Vacaville holds study session on updated development impact fees; staff offers project reductions and policy options

The Vacaville City Council and staff conducted a detailed study session on Sept. 23 to review a proposed update to the city’s development impact fee (DIF) program. Staff and consultant Economic & Planning Systems presented calculations for the maximum allowable fees under state law and then offered options to reduce the developer share by removing or rescoping a set of large transportation and parks projects.

Why the update: The city’s project cost estimates dated from 2018–2019 and construction and materials costs have risen sharply since then; staff and the consultant said that applying contemporary construction cost indices would raise the fee the city could lawfully charge. The study session presented both the maximum allowable fee under the updated nexus and a series of adjustments that would reduce the developer obligation.

Major proposed scope changes: On the transportation side staff proposed six adjustments to reduce DIF responsibility, including rescoping or reevaluating the California Drive overcrossing, Vaca Valley Parkway extension and the Nut Tree overcrossing; those options would reduce the transportation portion by roughly $112 million and reduce the per‑unit fee by about $5,175 per residential equivalent unit.

On the parks and recreation side staff identified nine new facilities added to the 2025 fee schedule; parks staff proposed postponing six of the nine new projects to a later fee cycle and also recommended exploring a Quimby land‑dedication ordinance so that land dedicated with subdivision maps could offset the land‑acquisition component of the DIF. Those parks changes would reduce demand on DIF revenues by about $103 million.

Net effect and alternatives: Incorporating the staff project rescoping options reduced the consultant’s April “maximum allowable” citywide fee substantially, but fees as presented would still represent a notable increase compared with current DIFs. Staff presented a range of alternatives including (a) adopting a Quimby ordinance to require land dedication in subdivisions, (b) designing targeted incentive programs (fee reductions or deferrals) for prioritized industries or housing types, (c) phasing residential and/or non‑residential fee increases over several years, and (d) writing clearer turnkey park credit policies to encourage developers to build parks that the city would later accept and credit.

Public comment and developer concerns: Developers and the Building Industry Association urged the council not to adopt the full maximum allowable fee and asked for an economic sensitivity analysis showing how fee increases would affect housing production. Several developer representatives said the combined fee load (city DIF plus school, county and other fees) reduces project feasibility and had already led some builders to pause or withdraw from local projects. Neighborhood residents and other commenters pressed city officials to preserve ridgelines and to ensure adequate parks and safety infrastructure.

Council direction: The study session did not finalize fee levels. Councilmembers asked staff to continue analysis, refine project scoping, respond to peer review comments submitted by developers and provide more detailed economic sensitivity work. Councilmembers also suggested the item be revisited after staff and the consultant incorporate the requested clarifications and letters that had arrived late in the process.

Next steps: Staff will respond to the August peer reviews and developer information requests, refine project lists and cost estimates, consider a Quimby ordinance and turnkey park guidance, and return to council with a revised proposal and (if requested) an economic sensitivity analysis. Any final fee adoption would be a separate council action requiring statutory findings and an ordinance or resolution as appropriate.