Significant increase ahead for some Galt development fees

GALT — In an effort to ensure the City of Galt’s budget remains stable in the future, the Galt City Council agreed to increase development fees for commercial and industrial projects last month.

For the upcoming fiscal year, staff hopes to increase revenue by $24,623. Staff hopes increased development fees will be recovered by $1.4 million annually to keep the city’s general fund whole.

Chris Erias, the city’s community development director, said fees for minor use permit reviews will increase from $1,959 to $6,337 per project, and design review fees for projects such as residential or commercial subdivisions will increase from $2,500 to $9,337 each.

“These are significant increases,” he told the council on Dec. 3. “But the level of effort when a project goes to the planning commission is pretty significant. The amount of time for review, the amount of time for routing an application, and the amount of time preparing to go to the planning commission far exceeded the current fees.”

Councilman Paul Sandhu raised concerns about the excessive increase and its effect on developers who may design smaller projects. He asked if developers with smaller projects will be charged less in fees than those with larger designs.

“I totally understand why you had to make the new fee $6,337. It’s about staff time,” he said. “But did you consider the other side, where there are different kinds of developers. Sometimes a developer has a half-acre site and some have a 20-acre site. On the development side, this isn’t really fair.

Erias said no matter what kind of project comes to the community development department, staff takes the same amount of time to review designs, meet with applicants and prepare projects for a planning commission presentation.

Vice Mayor Shaun Farmer asked if the fee increases were similar to current fees imposed by nearby cities such as Elk Grove, and will they deter developers from wanting to build in Galt.According to the Elk Grove planning decision website, minor use permit design review fees are $5,200, and permit review fees at the planning commission level are $8,800.

“I think this council has worked hard to put programs in place to incentivize economic growth,” he said. “I just want to make sure what we’re doing here is not going to undermine that. I don’t want to take two steps forward and three steps back.”

Erias said staff only looks at other cities’ development fees to see where Galt falls on the overall list of charges. And while the proposed fees are comparable to those of Elk Grove or Sacramento County, Erias said the city will impose fees based on cost burdens.

In addition, Erias said many developers in the area are aware of the proposed increases, which will not impact all development.

Projects that may be mostly impacted by these increased fees include telecommunication towers and shipping containers used as storage sites, such as the new Galt 24 Hour Storage project, currently in the planning stages, he said.

The city is also seeing an influx of drive-thru restaurants and convenience stores, Erias said, so those kinds of developments will also be impacted by new fees.

Councilman Rich Lozano said while many would like to keep Galt’s small-town feel, the city has to look at its long-term budget issues, of which commercial and residential development could help.

“I’m not one to increase fees just to increase fees,” he said. “I think government has the responsibility to live within its means. Having said that, this last year has been no fun. We were handed a situation where we have been woefully underfunded in many areas.”

The proposed fee increases come as the city faces a financial crisis that forecasts just $777,575 in the city’s general fund by July 1, 2020.

The budgetary shortfall is due to increased expenditures in the parks and recreation and lighting and landscape departments, which have ballooned to $1 million annually in the former and $200,000 in the latter.

In addition, the loss of revenue from the Galt Farmer’s Market has been a factor, which dropped from $3.5 million in 2005 to $2.5 million in 2019.

The council unanimously approved the proposed fees on Dec. 3, and they will take effect Feb. 1, 2020.