Finance Committee - Special Meeting

Allison, can you hear us?

Yes, I can hear you.

Okay, thank you for confirming.

David, can you hear me?

Yes.

Thank you. recording in progress

It's two minutes slow. I'm ready, man. If staff's ready, I'm ready to roll. So good to go? Yep. Okay. I don't see anything on the screen here, but we're waiting for channel 26. Okay.

THERE WE GO.

ALL RIGHT. I SEE SOMETHING ON THE SCREEN. WE'LL GO AHEAD AND GET GOING HERE. THIS IS TRACY FINANCE COMMITTEE SPECIAL MEETING FOR AUGUST 19TH, 2026. IT'S 530 P.M. WE'LL GO AHEAD AND OPEN THE MEETING. THIS MEETING WILL BE OPEN TO THE PUBLIC FOR IN-PERSON AND REMOTE PARTICIPATION. MEMBERS OF THE PUBLIC MAY PARTICIPATE REMOTELY IN THE MEETING VIA THE FOLLOWING METHOD. As always, the public may view the Tracy Finance Committee meetings live on the City of Tracy's website at cityoftracy.org or on Comcast Channel 26. If you only wish to watch the meeting and do not wish to address the Finance Committee, City requests that you stream the meeting through City's website or watch Channel 26. For remote public comment during the upcoming Finance Committee meeting, public comment will be accepted via options listed below. If you would like to comment remotely, Please follow the protocols below. You can be here in person in the chambers or visit us online at cityoftracy-org.zoom.us forward slash join and follow. Use the following meeting ID 895-0874-9745. Passcode 810299. Use the raise hand icon to speak. on an item or telephone in 1-669-900-6833, enter 895-087-49745 pound when prompted and enter 810299 hashtag when prompted, pressing star nine to raise your hand. If you memorized all that, you're smarter than I am and have much better memory than me. We do have public comment guidelines. The Brown Act provides that every regular finance committee meeting shall provide an opportunity for the public to address the committee on any item within its jurisdiction before or during the committee's consideration of the item. There's a lot more here, but everybody just acts nice and polite. We should be great. So we'll call the meeting to order, and we'll take a roll call and declaration of conflicts.

Chairperson Evans.

Present, no conflicts.

Vice Chair Abercrombie.

Present, no conflicts.

Thank you.

Great. This takes us to our consent calendar for 1A, adoption of meeting minutes on May 18th, 2026, special meeting.

Make a motion to approve consent calendar. I'll second.

Chair Evans.

Yes.

Vice Chair Abercrombie.

Yes.

Thank you.

Excellent. When he passes, that takes us to number two regular agenda. Do we have a staff report?

Thank you. My name is Veronica Child, Management Analyst for the Community and Economic Development Department. Tonight we're going to be talking about the City's nexus studies. We are requesting that the Finance Committee recommend that City Council conduct a public hearing and upon conclusion adopt a resolution adopting development impact fee nexus studies for parks, public facilities, public safety and water capacity and charges for these fee programs to become effective 60 days after final adoption and then adopting an impact fee project list to satisfy government code section 66016.5A as a requirement for the capital improvement plans. So what I'm going to do is go ahead and give you a brief presentation that talks a little bit about our nexus studies and how they relate to our master plans. And then I will answer any questions that you may have. So the city does have seven infrastructure master plans. Transportation, water, recycled water, sewer, storm, public safety, public facilities, and parks. What these master plans do is identify the long-term infrastructure needs and the costs related to that infrastructure to support future growth. Our NEXUS studies take the cost data from those master plans and then determine new developments fair share. That establishes development impact fees to fund that future infrastructure. So development impact fees are a one-time fee under the Mitigation Fee Act, or AB 1600. They must fund capital improvements only, no maintenance, no existing deficiencies, no salaries. And it requires that we define a clear link between the fee and the improvement. Fees are tracked by category in separate funds. How the development impact fees are calculated, we take the project costs attributed to new development and we divide that by the units of new development. Our fees vary by category, by residential versus non-residential, and by the specific infrastructure categories that I mentioned previously. We have three different fee areas in the city. You'll see on this map that there's the green Ellis area, there's the light blue area, which is our core fee area, and then the dark blue is our master plan fee area. The fees in this Nexus study that we're talking about today are related to the dark blue areas of the city. The fees for the other two areas are already set and being assessed. So currently, we have recently updated the Parks, Recreation, and Trails Master Plan in 2022, and then we adopted updates to the Water, Public Safety, and Public Facilities Plans in 2024. Since then, we've been working on these nexus studies. We have presented them to Finance Committee previously. Staff has been working on evaluating the underlying assumptions, updating growth, refining the methodologies used, and making various updates to these nexus studies. Some of those being that we wanted to align with the Assembly Bill 602 to shift residential fees to a fee per square foot. We decreased our program management fee from 5% actually to 2.5% so the number on that slide is wrong. We did a little bit of a further reduction. You'll see some increases in fees due to higher construction costs, updated facilities plans, updated persons per household, and employees per square foot. And then related to parks, we did break that out into Quimby and Loo fees, and fees are now based on 3.3 acres per 1,000 residents as opposed to the previous 4 acres per 1,000 residents. You'll see a decrease in water fees due to lower water demand and the city receiving a $20 million recycled water grant. And then water capacity fees are charged based on meter size now as opposed to acreage. So that way we are more accurately charging people based on their use. So our water and park fees, you'll see there has been a reduction to water fees, as I'd mentioned previously. Water was about $17,000 per EDU, and now we're at a little over $11,000 per EDU. The parks fees were previously about $4.20 per square foot for single-family residential, and now they're at $7.27 per square foot. Public safety facilities. These facilities were adopted with the master plan update. They are all included in that public safety master plan. All the facilities are listed here and they total out to about $98 million that need to be funded. The cost attributable to the development impact fee program is about $62 million. The public safety fee comparison, we're looking at about 86 cents per single-family residential unit, and they have increased in this proposed fee update to $1.31 per square foot. For commercial, they were about $680 per square foot and now $920 per 1,000 square feet. Public facilities buildings are listed in the table here. These were also adopted in the public facilities master plan. There's about $241 million worth of facilities that we need to fund. The maximum cost attributable to the fee program could have been $128 million. We are only proposing funding $101 million from the development impact fee program. The public facilities fees are slightly increasing. They were about $1.64 per square foot for single-family residential, and now they're about $1.82 per square foot. And then for commercial fees, about $110 per thousand square feet and $358 per thousand square feet. So next steps, if Finance Committee should choose to recommend this, we would take these to City Council on September 1st, and then the fees would take 60 days to go into effect after that point. I do have some consultants that worked on this with me, Alison Boulay with Harrison Associates attending virtually, so she is here to help answer questions, and we're happy to take whatever questions you have.

Thanks, and we'll bring it back to the committee. Questions?

So I know, I believe previously when we started this, we got this big docu-dunk on us. Have we met with like BIA, all that kind of gone over some of the concerns that they had? And they're not going to be happy unless we said, you're not going to pay any fees. But I mean, do they feel more comfortable with this now?

Yes, absolutely. We've had a couple meetings with the BIA. We've been exchanging many emails. I think there's one question remaining that we're discussing with them, but we're very close. We've had various meetings with developers as well, Tracy Hills, Prologis. We've had some discussions. And then we are providing responses to letters we received previously, written responses that will go out probably early next week.

Okay. So if you're still dealing with an issue with BIA, Would this possibly change a little bit before it goes to Council on the 1st? Or are you just telling them, no, this is the way it is? Or is there wiggle room for you guys to adjust it? I mean, if they did something that might be just a little different when it comes to Council, full Council?

I think there is a little bit of wiggle room. I don't anticipate there being a change between now and council. The last item that we're discussing is minor, and we sent them a pretty good explanation of why it's included, and it's a very standard item. So we don't anticipate the change. We do have to have the final studies out 10 days prior to the council meeting, and it's only related to parks that they have a question. So we don't anticipate it, but we do have another day or two if we had to. Okay.

And then...

Mayor Pro Tem, David Nafusi here as well. We've asked from the BIA and developers to that, you know, to the extent they are going to send a letter that they try to let us know in advance so that, yes, the day of the meeting, we are not getting such a communication. We made that abundantly clear to everybody that we'd much rather work with you on it well in advance. And I think the message has been delivered, but yeah, thank you for the follow-up on that.

Great. Thank you. And then I've talked with Sarah prior. So one of the things that the Tracy rule is always like where our feedback and I thought we were exploring Sarah about the possibility of somehow. Streamlining it more to get to rural instead of us holding and then is that still something that we're working with or what are we?

It's still in discussion. I don't think that we've decided one way or the other, but it is ongoing discussion.

Perfect. Okay. Thank you.

That's all I got. Okay. Thanks for those questions. So a couple of concerns, I guess. Some of the updated schedules are substantial changes, and I was curious if some of the developers might have concerns, and I haven't heard from any, so I don't think so. I don't see any in our chambers tonight. I even reached out to one and I DIDN'T GET ANY CONCERNS. SO I'M ASSUMING THAT THERE ARE NONE. MAYBE WE'LL GET SOME COMMENTS HERE TONIGHT. BUT MY MAIN CONCERN REALLY IS THESE CHANGES DO RAISE THE COST OF HOUSING OR WILL. THESE WILL BE I ASSUME PASSED ON TO THE HOME PURCHASERS. AND THAT DOES HAVE AN EFFECT ON COST OF LIVING. SO ARE ANY OF THESE CHANGES MANDATED OR DO STAFF HAVE CONCERNS IF WE DO ADJUST ANY OF THESE DOWN IF WE RECOMMEND lowering some of these that we will underfund some of these critical things that we need.

Yeah, it is. If we did lower some of these fees, we would be underfunding. We would have to find funds elsewhere for the various facilities that we've identified in the master plans. So that is always an option. It's always discretion of the committee and the council whether or not they wanted to lower those fees. But we do have to take into consideration that we wouldn't collect enough funding for some of these projects. And the city already does have a percentage that they do have to fund.

Got it. Okay. Good. That's the only question I have. There's nothing else we can take it to the audience. I don't, I do actually see one member, see some staff and audience and one member of our community. Do we have questions or concerns that we want to bring up? Comments? Answer the question. Okay. Do we have any calls or?

None on Zoom.

Okay. Okay. Then we'll bring it back to the committee for any further questions or concerns. I'll make a motion to approve 2A. I'll second the motion.

All those in favor? Aye. Thank you.

Well, that was fast. Okay. Nothing wrong with that. I guess that will take us to staff items number three. Staff, do you have any items tonight?

No staff items tonight.

Great. Short and sweet. If there's nothing else from the committee, we can take a motion. Motion to adjourn. I'll second that.

All those in favor?

Aye.

Meeting adjourned. Thank you. Recording stopped.