Almanac

News - April 21, 2010

Woodside: Huge jump in building fees? Council seeks more data

by Dave Boyce

If the length of a discussion indicates its seriousness, the question of how many thousands of dollars in fees Woodside property owners should pay to reimburse the town for staff time spent on building and remodeling projects is a serious matter.

The Town Council discussed the topic at length at its March 23 meeting, requested more data from staff, and talked about it again on April 13. After raising more questions than answers, the council formed a three-person committee to continue looking into it before bringing it back for more discussion and, eventually, a public hearing.

A recent report indicates that, contrary to the town's policy, the town is not recovering specified staff costs, a situation that could lead to some fees rising dramatically, perhaps as much as 300 percent.

Financial management policy No. 4, on Page ii of the town budget, states that development services — planning and building services performed by Town Hall staff — "should be self-supporting, including appropriate overhead costs."

But Woodside has been subsidizing development-services costs. In the 2008-09 budget year, for example, the town paid out $447,600 for planning services and $239,200 for building services, according to an analysis presented to the council on March 23 by San Jose-based Management Partners Corp.

Woodside's fee structure is out of date, said Management Partners analyst Lynn Dantzker, whose report says the fees were last changed 14 years ago and are now much lower than in neighboring towns. For example, a Woodside resident pays about $2,200 for a building permit for a new two-story home, versus $8,300 in Portola Valley, $9,000 in Hillsborough, and $12,400 in Los Altos Hills.

"Most municipalities are not too interested in subsidizing services," Ms. Dantzker told the council.

As for the residents, she said, they tend to want answers to three questions: What do I owe, when will I get the go-ahead, and what is my path to success?

In determining individual project fees, Ms. Dantzker recommended that the town adopt an across-the-board use of a project's total value rather than its square footage. The current system uses valuation for alterations and remodels, but square footage for new construction and additions.

Under the proposed fee schedule, that $2,200 building permit would rise to around $8,900, an increase of about 300 percent.

Not all projects would see that kind of bump. The estimated cost of a permit for a new four-car garage, for example, would go to $1,880 from the current $1,540.

The cost for checking the plans of a residential project should be 85 percent of the cost of the building permit, up from the current 75 percent, while a commercial project should increase to 100 percent from the current 75 percent, Ms. Dantzker said.

The analysis includes a building-permit-valuation table with proposed fees as well as automatic minimums that would kick in if the valuation, as reported, is lower than a set cost per square foot. The town's building official could reset a valuation for a new home to a minimum of $250 per square foot, for example, if the reported valuation worked out to be less than that.

"I don't think we have a good track record of knowing what a project really costs, (but) new construction is definitely more than $250 per square foot," said Councilman Peter Mason, an architect.

Councilman Dave Tanner, a builder, mentioned situations in which a client may claim it's a $3 million project, "and I know they spent $25 million."

Go to is.gd/bhOfZ and turn to Page 54 for more on the valuation table.

For the next round of discussions, the council's requests of staff include sample projects under current and new fee structures; more on Woodside's rates as compared with other communities; and an estimate of how many residents per year might feel the impact of higher fees.

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