Advocacy Council Concerned about Total Cost Recovery for Community Development Fees

The City's Community Development Department recently had a study done to determine the full cost of the services it provides when businesses seek permits for construction and development. This study was a precursor to the City considering raising fees in the Community Development Department for those services.

The Chamber’s Advocacy Council has submitted a letter to the Council expressing concern about this possibility. Members of the Council are concerned that increasing such fees will damage a construction industry just starting to recover from the Recession. Even more significantly, the Council is concerned about the premise of this approach which assumes that there is no benefit to the City nor the general public from these services and that all benefit will accrue to the entity undertaking new projects. This seems to fly in the face of the reality that the reason we have these requirements is to protect public safety, property rights, and infrastructure needs.

This item is scheduled to come before the City Council on December 10th. Read the Advocacy Council letter below:

November 1, 2013

Santa Rosa City Council
100 Santa Rosa Avenue, Room 10
Santa Rosa, CA 95404

Re: Community Development Department

Mayor Bartley and Members of the Council,

The Santa Rosa Chamber of Commerce Government Advocacy Council has attended the outreach meetings and reviewed the documents for the proposed increases by the Community Development Department. As a local organization representing the interests of almost 1000 businesses in the community, we would like to submit the following concerns for consideration:

It is our opinion that the premise for Total Cost Recovery is flawed and needs to be readdressed. The community benefits both directly and indirectly from development in the form of greater tax revenue, jobs, available services, and attraction for other businesses. In our opinion, community participation in the costs to develop is appropriate given the benefits received.
Costs of Services Billed – We believe that the report falls short in three key areas when proposing the basis for costs incurred:
1. The report utilizes hourly billing rates ranging from $110 - $289 per hour. These are almost 50%-60% higher than the rates in local engineering and architect firms for similar skill sets.
2. The report utilizes an overhead load rate of 20% to cover administrative costs like the city manager and city attorney. We would like more information on how this is calculated and benchmarked against other cities.
3. The report fails to address any programs or benchmarks to promote efficiencies. The report merely assembles the hours to complete a task.
Impact to Economy – This increase is being proposed with significant portion occurring in the first year. Many projects currently don’t pencil out under the cumulative load of current regulatory fees. What research has been done to determine whether the market can bear the proposed increases and how does this fit with the goals of the city’s economic development task force?

In summary, we believe that the timing of these proposed increases is ill advised and fails to address efficiencies or competitive rates. We recommend further study be performed in the areas above before any direction is considered. We urge the City to more thoroughly consider the implications of the actions being proposed.

Sincerely,
Steve Schofield
Advocacy Council Chairman