Staff recommends the City Council hold a public hearing and approve the proposed fee increases for FY21 and FY22.

The Planning Division is presenting an updated fee schedule and associated resolution to the City Council for Fiscal Year 2021. The resolution reflects 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.

The Planning Division is proposing a 10% increase in most of its fees. The Planning Division’s fees were last increased in 2018. At that time, the fees were increased 10%. 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. A 10% increase will help offset increasing personnel and operating costs and reflect the true cost of review and processing applications.

The Engineering Division charges fees for services as a part of the overall fee for each application and review it conducts. The fees as presented in the resolution are reflective of an increase in the existing Engineering fee to be closer to the actual cost of providing the services.  

The Planning Division has also proposed a fee structure for fees associated with the adoption of Project Re:Code. Though the new code has not yet been adopted, it is important to put the fee structure in place in anticipation of its adoption this fiscal year. The fees will not be effective until the adoption of Project Re:Code. The fee amount for each application or process type was estimated by the Planning Division based on the estimated time each application type would take with an average staff cost.

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 $25,000 in new revenues in FY21 under the new fee schedule based on the collected and estimated FY 20 level of zoning, subdivision, and annexation applications, and general permit and compliance review activity.  The change in costs to customers ranges from $3-$13 for some permits to $400-$500 for some larger subdivision applications (see Exhibit A of the attached Resolution).

The proposed fee increases have been shared with the Home Builders Association in March 2020. Additionally, the information was provided in an information notify me email received by the development community. Further, this hearing at the City Council Meeting was advertised three times beginning June 5, 2020.

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 $25,000 in new revenues in FY21 under the new fee schedule based on the collected and estimated FY 20 level of zoning, subdivision, and annexation applications, and general permit and compliance review activity.  The change in costs to customers ranges from $3-$13 for some permits to $400-$500 for some larger subdivision applications (see Exhibit A of the attached Resolution).

The 10% fee increase proposed by the Planning Division for FY21 is in response to the ongoing and increasing costs to provide services to the development community and the community at large. The 10% increase in Planning Division fees for the next two years (FY21-FY22) will specifically help offset increases in personal services and operations and maintenance.  There is one new fee associated with Exhibit A of the attached Resolution which is a fee for phased subdivisions. This is a process that was a result of the 2017 Legislature. Billings has not seen many phased subdivisions since its inception, but should have a fee. The process entails both Planning Board and Governing Body review. The fee is commiserate with the Final Plat fee. Additionally, two fee's were raised more than 10 percent. The Sign bond fee has increased from 55 dollars to 100 dollars to reflect the actual cost of the sign replacement. The commercial plan review fee has increased from $22 to $115. This reflects one hour of staff time towards this review process. It has historically been a nominal fee because of past financial contributions between Planning, CE and Building for a staff position that conducted plan reviews. However, that structure is no longer in place based on the use of building permit fees for non-building code related items.

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

Not all the Division's fees increase under this proposal. Sign permit fees and exempt plat processing fees will remain the same. Sign permit fees are calculated on a square foot basis per sign size and generally cover review costs. Exempt plat fees are set by State Law at $200 and can only be changed by the Legislature.
 
The Planning Division, in considering its fee proposal for FY21 and FY22, 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 consistently lower that Missoula, similar to Bozeman in some fees, and moderately higher than Great Falls. More information on community comparisons will be provided during the Council presentation.