CITY COUNCIL REGULAR MEETING AGENDA PACKET

Page 5 of 9 Recommended Fees for Adoption As described above, a significant consideration in the City Council’s discussion of the fee updates, was the level at which those fees should be set, whether at or below the maximum supportable by the Nexus Studies. The City Council considered various alternatives and options in evaluating the appropriate fee levels, with an emphasis on balancing the need to help offset costs of new infrastructure and facilities, with considering overall development feasibility and comparability to peer jurisdictions. The nexus analysis generally finds that new growth and the cost of infrastructure and facilities to serve it could justify significantly higher impact fees. However, in setting the level of the fees, there are tradeoffs to be considered; in particular, setting fees at a very high level could have the negative consequence of discouraging, or making infeasible, new development or investment in the city, which could have longer-term fiscal implications. After discussion, at the November 17 study session, the City Council provided direction to establish fees in consideration of the various factors above. The recommended initial fee amounts to be incorporated into the Master Fee Schedule are summarized below: Water and Wastewater Connection Fees The City Council recommended the water and wastewater fees be set at the maximum levels justified by the Nexus Study, as reflected in Tables 3 and 4 above and in Tables 8, 9, and 10 of the Raftelis Nexus Study (Attachment 1, Exhibit B,). Capital Facilities Fee, Transportation Development Fee, Commercial Linkage Fee and Affordable Housing In-Lieu Fee The recommended fee levels for residential and non-residential land uses are summarized in Tables 5 and 6 below, organized by land use. Table 5 includes the maximum allowable, versus the actual recommended fees for all residential land use categories. Not shown in the table, but reflected in the proposed Master Fee Schedule Amendments in Exhibit C to Attachment 1, are recommended fees for Accessory Dwelling Units. For ADUs, the proposed fee schedule follows the structure of the existing fee schedule, which does not charge impact fees for ADUs up to 750 square feet (as is required by State law), charges a reduced rate of 25 percent of the typical rate per square foot for smaller ADUs between 750 and 1,000 square feet, and 50 percent of the typical rate for ADUs larger than 1,000 square feet. This structure supports the production of ADUs more generally, by reducing fees relative to those of primary units, and providing a further discount to incentivize smaller and more affordable ADUs. This approach also meets the requirements of State law, which does not permit fees for ADUs to exceed 50 percent of those typically charged for the primary dwelling unit, and requires fees for ADUs to be charged such that they are proportionate to the size of the ADU, relative to the primary unit. Page 53 of 893