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Item 3.
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| City Council Regular | |
| Date: | 07/08/2024 |
| Title: | Public Hearing and Resolution establishing and revising Planning and Engineering Divisions' fees for FY25-FY26 |
| Presented by: | Anna Vickers, Planning Division Manager |
| Department: | Planning & Community Services |
| Presentation: | Yes |
| Legal Review: | Yes |
| Project Number: | N/A |
RECOMMENDATION
Staff recommends the City Council hold a public hearing and approve the proposed fee increases for FY25 and FY26.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
The Planning Division is presenting an updated fee schedule and associated resolution to the City Council for Fiscal Years 2025 and 2026. The attached resolution and exhibit reflect increases in many existing fees in an effort to cover the costs of providing services to the community. These are proposed changes to fees within the City Limits only. Any changes to fees charged by the Planning Division in the County will be subject to approval by the Yellowstone County Board of County Commissioners (BOCC). The Planning Division will approach the BOCC in August/September 2024 to discuss increasing FY 25 and 26 fees.
In summary, there are a variety of ways in which we are trying to accommodate bringing costs for all applications and permits in line with services provided:
· In general, Planning subdivision applications are proposed to increase by 5% in both FY 25 and FY 26. Engineering fees are incorporated into the subdivision fees and have been increased at a different rate. Engineering fees for FY 25 are proposed to increase by 30% and increase by 10% in FY 26.
· Exempt Plat review fees have been increased by 100% to $400. This increase in fee does not cover the amount of time spent processing exempt plats by staff. The fee increase reflects the maximum allowable fee per recent legislation HB874.
· Short term rental permits have been increased by 100%. This fee reflects the amount of time staff spends processing an application.
· Postage fees which are applicable for zoning applications have been updated to reflect the cost United States Postal Service charges for postcards.
· Zoning related applications that are resubmitted within 1 year of withdraw fees have been reduced. This is reflective of actual time worked on the associated application.
Historically, fee increases have been proposed every two years to reduce the impact of larger increases on the community and to better keep up with increases in the costs of providing these services. These increases are specifically to offset increasing cost of living raises for personnel and operating costs. The associated fee is reflective of the true cost of review and processing applications. Collectively, the Divisions estimate about $78,800 in new revenues as a result of the proposed fee increases over the course of two fiscal years.
The Engineering Division charges fees for services as a part of the overall fee for each application and review it conducts. Engineering fee costs are still below service level. Engineering is incrementally increasing fees until they are fully phased in. Engineering fees are reflected within the resolution.
In summary, there are a variety of ways in which we are trying to accommodate bringing costs for all applications and permits in line with services provided:
· In general, Planning subdivision applications are proposed to increase by 5% in both FY 25 and FY 26. Engineering fees are incorporated into the subdivision fees and have been increased at a different rate. Engineering fees for FY 25 are proposed to increase by 30% and increase by 10% in FY 26.
· Exempt Plat review fees have been increased by 100% to $400. This increase in fee does not cover the amount of time spent processing exempt plats by staff. The fee increase reflects the maximum allowable fee per recent legislation HB874.
· Short term rental permits have been increased by 100%. This fee reflects the amount of time staff spends processing an application.
· Postage fees which are applicable for zoning applications have been updated to reflect the cost United States Postal Service charges for postcards.
· Zoning related applications that are resubmitted within 1 year of withdraw fees have been reduced. This is reflective of actual time worked on the associated application.
Historically, fee increases have been proposed every two years to reduce the impact of larger increases on the community and to better keep up with increases in the costs of providing these services. These increases are specifically to offset increasing cost of living raises for personnel and operating costs. The associated fee is reflective of the true cost of review and processing applications. Collectively, the Divisions estimate about $78,800 in new revenues as a result of the proposed fee increases over the course of two fiscal years.
The Engineering Division charges fees for services as a part of the overall fee for each application and review it conducts. Engineering fee costs are still below service level. Engineering is incrementally increasing fees until they are fully phased in. Engineering fees are reflected within the resolution.
STAKEHOLDERS
The proposed fee increases were shared with the Home Builders Association, engineering and survey firms, and sent to those enrolled in receiving Planning Division email updates via CivicSend on June 11th and 12th. Fees were also posted on the Planning Division Website and Community and Development Services Facebook. Members of the public were encouraged to submit comments to the Planning Division by June 27th. Further, this public hearing at the City Council Meeting was advertised two times, June 21 and June 28. At this time only one comment was received and has been attached for council review.
ALTERNATIVES
The Planning Division continues to strive to provide the best customer and application review services in a cost- effective and timely manner. At the direction of the City Council, the Division is proposing fee increases every two years to reduce the impact of larger increases on the community and to better keep up with increases in the costs of providing these services.
The fee increase proposed by the Planning Division for FY25 and FY26 is in response to the ongoing and increasing costs to provide services to the development community and the community at large. The increase in Planning Division fees for the next two years will specifically help offset increases in personal services and operations and maintenance. The Division is careful to focus its fee increases on the costs for specific application and permit services completed by its staff and follows several guidelines:
· Fees should only cover permit and application processing
· Staff performs other duties funded from the County-Wide Planning Levy and the Federal Transportation Planning Program
· Many staff work on fee-based permits and applications, and transportation and community planning projects that are funded through the County-Wide Planning Levy and the Federal Transportation Planning Program, and this is a factor when estimating fee increases for the Division.
The Planning Division, in considering its fee proposal for FY25 and FY26, reviewed other jurisdictions in Montana to see how fees in Billings align with fees in places like Bozeman, Missoula, Kalispell and Great Falls. While fee structures are not all the same, and exact comparisons are not always possible even with the same types of applications, Billings fees are competitive - coming in lower than most communities in zoning fees and the same, or higher, in some subdivision fees. A city fee comparison will be provided as part of the presentation for this agenda item to provide a basic look at the differences.
The fee increase proposed by the Planning Division for FY25 and FY26 is in response to the ongoing and increasing costs to provide services to the development community and the community at large. The increase in Planning Division fees for the next two years will specifically help offset increases in personal services and operations and maintenance. The Division is careful to focus its fee increases on the costs for specific application and permit services completed by its staff and follows several guidelines:
· Fees should only cover permit and application processing
· Staff performs other duties funded from the County-Wide Planning Levy and the Federal Transportation Planning Program
· Many staff work on fee-based permits and applications, and transportation and community planning projects that are funded through the County-Wide Planning Levy and the Federal Transportation Planning Program, and this is a factor when estimating fee increases for the Division.
The Planning Division, in considering its fee proposal for FY25 and FY26, reviewed other jurisdictions in Montana to see how fees in Billings align with fees in places like Bozeman, Missoula, Kalispell and Great Falls. While fee structures are not all the same, and exact comparisons are not always possible even with the same types of applications, Billings fees are competitive - coming in lower than most communities in zoning fees and the same, or higher, in some subdivision fees. A city fee comparison will be provided as part of the presentation for this agenda item to provide a basic look at the differences.
- The City Council may approve of these fee increases and adjustments and continue to enable the Planning and Engineering Divisions to recover costs of providing these development services to the community.
- If the City Council does not approve of these fee increases and adjustments, the Planning and Engineering Divisions will be forced to look at other revenue sources to recover costs of providing these development services to the community, essentially subsidizing specific development projects with funding that should be allocated to community- wide planning efforts that benefit everyone.
FISCAL EFFECTS
The proposed fees will help cover the costs to the Planning and Engineering Divisions to provide services, resulting in additional revenues for the Divisions when services are delivered to customers for certain application types. The Divisions estimate about $78,800 in new revenues in FY25 and FY 26 under the new fee schedule based on the collected and estimated FY24 level of zoning, subdivision, and annexation applications, and general permit and compliance review activity.
SUMMARY
The Planning Division is proposing an updated fee schedule for Fiscal Years 2025 and 2026 to the City Council. The changes, which apply only within city limits, include a general increase in fees to cover service costs. Proposed fee increases include a 5% rise in planning subdivision and zoning applications for FY 25 and FY 26. The Division aims to gradually adjust fees biennially to minimize community impact and align with service costs, anticipating $78,800 in additional revenue over two years. Engineering fees are also adjusted to better reflect service costs. Changes in county fees require approval by the Yellowstone County Board of County Commissioners.