FY 2018-19 and 2019-20 Adopted Operating and CIP Budget

Development Services Fund In late 2015, early 2016, a review of the City’s land development services (planning, building, and engineering) processes and service delivery methods was conducted by Zucker Systems. As part of the recommendations presented in the Zucker report, a restructuring of the former Community Development Department was affirmed by Council in August 2016, and resulted in the creation of the Development Services Department. The Development Services Department is the ultimate body responsible for land development services and review and includes the planning, building, and land development engineering team. Including the land development engineers in a focused development review team is one of the more significant changes and considered an important step in streamlining the process and ensuring internal and external accountability. Staff will provide an update on the implementation of the Zucker study in the coming months. The Development Services Fund is a special revenue fund that is entirely supported by fees paid from developers and residents for planning, building, and land development engineering services. This fund has experienced noticeable fund balance growth during the past several years due to the surge in building activity resulting from the backlog of housing allocations and a slow resurgence of commercial and industrial development. However, the fund has been tapping into its fund balance since FY 15-16. In November 2017, the Council adopted an updated development fee schedule to be phased in over a two year period beginning in January 2018, with the remaining 50% to be implemented the following year. Even with the updated user fees, the fund is projected to continue to have an annual structural deficit of approximately $450,000. This is primarily due to time spent on development activities that recover little to no cost, such as front counter services, responding to public inquiries, tree removal permits, use permits for non-profits or special projects. In addition, personnel costs, overhead, internal service charges, and costs for supplies, outside services, and technology increased at a rate higher than the assumed increase in development revenue. Furthermore, fees are based on average time for processing, the more complicated the case, the more time is spent assisting the applicant in the application process. This extra time is not incorporated into the cost recovery model. The fund is projected to deplete its fund balance and rely on support from another fund by FY 21-22 if all assumptions related to both revenue and expenses, as described below, hold true.

RECOMMENDED BUDGET MESSAGE 21