Building fee begins to build roads

By: DAVE DOWNEY - Staff Writer | Friday, August 17, 2007 11:31 PM PDT ∞

Transportation money isn't exactly pouring in from new development these days, thanks to Riverside County's slumping housing market.

But the Western Riverside Council of Governments reported this month that a regional transportation fee has generated $418 million since its inception four years ago this summer. And at long last the cash is being turned into shiny new ribbons of concrete and asphalt.

Dubbed the Transportation Uniform Mitigation Fee in government circles, the fee raises money from each new house built in the fast-growing western part of the county, as well as from every new store, office and industrial plant.

Area officials instituted the program in summer 2003, saying it was crucial to secure millions from new development to defray the cost of building new roads required to serve those new homes and stores.

One example is the rebuilt Los Alamos Road interchange at Interstate 215, completed earlier this week, said Russ Napier, manager of capital improvement projects for Murrieta, which teamed up with the California Department of Transportation on the project.

Another is the new traffic signal installed at Highway 74 and Grand Avenue in Lake Elsinore, which opened last month.

And preparations are being made to start construction on other area roads targeted for fee money, said Ruthanne Taylor Berger, deputy executive director for the government council, which collects and distributes the funds.

Already, said Bob Cashman, a Wildomar man who commutes daily to Irvine, the new light at Grand and Highway 74 and the separated lanes for motorists turning left and right have helped traffic flow better.

"I'm glad they finally got that together," Cashman said.

Lake Elsinore city spokesman Mark Dennis added, "It's really keeping things moving now off the Ortega."

Los Alamos Road

Likewise, Murrieta's Napier said the $11 million Los Alamos expansion, which received $7 million from the regional fee, should pay dividends for both commuters and people trying to drive across town.

"This relieves historic congestion that has plagued Murrieta since the early '90s," he said. "A considerable amount of traffic has been forced to travel in one lane over the 215."

The revamped interchange ramps opened a couple of weeks ago, and the expanded bridge opened earlier this week. The new bridge has two lanes in each direction, but there is room for three, if needed later, Napier said.

One of the bigger local projects finished recently was the six-lane Newport Road/Domenigoni Parkway extension that opened last year. Taylor Berger said that project received $16 million from the fee program.

"After four years, we can look back and see some substantial projects that have moved forward," she said. "It is successful. It is working." The fee has become one of the area's most important sources of transportation funding. It is filling coffers at a time when state and federal dollars are less reliable than they have been in the past. And it rivals the region's dominant source of transportation funds: a half-percent sales tax known as Measure A.

The tax was due to expire in 2009, but a few years back voters agreed to keep it in place for three more decades.

Boom generated cash

At the height of the housing boom, the transportation fee brought in more than the sales tax.

According to the Council of Governments, the fee generated $371.7 million between July 2003 and July 2006. During the same period, the sales tax brought in $302.2 million, said John Standiford, a spokesman for the Riverside County Transportation Commission, which administers the Measure A fund.

However, early indications are that the sales tax raised about twice as much as the fee during the fiscal year that concluded last month.

"(Measure A) is far more stable," Taylor Berger said. "People don't stop buying food. They don't stop buying gasoline. But they do hold off on buying a home." The two sources are intended for two different sets of projects. The sales tax is geared toward freeways and state highways; the construction fee is targeted at major city streets and county roads, and bridges over freeways.

In the past, local agencies were criticized for spending very little of the construction funds they were collecting.

Money has begun to go out the door at a faster pace.

Standiford said the Transportation Commission, which has control over nearly half the funds, has committed $73 million for various regional roads that serve multiple communities. He said the commission also allocated $50 million for the Mid County Parkway, a 32-mile freeway that will one day run from Interstate 15 in Corona to Highway 79 in San Jacinto, parallel to Cajalco Road.

The regional council, in the meantime, has committed all of the $183 million collected so far for local streets considered important to individual communities ---- as well as millions in future anticipated collections.

The council reimburses communities after they finish projects. And it has written checks totaling only $25 million for the entire region, according to a report.

That is about to change in a big way, Taylor Berger said.

Not only has the regional council not reimbursed Murrieta yet for Los Alamos, local agencies ---- Murrieta, Temecula, Lake Elsinore and the county ---- plan to spend $90 million on Southwest County projects alone in the next two years.

Southwest County highlights

Here are some of the key Southwest County projects waiting in the wings:

- Clinton Keith Road between I-215 and Highway 79. The county is working to create a tax district that will pull money from landowners and developers to build the road and land is being purchased. The project is entitled to $17 million in fee money.

- The complex French Valley Parkway interchange at Interstate 15 in Temecula. Planning is under way and it is hoped that construction can begin in spring 2010. The fee program will commit $62 million.

- Scott Road/Bundy Canyon Road widening between Interstates 15 and 215. Planning is under way, and construction is expected to start a year or so from now. The project is in line for $16 million in fee funds.

- Scott Road east of I-215. The project includes improvements to the I-215 interchange, initially four lanes east to Briggs Road and eventually six lanes out to Highway 79. It is set to receive $33.8 million in fee money.

- Highway 74/I-15 interchange. There are plans for interim improvements next year and a major reconstruction later. Lake Elsinore is counting on fee proceeds to contribute $25 million.

- Railroad Canyon Road/I-15 interchange in Lake Elsinore. A total of $13.3 million is reserved.

- Clinton Keith Road/I-215 interchange in Murrieta. Targeted for construction next year, the project is in line for $7 million.

- Clinton Keith widening from I-15 to Copper Craft. Targeted for construction in about two years, it is slated to receive $5 million.

Boom is over

Transportation-fee collections surged during the early part of the fee program, growing from $72.6 million in fiscal year 2003-04 to $116.1 million in 2004-05 and $183.1 million in 2005-06, Taylor Berger said.

Sales tax collections, in the meantime, have been running steady at approximately $100 million a year.

Taylor Berger said the surge in fee collections in 2005-06 stemmed from the housing boom and the building industry's rush to avoid an approaching residential-fee increase. She said the charge per new house went from $7,248 to $9,693 on July 1, 2006. In sharp contrast, this past year's collections totaled $43.7 million.

Taylor Berger said indications are that the total will reach $50 million for the current fiscal year, which runs through June 2008.

That $50 million projection is overly optimistic given the sharply lower demand for new homes, said Borre Winckel, executive director for the Riverside County Chapter of the Building Industry Association of Southern California.

"I would offer (government council Executive Director Rick) Bishop and his staff a dinner at a fine restaurant if that figure comes true," Winckel said.

The erratic swings of collections, he said, suggest it is in the interest of local officials to take measures to help builders.

"It tells the story that a healthier housing industry helps to build a healthier revenue stream for building the roads," he said.

While not asking for a fee reduction, Winckel said it would help if cities and the county shortened the process for obtaining approval for new tracts.

He said it usually takes two years to get one approved, and it should take six months.

"It still takes forever to get a standard, no-frills project out of the county pipeline," he said.

Clearly, Winckel said, there is a need for the roads.

"They can't be built fast enough," he said. "But they can only be built if the housing sector is alive and well. We are now at a standstill. And local government should do everything it can to stimulate the housing sector."

Contact staff writer Dave Downey at (951) 676-4315, Ext. 2623, or ddowney@californian.com.

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