Austin Business Journal reports, "developers working in Travis County may face increased construction and permitting fees in the months ahead.
Travis County Commissioners Court is considering increasing existing development fees and implementing new ones for a variety of services including traffic impact analysis, on-site sewage facilities and floodplain permits, in addition to requests for variances and exceptions associated with development review.
If passed, this would be the first change to the county’s development fee structure since 2016 and generate millions in annual income for the county.
With already long wait times for county development review, which increase the cost of new construction, commissioners stress that any additional funds raised from the new or increased fees should go toward expediting the review process.
The change is being recommended by county staffers following a 2019 analysis conducted by accounting and consulting firm BerryDunn. It was brought to the board by Commissioners Jeff Travillion and Brigid Shea.
Proposed new fees include a project assessment set in place in response to the Texas Legislature’s 2019 revision to the plat and land development application process, pre-development meetings and traffic analysis fees.
Following a Nov. 29 public hearing on the proposed changes, during which one member of the community spoke, the commission unanimously voted to call on county staff to develop a plan to carry out a phased approach to implementing the fees. They also asked for information on how the new revenue would be used to expedite the development review process.
The commission will again review the topic in December.
How much will the proposed fees cost developers?
The fee increases are being prosed at rates that reflect the percentage of services cost that would be recovered by the county. If adopted at the full cost recovery rate — meaning the fees would completely cover the costs of county services — these fees are expected to generate more than $6 million. The new rates are proposed to start Jan. 16, 2023.
The service fee for a basic plat review currently being completed at a cost of $3,065 per plat for a developer could increase to between $7,664 and $14,562.
An application fee including the initial permit and renewals for stormwater and environmental inspections currently costing developers $400 could increase to $1,000 up to $1,900.
A type A residential permit could rise from $60 to $280, but a large subdivision permit would rise from $17,000 to $92,000.
Costs are generally determined by the size of a property and the number of lots it will include.
"We feel it is time for the court to look at fees again and new fees for services that we are providing but have never charged a fee for," said Cynthia McDonald, county executive of transportation and natural resources. "The development in the Austin area has continued at a very rapid pace. It has gotten more and more complicated as we moved out into the unincorporated areas. We are becoming much more urbanized. There are a lot of environmental issues to deal with."
The county’s development services division, which is responsible for reviewing applications for permits in the unincorporated areas of Travis County, uses fees to offset the cost of providing related services. The county’s expenditures are outpacing annual revenues for these services.
Due to the region's recent and unparalleled growth and urbanization, increased road traffic and and the resulting need for environmental protections and legislative changes require existing fees, county administrators argue.
According to the analysis from BerryDunn, the county previously had a 34% cost-recovery rate for these fees. In the 2023 fiscal year, that rate decreased to 20%.
BerryDunn recommended 90% cost recovery.
"We want to see this process improve," Shea said. "If we are going to collect $6 million in fees, use those fees to that end. It is shocking that we are only able to recover 20%.
She added: "We are not a charity and taxpayers should not be asked to subsidize the cost of development. I am very supportive of having us get to full cost recovery."
Rising fees in Austin
The increased rates would mean higher development costs in the Austin area, which already has higher real estate fees than any other major Texas metro, according to a Texas Real Estate Research Center study requested by the Austin Board of Realtors and the Home Builders Association of Greater Austin.
The city of Austin is also increasing fees to keep up with explosive growth. In September, Austin City Council adopted new fees that will support public parks. In June, the city initiated a one-time street impact fee that will fund transportation infrastructure.
"We still want to be affordable," Travis County Commissioner Margaret Gómez said.
She emphasized that the city’s many fees do not coincide with the affordability that the city "drastically needs."
Commissioner Ann Howard said it was difficult for her to consider raising the fees without a clear answer about whether that would decrease the time it takes for development to move forward.
"If we are going to change to recoup these fees, it gives us an opportunity to add the staff that we need, too," she said. "Instead of just taking $6 million and replacing it with general fund dollars, I think we should build a system that you [staff] want and need and our constituents are crying out for. It is to help build out the system that we can't otherwise afford. I think the development community would say full cost recovery makes sense if we are getting improvements to the process from that money.""
Source: Austin Business Journal
Written by: Mike Christen
Published: November 30, 2022
Posted by Grossman & Jones Group on
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