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Legislative History Regulating Fees...03/2003
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User Fees Versus Mission Independence
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For the Record, or Not
Land Use Compatibility....
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Perils of An Applicant-Driven User Fee Funded Planning Office
- Perils of
An Applicant
- by
- Land Use
Committee
- Hugo
Neighborhood Association & Historical Society
- &
- Goal One
Coalition
-
- November 28, 2006
-
- Introduction. The long term financial health of the Josephine
County Planning Department is a great concern of the Josephine County Board of County
Commissioners (BCC).
-
- Communities can
decide whether the cost for servicing permits is charged directly to the permit applicant
through user fees, or shared among all residents through taxes, or some other mix. Land use user fees for servicing permits are
different than impact fees or system development charges.
Land use user fees pay for the administrative servicing of applicants applying for
land use permits.
-
- The BCC raised user fees for the services provided by the
Planning Department three times since 2004. It
violated the Josephine County Charter each time by establishing user fees through a
process which bypassed the required approval of the public (Section 29.5 Charter
Amendment: Fees).
-
- July 26, 2006
(Order No. 2006-125)
- June 1, 2005
(Resolution No. 2005-041)
- June 30, 2004
(Resolution No. 2004-045)
-
- First and
foremost, we strongly request adequate funding from the BCC for the Planning Department
out of the general fund. The Planning
Department performs critical land use service missions that are important to the strength
of our county’s economy and quality of life which, for reasons we will provide,
should be independent of funding sources.
-
- 1.
Administration,
- 2. Current
planning (servicing land use application permits)
- 3. Advance
planning, and
- 4.
Enforcement.
-
- Applicable Fee Laws:
-
- ORS 215.416(1) When required or authorized by the
ordinances, rules and regulations of a county, an owner of land may apply in writing to
such persons as the governing body designates, for a permit, in the manner prescribed by
the governing body. The governing body shall establish fees charged for processing
permits at an amount no more than the actual or average cost of providing that service. [Emphasis
added]
-
- ORS 215.422(1)(c) The
governing body may prescribe, by ordinance or regulation, fees to defray the costs
incurred in acting upon an appeal from a hearings officer, planning commission or other
designated person. The amount of the fee shall be reasonable and shall be no more than the
average cost of such appeals or the actual cost of the appeal, excluding the cost of
preparation of a written transcript. The governing body may establish a fee for the
preparation of a written transcript. The fee shall be reasonable and shall not exceed the
actual cost of preparing the transcript up to $500. In lieu of a transcript prepared by
the governing body and the fee therefor[e], the governing body shall allow any party to an
appeal proceeding held on the record to prepare a transcript of relevant portions of the
proceedings conducted at a lower level at the party’s own expense. If an appellant
prevails at a hearing or on appeal, the transcript fee shall be refunded. [Emphasis added]
-
- Current Planning by
Planning Department: “Processing of development requests through the different
applications requirements. May involve
preparing a staff report, presenting it at a public hearing, preparing findings,
processing appeals, administering flood hazard and water quality requirements, and any
request for a land development or division.”
Planning Department web page: http://www.co.josephine.or.us/SectionIndex.asp?SectionID=127.
-
- Advanced Planning by
Planning Office: “Conduct the
Periodic Review required by the State of Oregon. Maintain and update the Comprehensive
Plan including the Rural Land Development Code, urban land use and land division
ordinances, the goals and policies document, and the database to comply with all state and
federal laws and rules.” Other special projects requested by the BCC. Planning
Department web page: http://www.co.josephine.or.us/SectionIndex.asp?SectionID=127.
-
- For the following seven
reasons we believe that land use user fees for “current planning” permits should
not be used to fund the Planning Department’s current planning function, but rather
that the department’s funding should be out of general appropriations for all four of
the Planning Department’s service functions.
-
- 1. User Fees Approved By Voters
- 2. User Fees Are Unstable Funding Source
- 3. User Fees versus State Mandated Planning
- 4. User Fees versus Permissive Appeal Fees
- 5. User Fees Are Dedicated To User Services
- 6. User Fees and Planning Customers
- 7. User Fees versus Corruption and Favoritism
-
- 1. User Fees Approved By Voters. The BCC should follow state law ORS 215.416(1)
through the Josephine County Charter, “Section 29.5 Charter Amendment: Fees”
as ORS 215.416(1) does not require a certain minimum fee structure. ORS 215.416(1) requires establishing fees charged
for processing permits at an amount no more than the actual or average cost of
providing that service. Through a vote
citizens could have retained the fee structure in place in FY 2002 - 2003 and been in
compliance with ORS 215.416(1). They could
also have voted to increase it to the maximum (i.e., actual or average cost of providing
that service), or established a fee structure some place in between.
-
- “Section 29.5 CHARTER AMENDMENT: FEES. Voter approval
shall be required before any use fee, license fee, or any other fee may be established by
the county. In no way shall this act interfere with any existing fee or license programs
nor with any policy or procedures related thereto nor shall it interfere with judicial
mandate or state or national law. (Definitions: FEE -- A charge fixed by law for the
services of public officers or for the use of a privilege or of property under control or
ownership of the county. LICENSE -- A permit or warrant issued by the county or agents
thereof empowering the grantee to do some act including those made unlawful by ordinance,
statute or order including that authorizing or requiring such license.) [Amended November,
1986]”
-
- The BCC violated the
Josephine County Charter by establishing use fees through processes which bypassed the
approval of the public in establishing these fees.
-
- 2. User Fees Are Unstable Funding Source. Historically, the BCC had determined that the
county needed a county planning system and had contributed to maintaining that
system for the benefits of all citizens. Today
the BCC appears to support user fees to cover revenue shortfalls based, in part, on the
myth that user fees would provide stable and predictable funding.
-
- Funding through land
use user application fees does not create a stable level of funding because funding levels
would rise and fall with the number of land use applications. If the market declines and/or interest rates go
up, the number of land use applications would decline in the future, and the Planning
Department would face inadequate funding, i.e., Planning Department would have adequate
staff without enough work and not enough budget to support salaries. Conversely, if the market were up and interest
rates were low, we would probably find a large increase in applications, i.e., there would
not be enough staff to perform adequate services for the unplanned workload. A change to user fees should not be undertaken
unless a marketing study and business plan are prepared to address the stable funding
issue.
-
- We believe user fees
will be a "financial disaster" for Josephine County. The reason is that when revenue from user fees
decreases for any reason (typically, a soft economy), the county will have to make up the
shortfall. The result will be an increase in
operating expenses at a time when the county would be least able to afford it. Do we adopt an unstable business model that links
planning services to the health of the economy, where we alternate between ruthless
cost-cutting that eliminates capable, experienced planning personnel, and frantic hiring
and training of fresh-faced newcomers to cope with another brief period of sunny skies for
the housing industry?
-
- 3. User Fees versus State Mandated Planning. In instances where State or other regulations limit
the level of fees charged for county planning services, user fees will not apply. The level of user fee cost recovery should
consider the community-wide versus special service nature of the service provided. The use of general-purpose revenues is appropriate
for community-wide services. There is also
the idea of the service recipient versus the service driver. For example, it could be argued that a land use
applicant is not the beneficiary of the county’s current planning service efforts;
the community is the primary beneficiary.
-
- Land use planning
should be conducted by and for the people of Oregon. Citizens should have ample access to
be involved in land use decision-making and planning processes, which should be conducted
in a fully transparent manner. Oregon
Statewide Goal One - Citizen Involvement (CI), the backbone of Oregon’s statewide
planning goals, is part of the “Oregon System” in which citizens should have a
say in the governance of their state and their local communities. Citizen involvement in land use planning is more
important than ever, which is exemplified by its being given top priority by our state,
and labeled as such - Goal One. We
need to get back to the basics: land use
planning is for the citizens of Oregon, not just permit applicants or local governments. If Goal One fails, the entire system fails.
-
- The present BCC policy
is for the Planning Department to ultimately
be 100 % self-supporting through applicant-driven user fees. However, the applicant-driven land use user fees
can not be regarded as "user fees" that fund all the services provided by the
Planning Office. Many of the Planning
Office’s services have no relationship whatsoever to the resources devoted to
servicing a particular land use application (i.e,. administration, advance planning, and
enforcement). By the very nature of current
planning services being restricted to the “No More than the Actual or Average Cost of
Providing That Service”, user fees would exacerbate an already critical problem of
almost no funding for advance planning and enforcement services.
-
- By Oregon law (ORS
215.416(1); ORS 215.422(1)(c)) user fees are restricted to “No More than the Actual
or Average Cost of Providing That Service.” Restricted
user fees could not fund advance planning and enforcement services and, therefore, the
county would be violating its state mandate under ORS 197 and ORS 215. Even more to the point, long-range planning
services and enforcement are functions clearly intended to serve the broader county
community.
-
- 4. Use Fees versus Permissive Appeal Fees. The BCC raised land use appeal fees three
times since FY 2003 - 2004 from a long-time standard of $250 to a high of $1,550.
-
- July 26, 2006
(Order No. 2006-125)
- June 1, 2005
(Resolution No. 2005-041)
- June 30, 2004
(Resolution No. 2004-045)
-
- This was a 520% percent
increase in land use appeal fees in three years ($1,550-$250/$250 = 5.2).
-
- Fiscal Year
Appeal Fees Annual
Percent
-
Without
A Hearing
Increase
-
- FY 2002 - 2003 $250
-
- FY 2003 - 2004 $250
0%
- FY 2004 - 2005 $750
200%
- FY 2005 - 2006
$1,250
67%
- FY 2006 - 2007
$1,550
24%
-
- By Oregon law (ORS
215.416(1); ORS 215.422(1)(c)) user fees are restricted to “No More than the Actual
or Average Cost of Providing That Service.”
-
- The July 26, 2006 Order
No. 2006-125 justified the 24 percent increase over the proceeding FY with the following
conclusory statement:
-
- “(2) The cost
of the proposed fees is calculated to cover the actual or average actual cost of providing
the services and administration of the programs directly related to the proposed fees.”
-
- The June 1, 2005
Resolution No. 2005-041 justified the 67 percent increase over the proceeding FY year with
the following conclusory statement:
-
- “4) The cost of
the proposed fees shall be calculated to cover the cost of providing the products,
services and administration of any program directly related to such fees.”
-
- The June 30, 2004
Resolution No. 2004-045 justified the 200 percent increase over the proceeding FY year
with the following conclusory statements:
-
- “WHEREAS, the
County is mandated by Oregon Revised Statute 215.416(1), to adopt fees for the processing
of permits up to the actual or average cost of providing such services by the Josephine
County Planning Office: and”
-
- “WHEREAS, the
amounts shown on the attached schedule of fees represent charges at or below the actual or
average cost for the processing of various permit activities and services; now therefore,”
-
- It is interesting that
the 2006 Order No. 2006-125 stated “The cost of the proposed fees is calculated .
. .” rather than the cost “was” calculated to cover the actual or average
cost. The 2005 Resolution No. 2005-041 was
truthful with the statement “The cost of the proposed fees shall be calculated .
. .” in admitting that there was no analysis supporting the proposed fees, but that
they “shall be” calculated. The
2004 Resolution No. 2004-045 made the conclusory statement that the fees represented
charges at or below the actual or average cost without any supporting analysis.
-
- This issue addresses
fees to defray local government land use appeal costs (ORS 215.422(1)(c) versus fees for
processing land use application permits (ORS 215.416(1)).
The Oregon Legislature recognized the difference between user fees for
permit applicants with a personal and/or economic interest in the outcome and an engaged
public with a sense of civic commitment, shared beliefs that value public ends, and a
sense of stewardship for each other and the places citizens call home. The engaged public has a commitment to a greater
common good - a visionary belief that values public ends and civic responsibility.
-
- The BCC’s focus on
making the Planning Department independent of being “subsidized” from general
revenues is on ORS 215.416(1), while ignoring ORS 215.422(1)(c). The BCC’s assumption appears to be that
State law requires establishing user fees and it has the authority to establish them
independently of the people’s will.
-
- “The governing body shall establish fees
charged for processing permits at an amount no more than the actual or average cost of
providing that service.” [Emphasis added].”
-
- The BCC is accurate in quoting ORS 215.416(1). However, the emphasis should not be on
establishing fees, but the limit on the amount of fees.
-
- “The governing body shall establish fees charged for
processing permits at an amount no more than the actual or average cost of
providing that service.” [Emphasis added].
-
- The BCC does not
acknowledge ORS 215.422(1)(c) where the permissive “may” is used when a local
government can consider defraying fees for local appeals.
-
- “The governing body may prescribe, by ordinance
or regulation, fees to defray the costs incurred in acting upon an appeal from a
hearings officer, planning commission or other designated person. The amount of the fee
shall be reasonable and shall be no more than the average cost of such appeals or the
actual cost of the appeal, excluding the cost of preparation of a written
transcript.” [Emphasis added]
-
- For example, through a
vote (Section 29.5 of Josephine County Charter Amendment: Fees) citizens can permissively
retain the long-term appeal fee structure that was in place in FY 2002 - 2003 and be in
compliance with ORS 215.416(1) and ORS 215.422(1)(c).
The voters could have eliminated local appeal fees or increased them to the
maximum (i.e., actual or average cost of providing that service), or established some
defraying fee amount some place in between the maximum and some lower minimum.
-
- We recommend very low
cost recovery levels for appeal fees because there is no intended relationship between the
amount paid, even at an amount no more than the actual or average cost of providing that
service, and the larger benefit received to the community from an engaged and watchful
citizenry.
-
- 5. User Fees Are Dedicated To User Services. One definition of user fees is from the United
States government (Budget of the United States Government Fiscal Year 2001, Analytical
Perspectives, includes a definition of "user fee" (page 93)). This U.S. definition is very close to Oregon law
(ORS 215.416(1); ORS 215.422(1)(c)) on the amount of user fees being restricted to
“No More than the Actual or Average Cost of Providing That Service.”
-
- “The term
"user fee" as defined here is fees, charges and assessments levied on a class
directly benefitting from, or subject to, regulation by a government program or activity, and
to be utilized solely to support the program or activity. In addition, the payers of the fee must be limited
to those benefitting from, or subject to regulation by, the general public or a broad
segment of the public. The user fee must be authorized for use only to fund the
specified programs or activities for which it is charged, including directly associated
agency functions, not for unrelated programs or activities and not for the broad purposes
of the government or an agency. (emphasis added).”
-
- User fees dedicated to
the user through the county’s current planning function are required to be no more
than the actual or average cost of providing that service.
A change to user fees should not be undertaken until some effort has been made to
develop a real assessment study designed to address the legal issue of actual or average
costs.
-
- Fee surveys of other
adjacent counties does not satisfy the law, nor are they reliable as there are many
factors that affect how and why other communities have set their fees at “their”
levels. For example, many communities have
established their own policies that some services are a benefit to the entire community
rather than to special interests: public
safety emergency response services such as police patrol services and fire suppression;
maintaining and developing public facilities on a uniform, community-wide basis such as
streets, parks, and general-purpose buildings; and providing social service programs,
economic development activities, and planning services because they are clearly intended
to serve the broader community. Where other
counties have made these policies their associated services have very low cost recovery
goals.
-
- An explicit county
policy of having user fees cover the cost of applicant-driven services could also include
most of the scheduled appeal fees covered within the application fee schedule. The approach to appeal fees within this overall
concept would be to consider the local process - including local appeals - as a package
and include all but a low recovery appeal fee in the cost of the initial application fee
assessed on the applicant. This approach
would recognized the difference between user fees for permit applicants with a personal
and/or economic interest in the outcome and an engaged public with a sense of civic
commitment, shared beliefs that value public ends, and a sense of stewardship for each
other and the places citizens call home. The
contingency appeal fee portion of the land use application fee would be returned to the
applicant if there was no appeal. An extra
benefit of this approach would be more thorough and complete land use applications that
effectively address the planning standards and criteria.
These well designed land use applications would have fewer public concerns
and, therefore, fewer appeals from neighbors.
-
- 6. User Fees and Planning Customers. Funding the Planning Department through user fees can create perverse incentives. It is widely recognized that for the
“years” when the market is up, and land use applications are much higher than
planned for, the Planning Department would have more work than was planned for and should
turn away some of this work to provide the same level of service, but would probably have
no incentive to do so because it would adversely affect the increased revenues it was
receiving. Conversely, in the down
“years”, market revenues from the applicant-driven land use user fees would not
be enough to pay for the planned work program and levels of staff. In this case there would be no choice but to lay
off trained staff or appropriate revenue from other vital county programs.
-
- An independent Planning
Department will want to avoid the appearance of being “in bed” with its land use
applicants and/or big business (i.e., developers). In
order to be above reproach, staff at the Planning Department should have an open mind on
the issues, and show no bias toward any applicants or opponents. Likewise, land use applicants should not have the
appearance of "quietly shaping our world" and "determining” what
neighborhoods or communities look like in the near future.
-
- However, when customers
(i.e., applicants and developers) provide 100 percent of the funding for the Planning
Department, there is a natural tendency toward bonding between long-term service providers
and funding sources. This then could become a
disservice to the people of Josephine County, as the county’s planning decisions
could become partial to its funding sources.
- In a worst case
scenario, the culture of the Planning Department could develop a systemic bias in favor of
ill designed, applicant-driven land use proposals that keep its employees busy and
accommodate powerful developers. Conflicts of
interest, or the appearance thereof, could challenge the overall ability for the Planning
Department to conduct honest and accurate analyses of land use applications. Widespread perceptions of bias by the public of
the Planning Department would be destructive to moral and the planning mission. The public could perceive the BCC’s
aggressive efforts to change the funding source of the Planning Department as an eagerness
to please big business and corporate customers creating an atmosphere where objectivity in
its analyses was placed in jeopardy.
-
- 7. User Fees versus Corruption and Favoritism. The problems of corruption and favoritism must be
addressed in any normative account of planning. Their
potential is enhanced in an atmosphere of an applicant-driven user fee Planning Department
where the serviced customers are the funding sources for the planning program. Ultimately there can be a real disconnect from the
people of the county as the real customers.
-
- To some extent, these
are problems associated with government generally, and especially local government. If local government does tend toward corruption,
it may appear sensible at first glance to strip local government of the planning power
(and any other powers it can do without), especially if an alternative regulatory scheme
can accomplish the same ends with a lower risk of corruption. When corruption and favoritism crop up
periodically in other areas of local government, the problem usually brings about a call
for prosecution of the individual offenders, institutional reforms, and more effective
policing, but not abolition of the police department, the judiciary, the building code, or
whatever institution may have committed the offense.
Is planning somehow different in an applicant-driven user fee-funded
Planning Department? Critics might suggest
corruption is so prevalent in planning that the institution simply cannot be salvaged. Further, they might contend that such large
financial interests are at stake in planning decisions that corruption is particularly
tempting. In a minimum damage scenario, faith
in the local planning system is weakened and CI is further injured.
-
- We submit that
planning, while a particularly important power of local government, is not so different
from other powers and institutions of local government. We should be concerned about
corruption, or even the appearance of corruption, and work to eradicate it. The response
to corruption in other areas, in the form of swift and tough prosecution of offenders,
more effective policing, institutional safeguards, and requirements of openness in
transactions, should apply here as well. Planning
may also require special policing, for example, through a special state agency with broad
investigatory powers, established solely to monitor and investigate planning corruption
cases. The ultimate failure might be for the
State to take over the Planning Department.
-
- Ultimately, as with
other avenues of government transparency, policy, and responsibilities, what matters most
is effective policing from the bottom up through effective participatory democracy, ergo, Goal
One. A tradition of neighborhood and
community participation minimizes graft and influence-peddling in the planning process. Through the increased transparency and engagement
engendered by CI, graft becomes impossible (or at least ineffective, and therefore not
worthwhile for the developer) under the watchful eyes of the citizenry.
- Centralization resulted
in removing citizens from active involvement in the day-to-day workings of their
government, resulting in distancing public officials from the watchful eyes of the
citizenry. This has increased the potential
for organized financial interests to influence decisions, not the least of all through
assimilation. An infusion of confidence is
needed in the planning process, and perhaps in other aspects of government as well. To accomplish this, we suggest, increasing citizen
participation and, including opportunities to be watchful by implementing an affordable
local land use appeals process that has equal “ownership” by all, one that is
funded in a manner that reflects such, and one that is structured around a Planning
Department powered for long-term stability through a non-fluctuating funding system.
-
- Summary. Alternate funding sources for the Planning
Department should not be a political strategy of how to raise revenue without raising
taxes. We believe the Planning Department performs critical land use service missions that
are important to the strength of our community’s economy and quality of life. We hope the BCC will reconsider its decision to
make the Planning Department’s budget 100 percent dependent on applicant-driven user
fees.
-
- We believe our Planning
Department should be completely independent of funding sources that are subject to
economic market fluctuations. Planning
services should be equitably provided to citizens of Josephine County, who represent a
wide range of financial income. The funding
source should provide for voter approval of a system which leaves no doubt that planning
is for the people of Josephine County, and that planning is not just servicing permits,
but also includes long range-planning and enforcement.
-
- Most important the BCC
should recognized the difference between user fees for permit applicants with a personal
and/or economic interest in the outcome, contrasted with appeal fees paid by an engaged
public having a sense of civic commitment, shared beliefs that value public ends, and a
sense of stewardship for each other and the places citizens call home. Appeals fees should not have a chilling effect on
CI, but rather they should be commensurate with CI and its goals.
-
- Moreover, a user fee
system would limit BCC oversight, effectively removing the BCC from its role as the
Planning Department’s governors. A user
fee system for any function of the Planning Department will be harmful to the entire
community.
-
- Hugo Land Use
Committee
- Hugo Neighborhood
Association & Historical Society
-
- Hal B. Anthony,
Outreach Chair
- Hugo Neighborhood
Association & Historical Society
- 3995 Russell Road
- Grants Pass, Oregon
97526
- 541-476-4156
- Email: threepines@jeffnet.org
- Web Page:
http://jeffnet.org/~hugo/
-
- Wayne McKy, Chair
- Hugo Neighborhood
Association & Historical Society
- 6497 Hugo Road
- Grants Pass, Oregon
97526
- 541-476-4006
- Web Page: http://jeffnet.org/~hugo/
-
- Mike Walker, Education
Chair
- Hugo Neighborhood
Association & Historical Society
- 3388B Merlin Rd #195
- Grants Pass, Oregon
97526
- 541-471-8271
- Email: hugo@jeffnet.org
- Web Page: http://jeffnet.org/~hugo/
-
- Goal One Coalition
-
- Holger T. Sommer,
Director
- Goal One Coalition
- 2000 Hugo Rd.
- Merlin, OR 97532
- 541-476-5744
- Email: HolgerTSo@aol.com
- Web Page: www.goal1.org
-
- Mike Walker, Director
- Goal One Coalition
- 3388B Merlin Rd #195
- Grants Pass, Oregon
97526
- 541-471-8271
- Email: hugo@jeffnet.org
- Web Page: www.goal1.org
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