Albemarle’s Cost of Complexity

By. Neil Williamson, President

Imagine you were running a small business.  If one of your primary vendors increased their pricing by 150% more than inflation, what would you do? 

Now imagine your vendor is the government and your product or service can not occur without the payment of such fees. 

On Wednesday (2/3), the Albemarle County Board of Supervisors will be revisiting the proposed zoning fee increases that came before the previous Board at the end of last year.  The Free Enterprise Forum has written extensively about the cost of complexity of Albemarle County’s development and zoning process. 

To better quantify the proposed zoning fee increases, the Free Enterprise Forum has created a “Cost of Complexity” index. 

Zoning Fees were last comprehensively reviewed in 1991.  Fees have been increased since that time but those increases were implemented across the board.A great deal has changed in terms of application process in Albemarle County since 1991.  A February 19, 1992 staff announcement highlights:

“New regulations, such as entrance corridor overlay and the water resource protection ordinances have added slightly to the costs [of application processing]” 

Using 1991 as a base, The Free Enterprise Forum compared the FY2010 proposed increase to 1991 fee schedule.  Discovering increases of between 14% and 620% we also compared these increases to the increases in the Consumer Price Index (CPI-U).  The resulting  percentage represents the “Cost of Complexity” index.  The full report can be found here.

One fee “Zoning Map Amendment (ZMA) – Planned development under 50 acres” increased over 200% since 1991, subtracting the CPI from the increase the cost of complexity is 150%.  Therefore, according to this fee schedule, a ZMA brought in today takes 150% more resources to review than the same plan if it came forward in 1991.   

One aspect of the proposed new fees includes a cost escalator tied to Albemarle County’s Market/Merit pay increases.  As a data point, we thought looking at this historically might prove closer to the rate of increase proposed in the new fees. 

The Free Enterprise Forum researched the pay increases for Albemarle County staff from 1991 to 2010.  We were not able to obtain the information for 1997 (we assumed no increase).  Our results indicated the increase in pay is higher than the growth in CPI (75% compared to 57%) it is not close to the increases seen in many of the proposed fees.   The Market/Merit worksheet can be found here.

This discussion about fees is much like rearranging deck chairs on the Titanic.  While the fees need adjustment the entire development review process [and culture] is the iceberg in our story.

Just last month, we heard anecdotally of an applicant who submitted an Erosion and Sediment control plan along with his $300 application fee and then received comments and requests for changes.  The applicant then made the changes and resubmitted the application with changes requested and an additional $300 application fee, new comments followed requiring yet another revision and another application fee of $300.  In total, this applicant paid $900 to Albemarle County (not counting the engineering fees paid) before receiving approval.

The cumbersome development review process [and obstructionist culture] is broken and it is negatively impacting both new construction and economic development.  On Wednesday, Albemarle County’s Board of Supervisors will again discuss the Zoning Fee proposal. 

  • The BOS could choose to hold the line on fee inflation limited by either CPI or Market/Merit increases
  • The BOS could choose to reconvene the Development Review Steering Committee to identify specific process reforms to be prioritized by staff and completed by the end of the year
  •  The BOS could pass the proposal as currently drafted.

Whether they choose to expand the discussion and engage the more difficult task of development review reform remains an open question.

Often the right choice is not the easy choice.

———————————————————————-

20070731williamson Neil Williamson is the President of The Free Enterprise Forum, a public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna and Nelson County.  For more information visit the website www.freeenterpriseforum.org

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One response

  1. […] Free Enterprise Forum has written extensively about Albemarle’s Cost of Complexity regarding the increase in Community Development fees that staff indicated accurately reflected the […]

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