Planning Commission hears staff recommendation to apply a 2.8% annual adjustment to development impact fees

City staff told the Salinas Planning Commission that the recommended annual adjustment to development impact fees for the coming year is 2.8%, an increase tied to the Engineering News‑Record Construction Cost Index.

The recommendation was presented as an informational item; no action was required of the commission. Staff said the adjustment reflects changes in construction costs and noted that different fees apply by project type — for streets, trees, utilities (storm and sanitary), traffic impact, police and fire, and, for residential development, community services such as parks and library services. The staff presenter said the city has followed the ENRCCI methodology for several years and that the 2.8% figure compares January-to‑January index values.

Staff also described the balance and purpose of the fee funds. The presentation reported an estimated combined balance of roughly $20 million in development impact fee funds and later referenced a $20.9 million estimated fund balance on an exhibit; staff attributed a large recent boost in traffic impact fee revenue to an Amazon development and noted traffic fees alone accounted for about $13.9 million of the balance. The presenter said master plans (sewer, traffic and other facility plans) guide which projects will be funded by the fees and that the fee adjustments aim to mitigate the incremental infrastructure impacts of new development.

The staff presenter said the adjustment is not a project under CEQA and outlined the public‑notice and outreach plan; staff said the item will go to the Finance Committee on April 7 and to City Council on April 21 for Council consideration. Commissioners asked for clarifications about what specific infrastructure the fees cover, why certain tree fees are waived when developers install landscaping, whether in‑lieu housing fees are part of the impact fee program (staff and the Planning Manager said in‑lieu fees stem from the city’s inclusionary housing requirements in the municipal code and are treated separately), and why the index produced an 8% increase in a prior year (staff said the index comparison method produced that spike for that year).

The commission approved the meeting consent agenda and heard no public comments on the development impact fee item. Staff indicated outreach has included notices to the development community and the Chamber of Commerce and encouraged further digital outreach to broaden public awareness.