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Supervisors Set Hearing on Proposed Fee Increases

Tuesday, February 11th, 2014
Issue 07, Volume 18.
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RIVERSIDE - The Board of Supervisors today scheduled an April 22 public hearing to consider implementing an ordinance that would require developers to begin paying higher fees to build or expand residential and commercial structures in Riverside County.

In a 5-0 vote, the board put developers on notice that the current reduced rates charged for construction of homes, office buildings, apartment complexes and other projects could go up beginning in July.

In 2009, when the Great Recession precipitated a crash in regional construction activity, the board slashed development impact fees by 50 percent in the hope of enticing developers to come back. The fee reductions were touted as temporary but were renewed for 12-month cycles every year, including last summer.

Critics complained that the board was giving financial interests too big a break while gaining little in return. Development impact fees are justified as being necessary to offset the environmental and other impacts of projects.

County officials argued that without the reductions, the area stood to lose out on potential revenue altogether.

According to the Executive Office, over the last decade, the development impact fees program generated $132 million that was allocated to infrastructure projects in unincorporated areas countywide.

Future impact fee revenue will go toward jail expansions, roadway grade separations, interchange improvement projects and the Interstate 10 "Life- Line" Bypass that entails building frontage roads paralleling the east-west artery between Banning and Palm Springs so motorists aren't stranded in the event of a massive traffic jam, the Executive Office said.

Under the proposed revised development impact fees program ordinance, reduced impact fees would be phased out over a year's time, between July 1, 2014 and July 1, 2015. In about half the unincorporated communities governed by the board, rates would increase over and above the rates that existed prior to 2009. In the other communities, rates would be lower than when the reductions went into effect five years ago.

Using a phased-in approach, for the first six months, rates would start out at 40 percent below their proposed base level.

Then, in January 2015, rates would climb to within 20 percent of the proposed base, and in July 2015, rates would normalize, according to county documents.

A spreadsheet provided by the Executive Office showed that, in the San Gorgonio Pass, the development impact fees assessment for construction of a single-family dwelling would be $2,631 in July and would rise to $3,508 in early 2015 and reach its proposed base level of $4,385 by July 1, 2015.

The pre-2009 fee was $4,956 per dwelling.

Development impact fee charges will vary according to the size of a project, with some fees applied per acre, or per housing unit or per certain number of square feet.



Comment Profile ImageThe Rest of the Story
Comment #1 | Thursday, Feb 13, 2014 at 12:18 am
Unfortunately, developers won’t be paying the full rate until July of 2015 – and even then, Riverside County Development Impact Fees will be lower than any surrounding County or any city within Riverside County, per the staff report.

I remind the public and members of this Board that in November of 2012, fees were increased on citizens for everything from marriage licenses to filing for a Fictitious Business Name Statement. Meanwhile, County developers have enjoyed a 50 percent reduction in impact fees since 2009.

This welfare program for developers is problematic. The County has underfunded essential infrastructure such as jail construction and criminal justice and juvenile facilities, even as the County is desperate to update and expand these critical public safety needs.

It is difficult to blame the state for not adequately funding jail construction following AB 109 Realignment, since it has been the policy of this County to underfund and under-build these facilities. The state must assume public safety is not important to Riverside County, where the priority has been to cut costs for developers.

What is the point of a Development Impact Fee Nexus Study if the County continues to gift developers a reduction in impact fees? It is difficult to determine if County policy is misguided or if this is yet another example of County mismanagement.

Voters were tricked into taxing themselves a half-cent sales tax to fund transportation improvements. In turn, this County partially alleviated developers from the responsibility to fund the impacts of their projects. Residents are subjected to higher fees for vital records and toll lanes, once the County gets them built.

Riverside County is slowly implementing a restoration of the lowest Development Impact fees in the land, but when it came to raising fees County residents must pay, that got put on the fast track.

By the time this welfare program for developers runs its course, they will have been gifted close to 20 million dollars in DIF discounts over a five-year period. That 20-million-dollar fiscal hole will lower the quality of life and increase deficits while placing a burden on Riverside County taxpayers and the General Fund.
Comment Profile ImageHmm...
Comment #2 | Friday, Feb 14, 2014 at 6:08 am
Actually, developers bring in housing and infrastructure that allows more taxes to be collected increasing money into county coffers. Also, the criminal justice system is one of two functions in the county that gets most of the tax dollars with the hospital getting the rest. The term "can't see the forest for the trees" comes to mind.
Comment Profile ImageUmm...
Comment #3 | Friday, Feb 14, 2014 at 4:58 pm
Actually it is the home buyers paying the taxes and the Community Finance District fees that developer pass along to home buyers to pay for the infrastructure. Some may feel developers are angelic, but by what miracle do Development Impact Fees get halved by an unproven County policy yet infrastructure gets built at 100 percent? It's not a miracle, but a bait and switch operation that takes from the taxpayers (Measure A, CFDs and increased County fees) and giving a tax break to developers and the building industry. The County hospital was losing a million dollars per week so taxpayers had to prop up the county-run institution while developers continued to get the DIF discount in place since August of 2009. It's just math.

Article Comments are contributed by our readers, and do not necessarily reflect the views of The Valley News staff. The name listed as the author for comments cannot be verified; Comment authors are not guaranteed to be who they claim they are.


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