City Council Agenda
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Memo to: |
Manteca City Council |
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From: |
Brad Wungluck, Director of Development Services |
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Date: |
March 3, 2026 |
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Subject: |
Government Building Facilities Fee Nexus Fee Study, Capital Improvement Plan, and Fee Schedule |
Recommendation:
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Hold a public hearing and consider adopting a resolution adopting the Government Building Facilities Nexus Fee Study and Capital Improvement Plan and setting charges for the Government Building Facilities Fee and finding that adoption of the Resolution is not a project, or, in the alternative, if the adoption of the Resolution is a project, it is exempt under the California Environmental Quality Act Guidelines.
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Background:
The City of Manteca currently collects a Government Building Facilities Fee with each building permit issued for the construction of residential dwelling square footage and non-residential square footage, including commercial or industrial uses. The purpose of this fee is to fund new development’s proportionate share of the costs of future government building improvements. Some examples include the addition or construction of new public facilities such as the Civic Center - City Hall, Library, and Police Facility. The fee that is collected is used to finance the portion of the costs of these new public facilities that can be attributed to new growth. The facilities that will be funded with the fee revenues are necessary to mitigate the impacts of new growth on the City’s government buildings and facilities. The fees collected and the projects identified assist in achieving the City’s adopted level of service for general government facilities.
Impact fee revenues, such as the Government Building Facilities Fee, are used to cover the cost of constructing capital and infrastructure improvements required to serve new development and growth in the area in which they apply. As such, impact fees must be based on a nexus that shows that the fees are roughly proportionate to the impacts of new development. Impact fee revenues cannot be used to cover the operation and maintenance costs of these or any other facilities and infrastructure. In addition, impact fee revenue cannot be collected or used to cover the cost of preexisting infrastructure deficiencies.
AB 1600 was enacted by the State of California in 1987 creating the Mitigation Fee Act - Section 66000 et seq. of the Government Code. There have been recent changes in the Mitigation Fee Act which governs the collection of impact fees. Assembly Bill 602 went into effect in 2022 and added Section 66016.5 to the Mitigation Fee Act and imposed several new requirements on impact fees. Two of those requirements directly impact the Government Building Facilities Fee. First, AB 602 requires that nexus studies be updated every eight years, from the period beginning on January 1, 2022. Second, AB 602 requires that all fee studies shall calculate a fee imposed on a housing development project proportionately to the square footage of proposed units in the development, unless certain findings are made, and a local agency that imposes the fee utilizing this method shall be deemed to have used a valid method to establish the reasonable relationship between the fee charged and the burden posed by the development.
The City completed a recent Nexus study for the Government Building Facilities Fee in 2024. At that time the list of projects was amended and the fees for both residential and commercial developments were updated based upon the revised project list and revised project construction costs. That update, to comply with AB 602, began in 2019 with Harris & Associates. Unfortunately, because of the COVID-19 pandemic, the fee study was not completed. At the March 3, 2020, City Council meeting, the City Council provided directions as to the facilities to be included in the updated nexus fee study. Utilizing that direction, the City restarted the Government Building Facilities fee update in 2022, again with Harris & Associates, and completed the fee study based on the updated facility list from 2020, additional projects since 2020, revised construction costs, and ensuring compliance with AB 602 in late 2024.
Since that time more current and accurate construction costs have been obtained for the construction of the new Police Station which are now being included in the updated and revised 2025 Government Building Facilities Fee Nexus Study. The reasons that the City identified the new Police Station, Police Range, and Police Training facilities as necessary public facilities to serve new development and the basis for the cost estimates for those facilities are detailed in the Nexus Study.
The purpose of the Nexus Study is to demonstrate that all fee components comply with the Mitigation Fee Act. The assumptions, methodologies, facility standards, costs, and cost allocation factors that were used to establish the nexus between the fees and the development on which the fees will be charged are summarized in the Nexus Study.
The proposed Nexus Fee Study and Capital Improvement Plan utilize the updated 2024 facility list and include space for City Administration / Civic Center - City Hall, Library Expansion, Multi-Use Community Facility, Animal Shelter Expansion, Police Station, Public Safety Training Facility, Police Range, Parks and Public Works Corporation Yard, Additional Maintenance Facilities, and a Parks Corporation Satellite Yard. As mentioned previously the 2024 Government Building Facilities list of Planned Facilities has since been updated to include the revised Police Station figure, now estimated to exceed $282 million.
All the facilities included in the fee update and the Capital Improvement Plan are expansion related projects that will provide additional square footage necessary to serve new development. The City Council will annually review the General Government Facilities Fee Capital Improvement Program and update it as necessary pursuant to the Mitigation Fee Act.
The city recognizes the need to support the development of employment centers such as quality office developments. Further, the General Plan calls for the “development and intensification of employment centers including high-quality professional office complexes” (General Plan Land Use Goal LU-5.1), and the attraction of “businesses and industries to provide a variety of jobs allowing career growth potential, while focusing on high-wage and/or high-sales tax producers” (General Plan Fiscal Sustainability Goal EF-4.2). As the City has a significant need for these types of employment centers to provide higher wage jobs and meet the goals of the General Plan, city staff is proposing a reduction from the maximum allowable for this land use category.
To support the City’s goal of an involved and transparent process, City staff provided the Building Industry Association (BIA) copies of the draft reports and met with their representatives to discuss methodology and to answer questions. Copies of the draft report were provided on December 8, 2025, and again on February 3, 2026. Following each of the draft reports being provided to the BIA, City staff met with the development community through the BIA on December 17, 2025, and on February 5, 2026, as part of the process to receive feedback on the draft reports and the proposed fee schedule. The City made changes to the study based upon the feedback from the BIA to address comments and concerns raised during those meetings. The draft reports were also posted to the City’s website on December 8, 2025, and February 5, 2026, for public review and comment. No comments were received.
Implementation of this Nexus Study is necessary to provide ongoing funding for the identified facilities. In accordance with the nexus study, staff recommends an annual inflationary increase to these fees occur every July 1st based on the increase in the ENR 20-City CCI.
The proposed revised fees would become effective sixty days (60) after the adoption of the resolution.
Proposed Government Building Facilities Fees
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Land Use |
Existing Fee |
Proposed Fee 2025 |
Percentage Change |
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Residential |
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Single-Family |
$ 2.87 |
$ 2.97 |
3.5% |
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Multi-Family |
$ 4.06 |
$ 4.45 |
9.6% |
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Non-Residential |
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Commercial |
$ 1.54 |
$ 1.60 |
3.9% |
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Industrial |
$ 0.79 |
$ 0.82 |
3.8% |
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Office |
$ 2.25 |
$ 2.40 |
6.7% |
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Hotel/Room |
$ 618.80 |
$ 640.08 |
3.4% |
Fiscal Impact:
The adoption of the revised fee schedule will allow for the collection of an estimated $143,415,299 over the planning horizon identified in the Nexus Study. These revenues will be restricted to funding expansion-related government building facilities necessary to serve new development, as detailed in the Government Building Facilities Nexus Fee Study and Capital Improvement Plan.
Documents Attached:
1. Attachment 1 - Resolution
2. Attachment 2 - Exhibit “A” to Resolution - Government Building Facilities Nexus Fee Study
3. Attachment 3 - Exhibit “B” to Resolution - Capital Improvement Plan
4. Attachment 4 - Exhibit “C” to Resolution - Government Building Facilities Fee Schedule
5. Attachment 5 - Presentation