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4. Resolution 5387 - Amends Resolution 5014 - Distribution of Building, Zoning, Fire Prevention, Site Review FeesPlanning Department 201 1" Avenue East Kalispell, MT 59901 Phone: (406) 758-7940 Fax: (406) 758-7739 www.kalispell.com/pla in REPORT TO: Kalispell Mayor and City Council FROM: Tom Jentz, Director Jane Howington, City Manager SUBJECT: Distribution of Building, Zoning, Fire prevention and Site Review Fees. MEETING DATE: September 8, 2009 BACKGROUND: The Building Department is operated as a revenue fund. The department, under state law, is allowed to accumulate up to two budget years of reserves before the State Codes Division will order fees to be reduced. The purpose of the revenue reserve is to allow departments to plan for and weather economic or cyclical construction fluctuations as well as to adjust for the occasional significantly large projects that occur. This system has worked well and the department has been able to maintain a stable, funded program. Other departments do and have in the past assisted the Building Department in the review and approval of building permits, most notably the Zoning Office, the Fire Department and the Site Review Committee consisting of several city functions (parks, fire, public works, building, planning and zoning). During the busier times, as permit fees accumulated, the city, by resolution, developed percentage formulas to directly allocate percentages from the building permit fees collected to these various departments to reflect the services provided. We are now in leaner times and in addition some of the inter -departmental services have changed. Currently, the Building Department only keeps 33% of the building permit fee paid to the department and it has created a financial impact on the department. Staff has reviewed these adjustments and feels that a more equitable method of assessing inter -departmental costs needs to be developed. Currently, from each building permit the following percentages are allocated to each department: Building Dept. - 33% Fire Dept. - 28% Zoning - 28% Site Review - 12% The percentages do not currently reflect the level of service provided. Also note that, in the case of the Fire Department significant service changes have occurred. The current 28% figure was applied when the Fire Department provided administrative oversight of the Building Department. This department is now supervised by the Planning Director. In addition, the Building Department now administers the Internal Fire Code for all new construction (fire plan reviews, fire sprinkler reviews and fire inspections for all new construction). In the robust years the Building Department has survived these internal transfers but reserves were depleted. In the lean years now, the Building Department cannot adequately function. Staff has included a summary of the past 7 years of building permit revenue activity as an illustration of this issue below: Analysis of Kalispell Building Department Revenue and Expenditure Sources Fiscal 2003 - 2009 Fiscal Year Gross Revenues received Building permit revenues retained Building permit revenues distributed Building Dept. Fiscal Year Actual Expenditures # of Building Dept. Employee 2003 $ 510,000 $ 361,000 $ 149,000 $ 348,000 5 2004 $ 395,000 $ 292,000 $ 103,000 $ 316,000 5 2005 $ 653,000 $ 487,000 $ 166,000 $ 353,000 5 2006 $ 995,000 $ 610,000 $ 385,000 $ 479,000 6 2007 $1,266,000 $ 748,000 $ 518,000 $ 562,000 6 2008 $ 687,000 $ 400,000 $ 287,000 $ 597,000 6 2009 $ 383,000 $ 223,000 $160,000 $ 427,000 5 OVER THE PAST 7 FISCAL YEARS (2003 - 2009) THE BUILDING DEPARTMENT HAS: Collected in total fees $ 4,889,000 Distributed to other departments $ 1,768,000 Retained $3,121,000 Spent $3,082,000 The table below notes the projected revenue sources for the Building Department this fiscal year. Because the department currently only retains 33% of the building permit fee, the department is projected to only keep 43% of all funds they receive. Kalispell Building Department 2009 - 2010 Fiscal Year Projected Revenue Sources Plan Review fees - 100% 120,000 Mechanical fee - 100% 30,000 Plumbing fee - 100% 22,500 Electrical fees - 100% 10,000 Building permit - 33% 80,000 Building revenue - 43% $ 262 500 Resolution 5386 is intended to get the Building Department back on a sound footing. It is also intended to create a more realistic basis for funding both the Building Department and providing a process for those other city departments that do assist the Building Department in the building permit process. RECOMMENDED ACTION: Staff recommends that the council adopt Resolution 5386 which allows the Building Department to retain fees collected and also allows other departments to adjust allocations for services rendered based on the volume of permits and type of services provided. Respectfully submitted, t V Thomas R. Jentz Jane Howington Director City Manager c: Theresa White, Kalispell City Clerk I R DIXII goY Ci7►iiCi��Cl �l RESOLUTION TO REPEAL RESOLUTION 5, WHICH SET THE CITY OF KALISPELL ASSOCIATEDFEES BUILDING PERMITS, ZONINGADMINISTRATION, PREVENTIONAND SITE REVIEW AND TO ESTABLISH TRANSFER OF FUNDS FROM THE BUILDING FUND TO THOSE CITY DEPARTMENTS BASED UPON DOCUMENTED SERVICES PROVIDED POLICY WHEREAS, the City of Kalispell currently receives revenue and, as required by state law, keeps a discrete account for its building permit fees and building code inspection services as allowed under the uniform codes adopted by the City; and WHEREAS, other city departments augment the building department services by providing other inspection and review services, such as zoning administration, fire prevention and site review; and WHEREAS, Resolution No. 5014, adopted by the City on June 6, 2005, provided for a percentage share distribution to those other departments providing the augmenting services based upon a projected building activity; and WHEREAS, more recent experience has proven that projecting building activity may not be the most precise or prudent method of allocating the building funds to the various city departments providing inspection and review services; and WHEREAS, the Kalispell City Council therefore finds that the allocation of building funds should be made to the various city departments based upon actual per unit measures of services provided. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL AS FOLLOWS: SECTION I. Each city department that provides inspection or review services that augment the building department services and are otherwise eligible to receive funds from the City Building Department revenue account shall submit a reimbursement request to the City Finance Director, on a quarterly basis, by a report that provides a per unit accounting of services provided, whereupon the City Finance Director shall make the appropriate account transfers and such budget adjustments as may be necessary. SECTION II. Resolution No. 5014, to the extent to which it is inconsistent with this resolution, is hereby repealed. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, THIS 8TH DAY OF SEPTEMBER, 2009. Pamela B. Kennedy Mayor Theresa White City Clerk