Fees Expected to Go Up for Developers Coming to Riverside County

Riverside County supervisors are expected Tuesday to approve hiking fees imposed on developers with projects planned in the county’s unincorporated communities.

After nearly eight months of study, debate and revision, the new development impact fee -- or DIF -- schedule appears ready for formal enactment in the form of an ordinance on which the Board of Supervisors will hold a final public hearing as part of its policy agenda Tuesday.

The matter was last scrutinized by the board on July 1, but disagreement about the size of the proposed fees and whether all applicants seeking to expand and build structures for commercial or residential use would be paying their fair share led to a postponement of the hearings. The board initially took up the issue of revising the DIF schedule in mid-February.

Development impact fees are imposed for construction of homes, office buildings, apartment complexes and other facilities. Fees have been capped at the same rate for five years. In August 2009, after a crash in regional homebuilding, the board slashed DIFs by 50 percent to encourage doing business with the county.

Critics complained the board was giving developers 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 more than $200 million, according to county figures. 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.

According to the Executive Office, one or two minor modifications have been made to the revamped fee schedule since the board’s July 1 meeting.

Under the county’s proposed new DIF schedule, an estimated $367.4 million would be generated through 2020.

Future impact fee revenue will go toward jail expansions, roadway grade separations, a fire station and 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 motorists aren’t stranded in the event of a massive traffic jam.

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

The proposed revised DIF program ordinance entails increasing fees over the next nine months until they reset at elevated rates, in some cases exceeding 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.

Figures included in a 130-page nexus study showed that, in the San Gorgonio Pass, the DIF assessment for construction of a single-family dwelling is $2,478. It would rise to $2,631 in November, 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, 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.

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