Chico council approves ordinance to allow development-fee decreases tied to construction-cost indices

The Chico City Council voted unanimously to approve an ordinance amending portions of the Chico Municipal Code to allow certain development-impact fees to be reduced when applicable construction-cost indices decline.

Barbara Martin, administrative services director, told the council the ordinance corrects language that previously allowed only increases tied to the construction cost index and highway cost index. "Before you tonight is the ordinance that makes that adjustment for those specific fees that were discussed at that time," Martin said, describing the change as a technical correction to the fee schedule process.

The ordinance applies to fees adjusted by construction-cost metrics — specifically transportation facility fees, storm drainage facility fees, park facility fees, and building and equipment fees, Martin said. Council members and the city attorney noted that fees tied to the consumer price index (CPI), such as sewer fees, are adjusted under separate statutory or code provisions and would need a different ordinance to change.

Katie Thoma, executive director of the Chico Builders Association, urged the council to consider including all development-impact fees subject to CPI, the Highway Cost Index or the Construction Cost Index for consistency and clarity. "We're requesting that all development impact fees subject to CPI, HCI, or CCI be included in the ordinance to ensure consistency and clarity," she said.

Council member Winslow moved to approve the ordinance and Council member Goldstein seconded the motion. The council recorded a 7-0 vote in favor.

Council members and staff said expanding the change to additional fee types would require an additional ordinance and further review by the finance committee. Staff said they will agendize any direction from council to pursue broader changes in a future meeting.