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(First Reading) AN ORDINANCE APPROVING AND ESTABLISHING A NON-PROFIT PERMIT FEE REDUCTION PROGRAM FOR ELIGIBLE ENTITIES WHO PROVIDE SUFFICIENT PUBLIC BENEFITS AND PUBLIC PURPOSES.
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WHEREAS, the City Council of the City of Foley (the "City Council") is authorized under Ala. Code, §§ 11-45-1, 11-43-43, and 11-43-59 to adopt ordinances and resolutions for the governance of the City, to fix and collect fees and charges for permits and regulatory services, and to appropriate public funds for valid municipal purposes; and
WHEREAS, the City Council further possesses authority under Ala. Code, § 41-9-166 and applicable provisions of Alabama law to promote the general welfare of the citizens of the City; and
WHEREAS, the City Council finds that certain qualifying nonprofit organizations provide vital services in the areas of health, safety, welfare, education, housing, social services, recreation, public safety, and other public, municipal purposes benefiting the residents and community of the City of Foley; and
WHEREAS, the City Council finds and determines that the reduction of certain City-controlled permit and development fees for qualifying nonprofit projects serves a valid public purpose by enabling the delivery of community-benefit projects that advance the health, safety, and welfare of the residents of the City of Foley; and
WHEREAS, the City desires to establish uniform, equitable, and transparent standards and procedures for the processing of nonprofit fee reduction requests to ensure accountability, fiscal responsibility, and the consistent application of eligibility criteria; and
WHEREAS, the City Council has considered the fiscal impact of this program and has determined that the public benefits derived from qualifying nonprofit projects outweigh the prospective foregone fee revenue to the City; and
WHEREAS, the City’s existing permit-fee provisions are set forth in Article III of Chapter 4 of the Code of Ordinances of the City of Foley, and the City’s planning, zoning, and right-of-way fee schedules are established by ordinance and resolution, as amended from time to time; and
WHEREAS, the City Council desires to add to Article III of Chapter 4 of the Code of Ordinances of the City of Foley to codify the Non-Profit Permit Fee Reduction Program; and
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FOLEY, ALABAMA, as follows:
SECTION 1. SHORT TITLE.
This Ordinance may be cited as the “City of Foley Non-Profit Permit Fee Reduction Ordinance.”
SECTION 2. PURPOSE.
The purpose of this Article is to establish standards and procedures for the reduction of certain City-controlled permit and development fees for qualifying nonprofit projects that serve a valid public purpose benefiting the residents and community infrastructure of the City of Foley, in a manner consistent with the Alabama Constitution and applicable state law.
SECTION 3. DEFINITIONS.
As used in this Article, the following terms shall have the meanings ascribed below unless the context clearly requires otherwise:
(a) “Applicant” means any Qualified Non-Profit that submits an application for a Fee Reduction under this Article.
(b) “City” means the City of Foley, Alabama, a municipal corporation organized and existing under the laws of the State of Alabama.
(c) “City Administrator” means the City Administrator of the City of Foley, or his or her designee.
(d) “City Council” means the City Council of the City of Foley, Alabama.
(e) “Compliance Period” means a period of thirty-six (36) months commencing on the date of issuance of the permit for which a Fee Reduction has been approved, during which period the Applicant must maintain compliance with all conditions of the approved Fee Reduction.
(f) “Covered Fee” means any fee identified in Section 4 of this Article that is eligible for reduction under the Program.
(g) “Department Director” means the director of the City department responsible for the administration of the applicable Covered Fee, or his or her designee.
(h) “Eligible Fee Categories” means the categories of City-controlled regulatory and development fees described in Section 4 of this Article that may be reduced under the Program for qualifying nonprofit projects.
(i) “Excluded Fee” means any fee identified in Section 5 of this Article that is not eligible for reduction under the Program, or any fee that is not described in Section 4.
(j) “Executive Director” means the Executive Director of the City of Foley over the Department Director, or his or her designee.
(k) “Finance Director” means the Finance Director of the City of Foley, or his or her designee.
(l) “Impact Fee” means any impact fee as defined in Ala. Code, § 45-2-243.81, imposed on new development within the corporate limits of the City pursuant to Ala. Code, §§ 45-2-243.80 through 45-2-243.93.
(m) “Non-Profit Organization” or “Qualified Non-Profit” means: (i) an organization that is exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “IRC”), and that is in good standing with the Internal Revenue Service and the Alabama Secretary of State (a “Primary Tier” organization); or (ii) any other nonprofit entity organized under the laws of the State of Alabama and operated exclusively for charitable, religious, educational, health, housing, civic, cultural, public-safety, or social-service purposes, with no part of its net earnings inuring to the benefit of any private shareholder or individual (a “Secondary Tier” organization).
(n) “Private Inurement” means any arrangement, transaction, or distribution by which any part of the net earnings of the Applicant inures to the benefit of any private shareholder, individual, officer, director, or insider of the Applicant, including but not limited to excessive compensation, below-market transfers, and self-dealing transactions.
(o) “Program” means the City of Foley Non-Profit Permit Fee Reduction Program established by this Ordinance.
(p) “Project” means the specific construction, development, renovation, or improvement activity for which the Applicant seeks one or more permits from the City and for which a Fee Reduction is requested under this Article.
(q) “Public Purpose” means a purpose that primarily benefits the public health, safety, welfare, education, housing, social services, recreation, public safety, community infrastructure, or other recognized municipal purpose of the residents and community of the City of Foley, and for which any private benefit to the Applicant is incidental to the public purpose served.
(r) “Reduction” or “Fee Reduction” means a partial or full reduction of a Covered Fee approved under this Article, which shall be applied prospectively as a classification within the City’s fee schedule for the specific qualifying nonprofit Project, and shall not constitute a post hoc forgiveness of an accrued debt or a gratuitous donation of public funds.
SECTION 4. COVERED FEES.
(a) Covered Fees eligible for reduction under this Article include the following City-controlled regulatory and development fees: building permit fees, mechanical permit fees, electrical permit fees, plumbing permit fees, gas permit fees, plan-review fees, inspection fees, land development permit fees, planning and zoning fees (including zoning plan review fees, flood determination letter fees, zoning verification letter fees, land disturbance activity fees, subdivision plat fees, rezoning fees, initial zoning with annexation fees, Planning Commission application fees, and Board of Adjustment and Appeals application fees), and right-of-way application and permit fees.
(b) Covered Fees are limited to fees that are set by City ordinance or resolution and administered by City departments. No fee imposed by any entity other than the City shall be a Covered Fee under this Article.
SECTION 5. EXCLUDED FEES.
The following fees and charges are expressly excluded from reduction under this Article and shall not be eligible for any Fee Reduction under the Program:
(a) Impact fees as defined in Ala. Code § 45-2-243.81 and imposed pursuant to Ala. Code §§ 45-2-243.80 through 45-2-243.93.
(b) Double fees, penalty fees, or fees assessed for performing work without a required permit.
(c) Fines, enforcement charges, and code enforcement liens.
(d) Re-inspection charges.
(e) Credit card, debit card, or electronic payment processing fees or surcharges.
(f) State-mandated or pass-through charges, including Alabama construction industry craft training fees assessed under Ala. Admin. Code r. 355-10-1-.02, except to the extent that applicable law provides that such fees are not collected on permits for which a fee has been specifically waived or reduced by the municipality.
(g) Third-party consultant, engineer, or professional review charges incurred by the City and passed through to the applicant.
(h) Recording charges and court costs.
(i) Utility connection, capacity, or availability charges.
(j) Any fee that is legally restricted to a dedicated fund and may not lawfully be reduced or waived.
(k) Heritage tree removal permit fees.
SECTION 6. ELIGIBILITY AND QUALIFICATION STANDARDS.
(a) Qualified Non-Profit. To be eligible for a Fee Reduction under this Article, the Applicant must be a Qualified Non-Profit as defined in Section 3. Primary Tier organizations (IRC Section 501(c)(3) entities) must demonstrate current tax-exempt status and good standing with the Internal Revenue Service and the Alabama Secretary of State. Secondary Tier organizations must demonstrate that they are organized and operated exclusively for charitable, religious, educational, health, housing, civic, cultural, public-safety, or social-service purposes under the laws of the State of Alabama, with no part of their net earnings inuring to the benefit of any private shareholder or individual.
(b) Expressly Excluded Entities. The following categories of organizations are expressly excluded from eligibility under this Article, regardless of tax-exempt status: trade associations, professional associations, business leagues, social clubs, political organizations, and civic leagues organized primarily for lobbying purposes.
(c) Project Eligibility. The Project for which a Fee Reduction is sought must: (i) provide a direct, non-incidental benefit to the residents of the City of Foley or to community infrastructure within the City; (ii) be undertaken by an Applicant that demonstrates ownership of the Project site, a long-term leasehold interest therein, or status as the primary beneficiary and manager of the permitted Project; and (iii) be located within the corporate limits of the City of Foley.
(d) Prospective-Only Reductions; Timing. No Fee Reduction shall be approved retroactively for work commenced or fees that have become delinquent before the date of a complete application. All Fee Reductions under this Article are prospective only. Fee reduction requests must be submitted prior to the submission of the associated permit application.
(e) Consistency with City Plans. The Project must be consistent with the adopted City comprehensive plans, zoning ordinances, land use plans, and capital improvement plans of the City of Foley.
(f) Absence of Private Inurement. The Applicant must certify, under penalty of perjury, that no part of the net earnings of the organization inures to the benefit of any private shareholder or individual, and that no Private Inurement exists or is contemplated in connection with the Project for which the Fee Reduction is sought.
SECTION 7. APPLICATION REQUIREMENTS.
Each applicant for a fee reduction under this Program shall submit a Non-Profit Permit Fee Reduction Application to the Building Department prior to the submission of the associated permit application, together with the following materials:
(a) Current IRS determination letter for 501(c)(3) status, or certified copies of non-profit charter demonstrating nonprofit status.
(b) Governing documents or mission statement.
(c) Proof of applicant ownership, long-term leasehold (minimum term of [5] years remaining), or written documentation establishing applicant as primary beneficiary and manager of the project.
(d) Certificate of Existence from the Alabama Secretary of State dated within ninety (90) days of application.
(e) Certificate of Compliance from Alabama Department of Revenue dated within (90) days of application.
(f) Completed City of Foley permit application (building, right-of-way, land development, or other applicable permit) with detailed project scope and itemized construction or project valuation estimate.
(g) Written statement identifying the expected Foley-resident beneficiaries and the nature of the direct public benefit.
(h) Written certification by an authorized officer of the Applicant that no part of the organization’s net earnings inures to the benefit of any private shareholder or individual in connection with the proposed project.
(i) Written agreement, in a form approved by the City Attorney, to repay the full amount of any fee reduction, plus lawful administrative costs, if the project ceases to qualify during the Compliance Period as provided in Section 12 of this Ordinance.
(j) Such additional documentation as the Department Director or City Administrator may reasonably require to evaluate the application.
SECTION 8. MAXIMUM REDUCTION; FEE SCHEDULE CLASSIFICATION.
(a) The maximum fee reduction under this Program shall not exceed fifty percent (50%) of the otherwise applicable Covered Fees for any single project.
(b) Each approved fee reduction constitutes a prospective classification within the City’s fee schedule for qualifying community-benefit projects and does not constitute post hoc forgiveness of accrued debt, a gratuity, or a donation of public funds.
(c) The City Council may, by resolution, establish a different fee reduction schedule or percentage for specific categories of nonprofit projects, provided that each such resolution contains written public-purpose findings as required by Section 10 of this Ordinance.
SECTION 9. TIERED APPROVAL AUTHORITY.
(a) Tier 1 - Aggregate Covered Fee reduction of $0 to $1,000: Joint approval by the Department Director and Executive Director. A written administrative approval form shall be completed and retained.
(b) Tier 2 - Aggregate Covered Fee reduction of $1,001 to $5,000: Joint approval by the Department Director, Executive Director, and City Administrator. A written administrative approval form shall be completed and retained.
(c) Tier 3 - Aggregate Covered Fee reduction exceeding $5,000: Administrative review and recommendation by the Department Director, Executive Director, and City Administrator, followed by mandatory placement on the City Council regular meeting agenda for formal approval by resolution.
(d) Aggregate Fee Calculation. The aggregate Covered Fee reduction for a single Project includes all Covered Fees for all permits associated with the Project, whether applied for simultaneously or sequentially. No Applicant shall divide a Project into separate applications to avoid a higher approval tier.
(e) Referral to Council. The City Administrator may refer any Tier 1 or Tier 2 application to the City Council for approval at a regular meeting if the City Administrator determines that the application raises policy issues warranting Council consideration.
SECTION 10. PUBLIC-PURPOSE FINDINGS.
(a) Written public-purpose findings are required for every approval under this Ordinance.
(b) Staff-Level Findings. For Tier 1 and Tier 2 approvals, the Department Director shall prepare written findings on the administrative approval form identifying:
(i) the specific public benefit to residents of the City of Foley;
(ii) the eligible fee categories and specific Covered Fees reduced;
(iii) the dollar amount of each fee reduction;
(iv) the fiscal impact on the applicable department budget and the City general fund; and
(v) the factual basis for concluding that any private benefit to the Applicant is incidental to the public purpose served.
(c) Council-Level Findings. For Tier 3 approvals and appeals, staff shall prepare a written recommendation and findings for inclusion in the Council agenda materials. The Council resolution approving or denying the application shall state whether each eligibility criterion is satisfied and shall contain findings addressing each element listed in subsection (b) of this Section.
(d) Public Inspection. All public-purpose findings shall be retained as part of the project file and shall be available for public inspection in accordance with the Alabama Open Records Act.
SECTION 11. OBJECTIVE APPROVAL STANDARDS.
In evaluating an application under this Ordinance, the approving authority shall consider:
(a) Whether the Project is located within the corporate limits of the City of Foley.
(b) Whether the Project provides public access or serves an eligible service population within the City.
(c) The expected duration of qualifying use and community benefit.
(d) The absence of Private Inurement in connection with the Project.
(e) Consistency with adopted City comprehensive plans, zoning ordinances, land use plans, and capital improvement plans.
(f) The impact on the applicable department or program budget.
(g) Whether the Applicant has outstanding code violations, unpaid fees, fines, or liens with the City.
SECTION 12. CLAWBACK AND REPAYMENT.
(a) The Applicant shall repay to the City the full amount of any fee reduction approved under this Ordinance, plus lawful administrative costs incurred by the City in processing and administering the reduction, if any of the following occurs within the Compliance Period:
(i) The Applicant made a material misrepresentation in the application or supporting documentation.
(ii) The Applicant loses its qualifying nonprofit status before Project completion.
(iii) The qualifying Project is not completed within the time period specified in the applicable permit, including any approved extensions.
(iv) The Project is sold, transferred, or converted to a nonqualifying use within the Compliance Period.
(v) Private Inurement occurs in connection with the Project.
(b) The Compliance Period shall be thirty-six (36) months from the date of permit issuance, unless the City Council establishes a different period by resolution.
(c) Notice and Opportunity to Cure. Before demanding repayment, the City shall provide written notice to the Applicant identifying the grounds for clawback and allowing thirty (30) calendar days to cure the noncompliance, if the noncompliance is reasonably susceptible to cure.
(d) The repayment obligation shall constitute a debt owed to the City and may be collected by any lawful means available under Alabama law, including but not limited to withholding of future permits, offset against amounts owed by the City to the Applicant, and referral to the City Attorney for collection.
(e) The clawback and repayment obligation under this Section shall survive the expiration or revocation of the applicable permit.
SECTION 13. PRESERVATION OF CODE COMPLIANCE.
A fee reduction under this Ordinance does not waive, modify, or excuse compliance with any substantive provision of the Code of Ordinances of the City of Foley, including but not limited to building codes, mechanical codes, electrical codes, plumbing codes, gas codes, fire codes, zoning regulations, subdivision regulations, floodplain management regulations, stormwater management requirements, accessibility requirements, utility requirements, inspection requirements, and right-of-way requirements. All bond, insurance, restoration, indemnity, safety, and security requirements applicable to the underlying permit or approval remain in full force and effect and are unaffected by any fee reduction granted under this Ordinance.
SECTION 14. NOTICE, APPEAL, AND PROCEDURAL DUE PROCESS.
(a) Written Notice. The Department Director shall issue written notice of approval, partial approval, or denial to the Applicant within ten (10) business days of receipt of a complete application. The notice shall state the grounds for the decision, the fee categories and amounts approved or denied, and the Applicant’s right to appeal under this Section.
(b) Appeal. An Applicant may appeal a denial or partial denial of a Tier 1 or Tier 2 request by filing a written Notice of Appeal with the City Clerk within fourteen (14) calendar days of the date of the written administrative notice. The Notice of Appeal shall state the specific grounds for the appeal and the reasons the staff decision should be reconsidered.
(c) Council Appeal Packet. Upon receipt of a timely Notice of Appeal, the City Clerk shall place the appeal on the agenda for the next available regularly scheduled City Council meeting. City staff shall prepare an agenda packet containing: the original application and all attachments; staff’s written rationale for the decision; and the Applicant’s Notice of Appeal.
(d) Hearing. At the Council meeting, the Applicant or the Applicant’s authorized representative shall be given the opportunity to present the request to the Council. City staff shall present the administrative findings and rationale for the decision.
(e) Council Decision. The City Council may, by resolution: (i) uphold the staff decision and affirm the denial; (ii) overturn the staff decision and approve a full or partial fee reduction; or (iii) table or remand the application for additional information prior to taking final action. The resolution shall state whether each eligibility criterion under Sections 6 and 11 of this Ordinance is satisfied.
(f) Finality. The decision of the City Council on appeal shall be final. If the Council affirms a denial, the Applicant must pay the full applicable permit fees before permit issuance.
SECTION 15. CONSTRUCTION CRAFT TRAINING FEE ADMINISTRATION.
The Alabama construction industry craft training fee imposed under Ala. Admin. Code r. 355-10-1-.02 shall be administered in accordance with applicable state law. To the extent that applicable state law provides that the craft training fee is not collected on permits for which a fee has been specifically waived or reduced by the municipality, the City shall administer the craft training fee consistently with any approved fee reduction under this Ordinance. Nothing in this Ordinance shall be construed to require the City to waive or reduce any state-mandated fee except as expressly provided by applicable state law.
SECTION 16. RECORD KEEPING AND ANNUAL REVIEW.
(a) The Finance Director shall maintain a log of all approved fee reductions in the municipal permitting database with an accounting code specifying “Non-Profit Fee Adjustment,” including the fee categories reduced, dollar amount of each reduction, approval tier, appeal status, and Council action (if any).
(b) The regulating Department shall maintain an annual summary of all reduced permit fees for review during the City’s annual budgeting process.
(c) Records shall be retained in accordance with the City’s records retention schedule and shall be available for audit, budget review, and equal-treatment review.
(d) The City Administrator shall report to the City Council at least annually on the operation of the Program, including the number of applications received, approved, partially approved, denied, and appealed, and the aggregate dollar amount of fee reductions approved during the reporting period.
SECTION 17. SEVERABILITY.
If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct, and independent provision, and such holding shall not affect the validity of the remaining portions of this Ordinance.
SECTION 18. CODIFICATION.
This Ordinance shall be codified as Article III of Chapter 4of the Code of Ordinances of the City of Foley, Alabama. The City Clerk is authorized and directed to make such nonsubstantive formatting and numbering changes as may be necessary to accomplish codification.
SECTION 19. REPEALER.
All ordinances or parts of ordinances in conflict with this Ordinance are hereby repealed to the extent of such conflict.
SECTION 20. EFFECTIVE DATE.
This Ordinance shall become effective upon publication as required by law.