Council members largely endorsed the proposed fee adjustments while asking for additional analysis on potential higher upticks in the affordable housing fee before their final deliberations, scheduled for later this month.
"Twenty years of not changing these rates, certainly it's time. We've lost money over the last 20 years that we should have gotten," Councilman Jerry Pentin said during the hearing at the Pleasanton Civic Center.
"I do think that we can look at these numbers and bring up the affordable housing numbers, to bring at least the single-family and multi-family (cumulative fees) up to our neighbors," Pentin added, later pointing out that the fee is just one piece of the affordability puzzle. "Whereas we're right in raising these fees, somewhere ... we have to discuss how we actually work with these developers to develop true affordable housing in this city."
City officials have been working since fall 2015 to update the developer fees, which aim to generate revenue for public projects to help mitigate the impacts new developments have on the community.
The city contracted with Economic & Planning Systems, Inc. (EPS) to conduct a comprehensive nexus study to determine the maximum fee amounts that the city could charge.
EPS and city officials have circulated the study results and held meetings with residents, the city's Economic Vitality Committee, Pleasanton Chamber of Commerce and developer organizations, among other stakeholders, to gather feedback before bringing their recommendation to the council.
The proposed fee schedule identifies increases in almost all categories, in most cases the maximum allowable fee but in some others based on the average of comparable fees charged by neighboring Dublin and Livermore.
"We had two goals: We wanted to set fees commensurate with Dublin and Livermore, so that's in our recommendation, and we wanted to keep our eye on funding for city projects," city finance director Tina Olson told the council.
City officials said they found Pleasanton's current cumulative development impact fees are between 67% and 85% of the average of Dublin and Livermore fees.
Pleasanton collected $4.3 million in development impact fees last fiscal year -- under the staff-recommended structure, that would have gone up to about $7 million, Olson said.
For the capital facility fee, city staff recommended adjusting the maximum fee, resulting in increases to all development categories except industrial, which would see a reduction in 5 cents per square foot. The other areas are single-family and multi-family residential, retail, office and hotel/motel.
The transportation fee would rise in all development categories, going up to the maximum in each case except for retail, for which city staff recommended the Dublin-Livermore average.
The proposed affordable housing fee called for increases for single-family and multi-family residential projects (up to the Dublin-Livermore average), but staff recommended no changes to the fee for the commercial development categories.
Several council members noticed that even after the slew of fee increases, Pleasanton cumulative development impact fee amounts were still tens of thousands of dollars lower than the Dublin-Livermore average.
As a result, they asked city staff to look at options for raising the city's affordable housing fee to bring Pleasanton's overall fee amount in line with the neighbors' average -- since capital facility and transportation fees were mainly recommended to increase to the maximum amount, the only wiggle room existed in the affordable fee.
City Manager Nelson Fialho also pointed out that the city fees are a minority percentage of the overall impact fees charged to new development in Pleasanton, which includes fees from other agencies such as Zone 7 Water Agency and Dublin San Ramon Services District.
Council members also wanted to ensure some flexibility in the fees for developers that propose public amenities in their projects.
Fialho said the city code already allows for the fees to be reduced or waived if a developer builds an amenity such as affordable housing units, a street extension or park.
The development fee increases were set up as a two-step consideration process, with final council deliberations scheduled for Sept. 18. City staff plans to incorporate the feedback from the council on Tuesday, as well as present the proposed new fee schedule at a Chamber of Commerce meeting, before returning to the council in two weeks with a final proposal.
The new fees would take effect on Jan. 1, although projects with development applications already submitted for city review would be grandfathered into the existing fee structure.
For the future, city staff suggests reviewing the fee schedule every five years for possible adjustment, or after major General Plan or Regional Housing Needs Assessment (RHNA) changes.
In other business
* The Tri-Valley/San Joaquin Valley Regional Rail Authority asked to delay its scheduled presentation to the City Council on its Valley Link concept for connecting the Dublin-Pleasanton BART station to ACE Train and San Joaquin County via a multiple-unit commuter rail system over the Altamont Pass.
The council discussion is expected to be rescheduled for October.
* Councilwoman Kathy Narum presented a proclamation declaring Sept. 17-23 as Constitution Week.
* As part of its five-item consent agenda, the council approved of increasing the contract with EPS for the development impact fee study by $15,000 to $160,070 overall.
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