Development Services Review. Final Report. Zucker July 2016

*

260,288 **

Engineering 780,865

28,456 -

-

492,121

896,127

182%

Planning

2,500,756 -

-

-

130,923 2,369,833 1,292,307 55%

Total

4,746,413 56,922 133,162

130,923 4,165,118 4,665,810 112%

*Based on 1 of 11 staff positions. **Based on 3 of 9 positions.

As can be seen in Table 2. Both Building (190%) and Engineering (182%) exceed 100% full cost recovery and Planning is less than full cost at 55%. This distribution is not unusual and many developers actually tend to prefer this distribution. We believe that all three taken together at 112% meet the full cost recovery goal. Nevertheless, it appears that Planning fees should be increased. As pointed out in this report, there is need for some increased staffing, particularly in Engineering as well as needed revenue to build the reserve account. The City’s desire to recover all of the costs associated with development through fees is an admirable goal, but we question if it can, or should be, fully achieved. We believe there are instances when the General Fund should provide supplemental funding because the service being provided represents an activity that promotes the greater good of the community. An example of an appropriate General Fund subsidy would be Code Enforcement and long range planning. The engineering function is also in Fund 206 even though some of this staff work on CIP projects, public counter and floodplain management. This cost should be pro-rated back to each of the relevant CIP projects or the General Fund. 7. Recommendation: The budget for development related departments should include some portion of General Fund dollars to support common good activities for which a full cost recovery fee is inappropriate. Fees Our numerous studies throughout the country have revealed a consistent attitude expressed by developers that they are more interested in short timelines and clear, consistent processes than the cost of permits. The permit fees are a very small part of the project. This attitude, however, is not universally shared by developers when the subject changes to development impact fees. We will confine our comments to permit related fees. The City is currently in the process of having a consultant (NBS) prepare an updated fee study to validate that the fees being collected for various development related activities are generating the revenue necessary to cover the cost of those services. We

Morgan Hill, California

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Zucker Systems