<div>The Porterville City Council unanimously approved amendments to the city’s long-standing deferred development fee payment program Tuesday night, creating a new early payoff incentive option aimed at encouraging development while improving the city’s cash flow.Engineering and Project Management Director Clayton Dignam said the program, originally established in 2012, was designed to encourage economic development, reduce barriers to investment, and support both business and housing growth by allowing eligible developers to defer certain development impact fees over time rather than pay them upfront.The newly approved amendments clarify affordable housing eligibility requirements and establish a standardized methodology for developers who choose to pay off deferred fee balances early through a lump-sum payment.“This is not designed to waive or forgive development fees,” Dignam said. “The city is still financially protected under the proposed structure. What changes is the timing of the payment.”Under the updated policy, affordable housing developments seeking eligibility for the deferred fee program must dedicate at least 51% of units to low, very low, or moderate-income households. Those affordability restrictions must remain in place for a minimum of 10 years through a recorded agreement approved by the city attorney.Dignam said staff attempted to balance encouraging affordable housing projects while avoiding requirements that would discourage participation.“The recommendation was intended to create a clear and objective standard rather than leaving eligibility open to interpretation on a project-by-project basis,” he said.The second major component of the amendment establishes a uniform early payoff incentive for developers participating in the deferred fee payment plan. Developers already have the option to defer development fees for up to 10 years without interest. The new amendment allows participants to voluntarily settle their remaining balances early at a discounted amount calculated using present-value financial principles tied to the city’s pooled investment earnings rate.“The city is not giving money away,” Dignam said. “It is accepting the present-day equivalent of what it would have collected anyway, just sooner.”The proposed resolution also includes safeguards intended to protect the city’s finances. Any incentive exceeding $100,000 must return to the City Council for approval, and the discount rate is capped at 3.5% annually unless the council chooses to revisit the policy later.Council members generally praised the proposal and the detailed financial presentation.Vice Mayor Ed McKervey said the concept reflected the “time value of money” and called the proposal “a creative solution.”“We want to encourage development,” McKervey said. “We want to encourage development, but the thing that we're always struggling with in California is that development fees are so high, and so we want to encourage that development.”Councilmember Raymond Beltran voiced some concern about the potential for large developers to take advantage of the program by entering long-term deferred agreements before paying them off early at significant discounts.“I don’t want to shoot ourselves in the foot by lowering or giving a 50% discount,” Beltran said, suggesting the city review the program after 18 months to evaluate its financial impacts.Mayor Greg Mesiter acknowledged the concern but noted the policy could be revisited if necessary.“If that’s happening, we’ve got a lot of growth going on,” Meister said. “It’s a good problem to have.”Councilman AJ Rivas also raised questions about potential risks but ultimately voiced support after hearing staff’s explanation.Before the final vote, council members amended the resolution to include a process allowing developers to appeal to the City Council if disputes arise regarding the payoff calculations.The amended resolution passed unanimously on a 4-0 vote.</div>

Block Source: Porterville Recorder

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The Porterville City Council unanimously approved amendments to the city’s long-standing deferred development fee payment program Tuesday night, creating a new early payoff incentive option aimed at encouraging development while improving the city’s cash flow. Engineering and Project Management Director Clayton Dignam said the program, originally established in...

Council Supports New Incentive Structure for Deferred Development Fees

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The Porterville City Council unanimously approved amendments to the city’s long-standing deferred development fee payment program Tuesday night, creating a

Council Supports New Incentive Structure for Deferred Development Fees

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