AGENDA #1
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TO: |
Roger L. Stancil, Town Manager |
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FROM: |
J.B. Culpepper, Planning Director Gene Poveromo, Development Coordinator |
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SUBJECT: |
Planning Department, Proposed Changes to Cap on Development Application Fees |
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DATE: |
June 6, 2007 |
As requested, we are providing follow-up information from the May 23 Work Session on:
NC case law from the 1990’s offered us guidance as to the reasonableness of a fee structure, and the Town’s authority to charge fees in order to cover the full cost of a particular regulatory program. In 2000, following review of this case law, an extensive study of fees was conducted. Significant fee increases were initiated for the Planning Department. We conducted a study of the estimated cost of staff time (all departments) spent on review of major applications (Master Plan, Special Use Permit, Major Subdivision, Site Plan Review), from the point of application to issuance of a Zoning Compliance Permit, over the course of a year. These figures were then used as a benchmark to determine the average staff cost involved in processing a major development application. Using the benchmark, the fee schedule was adjusted. As a result of the study, a cap on development application fees was introduced as well.
Subsequently, as part of the 2005-2006 Budget, the following adjustments were made to the Planning Department Fee Schedule:
In general (except as modified for certain types of applications, noted below), the Town’s policy, supported by guidance from the NC Courts, has been to recover 100% of direct Town costs of processing development applications. The law indicates that 100% recovery is acceptable and does not address limits on fee recovery such as a cap.
Footnotes on the proposed Planning Department fee schedule include:
The study in 2000 used a benchmark application and accounted for staff time from multiple departments. The resultant fees were significantly higher than the previous year because they attempted to recover 100% of direct Town costs of processing development applications. At the time, it was argued that, at some point, the increasing size of a proposed project ceases to create increasing needs for staff time. In reality, what we are finding is that the larger applications are more complicated and do require increased staff time. Because of concerns primarily associated with the then significant fee increases, a maximum amount for certain development application fees was initiated.
The 2006-2007 Special Use Permit fee schedule provides a base fee of $6,500 plus $25 per 100 square feet of floor area. We propose a 3.4% cost of service increase, as noted in earlier reports.
For reference, we provide information regarding several Special Use Permit applications and the associated Special Use Permit fee:
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Name of Development |
Square Footage of Special Use Permit Application |
Special Use Permit Fee Paid (does not include other application fees) |
Fee without Cap |
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Walgreens on Franklin |
12,000 sq. ft. |
$ 9,500 |
-- |
|
Castalia at Meadowmont |
76,000 sq. ft. |
$20,200 |
-- |
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Marriott Residence Inn |
85,800 sq. ft. |
$22,100 |
-- |
|
Greenbridge |
208,225 sq. ft. |
$58,456 |
-- |
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Residence at Chapel Hill North |
215,300 sq. ft. |
$60,000 (old cap) |
$ 60,325 |
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DEDI, Lot 5 |
275,715 sq. ft. |
$75,000 (capped) |
$ 75,429 |
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Residence Grove |
484,000 sq. ft. |
$75,000 (capped) |
$127,500 |
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East 54 |
511,985 sq. ft. |
$75,000 (capped) |
$134,496 |
We believe it is appropriate to adjust the fee schedule regarding maximum application fees for certain types of applications. The types of mixed use development proposals we have recently seen are increasingly complex and require extensive review. We recommend an adjustment to the fee schedule to reduce the types of applications subject to the fee cap.
We recommend that the proposed maximum application fee of $78,000 apply to three types of applications: Rezoning, Subdivision, and Zoning Compliance Permit (Final Plan) applications. With this change, the cap on fees would no longer apply to Master Plan or Special Use Permit applications. We recommend continuing to include the exception that, in the case of a Master Plan and a Special Use Permit submitted concurrently, the application fee is waived for the application with the smaller fee.