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Home My WebLink About27-Development Services o c o CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Valerie C. Ross, Director Subject: Public Hearing 4:00 p.m. - Resolution adopting updated building permit and plan review fees. Dept: Development Services Date: June 10, 2008 MCC Date: June 16,2008 Synopsis of Previous Council Action: Adopted 1991 Uniform Administrative Code fee tables in 1991 (MC-880) Reviewed by Ways & Means and forwarded to MCC - June 4,2008 . Recommended Motion: I. That the public hearing relative to the Resolution to adopt updated building permit and plan review fees be closed. 2. Adopt Resolution. ~t.~ Valerie C. Ross Contact person: Tnc'Th T .PAli:!P.~ Rlli1tflng Offip.1Al Phone: 384-5171 Supporting data attached: StaffRc:port & Resolution Ward: All FUNDING REQUIREMENTS: Amount: N/A Source: (Ace" No.) (Ace" Description) Finance: Council Notes: Agenda Item No. d~ o c o CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Staff Report Subiect: A Resolution adopting updated building permit and plan review fees. Baekuound: The Development Services Department charges regulatory fees for plan reviews and building permits to cover the costs of providing the services associated with the enforcement of building codes as mandated by state law. The Department has undertaken a fee study (available from the Department or the City Clerk) to review and update the fees charged for building and plan review services. One part of this study was a time/cost analysis in regards to residential housing construction, both tract housing and in- fill housing, in order to develop a schedule of fees specific to single-family housing. As is clearly evident from the analysis, construction of homes in quantity, as is characterized by typical tract developments, results. in economies of scale and consequently reduced overall inspection costs. As a result, separate fee schedules have been developed for tract homes (Attachment A) and infill homes (Att""hment B), since the costs associated with inspections of each are significantly different. The proposed resolution includes these fee schedules in addition to other fee results from the ~--~ study. The minimum permit fee and the fully burdened homly rates for building inspection and plan review have been analyzed and updated. Fees are proposed for residential additions based on a computed average inspection cost per square foot. The Department cmrently utilizes building construction valuation and fee tables that were last updated in 1991. These tables do not reflect cmrent construction costs, but rather those that were in effect in 1991. The existing level of fees based on 1991 building valuation rates are not adequate to provide the personnel and resources that the Department requires to provide an adequate level of service to the development community. Fmthermore, the use of outdated valuation rates does not accwately report the level of construction activity in current dollars. The following chart compares the total costs of providing building inspection and plan check services and the revenues associated with these activities over the past ten (l0) fiscal years. The total costs include departmental and general city overhead. o c o COSTS VS. REVENUE Buildln!! Inspection and Plan Check Fiscal Year Total Costs Total Revenue Shor.tfllll or Surplus % Over or Under Break Even Point 1998-99 $1,213,808 $868,634 1$345,174 - 28.4 % 1999-00 $1,171,579 $860,719 ($310,860 - 26.5% 2000-0 I $1,130,365 $919,271 $211,094 - 18.7% 2001-02 $1290,114 $1051,134 $238 980 - 18.5% 2002-03 $1,464,012 $1 235,800 $228,212 - 15.6% 2003-04 $1,348,657 $1,266,569 ($82,088 - 6.1% 2004-05 $1,610,464 $1,913,092 $302,628 + 18.8% 2005-06 $1,842,616 $2059,631 $217,015 + 11.8% 2006-07 $1,982,957 $1,924,589 1$58,368) - 2.9% 2007-08' $2,295,325 $1,368,000 1$927,32.51 . 40.4 % 'proJected values as of 3/3 ]/08 Except for the two peak years (2005 and 2006) Building Division revenues have consistently been below the cost recovery point. The Department has developed an updated Building Valuation Table based on current construction costs published in the February 2005 Edition of Building Safety Journal by the International Code Council (Attachment C). The valuation table currently in use has not been updated since August 1991 . The adoption of the updated Building Valuation Table will result in an increase in the amount of fees charged, and revenues collected, the magnitude of which will vary by the use (occupancy classification) and the type of construction of the buildings constructed. The amount of fee increase or decrease for any given project is highly variant based on the type of use, type of construction, its size, and complexity. On average the change in the amount of --feescoUeCtedforvanous types of projectS is-estiiiiated to -oe-adecreaseof 4S percent for tract homes, an increase of 33 percent for infiU homes, an increase of 52 percent for residential additions, an increase of 40 percent for misceUaneous electrical/plumbing/mechanical permits, an increase of 35 percent for commercial projects, and an increase of 74 percent for industrial projects. Attachment E provides some examples of the impact of the fee adjustments on specific projects that have been permitted in recent years. The overall increase in revenues would be dependent on the mix or proportion of residential, commercial and industrial projects in future years. Given the current recessionary trend, it is anticipated that construction levels and permit revenues will continue to fall in the coming year. If approved at the public hearing, the fees would be effective on August 15, 2008. The Government Code requires that all development related fees take effect no sooner than 60 days after their adoption, The Ways & Means Committee reviewed this fee proposal on June 4, 2008 and requested additional information in the form of specific examples of how the fee adjustments affect various projects. This information is summarized in Attachment E. Additionally, representatives from homebuilder GFR Enterprises Inc. spoke to the Committee in support of this fee proposal. They also asked the committee to consider altering the fee structure of various development impact fees (OlF) from the current one based per dwelling unit to a fee structure based on square feet. Since the DlF's are not part of this fee proposal, the committee agreed to review the matter separately. The Committee decided to forward this fee proposal on to the Mayor and Common Council. o c o Financial ImDact: It is anticipated that these fee increases would result in increased revenues of $430,000, offset by revenue losses of $315,000 due to lower construction activity, resulting in a net increase of $115,000. However, given the current economic climate and uncertainty, this is highly variable and dependent on the future level of construction activity. Recommendation: That the public hearing relative to the Resolution to adopt updated building permit and plan review fees be closed and the Resolution be adopted. Attachments: Resolution A. Table lA. Building Permit Fees - Tract Homes B. Table lB. Building Permit Fees - Infill Homes C. Table 2. Building Construction Valuations D. Table 3. Building Permit Fees E. Permit Examples for Comparison of the Impact of Building Fee Adjustments