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Wednesday, September 13, 2017 by Jo Clifton

Plan for new development services staff on hold

Along the way to passing a budget for the upcoming fiscal year, City Council voted Tuesday to derail the Development Services Department’s plan to hire 51 new employees beginning in either January or March. The department has said it needed the new employees in order to keep up with the demands of a growing city.

On a motion from Council Member Delia Garza, Council voted unanimously to postpone making a decision about whether to hire some or all of those 51 employees and asked staff to come back with a fee schedule reflecting that decision. Because some increase in fees is already baked into the fee schedule that will take effect Oct. 1, it’s possible that there will be two fee schedule changes in Fiscal Year 2017-2018.

The department has been under pressure for more than two years to streamline operations in moving development from plan to reality. The Zucker Report made clear that nobody was happy with the situation in the department.

As the Austin Monitor reported when the Zucker Report was released in 2015, “The report also includes input from customers, conducted via a survey. According to Zucker Systems, ‘The negative responses we received in this survey are the worst we have seen in our national studies including many Texas communities.’ … In fact, 82 percent of respondents felt that the city’s development review and plan check processes were unnecessarily cumbersome or complex, and 81 percent of customers felt that if the processing of a project was delayed, it was not typically justifiable and could occur over minor issues.”

Garza said she had received a number of letters and emails from small builders who were worried about a huge increase in permitting fees. She also said she would like the department to find a way to help lower the fees for low-income people who were building “granny flats” for their own use.

Rodney Gonzales, director of the Development Services Department, told Council on Tuesday that the point of hiring the 51 new employees was to try to keep up with growth. He has been trying to make the department an enterprise fund as the Zucker Report recommended and Council supported.

Gonzales said that two years ago, the department received 40 percent of its funding from the General Fund. With this budget, he said, development would pay for the services offered by the department without it having to rely on the General Fund. There is some General Fund money in the department, and Council Member Ann Kitchen tried first to eliminate $1 million of that money but found it difficult.

Gonzales explained that removing General Fund money would mean elimination of permanent employees in the city’s highly regarded urban forestry program as well as temporary employees in telecommunications permitting.

Eliminating the telecom permitting money would “affect service delivery” in that program, Gonzales said. The legislature passed a law this spring preventing the city from collecting fees for the telecom permits, he noted, so the money must come from the General Fund. The remaining General Fund money in the department’s budget is related to fees Council has directed the department to waive for programs such as Smart Housing, Gonzales said.

Mayor Steve Adler said he would not support the cut and other Council members did not say they would support it, so Kitchen’s motion was set aside without a vote.

Garza had already expressed her dissatisfaction with the cost of development for accessory dwelling units during a work session.

Council directed the department to refigure the development services budget without those new employees and report back to Council on how that will impact fees such as plan review and inspection.

Gonzales explained that his department will still be increasing fees on Oct. 1, just not as much as had been envisioned by the budget writers. The fee increases related to the 51 employees and associated costs would be postponed, he told the Monitor. That includes salaries, computers, trucks and other supplies those new employees would have used.

Interim Assistant City Manager Joe Pantalion said development services would have to work with its consultant, Matrix Consulting Group, to recalibrate those fees and bring them back to Council. Fees will be going up on Oct. 1, but the department will have to figure out how much before then, so it can raise the fees but stay within the Council directive, he said.

Pantalion said Council’s directive would have no impact on drainage utility fees. Currently, those fees are paid to the drainage utility, which transfers the funds to development services. But under the new service model, those fees will go directly to development services to support drainage reviewers and water quality reviewers, among others.

The department will save $3.8 million in salaries and benefits, but Gonzales said it would have to “tease out” the amount to be saved on vehicles not purchased and other costs. He expects to be able to provide Council with the total number on Wednesday, per its direction. This is not General Fund money, but money that will be cut from fees to develop property.

Gonzales noted that the new positions had been expected in January and March 2018. Council did not indicate that it had made a final decision about whether to fund some of those positions, Gonzales said, but he said he wants to have the conversation with Council “as soon as possible, because from our perspective they’re tied to service delivery and we want to make sure we have the right service delivery.”

Gonzales said the same plan review fee applies to developments, regardless of whether they are new single-family homes, duplexes or granny flats. However, the Monitor found that many variables affect those fees, so it is difficult to make a general statement about how much the fees for any particular structure might decrease under the proposal.

Gonzales said the department currently has 361 permanent positions and a fluctuating number of temporary positions based on need.

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Key Players & Topics In This Article

Austin City Council: The Austin City Council is the body with legislative purview over the City of Austin. It offers policy direction, while the office of the City Manager implements administrative actions based on those policies. Until 2012, the body contained seven members, including the city's Mayor, all elected at-large. In 2012, City of Austin residents voted to change that system and now 10 members of the Council are elected based on geographic districts. The Mayor continues to be elected at-large.

Development Services Department: A city department that reviews development and inspection services.

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