Tuesday, January 29, 2019 by Jo Clifton

Development fees could help parks department, study shows

The city of Austin could collect approximately $360,000 from development reviews done by the city’s Parks and Recreation Department, according to a cost of service study done by the Matrix Consulting Group at the request of City Council.

Currently, the department does not charge any fees for development review activities, even though staff members spend a considerable amount of time reviewing site plans, subdivision proposals and other development plans.

Council requested the study during deliberations on the budget last year. Council Member Alison Alter is particularly interested in helping the parks department recoup the money it is spending on services for developers.

On Monday, Alter told the Austin Monitor, “From my experience … PARD is spending a lot of its planning time working on development projects, when often the parks are what’s most important to the community. They’re spending a lot of time in order to get it right and that cost is being absorbed by PARD. That means that there are planning resources that are not spent on other aspects of the infrastructure that is under PARD.”

The money the parks department pays to its employees to do the development work should come back to the department in the form of fees, just like fees paid to other departments, Alter said.

According to a memo from Sara Hensley, who is serving as interim assistant city manager as well as director of PARD, the final report from the Matrix Consulting Group was submitted to the mayor and Council “for consideration of a midyear budget amendment to the fee schedule.”

The Matrix study says that based on the company’s experience in analyzing local government operations, “the typical cost recovery level for development review services is between 80-100 percent.”

The Parks and Recreation Department is not recovering any of its costs related to development review services, in contrast to other jurisdictions. The study says that “in recent years, more local jurisdictions have adopted formal cost recovery policies at the department/division level. The Matrix Consulting Group considers a formalized cost recovery policy for various fees for service an industry best management practice.”

Although Matrix did not tell the city how much PARD should collect for development review services, the company strongly suggested that the city should have specific policies related to development fees.

The study says, “Once the full cost of providing services is known, the next step is to determine the ‘rate’ or ‘price’ for services at a level which is up to, and not more than the full cost amount. The City Council is responsible for this decision, which often becomes a question of balancing service levels and funding sources.”

The Matrix report shows how the company calculated proposed fees based on direct staff costs and material costs, where applicable, as well as departmental and citywide overhead. For example, a site plan/subdivision review fee costs the city an estimated $717, while a review of a planned unit development or a municipal utility district costs the city more than $20,000.

A PARD zoning review, on the other hand, costs the city only $296.

“The total cost per unit for the reviews conducted by PARD staff varies from a low of $148 for initial development assessments to a high of $20,090 for MUD/PUD/PID/PDA reviews. It is important to note that for the MUD (etc.) reviews these projects can last for several years and this cost represents the time spent over the life of the project. Therefore, the cost per unit is not an annual cost as they are not charged annually, but just a one-time fee,” according to the report.

Hensley pointed out that the “proposed fee structure reflects only those reviews that we are conducting … what PARD has to do.” She said costs are not related to the size of a site plan, adding that “a small site plan … could take as much time as a large site plan.”

Photo by Spawnzilla [CC BY-SA 4.0], from Wikimedia Commons.

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Key Players & Topics In This Article

City of Austin Parks and Recreation Department: The city department responsible for the city's park system, rec centers, and associated infrastructure.

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