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Council authorizes master services agreement with Redding Rancheria including $3.25M payment in lieu of fees
Summary
Council authorized a master services and utilities agreement with the Redding Rancheria for a Health Village project that includes a $3.25 million payment characterized as payment in lieu of taxes (derived from in‑city traffic-impact fees), $600k+ in utility connection fees, and a $100,000 annual service/impact fee; council discussed appropriation and designation of the incoming funds.
City staff presented a proposed master services agreement with the Redding Rancheria tied to a Health Village project. Michael Webb described how the $3,250,000 figure was calculated using the city's traffic-impact fee formula that would apply if the project were inside city boundaries; that amount is the lion’s share of a package that also includes roughly $600,000 in connection fees for water and sewer and an annual $100,000 service-impact payment intended to address ongoing facility needs until a related development ("Strawberry Fields") is built.
Council members asked whether the payment should be characterized as payment in lieu of taxes or in lieu of impact fees, because that affects how funds are legally designated and spent. Webb and legal staff explained the distinction: impact fees are tied to regulatory approvals while payments in lieu of taxes are unrestricted on receipt. Staff said the payment would be received into a revenue account and would require appropriation before being spent; council discussed whether the revenue should be immediately earmarked for specific departments or initially placed in the general fund and later allocated. The council moved and approved the authorizations to sign the master service agreement and related utility distribution agreements.
