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Proposed municipal fee schedule draws council debate

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Springfield City Council held a public hearing last night on a proposal to alter municipal fees for services, initiating a debate on fees developers face as they work with city staff to forward projects.

Councilman Craig Hosmer took issue, specifically, with city fees related to Chapter 353 abatements. Through 353 abatements, developers can have property taxes waived on new improvements for a period of 10 years, and partially frozen on improvements for up to 25 years in blighted areas. The proposed Chapter 353 fees would increase to $1,394 per project, up 12 percent from the current charge of $1,245. Even with the adjustment, the city estimates the new fee only would recover 68 percent of its costs.

“To me, it doesn’t seem fair that people are getting tax abatements and the taxpayers are having to subsidize their request for city work,” Hosmer said. “The city is losing around $800 every time someone makes an application.

“Those people are getting hundreds of thousands of dollars in tax abatements - it seems they could at least pay their full share of the city’s costs.”

City Manager Greg Burris said it’s city policy only to raise fees by no more than 10 percent plus the annual increase in the consumer price index if current charges represent at least 50 percent of estimated costs. He said with fees estimated to garner less than 50 percent of expenses associated with delivering that service, a bump of 20 percent plus CPI has traditionally been the ceiling. Ultimately, however, Burris said it is council’s prerogative to move fees as they wish.   

As part of the fee-focused proposal, a total of 232 charges for municipal services were evaluated, according to information provided to council. In summary, the adjustments comprise:
  • 18 new fees recommended to be established;
  • 42 charges slated to be reduced;
  • 38 charges suggested to be held flat; and
  • the remaining 134 charges recommended to be increased.
Burris said the overall evaluation found municipal fees realized 95 percent of city costs, on average.

Regarding the proposed changes, Hosmer felt plan-review fees were too low. With a minimum charge of $175, plan review fees realize an estimated 56 percent of the city’s costs to review, and no changes for fiscal 2015 were recommended.

A Springfield Area Chamber of Commerce development group is not opposed to fee increases on plan reviews if staffing levels are increased, Burris said. He said city officials are reviewing how staff could be added and fees be adjusted to more accurately reflect costs at the same time. But Hosmer had more questions.

“How are we ever going to add more staff if we are subsidizing? It doesn’t make sense,” Hosmer said. “To me, it seems we need to start recovery as close to 100 percent of costs as we can.”

Councilman Jerry Compton said increasing development fees too rapidly could discourage new projects in the city.

“I think we have to be really careful about discouraging (development) if we are pricing ourselves higher than other communities,” Compton said, adding a review of plan costs in neighboring towns could be helpful in charting a course.

The bill is scheduled to receive a second reading and vote at the city’s next council meeting.[[In-content Ad]]

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