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Manhattan Beach introduces development-impact fee program to fund $266 million in capital needs
Summary
After a public hearing, the city council introduced an ordinance and adopted a related resolution to create a development impact fee program that staff says would cover about $61.6 million of identified capital needs tied to new development; the motion passed 5–0.
Manhattan Beach City Council on Feb. 3 held a public hearing and introduced an ordinance to create a development impact fee (DIF) program intended to require new development to pay a share of future capital and infrastructure costs.
Finance Director Libby Brenhower told the council the city’s nexus study, prepared with consultants at Harrison Associates, recommends fees per square foot (residential) and per thousand square feet (nonresidential) across categories including general government, police, fire, transportation, wastewater, storm drainage and water. Brenhower said the total list of projects identified in the study is about $266 million and the DIFs capture roughly $61.6 million of that cost attributable to future development. She recommended introducing the ordinance and adopting a companion resolution; council voted 5–0 to proceed.
“The purpose of development impact fees is to ensure new development pays its fair share of the capital needs it creates,” Brenhower said during the presentation. Consultant Adam Marston summarized the methodologies used in the nexus study (existing‑inventory, planned‑facilities and system‑plan), the projected build‑out demand, and several sample calculations showing how fees would apply to typical projects.
Marston said the study anticipates roughly 2,300–2,400 additional residential units at build‑out and an increase in service population from a little over 41,000 to roughly 46,000. Using those assumptions, staff estimated total DIF revenue attributable to new development at about $61.6 million, with the remaining $204 million of the $266 million CIP to be borne by other city funds, enterprise funds and potential grants unless other sources are identified.
The presentation included sample scenarios showing how fees would apply to expansions and new construction. For example, Marston showed an illustrative single‑family expansion of 2,000 additional square feet that would face a fee of about $12,240 (staff noted actual fees depend on project type and meter size for water fees). The consultants also explained that storm drainage fees are calculated on impervious acres, water fees on meter size, and that state law (the Mitigation Fee Act, Government Code section 66000 et seq.) constrains how fees are set and spent.
Council members asked about timing and what happens if the ordinance is not adopted. Staff said the ordinance is planned for introduction tonight and a second reading on Feb. 17; if adopted at second reading the fees would take effect 60 days later (roughly April 18). Brenhower said the DIFs are designed to reimburse the general fund for capital expenditures that serve new development as fees are collected.
Action and next steps: Council voted to introduce the ordinance (first reading) and adopt the associated resolution on the DIF program; the matter returns for a second reading on Feb. 17. If adopted at second reading, staff said the new fee schedule would take effect 60 days afterward. The council recorded a unanimous vote (motion passed 5–0).
Sources and attributions: Quotes and details above come from the Feb. 3 staff presentation by Libby Brenhower (Finance Director) and consultant Adam Marston (Harrison Associates).
