Commercial and housing developers in Kent could face a 15 percent increase in city permit fees next year, if a proposal outlined by Mayor Suzette Cooke and city staff garners Kent City Council approval.
Cooke and her staff presented the proposal during a Sept. 16 City Council workshop.
The proposed higher fees are needed to cover cost-of-living increases in salaries and benefits for city employees over the last two years, city officials said.
But Garrett Huffman, a spokesman for the Master Builders Association of King and Snohomish Counties, said in a phone interview Thursday that an increase next year in permit fees would be a bad move by the city.
“It would be an untimely act and would burden us further in a market where we can’t sell houses,” Huffman said. “And those fees would be directly passed on to the consumer. We don’t make up those costs.”
If approved, the extra fees would add an estimated $1,200 to the cost of a new house, said Bob Nachlinger, city finance director, at the Council workshop.
The proposed increases would apply to building, mechanical, plumbing, fire, planning and land-use fees. The city last raised its permit fees in 2006.
“These fees were not increased during that (two-year) period and costs are outpacing revenues,” Cooke wrote in a letter to the Council regarding the proposed increases.
Under the proposal, building, mechanical, plumbing and fire-permit inspection fees would jump to $107 per hour from $93 per hour.
Many fees would increase. Everything from each floor furnace in a building, to $21 from $18; an initial fire inspection, to $62 from $54; a mixed-use, design-review permit, to $620 from $539; and a subdivision final plat permit, to $2,477 from $2,154.
The Council will consider the fee increases as part of its deliberations on the upcoming 2009 budget. Further discussion on the proposed permit fees continued at a Council workshop yesterday, after press deadline.
Developers currently pay 82 percent of the city costs to process and review permit applications, Nachlinger said.
“Our costs subsidize the development by 18 percent,” Nachlinger said at Sept. 16 workshop. “With no increases in the fees and the increases in (city employee) salaries and benefits, the subsidy would be about 28 percent. If you pass the fee package as proposed, the subsidy would be 19 percent.”
Nachlinger asked Council members if they wanted to set a certain percentage for what they would consider an appropriate subsidy level, or if the Council did not want to subsidize developments at all.
“Most cities are looking at covering 100 percent of their costs,” Cooke said to the Council.
Council members did not indicate an interest at the workshop in moving toward 100 percent coverage of costs through even higher permit fees.
In unincorporated areas, King County sets permit fees at a rate high enough so that permit applicants pay for all of the county government costs to review permits.
“Our fees are less than most surrounding jurisdictions,” Nachlinger said. “We’re not even covering the direct costs.”
But Huffman said the higher permit fees would cause developers to stay away from Kent even more than they do now.
“They have other issues,” Huffman said of the city. “Their permit process is fairly slow. And the city has a knack for adding comments into the fold that make projects take longer. They’re always adding upgrades for roads and sewers and pushing developers into (those) projects.”
Councilman Ron Harmon asked city staff at the workshop to find out how much the proposed fee increases would have added to costs of recent developments in the city. Those projects include the Fred Meyer store on the West Hill, a couple of housing developments on the East Hill and the expansion of the Green River Community College campus at Kent Station.
City staff expected to have those figures by the end of this month.
Harmon also asked city staff to examine whether city departments are keeping costs down as much as possible on the permit applications.
“I want to know whether there is overlap and to make sure that we are being efficient,” Harmon said.
The Council has another budget workshop 5 p.m. Oct. 7 at City Hall. Residents can attend the Council workshops, but no public testimony will be taken.
But local folks can share their feelings during a public hearing 7 p.m. Oct. 21 at City Hall on the proposed permit fees and the 2009 preliminary budget.
A third public hearing is slated for Nov. 18, the same night the Council considers adoption of the budget.
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