Riverside County Settles on Future Development Impact Fee Schedule

By PAUL J. YOUNG, City News Service:

The Riverside County Board of Supervisors voted 3-1 Tuesday to tentatively approve increasing fees imposed on developers with projects planned in unincorporated areas of the county.

After a string of false starts going back to February, the Board of Supervisors held its final public hearing on a new development impact fee -- or DIF -- schedule, which is slated to be formally enacted in January.

“We’ve debated this a long time,” said Supervisor John Benoit. “It’s time to return fees to where they should be. It’s time for developers to get back to contributing an appropriate amount.”

Benoit, along with Supervisors Marion Ashley and Jeff Stone, backed the proposed new DIF rates, while Supervisor Kevin Jeffries voted against them. Supervisor John Tavaglione was away on vacation.

Jeffries took issue with county staff’s recommendation that commercial builders pay nothing toward the maintenance and improvement of regional parks and trails.

According to the Executive Office, a nexus study showed no correlation between commercial and industrial projects and the use of parks and trails.

“I don’t get it,” Jeffries complained. “Commercial developers can be asked to pay for jails but not parks and trails? We either all have skin in the game, or we don’t.”

Jeffries also expressed frustration that the DIFs are only applicable to developments in unincorporated areas, excluding developers with projects in the county’s 28 cities from paying anything toward the cost of building, expanding or improving the county’s correctional facilities.

“That’s terribly, terribly unfair,” Jeffries said.

Stone said it was unrealistic to “saddle” the building industry with fees related to parks and trails.

“They don’t cause impacts to parks; it’s the people who live in those communities who do, and they’re paying special assessments and property taxes,” Stone said.

Several residents voiced opposition to the revised DIF schedule, suggesting it was too generous to the building industry.

“Most of your constituents pay more for things, but developers remain relatively unburdened,” said Temecula resident Paul Jacobs.

Michelle Randall of Temescal Valley said the DIF schedule was designed for the “billionaire boys.”

“I object to having to subsidize these guys,” she told the board. “I say raise the DIFs to make it reasonable for this county to survive.”

Development impact fees are charged for construction of homes, office buildings, apartment complexes and other facilities. Fees have been capped at the same rate for five years, when they were slashed 50 percent by the board following a crash in regional homebuilding.

Critics complained that 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 potential revenue altogether as the economy struggled through the Great Recession.

Between the 2001-02 and 2011-12 fiscal years, the DIF program generated just over $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.

Under the county’s proposed new DIF schedule, an estimated $367.4 million would be generated through 2020. Fees would be increased over the next 24 months, until they reset at elevated rates, in some cases exceeding pre- recession levels.

Using this phased-in approach, rates would start out at 40 percent below their new proposed base levels. They would reset at their new targeted rates after two years.

In the San Gorgonio Pass, the DIF assessment for construction of a single-family dwelling is $2,478. According to the county, under the tentatively approved plan, the fee will rise every six months for 24 months until reaching its proposed new base level of $4,385. The pre-2009 fee was $4,956 per dwelling.

Future impact fee revenue will go toward jail expansions, roadway grade separations, fire station and youth correctional facility expansions, 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.

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

(Image via Shutterstock)