At first blush, the city’s preliminary budget looks badly askew.
Viewed by percentages, the largest item of spending for the coming year is labeled “support for developers.” The budget item totals over $3.2 million – almost 20 percent of the operations budget – in 2002.
And that budget item may have had an effect on the recent city election campaign, where “green” candidates took the mayor’s office and the three open city council seats.
“This galvanized the anti-growth activists,” said Mayor Dwight Sutton.
Some argue that if the budget were in line with community values surveys showing that growth is a widespread concern, Bainbridge would be regulating growth rather than “supporting” it.
So what would it take to bring about such a change? A new city council or mayor? More input from concerned citizens? Amendments to the comprehensive plan?
How about a bottle of white-out and a pen to change the label in the budget.
The “support,” it seems, is largely semantic. The items contained within the “support for developers” category are the costs of enforcing the city’s building and zoning regulations – in other words, the legal mechanisms by which the city regulates building and development.
But Mayor Sutton acknowledged that those items could as readily be termed “regulation” as “support.”
Saying that the “support” label is inappropriate, Sutton said it would be removed from the final version of the budget.
“We took out some inflammatory language in the initial draft, but we evidently didn’t get it all,” he said.
City Finance Director Ralph Eells, who chose the “support for developers” label, maintains that the myriad of city regulations do benefit the development community.
“They couldn’t build anything at all without getting the permits, and this is the cost of issuing the permits,” he said.
Therefore, Eells says, the city’s cost of enforcing its building and zoning regulations should be termed “support,” in the sense of a subsidy, for the development community.
Not surprisingly, the building community disagrees with the underlying premise.
“Why single out development?” said Dick Allen of Hillandale Homes. “If the city wants to have a regulatory process, that’s a cost to the city.”
Kelly Samson, who is developing a large-lot project at the south end of the island, takes a middle view.
“I think the planning department is for the benefit of both the developers and the community,” Samson said. “I don’t know how you would figure the percentage benefit to each.”
The formula
Eells computes the cost of the land-permitting system by tracking the actual hours spent by both the building department and those planners who work on current projects – long-range planning is not included.
He also includes a share of the costs of city hall that is proportionate to the amount of space dedicated to building and planning, and a share of general overhead – computers and administrative staff.
Then there’s the cost of “professional services,” mostly legal costs. Eells includes all legal costs related to a specific project (as opposed to general legal advice on land-use matters), no matter whether the city initiated the suit or was a defendant, and no matter whether the city won or lost.
For example, the cost of the Papa Murphy’s lawsuit – the city tried to keep a U-bake pizza parlor from setting up in the Village shopping area – was allocated to the “support for developers” account.
“This is a litigious community,” Eells said, “and that drives a significant amount of the costs. But I don’t know of any business that doesn’t seek to recoup its legal costs in some fashion.”The $3.2 million “support for developers” number is a gross figure, and does not offset the fees that builders pay.
In the year 2000, builder payments totalled some $1.47 million, but are projected to drop to just over $1 million in 2002.
Eells has subdivided the city’s costs and fees into two categories.
The “building” category, which is basically building permits and inspections, cost the city $1.49 million in the year 2000, and generated fees of $1.05 million, creating a roughly 70-30 percentage split between costs borne by the individual applicants and costs borne by taxpayers.
According to Eells’ calculations, the “development” function, which involved the issuance of subdivision and development permits, was a big money-loser for the city. He showed costs of $1.3 million and revenues of $276,000 for 2000, meaning less than 20 percent of the cost was borne by the applicant.
Presented with that information, the city council this week raised the hourly fees charged by the planning staff for large-development work from $70 to $90 in an effort to narrow that split.
“Developers should pay their fair share of the costs of growth,” said Michael Pollock. “I don’t know what that share should be, but the sense right now is that it’s not balanced fairly.”
Pollock said that even at $90 per hour, Bainbridge’s fee is reasonable compared to other cities. Seattle, he said, charges $175 per hour for comparable services.
Developer Samson argues that the fees builders pay is not the whole financial picture related to development.
“Somebody has been paying taxes on that raw land for years, and that land has never called a policeman or gone to school,” he said. “You could say that in return for those payments, the land is entitled to a well-functioning planning department when it is time for development.”
