Stanislaus County could end four-year wait on adjusting development fees

Modesto Bee (CA), 2014-08-19


Aug. 19 --For four years, Stanislaus County leaders were reluctant to adjust public facility fees because of the building slump and high unemployment.

Tuesday evening, the Board of Supervisors could raise the development fees 6 percent to 8 percent to adjust for building costs and inflation. The county has not made annual inflation adjustments to the fees since 2010.

"We had really high unemployment that has fallen significantly, and we have seen a rise in building permitting of over 22 percent," said Keith Boggs , county assistant executive officer. "This is a true-up to make sure the fees we are collecting are in 2014 dollars."

The proposed update would raise public facilities fees about 7 percent for residential projects, with the increase averaging 8 percent for office, commercial and industrial developments. The changes would take effect in 60 days.

The county has collected more than $170 million from developers since creating the fees in 1990 to pay for transportation improvements, law enforcement and jail facilities, libraries and parks. The county fees are charged to new development in the unincorporated area and the nine cities, enabling the county to expand public facilities to serve a growing population.

In the county-governed area, the proposed fees are $9,429 per single-family home and $6,203 per apartment unit. Developers would pay $7,631 per home and $4,949 for each apartment unit in Modesto , Ceres , Hughson , Patterson and Waterford on top of development fees charged by those cities.

The county fees in Turlock , Oakdale , Newman and Riverbank ? $7,559 per home and $4,898 per apartment unit ? are slightly different because those cities are not part of the Stanislaus Animal Services Agency , Boggs said.

Almost 60 percent of the county fees for housing subdivisions in the cities are collected for regional transportation improvements. The rest of the money can be used for mental health, criminal justice, emergency service, health care, sheriff and information technology facilities.

The county fees would be $4.50 (per square foot) for offices, $2.04 for manufacturing, $2.13 for distribution centers, $3.66 for shopping centers, $1.52 for churches and $1.30 for nursing homes.

A food business with a drive-through lane could pay $17.78 per square foot.

Boggs said there are enough positive signs in the local economy to justify updating public facilities fees. Stanislaus County's jobless rate was 11.4 percent in July, about 6 percentage points lower than the 17.5 percent in July 2010 . In March, the local foreclosure rate for home mortgages was less than 1 percent, compared with more than 3.5 percent two years ago, a county report said.

In the past year, the county issued 2,765 building permits, a 22 percent increase over the previous year. Builders took out only 1,851 permits in the 2009-10 fiscal year.

John Beckman , chief executive officer of the Building Industry Association of the Greater Valley , countered that building remains at a standstill in Stanislaus County ? "those numbers are probably half what they were in 2001." But the association does not oppose the fee adjustments.

"Like Stanislaus County , some of the cities held off on the annual escalator (for their development fees)," Beckman said. "They need to align their fees properly with their costs for facilities; at the same time, the ability to build things in the private sector is impacted by costs. It's a fine line between their costs and promoting economic development."

The county's staff also is asking the board to extend an incentive program that, since 2010, has offered fee discounts for companies that create local jobs. The program can discount 60 percent of fees for manufacturing, and up to 75 percent for distribution centers, based on the capital investments, jobs created, hourly wages and projected revenue for the county.

The program, scheduled to end July 1, 2015 , could be extended for two years. Interest was mild in the first four years, but fee discounts were granted for the Blue Diamond Growers facility in Turlock , Boggs said.

Bee staff writer Ken Carlson can be reached at kcarlson@modbee.com or (209) 578-2321.

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