Documents shared during the Tuesday, Nov. 7 meeting of the Westlake City Council show that revenue estimates for fiscal year 2023, which ended Sept. 30, were off by more than $1 million — and not for the better.
Going into the 2023 fiscal year, the city planned for $2,770,900 of revenue coming on from building permits, engineering permits, and planning and zoning permits. However, those and related revenues fell short by $1,049,170, according to documentation provided with the agenda backup.
Reductions in several Special Revenue/Enterprise Fund expenditures — such as $22,000 in consulting fees — resulted in a savings of more than $100,000, reducing the overall shortfall to $939,453.
The discrepancy required council members to pass the resolution, which they did 5-0, to move $255,000 from the city’s General Fund into the Special Revenue/Enterprise Fund.
Mayor JohnPaul O’Connor said that the shortfall did not put the municipality in the red; that it was a matter of shifting money from one account to another to balance the final 2023 books.
“I’m still very confident that we’re doing well,” O’Connor said Tuesday. “It’s not like we’re in trouble, or even close to it.”
City Manager Kenneth Cassel said the drop in permitting revenue is not an indication that the red-hot real estate market in Westlake is cooling off.
“I don’t see it slowing down at all,” Cassel said Tuesday. “We’re issuing [certificates of occupancy] on close to 40 homes a month… and we have several large commercial things on the way.”
Cassel explained that the overestimate was caused when Westlake’s major developer, Minto Communities USA, shifted its permit application process away from city staff to a private permit preparation provider, CAP Government Inc.
“We hit a breaking point… where the wheels came off,” Minto Senior Vice President John Carter said Wednesday. “It was taking 30 to 45 days to get a permit on a house. That just was not functional for us.”
Minto is the city’s largest landowner and developer with approval to build thousands of homes within the community.
“In a way, it was a blessing,” O’Connor said. “[City staff] was getting bogged down handling the number of permits that were coming in.”
Carter said that the pace of the manual, paper permitting then used by the city had been a point of frustration for several years, but the final decision to shift to a private permitting firm that uses a digital platform happened quickly. Still, city officials should not have been surprised, he said.
The city hopes to get Minto’s permit prep business back once a new permitting software program — City View — is up and running smoothly, Cassel said. The cost of the software and hosting by Nova Engineering & Environmental, with which the city is contracting for its permitting infrastructure, is approximately $95,000 a year. He said the software, which is being tested now, allows developers and contractors to apply for permits, get feedback, make necessary changes and pay online.
“We’re absolutely interested in returning that function back to the city,” said Carter, who is in charge of the Westlake project for Minto.
However, the city will have to demonstrate that its permitting department can expeditiously handle Minto’s approximately 400 permit requests per year, along with those of other residential and commercial developers, he said.
The 2024 budget estimates the income within the Special Revenue Fund from permitting will be $3,082,600 as part of the city’s $10 million in overall revenue.
The 2024 fiscal year is the first in which Westlake will not have available to it a lifeline of $500,000 or more from Minto. The agreement, which underpinned the city financially during its first seven years, expired at the end of the 2023 fiscal year.
“The growth out here is still explosive,” O’Connor said. “We’ve got 600,000 square feet of commercial going vertical right now with a million square feet in the pipeline.”
O’Connor said the names of incoming businesses will be well known to the public. For example, Planet Fitness will be part of the Publix Shopping Center Phase II at the corner of Seminole Pratt Whitney Road and Town Center Parkway South.
In other business, the council set Westlake’s second annual Holiday Pop-Up event for Sunday, Dec. 10. Food trucks, vendors and face painting will be part of the event, along with Santa.
“It was a huge hit last year,” O’Connor said, adding that it’s a great way to showcase the community. “It’s open to everyone, and not just in the western communities. We’d love to have people from all over the county come out and experience Westlake.”
O’Connor said the event mostly pays for itself through food truck and vendor fees. Vendors can register for the event at www.westlakegov.com.
The event will be held on the large lot between Kingfisher Blvd. and Town Center Parkway.