July 17, 2014

County officials look at potential changes to fee program

County leaders decided Thursday to look at options for restructuring a Merced County Association of Governments fee collection program after hearing concerns that the money doesn’t benefit all cities equally.

County leaders decided Thursday to look at options for restructuring a Merced County Association of Governments fee-collection program after hearing concerns that the money doesn’t benefit all cities equally.

Regional Transportation Impact Fees, which were started in 2005, are charged to developers of new commercial, residential and industrial projects. The money collected is put into a pot for regional transportation projects, such as widening a freeway or building a new on-ramp.

The road and highway projects have to be attributed to growth in the county, officials said.

Merced County, as well as the cities of Merced, Atwater and Gustine, have adopted ordinances to pay into the program. Los Banos was participating in the fees for residential developments only, until a majority vote from its City Council on Wednesday gave direction to change that.

The Los Banos City Council voted 3-2 to modify the ordinance to suspend its fee collection of residential development, with council members Scott Silveira and Elizabeth Stonegrove casting the dissenting votes.

The decision to suspend the residential fees came after officials in April voted to use $3 million of the collected money for a construction project in Merced. City leaders in Los Banos said the money was promised to the $431 million Los Banos Bypass project by way of a 2011 resolution.

Los Banos Mayor Mike Villalta said the April vote was the second time money was diverted from the Los Banos Bypass project to another part of Merced County. He asked the Merced County Association of Governments, which manages the program, to look at ways to make the program more equitable for all cities.

“We pay in, we get nothing out. Twice our money was stripped from us,” Villalta said at a workshop Thursday. “The majority or almost all the money goes to the east side (of Merced County). I can’t continue to pay with a promise that we’re number one and we’re treated like number two.”

Villalta said the city of Los Banos wants to work with MCAG to make the program work. He said a 1,500-acre distribution center planned for the city would be a “game-changer” and result in the funds skyrocketing, which would benefit the entire county.

The total amount collected from the fees stands at $10.6 million, according to MCAG officials. As of April, the city of Merced has contributed $4.4 million, followed by Merced County’s contribution of $3.9 million and Los Banos, which has put in $1.7 million.

MCAG Transportation Manager Matt Fell presented options for the program, including dividing the county into zones. Currently, the entire county collects one “uniform” fee for construction projects, though they can choose which types of development – residential, industrial or commercial.

By dividing the county into zones, Fell said, a portion of the collected fees would stay in each jurisdiction to be used for local projects. A smaller portion would be allocated for regional projects. San Joaquin and Monterey counties operate their programs in this way, Fell said.

The downside of the splitting the county into zones is that some areas might charge higher fees to compensate for more expensive construction projects, which could be a deterrent for developers.

There are 13 projects on the list for funding from the collected fees. The major ones are Atwater-Merced Expressway Project, the Campus Parkway in Merced and the Los Banos Bypass project.

Merced County District 5 Supervisor Jerry O’Banion, whose district covers Los Banos, said the bypass project has been put on hold several times before – usually because of money.

“There are reasons why the project has been delayed, but it is still the number one project today, contrary to what people say,” O’Banion said. “The local jurisdictions are willing to try to make it work. I think the state of California needs to step up to the plate to help solve the problem because it’s a state highway.”

O’Banion said he supports the bypass project, despite claims that he did not. “We have to work together and I want to work with (Villalta),” O’Banion said. “The system has been working. But it’s evident that some people think that it needs changes, and I’m willing to hear what they have to say.”

MCAG has used $13,893 on the bypass project thus far for a consultant to facilitate land purchases. MCAG staff will present a cost analysis in September associated with making potential changes to the program.

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