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Friday, Jun. 26, 2009

Revision of development fees put off

County agrees to update capital projects list, as builders suggest

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Home builders Thursday persuaded officials to postpone a controversial overhaul of fees on all development throughout Stanislaus County.

A public hearing scheduled for Tuesday will occur as planned, but county supervisors aren't expected to vote on the comprehensive revision for six months or so.

That will give officials time to update their capital projects plan, which is a wish list of improvements to be funded by developer fees, said Stan Risen, county assistant executive officer.

Until Thursday, officials had insisted that number-crunching was solid in an exhaustive fees study. They changed course Thursday, Risen said, when Building Industry Association officers said the capital projects list must first be revised.

"They didn't threaten anything," Risen said. "We just said, 'Yep, you're right.' "

The proposed fees would raise $1.2 billion through 2030, with most proceeds helping to finance road projects such as an expressway from the foothills to Salida and various Highway 99 interchanges. Such fees also pay for county buildings, vehicles and equipment in animal control, mental health, the sheriff's department and more.

Paying sharply steeper public facility fees, according to the tabled proposal, would be builders of industrial plants, gas stations and drive-through businesses. Store, office and hotel developers, however, would pay less.

Home builders would pay 27 percent higher fees in the county's northern half, according to a new formula that splits the county in two, divided by the Tuolumne River. Houses south of the river would be charged 5 percent more than the current level. Apartment construction in either zone would pay lower fees.

Leading up to Tuesday's hearing before the county Board of Supervisors, critics had assailed the idea of asking construction, largely dormant in a bruising recession, to pay more. Higher fees could delay a rebound, they said.

Until Thursday, officials countered that it's wise to prepare for the next building wave. Modesto lost millions of dollars in uncaptured Village I fees when its leaders were slow to raise fees after an economic rebound in the late 1990s.

Manufacturers group objects

Even though developers are idle, fees are out of whack, said Risen and county Assistant Executive Officer Keith Boggs. The goal is to require development to pay for itself, they said, so the county sponsored many meetings with their consultants and all kinds of builders.

"We can't support the program," said Jan Ennenga, executive director of the Manufacturing Council of the Central Valley. Her members would be among the hardest hit, if the proposed fees eventually are adopted.

"It looks to us like a departure from the county's long-standing policy at encouraging and not discouraging development and expansion of high-value jobs," Ennenga said.

Joy Madison, chief executive of the Modesto Chamber of Commerce, also frowns on the proposal, saying, "This certainly will affect the ability for all of us to develop. You can raise a fee hundreds of percents, but if the market can't bear it no one will build. And that doesn't improve the tax base for the county."

Carol Whiteside, president emeritus of the Great Valley Center and former Modesto mayor, said officials must balance the building industry's health against the public's demand for services.

"If they don't charge the documented cost, they're subsidizing the private sector," Whiteside said.

Planners in Modesto, Riverbank and Waterford said they are closely watching the county's process. Builders in a given city pay the county's development fees as well as the city's.

Postponing fee increases shouldn't hurt anyone, said Steve Madison, executive director of the Building Industry Association of Central California.

"Right now is a real good time for stakeholders to work with the county and make sure everything is correct," Madison said, "because nobody's pulling any (building) permits. I don't think anyone will be out anything by taking the time to get it done correctly."

Bee staff writer Garth Stapley can be reached at gstapley@modbee.com or 578-2390.