An increase in building around Palo Alto, spurred by large commercial projects, is prompting Palo Alto's Planning and Community Environment Department to request a 23 percent expenditure increase -- $2.5 million -- in its budget in fiscal year 2014, staff told the City Council's Finance Committee on Thursday night.
The department expects an overall revenue increase of 48 percent -- $4 million -- with the bulk of the boon coming from fees related to large projects and a restructuring of a deposit account from which expenses are paid.
Current and expected projects accounted for $2.3 million of the total revenue increase, with $1.5 million coming from the deposit account, staff said.
Total revenue is expected to jump from $8.2 million to $12.3 million, according to the proposed city budget.
Peter Pirnejad, director of Development Services, said building fees are projected to reach more than $10 million by the end of the 2013 fiscal year, which finishes on June 30. Planning fees are projected to reach $13.5 million by July, he said.
Revenues are on the rise at a time when Development Services, which oversees building permits and has been under the management of the planning department, is becoming a separate department. Staffing levels in both departments are being adjusted to improve performance and reduce wait times for customers, staff said Thursday.
Development Services will cut two full-time positions -- saving $465,000 -- along with five full-time positions that were vacant. However, it will add two positions: an administrative associate and administrative assistant, for a total of $130,000. It will also hire an associate planner, a position that will be transferred from Public Works at a salary of $137,000, Pirnejad said.
He said Development Services will ramp up staff as needed in accordance the ebbs and flows of development. Some fiscal flexibility is built in to hire additional help on a contract basis.
This year the department has figured in a $1.5 million revenue increase from a deposit account funded by developers for their project. The account pays for inspections and other related costs.
VMWare, for example, is a $500 million project that has so much going on they have two full-time city inspectors on site all of the time, he said.
The department is streamlining its plan processing through more online services such as an electronic plan check and other advanced technologies.
Already Development Services is seeing results. The average response time for photovoltaic plan reviews has plummeted from 100 days to four days for first and second rounds of comments.
"These are the trends we're seeing in the last few months," Pirnejad said.
The planning department expects to increase by 1.8 full-time employees, Curtis Williams, director of planning and community environment, said.
One vacant position will be filled by an engineer devoted to solving the city's parking problems.
"My time has been really, badly sapped for parking issues," he said.
The senior project engineer will be responsible for developing more parking in retail areas and will work to reduce overflow parking in residential neighborhoods.
Perhaps the biggest changes in expenditures not involving staffing are $250,000 for community presentations and notices regarding 27 University Ave. and an additional $250,000 for two studies related to downtown development and parking.
Councilman Marc Berman questioned the expenditure for the 27 University Ave. project -- the so-called Intermodal Transit Center/Arts and Innovation District Area.
"It looks like the city is paying for things associated with a PC (Planned Community zoning) project," Berman said. But staff said that type of expenditure is normal for public outreach on large projects.
Staff is also considering an increase in impact fees charged to developers, which pay for a range of improvements to parks, libraries and more. Councilman Pat Burt said an increase in fees should not be a worry.
"This is a really strong period -- not an artificial bubble. There are real challenges about how to pay for needs in the community," he said.