Development Impact Fees

The City of Vacaville collects a variety of development impact fees for new development projects in the City. These impact fee programs are the mechanism by which new development contributes its “fair-share” to construction of new infrastructure and public facilities needed to accommodate growth. Chapter 11.01 of the Vacaville Municipal Code specifies how the City of Vacaville administers the development impact fee program.

2025 Development Impact Fees and Ordinance Update

Background and Nexus Study

In April 2025 a Nexus Study (updated April 23, 2025) was prepared to support the updated Development impact fees. The document is now available for review. The public is encouraged to review the Nexus Study, attend public stakeholder meetings to ask questions, provide verbal feedback, provide written comments, and attend Council meetings where the matter will be formally considered.

Following the initial public outreach phase, the updated Development Impact Fees will be presented as a study session at the City Council meeting; this meeting is tentatively planned for May 27, 2025. Following the study session, the updated Development Impact Fees will be presented to City Council for adoption at a subsequent meeting.

Chapter 11.01 Development Impact Fee Ordinance Update

Development Impact Fee Increase – Feedback and Comments

The City of Vacaville is aware of concerns raised by members of the development and nonprofit communities regarding the proposed 2025 update to the Development Impact Fee (DIF) program. We want to clarify the intent of this update and reaffirm our commitment to a collaborative, transparent process.

Purpose of the 2025 DIF Update

The primary purpose of the 2025 DIF update is to address significant increases in infrastructure costs resulting from the COVID-19 pandemic, inflation, labor shortages, and ongoing supply chain disruptions. While the 2022 DIF update overhauled the outdated 1992 fee program and introduced a new structure based on modern planning assumptions, the underlying cost estimates were primarily developed in 2018 and 2019—prior to these recent economic shifts.

As a result, the 2025 update is focused on bringing project cost estimates in line with current market realities. The goal is to ensure that Vacaville can fund critical infrastructure improvements equitably and legally, based on up-to-date data, and without placing an undue fiscal burden on the City or its residents in the future.

Addressing Community Concerns

The City understands that any change in development fees can have a direct effect on the financial feasibility of proposed projects. We are particularly mindful of projects that offer shared community benefits, such as recreational facilities, public open space, or joint-use educational infrastructure.

At the April 10th kickoff meeting, staff presented three potential options for how the City Council could implement the updated fees:

Modify Level of Service (LOS) Standards to Reduce Fees
Apply a Policy-Based Fee Reduction with the City Covering the Funding Gap
Phase in Fee Increases Over a 5-Year Period

The "DIF Update – Implementation Options" below further discusses the three options.

Community Outreach - Public Outreach Meeting #1 (Hybrid) | April 10, 2025

Public Outreach Meeting #2 (Hybrid) | April 28, 2025

Public Outreach Meeting #3 (Hybrid) | May 15, 2025

Public Outreach Meeting #4 (Hybrid) | May 20, 2025

Public Outreach Meeting #5 (Hybrid) | July 15, 2025

Public Outreach Meeting #6 (Hybrid) | August 25, 2025

Coordination with the Building Industry Association of the Bay Area | September 18, 2025

Date: September 18, 2025

Documents reviewed during this presentation are available below:

After these public outreach meetings, this item will be taken to City Council for their consideration.

Development Impact Fee Update – Process

Clarification on the Development Impact Fee Update Process

The City of Vacaville would like to add some clarity about the background and intent of the 2025 Development Impact Fee (DIF) update and summarize how it builds on the stakeholder engagement and structural changes implemented during the 2022 DIF update.

The primary purpose of the 2025 DIF update is to address significant cost increases that have occurred since the last update due to the COVID-19 pandemic, supply chain disruptions, inflation, and construction cost escalation. The cost estimates used in the 2022 DIF were largely developed in 2018 and 2019, prior to these economic shifts. As a result, while the 2022 DIF established a new framework and project list, the current 2025 update is focused on updating cost assumptions to reflect actual conditions, not adding substantial new infrastructure or changing the methodology.

2022 DIF Update: New Framework After 30 Years

The 2022 update was not a simple revision of the 1992 fees—it was essentially the creation of a new DIF structure. Over three decades, Vacaville adopted a new General Plan, introduced new policies and standards for building safety and environmental compliance, implemented new master plans (such as the Park and Recreation Master Plan), and planned for significant population and economic growth. These changes required a comprehensive reevaluation of eligible capital projects and how impact fees should be assessed.

The number of transportation projects included in the program increased from 35 in 1992 to 68 in the 2022 report to support this planned growth and ensure infrastructure consistency with adopted policy documents. While this resulted in a broader scope of projects, the 2022 update did not account for post-pandemic cost increases, which is the primary driver behind the 2025 update currently underway.

Summary of Stakeholder Engagement: 2022 Update

Stakeholder input was central to the development of the 2022 DIF. From August 2021 to May 2022, the City held a series of meetings—both in-person and virtual—with development community representatives, engineers, and consultants. These meetings addressed key aspects of the DIF update, including:

Land use categories and boundaries
The process used to determine projects
Project lists and layouts
Cost estimating and sensitivity analysis
Capacity fee methodology
Base year and account balances
Grant funding and fair-share calculations

Key Engagement Dates:

August 11, 2021 – Staff presented the project list development process, methodology, and key assumptions. Questions were raised regarding the California Overcrossing and Vaca Valley Extension; staff explained their inclusion is based on General Plan policies and that only City Council can remove them.
December 9, 2021 – A follow-up meeting reiterated methodology and project list development, including project sensitivities.
February 15, 2022 – Staff held a session on utilities and sewer/water capacity fee calculations.
February 22, 2022 – EPS presented a study session to City Council on the DIF update.
April 20, 2022 – The Public Review Draft of the DIF Update was posted online, with a link shared with development community stakeholders.
April 21, 2022 – Staff met with local engineers for a technical Q&A ahead of the stakeholder presentation.
April 26, 2022 – Formal stakeholder meeting including a presentation, Q&A, and recording posted online.
May 10, 2022 – Stakeholder meeting and City Council presentation on the draft DIF update.
May 16, 2022 – A series of follow-up Q&A sessions to gather and respond to stakeholder questions, with written summaries posted publicly.
May 17, 2022 – A series of follow-up Q&A sessions to gather and respond to stakeholder questions, with written summaries posted publicly.
May 24, 2022 – A series of follow-up Q&A sessions to gather and respond to stakeholder questions, with written summaries posted publicly.
May 31, 2022 – A series of follow-up Q&A sessions to gather and respond to stakeholder questions, with written summaries posted publicly.

In total, these efforts provided multiple opportunities for stakeholders to engage and ask questions. View a more detailed summary of each of the stakeholders’ meetings.

Looking Ahead: 2025 Update Goals

While the 2022 DIF update laid the groundwork for a modern, policy-consistent program, the 2025 update is a targeted response to recent and dramatic cost escalations. The intent is not to expand the project list, but to ensure that fees are aligned with today’s construction costs so that the City can deliver the infrastructure needed to support growth. The majority of the 2022 work—such as the project list, land use framework, and methodology—is remaining consistent.

Development Impact Fee Update – Implementation Options

The Development Impact Fee Update outlines the maximum allowable fees that the City may charge. However, the actual implementation of these fees requires policy direction from the City Council.

At the April 10th kickoff meeting, staff presented three potential options for how the City Council could implement the updated fees:

1. Modify Level of Service (LOS) Standards

The City’s General Plan defines acceptable LOS standards, such as park acreage per 1,000 residents and intersection performance. Other LOS standards also exist across various infrastructure and service categories.

The City Council may choose to reduce the LOS for future development by amending relevant policy documents. This action would result in fewer capital improvement projects (e.g., parks, roadways, facilities), thus lowering the overall development impact fee. However, such a change would require careful deliberation and formal policy amendments.

2. Policy-Based Fee Reduction with City-Funded Gap

Alternatively, the City Council may opt to reduce the fees through policy direction while retaining the full list of identified capital projects. In this scenario, the City would be responsible for filling the funding gap through other means, such as:

General Fund allocations
Property taxes
New or existing assessment districts

For example, the Traffic Impact Fee assumes that some projects will receive outside grant funding, based on the City's historical grant receipts over the past 19 years.

3. Phase in Fee Increases Over 5 Years

If the updated fees represent a significant increase (e.g., 100% higher than current fees), the City may phase in the increase over a five-year period. Under this approach, fees would increase incrementally by 20% of the total increase each year, in addition to annual adjustments based on the California Construction Cost Index (CCCI):

Year 1: 20% of total increase
Year 2: 40% of total increase
Year 3: 60% of total increase
Year 4: 80% of total increase
Year 5: 100% of total increase

This phased approach can help ease the transition for developers and property owners while allowing the City to gradually adjust its revenue stream.

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City of Vacaville

2022 Development Impact Fees

1992 Development Impact Fees

2025 Development Impact Fees and Ordinance Update

Frequently Asked Questions - Documents

2025 Development Impact Fees Update - Documents

2025 Development Impact Fees Ordinance Update - Documents

Development Impact Fee Increase – Feedback and Comments

2025 Coordinated Fee Update Program Introduction

Development Impact Fee Update – Process

Development Impact Fee Update – Implementation Options