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