County shores up development fee ordinance

By From page A1 | September 06, 2017

The El Dorado County Board of Supervisors unanimously approved an ordinance revise designed to clarify the rules special districts must follow if they want to collect development impact fees.

The Aug. 29 vote comes as El Dorado County contends with a lawsuit filed by an El Dorado Hills couple alleging that it shouldn’t have collected impact fees on behalf of the El Dorado Hills Fire Department and the El Dorado Hills Community Services District because those agencies failed to file timely nexus studies to justify the fees as required by the California Mitigation Fee Act.

The lawsuit also mentions the county’s Public Safety Impact Fee collected in the El Dorado Hills area as the Sheriff’s Department had plans to build a substation on the county’s western end. That plan has since been scrapped in favor of the new sheriff’s headquarters in Diamond Springs. A year ago the Board of Supervisors rescinded the Public Safety Impact Fee but refunds to residents are on hold, pending the lawsuit’s outcome.

The next hearing is scheduled in El Dorado County Superior Court on Oct. 20.

Special districts must complete a study every five years and turn into over to the county for review and approval.

The California Mitigation Fee act stipulates that in order to charge a development fee the nexus studies must: 1) Identify the purpose to which the fee is to be put; 2) Demonstrate a reasonable relationship between the fee and the purpose for which it is charged; 3) Identify all sources and amounts of funding anticipated to complete financing in incomplete improvements and; 4) Designate the approximate dates on which the funding … is expected to be deposited into the appropriate account or fund.

The ordinance revisions are designed to provide special districts “a clear path” to getting nexus studies completed and fee programs before the board, Sue Hennike with the Chief Administrative Office told the board during the ordinance’s first reading earlier this month. The Board of Supervisors is the ruling body that must accept special districts’ nexus studies and then implement and collect the fees on their behalf. When a district wants to withdraw funds it must provide documentation that the money will go toward items/projects outlined in its study.

In years past a lack of communication between special districts and the CAO’s Office resulted in many district being out of compliance, noted county Auditor-Controller Joe Harn. He applauded current CAO Don Ashton for getting the process back on track but said he worries about the new ordinance’s indemnification language, calling it too detailed and saying it could have a negative impact on smaller special districts.

The ordinance’s indemnification clause requires special districts “to defend, indemnify and hold the county, its officers, agents and employees harmless from and against any and all liability, loss, damage, claims, judgments, costs, staff time, losses, expenses and any other costs of defense arising out of, resulting from or related to the creation, establishment, modification, collection or disbursement of fees on behalf of the special district or any other obligation of the special district or county under the agreement to collect and distribute fees on behalf of the special district, the Mitigation Fee Act or this chapter.”

County Counsel Mike Ciccozzi encouraged the board to adopt the strong language to ensure the county has the right to a defense should it get sued. He also noted that if it’s determined that the county committed an error, and not the special district, the county can accept responsibility and pay for its own defense if sued related to that error.

Harn also objected to language removed from the old ordinance that prohibited parks and recreation districts from applying development impact fees to commercial projects. Though Hennike said those districts would be “hard-pressed” to find a nexus between commercial development and parks, Harn argued that if a special district hires the right firm to complete the study it could justify just about anything the district wants.

District 2 Supervisor Shiva Frentzen, as well as El Dorado Hills Chamber of Commerce President/CEO Debbie Manning and El Dorado County Chamber CEO Laurel Brent-Bumb, worried this could harm the county’s efforts to boost economic development.

“I want to make sure we’re not putting up unintentional road blocks,” Brent-Bumb told the board.

Ashton told the supervisors any negative impact to economic development would be taken into consideration before he and his staff recommended approval of an impact fee.

Deputy county counsel Breann Moebius assured the board and audience members that per the Mitigation Fee Act nexus studies must define a clear relationship between the fee and those — new residential and commercial developemnt— who would be charged.

District 1 Supervisors John Hidahl said it’s up to the supervisors to do their due diligence when reviewing and approving nexus studies. The board has the option to reject a study.

The ordinance will take effect in 120 days. Before that 120-day mark each special district must complete individualized agreements with the county related to their development impact fee programs.

Noel Stack


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