Supervisors receive TIF reports

The San Diego County Board of Supervisors’ action January 12 was to receive two reports related to the Transportation Impact Fee (TIF) rather than to change the TIF structure, although one of the reports was a progress report on possible changes to the TIF assessment program while the other report was the annual report on fiscal year 2009-10 expenditures.

Any changes to the TIF structure will take place after the adoption of the county’s updated general plan. Developers are not required to mitigate for existing roadway deficiencies, but the TIF is intended to pay for road impacts of future development and the update of the general plan’s Circulation Element will create a recalculation of future road improvement costs and thus a development’s share of the costs.

The current cost for the future transportation road network is approximately $894 million. “If the board approves the general plan that’s got fewer lane miles for development, then that might bring the overall cost down,” said county Department of Public Works deputy director for management issues Donna Turbyfill.

Since the TIF program was implemented in 2005, the county has collected $24.1 million, or approximately three percent of the total needed for the network. During fiscal year 2009-10 the county collected $2,303,075 in TIF payments including $356,841 for the Fallbrook Community Planning Area, $27,349 for the Bonsall Community Planning Area, $11,334 in the Pala-Pauma Community Planning Area, and $1,502 for the Rainbow Community Planning Area. TIF payments also cover freeway ramp improvements, and $5,659 was collected to pay for North County freeway ramps. An additional $329,629 of interest income was generated including $50,743 for Fallbrook, $10,713 for Bonsall, $1,608 for Rainbow, $1,232 for Pala-Pauma, and $5 for the Pendleton-DeLuz Community Planning Area.

Refunds of paid fees may be given for development or road projects which will not be built, and those refunds include $6,156 for Fallbrook. The county can also enter into a reimbursement agreement with a developer who makes road improvements, and during 2009-10 the county reimbursed Granite Construction $6,292,740 for their improvements to State Route 76 between the Interstate 15 interchange and Couser Canyon Road.

On a countywide level, approximately $12.7 million, nearly equally divided between project development and actual construction, has been spent since the TIF ordinance took effect. During the 2009-10 fiscal year $2,427,706 of TIF payments were appropriated into the county’s road fund including $164,313 for Knottwood Way, $51,716 for Camino Del Rey and Old River Road, $49,155 for the Fallbrook Street extension, and $12,638 for Stage Coach Lane and Reche Road. As of June 30, 2010, the county’s $13,449,940 balance of TIF funds available included $2,139,383 for Fallbrook, $366,173 for Bonsall, $75,139 for Rainbow, $57,351 for Pala-Pauma, $159 for Pendleton-DeLuz, and $13,629 for North County freeway ramps.

“It’s proven to work well,” Department of Public Works director Rich Crompton said of the program.

In April 2005, the San Diego County Board of Supervisors adopted the TIF 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 TIF ordinance 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 (CEQA) 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.

The current TIF assessment for a single-family detached residential unit is $13,043 in Bonsall, $12,801 in Fallbrook, $11,082 in Rainbow, $7,595 in Pala-Pauma, and $6,355 in Pendleton-DeLuz. The TIF charge per 1,000 square feet of general commercial construction is $23,289 in Bonsall, $22,869 in Fallbrook, $19,781 in Rainbow, $13,569 in Pala-Pauma, and $11,358 in Pendleton-DeLuz.

Offices are assessed 56 percent of the general commercial fee, general industrial buildings are charged 37 percent of the general commercial amount, schools, commercial, and industrial buildings pay 32 percent of the general commercial rate, and furniture stores, storage facilities and warehouses, wineries, and non-residential agriculture structures are assessed 14 percent of the general commercial payment.

“We allocate the total cost of all of the development-related lane miles,” Turbyfill said. “You just have to divide that up by the types of development, how much square footage they have, and apply it somehow.”

In September 2010, the county began working with a consultant on a comprehensive update of the TIF program. The review will evaluate alternatives to determine if a reduction in fee rates is possible and will also ensure consistency with the updated general plan and maintain the cumulative mitigation nexus necessary for CEQA compliance.

The review will include the concept of vehicle miles traveled as part of the TIF ordinance; incorporating vehicle miles traveled would redistribute the TIF costs but would not reduce the total program obligation. “The TIF program is a zero-sum game,” said DPW deputy director for land development Troy Bankston.

“You still have to come up with the total amount,” Turbyfill said.

An updated TIF program is expected to be brought before the Board of Supervisors four to six months after adoption of the new general plan. County staff will meet with stakeholders, including the building industry and community representatives, for input.

“I do think there is more work to be done,” said Supervisor Dianne Jacob.

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