Carmel committee backs new engineering review fees, sends ordinance to council

The Land Use and Special Studies Committee voted to forward ordinance Z707-26 to city council with a positive recommendation after discussing a new schedule of engineering review and inspection fees meant to recover staff processing costs and discourage repeated low-quality plan submissions.

Committee Chair Dr. Anita Joshi opened the discussion Wednesday and invited city engineering staff to explain the proposal. Staff said the ordinance inserts engineering-related fees into Section 129 of the Unified Development Ordinance and groups charges under plan commission applications, board of zoning appeals review, and permit/inspection fees, including failed‑inspection and non‑business‑hour inspection charges. Staff noted the change responds to rising administrative costs and mirrored practices already used in neighboring jurisdictions.

"So this ordinance amends section 129 in UDO," staff said, laying out the proposed categories and the statutory constraint that fee increases generally may occur only once every five years and be tied to CPI under HEA 1001. Engineering staff presented three recommended amendments: raise the PUD ordinance review fee from $675 to $750, raise PUD ordinance amendment review from $300 to $400, and replace a flat engineering inspection fee with a scaled model — a base of $1,050 plus $300 per acre with single‑family properties up to one acre exempt.

Eleanor Prescott, an engineering department analyst, gave examples to illustrate the calculation: "So our proposed cost would be $19,175 for the total project fee for [Baker Village]," which the committee recorded as about $407 per lot for that 47‑lot, 16‑acre project; she also said a commercial example (Ardalan Plaza) came out near $5,600 and a large single‑family example totaled roughly $3,525 under the proposed structure.

Staff estimated the fees could generate roughly $160,024 annually based on 2025 dockets; they emphasized the intent is not to produce a major revenue stream but to recover processing costs and encourage higher‑quality plan submissions so city staff are not used as de facto designers.

Councilors focused much of the debate on who should be exempt and where to draw the threshold. Options discussed included exempting all single‑family lots, setting a smaller exemption (quarter or half‑acre), or using the one‑acre threshold staff proposed as a pragmatic middle ground. Supporters of the one‑acre exemption said it would reduce homeowner confusion and limit burdens on typical single‑family homeowners while still applying fees to larger estate or subdivision projects.

The committee also reviewed implementation timing under HEA 1001: if a municipality adopts new development fees after July 1, statutory rules may require a longer pause before collecting them. Staff advised taking time to refine language and noted that all development fees collected must be placed in a restricted engineering fund for processing and administration rather than reverting to the general fund.

Chair Dr. Anita Joshi moved to forward the ordinance with the staff amendments and a positive recommendation; Tony Green seconded. The motion carried and the committee voted to send Z707-26 to city council for final consideration.

The ordinance will next appear on the city council agenda; if passed there it would be subject to the statutory pause period described by staff before fees could be collected.