Agenda - Council Work Session - 12/13/2011

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CC Work Session 2. 1. Meeting Date: 12/13/2011 By: Patrick Brama, Administrative Services Title: Development Costs Study Follow Up Background: As part of the 2011 City Council Strategic goals, evaluating the City of Ramsey's development/building fees was identified as a high priority. City staff undertook a development costs study in the spring. Results of the Development Costs Study were presented to the City Council in August. Questions and inquires from the August presentation were investigated by city staff and responded to in November. On December 8th the City hosted a developer/builder open house. The purpose of this case is to address inquires from the November meeting and to report the results of the builder /developer open house. Notification: None required at this time. Observations: Builder /Developer Open House: The builder /developer open house took place on Thursday December 8th. About 200 builders and developers, along with five organizations, were invited. As part of the builder /developer open house staff organized an on -line survey; with the purpose of gathering documented input and adding convenience for participants. The on -line survey was available for participants to complete both from home /office and at the builder /developer open house. Attached to this case is a summary of the input received both at the open house and from the survey. Proposed Changes: In addition to the proposed changes that were presented in the November meeting, staff received direction to adjust fees that are based on the 2004 comprehensive sewer /water studies. Council direction was to reduce sewer/ water rates by 3.7% to reflect 2010 rates until results from the new comprehensive sewer/ water study are available. Per Unit Breakdown: In the November meeting, staff received requests to breakdown the proposed changes to development costs to a per unit basis rather than a development wide basis. Attached to this case is a per unit breakdown of the proposed changes, in development fees, from 2011 to 2012. Building Permit Fees Methodology: Staff received inquires regarding the methodology of how building permit fees are calculated; and, what are the actual costs to the city for work done regarding a building permit. NOTE: there are two building permit fees; base building permit fee and the plan review fee. Base Building Permit Fee: The City of Ramsey formulates their base building permit fee with two numbers; valuation and the suggested UBC fee (table). "Valuation" is determined by establishing a per square foot value of newly constructed home and then multiplying by the total number of square feet in that home. The City of Ramsey uses per foot valuations developed by the State of Minnesota; which are updated annually. In regards to the Universal Building Code (UBC) table, cities within the metro nearly exclusively use the UBC table. Unfortunately, the UBC no longer exists. Therefore, nearly all cities in the metro are using the 1997 UBC table to formulate their building permit calculations. Some cities have tweaked the table to fit their needs; however, they still use the 1997 UBC table. The reason the table is still viable today is because valuation changes over the years, which allows the building permit fee to adjust to the market. Finally, another reason the 1997 table is still exclusively used is the result of law suits that took place in the