Mitigation Fees

The assessment of mitigation fees is one authorized method for financing public facilities necessary to ameliorate and offset the impacts of new development and population growth. These fees are usually exacted from the developer within the planning process and are most commonly collected at building permit issuance or prior to the construction of a new residential or commercial building. A fee is “a monetary exaction, other than a tax or special assessment, which is charged by a local agency to the applicant in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project…” In California, the Mitigation Fee Act includes numerous requirements for public agencies that wish to establish a mitigation fee, but does not specify the manner in which the impact fee must be derived. Those requirements are:

   * Identify the purpose of the fee.
    * Identify the use to which the fee will be put.
    * Determine that there is a reasonable relationship between the fee’s use and the type of development on which the fee is to be imposed.
    * Determine how there is a reasonable relationship between the need for the public facility and the type of development project on which the fee is to be imposed.
    * Discuss how there is a reasonable relationship between the amount of the fee and the cost of the public facility or portion of the public facility attributable to the development on which the fee is imposed.

Mitigation fees can be used to offset impacts to a variety of issues so that developments pay for their “fair share” of impacts to wetlands, transportation infrastructure, service infrastructure, police and fire services and other impacts brought upon the public through increased development. Created to ensure a constant and dependable source of funding, mitigation fees can be used to leverage additional public and private funding and help public agencies better adapt to their communities growth.

With relation to open space and wildlife habitat, mitigation fees are justified because new development directly, indirectly and cumulatively impacts habitat associated with construction, operation and maintenance of certain transportation facilities needed to serve future planned development. Mitigation fees will usually fund acquisition, planning and conservation activities for habitat preservation and construction. In some cases, maintenance and ongoing stewardship are not part of the fee program and must be planned for with other funding.