REPORT TO COUNCIL
SUBJECT
Title
Action on a Resolution Accepting the AB 1600 Report on Development Impact Fees for Fiscal Year Ended June 30, 2025 and Making Required Findings
Report
BACKGROUND
A development impact fee is a monetary exaction, other than a tax or special assessment , charged by a local governmental agency to an applicant in connection with approval of a development project for the purpose of defraying all or a portion of the development project’s impact on public facilities, with certain exceptions. The legal requirements for enactment of a development impact fee program are set forth in Government Code §§ 66000-66025 (the "Mitigation Fee Act"), the bulk of which were adopted as 1987’s AB 1600 and thus are commonly referred to as “AB 1600 requirements.” Under AB 1600, there must be a reasonable relation between the amount of the fee and the cost of the public facility or portion of the public facility attributable to the development on which the fee is imposed. AB 1600 also requires that the City make certain findings with respect to unexpended funds held by the City in excess of five years.
DISCUSSION
Attached is the AB1600 Report on Development Impact Fees for the fiscal year ended June 30, 2025. This report contains all the information required by Government Code Section 66006(b). AB 1600 also requires that the City make certain findings with respect to the continuing need for unexpended funds held by the City in excess of five years.
Staff has determined that the following City funds and amounts are being held in compliance with the required AB 1600 findings: 1) Traffic Mitigation funds of $350,630; 2) Sanitary Sewer Conveyance Fee funds of $28,176,067; and 3) Storm Drain Impact funds of $173,718. In conformance with AB 1600, the City does not have any refund exposure for these funds as they have been budgeted and are necessary to fund future projects. Therefore, Staff is submitting the attached Resolution to accept the AB 1600 Report and make findings that there is a continuing need for these unexpended balances, among other required findings. (See Attachment 2)
On December 17, 2025, the City posted notice and made copies of the report available for public review in the City Clerk’s Office, the Finance Department, and online at www.Santaclaraca.gov/Finance. In addition, written notice of the time and place of the regularly scheduled City Council meeting on January 27, 2026, along with a copy of the AB1600 Report, was sent to interested parties as requested.
Staff has scheduled a review of this report for the regularly scheduled City Council meeting on January 27, 2026. More than 15 days will have elapsed as of the date of Council review since the report was made available to the public, as required by applicable state law.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(4) in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
FISCAL IMPACT
There is no cost to the City other than administrative staff time and expense to develop the report and resolution. There is no economic/fiscal impact since all qualified impact fees held by the City for over five years are either spent or committed, thus eliminating the need to refund any fees to developers according to the Government Code Sections 66000-66003.
COORDINATION
This report has been coordinated with the City Attorney’s Office.
PUBLIC CONTACT
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
Adopt a Resolution accepting the AB 1600 Report on Development Impact Fees for fiscal year ending June 30, 2025 and making findings regarding the continuing need for the unexpended balances of certain impact fees as of June 30, 2025.
Staff
Reviewed by: Kenn Lee, Director of Finance
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. AB 1600 Report on Development Impact Fees
2. AB 1600 Resolution