Agenda - Council Work Session - 08/23/2011

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CC Work Session 2. 1. Meeting Date: 08/23/2011 By: Patrick Brama, Administrative Services Title: 2011 Development Costs Study Background: As part of the Ramsey City Council's 2011 strategic goals, "Reviewing development fees and standards regarding construction" was identified as a council priority. This study, the "2011 Development Costs Study," aims to understand how different cities assess the costs of new development. In late April, the City of Ramsey sent a "Development Costs Survey" to 10 municipalities. The survey consisted of 200 questions. Completed surveys were received in mid June. The purpose of this case is to review The 2011 Development Costs Study results. Observations: Each and every city in this survey assesses development costs differently. Some municipalities rely more on developers to install needed infrastructure and to make site improvements than other municipalities. Some municipalities install needed infrastructure and make site improvements independently and then charge developers. Some cities put most of their costs into one part of a building permit and others break down their costs into separate permit fees. Some cities account for nearly all costs through development fees and some cities absorb costs into the general operating budget. Some cities pass on costs to end users rather than developers (i.e. residents and businesses) through utilities and assessments. Furthermore, there is often times a difference in development fee rates for fully developed communities when compare to developing communities. Cities also assign expenses in several different ways: flat rates, area specific rates, escrows, per unit rates, per acre rates, type of land use rates, per hour rates, assessments, trunk fees, etc. The 2011 Development Costs Study results are broken down in two documents (both are attachments in this case). First, being the executive report; and second being the appendix. The attached executive report contains background information on the development study and an overview of the results. The attached appendix contains detailed background information on how the study was conducted, how the survey was broken down and it also includes individual answers for each individual question asked in the survey. When reviewing the results of this survey please consider the following: • When cities rely on the developer to install (DI) needed public infrastructure; or, when a city assesses (ASSD) the cost of public infrastructure to future property owners those costs are not reflected in this survey. The actual cost of development (for a developer) would be greater than stated. Take scenario #1 for example, the City of Blaine has a much lower total cost of development than the City of Ramsey. However, the City of Blaine lists DI (developer installed) as an answer to five separate questions. Those developer installed costs are likely to exceed $300,000. • Leaving an answer space blank, writing "zero," writing the word "nothing," writing an answer that doesn't apply