*NOT YET APPROVED* Attachment B
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Resolution No. _____
Resolution of the Council of the City of Palo Alto Accepting the Annual Report on Development Impact Fees for the Period Ending June 30, 2025 and Making Findings Regarding the Continuing Need for Development Impact Fees Collected but Not Expended
R E C I T A L S
A. Government Code Sections 66000 et seq., commonly known as the Mitigation Fee Act, regulates the imposition, collections, expenditure, and reporting of development impact fees; and
B. Government Code Section 66006 requires that certain information be made available to the public regarding development impact fees on an annual basis; and C. Government Code Section 66001 requires the City Council to make findings describing the continuing need for impact fees every five years specifying the intended use of any unexpended impact fees; and
D. The City of Palo Alto imposes various development impact fees, and has prepared the Development Impact Fee Report for the Period Ending June 30, 2025, which contains the information required by Government Code 66006 for these fees; and E. The City of Palo Alto also imposes in-lieu fees and dedication fees in connection with development projects and although the Mitigation Fee Act’s requirements do not apply to these fees, the Development Impact Fee Report for the Period Ending June 30, 2025 includes information regarding those fees in its annual report in the interest of transparency.
F. The Development Impact Fee Report for the Period Ending June 30, 2025 was published on the City of Palo Alto website on November 14, 2025.
G. The City Council has read and considered the Development Impact Fee Report for the Period Ending June 30, 2025.
The Council of the City of Palo Alto RESOLVES as follows:
Section 1. The City Council accepts the Annual Report on Development Impact Fees for the Period Ending June 30, 2025 as required by Government Code 66006.
Section 2. Based on the Development Impact Fee Report for the Period Ending June 30, 2025, and the Schedule of Improvements and Expenditures attached as Exhibit 1 to this resolution, the City Council makes the following findings as required by Government Code Section 66001 with regard to fees collected but not expended for the following fees:
Stanford Research Park/El Camino Real Traffic Impact Fee *NOT YET APPROVED* Attachment B
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A. The purpose of this fee is to fund traffic-related improvements at eight designated intersections within the Stanford Research Park/El Camino Real CS zone.
B. The fee is reasonably related to its purpose because the fee is imposed on new non- residential development, which is expected to generate an average of eighty percent of new commute period traffic at the designated intersections, and the amount of the fee is based upon the estimated cost of the capacity improvements at the designated intersections.
C. The sources and amounts of funding anticipated for incomplete improvements are set forth in Exhibit 1 to this resolution.
D. The approximate dates on which the funding is expected to be deposited into the appropriate account are set forth in Exhibit 1 to this resolution.
San Antonio/West Bayshore Area Traffic Impact Fee
A. The purpose of this fee is to fund the cost of capital expenditures needed to provide operational improvements at certain intersections in the San Antonio/West Bayshore Area.
B. This fee is reasonably related to its purpose because the fee is imposed on new development in the San Antonio/West Bayshore Area, and the San Antonio/West Bayshore Environmental Impact Report (EIR) showed that these improvements are necessary to mitigate the demonstrated significant traffic impacts of such new development.
C. The sources and amounts of funding anticipated for incomplete improvements are set forth in Exhibit 1 to this resolution.
D. The approximate dates on which the funding is expected to be deposited into the appropriate account are set forth in Exhibit 1 to this resolution.
Commercial Housing Impact Fee
A. The purpose of this fee is to offset the demand that new jobs create for low and moderate-income housing in the city as a result of commercial and industrial development by supporting below-market rate housing at various levels of affordability.
B. The fee is reasonably related to its purpose because the fees are expended exclusively to provide new and preserve existing housing affordable to very low income, lower income, and moderate income households in the city, consistent with the goals and policies contained in the City's housing element and for administration and compliance monitoring of the City’s affordable housing program.
C. The Planning and Development Services Department released a Notice of Funding Availability (NOFA) for eligible facilities/services in September 2025.
D. The unexpended fund balance should be allocated in FY 2026 and later years through the NOFA process, which awards grants to eligible projects on an annual basis; however, a minimum balance will be maintained to account for unrealized losses as these funds are invested until the time of disbursement.
*NOT YET APPROVED* Attachment B
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General Government Facilities Fee
A. The purpose of this fee is to fund the cost of improvements to those facilities used by the City to provide basic governmental services and public facilities maintenance services, exclusive of public safety.
B. The fee is reasonably related to its purpose because new residential and non-residential development in the city will generate additional residents and employees who will increase the demand for services, including municipal services and general government functions. Population and growth has a direct impact on the need for government services and facilities, thus a reasonable relationship exists between new development and government facilities, which will have to be acquired to meet the increased demand.
A. The sources and amounts of funding anticipated for incomplete improvements are set forth in Exhibit 1 to this resolution.
B. The approximate dates on which the funding is expected to be deposited into the appropriate account are set forth in Exhibit 1 to this resolution.
Park Development Fee
A. The purpose of this fee is to fund the cost to design, acquire, install, and construct park facilities.
B. The fee is reasonably related to its purpose because the fees will be collected from new residential and non-residential development in the city for park facilities that will be necessary due to increased demand for such facilities resulting from new development.
New development will generate additional residents and employees who will increase the demand for active and passive park facilities within the city. Land will have to be purchased and improved to meet this increased demand.
C. The sources and amounts of funding anticipated for incomplete improvements/facilities is set forth in Exhibit A to this resolution.
D. The approximate dates on which the funding is expected to be deposited into the appropriate account is set forth in Exhibit A to this resolution.
Community Center Development Fee
A. The purpose of this fee is to fund the cost to design, acquire, install, and construct community center facilities.
B. The fee is reasonably related to its purpose because the fees will be collected from new residential and non-residential development in the city for community center facilities that will be necessary due to increased demand for such facilities resulting from new development. New development will generate additional residents and employees who will increase the demand for community center facilities within the city. Land will have to be purchased and improved to meet this increased demand.
C. The sources and amounts of funding anticipated for incomplete improvements/facilities is set forth in Exhibit A to this resolution.
D. The approximate dates on which the funding is expected to be deposited into the appropriate account is set forth in Exhibit A to this resolution. *NOT YET APPROVED* Attachment B
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Library Development Fee
A. The purpose of this fee is to fund the cost to design, acquire, install, and construct library facilities.
B. The fee is reasonably related to its purpose because the fees will be collected from new residential and non-residential development in the city for library facilities that will be necessary due to increased demand for such facilities resulting from new development.
New development will generate additional residents and employees who will increase the demand for library facilities within the city. Land will have to be purchased and improved to meet this increased demand.
C. The sources and amounts of funding anticipated for incomplete improvements/facilities is set forth in Exhibit A to this resolution.
D. The approximate dates on which the funding is expected to be deposited into the appropriate account is set forth in Exhibit A to this resolution.
Residential Housing Impact Fee
A. The purpose of this fee is to offset the demand for low and moderate-income housing in the city as a result of market rate residential development by supporting below-market rate housing at various levels of affordability.
B. The fee is reasonably related to its purpose because the fees are expended exclusively to provide new and preserve existing housing affordable to very low income, lower income, and moderate income households in the city, consistent with the goals and policies contained in the City's housing element and for administration and compliance monitoring of the City’s affordable housing program.
C. The Planning and Development Services Department released a Notice of Funding Availability (NOFA) for eligible facilities/services in September 2025.
D. The unexpended fund balance should be allocated in FY 2026 and later years through the NOFA process, which awards grants to eligible projects on an annual basis; however, a minimum balance will be maintained to account for unrealized losses as these funds are invested until the time of disbursement.
Charleston-Arastradero Corridor Pedestrian and Bicyclist Safety Impact Fee A. The purpose of this fee is to fund the cost to implement the Charleston-Arastradero Corridor Plan, a series of streetscape improvements designed to increase pedestrian and bicyclist safety in the corridor.
B. The fee is reasonably related to its purpose because the fees will be collected on residential and non-residential development within the Charleston-Arastradero Corridor Plan area and used to construct improvements identified in the Charleston-Arastradero Corridor Plan.
C. The sources and amounts of funding anticipated for incomplete improvements/facilities is set forth in Exhibit A to this resolution.
D. The approximate dates on which the funding is expected to be deposited into the appropriate account is set forth in Exhibit A to this resolution. *NOT YET APPROVED* Attachment B
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Citywide Transportation Impact Fee
A. The purpose of this impact fee is to fund the cost of citywide transportation enhancements, or public facilities and services that relieve citywide traffic congestion caused by new development projects.
B. The fee is reasonably related to its purpose because the fee is imposed on development projects that cause traffic congestion on a citywide basis, calculated based on the additional traffic impacts attributable to the project, and fee funds are used only on eligible citywide transportation enhancements.
C. The sources and amounts of funding anticipated for incomplete improvements are set forth in Exhibit 1 to this resolution.
D. The approximate dates on which the funding is expected to be deposited into the appropriate account are set forth in Exhibit 1 to this resolution.
Public Safety Facilities Impact Fee
A. The purpose of this fee is to fund the construction, acquisition and/or upgrade of Police and Fire Facilities and equipment.
B. The fee is reasonably related to its purpose because new residential and non-residential development will generate additional residents and employees who will require additional service calls increasing the need for trained Police and Fire personnel. Buildings and vehicles used to provide these services will have to be expanded, constructed, or purchased to meet this increased demand. Thus a reasonable relationship exists between the need for Public Safety facilities and the impact of residential and non-residential development.
C. The sources and amounts of funding anticipated for incomplete improvements/facilities is set forth in Exhibit A to this resolution.
D. The approximate dates on which the funding is expected to be deposited into the appropriate account is set forth in Exhibit A to this resolution.
University Avenue Parking In-Lieu Fee
A. The purpose of this fee is to fund the cost of providing public parking facilities to serve nonresidential development within the University Avenue parking assessment district area that does not provide adequate new off-street parking spaces to satisfy the requirements of the zoning code.
B. The fee is reasonably related to its purpose because the fees will be used for the construction of additional public parking spaces within the University Avenue parking assessment district area.
C. The sources and amounts of funding anticipated for incomplete improvements are set forth in Exhibit 1 to this resolution.
D. The approximate dates on which the funding is expected to be deposited into the appropriate account are set forth in Exhibit 1 to this resolution.
*NOT YET APPROVED* Attachment B
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Residential Housing In-Lieu Fee
A. The purpose of this fee is to offset the demand for low and moderate-income housing in the city as a result of market rate residential development by supporting below-market rate housing at various levels of affordability. The fee allows developers of market-rate residential ownership projects to fulfill their obligation to provide affordable ownership units by paying an in-lieu fee after demonstrating that providing such units as part of the project would be infeasible.
B. The fee is reasonably related to its purpose because the fees are expended exclusively to provide new and preserve existing housing affordable to very low income, lower income, and moderate income households in the city, consistent with the goals and policies contained in the City's housing element and for administration and compliance monitoring of the City’s affordable housing program.
C. The Planning and Development Services Department released a Notice of Funding Availability (NOFA) for eligible facilities/services in September 2025.
D. The unexpended fund balance should be allocated in FY 2026 and later years through the NOFA process, which awards grants to eligible projects on an annual basis; however, a minimum balance will be maintained to account for unrealized losses as these funds are invested until the time of disbursement.
Public Art In-Lieu Fee
A. The purpose of this fee is to fund the cost of providing publicly visible art displays that enhance the built environment in the city when private developers opt not to commission on-site art displays as part of their projects.
B. The fee is reasonably related to its purpose because the fees will be collected from development projects that exceed a minimum size that do not include on-site art displays and used to acquire and install temporary or permanent works of art in public places, provide publicly accessible exhibitions of art, provide community-based public art events, and cover expenses associated with the Public Art Program.
C. The Community Services Department, through the Public Art Commission, continually evaluates opportunities for public art displays, exhibitions, and community events using the Public Art Fund. The Public Art Fund also contributes to cost of administering the Public Art Program, however that contribution is limited to 20% of the project budget and for the repair, maintenance, conservation and insurance of those works.
D. The sources and amounts of funding anticipated for incomplete improvements are set forth in Exhibit 1 to this resolution.
E. The approximate dates on which the funding is expected to be deposited into the appropriate account are set forth in Exhibit 1 to this resolution. The unexpended fund balance is allocated on an ongoing basis as public art projects are considered and approved by the Public Art Commission.
Parkland Dedication Fee
This fee is under Government Code section 66477 and 66479 and therefore the requirement to make additional findings every five years does not apply. *NOT YET APPROVED* Attachment B
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Water & Wastewater System Connection and Capacity Fees
These fees are imposed under Government Code section 66013 and therefore the requirement to make additional findings every five years does not apply. Refer to the Development Impact Fee Report for the Period Ending June 30, 2025 for the information required by Government Code 66013(d).
SECTION 3. The Council finds that adoption of this resolution is not a project as defined by the California Environmental Quality Act (CEQA) in that it is a fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4).
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
__________________________ _____________________________ City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
__________________________ _____________________________ Chief Assistant City Attorney City Manager
_____________________________
Director of Administrative Services
Attachment B - Exhibit 1 City of Palo Alto
Schedule of Improvements and Expenditures
Fund/Project Name CIP Project
Number
Unexpended
Balance FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Notes; Other Funding Sources/Amounts Stanford Research Park/El Camino Real Transportation Impact Fee 1,350,476$ Page Mill Road/El Camino Real Intersection Improvements N/A 1,350,476 $ Project to be constructed by County of Santa Clara; additional project funding from County 2016 Measure B Expressway Program; anticipated construction start in mid-2026
San Antonio/West Bayshore Area Transportation Impact Fee 452,234$ Traffic Signal and Intelligent Transportation System Upgrades PL-05030 452,234 $ San Antonio/Charleston Road Intersection Improvement Project; anticipated construction start in 2026. See pp. 56 and 348 of the FY 2026 Capital Budget.
Commercial Housing Impact Fee 4,673,857$
3001 El Camino Real N/A 2,200,000 $ Funding award for 3001 El Camino Real 100% affordable housing development approved November 5, 2025
FY 2027 Notice of Funding Availability N/A The City annually issues Notices of Funding Availability (NOFA) to provide funding support for eligible affordable housing projects. Funding awards vary by project and the available balance in this fund, and other funds managed throught City's affordable housing program. Additional NOFAs will be issued for FY 2027 and later years based on available funding.
General Government Facility Development Fee 110,765$
Public Safety Building PE-15001 110,765 $
Park Development Fee 3,483,719$
Dog Park Installation and Renovation PG-18001 150,000 $ 150,000 $ 150,000 See pp. 56 and 228-230 of the FY 2026 Capital Budget.
Park Restroom Installation PG-19000 913,112 $ 559,342 $ 580,000 See pp. 56 and 266-268 of the FY 2026 Capital Budget.
Community Center Development Fee 299,518$
Facility Interior Finishes Replacement PF-02022 299,518 $ Rehabilitation of city-owned building at 445 Bryant for downtown teen center and La Comida senior nutrition program.
Library Development Fee 393,452$
Library Automated Material Handling LB-21000 100,000 $ See pp. 56, 87 and 146-148 of the FY 2026 Capital Budget.
Residential Housing Impact Fee 1,221,292$
3001 El Camino Real N/A 400,000 $ Funding award for 100% affordable housing development approved November 5, 2025
Notice of Funding Availability The City annually issues Notices of Funding Availability (NOFA) to provide funding support for eligible affordable housing projects. Funding awards vary by project and the available balance in this fund, and other funds managed throught City's affordable housing program. Additional NOFAs will be issued for FY 2027 and later years based on available funding.
Charleston-Arastradero Corridor Pedestrian & Bicyclist Safety 41,270$ Traffic Signal and ITS Upgrades PL-05030 41,270 $ Traffic signal upgrades in Charleston-Arastradero Corridor.
Citywide Transportation Impact Fee 1,721,417$
Traffic Signal and Intelligent Transportation System Upgrades PL-05030 395,000 $ 395,000 $ 395,000 $ 395,000 $ 395,000 $ See pp. 56, 88, and 348-350 of the FY 2026 Capital Budget.
Public Safety Facility Development Impact Fee 141,254$
Fire Station 4 Replacement PE-18004 95,093 $ 46,161 $ $95K carried forward FY 25 Capital Budget, construction start anticipated FY 2026.
University Avenue Non-Residential Development Parking In-Lieu 13,652,598$ New Downtown Parking Garage PE-15007 13,106,958 $ See pp. 56, 88, and 170-172 of the FY 2026 Capital Budget.
Residential Housing In-Lieu 4,332,361$
3001 El Camino Real N/A 500,000 $ Funding award for 100% affordable housing development approved November 5, 2025
FY 2027 Notice of Funding Availability N/A The City annually issues Notices of Funding Availability (NOFA) to provide funding support for eligible affordable housing projects. Funding awards vary by project and the available balance in this fund, and other funds managed throught City's affordable housing program. Additional NOFAs will be issued for FY 2027 and later years based on available funding.
Public Art In-Lieu 2,091,561$
Code: Art N/A 200,000 $ 200,000
$ 50,000 $ 50,000 $ 50,000 $ Projection mapped art displays; annual temporary public art exhibits and/or community events.
California Avenue and University Avenue Streetscape Projects 750,000$ 750,000 $ Permanent public artwork to enhance downtown and California Avenue