Industry Updates
December Government Affairs Update:
Recently, the Western Riverside Council of Governments (WRCOG) Executive Committee approved an extension of the temporary 50 percent TUMF reduction opportunity for 2012, allowing WRCOG jurisdictions to decide whether or not to adopt the reduction for 2012. Jurisdictions that currently have a 50 percent reduction in place are: unincorporated Riverside County, City of Riverside, City of Eastvale, City of Perris and the new City of Jurupa Valley.
Your Riverside BIA Government Affairs team is pleased to report the Riverside County Board of Supervisors, Riverside City Council, Eastvale City Council and Perris City Council all voted unanimously to extend reductions in their jurisdictions through 2012. Because TUMF reduction ordinances require two public readings, some jurisdictions will have a short time period where full TUMF rates will be collected. Please contact your Government Affairs team to get these dates for your area.
The Riverside BIA Government Affairs team will continue to solicit support for the 50 percent reduction in other jurisdictions and look forward to reporting continued good news.
November Government Affairs Update:
The California Energy Commission (CEC) has asked local utilities to provide reach code alternatives to municipalities throughout the state. Reach codes are adopted by municipalities that "reach" beyond Title 24 energy codes, with a goal of reaching an additional 15 percent over the 2008 Title 24 codes. Southern California Edison and Southern California Gas Company recently provided workshops to Riverside County jurisdictions regarding these codes. Western Riverside Council of Governments (WRCOG) hosted a workshop in October and plans to host more in 2012. Your Riverside County BIA team has been fully engaged and expressed serious concerns related to the increased costs of construction during the economic downturn.
The ultimate goal of the CEC is to have all new homes achieve "zero net energy" by the year 2020. For zero net energy to be accomplished, a new home would have to integrate substantial increases in energy efficiency levels and possibly a rooftop solar system. These changes would produce a dramatic increase in new home construction costs, something our industry cannot sustain.
School Fees Continue to Decline - September Government Affairs Update:
The Riverside County Chapter BIA government affairs team has achieved tremendous success helping reduce school fees assessed on new development. Recently, all 22 Riverside County school districts reduced their development fees. This is an unprecedented accomplishment. Over the past five years school fees have dropped 24 percent in Riverside County, this average reduction equates to about $2,500 per single family home. Fee reductions of such magnitudes are attained after scrutinizing each and every school fee analysis and working closely with school district staff members to ensure accuracy and fairness.
The collection of school fees is mandated by the State of California. Legislation known as S.B. 50 outlines how school fees are to be calculated, setting a minimum requirement for schools to collect what is known as a Level 1 fee, currently $2.97 per square foot. Districts are allowed to adopt a Level 2 fee if they can justify the need for more revenue to cover their 50 percent cost of constructing new schools. To justify a Level 2 school fee, districts must complete a School Facilities Needs Analysis (SFNA) each year. The resulting fee should cover 50 percent of the cost needed to mitigate new development. In certain instances, a Level 3 fee may be needed. Always double of the Level 2 fee, a Level 3 fee is only triggered if the State of California exhausts school bond proceeds and cannot cover their 50 percent share. Therefore, in a Level 3 environment, new development would need to cover 100 percent of the cost of school impact mitigation.
Because of the diligent work by the Riverside County BIA government affairs staff, all three levels of school fees have seen drastic reductions in a short period of time. School fees are just one portion of the entire fee load paid to mitigate development impact. The government affairs team will continue the fight to keep development impact fees at reduced levels.
September Government Affairs Update:
On September 13 the Riverside County Board of Supervisors voted to reinstate the 50 percent County DIF reduction that expired on September 9. The 50 percent reduction will become effective on October 13 and be in effect for one year. Your Riverside BIA Government Affairs team will continue to work diligently with the Board to ensure future extensions and a friendly business environment.
The Palm Desert City Council recently voted unanimously to freeze the City’s Development Review and Inspection Services fee schedules. City staff had urged the Council to incorporate changes in the fees, which were based on the updated cost study which used FY 2009/10 actual expenditures. If adopted, the proposed fee schedule would have resulted in an increase of 10 percent to as much as a 100 percent increase in user fees. As a result of the vote, this issue will not be brought back to Council for consideration until budget discussions begin for FY 2012/13, in April of 2012. The BIA team appreciates the Council’s sensitivity to the state of the industry and is especially thankful for Councilwoman Jan Harnik and Mayor Jean Benson’s efforts.
August Government Affairs Update:
The City of Eastvale's temporary 50 percent TUMF reduction went into effect July 11 and will remain until December 31, 2011, or until the aggregate uncollected reduced fee is $20 million system wide, whichever occurs first. At the end of May the aggregate uncollected fee was $13.2 million.
The City of Eastvale's Development Impact Fee (DIF), inherited from Riverside County at incorporation, expired June 30, 2011. The City will not collect these fees until the council has approved an Eastvale-specific DIF study. The city is currently developing a DIF Nexus study with approval expected around September and becoming effective sometime after December 1, 2011. Your BIA Governmental Affairs staff is monitoring the preparation of this report on a continuing basis.
Additionally, the Perris City Council unanimously approved to continue its 50 percent DIF reduction for the 2011/2012 fiscal year. The current 50 percent DIF reduction will continue without interruption. This is the third year the City of Perris has approved a DIF reduction, with total savings amounting to $6,334 per unit.
June/July Government Affairs Update
The BIA is pleased to announce that on Tuesday, June 21st, the La Quinta City Council unanimously voted to defer increasing their DIF for residential units for six months. The deferral, which represents significant savings to the industry, will be in place until December 30, 2011.
Recently, the Hemet Unified School District Board of Trustees considered increasing their Level 2 school fee by 13 percent. After hearing strong opposition from your BIA staff, the Board of Trustees voted 4-2 (1 Board Member was absent) to oppose the increase. Not only was the proposed increase defeated, but their action means they have dropped to a Level 1 fee of $2.97 per square foot, which equates to a 16 percent reduction from the current fee of $3.55 per square foot.
The Hemet Unified School District boundaries include the City of Hemet, portions of San Jacinto and the Winchester area. The district also expands out to Anza, Idyllwild and Aguaga. If you have questions about this school district or other districts throughout Riverside and Imperial Counties, please do not hesitate to call.
May 2011 Government Affairs Update
On Wednesday, April 27, the Eastvale City Council voted 5-0 to approve an ordinance authorizing a 50 percent Transportation Uniform Mitigation Fee (TUMF) reduction. The reduction will take effect 60 days after the ordinance's second reading, which was approved by a second 5-0 vote on May 11. The reduction will be in effect until December 31, 2011, or upon reaching $20 million of cumulative uncollected TUMF due to reductions, whichever occurs first. This is a great victory for the BIA team and comes during a time of need for our industry.
On May 2, the Western Riverside Council of Governments (WRCOG) Executive Committee approved a motion from Supervisor Tavaglione and seconded by Perris Councilwoman Rita Rogers of Perris, by vote of 14-3, defeating the adoption of a recommended 5.6 percent ($497/SFD) Construction Cost Index increase to the TUMF. The 5.6 percent increase had been previously recommended by WRCOG's Public Works Directors' Committee and the City Manager Committee. Your BIA staff worked efficiently through written and personal contacts to solicit support for opposing this fee increase proposal.
In the spirit of good news, the following three school districts have decided to lower their Level 2 Fees: Yucaipa/Calimesa USD, Jurupa USD, and Perris High School USD. Also, Lake Elsinore USD has elected to drop down to a Level 1 Fee, only charging $2.97/square foot. This is very good and very welcome news for our industry.