Also serving the communities of De Luz, Rainbow, Camp Pendleton, Pala and Pauma

Traffic Impact Fees reworked by supes

Under the plan approved 3-2 January 30 by the San Diego County Board of Supervisors, some Transportation Impact Fee (TIF) charges will increase, while others will decrease.

Since an ordinance amendment is involved, a second reading and adoption is required. The January 30 action approved the first reading, and the introduction of the ordinance and second reading is scheduled for February 27.

The January 30 motion also directed the county’s Chief Administrative Officer to work on issues brought forward during the public comments, particularly a spending plan, credits for frontage improvements, and a potential oversight committee.

“It’s important to continue the work to see how we can make this better,” said Supervisor Dianne Jacob. “It’s not perfect today what we have before us.”

All five supervisors sought a reduction in the TIF charges for commercial and industrial development, but revenue-neutrality considerations led to the elimination of credits for frontage improvement.

Supervisor Bill Horn’s substitute motion to continue the hearing for 60 days was defeated on a 3-2 vote with Ron Roberts supporting Horn on the substitute motion and Jacob, Greg Cox, and Pam Slater-Price seeking quicker action.

Jacob, Cox, and Slater-Price supported the final motion with Horn and Roberts in opposition.

“I’m sure we’re going to be taking an additional look at it,” Cox said.

“I just think there’s some language in here that has some very, very serious implications,” Horn said. “I do think this is an issue that has to be addressed.”

In April 2005 the San Diego County Board of Supervisors adopted a Transportation Impact Fee ordinance in order to comply with state law and provide funding for the construction of transportation facilities needed to support the increased traffic generated by new development.

The Transportation Impact Fee is actually an option rather than a requirement; developers may still perform an individual cumulative impact traffic study and make the appropriate mitigation.

The TIF ordinance was expected to help small developers who could address their projects’ impacts easier with a single check rather than with a comprehensive cumulative impact study.

Prior to a 2002 court case, the California Environmental Quality Act allowed exemptions for relatively small “de minimus” cumulative traffic impacts, but after the exemptions were declared invalid CEQA was changed to require all traffic impacts, no matter how minimal, to be addressed and mitigated. That eliminated the county’s ability to make “de minimus” findings, so all new projects now require mitigation for cumulative traffic impacts.

The change in the CEQA law held up approximately 300 projects in the county’s unincorporated area due to the difficulty of the smaller projects’ developers being able to fund the required traffic studies as well as the road improvements.

In some cases the road improvements on a project by project basis would have exceeded the actual cost of the project, and the TIF program was intended to allow the applicants to pay the fee as a “one-stop” process.

“I don’t think any of us actually wanted to adopt a TIF fee in the first place,” Jacob said.

Since the adoption of the TIF ordinance, citizens and local community groups as well as applicants and developers have expressed concern that the industrial and commercial fees are too high, producing a heavy strain on economic growth and development in unincorporated communities.

“This board got stampeded into doing something that was ill-conceived,” Roberts said. ”An enormous amount of damage has been done.”

In November 2007 the supervisors requested that county staff address specific issues and return to the board in 60 days with recommendations to change the TIF program to encourage commercial and industrial development in unincorporated San Diego County.

“The results of that study highlight an improved program,” Jacob said. “These changes…should encourage, not hinder, industrial development in the unincorporated area.”

The update added freeway ramps into the cost to address cumulative impacts. It also sought to simplify the determination of fees for non-residential development by multiplying the project’s gross floor area by a cost per square foot and by reducing the types of non-residential land uses from approximately 100 to six. Uses which cannot be classified into one of the six classifications will pay the general commercial fee.

(Although government/institutional was one of the classes, churches were not included as a defined use; county staff has indicated that churches will be charged under the general industrial rate.)

The TIF assessment itself would be reduced by an average of 40 percent for commercial and industrial projects, although the elimination of frontage credits offsets that savings for many projects. The adjustment for residential projects would range from a reduction in 28 percent to an increase of 3.5 percent.

If approved during the second reading, the TIF for a single-family detached residential unit in Fallbrook would be $12,067, which covers $6,084 for local improvements, $5,942 for regional impacts, and $41 for freeway ramps.

The TIF charges would be $12,295 for a Bonsall house, $10,447 for a home in Rainbow, $7,159 for a residence in the Pala-Pauma planning area, and $5,991 for a single-family dwelling in the Pendleton-De Luz planning area.

The $5,942 regional charge and $41 freeway ramp charges also apply to Bonsall, Rainbow, Pala-Pauma, and Pendleton-De Luz; the local costs are $6,312 for Bonsall, $4,464 for Rainbow, $1,176 for Pala-Pauma, and $8 for Pendleton-De Luz.

Multi-family attached homes, condominiums and apartments, lodging including hotel rooms and timeshare units, and accessory apartments (granny flats) will be charged at 67 percent of the single-family dwelling fee for each unit.

Mobile homes, agricultural labor housing, and retirement communities will be assessed at 33 percent of the single-family dwelling rate for each unit, and congregate care facilities for residents unable to care for themselves will pay 20 percent of the single-family dwelling cost for each unit.

Fallbrook’s general commercial rate will be $21,559 per 1,000 square feet which covers $18,217 in local costs, $3,234 in regional impacts, and $108 for freeway ramps.

The $108 freeway ramp fee also applies to Bonsall, Rainbow, Pala-Pauma, and Pendleton-De Luz.

Bonsall’s $21,955 fee per 1,000 square feet also includes $18,901 of local and $2,946 of regional costs, Rainbow’s $18,649 rate incorporates $13,367 of local and $5,174 of regional assessments, Pala-Pauma’s $12,792 cost per 1,000 square feet includes $3,521 of local and $9,163 of regional charges, and the $18,649 rate for Pendleton-De Luz is based on $36 of local and $10,564 of regional impacts.

Office space (including banks) would be charged at 56 percent of the general commercial fee, general industrial would pay 37 percent of the commercial rate, schools and government/institutional would pay 32 percent of the commercial assessment, and furniture stores would be charged 14 percent of the general commercial rate as would storage, warehousing, wineries, and non-residential agricultural.

Mixed-use buildings with distinct storefronts, such as a strip mall with retail stores and offices, would be charged based on the square footage of their respective storefronts, but ancillary uses such as management offices in retail stores or in industrial facilities and storage space in an office building will not be charged at a separate rate.

The select industrial category covers industrial uses which generate traffic but do not construct facilities of a size which would provide an adequate TIF payment to mitigate that traffic. Those uses include quarries and other mining operations, landfills, borrow pits, and concrete and asphalt production facilities including batch plants.

The TIF charges for those projects will be calculated by multiplying the TIF area base cost by the number of average daily trips, with heavy vehicle trips being converted to passenger vehicle equivalent trips.

The Fallbrook fee will be $598 per trip, the Pala-Pauma charge will be $355 per trip, the Bonsall assessment will be $610 per trip, the Rainbow payment will be $518 per trip, and the Pendleton-De Luz cost will be $298 per trip.

If a project’s building plan check fees were paid on or before February 29, regardless of whether the building permit has been obtained prior to the effective date of the ordinance update, the builder has the option of paying the existing TIF rate or the new rate.

The exemptions to the TIF charges were also expanded to specify conversions from apartments to condominiums, tenant improvements to an existing facility including changes of occupancy or use, minor expansions of up to 1,000 square feet, uncovered outdoor restaurant seating, fuel tanks and gas pumps, and permitted home businesses such as child care.

With one exception, the public speakers as well as the supervisors expressed pleasure at the reduction in the commercial and industrial fee rate while expressing concern about the elimination of the frontage credit.

“What we’re here to support is the concept,” said East County Construction Council chair Ron Pennock.

“These fees do not make sense, and they’re impacting severely especially commercial and industrial investments,” Pennock said.

Pennock also noted that state gas tax money, San Diego Association of Government TransNet sales tax revenue, and county TIF assessments are all being collected for improvements to State Route 67, which runs from El Cajon to Ramona, but that there is no timetable for construction of the Highway 67 improvements.

Pennock noted that in two years the county has collected $15 million in TIF charges and spent only $400,000.

“It’s a balance that we have to come up with,” said Matt Adams, the vice president of government affairs for the Building Industry Association.

Adams blamed the state government for taking away property tax revenue intended for local roads. He shared Pennock’s concerns about some of the specific changes but noted the need to change the existing program.

“This is an important exercise that we’re going through here,” he said. “I think this is a very strong and positive first step towards achieving those goals.”

If the second reading and adoption is approved February 27, the revised ordinance will take effect April 28.

“I just really think there needs to be more discussion here,” Horn said.

“The idea of an oversight committee would be a good one,” Slater-Price said.

“All we did is stop building. We didn’t improve the roads,” Roberts said. “This thing needs an overhaul.”

Roberts noted that the state law requiring mitigation of cumulative impacts allows for numerous options. “We went down the wrong path,” he said.

“We’re going to have no development if we continue this,” Horn said.

Roberts said that the fees were based on theoretical scenarios. “None of it worked,” he said. “It’s wrong in the housing. It’s wrong in the commercial. It’s wrong in the industrial. It’s just plain wrong.”

 

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