DEVELOPMENT IMPACT FEE
In California, the Mitigation Fee Act (the “Act”) and applicable law authorize cities to collect Development Impact Fees (DIFs) to off-set impacts from a development project. The Act allows the city to impose DIFs for the purpose of defraying all or part of the costs of public facilities related to a new development. Without such mitigation, the increased demand for public facilities resulting from new development would cause the quality of a community’s public services to decline. DIFs must have a reasonable relationship to the impact of the development project upon public services/facilities. If the City charges more, then such a fee may be regarded as a special tax.
Under the Act, cities may impose DIF upon new development for “public facilities.” Such facilities are defined as public improvements, public services, and community amenities. This rather broad language, however, is restricted by Government Code § 65913.8 which states that a DIF “may not include an amount for the maintenance or operation of an improvement.” “Facilities” and “improvements” are also defined elsewhere in the Act to include, without limitation, “public buildings” and “[a]ny other capital project identified in the capital facilities plan.” It is important to restate that DIF cannot be used for employee salaries, fringe benefits ongoing supplies and services.
The development impact cost calculations within this Report are intended to identify the cost of accommodating continued development in such a fashion as to safeguard the existing Levels of Service (LOS) currently enjoyed by the City’s existing residents and businesses.
To be able to match the infrastructure to the agency’s increasing demands and to match the cost of that new infrastructure to the new development, a valid Development Impact Fee Calculation and Nexus Report are legally required.