El Dorado County considering development fee increase to cover drop in grant funding
PLACERVILLE, Calif. — Facing a decrease in expected grant money, the El Dorado County Board of Supervisors is considering increases to its Traffic Impact Mitigation (TIM) fee program with a decision possibly coming in September.
Transportation grant funding has fallen from nearly $11 million in 2015 to $4.66 million this year. District 1 Supervisor John Hidahl noted that future grant funding could potentially fall even further.
County Department of Transportation staff prepared two alternatives for an interim fee program that addresses the reduction of the grant funding: one with no funds allocated to the non-residential offset, and another with an allocation of funds equivalent to a 20% reduction to the offset.
The offset program includes a provision to set aside $1 million of federal and state transportation revenues annually, for a period of 20 years, to be used to offset TIM fees in the development of affordable housing, according to the county website. High traffic impact fees can have a negative effect on efforts to develop affordable housing units.
In both proposals the residential fees would rise about 53%, up $10,971 per dwelling unit, in Zones 2 and 3 (an area between El Dorado Hills and Placerville along U.S. 50). No other residential zones would see their fees rise higher than $3,844 per dwelling unit.
TIM fees for non-residential development currently range from a low of $2,697 per dwelling unit per square foot to a high of $16,990 per dwelling unit, depending upon the TIM fee zone in which the construction is taking place.
The proposed non-residential TIM fees would rise anywhere from 41 to 152% with no offset and 76 to 215% with the offset depending upon the TIM fee zone.
When developers build new housing or commercial projects they pay TIM fees to the county to cover their share of stress on infrastructure. There are eight TIM zones. The fees currently range from a low of $4,651 to a high of $29,293 per residential unit depending upon the TIM fee zone in which the projects are to be located.
A TIM fee annual update that includes 4-5% increases in residential fees in most zones in the county and 4-8% increases in non-residential fees went into effect July 15.
At the Board of Supervisors meeting on Aug. 12 Hidahl said they must make adjustments soon, but he was unwilling to commit to an immediate $11,000 residential fee increase in Zones 2 and 3.
“My thought is if we looked at just half of the increases that are proposed here, and set an effective date of Jan. 1, 2020, so nobody is affected this building season. And then look at the rest of it when we get the update in 20-24 months … I feel we need to step up some of these increases.”
Hidahl expressed concern over large, sudden fee increases and what effect that would have on builders in the permit and pre-construction process.
“One of the things I’m hoping to reconsider in this discussion is possibly a phase-in over a period of time and not just one-step change,” Hidahl said. “It will allow people that are currently in their building cycle to complete what they’ve built and then (we can) look at an increment down the road … To me, that’s a more reasonable way to approach it so people’s plans aren’t totally destroyed.”
District 3 Supervisor Brian Veerkamp touched on the difficulties El Dorado County faces in coming up with transportation funds.
“Our general plan doesn’t allow us to build our way out of it,” Veerkamp said. “We’re very limited on where we can and can’t (build) … We’re going to have to be creative as heck. We can get all the money in the world, we just talked about it on the Highway 50 safety project, for more bike lanes and trains but it doesn’t work in El Dorado County. So less grant money, and we gotta cover the costs somehow.”
On behalf of the North State Building Industry Association, Jeff Short asked the board to devote more time on the matter so those involved could figure out how the changes would affect future development.
“We have very serious concerns with the proposed TIM fee increase,” Short said. “We believe that reallocating costs of this magnitude within the fee program represents a fundamental change and should not be done on an interim basis without a comprehensive analysis and careful consideration of all the different variables.”
Short noted that El Dorado County’s competitiveness in the housing market may be further hurt; the county already has some of the highest TIM fees in the region.
Ultimately the board decided not to push forward any fee increases just yet.
Rather than move forward with either proposal, the board voted to continue the item 30 days to discuss with a full board. District 5 Supervisor Sue Novasel was absent. The board also directed DOT staff to come back with data on Hidahl’s proposal.
Natalie Porter of the Department of Transportation said staff will explore splitting TIM Fee zones 2 and 3 into independent zones, a single-family dwelling unit fee based on the size of the dwelling unit, and how to deal with cannabis facilities in the next major TIM fee program update. Staff is currently starting their major update, Porter added. The last major update was in December 2016.
The TIM fee major update typically takes approximately 20-24 months as staff needs time to analyze expected growth, project needs and costs and community outreach, DOT Director Rafael Martinez said.
District 2 Supervisor Shiva Frentzen expressed frustration with what she described as long delays in the major update process and constant changes to the program.
A second vote authorized staff to look into expediting a major update to the county’s TIM fee program and coming back to the board with a conclusion in 30 days.
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