AGENDA #4b

BUDGET WORKING PAPER

TO:                  W. Calvin Horton, Town Manager

FROM:            Roger S. Waldon, Planning Director

SUBJECT:       Additional Questions About Proposed Fee Increase

DATE:             May 17, 2000

RESUBMITTED:      JUNE 5, 2000

You have forwarded comments from a Council member about the proposed increase in development application fees.  This memorandum offers some thoughts in response.

1. Each project needs to pay an application fee and then, if the project is approved, another fee for a Zoning Compliance Permit that is 50% of the initial fee.

That is correct.  The amount of staff time spent processing final plans after a project is approved is approximately half the time spent on processing an application from initial submittal through Council or Planning Board approval.   Therefore, if the initial application fee for a Special Use Permit application were to be $10,000, the applicant would pay an additional $5,000 for final plan review if the Special Use Permit were to be approved by the Town Council.

2. How would costs affect proposals for expansion and renovation?

If an expansion or renovation could be done with simple issuance of a building permit or, in the case of very small expansion, with issuance of an administrative Zoning Compliance Permit, the proposed increase in fees would have no impact.  For those expansions triggering the need for a Special Use Permit or Special Use Permit Modification, or Site Plan Approval by the Planning Board, the new fee structure would increase the application fees paid over the current fees by a factor of 3 or 4 or more.  

We note that there are two components of application fees:  a “base” fee, and a “per square foot” component.   For a Special Use Permit Modification, the proposed base fee increases from $1,350 to $5,000.   The proposed fee structure is designed such that there is a greater percentage increase, over the current fees, for larger projects (over 25,000 square feet);  a smaller percentage increase over the current fees for smaller projects.  The Council could choose to adjust the proposal by lowering the base fee and increasing the “per square foot” fee.  This would have the affect of shifting even more of the cost burden to larger projects, and make it less expensive to pursue a modest expansion of an existing facility.

3. Could the fee structure be designed on a sliding scale?

Both the current and the proposed fee schedules are structured on a sliding scale.  The variable is the component of cost that is “per square foot” or “per lot created.” 

4. What about exemptions for non-profits and churches?

We currently exempt only subsidized housing applications and Town applications (so that we don’t pay ourselves).  All other types of applications have paid application fees historically, including non-profits, churches, other governments, schools, and the University.   We have surveyed other municipalities in North Carolina to ask if any of them include such exemptions in their fee schedules.  A summary of that information is attached.  Very few exemptions are routinely granted.  We also note that none of these municipalities has fees as high as those being considered in Chapel Hill.

5. Could there be changes in the development review process that might result in greater efficiencies and therefore save money?

Yes.  Chapel Hill’s review processes are very staff-intensive.  A different set of processes could very well be accompanied by different levels of staffing commitments.  The process for change would be amendment to the Development Ordinance.