Pleasant Hill adopts traffic-impact study and moves to raise developer fees with phased increase

The Pleasant Hill City Council voted Feb. 23 to adopt a traffic impact fee nexus study prepared by Fair and Peers and introduced an ordinance to revise the city's traffic impact fee schedule.

Senior civil engineer Leticia Galatsi told the council the update replaces a 2003 study and bases fees on a vetted list of future transportation projects consistent with the 2040 General Plan. Galatsi said the study projects the city's population rising to about 45,000 residents and estimates roughly 4,500 adjusted new daily trips that form part of the fee calculation.

Galatsi summarized the methodology: the consultant identified land-use categories (industrial, commercial, office, single-family and multifamily), estimated trip generation for each, and matched projected trips to a set of 15 transportation projects to establish a funding nexus. She told the council staff applied 33% of the eligible project cost as the TIF target (about $34 million) and divided that amount by the projected new daily trips to derive a per-trip fee. "We take all of these new improvements and our nexus and we create a fee to be charged per land use category," she said.

Galatsi warned that the proposed fees are higher than the 2003-based schedule and that some categories (she noted single-family and retail) could see nearly double the current fee. To reduce short-term impact on developers, the budget committee recommended a three-year phase-in with a 4% cap on annual construction cost escalation.

Julie Morgan, a principal at Fair and Peers, explained why only a portion of project costs can be funded by the TIF: local fees may apply only to trips that are local in nature and a nexus must be demonstrated between new development and the need for the improvement. "It's never really the case that a full 100% of the cost of any improvement project can really be covered by the TIF program," Morgan said.

Council members asked how mixed-use projects would be charged and whether exemptions apply. Staff said mixed-use developments would be evaluated case by case (or apportioned by square footage) and reiterated that certain exemptions remain (temporary uses, government facilities and other listed exceptions). The city attorney's office recommended updating the Nexus study every 5–8 years.

Councilmember Law moved to adopt the resolution and introduce the ordinance; the motion passed unanimously on roll call (Law yes; Noak yes; Oalinski yes; Sotch/Sock yes; Chess yes). Staff said the ordinance's fee schedule will be provided and discussed at second reading, scheduled for the first meeting in April.

If adopted at second reading, the revised fee schedule would change the one-time fees charged to new development to help fund a portion of the 15 projects identified in the nexus study. The city indicated it expects to seek grants and other funding to cover the remainder of those projects' costs.

Next steps: council adopted the resolution and formally introduced the ordinance; staff will return at second reading with the full fee schedule and detailed numbers for council review.