HomeMy WebLinkAboutStaff Report 2308-1858CITY OF PALO ALTO
CITY COUNCIL
Special Meeting
Monday, February 05, 2024
Council Chambers & Hybrid
5:30 PM
Agenda Item
3.Review and Acceptance of Annual Report on Development Impact Fees for Fiscal Year
2023 and Adoption of a Resolution Making Statutory Findings for Certain Funds. CEQA
status - Not a Project.
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: February 5, 2024
Report #:2308-1858
TITLE
Review and Acceptance of Annual Report on Development Impact Fees for Fiscal Year 2023 and
Adoption of a Resolution Making Statutory Findings for Certain Funds. CEQA status - Not a
Project.
RECOMMENDATION
Staff recommends that the City Council review and accept the Annual Report on Development
Impact Fees for the period ending June 30, 2023 (Attachment A) and adopt the resolution making
statutory findings for certain development impact fee funds (Attachment B).
EXECUTIVE SUMMARY
This report contains information on the City of Palo Alto’s Development Impact Fees for the Fiscal
Year (FY) 2022-23. This report meets the annual reporting requirements in Government Code
section 66006.
BACKGROUND
Local agencies commonly impose fees on development projects to help offset the costs of
funding the public facilities impacted by those developments. These fees are known as
development impact fees. State law (Government Code section 66000 et seq. or “the Mitigation
Fee Act”) requires local agencies that impose development impact fees to prepare an annual
report providing specific information about those fees.
Within 180 days after the close of the fiscal year, the agency that collected the fees must make
available to the public the following information regarding each fund or account:
Brief description of the type of fee in the fund.
Amount of the fee.
Beginning and ending balance in the fund.
Amount of fees collected, and interest earned.
Identification of each public improvement on which fees were expended and the amount
of the expenditure on each improvement, including the total percentage of the cost of
the public improvement that was funded with fees.
Identification of an approximate date by which the construction of a public improvement
will commence, if the local agency determines that sufficient funds have been collected
to complete financing on an incomplete public improvement.
Description of each interfund transfer or loan made from the account or fund, including
the public improvement on which the loaned funds will be expended, and in the case of
an interfund loan, the date on which the loan will be repaid and the rate of interest that
the account or fund will receive on the loan.
Amount of any refunds made due to inability to expend fees within the required time
frame.
The Mitigation Fee Act further requires that the City Council review the annual report at its first
regularly scheduled public meeting not less than 15 days after the information is made available
to the public.
In addition to the annual reporting requirement, the Mitigation Fee Act requires, for the fifth
fiscal year following the first deposit into the fund and every five years thereafter, that the City
Council make findings with respect to any portion of the fee(s) remaining unexpended, whether
committed or uncommitted. The findings must:
Identify the purpose to which the fee is to be put;
Demonstrate a nexus between the fee and the purpose for which it was originally
charged; and
Identify all sources and amounts of funding anticipated to complete financing of
incomplete improvements
Designate the approximate dates on which the anticipated funding is expected to be
deposited into the fund.
If the agency no longer needs the funds for the purposes collected, or if the agency fails to make
required findings, or to perform certain administrative tasks prescribed, the agency may be
required to undertake a refunding process as set forth in the statute.
ANALYSIS
Annual Report (Government Code section 66006)
The annual report for FY 2023 is included as Attachment A. Staff published the report on the
City’s website on December 29, 2023. The report contains the statutorily required information
for the following fees:
Stanford Research Park/El Camino Real traffic impact fees (PAMC Ch. 16.45): Fee for new
nonresidential development in the Stanford Research Park/El Camino Real Service
Commercial zone, to fund capacity improvements at eight intersections. The City ceased
collecting effective fiscal year 2020.
San Antonio/West Bayshore Area traffic impact fees (PAMC Ch. 16.46): Fee for new
nonresidential development in the San Antonio/West Bayshore area to fund capacity
improvements at four intersections. The City ceased collecting effective fiscal year 2020.
Housing impact fees imposed on commercial developments (PAMC Ch. 16.65): Fee on
commercial and industrial development to contribute to offset the demand that new jobs
create for low income and moderate-income in the City.
General Government facilities: (PAMH Ch. 16.58) – Fee on residential and non-residential
development to fund facilities associated with municipal administration.
Parks, Community Centers, and Libraries impact fees (PAMC Ch. 16.58): Fee on new
residential and non-residential development to provide community facility funds for
parks, community centers, libraries, public safety, and general government.
Residential (Rental) impact fees (PAMC Ch. 16.65) Fee on rental residential developments
(including mixed use with rental housing) to offset the demand that new market-rate
rental housing creates for low and moderate-income housing in the City.
Charleston-Arastradero Corridor pedestrian and bicyclist safety fees (PAMC Ch. 16.60):
Fee on new development and re-development within the Charleston-Arastradero
Corridor to provide for pedestrian and bicyclist improvements.
Citywide Transportation impact fees (PAMC Ch 16.59): Fee on development in all parts
of the City to fund transportation projects and programs to reduce congestion.
New Public Safety facilities (PAMH Ch. 16.58): Fee on residential and non-residential
development to fund police and fire facilities, including fire apparatus and vehicles.
University Avenue Parking In-Lieu Fund (PAMC Ch. 16.57): Fees collected from non-
residential development within the University Avenue Parking Assessment District, in lieu
of providing the required number of parking spaces.
Residential housing in-lieu fees (PAMC Ch. 16.65): Fee on residential developments in-lieu
of providing required below-market rate units to low- and moderate-income households.
And in the interest of transparency, the report includes also includes information for the
following funds, although the Mitigation Fee Act’s reporting requirements do not apply:
Residential housing in-lieu fees (PAMC Ch. 16.65): Fee on residential developments in-lieu
of providing required below-market rate units to low-and moderate-income households.
Public Art Fund (PAMC Ch. 16.61): Fees imposed on new commercial developments
(including mixed use projects), including new construction, remodels, additions and
reconstruction that (i) have a floor area of 10,000 sq. ft. or more, and (ii) have a value of
$200,000 or more, exclusive of costs for architecture, design, engineering, and required
studies; and all new residential projects of five or more units to fund art for private
developments.
Parkland Dedication (CA Government Code Section 66477-Quimby Act): Fees on parkland
dedication imposed on new residential and non-residential development.
Water and Wastewater Collection (California Government Code Section 66000): Capacity
fees charged to developers that are adding load to the water and sewer systems effective
July 1,2005.
Five-Year Findings (Government Code section 66001)
Five of the development impact fees imposed by City are due for the additional five-year findings
in FY2022-23. These proposed findings are contained in Attachment B.
The Stanford Research Park/ El Camino Fund has an unexpended balance of $1,220,842
that was collected prior to FY 2023.
The San Antonio/West Bayshore Fund has an unexpended balance of $407,697 that was
collected prior to FY 2023.
The Commercial Housing Impact Fee Fund has an unexpended balance of $2,228,048 that
was collected as of FY 2023.
The Citywide Transportation Fund has an unexpended balance of $1,622,961 that was
collected as of FY 2023.
The University Avenue Parking In-Lieu Fund has an unexpended balance of $15,664,946
that was collected in FY 2023 and prior.
FISCAL/RESOURCE IMPACT
There is no direct fiscal impact associated with the review and acceptance of the annual report
(Attachment A). The various fee funds are reviewed annually for any unallocated or unexpended
balances as part of the development of the City’s five-year capital improvement plan.
If the council does not adopt the proposed resolution (Attachment B) making the five-year
findings, then City may be required undertake the refund procedures described in Government
Code section 66001(e). The total potential refund across the five development impact fees at
issue is $21,144,494.
STAKEHOLDER ENGAGEMENT
This report has been prepared by the Accounting Division in Administrative Services and
reviewed by partner departments including the City Attorney’s Office and the Planning and
Development Services Department.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by the California Environmental Quality Act
(CEQA) in that the report and findings required by the Mitigation Fee Act is a government fiscal
activity which does not involve any commitment to any specific project which may result in a
potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4).
ATTACHMENTS
Attachment A: FY 2023 Development Impact Fee Report Use of Fee Summary
Attachment B: Resolution of the Council of the City of Palo Alto Accepting the
Development Impact Fee Report for the Period Ending June 30, 2023 and
Making Findings Regarding the Continuing Need for Development Impact
Fees Collected but Not Expended
APPROVED BY:
Kiely Nose, Assistant City Manager/Administrative Services Director
City of Palo Alto
Development Impact Fee Report
for Period Ending June 30, 2023
Stanford Research Park/El Camino Real
Transportation Impact Fee
San Antonio/West Bayshore Area
Transportation Impact Fee
Description of the Type of Fee Traffic impact fees imposed on new non‐residential
development in the Stanford Research Park/El Camino Real
CS zone to fund improvements at eight identified
intersections. (PAMC 16.45)
Traffic impact fees imposed on new non‐residential
development in the San Antonio/West Bayshore Areas to
fund capacity improvements at four identified intersections.
(PAMC 16.46)
$12.85 per square foot; City ceased collecting effective FY
2020
$2.65 per square foot; City ceased collecting effective FY
2020Amount of the Fee
Fund Balance July 1, 2022 1,147,182 407,407
FY 2023 Activity
Revenues
Interest Earnings
Unrealized Gain/(Loss) Investments
Total Revenues
24,157
49,503
73,660
8,625
(8,335)
290
Expenditures 0 0
Total Expenditures 0 0
Ending Balance June 30, 2023 1,220,842 407,697
Reserves 0 0
Total Reserves 0 0
Net Funds Available 1,220,842 407,697
City of Palo Alto
Development Impact Fee Report
for Period Ending June 30, 2023
Commercial Housing
Impact Fee General Government Facility Development Fee
Description of the Type of Fee Fees imposed on commercial and industrial development to
offset the demand that new jobs create for low and
moderate‐income housing in the City; fees collected support
various levels of affordable housing projects. (PAMC 16.65)
Fees imposed on residential and non‐residential
development to fund facilities associated with municipal
administration. (PAMC 16.58)
Amount of the Fee Hotel / Retail / Other Residential:
Non‐Residential:$24.97 per sq. ft.Single family $1,600 per unit
Multi‐family $1,279 per unit
(ADUs under 750 sq. ft. exempt);Office/R&D: $74.01 per sq. ft.
Non‐residential:
Commercial $892 per 1,000 sq. ft. or fraction thereof
Industrial $300 per 1,000 sq. ft. or fraction thereof
Office/Institutional $1,192 per 1,000 sq. ft. or fraction
thereof
Fund Balance July 1, 2022 27,113,503 111,930
FY 2023 Activity
Revenues
Fees Collected 0
73,411
(115,201)
(41,790)
11,592
2,504
(4,861)
9,235
Interest Earnings
Unrealized Gain/(Loss) Investments
Total Revenues
Expenditures
Salaries and Benefit
Liability Insurance
Total Expenditures
(36,872)
(1,230)
(38,102)
0
0
0
Ending Balance June 30, 2023 27,033,611 121,165
Reserves
Notes Receivable (see detail below)
Reappropriations
Total Reserves
(23,629,563)
(1,176,000)
(24,805,563)
0
0
0
Net Funds Available 2,228,048 121,165
Notes Receivable Detail:
$1,290,000 for 2811 Alma; $4,137,254 for 801 Alma;
$7,700,000 for Buena Vista Mobile Home Park; $10,502,309
Wilton Court
City of Palo Alto
Development Impact Fee Report
for Period Ending June 30, 2023
Community Facilities Community Facilities
Parks Development Fee Community Centers Development Fee
Description of the Type of Fee
Amount of the Fee
Fees imposed on new residential and non‐residential
development approved after Jan 28, 2002 for Parks. (PAMC
16.58)
Fees imposed on new residential and non‐residential
development approved after Jan 28, 2002 for Community
Centers. (PAMC 16.58)
Residential: Single family $62,039.67 per unit. (ADUs under
750 sq ft exempt)
Residential: Single family $4795.06 per unit.
(ADUs under 750 sq ft exempt); Multi‐Family $3,547.13 per
unit
Non‐residential: Commercial/Industrial $18,190 per net new
1,000 sq ft; Hotel/Motel $3,100 per 1,000 sq ft.Non‐residential: Commercial/industrial $1410 per 1,000 sq ft;
Hotel/Motel $240 per 1,000 sq ft.
Fund Balance July 1, 2022 3,810,535 739,193
FY 2023 Activity
Revenues
Fees Collected 439,967
63,760
7,825
34,559
16,041
(18,174)
32,426
Interest Earnings
Unrealized Gain/(Loss) Investments
Total Revenues 511,552
Expenditures
Operating Transfer to Capital Projects Fund
Total Expenditures
(2,650,333)
(2,650,333)
0
0
Ending Balance June 30, 2023 1,671,754 771,619
Reserves 0
Total Reserves 0 0
Net Funds Available 1,671,754 771,619
City of Palo Alto
Development Impact Fee Report
for Period Ending June 30, 2023
Community Facilities
Library Development Fee
Residential Housing
Impact Fee
Description of the Type of Fee Fees imposed on new residential and non‐residential
development approved after January 28, 2002 for Libraries.
(PAMC 16.58)
Fees imposed on all rental residential developments
(including mixed‐use with rental housing) to offset the
demand that the new market‐rate rental housing creates for
low‐income and moderate‐income housing in the City.
(PAMC 16.65)
Amount of the Fee Residential: Single family $2,857.80 per unit; Multi‐family Single and Multi‐Family: $24.52 per sq. ft. apartment
$2,113.37 per unit (ADUs under 750 sq ft exempt)(rentals)
Non‐residential: Commercial/industrial $840 per net new
1,000 sq ft. Hotel/Motel $140 per net new 1,000 sq ft.
Fund Balance July 1, 2022 931,093 1,057,616
FY 2023 Activity
Revenues
Fees Collected 20,398
12,949
(20,398)
12,948
0
22,402
(29,041)
(6,639)
Interest Earnings
Unrealized Gain/(Loss) Investments
Total Revenues
Expenditures 0
Total Expenditures 0 0
Ending Balance June 30, 2023 944,041 1,050,978
Reserves
Reserve for Reappropriations
Total Reserves
0
0
(600,000)
(600,000)
Net Funds Available 944,041 450,978
City of Palo Alto
Development Impact Fee Report
for Period Ending June 30, 2023
Charleston‐Arastradero Corridor
Pedestrian and Bicyclist Safety Impact Fee
Citywide Transportation
Impact Fee
Description of the Type of Fee Transportation impact fees imposed on new development in
all parts of the City to fund congestion reduction projects.
(PAMC 16.59)
Fees collected from new development and redevelopment
within the Charleston‐Arastradero Corridor to provide for
pedestrian and bicyclist safety improvements. (PAMC 16.60)
Amount of the Fee Residential: $1,599 per residential unit $9,266 each; per net new PM peak hour trip
Commercial: $0.46 per sq ft (ADUs exempt)
Fund Balance July 1, 2022 34,904 1,999,269
FY 2023 Activity
Revenues
Interest Earnings
Unrealized Gain/(Loss) Investments
Total Revenues
474
794
1,268
37,798
(19,106)
18,692
Expenditures
Operating Transfer to Capital Projects Fund
Total Expenditures
(35,000)
(35,000)
(395,000)
(395,000)
Ending Balance June 30, 2023 1,172 1,622,961
Reserves 0
Total Reserves 0 0
Net Funds Available 1,172 1,622,961
City of Palo Alto
Development Impact Fee Report
for Period Ending June 30, 2023
University Avenue Non‐Residential Development
Parking In‐Lieu FeePublic Safety Facility Development Fee
Description of the Type of Fee
Amount of the Fee
Fees imposed on residential and non‐residential
development to fund police and fire facilities (including fire
apparatus and vehicles) (PAMC 16.58)
Fees collected from non‐residential development within the
University Avenue Parking Assessment District area in lieu of
providing the required number of parking spaces. (PAMC
16.57)
$124,275.00 per spaceResidential: Single family $1,269 per unit; Multi‐family
$1,015 per unit
Nonresidential: Commercial $709 per 1,000 sq ft. or fraction
thereof; Industrial $237 per 1,000 sq. ft. or fraction thereof;
Office/Institutional $946 per 1,000 sq ft or fraction thereof.
Fund Balance July 1, 2022 87,770 6,019,034
FY 2023 Activity
Revenues
Fees Collected 9,194
1,965
(3,837)
7,323
10,066,275
226,347
(554,310)
9,738,312
Interest Earnings
Unrealized Gain/(Loss) Investments
Total Revenues
Expenditures
Operating Transfer to Capital Projects Fund
Total Expenditures
0
0
(92,400)
(92,400)
Ending Balance June 30, 2023 95,093 15,664,946
Reserves 0 0
Total Reserves 0 0
Net Funds Available 95,093 15,664,946
City of Palo Alto
Development Impact Fee Report
for Period Ending June 30, 2023
(INFORMATION ONLY)
Residential Housing In‐Lieu Fee
(INFORMATION ONLY)
Parkland Dedication Fee
Description of the Type of Fee This fee is not subject to AB1600 reporting requirements
and is included only for information purposes. Fees
collected from ownership residential developments of three
or more units(including mixed used with ownership in
housing) in‐lieu of providing the required below‐market rate
unit(s) to low and moderate income households. (PAMC
16.65)
This fee is not subject to AB1600 reporting requirements
and is included only for information purposes. Fees on
parkland dedication imposed on new residential and non‐
residential development.
Govt Code Sec. 66477 (Quimby Act)
Amount of the Fee Single‐family $91.92 per sq. ft. single‐family detached; $61.28
per sq. ft. single‐family attached. Multi‐family $61.29 per sq.
ft. condos.
Single Family: $75,076.89 per unit; Multi‐Family: $51,747.91
per unit. This applies only to residential projects that require
a subdivision or parcel map. Land dedication is required for
subdivisions resulting in more than 50 parcels. Parkland
Dedication Fee ‐Land: Single Family: 531 sq. ft. per unit;
Multi‐Family: 366 sq. ft. per unit. When parkland dedication
applies, park impact fees do not apply.
Fund Balance July 1, 2022 29,466,762 3,779,395
FY 2023 Activity
Revenues
Fees Collected 49,043
277,887
(118,885)
208,045
0
56,765
54,249
111,014
Interest Earnings
Unrealized Gain/(Loss) Investments
Total Revenues
Expenditures
Salaries and Benefits
Liability Insurance
(36,872)
(1,230)
Program & Project Consultants
Operating Transfer to Capital Projects Fund
Total Expenditures
(316,136)
(1,650,000)
(1,650,000)(354,238)
Ending Balance June 30, 2023 29,320,569 2,240,408
Reserves
Encumbrances (5,746)
(3,000,000)
(23,758,078)
(26,763,824)
Reappropriations
Notes Receivable (details below):
Total Reserves 0
Net Funds Available 2,556,745 2,240,408
Residential Housing In‐Lieu Fund, Detail for Notes Receivable:
$375,000 for 3053 Emerson; $3,504,850 for Tree House Apts.; $747,734 for Sheridan Apts.; $2,285,026 for 801 Alma;
$848,386 for Palo Alto Housing Project; $593,952 for 2811‐2825 Alma St.; $203,561 for Colorado Park Housing;
$149,968 for El Dorado Palace; $6,800,000 for Buena Vista Mobile Home Park; $8,249,601 for Wilton Ct.
City of Palo Alto
Development Impact Fee Report
for Period Ending June 30, 2023
(INFORMATION ONLY)
Public Art In‐Lieu Fee Water and Wastewater Collection Capacity Fee
Description of the Type of Fee This fee is not subject to AB1600 requirements and is
included in this report only for information purposes. Fees
imposed on new commercial developments (including mixed
use projects), including new construction, remodels,
additions and reconstruction that (i) have a floor area of
10,000 sq. ft. or more, and (ii) have a construction value of
$200,000, or more, exclusive of costs for architecture, design,
engineering, and required studies; and all new residential
projects of five or more units to fund public art for private
developments. (PAMC 16.61)
The water and wastewater collection system capacity fees
are used to buy into existing water distribution and
wastewater collection systems and to recover the
proportionate cost of system improvements required to
serve the new customers of increased loads of existing
customers. These are one‐time fees paid before the water or
wastewater services are upgraded or installed. Utility
capacity fees received are placed in a special fund and used
exclusively for water and sanitary sewer capital improvement
projects.
Amount of the Fee 1% of first $120.25 million construction valuation and 0.9% of
construction valuation for valuation in excess of $120.25
million
Water Capacity Fees: 5/8 in., 3/4 in E‐Meter. $3,750, 1 in. E‐
Meter $6,250, 1 1/2 in. E‐Meter $18,850, 2 in. E‐Meter
$31,250, 4 in. Compound Meter by est. $125/FU (min. 5,000
FU) , 6 in. Compound Meter by est. $125/FU (min. 7,000 FU)
Fire Service Capacity Fees: 2 in. $750, 4 in. $8,425, 6 in.
$18,250, 8 in. $30,950, 10in. $48,110
Sewer Capacity Charges: 4 in. connection with 5/8 in Water
Meter (WM) $5,250, 4 in connection. with 1‐in WM $10,500,
4 or 6 in. connection with 1‐1/2 in WM $31,668, 6 in.
connection with 2 in. WM $52,500, 6 in. and larger
connection with 4 in. or larger WM by est. at $210/FU
Fund Balance July 1, 2022 1,925,710
FY 2023 Activity
Revenues
Fees Collected
Interest Earnings
261,001
42,512
Unrealized Gain/(Loss) Investments
Operating Transfer from General Fund
Capacity Fees Collected ‐ Water
Total Revenues
(48,425)
184,000
131,275
131,275439,088
Expenditures
Salaries and benefits
Other Contract Services
Liability Insurance
Total Expenditures
(255,040)
(16,000)
(2,324)
(273,364)
Ending Balance June 30, 2023 2,091,434
Reserves
Other Commitments/Appropriations
Total Reserves
(40,000)
(40,000)
Net Funds Available 2,051,434
City of Palo Alto
FY 2023 Use of Fees Summary
% of Total
Fee Fund FY 2023 Expenditures (Actual)FY 2023 Interfund Transfers Project Cost Construction Start Date
Stanford Research Park/El Camino Real Traffic Impact Fee
None in FY 2023
None in FY 2023
None in FY 2023
None in FY 2023
None in FY 2023
N/A N/A
San Antonio/West Bayshore Traffic Impact Fee
Commercial Housing Impact Fee
36%
N/AExpended $38,000 directly in the
Commercial Housing Impact Fee
Fund, related to staffing costs and
internal costs to support housing
grant work for Permanent Local
Housing Allocation (PLHA)
N/A
Entitlement Funding and Local
Housing Trust Fund (LHRF).
General Government Facilities
None in FY 2023 None in FY 2023 N/A N/A
Community Facilities ‐ Parks Development Fee
Boulware Park (PE‐17005)$343,580 in Capital Project Fund
$237,280 in Capital Project Fund
$143,530 in Capital Project Fund
$1,930,000 to Capital Project Fund
$383,633 to Capital Project Fund
$336,700 to Capital Project Fund
36%
4%
Construction scheduled to
commence summer 2024.
Phase 1 construction began fall 2021.Rinconada Park (PE‐08001)
Park Restroom Installation (PG‐19000)36%FY 2024, with additional projects
beginning in FY 2026 and FY 2028
Community Facilities ‐ Community Centers Development Fee
Community Facilities ‐ Library Development Fee
Residential Housing Impact Fee
None in FY 2023 None in FY 2023
None in FY 2023
N/A
N/A
N/A
N/ANone in FY 2023
City of Palo Alto
FY 2023 Use of Fees Summary
% of Total
Project Cost
N/A
Fee Fund FY 2023 Expenditures (Actual)
None in FY 2023
FY 2023 Interfund Transfers
None in FY 2023
Construction Start Date
N/A
Charleston‐Arastradero Corridor Pedestrian and Bicyclist Safety
Charleston/Arastradero Corridor Project (PE‐13011)$35,000 in Capital Project Fund $35,000 to Capital Project Fund
$395,000 to Capital Projects Fund
1%Phases 1 and 2 began June 2018
Citywide Transportation
Traffic Signal and Intelligent Transportation (PL‐05030 )$232,810 in Capital Project Fund 42%Project start was circa FY 2005. Fee
funds used for ongoing upgrades to
the City's comprehensive traffic
management system, including traffic
signal equipment and on‐call traffic
design/engineering services.
Public Safety Facility Development Fee
None in FY 2023
None in FY 2023
None in FY 2023 N/A
95%
N/A
University Avenue Parking In‐Lieu Fee
New Downtown Parking Garage (PE‐15007)$92,000 to Capital Project Fund Project currently in planning and
design. Construction start date is
TBD.
Residential Housing In‐Lieu Fee Fund
Expended $38,000 directly in the
Residential Housing In‐Lieu Fee Fund,
related to staffing costs and internal
costs to support housing grant work
for PLHA and LHRF and Below Market
Rate (BMR) administration.
Parkland Dedication
None in FY 2023
None in FY 2023
None in FY 2023
None in FY 2023
None in FY 2023
None in FY 2023
N/A
N/A
N/A
N/A
N/A
N/A
Public Art Fund
Water and Wastewater Collection
*NOT YET APPROVED*
Resolution No. _____
Attachment B
Resolution of the Council of the City of Palo Alto Accepting the Development
Impact Fee Report for the Period Ending June 30, 2023 and Making Findings
Regarding the Continuing Need for Development Impact Fees Collected but
Not Expended
R E C I T A L S
A. Government Code Sections 66000 et seq., commonly known as the Mitigation Fee Act,
regulates the imposition, collections, expenditure, and reporting of development impact
fees; and
B. Government Code Section 66006 requires that certain information be made available to the
public regarding development impact fees on an annual basis; and
C. Government Code Section 66001 requires the City Council to make findings describing the
continuing need for impact fees every five years specifying the intended use of any
unexpended impact fees; and
D. The City of Palo Alto imposes various development impact fees, and has prepared the
Development Impact Fee Report for the Period Ending June 30, 2023, which contains the
information required by Government Code 66006 for these fees; and
E. The City of Palo Alto also imposes in-lieu fees and dedication fees in connection with
development projects and although the Mitigation Fee Act’s requirements do not apply to
these fees, the Development Impact Fee Report for the Period Ending June 30, 2023 includes
information regarding those fees in its annual report in the interest of transparency.
F. The Development Impact Fee Report for the Period Ending June 30, 2023 was published on
the City of Palo Alto website on December 29, 2023.
G. The City Council has read and considered the Development Impact Fee Report for the Period
Ending June 30, 2023.
The Council of the City of Palo Alto RESOLVES as follows:
Section 1.The City Council accepts the Development Impact Fee Report for the Period
Ending June 30, 2023 as required by Government Code 66006.
Section 2.Based on the Development Impact Fee Report for the Period Ending June 30, 2023,
and the Schedule of Improvements and Expenditures attached as Exhibit 1 to this resolution, the
City Council makes the following findings as required by Government Code Section 66001 with
regard to fees collected but not expended for the following development impact fees:
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0003_20240125_ca29
*NOT YET APPROVED*Attachment B
Stanford Research Park/El Camino Real Traffic Impact Fee
A. The purpose of this fee is to fund traffic-related improvements at eight designated
intersections within the Stanford Research Park/El Camino Real CS zone.
B. The fee is reasonably related to its purpose because the fee is imposed on new non-
residential development, which is expected to generate an average of eighty percent of
new commute period traffic at the designated intersections, and the amount of the fee is
based upon the estimated cost of the capacity improvements at the designated
intersections.
C. The sources and amounts of funding anticipated for incomplete improvements is set forth
in Exhibit 1 to this resolution.
D. The approximate dates on which the funding is expected to be deposited into the
appropriate account is set forth in Exhibit 1 to this resolution.
San Antonio/West Bayshore Area Traffic Impact Fee
A. The purpose of this fee is to fund the cost of capital expenditures needed to provide
operational improvements at certain intersections in the San Antonio/West Bayshore
Area.
B. This fee is reasonably related to its purpose because the fee is imposed on new
development in the San Antonio/West Bayshore Area, and the San Antonio/West
Bayshore Environmental Impact Report (EIR) showed that these improvements are
necessary to mitigate the demonstrated significant traffic impacts of such new
development.
C. The sources and amounts of funding anticipated for incomplete improvements/facilities
is set forth in Exhibit 1 to this resolution.
D. The approximate dates on which the funding is expected to be deposited into the
appropriate account is set forth in Exhibit 1 to this resolution.
Citywide Transportation Impact Fee
A. The purpose of this impact fee is to fund the cost of citywide transportation
enhancements, or public facilities and services that relieve citywide traffic congestion
caused by new development projects.
B. The fee is reasonably related to its purpose because the fee is imposed on development
projects that cause traffic congestion on a citywide basis, calculated based on the
additional traffic impacts attributable to the project, and fee funds are used only on
eligible citywide transportation enhancements.
C. The sources and amounts of funding anticipated for incomplete improvements/facilities
is set forth in Exhibit 1 to this resolution.
D. The approximate dates on which the funding is expected to be deposited into the
appropriate account is set forth in Exhibit 1 to this resolution.
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0003_20240125_ca29
*NOT YET APPROVED*Attachment B
University Avenue Parking In-Lieu
A. The purpose of this fee is to fund the cost of providing public parking facilities to serve
nonresidential development within the University Avenue parking assessment district
area that does not provide adequate new off-street parking spaces to satisfy the
requirements of the zoning code.
B. The fee is reasonably related to its purpose because the fees will be used for the
construction of additional public parking spaces within the University Avenue parking
assessment district area.
C. The sources and amounts of funding anticipated for incomplete improvements/facilities
is set forth in Exhibit 1 to this resolution.
D. The approximate dates on which the funding is expected to be deposited into the
appropriate account is set forth in Exhibit 1 to this resolution.
In addition to the estimated expenditures stated in Exhibit 1, the City has also allocated $1.3
million of the unexpended fund balance for resolution of pending litigation (Hamilton and High,
LLC, et al. v. City of Palo Alto, et al. Case No. 20CV366967, Superior Court of California, Santa
Clara County).
Commercial Housing Impact Fee Fund
A. The purpose of this fee is to offset the demand that new jobs create for low and
moderate-income housing in the city as a result of commercial and industrial
development by supporting below-market rate housing at various levels of affordability.
B. The fee is reasonably related to its purpose because the fees are expended exclusively to
provide housing affordable to very low income, lower income, and moderate income
households in the city, consistent with the goals and policies contained in the City's
housing element and for administration and compliance monitoring of the City’s
affordable housing program.
C. The sources and amounts of funding anticipated for incomplete improvements/facilities
is set forth in Exhibit 1 to this resolution.
D. The approximate dates on which the funding is expected to be deposited into the
appropriate account is set forth in Exhibit 1 to this resolution.
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0003_20240125_ca29
*NOT YET APPROVED*Attachment B
SECTION 3. The Council finds that adoption of this resolution is not a project as defined by the
California Environmental Quality Act (CEQA) in that it is a fiscal activity which does not involve
any commitment to any specific project which may result in a potentially significant physical
impact on the environment. CEQA Guidelines section 15378(b)(4).
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
__________________________
City Clerk
_____________________________
Mayor
APPROVED AS TO FORM:APPROVED:
__________________________
Chief Assistant City Attorney
_____________________________
City Manager
_____________________________
Director of Administrative Services
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Exhibit 1 Schedule of Improvments and Expenditures
Amount and Approximate Dates of Funding to be Deposited
FY 2023 and Prior FY 2024 FY 2025 FY 2026 FY 2027Improvement/Public Facility Funding Source FY 2028 Additional Funding Sources; Notes
Traffic Signal and Intelligent Transporation Refer to City of Palo Alto FY 2024
Systems (PL-05053)San Antonio/W. Bayshore Impact Fee Fund $
$
$
$
900,000
900,000
Adopted Capital Budget, pp. 330-331
San Antonio/Charleston intersection
improvements (PE-86070)
Refer to City of Palo Alto FY 2024
Adopted Capital Budget, pp. 290-291San Antonio/W. Bayshore Impact Fee Fund
San Antonio/W. Bayshore Impact Fee Fund
$
$
400,000
Refer to City of Palo Alto FY 2024
Adopted Capital Budget, pp. 290-291San Antonio Overpass (PE-86070)900,000
Refer to City of Palo Alto FY 2024
Adopted Capital Budget, pp. 304-305Churchill Ave Enhanced Bikeway (PL-14000) Citywide Traffic Impact Fee Fund 1,000,000
Traffic Signal and Intelligent Transportation
Systems (PL-05030)
Refer to City of Palo Alto FY 2024
395,000 Adopted Capital Budget, pp. 330-331
Refer to City of Palo Alto FY 2024
Citywide Traffic Impact Fee Fund $395,000 395,000 $395,000 $395,000 $
Adopted Capital Budget, pp. 158-159.
In December 2023, the City Council
directed staff to resume work on the
Downtown Parking Garage project in
conjunction with the development of
affordable housing on City-owned
parking lots. Project budget, funding
amounts and dates will be updated in
the FY 2025-2029 Capital Improvement
Downtown Parking Garage (PE-15007)
2811 Alma Street
Downtown Parking In-Lieu Fee Fund
Commercial Housing Impact Fee
Commercial Housing Impact Fee
$
$
$
1,300,000
1,290,000
4,137,254
$5,448,600 Program.
Affordable housing units managed by
Alta Housing
Affordable housing units managed by
Eden Housing Management801 Alma Street
Affordable housing units managed by
Buena Vista Mobile Home Park
Wilton Court
Commercial Housing Impact Fee
Commercial Housing Impact Fee
$
$
7,700,000 Santa Clara County Housing Authority
Affordable housing units managed by
Alta Housing10,502,309
The Planning and Development
Services Department will be releasing
a notice of funding availability (NOFA)
in February 2024 and remaining
funding should be allocated in FY 2024;
a minimum balance will be maintained
to account for unrealized losses as
these funds are invested until the time
of disbursement.
Project constructed in partnership
Community Development Block Grant-
additional eligible affordable housing
units/affordable housing program
expenditures Commercial Housing Impact Fee $2,000,000
Page Mill Road/Hanover Street Intersection Stanford Research Park/El Camino Real Traffic
Improvements Impact Fee $2,200,000 with County of Santa ClaraProject to be constructed in
partnership with County of Santa Clara
with tenative construction start in FYPage Mill Road/El Camino Real Intersection Stanford Research Park/El Camino Real Traffic
Improvements Impact Fee $1,000,000 2026
Funding amounts and dates will be
Traffic Signal and Intelligent Transportation Stanford Research Park/El Camino Real Traffic
Systems (PL-05030) Impact Fee
updated in the FY 2025-2029 Capital
$50,000 Improvement Program.$50,000 $50,000 $50,000