TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: David Chantarangsu, AICP, Development Services Director
PREPARED BY: David Chantarangsu, AICP, Development Services Director
SUBJECT:
title
Public Hearing and First Reading of an Uncodified Ordinance Adopting Updated Development Impact Fees Associated with the Stephens’ Kangaroo Rat Habitat Conservation Plan
end
ABSTRACT
Earlier this year, the Riverside County Habitat Conservation Authority (RCHCA) adopted updated mitigation fees associated with development occurring within the Stephens’ Kangaroo Rat (SKR) Habitat Conservation Plan. The RCHCA has requested that cities included in the plan area adopt an ordinance that reflects the RCHCA’s new fees, increasing the standard mitigation fee from $500 to $900 per gross acre to provide continued funding for implementation of the regional conservation program, including a $250 fee for custom lot homes, and a fee for agricultural development of $500 per gross acre.
RECOMMENDATION
recommendation
Determine that the activity is exempt from the California Environmental Quality Act (CEQA) by Section 15273 of the Guidelines for the implementation of CEQA for the reasons stated below; and
Conduct a Public Hearing and introduce and conduct the first reading of Ordinance No. 639-26 entitled: An Ordinance of the City Council of the City of Murrieta, California, Amending Riverside County Ordinance No. 663 (as amended through 663.11) Establishing the Riverside County Stephens’ Kangaroo Rate Habitat Conservation Plan Fee Assessment Area and Setting Mitigation Fees.
body
PRIOR ACTION/VOTE
Prior to the City’s incorporation, the County of Riverside took actions to secure permits from state and federal agencies to address development impacts on Stephens’ Kangaroo Rat (SKR). In 1996, the City entered into an Implementation Agreement establishing a long-term Habitat Conservation Plan (HCP) with state and federal wildlife agencies. In the same year, the City Council adopted Ordinance No. 165-96, establishing fees associated with the SKR HCP, pursuant to Riverside County Ordinance No. 663. Amendments to the ordinance have been made over the life of the plan, with the last being in 1996 with the adoption of Ordinance 663.10.
STRATEGIC ALIGNMENT
This item aligns with the City Council goal of maintaining a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency. By establishing new fees that allow the SKR HCP to maintain fiscal sustainability, the City and other agencies within the plan area ensure that other important government priorities, such as economic development and infrastructure enhancements, can continue within an established regional conservation framework that meets required mitigation obligations and helps avoid potential project delays associated with compliance with state and federal endangered species requirements.
DISCUSSION
The City of Murrieta's (City) participation in the SKR conservation program dates to the regional response to the species' protection under state and federal endangered species laws. The SKR was listed as threatened by the State of California in 1971 and was federally listed as endangered in 1988. Following the federal listing, Riverside County and participating cities developed a coordinated approach to allow development to proceed while providing for the conservation and mitigation of impacts on SKR and its habitat.
Riverside County and participating cities have undertaken a regional approach to conservation planning that ultimately resulted in the Long-Term Stephens' Kangaroo Rat Habitat Conservation Plan administered by the Riverside County Habitat Conservation Agency (RCHCA). In 1996, the City joined the long-term regional program and adopted Ordinance No. 165-96 to implement its responsibilities under the program, including the establishment of an SKR mitigation fee to fund habitat conservation activities.
The downlisting of the SKR, however, does not conclude the regional conservation effort. The species remains protected under state and federal law, and the habitat conservation system established through the SKR HCP requires continued funding for habitat preservation, management, monitoring, and other conservation activities. The mitigation fee remains an important component of that funding structure by providing a mechanism for new development to contribute toward the conservation obligations associated with impacts to SKR and its habitat.
The current SKR mitigation fee has not been updated since 1996. Over the last 30 years, the costs associated with implementing the conservation program have changed substantially. RCHCA therefore commissioned an updated nexus study to evaluate the current cost of implementing the SKR HCP and the appropriate contribution from new development. The 2026 Nexus Study provides the basis for the proposed update to the mitigation fee, which recommends increasing the standard mitigation fee as follows:
|
Development Type |
Current Fee |
Proposed Fee |
|
Standard development |
$500 per gross acre |
$900 per gross acre |
|
Agricultural development |
$100 per gross acre |
$500 per gross acre |
|
Single-family residence on an individual parcel |
$100 per parcel |
$250 per parcel |
The 2026 SKR HCP Nexus Study concludes that an increase in the mitigation fee is needed to provide sufficient ongoing funding to implement the Habitat Conservation Plan. The existing $500-per-acre fee has remained unchanged since 1996 and is below its inflation-adjusted value. Based on approximately $1.59 million in annual fee revenue needed to fund HCP implementation and a forecast of approximately 1,770 acres of new development annually, the Nexus Study calculates an updated mitigation fee of $900 per acre. These findings are summarized on pages 3-4 of the Nexus Study and supported by the detailed funding and development analysis on pages 5-9, particularly Tables 2 through 6.
Costs associated with the HCP include activities such as reserve management and oversight, habitat management/restoration, biological monitoring, administration, staffing, consultants, services, supplies, insurance, and other implementation expenses. The $900-per-acre calculation is regional and assumes that approximately 1,772 acres will be developed annually throughout the SKR Plan Area, allowing the annual cost of the HCP to be spread across anticipated development. The forecast looked at regional growth projections and RCHCA fee collections to determine the forecast projection of development of 1,772 acres per year in the plan area.
Adoption of the attached ordinance will establish the updated fees which will become effective on January 1, 2027.
PUBLIC NOTICING
Pursuant to Government Code Section 66016.5 (a)(7), 30-days’ notice of the adoption of the updated fee was published on the Press Enterprise on September 2, 2026, and the Nexus Study has been posted on the City’s website on or about August 13, 2026.
CEQA AND REGULATORY OVERVIEW
The adoption of the ordinance setting the updated mitigation fees is exempt from the California Environmental Quality Act (CEQA) as a Statutory Exemption pursuant to Section 15273 of the CEQA Guidelines because CEQA does not apply to the modification of fees charged by public agencies when the fees are intended to meet operating expenses. The Nexus Study documents the need for an updated mitigation fee to meet costs associated with HCP management including activities such as reserve management and oversight, habitat management/restoration, biological monitoring, administration, staffing, consultants, services, supplies, insurance, and other implementation expenses that are necessary to ensure compliance with state and federal endangered species requirements.
FISCAL IMPACT
There are no fiscal impacts to the City associated with the adoption of the updated mitigation fees.
ATTACHMENTS
ATT 1 - Ordinance No. 639-26
ATT 2 - Nexus Study