Paramount City Council
February 24, 2026

Agenda
City Council
February 24, 2026
Regular Meeting - City Hall Council Chamber - 5:00 PM
16400 Colorado Avenue Paramount, CA 90723 (562) 220-2000 www.paramountcity.gov

PUBLIC PARTICIPATION NOTICE
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Any document distributed to a majority of the City Council regarding any item on this agenda after distribution of the agenda packet will be made available in the City Clerk’s office during normal business hours at City Hall located at 16400 Colorado Ave., Paramount, CA 90723. In addition, such documents will be posted on the City’s website at www.paramountcity.gov/government/city-council/meeting-agendas-minutes/.

CALL TO ORDER: Mayor Peggy Lemons
PLEDGE OF ALLEGIANCE: Ramiro Lupercio Aquino, 5th Grade Student Jefferson Elementary School
Alina Belloso, 5th Grade Student
Hollydale Elementary School

ROLL CALL OF
COUNCILMEMBERS:

Councilmember Isabel Aguayo
Councilmember Annette C. Delgadillo
Councilmember Vilma Cuellar Stallings
Vice Mayor Brenda Olmos
Mayor Peggy Lemons
Agenda February 24, 2026
Regular Meeting City Council Page 2

PRESENTATIONS

1. VIDEO NEW DEVELOPMENT GROUNDBREAKINGS

2. CERTIFICATE OF

RECOGNITION

STUDENT MAYORS FOR THE DAY

CITY COUNCIL PUBLIC COMMENT UPDATES

PUBLIC COMMENTS

CONSENT CALENDAR
All items under the Consent Calendar may be enacted by one motion. Any item may be removed from the Consent Calendar and acted upon separately by the City Council.

3. APPROVAL PROFESSIONAL SERVICES AGREEMENT WITH RDC-S111 (DBA STUDIO ONE ELEVEN) FOR THE DESIGN OF ADDITIONAL

BUS SHELTERS AT VARIOUS CITY LOCATIONS (CITY
PROJECT NO. 9672)
Recommended Action: Approve an agreement with RDC-S111
DBA Studio One Eleven in the amount of $78,500 for architectural design services related to bus shelter renovations (City Project No. 9672) and authorize the Mayor or her designee to execute the agreement.

4. AUTHORIZATION FIRE FLOW INSTALLATION FOR THE HAY TREE PUBLIC MARKET LOCATED AT 16493 PARAMOUNT BOULEVARD
Recommended Action: Authorize the installation of a 4-inch fire flow service by Doreck Construction for the Hay Tree Public Market, located at 16493 Paramount Boulevard.

5. ORDINANCE
1212

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PARAMOUNT AMENDING SUBSECTIONS 13.04.470(D) AND (E),
DELETING SECTION 16.24.060 OF THE PARAMOUNT
MUNICIPAL CODE, AND ADDING CHAPTER 3.40,

ESTABLISHING THE DEVELOPMENT IMPACT FEES PROGRAM

THAT INCLUDES A COMMERCIAL LINKAGE FEE APPLICABLE

TO CERTAIN NEW ACTIVITIES AND DEVELOPMENTS WITHIN

THE CITY AND MAKING A FINDING OF EXEMPTION UNDER
THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)”
Recommended Action: Adopt Ordinance No. 1212.

Agenda February 24, 2026
Regular Meeting City Council Page 3

6. ORDINANCE
1214

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PARAMOUNT AMENDING CHAPTERS 8.04.010 AND 8.04.040

OF THE PARAMOUNT MUNICIPAL CODE REGARDING

INCORPORATION OF THE LOS ANGELES COUNTY HEALTH

AND SAFETY CODE
Recommended Action: Introduce Ordinance No. 1214 and set a public hearing date of March 10, 2026, at 6:00 p.m. for consideration of adoption of Ordinance No. 1214.

7. ORDINANCE
1215

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PARAMOUNT AMENDING CHAPTERS 10.04.010 AND 10.04.020

OF THE PARAMOUNT MUNICIPAL CODE REGARDING

INCORPORATION OF THE LOS ANGELES COUNTY TRAFFIC
CODE
Recommended Action: Introduce Ordinance No. 1215 and set a public hearing date of March 10, 2026, at 6:00 p.m. for consideration of adoption of Ordinance No. 1215.

NEW BUSINESS

8. ORAL REPORT YOUTH ACTIVITIES LEAGUE PROGRAM OVERVIEW

9. REPORT SIX MONTH REVIEW OF DRONE SERVICES WITH FLYING LION, INC. FOR MOTOR VEHICLE SPEED CONTESTS OR

EXHIBITIONS OF SPEED
Recommended Action: Provide feedback to staff on the future use of drone services for motor vehicle speed contests and exhibitions of speed and receive and file this report.

10. APPROVAL FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM FOR FISCAL YEARS 2026-30
Recommended Action: Approve the Five-Year Capital
Improvement Program Plan for Fiscal Years 2026-30.

11. APPROVAL FIFTH AMENDMENT TO THE CITY MANAGER’S EMPLOYMENT

AGREEMENT
Recommended Action: 1) Approve a budget adjustment for FY 2025-26 in the amount of $8,000 to cover this expense; and 2) Approve the Fifth Amendment to the Amended and Restated City Manager Employment Agreement between the City of Paramount and John Moreno.

ENVIRONMENTAL SUSTAINABILITY NEW BUSINESS
NONE

COMMENTS/COMMITTEE REPORTS
Agenda February 24, 2026
Regular Meeting City Council Page 4

CLOSED SESSION

ADJOURNMENT
To a meeting on March 10, 2026 at 6:00 p.m. in the Council Chamber at City Hall, 16400 Colorado Ave., Paramount, CA
Americans with Disabilities Act: In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk’s office at (562) 220-2225 at least 48 hours prior to the meeting to enable the City to make reasonable arrangements to ensure accessibility to this meeting.

Note: Physical hard copies of agenda items are on file in the City Clerk’s office and are available for public inspection during normal business hours. Materials related to an item on this Agenda submitted after distribution of the agenda packet are also available for public inspection during normal business hours in the City Clerk’s office. The office of the City Clerk is located at City Hall, 16400 Colorado Avenue, Paramount.

To: Honorable City Council
From: John Moreno, City Manager
By: Heidi Luce, City Clerk
Date: February 24, 2026
SUBJECT: NEW DEVELOPMENT GROUNDBREAKINGS
A video highlighting the recent groundbreaking events at Entrada, the new housing development on Paramount Boulevard and the Hay Tree Public Market, located at the former Paramount Saw building, will be shared.

To: Honorable City Council
From: John Moreno, City Manager
By: Heidi Luce, City Clerk
Date: February 24, 2026
SUBJECT: STUDENT MAYORS FOR THE DAY
The City Council will recognize the following students for being chosen by their school to serve as the City of Paramount’s Student Mayors for the Day for February. • Ramiro Lupercio Aquino, 5th Grade Student
Jefferson Elementary School
• Alina Belloso, 5th Grade Student
Hollydale Elementary School
City Council Public Comment Updates
February 24, 2026
From the February 10th City Council Meeting:

Commenter Request/Issue/Concern Action/Comment
Paty Aldaba, Maria
Pardo, Maria
Morales
Submitted a petition
expressing appreciation and
support of a City employee
working at the Senior
Center.

Staff provided a written response
to the residents explaining the
City’s hiring practices.

Additionally, information will be
presented at the March 5th Senior
Services Commission meeting.

To: Honorable City Council
From: John Moreno, City Manager
By: Adriana Figueroa, Public Works Director
Date: February 24, 2026
SUBJECT: PROFESSIONAL SERVICES AGREEMENT WITH RDC-S111 (DBA

STUDIO ONE ELEVEN) FOR THE DESIGN OF ADDITIONAL BUS
SHELTERS AT VARIOUS CITY LOCATIONS (CITY PROJECT NO. 9672)

BACKGROUND
The City currently has nineteen (19) bus shelters located at designated fixed-route bus stops served by both Metro and Long Beach Transit. These shelters provide essential protection from weather elements, including sun and rain, improve user comfort, and overall support the City’s goals outlined in the Climate Action Plan (CAP) to promote public transit use.

As part of the City’s commitment to enhancing transit infrastructure, staff has evaluated opportunities to expand shelter coverage at high demand bus stop locations. Based on ridership data, six (6) bus stop locations have been identified having higher ridership with basic bus stop infrastructure. The current configuration at these locations consists of a concrete bench and trash receptacle with no shade structure. Upgrading the bus shelters at these locations will improve the rider experience, support increased transit usage, and enhance the City’s aesthetic.

DISCUSSION
RDC-S111 (DBA Studio One Eleven) previously worked with the City on the bus shelter renovations in 2021. Studio One Eleven is a qualified design firm with experience in transit and streetscape projects and will provide design plans, prepare the construction documents, and provide project support during construction for the six (6) bus shelter renovation locations. The shelters will be designed using consistent architectural aesthetics that align with the bus shelter renovations that were completed in 2021, ensuring a cohesive streetscape throughout the City.

The six locations identified with high public transit ridership are as follows:

1. Southwest corner of Rosecrans Ave. and Paramount Blvd.

2. Southeast corner of Rosecrans Ave. and Downey Ave.

3. Northwest corner of Rosecrans Ave. and Garfield Ave.

4. Northwest corner of Rosecrans Ave. and Orange Ave.

Agenda Report February 24, 2026
DESIGN SERVICES FOR BUS SHELTERS (CITY PROJECT NO. 9672) Page 2

5. Northeast corner of Somerset Blvd. and San Jose Ave.

6. Southwest corner of Alondra Blvd. and Garfield Ave.

Design elements will focus on rider comfort, safety, and durability and will include integrated canopy coverage, lighting, seating, and signage. Shelters will be sized to accommodate seating while maintaining the required Americans with Disabilities Act (ADA) clearances, including designed accessible seating areas with adequate weather protection. Lighting design will enhance nighttime visibility and safety while matching the previously installed shelter designs.

The design approach includes the development of one standardized shelter design that can be applied across all six (6) locations, promoting efficiency, visual consistency, and cost-effectiveness. Based on experience from the last bus shelter upgrades in 2021, each location may pose unique features that will need to be taken into consideration. Features to consider may include varying sidewalk widths, nearby trees which may affect bus shelter lighting configuration, and the like. The City’s contracted engineering firm, Willdan Engineering, is reviewing each bus shelter location, current site conditions, and will work with Studio One Eleven to make design modifications as necessary for each site. Should field verifications indicate that a bus shelter is not technically feasible, the City may resort to selecting another bus stop location based on ridership data for renovation.

Approval of this agreement with Studio One Eleven will allow the City to proceed with the design phase. The agreement is set to expire on April 30, 2027, unless extended or earlier terminated. This will allow time for Studio One Eleven to review and respond to requests for information from the contractor during the construction phase of the project.

Pursuant to Chapter 3.12 of the Paramount Municipal Code, contracts for professional services are exempt from competitive bidding requirements and may be awarded based on demonstrated competence, professional qualifications, and the fairness and reasonableness of cost, rather than lowest bid alone. The design of these bus shelters constitutes professional architectural and design services requiring specialized expertise.

Therefore, Studio One Eleven was selected based on its qualifications, experience with similar transit and streetscape projects, familiarity with the City’s design standards, and the reasonableness of its proposed fee.

FISCAL IMPACT
Funding for this project was included in the FY 2025-26 Capital Improvement Budget as City Project No. 9672.

VISION, MISSION, VALUES, AND STRATEGIC OUTCOMES
The City’s Vision, Mission, and Values set the standard for the organization, establish priorities, uniformity and guidelines; and provide the framework for policy decision making. The Strategic Outcomes were implemented to provide a pathway to achieving Agenda Report February 24, 2026
DESIGN SERVICES FOR BUS SHELTERS (CITY PROJECT NO. 9672) Page 3 the City’s Vision. This item aligns with Strategic Outcome No 1: Safe Community - Provide a safe place to live, work, and visit. 5: Attractive and Well-Maintained Infrastructure - Develop and maintain City-owned infrastructure, parks, facilities, and amenities that enhance quality of life and the attractiveness of the community.

RECOMMENDED ACTION
Approve an agreement with RDC-S111 DBA Studio One Eleven in the amount of $78,500 for architectural design services related to bus shelter renovations (City Project No. 9672) and authorize the Mayor or her designee to execute the agreement. 1 CITY OF PARAMOUNT

PROFESSIONAL SERVICES AGREEMENT
(With Professional Liability)
This Agreement is made and entered into as of February 24, 2026 by and between the City of Paramount, a municipal corporation organized and operating under the laws of the State of California with its principal place of business at 16400 Colorado Avenue, Paramount, CA 90723 (“City”), and RDC-S111 a California corporation, (dba Studio One Eleven) with its principal place of business at 245 East Third Street, Long Beach, CA 90802 (hereinafter referred to as “Consultant”). City and Consultant are sometimes individually referred to as “Party” and collectively as “Parties” in this Agreement.

RECITALS
A. City requires provision of the following professional services:

Design services for additional bus shelters at various locations throughout the city, all as more fully set forth and described in this Agreement.

B. Consultant is duly licensed and/or otherwise fully authorized by law, and has the necessary experience and qualifications, to provide such services. City enters into this Agreement in substantial reliance on such experience and qualifications.

C. The Parties enter this Agreement in order to set forth terms and conditions governing Consultant’s performance of the services described herein.

AGREEMENT
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

1. Scope of Services.

Consultant shall perform the services generally described in (i) the Scope of Services attached hereto as Exhibit “A”; (ii) any applicable request for proposals issued by the City; and (iii) as otherwise required by this Agreement, all to City’s satisfaction (collectively, “Services” herein.)

2. Compensation.
a. Subject to Section 2.b, below, the City shall pay for the Services satisfactorily performed, in accordance with the Schedule of Rates/Payments set forth in Exhibit “B”, attached hereto.
b. In no event shall the total amount paid for the Services exceed the sum of $78,500.

This amount covers and is inclusive of all labor, materials, and any and all other costs incurred by Consultant in performing the Services, unless otherwise agreed upon in writing. Consultant shall be deemed to have made all necessary inquiries and site inspections prior to agreeing to perform the Services. Periodic payments for undisputed work shall be made within thirty (30) days of receipt of an invoice which 2 includes a detailed description of the work performed. Payments to Consultant for work performed will be made on a monthly billing basis.

3. Additional Work.

The Parties may agree on additional work to be provided as part of the Services. An amendment to this Agreement shall be prepared by the City and executed by both Parties authorizing such additional work and compensation therefor, prior to such work being performed.

4. Maintenance of Records.

Books, documents, papers, accounting records, and other evidence pertaining to costs incurred shall be maintained by Consultant and made available for review by the City at all reasonable times during the term of this Agreement and for four (4) years from the date of final payment by City.

5. Term; Time of Performance.

The term of this Agreement shall commence on the date first set forth above and shall expire on April 30, 2027, unless extended or earlier terminated as provided herein.

Consultant shall complete the Services within the term of this Agreement and shall meet any other established schedules and deadlines agreed upon in writing. Consultant represents that it has the professional and technical personnel required to satisfactorily perform the Services as required by this Agreement. All indemnification provisions of this Agreement shall survive and remain in effect following the termination of this Agreement.

The Parties may, by mutual, written consent, extend the term of this Agreement.

6. Delays in Performance.
a. Force Majeure. Neither City nor Consultant shall be considered in default of this Agreement for delays in performance caused by force majeure events. Force majeure events mean and refer to circumstances beyond the reasonable control of the nonperforming party including, but not limited to, abnormal weather conditions; floods; earthquakes; fire; epidemics; war; riots and other civil disturbances; strikes, lockouts, work slowdowns, and other labor disturbances; sabotage or judicial restraint.

Consultant’s lack of financial capability, not due to any of the foregoing events, shall not constitute a force majeure event.
b. Should a force majeure event occur, the non-performing party shall, within a reasonable time of being prevented from performing, but not more than three (3) business days, give written notice to the other party describing the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement.
3 7. Compliance with Law.
a. Consultant shall comply with all applicable local, State, and federal laws, ordinances, statutes, codes and regulations, including Cal/OSHA requirements, in the performance of the Services.
b. City may, but is not required, to assist Consultant in obtaining and maintaining all permits required of Consultant by federal, state and/or local regulatory agencies. c. If applicable, and unless otherwise provided in the Scope of Services, Consultant is responsible for all costs of clean up and/or removal of hazardous and toxic substances spilled as a result of his or her services or operations performed under this Agreement.

8. Standard of Care.

Consultant’s Services shall be performed in accordance with the generally accepted professional standards of practice and principles and in a manner consistent with the level of care and skill ordinarily exercised by members of the profession currently performing similar services under similar conditions in the County of Los Angeles. Consultant shall, at all times herein, possess any and all State of California and/or federal professional licenses and certifications, as applicable, required to lawfully perform the Services.

9. Assignment and Subcontracting.

Consultant shall not assign or transfer this Agreement or any rights or obligations under, or any interest in this Agreement, or subcontract any required performance hereunder, without the prior written consent of the City, which may be withheld for any reason. The Services required to be performed by the Consultant are personal to the Consultant. Any attempt to so assign, transfer, or subcontract without such consent shall be void and without legal effect and shall constitute grounds for termination. Authorized subcontracts, if any, shall contain a provision making the subcontractor subject to all requirements of this Agreement.

10. Independent Contractor.

Consultant is retained as an independent contractor and is not an employee of City. No employee or agent of Consultant is or shall become an employee of City. The work to be performed shall be in accordance with the Scope of Services described in this Agreement, subject to such directions and amendments from City as herein provided. a. All work and other Services provided pursuant to this Agreement shall be performed by Consultant or by Consultant’s employees or other personnel under Consultant’s supervision, and Consultant and all of Consultant’s personnel shall possess the qualifications, permits, and licenses required by State and local law to perform the Services, including, without limitation, a City of Paramount business license as required by the Paramount Municipal Code. Consultant will determine the means, methods, and details by which Consultant’s personnel will perform the Services.

Consultant shall be solely responsible for the satisfactory work performance of all 4 personnel engaged in performing the Services and compliance with the customary professional standards.
b. None of Consultant’s employees and/or other personnel performing any of the Services under this Agreement on behalf of Consultant shall be employees of City and shall at all times be under Consultant’s exclusive direction and control. Consultant and Consultant’s personnel shall not supervise any of City’s employees; and City’s employees shall not supervise Consultant’s personnel. Consultant’s personnel shall not wear or display any City uniform, badge, identification number, or other information identifying such individual as an employee of City; and Consultant’s personnel shall not use any City e-mail address or City telephone number in the performance of any of the Services under this Agreement. Consultant shall acquire and maintain at its sole cost and expense such vehicles, equipment and supplies as Consultant’s personnel require to perform any of the Services required by this Agreement.

Consultant shall perform all Services off of City premises at locations of Consultant’s choice, except as otherwise may from time to time be necessary in order for Consultant’s personnel to receive projects from City, review plans on file at City, pick up or deliver any work product related to Consultant’s performance of any Services under this Agreement, or as may be necessary to inspect or visit City locations and/or private property to perform such Services. City may make a computer available to Consultant from time to time for Consultant’s personnel to obtain information about or to check on the status of projects pertaining to the Services under this Agreement. c. Consultant shall be responsible for and pay all wages, salaries, benefits and other amounts due to Consultant’s personnel in connection with their performance of any Services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: Social Security taxes, other retirement or pension benefits, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance. Notwithstanding any other agency, State, or federal policy, rule, regulation, statute or ordinance to the contrary, Consultant and its officers, employees, agents, and subcontractors providing any of the Services under this Agreement shall not become entitled to, and hereby waive any claims to, any wages, salaries, compensation, benefit or any incident of employment by City, including but not limited to, eligibility to enroll in, or reinstate to membership in, the California Public Employees Retirement System (“PERS”) or any other retirement program, as an employee of City, and entitlement to any contribution to be paid by City for employer contributions or employee contributions for PERS benefits or any other retirement benefits.
d. To the maximum extent permitted by laws, Consultant shall indemnify, defend and hold harmless the City and other Indemnitees (as defined in Section 13.a herein), from any and all liabilities, damages, claims, costs and expenses of any nature to the extent arising from, caused by, or relating to Consultant’s violation of any provision of this Section 10, or any of Consultant’s personnel practices. In addition to all other remedies at law, City shall have the right to offset against the amount of any fees due to Consultant under this Agreement any amount due to City from Consultant as a result of Consultant’s failure to promptly pay to City any reimbursement or indemnification obligation arising under this Section. The duty of indemnification set 5 forth in this Section is in addition to all other indemnification provisions of this Agreement.

11. PERS Compliance.

General Requirements. The Parties acknowledge that City is a local agency member of PERS, and as such has certain pension reporting and contribution obligations to PERS on behalf of qualifying employees. Consultant agrees that, in providing its employees and any other personnel to City to perform any work or other Services under this Agreement, Consultant shall assure compliance with the Public Employees’ Retirement Law, commencing at Government Code § 20000, the regulations of PERS, and the Public Employees’ Pension Reform Act of 2013, as amended. Without limitation to the foregoing, Consultant shall assure compliance with regard to personnel who have active or inactive membership in PERS and to those who are retired annuitants and in performing this Agreement shall not assign or utilize any of its personnel in a manner that will cause City to be in violation of the applicable retirement laws and regulations. .

12. Insurance.

Unless otherwise permitted in writing by City’s Risk Manager, Consultant shall not commence work for the City until it has secured insurance in such forms and with such limits as set forth in Exhibit “C“ attached hereto, and provided evidence thereof that is acceptable to the City. In addition, Consultant shall not allow any subcontractor to commence work on any subcontract until it has secured all insurance required under this section.

13. Indemnification.
a. To the fullest extent permitted by law, Consultant shall defend (with counsel reasonably approved by City), indemnify and hold the City, its elected and appointed officials, officers, attorneys, agents, employees, servants, designated volunteers, successors, assigns and those City agents serving as independent contractors in the role of City officials (collectively “Indemnitees” in this Section 13) free and harmless with respect to any and all claims, demands, causes of action, costs, expenses, liabilities, losses, damages, stop notices and/or injury of any kind, in law or equity, to property or persons, including bodily injury, wrongful death, personal injury and property damage, in any manner arising out of, pertaining to, or incidental to any acts, errors, omissions, or willful misconduct of Consultant, its owners, officials, officers, employees, servants, subcontractors, consultants or agents in connection with the performance of the Consultant’s Services, and/or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by Consultant, or by the City or any of the other Indemnitees. Consultant’s duty to indemnify and hold harmless City shall not extend to the City’s sole or active negligence or willful misconduct. b. For Design Professional Services: If Consultant’s Services hereunder include the performance of professional services by a “design professional,” as the term is defined under California Civil Code § 2782.8(c), then to the fullest extent permitted by law, the 6 Consultant shall, at its sole cost and expense, indemnify and hold harmless the Indemnitees, and each of them, from and against any and all damages, costs, expenses, liabilities, claims, demands, causes of action, proceedings, judgments, penalties, liens, and losses of any nature whatsoever, including fees of accountants and other professionals, and all costs associated therewith, and reimbursement of attorneys’ fees and costs of defense, whether actual, alleged or threatened, to the extent arising out of, pertaining to, or relating to, in whole or in part, the negligence, recklessness or willful misconduct of the Consultant, and/or its officers, agents, servants, employees, subcontractors, contractors or their officers, agents, servants or employees (or any entity or individual for whom the Consultant shall bear legal liability) in the performance of design professional services under this Agreement.

Notwithstanding the foregoing and as required by Civil Code § 2782.8(a), in no event shall the cost to defend the Indemnitees that is charged to Consultant, exceed Consultant’s proportionate percentage of fault. Consultant’s duty to indemnify and hold harmless City shall not extend to the City’s sole or active negligence or willful misconduct.
c. The provisions of this Section 13 shall survive the termination of this Agreement.

14. California Labor Code Requirements.
a. Consultant is aware of the requirements of California Labor Code Sections 1720, et seq. and 1770, et seq., which require the payment of prevailing wages and the performance of other requirements on certain “public works” and “maintenance” projects (“Prevailing Wage Laws”). If the Services are being performed as part of an applicable “public works” or “maintenance” project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, Consultant agrees to fully comply with the Prevailing Wage Laws. These rates are on file with the City Clerk or may be obtained at: http://www.dir.ca.gov/OPRL/DPreWageDetermination.htm. (i) Copies of the prevailing wage rates may be obtained at cost at the City Clerk's office. Consultant shall post a copy of such wage rates at the job site and shall pay the adopted prevailing wage rates as a minimum. Consultant shall comply with the provisions of Sections 1775, 1776, 1777.5, 1777.6, and 1813 of the Labor Code. Pursuant to the provisions of 1775 of the Labor Code, Consultant shall forfeit to the City, as a penalty, not more than $200.00 for each calendar day, or portion thereof, for each laborer, worker, or mechanic employed, paid less than the stipulated prevailing rates for any work done under this Agreement, by them or by any subcontractor under them, in violation of the provisions of this Agreement. (ii) Consultant shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claims, liabilities, costs, penalties or interest arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. It shall be mandatory upon the Consultant and all subcontractors to comply with all California Labor Code provisions, which include but are not limited to prevailing wages (Labor Code Sections 1771, 1774 and 1775), employment of apprentices (Labor Code Section 1777.5), certified payroll records (Labor Code Sections 1771.4 and 1776), hours of labor (Labor Code Sections 1813 and 1815) and debarment of contractors and subcontractors (Labor 7 Code Section 1777.1). The requirement to submit certified payroll records directly to the Labor Commissioner under Labor Code Section 1771.4 shall not apply to work performed on a public works project that is exempt pursuant to the small project exemption specified in Labor Code Section 1771.4. b. If the Services are being performed as part of an applicable “public works” or “maintenance” project, then pursuant to Labor Code Sections 1725.5 and 1771.1, the Consultant and all subcontractors performing such Services must be registered with the Department of Industrial Relations. Consultant shall maintain registration for the duration of this Agreement and require the same of any subcontractors, as applicable.

Notwithstanding the foregoing, the contractor registration requirements mandated by Labor Code Sections 1725.5 and 1771.1 shall not apply to work performed on a public works project that is exempt pursuant to the small project exemption specified in Labor Code Sections 1725.5 and 1771.1.
c. This Agreement may also be subject to compliance monitoring and enforcement by the Department of Industrial Relations. It shall be Consultant’s sole responsibility to comply with all applicable registration and labor compliance requirements. Any stop orders issued by the Department of Industrial Relations against Consultant or any subcontractor that affect Consultant’s performance of the Services, including any delay, shall be Consultant’s sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Consultant caused delay and shall not be compensable by the City. Consultant shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claim or liability arising out of stop orders issued by the Department of Industrial Relations against Consultant or any subcontractor.

15. Data Security.
a. As used in this Agreement, “City Data” means any and all information and data provided or made accessible, directly or indirectly, to Consultant by City, or otherwise acquired from City, in connection with Consultant’s performance of the Services. As between the Consultant and the City, any and all City Data is solely owned by City.

Consultant is granted a limited, non-exclusive, and revocable license to use City Data solely as necessary to perform the Services. At no time shall Consultant use City Data for its own purposes, or sell, disclose or disseminate City Data, except as required by law or to provide the Services. At all times herein, Consultant shall protect and maintain the security of City Data using methods providing not less than the level of security Consultant uses for its own confidential data, and that otherwise comply with recognized industry data security standards applicable to similar kinds of governmental data and information.
b. To the extent any City Data consists of personal information as defined in the California Consumer Privacy Act (Civil Code Section 1798.100, et seq.), Consultant shall comply with that statute and with Civil Code Section 1798.80. et seq., including providing the required notifications in the event of any unauthorized access or disclosure of personal information stored, maintained, accessed, used or transmitted by Consultant in connection with this Agreement. Notwithstanding the foregoing, Consultant shall within 24 hours notify the City Representative by telephone and in 8 writing of any unauthorized access of City Data. Thereafter, Consultant shall render any assistance to City and law enforcement as necessary to ascertain the nature and extent of such unauthorized access.
c. Consultant shall not store City Data using cloud-based storage without City’s prior, written consent, unless the use of such storage is clearly described in the Scope of Services. Where permitted herein, any and all cloud-based storage shall be on servers and other hardware located within the continental United States, and shall be in compliance with ISO/IEC 27001 - 27018, as applicable, unless otherwise agreed to in writing by the City Representative. Cloud storage using Amazon Web Service or Microsoft Azure shall be deemed to satisfy the requirements of this subsection (c).

16. Confidential Information
Consultant understands and agrees that, in the performance of the Services under this Agreement or in contemplation thereof, Consultant may have access to private or confidential information which may be owned or controlled by the City and that, if disclosed to third parties, could be damaging to the City. Consultant agrees that all City information and data provided to or made accessible to Consultant by City shall be held in confidence and disclosed only as needed in performance of this Agreement, or as required by law.

Consultant shall exercise the same standard of care to protect such information as a reasonably prudent consultant would use to protect its own confidential and/or proprietary information and data.

17. Laws and Venue.

This Agreement shall be interpreted in accordance with the laws of the State of California without regard for conflicts of laws rules. If any action is brought to interpret or enforce any term of this Agreement, the action shall be brought in a state or federal court situated in the County of Los Angeles, State of California. Consultant must comply with the claim procedures set forth in Government Code section 900, et seq. prior to filing any lawsuit against the City.

18. Termination.
a. City has the right to terminate any portion or all of the Services under this Agreement with or without cause, by giving ten (10) calendar days’ prior, written notice to Consultant. In such event, City shall be immediately given title to and possession of all Work Product, including all related intellectual property rights, and original field notes, drawings and specifications, written reports and all other documents produced or developed pursuant to this Agreement. Provided Consultant is not then in breach, City shall pay Consultant the reasonable value of services rendered for any portion of the Services completed prior to termination. If said termination occurs prior to completion of any specific task for which a payment request has not been received, the charge for Services performed shall be the reasonable value of such Services, based on an amount agreed to by City and Consultant. City shall not be liable for any costs other than the charges or portions thereof which are specified herein.

Consultant shall not be entitled to payment for unperformed services or services within the Scope Services performed prior to the effective date of this Agreement, and shall 9 not be entitled to damages or compensation resulting from such termination of the Services.
b. Consultant may terminate its obligation to provide further Services under this Agreement by serving written notice of termination to the City, provided Consultant has first served the City with a written notice of default and demand to cure, and City has failed to cure such default within thirty (30) days of receipt of such notice.

19. Ownership of Work Product.
a. Except as otherwise provided in Section 18, “Termination”, above, and unless otherwise agreed upon in writing, all draft and final reports, documents, and other written material, and any and all images, ideas, concepts, designs including website designs, source code, object code, electronic data and files, and/or other media whatsoever created or developed by Consultant in the performance of this Agreement (collectively, “Work Product”) shall be considered to be “works made for hire” for the benefit of City. All Work Product and any and all intellectual property rights arising from their creation, including, but not limited to, all copyrights and other proprietary rights, shall be and remain the property of City without restriction or limitation upon their use, duplication or dissemination by City upon final payment being made or termination of the Agreement by City, provided that any such use shall be at City’s sole risk. Consultant shall not obtain or attempt to obtain copyright protection as to any of the Work Product. “Work Product” does not include intellectual property lawfully owned by or licensed to Consultant prior to the effective date of this Agreement. b. Consultant hereby assigns to City all rights of ownership to the Work Product, including any and all related intellectual property and proprietary rights that are not otherwise vested in the City pursuant to subsection (a), above. c. Consultant warrants and represents that it has secured all necessary licenses, consents or approvals necessary to the production of the Work Product, and that upon final payment or Consultant’s default, City shall have full legal title to the Work Product, and full legal authority and the right to use and reproduce the Work Product for any purpose. Consultant shall defend, indemnify and hold City, and the other Indemnitees (as defined in Section 13(a), above) harmless from any and all loss, claim or liability in any way related to a claim that City’s use of any of the Work Product violates federal, state or local laws, or any contractual provisions, or any rights or laws relating to trade names, licenses, franchises, copyrights, patents or other means of protecting intellectual property rights and/or interests in products, ideas or inventions. Consultant shall bear all costs arising from the use of patented, copyrighted, trade secret or trademarked documents, materials, equipment, devices or processes in connection with its provision of the Work Product produced under this Agreement. In the event the use of any of the Work Product or other deliverables hereunder by City is held to constitute an infringement and the use of any of the same is enjoined, Consultant, at its expense, shall: (a) secure for City the right to continue using the Work Product and other deliverables by suspension of any injunction, or by procuring a license or licenses for City; or (b) modify the Work Product and other deliverables so that they 10 become non-infringing while remaining in compliance with the requirements of this Agreement. This covenant shall survive the termination of this Agreement.

20. Party Representatives.

Consultant hereby designates _Kirk Keller, or his or her designee, as Consultant’s Representative for this Agreement, unless and until written notice of a new representative acceptable to City is provided to City. City hereby designates _Adriana Figueroa_, or his or her designee, as City’s Representative for this Agreement. The foregoing Representatives shall be authorized to approve non-monetary revisions to this Agreement, provide consent where required herein, and to make other administrative decisions that will be binding on their respective Party, except as otherwise specifically required herein.

21. Notices.

Any notice or instrument required or permitted to be given or delivered by this Agreement may be given or delivered by depositing the same in any United States Post Office, certified mail, return receipt requested, postage prepaid, addressed to:

CITY:

City of Paramount
16400 Colorado Avenue
Paramount, CA 90723
Attn: Adriana Figueroa
CONSULTANT:

RDC-S111, Inc.
245 E. Third Street
Long Beach, CA 90802
Attn: Kirk Keller
and shall be effective upon receipt thereof.

22. Third Party Rights.

Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than the City and the Consultant.

23. Equal Opportunity Employment.

Consultant represents that it is an equal opportunity employer and that it shall not discriminate against any employee or applicant for employment because of race, religion, color, national origin, ancestry, sex, age or other interests protected by the State or Federal Constitutions. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination.

24. Entire Agreement.

This Agreement, with its exhibits, all of which are incorporated by reference herein, and all documents incorporated by reference, represents the entire understanding of City and Consultant as to those matters contained herein, and supersedes and cancels any prior 11 or contemporaneous oral or written understanding, promises or representations with respect to those matters covered hereunder. Each party acknowledges that no representations, inducements, promises or agreements have been made by any person which are not incorporated herein, and that any other agreements shall be void. This Agreement may not be modified or altered except in writing signed by both Parties hereto.

This is an integrated Agreement. In the event of any conflict or inconsistency between the provisions of this Agreement and any exhibit hereto or document incorporated by reference herein, the provisions of this Agreement shall govern.

25. Severability.

The unenforceability, invalidity or illegality of any provision(s) of this Agreement shall not render any other provisions unenforceable, invalid or illegal.

26. Successors and Assigns.

This Agreement shall be binding upon and shall inure to the benefit of the successors in interest, executors, administrators and assigns of each party to this Agreement.

However, Consultant shall not assign or transfer by operation of law or otherwise any or all of its rights, burdens, duties or obligations without the prior written consent of City. Any attempted assignment without such consent shall be invalid and void.

27. Non-Waiver.

None of the provisions of this Agreement shall be considered waived by either party, unless such waiver is agreed to in writing, and any such waiver shall be limited to that set of circumstances and not to any future circumstances unless another written waiver is executed.

28. Time of Essence.

Time is of the essence in each and every provision of this Agreement.

29. City’s Right to Employ Other Consultants.

City reserves its right to employ other consultants to provide the Services or similar services to the City.

30. Interest of Consultant.

Consultant covenants that it presently has no interest, and shall not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services under this Agreement. Consultant certifies that no one who has or will have any financial interest under this Agreement is an officer or employee of the City.
12 31. Interest of Subcontractors.

Consultant further covenants that, in the performance of this Agreement, no subcontractor or person having any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services under this Agreement shall be employed. Consultant has provided City with a list of all subcontractors and the key personnel for such subcontractors that are retained or to be retained by Consultant in connection with the performance of the Services, to assist the City in affirming compliance with this Section.

32. Prohibited Interests.

Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. If required, Consultant further agrees to file, or shall cause its employees or subcontractors to file, a Statement of Economic Interest with the City’s Filing Officer as required under state law in the performance of the Services. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no director, official, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.
[SIGNATURES ON FOLLOWING PAGE]
13 SIGNATURE PAGE FOR PROFESSIONAL SERVICES AGREEMENT

BETWEEN THE CITY OF PARAMOUNT
AND RDC, S111, INC.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

CITY OF PARAMOUNT CONSULTANT: RDC-S111, INC.

By:____________________________ By:____________________________ Peggy Lemons, Mayor Kirk Keller, Principal
By: ____________________________
Signature
_____________________________
Name, Title
[Two corporate signatures required if corporation]
ATTEST:

By:___________________________
Heidi Luce, City Clerk
Exhibit - 1

EXHIBIT A
Scope of Services
2 3
4 5
Exhibit B - 1

EXHIBIT B
Schedule of Rates/Payments
Consultant will invoice City on a monthly cycle, or otherwise as expressly provided in this Agreement. Consultant will include with each invoice a detailed progress report that indicates the amount of budget spent on each task, as applicable. Consultant will inform City regarding any out-of-scope work being performed by Consultant. Any other terms and conditions relating to the amount of compensation to be paid to Consultant are as follows:

Exhibit C - 2
Exhibit C - 1

EXHIBIT C

INSURANCE

1. Time for Compliance. Consultant shall not commence work under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this section, or as may otherwise be permitted or required in writing by the City’s risk manager.

2. Types of Insurance Required. As a condition precedent to the effectiveness of this Agreement for work to be performed hereunder, and without limiting the indemnity provisions of the Agreement, the Consultant, in partial performance of its obligations under such Agreement, shall procure and maintain in full force and effect during the term of the Agreement the following policies of insurance. If the existing policies do not meet the insurance requirements set forth herein, Consultant agrees to amend, supplement or endorse the policies to do so.

A. Commercial General Liability: Commercial General Liability Insurance which affords coverage at least as broad as Insurance Services Office “occurrence" form CG 0001, or the exact equivalent, with limits of not less than $1,000,000 per occurrence and no less than $2,000,000 in the general aggregate. Defense costs shall be paid in addition to the limits. The policy shall contain no endorsements or provisions (1) limiting coverage for contractual liability; (2) excluding coverage for claims or suits by one insured against another (cross-liability); or (3) containing any other exclusion(s) contrary to the terms or purposes of this Agreement.

B. Workers' Compensation: Workers' Compensation Insurance, as required by the State of California and Employer's Liability Insurance with a limit of not less than $1,000,000 per accident for bodily injury and disease.

C. Professional Liability (Errors & Omissions): Consultant shall maintain professional liability insurance that covers the services to be performed in connection with this Agreement, in the minimum amount of $1,000,000 per claim and in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the effective date of this Agreement. If a “claims-made” policy is provided, it shall include an extended reporting period of not less than three (3) years.

D. Commercial Automobile Liability Insurance: Consultant shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of the Consultant arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non-owned, or rented vehicles, in an amount not less than 1,000,000 combined single limit for each accident. The City of Paramount, its elected or appointed officers, officials, employees and volunteers shall be named as additional insureds on such policy.

E. Cyber Liability: Vendor shall maintain comprehensive cyber liability insurance with limits of $1,000,000 per occurrence/loss and $2,000,000 general aggregate. If a “claims-made” policy is provided, it shall include an extended reporting period of not less than three (3) years.

Exhibit C - 2
F. For Commercial General Liability and Commercial Automobile Liability (CGL Coverage):

The City will be named as an additional insured, under the commercial general liability (“CGL”) insurance policy coverage, for all liability arising out of the operations by or on behalf of the named insured, and this CGL policy protects the additional insured, its officers, agents and employees against liability for personal and bodily injuries, deaths or property damage or destruction arising in any respect, directly or indirectly, in the performance of the contract.
(i) Each such CGL policy shall be endorsed with the following language: The City of Paramount, its elected or appointed officers, officials, employees and volunteers are included as insureds with regard to damages and defense of claims arising from: (a) activities performed by or on behalf of the Named Insured, including the insured's general supervision of the Named Insured, (b) products and completed operations of the Named Insured, or (c) premises owned, leased or used by the Named Insured. (ii) This CGL policy shall be considered primary insurance as respects the City, its elected or appointed officers, officials, employees, agents and volunteers. Any insurance maintained by the City, including any self-insured retention the City may have, shall be considered excess insurance only and shall not contribute with it. (iii) The inclusion of more than one insured shall not operate to impair the rights of one insured against another insured, and the coverages afforded shall apply as though separate policies had been issued to each insured.
(iv)The Additional Insured coverage under the Consultant’s policy shall be primary and non-contributory and will not seek contribution from the City’s insurance or selfinsurance and shall be at least as broad as CG 20 01 04 13.

G. Deductibles and Self-Insured Retentions: Any self-insured retentions must be declared to and approved by City. City reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible, or require proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention.

3. Waiver of Subrogation. All policies of Commercial General Liability, Commercial Automobile Liability, and Worker’s Compensation shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against the City, its officials, officers, employees, and agents to the extent of such coverage.

4. Evidence of Insurance. The Consultant shall deliver redacted copies of the required policies or original certificates of insurance and redacted or specimen endorsements issued by their insurer. The Consultant and its insurer are solely responsible for ensuring that the required insurance complies with this Agreement and provides adequate coverage for all services performed. The Consultant shall procure insurance policies that meet the stated standards.

At least fifteen (15) days before any policy expires, or within a reasonable time after policy renewal, the Consultant shall provide evidence of renewal or replacement coverage. If any Exhibit C - 3
policy is canceled or reduced, the Consultant must file evidence of reinstatement or replacement coverage within ten (10) days of receipt of written notice of the change.

The City may request copies of insurance policies and endorsements for informational purposes only, without assuming any obligation to verify compliance or adequacy.

5. Failure to Maintain Coverage. In the event any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced immediately so as to avoid a lapse in the required coverage, City has the right but not the duty to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Consultant or City will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City may cancel this Agreement effective upon notice.

6. Acceptability of Insurers. Each such policy shall be from a company or companies with a current A.M. Best's rating of no less than A- VII and authorized to transact business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.

7. Enforcement of Agreement Provisions (non-estoppel). Consultant acknowledges and agrees that actual or alleged failure on the part of the City to inform Consultant of noncompliance with any requirement imposes no additional obligation on the City nor does it waive any rights hereunder.

8. Requirements Not Limiting. Requirement of specific coverage or minimum limits contained in this Agreement are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance.

Exhibit C - 4
WORKER’S COMPENSATION INSURANCE CERTIFICATION

WORKERS' COMPENSATION DECLARATION
I hereby affirm under penalty of perjury one of the following declarations: (ONE OF THE

PARAGRAPHS BELOW MUST BE CHECKED)
 I have and will maintain a certificate of consent from the California Labor Commission to self-insure for workers' compensation, as provided for by Section 3700 of the Labor Code, for the performance of the work to be performed under this Agreement.  I have and will maintain workers' compensation insurance, as required by Section 3700 of the Labor Code, for the performance of the work to be performed under this contract.

My workers' compensation insurance carrier and policy number are:

Carrier ____________________________________________
Policy Number ______________________________________
 I certify that, in the performance of the work under this Agreement, I shall not employ any person in any manner so as to become subject to the workers' compensation laws of California, and I hereby agree to indemnify, defend, and hold harmless the City of Paramount and all of its officials, employees, and agents from and against any and all claims, liabilities, and losses relating to personal injury or death, economic losses, and property damage arising out of my failure to provide such worker’s compensation insurance. I further agree that, if I should become subject to the workers' compensation provisions of Section 3700 of the Labor Code, I shall forthwith comply with those provisions.

WARNING: FAILURE TO SECURE WORKERS’ COMPENSATION COVERAGE IS

UNLAWFUL, AND SHALL SUBJECT AN EMPLOYER TO CRIMINAL PENALTIES AND CIVIL FINES UP TO ONE HUNDRED THOUSAND DOLLARS ($100,000), IN ADDITION TO THE COST OF COMPENSATION, DAMAGES AS PROVIDED FOR IN SECTION 3706 OF THE LABOR CODE, INTEREST, AND ATTORNEY’S FEES.

By: _________________________________ Dated:______________, 20_________ To: Honorable City Council
From: John Moreno, City Manager
By: Adriana Figueroa, Public Works Director
Date: February 24, 2026
SUBJECT: FIRE FLOW INSTALLATION FOR THE HAY TREE PUBLIC MARKET LOCATED AT 16493 PARAMOUNT BOULEVARD

BACKGROUND
The developer is moving forward with construction at the Paramount Saw building located at 16493 Paramount Boulevard. This project will include a community room, historical museum, food court, and other amenities for the community to enjoy. As part of the building’s development and permitting process, the developer has requested the installation of a dedicated fire service to meet fire protection and safety requirements.

After City staff and the Los Angeles County Fire Department (LACFD) reviewed the project, it was determined that a 4-inch fire service is required to adequately serve the building and comply with applicable fire code standards.

DISCUSSION
Fire service infrastructure is required to ensure adequate water supply and pressure is available for fire suppression needs. In response to LACFD requirements, a new 4- inch fire service will need to be installed to serve the building.

To determine the cost of this installation, City staff obtained three (3) proposals for the necessary work; proposals reflected costs ranging from $50,160 to $77,000. Following review, Doreck Construction was identified as the lowest responsible quote.

Pursuant to Chapter 3.12 of the Paramount Municipal Code, the total cost of this installation exceeds the City Manager’s purchasing authority threshold. Therefore, this item is being presented to the City Council for approval. Staff obtained three proposals to confirm a fair and reasonable cost, and all installation costs, including the City’s administrative fee, will be paid by the developer in accordance with the City’s adopted Master Fee Schedule.

The total cost of the fire service installation is $50,160, which will be paid directly to the City by the developer. In addition, the City will assess an administrative fee of $1,030 to cover staff time and processing associated with the installation. The total cost for the fire installation is $51,190.

Agenda Report February 24, 2026
FIRE FLOW SERVICE INSTALLATION Page 2

FISCAL IMPACT
As the costs are fully recovered from the developer, there is no net fiscal impact to the City, and no additional City appropriation is required. The project will be recorded in the Water Fund, which will recognize the associated installation fee revenue and the corresponding contractor installation expenditures.

VISION, MISSION, VALUES, AND STRATEGIC OUTCOMES
The City’s Vision, Mission, and Values set the standard for the organization, establish priorities, uniformity and guidelines; and provide the framework for policy decision making. The Strategic Outcomes were implemented to provide a pathway to achieving the City’s Vision. This item aligns with Strategic Outcome No 1: Safe Community - Provide a safe place to live, work, and visit. 5: Attractive and Well-Maintained Infrastructure - Develop and maintain City-owned infrastructure, parks, facilities, and amenities that enhance quality of life and the attractiveness of the community.

RECOMMENDED ACTION
Authorize the installation of a 4-inch fire flow service by Doreck Construction for the Hay Tree Public Market, located at 16493 Paramount Boulevard.

To: Honorable City Council
From: John Moreno, City Manager
By: Heidi Luce, City Clerk
Date: February 24, 2026
SUBJECT: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARAMOUNT AMENDING SUBSECTIONS 13.04.470(D) AND (E), DELETING SECTION

16.24.060 OF THE PARAMOUNT MUNICIPAL CODE, AND ADDING
CHAPTER 3.40, ESTABLISHING THE DEVELOPMENT IMPACT FEES

PROGRAM THAT INCLUDES A COMMERCIAL LINKAGE FEE

APPLICABLE TO CERTAIN NEW ACTIVITIES AND DEVELOPMENTS

WITHIN THE CITY AND MAKING A FINDING OF EXEMPTION UNDER

THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)

BACKGROUND
The City Council, at its regularly scheduled meeting on February 10, 2026, introduced Ordinance No. 1212, amending Subsections 13.04.470(d) and (e), deleting Section

16.24.060 of the Paramount Municipal Code, and adding Chapter 3.40, establishing the Development Impact Fees Program that includes a Commercial Linkage Fee applicable to certain new activities and developments within the City and making a finding of exemption under the California Environmental Quality Act (CEQA), and place it on the February 24, 2026 agenda for adoption.

ORDINANCE NO. 1212
“AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PARAMOUNT AMENDING SUBSECTIONS 13.04.470(D) AND (E),
DELETING SECTION 16.24.060 OF THE PARAMOUNT MUNICIPAL
CODE, AND ADDING CHAPTER 3.40, ESTABLISHING THE

DEVELOPMENT IMPACT FEES PROGRAM THAT INCLUDES A

COMMERCIAL LINKAGE FEE APPLICABLE TO CERTAIN NEW

ACTIVITIES AND DEVELOPMENTS WITHIN THE CITY AND MAKING A

FINDING OF EXEMPTION UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)”

DISCUSSION
During the City Council’s consideration of this item, discussion ensued concerning the applicability of the proposed Development Impact Fees to projects involving single-family reconstruction or additions. Following discussion, with City Council concurrence, the Agenda Report February 24, 2026
ORDINANCE NO. 1212 Page 2
ordinance was amended in to eliminate the following text (shown in strikeout) from Subsection 3.40.050(A) “Reconstruction of, or residential additions to, single-family dwellings., which do not result in a net increase the gross floor area.” Ordinance No. 1212, as amended, is presented for adoption at tonight’s meeting. The agenda report from the February 10, 2026, meeting is attached for reference.

FISCAL IMPACT
The proposed Development Impact Fees Program will generate revenue to support City infrastructure and other projects in accordance with the Capital Improvement Plan.

However, the specific revenue amounts will vary from year to year based on varying residential, commercial, and industrial development.

VISION, MISSION, VALUES, AND STRATEGIC OUTCOMES
The City’s Vision, Mission, and Values set the standard for the organization, establish priorities, uniformity and guidelines; and provide the framework for policy decision making. The Strategic Outcomes were implemented to provide a pathway to achieving the City’s Vision. This item aligns with Strategic Outcome No. 5: Attractive and WellMaintained Infrastructure - Develop and maintain City-owned infrastructure, parks, facilities, and amenities that enhance quality of life and the attractiveness of the community. 6: Efficient, Effective, and Fiscally Responsible - Deliver an efficient and effective City government in a fiscally responsible, transparent and collaborative manner.

RECOMMENDED ACTION
Adopt Ordinance No. 1212.

CITY OF PARAMOUNT

LOS ANGELES COUNTY, CALIFORNIA
ORDINANCE NO. 1212

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PARAMOUNT AMENDING SUBSECTIONS 13.04.470(D) AND (E),
DELETING SECTION 16.24.060 OF THE PARAMOUNT MUNICIPAL
CODE, AND ADDING CHAPTER 3.40, ESTABLISHING THE

DEVELOPMENT IMPACT FEES PROGRAM THAT INCLUDES A

COMMERCIAL LINKAGE FEE APPLICABLE TO CERTAIN NEW

ACTIVITIES AND DEVELOPMENTS WITHIN THE CITY AND MAKING A

FINDING OF EXEMPTION UNDER THE CALIFORNIA ENVIRONMENTAL

QUALITY ACT (CEQA)

THE CITY COUNCIL OF THE CITY OF PARAMOUNT DOES HEREBY ORDAIN AS FOLLOWS:

WHEREAS, the City of Paramount (“City”) is a general law city, incorporated under the laws of the State of California; and
WHEREAS, pursuant to its police power, the City may enact and enforce laws within its boundaries which promote the public health, morals, safety, or general welfare of the community, and are not in conflict with general laws; and WHEREAS, the City recognizes that there will continue to be additional development and expansion within the City based on growth projections from the Southern California Association of Governments; and
WHEREAS, the Paramount General Plan requires such development impacts to be mitigated by requiring that new development mitigate its share of the impacts to the natural and built environment to be fiscally neutral and not result in a net economic loss for the City; and
WHEREAS, future development within the City boundaries will result in a demand for additional public safety facilities, parks facilities, general government facilities, storm drain, transportation, water capacity, and affordable housing; and WHEREAS, the City may collect development impact fees under the authority granted by the State of California Mitigation Fee Act; and WHEREAS, in accordance with the requirement that new development mitigate its share of the impacts, the City contracted with Economic & Planning Systems Inc. (EPS) for preparation of a Development Impact Fee Nexus Study (“Study”) which recommends establishing development impact fees, and explains the nexus between the imposition of the fee and the estimated reasonable cost of providing the service for which the fee is charged; and
ORDINANCE NO. 1212

WHEREAS, EPS also prepared a comprehensive standalone Commercial Linkage Fee Nexus Study that provides for the feasibility of an affordable housing impact fee for new commercial development; and
WHEREAS, the Public Safety Facilities fee will be used to construct new development’s fair share portion of public safety facilities, as well as acquire public safety vehicles necessitated by new development; and
WHEREAS, the Parks Facilities fee will be used to construct new development’s fair share portion of park and recreation facilities, as well as acquiring parkland necessitated by new development; to plan, design, and develop parks and recreation facilities; and to fund the studies and administration to support the program; and WHEREAS, the General Facilities fee will be used to construct new development’s fair share portion of civic facility upgrades; and
WHEREAS, the Storm Drain fee will be used to construct new development’s fair share portion of storm drain facilities; and
WHEREAS, the Transportation fee will be used to construct new development’s fair share portion associated with all residential and nonresidential uses to assist with funding of transportation infrastructure projects identified in Table 1 of Appendix A of the Paramount Development Impact Fee Nexus Study. These projects include roadway expansion, intersection improvements, and the development of multimodal transportation options such as bike and pedestrian pathways. The fee may also be used to fund the administration to support the fee program; and
WHEREAS, the Water Capacity fee will be used to recover a proportionate share of costs for existing and future water system facilities and assets from new or expanded connections to the water system; and
WHEREAS, the Commercial Linkage Fee program will be used to assist in the production or rehabilitation of affordable housing units and/or the acquisition of land or existing at-risk units in the City. The fee may also fund the studies and administration to support the fee program; and
WHEREAS, to account for future construction cost inflation, the City shall implement automatic annual adjustments; and
WHEREAS, the annual adjustment to the Development Impact Fees (DIFs) program will be based on the Consumer Price Index for All Urban Consumers (CPI-U), Los Angeles-Long Beach-Anaheim, published by the U.S. Bureau of Labor Statistics.

ORDINANCE NO. 1212

SECTION 1. Purpose and Findings. The City Council finds and declares as follows:

A. California Constitution Article XI, Section 7, enables the City of Paramount ("the City") to enact local ordinances and regulations not in conflict with general laws; and
B. The State of California, through the enactment of Government Code Sections 66001 through 66009, has authorized the City to enact development impact fees; and
C. The imposition of development impact fees is one of the preferred methods of ensuring that development bears a proportionate share of the cost of capital facilities and related costs necessary to accommodate such development. The imposition of development impact fees must be done in order to promote and protect the public health, safety, and welfare; and D. The General Plan is comprised of elements, and the Resource Management Element includes Resource Management Element Policy 13 which states, “The City of Paramount will continue to collect park fees from all new residential development”; and
E. The Mitigation Fee/User Fee Study program of the Implementation Element of the General Plan states, “The City will continue to explore strategies to ensure that the public does not bear an undue burden associated with new development. The City will determine a reasonable fair method of assessing new development for the cost of providing any additional infrastructure required by the development”; and
F. The City Council held a duly noticed public hearing on this Ordinance on February 10, 2026, at which time it considered all evidence presented, both written and oral.

SECTION 2. Subsections 13.04.470(D) and (E) are hereby amended as follows.

D. Basis of charge. The capital improvement charge shall be calculated on a per meter equivalent unit basis.

E. Fees. Water capital improvement charges shall be payable in accordance with Chapter 3.40 (Development Impact Fees Program) of the Paramount Municipal Code and the Mitigation Fee Act.

SECTION 3. Section 16.24.060 (Regulations for payment of park fees for new residential dwelling units) is hereby repealed.
§ 16.24.060. Regulations for payment of park fees for new residential dwelling units.

A. Requirements. As a condition of approval of a building permit for a new ORDINANCE NO. 1212

residential dwelling unit in an R-M (Multiple Residential) zone or a PD-PS (Planned Development with Performance Standards) zone for multiplefamily dwellings, the subdivider or developer shall pay a fee for park or recreational purposes at the time and according to the standards and formula contained in this section. This section does not apply to stock cooperatives, which consist of the subdivision of air space in an existing apartment building which is more than five years old, when no new dwelling units are added.

B. General Standards. It is hereby found and determined that the public interest, convenience, health, welfare, and safety require that two acres of property for each 1,000 persons residing within this City be devoted to local park and recreational purposes.

C. Amount of Fee. The fee to be paid shall not exceed, but can be less than the fee determined by the following formula:
2 acres
(Cost of land/acre + Cost of park
development/acre) x
1,000
population
x
Average number of persons
per unit =
Fee to be
paid
D. Fees. The subdivider shall pay a fee as described in subsection C, or $500.00 for the first bedroom in each unit and $250.00 for each bedroom in the unit in excess of one bedroom, whichever is less.

E. Use of Money. The money collected hereunder shall be used exclusively for the purposes of developing new or rehabilitating existing neighborhood or community park or recreational facilities. The interest earned on the accumulated in-lieu fees shall be used for the same purposes.

F. Credit for Private Open Space. Where private open space for park and recreational purposes is provided in a proposed subdivision and such space is to be privately owned and maintained by the future residents of the subdivision, such areas shall be credited against the requirement of the payment of fees in lieu thereof in subsection C of this section, provided the City Manager, or designee, finds it is in the public interest to do so and that the following standards are met:

1. That yards, court areas, setbacks and maintenance of the open space is adequately provided for by written agreement; and

2. That the private ownership and maintenance of the open space is adequately provided for by written agreement; and

3. That the use of the private open space is restricted for park and recreational purposes by recorded covenants which run with the land in favor of the future owners of property within the tract and which cannot be defeated or eliminated without the consent of the City ORDINANCE NO. 1212

Council; and

4. That the proposed private open space is reasonably adaptable for use for park and recreational purposes, taking into account such factors as size, shape, topography, geology, access, and location of the private open space land; and

5. That facilities proposed for the open space are in substantial accordance with the provisions of the recreational element of the General Plan, and are approved by the City Council.

SECTION 4. A new Chapter 3.40 is hereby added to the Paramount Municipal Code.
“Chapter 3.40

DEVELOPMENT IMPACT FEES PROGRAM

3.40.10. Development Impact Fees Program fees imposed – Calculation, adoption, and adjustments of fees by implementing resolutions – Automatic annual adjustments.

The fees established by this chapter shall be calculated, adopted, and may be adjusted by implementing resolutions. In the future, the City Council may establish new public facility categories and fee categories by amending this chapter and adopting subsequent implementing resolutions. For each public facility category established by this chapter, the Finance Director shall create in the City treasury a separate and distinct “fee fund,” subject to the accounting requirements of the Mitigation Fee Act.

A. Development Impact Fees Program

1. Public safety facilities

2. Parks facilities

3. General government facilities

4. Storm drain

5. Transportation

6. Water capacity

7. Commercial Linkage Fee for affordable housing
ORDINANCE NO. 1212

B. To maintain the program’s financial sustainability and relevance, the City will apply an annual adjustment to the Development Impact Fees Program, reflecting changes in construction costs. Annual Adjustments will be based on the Consumer Price Index for All Urban Consumers (CPI-U), Los Angeles-Long Beach-Anaheim; published by the U.S. Bureau of Labor Statistics.

3.40.20. Obligation to pay fees.

A. Each applicant for City approval of a development project (including applications for a change of use) shall pay impact fees to the City, as allowed by law, in accordance with the amounts set forth in implementing resolutions, unless the applicant establishes, to the satisfaction of the Director, entitlement to a fee credit, a fee adjustment, or a fee exemption or exception. The commercial linkage fee is only applicable to nonresidential development projects.

B. The obligation to pay impact fees pursuant to this ordinance shall not replace an applicant’s obligation to mitigate development project impacts in accordance with state or local law.

C. Fees paid are refundable in accordance with the Mitigation Fee Act.

3.40.30. Amount of payment.

A. Except as otherwise set forth in this ordinance, the fee to be paid for each development project based on square footage within a development project shall be the amount of the fee in effect, pursuant to the implementation resolution, at the time that full payment is due to the City.

B. In the event that a previous partial fee payment is made for any development project, the full fee to be paid for that project shall be the amount of the fee in effect, pursuant to the implementing resolution, at the time that full payment is made to the City, minus the amount of the previous partial payment.

C. The applicant shall have the burden of providing the amount of any fee previously paid, the date on which the payment was made, and the development project for which the payment was made.

3.40.40. Timing of payment.

A. The fee for each development project based on square footage within a development project shall be paid in full prior to either the final inspection or issuance of Certificate of Occupancy required for that development project, unless otherwise authorized by the Mitigation Fee Act.

ORDINANCE NO. 1212

B. No City official or agency may certify final inspection or issue a certificate of occupancy for a development project, or otherwise allow occupancy of a development project, until the fees required by this ordinance with respect to such unit are paid in accordance with this section.

3.40.50. Exemptions and exceptions.

The following development projects are exempt from the requirement to pay fees, as set forth below:

A. Reconstruction of, or residential additions to, single-family dwellings., which do not result in a net increase the gross floor area.

B. Accessory dwelling units (ADUs) of less than 750 square feet.

C. A development project shall be exempt from the requirements of this ordinance if the applicant provides documentation, to the satisfaction of the Planning and Building Director, of federal, state, or local law (including a duly adopted resolution of the City Council) which establishes entitlement to the exemption.

3.40.60. Modifications of fee payment obligations.

A. An applicant for a development project may apply to the Planning and Building Director for a modification of that fee based on the absence of a reasonable relationship between the impact on public facilities of that development project and either the amount of the fee or the type of public facilities to be financed. The application for a fee modification shall be submitted a minimum of 14 days prior to payment.

B. The fee categories shall be considered individually; thus, may occur that a fee adjustment or waiver is made in one category and not another.

C. The applicant bears the burden of proof in presenting substantial evidence to support a request for modification for a fee adjustment or waiver of a fee.” SECTION 5. The recitals provided in this Ordinance are true and correct and are incorporated into the substantive portion of this Ordinance.

SECTION 6. California Environmental Quality Act (CEQA). The City Council finds the introduction and adoption of this ordinance is not subject to the California Environmental Quality Act (Public Resources Code, §§ 21000 et seq., “CEQA”), pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly.

ORDINANCE NO. 1212

SECTION 7. Severability. If any section, subsection, sentence, clause, or phrase in this ordinance or the application thereof to any person or circumstance is for any reason held invalid, the validity of the remainder of the ordinance or the application of such provision to other persons or circumstances shall be adopted thereby. The City Council hereby declares it would have passed this ordinance and each section, subsection, sentence, clause, or phrase thereof, irrespective of the fact that one or more sections, subsections, sentences, clauses, or phrases or the application thereof to any person or circumstance be held invalid.

SECTION 8. Effective Date. This Ordinance shall take effect 60 days after its adoption, shall be certified as to its adoption by the City Clerk, and shall be published as required by law, together with the names and members of the City Council voting for and against the Ordinance.

PASSED, APPROVED and ADOPTED by the City Council of the City of Paramount this 24th day of February 2026.

Peggy Lemons, Mayor
ATTEST:

Heidi Luce, City Clerk

12. ORDINANCE CONSIDERATION OF AN ORDINANCE TO AMEND THE

DEVELOPMENT IMPACT FEE PROGRAM BY AMENDING

THE EXISTING PARKS FACILITIES, WATER CAPACITY,

AND STORM DRAIN FACILITIES FEES AND TO ESTABLISH

THE PUBLIC SAFETY, GENERAL FACILITIES,

TRANSPORTATION, AND AFFORDABLE
HOUSING/COMMERCIAL LINKAGE FEES; A RESOLUTION

ADOPTING THE DEVELOPMENT IMPACT FEES NEXUS

STUDY FOR THE NON-AFFORDABLE HOUSING FEES,

THE NEXUS STUDY FOR THE COMMERCIAL LINKAGE

FEE, ESTABLISHING THE AMOUNT OF THE FEES AND

AMENDING THE FEE SCHEDULE, AND ADOPTING A
CAPITAL IMPROVEMENT PLAN; AND MAKING A FINDING

OF EXEMPTION UNDER THE CALIFORNIA

ENVIRONMENTAL QUALITY ACT (CEQA)
Recommended Action: Conduct a public hearing and:

A) Read by title only, waive further reading, introduce Ordinance No. 1212, amending Subsections 13.04.470(d) and (e), deleting Section 16.24.060 of the Paramount Municipal Code, and adding Chapter 3.40, establishing the Development Impact Fees Program that includes a Commercial Linkage
Fee applicable to certain new activities and developments within the City and making a finding of exemption under the California Environmental Quality Act (CEQA), and place it on the February 24, 2026 agenda for adoption.

B) Adopt Resolution No. 26:008, adopting the Development Impact Fees Nexus Study for the public safety facilities, parks facilities, general government facilities, storm drain, transportation, and water capacity impact fees and the Nexus Study for the Commercial Linkage Fee Study, adopting a
capital improvement program as part of the nexus studies, establishing the fee amounts and amending the fee schedule; and making a finding of exemption under the California
Environmental Quality Act (CEQA)
To: Honorable City Council
From: John Moreno, City Manager
By: John King, AICP, Planning and Building
Director
Date: February 10, 2026
SUBJECT: CONSIDERATION OF AN ORDINANCE TO AMEND THE

DEVELOPMENT IMPACT FEE PROGRAM BY AMENDING THE

EXISTING PARKS FACILITIES, WATER CAPACITY, AND STORM DRAIN

FACILITIES FEES AND TO ESTABLISH THE PUBLIC SAFETY,

GENERAL FACILITIES, TRANSPORTATION, AND AFFORDABLE
HOUSING/COMMERCIAL LINKAGE FEES; A RESOLUTION ADOPTING
THE DEVELOPMENT IMPACT FEES NEXUS STUDY FOR THE NONAFFORDABLE HOUSING FEES, THE NEXUS STUDY FOR THE

COMMERCIAL LINKAGE FEE, ESTABLISHING THE AMOUNT OF THE

FEES AND AMENDING THE FEE SCHEDULE, AND ADOPTING A
CAPITAL IMPROVEMENT PLAN; AND MAKING A FINDING OF

EXEMPTION UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY

ACT (CEQA)

BACKGROUND
Development impact fees are one-time charges on new development collected and used by cities and counties to cover costs of capital facilities and infrastructure needed to serve new residential and nonresidential growth.

The California Mitigation Fee Act, also known as AB 1600, requires cities to identify and determine the applicability of development impact fees and find a reasonable relationship between the fee’s use and the type of development project on which the fee is imposed.

This relationship is known as a nexus. In addition, the 5th Amendment’s takings clause requires that the amount of the fee be roughly proportional to the impact caused by new development. State law, including Assembly Bill 602 (AB 602) of 2021, requires local agencies that conduct an impact fee nexus study to follow specific standards and practices. When applicable, the nexus fee study must identify the existing level of service for each public facility, identify the proposed new level of service based upon growth caused by new development, and include an explanation as to why the new level of service is appropriate. Studies shall be updated at least every eight years, from the period beginning on January 1, 2022.

Agenda Report February 10, 2026
DEVELOPMENT IMPACT FEES PROGRAM Page 2
Additionally, the California Mitigation Fee Act requires a local agency that establishes, increases, or imposes a fee as a condition of approval of a development project to, among other things, provide a 30-day public comment period. The public review comment period began on November 14, 2025, through December 16, 2025.

In June of 2024, the City Council approved an agreement with Economic and Planning Systems, Inc. (EPS) to conduct a development impact fee nexus study and a commercial linkage fee study. The City’s development impact fee (or “DIF”) program has not been updated since the 1980s.

This item is a request to adopt the development impact fee nexus study for the nonaffordable housing fees, along with a commercial linkage fee nexus study, both prepared by EPS, the recommended fee schedule, and the proposed capital improvement plan.

DISCUSSION
The development impact fee nexus study and commercial linkage fee nexus study provide a thorough evaluation and update to the City’s DIF program. Staff worked closely with EPS to review the capital improvement plan (CIP) projects list to determine which projects would be included in the Development Impact Fee Capital Improvement Plan, and the approximate amount of funding needed to complete each project.

Below is a summary of the Development Impact Fee Capital Improvement Plan. As discussed later in this report, the fees generated through the DIF program will only be able to fund a portion of these capital improvements.

City of Paramount Development Impact Fee Capital Improvement Plan Improvement/Project Cost
Public Safety
Vehicles $125,480
Emergency Operations Center Expansion $1,500,000
Subtotal $1,625,480
Parks & Recreation Facilities
New Parks
Somerset Ranch Pocket Park Design $300,000
Century Greenway Park $1,490,000
Park Facility Expansions
Park Development Concept $285,000
Mariposa Classroom Conversion Design $287,500
Spane Park Facility Improvements $415,000
Paramount Park Community Center Renovation & Expansion $8,122,213 Agenda Report February 10, 2026
DEVELOPMENT IMPACT FEES PROGRAM Page 3
Mariposa Ash Tree Lights $20,000
Salud Park Volleyball Court Renovation & Expansion $400,000 All-American Park Picnic Shelter $160,000
Meadows Park Picnic Shelter Renovation and Expansion $50,000 Subtotal $11,529,713
General Facilities
City Hall Electrical Upgrades $600,000
City Facility Security Camera and Alarm Upgrades $1,000,000 City Storage Lot Security Upgrades $150,000
Subtotal $1,750,000
Stormwater Drainage
Storm Drain Improvements $4,000
Spane Park Stormwater Capture $18,265,530
Drywell Installation – Garfield and Pequeno Parks $415,000 Subtotal $22,680,530
Transportation
Electronic Message Boards $575,000
Alondra Blvd. Capacity Enhancements $3,465,000
West Santa Ana Branch Bikeway Phase 3 $1,175,200
West Paramount Utility Easement Multi-Use Path $9,661,000 Subtotal $14,876,200
TOTAL $52,461,923
Existing DIF Program
The City currently has a comprehensive DIF program that generates funding to support a range of capital improvements necessitated by new growth in Paramount. The City’s current fee categories include:

1. Park Development Fee

2. Water Capital Improvement Fee

3. Storm Drain Master Plan
The nexus analysis was conducted to update the City’s existing fees, as well as to expand the fee program to include funding for improvements in the following categories: public safety, general facilities, transportation, and a commercial linkage fee to support the funding of affordable housing in the City.

Agenda Report February 10, 2026
DEVELOPMENT IMPACT FEES PROGRAM Page 4
Proposed Fee Categories
New development in the City will increase the demand for certain public facilities and infrastructure. The DIF revenues would be collected and expended to fund the portion of these new infrastructure improvements needed to accommodate growth and maintain public service standards. Specifically, the DIF revenues calculated in the nexus study will be used to fund the following:

1. Public Safety (NEW)

2. Parks Facilities

3. General Facilities (NEW)

4. Transportation (NEW)

5. Storm Drain Facilities (REVISED - to replace Storm Drain Master Plan)

6. Water Capacity

7. Affordable Housing (through a Commercial Linkage Fee) (NEW) Summary of Proposed Development Impact Fee Schedule
The Development Impact Fee Nexus Study identifies the City’s maximum allowable development impact fee schedule for capital needs as evaluated in the Nexus Study.

While the City can adopt fees below these maximum nexus-supported levels based on policy considerations, staff is recommending accepting establishing fees at the maximum allowable fee amount across all fee categories. However, the separate Commercial Linkage Fee Nexus Study for affordable housing justifies a maximum allowable level that staff considers too high, and a much lower fee is recommended for this category. Actual recommended amounts are attached to an exhibit to the resolution.

Public Safety Development Impact Fee (NEW)
The Public Safety Development Impact Fee will fund Public Safety Department capital facilities and equipment, including recurring facilities such as vehicles and one-time facilities such as the future expansion of the Emergency Operations Center.

Land Use Maximum Fee
Residential (per sq. ft.) $0.11
Retail (per sq. ft.) $0.04
Office (per sq. ft.) $0.06
Warehouse/Industrial (per sq. ft.) $0.02
As an example, the Public Safety Development Impact Fee cost associated with the construction of a new 1,200 square foot single-family dwelling unit would be calculated in the following way:
1,200 x $0.11 = $132.00
Agenda Report February 10, 2026
DEVELOPMENT IMPACT FEES PROGRAM Page 5
Parks Facilities Development Impact Fee (Updated)
The Parks Facilities Development Impact Fee will be used to fund park and recreation facility improvements necessary to accommodate growth. This need can include costs associated with new parkland/facilities and expansion of park facilities.

Land Use Current Fee
[1]
Maximum Fee
Residential (per sq. ft.) $0.57-0.76 $1.10
Retail (per sq. ft.) - $0.40
Office (per sq. ft.) - $0.58
Warehouse/Industrial (per sq. ft.) - $0.20
*[1] Residential fee is assessed on a per unit basis. For this comparison, it is converted to a per square foot basis As an example, the Parks Facilities Development Impact Fee cost associated with the construction of a new 1,200 square foot single-family residence would be calculated in the following way:
1,200 x $0.57 = $684 (Existing Fee)
1,200 x $1.10 = $1,332 (Updated Fee)
General Facilities Development Impact Fee (New)
The General Facilities Development Impact Fee will be used to fund general civic facilities and improvements necessary to accommodate growth. These funds can include expenditures for upgrades and expansions to civic facilities not associated with specific departments, such as City Hall and City-owned storage properties.

Land Use Maximum Fee
Residential (per sq. ft.) $0.07
Retail (per sq. ft.) $0.03
Office (per sq. ft.) $0.04
Warehouse/Industrial (per sq. ft.) $0.01
As an example, the General Facilities Development Impact Fee cost associated with the construction of a new 1,200 square foot single-family residence would be calculated in the following way:
1,200 x $0.07 = $84.00 (New)
Agenda Report February 10, 2026
DEVELOPMENT IMPACT FEES PROGRAM Page 6
Transportation Development Impact Fee (New)
A Transportation Development Impact Fee would fund additions and improvements to the City’s transportation infrastructure to accommodate future use by new residents and workers. This fund can include expenditures for projects such as electronic message boards, capacity enhancements, and new or improved multimodal transportation pathways.

Land Use Maximum Fee
Residential (per sq. ft.) $0.54
Retail (per sq. ft.) $2.58
Office (per sq. ft.) $1.09
Warehouse/Industrial (per sq. ft.) $0.86
As an example, the Transportation Development Impact Fee cost associated with the construction of a new 1,200 square foot single-family residence would be calculated in the following way:
1,200 x $0.54 = $684.00 (New)
Storm Drain Facilities Development Impact Fee (Replaces Storm Drain Master Plan) The purpose of the existing stormwater-related fee is to fund the improvements in the stormwater drain master plan. The proposed update to the fee would replace the fee altogether with the Storm Drain Facilities Development Impact Fee to fund stormwater drainage infrastructure, equipment, and systems necessary to accommodate growth.

Infrastructure and equipment include stormwater capture facilities and equipment, and upgrades to existing facilities.

Land Use Maximum Fee
Residential (per sq. ft.) $0.48
Retail (per sq. ft.) $0.66
Office (per sq. ft.) $0.66
Warehouse/Industrial (per sq. ft.) $0.66
Agenda Report February 10, 2026
DEVELOPMENT IMPACT FEES PROGRAM Page 7
As an example, the Storm Drain Facilities Development Impact Fee cost associated with the construction of a new 1,200 square foot single-family residence would be calculated in the following way:
1,200 x $0.48 = $576 (Updated)
Water Capacity Development Impact Fee (Updated)
A Water Capacity Development Impact Fee would recover costs of water capacity in water system infrastructure necessary to accommodate growth. Such infrastructure includes pipelines, wells, and treatments.

Unlike the other fees, the Water Capacity Development Impact Fee would be charged based on meter size, not square footage. The fee per Meter Equivalent Unit (MEU), which would be the charge for a 5/8-inch or 3/4-inch meter, is $2,096. This would be the typical charge for a single-family home. The charges for typical meter sizes are shown in the table below. This fee structure is a change from the City’s current water capacity fee, which is charged per acre based on Fire Department requirements for fire flow and duration for a given building.

Meter Size Meter Ratio Charge
5/8” 1.00 $2,096
3/4” 1.00 $2,096
1” 1.57 $3,291

1.5” 3.43 $7,189
2” 5.00 $10,480
3” 15.71 $32,928
4” 25.14 $52,693
6” 40.00 $83,840
8” 100.00 $209,600
10” 157.14 $329,365
The exception for the per meter charge for water capacity is for accessory dwelling units (ADUs) larger than 750 square feet, which would pay a fee of $1.59 per square foot. The State does not allow charges for ADUs smaller than 750 square feet.

Commercial Linkage Fee (New)
Agenda Report February 10, 2026
DEVELOPMENT IMPACT FEES PROGRAM Page 8
In the City’s effort to assist with the development of affordable housing to meet Regional Housing Needs Assessment (RHNA) requirements along with State law mandates, staff is proposing a Commercial Linkage Fee associated with commercial/industrial type developments. A commercial linkage fee, also known as an affordable housing fee, is a type of development impact fee charged to developers of new, nonresidential properties to help support affordable housing for lower-wage workers. For this reason, residential type developments are exempt.

The fees will be used to fund production or rehabilitation of affordable units, acquisition of land for units, or acquisition of existing at-risk units in order to accommodate housing for employment created by new commercial and industrial development in the City. The fee may also fund the studies and administration to support the fee program.

Land Use Maximum
Fee
Recommended
Maximum Fee
Retail (per sq. ft.) $288 $4
Office (per sq. ft.) $189 $4
Industrial (per sq. ft.) $96 $3
Warehousing (per sq. ft.) $51 $3
As an example, the commercial linkage impact fee cost associated with the construction of a new 10,000 square foot commercial office/retail building would be calculated in the following manner:

Office/Retail (per sq. ft.)
10,000 x $4.00 = $40,000 (New)
Although industrial and warehousing buildings may occupy larger areas than office or retail developments, they typically employ fewer workers per square feet, as much of the building space is often occupied by equipment and/or goods. Given their lower employment density, these buildings generate less need for affordable housing on a per square foot basis than businesses with higher employment density such as retail and office uses. For this reason, the commercial linkage fee assessed for industrial and warehouse projects are proposed to be set at a lower rate than that applied to office and retail buildings.

As an example, the commercial linkage impact fee cost associated with the construction of a new 10,000 sq. ft. industrial/warehouse building would be calculated in the following manner:

Agenda Report February 10, 2026
DEVELOPMENT IMPACT FEES PROGRAM Page 9
Industrial/Warehouse (per sq. ft.)
10,000 x $3.00 = $30,000 (New)
DIF Program Overview
The proposed update to the DIF program is consistent with existing practice, and the fees calculated are proposed to be collected on a citywide basis given the broad scope of capital improvements included in the studies. ADUs that are 750 square feet or less are exempt from development impact fees.

DIF revenues would be collected and expended to fund the portion of the new infrastructure and facility improvements needed to accommodate growth and maintain public service standards. Additionally, a two percent charge has been factored into the maximum allowable fee to cover the cost of administering the fee program. Under the projected level of growth, the proposed DIF program would generate about $5.7 million in revenues through 2035, covering about 11% of the total capital improvements identified in the fee program, with the remainder covered by grants and other City funds. Revenues from fees could be higher or lower than this amount depending on the actual level of new development and other variables outside the control of local government.

Environmental Impact
The implementation of the DIFs program is statutorily exempt from the California Environmental Quality Act (CEQA) under Public Resources Code Section 21080(b)(8) and Sections 15061,15273, and 15378 of the CEQA guidelines.

FISCAL IMPACT
The proposed Development Impact Fees Program will generate revenue to support City infrastructure and other projects in accordance with the Capital Improvement Plan.

However, the specific revenue amounts will vary from year to year based on varying residential, commercial, and industrial development.

VISION, MISSION, VALUES, AND STRATEGIC OUTCOMES
The City’s Vision, Mission, and Values set the standard for the organization, establish priorities, uniformity, and guidelines; and provide the framework for policy decisionmaking. The Strategic Outcomes were implemented to provide a pathway to achieving the City’s Vision. This item aligns with Strategic Outcome No. 5: Attractive and Well-Maintained Infrastructure - Develop and maintain City-owned infrastructure, parks, facilities, and amenities that enhance quality of life and the attractiveness of the community; and No. 6: Efficient, Effective, and Fiscally Responsible - Deliver an efficient and effective City government in a fiscally responsible, transparent and collaborative manner.

Agenda Report February 10, 2026
DEVELOPMENT IMPACT FEES PROGRAM Page 10

RECOMMENDED ACTION
Conduct a public hearing and:

A) Read by title only, waive further reading, introduce Ordinance No. 1212, amending Subsections 13.04.470(d) and (e), deleting Section 16.24.060 of the Paramount Municipal Code, and adding Chapter 3.40, establishing the Development Impact Fees Program that includes a Commercial Linkage Fee applicable to certain new activities and developments within the City and making a finding of exemption under the California Environmental Quality Act (CEQA), and place it on the February 24, 2026 agenda for adoption.

B) Adopt Resolution No. 26:008, adopting the Development Impact Fees Nexus Study for the public safety facilities, parks facilities, general government facilities, storm drain, transportation, and water capacity impact fees and the Nexus Study for the Commercial Linkage Fee Study, adopting a capital improvement program as part of the nexus studies, establishing the fee amounts and amending the fee schedule; and making a finding of exemption under the California Environmental Quality Act (CEQA)

CITY OF PARAMOUNT

LOS ANGELES COUNTY, CALIFORNIA
ORDINANCE NO. 1212

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PARAMOUNT AMENDING SUBSECTIONS 13.04.470(D) AND (E),
DELETING SECTION 16.24.060 OF THE PARAMOUNT MUNICIPAL
CODE, AND ADDING CHAPTER 3.40, ESTABLISHING THE

DEVELOPMENT IMPACT FEES PROGRAM THAT INCLUDES A

COMMERCIAL LINKAGE FEE APPLICABLE TO CERTAIN NEW

ACTIVITIES AND DEVELOPMENTS WITHIN THE CITY AND MAKING A

FINDING OF EXEMPTION UNDER THE CALIFORNIA ENVIRONMENTAL

QUALITY ACT (CEQA)

THE CITY COUNCIL OF THE CITY OF PARAMOUNT DOES HEREBY ORDAIN AS FOLLOWS:

WHEREAS, the City of Paramount (“City”) is a general law city, incorporated under the laws of the State of California; and
WHEREAS, pursuant to its police power, the City may enact and enforce laws within its boundaries which promote the public health, morals, safety, or general welfare of the community, and are not in conflict with general laws; and WHEREAS, the City recognizes that there will continue to be additional development and expansion within the City based on growth projections from the Southern California Association of Governments; and
WHEREAS, the Paramount General Plan requires such development impacts to be mitigated by requiring that new development mitigate its share of the impacts to the natural and built environment to be fiscally neutral and not result in a net economic loss for the City; and
WHEREAS, future development within the City boundaries will result in a demand for additional public safety facilities, parks facilities, general government facilities, storm drain, transportation, water capacity, and affordable housing; and WHEREAS, the City may collect development impact fees under the authority granted by the State of California Mitigation Fee Act; and WHEREAS, in accordance with the requirement that new development mitigate its share of the impacts, the City contracted with Economic & Planning Systems Inc. (EPS) for preparation of a Development Impact Fee Nexus Study (“Study”) which recommends establishing development impact fees, and explains the nexus between the imposition of the fee and the estimated reasonable cost of providing the service for which the fee is charged; and
ORDINANCE NO. 1212

WHEREAS, EPS also prepared a comprehensive standalone Commercial Linkage Fee Nexus Study that provides for the feasibility of an affordable housing impact fee for new commercial development; and
WHEREAS, the Public Safety Facilities fee will be used to construct new development’s fair share portion of public safety facilities, as well as acquire public safety vehicles necessitated by new development; and
WHEREAS, the Parks Facilities fee will be used to construct new development’s fair share portion of park and recreation facilities, as well as acquiring parkland necessitated by new development; to plan, design, and develop parks and recreation facilities; and to fund the studies and administration to support the program; and WHEREAS, the General Facilities fee will be used to construct new development’s fair share portion of civic facility upgrades; and
WHEREAS, the Storm Drain fee will be used to construct new development’s fair share portion of storm drain facilities; and
WHEREAS, the Transportation fee will be used to construct new development’s fair share portion associated with all residential and nonresidential uses to assist with funding of transportation infrastructure projects identified in Table 1 of Appendix A of the Paramount Development Impact Fee Nexus Study. These projects include roadway expansion, intersection improvements, and the development of multimodal transportation options such as bike and pedestrian pathways. The fee may also be used to fund the administration to support the fee program; and
WHEREAS, the Water Capacity fee will be used to recover a proportionate share of costs for existing and future water system facilities and assets from new or expanded connections to the water system; and
WHEREAS, the Commercial Linkage Fee program will be used to assist in the production or rehabilitation of affordable housing units and/or the acquisition of land or existing at-risk units in the City. The fee may also fund the studies and administration to support the fee program; and
WHEREAS, to account for future construction cost inflation, the City shall implement automatic annual adjustments; and
WHEREAS, the annual adjustment to the Development Impact Fees (DIFs) program will be based on the Consumer Price Index for All Urban Consumers (CPI-U), Los Angeles-Long Beach-Anaheim, published by the U.S. Bureau of Labor Statistics.

ORDINANCE NO. 1212

SECTION 1. Purpose and Findings. The City Council finds and declares as follows:

A. California Constitution Article XI, Section 7, enables the City of Paramount ("the City") to enact local ordinances and regulations not in conflict with general laws; and
B. The State of California, through the enactment of Government Code Sections 66001 through 66009, has authorized the City to enact development impact fees; and
C. The imposition of development impact fees is one of the preferred methods of ensuring that development bears a proportionate share of the cost of capital facilities and related costs necessary to accommodate such development. The imposition of development impact fees must be done in order to promote and protect the public health, safety, and welfare; and D. The General Plan is comprised of elements, and the Resource Management Element includes Resource Management Element Policy 13 which states, “The City of Paramount will continue to collect park fees from all new residential development”; and
E. The Mitigation Fee/User Fee Study program of the Implementation Element of the General Plan states, “The City will continue to explore strategies to ensure that the public does not bear an undue burden associated with new development. The City will determine a reasonable fair method of assessing new development for the cost of providing any additional infrastructure required by the development”; and
F. The City Council held a duly noticed public hearing on this Ordinance on February 10, 2026, at which time it considered all evidence presented, both written and oral.

SECTION 2. Subsections 13.04.470(D) and (E) are hereby amended as follows.

D. Basis of charge. The capital improvement charge shall be calculated on a per meter equivalent unit basis.

E. Fees. Water capital improvement charges shall be payable in accordance with Chapter 3.40 (Development Impact Fees Program) of the Paramount Municipal Code and the Mitigation Fee Act.

SECTION 3. Section 16.24.060 (Regulations for payment of park fees for new residential dwelling units) is hereby repealed.
§ 16.24.060. Regulations for payment of park fees for new residential dwelling units.

A. Requirements. As a condition of approval of a building permit for a new ORDINANCE NO. 1212

residential dwelling unit in an R-M (Multiple Residential) zone or a PD-PS (Planned Development with Performance Standards) zone for multiplefamily dwellings, the subdivider or developer shall pay a fee for park or recreational purposes at the time and according to the standards and formula contained in this section. This section does not apply to stock cooperatives, which consist of the subdivision of air space in an existing apartment building which is more than five years old, when no new dwelling units are added.

B. General Standards. It is hereby found and determined that the public interest, convenience, health, welfare, and safety require that two acres of property for each 1,000 persons residing within this City be devoted to local park and recreational purposes.

C. Amount of Fee. The fee to be paid shall not exceed, but can be less than the fee determined by the following formula:
2 acres
(Cost of land/acre + Cost of park
development/acre) x
1,000
population
x
Average number of persons
per unit =
Fee to be
paid
D. Fees. The subdivider shall pay a fee as described in subsection C, or $500.00 for the first bedroom in each unit and $250.00 for each bedroom in the unit in excess of one bedroom, whichever is less.

E. Use of Money. The money collected hereunder shall be used exclusively for the purposes of developing new or rehabilitating existing neighborhood or community park or recreational facilities. The interest earned on the accumulated in-lieu fees shall be used for the same purposes.

F. Credit for Private Open Space. Where private open space for park and recreational purposes is provided in a proposed subdivision and such space is to be privately owned and maintained by the future residents of the subdivision, such areas shall be credited against the requirement of the payment of fees in lieu thereof in subsection C of this section, provided the City Manager, or designee, finds it is in the public interest to do so and that the following standards are met:

1. That yards, court areas, setbacks and maintenance of the open space is adequately provided for by written agreement; and

2. That the private ownership and maintenance of the open space is adequately provided for by written agreement; and

3. That the use of the private open space is restricted for park and recreational purposes by recorded covenants which run with the land in favor of the future owners of property within the tract and which cannot be defeated or eliminated without the consent of the City ORDINANCE NO. 1212

Council; and

4. That the proposed private open space is reasonably adaptable for use for park and recreational purposes, taking into account such factors as size, shape, topography, geology, access, and location of the private open space land; and

5. That facilities proposed for the open space are in substantial accordance with the provisions of the recreational element of the General Plan, and are approved by the City Council.

SECTION 4. A new Chapter 3.40 is hereby added to the Paramount Municipal Code.
“Chapter 3.40

DEVELOPMENT IMPACT FEES PROGRAM

3.40.10. Development Impact Fees Program fees imposed – Calculation, adoption, and adjustments of fees by implementing resolutions – Automatic annual adjustments.

The fees established by this chapter shall be calculated, adopted, and may be adjusted by implementing resolutions. In the future, the City Council may establish new public facility categories and fee categories by amending this chapter and adopting subsequent implementing resolutions. For each public facility category established by this chapter, the Finance Director shall create in the City treasury a separate and distinct “fee fund,” subject to the accounting requirements of the Mitigation Fee Act.

A. Development Impact Fees Program

1. Public safety facilities

2. Parks facilities

3. General government facilities

4. Storm drain

5. Transportation

6. Water capacity

7. Commercial Linkage Fee for affordable housing
ORDINANCE NO. 1212

B. To maintain the program’s financial sustainability and relevance, the City will apply an annual adjustment to the Development Impact Fees Program, reflecting changes in construction costs. Annual Adjustments will be based on the Consumer Price Index for All Urban Consumers (CPI-U), Los Angeles-Long Beach-Anaheim; published by the U.S. Bureau of Labor Statistics.

3.40.20. Obligation to pay fees.

A. Each applicant for City approval of a development project (including applications for a change of use) shall pay impact fees to the City, as allowed by law, in accordance with the amounts set forth in implementing resolutions, unless the applicant establishes, to the satisfaction of the Director, entitlement to a fee credit, a fee adjustment, or a fee exemption or exception. The commercial linkage fee is only applicable to nonresidential development projects.

B. The obligation to pay impact fees pursuant to this ordinance shall not replace an applicant’s obligation to mitigate development project impacts in accordance with state or local law.

C. Fees paid are refundable in accordance with the Mitigation Fee Act.

3.40.30. Amount of payment.

A. Except as otherwise set forth in this ordinance, the fee to be paid for each development project based on square footage within a development project shall be the amount of the fee in effect, pursuant to the implementation resolution, at the time that full payment is due to the City.

B. In the event that a previous partial fee payment is made for any development project, the full fee to be paid for that project shall be the amount of the fee in effect, pursuant to the implementing resolution, at the time that full payment is made to the City, minus the amount of the previous partial payment.

C. The applicant shall have the burden of providing the amount of any fee previously paid, the date on which the payment was made, and the development project for which the payment was made.

3.40.40. Timing of payment.

A. The fee for each development project based on square footage within a development project shall be paid in full prior to either the final inspection or issuance of Certificate of Occupancy required for that development project, unless otherwise authorized by the Mitigation Fee Act.

ORDINANCE NO. 1212

B. No City official or agency may certify final inspection or issue a certificate of occupancy for a development project, or otherwise allow occupancy of a development project, until the fees required by this ordinance with respect to such unit are paid in accordance with this section.

3.40.50. Exemptions and exceptions.

The following development projects are exempt from the requirement to pay fees, as set forth below:

A. Reconstruction of, or residential additions to, single-family dwellings, which do not result in a net increase the gross floor area.

B. Accessory dwelling units (ADUs) of less than 750 square feet.

C. A development project shall be exempt from the requirements of this ordinance if the applicant provides documentation, to the satisfaction of the Planning and Building Director, of federal, state, or local law (including a duly adopted resolution of the City Council) which establishes entitlement to the exemption.

3.40.60. Modifications of fee payment obligations.

A. An applicant for a development project may apply to the Planning and Building Director for a modification of that fee based on the absence of a reasonable relationship between the impact on public facilities of that development project and either the amount of the fee or the type of public facilities to be financed. The application for a fee modification shall be submitted a minimum of 14 days prior to payment.

B. The fee categories shall be considered individually; thus, may occur that a fee adjustment or waiver is made in one category and not another.

C. The applicant bears the burden of proof in presenting substantial evidence to support a request for modification for a fee adjustment or waiver of a fee.” SECTION 5. The recitals provided in this Ordinance are true and correct and are incorporated into the substantive portion of this Ordinance.

SECTION 6. California Environmental Quality Act (CEQA). The City Council finds the introduction and adoption of this ordinance is not subject to the California Environmental Quality Act (Public Resources Code, §§ 21000 et seq., “CEQA”), pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly.

ORDINANCE NO. 1212

SECTION 7. Severability. If any section, subsection, sentence, clause, or phrase in this ordinance or the application thereof to any person or circumstance is for any reason held invalid, the validity of the remainder of the ordinance or the application of such provision to other persons or circumstances shall be adopted thereby. The City Council hereby declares it would have passed this ordinance and each section, subsection, sentence, clause, or phrase thereof, irrespective of the fact that one or more sections, subsections, sentences, clauses, or phrases or the application thereof to any person or circumstance be held invalid.

SECTION 8. Effective Date. This Ordinance shall take effect 60 days after its adoption, shall be certified as to its adoption by the City Clerk, and shall be published as required by law, together with the names and members of the City Council voting for and against the Ordinance.

PASSED, APPROVED and ADOPTED by the City Council of the City of Paramount this 24th day of February 2026.

Peggy Lemons, Mayor
ATTEST:

Heidi Luce, City Clerk

CITY OF PARAMOUNT

LOS ANGELES COUNTY, CALIFORNIA
RESOLUTION NO. 26:008

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

PARAMOUNT, CALIFORNIA ADOPTING THE DEVELOPMENT IMPACT

FEES NEXUS STUDY FOR THE PUBLIC SAFETY FACILITIES, PARKS

FACILITIES, GENERAL GOVERNMENT FACILITIES, STORM DRAIN,

TRANSPORTATION, AND WATER CAPACITY IMPACT FEES AND THE

NEXUS STUDY FOR THE COMMERCIAL LINKAGE FEE STUDY,

ADOPTING A CAPITAL IMPROVEMENT PROGRAM AS PART OF THE

NEXUS STUDIES, ESTABLISHING THE FEE AMOUNTS AND
AMENDING THE FEE SCHEDULE; AND MAKING A FINDING OF

EXEMPTION UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY

ACT (CEQA)
WHEREAS, California Government Code Section 66000 et seq., (“Mitigation Fee Act”), enacted by the State of California in 1987 and amended over time, governs how local agencies can impose development impact fees (DIFs); and WHEREAS, the Mitigation Fee Act requires a local agency that establishes, increases, or imposes a fee as a condition of approval of a development project to, among other things, determine a reasonable relationship between the fee’s use and the type of development project on which the fee is imposed; and
WHEREAS, the Mitigation Fee Act requires the local agency to deposit the fee in a separate capital facilities account or fund, and to make certain information about the account or fund public annually and every five years; and WHEREAS, the funds collected from these fees will be segregated specifically to provide for these programs, services, and the administration of the DIFs program; and WHEREAS, Assembly Bill 602 (AB 602) was signed into law by the Governor of California and requires, on or after January 1, 2022, a local agency that conducts an impact fee nexus study to follow specific standards and practices; and WHEREAS, that prior to adoption of an associated development fee, an impact fee nexus study must be adopted; and
WHEREAS, AB 602 requires that impact fees be based on an approved capital improvement plan; and
WHEREAS, the approved capital improvement plan is referenced in the Nexus Study as Appendix C; and
RESOLUTION NO. 26:008

WHEREAS, that the study identifies the existing level of service for each public facility, identifies the proposed new level of service, and includes an explanation of why the new level of service is necessary. Additionally, the Nexus Study provides the basis for the City to collect fees and demonstrates a reasonable relationship between each fee’s use and the type of development project on which the fee will be imposed; and WHEREAS, if the Nexus Study is adopted after July 1, 2022, a fee levied or imposed on a housing development project shall be calculated proportionately to the square footage of the proposed units, or specified findings explaining why square footage is not an appropriate metric to calculate the fees shall be made; and WHEREAS, the City contracted with Economic & Planning Systems, Inc. (EPS) to provide a comprehensive review and update of the City’s DIF program pursuant to the constitutional and statutory principles, which review has taken place over the course of the past year; and
WHEREAS, EPS has prepared the Paramount Development Impact Fee Nexus Study, attached and incorporated herein as Exhibit 1, which provides for fee updates and adjustments consistent with the constitutional and statutory requirements set out in this Resolution and in the Paramount Development Impact Fee Nexus Study for all proposed fees except for the commercial linkage fee; and
WHEREAS, the Paramount Development Impact Fee Nexus Study addresses development impact fees categorized as Public Safety Facilities, Parks Facilities, General Facilities, Storm Drain, Transportation, and Water Capacity; and WHEREAS, the City’s 6th Cycle Housing Element, which was certified as of October 7, 2022, updates the General Plan to broaden the available current and potential resources to increase affordable housing and housing for populations with special needs and policies to support the City’s needs; and
WHEREAS, affordable housing developments face increased complexity in financing affordable projects; and
WHEREAS, Policy 3.1: Affordable Housing of the City’s 6th Cycle Housing Element promotes affordable housing development to the highest standards possible in a manner consistent with local market-rate housing; and
WHEREAS, EPS provided a comprehensive standalone Commercial Linkage Fee Nexus Study, attached and incorporated herein as Exhibit 2, which provides for the feasibility of an affordable housing impact fee for new commercial development; and WHEREAS, the City has made available the Paramount Development Impact Fees Nexus Study and Commercial Linkage Fee Study to those requesting special notice and were duly published 30 days prior to notice of a public hearing regarding such fee adjustments; and
RESOLUTION NO. 26:008

WHEREAS, copies of the Paramount Development Impact Fee Nexus Study and Commercial Linkage Fee Study have been available at City Hall at the City Clerk’s office and online during the entire notice period; and
WHEREAS, the City Council opened the duly noticed public hearing for the proposed DIFs on January 13, 2026, continued the hearing to January 27, 2026, and continued the hearing again to February 10, 2026, when the City Council conducted the duly noticed public hearing and heard comments for and against the update and increase of such fees and charges; and
WHEREAS, the City Council finds from its review of the Paramount Development Impact Fees Nexus Study, Commercial Linkage Fee Study, and the other documents on file for this matter (all of which are made a part of the record of this hearing) that each DIF imposed meets the requirements and has determined a reasonable relationship between the fee’s use and the type of development project on which the fee is imposed; and WHEREAS, the City Council finds that the purpose of the impact fees hereby enacted is to protect the public health, safety, and welfare by requiring new development to contribute to the cost of public facilities needed to mitigate the impacts of new development on the need for public facilities and affordable housing; and

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARAMOUNT AS FOLLOWS:

SECTION 1. The above recitations are true and correct.

SECTION 2. DEVELOPMENT IMPACT FEE NEXUS STUDY AND COMMERCIAL LINKAGE FEE STUDY ADOPTED. The City Council hereby approves the Paramount Development Impact Fee Nexus Study prepared by EPS attached as Exhibit 1 and the Commercial Linkage Fee Nexus Study prepared by EPS attached as Exhibit 2 (collectively, the Nexus Studies), and the findings contained therein. The Nexus Studies shall constitute the current “Study” for each respective fee pursuant to proposed Chapter

3.40 of the Paramount Municipal Code. A copy of the Nexus Studies shall be on file with the City Clerk and available during regular City business hours for public inspection. With respect to each DIF, the Nexus Studies explain (1) the purpose of each impact fee; (2) the use of each impact fee; (3) the reasonable relationship between the use of each impact fee and the development type on which it is imposed; (4) the reasonable relationship between the need for the facilities and the type of development between the need for the type of development on which each fee is imposed; and (5) the reasonable relationship between the amount of the fee and facility cost attributable to the applicable development project. The City Council agrees with the findings set forth in the Nexus Studies and adopts them as their own as if set forth in full here.

SECTION 3. ADOPTION OF CAPITAL IMPROVEMENT PLAN. The City Council hereby adopts the City of Paramount Capital Improvement Plan as shown in the attached listing included as Appendix C to the Paramount Development Impact Fee Nexus Study.

RESOLUTION NO. 26:008

SECTION 4. DEVELOPMENT IMPACT FEE SCHEDULE DETERMINED AND ADOPTED. The City Council hereby adopts the development impact fee amounts for each of the DIFs as shown in Exhibit 3 to this Resolution, incorporated herein by this reference. The City of Paramount Fee Schedule shall be amended to contain the fees and amounts identified therein.

SECTION 5. ADOPTION OF METHODOLOGY FOR CALCULATION, ANNUAL ADJUSTMENT, AND COLLECTION OF FEES. The City Council adopts the methodology set forth in the Nexus Studies for calculating and collecting the DIFs adopted herein. The amount of the DIFs shall be adjusted annually in July of each calendar year beginning in 2026, using the Consumer Price Index for All Urban Consumers (CPI-U), Los AngelesLong Beach-Anaheim, published by the U.S. Bureau of Labor Statistics ending in May, or a similar published index if the CPI is no longer available. The City Council hereby authorizes the City Manager, or designee, to make such annual adjustments to the DIFs based on such inflationary factors effective July 1 of each year.

SECTION 6. TIMING OF PAYMENT. All development fees shall be paid when required by the applicable provisions of the Paramount Municipal Code and in accordance with Government Code Section 66007.

SECTION 7. EFFECTIVE DATE OF DIFS. The DIF rates and new categories of DIFs set forth in this Resolution shall be effective on the later of: (i) the sixtieth (60th) day following the effective date of Ordinance No. 1212, an ordinance adding Chapter 3.40 to the Municipal Code and establishing the City’s program and requirements for the imposition of a development impact fees on development projects.

SECTION 8. ADMINISTRATIVE FEE. The DIF rates include an Administration Fee in the not to exceed amount of two (2%) of the total project cost for the management of the development impact fee program.

SECTION 9. NO CHANGES TO OTHER CITY FEES. Nothing in this Resolution shall repeal, amend, or supersede any other City imposed fees except for the fees addressed in the Paramount Development Impact Fee Nexus Study and Commercial Linkage Fee Study and expressly established by this resolution.

SECTION 10. CEQA. The adoption of fees, rates and charges as set out here is statutorily exempt from CEQA and staff is directed to take all necessary actions to prepare and file a Notice of Exemption immediately after adoption of this Resolution. The approval of the Paramount Development Impact Fee Nexus Study and Commercial Linkage Fee Study, and the adoption of the development impact fees specified in this resolution and the capital improvement plans, were reviewed in accordance with the criteria contained in the California Environmental Quality Act (“CEQA”) and the State CEQA Guidelines.

The City Council finds that approval of the Paramount Development Impact Fee Nexus Study and Commercial Linkage Fee Study, the adoption of the capital improvement plans, and the adoption of the development impact fee specified in this resolution, will not have a significant impact on the environment and are exempt from CEQA pursuant to Section 15061(b)(3) of State CEQA Guidelines because these actions involve the adoption of development impact fees and no specific development is authorized by the adoption of RESOLUTION NO. 26:008

the Paramount Development Impact Fee Nexus Study and Commercial Linkage Fee Study, or the adoption of new or updated development impact fees. The Paramount Development Impact Fee Nexus Study and Commercial Linkage Fee Study and the adoption of new or updated development impact fees cannot and do not have the potential to cause a significant effect on the environment. In addition, the adoption of this resolution approves and sets forth a procedure for determining fees for the purpose of obtaining funds for capital projects and equipment necessary to maintain service within existing service areas and is statutorily exempt from CEQA pursuant to State CEQA Guidelines 15273(a)(4) and Public Resources Code Section 21080(b)(8). Also, approval of Paramount Development Impact Fee Nexus Study and Commercial Linkage Fee Study and the adoption of new or updated development impact fees are, exempt from the requirements of CEQA pursuant to State CEQA Guidelines Section 15378(b)(4) because they are not a “project” as defined by CEQA, but involve the creation of government funding mechanisms or other government fiscal activities that do not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment. City staff are hereby directed to prepare and file a Notice of Exemption, under CEQA, within five working days of adoption of the resolution according to CEQA Guidelines Section 15062.

SECTION 11. Severability. If any section, subsection, sentence, clause, phrase, or portion of this resolution is for any reason held to be invalid or unenforceable by a court of competent jurisdiction, the remaining portions of this resolution shall nonetheless remain in full force and effect. The City Council hereby declares that it would have adopted each section, subsection, sentence, clause, phrase, or portion of this resolution, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions of this resolution be declared invalid or unenforceable.

SECTION 12. Effective Date. This Resolution shall take effect 60 calendar days from the date of its adoption.

PASSED, APPROVED, and ADOPTED by the City Council of the City of Paramount this 10th day of February 2026.

Peggy Lemons, Mayor
ATTEST:

Heidi Luce, City Clerk

PARAMOUNT DEVELOPMENT IMPACT FEE NEXUS STUDY

PUBLIC REVIEW DRAFT REPORT
NOVEMBER 13, 2025
Economic & Planning Systems, Inc. 1 Introduction and Overview

PARAMOUNT

DEVELOPMENT IMPACT

FEE NEXUS STUDY

PUBLIC REVIEW

DRAFT REPORT
Prepared for: Prepared by:

City of Paramount Economic & Planning Systems, Inc.

In collaboration with:

Fehr & Peers Transportation Consultants
Bartle Wells Associates
November 13, 2025
EPS #244011

PARAMOUNT DEVELOPMENT IMPACT FEE NEXUS STUDY

PUBLIC REVIEW DRAFT REPORT
NOVEMBER 13, 2025
Economic & Planning Systems, Inc. 2 Introduction and Overview Table of Contents

1. Introduction and Overview 5
Purpose and Use of AB 1600 Fees ......................................................................................................................5 DIF Legal Context....................................................................................................................................................6

2. Summary of Maximum Allowable Fees 9
Maximum Allowable Fees......................................................................................................................................9 Estimated DIF Revenues Through Build-out .................................................................................................. 10

3. Summary of Methodology and Key Assumptions 11
Summary of Methodology .................................................................................................................................. 11 Demographic and Land Use Assumptions....................................................................................................... 12 Population and Employment Growth Projections ......................................................................................... 13 Land Use Density Assumptions ......................................................................................................................... 14

4. Public Safety Facilities 16
Capital Needs and Costs ..................................................................................................................................... 16 Cost Allocations and Fee Calculations ............................................................................................................. 18 Nexus Findings for Public Safety Facility Fee Component.......................................................................... 18

5. Parks Facilities 20
Capital Needs and Costs ..................................................................................................................................... 20 Cost Allocation and Fee Calculation................................................................................................................. 22 Nexus Findings for Parks Fee Component...................................................................................................... 22

6. General Facilities 24
Capital Needs and Costs ..................................................................................................................................... 24 Cost Allocations and Fee Calculation............................................................................................................... 24 Nexus Findings for General Facility Fee Component ................................................................................... 25

7. Storm Drain 27
Growth Assumptions ........................................................................................................................................... 27 Capital Needs and Costs ..................................................................................................................................... 28 Cost Allocations and Fee Calculations ............................................................................................................. 29 Nexus Findings for Storm Drain Facility Fee Component ........................................................................... 30

8. Transportation 32
Improvement Needs and Costs ......................................................................................................................... 32 Cost Allocations and Technical Analysis.......................................................................................................... 32

PARAMOUNT DEVELOPMENT IMPACT FEE NEXUS STUDY

PUBLIC REVIEW DRAFT REPORT
NOVEMBER 13, 2025
Economic & Planning Systems, Inc. 3 Introduction and Overview

9. Water Capacity Fee 35
Improvement Needs and Costs ......................................................................................................................... 35 Cost Allocations and Fee Calculations ............................................................................................................. 36

10. AB 602 Compliance 37
Capital Improvement Plan .................................................................................................................................. 37 Explanation of Level of Service ......................................................................................................................... 37 Original Nexus Study ........................................................................................................................................... 37 Residential Fee to be Charged in Proportion to Unit Size ........................................................................... 38

11. Implementation and Administration 40
Publication of Financial and Zoning Information ........................................................................................... 40 Annual Review ...................................................................................................................................................... 40 Five-Year Report................................................................................................................................................... 41 Eight-Year Update................................................................................................................................................ 42 Appendix A: Fehr & Peers Technical Memorandum – Development Impact Fees for Transportation
Appendix B: Bartle Wells Associates Technical Memorandum – Development Impact Fees for Water Capacity
Appendix C: City of Paramount Development Impact Fee Capital Improvement Plan

PARAMOUNT DEVELOPMENT IMPACT FEE NEXUS STUDY

PUBLIC REVIEW DRAFT REPORT
NOVEMBER 13, 2025
Economic & Planning Systems, Inc. 4 Introduction and Overview List of Tables
Table 1 Summary of Maximum Allowable Fees .................................................................................................. 9 Table 2 Revenue Projections and Need for Outside Funding........................................................................10 Table 3 Growth Projections for Paramount Through 2035............................................................................13 Table 4 Summary of Existing and Projected Population and Employment .................................................14 Table 5 Land Use Density Assumptions .............................................................................................................15 Table 7 Public Safety Department Capital Needs and Cost Summary.........................................................17 Table 8 Maximum Public Safety Facilities Fee Calculation.............................................................................18 Table 9 Paramount Existing Park Inventory and Level of Service.................................................................20 Table 10 Parks Facility Capital Needs and Cost Estimates ...............................................................................21 Table 11 Maximum Parks Facilities Fee Calculation...........................................................................................22 Table 12 General Facilities Capital Cost Summary .............................................................................................24 Table 13 Maximum General Facilities Fee Calculations ....................................................................................25 Table 14 Estimated Growth in Impervious Acres................................................................................................28 Table 15 Storm Drain Capital Cost Summary ......................................................................................................29 Table 16 Maximum Storm Drain Facilities Fee Calculation ..............................................................................30 Table 17 Transportation Improvement Project List and Cost Estimates........................................................32 Table 18 Standard ITE Trip Rates and Adjusted PCE Trips Rates....................................................................33 Table 19 Cost per Trip and Per Square Foot Citywide ......................................................................................34 Table 20 Water System Asset Valuation ..............................................................................................................35 Table 21 Water Capacity Charge Calculation per MEU ....................................................................................36 Table 22 Residential Fee Per Square Foot............................................................................................................39

PARAMOUNT DEVELOPMENT IMPACT FEE NEXUS STUDY

PUBLIC REVIEW DRAFT REPORT
NOVEMBER 13, 2025
Economic & Planning Systems, Inc. 5 Introduction and Overview

1. Introduction and Overview
This Nexus Study is designed to provide the City of Paramount (City) with the necessary technical documentation to support an update of its comprehensive Development Impact Fee (DIF) program. It has been prepared by a team of consultants, including Economic & Planning Systems, Inc. (EPS), Fehr & Peers, and Bartle Wells Associates, with input and direction from City staff. EPS prepared this overall report and the nexus analysis for several fee categories; Fehr & Peers prepared the transportation impact fee nexus study; and Bartle Wells Associates prepared the water capacity nexus study.

Impact fees are one-time charges on new development collected and used by jurisdictions (e.g., a City or County) to cover the cost of capital facilities and infrastructure needed to serve new residential and nonresidential growth. The City currently has a comprehensive DIF program that generates funding to support a range of capital improvements necessitated by new growth in the City.

The City’s current fee categories include parks, storm drain, and water capacity.

This effort includes a nexus analysis to update the City’s existing fees, as well as to expand the fee program to include funding for improvements in the following categories: public safety, general facilities, and transportation. Additionally, under separate cover, EPS has provided an analysis of a potential new commercial linkage fee to support the funding of affordable housing in the City.

The Fee Program described in this Report is designed to be consistent with the most recent relevant case law and the principles of Government Code Section 66000 et seq. (subsequently referred to as AB 1600) and subsequent related legislation (including AB 602). The Report provides the nexus and associated fee calculations for the maximum fees the City can charge for the facilities indicated pursuant to AB 1600. The City can adopt fees at or below this maximum level.

Consistent with the existing practice, the fees calculated herein are proposed to be collected on a Citywide basis given the broad scope of capital improvements included in this study.

Purpose and Use of AB 1600 Fees
New development in the City will increase the demand for certain public facilities and infrastructure. The DIF revenues would be collected and expended to fund the portion of these new infrastructure and facility improvements needed to accommodate growth and maintain public service standards. Specifically, the DIF revenues calculated in this study will be used to fund:

PARAMOUNT DEVELOPMENT IMPACT FEE NEXUS STUDY

PUBLIC REVIEW DRAFT REPORT
NOVEMBER 13, 2025
Economic & Planning Systems, Inc. 6 Introduction and Overview • General Facilities – this fee will fund general civic facilities and improvements necessary to accommodate growth.
• Parks Facilities – this fee will fund park and recreation facility improvements necessary to accommodate growth.
• Public Safety Facilities – this fee will fund the Public Safety Department capital facilities and equipment (e.g. vehicles) necessary to accommodate growth. These costs do not include the cost of the City’s contract with the Los Angeles County Sheriff Department to provide police services, nor does it include costs incurred by the Los Angeles County Fire Department to provide fire and EMS services.
• Storm Drain – this fee will fund stormwater drainage infrastructure and systems necessary to accommodate growth.
• Transportation – this fee will fund needed additions and improvements to the City’s transportation infrastructure to accommodate future use of transportation facilities by the new residents and workers associated with new development. These improvements include infrastructure that supports vehicle, transit, pedestrian, and bicycle modes.
• Water Capacity Charges – the water capacity charges are designed to recover the costs of capacity in water system infrastructure.

DIF Legal Context
This Report is designed to provide the necessary technical analysis to support a new schedule of fees that will be established by an update to the City’s Impact Fee Ordinance and Resolution. The City will need to approve an updated DIF Ordinance that enables the collection of fees for capital facilities, pursuant to AB 1600. As noted, AB 1600 is codified California Government Section 66000 et seq., which sets forth procedural requirements for establishing and collecting development impact fees. These procedures require that a reasonable relationship, or nexus, must exist between a governmental exaction and the purpose of the condition. Development impact fees must also meet the Nollan/ Dolan tests of “essential nexus” and “rough proportionality”.

The guiding principles that determine the structure, scope, and amount of the proposed DIF Program are as follows:
• Collected for Capital Facility and Infrastructure Improvements Only.

Development impact fee revenue will be collected and used to cover the cost of capital facilities and infrastructure that are required to serve new development in the City. Impact fee revenue will not be used to cover the

PARAMOUNT DEVELOPMENT IMPACT FEE NEXUS STUDY

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Economic & Planning Systems, Inc. 7 Introduction and Overview operation and maintenance costs of these or any other facilities and infrastructure.
• Used to Fund Facility Needs Created by New Development Rather than Existing Deficiencies. Impact fee revenues will only be used to pay for new or expanded capital facilities needed to accommodate growth. Impact fee revenue will not be collected or used to cover the cost of existing deficiencies in the City’s capital facilities or infrastructure. In other words, the cost of capital projects or facilities that are designed to meet the needs of the City’s existing population must be funded through other sources. • Fee Amount is Based on a Rational Nexus and calculated on a Proportional Basis. The impact fee amount is based on a reasonable nexus, or connection, between new development and the needs and corresponding costs of the capital facilities and improvements needed to accommodate it. The costs associated with improvements that serve the needs of both new development and the existing population and workforce are split on a “fair share” basis according to the proportion attributable to each. This ensures both a nexus between the new development and capital improvements as well as a proportional relationship between the amount of fee charged and the impact of the new development.

In September 2021, the State of California adopted Assembly Bill (AB) 602, which includes several new requirements related to the development and implementation of impact fee programs. The key provisions related to the calculations documented in this Nexus Report are summarized below. • Capital Improvement Plan: AB 602 requires that impact fees be based on an approved capital improvement plan. This adoption can occur at the same time as the fee ordinance adoption. Accordingly, this Nexus Report relies on a City of Paramount Development Impact Fee Capital Improvement Plan to be approved by the City Council in conjunction with the update to the City’s DIF Program. The CIP, presented in Appendix C of this Nexus Report, is derived from the capital improvements needs identified by the City (and included in this report), and is based on existing or target levels of municipal service. • Explanation of Level of Service and Fee Increase: AB 602 requires that the nexus study provide explanations if the fee calculation is based on a change in existing levels of service. Except where otherwise noted in the report, the fee calculations contained within this Nexus Report are based on the City’s existing service standards.
• Original Nexus Study: AB 602 notes that “if a nexus study supports the increase of an existing fee, the local agency shall review the assumptions of the nexus study supporting the original fee and evaluate the amount of fees collected under the original fee.” The original nexus studies establishing the

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Economic & Planning Systems, Inc. 8 Introduction and Overview City’s existing parks, storm drain, and water capacity fees are no longer available, and no other studies have taken place since the fees were established. Therefore, no comparison can be made between the assumptions underlying this Nexus Report and the original nexus studies. • Residential Fee to be Charged in Proportion to Unit Size: AB 602 requires that a nexus report adopted on or after July 1, 2022 “calculate a fee imposed on a housing development project proportionately to the square footage of proposed units of the development” with the exception of water capacity fee.

A jurisdiction does not need to charge residential fees in proportion to unit size if it makes a specific set of findings. The EPS Team has calculated all fees on a per square foot basis, with the exception of water capacity. This calculation is detailed in Chapter 10.

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Economic & Planning Systems, Inc. 9 Summary of Maximum Allowable Fees

2. Summary of Maximum Allowable Fees
Maximum Allowable Fees
Table 1 summarizes the City’s maximum allowable development impact fee schedule for capital needs as evaluated in this Nexus Study. The City can adopt fees below these maximum nexus-supported levels based on policy considerations.

Table 1 Summary of Maximum Allowable Fees
Unit Sq. Ft.

Public Safety $144 $0.11 $0.04 $0.06 $0.02
Parks & Recreation $1,451 $1.10 $0.40 $0.58 $0.20
General Facilities $91 $0.07 $0.03 $0.04 $0.01
Transportation (2)(3) $709 $0.54 $2.58 $1.09 $0.86
Stormwater Drainage $632 $0.48 $0.66 $0.66 $0.66
Water Capacity (4) $1,074 $0.82 $0.27 $0.27 $0.14
Subtotal Impact Fees $4,101 $3.12 $3.98 $2.70 $1.88
TOTAL IMPACT FEES (5) $4,183 $3.18 $4.06 $2.76 $1.92
(1) Includes accessory dwelling units 750 square feet and larger. (5) Total fees include a two percent administration fee.

Source: Bartle Wells Associates; Fehr & Peers; EPS
(4) Numbers shown are illustrative; actual fees will depend on meter needs of individual projects where the water capacity fee is assessed on a per meter equivalent unit (MEU) basis. For illustrative purposes, in this table development assumptions were made to compare the water capacity fee to the other fee categories. The residential fee shown is a weighted average, assuming that among future residential units built, 35 percent will be single-family units and 65 percent will be multifamily units.

The single-family fee assumes one 3/4-inch meter per unit. The multifamily fee assumes one 2-inch meter for every 20 multifamily units. Retail and office assume two 2-inch meters for a 76,230 square foot development on 5 acres (0.35 FAR).

Industrial assumes two 2-inch meters for a 152,460 square foot development on 10 acres (0.35 FAR). (2) In accordance with AB 2533, there is a reduction in impact fees to be assessed in areas close to high quality transit. The fee in a high quality transit area is $0.38 per square foot. (3) The transportation fee shown for the Warehouse/Industrial land use is an illustrative average of the Manufacturing land use fee of $0.63 per square foot and the Warehouse land use fee of $1.09 per square foot.

Fee Category
Residential (/unit) (1)
Average
Nonresidential (/sq. ft.)
Retail Office Warehouse /
Industrial

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Economic & Planning Systems, Inc. 10 Summary of Maximum Allowable Fees These development impact fees apply to new residential and nonresidential development based on a “fair share” allocation of specified capital costs. The maximum fee estimates include a two percent program administration fee.1 Estimated DIF Revenues Through Build-out
Table 2 provides an estimate of the potential total funding generated by the maximum allowable DIF program through buildout, excluding the Water Capacity Fee. These revenue projections are based on growth projections described in Chapter 3 of this Report. As shown, under the projected level of growth, the proposed DIF program would generate about $5.7 million in revenues to cover about 11 percent of the total capital improvements identified in the fee program.

The City will need to find other sources of revenue to cover the remaining costs, such as grant funding and revenues from other City funds. Revenues from fees could be higher or lower than this amount depending on the actual level of new development.

Table 2 Revenue Projections and Need for Outside Funding 1 The administration fee is designed to cover expenses for preparation of the development impact fee and subsequent updates as well as the required reporting, auditing, collection and other annual administrative costs involved in overseeing the program. This is a typical administration fee level used in many cities throughout the State.

Total Cost of
Improvements Amount Cost Allocation
% of Total
Cost Amount Cost Allocation
Public Safety $1,625,480 $273,631 16.8% 4.8% $1,351,848 83.2% Parks & Recreation $11,529,713 $2,751,971 23.9% 48.2% $8,777,742 76.1% General Facilities $1,750,000 $172,844 9.9% 3.0% $1,577,156 90.1% Stormwater Drainage $22,680,530 $1,110,554 4.9% 19.5% $21,569,976 95.1% Transportation $14,876,200 $1,396,862 9.4% 24.5% $13,479,338 90.6% Total Impact Fees $52,461,923 $5,705,862 10.9% 100% $46,756,060 89.1% (1) Does not include water capacity fee.

Sources: City of Paramount; Fehr & Peers; EPS
Fee Category (1)
Amount Allocation to DIF Program
By Buildout Additional Funding Needs

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Economic & Planning Systems, Inc. 11 Summary of Methodology and Key Assumptions

3. Summary of Methodology and Key
Assumptions
This section provides a brief overview of the nexus methodology, the key assumptions, and the approach for allocating future capital facility needs between new and existing development and by land use category. It also summarizes the demographic and land use projections underlying the fee. Subsequent chapters provide more detailed calculations for each fee category.

Summary of Methodology
While the nexus methodology employed in this study varies by fee category as appropriate given the range of capital facilities and improvements covered, there are a number of basic steps common to all. Specifically, for each fee category, EPS has applied the following general steps to calculate the nexus-supported fee amounts:

1. The EPS consultant team established an estimate of existing and future population and employment in Paramount through 2035 using a variety of sources, as described in the subsequent section.

2. The EPS consultant team worked with City staff to identify new infrastructure and capital facility improvements needed to serve both existing and future residents and employees.

3. City staff provided cost estimates for the capital facility estimates described in Step 2 above.

4. EPS allocated the capital facility costs identified in step 3 above between existing and new development to determine the share included in the fee program. These allocation shares were determined in a variety of ways, dependent on the given improvement, available data, and City guidance. In some cases where the need for the facility or improvement is entirely triggered by new development, the costs are allocated 100 percent to the fee program. In cases where the improvement is expected to serve both the existing population and the future population equally, the share of costs attributable to new development are based on the City’s current versus future service population. These cost allocation assumptions are documented in subsequent sections.

5. Once costs have been allocated between new and existing development, they are further distributed among residential and nonresidential uses. This process is dependent on facility or improvement type and the associated service

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Economic & Planning Systems, Inc. 12 Summary of Methodology and Key Assumptions population. For many improvements, costs are distributed based on ratios of residents to employees in the horizon year (as described further below).

6. Once costs are allocated to residential and nonresidential uses, each cost category is divided by the total residential or employment population to arrive at a “cost per resident” or “cost per employee”. The cost per person is multiplied by the people per household or trip rate factor for each residential fee category or by the employment density or trip rate factor for each nonresidential fee category.

7. For residential fees, EPS estimated the average unit size for future residential units based on recent trends in the City and surrounding area. The fee per unit calculated in step 6 is divided by the average unit size to calculate a fee per square foot for residential uses, as required by AB 602. This conversion is not required or made for water capacity fees.

8. A two percent charge is added to the fee to cover the cost of administering the fee program. The fee plus the two percent administration charge determines the maximum fee amount by land use. The administration charge is factored into the maximum allowable fee summary in Table 1, but is not calculated in the department-specific fee calculation tables found in the report sections below.

Demographic and Land Use Assumptions
This section describes the demographic and land use assumptions utilized in this study for both existing and future year conditions (i.e., in 2035). The estimates are used for the following primary purposes in the fee calculation:
• Estimates of existing population and employment levels are used to set the baseline of existing needs relative to existing standards. • Estimates of future population and employment growth in the City are the basis for determining the future need for capital facilities which can be appropriately funded by the fee.
• Estimates related to population and employment density (e.g., persons per household, square feet per employee) are used to allocate costs between land use categories.

Service Population Factor
The DIF is largely predicated on calculations that translate the population and employment projections (provided in the following section) into estimates of existing and future “service populations.” The “service population,” in turn, is derived from assumptions that compare residents and employees based on the

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Economic & Planning Systems, Inc. 13 Summary of Methodology and Key Assumptions relative service demands or typical service profiles of each, as further described in the following chapters.

While the service population characterization can differ by infrastructure category, for the purposes of this study EPS has relied upon a default service population calculation that assumes the impact of employees on capital facilities is approximately half (or 50 percent) of the impact of residents. The exception is for transportation, where residents and employees are assumed to have equivalent impacts on infrastructure.

Population and Employment Growth Projections
This fee study relies on estimates of projected growth in the resident and employee population likely to occur by 2035. The consultant team used 2023 American Community Survey (ACS) data to establish existing population and employment count. Future growth through 2035 was established using the 2024 Southern California Association of Governments (SCAG) Regional Transportation Plan (RTP) Model. The SCAG RTP growth was supplemented with assumptions regarding growth in two Specific Plan areas in the City—the North Paramount Gateway Specific Plan and the Clearwater Specific Plan—as projected growth in these areas was not reflected in the RTP Model. The projected growth in population and employment is summarized in Table 3.

Table 3 Growth Projections for Paramount Through 2035
As summarized in Table 3, the City is projected to see growth of approximately 6,150 people in residential population and 1,350 in total jobs, representing a 12 percent and six percent increase over existing conditions, respectively.

Applying the resident equivalency factor described above, the City has a total service population of 62,322, shown in Table 4. At buildout, the service population is projected to grow by 6,830 to 69,162, with this new growth accounting for about 9.9 percent of the total future service population. New residents are estimated to account for approximately 90 percent of the growth in Category 2023 2035 Growth
Residents 51,072 57,224 6,152
Employees 22,500 23,856 1,356
Note: Baseline population and employment based on 2023 ACS.

Projected population and employment from 2024 SCAG RTP model and information from City.

Sources: SCAG; City of Paramount; Fehr & Peers; EPS

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Economic & Planning Systems, Inc. 14 Summary of Methodology and Key Assumptions service population, while new employees account for the remaining 10 percent.

These proportions are used to allocate costs between residential and nonresidential land uses for many of the facilities included in the DIF, unless otherwise indicated.

Table 4 Summary of Existing and Projected Population and Employment Land Use Density Assumptions
In addition to the demographic calculations described above, the DIF calculations also utilize assumptions related to population and employment densities by land use type. Specifically, DIF improvement cost estimates per capita or per job are converted to fee rates per unit or square foot based on average persons per household and square foot per employee factors. These assumptions are Item Amount Percent
Population
Existing 51,072 89%
New 6,152 11%
Buildout 57,224 100%
Employment
Existing 22,500 94%
New 1,356 6%
Buildout 23,856 100%
Service Population (1)
Existing 62,322 90.1%
Residential 51,072
Employment 11,250
New 6,830 9.9%
Residential 6,152
Employment 678
Buildout 69,152 100%
Service Population Share
Total New Service Population 6,830
Residential 6,152 90%
Employment 678 10%
Sources: SCAG; City of Paramount; Fehr & Peers; EPS
(1) Service population is defined as population plus a percentage of the existing labor force. In this case, 50% of employees are equivalent to a resident's impact on City services.

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Economic & Planning Systems, Inc. 15 Summary of Methodology and Key Assumptions summarized in Table 5 and rely on a data from the U.S. Census and industry standards.

Table 5 Land Use Density Assumptions
Item Amount
Persons per Household (1) 3.6
Single-family 3.9
Multifamily 3.1
Square Feet Per Employee (2)
Retail 500
Office 350
Warehouse / Industrial 1,000
Development Density or FAR
Single-family (units/acre) 10
Multifamily (units/acre) 35
Retail 0.35
Office 0.35
Warehouse / Industrial 0.35
(1) Based on ACS 2023 data.

Sources: U.S. Census Bureau ACS; EPS
(2) Based on industry standards.

Economic & Planning Systems, Inc. 16 Public Safety Facilities

4. Public Safety Facilities
This Chapter describes the technical methodology for calculating fees for Public Safety Facilities. It is assumed that both residential and nonresidential development will pay the Public Safety fees.

Capital Needs and Costs
The costs associated with public safety activities fall into two categories: recurring facilities and one-time need facilities. Recurring facilities include new vehicles needed to maintain the Public Safety Department’s current level of service to new population, as well as the replacement of these vehicles based on a typical lifecycle. The total cost of new public safety vehicles is based on the replacement schedule of existing public safety vehicles as provided by the City. Specifically, the City leases its public safety vehicles on five-year terms. These new vehicle costs are allocated 100 percent to new development, as they are triggered directly by growth.

The Public Safety Department also provided estimated costs for expansion of its Emergency Operations Center (EOC). Since the EOC will serve both the existing and new service population, the total cost for the facilities is allocated in a fair share proportion to both the existing and new service population, as calculated in Table 4.

The cost estimates for the above items attributable to new growth are summarized in Table 6 and sum to approximately $274,000.

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Economic & Planning Systems, Inc. 17 Public Safety Facilities Table 6 Public Safety Department Capital Needs and Cost Summary Equipment/ Facility Type
Existing
Number
Total Needed by
2035 (1)
# of New
Units
Needed
Lifespan
(years) (2)
# of New Units
Needed by 2035
(rounded)
Unit
Cost (3)
% Attributable
to New Growth
(4)
Total Cost
Attributable to
New Growth
a b= a*(1+9.9%) c = b-a d e = (5yrs /d)*c f g h = e*f*g Recurring Facilities
Vehicles 18 20 2 5 4 $31,370 100% $125,480
One-Time Need Facilities
Emergency Operations Center
Expansion N/A N/A N/A N/A N/A $1,500,000 9.9% $148,152
Total (5) $273,631
(1) Based on projected growth in service population of 9.9% as derived in Table 4. (5) The sum of total cost may not match with the costs associated with facilities due to rounding.

Sources: City of Paramount; EPS
(2) City currently leases vehicles on five-year terms.
(3) Costs provided by City. Unit cost for vehicles is an average across all department vehicles. (4) 'Recurring Facilities' are calculated to only account for facilities attributable directly to new growth; thus, these are assigned a 100% figure in this column. 'One-Time Need Facilities' are calculated as a total cost that is needed to serve the entire community, including the population not attributable to new growth; thus, the 9.9% figure is used to derive the total cost attributable solely to new growth.

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Economic & Planning Systems, Inc. 18
Cost Allocations and Fee Calculations
Table 7 allocates the $273,631 in future public safety facility costs based on the relative share of service population growth attributable to new residents and employees respectively, based on the calculations shown in Table 4. The fee is then calculated based on assumptions related to persons per household for residential and employees per square foot for nonresidential land uses, as detailed in Table 5.

Table 7 Maximum Public Safety Facilities Fee Calculation Nexus Findings for Public Safety Facility Fee
Component
Purpose of Fee
The Public Safety Fee component developed through this Nexus Study will fund public safety facility improvements and vehicle acquisition necessary to serve new residential and nonresidential development in the City based on the level of service described in this chapter. New development in the City will increase the service population and, therefore, the need for increased public safety services.

Use of Fee
The fee will be used to construct new development’s fair share portion of public safety facilities, as well as acquire public safety vehicles necessitated by new development.

Item Factor / Input
Future Residential/ Nonresidential Allocation Residential Nonresidential % Allocation 100% 90% 10%
Public Safety Facilities Cost $273,631 $246,469 $27,163 Net Future Growth in Residents or Employees (1) 6,152 1,356 Cost per Resident or Employee $40 $20
Land Use
Residential (per unit) (2) 3.60 persons/unit $144 per unit Retail (per sq. ft.) 500 sq. ft./employee $0.04 per sq. ft.

Office (per sq. ft.) 350 sq. ft./employee $0.06 per sq. ft.

Warehouse / Industrial (per sq. ft.) 1,000 sq. ft./employee $0.02 per sq. ft. (1) Calculated in Table 4.
(2) Residential fees are converted from per unit to per square foot fees in Table 20.

Cost Allocation and Fee Calculation
Building Density Maximum Fees (3)
(3) The maximum fee calculation may not exactly match the product of the shown cost per resident or employee, and building density due to rounding.

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Relationship between Use of Fee and Type of Development Development of new residential and nonresidential land uses in the City will generate a need for additional public safety personnel, facilities, and vehicles. The fee will be used to develop and expand the user capacity for public safety facilities and to acquire vehicles to serve new users from residential and nonresidential development.

Relationship between Need for Facility and Type of Project Each new residential and nonresidential development project will generate additional demand for public safety services and personnel. Additional public safety personnel will be housed in future public safety facilities and will require associated vehicles to serve additional demand generated by new residents and employees.

Relationship between Amount of Fee and Cost of or Portion of Facility Attributed to New Development
The amount of public safety facilities needed by each land use has been estimated by applying the public safety facility cost per persons served for each land use.

The common use factor for residential land uses is the number of persons per household for residential land uses. The common use factor for nonresidential land uses is based on the number of employees generated per 1,000 square feet for commercial, office, and industrial development and on the ratio of public safety demand for an employed resident as compared to a non-employed resident.

Economic & Planning Systems, Inc. 20 Parks Facilities

5. Parks Facilities
This Chapter describes the technical methodology for the Parks Facilities fees, which includes parks and recreation facilities. It is assumed that both residential and nonresidential development will pay Parks Facilities fees.

Capital Needs and Costs
The capital needs and costs associated with parks facilities fall into two categories: new parkland/facilities and expansion of existing parks facilities.

Table 8 shows the inventory of existing parks and recreation facilities based on information contained in the City’s recently-adopted Parks Master Plan. It also calculates the department’s existing level of service, presented as acres per 1,000 people in the service population. As shown, the City currently operates approximately 60 acres of parkland, yielding a service level of 1.0 acres per 1,000 service population. If this level is applied to the projected growth in service population, an additional 6.64 acres of parkland would be required to maintain the City’s existing parks service level at buildout.

Table 8 Paramount Existing Park Inventory and Level of Service Given this calculation, the parks fee can be based on the cost to acquire and improve an additional 6.64 acres of parkland. Among the list of anticipated parks improvements provided by the Community Services Department, the City has identified two projects that would involve the planning and construction of new Facility / Park
Number Acreage
PARKS
Pocket Parks 3 1.1
Community Parks 4 44.3
Neighborhood Parks 6 14.1
Special Use Sites 4 1.1
Total City-Run Developed Parks 17.00 60.60 1.0 acres/1,000 service population
New Service Population (2) 6,830 People
New Parkland Supported by Growth 6.64 Acres
(1) Based on population estimates shown in Table 3.
(2) Calculated in Table 4.

Sources: City of Paramount 2024 Parks Master Plan; EPS
Existing Inventory Existing
Level of Service (1)

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Economic & Planning Systems, Inc. 21 Parks Facilities
parks. The total acreage of these new parks is less than 6.64 acres; therefore, 100 percent of their costs can be allocated to new growth.

The list of anticipated parks improvements also includes upgrades and expansions of existing parks and recreation facilities. Unlike new parks development, the renovation projects are needed to serve both City’s existing and future service population. Consequently, the costs for these improvements allocated to new development are based on the growth in service population as a percentage of the total service population at buildout, as calculated in Table 4.

Table 9 lists the anticipated parks improvements and the total estimated capital costs attributable to new development, based on cost information provided by the Community Services and Public Works Departments. Total improvement costs attributable to growth sums to about $2.7 million.

Table 9 Parks Facility Capital Needs and Cost Estimates Park Improvements [1] Acreage Cost
New Parks
Somerset Ranch Pocket Park Design 0.07 $300,000
Century Greenway Park 0.84 $1,490,000
Subtotal 0.91 $1,790,000
Park Facility Expansions
Park Development Concept $285,000
Mariposa Classroom Conversion Design $287,500
Spane Park Facility Improvements $415,000
Paramount Park Community Center Renovation & Expansion $8,122,213 Mariposa Ash Tree Lights $20,000
Salud Park Volleyball Court Renovation and Expansion $400,000 All-American Park Picnic Shelter $160,000
Meadows Park Picnic Shelter Renovation and Expansion $50,000 Subtotal $9,739,713
Percent Attributable to Growth [2] 9.9%
Expansion Costs Attributable to Growth $961,971
Total Costs Attributable to New Growth $2,751,971
(1) Needs and costs identified by Parks Department and Public Works Department staff (2) Calculated in Table 4.

Sources: City of Paramount; EPS

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Economic & Planning Systems, Inc. 22 Parks Facilities
Cost Allocation and Fee Calculation
Table 10 allocates the $2.7 million in future park facility costs attributable to growth between residential and nonresidential development, based on the relative share of service population growth attributable to new residents and employees respectively, as shown in Table 4. The fee is then calculated based on assumptions related to persons per household for residential and employees per square foot for nonresidential land uses, as detailed in Table 5.

Table 10 Maximum Parks Facilities Fee Calculation
Nexus Findings for Parks Fee Component
Purpose of Fee
The Parks Fee component developed through this Nexus Study would fund parks and recreation facility improvements and land acquisition necessary to serve new residential and nonresidential development in the City based on the level of service described in this chapter. New development in the City will increase the service population and, therefore, the need for new parks and recreation facilities and parkland.

Use of Fee
The fee will be used to construct new development’s fair share portion of park and recreation facilities, as well as acquire parkland necessitated by new development; to plan, design, and develop parks and recreation facilities; and to fund the studies and administration to support the program.

Item Factor / Input
Future Residential/ Nonresidential Allocation Residential Nonresidential % Allocation 100% 90% 10%
Parks Facilities Cost $2,751,971 $2,478,789 $273,183
Net Future Growth in Residents or Employees (1) 6,152 1,356 Cost per Resident or Employee $403 $201
Land Use
Residential (per unit) (2) 3.60 persons/unit $1,451 per unit Retail (per sq. ft.) 500 sq. ft./employee $0.40 per sq. ft.

Office (per sq. ft.) 350 sq. ft./employee $0.58 per sq. ft.

Warehouse / Industrial (per sq. ft.) 1,000 sq. ft./employee $0.20 per sq. ft. (1) Calculated in Table 4.
(2) Residential fees are converted from per unit to per square foot fees in Table 20.

Cost Allocation and Fee Calculation
Building Density Maximum Fees (3)
(3) The maximum fee calculation may not exactly match the product of the shown cost per resident or employee, and building density due to rounding.

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Economic & Planning Systems, Inc. 23 Parks Facilities
Relationship between Use of Fee and Type of Development Development of new residential and nonresidential land uses in the City will generate a need for additional parks and recreation facilities and parkland. The fee will be used to develop park and recreation facilities and acquire parkland to serve new users from residential and nonresidential development.

Relationship between Need for Facility and Type of Project Each new residential and nonresidential development project will generate additional demand for park and recreation facilities and parkland. New parks and recreation facilities and additional parkland will serve additional demand generated by new residents and workers.

Relationship between Amount of Fee and Cost of or Portion of Facility Attributed to New Development
The amount of park and recreation facilities needed by each land use has been estimated by applying the parks and recreation costs per persons served for each land use. The common use factor for residential land uses is the number of persons per household for residential land uses. The common use factor for nonresidential land uses is based on the number of employees generated per 1,000 square feet for commercial, office, and industrial development and on the ratio of parks demand for an employed resident as compared to a non-employed resident.

Economic & Planning Systems, Inc. 24 General Facilities

6. General Facilities
This Chapter describes the technical methodology for calculating fees for General Facilities. It is assumed that both residential and nonresidential development will pay the General Facilities fees.

Capital Needs and Costs
City staff provided information on the General Facilities needs and costs required to serve both existing and future residents. These needs include upgrades and expansions to civic facilities not associated with specific departments, such as City Hall and storage lots. Table 11 below shows the capital costs associated with upgrades and expansions. Since the improvements are needed to serve both City’s existing and future service population, the costs of the facilities allocated to new growth are based on the growth in service population as a percentage of the total service population at buildout, as calculated in Table 4. The total cost allocated to new growth is approximately $173,000.

Table 11 General Facilities Capital Cost Summary
Cost Allocations and Fee Calculation
Table 12 allocates the $173,000 in General Facilities costs between residential and nonresidential land uses based on the relative share of service population growth attributable to new residents and employees respectively, as calculated in Table 4.

The fees are then calculated based on assumptions related to persons per household for residential and employees per square foot for nonresidential land uses, as detailed in Table 5.

Facilities (1) Amount
City Hall Electrical Upgrades $600,000
City Facility Security Camera and Alarm Upgrades $1,000,000 City Storage Lot Security Upgrades $150,000
Total Costs $1,750,000
Percent Supportable by Growth (2) 9.9%
Costs Supportable by Growth $172,844
Sources: City of Paramount; EPS
(1) Needs and costs for new facilities provided by City staff. (2) Calculated in Table 4.

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Economic & Planning Systems, Inc. 25 General Facilities Table 12 Maximum General Facilities Fee Calculations
Nexus Findings for General Facility Fee Component
Purpose of Fee
The General Facility Fee component developed through this Nexus Study would fund civic facility improvements necessary to serve new residential and nonresidential development in the City based on the level of service described in this chapter. New development in the City will increase the service population and civic engagements and therefore contribute to the need for upgraded civic spaces.

Use of Fee
The fee will be used to construct new development’s fair share portion of civic facility upgrades.

Relationship between Use of Fee and Type of Development Development of new residential and nonresidential land uses in the City will generate a need for upgraded civic facilities. The fee will be used to upgrade general facilities to serve new users from residential and nonresidential development.

Relationship between Need for Facility and Type of Project Each new residential and nonresidential development project will generate additional demand for civic facility space, requiring upgraded facilities able to accommodate this demand.

Item Factor / Input
Future Residential/ Nonresidential Allocation Residential Nonresidential % Allocation 100% 90% 10%
General Facilities Cost $172,844 $155,686 $17,158
Net Future Growth in Residents or Employees (1) 6,152 1,356 Cost per Resident or Employee $25 $13
Land Use
Residential (per unit) (2) 3.60 persons/unit $91 per unit Retail (per sq. ft.) 500 sq. ft./employee $0.03 per sq. ft.

Office (per sq. ft.) 350 sq. ft./employee $0.04 per sq. ft.

Warehouse / Industrial (per sq. ft.) 1,000 sq. ft./employee $0.01 per sq. ft. (1) Calculated in Table 4.
(2) Residential fees are converted from per unit to per square foot fees in Table 20.

Cost Allocation and Fee Calculation
Building Density Maximum Fees (3)
(3) The maximum fee calculation may not exactly match the product of the shown cost per resident or employee, and building density due to rounding.

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Economic & Planning Systems, Inc. 26 General Facilities Relationship between Amount of Fee and Cost of or Portion of Facility Attributed to New Development
The amount of general facilities needed by each land use has been estimated by applying the general facilities cost per persons served for each land use. The common use factor for residential land uses is the number of persons per household for residential land uses. The common use factor for nonresidential land uses is based on the number of employees generated per 1,000 square feet for commercial, office, and industrial development and on the ratio of general facilities demand for an employed resident as compared to a non-employed resident.

Economic & Planning Systems, Inc. 27 Storm Drain

7. Storm Drain
This Chapter describes the technical methodology for calculating fees for Storm Drain Facilities. It is assumed that both residential and nonresidential development will pay the Storm Drain fees.

Growth Assumptions
Since the need for storm drain facilities is associated with growth in impervious surface as opposed to growth in population, EPS utilized distinct growth assumptions to determine the allocation of future facility costs to new development. In order to estimate growth in impervious surface that would result from projected new development detailed in Table 3, EPS collected data on existing housing units and commercial square footage in the City, as well as average existing density for housing units and floor-to-area ratio for commercial space. This data was used to estimate the number of currently developed acres in the City. EPS then applied an impervious surface factor for residential and commercial uses, utilizing data from the California State Water Resources Control Board.2 This calculation results in an estimate of impervious surface currently developed in the City.

To calculate growth in impervious surface, EPS converted growth in residents and employees into growth in housing units and commercial space, using the density assumptions detailed in Table 5. Estimated densities for future housing and commercial space was applied to these growth projections in order to estimate growth in developed acres, and the same impervious factors were applied to estimate growth in impervious surface. As shown in Table 13, these calculations suggest that new development will result in a 4.9 percent growth in impervious surface in the City through 2035.
2 California State Water Resources Control Board Runoff Coefficient Fact Sheet - https://www.waterboards.ca.gov/water_issues/programs/swamp/docs/cwt/guidance/513.pdf

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Table 13 Estimated Growth in Impervious Acres
Capital Needs and Costs
City staff provided information on the Storm Drain needs and costs required to serve both existing and future residents. These needs include new stormwater capture facilities and equipment, and upgrades to existing facilities. Table 14 below shows the capital costs associated with these facilities. Since the improvements are needed to serve both City’s existing and future service population, the costs of the facilities allocated to new growth are based on the growth in impervious acres as a percentage of the total impervious acres at buildout, as calculated in Table 13. The total cost allocated to new growth is approximately $1.1 million.

Item Formula Number Unit Source

RESIDENTIAL
Existing
Est. Existing Units a 15,006 Units CA Department of Finance, 2025 City Population and Housing Estimates Avg. Density b 15 Units/acre Average density of existing residential zoning in City Est. Developed Acres c = a/b 1,000 Acres
Impervious Factor d 62.5% Average coefficient for single-family and multifamily units, California State Water Resources Control Board Runoff Coefficient Fact Sheet Est. Impervious Acres e = c*d 625 Acres
New
New Population f 6,152 Persons Table 3
Household Size g 3.64 Persons per unit Table 5
Est. New Units h = f/g 1,690 Units
Avg. Density i 49.5 Units/acre Weighted average density for projected new SF and MF development in City Est. New Developed Acres j = h/i 34 acres
Impervious Factor d 66% Average coefficient for single-family and multifamily units, California State Water Resources Control Board Runoff Coefficient Fact Sheet Est. New Impervious Acres k = j*d 23 acres
Growth
Total Res. Impervious Acres at Buildout l = e+k 648 Acres Percent Growth in Impervious Res. Acres m = k/l 5.3%

COMMERCIAL
Existing
Existing Comm. Bldg. Sq. Ft. n 12,284,345 Bldg. Sq. Ft. CoStar Existing Comm. Land Sq. Ft. o 33,819,412 Land Sq. Ft. CoStar Avg. FAR p = n/o 0.36
Existing Comm. Land Acres q = o/43560 776 Acres
Impervious Factor r 75% Average coefficient for business and light industrial uses, California State Water Resources Control Board Runoff Coefficient Fact Sheet Est. New Impervious Acres s = q*r 582 Acres
New
New Jobs t 1,356 Jobs Table 3
Avg. Employee Density u 617 Sq. ft./employee Table 5, average for all commercial uses Est. New Comm. Bldg. Sq. Ft. v = t*u 836,200 Bldg. Sq. Ft.

Avg. FAR p 0.36
Est. New Comm. Land Sq. Ft. w = v/p 2,302,100 Land Sq. Ft.

Est. New Comm. Acres x = w/43560 53 Acres
Impervious Factor r 75% Average coefficient for business and light industrial uses, California State Water Resources Control Board Runoff Coefficient Fact Sheet Est. New Impervious Acres y = x*r 40 Acres
Growth
Total Impervious Comm. Acres at Buildout z = l+s 622 Acres Percent Growth in Impervious Comm. Acres aa = y/z 8.5%
TOTAL
Total Impervious Acres at Buildout bb = z+l 1,270 Acres Total Growth in Impervious Acres cc = y+k 62 Acres
Percent Growth in Impervious Acres dd = cc/bb 4.9%
Sources: CA Department of Finance; CoStar; California State Water Resources Board; City of Paramount; EPS

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Table 14 Storm Drain Capital Cost Summary
Cost Allocations and Fee Calculations
Table 15 allocates the $1.1 million in future storm drain facility costs based on the relative share of impervious surface growth attributable to new residential and commercial development respectively, based on the calculations shown in Table 13.

This results in a fee per impervious acre for each use category. To calculate a fee per gross acre of development, the fee per impervious acre is multiplied by the impervious factors utilized in Table 13. The fees per gross acre for each land use type are detailed in Table 15. The fee is calculated based on the nexus between new development and the need for storm drain facilities; the calculation is based on acres of impervious surface, and then converted to a per unit or per building square foot basis based on development density assumptions in Table 5.

Facilities [1] Formula Amount
Storm Drain Improvements $4,000,000
Spane Park Stormwater Capture $18,265,530
Drywell Installation - Garfield and Pequeno Parks $415,000 Total Costs a $22,680,530
Percent Supportable by Growth [2] b 4.9%
Costs Supportable by Growth c = a * b 1,110,554
Sources: City of Paramount; EPS
(1) Needs and costs for new facilities provided by Public Works Department staff. (2) Calculated in Table 14.

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Table 15 Maximum Storm Drain Facilities Fee Calculation Nexus Findings for Storm Drain Facility Fee Component
Purpose of Fee
The Storm Drain Fee component developed through this Nexus Study will fund storm drain facility improvements necessary to serve new residential and nonresidential development in the City based on the level of service described in this chapter. New development in the City will increase the impervious surface and, therefore, the need for increased storm drain capacity.

Use of Fee
The fee will be used to construct new development’s fair share portion of storm drain facilities.

Item Factor / Input
Future Residential/ Nonresidential Allocation Residential Nonresidential % Allocation 100% 51% 49%
Storm Drain Facilities Cost $1,110,554 $566,585 $543,968 Net Future Growth in Impervious Acreage (1) 23 40
Cost per Impervious Acre (2) $25,143 $13,724
Land Use (per gross acre) % Impervious (3)
Residential 66% $16,594 per gross acre
Retail / Svc. Commercial 75% $10,293 per gross acre
Office 75% $10,293 per gross acre
Warehouse / Industrial 75% $10,293 per gross acre
Land Use (per square foot) Density or FAR Per Acre
Residential (4) 26 $632 per unit
Retail (per sq. ft.) 0.36 $0.66 per sq. ft.

Office (per sq. ft.) 0.36 $0.66 per sq. ft.

Warehouse / Industrial (per sq. ft.) 0.36 $0.66 per sq. ft. (1) Calculated in Table 14.

Cost Allocation and Fee Calculation
Maximum Fees
(3) California State Water Resources Control Board Runoff Coefficient Fact Sheet (https://www.waterboards.ca.gov/water_issues/programs/swamp/docs/cwt/guidance/513.pdf) (4) Residential density represents a weighted average of expected single-family and multifamily units to be built in the future. Residential fees are converted from per unit to per square foot fees in Table 20. (2) The cost per impervious acre may not exactly match the quotient of the facilities cost and net fture growth due to rounding.

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Economic & Planning Systems, Inc. 31 Storm Drain
Relationship between Use of Fee and Type of Development Development of new residential and nonresidential land uses in the City will generate a need for additional storm drain facilities. The fee will be used to develop and expand the capacity for storm drainage in the City.

Relationship between Need for Facility and Type of Project Each new residential and nonresidential development project will generate additional demand for storm drain capacity, requiring new and upgraded facilities able to accommodate this demand.

Relationship between Amount of Fee and Cost of or Portion of Facility Attributed to New Development
The amount of storm drain facilities needed by each land use has been estimated by applying the storm drain costs per impervious surface developed for each land use.

The common use factor for both residential and nonresidential land uses is the estimated impervious surface developed for each land use category.

Economic & Planning Systems, Inc. 32 Transportation

8. Transportation
The Transportation fee funds improvement needs associated with the City’s transportation infrastructure. Since these facilities will serve the needs of both residents and businesses, it is assumed that both residential and nonresidential development will pay the Transportation Fee. The following chapter provides a summary of the improvement needs, cost allocations, and fee levels for the Transportation Fee. A detailed technical memorandum on the methodology used to calculate the Transportation Fee is included in Appendix A.

Improvement Needs and Costs
Fehr & Peers worked with City staff to identify the transportation improvement needs and costs required to serve both existing and future residents. Table 16 below shows the project cost estimation for transportation infrastructure improvements.

The cost of improvement is determined by referencing recent costs and adjusting for factors such as construction materials, labor, environmental compliance, and projectspecific contingencies.

Table 16 Transportation Improvement Project List and Cost Estimates Cost Allocations and Technical Analysis
The allocation of transportation improvement costs to new growth is based on vehicle trips generated and projected vehicle miles traveled. To calculate fair share for nonresidential uses, Fehr & Peers used Passenger Car Equivalent (PCE) trip rates to normalize the impacts for autos and trucks. For retail and restaurant uses a 30% pass-by trip reduction is considered to account for existing activities. Table 17 shows the summary trip rates.

Facility Type Total Cost Estimate
Electronic Message Boards (1) $575,000
Alondra Boulevard Capacity Enhancements (1) $3,465,000
West Santa Ana Branch Bikeway Phase 3 (1) $1,175,200
West Paramount Utility Easement Multi-Use Path (1) $9,661,000 Total $14,876,200
(1) Project list and cost estimates provided by the City of Paramount.

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Table 17 Standard Institute of Transportation Engineers (ITE) Trip Rates and Adjusted Passenger Car Equivalent (PCE) Trips Rates
Fehr & Peers calculated the transportation development impact fee program’s contribution toward the transportation improvement projects by identifying the total cost of transportation infrastructure improvements, as shown in Table 16, and taking into account known funding, fee credits, existing deficiencies and cost of programming and administration.

Applying the estimated cost per trip to each land use category, a maximum fee per square foot of land use is calculated. Table 18 shows the estimated cost per trip, and cost per square foot by land use category. Appendix A provides further detail on the methodology used to make this allocation, as well as the nexus findings.

Land Use Unit (1)
Daily Trip
Rate
Passenger Car
Equivalent (PCE)
Trip Rate
Residential Land use (2) DU 7.68 7.68
Retail / Restaurant (3) KSF 25.90 27.91
Manufacturing / Industrial KSF 4.87 6.87
Office KSF 10.84 11.84
Warehouse KSF 6.74 11.74
(2) The residential trip rate reflects a weighted average of single-family and multifamily trip rates, based on the distribution of residential land uses within the City. Average Size of Dwelling Unit is 1,315 square feet. (based on information from recent development in City of Paramount (2024)).
(3) 30% average reduction applied to retail and service stations used to account for likelihood of pass-by and diverted trips.
(1) Units used are dwelling unit (DU) for residential uses and 1,000 sq. ft. (KSF) for nonresidential uses.

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Table 18 Cost per Trip and Per Square Foot Citywide
Measure Costs
Total Adjusted New Trips 15,133
Total DIF Program cost $1,396,862
Cost per Trip $92
Cost per Dwelling Unit (citywide) (1) $709
Cost per residential square foot (2) $0.54
If located in a high-quality transit area (2) $0.38
Cost per manufacturing/industrial square foot (3) $0.63 Cost per warehouse square foot (3) $1.08
Cost per office square foot (3) $1.09
Cost per retail/restaurant square foot (3) $2.58
(1) Cost per Dwelling Unit is calculated by multiplying cost per trip to the residential per unit trip rate.
(2) The cost per Dwelling Unit is divided by the average dwelling unit size of 1,315 square feet to arrive at a residential per square foot cost. (3) Cost per square foot of nonresidential land use applies the cost per trip to the Passenger Car Equivalency (PCE) trip generation rate per thousand square feet for each land use and then divides by 1,000 for a per square foot cost.

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9. Water Capacity Fee
The water capacity charges/ fees recover the costs of infrastructure and assets benefiting new development, and fund improvement needs associated with the City’s water system infrastructure. Since these systems will serve the needs of both residents and businesses, both residential and non-residential development will pay the water capacity fee. The following chapter provides a summary of the improvement needs, cost allocations, and fee levels for the Water Capacity Fee. The detailed technical analysis that establishes the Water Capacity Charges is provided in Appendix B.

Improvement Needs and Costs
Bartle Wells Associates worked with City staff to identify existing water system facilities and costs required to serve both existing and future residents. Table 19 shows a summary of existing water system asset values for the water capacity charges calculation. The capacity cost is determined by referencing construction projects from recent years and adjusting for factors such as construction materials and labor. Additionally, costs take into consideration physical effects of aging and percent useful life remaining for each asset type.

Table 19 Water System Asset Valuation
Asset Description System Value for Capacity Charges
Pipelines $12,862,500
Wells & Treatment $20,340,000
Total Replacement Value of Assets $33,202,500
Outstanding Principal (1) ($22,686,534)
Cash Reserves (2) $15,219,380
Net Principal Outstanding (Maximum of $0) ($7,467,154)
Total Value of Assets for Capacity Charges $25,735,346
(1) Source: City of Paramount Long Term Liabilities for the Year Ended June 30, 2024. (2) Source: City of Paramount Comprehensive Annual Financial Report, Statement of Cash Flows Asset Replacement Cost Values Based on Estimated Replacement Costs Adjusted by Remaining Asset Life
Less Outstanding Principal Net of Cash Reserves

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The Water Capacity fee is calculated by dividing the recoverable cost of water system assets by the projected future capacity of the City’s water system. This calculation is shown below in Table 20, which is calculated on a per meter equivalent unit (MEU) basis.

Table 20 Water Capacity Charge Calculation per MEU
Capacity Charge Component Amount
System Cost Recovery $25,735,346
Projected 2040 MEUs (1) 12,280
Capacity Charge per MEU $2,096
(1) Projection based on the City of Paramount 2020
Urban Water Management Plan.

Economic & Planning Systems, Inc. 37 AB 602 Compliance

10. AB 602 Compliance
The updated fee calculations have followed the new requirements of AB 602 in addition to the preexisting requirements of the Mitigation Fee Act. This chapter describes how the analysis complies with key sections of AB 602. There are other compliance components related to implementation and administration of the fee program (such as posting program-related documents online) that the City will oversee.

Capital Improvement Plan
AB 602 requires that jurisdictions adopt a capital improvement plan (CIP) as part of the nexus report process, to identify improvements that will contribute toward expanding the City’s infrastructure capacity in order to serve new residents.

Accordingly, this Report relies on the CIP presented in Appendix C, which was developed by City staff and summarized in the preceding chapters. AB 602 does not apply to water capacity charges, and as such water system costs associated with the Water Capacity Fee are not included in the CIP. The City will adopt the Development Impact Fee CIP at the same time as the fee ordinance adoption through a resolution.

A key purpose of the CIP is to indicate the types of improvements that will be funded in part by the fee program. As shown, the CIP includes a total investment of approximately $52.5 million through 2035. As shown in Table 2 above, the updated impact fees are estimated to generate approximately $5.7 million in funding to support the listed improvements, although the actual revenue collected from the impact fee is uncertain and will depend on the level of new development in the City.

Therefore, as is common, impact fee revenue will only fund a portion of the City’s overall improvement program. The City will identify additional funding sources to support these improvements, which may include other City revenues and grants.

Explanation of Level of Service
AB 602 requires that the nexus reports indicate whether the fee calculation is based on existing levels of service or on different levels of service, and to provide an explanation if the latter. As demonstrated throughout this Report, the calculated fees reflect the cost of maintaining the City’s existing level of service for each infrastructure category as new growth occurs.

Original Nexus Study
AB 602 states that “if a nexus study supports the increase of an existing fee, the local agency shall review the assumptions of the nexus study supporting the original fee and evaluate the amount of fees collected under the original fee.” Of the fees included in this Study, only the Parks, Storm Drain, and Water Capital fees are

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updates to existing fees adopted by the City. The remaining fee categories are new fees being adopted by the City.

At the time of this Report, the original nexus studies conducted for the existing fee categories were not available. Given that all three fees were adopted prior to 1989 and have not been formally updated in the interim, it is reasonable to assume that the cost estimates utilized to set the original fees are no longer applicable and that an increase in the fee amounts is to be expected as part of an update that reflects present-day cost conditions.

Residential Fee to be Charged in Proportion to Unit Size AB 602 requires that a nexus report adopted on or after July 1, 2022 “calculate a fee imposed on a housing development project proportionately to the square footage of proposed units of the development.” The following section details the steps taken to convert the per unit residential fees provided in the previous chapters to a fee that is charged proportionally based on housing unit sizes.

1. Average Square Feet for Residential Units: EPS reviewed data provided by the City on recent single-family residential projects permitted in the City, as well as data on multifamily projects built in neighboring cities over the past ten years, to determine average unit size for both single-family and multifamily building units. This calculation resulted in projected average net unit sizes of approximately 1,900 square feet for new single-family units and 1,000 square feet for new multifamily units.

Based on discussions with the City, it was determined that a single fee would be established for all residential unit types, including accessory dwelling units (ADU) over 750 square feet.3 The City projects that among future residential units built, 35 percent will be single-family units and 65 percent will be multifamily units. EPS calculated a weighted average of the average unit sizes based on these proportions.

The resulting estimated average size for residential units in the City is approximately 1,315 square feet (1,900*.35 + 1,000*.65 = 1,315).

2. Fee Per Square Foot: The fee calculations in the preceding chapters include per residential unit fees for each fee category. The fee per unit is calculated as the cost of future facility needs per resident multiplied by the average household size of 3.6 persons.
3 Assembly Bill (AB) 68 states that local agencies may not impose impact fees on the development of accessory dwelling units less than 750 square feet. It further states that impact fees charged on accessory dwelling units 750 square feet and larger must be “charged proportionally in relation to the square footage of the primary dwelling unit.” Since the impact fees calculated in this Report will be charged on a per square foot basis, the fee charged to ADUs 750 square feet and larger will be proportional to the fee that would be charged to the primary dwelling unit based on size of unit.

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As shown in Table 21, the average per unit fee for each category is divided by the average unit size to determine a maximum justifiable fee per square foot for each fee category.

Table 21 Residential Fee Per Square Foot
The variations in fee level by unit size will make development costs relatively lower for smaller units than larger units, encouraging the development of smaller units. This financial incentive will complement other trends and policies supporting the development of smaller units. For example, as stated above, the City expects the majority of new housing units built will be multifamily units, particularly in the City’s Specific Plan Areas.

Fee Category Fee Per Unit Fee Per Sq. Ft.

Square Footage (1) 1,315
Public Safety $144 $0.11
Parks $1,451 $1.10
General Facilities $91 $0.07
Stormwater $632 $0.48
Transportation $709 $0.54
Water Capacity (2) $1,074 $0.82
TOTAL $3,027 $2.30
(1) Estimated average size for residential units in the City is approximately 1,315 square feet, assuming future residential developments will be 35 percent will be single-family units and 65 percent will be multifamily units. Assumes that the average singlefamily unit is 1,900 sq.ft. and the average multifamily unit is 1000 sq.ft.
(2) Numbers shown are illustrative; actual fees will depend on meter needs of individual projects where the water capacity fee is assessed on a per meter equivalent unit (MEU) basis. For illustrative purposes, in this table development assumptions were made to compare the water capacity fee to the other fee categories. The residential fee shown is a weighted average, assuming that among future residential units built, 35 percent will be single-family units and 65 percent will be multifamily units. The single-family fee assumes one 3/4-inch meter per unit. The multifamily fee assumes one 2-inch meter for every 20 multifamily units.

Economic & Planning Systems, Inc. 40 Implementation and Administration

11. Implementation and Administration
The proposed Development Impact Fee Program is anticipated to be adopted by the City of Paramount through an enabling Ordinance. The City will also adopt an Resolution approving this Nexus Report and the Development Impact Fee CIP and establishing the updated fee amounts.

AB 1600 and AB 602 outline several implementation/ administration procedures for impact fee programs. This section highlights four of these procedures: publication of fee information online, the annual fee review, the five-year report, and eight-year comprehensive update.

Publication of Financial and Zoning Information
Assembly Bill (AB) 1483 requires all cities, counties, and special districts with a website to make the following information available online, if applicable:
• The current schedule of fees, exactions, and affordability requirements imposed by the city, county, or special district (including any dependent special district), applicable to a proposed housing development project. The schedule must be presented in a way that clearly identifies the fees and requirements that apply to each parcel.
• All zoning ordinances and design and development standards for each parcel. • The current and five previous annual fee or financial reports. • An archive of impact fee nexus studies, cost of service studies, or equivalent, conducted by the city, county, or special district on or after January 1, 2018.

The above information must also be updated within thirty days of any changes.

Annual Review
This Report and the technical information contained herein should be maintained and reviewed periodically by the City as necessary to ensure alignment of capital needs and new development and to enable the adequate programming of funding sources.

To the extent that capital needs, improvement requirements, or costs change over time, the Fee Program may need to be updated. Specifically, AB 1600 (at Gov. Code §§ 66001(c), 66006(b)(1)) stipulates that each local agency that requires payment of a fee make specific information available to the public annually within 180 days of the last day of the fiscal year:
• A description of the type of fee in the account.
• The amount of the fee.
• The beginning and ending balance of the fund.
• The amount of fees collected, and interest earned.
• Identification of the improvements constructed.

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• The fees expended to construct the improvement.
• The percentage of total costs funded by the fee.
• The approximate date for construction of the improvement.

Assembly Bill (AB) 516 additionally requires reports to include the following information:
• Identification of each public improvement identified in the previous report, and whether construction began on the approximate date noted • For previously identified projects that did not start construction on the approximate date identified in the prior report, a reason for the delay and a revised approximate construction start date
• For any refunds made, the number of persons or entities identified to receive those refunds
Because of the dynamic nature of growth and infrastructure requirements, and the additional requirements of AB 516, the City should monitor development activity, the need for improvements, and the adequacy of the fee revenues and other available funding. Formal annual review of the fee program should occur, at which time adjustments should be made as necessary.

Annually, the City should update the its fee program to reflect inflation and other factors that affect the costs of projects in the fee program. The annual adjustment will be based on the Consumer Price Index for All Urban Consumers (CPI-U), Los Angeles-Long Beach-Anaheim, published by the U.S. Bureau of Labor Statistics.

Five-Year Report
Updated fees will be collected from new development within the City once the updated Ordinance or Resolution takes effect. The use of these funds, however, may need to wait until a sufficient fund balance can be accrued. According to Government Code Section 66006, the City is required to deposit, invest, account for, and expend the fees in a prescribed manner. The fifth fiscal year following the first deposit into the Fee account or fund, and every five years thereafter, the City is required to make all of the following findings with respect to that portion of the account or fund remaining unexpended:
• Identify the purpose for which the fee is to be put;
• Demonstrate a reasonable relationship between the fee and the purpose for which it is charged;
• Identify all sources and amounts of funding anticipated to complete financing of incomplete improvements; and
• Designate the approximate dates on that the funding referred to in the above paragraph is expected to be deposited in the appropriate account or fund.

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Economic & Planning Systems, Inc. 42 Implementation and Administration Eight-Year Update
AB 602 requires that cities undertake a comprehensive update of their development impact fee programs, including conducting a comprehensive nexus analysis, at least every eight years to account for changes in improvement costs, growth projections, and other factors.

APPENDIX A:

Fehr & Peers Technical Memorandum - Paramount
Development Impact Fees for Transportation
Transportation
Development Impact
Fee (DIF) Program
Nexus Study
Prepared for:

CITY OF PARAMOUNT
November 13, 2025
LB23-0120
Table of Contents
Executive Summary....................................................................................................................... 1 What is the Citywide Transportation Development Impact Fee (DIF)?...................................................................1 Who pays the DIF?.......................................................................................................................................................................1 How is the DIF calculated? .......................................................................................................................................................1 How are fees assessed? .............................................................................................................................................................2 Introduction................................................................................................................................... 3 Nexus Study Scope......................................................................................................................................................................3 Regulatory Context......................................................................................................................................................................3 California Government Code...........................................................................................................................................3 California Assembly Bill 602 ............................................................................................................................................4 California Environmental Quality Act (CEQA)...........................................................................................................5 Methodology .................................................................................................................................................................................5 Data Collection .....................................................................................................................................................................5 Cost Estimation.....................................................................................................................................................................5 Maximum Allowable Fee...................................................................................................................................................6 Other DIF Considerations .................................................................................................................................................6 Summary of Findings..................................................................................................................................................................6 Fee Structure and Development.................................................................................................. 8 Purpose of Impact Fee Program ............................................................................................................................................8 Existing Service Population and Transportation Facilities ...................................................................................8 Development Trends ..........................................................................................................................................................9 Infrastructure Improvements.................................................................................................................................................10 Facility Standards...............................................................................................................................................................10 Transportation Project List and Estimated Costs ..................................................................................................11 Cost Estimating Assumptions .......................................................................................................................................13 Cost for Program Administration ................................................................................................................................13 Existing Deficiencies .........................................................................................................................................................13 Nexus Analysis............................................................................................................................. 16 Need................................................................................................................................................................................................16 Benefits...........................................................................................................................................................................................17 Cost Allocation............................................................................................................................................................................18 Total Program Costs .................................................................................................................................................................19 Maximum Fee Calculation ......................................................................................................................................................20 Fee Implementation.................................................................................................................... 23 Steps to Calculate Transportation Development Impact Fees.................................................................................23 Step 1 – Determine Project Description and Land Use Quantities ................................................................23 Step 2 – Apply Transportation Development Impact Fees ...............................................................................23 Example Calculation..................................................................................................................................................................23 Step 1 – Determine Project Description and Land Use Quantities ................................................................23 Step 2 – Apply Transportation Development Impact Fees ...............................................................................23 Program Administration..........................................................................................................................................................24 Program Administration..................................................................................................................................................24 Program Update.................................................................................................................................................................24 Program Reporting ...........................................................................................................................................................25 Unique Land Use Categories.........................................................................................................................................25 Refund Provisions ..............................................................................................................................................................26 Grievances ............................................................................................................................................................................26 List of Tables
Table 1 – Project List and Cost Estimates ...................................................................................................................................6 Table 2 – Development Trends .......................................................................................................................................................9 Table 3 – DIF Transportation Project List and DIF Eligible Costs.................................................................................... 11 Table 4 – Standard ITE Trip Rates and Adjusted PCE Trips Rates .................................................................................. 18 Table 5 – DIF Program Cost Total............................................................................................................................................... 20 Table 6 – Cost per Trip and Per Square Foot Citywide....................................................................................................... 21 Table 7 – Maximum Fee Calculation......................................................................................................................................... 22 1 Executive Summary
What is the Citywide Transportation Development Impact Fee? The Transportation Development Impact Fee Program (“DIF Program”) or (“Fee(s)”) is a type of development impact fee created to address the impacts of new residents and workers utilizing transportation-related infrastructure, (e.g., roads, intersections, bridges) and facilities that serve transit, pedestrians and/or non-motorized vehicles (e.g., trails, bike lanes, sidewalks). The DIF Program is established such that new development and redevelopment projects will pay their “fair share” toward new and expanded transportation infrastructure and facilities that mitigate the impacts caused by this growth.

Who pays the Fees?
Fees are paid for by applicants of land use development and redevelopment projects—including, but not limited to, residential, office, retail, and industrial uses.

How are the Fees calculated?
The Fees are calculated based on the Nexus Study presented here, prepared per the requirements of the Mitigation Fee Act. Fees established herein follow the fundamental legal tenets of having an essential nexus (relationship) and being roughly proportional to the impacts which the fee is designed to mitigate.

The relationship is drawn between transportation related impacts of future development, and the transportation infrastructure improvements that development will require to support the increased City of Paramount
Transportation Development Impact Fee Program
Nexus Study
2 demand—improvements such as roadway expansion and non-motorized transportation facilities. The costs associated with the identified improvements are then proportionally related to future development, quantified by the magnitude of anticipated impacts. As the DIF Program is a type of development impact fee program, it is designed to account for the impacts of future developments and does not address existing deficiencies. Specifically, fee programs cannot charge new development to fix existing deficiencies and, as such, this study identifies whether there are existing deficiencies in the system so that the cost to fix those deficiencies is not burdened onto future development. One common example of this relationship is related to providing added roadway capacity where a segment or intersection is already not operating at the city’s defined acceptable threshold. In this instance, the full cost of the improvement cannot be burdened onto new development, which can only be burdened with their “fair share” of the cost of the improvement.

How are Fees assessed?
Fees are assessed based on the anticipated impact of new developments on the transportation infrastructure, calculated using trip rates that reflect expected trip generation by land use type, accounting for impacts of both autos and trucks. Assessed fees are proportional to the development's estimated increase to transportation demand, with different land use categories, such as residential, commercial, and industrial, assigned appropriate rates based on their impact. The fee calculation process involves identifying the project’s land use type, applying the appropriate adjusted trip rate, and calculating fees based on the maximum allowable and adopted fee schedule. Pursuant to Government Code Section 66016.5(a)(5)(A), residential fees, although initially estimated using dwelling units provided by the local General Plan, are then converted to a per square foot fee rather than a per dwelling unit basis. 2 Introduction
Nexus Study Scope
This Transportation Impact Fee Program Nexus Study (“Nexus Study” or “Study”) provides the technical documentation to support the City of Paramount’s (“City”) update of the DIF Program by defining the relevant geographic boundaries, the types of development projects to which the Fee is imposed, and the types of transportation infrastructure to be funded by the DIF Program. The DIF Program will fund infrastructure improvements throughout the City, to support its growth by evaluating the current growth estimates, infrastructure needs, construction costs, and the associated fee basis.

The Nexus Study provides the basis for the City to collect fees consistent with the California Mitigation Fee Act (AB 1600/Government Code 66000 et seq.). This analysis also demonstrates that the Fees established have a reasonable relationship based on the needs, benefits, and proportionality to the impacts which the Fee is designed to mitigate.

Regulatory Context
California Government Code
California Government Code §§ 66000-66025, often referred to as the Mitigation Fee Act, governs how local governments can impose development impact fees. This legislation ensures that such fees are both legally defensible and equitable. The Mitigation Fee Act allows the City to adopt an ordinance establishing the legal authority that enables the fee and defines the program structure. The fee program typically is updated every 5 to 8 years. These updates allow the program to incorporate new projects, reflect changes in costs, and account for future growth.

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4 In establishing, increasing, or imposing a fee as a condition for the approval of a development project, 1 Government Code §§ 66001(a) and (b) state that the local agency must:
• Identify the purpose of the fee.
• Identify how the fee is to be used.
• Determine a reasonable relationship between the fee established and the type of development project for which the fee is imposed.
• Determine how the need for the public facility relates to the type of development project for which the fee is imposed.
• Demonstrate the relationship between the fee and the cost of the public facility.

Once the DIF Program is adopted, this Nexus Study and the technical information it contains will be maintained and reviewed periodically by the City to ensure Fee accuracy and to enable the adequate programming of funding sources. To the extent that transportation improvement requirements, costs, and development potential changes over time, the DIF program will need to be updated.

California Assembly Bill 602
Effective January 1, 2022, AB 602 requires that impact fees levied on residential development must be calculated such that they are proportional to the square footage of future units. A nexus study must evaluate how existing and future residential development can be estimated by residential square feet, or document why the use of residential square feet is not relevant in the case that it would not appropriately reflect the relationship between the fee, facility demand, and residential land use. Importantly, the legislation specifies that only Accessory Dwelling Units (ADUs) of 750 square feet or less are exempt from development impact fees, larger ADUS are subject to the fee program per square feet basis.

Effective July 1, 2022, AB 602 also mandates that large jurisdictions2 adopting a nexus study shall adopt a capital improvement plan as a part of the nexus study. At the time of this Study’s development, the residential population within the County of Los Angeles is approximately 9.76 million3 and thus, a Capital Improvement Plan (CIP) is required as a part of this Study. The City of Paramount updates and publishes their Capital Improvement Plan as part of the annual citywide budgeting procedure, and the latest 1 Development includes any land use activity that involves construction of residential, commercial, industrial, office, or other non-residential improvements which requires the issuance of a building permit. Such improvements are generally expected to create additional impacts to the City’s transportation infrastructure once completed through additional travel demand associated with the proposed use. 2 As defined in Section 53559.1 of the Health and Safety Code, “Large jurisdiction” means a county with a population of more than 250,000, or any city within that county.
3 United States Census Bureau, 2024 ACS 1-Year Estimate City of Paramount DIF Nexus Study 5
documentation can be found on the City’s website4. Further, the City has prepared a draft amendment to the Capital Improvement Plan (as incorporated into the Major Project's Program) to be considered as part of the establishment of fees under the DIF program. The amendment is available for review under separate cover.

California Environmental Quality Act (CEQA)
CEQA impact considerations do not apply to fee programs, as these programs function solely as government funding mechanisms and do not entail a commitment to specific projects that could cause significant physical environmental impacts. As such, they are not considered "projects" under CEQA.

However, for capital improvement projects funded by the DIF or other sources, the appropriate environmental documentation must be completed prior to construction—unless the project is determined to be exempt from CEQA5.

Methodology
Data Collection
This Study utilized data from various citywide planning documents, including the Paramount General Plan, North Paramount Gateway Specific Plan, Clearwater Specific Plan, Capital Improvement Program (CIP) cost estimates and records, and publicly available United States Census Data and American Community Survey (ACS) Estimates.

Cost Estimation
The cost estimation for transportation infrastructure improvements is prepared by City of Paramount. For each type of infrastructure—such as roadway lane miles, bicycle lanes, sidewalks, and trail facilities—the cost of improvement is determined by referencing recent costs and adjusting for factors such as construction materials, labor, environmental compliance, and project-specific contingencies. The project list and cost estimates are listed in Table 1.
4 City of Paramount. Five-Year Capital Improvement Program (CIP) Document. Accessible through the Capital Improvement Projects page on the City website. City of Paramount. Adopted Budget. Available on the City website under Government; Administrative Services; Finance; Section titled “Capital Outlays, Capital Projects and Capital Assets”.
5 CEQA Guidelines Section 15378(b)(4)
City of Paramount
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6 Table 1 – Project List and Cost Estimates
Facility Type Total Estimated Cost
Electronic Message Boards* $575,000
Alondra Boulevard Capacity Enhancements* $3,465,000
West Santa Ana Branch Bikeway Phase 3* $1,175,200
West Paramount Utility Easement Multi-Use Path* $9,661,000 TOTAL $14,876,200
* Project list and cost estimates provided by the City of Paramount Maximum Allowable Fee
The maximum allowable fee is calculated using the following steps:

1. Identify total program costs – cost for improvements, plus cost for implementation

2. Account for known funding (current fund balance) and fee credits (amount to be subtracted from fund balance due to outstanding obligations, such as improvement reimbursement programs discussed in later sections of this Study)

3. Account for existing deficiencies

4. Account for administrative fees

5. Determine proportional allocation of cost to new development Other DIF Considerations
• While the Study establishes a justified maximum fee based on proportional costs of infrastructure improvements for new development, the City Council retains the authority to adopt transportation impact fees lower than the maximum allowable amounts calculated in the Nexus Study. This flexibility allows the Council to balance the need for infrastructure funding with considerations such as encouraging development or addressing affordability concerns, while still maintaining compliance with the California Mitigation Fee Act. • The fee program is designed specifically to address transportation infrastructure needs generated by new development and does not cover the cost of remedying existing deficiencies in the system. Under the California Mitigation Fee Act, impact fees can only be used to fund improvements proportionate to the impacts of future development. As a result, any existing deficiencies, such as under-capacity roads or outdated infrastructure, must be addressed through alternative funding sources.

Summary of Findings
The findings of this Study support the implementation of a transportation development impact fee program through the following steps:
• Identify the purpose of the fee
City of Paramount DIF Nexus Study 7
• Account for existing population and projected growth
• Determine the appropriate facility standards
• Provide cost estimates of necessary improvements
• Demonstrate the need, benefit, and fair share responsibility of the public facilities Transportation-related development impact fees will be assessed per unit of land use proposed in the amount no more than the Maximum Fee Calculations provided at the end of this Study. 3 Fee Structure and Development
Purpose of Impact Fee Program
An impact fee program is often utilized to ensure that new developments contribute to the cost of public infrastructure that are proportional to the additional demand created by the development projects. As cities grow, new residential, commercial, and industrial projects increase the burden on the existing transportation networks. Without an impact fee program, the financial burden of accommodating this growth would fall disproportionately on existing residents, who would be forced to subsidize the infrastructure needs caused by new development.

In the last decade, the City experienced growth in jobs with a slight decline in population. 6 The City's
General Plan envisions population, and employment increases through 2035 and lays out a comprehensive vision that relies on well-maintained and effective infrastructure. The DIF Program is essential to securing sufficient funding for new and expanded facilities that are necessitated by new development.

Existing Service Population and Transportation Facilities The City serves an existing population of approximately 51,070 residents and 22,500 employees. This diverse and growing population places significant demands on the city's infrastructure, public services, 6 Number of residents decreased between 2013 and 2023 from an estimate of 54,750 to 51,070, number of employees increased from an estimate of 20,500 to 22,500. ACS 5-year Estimates and Census.

City of Paramount DIF Nexus Study 9
and amenities. Besides roadways, trails, bike lanes, and sidewalks, the City has a wide range and variety of transportation facilities that serve the population of the City. Some aspects of improvements to these types of infrastructure are difficult to measure tangibly—factors such as safety, comfort, equity, and access to the system. However, all these factors are crucial to the viability of an effective transportation system.

Infrastructure such as traffic management systems, access to regional transit systems, and a multimodal transportation network to support active and healthy mobility are all vital elements of a system able to foster sustainable development.

Development Trends
What types of existing and new development are occurring, and are there geographic differences that might affect the need for facilities and associated fees charged to certain types of development in an area?
Land use growth and new development require the support of transportation infrastructure. It is imperative to estimate the amount of new development expected to take place within the planning horizon, and the additional transportation facilities that would be required to prevent overburdening the existing service population (residents and employment) with the cost of new improvements. The City’s General Plan anticipates that between 2023 and 2035 the number of households will grow by nearly 1,300, leading to an estimated increase of nearly 6,152 residents by buildout of the General Plan (Table 2). One trend that should be noted is the increasing proportion of households with fewer residents, as families are having fewer children. The estimate of future households is the best available information used to estimate the number of future dwelling units, which are expected to have fewer residents per household in 2035 than they do today. The number of employees is also expected to grow by nearly 1,400 across various industries including manufacturing, education, and office, amongst the highest growing sectors.

Table 2 – Development Trends
Measure Impact Fee Base
Year (2023)
Impact Fee Nexus
Horizon Year (2035) Change % Change
Residents 51,072 57,224 6,152 12%
Employees 22,500 23,856 1,356 6%
Total Service Population
(Residents + Employees) 73,752 81,080 7,508 10.2%
Households 14,348 15,632 1,284 9%
Although development projects will take place in specific parcels across the city, the City’s transportation network is designed to serve all areas. However, improvements in a specific area tend to benefit development within that area more than development in a different area of the city. To that end, and to ensure that there is a localized nexus between new development and improvements needed to serve that City of Paramount
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10 new development, the geographic composition of growth areas have a relationship with proposed projects for local benefits. Based on the SCAG 2024 RTP/SCS, the population and employment growth are distributed across various parts of the city. While growth would not occur uniformly across all Census Blocks of the City, the estimated changes in population and employment growth point to increased demand throughout the City for additional transportation infrastructure.

Infrastructure Improvements
Facility Standards
Establishing an appropriate facility standard is crucial for ensuring that the future inventory of transportation infrastructure in Paramount meets the demands of new development, while still aligning with the City's long-term goals. The following standards are derived from the City's adopted policies and standards.

Complete Streets Standards – The General Plan includes support for encouraging improvements that encourage active transportation modes, designed to safely and efficiently accommodate all users, including pedestrians, cyclists, motorists, and transit riders. Paired with the City’s Active Transportation Plan, multimodal elements such as mixed-use trails, bike lanes, sidewalks, and connections to transit will be integrated as a critical component of the transportation network. This ensures that new developments contribute their fair share to a transportation system that is inclusive and accessible to all residents, by mitigating increased demand for mobility generated by new development within the City. In addition, the Health and Safety Element discusses the need to incorporate resiliency into city plans, while the Active Transportation Plan provides guidance for implementing specific projects that promote complete streets and alternative modes of travel. Furthermore, the City Council has adopted a resolution in support of complete streets.

Roadway Capacity and Quality – Maintaining efficient traffic flow and safety is a goal in the General Plan, especially on arterial roadways, with policies aimed at improving roadways and minimizing cutthrough traffic or other impacts to local streets. To address this, the circulation element, known as the Transportation Element in the Paramount General Plan, identifies a sliding impact scale for transportation facilities operating at a Level of Service (LOS) C, D, E, or F7 This sliding scale describes the amount of traffic that can be added before triggering a local deficiency, which would then require that new developments include improvement to handle the increased traffic they generate. This standard ensures that the road infrastructure remains functional as the city grows. The following information related to 7 Level of Service (LOS) is a measure of roadway and intersection performance, graded from A (free-flow, minimal delay) to F (severe congestion, high delay).

City of Paramount DIF Nexus Study 11
roadway facilities supports and helps to validate the rough proportionality of the program and how it relates to new development.

Transportation Project List and Estimated Costs
Based on the projected increases in service population between existing year and the Impact Fee horizon year of 2035, accommodating future development would require additional transportation infrastructure that can serve various modes of travel between land uses, within the City, and connecting to regional freeways. Multimodal transit infrastructure can help maintain access, facilitate economic development, and help realize City goals associated with alternative forms of transportation, reducing greenhouse gases, and enhancing resiliency and sustainability of the transportation system. The projected need for transportation facilities is calculated in proportion to the amount of growth in service population anticipated over the horizon of the DIF, while accounting for funds that have already been collected for these projects. A description of each project follows Table 3.

Table 3 – DIF Transportation Project List and DIF Eligible Costs Project Total Estimated
Cost
Funded
Costs Unfunded Costs
New
Development
Contribution %
New
Development
Contribution $
Alondra Blvd. Capacity
Enhancement $3,465,000 $600,000 $2,865,000 10.2%8 $292,230 WSAB Bikeway Phase 3 $1,175,200 $0 $1,175,200 10.2% $119,870 West Paramount Utility
Easement Multi-Use
Path
$9,661,000 $775,000 $8,886,000 10.2% $906,372
Electronic Message
Boards $575,000 $75,000 $500,000 10.2% $51,000
These transportation network improvements are identified based on the City’s General Plan, Active Transportation Plan, and Climate Action Plan (adopted 2021) goals to ensure efficient traffic circulation across the city and access to multi-modal transportation network. The new development would pay their fair share of the projects. The fair share is calculated based on expected growth as described in (Table 2).

There are four projects identified for funding through the DIF Program:
8 The need for the extra capacity and operational improvements is created by the additional traffic generated by future development. The existing roadway can serve current demand but added roadway and intersection capacity is required to accommodate growth and prevent congestion. Accordingly, the full project cost is allocated to new development.

City of Paramount
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12 • Alondra Boulevard Capacity Enhancements – the City Council approved initiating design and environmental clearance work for the Alondra Boulevard Capacity Enhancement Improvements Project from Hunsaker Avenue (west city-limit) to Lakewood Boulevard (east city-limit). The project is intended to accommodate new growth and reduce the potential for cut-through traffic within local neighborhoods. The proposed capacity enhancement improvements consist of roadway and intersection widening, median modifications, parkway narrowing, undergrounding of existing overhead utilities, ADA sidewalk and curb ramp improvements, green streets improvements, and traffic signal modifications. The fee program includes this suite of projects to reduce the potential impacts of development on Alondra Boulevard. This is consistent with Transportation Element Policy 3 where the City “…will continue to develop and enhance the existing streets and intersections in the City.”
• WSAB Bikeway Phase 3 – the City is pursuing construction of the West Santa Ana Branch (WSAB) Bikeway Class I bicycle and pedestrian trail along the railroad right-of-way that runs diagonally across the City. The approximately 2.3 mile trail would connect users from the Los Angeles River to the San Gabriel River through the cities of Paramount and Bellflower. Phase 3 of this project, from Paramount Boulevard to Garfield Avenue, includes bicycle and pedestrian infrastructure improvements including fencing, energy efficient LED pedestrian lighting, landscaping, decomposed granite, Americans with Disabilities Act (ADA) curb ramps, at-grade pedestrian/cyclist crossing, and street furniture for trail users. This is consistent with Transportation Element Policy 11, related to alternative forms of transportation where the “City of Paramount will continue to support the local public transit system and ongoing efforts to improve connections with other regional transit facilities.”
• West Paramount Utility Easement Multi-use Path – The City identified this project in the Active Transportation Plan. The project would install a dedicated bike and pedestrian trail along the Southern California Edison easement from north of Salud Park to the West Santa Ana Branch Bikeway Phase 4, just south of the 105 freeway. This is consistent with Transportation Element Policy 11 related to alternative forms of transportation where the “City of Paramount will continue to support the local public transit system and ongoing efforts to improve connections with other regional transit facilities.”
• Electronic Message Boards – as new development occurs additional vehicle activity on local roadways will increase the number of vehicles that cross active railroad tracks. To proactively prevent additional collisions arising from new development and increased activity, a series of electronic message boards will be installed throughout the City. In the first phase, the electronic message boards will alert commuters on Downey Avenue of cargo train crossings and delays.

DIF projects and associated program cost estimates are provided in Table 3. Project cost estimates were provided by the City of Paramount based on quantities, unit cost estimates, and preliminary design activities completed by the city. The city’s planned development is infill in nature, and consistent with the goals and policies outlined in the General Plan. Additionally, the new facilities delivered by this fee program meet the requirement for rough proportionality, as the estimated percent contribution to three City of Paramount DIF Nexus Study 13
of the four projects is capped at 10.2%, which is directly tied to the projected increase in service population by 2035 in the City of Paramount.

Cost Estimating Assumptions
Cost estimates for transportation improvements are referenced from the latest available and relevant cost records. The cost to construct each improvement is calculated as an average of project costs with similar scopes and adjusted to account for forecasted future costs of environmental procedures, engineering design, and contingency. Future updates to the DIF Program should also index costs to an industry standard (typically the Caltrans Construction Contract Cost Index) and adjust the fee schedule annually to ensure that the program maintains consistency with what actual costs are to deliver the program accordingly.

Cost for Program Administration
The DIF Program includes an administrative fee equal to 2% of the total project cost. This is in line with representative implementation costs as specified in the Nexus Study and Residential Feasibility Calculation Templates in fulfillment of AB 602 report prepared by the Terner Center for Housing Innovation at UC Berkeley for the California Department of Housing and Community Development (HCD).

Existing Deficiencies
Existing deficiencies refer to the gaps or inadequacies in current infrastructure or facilities that prevent them from meeting the desired service levels or standards. In the context of capacity-based projects— such as roadway widening—identifying and accounting for existing deficiencies is critical because these projects are often intended to enhance the ability of the infrastructure to accommodate current and future traffic volumes; or, in more simple terms, new development cannot pay to fix existing deficiencies.

While future development should not be burdened with addressing existing deficiencies in infrastructure, it is important to recognize that new growth proportionally contributes to the increased demand for expanded or improved facilities. New development will increase the existing levels of demand for transportation facilities. Therefore, it is reasonable and equitable to require new development to contribute its fair share toward the costs of infrastructure improvements that are necessitated by this growth.

In the case of roadway widening or other capacity-based projects, the need for additional infrastructure is created by traffic from new development. These improvements are designed to provide the capacity required to accommodate the City’s projected growth, not to correct existing deficiencies. Thus, applying impact fees proportional to the new development is justified because the fees are not addressing preexisting deficiencies, but rather the incremental impact that the new development imposes on the infrastructure system based on the proportion of growth to existing population and infrastructure level of service.

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14 Without new development, the need for such infrastructure improvements would not arise, or would arise at a much later time. Impact fees serve as a mechanism to ensure that new growth is financially responsible for the additional demands it places on public facilities, aligning with the principles and policies of the City of Paramount General Plan, which emphasizes the importance of a fair and proportionate allocation of infrastructure costs as described in Transportation Element Policy 5.

This DIF Program applies two simple tests as it relates to roadway infrastructure needs:
• “But For” Argument – But for new development, the improvement would not be required.

This typically applies to facilities that operate acceptably today but need widening in the future to serve future development. Alternatively, this could be applied to new roadway connections that are required to access new development. In these types of cases, since new development drives 100% of the need for the infrastructure, 100% of the cost of that infrastructure is included in the fee estimate.
• “Fair Share” Argument – For facilities that are currently deficient, new development is only responsible for paying their “fair share” toward the improvement. In this case, the increased demand by new development is divided by the total future demand on the roadway to identify what that fair share would be.

The expansion of roadways is typically justified by the need to reduce congestion and improve traffic flow, thereby directly responding to the deficiencies in capacity that limit the effectiveness of the existing road network. However, this approach is less applicable to other types of projects, such as multimodal improvements, which focus on enhancing infrastructure for various modes of transportation—like pedestrian pathways, bicycle lanes, and public transit facilities—rather than increasing capacity for a single mode. Multimodal improvements are designed to create a more integrated and balanced transportation network, often emphasizing safety, accessibility, and sustainability rather than solely addressing capacity deficiencies. Therefore, while existing deficiencies might drive roadway widening projects, they do not similarly affect the calculations for multimodal improvements, which are generally aimed at improving the overall quality and functionality of the transportation system (including reducing Vehicles Miles Traveled (VMT) and Greenhouse Gases (GHG)) rather than expanding its capacity.

For complete streets facilities, there is not a specific “existing deficiency” as achieving the city’s GHG reduction targets is outlined for the city as a whole. As such, new development can only be responsible for its fair share (as a percentage of total service population) of those improvements. For all the complete streets projects, new development is assumed to be responsible for up to 10.2% of the project cost, which corresponds to the new development as compared to the future service population of the city.

City of Paramount DIF Nexus Study 15
4 Nexus Analysis
Need
The Nexus Analysis, in alignment with the California Mitigation Fee Act, as amended including by AB 602 (2021), must establish a clear and proportional relationship between new development and the demand for public infrastructure. This section focuses on demonstrating the direct link between anticipated growth within the City and the necessity for transportation infrastructure improvements. By doing so, it ensures that the City’s Development Impact Fees (DIF) comply with the essential nexus and rough proportionality standards mandated by relevant legal precedents such as Nollan v. California Coastal Commission and Dolan v. City of Tigard.

Paramount's General Plan projects the City’s level of growth by 2035, with an anticipated future population of approximately 57,224 residents and 23,856 jobs at the Impact Fee Horizon year 2035 (Table 2). Such growth is reasonably expected to elevate the demand for transportation infrastructure, and necessitating enhancements to maintain current service levels. The General Plan outlines a vision for a circulation network that accommodates various transportation modes (vehicles, bicycles, pedestrians, and public transit) across the city. To support this vision, strategic investments in infrastructure are essential to prevent congestion and ensure safe, efficient mobility.

Given the projected growth, the City must expand its transportation network proportionally. The General Plan has a sliding scale for evaluating LOS impacts when a roadway is operating at LOS C, D, E, or F for its roadways. Failure to expand infrastructure to meet the additional demands from growth could degrade the service levels of facilities, leading to congestion, safety concerns, and a diminished quality of life for all who rely on the transportation system. Furthermore, this growth exacerbates safety risks by increasing City of Paramount DIF Nexus Study 17
potential conflicts at intersections, pedestrian crossings, train crossings, and other high-use areas.

Consequently, safety improvements—such as intersection enhancements, protected non-motorized facilities, and modernized traffic controls—are essential to maintaining a safe and efficient transportation system while accommodating new development.

As outlined in the General Plan and supported by transportation planning principles, developments generate varying impacts on transportation networks. Therefore, the DIF must differentiate this relationship by aligning fees assessed with the projected impacts of each type of future development, as shown in Table 4.

Benefits
The transportation infrastructure projects identified in the Nexus Study are essential to support the anticipated growth. These include roadway expansions, intersection improvements, and the development of multimodal transportation options such as bike and pedestrian pathways. Each project is carefully selected to address specific infrastructure needs that will arise from increases in service population and to meet General Plan goals for accessibility, safety, alternative transportation, and reducing greenhouse gases to combat climate change. The City’s General Plan prioritizes the multi modal projects and those supporting modal shifts from autos to cleaner mode such as walk and bike. Reduction of greenhouse gases is a key component of its sustainability goals, aligning with state policies to reduce GHG emissions.

Increasing bikeway facilities aligns with the City’s objectives to promote alternative transportation and enhance access to the transportation network for all user groups, thus improving air quality and reducing GHG emissions. The General Plan specifically highlights the need to expand alternative forms of transportation, such as Class II bike lanes and protected Class IV bikeways, to create a more connected, comfortable, and safe biking environment. The City’s Active Transportation Plan similarly emphasizes the role of expanding bikeways in improving access to schools, parks, and transit hubs, providing a viable alternative to car travel for short to medium distances. Enhanced bikeway networks will not only facilitate active transportation but also contribute directly to the City’s GHG emission reduction strategy. As such, these projects are consistent with goals and policies in the City’s General Plan, Active Transportation Plan, and the Climate Action Plan.

The Active Transportation Plan and Climate Action Plan emphasize a shift toward reducing Automobile trips by promoting compact, walkable communities and enhancing active transportation networks. One of the most effective strategies to meet the state’s GHG reduction targets is to reduce dependence on automobiles. By providing safe and comfortable walking and biking facilities, the City would reduce the number of vehicle trips, by providing alternative travel options and enhancing access and connectivity to two future train stations along the Southeast Gateway Line that will significantly enhance local and regional access without needing to rely on a vehicle.

Maintaining active transportation pathways is crucial for recreation and mobility. Building out the City's trail system is an environmentally friendly and cost-effective way to accommodate increasing travel demand without exploring additional roadway capacity enhancements. The existing segment of the WSAB City of Paramount
Transportation Development Impact Fee Program
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18 trail in Paramount extends from Lakewood Boulevard to Somerset Boulevard. This would help create a network of trails connecting the future train stations at Paramount/Rosecrans and I-105/C-line. The WSAB segment would help connect central, eastern, and northern portions of the City with transit and the Los Angeles River Bike Path. The West Paramount Utility Easement Multi-Use Path provides a north-south connection that links the southern, central, and western portions of the city with each other and future transit stations, enhancing the City’s ability to accommodate local and regional travel in a more sustainable manner that helps meet documented City goals. The focus within the planning horizon is on providing improved accessibility, safety, and connectivity to a growing active transportation network that helps meet local increases in demand for travel. Most of the City's planned developments are expected at infill areas, where existing pedestrian infrastructures are typically already in place. The DIF-funded a mix of multimodal projects; this balanced approach aligns with the General Plan’s goal to expand alternative modes, thereby supporting the City’s commitment to sustainability and enhancing the quality of life for its residents.

Cost Allocation
AB 602 mandates that development impact fees for residential units be calculated based on square footage rather than the traditional per-unit metric, unless a local agency makes the finding—that includes an explanation of why a per square foot metric is not appropriate—that an alternative basis of calculation is reasonably related, and that other policies in the fee structure supports smaller developments.

The principle of proportionality underlies the requirement that fees imposed on new developments must be proportionate to the impact those developments have on public facilities. To adhere to proportionality basis mandated by AB 602, we calculate the average trip rate per dwelling unit using the weighted average of Single-Family and Multi-Family trip generation rates from Institute of Transportation Engineers’ (ITE) Trip Generation Manual, and the distribution of residential land uses within the City (65% Single Family and 35% Multi-Family).

To calculate fair share for non-residential uses, Passenger Car Equivalent (PCE) trip rates are used to normalize the impacts for autos and trucks. For retail and restaurant uses a 30% pass-by trip reduction is considered to account for existing activities. The final summary trip rates are shown in Table 4 The fee per trip is then calculated based on total growth in PCE trips associated with all residential and non-residential uses.

Table 4 – Standard ITE Trip Rates and Adjusted PCE Trips Rates Land Use Unit* Daily Trip Rate
Passenger Car
Equivalent (PCE)
Trip Rate
Residential Land use** DU 7.68 7.68
Retail / Restaurant*** KSF 25.9 27.91
Manufacturing / Industrial KSF 4.87 6.87
City of Paramount DIF Nexus Study 19
Office KSF 10.84 11.84
Warehouse KSF 6.74 11.74
* Dwelling Unit (DU) for Residential, Thousand Square Feet (KSF) for Commercial. ** The residential trip rate reflects a weighted average of Single-Family and Multi-Family trip rates, based on the distribution of residential land uses within the City. Average Size of Dwelling Unit is 1,315 square feet. (based on information from recent development in City of Paramount (2024))
*** 30% average reduction applied to retail and service stations used to account for the likelihood of pass-by and diverted trips Total Program Costs
Total costs of the DIF program are calculated by the following steps, each ensuring that the fees collected are appropriately aligned with the costs incurred by new development impacts.

1. Identify Total Costs of Transportation Improvements. The total cost of expansion and improvement projects is $14,876,200 as provided in Appendix B.

2. Account for Known Funding (Balance) and Fee Credits (Obligations). While the City does not have an existing DIF program, the City of Paramount has obtained funding for three of the four projects on the DIF project list in the amount of $1,450,000. 9 This balance is subtracted from the
estimated costs to complete improvement projects, and to account for unspent dollars toward future projects. Improvement reimbursement programs allow developers to recover costs for constructing public infrastructure that exceeds the immediate needs of their project and benefits the broader community. Such reimbursement programs typically involve formal reimbursement agreements which the City would be obligated to fulfill, outstanding obligations should be accounted for and subtracted from the remaining balance. At the time of this Study, there are no known reimbursement obligations. Subtracting the known funding from the total transportation improvements cost estimates results in a total unfunded project cost of $13,426,200.

3. Account for Existing Deficiencies. All facilities where capacity-related improvement projects are identified are first evaluated to determine if they adequately serve the City’s current service population, while for multimodal projects, the project percent contribution is capped at its fair share growth. Therefore only a proportional amount of the total project costs is to be funded by future development. Deductions to account for existing deficiencies are in the amount of $12,056,728.

4. Account for Programming and Administrative Fees. The administrative fee associated with the fee program is estimated to be 2%. This percentage reflects the typical level used by many jurisdictions statewide to cover staff time and other costs associated with administering the 9 DIF Fund Balance as of June 2024
City of Paramount
Transportation Development Impact Fee Program
Nexus Study
20 program. The actual fee may be adjusted in the future to reflect the City’s documented administrative effort. This fee is in line with representative implementation costs including as specified in the Nexus Study and Residential Feasibility Calculation Templates in fulfillment of AB 602 report prepared by the Terner Center for Housing Innovation at UC Berkeley for the HCD.

Table 5 describes the total program cost.

Table 5 – DIF Program Cost Total
Program Element Total Cost
Total Project Cost $14,876,200
Available Funds -$1,450,000
Total Unfunded Project Costs $13,426,200
Adjustments for Existing Deficiencies* -$12,056,728
DIF Program Project Contributions (Appendix B) $1,369,472 Administrative Fee (2%) $27,389
DIF Program Total $1,396,862
* See Table 3.

Maximum Fee Calculation10
What is the maximum justified fee by land use type—based on the prior steps—that can be charged to new development? Fees on residential land use are levied per building square foot unless an alternative method is justified.

Table 6 shows the estimated cost per trip, and per square foot. 10 Government Code §§ 66005.1 (a) – If housing development satisfies all of the following characteristics, then a transportation fee, or the portion of the fee relating to vehicular traffic impacts, must be set at a rate that reflects a lower rate of automobile trip generation associated with such housing developments in comparison to housing developments without these characteristics, unless the local agency adopts specific findings:
• The housing development is located within one-half mile of a transit station and there is direct access between the housing development and the transit station along a barrier-free walkable pathway not exceeding one-half mile in length.
• Convenience retail uses, including a store that sells food, are located within one-half mile of the housing development.
• The housing development provides either the minimum number of parking spaces required by the local ordinance, or no more than one onsite parking space for zero-to-two-bedroom units, and two onsite parking spaces for three or more-bedroom units, whichever is less.

City of Paramount DIF Nexus Study 21
Table 6 – Cost per Trip and Per Square Foot Citywide
Measure Costs
Total Adjusted New Trips 15,133
Total Program cost $1,396,862
Cost per Trip $92
Cost per Dwelling Unit (citywide)* $709
Cost per residential square foot** $0.54
Cost per manufacturing/industrial square foot** $0.63
Cost per retail/restaurant square foot** $2.58
Cost per warehouse square foot** $1.08
Cost per office square foot** $1.09
* Cost per Dwelling Unit is calculated by multiplying cost per trip to the residential per unit trip rate. ** The cost per Dwelling Unit is divided by the average dwelling unit size of 1,315 square feet to arrive at a residential per square foot cost.
*** Cost per square foot of non-residential land use applies the cost per trip to the Passenger Car Equivalency (PCE) trip generation rate per thousand square feet for each land use and then divides by 1,000 for a per square foot cost.

Applying the estimated cost per trip to each land use category, a maximum fee per square foot of land use is calculated. Please note that per AB 602 requirements and assessments within this Study, impact fees for proposed residential projects should be assessed by size (square feet), adjusted by their relationship to the average size of Single-Family Residential units.

Developments near quality transit generally produce fewer vehicle trips due to the availability of transit options, which encourages a shift away from car usage. As such, AB 2533 was passed which requires lower impact fees to be assessed in areas where development is close to high quality transit. This bill was codified in Government Code section 66005.1.

Consistent with this requirement, difference conditions of residential development rates from the ITE Trip Generation Manual (11th Edition) were utilized to estimate the reductions appropriate for development meeting the requirements of the legislation. Please note that, by using ITE rates to develop this adjustment, low-rise multifamily units near high quality transit see a fee reduction of approximately 30% compared to the same development that is not near high quality transit. However, for mid-rise multifamily units, ITE rates show an increase in vehicle trip making for development near transit. To simplify the fee program, the same 30% reduction shown is applied to all residential land uses near a transit station.

Table 7 shows the summary of fee per square footage for residential and various commercial land uses.

City of Paramount
Transportation Development Impact Fee Program
Nexus Study
22 Table 7 – Maximum Fee Calculation
Land Use Unit
Maximum Fee Per
Land Use Category by
Zone
Residential
For an average
Dwelling Unit of
1,315 SF
$709
Sq. Ft. (to be used
for collection fee) * $0.54
If located in a highquality transit
area**
$0.38
Commercial/Retail*** SF $2.58
Office/Business Park SF $1.09
Manufacturing SF $0.63
Warehouse SF $1.08
* For Multi-Family Residential Units (low-rise or mid-rise), proposed square footage of projects above or below the average size (1,315 square feet for residential), shall be responsible for a proportional increase or decrease to the impact fees assessed. (See table and examples for application of fees in the following sections) ** See text description related to 30% reduction for land use in a high-quality transit area that was derived using ITE rates for lowrise multifamily units away from and proximate to transit. *** 30% reduction in trips is already included to account for pass-by trips.

Fee Implementation
Steps to Calculate Transportation Development Impact Fees Step 1 – Determine Project Description and Land Use Quantities In this step, the development project is clearly defined by identifying the land use type and its scale. The description should include:

Project type: Residential, commercial/retail, office/business park, manufacturing, warehouse Project size: Specify the quantity in units of the chosen land use category. For the DIF, all uses are measured by square feet.

Step 2 – Apply Transportation Development Impact Fees
Once the land use quantities are identified, the next step is to apply the appropriate transportation development impact fee rates.

Locate the fee schedule: Use the pre-determined transportation impact fee schedule (Table 7) that outlines the fee rates for different land use categories, such as single-family residential, multifamily, commercial, or warehouse.

Calculate the total fee: Multiply the number of proposed quantities of land use by the corresponding transportation impact fee rate.

Example Calculation
Step 1 – Determine Project Description and Land Use Quantities Example: A proposed development includes 100 multi-family dwelling units averaging 1,500 sq. ft. (150,000 sq. ft.) and 40,000 square feet of office space.

Step 2 – Apply Transportation Development Impact Fees
Example: If the fee for a multi-family detached home is $0.54 per sq. ft., the fee for 150,000 sq. ft. would be:
150,000 sq. ft. × $0.54/sq. ft. = $81,000
Example: If the fee for office space is $1.09 per square feet, the fee for 40,000 square feet of office space would be:
40,000 SF × $1.09/sq. ft. = $43,600
Summing up the total fees: After calculating the fees for each land use type, the total transportation impact fee for the project is obtained by adding the individual fees, or $124,600.

Program Administration
This section outlines the procedures for administering and reporting on the City of Paramount’s Transportation Development Impact Fee (DIF) program. It includes guidelines for program administration, updates, regular reporting, and how to address land uses that are not explicitly described within the land use categories of the fee structure. The requirements and procedures for refunds and filing of grievances in settling disputes regarding fee assessment are also detailed.

Program Administration
The City will be responsible for the overall administration and ongoing management of the DIF program.

This involves maintaining accurate records of fee collection, project funding, and program adjustments.

Key Administrative Responsibilities:
• Fee Collection: Ensure that all development projects subject to the DIF program pay the appropriate fees based on the approved fee schedule.
• Fund Allocation: Manage and allocate collected fees toward transportation infrastructure improvements that are directly related to growth.
• Monitoring and Adjustments: Regularly monitor the need for fee adjustments, including indexing fees to account for inflation or changes in construction costs.

To maintain the program’s financial sustainability and relevance, the City will apply an annual adjustment to the DIF, reflecting changes in construction costs. Adjustments should be based on an established construction cost index, such as the California Department of Transportation’s (Caltrans) Construction Contract Cost Index, to ensure fees align with current market conditions.

Program Update
In compliance with AB 602, the City of Paramount’s Transportation Impact Fee Program requires periodic updates and reviews to ensure its alignment with current development patterns, infrastructure needs, and legal standards. The statute requires the City to:
• Review the Fee Program every five (5) years per Government Code §§ 66001. • Update the Nexus Study every eight (8) years per AB 602 • Update the Fee Program and/or Nexus Study if there are any other substantial changes/updates to the Mitigation Fee Act
• Update the Fee Program and/or Nexus Study due to major changes in the policies/assumptions due to a General Plan Update or other citywide planning effort. • Update the Fee Program and/or Nexus Study if the City changes its development impact criteria. • Update the Fee Program and/or Nexus Study if the construction costs change significantly. • Annually update the Fee Program to reflect inflation and other factors that affect the costs of projects in the fee program. The annual adjustment will be based on the Consumer Price Index for All Urban Consumers (CPI-U), Los Angeles-Long Beach-Anaheim, published by the U.S. Bureau of Labor Statistics.

The City must adopt or update a Capital Improvement Plan (CIP) as part of the Nexus Study. The CIP outlines the infrastructure projects that will be funded by the collected impact fees, ensuring transparency and planning consistency.

Program Reporting
Government Code §§ 65940.1 requires that the City maintains the following items (which must also be posted on their website):
• A current schedule of fees, exactions, and affordability requirements imposed by the DIF. • All zoning ordinances and development standards adopted by the City showing the information, which shall specify the zoning, design, and development standards that apply to each parcel. • A list that specifies the information that will be required from any applicant for a development project.
• The current and five previous annual fee reports or the current and five previous annual financial reports, fee nexus studies, cost of service studies, or equivalent, conducted by that City, on or after January 1, 2018.

Unique Land Use Categories
In cases where a proposed development does not fit neatly into the predefined land use categories within the DIF program, the City will apply a methodology that ensures the fee is proportional to the anticipated impact of the development on transportation infrastructure.

Impact Assessment: For new or uncommon land uses, the project must submit a traffic impact assessment to determine the projected vehicle trips, or other relevant metrics (e.g., Vehicle Miles Traveled, VMT), generated by the proposed development.

Trip Generation Data: The City will reference the most recent edition of the Institute of Transportation Engineers (ITE) Trip Generation Manual to estimate the transportation demand of the new land use. If no specific trip generation data is available for the proposed land use, the City will use a comparable category from the manual as a proxy.

Custom Fee Calculation: Once the anticipated transportation demand is assessed, the City will calculate a custom fee based on the closest comparable land use category in the DIF schedule, adjusted for any unique characteristics of the development.

Refund Provisions
Under California Government Code §§ 66001(d) and (e), the City of Paramount must refund any unexpended development impact fees, along with accrued interest, if not used or committed within five years of collection. Refunds are issued to the current record owners on a pro-rata basis, determined using the last equalized assessment roll. If administrative costs of processing the refund exceed the refund amount, the City may, after a public hearing, allocate the funds to a related public improvement serving the original development. Additionally, the City must make specific findings every five years regarding the purpose, relationship, and anticipated use of unspent fees, ensuring transparency and accountability in fee management.

Grievances
California Government Code §§ 66000-66025 requires that legal avenues be available to contest the fees associated with this update. Under the Act, §66001(a)(3) requires that a local agency demonstrate “a reasonable relationship between the fee’s use and the type of development project on which the fee is imposed,” ensuring that all fees remain proportional and impact based. At the same time, §66020(a) establishes a formal avenue to contest such fees by stating that “any party may protest the imposition of fees, dedications, reservations, or other exactions imposed on a development project by a local agency.” Following this requirement, City of Paramount is open to anyone disputing the transportation impact fee and generally would be facilitated by the following key considerations that are required by the Government Code (as presented on the following page).

Fee Challenges and Protest Procedures
Under Government Code § 66020, developers or property owners who disagree with the amount or validity of an imposed fee must follow a specific protest procedure. To preserve their right to challenge the fee:
• The developer/owner must submit a written notice of protest to the City at the time of fee payment or within 90 days after the fee imposition, whichever occurs first. • The protest must clearly outline the grounds for dispute, such as the lack of nexus between the fee and the development's impact or disagreement with the fee calculation method.

Failure to file a protest within this period waives the right to legally challenge the fee in the future. This is consistent with the Municipal Code as noted above.

Public Hearing for Disputes
If the dispute is not resolved at the local level, the developer has the right to seek judicial review. To initiate this process:
• A lawsuit challenging the fee must be filed within 180 days of the fee being imposed or from the final decision issued by the City after the grievance process.

APPENDIX B:

Appendix B: Bartle Wells Associates Technical Report –
Water Capacity Charges Study
City of Paramount
Water Capacity Charges Study
January 26, 2026
January 26, 2026
Sol Bejarano
City of Paramount, Management Analyst
16400 Colorado Ave
Paramount, CA 90723
Re: Water Capacity Charges Study
Bartle Wells Associates is pleased to submit the attached Water Capacity Charges Study to the City of Paramount. The report develops water capacity charges that are designed to equitably recover the costs of infrastructure and assets benefiting new development.

Key objectives of the study include developing capacity chargesthat recover the costs of capacity in water system infrastructure, are fair and equitable to both existing customers and new connections, are based on industry-standard methodology, and comply with all legal requirements. The study recommends a set of charges that would apply uniformly to the City’s service area.

We enjoyed working with the City on this assignment and appreciate the ongoing input and assistance received from the City’s project team. Please contact us anytime if you have questions about the recommendations presented in this report or other related issues.

Yours truly,
Erik Helgeson, MBA
Consultant
2625 Alcatraz Ave, #602
Berkeley, CA 94705
Tel 510 653 3399
www.bartlewells.com

TABLE OF CONTENTS

1. BACKGROUND, OBJECTIVES, & GOVERNMENT CODE ....................................................... 1

1.1. Background ...............................................................................................................1

1.2. Government Code .....................................................................................................1

1.3. Proposed Water Capacity Charges............................................................................2

2. CAPACITY CHARGE METHODOLOGY................................................................................. 3

3. WATER CAPACITY CHARGE CALCULATION........................................................................ 5

3.1. Current Water Capacity Charges...............................................................................5

3.2. Existing Water System Facilities & Assets..................................................................5

3.3. Value of Water System Assets for Recovery..............................................................7

3.4. Current and Projected Water System Capacity .........................................................8

3.5. Water System Cost Recovery per MEU......................................................................9

3.6. Accessory Dwelling Units...........................................................................................9

4. CAPACITY CHARGES APPLICATION ................................................................................. 11

4.1. Capacity Charge Ordinance: Purpose of Charge ......................................................11

4.2. Annual inflation Adjustments..................................................................................11

4.3. Use of Capacity Charge Revenues ...........................................................................11

4.4. Capacity Charge Application with Unknown Uses...................................................11

4.5. Capacity Charge Credits for Redevelopment...........................................................12

4.6. Limited Term of Application for an Adopted Capacity Charge.................................12

4.7. Future Adjustments to Capacity Charges ................................................................12 List of Figures
Figure 1: Capacity Charge Methodology ......................................................................................3 List of Tables
Table 1 – Current Water Capacity Charges....................................................................................5 Table 2 – Water Distribution Assets..............................................................................................6 Table 3 – Water Wells & Treatment Assets...................................................................................6 Table 4 – Water System Asset Valuation.......................................................................................7 Table 5 – Current Meter Equivalent Units.....................................................................................8 Table 6 – Projected Water System Demand..................................................................................9 Table 7 – Water Capacity Charge Calculation per MEU.................................................................9 Table 8 – Water Capacity Charge Calculation for ADUs ..............................................................10 Appendices
Appendix A – Government Code Pertaining to Capacity Charges ...............................................13 Appendix B – Water Capacity Charge Study Tables.....................................................................20 BARTLE WELLS ASSOCIATES 1 | Page
City of Paramount Water Capacity Charges Study

1. BACKGROUND, OBJECTIVES, & GOVERNMENT CODE

1.1. Background
The City of Paramount (City) is located in Los Angeles county, approximately fifteen miles southeast of downtown Los Angeles, in Southern California. The City encompasses approximately 5 square miles and has an estimated population of 51,000.

The City levies water capital improvement charges on new or expanded connections to the City’s water system. These charges are levied as a condition of development or change in use and are designed to recover the cost of capacity in infrastructure and assets benefiting new development.

Capacity charges are one-time charges, paid up-front as a condition of new development or expansion. Capacity charges are separate from the City’s rates for water services. New connections begin paying the City’s water rates after they have paid their capacity charge and become ongoing customers.

The City retained Bartle Wells Associates to update the City’s water capacity charges with the goal of developing updated charges that:
• Recover the full costs of water system infrastructure and assets that benefit new or expanded development to help ensure that growth pays its own way; • Equitably recover costs based on the new or increased capacity needs of new development or redevelopment;
• Are consistent with industry-standard practices and methodologies; • Comply with government code.

1.2. Government Code
Development impact fees are governed by California Government Code Section 66000 et. seq This section of the Code was initially established by Assembly Bill 1600 (AB 1600) and is commonly referred to as the Mitigation Fee Act. Pursuant to the Code, a development impact fee is not a tax or special assessment, but is, instead, a voluntary charge levied to defray the cost of public facilities needed to serve new development.

Section 66013 of the Code specifically governs water and wastewater capacity charges. This section of the Code defines a “capacity charge” to mean “a charge for public facilities in existence at the time a charge is imposed or charges for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged.” BARTLE WELLS ASSOCIATES 2 | Page
City of Paramount Water Capacity Charges Study
The Code distinguishes “capacity charges” from “connection fees” which are defined as fees for the physical facilities necessary to make a water or sewer connection, such as costs related to installation of meters and pipelines from a new building to a water or sewer main. This report refers to the City’s Water Capital Improvement Fee as “capacity charges,” in line with the intended purpose of these fees.

According to the Section 66013, a water or wastewater capacity charge “shall not exceed the estimated reasonable cost of providing the service for which the fee or charge is imposed” unless approved by a two-thirds vote. As such, the capacity charges calculated in this report represent the maximum charges that the City can levy. Section 66013 does not detail any specific methodology for calculating capacity charges.

Section 66016 of the Code identifies the procedural requirements for adopting or increasing water capacity charges and Section 66022 summarizes the general process by which the charges can be legally challenged. The full text of Sections 66013, 66016 and 66022 are attached in Appendix A.

1.3. Proposed Water Capacity Charges
This report develops updated water capacity charges designed to equitably recover the costs of facilities and assets benefitting new development. The recommended charges are based on a System Buy-In Approach under which new or expanded connections would fund their proportionate share of costs (in current dollars) for capacity needed in existing water system facilities and assets.

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City of Paramount Water Capacity Charges Study

2. CAPACITY CHARGE METHODOLOGY
Public agencies have used a wide range of methodologies to calculate capacity charges. This section presents our general methodology and a brief overview of common methods for calculating updated capacity charges.

Our general methodology used to calculate updated water capacity charges is summarized in the following figure.

Figure 1: Capacity Charge Methodology
Public agencies have used a wide range of methodologies to calculate capacity charges. BWA recommends use of a Buy-in Method to calculate updated water capacity charges. Under this method, new connections “buy in” for a proportionate share of capacity needed in the City’s existing water system facilities and assets. A brief overview of common methods for calculating updated capacity charges is presented below.

Buy-In Only Approach (Recommended):
• Cost Recovery: Cost of existing assets (in current, inflation-adjusted dollars) • Capacity Denominator: The projected capacity of the system at the Horizon Year (2040) Step 1 - Determine Cost of Facilities & Assets for Fee Recovery Determine the recoverable cost of facilities and assets benefiting new development to be recovered by the capacity charge.

Step 2 - Identify Capacity of Facilities
Identify the corresponding capacity of facilities and assets identified in Step 1; capacity may be limited by the amount of development the City reasonably anticipates its facilities will serve for the foreseeable future.

Step 3 - Calculate Cost per Unit of Capacity
Calculate the cost per unit of capacity by dividing the costs identified for recovery in Step 1 by the capacity of those facilities identified in Step 2.

Step 4 - Apply Cost per Unit to the Capacity Needs of New Development Apply the unit cost for capacity to the infrastructure capacity needs of each new development to determine an equitable capacity charge per new connection.

BARTLE WELLS ASSOCIATES 4 | Page
City of Paramount Water Capacity Charges Study
Expansion or Marginal Cost Approach:
• Cost Recovery: The cost of anticipated expansion-related capital improvements in current, inflation-adjusted dollars
• Denominator: Expansion capacity in City facilities with completion of the growth-related capital improvements at the Horizon Year
Buy-In + Expansion Cost Approach:
• Under this approach, the capacity charge includes two components: a) a buy-in component to recover an equitable share of costs for existing facilities available to serve new development (in current dollars), plus b) an expansion component to recover the cost of capacity in future facilities needed to serve projected new development. • The Buy-in + Expansion Method is a widely used and accepted method for calculating capacity charges, particularly for service areas that are largely built out but require additional infrastructure improvements to meet the demands of anticipated growth and redevelopment.

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City of Paramount Water Capacity Charges Study

3. WATER CAPACITY CHARGE CALCULATION

3.1. Current Water Capacity Charges
The City levies water capital improvement fees on new or expanded connections to the City’s water system where construction of additional dwelling units or change in land use intensity is proposed, or an existing connection from an industrial, commercial, or institutional parcel where proposed modifications will either increase water consumption by more than 25 percent or will increase the existing fire flow requirements. Table 1 below summarizes the City’s current water capacity charges which are based on the Fire Department requirements for fire flow and duration and calculated on a per acre charge.

Table 1 – Current Water Capacity Charges
Fire Flow (gpm) Duration Charge per Acre
0 to 750 2 hours $1,200
851 to 1,250 2 hours 1,300
1,251 to 1,750 2 hours 1,400
1,751 to 2,250 2 hours 1,600
2,251 to 2,750 2 hours 1,800
2,751 to 3,250 2 hours 2,000
3,251 to 3,750 2 hours 2,400
3,751 to 4,250 2 hours 2,800
4,251 to 5,000 2 hours 3,200

3.2. Existing Water System Facilities & Assets
The City is responsible for the operation, maintenance, and repair of the water treatment and distribution system, comprised of 3 wells, and 130 miles of water pipe. The following tables show an inventory of water system assets along with current replacement cost estimates used to determine the current construction costs of the water system.

Replacement costs may be determined using established indexes, for example the Consumer Price Index (CPI) which measures the average change over time in the price of a basket of everyday goods and services such as food and transportation, or the Engineering News-Record Construction Cost Index (ENR-CCI) which measures the change in a package of construction materials and labor costs over time. This adjustment takes into consideration the change in the value of a dollar over time. For this analysis, cost estimates per unit of measurement for pipelines are and based on the City’s 2015 Water Master Plan and escalated to current dollars using the ENR-CCI, 20-Cities Average. This index represents the average cost of construction and labor across 20 major US cities and provides a more conservative measure of cost trends compared to individual city indexes which can be more volatile due to local price fluctuations.

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City of Paramount Water Capacity Charges Study
To provide recognition of the physical effects of aging, percent useful life remaining for each asset type is determined by dividing the age of assets by type by their estimated useful life. This adjustment takes into account the anticipated reduction of asset wear, tear, and decay caused by aging to determine water system assets for recovery by capacity charges.

Table 2 – Water Distribution Assets
Water
Main Size Units
Replacement
Costs
Total
Replacement
Costs [1]
Service
Life
Average
Age
Average %
Life
Remaining
Adjusted
Replacement
Costs
Type Inches
Linear
Feet Per Unit 2024 $ Years Years % 2024 $
Cast Iron Up to 4" 2,400 $300 $720,000 80 75 6% $45,000 Cast Iron 6-12" 106,000 $300 $31,800,000 80 75 6% $1,987,500 All Other 6-20" 577,600 $300 $173,280,000 80 75 6% $10,830,000 Total $205,800,000 $12,862,500
1, Water main age, lengths, and replacement costs based on the 2015 Water Master Plan, escalated to current dollars using the ENR-CCI 20-Cities Index as of December 2024.

Cost estimates for wells and treatment assets are based on construction projects from recent years. To provide recognition of the physical effects of aging, percent useful life remaining for each asset is determined by dividing the age of assets by their estimated useful life. This adjustment takes into account the anticipated reduction of asset wear, tear, and decay caused by aging to determine water system assets for recovery by capacity charges.

Table 3 – Water Wells & Treatment Assets
Wells and
Treatment Assets 1
Estimated
Replacement Cost
Estimated
Useful Life Asset Age
Life
Remaining
Adjusted
Replacement Costs
Well Number 2024 $s Years Years % 2024 $s
14 $6,000,000 50 40 20% $1,200,000
15 2 $11,000,000 50 13 74% $8,140,000
16 2 $11,000,000 50 0 100% $11,000,000
Total $28,000,000 $20,340,000
1, Wells and treatment assets and replacement costs provided by the City of Paramount Public Works Staff. 2, City has on-site treatment facilities located at Well 15 and Well 16.

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City of Paramount Water Capacity Charges Study

3.3. Value of Water System Assets for Recovery
Under the methodology used in this report, water capacity charges are designed to recover a proportionate share of the replacement value of existing water system facilities and assets (in current dollars). The value of existing assets is determined by identifying the estimated current replacement cost of assets and then reducing the value to only reflect the remaining estimated useful life. While the charge could be based on the replacement value, this approach was used because it reflects the remaining value of assets.

The updated charges exclude the outstanding principal, net of cash. The value of assets is reduced by the outstanding principal balances related to the financing of assets because the outstanding principal balance reflects asset value that will be paid by future rate revenues. Existing cash balances have been collected from customers and could be used to pay off the debt principal.

For this study, reserves exceeding the outstanding principal were not included as assets.

Table 4 shows a summary of existing water system asset values for the water capacity charges calculation.

Table 4 – Water System Asset Valuation
Asset Description System Value for Capacity Charges
Asset Replacement Cost Values Based on Estimated Replacement Costs Adjusted by Remaining Asset Life
Pipelines $12,862,500
Wells & Treatment 20,340,000
Total Replacement Value of Assets $33,202,500
Less Outstanding Principal Net of Cash Reserves
Outstanding Principal1 ($22,686,534)
Cash Reserves2 15,219,380
Net Principal Outstanding (Maximum of $0) ($7,467,154)
Total Value of Assets for Capacity Charges $25,735,346
1, Source: City of Paramount Long Term Liabilities for the Year Ended June 30, 2024. 2, Source: City of Paramount Comprehensive Annual Financial Report, Statement of Cash Flows Proprietary Funds Year Ended June 30, 2024.

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City of Paramount Water Capacity Charges Study

3.4. Current and Projected Water System Capacity
The next step in calculating capacity charges for the City’s water system is to determine the current capacity of the system. Existing customer connections are converted into Meter Equivalent Units (MEUs) by meter size. The benefit of using MEUs is that they relate the relative capacity of connections by the American Water Works Association (AWWA) standards for maximum safe operating capacity by meter size. In short, using MEUs accounts for the relative capacity of connections with meters of various sizes and the likelihood of larger meters generating more system demand. Since single family residences are the City’s primary water connection type, and since current development requirements for new single family connections require a minimum ¾” meter, this study calculates the meter equivalent ratio based on a ¾” meter base. The meter ratio for all other meters is determined by dividing the capacity for that meter by the capacity for a ¾” meter
Table 5 summarizes the data used to determine the City’s current number of MEUs, which is reflective of the current capacity of the system.

Table 5 – Current Meter Equivalent Units
Meter Size Meter Capacity1 Meter Ratio
Total
Meters
Total Meter
Equivalent Units (MEUs)
5/8" 35 1.00 5,811 5,811
3/4" 35 1.00 2 2
1" 55 1.57 731 1,148

1.5" 120 3.43 239 820
2" 175 5.00 446 2,230
3" 550 15.71 10 157
4" 880 25.14 13 327
6" 1,400 40.00 5 200
8" 3,500 100.00 5 500
10" 5,500 157.14 2 314
Totals 7,264 11,509
1, Based on the American Water Works Association (AWWA) maximum safe operating capacity.
2, This study assumes all existing 5/8" SRF connections have a 3/4" meter equivalency since current design requirements for new residential homes require 3/4" meters.

Table 6 projects the number of MEUs for the City’s future customer base through 2040 based on a) the City’s most recent population growth estimates and b) the City’s existing MEU count. The projections shown represent the total customer demand that the City’s water system is projected to serve through 2040.

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Table 6 – Projected Water System Demand
Customers Served
Population 2025 57,404
Population 2040 1 61,266
Population Increase % 6.7%
Current MEU 11,509
Population Increase % 6.7%
Projected 2040 MEUs 12,280
1, Projection based on the City of Paramount 2020
Urban Water Management Plan.

3.5. Water System Cost Recovery per MEU
Table 7 calculates an updated capacity charge using the Buy-in Method by dividing a) the recoverable cost of water system assets by b) the projected future capacity of the City’s water system. The calculation results in a water system capacity charge of $2,096 per MEU.

Table 7 – Water Capacity Charge Calculation per MEU
Capacity Charge Component Amount
System Cost Recovery $25,735,346
Projected 2040 MEUs 1 12,280
Capacity Charge per MEU $2,096
1, Projection based on the City of Paramount 2020 Urban Water Management Plan.

While the proposed capacity charges developed in this study are higher than the City’s existing charges, they are developed to reflect the current cost of infrastructure and help ensure that new and expanded connections pay for their share of capacity in the City’s water system.

3.6. Accessory Dwelling Units
Accessory Dwelling Units (ADUs) are generally defined as secondary residential dwelling units constructed on a residential property and may include a) second independent living units within or attached to the living area of an existing primary residence, and b) detached accessory dwelling units. ADUs are governed by California Government Code Section 65852.2.

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City of Paramount Water Capacity Charges Study
The Code includes language governing water and sewer capacity charges for ADUs including:
• ADUs within the living area of a primary residence “shall not be considered to be a new residential use for the purposes of calculating connection fees or capacity charges for utilities, including water and sewer service.” Hence, the Agency may not levy capacity charges on ADUs that meet the requirements of the Code and are constructed within the living area of primary residence. To be considered within the living area of a primary residence, the Code permits “an expansion of not more than 150 square feet beyond the same physical dimensions as the existing accessory structure.”
• Detached ADUs, or ADUs that require expansion of a primary residence in excess of 150 square feet, may require a new or separate utility connection directly between the accessory dwelling unit and the utility. Consistent with Section 66013, the connection may be subject to a connection fee or capacity charge that shall be proportionate to the burden of the proposed accessory dwelling unit, based upon either its size or the number of its plumbing fixtures, upon the water or sewer system.”
In compliance with the Code, the water system “burden” and corresponding capacity charges for ADUs eligible to pay such charges are proposed to be calculated in proportion to the square footage of an ADU as compared to the average square footage of a single family home or MEU, resulting in a proportionate cost per square foot for an ADU.

Table 8 on the following page show the City’s capacity charge calculation for ADUs.

Table 8 – Water Capacity Charge Calculation for ADUs
Capacity Charge Component Amount
Capacity Charge per MEU $2,096
MEU Sq. Ft 1 1,315
Capacity Charges per Square Foot 2 $1.59
1, Based on average size for single family homes.
2, Applicable to new ADUs 750 sq. ft. and larger requiring or requesting a new water connection.

Water capacity charges for new ADUs 750 square feet and larger requiring or requesting a separate connection to the City’s water system would be calculated based on the square footage of each unit multiplied by the capacity charge per square foot.

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City of Paramount Water Capacity Charges Study

4. CAPACITY CHARGES APPLICATION
This section highlights some key issues regarding the application and implementation of the updated capacity charges.

4.1. Capacity Charge Ordinance: Purpose of Charge
Pursuant to Government Code 66013, revenue derived from the City’s capacity charges can only be used for the purpose for which the charges are collected. In order to maximize the City’s flexibility for use of capacity charge revenues, BWA recommends that the ordinances/resolutions adopting new charges broadly define the purpose of each capacity charge, such as to recover a proportionate share of costs for existing and future water system facilities and assets from new or expanded connections to the water system.

4.2. Annual inflation Adjustments
To account for future construction cost inflation, BWA recommends that the City’s capacity charge ordinances include language authorizing automatic annual adjustments along with the ability to implement a “catch-up” adjustment if an annual adjustment is ever deferred or only partially implemented. This will allow for a multi-year adjustment if the City ever defers an annual adjustment.

4.3. Use of Capacity Charge Revenues
BWA recommends that the City apply all capacity charge revenues to fund water system capital improvements.

4.4. Capacity Charge Application with Unknown Uses
Developers occasionally seek permits for development projects whose ultimate uses are not known at the time the capacity charge is paid. In these cases, BWA recommends the City levy the capacity charge for the estimated number of water meters by size as an initial payment that would be subject to adjustment after the development is occupied and its uses are known. The future adjustment may include the requirement to pay additional capacity charges or potentially receive a partial refund. In such cases, the City should require written acknowledgment from the property owner regarding the potential requirement for additional capacity charges to be paid based on the future use of the property.

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City of Paramount Water Capacity Charges Study

4.5. Changes in Property Use
In cases where a property experiences a change in use, such as if an office is converted into a restaurant, the City is entitled to collect capacity fees for any change in water demand, similar to a redevelopment project.

4.6. Capacity Charge Credits for Redevelopment
Capacity charges for redevelopment projects and/or expansions should be based on the incremental demand generated from each project. Under this approach, future redevelopment projects would get credited for the capacity purchased by the prior development. For example, if a customer initially paid capacity charges for a 1-inch meter and later upgrades their connection to a 1.5-inch meter, they would be responsible for their incremental demand on the water system. The capacity charges for this customer would be calculated as the difference between the current capacity charges for a 1.5-inch meter less the capacity charges for a 1-inch meter.

4.7. Limited Term of Application for an Adopted Capacity Charge Other California agencies have experienced problems with developers’ purchasing capacity many years in advance of anticipated development in order to lock in lower fees. To avoid these problems, the City should require that capacity fees be paid up front as a condition of development and should allow the charges to be effective for a limited period of time (typically one year) after which the developer or property owner would be responsible for paying any increase to the charges.

4.8. Future Adjustments to Capacity Charges
In future years, BWA recommends that the City update its capacity charges annually. The City’s capacity charge ordinances can allow for automatic annual adjustments based on the Consumer Price Index for All Urban Consumers (CPI-U) for Los Angeles-Long Beach-Anaheim, which is City’s preferred cost index. The maximum annual charge in a given year is the capacity charge amount shown in the study above increased by the percent change between that year’s CPI-U and 334.531 (CPI-U, December 2024).

Additionally, the City should review and consider updating its capacity fees when substantial revisions are made to anticipated capital improvement costs or to substantial changes in projected demand. In general, BWA recommends that capacity fees be independently reviewed and/or updated approximately once every five years.

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City of Paramount Water Capacity Charges Study

APPENDIX A
California Government Code:

Key Sections Pertaining to Capacity Charges
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City of Paramount Water Capacity Charges Study
California Government Code
Key Sections Pertaining to Capacity Charges
Sections 66013, 66016, 66022 & 66023
66013
(a) Notwithstanding any other provision of law, when a local agency imposes fees for water connections or sewer connections, or imposes capacity charges, those fees or charges shall not exceed the estimated reasonable cost of providing the service for which the fee or charge is imposed, unless a question regarding the amount of the fee or charge imposed in excess of the estimated reasonable cost of providing the services or materials is submitted to, and approved by, a popular vote of two-thirds of those electors voting on the issue. (b) As used in this section:
(1) “Sewer connection” means the connection of a structure or project to a public sewer system.
(2) “Water connection” means the connection of a structure or project to a public water system, as defined in subdivision (f) of Section 116275 of the Health and Safety Code. (3) “Capacity charge” means a charge for public facilities in existence at the time a charge is imposed or charges for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged, including supply or capacity contracts for rights or entitlements, real property interests, and entitlements and other rights of the local agency involving capital expense relating to its use of existing or new public facilities. A “capacity charge” does not include a commodity charge. (4) “Local agency” means a local agency as defined in Section 66000. (5) “Fee” means a fee for the physical facilities necessary to make a water connection or sewer connection, including, but not limited to, meters, meter boxes, and pipelines from the structure or project to a water distribution line or sewer main, and that does not exceed the estimated reasonable cost of labor and materials for installation of those facilities. (6) “Public facilities” means public facilities as defined in Section 66000.

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(c) A local agency receiving payment of a charge as specified in paragraph (3) of subdivision (b) shall deposit it in a separate capital facilities fund with other charges received, and account for the charges in a manner to avoid any commingling with other moneys of the local agency, except for investments, and shall expend those charges solely for the purposes for which the charges were collected. Any interest income earned from the investment of moneys in the capital facilities fund shall be deposited in that fund.
(d) For a fund established pursuant to subdivision (c), a local agency shall make available to the public, within 180 days after the last day of each fiscal year, the following information for that fiscal year:
(1) A description of the charges deposited in the fund. (2) The beginning and ending balance of the fund and the interest earned from investment of moneys in the fund.
(3) The amount of charges collected in that fiscal year. (4) An identification of all of the following:
(A) Each public improvement on which charges were expended and the amount of the expenditure for each improvement, including the percentage of the total cost of the public improvement that was funded with those charges if more than one source of funding was used.
(B) Each public improvement on which charges were expended that was completed during that fiscal year.
(C) Each public improvement that is anticipated to be undertaken in the following fiscal year.
(5) A description of each interfund transfer or loan made from the capital facilities fund. The information provided, in the case of an interfund transfer, shall identify the public improvements on which the transferred moneys are, or will be, expended. The information, in the case of an interfund loan, shall include the date on which the loan will be repaid, and the rate of interest that the fund will receive on the loan. (e) The information required pursuant to subdivision (d) may be included in the local agency’s annual financial report.
(f) The provisions of subdivisions (c) and (d) shall not apply to any of the following:

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(1) Moneys received to construct public facilities pursuant to a contract between a local agency and a person or entity, including, but not limited to, a reimbursement agreement pursuant to Section 66003.
(2) Charges that are used to pay existing debt service or which are subject to a contract with a trustee for bondholders that requires a different accounting of the charges, or charges that are used to reimburse the local agency or to reimburse a person or entity who advanced funds under a reimbursement agreement or contract for facilities in existence at the time the charges are collected.
(3) Charges collected on or before December 31, 1998.
(g) Any judicial action or proceeding to attack, review, set aside, void, or annul the ordinance, resolution, or motion imposing a fee or capacity charge subject to this section shall be brought pursuant to Section 66022.
(h) Fees and charges subject to this section are not subject to the provisions of Chapter 5 (commencing with Section 66000), but are subject to the provisions of Sections 66016, 66022, and 66023.
(i) The provisions of subdivisions (c) and (d) shall only apply to capacity charges levied pursuant to this section.
(Amended by Stats. 2007, Ch. 94, Sec. 1. Effective January 1, 2008.) 66016
(a) Prior to levying a new fee or service charge, or prior to approving an increase in an existing fee or service charge, a local agency shall hold at least one open and public meeting, at which oral or written presentations can be made, as part of a regularly scheduled meeting. Notice of the time and place of the meeting, including a general explanation of the matter to be considered, and a statement that the data required by this section is available, shall be mailed at least 14 days prior to the meeting to any interested party who files a written request with the local agency for mailed notice of the meeting on new or increased fees or service charges. Any written request for mailed notices shall be valid for one year from the date on which it is filed unless a renewal request is filed. Renewal requests for mailed notices shall be filed on or before April 1 of each year. The legislative body may establish a reasonable annual charge for sending notices based on the estimated cost of providing the service. At least 10 days prior to the meeting, the local agency shall make available to the public data indicating the amount of cost, or estimated cost, required to provide the service for which the fee or service charge is levied BARTLE WELLS ASSOCIATES 17 | Page
City of Paramount Water Capacity Charges Study
and the revenue sources anticipated to provide the service, including General Fund revenues.

Unless there has been voter approval, as prescribed by Section 66013 or 66014, no local agency shall levy a new fee or service charge or increase an existing fee or service charge to an amount which exceeds the estimated amount required to provide the service for which the fee or service charge is levied. If, however, the fees or service charges create revenues in excess of actual cost, those revenues shall be used to reduce the fee or service charge creating the excess. (b) Any action by a local agency to levy a new fee or service charge or to approve an increase in an existing fee or service charge shall be taken only by ordinance or resolution. The legislative body of a local agency shall not delegate the authority to adopt a new fee or service charge, or to increase a fee or service charge.
(c) Any costs incurred by a local agency in conducting the meeting or meetings required pursuant to subdivision (a) may be recovered from fees charged for the services which were the subject of the meeting.
(d) This section shall apply only to fees and charges as described in Sections 51287, 56383, 65104, 65456, 65584.1, 65863.7, 65909.5, 66013, 66014, and 66451.2 of this code, Sections 17951, 19132.3, and 19852 of the Health and Safety Code, Section 41901 of the Public Resources Code, and Section 21671.5 of the Public Utilities Code.
(e) Any judicial action or proceeding to attack, review, set aside, void, or annul the ordinance, resolution, or motion levying a fee or service charge subject to this section shall be brought pursuant to Section 66022.
(Amended by Stats. 2006, Ch. 643, Sec. 19. Effective January 1, 2007.) 66022
(a) Any judicial action or proceeding to attack, review, set aside, void, or annul an ordinance, resolution, or motion adopting a new fee or service charge, or modifying or amending an existing fee or service charge, adopted by a local agency, as defined in Section 66000, shall be commenced within 120 days of the effective date of the ordinance, resolution, or motion.

If an ordinance, resolution, or motion provides for an automatic adjustment in a fee or service charge, and the automatic adjustment results in an increase in the amount of a fee or service charge, any action or proceeding to attack, review, set aside, void, or annul the increase shall be commenced within 120 days of the effective date of the increase.

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(b)Any action by a local agency or interested person under this section shall be brought pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure. (c) This section shall apply only to fees, capacity charges, and service charges described in and subject to Sections 66013, 66014, and 66016.
(Amended by Stats. 2006, Ch. 643, Sec. 20. Effective January 1, 2007.) 66023
(a) Any person may request an audit in order to determine whether any fee or charge levied by a local agency exceeds the amount reasonably necessary to cover the cost of any product, public facility, as defined in Section 66000, or service provided by the local agency. If a person makes that request, the legislative body of the local agency may retain an independent auditor to conduct an audit to determine whether the fee or charge is reasonable, but is not required to conduct the audit if an audit has been performed for the same fee within the previous 12 months.
(b) To the extent that the audit determines that the amount of any fee or charge does not meet the requirements of this section, the local agency shall adjust the fee accordingly. This subdivision does not apply to a fee authorized pursuant to Section 17620 of the Education Code, or Sections 65995.5 and 65995.7.
(c) Except as otherwise provided in subdivision (h), the local agency shall retain an independent auditor to conduct an audit only if the person who requests the audit deposits with the local agency the amount of the local agency’s reasonable estimate of the cost of the independent audit. At the conclusion of the audit, the local agency shall reimburse unused sums, if any, or the requesting person shall pay the local agency the excess of the actual cost of the audit over the sum which was deposited.
(d) Any audit conducted by an independent auditor to determine whether a fee or charge levied by a local agency exceeds the amount reasonably necessary to cover the cost of providing the product or service shall conform to generally accepted auditing standards. (e) The procedures specified in this section shall be alternative and in addition to those specified in Section 54985.

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City of Paramount Water Capacity Charges Study
(f) The Legislature finds and declares that oversight of local agency fees is a matter of statewide interest and concern. It is, therefore, the intent of the Legislature that this chapter shall supersede all conflicting local laws and shall apply in charter cities. (g) This section shall not be construed as granting any additional authority to any local agency to levy any fee or charge which is not otherwise authorized by another provision of law, nor shall its provisions be construed as granting authority to any local agency to levy a new fee or charge when other provisions of law specifically prohibit the levy of a fee or charge. (h) Notwithstanding subdivision (c), if a local agency does not comply with subdivision (b) of Section 66006 following the establishment, increase, or imposition of a fee, but requires payment of that fee in connection with the approval of a development project for three consecutive years, the local agency shall not require a deposit for an independent audit requested pursuant to this section and shall pay the cost of the audit.
(Amended by Stats. 2018, Ch. 357, Sec. 1. (SB 1202) Effective January 1, 2019 BARTLE WELLS ASSOCIATES 20 | Page
City of Paramount Water Capacity Charges Study

APPENDIX B
Water Capacity Charge Study Tables
City of Paramount
Water Capacity Charge Study Tables
Table 1
City of Paramount
Water Capacity Charge Study
Current Water Capital Improvement Charges
Fire Flow (gpm) Duration Charge per Acre
0 to 750 2 hours $1,200
851 to 1,250 2 hours 1,300
1,251 to 1,750 2 hours 1,400
1,751 to 2,250 2 hours 1,600
2,251 to 2,750 2 hours 1,800
2,751 to 3,250 2 hours 2,000
3,251 to 3,750 2 hours 2,400
3,751 to 4,250 2 hours 2,800
4,251 to 5,000 2 hours 3,200
Table 2
City of Paramount
Water Capacity Charge Study
Current Meter Equivalent Units
Meter Size Meter Capacity1 Meter Ratio
Total
Meters
Total Meter
Equivalents Units (MEUs)
5/8" 35 1.00 5,811 5,811
3/4" 35 1.00 2 2
1" 55 1.57 731 1,148

1.5" 120 3.43 239 820
2" 175 5.00 446 2,230
3" 550 15.71 10 157
4" 880 25.14 13 327
6" 1,400 40.00 5 200
8" 3,500 100.00 5 500
10" 5,500 157.14 2 314
Totals 7,264 11,509
1, Based on AWWA maximum safe operating capacity.
2, This study assumes all existing 5/8" SRF connections have a 3/4" meter equivalency since current design requirements for new residential homes require 3/4" meters.

Table 3
City of Paramount
Water Capacity Charge Study
Projected Meter Equivalent Units
Customers Served
Population 2025 57,404
Population 2040 1 61,266
Population Increase % 6.7%
Current MEU 11,509
Population Increase % 6.7%
Projected 2040 MEUs 12,280
1, Projection based on the City of Paramount 2020 Urban Water Management Plan.

Table 4
City of Paramount
Water Capacity Charge Study
Distribution System Assets
Water Main Size Units Replacement Costs
Total
Replacement Costs [1]
Service
Life
Average
Age
Average %
Life Remaining
Adjusted
Replacement Costs
Type Inches Linear Feet Per Unit 2024 $ Years Years % 2024 $ Cast Iron Up to 4" 2,400 $300 $720,000 80 75 6% $45,000 Cast Iron 6-12" 106,000 $300 $31,800,000 80 75 6% $1,987,500 All Other 6-20" 577,600 $300 $173,280,000 80 75 6% $10,830,000 Total $205,800,000 $12,862,500
1, Water main age, lengths, and r eplacement costs based on the 2015 Water Master Plan, escalated to current dollars using the ENR-CCI 20-Cities Index as of December 2024.

Table 5
City of Paramount
Water Capacity Charge Study
Water Supply and Treatment Assets
Wells and
Treatment Assets 1
Estimated
Replacement Cost
Estimated
Useful Life Asset Age
Life
Remaining
Adjusted
Replacement Costs
Well Number 2024 $s Years Years % 2024 $s
14 $6,000,000 50 40 20% $1,200,000
15 2 $11,000,000 50 13 74% $8,140,000
16 2 $11,000,000 50 0 100% $11,000,000
Total $28,000,000 $20,340,000
1, Wells and treatment assets and replacement costs provided by the City of Paramount Public Works Staff. 2, City has on-site treatment facilites at Well 15 and Well 16.

Table 6
City of Paramount
Water Capacity Charge Study
Asset Summary
Asset Description System Value for Capacity Charges
Asset Replacement Cost Values Based on Estimated Replacement Costs Adjusted by Remaining Asset Life Pipelines $12,862,500
Wells & Treatment 20,340,000
Total Replacement Value of Assets $33,202,500
Less Outstanding Principal Net of Cash Reserves
Outstanding Principal1 ($22,686,534)
Cash Reserves2 15,219,380
Net Principal Outstanding (Maximum of $0) ($7,467,154)
Total Value of Assets for Capacity Charges $25,735,346
1, Source: City of Paramount Long Term Liabilities for the Year Ended June 30, 2024. 2, Source: City of Paramount Comprehensive Annual Financial Report, Statement of Cash Flows Proprietary Funds Year Ended June 30, 2024.

Table 7
City of Paramount
Water Capacity Charge Study
Capacity Charge Calculation
Capacity Charge Component Amount
System Cost Recovery $25,735,346
Projected 2040 MEUs 12,280
Capacity Charge per MEU $2,096
Table 8
City of Paramount
Water Capacity Charge Study
Proposed Capacity Charges
Meter Size Meter Capacity Meter Ratio Proposed Capacity Charge 5/8" 35 1.00 $2,096
3/4" 35 1.00 $2,096
1" 55 1.57 $3,291

1.5" 120 3.43 $7,189
2" 175 5.00 $10,480
3" 550 15.71 $32,928
4" 880 25.14 $52,693
6" 1,400 40.00 $83,840
8" 3,500 100.00 $209,600
10" 5,500 157.14 $329,365
Table 9
City of Paramount
Water Capacity Charge Study
ADU Capacity Charge Calculation
Capacity Charge Component Amount
Capacity Charge per MEU $2,096
MEU Sq. Ft 1 1,315
Capacity Charges per Square Foot 2 $1.59
1, Based on average size for single family homes.
2, Applicable to new ADUs 750 sq. ft. and larger requiring or requesting a new water connection.

APPENDIX C:

City of Paramount Development Impact Fee Capital
Improvement Plan
Appendix C: Capital Improvement Plan
Paramount Development Impact Fee Update and Nexus Study; EPS # 244011 Improvement/Project Cost
Public Safety
Vehicles (1) $125,480
Emergency Operations Center Expansion $1,500,000
Subtotal $1,625,480
Parks & Recreation
New Parks
Somerset Ranch Pocket Park Design $300,000
Century Greenway Park $1,490,000
Park Facility Expansions
Park Development Concept $285,000
Mariposa Classroom Conversion Design $287,500
Spane Park Facility Improvements $415,000
Paramount Park Community Center Renovation & Expansion $8,122,213 Mariposa Ash Tree Lights $20,000
Salud Park Volleyball Court Renovation and Expansion $400,000 All-American Park Picnic Shelter $160,000
Meadows Park Picnic Shelter Renovation and Expansion $50,000 Subtotal $11,529,713
General Facilities
City Hall Electrical Upgrades $600,000
City Facility Security Camera and Alarm Upgrades $1,000,000 City Storage Lot Security Upgrades $150,000
Subtotal $1,750,000
Stormwater Drainage
Storm Drain Improvements $4,000,000
Spane Park Stormwater Capture $18,265,530
Drywell Installation - Garfield and Pequeno Parks $415,000 Subtotal $22,680,530
Transportation
Electronic Message Boards $575,000
Alondra Boulevard Capacity Enhancements $3,465,000
West Santa Ana Branch Bikeway Phase 3 $1,175,200
West Paramount Utility Easement Multi-Use Path $9,661,000 Subtotal $14,876,200
Total (2) $52,461,923
(1) Assumes four new vehicles would be attributed to growth in service population. (2) Does not include costs associated with the water capacity fee.

Draft Report
Commercial Linkage
Fee Nexus Study
Prepared for:

City of Paramount
Prepared by:

Economic & Planning Systems, Inc.

November 13, 2025
EPS #244011
Table of Contents

1. INTRODUCTION AND EXECUTIVE SUMMARY......................................................................1 Background............................................................................................................ 1 Regional Context .................................................................................................... 1 Key Findings .......................................................................................................... 1 Primary Sources ..................................................................................................... 2 Organization of Report............................................................................................. 3

2. REQUIRED NEXUS FINDINGS FOR FEE PROGRAM ...............................................................4 Background............................................................................................................ 4 Authority ............................................................................................................... 4 Required Nexus Findings .......................................................................................... 4 Assembly Bill 602 Provisions..................................................................................... 5

3. METHODOLOGY AND FEE CALCULATION ..........................................................................8 Land Use Categories................................................................................................ 8 Estimates of New Worker Households ...................................................................... 10 Housing Development Costs and Affordability Gap ..................................................... 15 Fee Calculation ..................................................................................................... 18 Appendices:

Appendix A: Assumptions and Sources
Appendix B: Occupation Distribution by Employment Category Appendix C: Survey of Commercial Linkage Fees in Other Jurisdictions List of Tables
Table 1 Summary of Maximum Allowable Linkage Fees .................................................... 2 Table 2 Los Angeles County Income Category Definitions (2024)....................................... 2 Table 3 Land Use Category Descriptions ........................................................................ 8 Table 4 Illustration of Employees' Household Income Calculation..................................... 11 Table 5 Income Distribution of Worker Households by Employment Category .................... 13 Table 6 Household Generation Rates by Employment Category ....................................... 14 Table 7 Affordability Gap Analysis – Rental Product Type (Per Unit) ................................. 17 Table 8 Adjusted Maximum Allowable Linkage Fees ....................................................... 18 Table 9 Fee Calculation – Retail/Restaurant/Services ..................................................... 19 Table 10 Fee Calculation – Office/R&D/Medical Offices ..................................................... 20 Table 11 Fee Calculation – Industrial............................................................................. 21 Table 12 Fee Calculation – Warehousing........................................................................ 22 Economic & Planning Systems, Inc. 1

1. INTRODUCTION AND EXECUTIVE SUMMARY
Background
The City of Paramount is exploring various tools to address the City’s affordable housing needs, including the potential adoption of a commercial linkage fee program. A commercial linkage fee, also known as a jobs-housing linkage fee, is a type of development impact fee charged to developers of new, nonresidential properties to help support affordable housing for lower-wage workers. The conceptual underpinning of the fee is that new nonresidential development creates new jobs, and some of these jobs will pay wages below what is required for a worker to afford a market-rate housing unit in the City. If the cost to construct new housing units is higher than can be supported by the rents or home prices that workers can afford to pay, the difference is considered an “affordability gap.” The nexus (or reasonable relationship) established between the projected number of lower-wage jobs created by new development, and the subsidy needed to fund this “affordability gap” and support the creation and maintenance of units that are affordable to workers in these jobs is the basis for the linkage fee.

Economic & Planning Systems (EPS) was retained to analyze the feasibility of a commercial linkage fee program in Paramount. EPS has completed the required nexus analysis that quantifies the relationship between the growth in several nonresidential land uses (commercial land use categories), including retail/restaurant/services, office, industrial, and warehousing, and the demand for and cost of affordable housing for the local workforce.

Assessing an impact fee, such as a linkage fee, based on an established nexus is allowed pursuant to the State of California’s Mitigation Fee Act (California Government Code sections 66000 et seq.). As a development impact fee, this linkage fee can only be charged to new development and must be based on the impact of new development on the need for resources to subsidize the development of new affordable housing. Fee revenue may be collected by the City and used to subsidize the production or preservation of affordable units for lower-income households.

Regional Context
Commercial linkage fees are common across the state but most common in high-demand, highvalue jurisdictions with strong nonresidential development trends. Fees are often set well below the nexus-based maximums and typically range from $1 to $10. Appendix C exhibits examples of commercial linkage fees in other cities by land use category.

Key Findings
Table 1 summarizes the maximum justifiable linkage fee by commercial land use category. The methodology used to establish the maximum justifiable fees is described in the subsequent chapters of this report. Please note that these maximum fees are supported by the nexus analysis but are likely to exceed levels that could feasibly be borne by new commercial developments. The City has the opportunity to adopt fees up to these maximum levels but may want to consider other economic development and fiscal revenue factors in determining the fee level for adoption.

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Table 1 Summary of Maximum Allowable Linkage Fees
Table 2 presents the income categories that are relevant for this fee program. This study uses incomes defined by the State of California’s Department of Housing and Community Development (HCD)1. The number of worker households that are generated as a result of commercial development are categorized on the basis of these income levels. Within Los Angeles County, the maximum income defined for Acutely-Low, Extremely-Low, Very-Low, and LowIncome households is adjusted upwards from the associated percentage of area median income (AMI) by approximately 30 percent. Due to this adjustment, for example, the maximum income for a Low-Income household in Los Angeles County is actually higher than the County median income. HCD applies these adjustments in counties with relatively high housing costs and/or relatively high or low household incomes.

Table 2 Los Angeles County Income Category Definitions (2024) Primary Sources
To estimate the fee, EPS relied on numerous sources of data, including the following:
1 See HCD State Income Limits 2024 for Los Angeles County, https://www.hcd.ca.gov/sites/default/files/docs/grants-and-funding/income-limits-2024.pdf Maximum Fee
per sq. ft.

Retail/Restaurant/Services $288
Office $189
Industrial $96
Warehousing $51
Source: Economic & Planning Systems, Inc.

Employment Category
Income Group and Standard Definition HCD 2024 Maximum Income 4-Person Household
Acutely Low ≤15% AMI $14,750
Extremely Low >15% to ≤30% AMI $41,600
Very Low Income >30% to ≤50% AMI $69,350
Low Income >50% to ≤80% AMI $110,950
Median Income 100% AMI $98,200
Moderate Income >80% AMI to ≤120% AMI $117,850
Source: California Department of Housing and Community Development Draft Report
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• JobsEQ, which is a software tool that compiles industry and wage occupation data for 2023 from a variety of sources, including U.S. Census Bureau, Bureau of Labor Statistics, Bureau of Economic Analysis, National Center of Education Statistics, and others • State Department of Housing and Community Development (HCD) annual income limits for 2024
• U.S. Census Bureau American Community Survey (ACS) 5-Year Estimates (2019-2023) • Input from City of Paramount’s staff regarding affordability levels, recently developed affordable housing projects, market assumptions, and nexus study methodology These and other data sources are identified on the tables provided throughout this report. In addition, data from recent Paramount and regional developments and land transactions have been combined with information collected from various market-rate and affordable housing developers to estimate appropriate development cost assumptions for use in Paramount.

Organization of Report
Following this Introduction and Executive Summary, this study includes the following chapters:
• Chapter 2 summarizes the required nexus findings of the Study. • Chapter 3 describes the methodology used to calculate the fee.

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2. REQUIRED NEXUS FINDINGS FOR FEE PROGRAM
The following section confirms that this Nexus Study contains the findings required under the Mitigation Fee Act for the establishment of a new development impact fee (Commercial Linkage Fee), should the City Council decide to proceed with adoption of a commercial linkage fee program.

Background
The City of Paramount (City) has not previously adopted a commercial linkage fee for affordable housing. The City of Paramount’s 6th Cycle Housing Element, which was certified as of October 7, 2022, addressed regional housing trends, local housing needs, and broader goals and policies to support the City’s needs. The City retained Economic & Planning Systems, Inc. (EPS) to explore the feasibility of an affordable housing impact fee for new commercial (i.e., nonresidential) development.

Authority
This study serves as the basis for requiring development impact fees under AB 1600 legislation, as codified by the Mitigation Fee Act (California Government Code sections 66000 et seq.). This section of the Mitigation Fee Act sets forth the procedural requirements for establishing and collecting development impact fees. These procedures require that a reasonable relationship, or nexus, must exist between a governmental exaction and the purpose of the condition.

In 1991, the Ninth Circuit U.S. Court of Appeals upheld the City of Sacramento’s nonresidential linkage fee.2 In that case, the court found that the City of Sacramento’s fee program “substantially advanced a legitimate interest.” EPS is using a similar methodology to the nexus study reviewed in that case to develop the City of Paramount’s fee program.

Required Nexus Findings
The Mitigation Fee Act clearly identifies the required nexus findings.

Required Nexus Findings
• Identify the purpose of the fee.
• Identify how the fee is to be used.
• Determine how a reasonable relationship exists between the fee’s use and the type of development project on which the fee is imposed.
• Determine how a reasonable relationship exists between the demand for affordable housing and the type of development project on which the fee is imposed. • Demonstrate a reasonable relationship between the amount of the fee and the cost of the public benefit attributable to the development on which the fee is imposed. 2 Commercial Builders of Northern California v. City of Sacramento, 941 F2d 872 (1991).

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Purpose of Fee
The fee program established through this Nexus Study will fund the development and preservation of affordable housing in the City to serve lower-wage workers employed by new nonresidential development.

Use of Fee
The fee will be collected by the City. The funds are used to assist in the production or rehabilitation of affordable housing units and/or the acquisition of land or existing at-risk units in the City. The fee may also fund the studies and administration to support the fee program.

Relationship between Use of Fee and Type of Development New commercial development in the City will generate new jobs. Some portion of the workers in those jobs will not earn wages high enough to afford rent prices necessary to support new residential development without subsidy. The linkage fee will be used to help fund this subsidy, resulting in the development of residential units affordable to the local workforce.

Relationship between Demand for Affordable Housing and Type of Project The City and EPS have identified four commercial land use categories (retail/restaurant/services, office, industrial, and warehousing) for which a separate fee has been calculated. The proportion of lower wage workers and the number of square feet per employee for each employment category has been assessed to ensure a proper nexus is established.

Relationship between Amount of Fee and Cost of Public Benefit Attributed to New Development
EPS estimated the difference between the cost of developing new rental housing and the value of the new rental units based on rents affordable to workers at wages typical of businesses in different commercial land uses. The affordable rents yielded unit values below the cost of construction, indicating an “affordability gap.” To estimate the fee for each Commercial Land Use, this gap was multiplied by the anticipated number of lower wage workers generated by the new development projects and the number of households of various income categories those workers are likely to form.

A ssembly B ill 602 Provisions
AB 602 passed in the California Assembly in 2021 and was signed by the Governor. The legislation adds some new requirements for impact fees in addition to those required under AB 1600. While much of the intent of AB 602 was to clarify and limit impact fees applied to residential development, certain aspects of AB 602 may also apply to nonresidential development.

Existing Level of Service
Under Government Code 66016.5, AB 602 requires that an impact fee nexus study “identify the existing level of service for each public facility, identify the proposed new level of service, and include an explanation of why the new level of service is appropriate.” Draft Report
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The City of Paramount currently has 30 affordable housing units for an employment base of 25,099 workers.3 This represents a ratio of 0.0012 assisted affordable rental units per worker.

The “adjusted maximum” linkage fee levels identified herein would allow the City to subsidize a greater number of affordable units per worker – 0.4 per retail/restaurant/services worker, 0.2 per office/R&D/medical office worker, 0.3 per industrial worker, and 0.3 per warehouse worker.4 These higher proportions may be appropriate given the shortfall of such affordable units in the city, region, and state, and the demonstrated impacts of new commercial development on the City’s need for affordable housing.

As an example of public policy reflecting that shortfall, the State’s Regional Housing Needs Allocation (RHNA) process has indicated that Paramount should aim to produce 364 total housing units between 2021 and 2029, including 184 units priced at moderate or lower incomes. This target would represent a significant increase in the pace of both targeted and actual affordable housing production in recent years.

Collection of Fees at Previous Levels
Under Government Code 66016.5, AB 602 requires that “if a nexus study supports the increase of an existing fee, the local agency shall review the assumptions of the nexus study supporting the original fee and evaluate the amount of fees collected under the original fee.” The City has not previously adopted a commercial linkage fee nexus study or fee program. The City of Paramount wishes to use the commercial linkage fee program to generate revenue to increase the number of deed-restricted affordable housing as new workers are added to the local employment base.

Capital Improvement Plan
Under Government Code 66016.5, AB 602 requires that “large jurisdictions shall adopt a capital improvement plan as a part of the nexus study.” Under Government Code 66002, “any local agency which levies a fee subject to Section 66001 may adopt a capital improvement plan, which shall indicate the approximate location, size, time of availability, and estimates of cost for all facilities or improvements to be financed with the fees.” Capital improvement plans typically include specific infrastructure projects and public facilities rather than affordable housing developments, and affordable housing is not listed in the statute as the type of “facility” or “improvement” for which a capital improvement plan must be adopted. However, the City has expressed its intent to support the permitting and construction of affordable housing units as specified in the State’s RHNA process, including 184 moderate- and lower-income units. These units may be located in various areas within the City’s boundaries, may range from single units to larger complexes of 100 or more units, and are intended to be permitted and/or developed by 2029. This nexus study estimates the costs to develop such units, less their value as income3 Assisted rental unit count is from correspondence with City staff. 4 Proportions are calculated as the number of affordable units that could be subsidized by the maximum fee on a 100,000 square foot space, discounted by 7.6 percent of that figure given commute patterns to reflect the “adjusted maximum” (as shown on Tables 9-12) and then divided by the total number of employees that would work in a given building size (as shown on Table 6).

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restricted units, which represents the housing production subsidies to be financed with the collected linkage fees.

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3. METHODOLOGY AND FEE CALCULATION
Land Use Categories
The commercial land uses analyzed in this study are presented in Table 3, along with a description of the types of businesses that are included in each category. In general, each land use category is intended to be associated with a particular type of building or land use, to which the fees can be applied. The City has asked EPS to evaluate four distinct land use categories, but the City may choose not to adopt fees for all land use categories. While most land use categories are discretely associated with a particular type of building, others may be interchangeable as tenants may shift between building types (e.g., businesses located in industrial space moving to office space). This analysis bases its employment projections on North American Industry Classification System (NAICS) codes associated with the most typical tenants for each land use category, as defined in Appendix B.

Table 3 Land Use Category Descriptions
Land Use Category Description and Examples NAICS Sectors Retail/Restaurant/Services Businesses selling merchandise, entertainment, and personal services to the general public. Examples include grocery stores, drug stores, clothing stores, general
merchandise stores, beauty salons, and gas stations.

Restaurants are also included in this category.
44 - Retail Trade
722 - Food Services and Drinking Places
812 - Personal Laundry Services
Office/R&D/Medical Offices Employers engaged in business activity with limited direct access from the general public; businesses focused on
professional and financial services. Examples include
finance, insurance, real estate, law, engineering, medical offices, and science and technology.
51 - Information
52 - Finance and Information
53 - Real Estate and Rental and Leasing
54 - Professional, Scientific, and Technical
Services
55 - Management of Companies and Enterprises
561 - Administrative and Support Services
6211 - Offices of Physicians
6212 - Offices of Dentists
6213 - Offices of Other Health Practitioners
6214 - Outpatient Care Centers
6215 - Medical and Diagonistics Laboratories
Industrial Employers engaged in business activity with limited direct access from the general public; businesses focused on
assembling, distributing, or repairing products; businesses focused on the testing and invention of new materials,
products, or processes; and businesses engaged in the
transformation of raw materials into consumable products.

Examples include auto repair, self-storage facilities, and food/beverage products manufacturing. Additionally includes utilities.
22 - Utilities
23 - Construction
31 - Manufacturing
484 - Truck Transportation
811 - Repair and Maintenance
Warehousing Employers engaged in business activity with limited direct access from the general public; businesses specifically focused on the storage and distribution of goods.
42 - Wholesale Trade
484 - Truck Transportation
493 - Warehousing & Storage
Source: Economic & Planning Systems, Inc.

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Estimates of New Worker Households
The following section details the methodology for estimating the distribution of household income levels for new worker households in the City, and the number of these households that will be generated by new development in each commercial land use category.

Occupational Category and Wage Distribution
The first step in determining the number of new worker households requiring affordable residential units is to associate each land use type with occupational categories and the wage distribution within those categories. This estimate included the following analytical steps:
• EPS used JobsEQ to calculate the proportion of occupations likely to be represented under each land use category in the Los Angeles-Long Beach-Anaheim Metropolitan Statistical Area (MSA). For example, EPS evaluated the occupation categories within the utilities, construction, manufacturing, truck transportation, and repair and maintenance industries to determine the proportional distribution of occupations for the land use category “Industrial.” Using JobsEQ, EPS found that the NAICS sector 310000 (“Manufacturing”) for Los Angeles-Long Beach-Anaheim MSA shows that 8.00 percent of the jobs in the industrial industry nationwide are filled by managers, while 23.66 percent of jobs are categorized as production-related occupations (see Table B-3). The occupational distribution for all designated employment categories is provided in Appendix B. In addition to the distribution of occupation, JobsEQ provides the average wage for each occupation category in each land use category.
• The wages for each occupation were multiplied by 1.95, the average number of workers per working household in the City.5 The resulting figure represents estimated annual household income under the assumption that all workers in a household have similar earning potential. While certainly there will be some variation in wages per employee within a household, in the absence of more specific data, this analysis assumes comparable levels of education and training and thus hourly earnings among all workers in a given household.

Table 4 presents an example of how household income is calculated for each occupational category and the corresponding income category for that household. 5 From the Census Bureau’s American Community Survey 2023 5-Year Estimate.

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Table 4 Illustration of Employees' Household Income Calculation Item Source Example
Employment Category City of Paramount and EPS Industrial Industry JobsEQ Manufacturing (NAICS Code 310000)
Occupation Category JobsEQ Buildings and Grounds Cleaning and Maintenance Median Wage for the Los Angeles-Long Beach-Anaheim MSA
for Occupation within Industry JobsEQ $43,667
Workers per Household American Community Survey 5-Year Estimates 2023 1.95 Median Income per Household Workers per HH Multiplied by Med. Annual Wage $85,150 Income Category for 4-person Household California Housing and Community Development (HCD) Low Sources: City of Paramount; California Housing and Community Development (HCD); JobsEQ, 2022; U.S. Census American Community Survey 5-Year Estimates 2023; Economic & Planning Systems, Inc.

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Distribution of Workers by Land Use Type
After identifying income ranges for each occupation category, EPS summed the percentages of the households in each income bracket across all occupations represented in the land use categories. These estimates of the proportion of worker households in each income brackets by land use category are presented in Table 5.

As illustrated, no employment categories are expected to generate any households at the Very Low-Income levels. Retail/Restaurant/Services, Industrial, and Warehousing uses are expected to generate significant numbers of households at the Low-Income level, while jobs in the Office/R&D/Medical Offices use are expected to yield more households with incomes at or above Moderate-Income levels. See Appendix B for details regarding the distribution of occupations and wages within each land use type.

Employment Densities
Different land use categories operate with varying levels of employment densities. A 100,000 square foot warehousing facility, for example, typically has fewer employees than an office building of the same size. The number of building square feet anticipated for an employee is termed the “employment density” of each land use category.

Based on research and experience with other comparable cities, EPS estimated the employment density for each of the land use categories (detailed in Appendix Table A-1). Using these employment density assumptions, EPS estimated the number of employees that would occupy a prototypical 100,000-square foot building for each land use category, as shown in Table 6.

Household Formation
After calculating the estimated number of new employees generated for each land use category, EPS estimated the number of households represented by these new employees, detailed in Table 6. To calculate new households, EPS first adjusted the number of workers expected to form new households, accounting for those workers who are typically too young (aged 16 to 19) to form their own households.6 The resulting adjusted estimate of new workers was divided by

1.95, which represents the average number of workers per household in Paramount.7 6 Data from the Bureau of Labor Statistics indicate this age cohort represents about 2.3 percent of the overall workforce. This proportion was applied to all industries except retail/restaurant/services industries, where the younger worker cohort represent 7.9 percent of the overall industry employment. 7 Based on the Census Bureau’s American Community Survey 2019-2023 data regarding the number of Paramount residents who are defined as “workers” in households that have workers.

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Table 5 Income Distribution of Worker Households by Employment Category Employment Category [1] Very Low Low Moderate Above Moderate 50% AMI 80% AMI 120% AMI >120% AMI
Retail/Restaurant/Services 0.0% 89.0% 2.8% 8.2%
Office/R&D/Medical Offices 0.0% 35.6% 0.0% 64.4%
Industrial 0.0% 53.6% 0.0% 46.4%
Warehousing 0.0% 56.4% 0.0% 43.6%
Sources: JobsEQ, 2022; California Housing and Community Development (HCD); Economic & Planning Systems, Inc.

Income Level
[1] Designation of household income assumes a 3-person household and 1.95 workers per household, based on American Community Survey data.

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Table 6 Household Generation Rates by Employment Category % of Workers Total
Employment Sq.Ft. per Total Workers Forming Households per Very Low Low Moderate Above Moderate Category Worker1 per 100k Sq.Ft. Households2 100k Sq.Ft.3, 4 50% AMI 80% AMI 120% AMI >120% AMI Retail/Restaurant/Services 400 250 92.1% 118 0 105 0 13 Office/R&D/Medical Offices 250 400 97.7% 200 0 39 0 161 Industrial 750 133 97.7% 67 0 29 7 31
Warehousing 1,500 67 97.7% 34 0 14 5 15
[1] See Appendix Table A-1 for sources on employment densities in different land uses. [3] Assumes 1.95 workers per household based on Census data; rounded. [5] Figures are rounded to nearest whole number.

Households by Income Level5
[2] U.S. Bureau of Labor Statistics data indicates that 7.9% of retail/restaurant workers are aged 16-19, but an average of only 2.3% of workers in other industries fall into that age cohort. EPS has assumed that workers aged 16-19 do not form their own households. [4] This maximum nexus-based fee calculation assumes that Paramount fees account for all worker households generated by new employers in City of Paramount, though some workers and their households may choose to reside outside of Paramount. Total number of households may not match sum of households by income level due to rounding.

Sources: U.S. Census American Community Survey 5-Year Estimates 2023; JobsEQ, 2022; California Housing and Community Development (HCD); Economic & Planning Systems, Inc.

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Housing Development Costs and Affordability Gap
To calculate the maximum justifiable fee for each land use category, EPS estimated the “affordability gap” related to developing residential units affordable to very-low, low, and moderate-income households. The average household size in Paramount is 3.64 people per household according to 2023 Five-Year Estimates from the American Community Survey (ACS), but the average number of people, per working household (households with earnings – not including retired households, etc.) is 4.09. Thus, this analysis estimates the costs of providing affordable housing for a four-person household, to represent the average size of working households (rounded). California State law (California Health and Safety Code Section 50052.5) assumes that a four-person household would occupy a three-bedroom unit, and this assumption is used in this analysis.

The assumed prototype reflects multifamily construction at 30 dwelling units to the acre with structured parking, consistent with typical multifamily zoning allowances in the City. Based on comparable recent projects in the vicinity of Paramount, EPS assumes that the typical net square footage of a three-bedroom rental unit in Paramount will be approximately 1,100 square feet.

Development Cost Assumptions
Affordable housing development costs include land costs, direct costs (e.g., labor and materials), and indirect or “soft” costs (e.g., architecture, entitlement, marketing, etc.). Data from recent land transactions in and around Paramount have been combined with EPS’s information from various market-rate and affordable housing developers in the surrounding region to estimate appropriate development cost assumptions for use in Paramount. A developer fee is also estimated and represents the compensation to the developer for their efforts, investment, and risk. These assumptions are shown on Table 7 and indicate that the total cost per unit for rental apartments is about $778,000. By necessity, this figure represents a “prototypical” project; the actual costs for a given project will vary by location and project design characteristics.

Revenue Assumptions
Assumptions must be made regarding the applicable income level (very-low, low, and moderate) and the percentage of household income spent on housing costs to calculate the values of the affordable units. In addition, translating these assumptions into unit prices and values requires estimates of operating expenses and capitalization rates. The following assumptions were used in these calculations:
• Income Levels—This analysis estimates the subsidy required to produce units for households falling into the very low, low, and moderate-income categories for a four-person household.

While these categories are generally defined as a percentage of area median income (AMI) by HCD, EPS has assumed the maximum income level allowable under each nominal income category (for instance “moderate income” levels are set at 120 percent AMI, the very top of the range typically defined as 80 to 120 percent AMI). This assumption thus minimizes the development subsidy required for units at each income category. • Percentage of Gross Household Income Available for Housing Costs— HCD standards on overpaying for rent indicate that households should pay no more than 30 percent of their Draft Report
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gross income on housing cost.8 For this analysis, EPS has assumed that all households shall spend 30 percent of their gross income on housing costs, including the cost of utilities stated by the Los Angeles County Development Authority (LACDA) utility allowance schedule. • Operating Costs for Rental Units—This analysis assumes that apartment operators incur annual operating costs of $7,700 per unit for units affordable to Very-Low and Low-Income households. EPS has assumed the units affordable to Moderate-Income households would have similar operating costs but would be built by for-profit builders and thus also subject to property taxes, increasing their annual operating cost to $10,000 per unit.

Affordability Gap Results
Table 7 shows the costs and values for developing rental apartments in the City for households at various income levels. Across all categories, the cost of constructing the unit is higher than the supportable value of the unit. This is considered the “affordability gap,” and serves as the basis for calculating the subsidies required to provide housing for the lower-wage worker households generated by new nonresidential development. The results of the analysis illustrate that rents affordable to households earning Moderate Income levels and below cannot support the costs of new construction without subsidy.
8 See HCD standards for Overpayment and Overcrowding, Building Blocks: Overpayment and Overcrowding (ca.gov)
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Table 7 Affordability Gap Analysis – Rental Product Type (Per Unit) Item
Very Low
Income Low Income
Moderate
Income
50% AMI 80% AMI 120% AMI
Development Program Assumptions
Density/Acre [1] 30 30 30
Gross Unit Size 1,100 1,100 1,100
Number of Bedrooms 3 3 3
Occupants per 3-bedroom Unit [2] 4 4 4
Parking Spaces/Unit [3] 2.25 2.25 2.25
Project Cost Assumptions per Unit (1-Acre Site)
Land Acquisition and Site Improvement [4] $148,333 $148,333 $148,333 Direct Development Costs [5] $427,450 $427,450 $427,450 Indirect Development Costs [6] $106,863 $106,863 $106,863 Developer Fee $95,570 $95,570 $95,570
Total Development Costs $778,216 $778,216 $778,216
Maximum Supported Home Price
Household Income [7] $69,350 $110,950 $117,850
Income Available for Housing Costs/Year [8] $20,805 $33,285 $35,355 (less) Operating Expenses per Unit/Year [9] ($7,700) ($7,700) ($10,000) Net Operating Income $13,105 $25,585 $25,355
Capitalization Rate [10] 5.0% 5.0% 5.0%
Total Supportable Unit Value [11] $262,100 $511,700 $507,100 Affordability Gap $516,116 $266,516 $271,116
[10] The capitalization rate is used to determine the current value of a property based on estimated future operating income, and is typically a measure of estimated operating risk. [11] The total supportable unit value is determined by dividing the net operating income by the capitalization rate.

Sources: California Tax Credit Allocation Committee; California Housing and Community Development (HCD); CoStar; Economic & Planning Systems, Inc.
[4] Includes land acquisition, site preparation costs, entitlement consultants, and fees/permits. Land acquisition value reflects a weighted average, based on TCAC applications within the last four years. [5] Includes on-site work, offsite work, vertical construction, general requirements, overhead and builder fees. The cost estimate reflects wood-frame construction. Assumes workers are paid prevailing wage. [6] Includes costs for architecture and engineering; project management; appraisal and market study; marketing, commissions, and general administration; financing and charges; insurance; and contingency. [7] Incomes are based on 2024 HCD Income Limits for three-person households in Los Angeles County and revised to reflect State Density Bonus Law affordability requirements. [8] Assumes that no more than 30% of a household's income should be spent on housing-related costs for housing to be considered affordable.
[9] Operating expenses are generally based on EPS feasibility studies in the region and are inclusive of utility costs; lowerincome units (at or below 80% of AMI) are assumed to be built as non-profit and are, therefore, exempt from property taxes.

Property taxes are assumed to comprise a share of the operating expenses for the moderate-income category.

Multifamily Rental Apartments with Structure Parking
[1] Reflects the highest allowable densities in multifamily residential zone in Paramount. [2] Consistent with guidance in State law (Health and Safety Code Section 50052.5), a 3-bedroom unit should be assumed to be occupied by a 4-person household.
[3] Parking requirement in multifamily residential zone is 2 spaces per unit plus guest parking.

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Fee Calculation
Table 9 through Table 12 provide the maximum nonresidential housing fee calculations for each of the three land use categories.

The fee is calculated by the following steps:

1. Estimate the number of new households by income category generated by a prototypical 100,000-square foot building in the land use category.

2. Multiply the number of households generated by the per-unit affordability gap (as calculated in Table 9) to determine the level of subsidy required to provide housing in Paramount for all new worker households.

3. Divide the total affordability gap by 100,000 square feet (the size of the prototype building) to determine a maximum fee per building square foot.

The “Maximum Fee per Square Foot” calculated in the following tables represents the maximum justifiable linkage fee that the City can charge for each land use category based on the required nexus findings. The City may, however, decide to adopt fees below the maximum justifiable levels based on economic or policy considerations, as the maximum fee levels likely exceed levels that could feasibly be borne by new commercial developments.

For example, EPS has calculated an “Adjusted Maximum” fee reflecting the idea that not every employee of newly developed workplaces will in fact reside in Paramount, as shown in Table 8.

According to the most recently available data from the US Census Bureau’s American Community Survey, only 7.6 percent of people who work in Paramount also live in Paramount. EPS has applied that proportion to the “Maximum Fee” to calculate an “Adjusted Maximum” for each land use category. To be clear, however, this type of adjustment is not legally required, but does yield a lower fee.

Table 8 Adjusted Maximum Allowable Linkage Fees
Maximum Fee Adjusted Maximum [1]
per sq. ft. per sq. ft.

Retail/Restaurant/Services $288 $266
Office $189 $175
Industrial $96 $89
Warehousing $51 $47
Source: Economic & Planning Systems, Inc.
[1] Adusted to avoid potential double-counting of the 7.6% of people who work in Paramount and also live in Paramount (as of 2022 LEHD data).

Employment Category
Draft Report
Paramount Commercial Linkage Fee Nexus Study
11/13/25
Economic & Planning Systems, Inc. 19
Table 9 Fee Calculation – Retail/Restaurant/Services
Worker
Households Affordability Gap Total Gap
Item per 100k sq. ft. per household
Table References: Table 6 Table 7
Aggregate Financing Gap per 100K Sq. Ft
Affordability Level
Very Low Income 0 $516,116 $0
Low Income 105 $266,516 $27,984,206
Moderate 3 $271,116 $813,349
Total 108 $28,797,555
Fee Calculation formula
Total Financing Gap a $28,797,555
Total Building Sq. Ft. b 100,000
Maximum Fee per Sq. Ft. c = a / b $287.98
Adjustment for % of Workers Living in Paramount [1] 7.6% Adjusted Fee per Sq. Ft. $266.09
Sources: US Census Bureau "On The Map"; Economic & Planning Systems, Inc. [1] The US Census Bureau indicates that 7.6% of people working in Paramount also lived in Paramount in 2022 (most recent data available).

Draft Report
Paramount Commercial Linkage Fee Nexus Study
11/13/25
Economic & Planning Systems, Inc. 20
Table 10 Fee Calculation – Office/R&D/Medical Offices
Worker
Households Affordability Gap Total Gap
Item per 100k sq. ft. per household
Table References: Table 6 Table 7
Aggregate Financing Gap per 100K Sq. Ft
Affordability Level
Very Low Income 0 $516,116 $0
Low Income 71 $266,516 $18,922,654
Moderate 0 $271,116 $0
Total 71 $18,922,654
Fee Calculation formula
Total Financing Gap a $18,922,654
Total Building Sq. Ft. b 100,000
Maximum Fee per Sq. Ft. c = a / b $189.23
Adjustment for % of Workers Living in Paramount [1] 7.6% Adjusted Fee per Sq. Ft. $174.85
Sources: US Census Bureau "On The Map"; Economic & Planning Systems, Inc. [1] The US Census Bureau indicates that 7.6% of people working in Paramount also lived in Paramount in 2022 (most recent data available).

Draft Report
Paramount Commercial Linkage Fee Nexus Study
11/13/25
Economic & Planning Systems, Inc. 21
Table 11 Fee Calculation – Industrial
Worker
Households Affordability Gap Total Gap
Item per 100k sq. ft. per household
Table References: Table 6 Table 7
Aggregate Financing Gap per 100K Sq. Ft
Affordability Level
Very Low Income 0 $516,116 $0
Low Income 36 $266,516 $9,594,585
Moderate 0 $271,116 $0
Total 36 $9,594,585
Fee Calculation formula
Total Financing Gap a $9,594,585
Total Building Sq. Ft.1 b 100,000
Maximum Fee per Sq. Ft. c = a / b $95.95
Adjustment for % of Workers Living in Paramount [1] 7.6% Adjusted Fee per Sq. Ft. $88.65
Sources: US Census Bureau "On The Map"; Economic & Planning Systems, Inc. [1] The US Census Bureau indicates that 7.6% of people working in Paramount also lived in Paramount in 2022 (most recent data available).

Draft Report
Paramount Commercial Linkage Fee Nexus Study
11/13/25
Economic & Planning Systems, Inc. 22
Table 12 Fee Calculation – Warehousing
Worker
Households Affordability Gap Total Gap
Item per 100k sq. ft. per household
Table References: Table 6 Table 7
Aggregate Financing Gap per 100K Sq. Ft
Affordability Level
Very Low Income 0 $516,116 $0
Low Income 19 $266,516 $5,063,809
Moderate 0 $271,116 $0
Total 19 $5,063,809
Fee Calculation formula
Total Financing Gap a $5,063,809
Total Building Sq. Ft.1 b 100,000
Maximum Fee per Sq. Ft. c = a / b $50.64
Adjustment for % of Workers Living in Paramount [1] 7.6% Adjusted Fee per Sq. Ft. $46.79
Sources: US Census Bureau "On The Map"; Economic & Planning Systems, Inc. [1] The US Census Bureau indicates that 7.6% of people working in Paramount also lived in Paramount in 2022 (most recent data available).

APPENDICES:

Appendix A: Assumptions and Sources
Appendix B: Occupation Distribution by
Employment Category
Appendix C: Survey of Commercial Linkage Fees in
Other Jurisdictions
APPENDIX A:

Assumptions and Sources
Table A-1 Assumptions and Sources

Item Total Unit Source
Demographic Assumptions
Total Population 52,546 persons American Community Survey 5-Year Estimates 2023 Total Employed 25,099 persons American Community Survey 5-Year Estimates 2023 Households 14,348 households American Community Survey 5-Year Estimates 2023 People per Household 3.64 persons American Community Survey 5-Year Estimates 2023 Households with Earnings 12,858 households American Community Survey 5-Year Estimates 2023 Workers per Household with Workers 1.95 persons American Community Survey 5-Year Estimates 2023 Persons per Working Household 4.09 persons American Community Survey 5-Year Estimates 2023 Paramount Workers Living in Paramount 7.6% of workers US Census Bureau "On The Map" 2022 data Employment Density Assumptions
Retail/Restaurant/Services 400 sq. ft. per employee EPS Professional Industry Assumption Office 250 sq. ft. per employee EPS Professional Industry Assumption Industrial 750 sq. ft. per employee EPS Professional Industry Assumption Warehousing 1,500 sq. ft. per employee EPS Professional Industry Assumption Sources: U.S. Census American Community Survey 5-Year Estimates 2023; US Census Bureau "On The Map"; Economic & Planning Systems, Inc.

APPENDIX B:

Occupation Distribution by Employment Category
Table B-1
Occupation and Wage Distribution - Retail/Restaurant
City of Paramount Commercial Linkage Fee Study; EPS #244011 Occupation Category [1] 1.95 workers/HH
Management Occupations $102,983.13 4.06% $200,817.10 Above Moderate Business and Financial Operations Occupations $74,555.77 1.26% $145,383.76 Above Moderate Computer and Mathematical Occupations $102,151.76 0.28% $199,195.94 Above Moderate Architecture and Engineering Occupations $97,643.27 0.01% $190,404.38 Above Moderate Life, Physical, and Social Science Occupations $61,912.07 0.01% $120,728.53 Above Moderate Community and Social Service Occupations $44,262.50 0.05% $86,311.87 Low Legal Occupations $106,095.33 0.02% $206,885.89 Above Moderate Educational Instruction and Library Occupations $58,828.72 0.04% $114,716.01 Moderate Arts, Design, Entertainment, Sports, and Media Occupations $62,600.98 0.83% $122,071.90 Above Moderate Healthcare Practitioners and Technical Occupations $91,542.32 1.74% $178,507.52 Above Moderate Healthcare Support Occupations $58,761.50 0.51% $114,584.92 Moderate Protective Service Occupations $43,608.34 0.33% $85,036.27 Low Food Preparation and Serving Related Occupations $39,945.75 40.09% $77,894.20 Low Building and Grounds Cleaning and Maintenance Occupations $42,848.79 0.82% $83,555.15 Low Personal Care and Service Occupations $46,141.69 5.78% $89,976.31 Low Sales and Related Occupations $42,971.66 24.72% $83,794.74 Low Office and Administrative Support Occupations $48,691.09 5.01% $94,947.62 Low Farming, Fishing, and Forestry Occupations $41,497.10 0.10% $80,919.35 Low Construction and Extraction Occupations $58,892.21 0.12% $114,839.81 Moderate Installation, Maintenance, and Repair Occupations $57,815.28 2.12% $112,739.79 Moderate Production Occupations $43,756.09 2.11% $85,324.38 Low
Transportation and Material Moving Occupations $41,352.29 9.98% $80,636.96 Low Total or Weighted Average $46,535.58 100.00% $90,744.38 [1] Includes NAICS Sectors: 44 and 45 - Retail Trade; 532000 - Rental and Leasing Services; 812000 - Personal and Laundry Services; and 722000 - Food Services and Drinking Places.

Sources: JobsEQ, 2023; U.S. Census American Community Survey 5-Year Estimates 2023; Economic & Planning Systems, Inc.

Retail/Restaurant/Services
Los Angeles-Long
Beach-Anaheim MSA
Average Wage
% of Industry Jobs in
Occupation Category Income Category
HH Income at
Table B-2
Occupation and Wage Distribution - Office/R&D/Medical Offices City of Paramount Commercial Linkage Fee Study; EPS #244011 Occupation Category [1] 1.95 workers/HH
Management Occupations $165,815.18 10.78% $323,339.59 Above Moderate Business and Financial Operations Occupations $96,635.30 13.04% $188,438.84 Above Moderate Computer and Mathematical Occupations $128,823.13 6.78% $251,205.11 Above Moderate Architecture and Engineering Occupations $111,845.69 2.50% $218,099.10 Above Moderate Life, Physical, and Social Science Occupations $104,423.33 1.35% $203,625.49 Above Moderate Community and Social Service Occupations $68,096.84 1.51% $132,788.84 Above Moderate Legal Occupations $161,303.88 3.10% $314,542.57 Above Moderate Educational Instruction and Library Occupations $69,585.07 0.21% $135,690.88 Above Moderate Arts, Design, Entertainment, Sports, and Media Occupations $113,044.74 7.48% $220,437.24 Above Moderate Healthcare Practitioners and Technical Occupations $139,321.88 7.48% $271,677.67 Above Moderate Healthcare Support Occupations $48,685.03 3.88% $94,935.80 Low Protective Service Occupations $43,505.48 3.62% $84,835.69 Low Food Preparation and Serving Related Occupations $41,304.79 0.40% $80,544.34 Low Building and Grounds Cleaning and Maintenance Occupations $45,391.84 5.74% $88,514.09 Low Personal Care and Service Occupations $48,573.27 0.64% $94,717.87 Low Sales and Related Occupations $83,780.63 7.06% $163,372.22 Above Moderate Office and Administrative Support Occupations $54,451.35 16.02% $106,180.12 Low Farming, Fishing, and Forestry Occupations $46,323.69 0.10% $90,331.20 Low Construction and Extraction Occupations $69,398.25 0.82% $135,326.59 Above Moderate Installation, Maintenance, and Repair Occupations $64,656.46 2.26% $126,080.10 Above Moderate Production Occupations $44,016.53 2.01% $85,832.23 Low
Transportation and Material Moving Occupations $41,533.06 3.23% $80,989.46 Low Total or Weighted Average $93,948.96 100.00% $183,200.46 Sources: JobsEQ, 2023; U.S. Census American Community Survey 5-Year Estimates 2023; Economic & Planning Systems, Inc.

Los Angeles-Long
Beach-Anaheim MSA
Average Wage
% of Industry Jobs in
Occupation Category
Office/R&D/Medical Offices
[1] Includes NAICS Sectors: 51 - Information; 52 - Finance and Insurance; 53 - Real Estate and Rental and Leasing (excluding 532000 -Rental and Leasing Services); 54 - Professional, Scientific, and Technical Services; 55 - Management of Companies and Enterprises; 561 - Admin. and Support Services; 6211 - Offices of Physicians; 6212 - Offices of Dentists; 6213 - Offices of Other Health Practitioners; 6214 - Outpatient Care Centers; and 621500 - Medical and Diagonostic Laboratories.

Income Category
HH Income at
Table B-3
Occupation and Wage Distribution - Industrial
City of Paramount Commercial Linkage Fee Study; EPS #244011 Occupation Category [1] 1.95 workers/HH
Management Occupations $159,041.63 8.00% $310,131.18 Above Moderate Business and Financial Operations Occupations $93,554.97 5.87% $182,432.19 Above Moderate Computer and Mathematical Occupations $136,225.69 2.85% $265,640.10 Above Moderate Architecture and Engineering Occupations $119,130.44 4.14% $232,304.36 Above Moderate Life, Physical, and Social Science Occupations $89,236.58 0.77% $174,011.32 Above Moderate Community and Social Service Occupations $79,959.18 0.00% $155,920.40 Above Moderate Legal Occupations $210,129.64 0.07% $409,752.79 Above Moderate Educational Instruction and Library Occupations $74,158.93 0.01% $144,609.91 Above Moderate Arts, Design, Entertainment, Sports, and Media Occupations $82,169.22 1.42% $160,229.98 Above Moderate Healthcare Practitioners and Technical Occupations $102,069.46 0.17% $199,035.44 Above Moderate Healthcare Support Occupations $60,934.74 0.02% $118,822.75 Above Moderate Protective Service Occupations $52,151.69 0.12% $101,695.80 Low Food Preparation and Serving Related Occupations $41,913.15 0.51% $81,730.65 Low Building and Grounds Cleaning and Maintenance Occupations $43,666.74 0.52% $85,150.15 Low Personal Care and Service Occupations $62,900.93 0.04% $122,656.82 Above Moderate Sales and Related Occupations $83,307.33 8.58% $162,449.30 Above Moderate Office and Administrative Support Occupations $54,351.86 10.46% $105,986.13 Low Farming, Fishing, and Forestry Occupations $44,702.28 0.36% $87,169.44 Low Construction and Extraction Occupations $62,494.52 7.43% $121,864.31 Above Moderate Installation, Maintenance, and Repair Occupations $65,647.75 7.06% $128,013.12 Above Moderate Production Occupations $50,861.42 23.66% $99,179.77 Low Transportation and Material Moving Occupations $48,426.63 17.92% $94,431.94 Low Total or Weighted Average $72,754.41 100.00% $141,871.09 [1] Includes NAICS Sectors: 22 - Utilities; 23 - Construction; and 811 - Repair and Maintenance; and 484 - Truck Transportation.

Sources: JobsEQ, 2023; U.S. Census American Community Survey 5-Year Estimates 2023; Economic & Planning Systems, Inc.

Income Category
HH Income at
Los Angeles-Long
Beach-Anaheim MSA
Average Wage
% of Industry Jobs in
Occupation Category
Industrial
Table B-4
Occupation and Wage Distribution - Warehousing
City of Paramount Commercial Linkage Fee Study; EPS #244011 Occupation Category [1] 1.95 workers/HH
Management Occupations $158,601.55 8.77% $309,273.02 Above Moderate Business and Financial Operations Occupations $89,939.30 5.90% $175,381.64 Above Moderate Computer and Mathematical Occupations $116,400.50 2.38% $226,980.98 Above Moderate Architecture and Engineering Occupations $109,931.13 0.77% $214,365.70 Above Moderate Life, Physical, and Social Science Occupations $89,053.71 0.36% $173,654.74 Above Moderate Community and Social Service Occupations $81,879.27 0.01% $159,664.57 Above Moderate Legal Occupations $192,222.63 0.08% $374,834.12 Above Moderate Educational Instruction and Library Occupations $74,246.94 0.02% $144,781.53 Above Moderate Arts, Design, Entertainment, Sports, and Media Occupations $82,628.15 2.03% $161,124.89 Above Moderate Healthcare Practitioners and Technical Occupations $102,219.55 0.35% $199,328.13 Above Moderate Healthcare Support Occupations $57,000.00 0.02% $111,150.00 Moderate Protective Service Occupations $47,864.39 0.19% $93,335.56 Low Food Preparation and Serving Related Occupations $40,409.66 0.14% $78,798.84 Low Building and Grounds Cleaning and Maintenance Occupations $44,983.33 0.41% $87,717.48 Low Personal Care and Service Occupations $66,087.42 0.09% $128,870.47 Above Moderate Sales and Related Occupations $84,869.96 17.83% $165,496.43 Above Moderate Office and Administrative Support Occupations $53,939.14 13.90% $105,181.32 Low Farming, Fishing, and Forestry Occupations $44,027.70 0.78% $85,854.01 Low Construction and Extraction Occupations $76,258.11 0.38% $148,703.32 Above Moderate Installation, Maintenance, and Repair Occupations $66,672.86 4.63% $130,012.07 Above Moderate Production Occupations $49,893.81 4.55% $97,292.92 Low
Transportation and Material Moving Occupations $49,775.42 36.42% $97,062.07 Low Total or Weighted Average $72,498.93 100.00% $141,372.92 [1] Includes NAICS Sectors: 493 - Warehousing & Storage; 484 - Truck Transportation; and 42 - Wholesale Trade.

Sources: JobsEQ, 2023; U.S. Census American Community Survey 5-Year Estimates 2023; Economic & Planning Systems, Inc.

Warehousing
Los Angeles-Long
Beach-Anaheim MSA
Average Wage
% of Industry Jobs in
Occupation Category Income Category
HH Income at
APPENDIX C:

Survey of Commercial Linkage Fees
in Other Jurisdictions
Table C Survey of Commercial Linkage Fees in Other Jurisdictions Land Use Category Glendale West
Hollywood
Santa
Monica [1]
Fontana
[2]
Los Angeles
[3]
Office (Per Sq. Ft.) $4.00 $9.39 $14.93 $1.15 $3.75 - $6.25 Retail (Per Sq. Ft.) $4.00 $9.39 $12.98 $1.66 $3.75 - $6.25 Industrial (Per Sq. Ft.) $4.00 $9.39 $10.03 $0.12 $3.75 - $6.25 Warehouse (Per Sq. Ft.) [4] - - - $0.13 -
Source: Economic & Planning Systems, Inc.
[2] Fontana's linkage fee program has additional land use categories of "Hospital/Medical" at $1.43 per sq. ft..
[1] Santa Monica's linkage fee program has additional land use categories of "Creative Office" at $12.58 per sq. ft., "Medical Office" at $9.04 per sq. ft., "Hospital" at $8.06 per sq. ft., and "Institutional" at $9.88 per sq. ft.
[3] Los Angeles' linkage fee is different for different areas of the City. [4] Of the cities selected in this comparison, only Fontana has a linkage fee specifically for the "Warehouse" use.

Exhibit 3
City of Paramount
Development Impact Fee Schedule
Public Safety Facilities Fee
Land Use Fee
Residential $0.11/sq. ft.

Retail $0.04/sq. ft.

Office $0.06/sq. ft.

Warehouse/Industrial $0.02/sq. ft
Park and Recreation Facilities Fee
Land Use Fee
Residential $1.10/sq. ft.

Retail $0.40/sq. ft.

Office $0.58/sq. ft.

Warehouse/Industrial $0.20/sq. ft
General Facilities Fee
Land Use Fee
Residential $0.07/sq. ft.

Retail $0.03/sq. ft.

Office $0.04/sq. ft.

Warehouse/Industrial $0.01/sq. ft
Transportation Facilities Fee
Land Use Fee
Residential $0.54/sq. ft.

Retail $2.58/sq. ft.

Office $1.09/sq. ft.

Warehouse/Industrial $0.86/sq. ft
Stormwater Drainage Facilities Fee
Land Use Fee
Residential $0.48/sq. ft.

Retail $0.66/sq. ft.

Office $0.66/sq. ft.

Warehouse/Industrial $0.66/sq. ft
Commercial Linkage Fee
Land Use Fee
Retail $4.00/sq. ft.

Office $4.00/sq. ft.

Industrial $3.00/sq. ft
Warehouse $3.00/sq. ft.

Water Capacity/Water Capital Improvement Fee
Meter Size Capacity Charge
5/8” $2,096
3/4" $2,096
1” $3,291

1.5” $7,189
2” $10,480
3” $32,928
4” $52,693
6” $83,840
8” $209,600
10” $329,365
To: Honorable City Council
From: John Moreno, City Manager
By: Margarita Matson, Public Safety Director
Date: February 24, 2026
SUBJECT: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARAMOUNT AMENDING CHAPTERS 8.04.010 AND 8.04.040 OF THE PARAMOUNT

MUNICIPAL CODE REGARDING INCORPORATION OF THE LOS

ANGELES COUNTY HEALTH AND SAFETY CODE

BACKGROUND
Since incorporation, the City of Paramount has utilized the Los Angeles County Health Department for inspections and other services related to health and sanitation. Chapters

8.04.010 and 8.04.040 of the Paramount Municipal Code incorporate by reference the Los Angeles County Health and Safety Code as the Health Code for the City. To ensure that we are utilizing the most current version of the County Code, we annually readopt it by reference.

DISCUSSION
Prior to adopting by reference a provision of the Los Angeles County Code, the City Council must perform a first reading of the title of the proposed ordinance and set a date for a public hearing.

VISION, MISSION, VALUES, AND STRATEGIC OUTCOMES
The City’s Vision, Mission, and Values set the standard for the organization, establish priorities, uniformity and guidelines; and provide the framework for policy decision making. The Strategic Outcomes were implemented to provide a pathway to achieving the City’s Vision. This item aligns with Strategic Outcome No 1: Safe Community - Provide a safe place to live, work, and visit.

RECOMMENDED ACTION
Introduce Ordinance No. 1214 and set a public hearing date of March 10, 2026, at 6:00 p.m. for consideration of adoption of Ordinance No. 1214.

CITY OF PARAMOUNT

LOS ANGELES COUNTY, CALIFORNIA
ORDINANCE NO. 1214

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PARAMOUNT AMENDING CHAPTERS 8.04.010 AND 8.04.040 OF THE

PARAMOUNT MUNICIPAL CODE REGARDING INCORPORATION OF

THE LOS ANGELES COUNTY HEALTH AND SAFETY CODE

THE CITY COUNCIL OF THE CITY OF PARAMOUNT DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. Chapters 8.04.010 and 8.04.040 of the Paramount Municipal Code are hereby amended in their entirety as follows:

8.04.010 County Health Code Adopted.

Title 11 of the Los Angeles County Code, entitled "Health and Safety Code," being a code regulating public health and sanitation, is hereby adopted by reference as the Health Code of the City.

8.04.40 Penalty.

Not withstanding any other provision of this chapter, violation of any of the provisions of this chapter incorporating the County Health Code and portions of the County Consumer Protection Code is punishable as a misdemeanor by a fine of not more than $500.00 or by imprisonment in the County Jail for not more than six months, or both. Each day during any portion of which any violation herein is committed or continued to be permitted makes such violation a separate chargeable offense.

SECTION 2. Severability. If any section, subsection, sentence, clause or phrase in this ordinance or the application thereof to any person or circumstance is for any reason held invalid, the validity of the remainder of the ordinance or the application of such provision to other persons or circumstances shall be adopted thereby. The City Council hereby declares it would have passed this ordinance and each section, subsection, sentence, clause or phrase thereof, irrespective of the fact that one or more sections, subsections, sentences, clauses, or phrases or the application thereof to any person or circumstance be held invalid.

SECTION 3. Effective Date. This Ordinance shall take effect thirty days after its adoption, shall be certified as to its adoption by the City Clerk, and shall be published as required by law, together with the names and members of the City Council voting for and against the Ordinance.

ORDINANCE NO. 1214
March 10, 2026, Page 2
PASSED, APPROVED, and ADOPTED by the City Council of the City of Paramount this 10th day of March 2026.

Peggy Lemons, Mayor
ATTEST
Heidi Luce, City Clerk
To: Honorable City Council
From: John Moreno, City Manager
By: Margarita Matson, Public Safety Director
Date: February 24, 2026
SUBJECT: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARAMOUNT AMENDING CHAPTERS 10.04.010 AND 10.04.020 OF THE PARAMOUNT

MUNICIPAL CODE REGARDING INCORPORATION OF THE LOS

ANGELES COUNTY TRAFFIC CODE

BACKGROUND
Chapters 10.04.010 and 10.04.020 of the Paramount Municipal Code incorporate by reference the Los Angeles County Traffic Code as the Traffic Code for the City. To ensure that we are utilizing the most current version of the County Code, we annually readopt it by reference.

DISCUSSION
Prior to adopting by reference a provision of the Los Angeles County Code, the City Council must perform a first reading of the title of the proposed ordinance and set a date for a public hearing.

VISION, MISSION, VALUES, AND STRATEGIC OUTCOMES
The City’s Vision, Mission, and Values set the standard for the organization, establish priorities, uniformity and guidelines; and provide the framework for policy decision making. The Strategic Outcomes were implemented to provide a pathway to achieving the City’s Vision. This item aligns with Strategic Outcome No 1: Safe Community - Provide a safe place to live, work, and visit.

RECOMMENDED ACTION
Introduce Ordinance No. 1215 and set a public hearing date of March 10, 2026, at 6:00 p.m. for consideration of adoption of Ordinance No. 1215.

CITY OF PARAMOUNT

LOS ANGELES COUNTY, CALIFORNIA
ORDINANCE NO. 1215

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PARAMOUNT AMENDING CHAPTERS 10.04.010 AND 10.04.020 OF

THE PARAMOUNT MUNICIPAL CODE REGARDING

INCORPORATION OF THE COUNTY TRAFFIC CODE

THE CITY COUNCIL OF THE CITY OF PARAMOUNT DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. Chapters 10.04.010 and 10.04.020 of the Paramount Municipal Code are hereby amended in their entirety as follows:

10.04.010 County Traffic Code Adopted.

Title 15 of the Los Angeles County Code, entitled "Vehicles and Traffic," being a code regulating traffic upon public highways, is hereby adopted by reference as the Traffic Code of the City.

10.04.020 Penalties - Continuing Violations.

A. The first and second violation of any provision of this title may be cited as an infraction or punished as a misdemeanor. The third such violation shall be punished as a misdemeanor by a fine not exceeding $500 or imprisonment for a term not exceeding six months, or by both such fine and imprisonment. Such violations may also be redressed by civil action.

B. Each day that any violation of this title continues shall constitute a separate offense.

SECTION 2. Severability. If any section, subsection, sentence, clause or phrase in this ordinance or the application thereof to any person or circumstance is for any reason held invalid, the validity of the remainder of the ordinance or the application of such provision to other persons or circumstances shall be adopted thereby. The City Council hereby declares it would have passed this ordinance and each section, subsection, sentence, clause or phrase thereof, irrespective of the fact that one or more sections, subsections, sentences, clauses, or phrases or the application thereof to any person or circumstance be held invalid.

SECTION 3. Effective Date. This Ordinance shall take effect thirty days after its adoption, shall be certified as to its adoption by the City Clerk, and shall be published as required by law, together with the names and members of the City Council voting for and against the Ordinance.

ORDINANCE NO. 1215
March 10, 2026, Page 2
PASSED, APPROVED, and ADOPTED by the City Council of the City of Paramount this 10th day of March 2026.

Peggy Lemons, Mayor
ATTEST
Heidi Luce, City Clerk
To: Honorable City Council
From: John Moreno, City Manager
By: Margarita Matson, Public Safety Director
Date: February 24, 2026
SUBJECT: YOUTH ACTIVITIES LEAGUE PROGRAM OVERVIEW
The Long Angeles County Sheriff’s Department Youth Activities League (YAL) provides after-school programs for at-risk youth ages 7 to 17. Operated by the Sheriff’s Youth Foundation, YAL works to strengthen relationships between law enforcement and the community. The City of Paramount hosts a YAL Program at Spane Park, staffed by a Deputy Sheriff, three civilian independent contractors, and a Life Skills Coach who visits monthly. The Paramount YAL Program operates year-round and focuses on academics, recreation, and physical fitness. Deputy Aguilar, the YAL Program Manager, will present an overview of the program and a 2025 recap.

To: Honorable City Council
From: John Moreno, City Manager
By: Margarita Matson, Public Safety Director
Eric Wosick, Assistant Public Safety
Director
Date: February 24, 2026
SUBJECT: SIX MONTH REVIEW OF DRONE SERVICES WITH FLYING LION, INC.

FOR MOTOR VEHICLE SPEED CONTESTS OR EXHIBITIONS OF
SPEED

BACKGROUND
In an effort to enhance our ability to deter crime, combat street racing, and prevent intersection takeovers, the City continually explores innovative ways to incorporate new technology into our surveillance and enforcement practices. One such innovation is the utilization of drones as a supplemental law enforcement tool. In April 2024, the Los Angeles County Sheriff’s Department (LASD) conducted a pilot program whereby drone deployment was incorporated into the Paramount Special Assignment Officer Team’s weekly street racing operations. Unfortunately, there were deficiencies that were identified in the County’s equipment, deployment practices, and policy restrictions that limited the effectiveness of LASD drones when used for street racing prevention and intersection takeover surveillance.

After a thorough assessment of the City’s needs and LASD’s drone-use limitations, it was determined that a civilian Public Safety Drone Pilot Program would be the most effective, efficient, and fiscally responsible way to support the City’s law enforcement priorities. At the City Council meeting on July 8, 2025, Council approved an agreement with Flying Lion, Inc. (FLI) to provide drone overwatch services for a six-month trial period to help us accomplish this Public Safety goal.

FLI drone services were intended to enhance the comprehensive street racing response and deterrence program that Paramount already deploys, which includes intersection cameras, a vehicle forfeiture process, reckless driving policy enhancements, advanced law enforcement training, and interagency task force participation.

DISCUSSION
The Public Safety Drone Pilot Program consisted of FLI pilots deploying drones citywide four days a week, five hours per day, during high probability street racing and intersection takeover times (primarily late night and early morning hours on weekend and weekendadjacent days). The drone operations focused on high-risk areas and intersections that the City identified based on current street racing crime trends and historical intersection Agenda Report February 24, 2026
DRONE SERVICES REVIEW Page 2
takeover data. Drone pilots served in an observe and report capacity only, generating general LASD calls for service whenever violations were identified.

August 21, 2025 – January 31, 2026
Operational Days Drone Flights Flight Time Hours
77 729 210
During the pilot period, FLI provided 77 operational days of drone surveillance looking for street racing and intersection takeover activity. An additional 17 days were contracted but unable to be provided due to inclement weather, technical issues, or pilot emergencies that prevented the drone from being deployed. There were also seven operational periods where hours were significantly limited due to weather conditions and/or technical issues.

This highlights one of the significant deficiencies identified in the use of this technology for long-term preventative surveillance purposes. Common weather impacts, including rain, heavy cloud cover, and fog accounted for 76% of the lost deployment time and severely restricted the use of drones under non-ideal circumstances Observed/Reported Activity
Street Takeovers Other Incidents LASD Takeovers
12 4 19
Over the pilot period, FLI reported 12 total street takeovers to LASD. Deputies had an average response time of 8.5 minutes, but this was artificially inflated by two instances where LASD was significantly delayed due to active responses to other emergencies.

With those emergencies factored in, the average response time for general intersection takeover incidents was 4.5 minutes. Additional calls were also documented from non-FLI sources on seven of the street racing incidents, making the FLI observations redundant in those cases. During the same FLI operational periods, LASD recorded a total of 19 street racing/takeover incidents, including seven instances that FLI drones did not capture. These missed incidents were directly correlated to limited drone flight path capacity, equipment charging, inclement weather, and other operational issues.

A review of the Public Safety Drone Pilot Program has allowed us to identify that drone use as a preventative surveillance tool is optimized under certain conditions:
• Non-active Communities – Drone surveillance has the most impact when it functions as the only point of reporting violations. A resident population that actively observes violations and reports incidents in a timely manner can render the service redundant. Paramount is an extremely active community. • Areas with High Response Times – Law enforcement agencies with extended observation and response times would gain the largest reduction benefit from preventative drone surveillance. Paramount’s response time to intersection takeover calls during the pilot period was 4.5 minutes.

Agenda Report February 24, 2026
DRONE SERVICES REVIEW Page 3
• Consistent/High Volume Violation Areas – The most significant positive results from a cost-benefit analysis come when the underlying violations occur at regular, predictable intervals and at a high enough rate to justify the cost. FLI captured 12 intersection takeovers during the six-month pilot program. • Ideal Weather Conditions – Drone surveillance is severely susceptible to inclement weather and multiple instances of negative operational impact were experienced during the pilot period.
• Multiple Drones/Overlapping Coverage – Drones require in-use charging time and have focused flight patterns that limit their overall observational abilities and restrict their effectiveness. Employing multiple drones to compensate for these gaps in coverage may help make up for this deficiency.

FISCAL IMPACT
The FY 2025-26 budget includes a total of $109,000 allocated to provide drone services.

Approximately $82,000 of that amount was expended with no additional fiscal impact.

Fund Division Account Service Description Amount
GF/ARPA CIP/JC 112-9483-7146-394 Law Enforcement Tool (Drone) $109,000

VISION, MISSION, VALUES, AND STRATEGIC OUTCOMES
The City’s Vision, Mission, and Values set the standard for the organization, establish priorities, uniformity and guidelines; and provide the framework for policy decision making. The Strategic Outcomes were implemented to provide a pathway to achieving the City’s Vision. This item aligns with Strategic Outcome No 1: Safe Community - Provide a safe place to live, work, and visit.

RECOMMENDED ACTION
Provide feedback to staff on the future use of drone services for motor vehicle speed contests and exhibitions of speed and receive and file this report.

To: Honorable City Council
From: John Moreno, City Manager
By: Adriana Figueroa, Public Works Director
Date: February 24, 2026
SUBJECT: FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM FOR FISCAL YEARS 2026-30

BACKGROUND
One of the program goals and initiatives outlined during the City Council’s Goal Setting session for 2024 included the development of a 5-year Capital Improvement Project (CIP) Plan to serve as a roadmap for the City’s longstanding commitment to maintaining, enhancing, and developing infrastructure to meet the needs of the community.

The City’s first long-term CIP planning document was completed last year. The Fiscal Years 2026-30 CIP is the City’s second CIP planning document.

DISCUSSION
The Five-Year Capital Improvement Program (CIP) is a focused spending plan designed to support the City’s long-term infrastructure and facility needs. The CIP supplements the FY 2025–26 adopted budget by describing each capital project, identifying available funding sources, and presenting the anticipated total project cost.

The FY 2026–30 CIP includes final FY 2024–25 carryover balances, FY 2025–26 approved appropriations, as well as projected funding amounts for the subsequent four fiscal years. Together, these elements illustrate how the City plans to invest in its infrastructure and public facilities over the long term.

The Five-Year CIP is updated annually and presented to the City Council for review. While the CIP serves as a multi-year planning framework, appropriations are authorized one fiscal year at a time through the annual budget adoption or mid-year budget amendment process. Only those FY 2025-26 amounts approved by the City Council are considered adopted.

FISCAL IMPACT
Agenda Report February 24, 2026
CAPITAL IMPROVEMENT PROGRAM PLAN FISCAL YEARS 2026-30 Page 2 There is no fiscal impact with approval of the FY 2026-30 Capital Improvement Program.

The CIP reflects previously adopted FY 2025-26 capital projects and appropriations, as well as proposed FY 2025-26 midyear budget adjustments that are subject to separate City Council approval.

VISION, MISSION, VALUES, AND STRATEGIC OUTCOMES
The City’s Vision, Mission, and Values set the standard for the organization, establish priorities, uniformity and guidelines; and provide the framework for policy decision making. The Strategic Outcomes were implemented to provide a pathway to achieving the City’s Vision. This item aligns with Strategic Outcome No 5: Attractive and WellMaintained Infrastructure - Develop and maintain City-owned infrastructure, parks, facilities, and amenities that enhance quality of life and the attractiveness of the community.

RECOMMENDED ACTION
Approve the Five-Year Capital Improvement Program Plan for Fiscal Years 2026-30. 5-YEAR CAPITAL

IMPROVEMENT

PROGRAM

CITYWIDE MEDIAN

ENHANCEMENT PROJECT

CITY OF PARAMOUNT
5-YEAR CAPITAL IMPROVEMENT PROGRAM
FISCAL YEARS 2026-30
City Council
Peggy Lemons, Mayor
Brenda Olmos, Vice Mayor
Isabel Aguayo, Councilmember
Annette C. Delgadillo, Councilmember
Vilma Cuellar Stallings, Councilmember
City Attorney
Nicholas R. Ghirelli
City Manager
John Moreno
Assistant City Manager
Grissel Chavez
City Clerk
Heidi Luce
Community Services
Director
Yecenia Guillen
Finance Director
Lana Dich
Planning Director
John King
Public Safety Director
Margarita Matson
Public Works Director
Adriana Figueroa
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1 5
7 9116 13
9412 14
9414 15
9510 16
9610 17
WT01 18
WT02 19
WT03 20
WT04 21
WT05 22
9132 23
9136 24
9233 25
9237 26
9432 27
9433 28
9435 29
9530 30
9531 31
9532 32
9533 33
9630 34
9631 35
9634 36
9635 37
9730 38
9731 39
9734 40
9830 41
9831 42
9833 43
9834 44
9930 45
9931 46
9932 47
9934 48
ST01 49
ST02 50
ST03 ARTERIAL STREET RESURFACING (2030) 51
TABLE OF CONTENTS
ALLEY IMPROVEMENTS (2026)
NEIGHBORHOOD STREET RESURFACING (2026)
ARTERIAL STREET RESURFACING (2026)
ARTERIAL STREET RESURFACING (2025)
NEIGHBORHOOD STREET RESURFACING (2025)
WATER MAIN IMPROVEMENTS
WELL #16 DESIGN/CONSTRUCTION
WATER FACILITIES INTERNET INFRASTRUCTURE UPGRADES
WATER INTERCONNECTION IMPROVEMENTS
WELL 15 VARIABLE FREQUENCY DRIVE (VFD)
INFRASTRUCTURE PROGRAM ASSESSMENT
ADVANCED METERING INFRASTRUCTURE
WEST SANTA ANA BRANCH BIKEWAY PHASE III
HUNSAKER TRAFFIC SAFETY IMPROVEMENT
TRAFFIC SIGNAL GARFIELD/70TH
BUDGET MESSAGE
SHADE SAILS FOR WELL 16
WATER MASTER PLAN UPDATE
WATER 15 FILTER VESSEL REPLACEMENT
ALONDRA BLVD WIDENING
CAPITAL IMPROVEMENT PROJECTS BY CATEGORY
CAPITAL IMPROVEMENT PROJECTS SUMMARY BY FUND
ARTERIAL STREET RESURFACING (2030)
WEST SANTA ANA BRANCH BIKEWAY PHASE IV
TRAFFIC SAFETY IMPROVEMENTS (2024)
NEIGHBORHOOD STREET RESURFACING (2027)
WATER PROJECTS
STREET/SIGNAL PROJECTS
MEDIAN ENHANCEMENTS
ALLEY IMPROVEMENTS (2028)
ARTERIAL STREET RESURFACING (2028)
ALLEY IMPROVEMENTS (2027)
WEST SANTA ANA BRANCH BIKEWAY PHASE II
STORM DRAIN IMPROVEMENTS
PHASE 1 MEDIAN IMPROVEMENTS
ROSECRANS BRIDGE REPAIR
ARTERIAL STREET RESURFACING (2027)
WEST PARAMOUNT UTILITY EASEMENT MULTI‐USE PATH
CURB ADDRESS PAINTING
ALLEY IMPROVEMENTS (2029)
NEIGHBORHOOD STREET RESURFACING (2029)
ARTERIAL STREET RESURFACING (2029)
NEIGHBORHOOD STREET RESURFACING (2028)
i
TABLE OF CONTENTS
ST04 52
ST05 53
9258 54
9259 55
9268 56
9352 57
9450 58
9451 59
9455 60
9460 61
9462 62
9463 63
9464 64
9550 65
9650 66
9651 67
9652 68
9653 69
9654 70
PK01 71
PK02 72
PK03 73
PK04 74
PK05 75
PK06 76
PK07 77
PK08 78
PK09 79
PK10 80
PK11 81
PK12 82
PK13 83
PK14 84
PK15 85
PK16 86
PK17 87
PK18 88
PK19 89
PK20 90
PK21 91
PK22 92
PK23 93
PK24 94
PK25 95
SPANE PARK FACILITY INTERIOR IMPROVEMENTS ‐ PHASE 2
MARIPOSA ASH TREE LIGHTS
MEADOWS PARK PLAYGROUND REPLACEMENT
GARFIELD PARK PLAYGROUND REPLACEMENT
SALUD PARK EXERCISE TRACK AND ARTIFICIAL FIELD RENOVATION DILLS PARK EXERCISE EQUIPMENT REPLACEMENT
PROGRESS PLAZA EXTERIOR IMPROVEMENTS
MARIPOSA CLASSROOM CONVERSION DESIGN
REPLACEMENT OF RUBBERIZED MATTING AT PARAMOUNT PARK PLAYGROUND BASKETBALL COURT RESURFACING ‐ VARIOUS PARKS
SHADE SAILS AT DILLS PARK (NORTH PLAYGROUND)
ALL‐AMERICAN PARK PICNIC SHELTER REPLACEMENT
NEIGHBORHOOD STREET RESURFACING (2030)
SOMERSET RANCH POCKET PARK DESIGN
CARPET REPLACEMENT AT PROGRESS PARK
PARK PROJECTS
PARAMOUNT MONUMENT SIGN
HAY TREE OUTDOOR PATIO SPACE AND LIGHTING
CENTURY GREENWAY PARK
ALONDRA BALLFIELD LIGHTS REPLACEMENT
PARAMOUNT HIGH SCHOOL WEST BALLFIELD LIGHTS REPLACEMENT ROOSEVELT BALLFIELD LIGHTS REPLACEMENT
MEADOWS PARK PICNIC SHELTER RENOVATION
PROGRESS PARK AND PARAMOUNT PARK BALLFIELD RENOVATIONS
PROGRESS PLAZA BOARD ROOM IMPROVEMENTS
PROGRESS PLAZA KITCHEN RENOVATION
DILLS PARK SOUTH FIELD PLAYGROUND REPLACEMENT
ORANGE SPLASH PAD RESTROOM RENOVATION
VILLAGE PARK OUTDOOR BASKETBALL COURT & LIGHTING RENOVATIONS PARAMOUNT PARK EXERCISE EQUIPMENT REPLACEMENT
ALL‐AMERICAN PARK FITNESS EQUIPMENT RENOVATION
PARAMOUNT PARK COMMUNITY CENTER RENOVATION & EXPANSION
ALL AMERICAN PARK ACTIVITY CENTER CONCEPTUAL DESIGN
VILLAGE SKATEPARK RENOVATIONS
PARK DEVELOPMENT CONCEPT
PARAMOUNT PARK EAST PLAYGROUND REPLACEMENT
ALLEY IMPROVEMENTS (2030)
PARAMOUNT SAW COMMUNITY MEETING ROOM/MUSEUM DEVELOPMENT DILLS PARK RENOVATION
IRRIGATION VALVE UPGRADES
DILLS PARK COMMUNITY ORCHARD
SALUD PARK VOLLEYBALL COURT RENOVATION
SALUD PARK EXERCISE EQUIPMENT REPLACEMENT
ORANGE SPLASH PAD EQUIP AND HARDSCAPE RENOVATIONS
REPLACEMENT OF DIVING BLOCKS AT PARAMOUNT POOL
ii
TABLE OF CONTENTS
PK26 96
9274 97
9276 98
9381 99
9386 100
9387 101
9475 102
9476 103
9481 104
9483 105
9485 106
9486 107
9487 108
9488 109
9570 110
9571 111
9572 112
9573 113
9670 114
9671 115
9672 116
MI01 117
MI02 118
MI03 119
MI04 120
MI05 121
MI06 122
MI07 123
MI08 124
MI09 125
MI10 126
MI11 127
MI12 128
MI13 129
MI14 130
MI15 131
MI16 132
MI17 133
MI18 134
MI19 135
MI20 136
MI21 137
9295 138
9391 139
ROOF REPLACEMENT ‐ CITY YARD BACK BUILDINGS
ROOF REPLACEMENT ‐ MARIPOSA
AFFORDABLE HOUSING 16638‐16675 PARAMOUNT
ROOF REPLACEMENT ‐ PARAMOUNT GYM
BANNER POLE INSTALLATION
ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM UPGRADE
OUTDOOR RESTROOM RENOVATION ‐ ALL AMERICAN PARK
CITY HALL LOBBY REDESIGN
DOWNTOWN ELECTRICAL UPGRADES
INSTALL 6 NEW BUS SHELTERS
CITY HALL ELECTRICAL UPGRADES
ELECTRONIC MESSAGE BOARDS
15101 PARAMOUNT BLVD PROJECT
EMERGENCY OPERATIONS EQUIPMENT
CIVIC CENTER FOUNTAIN UPGRADE
PARAMOUNT POOL LOCKER ROOM SHOWER RENOVATION
CITY HALL PARKING LOT
CITY HALL PLANNING DEPARTMENT IMPROVEMENT
BUS BENCHES & TRASH CANS
PROPERTY PURCHASE (16471 PARAMOUNT)
CITY YARD GYM IMPROVEMENT
CITY COUNCIL AMERICAN RESCUE PLAN ACT (ARPA) FUND
CITY YARD RENOVATION
ROOF REPLACEMENT ‐ CITY HALL
ROOF REPLACEMENT ‐ CLEARWATER BUILDING
ROOF REPLACEMENT ‐ ROOSEVELT RESTROOMS
ROOF REPLACEMENT ‐ PROGRESS PLAZA
FLOORING REPLACEMENT ‐ SECOND FLOOR OF YARD
AC ROOF UNIT REPLACEMENT
PROGRESS PARK EXTERIOR LIGHTING REPLACEMENT
SPANE PARK STORMWATER CAPTURE
SUSTAINABILITY PROJECTS
MISCELLANEOUS PROJECTS
FLOORING REPLACEMENT ‐ CITY HALL CARPET
CITY HALL PATIO DECK REPAIRS
FLOORING REPLACEMENT ‐ CITY HALL TILE
CITY FACILITY SECURITY CAMERA AND ALARM UPGRADES
OUTDOOR RESTROOM RENOVATION ‐ ALONDRA AND ROOSEVELT
BUILDING REPAINTING ‐ SPANE PARK
BUILDING REPAINTING ‐ CITY HALL
CLEARWATER BUILDING ‐ EXTERIOR STAIR REPLACEMENT
CITY STORAGE LOT UPGRADE
BUILDING REPAINTING ‐ CITY YARD
BUILDING REPAINTING ‐ CLEARWATER
BUILDING REPAINTING ‐ MARIPOSA BUILDING
BUILDING REPAINTING ‐ ALL AMERICAN PARK
iii
TABLE OF CONTENTS
9493 140
9590 141
9690 142
9691 143
SU01 144
SU02 145
SU03 HVAC CONTROL SYSTEM 146
LIGHTING CONTROL SYSTEM FOR THE SUBSTATION
LIGHTING CONTROL SYSTEM FOR THE CITY HALL PARKING LOT
DRYWELL INSTALLATION ‐ GARFIELD AND PEQUENO PARKS
WILLDAN ENERGY AUDIT PROJECT
DRYWELL INSTALLATION ‐ MEADOWS AND VILLAGE PARKS
LED LIGHTING CONVERSION
iv
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CAPITAL IMPROVEMENT PROGRAM

BUDGET MESSAGE
Honorable Mayor and Members of the City Council,
I am pleased to present the City of Paramount’s Capital Improvement Program (CIP) Budget for the 5-year period of Fiscal Year (“FY”) 2026-30. This is the City’s second official long-term CIP document. While the City has always been committed to investing in its infrastructure by allotting funds and resources to complete major capital projects, the Council recognizes the importance and value in transparency with having a long-term capital improvement planning document in place.

The CIP document serves as a roadmap for the City’s ongoing commitment to maintaining, enhancing, and developing infrastructure to meet the needs of the community. The 5-year CIP will create a focused spending plan and will enhance the overall long-term financial management for the City’s infrastructure needs.

FY 2025-26 Adopted Capital Improvement Project Budget
The adopted FY 2025-26 CIP appropriations approved by the City Council as part of the annual budget process are reflected in this document and signifies the Council’s approval of the current CIP plan. The numbers reflected in this document may vary from the originally adopted capital improvement budget due to additional appropriations and adjustments during the fiscal year.

Funding sources that make up the CIP budget include funding from General Fund, grant funds, Water Fund, and Equipment Replacement Fund.

The CIP budget includes improvements to arterial street corridors, alleyways, neighborhood streets, and traffic signal hardware upgrades. Additionally, funding has been set aside to continue improving our parks and public facilities while handling vital maintenance needs. Efforts will continue with the design of several large infrastructure projects in the coming years and projects that will better serve our community. This includes improved community facilities, roadway and highway safety improvements, as well as the West Santa Ana bikeway trail that will ultimately connect the Los Angeles River and San Gabriel River.

Content and Format of the CIP Budget
This CIP document supplements the FY 2025-26 adopted budget by providing project details and the projected spending plan for the next five years. This document will include summaries for each capital project, project scope, funding source(s) if identified, and projected project total. Additionally, the 5-year CIP document includes estimates of FY 2024-25 carryovers, FY 2025-26 adopted appropriations, and anticipated CIP amounts for four additional fiscal years.

CIP Process Overview
Moving forward, staff will update this CIP document annually and present it to the City Council. The 5-year plan will be prepared based on the established City Council priorities, goals, and objectives for the capital improvement program.

Respectfully submitted this 24th day of February 2026.

John Moreno
City Manager