Milpitas council adopts 3.59% construction‑index increase to development and storm impact fees

The Milpitas City Council on Feb. 4 unanimously adopted a resolution updating the city’s fiscal‑year 2024–25 development and storm‑impact fee schedule, applying an across‑the‑board increase tied to the regional construction‑cost index.

Finance Director Luce DeFriese Howe told the council the recommended adjustment tracks the Engineering News‑Record construction cost index and represents a 3.59% increase to the Transit Area Specific Plan (now Milpitas Metro) impact fee, the Calaveras Boulevard widening traffic fee and the storm‑drain impact fee. “The increase is 3.59%,” DeFriese Howe said during her presentation.

Why it matters: the fees are charged to new development and are intended to fund infrastructure improvements — streets, intersections, storm drains and other capital work — necessary to support growth near the Great Mall area and other redevelopment sites. Staff emphasized the change would not affect projects already in the permitting pipeline; it applies to new development approvals and future redevelopment.

Key details from the presentation and council discussion: - Transit area / Milpitas Metro specific plan: staff said the plan covers an area that has been updated and expanded to roughly 510 acres and is intended to support higher‑density housing, offices, hotels and shops near a future BART and VTA light‑rail station. Staff noted many parcels are currently developed and that redevelopment would trigger the fee for those projects. Planning staff said they would provide maps showing the expanded boundary after the meeting. - Calaveras Boulevard widening: the traffic impact fee covers roughly a 1.1‑mile widening project from Abel Street to Milpitas Boulevard. - Storm‑drain impact fee: the updated fee reflects three service areas — the Milpitas Metro plan area, the Gateway/Main Street specific plan area and the rest of the urban service area — and applies to the underground storm infrastructure the city maintains (Valley Water manages major waterways downstream). - Index basis and effective date: the adjustment is a standard index update based on December 2022–December 2023 construction costs; staff said the new schedule applies to future permit applications and does not change fees for projects that already have permits or submitted plans.

Council member questions focused on the area included in the expanded Transit Area Specific Plan, where staff said parcels along Main Street, older commercial sites and the Great Mall site represent likely redevelopment opportunities over the next 20–30 years. The council then moved, seconded and approved the resolution (Councilmember Chua moved; Councilmember Lien seconded). The vote was 5–0.

The adopted fee schedule will be used to calculate development impact charges for new projects that submit applications after the fee change takes effect. Staff said they will share the updated maps and provide additional breakdowns of last year’s actual fee collections at council members’ request.

The council’s action: resolution approving the fiscal‑year 2024–25 development and storm‑impact fee schedule, passed 5–0.

Attribution: Finance Director Luce DeFriese Howe presented the fee study and explained the 3.59% indexed increase; Councilmembers Chua and Lien made and seconded the motion, respectively.