At the Dec. 15 Springfield City Council meeting, a proposal to alter municipal fees for services initiated a debate on charges developers face as they work with city staff to forward projects.
Developers are getting off easy regarding a couple of notable municipal fees for services, and corrective action needs to be taken, according to Councilman Craig Hosmer. However, not everyone is ready to implement increases. Councilman Jerry Compton said fees in surrounding cities should be reviewed to make sure Springfield is competitive and doesn’t discourage development with fee hikes.
Hosmer took issue, specifically, with city charges related to Chapter 353 tax abatements. Through the state program, developers in blighted areas can have property taxes waived on new improvements for a period of 10 years, and partially frozen on improvements for up to 25 years. The proposed Chapter 353 fees would increase to $1,394 per project, up 12 percent from the current charge of $1,245. With the adjustment, the city estimates the new fee would recover 68 percent of its costs.
“The city is losing around $800 every time someone makes an application,” Hosmer said. “It doesn’t seem fair that people are getting tax abatements, and the taxpayers are having to subsidize their request for city work.
“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 city policy caps fee increases at 10 percent, plus the annual increase in the consumer price index if current charges represent at least 50 percent of estimated costs.
When existing fees garner less than 50 percent of expenses associated with delivering a service, he said a bump of 20 percent plus CPI traditionally is the ceiling. Ultimately, however, Burris said it is council’s prerogative to move fees with an amendment to the proposal and vote.
City staff analyzed 232 municipal fees and proposed 134 increases and 42 reductions in fiscal 2015. According to information provided to council, the fee adjustments included 18 new charges, such as a $116 asbestos inspection fee, and 38 with no change recommended.
Burris said the staff evaluation found municipal fees realized 95 percent of city costs, on average.
After reviewing the staff proposals, Hosmer noted plan-review fees – among the 38 without a recommended change – were too low.
With a minimum charge of $175, plan review fees realize an estimated 56 percent of the city’s costs to review.
According to representatives of the Development Issues Input Group, a public-private body formed by the Springfield Area Chamber of Commerce, developers don’t object outright to fee increases, so long as it speeds up the services provided by the city.
“Time is money,” said Springfield chamber Executive Vice President Rob Dixon and a DIIG member.
Representing DIIG’s 30 active members, including city code officials and commercial contractors that have open dialogue about development regulations and fees, Dixon said the longer developers wait on construction plan approvals, the more costs they incur.
The city’s goal on first reviews is to complete them within 10 days, and Dixon said that was being met nearly 100 percent of the time during the recession. But he said plan review times have been slipping as project volumes increased in recent years.
In September and October, that completion rate dropped below 90 percent, according to city data provided to the group. Dixon said second and third reviews are even more apt to miss targets.
DIIG members suggest any bump in review fees should help pay for more staff to expedite the paperwork. Burris said city officials are reviewing options for solutions, and additional staffing is on the table.
But Hosmer said the question of staffing puts the cart before the horse. The fee schedule changes are designed to recover existing expenses.
“To me, it seems we need to start recovering as close to 100 percent of costs as we can,” he said.
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, emphasizing a review of plan costs in neighboring towns could be helpful in charting a course.
The bill is slated for a second reading and vote at the Jan. 12 council meeting.
Moon City Council unanimously approved the Moon City Creative District Strategic Plan that establishes a live/work overlay district for residents north of Commercial Street and south of Atlantic, between Broadway and Washington avenues.
Brendan Griesemer, the city’s neighborhood conservation manager, introduced the resolution at the Dec. 15 meeting. He said the aim is to encourage artists to work and live in the district and to improve the physical, social, economic and cultural environment.
The district’s action plan over the next three years includes establishing a Moon City advisory board with seven to nine members; identifying a neighborhood real estate agent to help market the district; creating a 501(c)3 nonprofit organization to pursue grant opportunities; developing an artist relocation program; coordinating landscaping and signage; and initiating the development of an art center and a trolley line connecting Moon City to Commercial Street and downtown.
Griesemer said city planning staff assisted the residents, who developed goals and plans on their own, as needed.
Under the approved zoning, up to two nonresidents can work in homes within the district, but no more than 50 percent of the residential space can be devoted to commercial space.
Councilman Jeff Seifried applauded the neighborhood’s efforts to attract development and enhance its character.
“This is exactly the kind of economic development we should be supporting,” he said.[[In-content Ad]]
