City Manager Proposes Tax Increase & Development Fee Hikes to Close Budget Gap

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Charlotte City Manager Ron Carlee unveiled a 2015 budget proposal that addresses a $21.7 million budget gap through a combination of property tax increases, user fee hikes and service cuts.

If passed, the budget would also result a Storm Water fee increase for nearly 40 percent of City residents, higher water rates, and the elimination of roughly 100 vacant staff positions (though no layoffs are proposed).

For the development industry, the proposed budget includes substantial increases in fees for development permits, plan review, and major rezonings, with some fees more than doubling in cost. Carlee argues that these fee increases would move toward full implementation of a 2005 City Council policy to recover 100 percent of the cost of providing a regulatory service through user fees.

The regulatory fee hike proposals come just a few short months after the release of an independent study by the Gartner Group showed the need for substantial improvements in how both the City and Mecklenburg County issue building and development permits. The study called for improvements in customer service, better interdepartmental coordination, and new investments in technology.

Some of the most significant development fee increases proposed in the budget include:

Commercial Plan Review and Inspection: The per-project fee would increase 37.4 percent, from $1,485 to $2,045 on July 1.Major Commercial Subdivision Review & Inspection: The per project fee would increase 116.8 percent, from $3,700 to $8,110 on July 1. The additional $100 per-acre fee for this review would remain the same.Major Residential Subdivision Review & Inspection: The per project fee would increase 103.2 percent, from $4,200 to $8,535 on July 1. The additional $100 per-acre fee for this review would remain the same.Conditional Rezoning: This fee currently ranges from $925 for a conventional single-family subdivision to $3,100 for a commercial or mixed-use project. The budget proposes restructuring this fee to create two separate tiers for major subdivisions (more than 10 acres or 2,500 trips generated per day) and minor subdivisions (less than 10 acres or fewer than 2,500 trips per day). The fee for a conditional rezoning for a major subdivision would be a flat $5,000, while a minor subdivision rezoning would cost $3,100. Conventional rezonings (which are rare in Charlotte) would be charged a flat $1,950.CDOT’s Commercial Building/Driveway Permit/Site Plan Fee: The per project fee would increase from a range of $100 – $300 to a flat $740, for an increase of 146 percent.CDOT’s Rezoning Application Review Fee: Currently a flat, per project fee of $1,400, this would increase 169.3 percent, to $3,770, for a major rezoning, while dropping by nearly half for a minor rezoning.

Summaries of the proposed development fee increases, for both Major and Minor rezonings, are below:

While the proposed regulatory fees for Land Development would fully eliminate any General Fund ‘subsidy’, the Manager’s Office says the proposed increases for the Planning Department would leave some subsidy in place by not moving to 100 percent cost allocation recovery. REBIC has long maintained that the City Planning Department provides benefits to the entire community, and that taxpayers should therefore bear some of the overhead cost.

The full details of the Manager’s proposed budget can be found on the City’s website, with the User Fee recommendations beginning on page 129 of the full document. City Council will meet Wednesday, May 6th at 2 p.m., to discuss the proposal in a budget workshop, and a public hearing is scheduled for Monday, May 11th, at 6 p.m. Three more workshops will follow in the month of May, with Council scheduled to vote on the budget at its regular meeting on Monday, June 8th.

REBIC members and staff will be meeting with the City Manager’s office this week to voice our concerns about the proposed fee increases, which we believe could have a negative impact on the City’s ability to attract economic development.

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