Crime and development
Builders sue, halt jail-impact fee for new homes
People who buy brand-new houses in Chico pay for more than a home. As local developer Doug Guillon explained: If a house is listed at, say, $400,000, that includes about $25,000 in impact fees that go toward local schools, parks and roadways. The system irks him.
“This is a pattern that developed years ago,” he said. “It’s easier to get money out of [new-home buyers] through increased purchase prices than to have the community vote for bond measures for things that are community-wide benefits.”
Take, for instance, expanding Butte County Jail at a cost of $44 million. Last year, in order to pay for the project, public officials from each municipality in Butte County—Chico, Paradise, Oroville, Gridley and Biggs—agreed to tack on a jail-impact fee to the cost of buying a new home ($455 for single-family homes, $363 per multifamily housing unit, and $372 for mobile homes).
Guillon Inc. and four other local construction companies—Bill Webb Construction, Epick Homes, Shastan Homes and Discovery Builders—took legal action. In March, they sued the county and its municipalities, arguing that the cost of the jail should be borne by the whole community rather than a small segment of it. Further, the lawsuit says the county failed to demonstrate a link between new homes and increased crime.
“There is absolutely no connection,” Guillon said. “It’s unfair on the face of it.”
County officials contest those points. Still, rather than fight the lawsuit, they recently agreed to a tentative settlement under which each municipality must stop collecting the fees and return money to homeowners who’ve been charged. The Chico City Council voted to rescind its agreement with the county during its meeting on June 7. By doing so, the council in effect canceled the cooperative agreements between the county and Biggs, Gridley, Oroville and Paradise.
The county agreed to the settlement due to an abundance of caution, said Paul Hahn, the county’s chief administrative officer. Specifically, the procedure for collecting the fees might not hold up in court.
New residential construction, as a reflection of population growth, does strain the jail, he argues. The addition of residents places a greater burden on public services such as law enforcement and fire protection as well as public parks, schools and roadways. The jail is no different.
“Certainly, as the population increases, there’s the likelihood of crime increasing,” he said.
As such, Hahn stands behind the concept of the fees—and intends to reintroduce them.
The proposal to renovate and expand Butte County Jail first came before the Chico City Council in March 2015. County Sheriff Kory Honea explained that, under Assembly Bill 109—the Public Safety Realignment Act of 2009—serious criminals who would have previously served their sentences in state prison were shifted to county jails.
When the 614-bed jail was built in 1963, it wasn’t with long sentences in mind and “it was never contemplated that we’d hold the kind of criminals we do now,” Honea told the council. The goal, he said, was to expand the jail to 750 beds and increase space for programs aimed at reducing recidivism and addressing mental health needs.
Honea was seeking $40 million in state grant funding, which required a $4 million match. The county borrowed the money from its own fire-impact fund, Hahn said, and intended to pay about $1.2 million of it back through the jail-impact fees. Each city and town signed on.
Then came the lawsuit. It raised one valid point, from Hahn’s perspective.
“The argument we believe might have some legitimacy—and that’s a question, but not worth arguing at this point—is about asking [cities] to collect the fees on the county’s behalf,” he said.
Here’s the gist: Under a countywide ordinance established in 2007, the jail-impact fees have been collected in unincorporated areas. Last year, the five municipalities agreed to begin collecting the fees from construction within their boundaries and pass them along to the county. A more legally defensible approach—one that more closely adheres to state law on establishing impact fees—is asking each city or town to craft its own ordinance to implement the fees, Hahn said.
And that is exactly what he’ll propose. “Our hope is that we’ll be back to reimplement the jail-impact fees in each city within a year or two,” he said.
As for the jail, it won’t be delayed by the loss of funding, Honea recently told the CN&R. It’s still slated for completion in August 2020.
“We’re going to push forward with the project,” he said.