17 - Amending Sections 7-19 Permit Fees and 34-4 Application and Fee for Water and Sewer Taps

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Item No. 17 memorandum TO: Mayor & Council FROM: Carla Easton, Community Development Director SUBJECT: DEVELOPMENT FEES DATE: July 12, 2019 BACKGROUND: Cities collect fees for various development related services in order to recoup the costs of the municipality for providing those services. Fees are not used to generate revenue for the sake of making a profit, however most cities make an effort to break even when it comes to development costs, the notion being that development should pay for itself. When it fails to pay for itself, those services are subsidized by taxes paid by those not benefiting directly from the services rendered. One concern is that such fees may drive development away. However, virtually every study on development fees shows that is not the case, especially in a city like Paris which does not even collect many of the typical charges, like impact fees, assessed on new development. To test that theory here, a few years ago we placed a moratorium on the collection of all development fees for six months. There was no impact on the number of permits requested; however, there was a loss of revenue and a greater reliance on taxes paid by existing residents. Paris has not raised permitting fees for many years, and as a result the current fee schedule lags behind actual costs to the city for completing the work. Furthermore, recent state legislation prohibits a municipality from collecting residential permit fees based on project valuation, rather requiring the cost for permit to be based on square footage of improvements. Because of this, Paris must change the method by which we charge for residential permits. STATUS OF ISSUE: Staff has compared our current fee schedule to that of other cities similar in size, and we are proposing several adjustments in order to cover the city costs associated with the work. BUDGET: Will potentially generate additional revenues. RECOMMENDATION: Approve of an ordinance revising the schedule of building permit and miscellaneous fees.