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Thread: Revising application fee structure

  1. #1
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    Revising application fee structure

    My small city (pop. 70,000) is looking to revise our application fees to attempt to capture a greater share of the cost of processing the applications.

    Here in Iowa cities haven't really determined true costs for processing applications and we want to stay somewhere near other cities as far as costs.

    What is the downside to being a city with higher application fees compared to similarly sized cities within the same state?

    Any other ideas on methodologies for raising application fees (things like Subdivisions, Planned Area Developments, Rezonings, Variances, Special Exceptions, etc.). My city already has preliminary fees which is a strategy I have seen in other communities.

  2. #2
    Cyburbian dandy_warhol's avatar
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    Quote Originally posted by TrueGreenCore View post

    What is the downside to being a city with higher application fees compared to similarly sized cities within the same state?
    Being labeld "anti-development". That's the main complaint we get. We recently capped our fees for larger projects and developers are still b*tching about it.
    In the end, we will remember not the words of our enemies, but the silence of our friends. -Martin Luther King Jr.

  3. #3
    Cyburbian Tide's avatar
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    You should be able to easily figure a base cost for reviewing certain applications:

    Take all of these into account:

    Man Hours
    Public Meeting Notifications (newspaper ads, signs, posters?)
    Paperwork involved
    Do you hire a board attorney?

    I'm sure you can figure more individual costs.

  4. #4
    Cyburbian dvdneal's avatar
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    I think our case is very opposite of others. We tend to like higher fees, it slows development. But we have a sprawl problem. The downside is that it makes the city less competitive than our neighbors when it comes to retail proejcts we want to locate here.

    I agree with the others, try to make everything cost neutral if possible based on hours for review and other factors.

  5. #5
    Cyburbian
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    Or get rid of your permit process. Shocking on this board, I know. However, if the builder is responsible for resolving all of the issues around the project (drainage, electrical issues, erosion, architectural, wetlands issues, etc), do you really need to go over every detail ahead of time? Not necessarily.

    You don't need a permit to shoot a gun. You just go down to the range. If the intent is to deter shooting someone else, then we examine the facts after the fact, rather than before every single discharge of a firearm. Traditional America was based on an after the fact system, rather than a Soviet style, rigid bureaucracy.

    In much of the country, you never needed a permit to build a deck on your own home. Now, you may need a permit to paint it a different color. It's not practical to deter renovations this way, nor is it practical to pay millions of Americans to do nothing but work this permit process. It isn't just inefficient, it deters any development.

    American companies are building overseas and finding that they don't have to wade through all of this in some countries. When they come back here, they are being stifled with red tape.

  6. #6
    Cyburbian stroskey's avatar
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    We are thinking about raising our fees in Marshalltown as well. I've crunched the numbers and on even the most basic rezoning we are losing hundreds of dollars through wages, publication notices, etc. I know IC and Mtown aren't comparable but after doing some research about what other cities in Iowa charge I know most of them WANT to raise permitting fees - it's just the political side of things that make it hard.

    Get out a spreadsheet and calculate the time you and the clerk spend on various items, multiply that by the wages (including benefits) and then add in the real costs, such as printing and putting up signs. That amount should be your permit fee and when you present the fact that your city is losing money it should be an easy sell. Why should the whole city have to pick up the tab for one person's permit? You could make the fees for a single family residence less than other buildings if you want to be friendlier. Another benefit we see is that people won't apply for variances for frivolous things as much if the fee goes from $50 to $400 - it will weed out the applications that reall should have never been filed.

  7. #7
    Cyburbian fringe's avatar
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    The ICC (building codes publisher) develops and makes available valuation data based on building type, use, etc. expressed in SF costs, that reflect current activity.

    It provides localities with a very current, statistically based yardstick by which fees may be set, depending upon the locality's idea of how much of a department's cost is to be supported by fees.

    It is sort of in a parallel universe, but there may be something of value for you there.

    Google up ICC and look for Valuation data.

  8. #8
    Cyburbian Emeritus Chet's avatar
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    The last local gov't i worked for actually did "time studies" to determine the fees. For local gob'mint that was actually progressive.

  9. #9
    moderator in moderation Suburb Repairman's avatar
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    Quote Originally posted by Chet View post
    The last local gov't i worked for actually did "time studies" to determine the fees. For local gob'mint that was actually progressive.
    Between using a time study like Chet mentions, and the info contained in the ICC that fringe mentions, you should be able to get a pretty good picture of what your costs should be.

    One thing to keep in mind with the time study--make sure to account for employee benefits in the cost, rather than just salary.

    I have a feeling this kind of revisiting of low development application processing fees is becoming increasingly common as cities & counties start looking for revenue sources and notice how much they've been supplementing the developers.

    maxxoccupancy, I see where you are coming from, as far as all liability being on the builders/developers. However, the only recourse a purchaser has is judicial, which can be a very lengthy and expensive process. Also, while the builder/developer may have liability, their errors can cost lives. Imagine for a minute that during a drought, an improperly installed electrical system sparks a fire. The winds pick up, and suddenly you've got an entire street in flames. Going through the pre-emptive plan review and inspections is a service to protect the community from the mistakes of an individual. Substandard construction places lives at risk, and a pattern of that in a neighborhood can cause property values to plumet.

    Also, it appears the original poster is looking mostly at land development entitlement applications, rather than building permits. Processing a zoning variance requires significant staff time, board time and resources. Doing them for free means that the requestor is not risking anything. Proper fees can help discourage speculative applications or spite applications, because people have some financial risk, or a "dog in the hunt."

    "Oh, that is all well and good, but, voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country."

    - Herman Göring at the Nuremburg trials (thoughts on democracy)

  10. #10
    Cyburbian Tide's avatar
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    Quote Originally posted by fringe View post
    The ICC (building codes publisher) develops and makes available valuation data based on building type, use, etc. expressed in SF costs, that reflect current activity.

    It provides localities with a very current, statistically based yardstick by which fees may be set, depending upon the locality's idea of how much of a department's cost is to be supported by fees.

    It is sort of in a parallel universe, but there may be something of value for you there.

    Google up ICC and look for Valuation data.
    That's a great resource for building permit fees but for rezoning, variance, and subdivision fees there is no real formula. Looking at surrounding cities and counties is a good start too. Just FYI at one of my jobs the cap for a subdivision or site plan review was $20,000. We would hit that cap several times a year with large SDs or warehouses.

  11. #11
    Cyburbian
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    Quote Originally posted by TrueGreenCore View post
    Any other ideas on methodologies for raising application fees (things like Subdivisions, Planned Area Developments, Rezonings, Variances, Special Exceptions, etc.). My city already has preliminary fees which is a strategy I have seen in other communities.
    This may not apply to your particular city, but don't forget to account for the people you will have to pay to conduct their review of a project, like outside legal counsel or engineers. It's a good idea to require an escrow to be deposited and maintained to them. At the end of the project, the applicant is returned the balance.

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