AGENDA #11a

 

BUDGET WORKING PAPER

 

TO:                  W. Calvin Horton, Town Manager

 

FROM:            Sonna Loewenthal, Assistant Town Manager

 

SUBJECT:       Development Review Fees

 

DATE:             April 2, 2003

 

 

A Council member has asked how we would need to modify our development review fees for 2003-04 in order to generate revenue that meets our expenses of development review.

 

BACKGROUND

 

During 2001-02 we conducted a study of time spent on the various aspects of development review, including work related to all permits issued by the Planning Department, Engineering Construction Permits and Building Permits issued by the Inspections Department.  Our study used several methods to estimate time and costs, but most of it related to keeping track contemporaneously of time spent by several dozen people.  The study lasted a year, plus planning time before and analysis time after that 12-month study period.

 

We also reviewed the audited numbers to accumulate revenues generated by these permit fees.

 

We found that in 2001-02, our costs and revenues related to development review were as follows:

 

            Costs:               $1,256,592

            Revenue           $1,022,369

 

DISCUSSION

 

On January 27, 2003, the Council adopted the Land Use Management Ordinance, and it became effective the next day.  Therefore, we believe that these 2001-02 cost and revenue figures are not a reliable guide to what we should expect in 2003-04.

 

Application activity had slowed during the previous 6 months before enactment of the Land Use Management Ordinance (LUMO), because potential applicants were apparently waiting to see exactly what the new ordinance would contain and because several hearings were devoted to development of the new ordinance. The February 17 public hearing night had no hearings scheduled.  For two months after adoption of the LUMO, there were no applications submitted for new development under a Major Subdivision or Special Use Permit.   It may take a few more months for the flow of applications to return to normal.

 

Even while the flow of formal applications has slowed, the staff has been more than fully occupied in talking with potential applicants and their engineers, architects, builders and surveyors, as well as to citizens who need information about newly applicable procedures for residential development. We believe that it is possible that the amount of staff time spent this way may gradually decrease as members of the local development community become more familiar with the new requirements and standards, and as the staff is able to produce better written guidance.  The staff is also working on developing and following the most efficient procedures for reviewing development applications.  We expect that amounts of staff time spent per application may also gradually decrease.

 

NEXT STEPS

 

During the first year after enactment of the Land Use Management Ordinance, Town staff, local developers, and local builders will all be working to make the new ordinance work.  By February 2004, we should have worked out a reasonably efficient process of staff review, and the local development community will be more familiar with the process and standards.  I believe that we could at that point begin a new study of costs related to development review.  If we begin in January 2004 recording time spent, we could have a study completed by February 2005, in time for budget decisions for 2005-06.