Chapter 15.38 — FAIR SHARE TRAFFIC CONTRIBUTION ORDINANCE

The City Council of the City of Newport Beach finds that future development, or redevelopment, of property within the City will result in traffic volumes that exceed the capacity of the existing City wide circulation system.

The City Council of the City of Newport Beach has determined that the failure to expand the capacity of the existing circulation element in accordance with the master plan of streets and highways will cause unacceptable levels of congestion on streets and intersections, traffic accidents, air pollution, noise, and restrictions on access for emergency vehicles.

The City Council also finds and declares that, in the absence of this ordinance imposing a fair share traffic contribution, existing and future sources of revenue are inadequate to fund a substantial portion of the circulation system improvements necessary to accommodate traffic volume generated by future development or redevelopment of property and to avoid unacceptable levels of congestion and related adverse impacts. (Ord. 84-16 (part), 1984; Ord. 94-19 (part), 1994)

The City Council of the City of Newport Beach finds and determines that the adoption of this Fair Share Traffic Contribution Ordinance will raise revenues sufficient to enable the City to construct circulation system improvements that increase roadway capacity within the City of Newport Beach such that traffic generated by development and redevelopment of land within the city will not result in unacceptable levels of congestion of the circulation system.

The City Council also finds and declares that this chapter contains a fair and equitable method of determining the extent to which the development or redevelopment of land will generate traffic volumes and establishes a fair and equitable method for distribution of costs of circulation system improvements necessary to accommodate the traffic volumes generated by such development. (Ord. 84-16 (part), 1984; Ord. 94-19 (part), 1994)

The City Council, after thorough review of all relevant information, has made specific factual findings concurrently with the adoption of this chapter. The specific findings made by the Council as of the time of the adoption of this chapter are as allows:

A. On May 29, 1972, the City Council adopted a land use element as part of the general plan for the City of Newport Beach. The land use element specifies the permitted uses of land within the City of Newport Beach and places limits on the intensity and density of such use. The land use element has been updated and amended, from time to time, to reflect changes in land use and intensities approved by the City Council subsequent to the adoption of the element;

B. The City Council has conducted a thorough and extensive study of the relationship between the land uses and densities permitted by the general plan and the actual development of property. The City Council has considered the effects of the fee with respect to the City’s

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City of Newport Beach, CA § 15.38.030 NEWPORT BEACH CODE § 15.38.030

housing needs as established in the housing element of the general plan. The relationship
between permitted uses and densities and actual development has been studied over a
period of several years and based upon this study, the City Council is able to analyze
trends in growth and development authorized under the general plan and relevant zoning
ordinances. Based upon this study and analysis, the City Council is able to predict with
some certainty, the magnitude and extent of future development;

C. The City Council has also studied and evaluated the extent to which different land uses
generate automobile trips (trip generation rates). The City Council, in evaluating trip
generation rates, has taken into consideration material prepared by the Institute of
Transportation Engineers and similar organizations. The traffic generation rates reflect the
most accurate characterization of the actual traffic generated by specific land uses;

D. The Council, based upon its study of trends in development and trip generation rates, has
determined that the capacity of existing roadway improvements are inadequate to
accommodate traffic volumes that will be generated by future development;

E. On March 11, 1974, the City Council adopted, as part of the general plan, a circulation
element. The circulation element contains a master plan of streets and highways (MPSH),
and has been amended from time to time to reflect changes to the circulation system
necessary or appropriate to prevent the occurrence of unacceptable levels of traffic
congestion;

F. The City Council finds that implementation of the master plan of streets and highways and
the traffic phasing ordinance, as presently designed, would result in a circulation system
which has the capacity to substantially accommodate the additional traffic volume that will
be generated by anticipated future development;

G. Implementation of the master plan of streets and highways will require the construction of
major improvements to the existing City-wide circulation system. The City Council has,
after review of all relevant information, determined which roadway improvements are
necessary to implement the master plan of streets and highways, the estimated cost of those
improvements, and established funds available to make such improvements, as well as the
extent to which funding is inadequate to make the necessary improvements;

H. The City Council, in determining the extent to which funds are available to make roadway
improvements, has evaluated present and future sources of State, Federal, and County
funding, City revenues which are earmarked for roadway-related improvements, and the
extent to which private development projects are required to construct or fund roadway
improvements that will assist in the implementation of the master plan of streets and
highways. The City Council has determined that the extent to which regional traffic will
impact the circulation system of the City of Newport Beach is generally offset by existing
and anticipated sources of funding from governmental entities or private developers;

I. While the traffic volume generated by a single development may not be, in and of itself,
sufficient to overload the existing circulation system, the cumulative impact of all new
development and redevelopment will result in unacceptable levels of traffic congestion,
unless the master plan of streets and highways is implemented. For this reason, the only
fair and equitable method of securing the revenues necessary to construct required
circulation system improvements is a contribution based solely on the extent to which new
development generates additional traffic volumes. The formula for establishing each fair
share traffic contribution is as fair and equitable as possible. The City Council also finds

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City of Newport Beach, CA § 15.38.030 BUILDINGS AND CONSTRUCTION § 15.38.040

that, by requiring the contribution in conjunction with the issuance of building permits, or any other form of entitlement issued by City to construct or change the use of a building or property, the funds generated by this chapter will enable the City to construct major improvements to the circulation system concurrently with the traffic volumes created by development;

J. The roadway improvements that will be constructed with funds generated by this chapter
will significantly benefit the contributor in that the adverse impacts, such as noise, air
pollution, delay, accidents, and inconveniences, will be alleviated or eliminated and the
Council further finds that the benefit derived from roadway improvements is generally
equivalent to the contributions received;

K. The contribution called for by this chapter will help to fund circulation system
improvements that will increase the capacity of the streets and highways within the City of
Newport Beach and the purpose and intent of this chapter is complementary to those
provisions of the existing traffic phasing ordinance which, for the most part, is predicated
upon the need to improve intersections as opposed to roadway capacity;

L. Regular review, and possible revision, of the provisions of the related fair share
implementation resolution establishing the trip generation rates and procedures for the
payment of fair share contributions, will allow for the adjustment of the contributions to be
made under this chapter to ensure that those contributions are fair and equitable.
(Ord. 84-16 (part), 1984; Ord. 94-19 (part), 1994)

For the purpose of this chapter, the following terms shall have the meanings indicated below:

A. “Trend growth” shall mean the level of future development and redevelopment of property
in Newport Beach, calculated as the percentage of general plan build out to occur by the
year 2010 and shall be expressed in the units listed for the trip generation rate as stated in
the fair share implementation resolution.

B. “Gross floor area” shall mean all the area included within the surrounding exterior walls of
the building or portion thereof, exclusive of vent shafts and courts. The floor area of a
building, or portion thereof, not provided with surrounding exterior walls shall be the
usable area under the horizontal projection of the roof of floor above.

C. “Land use category” shall mean any of the specific land uses that have been listed in the
fair share implementation resolution and used to provide the basis for future traffic
projections.

D. “Trip generation rate” shall mean the number of average, daily trips generated by land use
category per unit of development as stated in the fair share implementation resolution.

E. “Project” shall include any discretionary or ministerial action by the City resulting in the
issuance of grading, building, plumbing, mechanical, or electrical permits, or any other
form of entitlement issued by the City to construct on or change the use of a building or
property.

F. “Roadway improvements” shall include those improvements necessary to complete the
roadway to master plan configuration and shall include and not be limited to: paving, curb

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City of Newport Beach, CA § 15.38.040 NEWPORT BEACH CODE § 15.38.050

and gutter, sidewalks, medians with landscaping, drainage facilities, traffic signals, street lighting, noise walls, right of ways, and improvements necessary to mitigate significant environmental impacts. The preparation of environmental documents, planning and design studies plans, specifications and estimates, and project management shall be considered a part of roadway improvements.

(Ord. 84-16 (part), 1984; Ord. 94-19 (part), 1994)

The provisions of this chapter shall apply to all new development, and to any redevelopment or change of use of any existent building or parcel, unless otherwise provided herein. (Ord. 84-16 (part), 1984; Ord. 94-19 (part), 1994)

A. The fair share traffic contribution is based upon the unfunded portion of the estimated construction cost of the total circulation system roadway improvements necessary to implement the master plan of streets and highways (net roadway costs), and the total number of vehicle trips anticipated as a result of trend growth.

B. The fair share traffic contribution shall be calculated, in accordance with the following
procedure and as established by the fair share implementation resolution adopted by City
Council in conjunction with this chapter:

1. The City Council shall determine by resolution net roadway cost as follows:

a. The City Council shall determine which roadway and related improvements are
necessary to implement the master plan of streets and highways;

b. The City Council shall determine, for each specific improvement, an estimate of
the total costs necessary to complete each improvement;

c. The City Council shall determine, with respect to roadway improvements, an
estimate of the current and anticipated funding available to satisfy the costs of
construction. In determining the amount of funding available for roadway
improvements, the Council shall include funding from other governmental
entities, City revenues earmarked for roadway construction purposes, and the
extent to which private development projects are required to construct, fund or
dedicate land for, the specific roadway improvement;

d. The City Council shall determine, for roadway improvements, the difference, if
any, between the estimated costs of construction and the estimated funding
available to complete the improvement;

e. The extent to which the cost of construction for all roadway improvements
exceed the funds available, or anticipated for constructing the improvement,
shall be the “net roadway cost.”

2. The City Council shall determine the total anticipated average daily trips resulting
from trend growth as defined in Section 15.38.040(A), in the following manner:

a. The projected development in each land use category as established in the fair
share implementation resolution shall be multiplied by the trip generation rate

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City of Newport Beach, CA § 15.38.050 BUILDINGS AND CONSTRUCTION § 15.38.050

established in the fair share implementation resolution to determine additional daily trips.

b. All of the additional daily trips of each land use category shall be added to determine the total additional daily trips that the City’s circulation system must accommodate in the future.

3. The City Council shall determine the average cost per trip by dividing net roadway
cost by the total additional daily trips generated by trend growth.

4. The fair share traffic contribution required of any project shall be calculated in the
following manner:

a. Residential Projects: The average cost per trip shall be multiplied by the total
number of trips generated by the project, using the methodology and traffic
generating rates established in this section. The cost per dwelling unit is the
product of the trips per dwelling unit and the average cost per trip as established
in this section. The cost per dwelling unit is multiplied by the total dwelling
units to determine the fair share contribution.

b. Hotel/Motels: The average cost per trip shall be multiplied by the number of
trips generated by each room, the product of which shall be then multiplied by
the total number of rooms to determine the fair share contribution.

c. For office, retail, commercial and industrial uses, the following procedures
apply:

i. The traffic generation rates shall be used to determine the number of trips
per square foot;

ii. The number of trips per square foot is multiplied by the average cost per
trip as determined by the methodology set forth in this section, to
determine the cost per square foot;

iii. The cost per square foot is multiplied by the total square footage of a
proposed project to determine the fair share contribution;

d. For those projects not falling in the above categories, the average cost per trip
shall be multiplied by the total number of trips generated by the project, using
the methodology, and traffic generation rates established in the fair share
implementation resolution to determine the fair share contribution. In the event
the proposed use is not listed in the table of traffic generation rates, the Traffic
Engineer shall determine the appropriate trip generation rate for the use. In
determining the appropriate trip generation rate the Traffic Engineer shall
consider:

i. Whether the traffic characteristics of the land use are essentially the same
as one of those listed in the fair share implementation resolution.

ii. If the hours of operation of the project are different than those normally
observed by similar projects.

iii. If the project includes multiple land uses which are complementary from a

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City of Newport Beach, CA § 15.38.050 NEWPORT BEACH CODE § 15.38.080

traffic standpoint and the total trip generation is anticipated to be less than
the sum of the trips from the individual land uses.

C. Every five years, or as deemed necessary, the City Council, in conjunction with the City’s
budget sessions, shall review the trend growth assumptions, trip generation rates, and
roadway improvement cost estimates, and if necessary, shall amend the fair share
implementation resolution establishing the fair share traffic contribution to ensure that it is
a fair and equitable method for the distribution of costs of circulation system improvements
necessary to accommodate traffic volumes generated by trend growth.

D. In the event no substantive changes to any of the provisions of this chapter or the fair share
implementation resolution occur during the time between the mandatory City Council
reviews as set forth herein, the dollar amount set forth in the fair share implementation
resolution exhibits shall be increased automatically, based upon any interim increase in the
Consumer Price Index. This automatic increase shall be calculated and become effective
on July 1st of any year that the City Council does not otherwise review the contents or
provisions of this chapter and the fair share implementation resolution.
(Ord. 84-16 (part), 1984; Ord. 94-19 (part), 1994; Ord. 2023-22 § 729, 2023)

No building or grading permit or any other form of entitlement issued by the City to construct on or change the use of a building or property shall be issued, and no construction shall be commenced, for any project not exempt from this chapter unless all contributions required pursuant to this chapter have been deposited with the City Administrative Services Director. (Ord. 84-16 (part), 1984; Ord. 94-19 (part), 1994; Ord. 2025-37, 1/13/2026)

The revenues raised by payment of this fee shall be placed in a separate and special account and such revenues, along with any interest earnings on that account, shall be used solely for the purpose of planning, designing and constructing roadway and related improvements or acquiring right-of-way necessary to complete implementation of the master plan of streets and highways. Yearly, during the budget review, the City Council shall review fund balances and required roadway improvements and make a determination for use of the funds for the coming fiscal year. (Ord. 84-16 (part), 1984; Ord. 94-19 (part), 1994)

Fees paid under this chapter for a specific use on a parcel of land shall be considered to run with said parcel. Businesses may not transfer or take credit for fees paid upon relocation to another parcel. (Ord. 94-19 (part), 1984)

The provisions of this chapter may be satisfied, in whole or in part, by the dedication of right-of- way, or the construction of roadway or related improvements necessary to the implementation of the master plan of streets and highways, as set forth herein:

A. In lieu credit may be given for master plan of streets and highways improvements which

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City of Newport Beach, CA § 15.38.080 BUILDINGS AND CONSTRUCTION § 15.38.085

are not assumed to be required of adjacent developments pursuant to the Subdivision Map
Act, and are included in the fair share implementation resolution.

B. In lieu credit may be given where application of the traffic phasing ordinance to a specific
development results in improvements that are shown on the master plan of streets and
highways, except:

1. Improvements required pursuant to the traffic phasing ordinance that may be or are
temporary in nature, or those improvements that may have to be relocated, altered or
removed in the future, shall not be eligible for consideration as an in lieu contribution.

2. Improvements required pursuant to the traffic phasing ordinance that exceed the
requirements of the master plan of streets and highways, that are necessary to
accommodate a specific development, shall not be eligible for consideration as an in
lieu contribution.

C. Acceptance of all proposed in lieu contributions shall be subject to the approval of the
Planning Commission or the City Council on appeal or review.
(Ord. 84-16 (part), 1984; Ord. 94-19 (part), 1994)

A developer of any project subject to the fee described in Section 15.38.050 may apply to the City Manager for a reduction, adjustment, or a waiver of the fee established under this chapter based upon a showing that the trip generation rate is inapplicable to the proposed use.

A. The application shall be made in writing and filed with the Public Works Department and
shall state in detail the factual basis for the claim of waiver, reduction, or adjustment. The
City Manager shall consider the application within fourteen (14) days after the filing of the
fee adjustment application.

B. If the developer wishes to obtain a permit or any other entitlement prior to the resolution of
application, the application must be accompanied by a deposit of the full amount of the fee
established under this chapter. The deposit will be held, under protest, until a final decision
is made under this section.

C. The fee shall be as established in the fair share implementation resolution unless the
following findings can be made:

1. The appellant has presented factual information which supports the use of a different
trip generation rate from that used to calculate the fair share fee.

2. The appellant has demonstrated that the operational characteristics of the project are
substantially different than those upon which the trip generation rate was based. For
the purposes of this finding, substantial shall mean twenty (20) percent or greater.

3. Appellant has demonstrated that for projects which are an expansion of an existing
use, that the appeal is based upon a claim of no net increase in trips from the expanded
area and there are similar projects in the area which have trip generation rates at least
as low as would result from dividing the current trips by the total project area after
expansion.

D. The decision of the City Manager shall be final. If a reduction, adjustment, or waiver is

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City of Newport Beach, CA § 15.38.085 NEWPORT BEACH CODE § 15.38.120

granted, any change in use within the project shall invalidate the waiver, adjustment or reduction of the fee, and the fee will be recalculated using the changed conditions.

(Ord. 94-19 (part), 1994)

The following projects shall be exempt, in whole or in part, from the contributions otherwise required by this chapter:

A. In the event a site contains one or more structures which are proposed to be demolished in
conjunction with a new development, the contributions otherwise required by this chapter
shall be reduced in an amount equal to the contributions that would have been required had
the existing structure been subject to the provisions of this chapter.

B. In the event that no new construction is proposed, no contribution shall be required for the
conversion from one land use category to another unless the land use category to which the
property is to be converted generates more average daily trips than the existing use. In such
case, the contributions to be charged shall be based solely on the difference between the
contributions required for each land use as set forth herein.

C. Where a land use proposed for a site is less intensive than the existing land use, no refund
will be available to the developer.
(Ord. 84-16 (part), 1984; Ord. 94-19 (part), 1994)

A. In those cases where a developer has submitted a fair share contribution required as a condition of approval prior to the effective date of this chapter, refunds are prohibited.

B. In those cases where a condition on a development approved prior to the effective date of
this chapter states that a fair share contribution shall be determined prior to the issuance of
building permits, the contribution shall be based upon the amounts set forth in the fair share
implementation resolution at the time building permits are issued.
(Ord. 84-16 (part), 1984; Ord. 94-19 (part), 1994)

Contributions, otherwise required pursuant to this chapter, shall be waived for all affordable residential housing as that term is defined in the housing element, and for any “granny units” or “second units” as defined in California Government Code Section 65852.1. (Ord. 84-16 (part), 1984; Ord. 94-19 (part), 1994; Ord. 2023-22 § 730, 2023)

It is the intent of the City Council that the contributions required by this chapter shall be supplementary to the contributions and conditions imposed upon projects pursuant to the provisions of this Code, the Subdivision Map Act, California Environmental Quality Act, and other state and local laws, ordinances or Charter provisions which may authorize the imposition of conditions or contributions on development. (Ord. 84-16 (part), 1984; Ord. 94-19 (part), 1994)

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City of Newport Beach, CA