DIXON, CA (MPG) - At a city council meeting in early April, fees were discussed. It seems that the total fees for a new house are from $48,000, to $55,000 and the new fees passed will increases costs. Whow! If we look at the Homestead Development where around 1200 houses will be built that amounts to a total of almost $66,000,000. Yes, that is $66 million. Granted some of the houses will be multi-family and some will be commercial.

From the discussion at the meeting, the city charges a lot of different types of fees—building, related and capital facilities fees. City councilmen mentioned during the meeting that development fees are used for finance, human resource, and building salaries of employees. A comment was made that 20% of the city manager’s salary had been paid from development fees. Since these salaries may have been budgeted for the General Fund, these funds can be allocated elsewhere. So if those funds are allocated elsewhere, where does the refund go?

That is a lot of money most of which will be paid for over 30 years. The new home owners will buy their house and finance it for 30 years. In the meantime, the development and impact money will be long gone. Offhand it seems like local fees may account for 10% to 15% of the median price of new single-family homes. It could be that fees are the fastest growing market. Plus, if these fees are folded into the price of a house, locally property taxes could raise $500 each and every year just to pay for the development fees.

If we think back, development fees, prior to the passage of Proposition 13 in 1978, public utilities charged development fees principally to cover the direct costs of development and building permit reviews, and hooking up utilities on site. The indirect costs of development reviews, the costs of maintaining local planning and building departments staffs—were usually covered out of general revenues. On-site capital improvements, including roads, utility systems, public safety and school facilities, and parks were usually paid out of bond revenues, special assessment revenues, and general revenues, from State and federal grant funds, and in the case local public utilities, out of the rate base. Development fees were a minor part of local budgets.

Are there things that could be done: reducing fees by shifting to other capital finances sources might make home ownership more affordable for folks. Are there ways to streamline fees? Can fees be consolidated?? Is there technology which could be used? Can fees be downloaded for the applicants to fill out?

Has anyone reviewed the city work’s work and the quality of their product? Is it outstanding and efficient? How does the city council evaluate the city’s work? Is there a process for the developers to have input into the quality or the services they receive? Is there a qualitied oversight committee that makes recommendations? Sure, seems like that for $66 million in fees any and all suggestions should be taken and that there should be evaluation and oversight.

Development fees are very high in California. If California was not so densely populated, it is not likely the fees charged would be an issue; here would be no need to charge development fees. Whether through taxes or assessments, local governments would simply charge every member of the community the same service price. But with the congestion, California has laws which say the city has to have to pay for growth which costs more for new residents. But if these fees are reasonable, or approached with efficiency these costs should not be inequitable or overly intrudable.

All plan checks and permit fees (except mobile home set-up and alterations) are based on the value of the project. The project total is the value of all the construction that the permit is issued for. This includes all finish work, roofing, electrical, plumbing, heating, air conditioning, elevators, fire extinguishing systems, any other permanent work or permanent equipment, normal site preparation and paving. It does not include the cost of the land. Before obtaining your building permits, you must pay any required sewer and water hookup fees and encroachment permit fees. You also will be required to pay school impact fees to the affected school district.

It would be interesting to know what rhyme and reason is used locally to set these fees. Marin, Alameda, Sonoma and Contra Costa have a new process for new or upgraded service connections though a single application for new construction.                                                                                     

The paperwork process for these applications can span 1,000 pages and is not easy to understand. The product should be short and simple so that the average person can understand what is being said. Cities could also expand by-right designations, which allow projects that conform to existing codes to go forward without lengthy review periods. 

Flexibility in design requirements would also help reduce housing costs, especially if design review was removed from request for proposal and request for qualifications requirements and addressed later in the development process

We are living in a time of modern technology and our council needs to look at the fees process in Dixon to see how it can be simplified. Remember 10 years ago, taxis were relevant—then Uber came on the scene and costs came down.