HomeMy WebLinkAboutStaff Report 2412-3919CITY OF PALO ALTO
CITY COUNCIL
Monday, December 08, 2025
Council Chambers & Hybrid
5:30 PM
Agenda Item
11.Acceptance of Annual Report on Development Impact Fees for Fiscal Year 2025 and
Adoption of a Resolution Making Statutory Findings for all Development Impact and In-
Lieu Fee Funds; CEQA status - Not a Project.
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: December 8, 2025
Report #:2412-3919
TITLE
Acceptance of Annual Report on Development Impact Fees for Fiscal Year 2025 and Adoption of
a Resolution Making Statutory Findings for all Development Impact and In-Lieu Fee Funds;
CEQA status - Not a Project.
RECOMMENDATION
Staff recommend that the City Council review and accept the Annual Report on Development
Impact Fees for the period ending June 30, 2025, and adopt the resolution making statutory
findings for all development impact and in-lieu fee funds (Attachment B).
EXECUTIVE SUMMARY
This report contains the annual report on the City of Palo Alto’s Development Impact Fees for
the Fiscal Year (FY) 2025. This report meets the annual reporting requirements in Government
Code sections 660066 and 66013. This report also contains a resolution making the findings
required by Government Code section 66001.
BACKGROUND
Development Impact Fees
Local agencies commonly impose 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 those development impact fees to prepare an annual report
providing specific information about those fees. The City assesses 12 development impact 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, if applicable.
Identification of each public improvement on which (Attachment):
o Fees were expended
o Amount of expenditure on each improvement
o 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 requires that the City Council review the annual report at its first
regularly scheduled public meeting no less than 15 days after the information is made available
to the public. Staff published the report on the City’s website on November 14, 20251.
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 for 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 for which they were collected, or if it
fails to make required findings or perform certain prescribed administrative tasks, it may be
required to initiate a refunding process as outlined in the statute. The City has chosen to make
these findings on an annual basis.
1 https://www.paloalto.gov/Departments/Administrative-Services/Annual-Report-on-Developer-Impact-Fees
In-Lieu and Other Development-Related Fees
In-lieu fees provide developers with an alternative means of satisfying the City’s requirement to
provide or construct certain improvements or amenities as part of their projects. While In-lieu
fees do not have statutory reporting requirements, they are included in this report in the
interest of transparency. These fees include the Parkland Dedication Fee/Quimby Act fee
imposed under Government Code section 66477, the Residential Housing In-Lieu Fee, the Public
Art In-Lieu Fee, and the water and wastewater connection and capacity fees imposed under
Government Code section 66013.
The annual report for FY 2025 is included as Attachment A. The Staff published the report on
the City’s website on November 14, 2025. 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 this fee effective FY 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 this fee effective FY 2020.
Housing impact fees imposed on commercial developments (PAMC Ch. 16.65): Fee on
commercial and industrial development to offset the demand that new jobs create for
low-income and moderate-income housing in the City by supporting below-market rate
housing at various levels of affordability.
General Government facilities: (PAMH Ch. 16.58) – Fee on residential and non-
residential development to fund improvements to those facilities used by the City to
provide basic governmental services and public facilities maintenance services,
exclusive of public safety.
Parks, Community Centers, and Libraries impact fees (PAMC Ch. 16.58): Fee on new
residential and non-residential development to provide funds for improvements to
community facilities, including parks, community centers, and libraries.
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 redevelopment within the Charleston-Arastradero Corridor
to provide for streetscape improvements designed to increase pedestrian and bicyclist
safety in the corridor.
Citywide Transportation impact fees (PAMC Ch 16.59): Fee on development in all parts of
the City to fund transportation enhancements, or public facilities and programs to reduce
congestion.
New Public Safety facilities (PAMH Ch. 16.58): Fee on residential and non-residential
development to fund the construction, acquisition, and/or upgrade of 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 to
fund the cost of public parking facilities to serve non-residential development projects
that do not provide adequate new off-street parking spaces to satisfy the requirements
of the zoning code.
Development Impact Fee Five-Year Findings (Government Code section 66001)
The City has elected to conduct an annual review of findings for all development impact fees. The
proposed findings are presented in Attachment B, and the unexpended balances as of June 30,
2025, for each fund are outlined below:
The Stanford Research Park/ El Camino Fund is $1,350,476.
The San Antonio/West Bayshore Fund is $452,234.
The Commercial Housing Impact Fee Fund is $4,673,857.
The General Government Facilities Fund is $110,765.
The Community Facilities-Park Development Fee Fund is $3,483,319.
The Community Facilities- Community Center Development Fee Fund is $299,518.
The Community Facilities- Library Development Fee Fund is $393,452.
The Residential Housing Impact Fee Fund is $1,221,292.
The Charleston-Arastradero Corridor Pedestrian & Bicyclist Safety Fee Fund is $41,270.
The Citywide Transportation Fund is $1,721,417.
The Public Safety Facility Fee Fund is $141,254.
The University Avenue Parking In-Lieu Fund is $13,652,598.
In addition to development fee funds that are required to be reported under AB 1600, the
following funds are reported for information purposes only. They are not required to be
reported under AB 1600:
Residential housing in-lieu fees (PAMC Ch. 16.65): Fee on residential ownership
developments in lieu of providing the required below-market rate to low-income
households.
Parkland Dedication (CA Government Code Section 66477-Quimby Act): Fees on
parkland dedication imposed on new residential and non-residential development.
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
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.
Water and Wastewater Collection (California Government Code Section 66013):
Connection and Capacity fees charged to developers that are adding load to the water
and sewer systems, effective July 1, 2005.
FISCAL/RESOURCE IMPACT
There is no direct fiscal impact associated with the review and acceptance of the annual report.
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 make the findings contained in Attachment B, the development fees
described therein might be required to be refunded. This would have a potential fiscal impact
of up to $27,541,452.
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, the Planning and
Development Services Department, the Office of Transportation, Public Works, Library, and the
Community Services Department.
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 are government
fiscal activity, which does not involve any commitment to any specific project that may result in
a potentially significant physical impact on the environment. CEQA Guidelines section
15378(b)(4).
Attachment A: Development Impact Fees FY 2025 and Use of Fees Summary
Attachment B: Resolution Making Findings Regarding the Continuing Need for Development
Impact Fees Collected but Unexpended
:
Lauren Lai, Administrative Services Director
Stanford Research Park/El Camino Real San Antonio/West Bayshore Area
FUND Transportation Impact Fee Transportation Impact Fee
Description of the Type of Fee
Amount of the Fee $12.85/sq. ft.; City ceased collecting effective FY 2020 $2.65/sq. ft.; City ceased collecting effective FY 2020
Fund Balance July 1, 2024 $1,275,358 $427,120
FY 2025 Activity
Revenues
Interest Earnings 34,315 11,492
Unrealized Gain/(Loss) Investments 40,803 13,622
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Revenues $75,118 $25,114
Total Expenditures - -
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Balance June 30, 2025 $1,350,476 $452,234
Total Reserves - -
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net Funds Available $1,350,476 $452,234
Commercial Housing
FUND 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. (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: (ADUs under 750 sq. ft are exempt)
Non-Residential: $27 per sq. ft. Single family $1,744.59 per unit
Multi-family $1.394.64 per unit
Office/R&D: $80 per sq. ft.
Non-Residential:
Commercial $973 per 1,000 sq. ft. or fraction thereof
Industrial $324 per 1,000 sq. ft. or fraction thereof
Office/Institutional $1,301 per 1,000 sq.ft. or fraction thereof
Fund Balance July 1, 2024 $27,836,932 $191,972
FY 2025 Activity
Revenues
Fees Collected 55,680 98,585
Interest Earnings 327,963 4,656
Unrealized Gain/(Loss) Investments 110,723 5,551
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Revenues 494,365 108,792
Expenditures
Salaries and Benefit (26,488) -
Liability Insurance (1,390) -
Operating Transfer to Capital Projects Fund - (190,000.00)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Expenditures (27,878) (190,000)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Balance June 30, 2025 $28,303,420 $110,765
Reserves
Notes Receivable, net of allowance (see detail
below) (23,629,563) -
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Reserves (23,629,563) -
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net Funds Available $4,673,857 $110,765
Notes Receivable Detail:
$1,290,000 for 2811 Alma; $4,137,278 for 801 Alma; $2,221,976
Alma SRO; Barker Hotel $400,000; $7,834,000 Oak Courts Apt
$7,700,000 for Buena Vista Mobile Home Park;
$10,502,309 Wilton Court
FUND Park Development Fee Community Centers Development Fee
Description of the Type of Fee
Amount of the Fee Residential: (ADUs under 750 sq ft are exempt)Residential: (ADUs under 750 sq ft are exempt)
Traffic impact fees imposed on new non-residential development in
the Stanford Research Park/El Camino Real Commercial Service
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 area to fund capacity
improvements at four indentified intersections. (PAMC 16.46)
Fees imposed on new residential and non-residential development
approved after Jan 28, 2002 to fund acquisition of land and
improvements for neighborhood and district parks. (PAMC 16.58)
Fees imposed on new residential and non-residential development
approved after Jan 28, 2002 to to fund development and
improvements to community centers. (PAMC 16.58)
Single family $67,650.36 per unit Single family $5,228.71 per unit.
Multi-Family $50,034.40 per unit Multi-Family $3,867.92 per unit
Non-residential: Non-residential:
Commercial/Industrial $19,837 per net new 1,000 sq ft.Commercial/industrial $1,533 per 1,000 sq ft.
Hotel/Motel $3,377 per 1,000 sq ft.Hotel/Motel $262 per 1,000 sq ft.
Fund Balance July 1, 2024 $2,384,330 $970,142
FY 2025 Activity
Revenues
Fees Collected 1,251,833 205,875
Interest Earnings 82,200 16,397
Unrealized Gain/(Loss) Investments 40,756 37,355
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Revenues $1,374,789 $259,627
Expenditures -
Operating Transfer to Capital Projects Fund (275,800) (930,250.00)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Expenditures ($275,800) (930,250.00)-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Balance June 30, 2025 $3,483,319 $299,518
Total Reserves - -
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net Funds Available $3,483,319 $299,518
Residential Housing
FUND Library Development Fee Impact Fee
Description of the Type of Fee Fees imposed on new residential and non-residentual development
approved after January 28, 2002 to fund development and
improvements to 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: (ADUs under 750 sq ft are exempt)Single and Multi-Family: $26 per sq. ft. apartment (rentals)
Single family $3,116.25 per unit
Multi-family $2,304.49 per unit
Non-residential:
Commercial/industrial $914 per net new 1,000 sq ft.
Hotel/Motel $156 per net new 1,000 sq ft.
Fund Balance July 1, 2024 $617,837 $1,155,034
FY 2025 Activity
Revenues
Fees Collected 110,159 -
Interest Earnings 13,047 31,082
Unrealized Gain/(Loss) Investments 35,392 35,176
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Revenues $158,598 $66,259
Expenditures
Operating Transfer to Capital Projects Fund (382,983) -
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Expenditures (382,983.00) -
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Balance June 30, 2025 $393,452 $1,221,292
Total Reserves - -
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net Funds Available $393,452 $1,221,292
Charleston-Arastradero Corridor Citywide Transportation
FUND Pedestrian and Bicyclist Safety Impact Fee Impact fee
Description of the Type of Fee Fees collected from new development and redevelopment Transportation impact fees imposed on new development in
within the Charleston-Arastradero Corridor to provide for all parts of the City to fund congestion reduction projects.
pedestrian and bicyclist safety improvements. (PAMC 16.60)(PAMC 16.59)
Amount of the Fee Residential: $1,744 per residential unit
Commercial: $0.51 per sq ft (ADUs exempt)
$10,103.99 each; per net new PM peak hour trip
Fund Balance July 1, 2024 $17,252 $1,883,519
FY 2025 Activity
Revenues
Fees Collected 23,359 127,504
Interest Earnings 978 46,825
Unrealized Gain/(Loss) Investments (319)58,570
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Revenues $24,018 $232,899
Expenditures
Operating Transfer to Capital Projects Fund - (395,000)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Expenditures - ($395,000)-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Balance June 30, 2025 $41,270 $1,721,417
Total Reserves - -
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net Funds Available $41,270 $1,721,417
University Avenue Non-residential Development
FUND Public Safety Facility Development Fee Parking In-Lieu Fee
Description of the Type of 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 Ave. Parking Assessment District area in lieu of providing
the required off-street parking spaces. (PAMC 16.57)
Amount of the Fee Residential:$135,514.06 per each parking space
Single family $1,384.31 per unit
Multi-family $1,107.96 per unit
Non-residential:
Commercial $773 per 1,000 sq ft. or fraction thereof
Industrial $258 per 1,000 sq. ft. or fraction thereof
Office/Institutional $1,103 per 1,000 sq ft or fraction thereof.
Fund Balance July 1, 2024 $151,287 $15,189,653
FY 2025 Activity
Revenues
Fees Collected 77,389
Interest Earnings 4,158 291,788
Unrealized Gain/(Loss) Investments 3,512 562,799
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Revenues $85,060 $854,587
Expenditures
General Expense - 0
Operating Transfer to Capital Projects Fund (95,093.00)(2,391,642)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Expenditures (95,093.00) (2,391,642.00)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Balance June 30, 2025 $141,254 $13,652,598
Total Reserves - -
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net Funds Available $141,254 $13,652,598
Residential Housing In-Lieu Fee Parkland Dedication Fee
FUND (INFORMATION ONLY)(INFORMATION ONLY)
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 inlcuded only for information purposes. Fees on parkland
dedication imposed on new residential and non-residential
development. (PAMC 21.50; Gov. Code Sec. 66477 and 66479)
Amount of the Fee Single-family $100 per sq. ft. single-family detached; $66 per sq. ft.
single-family attached. Multi-family $66 per sq. ft. condos.
Single Family: $81,863.14 per unit; Multi-Family: $56,425.44 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, 2024 $29,873,784 $3,601,005
FY 2025 Activity
Revenues
Fees Collected 2,722,519 1,970,457
Interest Earnings 723,124 107,678
Unrealized Gain/(Loss) Investments 142,973 60,213
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Revenues $3,588,616 $2,138,348
Expenditures
Salaries and Benefit (26,488.28) -
Liability Insurance (1,389.69) -
Contract Service/General Expense (202,690.87) -
Operating Transfer to Capital Projects Fund - (961,490)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Expenditures (230,569)($961,490)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Balance June 30, 2025 $33,231,831 $4,777,863
Reserves
Reserve for Encumbrances & Reappropriations (41,391) -
Reserve for Notes Receivable (28,858,078) -
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Reserves ($28,899,469) -
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net Funds Available $4,332,361 $4,777,863
Residential Housing In-Lieu Fund, Notes Receivable Detail:
$375,000 for 3053 Emerson; $3,504,850 for Tree House Apts.; $3,000,000 Grant Ave; $747,734 for Sheridan Apts.
Public Art In-Lieu Fee
FUND (INFORMATION ONLY) Water Connection/Capacity Fees
Description of the Type of Fee This fee is not subject to AB1600 reporting requirements and
is included only for information purposes. The Public Art In-Lieu
fee is used to fund public art for private developments that elect not
to provide public art onsite. The fee is imposed on new commercial
developments and mixed-use projects 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, as well as all new residential
projects of five or more units. (PAMC 16.61)
Water connection and capacity fees are imposed on new
development and redevelopment to buy into existing water
distribution system 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
water services are upgraded or installed. Capacity fees recieved
are used exclusively for water capital improvement projects. (Gov.
Code Sec. 66013)
Amount of the Fee 1% of first $132.67 million construction valuation and 0.9% of
construction valuation for valuation in excess of $132.67 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, 10 in. $48,110
Fund Balance July 1, 2024 $2,249,946 -
FY 2025 Activity
Revenues
Fees Collected 118,021
Connection Fees Collected 1,489,198
Capacity Fees Collected 333,490
Interest Earnings 59,151 -
Unrealized Gain/(Loss) Investments 71,430 -
Transfers in from other funds 187,800 -
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Revenues $436,402 $1,822,688
Expenditures
Salaries and benefits (294,479) -
Contract Services/Other (152,513) (1,822,688)
Liability Insurance (8,439) -
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Expenditures ($455,431)($1,822,688)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Ending Balance June 30, 2025 $2,230,917 -
Reserves
Encumbrances & Reappropriations (139,356) - -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Reserves (139,356) - -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net Funds Available $2,091,561 -
FUND Wastewater Connection/Capacity Fees
Description of the Type of Fee Wastewater connection and capacity fees are imposed on new
development and redevlopment to buy into the existing 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 wastewater services are upgraded or installed. Capacity fees
recieved are used exclusively for sanitary sewer capital
improvement projects. (Gov. Code Sec. 66013)
Amount of the Fee 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, 2024 -
FY 2025 Activity
Revenues
Connection Fees Collected 320,608
Capacity Fees Collected 137,004
-----------------------------------------------------------------------------------------
Total Revenues $457,612
Expenditures
Contract Services/Other (457,612)
-----------------------------------------------------------------------------------------
Total Expenditures ($457,612)
-----------------------------------------------------------------------------------------
Ending Balance June 30, 2025 -
Total Reserves - -----------------------------------------------------------------------------------------
Net Funds Available $0
$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.; $1,500,000 for 525 E. Charleston Rd.; $600,000 Fabian Way Housing
$2,285,026 for 801 Alma; $842,338 for Palo Alto Housing Project; $600,000 for 2811-2825 Alma St.;
City of Palo Alto
FY 2025 Use of Fees Summary
Fund Name Project FY 2025 Expenditures Total Project Cost
% of Total
Project
Cost
Construction Start
Date
Stanford Research Park/El Camino Real Transportation Impact Fee Page Mill Road/El Camino Real Intersection Improvements None N/A N/A 2026
San Antonio/West Bayshore Area Transportation Impact Fee PL-05030 Traffic Signal and ITS Upgrades None 4,091,083.00$ N/A 2026
Commercial Housing Impact Fee Affordable Housing Development Projects 27,878.00$ N/A N/A N/A
General Government Facility Development Impact Fee PE-15001 New Public Safety Building 190,000.00$ 118,602,764.00$ 0.3%March 2021
Community Facilities Parks Development Impact Fee PG-19000 Park Restroom Installation 275,799.00$ 2,003,799.00$ 83.4%Recurring
PG-18001- Dog Park Installation and Renovation None 338,904.00$ 88.5%Recurring
Community Center Impact Fee PE-24001 Electrification of City Facilities 490,000.00$ 1,799,238.00$ 54.5%Recurring
PF-02022 Facility Interior Finishes Replacement 440,250.00$ 1,069,488.00$ 82.3%Recurring
Community Facilities Library Developers Impact Fee LB-21000 Library Automated Material Handling 382,983.00$ 1,898,292.00$ 45.6%February 2025
Residential Housing Impact Fee Affordable Housing Development Projects None N/A N/A N/A
Charleston-Arastradero Corridor Pedestrian & Bicyclist Safety Impact Fee PL-05030 Traffic Signal and ITS Upgrades None 4,091,083.00$ 1.0%N/A
Citywide Transportation Impact Fee PL-05030 Traffic Signal and ITS Upgrades 395,000.00$ 4,091,083.00$ 9.7%ongoing
Public Safety Facility Development Impact Fee PE-18004 Fire Station 4 Replacement 95,093.00$ 18,255,946.00$ 0.5%Spring 2022
University Ave Non-Residential Development Parking In-Lieu Fee PE-15007 New Downtown Parking Garage 2,391,642.00$ 17,286,151.00$ 13.8%2025
Residential Housing In-Lieu Fee Affordable Housing Development Projects 230,569.00$ N/A, ongoing N/A N/A
Parks Dedication Fund PG-26000 Stanford Palo Alto Community Playing Fields Turf
Replacement 961,490.00$ 2,707,547.00$ 35.5% Spring 2025
PE- 18006 Byxbee Park Completion None 3,199,189.00$ 48.4%Fall 2024
PE-24004 Rinconada Pool Family Changing Room None 1,406,158.00$ 26.4% Winter 2024
Public Art In-Lieu Fee
Public Art Program(acquisition of new artwork, repair and
maintenance, project management and program
administration)
455,431.00$ N/A, ongoing N/A N/A
Water Fund Capacity Fees WS-80013 Customer Connections, Annual 1,432,833.00$ N/A, ongoing N/A ongoing
WS-15002 Water Main Replacement Project #29 389,855.00$ N/A, ongoing N/A Winter 2022
Wastewater Connection Capacity Fees WC-80020 Sewer System, Customer Connections, Annual 457,612.00$ N/A, ongoing N/A ongoing
*NOT YET APPROVED*
Resolution No. _____
Attachment B
Resolution of the Council of the City of Palo Alto Accepting the Annual Report
R E C I T A L S
A. Government Code Sections 66000 et seq., commonly known as the Mitigation Fee Act,
G. The City Council has read and considered the Development Impact Fee Report for the Period
The Council of the City of Palo Alto RESOLVES as follows:
Section 1.The City Council accepts the Annual Report on Development Impact Fees
for the Period Ending June 30, 2025 as required by Government Code 66006.
Section 2.Based on the Development Impact Fee Report for the Period Ending June
30, 2025, and the Schedule of Improvements and Expenditures attached as Exhibit 1 to this
Stanford Research Park/El Camino Real Traffic Impact Fee
1
0290010_20251114
*NOT YET APPROVED*Attachment B
A. The purpose of this fee is to fund traffic-related improvements at eight designated
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
Commercial Housing Impact Fee
A. The purpose of this fee is to offset the demand that new jobs create for low and
2
0290010_20251114
*NOT YET APPROVED*Attachment B
General Government Facilities Fee
A. The purpose of this fee is to fund the cost of improvements to those facilities used by the
B. The fee is reasonably related to its purpose because new residential and non-residential
B. The approximate dates on which the funding is expected to be deposited into the
Park Development Fee
A. The purpose of this fee is to fund the cost to design, acquire, install, and construct park
B. The fee is reasonably related to its purpose because the fees will be collected from new
Community Center Development Fee
A. The purpose of this fee is to fund the cost to design, acquire, install, and construct
B. The fee is reasonably related to its purpose because the fees will be collected from new
3
0290010_20251114
*NOT YET APPROVED*Attachment B
Library Development Fee
A. The purpose of this fee is to fund the cost to design, acquire, install, and construct library
B. The fee is reasonably related to its purpose because the fees will be collected from new
Residential Housing Impact Fee
A. The purpose of this fee is to offset the demand for low and moderate-income housing in
Charleston-Arastradero Corridor Pedestrian and Bicyclist Safety Impact Fee
B. The fee is reasonably related to its purpose because the fees will be collected on
D. The approximate dates on which the funding is expected to be deposited into the
4
0290010_20251114
*NOT YET APPROVED*Attachment B
Citywide Transportation Impact Fee
A. The purpose of this impact fee is to fund the cost of citywide transportation
Public Safety Facilities Impact Fee
A. The purpose of this fee is to fund the construction, acquisition and/or upgrade of Police
B. The fee is reasonably related to its purpose because new residential and non-residential
University Avenue Parking In-Lieu Fee
A. The purpose of this fee is to fund the cost of providing public parking facilities to serve
5
0290010_20251114
*NOT YET APPROVED*Attachment B
Residential Housing In-Lieu Fee
A. The purpose of this fee is to offset the demand for low and moderate-income housing in
Public Art In-Lieu Fee
A. The purpose of this fee is to fund the cost of providing publicly visible art displays that
Parkland Dedication Fee
6
0290010_20251114
*NOT YET APPROVED*Attachment B
Water & Wastewater System Connection and Capacity Fees
These fees are imposed under Government Code section 66013 and therefore the requirement
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
INTRODUCED AND PASSED:
NOES:
ABSENT:
ABSTENTIONS:
_______________________________________________________
APPROVED AS TO FORM:APPROVED:
_______________________________________________________
_____________________________
7
0290010_20251114
Attachment B - Exhibit 1 City of Palo Alto
Schedule of Improvements and Expenditures
CIP Project Unexpended FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Notes; Other Funding Sources/AmountsNumberBalance FY 2025
Stanford Research Park/El Camino Real Transportation Impact Fee
Page Mill Road/El Camino Real Intersection Improvements
$1,350,476
N/A $1,350,476 Project to be constructed by County of Santa Clara; additional project funding
San Antonio/West Bayshore Area Transportation Impact Fee
Traffic Signal and Intelligent Transportation System Upgrades
452,234
PL-05030 452,234 San Antonio/Charleston Road Intersection Improvement Project; anticipated
Commercial Housing Impact Fee 4,673,857
3001 El Camino Real N/A 2,200,000 Funding award for 3001 El Camino Real 100% affordable housing development
FY 2027 Notice of Funding Availability The City annually issues Notices of Funding Availability (NOFA) to provide
General Government Facility Development Fee
Public Safety Building
$110,765
PE-15001 $110,765
3,483,719
Dog Park Installation and Renovation PG-18001 $150,000 $150,000 150,000 See pp. 56 and 228-230 of the FY 2026 Capital Budget.
Community Center Development Fee
Facility Interior Finishes Replacement
$299,518
PF-02022 $299,518 Rehabilitation of city-owned building at 445 Bryant for downtown teen center
Library Development Fee $393,452
Library Automated Material Handling
Residential Housing Impact Fee
LB-21000 $100,000 See pp. 56, 87 and 146-148 of the FY 2026 Capital Budget.
1,221,292
Funding award for 100% affordable housing development approved November
Notice of Funding Availability The City annually issues Notices of Funding Availability (NOFA) to provide
Charleston-Arastradero Corridor Pedestrian & Bicyclist Safety
Traffic Signal and ITS Upgrades
Traffic Signal and Intelligent Transportation System Upgrades
Fire Station 4 Replacement
$41,270
1,721,417
141,254
PL-05030 $41,270
395,000
95,093
Traffic signal upgrades in Charleston-Arastradero Corridor.
$395,000 $395,000 $395,000 $395,000 See pp. 56, 88, and 348-350 of the FY 2026 Capital Budget.
46,161 $95K carried forward FY 25 Capital Budget, construction start anticipated FY
University Avenue Non-Residential Development Parking In-Lieu
New Downtown Parking Garage
$13,652,598
PE-15007 $13,106,958 See pp. 56, 88, and 170-172 of the FY 2026 Capital Budget.
3001 El Camino Real Funding award for 100% affordable housing development approved November
FY 2027 Notice of Funding Availability N/A The City annually issues Notices of Funding Availability (NOFA) to provide
Public Art In-Lieu $2,091,561
Code: Art N/A $200,000 $200,000 $50,000 $50,000 $50,000 Projection mapped art displays; annual temporary public art exhibits and/or
community events.
750,000 Permanent public artwork to enhance downtown and California AvenueCalifornia Avenue and University Avenue Streetscape Projects 750,000