Supervisors lower fees to spare developers unexpected costs

Concerned that some developers were caught off guardby recent rate increases, Riverside County supervisors voted today to halve thefees paid by small and large interests to build or expand commercial andresidential structures.

“We need to have these fees phased in over time for the benefit of thesmall developer — the mom-and-pop operation,” said Supervisor JohnTavaglione. “There needs to be a system in place so that we can notify themthat higher fees are coming.”

Tavaglione worried that because the Board of Supervisors alloweddevelopment impact fees to revert to normal levels on July 1 — after years ofkeeping fees cut in half — projects would be threatened as developersscrambled to reconfigure their budgets to account for the steeper costs toobtain permits.

“Although we are seeing some signs of an economic recovery in our localhousing and business climate, the recovery is still slow and uncertain,” thesupervisor said.

In 2009, the board chopped fees by 50 percent to spur development amid asputtering economy. The fee reductions were extended every year, but the last“temporary” reductions expired June 30. The board had expected to have arevised fee structure in place by that time. But, according to Tavaglione,there’s more research to do before revisions can be implemented.

In the meantime, he said, builders are being charged rates enactedduring the region’s last boom times.According to the DIF program ordinance, fees can range from a fewhundred dollars per dwelling unit to $35,000 per acre, depending on the size ofthe project and where it’s located.

The board implemented the development impact fees program in 2001 tomitigate the effects of growth in the region. Fees underwrite a variety ofpublic improvements, including street widening, jail expansion, libraryrenovations and the construction of fire stations.

“These fees pay for needed infrastructure,” said Temecula residentPaul Jacobs, who urged the board not to re-institute the 50 percent cuts.“Developers are not going to want to go into areas with poor roads, arethey?”

Supervisor Kevin Jeffries expressed similar concerns about continuing tonarrow a revenue stream that pays for better access to communities, but hesupported another temporary reduction in DIFs anyway.

Supervisors John Benoit and Jeff Stone also voted in support of thereductions. Supervisor Marion Ashley was away on personal business.

The board additionally authorized refunding half the fee amounts paid bydevelopers since July 1. Tavaglione argued that the reimbursements wereessential “in the spirit of fairness and to create a level playing field”because the fee reversion on July 1 came without advanced warning to developerswith projects already in the pipeline.

The Department of Transportation and Land Management estimated thatreimbursements would be less than $12,000.

The current fee reductions are likely to remain in place until early2014, when TLMA Director Juan Perez and his staff are expected to bring forwardproposed revisions to the DIF program ordinance.

Perez told the board today that objectives include establishing an emailalert system for developers that would enable the county to contact themimmediately when any sort of change is in the works that may affect them, aswell as establishing “funding mechanisms” under which developers couldarrange financing to pay off permit fees over time.

According to the Executive Office, DIF revenue peaked at $36.2 millionin the 2005-06 fiscal year but has steadily declined, falling to just over $1million in fiscal year 2011-12.