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early 2000's (Elk River and Shakopee). Cities were being sued for either over charging developers or not
<br />delivering on a service that was paid for (i.e. inspections). In response, most cities either stayed with or
<br />re- adopted the UBC fee table. After contacting the League of Minnesota Cities (LMC), MetroCities, the
<br />State of Minnesota, LOGIS, by conducting the development costs study, and by reviewing UBC
<br />handbooks staff was unable to determine the exact methodology was used in determining the 1997 UBC fee
<br />tables.
<br />Plan Review Fee: The plan review is calculated by multiplying the base building permit fee by 65 %.
<br />Based on the development costs study and by contacting multiple other cities, the 65% rule for plan review
<br />fees is nearly exclusively used. It should also be noted that recent changes in state law that the plan review on
<br />repetitive plans are charged at 25% plan review fee.
<br />The State of Minnesota and the League of Minnesota Cities both suggest that cities calculate building permit fees by
<br />balancing total revenues and total expenses of the building department. Furthermore, the State of Minnesota
<br />regulates that cities' building departments by requiring annual reports of revenues and expenditures. After review,
<br />staff has concluded that the total expenses for the building department are significantly higher than total
<br />revenues. Please see the attached 2010 annual report filed with the State of Minnesota ($423,330 revenue,
<br />$1,146,287 expenses).
<br />A second fee calculation example: On average, it takes 10 inspections for a single family home. The cost that the
<br />city charges is $47 per inspection per the fee schedule, this rate has not been adjusted since the adoption of the UBC
<br />schedule. NOTE: this number is listed in the 1997 UBC table. At first glance, the cost of the city is $470.
<br />However, staff would like to note that the actual cost is significantly higher that $47 per inspection. The actual cost
<br />per inspection goes up or down due to the allocation of fixed capital costs (i.e. building, vehicles, software,
<br />equipment) depending on the year (i.e. different number of building permits per year) and the staffing allocation
<br />performing the work. In the early 2000's development was paying for a large share of it's costs, and in the past few
<br />years development has not been paying for a large share of it's costs.
<br />Taking a third perspective of the actual costs of the building department, staff estimates that any given given
<br />inspection takes 30 -45 minutes. The base rate of the building inspector is $38.65. If that rate is multiplied by 2.3
<br />(multiplier used for other scenarios) we arrive at $88.89 per hour. Therefore, the actual costs to the city for a 30 -45
<br />minute inspection is $44.44 - $66.48. When compared to the 1997 UBC inspection charge of $47, which the city is
<br />currently using, the actual costs are higher than what is charged.
<br />Example Building Permit:
<br />In the November meeting, staff was directed to provide an example building permit for an average sized home.
<br />Attached to this case is an example building permit for a $165,000 home (2011). In summary, the charges are:
<br />$4.00 Certificate of Occupancy, $5.00 License Verification, $940.39 Plan Review, $75 City Sewer Connection, $75
<br />City Water Connection, $1,500 Erosion Control Escrow, $100 Erosion Control Admin Fee, $1,446.75 Base
<br />Building Permit, $150.00 Mechanical Permit, $434.59 Water Meter/Horn, $200 Plumbing Permit, $2,230 SAC,
<br />$200 SAC Handling Fee, $102.50 State /County Surcharges. NOTE: the $1,500 erosion control escrow is returned
<br />to the builder upon completion of an erosion barrier.
<br />Copper Vs. Plastic Pipe:
<br />Staff was asked to follow up on the use of plastic pipe versus copper pipe to connect a building to the property
<br />line. This item was discussed in detail in two public works meetings (05/18/10 &07/20/10). In summary, staff was
<br />directed to wait for the technology, regarding the use of plastic pipes, to improve before Ramsey adopted it's use.
<br />The main concerns were regarding the detection of the pipe and a solution to pipes that freeze. At this point in time,
<br />staff is not comfortable with the available solutions. Attached to this case are the meeting minutes from both public
<br />works cases.
<br />Developer Vs. Builder Costs:
<br />In the November meeting, it was suggested to use the certificate of occupancy (CO) as a tool for ensuring that site
<br />improvements take place in a new development. Furthermore, there seemed to be some confusion between
<br />the requirements /charges placed upon developers versus builders. Staff would like to note that there is an important
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