Next fiscal year, Danville-Boyle County Planning and Zoning could reduce its reliance on customer fees — but city and county governments would likely have to kick in some additional funding to make it happen.

At an impromptu budget committee meeting Wednesday, members of the P&Z Commission discussed the idea of becoming an “appropriation-driven” agency instead of a “permit-driven” one, as P&Z Director Steve Hunter phrased it.

“Let’s talk about philosophical issues about funding — these funding levels. Would (Danville and Boyle County) prefer to see a permit-driven agency? Or an appropriation-driven agency where we reduce some of these permits on the consumer?” Hunter said. “We’re not too far off on what they give us to be an appropriation-driven agency. We’re talking just very little more and we could literally fund the planning commission and reduce these fees on the consumer. That could be positive.”

Currently, P&Z gets $140,000 annually in appropriation funding — $75,000 from Danville and $65,000 from Boyle County. It also brings in a significant portion of its revenues from fees on things such as zoning permits.

It’s widely acknowledged the P&Z agency has higher fees than average in Kentucky — that was done on purpose years ago so that P&Z could fund itself more and require less money from the governments it works for, former director Paula Bary explained last year.

“I think we’re one of the few agencies that are totally separate from city and county, and we have a totally separate account,” Bary said in May 2017. “So our fees were set up several years ago to pay for the time and effort that is spent on an application, where other agencies aren’t required to support themselves.”

Since he took over as P&Z director last summer, Hunter has been critical of the agency’s fees. He told members of the Boyle County Fiscal Court in August that after a week on the job, the number and level of fees charged by P&Z were one of several things that surprised him about how the agency was operating.

In October, the P&Z Commission approved rate reductions for several less-common services as recommended by Hunter, including dropping the price for a zoning certification letter from $162 to $20; and lowering the cost for variances by $60. Hunter said at the time he would like to lower the agency’s zoning permit costs, which make him “uncomfortable,” but because zoning permits generate so much revenue for the agency, P&Z was “not in a position to change” them “just because of the way our budget is structured.”

“I think it’s something we have to address if we really want to meet the goal you guys have set to be customer-friendly,” Hunter said to the P&Z Commission at the time.”

On Wednesday, Hunter said one of the first steps in determining if P&Z can wean itself off of fees will be holding a meeting of P&Z, Danville and Boyle County officials to see what the city and county would be comfortable with and what they could afford.

Hunter said the meeting would likely include the P&Z chair and vice-chair; the Danville city manager and mayor; and the Boyle County judge-executive. Hunter has proposed this group be an “advisory committee” to P&Z.

“We want … to sit down with them and say, ‘hey, here’s what we’ve historically been asking you guys for. What would your reaction be … if we bump that up $5,000? Or $12,000?” Hunter said. “I think talking to them would be really positive.”

Hunter and P&Z Commissioner Terry Manon said the meeting could also be used to address the current discrepancy in funding levels between the city and county and the P&Z interlocal agreement.

Currently, P&Z operates under a “pretty old” interlocal agreement that provides very little guidance, Hunter said. The agreement is “less than a paragraph” and states that Danville and Boyle County will each provide 44 percent of the funds needed to run P&Z. 

“It doesn’t define how expenditures are determined,” Hunter said of the agreement.

Danville currently provides P&Z with office space in city hall rent-free, and Boyle County also provides P&Z with assistance that’s not direct appropriations, Hunter said.

At one point in the budget committee meeting, it was suggested that Danville and Boyle County could level off their P&Z appropriations at $70,000 apiece, instead of the current $65,000/$75,000 split. Manon explained that years ago, P&Z requested an increase in funding of $10,000 from both governments. Danville increased its allocation from $65,000 to $75,000; Boyle County did not.

“We have done that every year; we have asked for the same amount … and the city comes through and the county says, ‘no, we’re only going to give you what we gave you last time,'” Manon said.

One idea, if the city and county are on-board, could be to slash the price of zoning permits, which Hunter said currently cost individual homeowners wanting to build on decks or expansions to their homes more than any other kinds of builders.

“I just know the end-user of those, it’s tough on (them). I didn’t realize they were so residential-driven; I figured they were commercial driven,” he said. “… When (P&Z employee) Jennie (Hollon) trended them, most of them were coming on the backs of people doing minor additions on their houses. And then that’s the big rub — you come in and build a garage and get hit with a $300 bill, and they’re just like, ‘wow, why do I gotta pay that?’ And then they go get a building permit (which costs money, too).”

Hunter said he also has an idea to eliminate zoning permits entirely outside of Danville City Limits.

“What if we didn’t do zoning permits in the county? Which is what most of the counties in the state do,” Hunter said.

P&Z Chair Jerry Leber seemed on-board with that idea.

“Before I became a member of Planning and Zoning … I never understood why if I wanted to build a patio, I had to pay the city or the county — I had to go pay money so I could do that,” Leber said. “That always just rubbed me the wrong way — that as a citizen of a community, that I had to pay somebody so I could build something on my place.”

But ultimately, officials agreed, their ideas would only work if the city and county can increase their funding for P&Z — and that could be tough to accomplish in a year when the state seems likely to create new burdens of retirement funding on local governments.

Hunter suggested $95,000 from both governments could be enough to largely do away with zoning fees. But “I think it’s going to be hard for both of them.”

If the cost of funding the County Employees Retirement System is going up by double-digit percentages, the city and county may even tell P&Z they can’t maintain the current level of funding, Hunter said.

What that increased cost turns out to be comes down to what the state legislature decides to do about Kentucky’s retirement systems’ liabilities during the current General Assembly.

“I think the CERS is going to drive the show on this,” Hunter said.