ensure accurate data collection, tailored modeling, and efficient use of staff time;
• A robust and legally defensible methodology aligned with applicable state and federal laws and regulations, including AB 1600, Proposition 26, Proposition 218, and 2 CFR Part 200;
• Strong public communication skills, with commitments to participate in study sessions and public hearings, and to provide presentation materials for Council and community review.
• A dedicated seven-person project team with a proven track record of delivering successful outcomes for other Bay Area cities, including Foster City, Sausalito, Alameda, and San Bruno.
COLLABORATION AND PUBLIC ENGAGEMENT:
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Throughout the duration of the project, Willdan will work closely with City staff to gather operational data, review findings, and refine assumptions. A detailed project schedule will be finalized upon contract execution, including biweekly progress updates and regular check-ins with City staff to allow for review of preliminary findings and recommendations prior to presenting the final findings to the City Council and public hearings during fee and plan adoption processes. It is the City’s goal to have this project completed in time for the development of the FY 2026-27 Budget. These efforts will ensure transparency and alignment with City needs and expectations and support the development of a fiscally sound and legally defensible fee structure consistent with City policy and cost-recovery goals.
Willdan’s proposal demonstrated extensive experience working with California municipalities, a well-defined methodology for each project component, and a strong understanding of Pacifica’s operational and staffing realities through recent past projects. Their ability to perform the work independently while producing defensible, clear, and actionable deliverables was a key factor in the selection.
PROJECT SCOPE:
Willdan will undertake the following:
• Development Impact Fee Study
Willdan will prepare a legally and analytically defensible nexus-based study in accordance with AB 1600 (Mitigation Fee Act) and applicable case law. The study will quantify the relationship between new development and the need for public infrastructure improvements, using capital improvement plans, General Plan elements, and other planning documents as the inputs. Methodology will include service population projections, facility standards, cost apportionment, and impact analysis by land use type.
Willdan will also perform benchmarking against comparable jurisdictions and provide defensible draft and final reports available for public review and Council adoption. • Cost Allocation Plan
Willdan will develop a fully compliant internal cost allocation model compliant with federal OMB guidelines and 2 CFR Part 200. The plan will calculate the full cost of internal services and allocate overhead to direct service departments based on rational, equitable, and auditable allocation factors (e.g., FTEs, square footage, time-use studies). In addition to a comprehensive allocation model, Willdan will calculate a fully burdened hourly rate report for all relevant staff positions, incorporating direct labor, benefits, and overhead. The final deliverables will be formatted for both internal management use and external reporting, including grant compliance, interagency billing, and cost recovery justifications.
• Comprehensive User Fee Study
Willdan will conduct a citywide user fee analysis to determine the full cost of providing discretionary services across all City departments. The study will include direct and indirect costs, administrative overhead, third-party and capital-related expenses, and will evaluate existing fees and identify potential new fees where appropriate. The study will also assess any policy-based subsidies to support Council’s discussion on cost-recovery goals. The study will also include benchmarking of selected fees against peer jurisdictions to provide additional context for decision-making.
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All deliverables will include clear, transparent and easily customizable excel models, supporting documentation, draft and final reports, and presentation materials suitable for public review and Council adoption.
ALTERNATIVE ACTION:
Council may choose not to approve the agreement or direct staff to modify the scope of the project. However, deferring this project would delay the City’s ability to ensure adequate cost recovery, update its fee structure, and meet compliance with legal and financial best practices.
ENVIRONMENTAL REVIEW:
The approval of the Agreement with Willdan Financial Services to provide consulting services for the preparation of a Development Impact Fee Study, Cost Allocation Plan, and Comprehensive User Fee Study is not subject to review under the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21000, et seq. and the CEQA Guidelines (14 Cal. Code Regs. §§ 15000 et. seq.), including without limitation, Public Resources Code section 21065 and California Code of Regulations 15378 as this is not a “project” that may cause a direct, or reasonably foreseeable indirect, physical change in the environment.
RELATION TO CITY COUNCIL GOALS AND WORK PLAN:
This item furthers several of the City Council’s Strategic Goals and the City’s efforts to:
• Enhance Organizational and Fiscal Stability
• Improve and steward City infrastructure, streets, and facilities • Prioritize protection and development of affordable housing • Broaden public communications and collaboration
By comprehensively updating the City’s development impact fees, user fees, and cost allocation methodologies, this initiative will help ensure that Pacifica’s fee structures are transparent, equitable, and based on the true cost of service. This enhances long-term revenue stability, promotes responsible budgeting, and supports compliance with state and federal financial standards.
The updated Development Impact Fee Study will help ensure that new development contributes its fair share toward critical infrastructure needs-such as transportation, parks, and public safetywhile allowing for thoughtful policy decisions that encourage the production of affordable housing. Through clear documentation and flexible modeling, the study will help the City identify where fee reductions, subsidies, or exemptions may be appropriate to support housing affordability goals, while maintaining overall fiscal health.
Additionally, the project will include opportunities for public and Council input, reinforcing the City’s commitment to inclusive governance and transparent decision-making.
FISCAL IMPACT:
There is no additional fiscal impact associated with this budgeted project. The Adopted FY 2025-26 Budget includes sufficient funds to cover the total not to exceed cost of this project in the amount of $93,260, inclusive of all fees and reimbursable expenses.
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ORIGINATED BY:
Finance Department
ATTACHMENT LIST:
Attachment 1: Agreement for Consultant Services with Willdan Financial Services(DOCX) Attachment 2: Willdan Professional Services RFP presentation (PDF) Pacifica City Council 6
August 25, 2025
RESOLUTION NO. ________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA AUTHORIZING THE
CITY MANAGER TO EXECUTE A CONTRACT WITH WILLDAN FINANCIAL SERVICES FOR
A DEVELOPMENT IMPACT FEE STUDY, COST ALLOCATION PLAN, AND
COMPREHENSIVE USER FEE STUDY
WHEREAS, the City of Pacifica recognizes the need to update its development impact fees, cost allocation methodologies, and user fees to ensure financial sustainability, legal compliance, and transparency in service cost recovery; and WHEREAS, the City issued a Request for Proposals (RFP) in June 2025 and received six proposals from qualified firms to conduct a comprehensive Development Impact Fee Study, Cost Allocation Plan, and Comprehensive User Fee Study; and WHEREAS, after evaluating all proposals and conducting interviews with the top three firms, City staff determined that Willdan Financial Services was the most qualified firm based on their experience, technical approach, and ability to complete the project with minimal disruption to City staff; and
WHEREAS, the total cost of the proposed services is $93,260, for which sufficient funds have been included in the adopted FY 2025–26 budget;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Pacifica, California, that the City Council hereby authorizes the City Manager to execute a contract with Willdan Financial Services in an amount of $93,260 to complete the Development Impact Fee Study, Cost Allocation Plan, and Comprehensive User Fee Study, with the scope and terms substantially as presented in the accompanying exhibit. • • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 25th day of August 2025, by the following vote:
AYES, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
ABSTAIN, Councilmembers:
_________________________________
Sue Beckmeyer, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ _________________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney