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Local News

Not All Cities on Board with Raising Planning Fees

The Board of Supervisors has approved a fee hike as a budgetary solution, but some say such a move will only hinder development

As various jurisdictions in Santa Barbara County consider gaping budget holes, planning departments follow one of two schools of thought: raise fees to close the gap, or cut fees to provide an incentive to developers.

Santa Barbara County has been facing a multimillion-dollar budget hole, and the next fiscal year isn’t likely to be any better. The Planning Department’s increased salary and benefit costs prompted the Board of Supervisors last Tuesday to approve a $30-an-hour increase in planning processing fees.

The public — and advisory committee — did not react favorably.

The committee called it “inopportune” and suggested alternatives, including reducing salaries and benefits, halting long-term planning and outsourcing reviews of private projects, staff said. 

Members of the public — including developers — have said that increased fees will further hinder development in the current economic climate. And with next year’s budget still unclear, some fear that increasing fees also will set a precedent.

Perhaps next year’s fees will be even higher, when more pension costs hit, said Andy Caldwell, executive director of the Coalition of Labor, Agriculture and Business.

Unlike jurisdictions that charge a flat rate or subsidize planning departments from the general fund, the county wants to create full cost recovery and now charges an hourly rate of $182 for processing applications.

With last Tuesday’s presentation by staff, many alternatives were suggested but ultimately shot down — most of which centered on cutting costs, outsourcing to private companies and streamlining the permit process.

“It sends absolutely the wrong signal to the development community,” Carpinteria City Councilman Joe Armendariz said.

Higher fees could result in fewer applications, which would be a lose-lose for everyone, he said.

Suzanne Elledge of Suzanne Elledge Planning & Permitting Services Inc. said the move will hurt private companies.

“It was disappointing that the county made the decision to increase fees at a time when applicants are withdrawing or withholding projects due to finances,” she said.

Some people also took issue with the reason behind the fees. Many suggested cutting salaries and benefits as a solution to the increased costs, but supervisors said it can’t be done between contract negotiations.

“Those of us in the private sector have cut hours, pay and benefits to our valued employees in an effort to keep from having to lay people off,” Elledge said.

If the expected revenue doesn’t materialize, the only solution would be to lower operating expenses, Armendariz said.

The county is far from alone in its struggle to fill budget holes, and local jurisdictions have different ways of dealing with their planning fees — whether they subsidize their services to lower costs or aspire to full cost recovery by applicants.

The city of Santa Barbara charges a flat rate for applications until they are approved or denied, and services are subsidized by the general fund since they don’t recover all costs. Its building and safety fees (mostly for inspections) are at full cost recovery.

Some increases were passed last year, and there’s a chance more could be slated for next year during budget talks in April and May, community development director Paul Casey said.

During last Tuesday’s Board of Supervisors meeting, opponents of a fee increase referred to the efforts of Lompoc and Carpinteria to cut some planning fees within the past year to encourage development.

Lompoc suspended its traffic impact fee in December in a unanimous City Council vote. The suspension will last at least 15 months, according to the Lompoc Record.

Last March, the Carpinteria City Council reduced the development impact fee — the city’s largest fee — by half, according to Armendariz, who proposed the cut.

Though it took a certain amount of faith, the council unanimously approved the fee cut.

“Fifty percent of something is better than 100 percent of nothing,” said Armendariz, who believes that high fees can be roadblocks to development.

A few large projects in the city — by Bega-US and Investec — were considered unviable because of fees, he said.

The second phase of a project by Bega-US would have cost nearly $1 million in fees at the 100 percent rate, which caused the company to consider other options, such as renting a warehouse.

“We actually made money by lowering fees,” he said.

The city of Ventura is in the middle of updating its fee schedule, but doesn’t anticipate significant fee changes in either direction, according to city community development director Jeffrey Lambert.

Its planning department has flat rates for some conditional-use permits and has staff members bill applicants for their time on more long-range projects.

Certain permits — such as making a residence a historical landmark — are free of cost, since the city wants to encourage it.

While there has been a slowdown of development recently in Ventura as well as Santa Barbara County, it seems that people are starting to get projects back on track, Lambert said.

Ventura County operates similarly to Santa Barbara County. It aims for cost recovery by charging applicants an hourly rate for staff time.

Santa Barbara County’s increased planning fee applies to unincorporated areas, such as Hope Ranch, Montecito and Isla Vista.

Noozhawk staff writer Giana Magnoli can be reached at .(JavaScript must be enabled to view this email address).

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