Hwy 32 widening: Will CalTRANS carry out their threat to sue us because we didn’t collect developer fees? ANSWER – probably so!

22 Aug

NOTE: This is an old blog, I’m not posting comments here anymore. I posted a comment received recently on a new blog. Thanks!

This morning I sent the following e-mail to Mark Sorensen, at msorense@ci.chico.ca.us. No, that address is not a typo, he leaves that last letter off his name for whatever reason.  I’ll keep you posted as to his response, if I get any.

Hi Mark,

 
I was not able to stay for  the Hwy 32 widening conversation – that first item was pretty badly agendized, and the discussion was poorly handled. One thing Scott will need to learn to do is SHUT UP. He rambles too much. Maybe you councilors ought to be held to 3 minutes a piece?
 
Anyway, I had wanted to ask – I sat in on a meeting years ago with Wayne from CalTRANS. He told us they were poised to sue the city of Chico  because of those subdivisions – including, by name, Meriam Park, Westside Green, Barber Yard, among others – that had been approved without dedicating funds to widen 32. At that time Lando opted NOT to collect the fees from Tom DiGiovanni and the other developers, but to take the money from the RDA.
 
So, did DiGiovanni or Giampoli or Greening or any of the other developers/project owners named specifically in that lawsuit demand ever pay any road impact fees? At that time, we attended a charette at which Varga told us Meriam Park was going to take our traffic rating on that side of town from “A-B to D”, regardless of road improvements. I also remember, Tom DiGiovanni got $7 million in RDA funding for the sale of the low-income part of Meriam Park to a Fresno Developer – the city paid with RDA funds. So, did ANYBODY ever pay road impact funds on Meriam Park? 
 
And, finally, how are we going to avoid the lawsuit from CalTRANS? 
 

thanks, at your convenience, for your anticipated cooperation – Juanita

UPDATE: Mark got back to me pretty quickly:

the city matching funds for the project are expected to be 100% development impact fee supported. The problem is an old one, in that development impact fees are not collected until construction begins (or is completed) on actual structures. Whereas there are some advantages to fixing the traffic problem before it becomes really bad. 

 

At this point in time that particular development impact fee fund is in a deficit position. 

 

The low income project should have paid their development impact fees, but that is just a tiny portion of the Meriam Park project. 

“And, finally, how are we going to avoid the lawsuit from CalTRANS? “

 

Its might not be a lawsuit, per se. But CalTrans could oppose projects if the impacts on their roadways will be too severe and un-mitigated. This was a portion of the discussion on Tuesday night. 

 

But, when we come right down to it, the city can not continue to spend money that it does not have. Some sort of a reasonable funding source must be found. That might include developers developing a solution, and it might include holding off on the project for a period of time (EG: one or more years) until a reasonable method of funding is found. …. 

But I had to ask him to explain, you know I’m pretty thick:

Thanks for responding Mark,

 

I’m not sure what you mean, let me run this by you:

 

The developer (Ashcroft? of Fresno)  has paid the impact fees for the low-income portion of Meriam Park, but no road impact fees have been paid for Meriam Park, is that correct? What about Forgarty? Any of the others named in that lawsuit threat? I realize the fund is empty now – did they ever pay? 

 

Also, could you give me an example of what you mean by “reasonable funding”?  

 

Thanks for your help understanding this issue – and, I’d also like to invite you to our next CTA meeting, Sept. 1, 9am, library. I can get the room earlier if you’d like,  for some discussion of these latest developments Downtown – thanks, Juanita

He resent my e-mail with his responses in red:

The developer (Ashcroft? of Fresno)  has paid the impact fees for the low-income portion of Meriam Park, but no road impact fees have been paid for Meriam Park, is that correct? What about Forgarty? Any of the others named in that lawsuit threat? I realize the fund is empty now – did they ever pay? 

 

The low income housing project should have paid the appropriate development impact fees before or during the construction of that housing project. I’ll ask city staff to provide the calculation and indicate what was paid in the way of development impacts fees. (digressing for a moment) Fees that were probably paid with RDA, State and/or Federal grants or loans. And of course, the property is now off of the property tax rolls. 

 

Development impact fees are usually not collected until construction begins (or is completed) on actual structures (homes, buildings, etc). The vast majority of Meriam Park is still vacant land. Same is true of the Oak Valley Subdivision (Fogarty) it is vacant land on which impact fees would not yet normally have been assessed or paid. 

 
 

Also, could you give me an example of what you mean by “reasonable funding”?  

 
A GREAT example would be to use development impact fee surpluses on hand at the city. The problem is that the fund is already in a deep deficit position. See Fund 308 on page 87 of the following PDF: 
 

Clearly the Council did not find any of the 3 alternatives presented on Tuesday to be “reasonable”. 

 

If and when the State Department of Finance actually allows the City to use the remaining (approx) $6 million in RDA bond proceeds for projects, the HWY 32 project could be a candidate for consideration. 

 
 

Thanks for your help understanding this issue – and, I’d also like to invite you to our next CTA meeting, Sept. 1, 9am, library. I can get the room earlier if you’d like, and probably get at least Stephanie and Sue to show up for some discussion of these latest developments Downtown – thanks, Juanita

 

At this moment, I don’t know if I’ll be in town for the Labor Day weekend….

I thanked Mark, for responding.  But the whole thing really pisses me off. Developers don’t pay their way, they never have. But, try being a developer, dealing with the City of Chico! It’s a meeting of nasty dogs, don’t get too close, you will get bit.  

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One Response to “Hwy 32 widening: Will CalTRANS carry out their threat to sue us because we didn’t collect developer fees? ANSWER – probably so!”

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