CITY COUNCIL STAFF REPORT
Meeting Date: May 18, 2026
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
TITLE: ADOPT RESOLUTION ADOPTING THE TRAFFIC IMPACT FEE NEXUS
STUDY AND FEE CALCULATION GUIDELINES AND INTRODUCE THE
REVISED TRAFFIC IMPACT FEE ORDINANCE
SYNOPSIS
The Traffic Impact Fee (“TIF”) is a development impact fee authorized under the Mitigation Fee Act (AB 1600) to fund transportation improvements required to accommodate growth from new development. The City’s current TIF program has not been updated since it was established in 2003. To ensure continued compliance with State law that fees reflect current conditions, the City recently completed a Traffic Impact Fee Nexus Study (see Attachment “B”) in order to update the City’s ordinance to reflect current TIF methodology and related fees.
Adoption of the Resolution will adopt the Traffic Impact Fee Nexus Study (“Nexus Study”) and Fee Calculation Guidelines, establishing a clear and legally defensible framework for the City’s TIF. Introduction of the new TIF Ordinance is the first reading of the revised Ordinance to implement the Nexus Study.
The adoption or second reading of the Ordinance will be presented on June 1 along with the resolution updating the Master Fee Schedule. The Council Budget Committee considered this item on November 5, 2025, and recommended a phased approach over three years for the fee structure.
Staff recommends that the City Council conduct a public hearing to review the Nexus Study and accompanying Guidelines, and then adopt the Resolution authorizing adoption of the Nexus Study and Fee Calculation Guidelines and introduce the first reading of the revised Ordinance.
DISCUSSION
Background
The City established a TIF pursuant to the Traffic Mitigation Fee Act of 1989 (AB 1600), now codified in the Government Code at sections 66000-66025, governing development impact fees.
The TIF is intended to fund street and transportation improvement projects necessary to serve new development.
The City’s current citywide TIF program was adopted in 2003 and is based on a “System Equity Approach”, which allocates transportation infrastructure costs on a cost-per-trip basis using the City’s current citywide built infrastructure as the cost foundation. The initial TIF rate was established by a Nexus Study performed by MuniFinancial. As required by State Law, the TIF is reported annually in the City’s financial reports and is adjusted annually pursuant to Pleasant Hill Municipal Code Section 5.55.050 based on a construction cost index.
With the adoption of the City’s 2040 General Plan, and approval of the Master Bicycle and Pedestrian Plan, the City Council needs to update the TIF nexus analysis to be consistent with these new plans.
The Government Code requires that Traffic Impact Fees be supported by a “nexus analysis,” which demonstrates a reasonable relationship between:
1. The impacts of new development;
2. The need for public facilities resulting from that development; and
3. The amount charged per net daily trip.
To meet these requirements and reflect current and projected conditions, the City executed an Agreement for Professional Services with Fehr & Peers to prepare an updated Traffic Impact Fee Nexus Study. The new TIF program includes a list of capital improvement projects, reflecting the most recent projections of population and employment growth in the City, and changes the approach used to calculate fees from the existing “system equity” approach to one in which the fee is calculated based on the costs of a specific list of capital improvement projects.
Analysis
Nexus Study Summary
Fehr & Peers prepared a Traffic Impact Fee Nexus Study, dated April 16, 2026 (see “Attachment B”). The study evaluates existing and future transportation conditions citywide and identifies the transportation improvements needed to accommodate anticipated growth as identified in the City’s Capital Improvement Program (“CIP”).
The study estimated that the total eligible transportation improvement costs of approximately $33.96 million, and approximately 4,589 additional adjusted daily trips will be accounted for between 2025 and 2035.
Based on these assumptions, the study calculates the cost per daily trip is $917 and recommends updated TIF rates by land use category. The recommended fees are designed to ensure that new development contributes proportionately to the cost of transportation improvements necessitated by growth.
Implementation Guide
Upon review of the original draft of the Nexus Study, staff determined that guidance was needed as to calculation of fees for uses with exceptionally high trip volumes. To assist with calculating fees for these uses, a Fee Calculation Guidelines document (see Attachment “C”) was developed to assist City staff in calculating a traffic impact fee based on daily trip generation. This guide also provides additional clarification regarding mixed-use developments and the intensification of use within existing vacant buildings.
Proposed Ordinance Update
In keeping with the new TIF Nexus Study, the existing TIF Ordinance was completely revised.
This updated TIF Ordinance is attached and ready for introduction (first reading). The adoption (second reading) of the TIF Ordinance is scheduled for June 1, 2026, and should it be adopted, will take effect 30 days later, on July 1, 2026. At the time of adoption (second reading) of the new TIF Ordinance, the Master Fee Schedule will be presented with new charges for a phased in approach to the new TIF fees.
FISCAL IMPACT
Information regarding the phased approach will be presented with the revised Master Fee Schedule at the June 1 Council meeting.
PUBLIC CONTACT
Public Contact was made through posting of the City Council agenda on the City’s official notice bulletin board, at the Pleasant Hill Senior Center, and at the Pleasant Hill Police Department. The agenda and staff report are posted on the City’s web page. The TMF study was posted on the City’s website on April 18, 2026.
RECOMMENDED CITY COUNCIL ACTION
Staff recommends that City Council take the following separate actions:
1) Move to adopt the proposed Resolution, adopting the TIF Nexus Study and Fee Calculation Guidelines; and
2) Move to introduce the revised TIF Ordinance.
ALTERNATIVES TO RECOMMENDED ACTION
None recommended.
The Council could elect to subsidize future projects using General Fund resources; otherwise, future Capital Improvement Projects may face insufficient funding.
ATTACHMENT(S)
Attachment “A” Ordinance
Attachment “B” Pleasant Hill Traffic Impact Fee Update, Prepared by Fehr and Peers, dated September 25, 2025
Attachment “C” Pleasant Hill Traffic Impact Fee Calculation Guidelines Attachment “D” Resolution Adopting the Traffic Impact Fee Nexus Study and Fee Calculation Guidelines
Prepared by: Laetitia Porta, PE, Senior Civil Engineer
Approved by: Ann James, PE, Public Works Director