2020-03 Ordinance Amending City Code Chapter 68 - Mechanical Code

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City Manager DATE: 1/612020 MEMU: 2424-02 TO: Honorable Mayor Moore Wolfe&City Council Members FROM: Scot Wrighton,City Manager Jon Kindseth,Deputy City Manager David Greenwell,Building Inspectian Manager SUBJECT: Consideration of Ordinancas Amending Chapters 67,67.2,68,69,&70 as they relate to fees. SUMMARY RECOMMENDATION; Staff recomme�xls approval of the five following Ordi�nces whieh wiil primarily modify the fees staff collects when processing and issuing building pemut fees. BACKGROUND: Staff has perfotmed an analysis of aur sunounding peer communities and detem�it�d we are sigrrificantly lower Than any others. More imporGantly than this is the fact that the City lases money on our pernutting service as currently provided. Our current fee shucture is very carnplex and confusing far the average property owner,general cantractors,and our staff tasked w'rth administering this service. The permit fees are currently found in five separate ordinances depending upon the typa of work being dane. Under our current fee model,we lose money on the smallest projects and the larger,rnore complex projects. The biggest benefits of this new fee structure is the simplicity of irnowing what the fees are for any project that a person would undertake. The fees are based on the value of the work being done by the owner or contr�actar. The City will start charging for full plan reviews,as opposed to the current structure where plan review and inspection casts are absorbed by the City with the issuance of a permit fee. We believe the new fee structure is a rnore equitable model and thus we have seen this same trend arr�ong other prpfessianally m�naged communities. Even with this fee increase,it is not e�pected that permit fees will cover all cxpenses related to pracessing and administering the building departrnent division. Our fees will be more in line with wuncorporated Macon County after this change,whereas now our fees are orily about 50%of what theirs are. Most permits far residential or commercial repairs are nat likely to be impacted by this change. Most smail projects are oniy going to be subjected to the mininnum pernvt fee,thus r�t significantty impacted by this change. The permits that wiil be impacted are the sr�llest fee pernvts like fences,where they were$14 they will naw likely be$SQ Tl�most significantly impacted projects are the large new construction projects,where fees were not covering the plan review or inspectian costs historically. Over the next year,the City will strive to conduct a more detailed analysis of the building division to detelmine if these new fees are adequate to cover costs,aver if additional changes should be made to get pemut retated fees to cover the administratian costs of praviding Ehis service. This proposed increase in building fees was terrtatively authorized by the City Council during their review of the recomrnended FY 2020 budget.These five ardinance arnendments irnplement this council directive. PRIOR C{)UNC�L ACTIUN: A comprehensive permit fees modification has not been done in the past decade or]onger. Mast of our current fees are significantly]awer than whai we believe ta be the market average. A brief discussion over raising permit fees was had during the budget workshops in November. POTENTIAL OBJECTIONS: There are na known abjections to this recommended approach ta the permit fees. INPUT FROM OTHER SOURCES: Staff used budget data and fee schedules from our neighboring cornmunities of Chairq�aign,Peoria,Blaomington,Normal, Springfield,Quincy,and Macon Caunty. STAFF REFERENCE: Jon and David are available to at�swer any questions and will be in attendance at the City Council meeting to provide answers not previously provided. BUDGET/TIME IMPLICATIONS: Currently taxes and general fund revenues are being used to snbsidize the expenses related ta pernutting a new house being built in Decatur,for example. The increase in permit fees will reduce or eliminate that subsidy,and set the user fees to a level that pays for the service.