The City of Bend is looking at potential adjustments in planning-related charges after encountering a growing groundswell of concern regarding the effect of hikes implemented last year.
Increases affecting many elements of the permitting system were instituted following an outside consultant analysis of user fees in connection with the Community Development Department (encompassing planning, building and engineering) which concurred such rises were necessary for CDD to balance its books.
A precipitous drop in volume – and consequent revenue dip – regarding planning applications due to the economic downturn, staff layoffs and the costs of long-range planning pursuits, such as the Urban Growth Boundary expansion proposals and Juniper Ridge project, all contributed to a budgetary disconnect in the context of contemporary council policy that the CDD should be self-funding.
The new rates were adopted July 1 to run with the current 2009-11 budget cycle, but the real world reaction from individual applicants and the wider building and development community to date has been generally negative, prompting overtures from industry representatives that costs could be nearing a “tipping point” in hindering business growth – especially worrisome in regard to a faltering economy’s prospects for a fragile recovery.
Last month, Cascade Business News highlighted an example of a physician who had local professionals undertake research on potential development fees for a contemplated 4,500 square feet building as part of his planned relocation from Prineville to the St. Charles Medical Center campus area in Bend.
Partly based on those initial estimates, gathered last spring, he decided to proceed with the project. But the increases in fees sanctioned by the City last summer meant that by the time permits were to be pulled early this year, associated permitting costs alone had more than doubled.
The project architect Don Stevens, of BBT Architects in Bend, said at the time that had his client known initially that just to get through site plan and design review would total around $5 a square foot – for a relatively straightforward medical office building project in an appropriate (medical overlay) zone, and before adding in the larger Systems Development Charges (SDCs) and permit fees – it may have given him pause over moving ahead and led to consideration of switching to another community, such as Redmond, where costs were ostensibly considerably less.
The conversation also takes place in the wider context of others in the construction community, including contractors, actually reducing costs in an effort to stimulate business, in response to an undoubtedly competitive and economically challenging environment.
The same economic headwinds have also predicated lower land and building material costs together with competitive interest rates and led many jurisdictions, such as Portland, to look at ways to incentify and spur building activity through effective reductions in associated costs or streamlined processes.
The Bend medical building project costs included site plan review in which the City’s base fee for such a service alone had more than doubled compared to mid 2009.
Other fees included a burden of proof letter which commanded a fee regarding verification of appropriateness of the proposed use, traffic studies, sewer and water flow testing and a pre-application conference – where city departmental representatives are in attendance giving preliminary input – that previously was free and optional, but now was required and fee-based. Concerns have also been raised that plan review timeframes had been extended, in part due to staffing cuts, which also potentially impacts a project’s holding costs.
A building and development council of industry exponents – which evolved out of a ‘blue ribbon committee’ delving into the issue – has been vocal on the ramifications of the current policy, including contemplating proposing a ‘fee for services’ approach to quantify actual time spent on each application.
Other private land use planning professionals have also wondered aloud whether the Bend planning mechanism has grown to become overly process-laden, with each layer accruing fees, and how Bend could apparently rack up pre-permit costs on a par with the line item for the actual planning and design consultants’ component of a project.
But now Bend City Manager Eric King revealed the user fee issue is to be revisited and new proposals are to be presented to an interim budget committee meeting later this month (May 26) in response to a rising tide of feedback.
He said: “There is always a delicate balancing act in providing a certain level of service, for example in administering state land use law, and recovering costs.
“Fees were adjusted last year in light of the reduced volume of planning and building-related applications as the revenue drop even outpaced cost cuts from reduced staffing levels – though the workload seems to have been increasing again more recently.
“But when changes in policy are made, including in the way fees are calculated, the ultimate effect is unclear until the aftermath of actual implementation.
“We see ourselves as partners with the community in relation to how business is conducted and we have heard some of the feedback on a day-to-day basis, as well as from the Building and Development Council.
“In light of this, we have been conducting discussions to look at ways of minimizing impact and will be putting together proposals for consideration by the budget committee later this month regarding the assessment of planning fees.”
One area that could be revisited is a surcharge subsidizing long-range planning costs that previously have been picked up by the city’s general fund.
King said long-range planning areas such as the Urban Growth Boundary expansion and implementation of the Central Area Plan could be construed as having more of a general benefit, adding: “We want to get the UGB resolved, so we have an adequate 20-year supply of land, especially in regards to employment land being available when the economy picks up.
“It also helps with the perception issue regarding land supply in keeping values competitive and mitigating any tendency towards speculation.”
King said another area that could be explored regarding increasing CDD efficiency in regards to building projects could involve expanding the scope for electronic, or ‘e-plan’ filing submissions, citing a substantial online element to the recent Kohl’s and Sonic projects as recent examples.
He also referenced the ‘work in progress’ regarding streamlining the City’s development code, including the introduction of periodic ‘tune-up packages’ aimed at eliminating confusion and removing some of the inherent layers that have evolved over time.
Proposals to be heard by the budget committee slated for May 26 will act as a precursor to further fee resolution discussions taking place in June as part of the budgetary process.
The moves will likely come as welcome news to the local commercial community in the wake of a recent Bend Chamber of Commerce survey which revealed almost two thirds of members canvassed in an online questionnaire perceived the City as indifferent to business interests. About the same number said they believed the level of systems development charges was affecting potential job growth.
NorthWest Crossing General Manager David Ford, who is involved with the Building and Development Council, added: “We want to partner with the City and work together in a cooperative manner regarding input on the ramifications of certain policies.
“We understand that we are all in this together. We want to explore the whole range of associated questions and work in a collaborative effort to see how we can help encourage positive economic development.”