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Planning Departments Struggle To Cope With Budget Cuts

Though the economic prosperity and real estate boom of the past decade may seem like a distant memory, it wasn't more than two or three years ago that planning departments around the state were buried in paperwork. From sprawling subdivisions to loft renovations, developers sent them all the work they could handle. Some planning agencies even complained that attention to case processing prevented them from actually planning.

Today, planning departments are as overburdened as ever, but for completely different reasons.

Though the downturn in the economy has put fewer permits and entitlements across the counter at city planning departments, layoffs and staff reductions have resulted in more work for fewer people. Big cities have eliminated the equivalent of entire small-city departments. San Jose's planning department underwent three rounds of layoffs in 2009. Riverside County is cutting 25 percent of its planning department capacity. San Francisco has cut its staff time down to 37.5 hours per week. Fresno has seen 40 positions eliminated. To help close a $485 million city deficit, the Los Angeles Department of City Planning, once with a staff of over 1,000, has had to reduce its planning capacity by 40 percent.

Some departments have responded by changing the way their planners work, while others have sought new sources of revenue. More often, however, it's been a combination of attempts to try to get the work of the planning department done. During this unprecedented period, some agencies have made some tweaks and stopgap measures while others are hanging on for dear life.

Cross-Training

Just as much of the state's fiscal pain has been centered in the state capital, the City of Sacramento Planning Department has also suffered its share of cuts. But the situation has compelled the department to look internally to achieve greater efficiency.

"We used to be able to do 20 things at one time," said David Kwong, planning director for the City of Sacramento. "We can only do 15 now." Kwong said his department gets about 35-40 percent of its budget from the city's general fund, and the rest from revenue. He said about twenty positions have been eliminated, though fix or six were already vacant. That's brought his department down to 37 planners.

"Some programs, admittedly, will have to take the back burner and take longer to do, as well as some programs being eliminated entirely," Kwong said. Though the work has slowed, it hasn't stopped completely. Kwong said permit applications are down from about 18,000 a year, to roughly 13,000. To handle the work with fewer planners, the planners under Kwong are now cross-trained in a variety of tasks and skill sets, allowing them to do a greater variety of work.

"As the projects have faded with the economy, we saw a big need to change internally," Kwong said. "We couldn't just have one type of planner, per se. We had to have planners that were more versatile."

That means long-term planners can now sometimes be found processing requests at the planning counter or helping with zoning administration. Kwong said there was some initial resistance to the changes within the department, but planners have now mostly gotten used to their new responsibilities.

ARRA To The Rescue

In Fresno, planners are facing a similar challenge. Over the past year, the city's planning department has been forced to cut about 40 positions, bringing its staff from about 220 people to roughly 180. But things could have been worse.

Planning Director John Dugan said his department was able to save about 14 positions through a well-timed grant application. The city secured some American Recovery and Reinvestment Act block grant funds from the Department of Energy, which it split between energy auditing and a continuation of long-range planning programs.

"It was a very creative response to take advantage of the energy grant, which allowed for new local development regulations that resulted in energy conservations, but also avoided the layoff of some of the planning staff," said Dugan.

However, the structural issue in Fresno – as elsewhere – is that development is down. Revenues have been dropping about 10 percent each year for the past few years, said Dugan. When he looks back three or four years, there's more than a 40 percent decline. And because most of the city's planning program is funded by development application fees, the decline in building has had a huge impact. "When the fees tanked, all of the revenues that ran the planning department went with them," Dugan said. The budget for city's next fiscal year includes some extra contributions from the general fund to make up for the shortfall from the department's enterprise fund.

Dugan sees a turnaround on the way, however. Fresno has historically grown by about 10,000 people per year, according to Dugan, and that growth creates a demand for about 3,000 new housing units. But the supply hasn't matched that demographic increase in recent years.

"There's been a big pent-up demand as the new construction tapered off to the hundreds instead of thousands per year," said Dugan. "That's going to be breaking through pretty soon as financing opens up."

Silo-Busting In L.A.

In Los Angeles, fee increases have been the cornerstone of the planning department's attempts to survive the recession and massive citywide cuts in personnel. After implementing two fee increases, Planning Director Gail Goldberg said the department isn't quite there, but it's getting close.

"We successfully went from what was considered a 100 percent general fund department to a budget that will be about 75 percent of special fund and only about 25 percent general fund," said Goldberg of the rise in fee-based funding.

But fee increases are only a part of a grim picture in L.A. The city has instituted an early retirement buyout program and put many workers on a 10 percent furlough. Goldberg said that 40 planners have taken advantage of the early retirement program, which helped to reduce the number of forced layoffs but also drastically reduced the number of senior planners on staff. The proposed city budget for the 2010-2011 fiscal year would cut 13 more positions in the department.

Notable departures include that of former Principal Planner Jane Blumenfeld, who was considered the department's foremost expert on the city code, and of Emily Gabel-Luddy, founding co-director of the department's Urban Design Studio, which opened only three years ago to much fanfare.

"We are significantly down in terms of capacity, but we're not going to be facing huge layoffs," Goldberg said. "It's certainly a blow to the department to lose at one time that history of the department. I think, in some ways, it presents an opportunity to do some reorganization and to do things in a different way."

Like Sacramento, Los Angeles is transitioning planners from specialized roles to more general planning assignments. The department is being restructured into teams based on city geography, and now planners will be involved in cases from start to finish, handling all aspects of each project. Goldberg said this reorganization has been in the making ever since she took over as planning director four years ago.

"The criticism of the planning department was that we had functional silos. People that did subdivisions only did subdivisions. People that did zoning only did zoning," said Goldberg. "It has long been the thought that if we were organized in geographic teams….it would be better for the planners, but it would also be better for the work if people could take a project from the beginning to the end."

That reorganization will likely be a good thing for the planning department, according to Los Angeles-based land use attorney Bill Delvac of Armbruster Goldsmith & Delvac. But he said the troubles aren't over in Los Angeles. His firm has seen an increase in work in recent months as developers try to time new projects for a rebound in the market. They're also trying to compensate for the backlog at the planning department.

"Because it takes a year or two or three to get projects approved, more (developers) are gearing up now to hit the next cycle," Delvac said. That's good for his firm, but not so good for the planning department.

"It's a challenge for the planning department," Delvac said. "The planners are not the source of the problem. They're on the receiving end."

As the market recovers, cities and their planning departments will likely continue to rethink the way they operate, and the mechanisms that fund their operations. For now, they'll simply have to adapt an era of declining revenues and reduced department sizes – and the uncertainty of when the situation will begin to improve.

Contacts

Daivd Kwong, Director of Planning, City of Sacramento, (916) 808-2691

John Dugan, AICP, Director of Planning and Development, City of Fresno, (559) 621-8001

Gail Goldberg, AICP, Director of Planning, City of Los Angeles, (213) 978-1271

Bill Delvac, Armbruster Goldsmith & Delvac, (310) 209-8801