ANNUAL REPORT
Receipt and Use of Development Impact Fees, In-Lieu Fees, Linkage Fees and Wastewater Capacity Charges
Introduction
The following report provides a summary of the receipt and use of development impact fees, in-lieu fees, linkage fees and wastewater capacity charges for the fiscal year ending June 30, 2025. The City is required each year within 180 days of the end of the fiscal year to provide this information to the public and present this report to the City Council. Four main types of fees are included in the annual report. Although not all of the fees included are subject to the same procedural requirements, the City provides the same receipt and use information for each fee in the report. The annual report complies with requirements of the Mitigation Fee Act and the Quimby Act.
Section I: Development Impact Fees
Wastewater Treatment Plant Phase II Expansion Fee
In April 2005, construction began to increase capacity of the wastewater treatment plant, and construction was substantially completed in the spring of 2009. Funds from the Sewer Enterprise Fund were used to pay for the expansion project. Under a Joint Powers Agreement (JPA), the treatment plant is partially owned by the Estero Municipal Improvement District (Foster City). Based on San Mateo’s share of the treatment plant and based on the total projected cost attributable to development based on the 2005 expansion study, the amount that is to be recovered through development fees is $3.52 million in total.
The Wastewater Treatment Plant Phase II Expansion Fee is imposed on all developments that result in a change of use and that add more sewage to the City’s sewage treatment system. The fee took effect on July 1, 2006 and will continue to be charged until $3.52 million is collected. Funds collected are transferred annually to the fund balance of the Sewer Enterprise Fund as a repayment to the Fund for the expansion cost.
The following table shows collections in 2024-25, as well as collections to date.
Wastewater Treatment Plant Expansion Impact Fee 2024-25 Beginning Balance $ -
Developer Fees $ 8,122
Interest Income / (Expense) $ -
Transfer to Sewer Enterprise Fund $ (8,122)
Ending Balance $ -
Collections to Date
Total Developer Fees Collected as of 2024-25 $3,191,823 Total Developer Fees Needed $3,520,000
Percent (%) Collected 91%
Transportation Improvement Fee
San Mateo Municipal Code Chapter 27.13 establishes a transportation improvement fee for new development to fund City-wide traffic improvements to mitigate the cumulative impacts of new development and to accommodate future development. The fee is charged as shown in the 2024-25 Comprehensive Fee Schedule:
Residential
• Single-family Per dwelling unit $7,406.95
• Multi-family Per dwelling unit $3,740.77
Commercial and Industrial
• Retail Per 1,000 sq. ft. $29,911.98
• Office Per 1,000 sq. ft. $9,023.33
• Industrial Per 1,000 sq. ft. $4,949.80
• Hotel Per Room $4,710.60
• Institution Per 1,000 sq. ft. $3,848.53
The following table shows activities in 2024-25.
Transportation Improvement Fee 2024-25
Beginning Balance $ 56,421.00
Developer Fees $ 9,575.00
Interest Income / (Expense) $ -
Expenditures $ (1,819,495.86)
Expenditure Reclassification $ -
Ending Balance $ (1,753,499.86)
2024-25
Transportation Improvement Fee Total Expended Impact Fees Used % of Total Project Expenditures:
Poplar Avenue / Humboldt Street
Signal Modify - Left Turn 460049 $ 17,558 $ 16,874 96% Citywide Traffic Calming 466600 $ 154,861 $ 154,438 100% El Camino At Highway 92 Landscape
Improv 460037 $ 1,001,124 $ 321,336 32% Railroad Ave Wall Enhancement
46r008 $ 1,307,581 $ 1,307,128 100% Traffic Model Update 466601 $ 19,720 $ 19,720 100% Total $ 2,500,844 $ 1,819,496 73%
The total ending balance as of the end of fiscal year was $(1,753,500). The continued collection of the Transportation Improvement Fee will be utilized to restore the fund balance and fund the project(s) listed in Exhibit A.
Park Impact Fee
Under San Mateo Municipal Code Chapter 13.05, a park impact fee is imposed on the construction of new residential units to accommodate the increased demand on park and recreation facilities. The fee is charged as shown in the 2024-25 Comprehensive Fee Schedule:
Per residential unit type:
Single family $25,914 per unit
Multi-family 2-4 units $25,474 per unit
Multi-family 5+ units $18,510 per unit
The following table shows activities in 2024-25.
Park Impact Fee 2024-25
Beginning Balance $ 3,597,515
Prior Year Adjustments $ 132,469
Developer Fees $ -
Interest Income / (Expense) $ 167,047
Expenditures $ -
Ending Balance $ 3,897,031
The total ending balance as of the end of fiscal year was $3,897,031. The fund balance and continued collection of the Park Impact Fee will be utilized to fund the project(s) listed in Exhibit A.
Section II: In-Lieu Fees
Parking In-Lieu Fee
San Mateo Municipal Code Chapter 11.62 establishes a parking in-lieu fee for new development to fund additional parking in downtown San Mateo. Applicants for planning approval within the Central Parking Improvement District may pay a fee in lieu of providing required parking on the property site in accordance with Title 27 of the Municipal Code. As shown in the 2024-25 Comprehensive Fee Schedule, the fee is $62,227.81 per space.
The following table shows activities in 2024-25.
Parking In-Lieu Fee 2024-25
Beginning Balance 3,809,910
Prior Year Adjustments -
Developer Fees -
Interest Income / (Expense) 1,156,562
Expenditures (652,046)
Ending Balance $ 4,314,426
2024-25
Parking In-Lieu Fee Total Expended In-Lieu Fees Used % of Total Project Expenditures:
Parking Facility Structural Repairs 46f025 $ 652,046 $ 652,046 100% Total Expenditures: $ 652,046 $ 652,046 100%
The total ending balance as of the end of fiscal year was $4,314,426. The fund balance and continued collection of the Parking In-Lieu Fee will be utilized to fund the project(s) listed in Exhibit A.
Art in Public Places Fee
San Mateo Municipal Code Chapter 23.60 establishes a fee on developers in-lieu of placing approved artwork as part of a new development to balance the community’s physical growth and revitalization with its cultural and artistic resources. The fee is applicable to commercial and multi-family residential projects exceeding three million dollars in building permit valuation, which is computed using the latest building valuation data as set forth by the International Conference of Building Officials (ICBO) unless, in the opinion of the Building Official, a different valuation measure should be used. As shown in the 2024-25 Comprehensive Fee Schedule, the fee is charged 1.19 percent of total building valuation.
The following table shows activities in 2024-25.
Art in Public Places Fee 2024-25
Beginning Balance 761,983
Prior Year Adjustments -
Developer Fees -
Interest Income / (Expense) 266,650
Expenditures (5,184)
Ending Balance $ 1,023,449
2024-25
Art in Public Places Fee Total Expended In-Lieu Fees Used % of Total Project Expenditures:
310330 Art in Public Places $ 5,184 $ 5,184 100% Total Expenditures: $ 5,184 $ 5,184 100%
The total ending balance as of the end of fiscal year was $1,023,449. The fund balance and continued collection of the Art in Public Places Fee will be utilized to fund the project(s) listed in Exhibit A.
Tree Replacement Fee
San Mateo Municipal Code Chapter 27.71 establishes a fee on all development requiring approval of a planning application, except for Single-Family Dwelling Design Review (SFDDR) applications, for the removal of existing trees on development sites. The fee is imposed if the trees to be removed are not made up with replacement trees on-site.
Under San Mateo Municipal Code Chapter 13.35, the City may also impose a fee on any person or entity for removing trees that encroach on City streets. The fee is imposed if the tree(s) to be
removed are not replanted with a like tree satisfying City requirements. The fee is to be used by the City for plantings on public land. As shown in the 2024-25 Comprehensive Fee Schedule, effective January 1, 2025, the fee charged is as follows:
Tree Replacement Cost:
24 inch Box Tree $805 per tree
15 gallon Tree $503 per tree
36 inch Box Tree $1,593 per tree
8 inch Box Tree $3,217 per tree
The following table shows activities in 2024-25.
Tree Replacement Fee 2024-25
Beginning Balance 1,132,343
Prior Year Adjustments -
Developer Fees 297,649
Interest Income / (Expense) 410,166
Expenditures (97,366)
Ending Balance $ 1,742,792
2024-25
Tree Replacement Fee Total Expended In-Lieu Fees Used % of Total Project Expenditures:
610008 Tree Planting - Parks Division $ 99,766 $ 97,366 98% Total Expenditures: $ 99,766 $ 97,366 98%
The total ending balance as of the end of fiscal year was $1,742,792. The fund balance and continued collection of the Tree Replacement Fee will be utilized to fund the project(s) listed in Exhibit A.
Below Market Rate Housing Fee
The Below Market Rate Housing Fee, which became effective January 1, 2010 pursuant to City Council Resolution No. 121 (2008), is collected from developers in lieu of constructing affordable housing units onsite as required under the City’s Below Market Rate program. The fee applies to developments that contain fewer than 11 residential units, and to fractional unit requirements of less than .5 for developments that contain 11 or more units. The fee is charged as shown in the 2024-25 Comprehensive Fee Schedule:
A. Fractional required units for projects consisting of 11 or more residential units
1. Rental 0.1 housing unit $33,452
0.2 housing unit $66,903
0.3 housing unit $100,355
0.4 housing unit $133,807
2. Owner 0.1 housing unit $30,701
0.2 housing unit $61,401
0.3 housing unit $92,102
0.4 housing unit $122,802
B. Requirement for projects less than 11 units
1. Rental 5 unit project $167,259
6 unit project $200,710
7 unit project $234,162
8 unit project $267,614
9 unit project $301,065
10 unit project $334,517
2. Owner 5 unit project $153,503
6 unit project $184,203
7 unit project $214,904
8 unit project $245,604
9 unit project $276,305
10 unit project $307,005
The following table shows activities in 2024-25.
Below Market Rate Housing Fee 2024-25
Beginning Balance $ 254,281
Developer Fees $ -
Interest Income / (Expense) $ -
Expenditures $ -
Ending Balance $ 254,281
The total ending balance as of the end of the fiscal year was $254,281. A public improvement project is not currently specified in the five-year plan. The Below Market Rate Housing Fee will continue to be collected to build its fund balance, and potential housing-related projects will be identified as the fund balance reaches an appropriate level.
Park In-Lieu Fee
San Mateo Municipal Code Chapter 26.64 establishes a park in-lieu fee on subdivisions in residential planning application projects. Pursuant to the authority of the Subdivision Map Act, and in conformity with the parks and recreation element of the General Plan, the fee is imposed as a condition of final approval of a subdivision or parcel map for park and recreation facilities to serve the subdivision. The fee is charged as shown in the 2024-25 Comprehensive Fee Schedule:
Per residential unit type:
Single family $25,914 per unit
Multi-family 2-4 units $25,474 per unit
Multi-family 5+ units $18,510 per unit
The following table shows activities in 2024-25.
Park In-Lieu Fee 2024-25
Beginning Balance $ 16,071,491
Prior Year Adjustments $ (359,099)
Developer Fees $ 110,364
Interest Income / (Expense) $ 634,893
Expenditures $ (1,646,254)
Ending Balance $ 14,811,395
2024-25
Park In-Lieu Fee Total Expended P&R In-Lieu Used % of Total Project Expenditures:
Central Park 610027 $ 1,409,721 $ 1,409,721 100% Citywide Park Play Area Upgrade - Historic 610017 $ 202,295 $ 63,928 32% Golf Course - Well Drilling 618278 $ 840 $ 840 100% Joinville Pool Assessment & Improvements 46f037 $ 54,189 $ 54,189 100% King Pool Assessment & Improvements 46f036 $ 33,153 $ 33,153 100% Laurelwood/Sugarloaf Open Space 610012 $ 57,685 $ 57,685 100% Parks Irrigation Controller Upgrade 610060 $ 6,448 $ 6,448 100% Skate Plaza Updates 610038 $ 17,820 $ 17,820 100% Sports Fields Conversion: Synthetic Turf 610023 $ 2,471 $ 2,471 100% Total Expenditures: $ 1,784,621 $ 1,646,254 92%
The total ending balance as of the end of the fiscal year was $14,811,395. The fund balance and continued collection of the Park In-Lieu Fee will be utilized to fund the project(s) listed in Exhibit A.
Section III: Linkage Fees
Child Care Development Fee
The Child Care Development Fee, which became effective on July 1, 2004, pursuant to City Council Resolution No. 34 (2004), is collected to mitigate the impact of new development on the need for childcare facilities. The fee is charged as shown in the 2024-25 Comprehensive Fee Schedule:
Per Dwelling unit:
Single-family $4,677.29
Multi-family $3,373.46
Per Sq. Ft.:
Retail
$0.39
Office $0.67
Industrial $0.22
Hotel $0.14
The following table shows activities in 2024-25.
Child Care Development Fee 2024-25
Beginning Balance 1,862,221
Prior Year Adjustments -
Developer Fees -
Interest Income / (Expense) 578,301
Expenditures (1,018,865)
Ending Balance $ 1,421,657
2024-25
Child Care Development Fee Total Expended In-Lieu Fees Used % of Total Project Expenditures:
310600 Child Care Facilities $ 1,018,865 1,018,865 100% Total Expenditures: $ 1,018,865 $ 1,018,865 100%
The total ending balance as of the end of the fiscal year was $1,421,657. The fund balance and continued collection of the Child Care Development Fee will be utilized to fund the project(s) listed in Exhibit A.
Affordable Housing Commercial Linkage Fee
San Mateo Municipal Code Chapter 23.61 establishes an Affordable Housing Commercial Linkage Fee to mitigate the impact that new commercial and office developments have on the demand for affordable housing in the City. The fee is imposed on commercial and office projects over 5,000 sq. ft. and is charged as shown in the 2024-25 Comprehensive Fee Schedule:
Hotels Per square foot $13.11
Retail, restaurants, and services Per square foot $ 6.55 Office, research & development uses, and medical offices Per square foot $32.76
The fee does not apply to public use developments such as hospitals, nonprofit and government facilities, as well as churches, schools, and childcare centers. Developers who enter into written agreements to pay area standard wages to all construction workers on the project are entitled to a 25 percent reduction of the fee. Additionally, developers may provide construction of affordable housing units in lieu of the fee payment. The following table shows activities in 2024-25.
Affordable Housing Commercial Linkage Fee 2024-25
Beginning Balance 3,405,094
Developer Fees -
Interest Income / (Expense) 152,179
Misc item (5,339)
Expenditures -
Ending Balance $ 3,551,934
The total ending balance as of the end of fiscal year was $3,551,934. A public improvement project is not currently specified in the five-year plan. The Affordable Housing Commercial Linkage Fee will continue to be collected to build its fund balance, and potential housing-related projects will be
identified as the fund balance reaches an appropriate level.
Section IV: Wastewater Capacity Charges
Wastewater Capacity Charge
San Mateo Municipal Code Chapter 7.38.065 establishes a capacity charge for sewer improvements. The fee is imposed on all new developments to recover a proportionate share of costs for existing and future wastewater system facilities and assets from new or expanded connections to the City’s wastewater systems. The applicable wastewater capacity charge is determined by use, wastewater flow, and wastewater strength loadings, and became effective on January 15, 2022. Under state law, this capacity charge has similar reporting requirements to impact fees. Exhibit B to this report provides the charges as shown in the 2024-25 Comprehensive Fee Schedule.
The following table shows activities in 2024-25.
Wastewater Capacity Charge 2024-25
Beginning Balance $ -
Developer Fees $ 136,104
Interest Income / (Expense) $ 304,136
Expenditures $ (440,240)
Ending Balance $ -
2024-25
South Trunk Area Sewer Improvement Fee Total Expended Impact Fees Used % of Total Project Expenditures:
46S003 Basins 2&3 Collection System Improvements $ 11,145,041 $ 440,240 4.0% Total Expenditures: $ 11,145,041 $ 440,240 4.0%
South Trunk Area Sewer Improvement Fees were replaced by the Wastewater Capacity Charges effective January 15, 2022. However, some development projects entitled prior to this date included a condition of approval (COA) requiring payment of the South Trunk Area Sewer Improvement Fees.
In fiscal year 2024-25, the City received payments from these projects, and the funds were deposited to the wastewater capacity charge fund balance. These funds have been spent on capital improvement projects to increase the City’s wastewater collection and treatment capacity. There is no interfund transfer or loan made from these charges collected.
The fund balance and continued collection of the Wastewater Capacity Charges will be utilized to fund the project(s) listed in Exhibit A.
Exhibit A
City of San Mateo
Public Improvement Project Expenditures Related to the Mitigation Fee Act and Quimby Act Five-Year Plan
* Specific details on each of these projects can be found in the five-year capital improvement program section in the City’s 2024-25 Budget, which was adopted by City Council on June 17, 2024.