COWculation of Fees

February 15, 2011

As we mentioned in our recent COWncil Roundup, on January 25th the Town COWncil adopted a resolution raising most Town fees. Some fees were raised by 25%, some were doubled, tripled, or quadrupled, and at least one fee was increased by 1,000%, and another by 2,000%!

The COWncil had general discussions about this issue last year, in March, April, September and November. At the meetings in September and November, Patricia Kutzmann of Kutzmann & Associates, the Town’s outside plan check firm, submitted data comparing Woodside’s plan checking fees to those of Palo Alto and San Carlos. According to her, Woodside was under pricing its plan check fees and she warned that if something was not done, her firm couldn’t do as thorough a job on Woodside reviews.

In addition to that concern, a review of Woodside’s fees by Woodside’s go-to consultant group Management Partners back in March, the building services fees only cover 73% and planning review fees only cover 10% of the “actual costs” of providing the services. According to Assistant Town Manager Kevin Bryant’s report, the Town has not comprehensively reviewed its fee structure since 1995. Meanwhile, the Town has Financial Management Policies that were put in place in 1993 that state that Development Services and some other parts of Town operations should be self-supporting and cover their own operating costs. The rationale given in Bryant’s report is that when the Town’s General Fund subsidizes these costs, as it does now, it diverts dollars from “programs and functions that are of benefit to the entire Town.”

Given all this, in November the Town COWncil told staff to prepare a fee schedule that increases fees to better recoup costs. Here’s an overview of some of the new fees which Staff proposed and the COWncil adopted:

Likely to have the biggest impact are the increases to Planning fees which have been increased by 25% and Building Permit fees which were increased to $1.95 per gross square foot, up from $0.65 a foot. The Town also changed its default market valuation of construction projects so that when a reported valuation is below $175 a square foot, the Town will use a higher base valuation.

There are a lot of new flat fees for “relatively easy” projects. There is a $350 flat fee for a single kitchen remodel, $300 for single bath remodel, $300 for a roof replacement up to 8,000 square feet and $400 for a roof replacement over 8,000 square feet. Tennis courts now have a fee of $180, landscape lighting will be $250, and sewer and water tests will be a flat fee of $315 , which is an increase from $30. Water heater permits will sextuple to $120. Tree removal permits will now be $50.

Commercial plan check fees have now increased to 100% of the building permit fee, instead of 75%; residential plan check fees increase to 85% from 75%; and demolition permit fees will quadruple to $200. A new ‘Archival Fee’ of $120 has been implemented for Building and Planning permits to offset the costs of digitizing projects on completion for future reference.

Engineering fees have increased by 25%, as have flat fees associated with sewer and septic fees. Some fees have been reduced to better reflect their actual cost so that the sewer inspection fee has now been reduced from $250 to $75, and the fee for Town COWncil consideration of a sewer allocation has been reduced from $750 to $75, although the deposit has been increased.

The fee with the whopping 1,000% increase is the fee for electrical service upgrades. Upgrades to 100 and 200 amps will both have a flat fee of $250, when previously it was $25 and $35. An upgrade to 400 amps was increased to $360 from $45. The big winner in terms of percentage increase? Non-residential appliances and equipment, such as switches and controls, outlets etc. now have a flat fee of $250, while previously it could be as low as $12 – an increase of more than 20 times. The Town will continue to use the increased ‘Hourly Direct Charge Rates’ that were passed on July 27th, 2010.

While no COW likes to pay higher fees, we are glad to see the Town doing employee hour costing in order to monitor actual costs, not imagined costs. The Town should have been doing this long ago. Some of the new fees seem fair and, if anything, a bargain. The Flat fees for bathroom, kitchen and roof remodels will make it easier for homeowners to predict the cost of an upgrade.

The Town should not subsidize the cost of private development by under charging fees to the extent it apparently has been doing. It should not over charge either. This means it should have a regular periodic review of fees to make sure that they are set properly. However, what really concerns use is that not even one member of the public spoke to the fee increases prior to there adoption by the COWncil. COWs who did not speak up before fees were set, will just lick salt when the time comes to pay the fees.

Kutzmann presentation, p. 59:
Full listing of new fees, p. 68:

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