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City staff refutes $24 million claim on connection fees, outlines development‑agreement rules and upcoming fee study
Summary
City staff told the Rio Vista council a former employee's claim that the city lost about $24 million in water connection fees is inaccurate, explaining many projects built required infrastructure under development agreements and that development agreements can vest fee terms; staff noted a new development‑impact fee study is funded and ongoing.
City staff told the Rio Vista City Council on Oct. 1 that a public records request and a former employee's allegation that the city lost about $24,000,000 in water connection fees was incorrect and based on an incomplete spreadsheet. The city manager said projects subject to development agreements often elected to construct required infrastructure rather than pay fees in lieu, which removes the legal basis to collect additional connection fees under those agreements.
"The city had no basis for charging the $24,000,000," the city manager said, explaining that development agreements take precedence over municipal code when projects were vested by agreement and that charging those fees could have led to double charging and litigation. Staff reviewed the Marks Ranch and Gibbs Ranch agreements (now known by later project names such as Trilogy Liberty, Luminescence and Liberty at Summit) and said the agreements allowed developers to build required improvements rather than pay connection fees.
Staff also summarized legal constraints under the Mitigation Fee Act (AB 1600) and recent case law, noting that councils can elect annual CPI increases for fees in development agreements but cannot retroactively impose fees where no nexus or proportionality exists. The city said it has funded an updated development‑impact fee study (NBS) and will bring additional detail to the council. Council members and members of the public pressed for more transparency on fee accounting, whether collected fees were segregated into the required public‑facilities accounts, and whether levy timing and CPI adjustments were properly tracked.
Public commenters raised concerns about auditing practices, past council decisions and possible preferential treatment by developers. Staff acknowledged the need for clarity, said documentation exists showing infrastructure was built for certain projects, and agreed to report back with more detailed records, account reconciliations and a plan for annual fee reviews.
