title
PUBLIC FACILITY FEE ANNUAL REPORT FOR FISCAL YEAR 2024-25
recommended action
RECOMMENDATION
It is recommended that the City Council accept by motion the Public Facilities Fee Program Annual Report for Fiscal Year 2024-25 (Attachment A) to comply with State reporting requirements.
It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this motion.
body
Summary
Under State law, cities are required to make available to the public an annual report on Public Facilities Fees (PFF). The fees are collected for the purpose of mitigating impacts caused by new development on certain public facilities. Fee revenues are then used to finance the acquisition, construction, and improvement of public facilities needed as a result of new development. State law prescribes the required elements of the report, outlines public notice requirements, and specifies that the City Council review the report. The City is required to publish the annual report within 180 days of the last day of the fiscal year. The Fiscal Year (FY) 2024-25 Annual Report was filed with the City Clerk’s Office on January 05, 2026, and made available for public review on the City’s website.
The combined available PFF fund balance as of June 30, 2025, is $93,360,141. The City programs PFF funds in its five-year Capital Improvement Plan (CIP) for eligible projects that meet the local infrastructure commitments. In some fee categories, the available fund balances are insufficient to cover all infrastructure commitments and future collections will be required.
DISCUSSION
Background
California Government Code Section 66000 et seq., known as the Mitigation Fee Act (“the Act”) and/or AB 1600, requires the City make an Annual Report of fees collected to support City infrastructure publicly available. The Act spells out the fee information that must be provided in the Annual Report and specifies that the report is to be reviewed by the City Council at a regularly scheduled public meeting. As required by the Act, the annual reports are to be filed and made available to the public no later than 180 days following the last day of the fiscal year. The FY 2024-25 Annual Report was filed with the City Clerk’s Office on January 05, 2026, and made available for public review on the City’s website. The City is required to review the information at the next regularly scheduled public meeting, at least 15 days after the information is made public.
The Act provides that PFFs may be enacted and imposed on development projects. The City found and determined that new development projects create the need for the construction, expansion, or improvement of public facilities within the City and create new permanent financial obligations. The City imposes PFFs as new development projects are approved. In some jurisdictions, PFFs are known as Impact Fees or Development Impact Fees.
Utilization of a PFF program allows for the allocation of improvement costs across eligible development projects. Absent a city-wide PFF program, improvement costs would not be apportioned, and the full cost of mitigation improvements would be borne by the first project that established the need for the improvement. Such an approach would be a barrier to development in some instances given the disproportionate costs to early development projects. These issues formed the basis of the City establishing its PFF program beginning with the 1990 General Plan and the establishment of the original fees in 1991. The 1990 General Plan established the growth patterns and policies, and the PFF program was established to collect impact fees to address facility impacts from those growth policies. The fees are collected to finance eligible public facilities and collected for specific purposes.
Present Situation
Annual Report Requirements
The Mitigation Fee Act requires that each Annual Report contains the following information:
A. A brief description of the type of fee in the PFF fund.
B. The amount of the fee.
C. The beginning and ending balance of the fund in the year reported.
D. The amount of the fees collected, and interest earned.
E. An identification of the public improvement on which fees were expended.
F. An identification of an approximate date by which the construction of future public improvements will commence, once sufficient funds have been accumulated (the City meets this requirement by including PFF funds in the CIP).
G. A description of each interfund transfer or loan made from the fund, the approximate date the loan will be repaid and the interest the account will receive.
H. Refunds made under the provisions of the Mitigation Fee Act.
The PFF report attached to this staff report (Attachment A) presents the required information for FY 2024-25. This report provides additional information (balance sheet and the previous year’s data) to be transparent and comprehensive.
Fee Revenues and Expenditures
The City received $19.4 million in total revenues in FY 2024-25, a decrease of $0.6 million compared to the $20 million collected in FY 2023-24. The variance is primarily due to the decreases in Delta Water Surface Fees, Water Connection Fees, and Air Quality Impact Fees.
The largest fee types by source in FY 2024-25 were Delta Water Surface fees at $5.4 million, Wastewater Connection fees at $3.5 million, Regional Transportation Impact fees at $3.7 million, and Street Improvements fees at $2.2 million.
Expenditures in FY 2024-25 totaled $11.8 million as compared to $11.4 million in FY 2023-24. The largest expenditures are primarily from Libraries Impact Fee and debt service in the Wastewater Connection Fees.
Selected Program Highlights
Street Improvement Program
The Street Improvements Impact Fee provides for traffic improvements necessary to accommodate increased traffic generated by new development.
The total revenues received by Street Improvement Impact Fee in FY 2024-25 is $2,074,715 compared to the prior fiscal year of $2,079,320. The total expenditure (including operating and capital improvement projects) is $294,164 in FY 2025. The ending fund balance on June 30, 2025, is $20,773,366 whereas the available fund balance for projects is $16,671,133.
In FY 2024-25, Street Improvement Impact Fee received a total transfer in of $165,019 from PFF Recreation Center and PFF Police Stations for the interfund loan repayments required by Council Reso. #2018-08-21-1107. The fund also transferred out of $438,714 to CIP fund for capital improvement projects and $32,880 as allowance for uncollectible interfund loan for the accrued interest on interfund loans in FY 2025.
Community Recreation Centers
The Community Recreation Centers Impact Fee provides for the construction and expansion of community centers as required by new development.
In FY2024-25, the Community Recreation Centers received a total of $27,679 in revenues, compared to prior fiscal year of $46,426 and incurred $23,545 of interest and operating expenses. As of June 30, 2025, the ending fund balance is $29,295.
In FY2024-25, the Community Recreation Centers received a transfer in of $22,660 for the accrued interest expense to be recorded as “Allowance for Uncollectable” interfund loan. The fund also transferred out of $37,665 to PFF Street Improvements Fee for the interfund loan repayment as required by Council Reso. #2018-08-21-1107.
As of June 30, 2025, the Community Recreation Centers fund has a total outstanding interfund loan balance of $2,373,680, payable to Street Improvement Fees Fund and was recorded as “Allowance for Interfund Loans.” As specified by Council Reso. #2018-08-21-1107, the fund is required to make annual payments by the net using excess of revenues from impact fees collected until the balance is paid in full.
Fire Stations
The Fire Station Impact Fee provides for new or expanded fire stations as driven by new development.
In FY 2024-25, Fire Stations Impact Fee fund received a total revenue of $65,837, compared to prior fiscal year of $107,035 and incurred $26,861 of interest and operating expenses. The ending fund balance on June 30, 2025, is $67,431.
In FY 2024-25, the funds received a transfer in $25,954 for the accrued interest on PFF interfund loan to be recorded as Allowance for Uncollectable. The fund also has a transfer out of $99,239 to PFF Libraries Fund for the interfund loan repayment as required by Council Reso. #2018-08-21-1107.
As of June 30, 2025, Fire Stations Impact Fee fund has a total outstanding interfund loan balance of $1,115,356 owed to Libraries Impact Fee fund and was recorded as Allowance for Interfund Loans. As specified by Council Reso. #2018-08-21- 1107, the fund is required to make annual payments by using excess revenues from fees collected until the balance is paid in full.
Library Facilities
The Libraries Facility Impact Fee provides for new libraries as required by growth and new development.
In FY 2024-25, the Libraries Impact Fee fund received a total revenue of $359,992, compared to prior fiscal year of $364,802 and incurred $2,263 in operating expenses and transferred out of $2,867,483. As of June 30, 2025, the total ending fund balance is $2,200,940.
In FY 2024-25, the fund received a transfer in of $99,239 from PFF Fire Stations for the interfund loan payment required by Council Reso. #2018-08-21-1107. The fund also transferred out of $2,867,483 ($25,954 to Fire Stations for the “Allowances for Uncollectible” on PFF interfund loans interest accrued and $2,841,529 to CIP fund for the construction costs of the NE Branch McNair Library)
Police Stations
The Police Stations Impact Fee provides for expansion of police stations as required by growth and new development.
In FY 2024-25, the fund collected total revenues of $75,173 compared to the prior fiscal year of $121,484 and incurred $11,136 in operating expense. The ending fund balance on June 30, 2025 is $76,758.
In FY 2024-25, the fund has a transfer in of $10,220 for the accrued interest on PFF interfund loans to be recorded as “Allowance for Uncollectable” interfund loan and a transfer out of $127,354 to Street Improvement Fund for the interfund loans payment required by Council Reso. #2018-08-21-1107.
Parklands (Park and Recreation Impact)
The Parkland Impact Fee provides for the acquisition of land and the development of regional and neighborhood parks due to growth and new development.
In FY 2024-25, the fund collected total revenues of $444,092 compared to the prior fiscal year of $294,227 and incurred $433,279 in expenditures. The ending fund balance at June 30, 2025, is $7,317,210. The available fund balance for projects is $6,782,348.
City Office Space
The City Office Spaces Fee provides for additional administrative office space to maintain and provide administrative and general services as the City grows.
In FY 2024-25, the City Office Spaces Fee received total revenues of $60,798 compared to prior fiscal year of $67,240 and incurred $1,039 in operating expenses. The ending fund balance on June 30, 2025 is $615,576.
Administration
The Administrative Fee supports the administrative costs of the PFF Program.
In FY 2024-25, the Administrative Fee Fund collected total revenues of $774,213 compared to the prior fiscal year of $830,107 and incurred $403,325 in operating expenditures. The ending fund balance on June 30, 2025, is $3,798,795.
Air Quality
In FY 2024-25, the fund collected total revenues of $958,785 compared to the prior fiscal year of $1,179,431 and incurred $16,651 in operating expense. The ending fund balance on June 30, 2025 is $7,745,635, whereas the available fund balance for projects is $4,512,851.
Supplemental Reports
The “Supplemental Reports” section of the attached Annual Report contains information pertaining to deferred PFF fees, PFF interfund loans, public improvement expenditure details, and the PFF five-year budgetary expenditures.
FINANCIAL SUMMARY
This report is an informational item only. There is no financial impact associated with accepting the FY 2024-25 Public Facilities Fee (PFF) Annual Report.
Attachment A - PFF Program Annual Report FY 2024-25