Agenda Date: 01/14/2025
Subject:
Title
Development Review Cost of Service Study and Amended 2025 Fee Schedule
Body
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From: |
James L. Becklenberg, City Manager |
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Prepared by: |
Tiffany Hooten, Finance Director |
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Presentations: |
Kevin Orton, Budget Manager Tiffany Hooten, Finance Director Matt Knight, Community Development Director |
PURPOSE:
Presentation on the cost of services study for development services user fees and recommended adjustments to the 2025 Fee Schedule. Development services user fees include subdivision review, site plan/rezoning review, master development plan review, major and minor plan amendments, historic district designation, tax credit application, variances, and other miscellaneous development review fees.
LONG-TERM OUTCOME(S) SERVED:
High-Quality Governance
DISCUSSION:
Fees are charged to customers, citizens, and other parties for certain city services. The purpose of a fee is to help defray the cost of providing certain city services. The purpose of a fee is not to raise general revenue.
Noted within the city’s Principles of Sound Financial Management, passed by City Council in 2018 and amended in 2023, Policy 3 - Revenues reflects “User fees shall be reviewed on a regular basis to calculate their full cost recovery levels, to compare them to the current fee structure, and to recommend adjustments where necessary. Competing policy objectives may result in reduced user fees and charges that recover only a portion of service costs.”
The Finance Department and Community Development Department conducted a cost of services study to review development review fees and is recommending adjustments to the 2025 fee schedule in alignment with updated cost to provide development review services. The recommended adjustments to the fee schedule are attached and referenced as Exhibit A.
BACKGROUND:
In 2023, City Council approved dividing development review fees between Public Works and Community Development Department to reflect the development review performed in each department.
In 2024, development review staff within Public Works were re-organized into Community Development. As a result, all development review is now completed within the Community Development Department.
The current 2025 fee schedule was adopted by resolution on December 3, 2024. At the time of adoption, a cost of services studies to review development review fees was still in progress. Now that this cost of services study is completed, an adjustment to the 2025 fee schedule is presented for City Council consideration.
The cost of services study looked at the number of employees that work on development review and the hours per review type. A total of 81 different fees associated with development review were identified. The fees reviewed included subdivision review, site plan/rezoning review, master development plan review, major and minor plan amendments, historic district designation, tax credit application, variances, and other miscellaneous development review fees.
Additionally, an indirect rate to recover the cost of auxiliary services were included as part of each fee. These auxiliary services include personnel in support departments such as Information Technology, Human Resources, Finance, the City Attorney’s Office, and the City Manager’s Office. Also included as part of auxiliary services is the software cost for development review staff.
As a result of the cost of services study, staff is recommending the following adjustments to the 2025 Fee Schedule to better align with the cost to provide development review services.
• Combining Public Works and Community Development fees into one fee to reflect the staff re-organization of development services from Public Works to Community Development
• 20 fee decreases (average decrease of $725.50 per fee)
• 55 fee increases (average increase of $2,155 per fee)
• 6 fees with no change
• 8 additional fees to reflect work already performed by development review staff
o ICC Test - Class A: $100
o ICC Test - Class B: $100
o ICC Test - Class C: $100
o ICC Test - Class D: $100
o Class M (Municipal ROW): $400
o State License - Plumbing: $50
o State License - Electrical: $50
o State License - Arborist: $150
A full redline of recommended fee adjustments are included as Exhibit A.
FISCAL IMPACTS:
Recommended adjustments to the 2025 fee schedule are attached and referenced as exhibit A.
STAFF RECOMMENDATION:
Direct staff to present the modified 2025 fee schedule as presented for City Council consideration at the January 21, 2025, City Council Meeting.
ALTERNATIVES:
1. Provide direction to staff to modify the amended fee schedule for City Council consideration at the January 21st, 2025, City Council Meeting.
2. Provide direction to staff to maintain the 2025 fee schedule as adopted on December 3, 2024 which does not include any changes to the development review fees.
3. Provide direction to staff to modify the amended fee schedule for City Council consideration at a later date.