Wilsonville building permit fees may rise
City of Wilsonville building official Dan Carlson referred to a chart showing the City's recent building permit revenue fluctuations as a roller coaster during a City Council work session Thursday, Jan. 22.
Permitting numbers hit a nadir during the Great Recession, ballooned at the height of the Villebois buildout from 2015-18, and have steadily fallen in the past few years.
Carlson expects more stability in the coming years. The problem is that, at current rates and development activity, the building department (which is primarily supported by building permit and plan review fees) is losing money.
To quell what has become an annual department deficit in recent years, during the session, Carlson brought up the idea to the council of raising permitting rates by 8.5% and to raise plan review fees to the
same amount as the permitting fees.
Overall, this equates to about a 30% increase. However, Carlson said building permit fees only amount to about 4% of the expenditure developers pay to the City (system development charges make up the majority of the cost — and those are banked for future infrastructure improvements).
The council favored this proposal and the City likely will decide whether to approve it during a meeting in March or April.
"When your revenues go down and down and down and (budget) gaps get bigger, you have to make an adjustment," Carlson said.
Along with the proposed fee increases, the City is proposing to increase or reduce fees on an annual basis based on the Consumer Price Index (CPI).
According to a chart Carlson showed during the meeting, the City's building permit fees are cheaper than many cities nearby. The increase would bring the fees to about average in comparison to the other cities listed, which includes West Linn, Tualatin, Lake Oswego, Forest Grove, Milwaukie, Sherwood and Oregon City. The City hasn't raised permitting fee rates since 2006.
"It seems to me to be pretty defensible if we get people who don't like their fees being increased to (tell them) 'Yeah, well we're going to bring it up so we're average,'" Mayor Tim Knapp said.
The building permit fees for new single-family homes currently cost developers $2,809.33 for a $260,800 house that is 2,000 square feet with a 500-square-foot garage. If the rates are increased, that cost would jump to $3,651.07.
In response to the permitting surge last decade, three full-time staffers were added to the building department. Carlson and City Manager Bryan Cosgrove said they had considered the idea of cutting staff to balance the budget but decided that wouldn't be a good idea.
"It really is driven by customer service expectations and standards and that's the norm here," Cosgrove said. "And I will tell you that since I've been here, we get people singing our praises all the time about how responsive we are, about how customer friendly we are. If you're going to have that as an expectation you're going to have to have the staffing to help back it up. At the same time, If we went through a Great Recession again this would be a different conversation."
Cosgrove also added that hiring and firing staff based on short-term permitting trends wouldn't be a wise idea.
Carlson said if the increase is approved, the City's annual building fund would break even in three years (due to projected development activity). The fund is in the red by about $400,000 for this fiscal year and Carlson showed during a City Budget Committee meeting last year that the building department reserves had declined from $4 million to $2 million from 2016 to 2019.
"If we continue this trend and not increase fees, that (budget gap) will grow significantly," he said.
Council term limits
The City also announced during the meeting that it will make a decision regarding the successful petition filed by resident Doris Wehler to impose term limits on councilors during a meeting Monday, Feb. 3, at Wilsonville City Hall.
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