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Council adopts 3% increase to transportation and storm drainage development impact fees
Summary
After discussion and public comment from builders and realtors, the Chico City Council approved a 3% increase to transportation and storm drainage development impact fees rather than the 23.4% spike tied to the highway construction index, citing housing affordability and the upcoming Nexus study.
The Chico City Council on June 17 approved a resolution to amend the city fee schedule and apply a 3% inflator to select development impact fees for transportation facilities and storm drainage, rejecting a staff‑calculated increase of 23.4% based on the Highway Construction Cost Index.
Staff explained the highway construction index (HCI) had produced a higher figure and that the finance committee had recommended using a smaller inflator tied to the consumer price index (rounded to 3%) pending a full Nexus study in 2026. The staff presentation noted municipal code does not provide for automatic fee decreases when indices fall, and that councils have in past years used phased approaches to smooth volatile jumps in the cost indices.
Speakers from the building and real‑estate communities supported the lower increase. Katie Toma, executive director of the Chico Builders Association, said the HCI‑based increase would have raised fees substantially — for example, adding about $3,000 to a typical three‑bedroom house and increasing storm drainage fees by thousands per developed acre — and urged caution until a full Nexus study examines fee methodology. Adam Fideli, chair of the Sierra North Valley Association of Realtors’ Local Government Relations Committee, urged conservative increases so that added fees do not further reduce housing affordability.
Councilmembers said the finance committee’s recommendation reflected recent long‑term trends for fee growth and recognized local housing affordability concerns; the council adopted the amended fee schedule with a 3% inflator on a 6–1 vote.
The amendment will be implemented in approximately 60 days unless otherwise revised; staff said the Nexus study in 2026 will re‑examine fee methodology and actual cost drivers and could prompt future adjustments.
