Santa Rosa is considering an overhaul of the building fees it charges for everything from replacing a water heater to building a Wal-Mart.
Instead of basing fees on the values of projects, the city is following the lead of many other communities and may set its fees on the actual cost of providing plan reviews and building inspections.
The change has been in the works for years, but it took a back seat after the recession forced cutbacks in the city's Community Development Department.
Now that the budget has improved somewhat, the city has finished a lengthy study of how much it costs to process various permits and soon will ask the City Council to consider wholesale changes to how fees are set.
The council heard a summary of the study last week, opened up a 45-day comment period and set a public hearing for Nov. 5.
The changes could have major implications for the building industry in Sonoma County, depending on how much of the city's cost the council decides to recover for private development.
The city passed a policy in 2004 calling it “desirable” for all “development related” fees to recover 100 percent of the cost of processing development applications.
Fees rose in the following years, but they never got anywhere near 100 percent of the processing costs.
The study showed that the city spends just over $5 million annually on development activities but collects only about $2.6 million in fees for those same activities.
That means the city is recovering only 52 percent of its costs, effectively subsidizing private development activities with $2.4 million in general tax revenue per year.
“If you don't increase fees, you will continue to subsidize with the general fund to the tune of $2.4 million per year,” Chad Wohlford, a Sacramento-based consultant, told the council.
Some of that subsidization has been intentional. Many fees, such as those for appeals and changes to homes in historic districts, have been intentionally set low to not discourage citizen participation. Others services, like pre-application reviews, are free.