Menifee To Seek Economic Stimulus Plan

The Menifee City Council yesterday voted unanimously to let sunset the 50% reduction in developer fees, in favor of seeking new ways to gene...

The Menifee City Council yesterday voted unanimously to let sunset the 50% reduction in developer fees, in favor of seeking new ways to generate economic stimulus for developers.

A year ago the city council voted to take part in an special offer by the Western Riverside Council of Governments (WRCOG) whereby cities could suspend its TUMF payments to WRCOG. Transportation Uniform Mitigated Fees (TUMF) are fees that builders pay to cities to compensate them for the additional population and traffic they bring in. Cities then pay those fees on to WRCOG.

WRCOG is the body that administers the TUMF fund. WRCOG disperses that money back to the cities to pay for transportation projects, namely roads and bridges. It's a form of "wealth redistribution" whereby the cities with the largest growth pay for projects in cities that can't afford their own improvements.

But last year, when development was stymied by the bad economy, WRCOG offered to waive its own fees, meaning cities didn't have to pay TUMF to WRCOG. But this was presented to cities as an option. The cities that took it, including Menifee, allowed them to drastically reduce fees they pass on to developers.

But what the Menifee City Council didn't know at the time is that WRCOG didn't actually waive those fees. They only postponed them, meaning Menifee was still on the hook to pay it back.

Mayor Edgerton's estimates came to $2.4 million in fees it would have to pay to WRCOG. Mark Knorringa, who's with the Building Industry Association of Riverside County, felt that figure was actually much lower, around $1.67 million. Currently, the City of Menifee doesn't have either of those amounts of cash available.

"The question now is who knew what, and when did they know it?" the Mayor spoke in an emotional tone, accusing the previous City Manager, previous City Works Director, and even former city councilman Scott Mann, as knowing that WRCOG's fee waiver was actually a fee postponement, but didn't explain that to other councilmembers. "The City Manager was at those WRCOG meetings, the former city councilman that is no longer here was at those meetings. What I'm very angry of is that this council accepted a reduction in fees without knowing that reduction was going to cost the taxpayers."

City councilmember Darcy Kuenzi countered the Mayor's comments. "The TUMF money collected is not paid by taxpayers, but by developers. These are developers fees!" Her comments along with the Mayor's seemed indicative of two competing philosophies on the council of how TUMF fees are paid, and how WRCOG operates. "Do we want to stimulate growth in this city? We have a gentleman that's trying to open a new steakhouse here. It's not even clear that the City is on the hook for this shortfall." (the $2.4 million that Edgerton estimates)

Edgerton responded by asking Don Allison, the City Engineer, whether or not Menifee owes about $2.4 million in fees to WRCOG, to which Allison responded, "About that much". Edgerton then asked Allison if Menifee owes that money to WRCOG, to which Allison responded, "Yes, in some form."

The debate dragged on, and through it all it seemed clear that Darcy Kuenzi and John Denver took the philosophy that reduced fees help bring in development which ultimately increases sales tax revenue which negates any kind of shortfall that Edgerton spoke of. Meanwhile, it seemed clear that Edgerton and councilmember Fred Twyman were to going to vote for allowing the reduced fees to sunset.

But when John Denver made a motion to adopt a three month extension of the reduced fees, the City Attorney stepped in and clarified that the item on the agenda was to allow the fees to sunset, not to adopt an extension. Therefore, Darcy Kuenzi motioned to let the reduced fees sunset and instead appoint an ad hoc committee that will assist the City Manager in crafting some kind of economic stimulus plan to attract new development.

The motion passed unanimously. Mayor Edgerton appointed himself and Kuenzi to the ad hoc committee, which will be named "Economic Incentive Ad Hoc Committee".