Cotati council approves fire‑fee agreement, waives certain impact fees for affordable housing and hotels; adopts budget adjustment

The Cotati City Council took a series of formal actions during its Aug. 26 meeting, adopting a coordination agreement with Rancho Adobe Fire District to implement a new fire impact fee, approving targeted temporary waivers of several development impact fees for deed‑restricted inclusionary multifamily housing and high‑quality hotels, and adopting a budget adjustment. All final motions were adopted unanimously unless noted.

Why it matters

The votes change how Cotati will collect and manage several development impact fees and create temporary policy incentives the city hopes will spur construction of deed‑restricted affordable housing and attract higher‑quality lodging that can generate transient‑occupancy taxes (TOT). The measures shift the near‑term burden of impact fees away from some new development types and outline how the city will monitor and (in some cases) backfill lost fee revenue.

Summary of actions and votes

1) Fire impact fee and development coordination agreement with Rancho Adobe Fire District - Motion: Adopt a resolution approving a fire impact fee and a development coordination agreement by which Rancho Adobe Fire District will collect city‑authorized fire impact fees on behalf of the city, provide annual accounting and prepare required reports under the Mitigation Fee Act. - Vote: 5–0 in favor (Mayor Ford, Vice Mayor Lemus, Councilmembers Sparks, Harvey and Savage all voted yes). - Key points: The agreement makes Rancho Adobe responsible for collecting the fire impact fee, producing the Mitigation Fee Act five‑year reports and handling an eight‑year fee nexus update; the district and city will coordinate on permitting and reviews. If fees are unpaid, permits will not be issued until documentation of payment is provided.

2) Resolution: Eliminate development impact fees for deed‑restricted inclusionary multifamily housing (three‑year pilot; council amended cap to 25%) - Motion: Approve a resolution establishing a three‑year pilot that waives development impact fees for qualifying deed‑restricted multifamily inclusionary units, with administrative rules to implement the pilot and a 24‑month entitlement guarantee from the date fees go live. - Amendment adopted in debate: the staff recommendation to allow waivers for up to 15% of a project’s total units was amended by council to a 25% cap for eligible units. - Vote: 5–0 in favor after amendment. - Key points and limits: Eligible projects must meet the city’s inclusionary ordinance definitions and usually have a 10‑unit minimum to qualify; units granted fee waivers must remain deed restricted for at least 55 years and fees would be assessed at market rates if a unit converts to market rate (administrative mechanics to be drafted by the city attorney). The council also limited fee waivers to no more than 25% of a project’s total units under the motion it adopted. Staff noted the city’s linkage/inclusionary funds (about $1.2M combined, with roughly $200k already committed) would be the initial backfill source for waived fees and that the pilot will be monitored and reported back to council.

3) Resolution: Targeted fee elimination for high‑quality lodging - Motion: Approve a targeted impact‑fee waiver policy for high‑quality hotels intended to attract lodging projects that would provide economic development and TOT revenue to the city. - Key policy features: Eligible projects must be at least 25 rooms and meet a “three‑diamond” equivalent quality standard (AAA rating or equivalent); extended‑stay motels and lower‑quality properties are not eligible. The city will track waived fee amounts and backfill the lost revenue using TOT receipts, with staff modeling payback timelines for council review. The staff analysis showed typical payback of waived fees from TOT could be approximately three years under the modeled scenarios. - Vote: 5–0 in favor.

4) Resolution/policy: Application of impact fees for additions and remodels; residential threshold raised to 500 sq. ft. - Motion: Adopt policy guidance clarifying how the new square‑footage‑based development impact fees apply to additions and remodels. - Change adopted by council: staff originally proposed a 400‑square‑foot threshold (based on neighboring jurisdictions) for residential additions that would not trigger a fee; council amended the policy to a 500‑square‑foot look‑back threshold to align the city practice with the local school district’s standard. - Vote: 5–0 in favor.

5) Budget amendments (fiscal years 2025‑26 and 2026‑27) - Motion: Adopt budget adjustments to reallocate staff time and expense allocations across departments and funds (no net increase to overall fund balances). - Vote: 5–0 in favor.

Other procedural votes - Consent calendar (minutes and routine items) were approved earlier in the meeting on voice vote (recorded as carrying 5‑0). Several administrative and routine measures were handled under consent and will be listed in the official minutes.

Authorities and legal notes - The fire fee agreement and the city’s impact fee work reference obligations under the California Mitigation Fee Act for tracking, accounting and reporting of impact fee balances and expenditures. - Staff referenced state laws on supportive housing and density bonus, and earlier in the meeting AB 2162 (as cited in the transcript) in connection with ministerial approval for supportive units; the city emphasized it must remain legally compliant with state requirements when establishing fee policies and exemptions.

Financial and timing notes - Staff told council that new development fees adopted in earlier action will go live after the statutory run‑up period; staff cited Oct. 13, 2025 as the effective date for the recently adopted fees (60 days after adoption). The three‑year pilot waivers for deed‑restricted multifamily housing will be measured from the date the fees become effective. - Staff estimated the city’s combined inclusionary/linkage fund at roughly $1.2M with about $200k already committed, leaving approximately $1M available initially to help backfill fee waivers; staff said they will monitor the pilot and consider additional backfill strategies as needed.

Speakers and staff involved in votes - Noah (City Manager) — answered questions on CEQA and process. - Chief Felichet (Rancho Adobe Fire District) — appeared for the fire district and described coordination and implementation. - Angela Korder, Director of Administrative Services — presented the quarterly unaudited financial update and the budget amendment that council adopted.

What’s next - Staff will implement the fire impact fee collection arrangement with Rancho Adobe, post the required nexus and fee reports on the city website and begin coordination on permit review procedures covered by the development coordination agreement. - For the affordable housing pilot, staff will draft administrative procedures and return with monitoring metrics and an accounting plan tied to the linkage/inclusionary fund and report back on pilot outcomes at council‑directed intervals. - For the lodging policy, staff will formalize the mechanism for tracking waived fee amounts and TOT backfill and will present an accounting approach and potential options for partial backfill if council prefers to retain some TOT for general fund uses.

Votes at a glance (selected motions and outcomes) - Adopt fire impact fee and development coordination agreement with Rancho Adobe Fire District — passed 5–0. - Adopt pilot waiver for deed‑restricted inclusionary multifamily units (cap amended to 25%) — passed 5–0. - Adopt targeted development impact fee elimination for high‑quality lodging (25‑room minimum, three‑diamond equivalent) — passed 5–0. - Adopt policy clarifying impact‑fee application to additions/remodels and set a 500‑sq.‑ft. residential threshold — passed 5–0. - Adopt budget amendments for FY 2025‑26 and 2026‑27 reallocating staff and expense coding (no fund balance impact) — passed 5–0.

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