Developers raise the roof over fee hikes.

Byline: Edward Russo The Register-Guard

Developers, contractors and others involved in construction and development are grumbling about paying dramatically higher fees for Eugene officials to review land use plans.

But the city says the increases are needed in order to make the development industry pay a greater share of the costs for the process to review plans.

The raises will lessen the planning department's reliance on the city's general fund, which is supported largely by property taxes.

Now, the department's fees capture about 23 cents out of every dollar that the department spends to process land use applications, Principal Planner Steve Nystrom said.

The fees are set to rise in each of the next three years. The increases are meant to boost developers' share to 40 percent of costs this year, and to 50 percent by 2008, Nystrom said.

Other local jurisdictions also have raised planning fees.

Springfield's planning department has raised fees and now captures about 45 percent of its costs from applicants, planning manager Mel Oberst said. The City Council has approved the goal of 60 percent cost recovery, which the city may implement in the next year or so, he said.

And Lane County collects 85 percent of the revenue to support its land management division from fees and permits, said Jeff Towery, manager of the division.

Land use application fees are separate from other develop- ment-related charges that governments impose, such as building permit fees, hook-up fees and systems development charges for sewers, streets and parks.

Land use application fees don't just involve big developers seeking permission to build shopping centers or office buildings. Homeowners must file land use applications to adjust property lines or subdivide their properties, for example.

The proposal approved by the Eugene City Manager Dennis Taylor will raise the city's land use application fees anywhere from 31 percent to 78 percent effective March 1, the first of three consecutive years of increases that ultimately will more than double the cost of some development applications.

For instance, the cost for city officials to review and approve initial and final housing subdivision plans will rise from $5,245 presently to $11,107 in 2008.

"My concern is that these increases are huge," said Roxie Cuellar, government affairs director of the Homebuilders Association of Lane County.

Home builders will have little choice but to pass along the costs to home buyers, Cuellar said. That will accelerate the already fast-rising cost of housing in Eugene, she said.

Cuellar said she thinks the city is currently is recovering more than 23 percent of its costs to process applications, and has asked planning officials to provide a more detailed account- ing.

She worries that the planning department may be moving toward trying to have fees cover the full cost of application processing, which would be even more of an expense for home builders.

`I know there are people who say, `See, (the city is) only recovering 23 percent of the cost,' ' she said. "I think we are sending out a message that says the public is picking up a much larger share of the cost than is actually the case."

But Nystrom said that the city's land use code is complex, and that it take time for city planners and others to review applications and make sure they are complete and comply with all city requirements.

Many land use applications require analysis not only by planning department staff, but also by staff in other departments, such as transportation analysts and public works experts.

The scheduled fee increases also are meant to account for the time that these other city employees take to review applications.

The proposed fees are based on a "true cost-accounting approach," Nystrom said.

There is no plan to boost fees to the point that they recover all of the various planning expenses, Nystrom added.

The move to increase fees is part of government's reaction to Oregon voters passing property tax limitation measures, beginning in 1990 with Measure 5.

"Fifteen years ago, Springfield and all the other cities in Oregon were charging fees that didn't even cover the postage stamps," Oberst said. "It always had been a big, fat subsidy (to developers). And that was fine until the (tax-limitation) ballot measures came along."

Eben Fodor, a Eugene-based community planning consultant who helped start the slow-growth group Friends of Eugene, said it make sense for the city to generate more revenue from developers seeking project approval.

"The primary purpose of planning is growth accommodation," he said. "So the primary beneficiary of planning is new growth and development. The public is not the primary beneficiary."

Fodor said he's familiar with the argument that increasing the cost of getting a subdivision approved will push up the cost of housing.

But he said if residents were asked if they wanted to help subsidize developers through their taxes or have developers pick up a greater share of building approval costs, "let me assure you that everyone will choose to have a developer pay for it. The community is not divided about that."

UP, UP AND AWAY

Effective March 1, the city of Eugene will raise fees that developers and property owners pay for land use applications. The fees will increase in each of the next three years. Here are some of the affected land use requests, with their present rate, how much they will be on March 1 and the rate in November 2008.

Zone change: $1,525 now; $2,497 on March 1; $3,655 by Nov, 2008

Property line adjustment: $385 now; $569 on March 1; $823 by November 2008

Lot partition: $1,860; $2,757; $4,024

Site review (evaluates a proposal's parking, traffic flow, landscaping): $2,005; $3,586; $5,224

Conditional use permit (sets special conditions for development): $2,500; $4,218; $6,136