Westminster City Council
SUBJECT
Title
Strategic Plan Goal #1: Achieve Financial Stability.
Strategic Plan Objective: Reassess Traffic Impact Fees and Park Fees and Explore Other Fees.
End
From: Christine Cordon, City Manager
Requested by: Administration
Prepared by: Adolfo Ozaeta, Assistant City Manager; Erin Backs, Finance Director; Ryan Salz, Senior Management Analyst
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RECOMMENDED ACTION
Recommendation
Receive and file.
end
BACKGROUND
On April 28, 2025, the City Council held a strategic planning workshop to develop the City’s second three-year strategic plan and identify priorities for the City. These include:
• Goal #1 - Achieve Financial Stability
• Goal #2 - Implement and Support Effective Land-Use Policies that Encourage Quality Development
• Goal #3 - Attract, Develop, and Retain Well-Qualified Staff Members
• Goal #4 - Improve Customer Service Delivery to the Community
• Goal #5 - Enhance Quality of Life and Beautification Throughout the City
The new goals stem from the first set of goals adopted in 2022, which included:
• Goal #1 - Achieve Financial Stability
• Goal #2 - Develop and Implement Specific Plans for Little Saigon, the Downtown District, and the West Side
• Goal #3 - Attract, Develop, and Retain Well-Qualified Staff Members
• Goal #4 - Improve Customer Service Delivery to the Community
The April 28, 2025 strategic planning workshop was an opportunity for the City Council to discuss the previous three-year strategic plan goals and objectives, reflect on lessons learned, and consider new priorities, concerns, and needs in establishing a new set of goals and objectives. The new three-year strategic plan includes previous goals that are being continued due to ongoing implementation of objectives, as well as new opportunities that have presented themselves since the previous planning period.
A follow-up strategic planning workshop was held on October 6, 2025 to evaluate the City's progress in achieving goals through the strategic plan.
One of the objectives under Strategic Plan Goal #1 - Achieve Financial Stability is to reassess traffic impact fees and park fees and explore other fees.
Economic and Planning Systems, Inc. (EPS) was contracted by the City to conduct the first phase of the objective, a development impact fee comparison study. Attachment 1 shows a memorandum that details the key findings of the study. This analysis evaluated Westminster’s current impact fee structure and compared it to nine neighboring jurisdictions, including Torrance, Huntington Beach, Garden Grove, Costa Mesa, Anaheim, Stanton, Placentia, Seal Beach, and Santa Ana. The aim of the study was to evaluate the total value of impact fees charged in “peer cities,” as well as the range of fee types included in their fee programs.
As shown in Table 1 of the memorandum (Attachment 1), peer cities vary widely in the number and type of fees they implement. Westminster’s current fee structure only includes impact fees for parks and traffic. In contrast, many of the peer cities analyzed have more comprehensive programs that support a broader range of capital needs such as public safety, libraries, water/sewer, fire, affordable housing, and public arts.
While Westminster has a more condensed fee program, its total residential impact fee burden is more closely aligned with the peer cities. For single-family fees ($17,595 per unit), Westminster is at the higher end of the spectrum but still lower than Garden Grove and Huntington Beach. For multi-family ($12,879 per unit), the City falls at the median and is comparable to the fee values of Costa Mesa, Anaheim, and Placentia. In addition to an absolute comparison, EPS evaluated the relative burden of these fees in the context of local housing costs. This was accomplished by comparing residential impact fees as a percentage of average housing values in each location. This method offers a more meaningful understanding of how impact fees affect development feasibility. Westminster fell near the higher end of the range for both single-family and multi-family but is not one of the top three cities for either category.
Non-residential impact fees were separately considered and analyzed. Non-residential includes four fundamental commercial and industrial land use categories: office, retail, hotel/motel, and industrial. Across all four categories, Westminster is at the very bottom or among the lowest of the peer cities reviewed.
The findings of the study led to a few key takeaways as the City continues its reassessment of traffic and park impact fees, and exploration of other fees. Since Westminster’s non-residential impact fees were found to be substantially lower than most peer cities, the City may choose to consider increasing non-residential fees and adding new fee categories. On the other hand, residential impact fees were close to the top of the identified range. The City may choose to consider this context when assessing potential increases to residential impact fees.
Equipped with the information obtained in this study, staff plans to begin the next phase necessary to fully complete the strategic plan objective related to impact fees. Following a preliminary review of infrastructure and public service needs, nexus studies will be commissioned to consider the alteration of current impact fees and/or the implementation of new impact fees. The Mitigation Fee Act (Government Code Section 66000 et seq.) stipulates the conditions in allowing local government to impose fees for “public improvements, public services, and community amenities.” There must be a nexus between fees imposed, the use of the fees, and the development projects on which the fees are imposed. The total amount of fees cannot exceed what is “roughly proportional” to the amount of the impact of the development.
The most recent nexus study completed was for the Parks and Recreation Development Impact Fee Program (“park fee”) in 2019. Both the traffic and park fee are due to be reexamined. Although the park fee is only about seven years old, some significant factors included in the calculation are not aligned with the Parks and Recreation Facilities Master Plan, approved in 2020. Completion of nexus studies will not require the City to impose any new fees or fee increases. Instead, it will validate the impact fees currently in place and provide the City with more information to properly evaluate potential increases or decreases to the broader development impact fee program.
FISCAL IMPACT
There is no fiscal impact associated with this item.
LEGAL REVIEW
The City Attorney’s Office has reviewed as to form.
CONCLUSION
Strategic Plan Goal #1 - Achieve Financial Stability with an objective to reassess traffic impact fee and park fees and explore other fees. The development impact fee comparison study provides a basis to proceed with a nexus study for park and traffic impact fees and consider the study and implementation of additional fee types.
ATTACHMENTS
1. Memorandum - Development Impact Fee Comparison Study
REVIEWED BY
Erin Backs, Finance Director
City Attorney’s Office
Christine Cordon, City Manager