Building fees in Turlock will be going up for most new residential and commercial construction projects in an effort to lessen the funds the city’s building department draws from the general fund.
The Turlock City Council adopted an amendment to the city’s municipal code that will replace the current valuation based fee system with a cost recovery fee structure.
The building department annual expenses run about $1.1 million, but revenues have only been running about $662,000. Principal Civil Engineer Eric Picciano said the building department, which is responsible for plan checking, inspections and record management, has a workload that does not equal its generated revenue.
“We spend a lot of time out there inspecting and plan checking and we are not getting paid for it,” Picciano said.
In the new fee structure a building permit for a single family home would cost an additional $1,500. Most other projects would be based on the hours worked, from a variable range of $118 to $198 per hour. The new fee structure would reward efficiency with lower costs.
“The more time spent checking and inspecting, the more money it will cost,” Picciano said.
The one exception to the hourly rates would be for minor projects, like replacing a water heater or adding a deck, which would have flat fees depending on the project.
The new fee structure was passed unanimously by the City Council Tuesday night and then immediately amended. The amendment, passed by a 3-2 vote, reduces fees by 25 percent for two years with a one year review. It also allows for a deposit-based fee for new residential construction. The dissenting votes were cast by Council members Forrest White and Steve Nascimento.
Both the Building Industry Association and the Development Collaborative Advisory Committee advocated for the 25 percent reduction as a means to spur new development.
The fee structure that Turlock’s building department had been using was 150 percent of the amount determined based on the 1994 Uniform Building Code. In 2007, a study commissioned by the city suggested the fees be increased by 216 percent, but a 50 percent increase was adopted instead. As a result the building department was not collecting adequate revenue to keep it from deficit spending and has had to use money from the general fund.
“We’re trying to reduce that dependency,” Picciano said of the new fee structure.
Changing the fee structure could also keep the city from being sued. Numerous California communities have been targeted in lawsuits by building permit applicants claiming the fees were not equal to the actual cost and that the building departments were generating large profits that were paying for other city services. As a result of court rulings, many communities are moving away from arbitrary valuation based fees to cost recovery based fees.