El Dorado County Planning and Building Department divisions will increase fees in an effort to level cost recovery with revenue.

A cost recovery evaluation by NBS Government Finance Group Inc., which conducted a fee and nexus study to analyze costs of Planning and Building services and the revenue brought in, determined the county is currently recovering approximately 68% of total annual costs of providing services across the divisions. 

“When we don’t charge 100% of any fee for service, then you need another funding source, wherever that may be, which could include the General Fund,” said Nicole Kissam, NBS director.

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According to the study, which was presented at the El Dorado County Board of Supervisors Aug. 15 meeting, the Planning and Building Department is recovering just over $9 million in fee revenue between Planning Services, Stormwater and VHRs, Building Services, Technology, General Plan Implementation, GIS Support, Code Enforcement, Airports and Cemetery division fee categories.

Planning and Building’s estimated revenue at full-cost recovery is more than $13 million but staff made the recommendation to increase recovery fees byapproximately $2 million for an overall 82% department recovery percentage. 

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The Board of Supervisors conceptually approved most of the increases and gave Planning and Building staff until October to return to the board with a resolution on recovery increases for a first reading. The board then can enact the resolution 60 days after the first reading.

Planning Services is reported to receive approximately $1.2 million in fee revenue, which covers 52% of costs. Planning staff recommended increasing its fees to hit NBS’s proposed cost recovery figures, which includes 98% cost recovery at an approximate $1.1 million increase. 

Planning Deputy Director Robert Peters told the board the increase includes estimates on new fees such as implementing Senate Bill 9, the California HOME Act, which was enacted to make it easier for homeowners to build a duplex or subdivide existing land, and increases in time estimates it takes staff to conduct tasks.

“In some instances, those time metrics have been increased,” Peters said. “We found what we are charging and the amount of time we were taking (for tasks) increases due to the complexity of the projects. What may take a project two hours might take three, when when you add that to the amount of the increase in the rate to get to the cost of the recovery, we are now increasing the gap (between charging and time spent) because you’ve added hours to some of those activities.” 

Assistant Director of Planning Chris Perry gave the board his department’s reason for not going 100% on cost recovery on all fees — it would not be equitably ideal.

“An example of a permit we wouldn’t want to go 100% cost recovery on would be an appeal, because you have an equity question there since you want people to make appeals as they need to,” Perry said. “You can see that the current fee for appeals is $239 and the recommended change is from 4% to 8%. If we went 100%, you can imagine that is not going to work.”  

Peters added certain services offered at the counter are not charged due to the division’s desire to improve customer satisfaction, to which the board agreed. 

“There are cases where it doesn’t make sense to charge a fee for something but I look at this holistically,” said John Hidahl, District 1 supervisor. “If we are subsidizing Planning or Building functions with taxpayers money out of the General Fund, we are really subsidizing somebody’s private projects with the general tax revenues, so we all pay and that isn’t fair or equitable. Everyone should pay their fair share and this is trying to get closer back to that fair share.” 

Other supervisors agreed but considered if implementing an escalator method would be best due to seemingly high rate increases. 

“When we have these huge increases it’s kind of shocking,” said Lori Parlin, District 4 supervisor. “We have incremented (fee increases) over one or two years when the change is so big in other programs.” 

Brendan Ferry, director of the Tahoe Planning and Stormwater divisions, gave a similar perspective to the board and stated fee increases for permit application, permit renewal, permit modification and waitlist fees were necessary due to increases in time it is taking to complete certain tasks. 

“We have our four fees as they exist and it is our recommendation we increase those fees due to the fact we have been charging for about one hour of our time, which is far insufficient for what it takes to issue a new VHR,” Ferry said. 

The recommended permit application fee, which is currently set at $190, could jump as high as $760. Ferry’s division is bringing in estimated fee revenues of just over $256,736 at 36% recovery. 

Other board recommendations included increasing fees for Code Enforcement, charging a time and materials flat fee amount of 7.59% on the average hours worked for each application type based on time estimates and setting a 7.59% flat fee charge for Planning and Building, both concepts for General Fund fees. For the technology fee, staff will move forward with a 3.2% annual permit and project revenue and a “future” technology fee of 2.45% of permit revenues for building permits only. 

An airport fuel flowage fee for emergencies will also be looked into. 

GIS fees for the Surveyor’s Office and Cemetery Division fee increases have been tabled for future research. 

A full breakdown of the fee study and a staff report on the fees can be found on the county’s legistar’s website.