12 Desk Item.Item #12 - Transportation Impact Fee
PREPARED BY: Nicolle Burnham
Director of Parks and Public Works
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL STUDY SESSION AGENDA REPORT
MEETING DATE: 1/16/2024 ITEM NO: 12 DESK ITEM
DATE: January 16, 2024
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Conduct a Public Hearing for the Town’s Transportation Impact Fee Program
to:
a. Adopt a Resolution to Adopt the Transportation Impact Nexus Study
Dated November 2023 (including the Project List – Appendix 1 Which
Serves as the Town’s Transportation Capital Improvement Plan);
b. Adopt a Resolution to Update a Transportation Impact Fee to Replace the
Town’s Existing Traffic Impact Mitigation Fee;
c. Introduce an Ordinance Titled “An Ordinance of the Town of Council of
the Town of Los Gatos Amending Town Code Section 15, Article VII
‘Traffic Impact Mitigation Fees’”; and
d. Adopt a Resolution to Modify Town Council Policy 1-08: “Transportation
Impact Policy.”
REMARKS:
Attachment 7 contains a public comment received between 11:01 a.m. Monday, January 15,
2024, and 11:00 a.m. Tuesday, January 16, 2024.
Attachment 8 contains PowerPoint presentation that will given by staff at the meeting.
Attachments received with the Staff Report:
1. Draft Resolution to Adopt the Nexus Study, including the Project List which serves as the
Town’s Transportation Capital Improvement Plan
2. Draft Resolution to Adopt Updated Transportation Impact Fee to Replace the Town’s
Existing Traffic Impact Mitigation Fee
3. Draft Ordinance Titled “An Ordinance of the Town of Council of the Town of Los Gatos
Amending Town Code Section 15, Article VII ‘Traffic Impact Mitigation Fees’”
4. Redline of Proposed Changes to Town Code Section 15, Article VII
5. Draft Resolution to Modify Town Council Policy 1-08, “Transportation Impact Policy.”
6. Redline of Proposed Changes to Town Council Policy 1-08
PAGE 2 OF 2 SUBJECT: Transportation Impact Fee DATE: January 16, 2024
Attachments received with this Desk Item:
7. Public comment received between 11:01 a.m. Monday, January 15, 2024, and 11:00 a.m.
Tuesday, January 16, 2024.
8. PowerPoint presentation
From: Phil Koen <>
Date: January 16, 2024 at 7:10:35 AM PST
To: Rob Moore <RMoore@losgatosca.gov>
Subject: Agenda item 12
[EXTERNAL SENDER] Hello Rob,
I want to share some quick thoughts regarding the TIF study
under consideration in agenda item #12. Unfortunately, this
study fails to analyze what the law requires, which is a fair
analysis of capital improvements related to growth.. There
must be a factual causal relationship between new incremental
growth and the capital expenditure.
Before adopting a TIF, a local jurisdiction must make a specific
finding that include identifying the purpose of the fee and
describing why the fee is needed to provide new or expanded
facilities to mitigate the impacts of new development induced
by the growth. Unfortunately, most of the projects listed are
the result of deficiencies in current conditions. Under state law
AB 1600, improvements to existing deficiencies cannot be
funded through a TIF. At the very least the study needs to
analyze and separate which capital costs will serve future
growth vs which capital costs are associated with existing
deficiencies.
I have attached the staff report from the study session that was
held on October 10, 2023. The discussion of the SR-17 project is
very instructive on this point. This project is all about
addressing an existing regional deficiency. Just read VTM’s flyer
ATTACHMENT 7
on this project. If there was no growth in Los Gatos over the
next 20 years, this project will still go forward given the current
deficiencies. The staff report makes it very clear that the only
reason this project is included is Staff wants to use TIF funds to
pay for the required 10% match. That unfortunately is not how
the law works. They have put the cart before the horse.
The net result of the TIF study is to burden 100 % of the $42m
of unfunded capital project costs (and who knows if that
number is even remotely accurate – I have my doubts) on the
new residents of Los Gatos. This is driving the TIF for new
residential units to increase anywhere from 168% to 178% at
the same time we are trying to promote new housing
development. Furthermore, the difference between the
proposed TIF and surrounding jurisdictions of like size is breath
taking. It simply doesn’t make sense to me.
Assessing the full cost of new infrastructure on new
housing/growth could prove to be exclusionary and place an
outsized burden on or prevent the accommodation of new
residents. This is totally at odds to what we are saying in the
HE.
My recommendation is the send the study to the FC and have
the FC work with the consultant to prepare a complete TIF
study. This one is deeply flawed.
As always, please let me know if you have any questions.
Phil Koen
Transportation Impact Fee Program
Town Council Meeting
January 16, 2024
1ATTACHMENT 8
PROJECT BACKGROUND
2
•2014 – Town’s most recent Nexus Study and Traffic Impact Fee are adopted
(Resolutions 2014-017 and 2014-059) in accordance with Assembly Bill 1600 (the
Mitigation Fee Act).
•2022, January – Assembly Bill 602 takes effect, requiring new nexus studies for impact
fees and certain other changes to fee calculation methodology.
•2022 – DKS Associates is contracted to develop new Nexus Study and Update Traffic
Impact Fee Program.
PROJECT BACKGROUND (Cont’d)
3
•May 2023 – Staff provides report on technical work completed and preliminary fee
calculations.
•October 2023 – Town Council holds a study session to address questions raised in the
May 2023 meeting and provides feedback to staff.
•November 2023 – Town Council received the draft Nexus Study, including the Capital
Project List in Appendix 1, and set a hearing date for January 16, 2024.
ADOPT THE NEXUS STUDY WITH CAPITAL IMPROVEMENT PLAN
4
•Informed by General Plan and previously adopted transportation related planning
documents.
•Considers historic investment in transportation infrastructure.
•Documents desired transportation investments based on adopted planning documents
and needed projects. This is the Capital Improvement Plan as presented in Appendix
Section 1 of the Nexus Study.
•Calculated the maximum justifiable fee to $57,907 per dwelling unit equivalent based on
the historic level of investment the Town of has made in transportation related projects.
UPDATE THE TRANSPORTATION IMPACT FEE
5
Land Use Classification Proposed Fee
Single Family Residential (per square foot)1 $6.10
Multi-Family Residential (per square foot)2 $6.96
Retail (per 1,000 square feet)$22,391.00
Office (per 1,000 square feet)$19,731.00
Industrial (per 1,000 square feet)$9,255.00
1.Single family fee is $16,051 per dwelling unit; converted to a square foot basis
using an average single family residential unit size of 2,632 square feet.
2.Multi-family fee is $11,472 per dwelling unit converted to a square foot basis
using an average multi- family residential unit size of 1,649 square feet.
MODIFY TOWN CODE SECTION 15, ARTICLE VII
6
•Update title and name of the fee to Transportation Impact Fees to reflect the
inclusion of bicycle and pedestrian projects in the Project List.
•Update method of calculating the Transportation Impact Fee to reflect the
Nexus Study and AB 602 requirements.
•Add credits of 50% for deed restricted low- and very-low-income housing
units and for existing traffic from current uses of a property.
MODIFY COUNCIL POLICY 1-08 TRANSPORTATION IMPACT POLICY
7
•Update the name of the fee
•Charge impact fees on Accessory Dwelling Units of 750 square feet or larger
•Clarify per square foot basis fee calculation for residential units
•Update information about credits to be consistent with proposed changes to
Town Code Chapter 15
•Replace the project list in Attachment 2 with the Capital Improvement Plan in
Appendix 1 of the Nexus Study.
PROPOSED ACTIONS
8
a.Adopt a Resolution to Adopt the Transportation Impact Nexus Study dated November
2023 (including the Project List – Appendix 1 which serves as the Town’s Transportation
Capital Improvement Plan)
b.Adopt a Resolution to Update a Transportation Impact Fee to Replace the Town’s
Existing Traffic Impact Mitigation Fee
c.Introduce an ordinance titled “An Ordinance of the Town of Council of the Town of Los
Gatos Amending Town Code Section 15, Article VII ‘Traffic Impact Mitigation Fees’”
d.Adopt a resolution to modify Town Council Policy 1-08: “Transportation Impact Policy”