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Council reviews AB 1600 development-impact fee inflation update; staff to add permit-type totals ahead of public hearing
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Summary
Staff recommended a 3.6% inflationary adjustment to five AB 1600 development-impact fees based on the ENR construction cost index and proposed returning to council for a public hearing and ratification with added detail on fund balances and totals by permit type.
City finance staff on March 8 presented the annual inflationary adjustment for Cathedral City's AB 1600 development-impact fees and recommended the council schedule a public hearing before final adoption.
Kevin Biersack explained that the adjustment uses the Construction Cost Index (CCI) as reported by Engineering News-Record and that the 12-month year-over-year index (Dec. 2024 over Dec. 2025) indicates a 3.6% inflationary increase for the five DIF categories (parks, transportation, general government, fire and police facilities). "In that publication, the 12 month inflationary adjustment year over year is 3.6%," he said.
Staff said the adjustment would take effect July 1 if the council follows the standard notice and hearing schedule; they noted the city will return in two weeks for a formal public hearing and then allow a 60-day ratification period per the code. Biersack also said staff can add a totals column showing the combined fee by permit type for the final presentation, after council members requested clearer per-permit totals.
A representative of the Desert Valleys Builders Association, James Brown, asked that staff include documentation showing the fee increases do not exceed the cost of providing the infrastructure and asked that fee-justification language required by Government Code be added to the materials; staff acknowledged the request and said they would include that information before the public hearing.
Biersack estimated a possible fiscal impact of up to $75,000 for fiscal 2026–27 if development activity matched 2024–25 levels and said each impact-fee category maintains a separate fund balance that staff will report at year-end. Council members asked for the fund balances and noted the importance of transparent per-permit totals to understand developer impact.
The council did not adopt the increase at the study session; staff recommended returning with the added details and a public hearing in two weeks.
