New commercial and industrial development in town will continue for another year without paying a regional fee.
Los Banos City Council members suspended Regional Transportation Impact Fees, which are paid to the Merced County Association of Governments, for a second year with a 4-1 vote Wednesday.
"I'm not giving them another dime," Mayor Mike Villalta said.
Developers pay the RTIF when they build a project that will increase traffic levels. The money collected then goes into a fund to be used for regional traffic projects, such as the Highway 152 bypass, the Atwater-Merced Highway and the Gustine Truck Route.
Developers continue to pay local impact fees.
MCAG retained $9.6 million through 2012 in its RTIF fund, and Los Banos paid $1.7 million into it before the suspension last year.
MCAG Interim Executive Director Marjie Kirn said she was not surprised by the decision and expected a second year of suspension. She said the decision was made to boost business in Los Banos. "It's understandable," she said.
The decision will also be a drag on regional traffic projects, she said.
"It basically slows down the collection of our fees," Kirn said.
The MCAG board will discuss whether to redirect funds set aside for the Los Banos Bypass at its Feb. 21 meeting. The agency has been operating under a policy to hold all future funds for the bypass project, but the discussion could change that.
It would not be the first time the MCAG has pulled money pointed at the bypass. In May 2011, MCAG moved $2.3 million set aside for the Los Banos Bypass and put it toward the Merced-Atwater Expressway project.
Councilwoman Elizabeth Stonegrove, the only dissenting vote, has remained against suspension since the idea first surfaced in late 2011. She said anytime developers don't pay their fees, it eventually has to be covered by residents.
"That's going to be passed on for our children or maybe even in our lifetime we're going to suffer," Stonegrove said.
Los Banos is not unique in the fee suspension. Sanger, Paso Robles, Hanford and Fresno County have reduced or suspended impact fees.
Councilwoman Deborah Lewis said the absence of RTIF in Los Banos helps to make the city more appealing to business. She said Los Banos has realized no benefit from the time it charged developers.
"If it were up to me, I would suspend this indefinitely," Lewis said.
Los Banos' RTIF rates for commercial and industrial buildings were set between $1,409 and $12,082 per 1,000 square feet. The rate is dependent on the building's size, type and turnover rate.
Atwater, Gustine, and both Merced city and county continue to pay.
Villalta said MCAG needs to "show good faith" on the money planned for a bypass.
"You (need) to make good on what you said," Villalta said. "MCAG has not made good."
Enterprise reporter Thaddeus Miller can be reached at (209) 388-6562 or by email at
Enterprise reporter Thaddeus Miller can be reached at (209) 388-6562 or by email at tmiller@losbanos enterprise.com.