Desperate to make a decision quickly to pay for future growth, the Clovis City Council unanimously raised builder fees to support infrastructure on Monday night.
And, in a surprising remark, Clovis Mayor Lynne Ashbeck told developers that if the fees missed the mark, the council would fix them later.
On May 8, the city council directed staff to come back with new infrastructure fees after builders said the proposed 12% to 23% increases would price people out of new homes.
Less than a month later, staff returned with what they said was a compromise with fees between 2% and 10%. Decisions on water fee rates were delayed for a future meeting after initial estimates showed a 61% increase.
The council took action on the fees even though Mike Prandini, president of the Building Industry Association of Fresno Madera Counties, asked members to wait until July to give the group time to look into all the proposed fee hikes.
Ashbeck Wants Staff and Builders to Figure Out Math
Over-inflated cost estimates for fire stations and water treatment facilities in northeast and northwest Clovis, as well as line items such as bomb squad equipment for Clovis police, will drive up the cost of homes, Prandini said.
Fees for each new medium-density house in northeast Clovis are now $41,398, up 6.3% from the previous year. In southeast Clovis, fees for a new home are up 4.9% for a high-density development to $33,893 per unit.
Prandini wanted fee increases capped at 4.6%, in keeping with inflation estimates for construction costs.
Saying that leaving the council to do the math “would be a disaster,” Ashbeck said its members should focus on who pays for services in the next 20 years.
“I’m not that interested in validating the water fees, park fees, and finance options. In my mind, that’s really a staff-stakeholder job,” Ashbeck said.
Ashbeck said that if the latest estimates were too high, they would roll back the newly approved fees.
Homebuilder Darius Assemi, president/CEO of Granville Homes and publisher of GV Wire, said he’s never known fees to go lower — something Ashbeck disputed.
In the end, the council voted 5-0 on fee increases. “If we do this one today, we can put this to bed for a while,” said Councilman Drew Bessinger.
Clovis Hasn’t Kept Up with Costs
Consistently among the fastest-growing cities in Fresno County, Clovis has fallen behind on paying for street repairs, sewer lines, parks, and police and fire stations.
As buildings go up, infrastructure costs fall to developers in the form of fees. Those fees go toward building new parks, police stations, water treatment facilities, and other services shared by the public. Ultimately, the developers push the fee hikes onto new homebuyers.
But as inflation pushes up costs, cities have to keep pace.
In 2022, fees climbed by 15% instead of the recommended 20%, according to Mike Harrison, city engineer with Clovis.
“Each year we put it off, it’s going to be worse,” Harrison said.
“Strange Calculations” for Clovis Infrastructure Models
City engineer Sean Smith said he didn’t doubt developer claims that housing costs are pricing buyers out of the market. But, Smith said, it’s hard to predict when those costs will cause development to stop.
“In the last eight years, there has been a lot of discussion in the industry where this is no longer something that can work,” said Smith. “At some point, we’re pricing people out of homes.”
But Prandini said “strange calculations” went into how city staff and a consultant determined those costs.
“We have some serious questions that those are the right numbers,” said Prandini.
One calculation showed it cost $9 million to build a fire station. Prandini said that figure appeared “exorbitantly high.”
Prandini also questioned the need for a bomb squad in Clovis.
“We have a county here of almost a million people and not every agency needs a bomb squad,” Prandini said.
Council Agrees Fee Structure Needs Overhaul
The council agreed to hold at least two workshops — one to figure out water fees and the other to provide options on fee structures so that rates needn’t go up every year.
Ashbeck said the current model for funding infrastructure might have worked 30 years ago when Clovis was small. Now she fears that some parts of town are getting left behind.
“Development pays its own way is great unless you live in southwest Clovis because you look around and go, ‘Hey, it didn’t pay for anything around here,’” Ashbeck said.
One option: Residents in a specific region can decide to tax themselves for infrastructure services through a mechanism called Mello-Roos.
Councilmember Diane Pearce wants outside experts to explain the options.
Parks and trails are what distinguish Clovis and the city shouldn’t lower its standards, said Councilmember Matt Basgall.
“Does it get to where we stop growth?” Basgall asked.