Should Los Banos council offer fee waivers even if it comes from general fund money?

A nonprofit organization that helps low-income families purchase homes asked the Los Banos City Council on Wednesday to waive the impact fees for a home they built.

However, for the council, it wasn’t a simple decision because the funding burden would land on taxpayers.

Habitat for Humanity in Los Banos recently built a home for a local family at 541 M St., and with that came a developmental impact fee of $25,138.40, that pays for things like fire, police, parks, water, and sewage. The organization asked the council to either waive the fee or reduce it.

The council struggled to find a solution that would still help needy families with paying impact fees, but without taking money away from other resources that depend on general fund money.

Los Banos city staffers recommended the council deny the request because there is no policy set in place for fee waiver requests and the other place the money could come from is the general fund, which would mean other resources would take the financial hit.

The council unanimously voted for city staff to come up with a policy that addresses fee waiver requests.

“Without a policy, it would be like we were picking and choosing” which organizations get an impact fee waiver, said Stacy Souza Elms, community and economic development director for the city. “There’s only so much money.”

She added: “We do appreciate Habitat. They do great work. But, do we allocate money for parks and recreation that could serve 40,000 people or do we do this and only serve one low-income family? It’s trying to find the balance.”

The money doesn't have to come out of the general fund, but it’s “probably the only source” the city can use because they can’t use other impact fees to make up for the gap waiving this fee would create, said William Vaughn, the city attorney.

“The issue becomes essentially you’re shorting projections for the capital improvement you want to make” by $25,138.40, Vaughn said. “There’s no other funding source. Either it doesn't get funded or it comes out of the general fund.”

One way the city could go about it is to offer a payment plan rather than asking for the full amount upfront, Councilmember Tom Faria said.

“We would still get our money,” Faria said at the meeting. “It would be less painful for the homeowner. If that solution would work I would be very supportive of that solution.”

Councilmember Scott Silveira said Habitat for Humanity is a “worthy cause” and said part of the fees should be waved, like for fire and police because it’s “vital” to public safety.

The city needs to be careful with using general fund money, said Councilmember Deborah Lewis, and she's very concerned about the city being a “gift giver” with this type of money.

“When you start taking away from general fund money that provides necessary services to the people in the community then you put a city at risk, especially a small city that has limited funds. The bottom line is we have to be a guardian of the money’s that come in for the whole community.”

Two people at the meeting expressed their support for Habitat for Humanity during public comment and agreed the council should waive the fees.

Habitat for Humanity is asking the council to “take a stand for affordable housing,” said Ashlee Williams, executive director for the local branch of the organization. Although they did get financial and material donations to build the homes, “it still costs a lot to build a house in California.”

“It really benefits everyone,” Williams said in a phone interview. It benefits the city with property taxes and helps families who otherwise wouldn’t be able to afford to buy a home.

Habitat for Humanity could put up the $25,138.40, but it would slow down construction on other sites until they could raise enough funds, Williams said.

“Those dollars could be used to pay impact fees or move forward in other projects,” according to Williams. This is the first time Habitat for Humanity has asked for a fee waiver and “I think the community would see a benefit in affordable home ownership.”

Monica Velez: 209-385-2486, @monicavelez21

This story was originally published April 19, 2018 at 5:12 PM with the headline "Should Los Banos council offer fee waivers even if it comes from general fund money?."