Chapter 3.36
DEVELOPMENT IMPACT FEES
Sections:
3.36.030 Establishment of development impact fees.
3.36.050 Creation of special accounts.
3.36.060 Land use to compute fee.
3.36.080 Development impact fee exemptions and exceptions.
3.36.090 Developer construction of facilities.
3.36.110 Applications to waive, adjust or reduce fees.
3.36.010 Purpose.
A. The intent of the city is to require every person who develops land to mitigate the impacts of that development on the city’s public facilities. The city will therefore require developers to pay a development impact fee that will assist in meeting the demand for public facilities caused by development. The public facilities will be constructed in accordance with a master facilities plan adopted by resolution of the city council.
B. A development impact fee calculation and nexus report for the city of Highland, California, dated August 28, 2023, (“2023 DIF Report”) was prepared to identify the purpose of each existing and proposed fee, the use to which the fee is to be put, establish and explain how there is a reasonable relationship between the fee’s use and the type of development project on which the fee is to be imposed, and how there is a reasonable relationship 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.
C. The amount of the development impact fees collected pursuant to this chapter shall be limited to the cost of public facilities attributable to new development. The amount of the public facilities development impact fees collected shall not include the cost of public facilities that serve existing development. (Ord. 461 § 4, 2023)
3.36.020 Definitions.
For purposes of this chapter, the following terms, phrases, words, and their derivations shall have the meanings respectively ascribed to them by this section:
A. “Development project” means any project undertaken for the purpose of development. “Development project” shall include a project involving the issuance of a permit for construction or reconstruction, remodeling, or any work requiring any permit under the ordinances of the city, including the provisions of HMC Title 16, Land Use and Development. The term “development project” shall also include permits for erection of manufactured housing or structures, and structures moved into the city.
B. “Fee” means a monetary exaction, other than a tax or special assessment, which is charged by the city to an applicant in connection with the approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project, but does not include fees specified in Section 66477 of the Government Code, nor fees for processing applications for regulatory actions or approvals, nor fees collected under development agreements.
C. “Public facilities” includes public improvements, public services, and community amenities. (Ord. 461 § 4, 2023)
3.36.030 Establishment of development impact fees.
A. Development impact fees are hereby established in the following categories:
1. Law enforcement facilities;
2. Fire suppression facilities, vehicles and equipment;
3. Local circulation systems (streets, signals, drainage and bridges);
4. Regional circulation systems;
5. Local and regional flood control facilities;
6. General facilities, vehicles and equipment;
7. Library facilities and collection;
8. Public use (community center) facilities; and
9. Park facilities development.
B. The fees shall be collected as a condition of issuance of building occupancy for development within the city to finance the cost of certain identified public facilities and improvements required by new development as identified in the 2023 DIF Report.
C. The city council shall, by a city council fee resolution, set forth the specific amount of the fees, describe the benefit and impact area on which the development impact fees are imposed, list the specific public improvements to be financed, describe the estimated cost of these facilities, describe the reasonable relationship between these fees and the various types of new developments and set forth the time for payment.
D. The city council shall periodically review these fees to determine whether the fee amounts are reasonably related to the impacts of development and whether the described public facilities are still needed. The city council shall make findings with respect to any portion of the fee remaining unexpended or uncommitted in its account five or more years after deposit of the fees to identify the purpose to which the fees are to be put and to demonstrate a reasonable relationship between the fee and the purpose for which they were charged, consistent with the requirements of Government Code Sections 66001(d), (e) and (f). (Ord. 461 § 4, 2023)
3.36.040 Fee adjustments.
A. The fees imposed by this chapter shall be adjusted annually in April of each year, beginning April 2025 using the California Construction Cost Index. This adjustment shall not apply to fees which are based on variable factors which result in automatic adjustments or those which specifically indicate otherwise and shall be subject to the requirements of Government Code Section 66018 or otherwise as required by law.
B. The amount of each category of fee established pursuant to this chapter may be more specifically set and adjusted periodically by resolution of the city council, with this chapter being considered as enabling and directive. (Ord. 461 § 4, 2023)
3.36.050 Creation of special accounts.
Each fee collected pursuant to this chapter shall be deposited in a special account created to hold the revenue generated by each such fee, consistent with the requirements of Government Code Section 66006. Monies within each such account may be expended only by appropriation by the city council for specific projects which are of the same category as that for which the money was collected. (Ord. 461 § 4, 2023)
3.36.060 Land use to compute fee.
All development impact fees identified in HMC 3.36.030 and the amounts specified in the fee resolution are to be imposed on new development based on land use (not zoning) of the proposed development. For purposes of this chapter, the following land use designations shall apply:
A. Detached dwelling: projects consisting of detached residential buildings as allowed within the city’s land use designations of agricultural equestrian, low density, and some medium density residential.
B. Attached dwelling: projects consisting of attached residential units within a lot as allowed within the city’s land use designation of high density residential and some medium density residential.
C. Mobile home: mobile home/trailer parks, and manufactured homes in land-leased communities, etc. This category does not include a manufactured home subdivision.
D. Commercial lodging: hotels and motels.
E. Commercial/office: uses generally considered commercial.
F. Industrial: uses generally considered industrial. This category also includes educational and religious establishments.
The land uses set forth in this section shall be used in the computation of the fees required to be paid in connection with new development and in the amounts specified in the fee resolution. Public properties shall be classified into the category of use as between residential, commercial, or industrial, and shall pay the fee pursuant to that classification, as determined by the community development director. (Ord. 461 § 4, 2023)
3.36.070 Payment of the fee.
A. Except as required by Government Code Section 66007, development impact fees for all development projects shall be paid prior to issuance of certificate of building occupancy.
B. The fees imposed pursuant to this chapter shall be calculated on the basis of land use, evaluated on the basis of acreage, by dwelling unit, or by square footage of construction, as indicated in the 2023 DIF Report, or otherwise as that may be revised and amended under the authority of the city council. (Ord. 461 § 4, 2023)
3.36.080 Development impact fee exemptions and exceptions.
A. Residential Building Expansion. No development impact fee for residential building expansion shall be required on any new addition, expansion or incidental construction to an existing residential building when the new construction consists of a total of less than 500 square feet of an enclosed structure which requires a building permit to construct, and the community development director finds that the expansion will not result in an increase of the number of dwelling units originally permitted for the residential building. When the new residential construction consists of a total of 500 square feet or more of an enclosed structure which requires a building permit to construct, and the community development director finds that the expansion will not result in an increase of the number of dwelling units originally permitted for the residential building, the development impact fee for the square footage of residential expansion above 499 square feet shall be required in accordance with this chapter and the fee resolution.
B. Building Remodeling. Where a building permit is issued to remodel an existing structure for the same occupancy type, development impact fees shall not be required. Where the remodeling work will alter the occupancy type of the building, resulting in a higher intensity of use as determined by the community development director, development impact fees shall be required as specified in this chapter and the fee resolution. This section does not include projects which constitute an expansion of the previous use.
C. Building Reconstruction. Where a building permit is issued to reconstruct or replace an existing structure and the new structure does not increase the square footage of the existing structure, development impact fees shall not be required. If the size of the new structure is larger than that of the existing structures, development impact fees shall be required in accordance with this chapter and the fee resolution.
D. Building Relocation. Where a permit is issued to relocate a structure from one location in the city to a new location within the city, and the community development director finds that no new impacts are created, development impact fees shall not be required.
E. Accessory Dwelling Units. Accessory dwelling units (“ADUs”) that are less than 750 square feet shall not be charged development impact fees. For an ADU that is 750 square feet or larger, the ADU will be charged fees proportionately in relation to the square footage of the primary dwelling unit. Notwithstanding the foregoing, ADUs shall be subject to impact fees as allowed by Government Code Section 65852.2, as it may be amended from time to time.
F. Timing of Permit Application. Development impact fees in effect at the time of building permit application shall continue to apply on any development project where the building official finds and determines that a complete building permit application has been submitted and accepted by the city of Highland, and that through no fault of the developer, the permit was not issued prior to the effective date of the development impact fees as specified in this chapter and the fee resolution. (Ord. 461 § 4, 2023)
3.36.090 Developer construction of facilities.
Whenever a developer is or has been required, as a condition of approval of a development permit, to construct a public facility which is the subject of this chapter, and which facility is determined by the city to have supplemental size, length or capacity over that needed for the impacts of that development, and when such construction is necessary to ensure efficient and timely construction of the facilities network, a reimbursement agreement with the developer and a credit against the fee, which would otherwise be charged pursuant to this chapter on the development project, shall be offered.
The reimbursement and credit amount shall not include the portion of the improvement needed to provide services or mitigate the need for the public facility or the burdens created by the development project. The specific procedures for reimbursements and credits may be adopted by resolution of the city council, with this chapter being considered as enabling and directive. (Ord. 461 § 4, 2023)
3.36.100 Calculation of development impact fees based upon special circumstances related to intensity of use.
A. Where in the opinion of the city manager, or his designee, a development project is certain to have impacts on those facilities and improvements identified in the 2023 DIF Report and master facilities plan that is disproportionate to the square footage of the building to be constructed by virtue of the proposed development project, development impact fees may be calculated based upon the city manager’s determination of actual impacts in each of the categories in which development impact fees are collected. The city manager’s determination must be based upon objective criteria, such as trip generation rates specific to the type of development proposed.
B. In each instance where the city manager, or his designee, makes a calculation based upon his authority herein granted, the criteria upon which that calculation is based shall become the criteria used for all similarly situated development projects thereafter. In implementing this provision, the city manager is directed to maintain a record of all decisions made under his authority, and to use that record as a guideline for future decisions. The city manager shall make a recommendation to the public works subcommittee of the city council which brings its recommendation to the city council for final approval determination of the development impact fees.
C. In all instances where the city council determines and imposes development impact fees according to its authority granted herein, that calculation and determination shall be subject to legal challenge as provided by state law, as set forth in Government Code Section 66020 et seq. (Ord. 461 § 4, 2023)
3.36.110 Applications to waive, adjust or reduce fees.
A. A developer of any development project subject to the fees described herein may apply to the city council for a reduction or adjustment to the fees, or a waiver of the fees, based upon the absence of any reasonable relationship or nexus between the impacts of that development and either the amount of the fees charged or the type of facilities to be financed. The application shall be made in writing and filed with the city clerk not later than: (1) 10 days prior to the public hearing on the development permit application for the project, or (2) if no development permit is required or no public hearing is required to be held, at the time of the filing of the request for a building permit. The application shall state in detail the factual basis for the claim of waiver, reduction, or adjustment. The city council shall consider the application at the public hearing on the permit application or at a separate hearing held within 60 days after the filing of the fee adjustment application, whichever is later. The decision of the city council shall be final. If a reduction, adjustment, or waiver is granted, any change in use within the project shall invalidate the waiver, adjustment, or reduction of the fees.
B. The city council may, from time to time and as the need may arise, set forth, by council resolution, specific limitations which will apply to reductions, adjustments, waivers, or deferrals of development impact fees which may be made pursuant to this section.
C. If a fee exemption is granted pursuant to HMC 3.36.070, or a fee reduction, adjustment or waiver is granted pursuant to this section, any subsequent change or intensification of the use or uses of the property or any expansion of the structures on the property shall invalidate the fee exemption, fee reduction, adjustment or waiver, and the applicant shall be subject to the development impact fee requirement applicable to the entire development based on the fee in effect at the time of the change or expansion, less any amount previously paid.
D. If a fee exemption, fee reduction, adjustment or waiver is not granted, then upon the payment of the required fees, the city shall, pursuant to Government Code Section 66020, provide the applicant a written notice of the amount of the fees or a description of the dedications, reservations, or other exactions, and shall also provide notification that the 90-day protest period has begun. (Ord. 461 § 4, 2023)