Development Impact Fees
Development Impact Fees are fees adopted by the City Council based on the provisions set forth in California Government Code Section 66000-66025 (Mitigation Fee Act as established by Assembly Bill 1600 in 1987). These fees are assessed upon new development projects to fully or partially offset the costs of public capital facilities and infrastructure that is needed to serve new demand created by development projects. The City prepared the required nexus studies to document the appropriate Development Impact Fees that can be charged by the City. Fees collected under the Mitigation Fee Act are to be collected for capital facility and infrastructure improvements only, used to fund facility needs created by new development rather than existing deficiencies, and the fees are to be based on a rational nexus between new development and the costs of the capital facilities and infrastructure needed to accommodate such development as documented in the nexus studies. These fees do not pay for operation and maintenance of capital facilities, or city staffing costs. Development Impact Fees are segregated from the General Fund and from other City budget funds or accounts containing fees collected for other purposes in accordance with accounting standards. The State Mitigation Fee Act requires that the City provide an accounting of impact fees imposed on development projects on an annual basis. This Annual Report must be reviewed and accepted by the City Council at a regularly scheduled public meeting.
The City's Development Impact Fees are summarized in this public information document:
The following Ordinances and Resolutions provide additional information about the City's development impact fees. The related Nexus Studies are included in these documents. However please note the listed fee values are outdated, as they do not reflect the annual indexing which increases the fees every year.
- Ordinance Number 765- MSASP Development Impact Fees Ordinance Amendment (PDF)
- Ordinance Number 777 - Citywide Development Impact Fees Ordinance Adoption (PDF)
- Resolution Number 17-07 MSASP Development Impact Fees Implementation (PDF)
- Resolution Number 20-35 Citywide Development Impact Fees Implementation (PDF)
All new construction in the City of Millbrae is required to pay Development Impact Fees. All projects were not issued building permits prior to the effective dates of the Ordinances establishing the fees are required to pay the fees. Specific exemptions are included in Millbrae Municipal Code Section 10.05.3130. For example, alterations, renovations or expansion of an existing residential building or structure where no additional dwelling units are created and the use is not changed; provided, however, that the expansion of an existing commercial or industrial building or structure shall not be exempt. The remodeling or restoration of a nonresidential building or structure where the building or structure is improved or replaced, but the floor area is not increased, is also exempt.
Accessory Dwelling Units
Accessory Dwelling Units (ADUs) up to 750 square feet are exempt from Development Impact Fees (California Government Code § 65852.2, subd. (f)(3)). However, ADUs that are 750 square feet or larger are charged Development Impact Fees but only such fees that are proportional in size (by square foot) to those for the primary dwelling unit (Gov. Code, § 65852.2, subd. (f)(3)), based on the Single Family Residential Fee, which was $66,041.02 effective January 1, 2021.
An example of the calculation methodology for Accessory Dwelling Units of 750 square feet or larger is as follows:
- ADU Total Size: 800 Square Feet
- Primary Dwelling Unit Size: 1,600 Square Feet
- Percent Proportion of ADU to PDU: 800/1600 = 50%
- Development Impact Fee Total: 50% of $71,309.30) = $36,654.65
On February 28, 2017 the City Council adopted Ordinance Number 765 amending the Millbrae Municipal Code, Article XVIII of Chapter 10.05.1800 et seq., Millbrae Station Area Specific Plan (MSASP) Development Impact Fee and adopted Resolution Number 17-07 Concerning Development Impact Fees for the Millbrae Station Area Specific Plan. This fee was first established in 2000. The ordinance sets out a protocol for adopting impact fees, details when the fees will be paid, establishes exemptions and credits, implements procedures for appeals and refunds, and provides for reporting and accounting procedures. The associated Resolution sets the fee amounts. The updated MSASP Development Impact Fees were effective on April 17, 2017, and are subject to annual indexing every July 1. The Feasibility Report and Nexus Study (PDF) were prepared and included the required facilities, cost estimates for implementation of improvements, and allocation of the costs to individual land uses within the MSASP area.
Development impact fees are established and imposed on the issuance of all building permits for development within the MSASP area to finance the cost of the following categories of facilities:
- Sewer - Utilities infrastructure. The fees will fund Rainfall Infiltration Inflow (RDII) and gravity main improvements needed to provide adequate sewage treatment services to the MSASP. The RDII improvements are required to serve the whole MSASP area, while an additional fee will only apply in the specific subareas of the MSASP which the gravity main improvements will serve.
- Transportation - Traffic improvement measures. This fee is intended to help maintain acceptable transportation operations in the Specific Plan Area, including for users of alternative modes. The Nexus Study stated that in combination with grant and other funding, fee revenue will be used to fund the required new transportation facility improvements including roadway and alternative mode facility improvements.
- Parks and Recreation Facilities - The fee will fund the provision of additional parks and recreation land and facilities sufficient to maintain the City's existing service standards. Fee revenues will contribute funding towards the acquisition of parkland as well as the improvement of parkland/recreational facilities.
- Public Safety - The fee helps ensure there are sufficient fire facilities and equipment to serve new MSASP development. Fee revenues will be used to replace capital equipment as required, such as acquisition of new public safety vehicles, motorcycles, and associated equipment, and to provide upgrades to the Millbrae Fire Station #37.
On June 9, 2020 the City Council adopted Ordinance Number 777 adding the Millbrae Municipal Code, Article XXXI of Chapter 10.05.3100 et seq. Development Impact Fees, and adopted Resolution Number 20-35 Adopting Development Impact Fees. The citywide Development Impact Fees were effective on August 8, 2020, and are subject to annual indexing every January 1. Projects within the MSASP area are also subject to these fees. A Nexus Study (PDF) was prepared.
There are six types of Development Impact Fees: a library fee, a general government facilities fee, a recreation services fee, a public safety fee, a park acquisition and facilities fee, and a mobility fee.
- Library - The purpose of the Library Fee is to fund new library facilities or improvements to existing library facilities to maintain the City's existing level of service. New residential and nonresidential development will bring additional residents, workers, and visitors to the City, increasing the demand on existing library facilities. The Library Fee is based on the cost per capita of the library assets necessary to provide the current level of service.
- General Government Facilities - The General Government Facilities Fee will be used to fund new general governmental facilities or improvements to existing general governmental facilities that are not covered by another impact fee to maintain the City's existing level of service. An increase in residential and non-residential development generates additional residents and workers that increase the need for government facilities to maintain the City's existing level of service.
- Recreation Service - The Recreation Services fee is to fund new development's share of planned new recreation facilities or improvements to existing recreation facilities. New residential and nonresidential development will bring additional residents, workers, and visitors to the City, increasing the demand on existing recreation facilities. The Recreation Services Fee will generate revenue to fund new development's share of planned Recreation Center and other improvements.
- Public Safety - The Public Safety Fee is to fund new public safety facilities or improvements to existing public safety facilities to maintain the City's existing level of service. New residential and nonresidential development will bring additional residents, workers, and visitors to the City, increasing the demand on existing public safety facilities. The Public Safety Fee will generate revenue to fund new public safety facilities or improvements to existing public safety facilities to maintain the City's existing level of service.
Development within the MSASP area is already subject to a fee that includes a public safety component. Projects in the MSASP area are required to pay the Citywide Public Safety Fee and with the portion of the MSASP fee paid credited towards the total fee payment.
- Park Acquisition and Facilities - The fee is to fund park acquisition and new park facilities or improvements to existing park facilities to maintain the City's existing level of service. New residential and nonresidential development will bring additional residents, workers, and visitors to the City, increasing the demand on existing park facilities. The Park Acquisition and Facilities Fee will generate revenue to fund acquisition of parks and new park facilities or improvements to existing park facilities to maintain the City's existing level of service. An increase in residential and non-residential development generates additional residents and workers that increase the need for park facilities to maintain the City's existing level of service. The City also requires dedication of parkland in connection with subdivision maps and as part of the MSASP impact fee. Projects that pay this fee will receive a credit based on other park fees paid or land dedicated to the City as part of a subdivision.
- Mobility - The purpose of the Mobility Fee is to fund new development's share of planned pedestrian and bicycle improvements. New residential and nonresidential development will bring additional residents, workers, and visitors to the City, increasing the demand on existing mobility facilities. The Mobility Fee will generate revenue to fund the new mobility facilities or improvements to existing mobility facilities detailed in the Fee Study. The Mobility Fee is based on new development's share of the planned mobility improvements stated in the Fee Study as determined by the trip generation rate of the new development.
Development within the MSASP area is already subject to a fee that includes a transportation component. Projects in the MSASP area will receive a credit against the Mobility Fee. Projects within a half mile of a transit stop are also eligible for a discount on this fee.
- Administration - The Administration Fee amounting to 5% of each fee to cover legal, accounting, and other administrative support as well administration cost including revenue collection, revenue and cost accounting, mandated public reporting, and fee justification analysis.
These fees are indexed annually as follows:
- MSASP DIF: Automatically adjusted sixty days following the end of the city's fiscal year (June 30th of each year) in accordance with the change in the Engineering Construction Cost Index, as most recently published by Engineer News Record, for the elapsed time period from the previous July 1st.
- Citywide DIF: Automatically adjusted on January 1st of each year in accordance with the change in the Engineering Construction Cost Index, as most recently published by Engineering News-Record, for the previous calendar year.
The City applies the current fees in effect at the time of payment of any permit fees. It is important to check the current fees in effect as they adjust on either January 1st or July 1st.
These fees are required to be paid for each approved non-residential development project at the time of the issuance of the first required building permit, except as otherwise provided in the Millbrae Municipal Code or in a Development Agreement. Fees imposed on a residential development project with one unit are required to be paid prior to the date of the final inspection, or the date the certificate of occupancy is issued, whichever occurs first. For residential developments containing more than one unit, all fees must be paid when the first unit in the development receives its final inspection or certificate of occupancy, whichever occurs first. If fees are paid at final inspection or occupancy, an impact fee agreement between the city and the applicant shall be prepared and recorded as a lien on the property(ies).
The City Council conducts an annual review of the report on the receipt and use of the development impact fees collected for each fiscal year. This report is reviewed by the City Council at a publicly noticed meeting.
Fiscal Year 2019 to 2020: The report was reviewed by the City Council on January 12, 2021 and the associated resolution approving the report was approved. View the City Council Staff Report - Annual Report on Development Impact Fees on January 12, 2021 (PDF).
Fiscal Year 2020 to 2021: The report was reviewed by the City Council on November 9, 2021 and the associated resolution approving the report was approved. View the City Council Staff Report - Annual Report on Development Impact Fees on November 9, 2021 (PDF).
The City assesses Public Works Utility Capital Facility Impact Fees for water and sewer connections and service. These fees are in the City's Master Service and Fee Schedule.
Impact Fees are different from, and apply in addition to, utility connection and planning application and building permit application fees, which are used to cover the cost of the City's processing for permits and direct utility costs. The City may also impose other fees or exactions imposed pursuant to the Subdivision Map Act, or other measures required to mitigate site-specific impacts of a development project, including, but not limited to, mitigations pursuant to the California Environmental Quality Act; regulatory and processing fees; fees required pursuant to a development agreement; funds collected pursuant to a reimbursement agreement that exceed the applicant's share of public improvement costs; or assessment district proceedings, benefit assessments, or taxes.
Additionally, the Millbrae Municipal Code, Chapter 10.20 et seq. Park and Recreation Land includes requirements pursuant to Government Code Sections 66418 and 66477 related to the requirements for the dedication of land or payment of a fee in lieu thereof, or both, as a condition of approval of a final subdivision map.
- Affordable Housing In-Lieu Fees for Residential Development Projects & Commercial Linkage Impact Fees for Commercial Development Projects
The City of Millbrae City Council adopted a comprehensive affordable housing regulation policy package on July 13, 2021. These new regulations include three main components:
- Ordinance Number 787 (PDF) adding Article XXXIII Section 10.05.3300 et seq. Affordable Housing On-Site and In-Lieu Fee Requirements and Article XXXIV Section 10.05.3400 et seq. Affordable Housing Commercial Linkage Impact Fee to Chapter 10.5 of Title 10 of the Millbrae Municipal Code
- City Council Resolution Number 21-49 (PDF) Adopting Affordable Housing Requirements and Program Regulations
- City Council Resolution Number 21-50 (PDF) Establishing Affordable Housing In-Lieu Fees for Residential Development Projects and Commercial Linkage Impact Fees for Commercial Development Projects
Associated final nexus studies to support the establishment of the fees were prepared and published. The City Council agenda which includes the final Ordinance, final Resolutions, and final nexus studies is available online.