January 17, 2023
Finance Department
DATE: January 17, 2023
TO: Mayor Martinez and Members of the City Council
FROM:
Nickie Mastay, Deputy City Manager
Mubeen Qader, Acting Director of Finance
Vrenesia Ward, Sr. Budget Analyst
Subject:
Compliance with Developer Fees Reporting Requirements
of Sections 66006 and 66001 of the Government Code
FINANCIAL IMPACT: Receipt of the annual year-end developer fee report has no financial impact on the City.
PREVIOUS COUNCIL
ACTION:
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STATEMENT OF THE
ISSUE:
Pursuant to Section 66006 of the Government Code,
every local agency is required to make public a report at a public meeting on collected developer fees within 180 days after the close of each fiscal year. Section 66001 of the Government Code requires every local agency to
spend or commit collected developer fees within five
years of collection. If fees remain unexpended or
uncommitted five years after collection, the local agency must make a finding that there remains a reasonable
relationship between the current need for the fees and
the purpose for which it was originally collected.
RECOMMENDED ACTION:
RECEIVE the annual year-end developer fee report as
required pursuant to Section 66006 of the Government
Code – Finance Department (Mubeen Qader 510-412-
2077/Vrenesia Ward 510-621-1211).
AGENDA
REPORT
January 17, 2023
DISCUSSION:
On January 1, 1989, AB1600 went into effect. AB1600 added Section 66000 et. seq. to the Government Code (Code) which added several requirements that local agencies must follow if they collect developer fees to pay for the cost of construction of public facilities or public services related to mitigating impacts caused by development projects.
Section 66006(b)(1) of the Code requires each local agency to make public a report on collected developer fees within 180 days after the close of each fiscal year. The City has completed its year-end annal report (Attachment 1). The report includes a brief description of the fee type in the fund, amount of the fee, beginning and ending balances of each fund, and any interest earned. Section 66006(b)(2) of the Code requires each local agency to review its year-end report at a public meeting. Receipt of the year-end report at this meeting is the required public meeting.
Each local agency is also required pursuant to Section 66001 of the Code to spend or commit collected developer fees within five years of collection. If fees remain unexpended or uncommitted five years after collection, the local agency must make a finding that there remains a reasonable relationship between the current need for the fees and the purpose for which it was originally collected to continue use of such funds for projects. All relevant fees are committed and/or are not approaching the five-year limit. Therefore, no resolution is required as part of this annual report.
Through the General Plan and fee studies, the City established the required nexus between development, improvements and services necessary to mitigate the effects of development, and approved fees to fund the mitigation measures. The funds for which fees are collected are as follows:
Fund Number Fund Description
2110 Park Land Dedication
2111 Traffic
2113 Fire
2114 Police
2115 Community Aquatic
2116 Parks Open Space
2117 Library
2118 Hilltop
2119 Storm Drainage
2120 Wastewater
The City uses Uniform Building Code (UBC) regulations to factor fee amounts for developer fees the City collects. Public facilities fees pay for major infrastructure improvements and public services reasonably related to new development. Examples include off-site roads, traffic signals, parks, recreation facilities, fire facilities and services, and police facilities and services. The City’s Master Fee Schedule, which
January 17, 2023
includes developer impact fees, is available at the City’s website as follows:
https://www.ci.richmond.ca.us/DocumentCenter/View/61206/Attachment-2---Master- Fee-Schedule-Update-May-2022-PDF
The adopted Master Fee Schedule (last updated May 2022) details fees for each of the following categories:
Residential single-family development per dwelling unit; Residential multi-family development, per dwelling unit; Commercial development per 1,000 square feet;
Office development per 1,000 square feet;
Industrial development per 1,000 square feet; and
Warehousing space per 1,000 square feet.
In each of the above stated categories, the following developer impact fees are specified:
Park/open space;
Sewer;
Traffic;
Community/aquatic centers;
Storm drainage;
Library;
Police facilities;
Fire facilities; and
Subregional Transportation Mitigation Fee Program.1
Government Code Requirements
There are generally eight requirements on fees that the local agency must adhere to pursuant to the Code.
1. Create separate capital facilities funds for each improvement funded with impact fees (Section 66006(a)).
2. Remit all interest income earned by the fees to the same fund. Interest income must be spent solely on the purpose for which the fees were collected (Section 66006(a)).
3. Prepare a public report concerning each impact fee fund within 180 days after the close of each fiscal year. Such report must include the: fund’s beginning and
1 The Subregional Transportation Mitigation Fee Program (STMP) applies specifically to the following land use types: single-family residential, multi-family residential, senior housing, hotel, retail, office, industrial, storage facility, church, and hospital categories.
January 17, 2023
ending balance for the fiscal year, amount of fees and interest deposited into the fund each year, and the description for each expenditure from the fund for that year, including identification of the improvement being funded (Section 66006(b)).
4. Review the report at a public meeting not less than 15 days after the report is released to the public (Section 66006(b)).
5. If fees remain unexpended or uncommitted five years after being collected, the local agency is to return the funds to the developer or make a finding that there remains a reasonable relationship between the current need for the fees and the purposes for which they were originally collected (Section 66001(d)).
6. Refund any fees with accrued interest to current owner of the lots, units or developed project for which continued need cannot be demonstrated (Section 66001(e)).
7. A local agency must not commingle fees with any other revenue, except for temporary investment purposes (Section 66006(a)).
8. A local agency may not spend impact fees for maintenance or operation of improvements funded with impact fees (Section 65913.8).
Annual Report Fiscal (FY) 2021-2022
The annual report (Attachment 1) shows revenues, expenditures and the beginning and ending fund balance for each fund. As shown in the annual report, the City is in full compliance with all the eight requirements listed above.
The Subregional Transportation Mitigation Fee Program (STMP) fund is administered by the West Contra Costa Transportation Advisory Committee (WCCTAC). The STMP fund is included in the annual report pursuant to Section 15.12.040(L) of the Richmond Municipal Code which provides that the STMP fee be reported on in the City’s annual report. STMP funds are only available for City projects pursuant to the 2006 Master Cooperative Agreement between the Contra Costa Transportation Authority and the Cities of El Cerrito, Hercules, Pinole, Richmond, San Pablo, County of Contra Costa and WCCTAC; STMP fees are not administered by the City.
DOCUMENTS ATTACHED:
Attachment 1 – Annual Report