Title
Recommendation to Accept the Fiscal Year 2024-25 Development Impact Fee (DIF) Report. (Finance 10024051)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
Local agencies are required to report annually on the collection and use of Development Impact Fees (DIF). For Fiscal Year (FY) 2024-25, the combined beginning balance of the DIF Funds (305, 306, 307, 308, and 309) was $9,650,274. During FY 2024-25, $829,060 of DIF fees was collected. The funds gained $475,263 in investments. Expenditures of $2,262,099 were incurred for eligible transportation projects. The ending balance in the DIF Funds as of June 30, 2025, was $8,692,497.
BACKGROUND
The California Government Code Section 66006 requires local agencies with DIF to submit a report on the collection and use of these fees for public review within 180 days after the end of each fiscal year. The annual review must include the following information:
• A brief description of the fee;
• The amount of the fee;
• The beginning and ending balance of the account or fund;
• The amount of the fees collected and the interest earned;
• An identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with fees;
• An identification of an approximate date by which the construction of the public improvement will commence, if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement;
• A description of each interfund transfer or loan made from the account or fund, including the public improvement on which the transferred or loaned fees 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; and
• The amount of unexpended revenues refunded.
DISCUSSION
The City of Alameda (City) collects the following impact fees: Public Safety Facilities, Parks, Public Facilities and Transportation.
Development Impact Fees (Funds 305, 306, 307, 308, 309).
Description - The DIF was approved by City Council on July 1, 2014, after completion of a nexus study. The DIF became effective on September 15, 2014. The DIFs are imposed on all new or expanded existing commercial development, new residential development, and upon uses which intensify the use of existing commercial or residential structures.
Amount of the Fee - The DIF was adopted by Ordinance No. 3098 and became effective September 15, 2014. The fees, based on a nexus study, are set such that they shall not exceed the estimated reasonable cost of providing the facility, equipment, or improvement for which the fee is imposed. The fees are based on the proposed development use and are collected at the time of the permit issuance.
The nexus study and supporting documentation, presented as part of the resolution noted above, identified the public improvements that those fees will be used to finance. These studies also show that there is a reasonable relationship between a) the fees’ uses and the type of development project on which the fee is imposed, and b) the need for the public facility and the type of development project on which the fee is imposed.
Financial Information - For FY 2024-25, the beginning balance of the combined DIF accounts was $9,650,274. During the fiscal year, $829,060 of DIF fees were collected. The funds gained $475,263 in investments. Expenditures of $2,262,099 were incurred for eligible transportation projects. The ending balance in the DIF Funds as of June 30, 2025, was $8,692,497. For additional details refer to Exhibit 1.
Expenditure of Fees - The DIF Program identified 29 separate capital improvement projects distributed among four categories for a total cost of $210.2 million. The categories of capital improvements covered by the DIF are public safety, transportation, parks and recreation, and public facilities.
The DIF funds may only be used for new improvements and the City is required to use other funds to pay for any remaining share of the improvement costs attributed to existing development. Until sufficient funds are available to cover the cost of these large capital projects, the fund balances will continue to grow. These projects are included in the deferred Capital Improvement Program (CIP) budget until such time as sufficient funds have accumulated or been identified through other funding sources, such as grants, to cover the total project costs.
Refunded Unexpended Revenues - No unexpended revenues were refunded during FY 2024-25.
ALTERNATIVES
• Accept the annual Development Impact Fee Report.
• Request additional information from staff.
FINANCIAL IMPACT
There is no financial impact from acceptance of the annual report.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This annual review is consistent with the requirements of Section 27 - Development Impact Fee of the Alameda Municipal Code and California Government Code Sections 66000 et seq.
ENVIRONMENTAL REVIEW
This activity is not a project and is exempt from the California Environmental Quality Act (CEQA) pursuant to section 15378(b)(4) of the CEQA Guidelines, because it involves governmental fiscal activities, which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.
CLIMATE IMPACTS
There are no climate impacts from accepting the Development Impact Fee Report.
RECOMMENDATION
Accept the Fiscal Year 2024-25 Development Impact Fee (DIF) Report.
Respectfully submitted,
Ross McCarthy, Finance Director
By,
Carlos Figueroa, Senior Financial Analyst
Exhibit:
1. Development Impact Fees Annual Report