RivCo Supervisors Schedule Public Comments on Proposed Building Fee Increases

The Board of Supervisors this week scheduled a July 1 public hearing to analyze a proposal to hike the fees imposed on developers to create revenue streams in support of county projects, including jails, roads and fire stations.

In a 5-0 vote, the board Tuesday put developers on notice that the current reduced rates charged for construction of homes, office buildings, apartment complexes and other facilities are due to go up after a five-year cap that was intended to stimulate local construction activity during the Great Recession.

In August 2009, after a crash in regional homebuilding, the board slashed development impact fees by 50 percent in the hope of enticing builders 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. County officials countered that without the reductions, the area stood to lose out on potential revenue altogether.

Between fiscal years 2001-02 and 2011-12, the DIF program generated just over $200 million, according to a county study. That money, which under state law cannot be mixed with general fund revenue for discretionary use, was allocated to infrastructure projects in unincorporated areas countywide. Cities have their own DIF programs.

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

Revenue collected within one of 20 county-designated areas must be applied to plans or projects in those specific locations.

Under the proposed revised DIF program ordinance, current reduced impact fees would be gradually increased over a 10-month span, beginning Sept. 1. By July 1, 2015, fees would be reset at elevated rates -- though still well below pre-recession levels.

Using the phased-in approach, rates would start out at 40 percent below their new proposed base levels. Then, in January 2015, rates would climb to within 20 percent of the proposed base, and in July 2015, DIF rates would normalize, according to county documents.

A spreadsheet included in a 130-page "nexus study" chartered by the Executive Office showed that, in the San Gorgonio Pass, the DIF assessment for construction of a single-family dwelling is currently $2,478. It would rise to $2,631 in September, to $3,508 in early 2015, and then reach its proposed base level of $4,385 by July 1 of next year.

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

DIF charges would vary by location and according to the size of a project, with some fees applied per acre, or per housing unit or per certain number of square feet.

In the Coachella Valley, for instance, the total DIF assessment for an office building would be $26,592 under the proposed fee schedule. The charges apply when a "certificate of occupancy" is issued to a developer by county officials.

 – City News Service.