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6. Resolution 5287 - Building Feeslanning Department 201 1't Avenue East Kalispell, MT 59901 Phone: (406) 758-7940 Fax: (406) 758-773 9 www.kalispefl.com/planm*!Ig REIsORT TO: Kalispell Mayor and City Council FROM* Thomas R. Jen.tz, Director James H. Patrick, City Manager SUBJECT Adjustments to the Current Building Permit Fees MEETING DATE: July 7, 2008 BACKGROUND: The Kalispell Building Department has completed a review of the fees that are assessed for building permits. Generally our fee structure for commercial, industrial and public projects continue to be reasonable and adequate, at this time, as the fees are based on actual bid prices for construction. However, our residential program is currently slipping in terms of being current. Based on the staff review we recommend that the city council consider raising fees in 3 separate areas in order to ensure financial stability for the office, to ensure that the cost of permits fully addresses the cost of services rendered and to ensure accurate reporting of construction costs to the general public. The three areas recommended for increases include adjusting the fee schedule for the general building permit, raising the cost of plumbing and mechanical permits and adding a fee schedule for residential plan reviews. Each area will be described below-. Adjust building permit fees: Building permit fees have not been adjusted for 3 years and are in need of updating. The price of a residential building permit is based on a cost per square foot basis. we use a pre-set construction cost, apply it to the square footage of a house to give us a construction value and then go to a standard table and determine the building permit fee. Currently the city uses $70 per square foot as a construction cost. This was last adjusted 3 years ago when it stood at $62/square foot. The true cost of residential construction today is in excess of $100/square foot. Staff is recommending that we adjust the cost per square foot upwards to $100/square foot. At the same time we recommend adjusting downward the fee schedule for smaller projects i.e. entry level homes and remodels. The fee schedule as proposed in the attachments to this memo would reduce the cost of building permits for projects under $150,000 in valuation. This would include most small re -models up to a typical 1,500 square foot house with garage and porch. Permit prices would increase for larger projects over the $150,000 threshold (excluding land costs) . This proposal, based on an average conservative estimate of 200 homes constructed in Kalispell per year would raise approximately $25,000/year. Below is an example of how raising the construction value from $70 /square foot to $100 but reducing the fee schedule would work for small projects in the city. 2003 Proposed Building Fee Comparisons Square Feet of Construction (Residence) valuation based on current value of $70/s . ft Permit fee (current) valuation based on proposed ,value of $too/s . ft Permit fee (Proposed) l , 000 s . ft. $ 705000 $ 784 $1005000 $ 775 1,500 s . ft. $105NO $17021 $150,000 $15020 21,000 s . ft. $140,000 $1,217 $2001000 $152�5 This fee adjustment addresses two points. It actually reduces the permit fee associated with lower cost projects -- entry level housing units and small remodels. Secondly, it serves to provide more accurate information on housing costs to the national reporting services such as the US Census and the Dodge Reports which collect building information from the City of Kalispell using our construction costs. Attached is the proposed fee schedule entitled "Kalispell ZOOS Building Permit Schedule". This schedule is based on our current building department fee schedule with the modifications as discussed above inserted. Increase lumbiLag and mechanical vermits.. The last fee increase for either plumbing or mechanical permits was January 15, 1990. Staff recommends increasing the fee to match the state fee schedule. An average house would experience a $10 increase for a plumbing permit and a $15 increase for a mechanical permit. The actual fee schedule is attached to this memo and entitled, "Kalispell 20O8 Mechanical Permit Fee Schedule' (proposed) and the Kalispell ZOOS Plumbing Permit Fee Schedule (proposed). Add a residential Rlan review fee: Currently the city assesses a commercial plan review fee but we do not assess a residential plan review fee. An average set of house plans tales 1 1/4 hours to review. We are suggesting a flat fee of $50/house to address the cost of the plan review. There is an exemption for submission of the same house plan, as is common for entry level homes. Based on a conservative estimate of 200 houses/year this fee would raise $10,000/year. Summary: The three increases proposed would raise the following revenues over the course of a typical year of construction activity. Building permit increase $25,000 Plumbing permit $ 27000 Mechanical permit $ 3,000 Plan review fees a.10,2000 Total revenue increase $40,000 It should be noted that the Building Department is an enterprise fund. In addition, the Building Department is prohibited from accruing funds in excess of one full operating year. The Building Department is audited by the State Building Division every year and if reserves exceed one year's budget, the Building Department is required to reduce fees to bring this into balance. As we begin fiscal year 2009, the Building Department is operating with a reserve account of only 13% ($75,000). RE:[3BEMNDA'TION: A motion to approve the resolution implementing fee increases in the three areas outlined above as follows. a. Adopt the proposed "Kalispell 2003 Building Permit Fee Schedule b. Adopt the proposed "Kalispell 2008 Plumbing Permit Fee Schedule" c. Adopt the proposed "Kalispell 2003 Mechanical Permit Fee Schedule" d. Establish a Residential Plan Check Fee of $50/house with exemption for duplicate print reviews FISCAL EFFECTS: Positive fiscal impacts as the cost of doing services will more accurately be reflected in the fees assessed by the building department. ALTERNATIVES: As suggested by the city council. Respectfully submitted, Thomas R. Jentz Director Report compiled: June 27, 2008 c: Theresa White, Kalispell City Clerk James H. Patrick City Manager RESOLUTION NO. 5287 A RESOLUTION TO SET THE CITY OF KALISPELL BUILDING, PLUMBING AND MECHANICAL PERMIT FEE SCHEDULES AND TO ESTABLISH A RESIDENTIAL PLAN CHECK FEE AND DECLARING AN EFFECTIVE DATE. WHEREAS, the City of Kalispell has adopted the 2006 International Building Code, the 2006 International Mechanical Code Section and the 2006 Uniform. Plumbing Code. Each of these codes enables the City to charge fees for the inspection and administrative services provided in the administration of these codes; and WHEREAS, the City Building Department is responsible for, but not limited to, issuing general building permits, plumbing permits, and mechanical permits, residential plan reviews, and commercial plan reviews; and WHEREAS, it is necessary for the City of Kalispell to maintain an equitable fee system to be charged to the public for the services provided to it by the City of Kalispell Building Department that adequately pays the costs and expenses of maintaining that department; and WHEREAS, the building department staff and city manager, using projected activity for the fiscal year 2008--2009, have developed a fee schedule, attached hereto as Exhibit "A", in order to update fees to ensure that the cost of permits addresses the costs of services rendered and to ensure accurate reporting of construction costs to the general public. NOW, THEREFOR`,, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL AS FOLLOWS: SECTION I. The 2008 Kalispell Building, Plumbing and Mechanical Permit fee schedule, including a Residential Plan Check fee schedule, attached hereto as Exhibit "A" and fully incorporated herein by this reference, shall be and is hereby established as the valid and enforceable fee schedule of the Kalispell Building Department for those services provided. SECTION II. This Resolution shall be effective August 1, 2008. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, THIS 7TH DAY OF JULY, 2008. Pamela B . Kennedy Mayor ATTEST: Theresa white City Clerk EXHIBIT A -- PROPOSED FEE SCHEDULES City of Kalispell 2008 Building Permit Fee Schedule $1.00 to $500 $23.50 $501.00 to $2,000.00 $2,001-00 to $1009000-00 $100,001.00 to $200,000.00 $23.50 for the first $500.00 plus $3.05 for to and including $2,000.00 $69.25 for the first $2,000.00 plus $7.20 for each additional $1,000.00 or fraction thereof, to and including $25,000.00 $774.85 for the first $100,000.00 plus $4.90 for each additional $1,000.00 or fraction thereof, to and including $200 000.00 $200,001.00 to $500,000.00 $1,264.85 for the first $200,000.00 plus $7.00 for each additional $1,000.00 or fraction thereof, to and including $500 000.00 $500,001.00 to $750,000.00 $3,364.85 for the first $500,000.00 plus $6.00 for each additional $1,000.00 or fraction thereof, to and including $750,000.00 $750,001.00 to $1,000,000.00 $4,864.85 for the first $750,000.00 plus $5.25 for each additional $1,000.00 or fraction thereof, to and including $1,000,5000.00 $1, 000, 000.00 and up. $6,177.35 for the first $1,000,000.00 plus $5.00 for each additional $1,000.00 or . . . .. . .. .fraction... ................... ...................... .... ... t.... ......h. ..ereof. Other fees Residential plan review fee Inspections outside of normal business hours Re -inspection fees Outside consultants for plan checking and/or Inspections Commencing work without a permit - $50 - $75.00 per hour/min 1 hour - $50.00 per re -inspection $ cost plus 10% adMin/overhead fee 200 % of the permit fee Cit of Kalispell 2008 Mechanical Permit Fee Schedule (Proposed) The cost shall be the cost to the owner of all labor charges and all mechanical materials and equipment installed as part of the mechanical system. Valuation Mechanical fee $0.00 - $2,000.00 $30400 $29001.00 - $103000.00 $10,001.00 -- $509000.00 $50,001.00 or more $30.00 for the ls` $2,000.00 plus $15.00 for each additional $1,000.00 or fraction thereof. $150.00 for the 1" $10,000.00 plus $7.50 for each additional $1,a00.00 or fraction thereof. $450.00 for the 15Y $50,000.00 plus $4.00 for each additional$1,000.00 or fraction thereof. Valuation Permit 0-2,000.00 30.00 001.00 - 3,000.00 $45.00 001.00 - 4 000.0a160-00 001.00 - 5,000.00 $75.00 s o01.00 - 6,000.00 90.00 001.00 - 7 oaa.aa $105.00 7 001.00 - s oaa.0o $120.00 8 oo l .00 - 9 0aa.0a l 3 5.00 91001.00 - 10,000.00 $150.00 City of Kalispell 2008 Plumbing Permit Fee Schedule Pro osed $20.00 Base plus $7.00 per plumbing fixture and/or gas outlet