COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Planning and Building Department

DATE:

September 21, 2009

BOARD MEETING DATE:

October 6, 2009

SPECIAL NOTICE/HEARING:

14 Day/Interested Party Mailing

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Lisa Grote, Director of Community Development

SUBJECT:

Adoption of Planning and Building Department Service Fee Schedule Amendments

RECOMMENDATION

Adopt a Resolution amending the Planning and Building Department’s Service Fee Schedules.

BACKGROUND

The Planning and Building Department is proposing to amend its service fee schedules to add or adjust planning and building fees. In addition to changing certain planning and building fees, the Department is proposing to modify the Building Inspection Section’s fee schedule to make it clearer. The Department of Public Works is also proposing to amend two of its service fees for services they provide in conjunction with development proposals as indicated on the Planning and Building Department’s service fee schedules.

The Planning and Building Department has not increased or amended any planning and building service fees since the adoption of the fee schedules for Fiscal Year 2004/05. Those increases for FY 04/05 were the last ones imposed and were intended to cover all or part of the cost of operation and to assist the Current Planning and Building Inspection Sections to become as self-supporting as possible. The Long Range Planning Section continues to be partially funded by the General Fund. It was also the past practice to adopt multi-year fee schedule increases following new labor contracts to reflect COLAs incorporated into those contracts. As a result of the discussions regarding fees and services at the public hearing for FY 04/05 amendments, the Board of Supervisors convened a Planning and Building Task Force.

The Planning and Building Task Force was formed in late summer of 2004 to address constituent concerns raised after fees were increased during the FY 04/05 budget hearings. Constituents were concerned that the significant fee increases occurred during a period when permit processing time had greatly increased. No further planning and building permit fee increases have been recommended or authorized since 2004.

The Task Force found that because there was not enough staff to adequately handle the workload, many permits were not issued in a timely manner. As a result, additional staff was identified as a critical need for the Department. Task Force recommendations resulted in additional staffing being added and other positions being reclassified to create new advancement opportunities. Between the increases in staff in FY 06/07 and the reduction of permit fee revenue since FY 05/06, Current Planning and Building Inspection services have not achieved cost recovery.

In fall 2008, the Department and its assigned County Manager Analyst prepared and provided a Planning and Building Department Funding report to the County Manager. Two important findings in the report were that the Department has relatively high fees for some services when compared to the municipalities surveyed and that a “time and materials” model for service fees would decrease revenues from fees. The report also concluded that current permit fees should be adjusted to more accurately reflect the amount of work needed to provide service and explore additional opportunities to create new permits or fees. In light of that report, the Department is reexamining the services it provides for which no fees are collected.

DISCUSSION

1.

Authority

County Ordinance 2193, adopted April 10, 1973, authorizes the setting of the Planning fees by resolution of the Board of Supervisors. Ordinance 2512, adopted June 13, 1978, authorizes a similar process for setting Building Inspection fees by resolution. State law requires that fees not exceed the estimated reasonable cost of providing the service for which the fee is charged. Staff calculations show that the proposed fees would equal but not exceed the cost of the service the Department provides. Government Code Section 66014 also authorizes local governments to recover from permit applicants the cost of preparing the general plan and development regulations.

2.

Current Planning Section – Proposed New and Amended Fees

The Department is recommending the establishment or amendment of seven service fees to cover the cost of services the Current Planning Section has either been absorbing and providing at no cost to the public or that have not reflected the actual cost of providing the service. The new and amended fees for services include: Current Planning review fees for building permits, lot mergers, coastal development permits for lot line adjustments in the Coastal Zone, Williamson Act Program notices of non-renewal or contract amendment, research services, Design Review Committee public hearing for major revisions, and credit card processing fees. Each of the proposed new or amended fees is discussed below. The proposed amended fee schedule for Planning services is included as Attachment B.

a.

Planning Fee for Building Permit Plan Checking

This proposed new fee is to cover the cost associated with the Current Planning Section’s review of a building permit for conformance with planning regulations. Currently, when a building permit is submitted for review, copies of the application and plans with supporting documents are referred to a number of departments that have approval authority for the requested building permit. The building permit fees that are collected only cover the Building Inspection Section staff time for its review and processing. Current Planning does not receive any building permit submittal fees for its review to ensure conformance with planning regulations.

For the past twelve months, the Department has documented all the building permit plan check services Current Planning has provided for building permit reviews. These services by Current Planning include building permit review(s) at time of initial submittal, resubmittal reviews (document reviews prior to building permit issuance), and revision reviews (document reviews after a building permit has been issued). As is the case for all three types of reviews (initial, resubmittals, and revisions), some reviews, which tend to be for “minor” building permits, are conducted at our counter during normal business hours and are normally approved on the spot. The planning counter staff is currently supported only by planning fees received for discretionary planning permits. This new fee is proposed to cover the cost for staff’s time to review the proposed building permit(s) that are not considered “minor” and are not reviewed and approved “over the counter.” Because these “major” types of building permit reviews are not conducted at the counter, they require planners to check for conformance with zoning regulations and/or discretionary permits previously obtained prior to application for a building permit. An examination of the total building permit reviews performed last fiscal year (FY 08/09) indicated that out of 1,788 permits reviewed, approximately 48% were minor over the counter reviews and 52% were major type reviews.

Staff has estimated it takes approximately three (3) hours for each plan check for major type building permits. This includes the time required to review the submitted plans for conformance with applicable regulations, correspondence with the applicant, and providing any necessary notes or letters to the applicant indicating required modifications necessary for conformance with the applicable regulations. In addition, when further modifications are necessary, more plan checking is required to review the corrected documents for compliance. It is estimated that these resubmittal reviews take approximately one (1) hour to complete and document the results. Thus, the total estimated time for Current Planning to plan check a building permit is four (4) hours. An average of the current filled positions of planners’ salaries and overhead is currently $97.73/hour. Staff has rounded this hourly rate to the nearest $5.00 increment; or $100.00/hour. Therefore, the proposed building permit plan check fee is $400.00 and will include one resubmittal plan check review. Additional resubmittal reviews, in excess of one, will incur a resubmittal fee of $100.00, as such resubmittal plan checks typically require one (1) hour of staff time to complete.

Revisions to issued building permits may also require Current Planning’s review for compliance. Staff has determined that these reviews are typically completed in approximately 1.5 hours. Applying the average hourly rate above, the proposed building permit revision plan check fee would be $150.00. The amended fee schedule (see Attachment B) indicates these new fees for these services.

b.

Parcel Merger Fee

Currently, the Department does not charge a fee for providing parcel merger services. These services include administrative application processing, project assignment to a planner, review and verification of the parcel legal descriptions for the requested merger, legal document formatting, legal document recordation with the County Recorder, and file management. The Department has determined that it takes approximately four (4) hours to complete the tasks necessary to process these requests. The proposed merger fee would therefore be instituted at the rate of $400.00.

c.

Coastal Development Permit Fee for Lot Line Adjustments

The Current Planning Section also processes lot line adjustment applications pursuant to the County’s Subdivision Regulations (Chapter 10). If a proposed lot line adjustment is located in the Coastal Zone, a lot line adjustment also requires an additional application and issuance of a coastal development permit pursuant to the County’s Local Coastal Program and State Coastal Act regulations. Most lot line adjustments are approved by the Community Development Director with no public hearing. However, if a public hearing is required for the coastal development permit, the current fee schedule sets forth a fee of $3,489.00. Based on its analysis of current data, the Planning and Building Department now considers this fee to be excessive. Therefore, staff proposes that the current “staff level” CDP fee be applied for coastal development permits in conjunction with lot line adjustments in the Coastal Zone. This fee is currently $1,782.00. The Department is proposing to amend the current fee schedule to include the specific language and cost when a coastal development permit is required in conjunction with a lot line adjustment application to make the fee schedule more clear.

d.

Williamson Act Non-Renewal and Amendment Fees

(1)

Non-Renewal Fees

The County is currently updating its processes and procedures as a result of the State’s 2007 audit of the County’s Williamson Act Program. During this time, property owners have been requesting non-renewal of their Williamson Act contracts with the County. The non-renewal occurs over a 10-year period, during which time the property taxes on affected parcels are adjusted upward on a yearly basis. There are administrative costs incurred by staff to research, prepare, and record the non-renewal documents with the County Recorder. The current fee schedule sets forth a fee of $1,782.00 for processing a non-renewal of a Williamson Act contract. Based on consideration of current data, the Planning and Building Department now considers this fee to be excessive. Staff has re-calculated the cost for this service and has determined that it takes, on average, approximately four (4) hours to complete the tasks necessary to process these requests. Therefore, staff proposes to reduce the fee to $400.00. The amended fee schedule (see Attachment B) indicates this reduced cost for this service.

(2)

Amendment Fees

As part of the public coordination process and changes in the County’s procedures, property owners may need to amend their contracts to reflect current conditions. An example of this type of project includes adjusting the property boundaries of the contracted parcels or amending the scope or type of contract. In the past, multiple owners could combine their holdings under one contract. However, if any of the owners in a group contract files for non-renewal, the original contract requires amendment to reflect deletion of the property belonging to that owner. Amending a contract requires nearly the identical application and review process as that for new contracts and, therefore, an equivalent amount of staff time. The current fee schedule sets forth two fees for new Williamson Act contracts; one for projects with less than 40 acres and another for projects with more than 40 acres. The Department proposes the use of a fee equal to the lower of these two fees, $5,783.00, for amending an existing contract. The current fee schedule does not specifically indicate a fee for this service. This service for amending a Williamson Act contract has been added to the Planning Service Fee Schedule (see Attachment B).

e.

Research Fees

Current Planning provides research assistance and services to the public. Most inquiries require locating project files and notifying the public when the file(s) is located. However, other types of research may include researching a particular topic or issue for an area or specific parcel. The current practice is to provide the public with the first hour of research for free and any additional time over one (1) hour at a rate of $122.00/hour. The proposal is to provide the first half hour for free and any additional time at the rate of $100.00/hour. These fees would not apply for any research service normally provided at the front counter by staff that requires a nominal amount of time, such as file retrieval.

f.

Design Review Committee Public Hearing for Major Revisions

On occasion, applicants will propose modifications to the approved design of their projects. Most of the time, these changes are considered minor and can be approved by the Community Development Director without any Committee involvement. However, some proposed modifications are not considered minor and must be reconsidered by the Design Review Committee or Design Review Officer. The current practice has been to charge the applicant a fee of $451.00 for this service. Staff has evaluated all the tasks necessary to process the applicant’s request, including: project intake, referrals to other departments and agencies for comment, field analysis, project analysis for compliance with applicable regulations, agenda preparation, public notification, packet preparation, public hearing attendance, decision letter preparation and mailing, and file and document management. It takes, on average, approximately 15 hours to complete the tasks necessary to process these types of requests, and therefore, staff is proposing to increase this fee to $1,500.00.

g.

Credit Card Processing Fee

The Department is proposing to increase the current credit card processing fee from 2% to 3% to reflect the direct cost the credit card providers charge the Planning and Building Department. The current processing fee has been in effect since 2004 and has remained flat even though credit card companies have increased the service fees they charge the Department. The small increase proposed would cover the increased cost to the Department. The Planning Fee Schedule would be amended to reflect this increase.

3.

Long Range Planning Section – Proposed General Plan Update Fee

The Long Range Planning Section does not have any sources of revenues for any significant level of cost recovery. The Section therefore relies entirely on support from the County’s General Fund.

As part of its work plan, over the course of the next few years, the Long Range Planning Section will be working on significant changes to the County’s General Plan and Zoning Regulations.

In order to supplement the General Fund contribution to the Section, a “general plan update” fee is proposed for the Current Planning Fee Schedule. Currently, there has been $1 million budgeted for the General Plan Update project, but while this initial amount is expected to provide enough to begin the process, it will not cover all costs for the update. The new General Plan Update fee is only intended to supplement the budget for this project.

As part of determining this new fee, the Department contacted a number of other Planning and Building Departments in the Bay Area and found that these jurisdictions charged a “General Plan” fee. A number of organizations include this fee as a surcharge to other planning permit fees. The range for this fee varied from $35.00 to $50.00. The Department is proposing to include a flat fee of $40.00 for every planning application to help fund the General Plan Update. Simple permits, such as tree removal permits and permit exemptions less than $500.00 (e.g., design review exemptions, coastal development permit exemptions, etc.) will be exempt from this surcharge. During FY 08/09, the Planning Department received 403 planning permit applications. Of this total, 193 permits would fall in the exempt category and 210 would be required to pay the surcharge. At this level of permit applications, $40.00 per planning permit is projected to provide approximately $8,400.00 in additional revenue to help offset the General Plan and Zoning Regulations update project on a yearly basis.

4.

Building Inspection Section – Proposed New and Amended Fees

a.

FEMA Special Hazards Zone Plan Check Fee

On occasion, there may be proposed new construction or additions in a special hazards zone (flood zones, floodways, tsunami wave run-up areas, etc.) as designated by FEMA (Federal Emergency Management Agency). Any project in one of these special areas requires the local jurisdiction to review additional submittal materials (forms and plans) as part of the plan checking process for conformance with local and federal requirements. Currently, the Department does not charge any additional fees for this service. The Department is proposing an additional fee to cover the time it takes staff to review these documents. Staff has determined that it requires one (1) hour to review materials related to such matters and determine if the submitted plans and proposed materials and construction methods comply with the regulations. In addition, prior to a final inspection, the applicant is required to submit a final letter of conformance from a licensed professional indicating that the project was constructed in conformance with the plans and applicable regulations. Staff estimates it takes approximately 1/2 hour to validate the final document(s) and complete the administrative procedures. An average of the building inspection plan checkers’ salaries and overhead is $130.00/hour. Staff is therefore proposing a fee for this service to be set at $195.00. The Building Inspection Fee Schedule (see Attachment C) would be amended to reflect this new fee.

b.

Credit Card Processing Fee

As initially discussed above under Section 2.g., the Department is proposing to increase the current credit card processing fee from 2% to 3% to reflect the direct cost the credit card providers charge the Planning and Building Department. In addition to amending the Planning Service Fee Schedule, the Building Inspection Fee Schedule would also be amended to reflect this increase.

5.

Building Inspection Section – Revised Fee Schedule

The Department is also proposing that the Building Inspection Section modify its fee schedule in order to clarify and simplify it. A number of fees would be either eliminated or replaced with a single flat fee that staff has determined to equate to the cost of providing that service. The current fee schedule also includes fee tiers for some miscellaneous types of building permits (e.g., electrical permits are tiered based on the number of ampere capacity circuits) that are also proposed for modification. In an effort to simplify this fee schedule, the Department is proposing an averaging method for some fee tiers. In general, the two lowest fee tiers have been averaged to determine the new flat fee as the majority of projects are typically in one of the first two tiers.

The proposed revised fee schedule for the Building Inspection Section is included as Attachment C.

6.

Department of Public Works – Proposed Amended Fees

The Department of Public Works (DPW) has been supporting the Planning and Building Department with its review of proposed developments in the unincorporated County areas for many years. In prior years, the Departments worked closely and shared both resources and funding. This has allowed Public Works staff to interact with Planning and Building Department staff seamlessly in order to provide the public a simple permit process.

However, as of FY 2008/09, when Public Works began collecting fees for permits authorizing encroachments into the public right-of-way, the Planning and Building Department and Public Works agreed to cease funding assistance completed by Public Works staff through a direct charge and reimbursement process on the assumption that the existing fee schedule and new encroachment permit fees would adequately support Public Works staff.

After a one-year trial, the Department of Public Works has determined that the loss of funding from the Planning and Building Department has impacted the Road Operations Budget (which is the Section of the Department of Public Works that assists the Planning and Building Department with development proposals).

DPW currently charges building permit or planning permit applicants $258.00 to review applicant’s stormwater pollution prevention plans and provide field site inspections for conformance with approved plans. Staff has calculated that this fee covers staff time for office and field reviews for a majority of the projects applicants submit. However, DPW has found that when a project is revised or modifications are required by DPW, additional review time is required by staff that is not compensated by the current fees. The current fee schedules include one review and two site inspections and indicate that any additional time beyond these services are to be charged at the hourly rate of the staff involved. Staff has determined that additional services are difficult to track and bill. DPW has calculated that it takes, on average, approximately one (1) hour to either review revised plans or perform site inspections, including any documentation. DPW has calculated the average salaries and overhead for the engineers responsible for these services to be $100.00/hour. Staff is proposing to amend the fee schedules to charge a flat fee (instead of an hourly rate) of $100.00 for each additional service (either plan review or site inspection) they provide beyond the one time plan review and two site inspections. DPW staff believes this method will help streamline the accounting processes currently in place.

DPW also charges building permit or planning permit applicants (if a planning permit is required prior to the issuance of a building permit) a $400.00 review fee per case for project and field review. Staff has determined that this fee does not cover the cost of services DPW staff provides applicants. During the past year, staff has determined all the additional services they provide applicants for their building and planning permits, both directly and indirectly. Some examples include assisting the Planning Commission at public hearings on either general or project specific questions regarding DPW conditions of approval or responsibilities, reviewing CEQA (California Environmental Quality Act) documents for compliance with DPW requirements, and providing staff assistance at various design review committee public hearings. Staff has determined the current fee will cover staff’s time to review the proposed project and provide two site inspections. However, if an applicant modifies their project or DPW requires modifications to the applicant’s proposal, staff is proposing an additional fee of $100.00 for each additional service provided.

These two fee amendments have been included in both the Planning and Building Service Fee Schedules. See Attachments B and C.

7.

Community Outreach

The Planning and Building Department initiated a community outreach program to communicate the proposed fee increases and amendments to the public. The program included notices and handouts in the Development Review Center lobby, reception area, and counter areas, posting on the Department’s website with a summary document and background memo and a direct mailing to over 1,100 applicants, contractors, professionals and homeowners who have submitted for either a planning or building permit application from January to July 2009. The direct mailing included a copy of the summary document posted on the Department’s website. A copy of the summary document is included as Attachment D. The public’s response during the past two months has been mixed. There has been both an expressed understanding of the new proposed fees for services we currently provide at no cost to the public and concerns that the new and amended fees are proposed at a time of economic difficulty and uncertainty in the construction industry.

8.

Effective Date for New and Amended Fee Schedules

Section 66016, et seq., of the California Government Code requires that all local agencies hold a public hearing to consider any proposed new fees. In addition, any action adopting a fee or charge shall be effective no sooner than 60 days following the final action. The effective date for the proposed fee schedule increases or modifications would therefore be Monday, December 7, 2009.

County Counsel has reviewed the staff report documents, Fee Schedules, and Resolution as to content and has approved their form and substance.

The approval of the Planning and Building Department’s service fee amendments contributes to the Livable Communities 2025 Shared Vision outcome because the service fees fund the services necessary to ensure that growth occurs near transit, promotes affordable, livable connected communities and the adjustments are consistent with State law that requires fees not to exceed the estimated reasonable cost of providing services.

FISCAL IMPACT

The Planning and Building Department service fees proposed in this report cover the cost of Current Planning’s review for building permits, lot mergers, coastal development permits, Williamson Act contract non-renewals and amendments, research, General Plan Update surcharge, and FEMA document review services are estimated to generate $180,000 annually.

ATTACHMENTS

A.

Resolution Amending Planning and Building Inspection Service Fee Schedules

B.

Proposed Planning Service Fee Schedule

C.

Proposed Building Inspection Service Fee Schedule

D.

Copy of Public Notice Summary Table for Proposed Fee Increases and Amendments