Accounting twist adds to fee drama
| Thursday, Jun 25 2009 06:31 PM
Last Updated Thursday, Jun 25 2009 08:06 PM
Read more and comment on the City Beat blog on bakersfield.com.
The city of Bakersfield has committed "accounting malpractice" of such magnitude, a homebuilders' lawyer says, it might have to cough up millions of dollars of traffic impact fees already in city coffers.
The assertion is among the latest twists in a long-running saga over a development fee Bakersfield is about to increase.
Walter McNeill, a Redding attorney who specializes in government fee litigation, says Bakersfield officials have failed to create yearly reports that spell out how the city has used fee dollars collected from builders for almost 17 years. The reports are required by state law.
"They've blown this completely," McNeill said in a phone interview Thursday, adding: "Even podunk little cities with 5,000 people" do the reports.
Bakersfield's finance director, Nelson Smith, says the city has indeed fulfilled accounting requirements.
The dispute comes down to "what a report should look like," Smith said.
The city's accounting doesn't give project-by-project details, Smith acknowledged, but such information has always been provided by the public works division to anyone who asks.
The issue boiled over Wednesday night when the City Council was slated to approve higher fees but instead postponed a decision until July 7.
The Homebuilder's Association of Kern County has turned up the heat in recent weeks as the new fee -- almost $13,000 per home, an increase of several thousand dollars -- inched closer to final approval by the city. (County supervisors passed a matching version in May.)
Letters, record requests and meeting comments indicate the association is considering a lawsuit after the city acts.
Bob Decker, the HBA's executive officer, said a board meeting Thursday morning didn't lead to a decision to sue.
But the board "definitely feels" there is "sufficient basis" to challenge the traffic fee program on several fronts, Decker said.
One front -- the annual reporting requirement -- could prove costly to the city if the association's claims held up in court.
McNeill, the HBA's lawyer, believes a court could make the city refund up to $50 million or so held in the fund, according the city's most recent financial statement.
If a refund were ordered, McNeill said, most of the money would go to current property owners: homeowners. About 10 to 20 percent would go to builders who still own impacted property, he estimated.
Over the next couple of decades, the fee is expected to pull in nearly $2 billion to help fund regional transportation improvements.
City and county officials say it is needed to keep hundreds of millions in federal transportation dollars that could be lost if the program isn't in place.
The City Council is holding a special meeting at noon on July 7 to vote on the fee. The public hearing will be held in council chambers of City Hall,1501 Truxtun Ave.
