Title
Natomas Basin Habitat Conservation Plan Fee - 2026 Adjustment [Four-Fifths Vote Required] [Published 04/17/2026, 05/08/2026, 05/15/2026]
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FileID
File ID: 2026-00886
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Location
Location: Natomas Basin, District 1 and District 3
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Recommendation
Recommendation: Conduct a public hearing and upon conclusion, adopt a Resolution by a four-fifths vote: 1) adopting the Natomas Basin Habitat Conservation Plan Fee Update - 2026 (Nexus Study); 2) adjusting the amount of the Natomas Basin Habitat Conservation Plan fee (HCP fee); and 3) making the findings pursuant to Government Code section 66017, subdivision (b), for the adjusted HCP fee to take effect immediately upon adoption.
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Contact
Contact: Cheryle Hodge, Principal Planner, (916) 808-5971, chodge@cityofsacramento.org; Matthew Aijala, Associate Planner, (916) 808-7176, maijala@cityofsacramento.org; Community Development Department
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Presenter
Presenter: Matthew Aijala, Associate Planner, (916) 808-7176, maijala@cityofsacramento.org, Community Development Department
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Attachments
Attachments:
1-Description/Analysis
2-Resolution to Adjust the Habitat Conservation Fee
3-Exhibit A: Natomas Basin Habitat Conservation Plan Nexus Study
4-TNBC Board of Directors HCP Fee Resolution
5-TNBC NBHCP Fee Update -- 2026 Finance Model / Nexus Study
6-Staff PowerPoint Presentation
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Description/Analysis
IssueDetail
Issue Detail: On April 1, 2026, board of directors of The Natomas Basin Conservancy (Conservancy) recommended that the City increase the HCP fee due to increases in annual administration and operations and maintenance costs. The Nexus Study, which was prepared in accordance with the Mitigation Fee Act (California Government Code,§ 66000 et seq.), sets forth the basis for the increase in the HCP fee.
Developers of land covered by the Natomas Basin habitat conservation plan (NBHCP) within North and South Natomas currently pay a HCP fee of $47,031 per gross acre of development ($33,281 per acre with land dedication). The Conservancy’s economic consultant - Economic & Planning Systems (EPS) - completed an update of the HCP finance model (the Nexus Study) based on actual costs, as well as estimated costs, which indicates a necessity to adjust the HCP fees in order to successfully implement the NBHCP. Under the terms of the 2003 NBHCP implementation agreement between the City, the state and federal wildlife agencies, and the Conservancy, the City agreed to have its NBHCP “Plan Operator” (Conservancy) update the HCP finance model annually for the life of the NBHCP.
The HCP fee revenue pays for the land acquisition, restoration and enhancement, administration and operations and maintenance, operations and maintenance endowment, and supplemental endowment funds associated with implementing the NBHCP and mitigating impacts of urban development on the species covered under the NBHCP. Based on the Nexus Study and the judgment of the Conservancy Board, the City Council is requested to approve an increase of $536 for the HCP fee that does not have land dedication and an increase of $536 to the HCP with land dedication, resulting in a 2026 HCP fee of $47,567 per gross acre of development ($33,817 with land dedication). There is no obligation of the general fund associated with this requested fee adjustment.
|
|
2022 Fee |
2023 Fee |
2024 Fee |
2025 Fee |
2026 Fee |
|
Full Fee (no land dedication) |
$43,968 |
$45,565 |
$46,009 |
$47,031 |
$47,567 |
|
Fee with Land Dedication |
$27,718 |
$29,815 |
$32,259 |
$33,281 |
$33,817 |
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PolicyConsiderations
Policy Considerations: The 2003 NBHCP was approved by City Council on May 13, 2003, the federal incidental take permit (ITP) was issued by U.S. Fish and Wildlife Service on June 27, 2003, and the amended state ITP was issued by California Department of Fish and Game on July 10, 2003. On an annual basis, the City considers a HCP fee adjustment to ensure adequacy of the funding to implement the 2003 NBHCP and comply with the ITP and the related implementation agreement.
The City is adjusting HCP fee in accordance with the Mitigation Fee Act (California Government Code Section 66000 et seq.), which establishes the framework that local agencies must follow when imposing or adjusting development impact fees, including public noticing and nexus findings. Under the Mitigation Fee Act, fee adjustments are not effective earlier than 60 days after adoption unless the resolution includes findings that the fee must take effect immediately to preserve public health, welfare, and safety. Because the HCP fee adjustment must be implemented in advance of the grading season (May 1), or as soon as possible after the beginning of the grading season, to ensure adequate funding for habitat mitigation, the City Council is asked to adopt the HCP fee adjustment as an urgency measure to take effect immediately upon adoption pursuant to Government Code section 66017, subdivision (b). This requires the City Council to make findings describing the current and immediate threat to the public health, welfare, and safety, and adopt the adjusted fee by a four-fifths vote. Since this interim authorization is effective for no more than 30 days, staff will need to return to City Council within 30 days to extend the interim authorization for an additional 30 days, after which the HCP fee adjustment will take permanent effect pursuant to Government Code Section 66017, subdivision (a).
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EconomicImpacts
Economic Impacts: Not applicable.
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EnvironmentalConsiderations
Environmental Considerations:
California Environmental Quality Act (CEQA): The City Council’s action in approving this resolution is solely for the purpose of establishing an adequate HCP fee to be used to implement the NBHCP and is therefore not a project for the purpose of the CEQA pursuant to Guidelines section 15378(b)(4). Previous environmental review has been conducted related to the North Natomas Community Plan, the 2003 NBHCP Final Environmental Impact Report, and the Comprehensive Drainage Plan, among others.
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Sustainability
Sustainability: Periodic review and adjustment of the HCP fee is consistent with and supportive of the sustainable practice of preservation of prime farmland and critical habitat resources.
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Commission/Committee Action
Commission/Committee Action: The Conservancy’s board of directors reviewed the proposed HCP fees on April 1, 2026, and adopted a resolution recommending an increase be made to the HCP fee. The board of directors’ resolution is included as Attachment 4.
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RationaleforRecommendation
Rationale for Recommendation: The HCP fees are adjusted annually, prior to the commencement of the grading season (May 1). Because the fee must be in place before grading activity begins, or as soon after the grading season as possible, the HCP fee adjustment must take effect immediately pursuant to Government Code Section 66017, subdivision (b), to protect the public health, welfare, and safety by ensuring habitat mitigation is adequately funded during the grading season. The Conservancy recommends an increase to the current HCP fee to maintain adequate funding to implement the NBHCP and mitigate impacts of urban development on the species covered by it. (See Attachment 4 - Conservancy resolution to increase the HCP fee 2026 rate.)
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FinancialConsiderations
Financial Considerations: There is no obligation of the general fund associated with this requested fee adjustment.
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LocalBusinessEnterprise
Local Business Enterprise (LBE): Not applicable.
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Background
Background:
History of the NBHCP Fee
On August 7, 1997, the City Council added Chapter 84.10 to Title 84 (currently Chapter 18.40 of Title 18) of the City Code, which created and established the authority for the HCP fee to fund the costs of implementing the NBHCP (Ord. No. 97-046). Chapter 18.40 directs the City Council, by resolution, to set the amount of the fee. The chapter also contemplates the periodic revision of the fee by resolution of the Council.
The history of the HCP fee rate is shown in the graphics and table below. As shown, it increased dramatically following the approval of the 2003 NBHCP and the years immediately following. This increase was due to the enhanced mitigation necessitated by ligation and set forth in the 2003 revised NBHCP, as well as a continued and sustained increase in land prices. The HCP fee is adjusted when required and has only been adjusted seven times since 2014 after four years of annual decreases. In 2017, there was a decrease of $659 in the HCP fee largely due to an increase in estimated crop land lease revenue per acre used to offset the Administration and Operation and Maintenance Costs. In 2018, there was an increase in the HCP fee of $1,491, which reflected the change in the estimated annual Endowment fund management fees paid by the Conservancy. The most recent adjustment in 2025 amounted to an increase of $1,022 which was largely attributable to increases in administration, operations, and maintenance costs in addition to an increase in costs associated with mitigation land restoration and enhancement.
Graphic - HCP Fee History 2005 through 2026
History of HCP Fees
|
Date |
HCP Fee / Gross Acre |
Resolution No. |
|
October 31, 1995 |
$2,240 [Interim Fee] |
95-060 |
|
September 2, 1997 |
$2,656 |
97-508 |
|
August 17, 1999 |
$3,292 |
99-473 |
|
September 12, 2000 |
$3,941 |
2000-538 |
|
June 12, 2001 |
$10,021* (incl. $4,028 premium) |
2001-391 |
|
May 21, 2002 |
$11,962* (incl. $4,028 premium) |
2002-300 |
|
June 24, 2003 |
$12,270 |
2003-460 |
|
April 20, 2004 |
$16,124 ($8,624 w/ land dedication) |
2004-285 |
|
April 5, 2005 |
$24,897 ($12,397 w/ land dedication) |
2005-223 |
|
May 4, 2006 |
$41,182 ($18,682 w/ land dedication) |
2006-301 |
|
February 13, 2007 |
$38,445 ($18,445 w/ land dedication) |
2007-092 |
|
February 19, 2008 |
$38,133 ($20,633 w/ land dedication) |
2008-097 |
|
February 17, 2009 |
$38,133 ($20,633 w/ land dedication) |
N/A |
|
March 9, 2010 |
$44,050 ($26,550 w/ land dedication) |
2010-127 |
|
March 22, 2011 |
$37,547 ($22,547 w/ land dedication) |
2011-157 |
|
February 21, 2012 |
$32,861 ($21,611 w/ land dedication) |
2012-037 |
|
January 29, 2013 |
$27,419 ($18,669 w/ land dedication) |
2013-027 |
|
February 4, 2014 |
$32,259 ($21,009 w/ land dedication) |
2014-0034 |
|
January 13, 2015 |
$32,259 ($21,009 w/ land dedication) |
N/A |
|
February 9, 2016 |
$32,259 ($21,009 w/ land dedication) |
N/A |
|
January 17, 2017 |
$31,600 ($20,350 w/ land dedication) |
2017-0043 |
|
January 30, 2018 |
$33,091 ($21,841 w/ land dedication) |
2018-0051 |
|
February 26, 2019 |
$33,091 ($21,841 w/ land dedication) |
N/A |
|
February 27, 2020 |
$40,032 ($25,032 w/ land dedication) |
2020-0062 |
|
April 13, 2021 |
$40,032 ($25,032 w/ land dedication) |
N/A |
|
March 1, 2022 |
$43,968 ($27,718 w/ land dedication) |
2022-0067 |
|
February 21, 2023 |
$45,565 ($29,815 w/ land dedication) |
2023-0052 |
|
February 27, 2024 |
$46,009 ($32,259 w/ land dedication) |
2024-0054 |
|
February 25, 2025 |
$47,031 ($33,281 w/ land dedication) |
2025-0049 |
|
May 19, 2026 |
$47,567 ($33,817 w/ land dedication) |
2026- |
* In 2001, the Council increased the HCP fee to $10,021 per gross acre to implement the 1997 NBHCP and the Settlement Agreement. The HCP fee included a base fee of $5,993 per gross acre and a premium fee of $4,028 per gross acre to acquire reserve lands in prioritized areas of the Basin in order to comply with the agreement. In 2002, the Council increased the HCP fee to $11,962 per gross acre - a base fee of $7,934 and a premium fee of $4,028 for the agreement.
The table above shows the history of the HCP fee. As shown in the table, the HCP fee reached a high in 2010 at $44,050 per gross acre ($26,550 w/land dedication). Sixteen years later, the HCP fee is not significantly higher.
The Conservancy is the plan operator of the NBHCP. The Conservancy acquires mitigation land and implements management and enhancement measures necessary to meet the mitigation requirements of the NBHCP. With best available information regarding current and projected costs associated with implementation of the 2003 NBHCP, Conservancy staff worked with its economic consultant EPS to update the HCP finance model (the Nexus Study). Based on the economic model and the judgment of the Conservancy, an increase adjustment is needed to accurately reflect the current costs of operating the HCP and thus should be reflected in the HCP fee.
Justification for Adjusting the HCP Fee
Each December, the Conservancy considers whether a HCP fee adjustment is necessary to implement the NBHCP given current assumptions. The current fee is $47,031 per gross acre of development ($33,281 per acre with land dedication); the proposed fee would be increased to $47,567 ($33,817 per acre with land dedication) based on the NBHCP Finance Model and the Conservancy analysis.
The NBHCP Fee is made up of five major parts:
1) Land Acquisition,
2) Restoration and Enhancement,
3) Administration and Operation and Maintenance (O&M),
4) O&M Endowment, and
5) Supplemental Endowment.
The fifth component - the Supplemental Endowment -- was added (at the request of the City) in June 2001 to provide assurances that the last 200 acres of required mitigation land will be purchased after all the fee revenue has been collected. The Supplemental Endowment may also be used for expenses due to unforeseen circumstances.
Unlike the Supplemental Endowment part of the HCP fee, the O&M Endowment Fund is used to maintain the preserve lands in perpetuity after build-out of the plan area and all development fee revenue has been collected.
A small sixth component is allocated to the City for administrative purposes including fee collection (2% of the fee).
Compared to the 2025 HCP fee, the proposed 2026 HCP fee represents a fee increase of 1.1% (without land dedication) or a 1.6% fee increase (with land dedication). The increase is largely attributable to increases in annual administration and operations and maintenance costs.
Mitigation Fee Act Compliance
The HCP fee is a development impact fee subject to the requirements of the Mitigation Fee Act (Government Code Section 66000 et seq.). Pursuant to Government Code Section 66001, the City must establish a reasonable relationship between the fee and the development on which it is imposed. The Nexus Study prepared by Economic & Planning Systems (EPS), included as Attachment 5, demonstrates the following nexus findings:
Purpose of the Fee: The purpose of the NBHCP fee is to cover the mitigation costs associated with new development in the NBHCP development area and to provide the funding required to implement the NBHCP, thereby maintaining the incidental take permits for new development under the Federal and State Endangered Species Acts.
Use of Fee: Fee revenues fund habitat land acquisition, restoration and enhancement, operations and maintenance, program administration, and endowment funds to ensure habitat management in perpetuity.
Relationship Between Use of Fee and Type of Development: The NBHCP fee is charged on a per-gross-acre basis because each acre of development results in the disturbance of habitat land that must be mitigated, regardless of the development type. This approach ensures the fee paid by any project is directly proportional to its impact on habitat.
Relationship Between Need for Facility and Type of Development: New development in the NBHCP area impacts land and species covered by the NBHCP, necessitating mitigation under the Federal Endangered Species Act. The NBHCP was developed to address this through a regional approach to obtaining incidental take permits.
Relationship Between Amount of Fee and Cost of Facility or Portion of Facility Attributed to Development on Which Fee is Imposed: The fee is calibrated to cover estimated implementation costs with fees charged proportionally based on gross acreage of impact.
Full and comprehensive nexus findings are available as Attachment 5 of this report.
Urgency Findings:
Urgency Findings for Immediate Effectiveness: Pursuant to Government Code Section 66017, subdivision (b), the City Council may adopt an urgency measure authorizing the adjusted HCP fee to take effect immediately upon adoption, rather than after the standard 60-day waiting period. This interim authorization requires a four-fifths vote and findings describing the current and immediate threat to public health, welfare, and safety. The threat here is that without the adjusted fee in place before the onset of the grading season (May 1), or as soon as possible after the beginning of the grading season, development activity would proceed under the current HCP fee, which does not reflect the actual costs of implementing the NBHCP. Underfunding the NBHCP jeopardizes the City’s compliance with its federal and state incidental take permits and the associated implementation agreement, which could result in the suspension of those permits and a halt to development in the Natomas Basin. The interim authorization for the HCP fee adjustment is effective for no more than 30 days. Staff will return within 30 days to request that the City Council extend this interim authorization for an additional 30 days pursuant to Government Code Section 66017, subdivision (b), after which the adjusted HCP fee will take permanent effect.
Mitigation Fee Summary (per acre of development) without land dedication
|
Fee Component |
2025 Adopted |
2026 Proposed |
Change from 2025 |
|
Land Acquisition (land, transaction, and contingency) |
$14,250 |
$14,250 |
$0 |
|
Restoration & Enhancement |
$2,775 |
$2,775 |
$0 |
|
Administration / Operations & Maintenance |
$17,758 |
$18,076 |
$318 |
|
O&M Endowment |
$10,655 |
$10,846 |
$191 |
|
Supplemental Endowment |
$671 |
$687 |
$16 |
|
Fee Collection Administration |
$922 |
$933 |
$11 |
|
Total |
$47,031 |
$47,567 |
$536 |
Mitigation Fee Summary (per acre of development) with land dedication
|
Fee Component2025 Adopted2026 ProposedChange from 2025 |
|
|
|
|
Land Acquisition (land, transaction, and contingency) |
$500 |
$500 |
$0 |
|
Restoration & Enhancement |
$2,775 |
$2,775 |
$0 |
|
Administration / Operations & Maintenance |
$17,758 |
$18,076 |
$318 |
|
O&M Endowment |
$10,655 |
$10,846 |
$191 |
|
Supplemental Endowment |
$671 |
$687 |
$16 |
|
Fee Collection Administration |
$922 |
$933 |
$11 |
|
Total |
$33,281 |
$33,817 |
$536 |
The Conservancy is obligated to submit a HCP fee recommendation each year that ensures its ability to successfully implement the NBHCP. A copy of the full fee study (dated March 2026) is available for review at the City Planning Office, 300 Richards Blvd., 3rd Floor, Sacramento, CA 95811, and as Attachment 5 of this report.
Land Dedication Requirement
Since 2003, all large mitigation efforts have been accomplished through land dedication by the developers to the Conservancy, as opposed to payment of the Land Acquisition portion of the HCP fee. In April 2005, the City Council voted to require developers of 50+ acres to dedicate land in lieu of the full fee payment - unless the Conservancy deemed it had adequate surplus land such that accepting fees over dedication was helpful to the NBHCP’s implementation. On May 4, 2006, the City Council extended this provision to May 1, 2007. On February 13, 2007, the City Council extended the land dedication in-lieu requirement without a sunset date. No change in this requirement is proposed in this report.
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