2.2 minute read
September 25, 2020
With each fiscal year, agencies must adhere to numerous requirements around their finances. This includes everything from their annual budget to comprehensive annual financial reports. One annual requirement that agencies often overlook is the Development Impact Fee Annual Report.
Development Impact Fees are created under Assembly Bill 1600 (AB 1600), also known as the Mitigation Fee Act. AB 1600 requires agencies to report annually on the fees collected and their use.
If an agency has not kept up with the Mitigation Fee Act reporting requirements, their impact fee fund balances are at risk.
The Mitigation Fee Act requirements dictate that within 180 days after the last day of each fiscal year, agencies must make the following information available for each fee:
- The beginning and ending balances in each fee account
- The fee amounts collected during the preceding year
- The projects the fees were used for and the percentage of the total project costs funded with fees
- The expected start date for construction on improvements the fees will fund
- A description of any inter-fund transfers or loans, the interest the account will receive for the loan, and the date on which the loan will be repaid
In addition, every five years, agencies must:
- Identify the fee’s purpose
- Demonstrate a reasonable relationship between the fee and its purpose
- Identify all sources and amounts of funding anticipated to complete financing in incomplete improvements in the fee program
- Designate the approximate dates on which the funding is expected to be deposited into the appropriate account or fund.
Agencies are also required to present this information at the next regularly scheduled public meeting no less than 15 days after making it available.
Changes with the Passage of AB 1483: Sharing Information Online
In addition, the passage of AB 1483 last year now requires agencies to publish the information listed above on the city’s website along with the current fee schedule and an archive of impact fee nexus studies and cost of service studies. These internet publication requirements take effect January 1, 2021. It’s important that agencies be prepared for this requirement to make sure they stay in compliance and ensure their impact fee fund balances are secure. In our next blog post, we’ll examine AB1483 requirements for posting impact fee-related documentation online for easy access.
For help and more information about preparing and sharing required reports, including your Development Impact Fee Annual Report, please contact Alison Bouley, Megan Quinn or Nick Kral, who will be happy to provide assistance.