Developers urge council to delay steep fee increases; council sends major transport and stormwater fees back to finance

The City Council held a public hearing on the annual fee schedule and associated index adjustments on May 20. Staff told council the schedule is updated annually using inflation indexes tied to specific fee categories. The Engineering/Development indexes used include the HCI (Highway Cost Index) for roadway‑related fees and the CCI (Construction Cost Index) for vertical construction costs.

Katie Toma, executive director of the Chico Builders Association, and Bill Webb, representing local construction interests, urged council to delay or reconsider several large increases that staff proposed. Toma said the proposed transportation impact fee change would add nearly $3,000 to the cost of a single‑family house and that the storm‑drain fee would rise from about $3,000 to about $6,000 per developed acre. Citing the National Association of Home Builders, she said each $1,000 increase in development cost can price a significant number of households out of the market; she estimated the combined proposed increases could “price out nearly 300 households.” Webb told council that contractors he surveyed had not experienced a comparable 25% spike in materials and labor and questioned the use of the HCI for local impact fees, saying the more widely used Engineering News‑Record construction cost index (CCI) is a common benchmark.

Council members expressed concern about the magnitude of some of the increases and whether the underlying indexes and timing made sense. Several council members — including Council members Van Overbeck and Winslow — supported sending the highest‑impact items back to the Finance Committee for a focused review. After public comment, the council approved the fee schedule overall but voted to return the transportation impact fee line (the item tied to the HCI that would add roughly $3,000 per home) and the storm‑drain fee changes to Finance for further review before those particular increases take effect.

Council approval included a 60‑day waiting period for many fees before implementation; staff said the referral was intended to permit a targeted, expedited review while leaving other fee changes in place. Councilmember Van Overbeck asked staff to provide an estimate of budgetary impacts from delaying the two referred fees.

Actions: Council voted to approve the citywide fee schedule as presented and to refer the transportation impact fee and storm‑drain fee items to the Finance Committee for reexamination. (Motion, second and roll call recorded on the public record.)