AGENDA #10d

BUDGET WORKING PAPER

TO:                  W. Calvin Horton, Town Manager

FROM:            Roger S. Waldon, Planning Director

SUBJECT:       Response to Recommendation from Citizen Budget Committee Regarding Fee Awareness of Budget Reduction

DATE:             April 27, 2005

You have requested a response to a recommendation made to the Town Council on April 11 by the Council’s Citizens Budget Subcommittee. The April 11 report of that Committee recommended that changes be made in the Planning Department, through a combination of revenue enhancements and expense reductions, to achieve a $145,000 savings in the Department’s base budget for the 2005-06 fiscal year.

I have studied the Committee’s report, and offer the following comments for your consideration.

Fee Increases:  Our budget consultant (MAXIMUS) suggested that there is room in our current development application fee schedule for increases in the fees we charge applicants.  I agree with this assessment, and indicated agreement to the consultant.  You and I discussed this idea, and you asked me to prepare a proposal for adjusting our application fees.  I have done so, and forward those ideas to you in an accompanying Budget Working Paper. 

I believe that it would be reasonable and justifiable to increase application fees as we suggest in that paper.  If the Council were to agree to make those recommended adjustments, I estimate that approximately $40,000 to $50,000 in additional revenue would be generated.  The estimate is rough, however, because we cannot predict what applications will be submitted next year.  I based my estimate on past levels of application submittals, with consideration of these proposed fee increases.

Cost Reductions:  I do not know of a way to reduce the Planning Department's costs unless we reduce services. The Committee's first goal, in the April 11 paper, is to "Maintain current level of service to citizens."  Embracing that goal, and examining our operations, I have not found any way to significantly cut costs.  Almost all of our costs are personnel costs (well over 90%).   We could look for ways to reduce copying costs, or reduce our already-low allocation for continuing training/education, but those components in our budget are not more than a few thousand dollars as is.  As I have reported to you previously, we are over-committed at present, and are not able to keep up with the workload demands being sent our way by the Town Council.  Things are falling through the cracks, and our primary emphasis is to not let any legally-required or Council-mandated work elements slip.  But other things are slipping.  There is simply no opportunity to reduce departmental costs without cutting services.  We discussed this at length with the consultant, and reviewed all the things we are doing to achieve efficiencies in our operations.

Summary:  I do not understand the basis for the Committee's recommendation to achieve a $145,000 combination of fee increases and cost reductions, while not cutting any services.  I believe that we can increase fees, and perhaps net an additional $40,000 - $50,000 in revenues.  I do not believe that we can achieve any significant reduction in costs without cutting services.