REPORT TO COUNCIL
SUBJECT
Title
Action to Waive Second Reading and Adopt Ordinance No. 2082 amending Chapter 17.35 (Park and Recreational Land) Section 17.35.080 (Procedure) of the Santa Clara City Code to temporarily authorize a deferral of the payment of Park In-Lieu Fees of residential developments to certificate of occupancy or final building inspection, subject to certain conditions and to bring the City Code into compliance with state law.
Report
BACKGROUND
At the November 4, 2025, Council meeting, proposed Ordinance No. 2082 was passed for the purpose of publication. Pursuant to City Charter Sections 808 and 812, a summary of proposed Ordinance No. 2082 was published in the Santa Clara Weekly on November 12, 2025, and copies were posted in three public places.
DISCUSSION
The proposed ordinance will bring the City Code into compliance with state law by clarifying that, when required by law, payment of the parks impact fee will be deferred. It also goes above and beyond state law by allowing projects that do not qualify for a fee deferral under state law that receive a building permit prior to December 31, 2027, to receive approval for a deferral, provided the City Manager finds that the deferral will not negatively affect the City’s park expansion efforts. The ability to defer payment of the in-lieu fee terminates if construction of the project does not begin within five years of the date upon which the building permit is issued.
The proposed ordinance also provides that any approved deferral of Park In-Lieu Fees shall require execution of a Fee Deferral Agreement between the property owner or lessee, and the City. The standard form Park In-Lieu Fee Deferral Agreement and Notice of Lien with Power of Sale was approved by Council on November 4, 2025. The City Manager will be authorized to execute the form Fee Deferral Agreement, and modify the agreement as needed for individual projects, subject to the City Attorney’s approval.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to California Code of Regulations Title 14 Section 15378(b)(4) in that it is an administrative activity that does not involve commitment to a specific project which may result in potential significant impact on the environment.
FISCAL IMPACT
The Parks In-Lieu Fee is typically collected prior to the issuance of the building permit. However, the payment of Park In-Lieu Fees for specific designated residential projects are now deferred until the issuance of Certificate of Occupancy under SB 937. The proposed action would expand the Parks In-Lieu Fee deferral to residential development projects throughout the City that receive building permits prior to December 31, 2027, and subject to the City Manager determining that the deferral will not negatively affect the City’s park expansion efforts. With this change, Parks In-Lieu Fees will be collected prior to issuance of Certificate of Occupancy, which is one to three years after the current practice of collecting fees prior to the issuance of the building permit. The deferral of fees may delay the use of the funding and result in less buying power for those fees.
It is difficult to project the number of residential building permits issued in any particular year and the number of projects for which the developer will opt to pay the in-lieu fee rather than provide the park improvements. Thus, the amount of Parks In-Lieu Fee revenues that would be deferred from this proposed action compared to current practice of collecting in-lieu fees at Building Permit, and the impact, would also be difficult to anticipate.
The City deposits Parks In-Lieu Fees received into separate accounts specified for either Quimby or Mitigation Fee Act. During the development of the City’s Capital Improvement Program budget, in-lieu fees are allocated to Capital Improvement Program projects with allowable uses of the funds that may include acquisition of parkland and development of neighborhood and community parks, and, under certain conditions for Quimby, the rehabilitation of existing park facilities. In-lieu fees cannot be used for ongoing maintenance.
COORDINATION
This report was coordinated with the City Manager’s Office, City Attorney’s Office, Community Development Department, and Parks and Recreation Department.
PUBLIC CONTACT
A summary of proposed Ordinance No. 2082 was published in the Santa Clara Weekly on November 12, 2025, and copies were posted in three public places and made available for public inspection at the City Clerk’s Office.
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Waive Second Reading and Adopt Ordinance No. 2082 amending Chapter 17.35 (Park and Recreational Land) Section 17.35.080 (Procedure) of the Santa Clara City Code to temporarily authorize a deferral of the payment of park in-lieu fees of residential developments to certificate of occupancy or final building inspection, subject to certain conditions and to bring the code into compliance with state law.
Staff
Reviewed by: Reena Brilliot, Director of Economic Development and Sustainability
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Ordinance No. 2082 (Intro)