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8.A. - Page 21 of 42 <br />Development Fees <br />Development -related fees are used to recover the cost of staff and consultant time to process development <br />applications. The City Council updated these fees in 2017 and 2018. Budgeted revenue for development fees <br />is slightly lower than with current estimates. Staff is projecting an increase of $1.2 million from the original <br />budget amount for permits and licenses for FY 2020-21. There has been relative stability of development <br />demand in the past five years, and with no clear signs of significant declines in development, staff estimates <br />development fee revenues to increase by approximately 7 percent in FY 2021-22. <br />However, projecting for a ten-year forecast period will be dependent on upcoming City Council policy <br />decisions. The City Council's creation of a vision for development in the Transit District and in Central <br />Redwood City and development of projects considered through the Gatekeeper process will have an impact <br />on development fees. Additionally, projections must take into consideration market trends and state of the <br />economy. Currently, the forecast projects that development fees will stay relatively flat over the next ten <br />years; these projections will be updated as more is known. <br />Cannabis <br />The Cannabis Business Tax ordinance became effective and the assessment of the tax began on January 1, <br />2019. The Cannabis Business Tax applies to cannabis business activities: 2.5% of gross receipts for Cannabis <br />Nursery Businesses; and 4.0% of gross receipts for Cannabis Retail Business Sales. In late 2020, the City <br />Council approved zoning ordinance amendments to allow up to six storefront cannabis retailers, projected <br />to generate more than $1.3 million annually in tax revenue. In January 2021, the City began accepting <br />applications from interested parties. Staff has projected a total of $1.1 million in revenues related to <br />cannabis will be collected in FY 2020-21 and FY 2021-22, doubling to over $2.2 million annually starting in FY <br />2022-23. <br />Page 21 of 28 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org <br />552 <br />