In anticipation of numerous public works projects slated for the coming years, Highland City Council approved on Tuesday, April 27, adjustments to the city’s development impact fee (DIF) rates.
Cities and other public agencies charge DIFs to ensure new developments pay their share to support the construction and maintenance of vital infrastructure, such as streets, sidewalks, utilities and others.
Under the approved amendments, six of the city’s nine DIF categories were increased from last year’s rates. The rates are adjusted each year based on the California Highway Construction Item (CHCI) Index and the California Construction Cost Index (CCCI), which increased by 8.19 percent and 2.83 percent in the last year.
According to City Manager Joseph Hughes, for the past three years the council chose to just apply CCCI to limit DIF cost increases.
This year’s recommendation was to also use the CHCI due to the fact that the city has several large CalTrans projects to fund.
“If we keep not making the larger adjustment we’ll fall behind,” Hughes said. “We have a loan borrowing our own Measure I funds, but that has to be paid back. It’s not due for 10 years, but eventually that bill’s going to come due.”
“It pains me to use the higher amount,” said Mayor Pro Tem Larry McCallon. “The reason we’ve recommended using the higher amount is because we have several projects that require matching funds for us to pay our share and we don’t have enough money for all the regional circulation system projects. With all the stimulus money that’s coming down costs are going to go through the roof because there’s going to be more money on the street.”
The amendment also defers payment of DIFs from permit application to building occupancy.
Development impact fee adjustments