City wants site plan reimbursement
Thursday, April 17, 2014 11:18 AM
The first reading of an ordinance that would establish site-plan-reimbursement fees was approved by the Decorah City Council last week on a 6-1 vote.
Council member Tade Kerndt, who cast the lone dissenting vote, said the fees could be a deterrent to development in the city. Earlier during the same meeting, he noted the Council heard the results of a study that recommends the city consider incentives such as tax abatement to encourage housing projects in Decorah.
The Council will hold the second reading of the ordinance during its meeting Monday, April 21, which starts at 5:45 p.m. Three readings of an ordinance are required before an ordinance can be considered for adoption.
During last Monday’s discussion, Council member Paul Wanless said he didn’t disagree with Kerndt.
“On one hand, we’re looking to spur economic development and on the other, we’re adding costs to do it,” he said.
But the difference is, the tax abatement the Council is considering for housing will cost the city nothing, Wanless said. However, in the case of site plans, in some cases the city has had “some pretty extreme direct costs.”
Currently, developers are charged a site-plan fee based on a fee schedule, but there are no provisions to capture reimbursable expenses such as legal or engineering review fees, according to City Manager Chad Bird.
The technical review of the site plan for the proposed Traditions apartment complex has likely been the city’s most expensive. Bird said the city spent about $10,000 on it over the past five years.
Traditions planned to build the apartments on the west side of Decorah. Bird closed the application after the developer failed to provide information requested by the Decorah Planning and Zoning Commission and city officials.
Under the proposed ordinance establishing site-plan reimbursement fees, the city could charge the developer for fees from consultants related to review and approval of site plans, Bird said.
“This proposed language is similar to current language in the subdivision ordinances for construction inspections,” Bird said.
Kerndt asked how much the fees might be.
Bird said most site plans require five or six hours of review by staff, the city engineer and city attorney, an expense of $1,000 to $1,500.
“That’s not even comparable to our application fee,” he said.
Currently, the site plan permit fee is $50.
Kerndt asked if the fees would be charged regardless of whether the site plan is approved under the proposed ordinance.
Bird responded they would.
Kerndt agreed there should be a fee for a site plan that takes the city “tons of time.” But he also said if developers have to spend “a lot” of money to do a site plan, they might not pursue a project. He said developers spend $2,500-$3,000 to develop plans. It would “add up” when that figure is combined with $1,000-$2,000 in fees charged by the city for a project that may or may not be approved, he said.
“If you’re putting in a lot of time to make sure your plan is applicable and is going to work, another $1,000 is not going to matter,” Council member Jody Niess said.
“Budgets get tighter and tighter. Little things can make a difference on our end as well,” Bird said.
Kerndt said in the case of Traditions, there should be compensation to the city.
“But the majority of projects aren’t that big,” he said.
Bird said city officials do have free “preconsultations” with developers before the site-plan phase, to start “sketching things out and to go through the code.” Then the developer decides whether to go forward, he said.
Last Monday, the Council did unanimously approve a resolution amending fees for city services and permits.
“Almost all of these fees have been in place for many years and most have not been adjusted since 2007,” Bird said.
The increase in fees was reviewed with the Decorah Board of Adjustment and the Decorah Planning and Zoning Commission, he said.
“Most of the fee increases are modest and I support a period review of these fees,” Bird said. “In most cases there is considerable staff time devoted to administering the permits and applications.”
Under the new fee schedule, a residential compliance certificate permit increases from $45 to $55, and from $40 to $75 for new commercial construction. A simple site plan review increases from $50 to $75 and a major site plan increases from $200 to $225.