FROM:
Engineering
SUBJECT:
Title
Adopt Development Impact Fee Nexus Study and Updated Development Impact Fees
End
RECOMMENDATION:
Recommendation
Adopt Resolution No. 2026-078, adopting a Development Impact Fee Nexus Study, the findings contained therein, and revising the amount of Development Impact Fees to finance certain public facilities and taking certain other actions related thereto.
End
COUNCIL GOALS:
• To practice sound fiscal management by living within our means while investing in the future.
• To invest in the City’s infrastructure (streets, sewers, parks, etc.) by providing for the development of new infrastructure.
DISCUSSION:
The City of Fontana recently completed a comprehensive Capital Improvement Plan (CIP) update for public facilities, police facilities, fire facilities, library facilities, park facilities, landscape medians, local arterials, active transportation, traffic signals, storm drain, and sewer systems. The CIP has been requested for the City Council’s approval separately and it will continue to be updated annually. Based on these significant and ongoing updates, staff retained David Taussig and Associates (DTA) to prepare an impact fee nexus study (“Study”) which analyzed and provided recommendations of potential modifications to the City’s Development Impact Fee Schedule (“DIF”). The Study was prepared in compliance with Assembly Bill 1600 and the requirements of AB 602.
As part of the Study, DTA evaluated the City’s needs across multiple infrastructure and service categories. These evaluations were based on service levels identified by the respective City departments as necessary to support future development.
DTA utilized a range of data, assumptions, and planning documents in its analysis, including existing City facilities, property and equipment valuations, the current funded Capital Improvement Program (CIP), and identified unfunded CIP needs to calculate the maximum justifiable fee for each DIF category. The Study also considered anticipated infrastructure, equipment, and capital investments required to accommodate future growth, as well as relevant master plans for sewer and storm drain systems and the City’s most recent General Plan.
In addition to the specific recommendation noted below, as described in the Study, affected residential fees have been updated to a calculation based on the square footage of the homes, rather than a fixed “per unit” cost in compliance with AB 602. Storm drain fees are proposed to be assessed based on a citywide rate, rather than a zone-by-zone calculation as prior studies included.
Based on the findings of the Study and internal analysis of the recommendations included, staff recommends adoption of the updated DIF schedule for public facilities, police, fire, library, landscape medians, local arterials, active transportation, traffic signals, sewer, and storm drain systems, as depicted below. Fees not shown on the table below are not impacted by this recommendation. Please note that the below table includes a recommendation for imposition of only 50% of the maximum legally justifiable storm drain fee identified in the Study for Single Family Detached Residential units, as well as Commercial and Industrial uses to maintain development activity and support continued economic investment. The City will, as needed, seek grant opportunities or contribute funding from unrestricted revenue sources to ensure timely completion of storm drain facilities.
To ensure the fee schedule remains current with increases in construction and service delivery costs, staff also recommends incorporating an annual inflationary adjustment to all DIF based on the annual percentage increase in the California Construction Cost Index. This provision, included in the adopting Resolution, would authorize the City Manager or their designee to implement annual inflationary fee adjustments without further action from the City Council.
In preparation for the public hearing, a Notice of Public Hearing was published in the San Bernardino County Sun on June 12th, 2026, and again on June 29th, 2026, providing notice of the Updates to the Development Impact Fees. Additionally, written notice, including the Development Impact Fee Study (Exhibit “A”), was provided to all interested parties who requested such notice at least 14 days prior to the public hearing.
Approval of this report and adoption of the attached Resolution will establish the updated DIF program and provide a structured mechanism for future DIF adjustments. If approved, the new DIF schedule shall be effective immediately but shall not be assessed to new development until July 1, 2027. The annual inflationary adjustment shall be effective July 1, 2028, and each July 1 thereafter.
FISCAL IMPACT:
The fiscal impact associated with the approval of this item will result in fee revenue increases that will be better estimated as activity occurs. Actual revenue will be dependent upon fee related activities.
MOTION:
Approve staff recommendation.