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Committee recommends 1.6% increase to Salinas development impact fees
Summary
The Finance Committee unanimously recommended that the council adopt a 1.6% adjustment to development impact fees, tied to the Construction Cost Index, with a July 1 effective date if approved by council.
The Salinas Finance Committee on April 8 voted 3-0 to recommend that the City Council approve a 1.6% annual adjustment to development impact fees, effective July 1, 2025, consistent with the Engineering News-Record construction cost index.
Adriana, a Community Development staff member, told the committee the request "is an adjustment of 1.6%, which is consistent with the engineering news records, published January rate, and that's comparing January 2024 to January 2025." She said the adjustment applies to fees relating to development, with separate exhibits in the staff report showing commercial/industrial and residential fee schedules and a statement of revenues and expenditures listing an overall balance of about $6,100,000 across those fee accounts as of Jan. 29.
Outreach and rationale: staff said they notified the Salinas Valley Chamber of Commerce, SUBA, the FGA developers known to the city, and the Builders Exchange and reported no feedback. Adriana said the development impact fees have tracked the construction cost index since the council declined an increase during FY 2020-21 and that the resolution before the committee would increase development impact fees by 1.6% starting July 1, if the council approves.
Committee response: Committee members described the 1.6% figure as reasonable and noted the low percentage compared with the large post-COVID spikes in construction costs. A motion to recommend the 1.6% increase passed unanimously with Councilmember D'Arrigo, Councilmember De La Rosa and Mayor Donahue voting in favor. The recommendation will go to the City Council for consideration on April 22.
Next steps: staff said the item will be forwarded to council with the supporting exhibits and the proposed resolution. If council approves, the rate change would take effect July 1, 2025.
