Chapter 3.36 DEVELOPMENT IMPACT FEES

The intent of the city is to require every person who develops land to mitigate the impacts of that development on the city's public facilities. The city will therefore require developers to pay a development impact fee that will assist in meeting the demand for public facilities caused by development. The public facilities will be constructed in accordance with a master facilities plan adopted by resolution of the city council.

A development impact fee calculation and nexus report for the city of Highland, California, dated August 28, 2023, ("2023 DIF Report") was prepared to identify the purpose of each existing and proposed fee, the use to which the fee is to be put, establish and explain how there is a reasonable relationship between the fee's use and the type of development project on which the fee is to be imposed, and how there is a reasonable relationship between the amount of the fee and the cost of the public facility or portion of the public facility attributable to the development on which the fee is imposed.

The amount of the development impact fees collected pursuant to this chapter shall be limited to the cost of public facilities attributable to new development. The amount of the public facilities development impact fees collected shall not include the cost of public facilities that serve existing development.

Development impact fees are hereby established in the following categories:

The fees shall be collected as a condition of issuance of building occupancy for development within the city to finance the cost of certain identified public facilities and improvements required by new development as identified in the 2023 DIF Report.

The city council shall, by a city council fee resolution, set forth the specific amount of the fees, describe the benefit and impact area on which the development impact fees are imposed, list the specific public improvements to be financed, describe the estimated cost of these facilities, describe the reasonable relationship between these fees and the various types of new developments and set forth the time for payment.

The city council shall periodically review these fees to determine whether the fee amounts are reasonably related to the impacts of development and whether the described public facilities are still needed. The city council shall make findings with respect to any portion of the fee remaining unexpended or uncommitted in its account five or more years after deposit of the fees to identify the purpose to which the fees are to be put and to demonstrate a reasonable relationship between the fee and the purpose for which they were charged, consistent with the requirements of Government Code Sections 66001(d), (e) and (f).

The fees imposed by this chapter shall be adjusted annually in April of each year, beginning April 2025 using the California Construction Cost Index. This adjustment shall not apply to fees which are based on variable factors which result in automatic adjustments or those which specifically indicate otherwise and shall be subject to the requirements of Government Code Section 66018 or otherwise as required by law.

The amount of each category of fee established pursuant to this chapter may be more specifically set and adjusted periodically by resolution of the city council, with this chapter being considered as enabling and directive.

Detached dwelling: projects consisting of detached residential buildings as allowed within the city's land use designations of agricultural equestrian, low density, and some medium density residential.

Attached dwelling: projects consisting of attached residential units within a lot as allowed within the city's land use designation of high density residential and some medium density residential.

Mobile home: mobile home/trailer parks, and manufactured homes in land-leased communities, etc. This category does not include a manufactured home subdivision.

Commercial lodging: hotels and motels.

Commercial/office: uses generally considered commercial.

Industrial: uses generally considered industrial. This category also includes educational and religious establishments.

Except as required by Government Code Section 66007, development impact fees for all development projects shall be paid prior to issuance of certificate of building occupancy.

The fees imposed pursuant to this chapter shall be calculated on the basis of land use, evaluated on the basis of acreage, by dwelling unit, or by square footage of construction, as indicated in the 2023 DIF Report, or otherwise as that may be revised and amended under the authority of the city council.

Residential Building Expansion. No development impact fee for residential building expansion shall be required on any new addition, expansion or incidental construction to an existing residential building when the new construction consists of a total of less than 500 square feet of an enclosed structure which requires a building permit to construct, and the community development director finds that the expansion will not result in an increase of the number of dwelling units originally permitted for the residential building. When the new residential construction consists of a total of 500 square feet or more of an enclosed structure which requires a building permit to construct, and the community development director finds that the expansion will not result in an increase of the number of dwelling units originally permitted for the residential building, the development impact fee for the square footage of residential expansion above 499 square feet shall be required in accordance with this chapter and the fee resolution.

Building Remodeling. Where a building permit is issued to remodel an existing structure for the same occupancy type, development impact fees shall not be required. Where the remodeling work will alter the occupancy type of the building, resulting in a higher intensity of use as determined by the community development director, development impact fees shall be required as specified in this chapter and the fee resolution. This section does not include projects which constitute an expansion of the previous use.

Building Reconstruction. Where a building permit is issued to reconstruct or replace an existing structure and the new structure does not increase the square footage of the existing structure, development impact fees shall not be required. If the size of the new structure is larger than that of the existing structures, development impact fees shall be required in accordance with this chapter and the fee resolution.

Building Relocation. Where a permit is issued to relocate a structure from one location in the city to a new location within the city, and the community development director finds that no new impacts are created, development impact fees shall not be required.

Accessory Dwelling Units. Accessory dwelling units ("ADUs") that are less than 750 square feet shall not be charged development impact fees. For an ADU that is 750 square feet or larger, the ADU will be charged fees proportionately in relation to the square footage of the primary dwelling unit. Notwithstanding the foregoing, ADUs shall be subject to impact fees as allowed by Government Code Section 65852.2, as it may be amended from time to time.

Timing of Permit Application. Development impact fees in effect at the time of building permit application shall continue to apply on any development project where the building official finds and determines that a complete building permit application has been submitted and accepted by the city of Highland, and that through no fault of the developer, the permit was not issued prior to the effective date of the development impact fees as specified in this chapter and the fee resolution.

Where in the opinion of the city manager, or his designee, a development project is certain to have impacts on those facilities and improvements identified in the 2023 DIF Report and master facilities plan that is disproportionate to the square footage of the building to be constructed by virtue of the proposed development project, development impact fees may be calculated based upon the city manager's determination of actual impacts in each of the categories in which development impact fees are collected. The city manager's determination must be based upon objective criteria, such as trip generation rates specific to the type of development proposed.

In each instance where the city manager, or his designee, makes a calculation based upon his authority herein granted, the criteria upon which that calculation is based shall become the criteria used for all similarly situated development projects thereafter. In implementing this provision, the city manager is directed to maintain a record of all decisions made under his authority, and to use that record as a guideline for future decisions. The city manager shall make a recommendation to the public works subcommittee of the city council which brings its recommendation to the city council for final approval determination of the development impact fees.

In all instances where the city council determines and imposes development impact fees according to its authority granted herein, that calculation and determination shall be subject to legal challenge as provided by state law, as set forth in Government Code Section 66020 et seq.

A developer of any development project subject to the fees described herein may apply to the city council for a reduction or adjustment to the fees, or a waiver of the fees, based upon the absence of any reasonable relationship or nexus between the impacts of that development and either the amount of the fees charged or the type of facilities to be financed. The application shall be made in writing and filed with the city clerk not later than: (1) 10 days prior to the public hearing on the development permit application for the project, or (2) if no development permit is required or no public hearing is required to be held, at the time of the filing of the request for a building permit. The application shall state in detail the factual basis for the claim of waiver, reduction, or adjustment. The city council shall consider the application at the public hearing on the permit application or at a separate hearing held within 60 days after the filing of the fee adjustment application, whichever is later. The decision of the city council shall be final. If a reduction, adjustment, or waiver is granted, any change in use within the project shall invalidate the waiver, adjustment, or reduction of the fees.

The city council may, from time to time and as the need may arise, set forth, by council resolution, specific limitations which will apply to reductions, adjustments, waivers, or deferrals of development impact fees which may be made pursuant to this section.

If a fee exemption is granted pursuant to HMC § 3.36.070, or a fee reduction, adjustment or waiver is granted pursuant to this section, any subsequent change or intensification of the use or uses of the property or any expansion of the structures on the property shall invalidate the fee exemption, fee reduction, adjustment or waiver, and the applicant shall be subject to the development impact fee requirement applicable to the entire development based on the fee in effect at the time of the change or expansion, less any amount previously paid.

If a fee exemption, fee reduction, adjustment or waiver is not granted, then upon the payment of the required fees, the city shall, pursuant to Government Code Section 66020, provide the applicant a written notice of the amount of the fees or a description of the dedications, reservations, or other exactions, and shall also provide notification that the 90-day protest period has begun.