4. Building Fees AdjustmentPLANTING FOR THE F[3Ti1RE MD1VT'ANA.1-J
i4ji.C60- N
To: Jim Patrick, City Manager
From. Tom Jentz, Director
Date: June 17, 2008
Subject: Building Permit Fees Proposed Increase
Planning Department
201 V Avenue East
Kalispel� MT 59901
Phone: (406) 758-7944
Fax: (406) 758-7739
www.kalispell.com/plannl*Lag
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 ermit fees:
Building permit fees have not been adjusted for 3 years. For example, 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 $200,000 in valuation..
This would include most small re -models up to a typical 1,600 - 1,800 square foot
house with garage and porch. Permit prices would increase for larger projects over
the $200,000 threshold. 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.
2008 Proposed Building Fee Comparisons
Valuation. Current Permit Fees Pro osed Permit Fees
$125,000.00 $1133.75 $12045.75
$1501000.00 $11273.75 $1,208.25
$1751000-00 $12413.75 $1,370.75
$200,000.00 $17553.75 $15,533.25
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 Bodge Reports which
collect building information from the City of Kalispell using our construction. costs.
Attached is the proposed fee schedule entitled "Kalispell 2008 Building Permit
Schedule". This schedule is based on our current building department fee schedule
with the modifications as discussed above inserted.
Increase lumbin and mechanical ermits:
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 2008 Mechanical Permit Fee Schedule" (proposed) and the
Kalispell 2008 Plumbing Permit Fee Schedule (proposed).
Add a residential plan 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 takes 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 douse plan, as is common for entry
level domes. 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 $ 2,000
Mechanical permit $ 3,000
Plan review fees $10,000
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 2003, the
building department is operating with a reserve account of only 13% ($75,000).
Recommendation.
Staff recommends implementing fee increases in the three areas outlined above as
follows.
a. Adopt the proposed "Kalispell 2008 Building Permit Fee Schedule
b. Adopt the proposed "Kalispell 2008 Plumbing Permit Fee Schedule"
c. Adopt the proposed "Kalispell 2008 Mechanical Permit Fee Schedule"
d. Establish a Residential Plan Check Fee of $50/house with exemption for
duplicate print reviews
EXHIBIT A —PROPOSED FEE SCHEDULES
City of Kalispell 2008 Building Permit Fee Schedule (Proposed)
$1.00 to $500.00 $23.50
$501.00 to $2,000.00 $23.50 for the first $500.00 plus $3.05 for
each additional $100.00 or fraction thereof,
to and 'including $2,000.00
$2,001.00 to $25,000.00 $69.25 for the first $2,000.00 plus $11.00
for each additional $11000.00 or fraction
thereof, to and including $25,000.00
$25,001.00 to $501,000.00 $333.25 for the first $25,000.00 plus $9.00
for each additional $1,000.00 or fraction
thereof, to and 'including $ 5 0 000.00
$501,001.00 to $500,000.00 558.25 for the first $50,000.00 plus $6.50
for each additional $1,000. 00 or fraction
thereof, to and includin $200 000.00
$5005001.00 to $11,0001,000.00 $3,483.25 for the first $500,000.00 plus
$ d. 00 for each additional $1, 000. 00 or
fraction thereof, to and including
$ 000 000.00
$1,000,001.00 and up. $6,483.25 for the first $11000,000.00 plus
$5.00 for each additional $1,000,000.00 or
fraction thereof.
Ci of Kalispell 2008 Mechanical Permit Fee Schedule ro osed
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 - $Z 000.00 $30.00
$Z, 001.00 - $10, 000.00 $ 3 0.00 for the 1 " $ 2, 000.00 plus
$15.00 for each additional $11,000.00
or fraction thereof.
$101001.00 - $50,000.00 $150.00 for the 1" $105000.00 plus
$7.50 for each additional $1,000.00
or fraction thereof.
$50,001.00 or more $450.00 for the l't $501)000.00 plus
$4.00 for each additional $1, 000.00
or fraction thereof.
Valuation
Permit
0- 0o0.00
$ 3 0.00
001.00 -
33000.00
$45.00
32001.00 -
4 000.00
$60.00
42001.00 -
51000.00
$ 75.00
5 001.00 -
000.00
$ 90.00
001.00 -
7noOO.00
$105.00
7 oo l . 00 -
82000.00
$120.00
82001.00 ---
92000.00
$13 5. 00
001.00 -1M00.00
$150.00
City of Kalispell 2008 Plumbing Permit Fee Schedule (Proposed)
$20.00 Base plus $7.00 per plumbing future and/or gas outlet