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Santa Rosa weighs big changes to building fees

By KEVIN McCALLUM
THE PRESS DEMOCRAT

Santa Rosa is considering an overhaul of the building fees it charges for everything from replacing a water heater to building a Wal-Mart.

Instead of basing fees on the values of projects, the city is following the lead of many other communities and may set its fees on the actual cost of providing plan reviews and building inspections.

money houseThe change has been in the works for years, but it took a back seat after the recession forced cutbacks in the city’s Community Development Department.

Now that the budget has improved somewhat, the city has finished a lengthy study of how much it costs to process various permits and soon will ask the City Council to consider wholesale changes to how fees are set.

The council heard a summary of the study last week, opened up a 45-day comment period and set a public hearing for Nov. 5.

The changes could have major implications for the building industry in Sonoma County, depending on how much of the city’s cost the council decides to recover for private development.

The city passed a policy in 2004 calling it “desirable” for all “development related” fees to recover 100 percent of the cost of processing development applications.

Fees rose in the following years, but they never got anywhere near 100 percent of the processing costs.

The study showed that the city spends just over $5 million annually on development activities but collects only about $2.6 million in fees for those same activities.

That means the city is recovering only 52 percent of its costs, effectively subsidizing private development activities with $2.4 million in general tax revenue per year.

“If you don’t increase fees, you will continue to subsidize with the general fund to the tune of $2.4 million per year,” Chad Wohlford, a Sacramento-based consultant, told the council.

Some of that subsidization has been intentional. Many fees, such as those for appeals and changes to homes in historic districts, have been intentionally set low to not discourage citizen participation. Others services, like pre-application reviews, are free.

In general, the smaller the project, the less of its costs the city recovers.

For example, a conditional-use permit costs the applicant $221, but runs the city $1,190, for a subsidy of $969. That’s a paltry cost-recovery rate of 19 percent.

A building permit for a 2,500-square-foot custom single-family home, including plan check and inspections, costs the developer $2,825, compared to the full cost of $4,117. That’s a 69 percent cost-recovery rate, or a $1,292 public subsidy.

While most fees are lower than the full cost of performing the service, some are higher.

The study found that the $208 fee to install a residential solar panel array was 103 percent of the city’s costs, while the $2,397 in fees for a 2,000-square-foot production home were 139 percent of the city’s costs.

Community Development Director Chuck Regalia explained that the city recovers less of its costs under the current valuation method because the work of processing permits for a small home is not that different from what’s needed for a larger one.

“There’s still the same number of inspections on a new single-family house whether it’s 900 square feet or 2,200 square feet,” Regalia told the council.

As a result, switching from the valuation method to the cost method could end up increasing fees for smaller homes and reducing them for larger ones.

For example, planning and building permit fees for a 1,000-square-foot home are $1,547, or 43 percent of the total city cost. The same fees for a 10,000-square-foot home increase to $8,341, or 137 percent of the cost of providing the services.

This means that the city for many years has been effectively making money from permits for large homes and losing money on permits for smaller homes.

If the city requires 100 percent cost-recovery, which is not expected, the fees for the 1,000-square-foot home would increase by $2,035 while the fees for the 10,000-square-foot home would decrease by $2,265.

While there can be the perception of inequity when communities make such changes, generally residents are pleased to know they are switching to a system that is “fair and equitable and reasonable and defensible,” Wohlford said.

The city already has been in contact with building trade groups to discuss the changes, Regalia said. The trades already feel the city’s permit costs are too high, but he said he hoped they can come up with changes the building industry can support.

Councilman Gary Wysocky recommended Regalia take a “flak jacket” to that meeting.

“I’ll be a surprised if they agree to any increase in fees. That’s just the nature of the beast,” Wysocky said.

(You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com. On Twitter @citybeater.)





22 Responses to “Santa Rosa weighs big changes to building fees”

  1. brown Act Jack says:

    You may , or may not, know this, but the money collected from the builders did not go into the funds supporting the building inspectors.

    the money for the inspections went into the general funds of the city for the use as the City Manager wanted to spend them

    they always had the funds to do the work, but the funds were diverted to other uses.

    therefore they could always raise the prices as needed by falsely claiming that the expenses exceeded the money in CD coffers.

    LOL

    Thumb up 1 Thumb down 0

  2. James Bennett says:

    Subversives?

    Change agents.

    Controlled opposition?

    Thumb up 1 Thumb down 0

  3. James Bennett says:

    Interesting.

    Public officials moving consensus on this board under assumed names.

    Is there even a name for that?

    Thumb up 1 Thumb down 0

  4. bear says:

    @mockingbird

    I have not one contrary word to say about what you wrote. I had a very good friend in DHS.

    Years in a labor-management committee?

    Not city.

    Thumb up 1 Thumb down 5

  5. MOCKINGBIRD says:

    Bear-to answer your question, in a fair world yes, that’s how it would work. But you and I know there are too many managers whose salaries could support more line staff whether in the permit office or out on the roads. The county halved their road crew after 2008 and those guys out there on the roads don’t make much. They are some of the lowest paid county workers. They tell us that there are more managers than ever.

    Maybe the city management to staff ratio is smaller but I’ll bet it isn’t 11:1 ratio in line with the law that Texas and Oregon passed.

    Managers run the county and protect themselves. The county is busy contracting all kinds of jobs and hiring more managers to “manage” those contract. Look at DHS for an example.

    Thumb up 5 Thumb down 3

  6. Lets be Reasonable says:

    Robert,

    Actually, it does not cost the City the same. As we went through this last building slump, Community Development ended up laying off a huge percentage of its staff. As building picks up, and the level of inspections required goes up, new staff will be hired.

    Thumb up 3 Thumb down 3

  7. bear says:

    @mockingbird

    I served a long time in (maybe) a larger jurisdiction. You will never get an argument from me regarding the ratio of management to line employees. I was a line employee.

    The issue here is whether builders/developers should pay for the cost of the services, when they are legally required to comply with building and other codes. In some past golden time, these costs were subsidized by the General Fund. Now they are not.

    So I think we should support line employees by charging fees equal to the cost of the services they provide.

    Am I wrong?

    Thumb up 2 Thumb down 7

  8. Robert says:

    I am not against inspections. Every city has budgeted the pay for their staff, wether that staff member is actively inspecting, or sitting at a desk waiting for an inspection assignment. To say it costs more for them to actually do their job than it does for them to sit and wait, is a lie. Same cost. The inspections and reviews she be free. Taxes have been paid to cover the people already. Don’t go gov’t on me.

    Thumb up 7 Thumb down 3

  9. Lets be Reasonable says:

    @mockingbird

    I think you know that I agree with you 80% of the time – but not with this one. Santa Rosa has one of the better manager to line worker ratios. When we did budget cuts, it was not just the line worker positions cut.

    Thumb up 3 Thumb down 5

  10. bear says:

    @mockingbird

    I think you know that I agree with you 99% of the time.

    Thumb up 3 Thumb down 5

  11. James Bennett says:

    That smell, the heavy breathing…

    it’s the 800 lb. gorilla in the room.

    Part of The ‘Climate Action Plan’ will have you making mandatory ‘efficientcy’ upgrades when you pull a permit too.

    The planned pain on private property continues.

    The gorilla has a name.

    Ignoring it, disbelieving it, won’t do us any good.

    Thumb up 11 Thumb down 3

  12. MOCKINGBIRD says:

    Bear, it’s not that people are against inspections. You and I know that management is very heaving in the cities and county governments. We need more line workers AND LESS HIGH MAINTENANCE MANAGERS. I get feedback from other county offices from people who have worked there for a very long time about the personnel “changes” in their offices. The “changes” are more high paid, high perk managers with fewer line staff. That’s the trend along with contracting out services.

    Now if we had more line staff, more road crew instead of MORE MANAGERS the work could be done and done quickly.

    But leave the decision making in the hands of the managers and you get WASTE, WASTE, WASTE!

    Thumb up 7 Thumb down 3

  13. Big Jim says:

    What a condescending attitude among entitled government beauracrats
    “generally residents are pleased to know they are switching to a system that is “fair and equitable and reasonable and defensible,” Wohlford said”

    I am not at all pleased that local government has out of control costs and is intent on foisting them onto already burdened taxpayers through exorbitant fees for doing anything to my property. I already pay property tax, why would I pay again to replace my water heater? The permit costs more than the water heater!
    Excessive pay and pensions are turning the government from a service into a tyrant!!

    Thumb up 13 Thumb down 2

  14. bear says:

    One can only pray that no kids are killed in a water heater explosion caused by some incompetent random capitalist.

    Even if you know what you’re doing, good luck selling a house with unpermitted work. Hint: you have to have it inspected and pay penalty fees.

    Are you also against food inspections, airplane inspections, hospital inspections, nuclear weapon inspections, water quality inspections, sewer inspections or power grid inspections? Please be specific.

    Do you maintain your car? Who pays for that? Or worse, who pays if you don’t?

    You pay for all of this because past experience teaches us that bad things happen when know-it-alls ignore the law.

    And all this should be paid for by anyone but you? Whiners. Freeloaders.

    Thumb up 3 Thumb down 13

  15. Robert says:

    They think the public is so stupid. We know, that at the end of the day, each and every employee gets their hours and a paycheck every couple of weeks. Wether they study and approve zero plans, or 100 plans. It costs the city the same. The only reason they have fees, is becasue an MBA was hired and they saw a revenue stream that could be exploited for more spending cash.

    These services cost the same wether they are utilized or not. They are called the budget. The extra is just that, extra taxes. Have fun with that.

    Thumb up 10 Thumb down 2

  16. brown act jack says:

    But, you forget, that beyond the inspector, you have to pay for the supervisors, and the manager, and the director, and their salaries are big!

    I was Senior Appraiser, Propery Agent 2 for the state of California,and an FHA appraiser for homes, and we charged nothing for the services provided to the custormers.

    When you require a service of your customer you should not charge him for you services to do the job.

    I had associates who could do 10 VA building inspections before 8 am in the morning and then come in to work at 8 am and do inspections for the state!

    They were paid $20 an inspection, and I was paid $20 for a FHA appraisal and did 5-8 a day on the weekends.

    Fees are just another way of collecting taxes to run the city.

    tell me not about how hard it is and how much time it takse!

    And then the contract out some of the work and charge that against the fees calculations

    Thumb up 9 Thumb down 1

  17. Paul says:

    I am supposed to pay a FEE because I replaced my WATER HEATER??
    NICKED YA ON THAT ONE, YOU THIEVES!!
    What’s next? A fee for HANGING A PICTURE ON THE WALL?? THIEVES!! OVERPAID THIEVES!!

    Thumb up 21 Thumb down 2

  18. James Bennett says:

    Turning permits into a big morphing X factor.

    Guess pencil whipping is expensive…

    for us.

    Where do they come up with this oppressive crap?

    Three guesses.

    a) The Constitution

    b) A concern for our safety

    c) ICLEI

    Exactly.

    Thumb up 12 Thumb down 4

  19. Greg Karraker says:

    The first sentence of this story defines just how intrusive local government has become… “Building fees to replace a water heater?” If they weren’t micro-meddling in every nook and cranny of our lives, then they wouldn’t have to charge their bloated fees.

    Of course, if permit officials stopped taking money from honest citizens, many of these unelected twits would be forced to get out of their overcompensated, unnecessary jobs and find real jobs in the private sector. To see just how egregious their acts can be — especially PRMD — visit thelittlepicture.net

    Thumb up 17 Thumb down 3

  20. farmer west says:

    The city should be looking at why these costs are so high. Building inspections should be at a fixed rate by the number of inspections, something like $65.00 per inspection.

    How is it that plan check fee exceeds the amount is cost to create the plans. How about the city getting out of the plan check business by requiring state licensed private plan checks.

    How about charging the full cost of an appeal instead of the applicant?

    Thumb up 15 Thumb down 2

  21. Emerson Burkett says:

    Hmmm, So, according to this article, The City of Santa Rosa has been subsidizing Builders (read Wealthy, Powerful Folks with lots of “pull”) on the backs of their long suffering taxpayers (read “the Little Folks” with NO POWER). Golly, must be nice to have friends in high places (read Northeast Santa Rosa). Way past time to put “District elections on the Voters table; but, of course they will go nowhere again; because the Deck is Stacked and has been for years. WAKE UP Santa Rosa Voters, you have been getting scr—d for YEARS!

    Thumb up 8 Thumb down 6

  22. Greg Karraker says:

    The first sentence of this story defines just how intrusive local government has become… “Building fees to replace a water heater” If they weren’t micro-meddling in every nook and cranny of our lives, then they wouldn’t have to charge these bloated fees to pay for permits we don’t need.

    Of course, then many of these nebbishes would be forced to get out of their overcompensated, unnecessary jobs and find real jobs in the private sector. To see just how egregious the acts of local busybodies like PRMD can be, visit http://www.thelittlepicture.net

    Thumb up 14 Thumb down 2

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