The city of Morgan Hill is considering imposing a series of new
development-related impact fees.
The city of Morgan Hill is considering imposing a series of new development-related impact fees.
Three proposed new fees, if approved by the city council, would help city departments recover costs associated with two new local ordinances, as well as the city’s participation in a regional stormwater management plan, according to Deputy Public Works Director Karl Bjarke.
One of the fees is required as part of a new sustainable building ordinance. When the city council approved the ordinance last fall, staff indicated they would have to impose new impact fees to fund the code’s enforcement. The ordinance requires plan reviews and periodic inspections to ensure that residential projects subject to the regulations are in compliance by using sustainable building features, such as energy efficiency, water conservation, and reduced waste during construction.
According to a staff report written by Morgan Hill Program Administrator Anthony Eulo, without the fee the city cannot afford to implement the ordinance. The estimated cost for conducting plan reviews is $89.17 per hour of building department staff time, and a review takes up to two hours, bringing the total to about $178 per review, according to the staff report. As the ordinance also requires verification that builders comply throughout construction, staff will have to spend extra time inspecting the sites. A sustainable building inspection of a custom home costs the city a rate of $110 per hour of staff time, with the average inspection taking about 1.5 hours, according to the staff report.
The staff recommendation on the city council meeting agenda for Wednesday night calls for the council to undertake a fee study to determine the appropriate amount for the sustainable building ordinance fee, as well as two other proposed fees which would be paid by developers.
As the city is currently in the midst of a larger study to determine if all its development impact fees are up-to-date, staff recommends that the viability of the three new fees be added to the study. The cost to add the three new fees to the study, which is being conducted by consultant Willdan, would be $2,880.
Another new proposed fee would pay for similar staff-time costs to implement and enforce a likely new water-efficient landscape ordinance, which is mandated but not funded by the state. The council has not yet enacted such an ordinance.
The estimated staff costs to inspect landscaping projects under such an ordinance is about $45 for small projects, and about $355 for large projects – both based on the $89.17 hourly rate.
Without the fee, the city would likely use water fund revenues to pay for the inspections, according to the staff report.
A third proposed new fee would help the city pay for state-mandated efforts to prevent stormwater pollution. The city participates in a regional plan with Santa Clara County and the city of Gilroy to control stormwater quality, Bjarke said. A permit the city expects to receive under that plan could impose fines of up to $10,000 per day if the city does not implemented the state-mandated guidelines.
The stormwater plan requires regular inspections of businesses to ensure they are not allowing polluted water to run off their property by, for example, washing vehicles in a paved lot that empties into a storm drain, Bjarke said. The staff report says an annual fee of $80 per year to fund the inspections, imposed on the city’s 1,200 businesses, could bring in $96,000 of revenue annually.
The city’s current stormwater budget is supported by its community development fund, which pays for staff time to conduct plan reviews related to other stormwater programs. However, the staff report indicates that a new fee to support stormwater regulations could replace the existing funding source.
That likelihood as well as further examination of the estimates of staff costs for the services would be the subject of a further study if the council approves.
The council meeting is 7 p.m. Wednesday at Morgan Hill City Hall, 17555 Peak Ave.
