Desk Item.Item #17 - TIFPREPARED BY: Jenna De Long, Deputy Town Clerk
Reviewed by: Town Manager, Town Attorney
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 04/02/2024 ITEM NO: 17 DESK ITEM
DATE: April 2, 2024
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Receive a Report on the Transportation Impact Fee and Provide Direction
REMARKS:
Attachment 4 contains a staff presentation.
Attachments Previously Received with the Staff Report:
1.Asset Based Transportation Impact Fees in California (Partial List)
2.Summary of Alternatives
Attachment Received with the Previous Addendum:
3.Public Comment received before 11:00 a.m. on Monday, April 1, 2024.
Attachment Received with this Desk Item:
4.Staff Presentation
Transportation Impact Fee Program
Receive Report and Provide Direction
Town Council Meeting
April 2, 2024
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ATTTACHMENT 4
BACKGROUND
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•Spring 2022 –Town hires DKS to update the Town’s Traffic Impact Fee Program
•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.
•January 2024 – Council adopted a Transportation Impact Nexus Study, approved
modifications to Section 15, Article VII of the Town Code and adopted resolutions to
replace the Traffic Impact Fee with Transportation Impact Fee and modify Town
Council Policy 1-08
REGULATORY FRAMEWORK OF IMPACT FEES
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Per the California Mitigation Fee Act the Town must:
•1) identify the fee’s purpose and use;
•2) determine a reasonable relationship between the fee’s use and the type of land
use development project(s) required to pay the fee;
•3) determine a reasonable relationship between the need for the public
facility(ies) and the type of land use development projects required to pay the
fee; and
•4) demonstrate a reasonable relationship between the amount of the fee and the
costs of the facilities needed to cover developmental impacts.
Also, when applicable, a nexus study shall identify the existing level of service for each
public facility, identify the proposed new level of service, and include an explanation of
why the new level of service is appropriate.
CALCULATION OF TRANSPORTATION IMPACT FEES
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•Historically Traffic Impact Fees focused on optimizing vehicle improvements
and used intersection Level of Service to apportion traffic fees.
•Intersection Level of Service does not consider bicycle and pedestrian
infrastructure.
•There are three basic approaches to impact fee calculations:
•Level of Service (for traffic only);
•Asset Based (adopted by Los Gatos in January); and
•Fair Share Approach
FEE CALCULATION OPTIONS
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Alternative Name Advantages Disadvantages
Option 1: Keep the Adopted
Analysis and Associated Fee
(Asset-Based Approach)
•Analysis is complete and fee is
adopted.
•Fee was based on the
otherwise unfunded project
costs, and accounts for
anticipated grant and other
funding sources.
•Approach has been adopted by
other jurisdictions yet has not
been legally tested for a TIF.
•Adopted fee is higher than
nearby jurisdictions.
FEE CALCULATION OPTIONS (cont’d)
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Alternative Name Advantages Disadvantages
Option 2: Refine the
Adopted Analysis
(Modified Asset Based
Approach)
•Clarifies the assumptions.
•Provides a more conservative calculation of
the maximum justifiable fee.
•Refines the transportation project list to
provide 2024 cost estimates and clarify
other funding sources.
•Retains an approach that has been
used by other jurisdictions but has
not been legally tested for a TIF.
•Staff is unclear at this time how
this approach might change the
resulting fee.
Option 2A: Option 2 with
Intersection Level of
Service Analysis for Hwy
17 Project
•Uses intersection Level of Service for the
only traditional transportation project (Hwy
17) on the project list.
•Clarifies the assumptions.
•Provides a more conservative calculation of
the maximum justifiable fee.
•Refines the transportation project list to
provide 2024 cost estimates and clarify
other funding sources.
•Retains an approach that has been
used by other jurisdictions but has
not been legally tested for a TIF.
•Staff is unclear at this time how
this approach might change the
resulting fee
FEE CALCULATION OPTIONS (cont’d)
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Alternative Advantages Disadvantages
Option 3: Calculate Fee
Using “Fair Share”
Estimate of Project Costs
•Method has survived legal challenge.
•Refines the transportation project
list to provide 2024 cost estimates
and clarify other funding sources.
•May reduce the proposed fee to below
the previous level of $1,104 per trip.
•Unfunded costs for most projects would
be allocated to the fee based on the new
development’s share of total future land
use in Los Gatos.
•Requires the Town to clearly document
how funding gaps will be filled for all
transportation projects on the project
list.
Option 4: Use only an
Intersection Level of
Service Calculation
•Traditional method of calculation
that has survived legal challenge.
•SR 17 Congestion Management is the
only project that lends itself to this
approach. Bicycle and pedestrian
projects would not be funded.
FEE CALCULATION OPTIONS (cont’d)
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Alternatives Advantages Disadvantages
Option 5: Combine Options 3
and 4
•Relies on “Fair Share”
approach for bicycle and
pedestrian costs and “Level of
Service” for Highway 17.
•Combines two options that
have survived legal challenge.
•May reduce the proposed fee
to below the previous level of
$1,104 per trip.
•Unfunded costs for most
projects would be allocated to
the fee based on the new
development’s share of total
future land use in Los Gatos.
•Requires the Town to clearly
document how funding gaps
will be filled for all
transportation projects on the
project list.