Vail to increase fees associated with planning and development — but how much is the right amount?

The town of Vail is beginning a process to increase some of its fees associated with planning and development.

On Tuesday, March 19, the Vail Town Council had a work session on its planning application fees and public way permit fees, both of which have remained stagnant for many fees.

“The short version of the presentation is that costs have gone up in the last 23 years and so fees are recommended to go up as well,” said Greg Roy, the town’s planning manager.

As the town opens the conversation, it is expected to host at least one other work session as well as engage the development community before the adoption of any ordinances to implement the fee increases.

Planning application fees

The first fee schedule the town is looking to update is its planning application fees. The increases would apply to applications for things like additions, exterior alterations, conditional use permits, zoning code amendments, variances and more.

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The fees in place are meant to cover a portion of the cost the town incurs in reviewing the applications. Vail Town Manager Russ Forrest told council the policy determination they needed to make is how much should the taxpayer subsidize the development review process and how much should the developer or applicant pay for.

The current fees were put into place 23 years ago. At that time, the fees were such that they covered around 72% of the cost to review. Since then, the town has seen a 116% increase in staffing costs, Roy reported.

This means that the town is currently only recovering around 33% of the cost of reviewing these planning applications.

In determining how much to increase the fees, Roy said that staff completed an analysis on what the town’s costs are in terms of reviewing the applications. This included determining how long it takes to review each application and the staffing cost associated with that time, noting that certain applications are more complex than others.

The proposed fee schedule would allow for the town to recover 68% of its costs.

“We can’t charge more than the cost of the service, so we always erred more on the low side as far as what’s the average time that it takes to review applications,” Roy said, adding that the proposed fees will put them in line or below other nearby jurisdictions.

There are a few fees that the town is not proposing increasing.

While the Town Council did not make a final determination on how much it would like to increase its planning application fees, council members did ask to see a few alternative cost-sharing models, including one where the town recovers 100% of the cost and one where the town splits the cost 50/50 with the applicant.

Regardless of the increase eventually set, Forrest recommended this be something the town looks at with more regularity going forward.

“This is something we should look at on a regular basis so we’re not creating a surprise, a shock to the building community but we’re also staying up with inflation at least and hitting whatever target council wants in terms of cost recovery,” Forrest said.

In addition to increasing some of its existing fees, the town is proposing adding two new fees. The first would be for a “staff determination,” referring to applications in which the community development director has to issue an official interpretation of a specific section of the town code. The town does not currently have a fee for this, but it is proposing a $200 fee, commensurate to the $584 low-end estimate of how much it costs the town.

The second fee change would be regarding appeals. Currently, the town does not have a fee to file an appeal, but based on a low-end cost estimate of $1,536, the town is recommending a $1,000 fee.

Additionally, staff is proposing that the new appeal fee as well as its existing zoning code amendment fee have a “pass-through account,” Roy said.

“Those are the two where most of the time we have legal staff reviewing the application as well. The point of a pass-through account is that a certain amount of money is put up and then we bill against that time. Whatever is left over goes back to the applicant, if more time is spent on it, they have to pay more to whatever the time spent on that application,” he added.

Phillips said that he had one “hang-up” with the proposed appeal fee.

“I get it that we are sustaining costs for that appeal, but as a guy that’s been on the other side of the appeal process, if I come back and win that appeal in my favor, does it seem fair and equitable for me to have to pay a cost to show that there was an error in the initial judgment on that application?” Phillips said.

As such, Phillips suggested that a portion of this fee could be repaid to the developer should the appeal come back in their favor. At the very least, he felt this was something “worth more discussion.”

As the town contemplates these changes, Roy said the town is not in a rush to roll them out.

“We’re waiting a little bit longer to implement these, get the word out, and make sure people know we’re increasing fees ahead of time so it’s not a surprise to anyone,” Roy said, adding that they were “shooting for July, theoretically.”

Public way permit fees

The Town Council also discussed increasing its public way permit fees, which have remained the same since 2008.

Public way permits are issued when a development or project interrupts the town’s public right-of-way. Most of the time these interruptions are for projects that require the developer to tear up asphalt for utility services or for parking or construction staging in the roadway.

There are two portions of the permit fee, said Tom Kassmel, the town engineer. The first is a base application fee, which, similarly to the planning application fees, is a cost-share with the town. The second is a use fee, which more directly speaks to what the interruption is in the public right-of-way.

This, Kassmel reported includes costs related to pavement degradation as well as the traffic impact to cars, pedestrians and bikes.

“For all intensive purposes, they’re somewhat leasing that property for a short duration, which facilitates that construction,” Kassmel said. “Ninety percent of public way permit fees have to do with utility service street cuts. So, they cut into our street and tie into existing utilities and/or they are parking or staging within the right-of-way.”

On average, Kassmel said the town issues around 500 of these permits during the construction season, with an average cost of $200 per permit.

The town is proposing to increase its base permit fee from $150 to $250. As it also increases the use fees — which are issued based on things like how many cars are parked or how much asphalt is torn up — Kassmel said they expect the average public way permit fee to go up to around $300.

Overall, the fees are expected to increase by about 50% “to be more in line with other communities, to cover application fees and a lot of this has to do with, we want the developer to do it as efficiently as possible,” Kassmel said.

“We want to incentivize them to find the most efficient way to do that, and sometimes controlling that by fees is the best way to do that with regard to somewhat leasing town property,” he said.

Before coming back to council for adoption, council members requested a few additions. This included issuing a five-vehicle cap as well as looking at increasing the parking fees in Vail Village to further disincentivize that behavior there.  

Increasing these permit fees is on a tighter deadline, with the town wanting to implement these ahead of the upcoming construction season, Kassmel said.

“We will be starting to issue those (permits) starting April 15,” he said.