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Dispute over city pro-rata credit takes months to sort through
If the first instance in which the city of Yuma's pro-rata payback law was used is any indication, the current law isn't working and is so complicated it requires even lawyers to spend months trying to figure out whom owes who what.
The Sun has learned that a claim filed with the city in December 2002 for nearly $800,000 worth of payback amounts owed to developer Brian Hall wasn't settled until August 2003 after months during which city staff and Hall's representatives negotiated back and forth over the amount Hall claimed the city owed him for not properly calculating the preliminary fees or credits due him for streets and parks he built beginning in 1995 and involving 15 different subdivision phases.
All of the subdivisions are in the Yuma valley, which is currently the only area in the city in which the pro-rata law applies.
"There was never a doubt that the paybacks were owed," said City Attorney Steve Moore. "And they were always available to the developer. The difficulty was in the computation of the amounts."
Both sides say they are satisfied with the final amount the city agreed to pay Hall and are hoping a new citywide impact fee being planned for Yuma in place of the current limited pro-rata law will take care of any future problems.
The current pro-rata law applies to two areas in the Yuma valley where development was thought most likely to take place.
The idea behind the law is simple. If the first developer in an area builds streets and parks that other developments will eventually benefit from when they are built, the first developer gets paid back a certain amount from future developers as each new development is built, with the city acting as a holding account for the money.
"That's the theory," said Jeff Snow, who handles financial matters for Hall.
"If it were all that simple, I'd say 'hurrah,'' Hall said.
But there are several problems with the current city pro-rata law.
One is that the city doesn't automatically have to return any pro-rata amounts paid by later developers to the first developer unless the first developer asks for the money.
And there is no time limit on when the developer can come back and ask for the money, Mike Steele, community development director, said.
Asked why the city doesn't just voluntarily pay a developer back the money it owes him as new developments come online, Steele said, "The payback is an option that the developer pursues."
Steele said he was surprised to learn that Hall had hired an attorney and asked for his payback amounts by filing a settlement claim with the city.
Snow defended Hall's use of an attorney, saying the calculations that are used to arrive at payback amounts for streets and parks are so complicated, it takes an attorney to sort them out.
Hall said he doesn't believe the city was intentionally trying to avoid paying him his payback amounts.
In the end, he noted, he got back everything from the city he had asked for.
Now, he continued, he's more eager than ever to see the city change its pro-rata law by coming up with some sort of a simple, citywide impact fee to charge developers.
The city intends to hire a consultant who will work with the Yuma community to devise a new citywide impact fee program.
The draft program that the consultant comes up with will be presented to the Yuma City Council in December, which will start a 60-day notice period. The final plan should be adopted by the council in March 2005 and become effective in June 2005.
T.M. Shultz can be reached at firstname.lastname@example.org or 539-6852.