Sussex County won’t be reducing its Board of Adjustments fees – at least not yet.
County council members voted recently not to make proposed changes to the fee structure for applications for variances from the county BoA, on a split 3-2 vote, with the final outcome of the notion clearly yet to be decided.
Councilman Vance Phillips spent several council meetings this summer trying to push forward proposed reductions in the fees, from $400 to $150, for variances and for special-use exceptions for manufactured homes being used as single-family dwellings.
But, after getting as far as a public hearing on the issue on Sept. 13, Phillips was unable to persuade a majority of the council to back the idea, which he cited as “an important step” “in very tough economic times.”
“It would lessen the burden on citizens who try to comply with the ordinances we put in place,” he said. “It’s not necessarily the case that our fees pay for services,” Phillips continued, trying to counter the argument made by Councilman George Cole during prior discussions, that the fees should pay for the cost of the BoA applications to the County, which runs about $450 per application, including required legal advertising.
“Paramedics cost $667 per call on average, but citizens are not charged that much. The libraries, per item taken out, cost $4.40. Dog control costs $15 per license, for a $120 per-license cost. Marriage licenses cost $50 for in-state residents, $100 for out-of-state, and $40 per license is coming from other sources.”
Meanwhile, Phillips said, the County’s Recorder of Deeds, Register of Wills and Sheriff’s offices “have traditionally run significant surpluses, underwriting other departments.”
Phillips further argued that the BoA fee isn’t really a fee as he would define it.
“Call it a user fee, but, really, it’s a regulatory compliance tax,” he said. “We create regulations. People who are trying to put up a fence or a building find themselves out of compliance. They have to come to get permission to do what they want on their own land. Then we charge them.”
Phillips said he wanted to take the fee back down to the former level of $150 per application. Citing the economic conditions, he said, “Many people who are interested in complying just can’t afford the $400,” he asserted, saying those people are forced to either stay out of compliance with the law or put off their project.
Under Phillips proposed changes, while the fee for many applications would drop to $150, those not involving variances or manufactured housing would have remained at $400.
Phillips said such applications – such as the application for a cellular phone tower – can involve more staff time and effort, justifying the higher fees.
County residents express support, concerns
The proposal got mixed reactions during the public hearing on Sept. 13.
Lewes resident Robert Hemrich said she wasn’t sure whether she should be speaking in favor or against the idea.
“I support reducing fees, but that’s only a portion of the problem,” she said. “The entire process should be reviewed and revised. [Variances] should not be given unless they meet the five criteria for a variance. That would eliminate many of them before the hearings.
“Everyone who is dealing with it should be required to take the University of Delaware course on the Board of Adjustments,” she asserted, referencing recent concerns about the board’s operation.
Georgetown resident Cliff Dryden said he favored reducing the fees.
“Reducing fees that can afford to be reduced is always a good thing,” he said. “Fees for service ought to be allocated to that specifically.”
Dryden asked about the impact reducing the fees would have on the county’s budget, since the $400 fee is already part of this fiscal year’s budget.
“Whatever is in the budget, we won’t have enough to do it, because it costs more than $400 to provide the service,” argued Cole.
Cole has argued that the BoA fee system does need to be revamped. “Some require an inspection. Some don’t. Some could be done over the counter.”
“We came up with this, which I don’t think really addresses the problem,” Cole continued. “We will lose more money now. The idea that we have a positive cash flow in some of the departments is excellent. When I started, there was a point where we didn’t. It sets a bad precedent,” Cole added of the reduced fees. “We’re losing money now. Whatever is budgeted in that department, we’ll have to get some more money from somewhere else to cover it.”
“As intensive as the budgeting process is, why are we underfunding it?” Dryden inquired.
Rehoboth Beach resident John Walsh said he favored reducing some of the fees, possibly on a sliding scale.
“There’s a difference between someone in a single-family home wanting a couple of inches … instead of a person who just put in a $3 million home with the idea of doing something and asking for forgiveness rather than following the rules.
“I have seen people at hearings saying basically, ‘Everyone else got their variance. I want mine.’ And they’re quite cheerful about it. I don’t think a major builder should be able to get away with paying the same fee … as someone making an almost-excusable error.”
Council discusses revenues and means
That raised further concerns for Phillips, who maintained that the fees needed to be dropped for everyone.
“We talked about class warfare. Why would we charge certain fees for one group of folks? I have to agree. Something that complicated will probably add more costs, trying to figure out everybody’s income.
“There are services currently being supported by the County. Why don’t we start charging people $4.40 when the take a book out? Because they’ll stop using the service,” he argued. “It’s the same thing we’re seeing happening here. We may see more people coming in for variances,” he said of reducing the fees.
“Why not charge $150 for a dog license? People will stop coming in,” he answered.
Phillips said that perhaps the advertising costs for the BoA hearings were something the County could look at – “$400 is a lot. Maybe they should meet only once a month. Maybe we should advertise once a month. There are other forms of advertising that could be more efficient but still meet state statutes.”
Economic times have changed, Phillips said.
“We have an extra $4.4 million in three offices that we’re allowing the residents of the county to meet,” he said. “We are not setting a precedent. We are already providing services well below cost. This would put us back to the place we were 10 years ago, before the building boom, and the economy was driving efforts because we thought the market could bear it. The market can’t bear it anymore.”
Cole disagreed, pointing out that services such as paramedics, dog control and libraries are something that many county residents use, directly or indirectly. He also pointed out that variances are something only needed by a small number of people, in cases in which they themselves are direct beneficiaries of approvals.
“Where does the surplus money go? To the general fund. And then, when we have a general fund that’s nicely funded, we don’t have to go to the taxpayers of the county for more money.”
“This will set a precedent,” he said. “I don’t think anybody says we don’t need to address the problem in the Board of Adjustments, but the problem isn’t about money.
“There are poor people living in all types of housing in this county,” Cole said. “It’s not financially responsible for this county, knowing how the economic landscape looks now, that we would blanket reduce something to $150 and lose that much more money, when we could look at it and address it through a tiered system.”
Notion of administrative variances raised again
Cole said the council could look at variances for sheds, or variances of inches, versus feet. “They should be able to right into [Planning Director] Lawrence [Lank]’s office and over-the-counter get a variance.
“Different things should require different fees. We will still lose money, but not as much as this. We have said each service should pay for itself. … We could have a menu of different things – some would be miniscule.
“I’d like to defer and give people a little time to think on this,” Cole said. “We’re going to lose more – not just a little more, but a lot more – based on some preconceived thing that all people who apply for variances are poor.”
“We’ve been able to maintain a steady keel on this ship of state because of the fees we charge. You can’t find a cheaper place to live than Sussex County. You can’t find a quicker place to get a variance than Sussex County. It’s not whether there’s a surplus, it’s whether it’s excessive. If you run a business, just because you have a surplus, doesn’t mean you’re being greedy.
“I think there is a better way to do it. I would like to see this council step back and see if there’s a better way, rather than these blanket reductions, where people get things whether they deserve it or not. We did it the other day with zoning,” he pointed out of the council’s recently adopted blanket extensions for planning approvals. “I haven’t had anyone walk up to me and give me a positive comment on that. They thought it was a joke.”
Council split on issue of fee reduction
Councilman Sam Wilson sided with Phillips.
“A surplus in business is good, but we’re not in the business of making money here. We should be look at it as a non-profit business. We took $2 million more than we needed,” he said of the profit-making offices.
Councilwoman Joan Deaver said she objected to the notion of losing even more money on the applications.
“I couldn’t really go for our already having lost money and losing more money in a blanket situation about this,” she said. “It has been touch-and-go in transfer taxes. Sometimes it’s higher, and sometimes it isn’t. We have cut back by millions of dollars in grants of what we used to give. We have 10,000 people waiting on a list for grants.”
Deaver pointed out that the county helps residents with sewer costs.
“There is a means testing for that. … We help them if they can’t afford it. It’s in the interest of the public if we do that. It’s in our interest for people to keep up their homes. I have no problem with means testing – $150 is reasonable, I think, but not across the board.”
Phillips asked her if they should also then have means testing for fees for marriage licenses, dog licensing and paramedic services.
“None of those cost $400,” she said of items excluding the paramedics, which is partially state-funded – though that funding, too, is being reduced.
Having previously pushed back formal consideration of Phillips’ ordinance, Cole moved on Sept. 13 to defer voting on the ordinance until a better solution could be found.
“To defer this is just a backdoor way of killing it,” Phillips said. “We’ve had the public hearing. We’ve had a healthy discussion. It’s time to move on.”
“If three people want to defer,” Cole replied, “maybe it’s not a good idea. I’m not opposing this. I’m just saying we need to make it better.”
Wilson said he would go along with not reducing the BoA fees, if the council could agree to cut fees in the Register of Wills and Recorder of Deeds offices.
Council President Michael Vincent asked county staff what the impact of the changes would be on the county’s budget.
“It would drastically impact the budget,” outgoing County Administrator David Baker replied.
“Would we be in questionable financial shape for this year’s budget?” he asked Baker.
“Yes,” Baker replied. “But there are many variables, such as transfer tax, which nobody can know.” He said the change would cost the county $46,000 based on 2010’s activity. The County had a $610,000 surplus in 2010, but that didn’t go back into the general funds or reserves, or even County programs.
“But people need help and we’re unable to help them,” Deaver pointed out.
“We passed a motion to give that back to the taxpayers,” Vincent added of the surplus.
“We have a rainy-day fund of $10 million and other reserves in the tens of millions,” Phillips argued. “I don’t think $46,000 is going to break us.”
“We have cut back,” Deaver countered. “There are 10,000 people we can’t help with rehabs, and most of that is federally financed.”
Council members voted 3-2 not to defer on voting on the ordinance on Sept. 13, with Cole and Deaver favoring deferral and saying the issued needed more consideration.
The council then voted 3-2 not to adopt the ordinance, with Vincent siding with Deaver and Cole.
“I think Mr. Cole and Mr. Phillips both have some points,” Vincent said. “I think we should have some discussion. I think there is a bigger issue than simply lowering a fee. The whole thing should be looked at – lowering the fee, taking care of paperwork at the counter and paying no fee…
“There are a number of things need to be addressed, not put off, not talked about and dropped for two or three years, but to come back with a program that would address all of these issues,” Vincent said. “I would be happy to move that forward. To make this one change… We need a lot more.”
Cole asked the county staff work to develop a draft of a concept to reduce fees in some areas and, he said, “have some logical way of dealing with these issues, reflecting costs and demands on resources.”
Phillips said he’d like to see a plan sooner than that.
“There are a lot of other things than lowering a fee,” he said. “I’d like to see this back before the council in 60 days.”
Finally, Deaver asked whether the council had a consensus for exploring means testing as a basis for adjusting the fees. Council members did not express support for the idea.