Consequences of construction

Council considers raising development impact fees

Residential development is booming in north Chico.

Residential development is booming in north Chico.

Photo by Howard Hardee

The Chico City Council stepped lightly under the threat of looming litigation on Tuesday (Aug. 15) as the panel discussed impact fees that help build and maintain schools, parks and roadways.

Local developers who spoke at the meeting cast the warning shots, noting they already feel squeezed by the fees—that much was clear as the council considered updates to the development impact fee program. According to Brendan Ottoboni, the city’s director of Public Works-engineering, approving all of the recommended changes would add $6,000 and $10,500 to the total cost of building new single- and multifamily homes, respectively. That translates to an additional $300,000 to the city’s coffers each month.

From the city’s perspective, the growing population puts strain on public facilities and developers should help pay to maintain them.

On the other hand, builders argued that the burden of fixing facilities worn down by past and current Chicoans shouldn’t be borne entirely by future residents.

“The people who are going to be moving here haven’t impacted those roads yet,” said Chris Giampaoli, owner of Epick Homes. “You need to understand that those roads are down to an insufficient level to begin with and it’s not legal to ask new residents to pay for that.”

The council slogged through all 14 fee categories during a nearly three-hour public hearing. Here’s a breakdown:

Parks/neighborhood. The city is anticipating about 39,000 new residents by 2040. Based on that number and goals outlined in the general plan, Chico needs to develop 59 acres of neighborhood parks. To help pay for their construction, the council voted unanimously to raise this impact fee on single-family homes from $989 to up to $1,679. The fee for multifamily units would increase from $2,498 to the same cost.

Parks/community. This impact fee—which staff recommended raising from $1,824 to $4,138—would go toward developing 98.45 acres of additional community parks. The council considered dedicating some of these fees to Chico Area Recreation District’s proposal to build multimillion-dollar aquatic and recreation centers, but the builders weren’t having that. Local developer Bill Webb, for instance, did not see a relationship between new homes and special recreational facilities.

Councilwoman Ann Schwab made a motion to approve the fee increase and to direct some of the revenue toward the proposed CARD facilities, but she was opposed by Councilman Mark Sorensen. Vice Mayor Reanette Fillmer made a sub-motion to not direct the fees toward the proposed CARD facilities—which passed 4-2, with Schwab and Councilman Karl Ory dissenting. (Councilman Andrew Coolidge was absent.)

Bidwell Park land acquisition. These fees help pay off debt incurred when Bidwell Park was expanded in 1995. The council voted 6-0 to reduce them from $211 per residential unit to $85.

Street maintenance. These fees help pay for street equipment. The council had the option of drastically raising the fees—from about $150 to $2,326 for single-family homes—but due to anticipated funding from Senate Bill 1 (aka the gas tax), Ottoboni recommended a more modest increase. Schwab made a motion to roughly double the fees, which the council passed unanimously.

Urbanization. The city picked five roadways in desperate need of reconstruction, but, again, builders questioned using impact fees to fix pre-existing problems. The council voted unanimously to kick the item back to the Finance Committee.

Street facilities. The most substantial fee hike would go toward roadway construction projects totaling $149 million. As proposed, the fees would increase from $3,331 to $9,564 for single-family homes and from $2,304 to $8,161 for multifamily homes. Schwab made a motion to approve the fees as recommended, but it failed on a 3-to-3 vote. Ory made a motion to send the fees to the Finance Committee. That passed 5-1, with Schwab dissenting.

Miscellaneous. On a 5-to-1 vote, the council approved modest changes to eight fee categories—administrative building, fire facilities, animal shelter, police facilities, sewer, Water Pollution Control Plant, bikeways and greenways. Ory cast the dissenting vote after pushing for lesser fees for small apartments and studios to promote more affordable housing. The council voted unanimously to send that policy discussion to the Finance Committee.

The council will discuss the fees again in October after the Finance Committee reviews them.