1 ORDINANCE NO. _____
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
PLEASANT HILL AMENDING CHAMPTER 5.55, TRAFFIC
MITIGATION FEE, OF THE PLEASANT HILL MUNICIPAL CODE
WITH AN UPDATED TRAFFIC IMPACT FEE NEXUS STUDY
WHEREAS, in 1989, a Traffic Impact Fee was authorized under the Mitigation Fee Act (Assembly Bill 1600) and is intended to fund street and transportation improvement projects necessary to accommodate growth resulting from new development; and WHEREAS, The City’s current citywide Traffic Impact Fee (TIF) program was established in 2003. The current program is based on a “system equity” approach, in which the TIF is based on a cost per trip using the citywide built infrastructure as the cost basis. As required by state law, City staff includes the TIF program in the City’s annual financial reports, and, per Municipal Code
5.55.050, the traffic impact fee is increased annually based on the construction cost index; and WHEREAS, the Mitigation Fee Act requires that development impact fees be supported by a nexus analysis demonstrating a reasonable relationship between the impacts of new development, the need for public facilities, and the amount of the fee charged; and WHEREAS, on March 13th, 2023, the City executed an Agreement for Professional Services with Fehr & Peers to conduct the Traffic Impact Fee Nexus Study and recommend revised fees; and
WHEREAS, Fehr & Peers prepared a final Traffic Impact Fee Nexus Study dated April 16, 2026, which evaluates existing and future transportation conditions, identifies necessary transportation improvements, and establishes a reasonable relationship between new development and the need for those improvements; and
WHEREAS, Fehr & Peers prepared a Fee Calculation Guidelines document to accompany the Traffic Impact Fee Nexus Study; and
WHEREAS, Fehr & Peers recommends increased Traffic Impact Fee rates consistent with the findings of the Nexus Study to ensure that new development contributes its fair share toward mitigating transportation impacts; and,
NOW THEREFORE, the City Council of the City of Pleasant Hill does ordain as follows:
SECTION 1. Chapter 5.55 of the Pleasant Hill Municipal Code is amended in its entirety to read as follows:
Traffic Impact Fee
Section Title
2 5.55.010 Intent and Purpose
5.55.020 Findings
5.55.030 Definitions
5.55.040 Applicability – Time of Payment
5.55.050 Establishing the Fee – Fee Amount – Annual Adjustment
5.55.060 Exemptions
5.55.070 Use of Funds
5.55.080 Refunds
5.55.090 Accounting
5.55.100 Appeals
5.55.110 Supplementary Provisions
§ 5.55.010 Intent and Purpose.
A. In keeping with the requirements of the Mitigation Fee Act (AB 1600, CA Govt Code sections 66000 through 66025), and mindful of the City’s policy that new development pay for the cost of improvements to the citywide transportation system necessary to accommodate or offset the impacts generated by the new development, the City adopts a Traffic Impact Fee (“TIF”). (See, City of Pleasant Hill General Plan 2040, adopted May, 2023.) B. Adopting and implementing a TIF is a fair and equitable method of securing some of the revenues necessary to construct the required transportation improvements as a result of, and to the extent to which new development generates the need for additional transportation improvements.
C. The City of Pleasant Hill is close to being built out under its general plan. Approaching buildout has implications for the type of facilities needed to accommodate growth. Large capacityincreasing projects such as street extensions and widenings and interchange improvements are no longer a practical method for accommodating growth. Rather, a range of upgrades to the existing system of transportation improvements, including bicycle and pedestrian facilities, better represent the remaining improvements needed to complete the transportation system.
D. Many types of improvement projects across all modes (vehicle, transit, bicycle and pedestrian) can accommodate or offset the impacts generated by new development. The Pleasant Hill General Plan 2040 and specifically, the Transportation and Circulation Element, specifies certain policies that support the need to provide a TIF to fund projects to fulfill these goals, including, but not limited to, TC – 3.2, 3.3, 3.4, 5.3, 8.5, 8.6, 8.8, 8.10, 9.3, 9.4, 11.1 and 11.2. Examples of upgrades needed to accommodate new development include but are not limited to: minor intersection improvements such as adding turn lanes; upgrades to traffic control devices (traffic signals) and improved interconnects; completion of gaps in the street, transit, bicycle and pedestrian network; and improvements to substandard street, transit, bicycle and pedestrian facilities.
E. The traffic impact fee must fairly apportion to new development a fair share of the City's costs for transportation improvements. New development's fair share should be based on the capital improvement projects needed to accommodate the additional demand generated by the new development.
3 F. In the absence of this Chapter imposing a TIF, existing and future sources of revenue will be inadequate to fund the transportation improvements which are necessary to avoid unacceptable levels of congestion and related adverse impacts created by expected development within the City.
G. To update and properly evaluate the relationship (or “nexus”) between anticipated future development in the City, the need for new infrastructure to support that development, and the fees that will be charged to help fund that infrastructure, the City retained Fehr & Peers to undertake a study entitled “Pleasant Hill Traffic Impact Fee Update” dated April 16, 2026. A copy of this study is on file in City offices.
H. By adopting this Chapter, it is the intent of the Pleasant Hill City Council to adopt a fair and equitable method of securing some of the revenues necessary to fund the construction and implementation of transportation improvements in the City to accommodate the traffic volumes generated by new development.
I. The City Council intends to update the City’s TIF by including a new list of capital improvement projects, reflect the most recent projections of population and employment growth in the City, and change the approach used to calculate fees from the current “ system equity” approach to one in which the fee is calculated based on the costs of a specific list of capital improvement projects.
The fees will continue to be applied to new development that occurs anywhere in the City of Pleasant Hill.
§ 5.55.020 Findings and Requirements.
Consistent with AB 1600 (CA Govt. Code §§ 66000 through 66025), the City Council finds as follows:
A. Purpose. The purpose of the TIF is to fund transportation improvements to accommodate or offset the impact from new development in the City.
B. Use of the TIF. The TIF revenues will be used to help fund a proposed list of projects found in Figure 1 and Table 2 (pages 5-7) of the “Pleasant Hill Traffic Impact Fee Update dated April 16, 2026”.
C. Relationship between the TIF’s use and the type of development on which the TIF is imposed.
Different types of development generate traffic with different characteristics. The calculations presented in Tables 4 and 5 of the “Pleasant Hill Traffic Impact Fee Update dated April 16, 2026” account for these characteristics by calculating the travel-related characteristics of different land use types. These considerations account for the differential impacts on the local transportation system generated by different development types.
4 D. Relationship between the need for the public facility and the type of development on which the TIF is imposed. The need for the facilities listed in Table 2 of the “Pleasant Hill Traffic Impact Fee Update dated April 16, 2026” has been established through local planning processes prepared by the City of Pleasant Hill.
E. Determining a reasonable relationship between the amount of the fee and cost of the public facility (or portion of the public facility) attributable to new development. Section 4 of the “Pleasant Hill Traffic Impact Fee Update dated April 16, 2026” describes the calculations applied to determine the cost of the public facilities that is attributable to new development in the TIF area.
F. If the nexus study supports the increase of an existing TIF, review the assumptions of the nexus study supporting the original fee and evaluate the amount of fees collected under the original fee.
The TIF program and ordinance was established in 2003 using a “system equity” approach in which fees were calculated as a cost per trip based on the value of the City’s existing transportation system and adjusted annually to reflect changes in construction costs. Since its adoption, the City has prepared annual reports documenting fee activity, and the Traffic Mitigation Fund has been included in the City’s audited financial statements. These reports show that revenues have been collected and used to support transportation improvements, with amounts varying in line with development activity. The current update shifts the program from the system equity method to a project-based calculation using the costs of a defined list of transportation projects in the City’s 2024-2029 Capital Improvement Plan. Because this methodology directly reflects the identified project costs needed to accommodate growth, the updated fee levels are higher than under the prior approach and align the program with the cost of planned improvements.
G. Calculate a fee imposed on a housing development proportionately to the square footage of proposed units of the development, or explain why that would not be an appropriate metric for calculating fees. The TIF on housing developments has always been calculated based on the type of unit, with one level for single family units and another for multi-family units. This has been a common practice for most fee programs throughout the State of California.
For the City’s TIF Program, this practice aligns with readily available data about the transportation impacts of housing developments. Industry standard reference documents about trip generation rates and trip lengths, present that data for all types of housing units combined and do not typically present that data based on the unit size. Moreover, there is no available reference document that directly links trip generation rates to the square footage of a housing unit.
Since there is not a wide variation in house size in the City, the City is largely built out, and given the lack of consistent and available sources of data, the City has concluded that square footage, currently, is not an appropriate metric to use in calculating fees on residential developments, nor is there substantial evidence that the current method of calculating fees is disproportionate to a residential development’s effects on the transportation system.
H. Adopt a capital improvement plan as a part of the nexus study. The City maintains a Capital Improvement Plan, most recently updated for the 2024-2029 period and this plan was used to identify projects for updating the City’s TIF Program.
5 § 5.55.030 Definitions.
In this Chapter:
A. Development means:
1. Any new construction, or any addition, extension, or enlargement of an existing structure or unit, which includes a dwelling unit for residential use or the gross floor area of retail, office or industrial use; or
2. Any conversion or change in use of an existing structure requiring City approval, including a building permit, which would result in a change in the land use category (resulting in an increase in the trip demand factor applicable to the structure).
B. Gross floor area means the sum of the square footage of the floor area at each floor level included within the exterior walls of a building or portions thereof, including mezzanines and lobbies. It excludes floor area devoted to vehicle parking, necessary interior driveways and ramps.
C. Land use category means any of the following specific land uses:
1. Residential;
a. Single-family;
b. Multifamily;
2. Nonresidential;
a. Retail;
b. Office;
c. Industrial.
D. Transportation improvements, system of transportation improvements and facilities means the list of proposed TIF projects found in Figure 1 and Table 2 (pages 5-7) of the “Pleasant Hill Traffic Impact Fee Update dated April 16, 2026”.
E. Traffic fee study means the "Pleasant Hill Traffic Impact Fee Update," dated April 16, 2026, prepared by Fehr & Peers and on file in the City offices. § 5.55.040 Applicability – Time of Payment.
A. Applicability. Except as provided in Pleasant Hill Municipal Code (PHMC) §5.55.060 Exemptions, this Chapter applies to each development within the City for which a building permit or other entitlement for development is issued.
B. Time of payment. The traffic impact fee is due:
6 1. For residential development, before the final inspection, or the date the certificate of occupancy is issued, whichever occurs first. (Govt. Code § 66007(a).)
2. For nonresidential development, before the issuance of the building permit. § 5.55.050 Establishing the Fee – Fee amount – Annual adjustment.
A. Establishing the fee. The traffic fee study establishes a common basis for assessing fees across different land use categories by calculating a Trip Demand Factor, reflecting characteristics of each land use, including the trip generation rate, the proportion of new and pass-by trips and trip lengths. (See Table 4, page 9, Trip Demand Factors, in the traffic fee study.) The Adjusted Daily Trip Demand Factors are then used to calculate the total growth in Adjusted Daily Trips. Table 5, page 10, Growth Converted to Adjusted Daily Trips in the traffic fee study displays how that growth was modified by the trip demand factors to derive total growth expressed in units of Adjusted Daily Trips.
B. Fee amount. The amount of TIF required of the development shall be determined by the Director of Public Works or their designee in accordance with this section, which is based on the traffic fee study.
Land Use
Category Unit Fee Per DUE
DUE
Factor
Raw Fee
Per Unit
Admin Charge
(2%)
Total Fee
Per Unit
Residential
Single-Family DU $7,401 1.00 $7401 $148 $7,549
Multifamily DU $7,401 0.71 $5290 $106 $5,396
Nonresidential
Retail KSF $7,401 2.39 $17,693 $354 $18,047
Office KSF $7,401 1.64 $12,132 $243 $12,374
Industrial KSF $7,401 0.74 $5,507 $110 $5,617
Other Daily
Trip
__ __ $917 $18 $936
In determining the land use category for which a fee applies, the fee shall be charged on the basis of the primary use of the building as a whole. The City shall use the category which in its judgment most nearly fits the proposed use. The Director of Public Works may refer to specific uses described in the PHMC Chapter 18 Zoning and to the Standard Industrial Classification Manual 7 (SIC). The City has adopted fee calculation guidelines that provide additional specificity on how the TIF will be applied to individual development applications. The guidelines support consistent implementation by identifying the applicable land use categories and setting procedures for calculating the fee for new construction, intensification of use, and land uses that do not fit within the City’s standard fee categories.
C. Annual adjustment of the rate based on construction cost index. The fee shall be increased annually in the City’s Master Fee Schedule based on the Engineering News Record 20-city construction cost index listed in the prior October 1st issue, as published by McGraw-Hill Publishing Company. Annual increases are capped at 4% (four percent). § 5.55.060 Exemptions.
The following development projects are exempt, in whole or in part, from the TIF otherwise required by this Chapter:
A. Capital improvements and/or buildings or structures related to the operation of the City, Contra Costa County, state or federal governments including, but not limited to, police and fire stations, Pleasant Hill Recreation and Park District facilities, parking lots, offices, equipment yards, sanitation facilities, parks and similar facilities in or through which general government operations are conducted. This section does not create an exemption for private commercial or industrial activities conducted on public lands.
B. Temporary uses less than 12 months in duration.
C. Additions, extensions or enlargements of an existing residential structure which, in any twoyear period, increases the gross floor area by less than 800 square feet.
D. Additions, extensions or enlargements of an existing commercial or industrial structure which, in any one calendar year, increases the gross floor area of such structure by 200 square feet or less.
E. No fee is due if a traffic mitigation fee was previously paid in full for the property, unless there is a change of use which requires a use permit or tenant improvements. In such case, the applicant shall pay the incremental difference between the previously paid fee and the applicable fee for the proposed new use.
§ 5.55.070 Use of Funds.
The fees paid under this Chapter, and interest income earned, shall be used solely for the purpose of constructing or providing the list of transportation improvements. § 5.55.080 Refunds.
8 The City’s Chief Building Official may authorize a refund if all of the following occur:
1. The building permit expires and no extension has been granted for a development for which the fee has been collected; and
2. No substantial work has been done; and
3. The claim for the refund is filed within one year after the expiration date of the building permit or any extension of it.
§ 5.55.090 Accounting.
The City shall deposit, invest, account for, and expend the fees in accordance with this Chapter and Government Code section 66006.
§ 5.55.100 Appeals.
A developer may appeal to the City Manager any determination made under this Chapter. The developer must file an appeal within 15 days of the date of the determination. The appeal must be in writing, stating the reasons for the appeal. The City Manager shall set the matter for hearing within 45 days of the date of receipt by the City Clerk of notice of the appeal. In making a determination on the appeal, the City Manager shall follow the standards set forth in this Chapter. § 5.55.110 Supplementary Provisions.
It is the intent of the City Council that the fees required by this Chapter shall be supplementary to the fees, dedications or conditions imposed upon development under the provisions of the Subdivision Map Act, California Environmental Quality Act, and other state laws and City ordinances or policies which may authorize the imposition of fees, dedications or conditions.” SECTION 2. This updated Traffic Impact Fee Ordinance is exempt under California Environmental Quality Act (CEQA) Guidelines Section 15378(b)(5), as the changes are administrative in nature and will not result in direct or indirect physical changes in the environment and Section 15061(b)(3) as CEQA applies only to projects which have the potential for causing a significant effect on the environment.
SECTION 3. If any section, subsection, phrase, or clause of this article is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council would have passed this ordinance and each and every section, subsection, sentence, clause or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.
SECTION 4. This ordinance shall be effective 30 days after its adoption. 9 SECTION 5. Within fifteen days after the passage of this ordinance, the City Clerk shall cause a summary to be posted in the three places designated by resolution of the City Council.
The foregoing ordinance was introduced at a regular meeting of the City Council of the City of Pleasant Hill held on the 18th day of May, 2026.
[Signatures on the Following Page]
ADOPTED and ordered posted at a meeting of the City Council of the City of Pleasant Hill, held on the day of , 2026, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
__________________________________________
ZAC SHESS, MAYOR
ATTEST:
___________________________________
LYONE CONNER, CITY CLERK