Residents will have a little less spare change after Los Altos Hills raises fees for building permits and other town services and staff time May 21.
The first fee increases since 2008 are necessary to ensure that fees reflect the rising costs of doing business, according to an analysis conducted by an outside consulting firm. Currently, the town recovers only 60 percent of its expenses.
“If we don’t apply overhead in addition to direct costs, no matter what we do, the fees we’re collecting will always be dramatically under what the city needs to provide these services,” Mayor John Radford said. “We’re looking at trying to create a system through the fees we charge that truly recoups the direct and overhead costs incurred to provide them.”
The Los Altos Hills City Council unanimously voted to boost fees to meet the goal of a 90 percent recovery rate. To determine current and actual costs of services, an outside consultant studied the labor, department and central services overhead for the town’s building, planning, public works and parks and recreation services.
The town expects to generate $389,743 in additional revenue annually when the fee increases take effect.
Although it’s difficult to compare rates because of the unique service schedules and pricing methodology that each municipality uses, Los Altos Hills’ current average building permit fees of $12,396 per residence are less expensive than the rates imposed in neighboring communities, the comprehensive fee and rate study reported. The average building-permit fees for a new residence range from $14,670 in Portola Valley (2012) to $18,004 in Los Altos (2013) and $23, 291 in Los Gatos (2010). When the new Los Altos Hills fee rates are in effect, a building permit will increase from $158 plus 0.7 percent of valuation to $192 plus 0.9 percent of valuation.
The town’s Financial and Investment Committee endorses the new recovery rate, but at least one resident expressed concern that the adjustments would impose an additional financial burden on residents.
“This isn’t just about taxing new guys, but residents,” said Bill Balson in response to the proposal.
Councilmembers will evaluate the fee increases one year after implementation to determine if any changes are necessary.