City Council
259 N. Wilma Avenue
Ripon, CA 95366
MEMO
To: Honorable City Council
From: Lisa Roos, City Clerk & Finance Director
Date: 12/09/2025
Subject: Annual AB1600 Report - PFFP Capital Funds
RECOMMENDED ACTION:
Staff recommends the Ripon City Council adopt the AB1600 Development Impact Fee Annual Report for fiscal year 2024-25 that has been prepared in accordance with the provisions of the California Government Code.
BACKGROUND:
The City utilizes a number of funds to track revenue and expenses used to conduct the business of the various City departments. These funds are classified by three categories - “Operating Funds”, “Capital Funds”, and “Restricted Funds”. Attached is a figure showing each of these fund categories along with the breakdown of the different funds within each of these categories.
The Capital Fund category includes three sub-categories, as described below:
General Capital Funds – At the City Council’s discretion, funds are transferred from the General Fund to be used for capital projects/purchases or to reserves. Enterprise Capital Funds – By resolution, revenue from the designated operating fund (e.g., Water Operating Fund) are transferred to the designated enterprise capital fund (e.g., Water) for equipment and infrastructure replacement. PFFP Capital Funds – The various Public Facilities Financing Plan (PFFP) Capital Funds track revenue and expenses for the different designated fund categories. The revenue is from development and restricted to fund infrastructure needed to support growth.
By law, we are required to report upon our PFFP Capital Funds, which are also referred to as AB1600 Development Impact Fees. There is both an annual requirement and a five-year findings reporting requirement. The attached AB1600 Development Impact Fees Annual Report (“Report”) has been prepared in accordance with the requirements of California Government Code Section 66000. Since the five-year findings were reported in the fiscal year ending June 30, 2024 report, they are not required this year.
DISCUSSION/ANALYSIS:
The Fund Balances Summary as of June 30, 2025 has been attached for your reference along with the AB1600 Development Impact Fees Annual Report for the Fiscal Year Ending June 30, 2025.
There are certain PFFP capital funds with negative balances. This is mostly related to advancing construction of the City Hall and Library buildings to the size necessary to accommodate the buildout of the General Plan before new growth has fully funded these projects. These negative balances continue to be tracked and these accounts are charged interest that is, in turn, applied to the capital accounts with positive balances.
Due to the current unique time in the economy, the City’s investment income is higher than usual, which means that the funds with negative balances are charged a higher interest. We do not expect this to continue, but this may extend the time estimated to eliminate these deficits.
In 2017, Goodwin Consulting evaluated the funds with negative balances (City Hall, Police, Library and Refuse) to determine if an adjustment was necessary to the AB1600 fee to ensure the City is collecting sufficient revenue from future development. No increases were proposed at that time. Goodwin’s analysis noted that based upon a residential growth rate of 1.5%, which is a long-term average, the City Hall and Police Funds deficits would be eliminated in 2047, Library Fund in 2032 and Refuse Fund in the next five years. The City Plans to do a PFFP program update in 2026 as required by law. We will re-evaluate fees of negative funds to ensure sufficient fees are collected through future development.
FISCAL IMPACT:
None.
Attachments:
1. Budget Category Reporting Summary
2. Fund Balances 2025.06.30
3. 24-25 PFFP Report