Introduce Ordinance #23-10 Amendment to Ch. 105, Building and Building Regulations

The Minnesota Department of Labor and Industry (DOLI) conducts plumbing plan reviews for permits in Ramsey, as stipulated in MN Rules 1300.0215, Subpart 6.  Ordinance #23-10 amends Chapter 105, Building and Building Regulations; adding Section 3, 105-25. Plumbing Permit Administration, Plan Review and Inspections. The language grants the City of Ramsey the authority to collect fees, issue permits, and perform inspections for public and commercial projects. The proposed language is acceptable to DOLI. 

MN Statutes 326B.43 Subdivision 2 permits the delegation of authority for plumbing plan review for public and commercial projects to municipalities. This statute enables the DOLI Commissioner to establish an agreement with a municipality, in which the municipality agrees to carry out plan reviews typically performed by the commissioner or their designee. To obtain a special delegation, the City of Ramsey must undertake several key steps to formalize the delegation, including the approval of an ordinance to offer local plumbing plan review services, the endorsement of an application and submission of an agreement with the State of MN, the establishment of local fees, and ensuring the designated representative of the municipality is eligible to perform the local plumbing plan reviews.

The City of Ramsey does not have qualified staff to obtain the designation through the state.  However, Rum River Consultants (RRC) located in St. Francis has added a master plumber to its 23-member team.  They have been successful in obtaining the state designation for other cities they provide contracted inspections for.  RRC has provided inspection services to the City in the past, and remains in contact with City staff to assist when needed. Staff supports a supplemental contract with RRC to provide plumbing review for public and commercial projects; and to provide inspection services as needed.  The supplemental contract is not financially binding, except when services are needed.  Meaning there is no retainer fee or minimum contract costs owed to RRC.  Additionally, the supplemental contract would provide optional services for other commercial plan review and inspections if needed, i.e. fire suppression systems.

By approving a new contract with RRC, the City of Ramsey can apply to the DOLI for the plumbing plan review designation.  Most importantly, the customer service benefits for permit applicants are significant. The state is typically eight to twelve weeks behind on plan review, causing considerable delays in construction. RRC has indicated its capacity to review plumbing plans in half the amount of time. If Ramsey receives this delegation, it will enable projects to begin and conclude more swiftly in Minnesota's demanding climate.  This delegation agreement will also benefit Ramsey by generating additional revenue that the State of MN usually retains by conducting these reviews.

The City of Ramsey also holds a supplemental contract with Inspectron, Inc. for building inspection services and plan review assistance. However, services have been very minimal since late 2022 with the hiring of an addition building inspector.  Staff would also recommend terminating this agreement upon receiving delegation as the two supplemental service agreements would be an unnecessary redundancy.

Two agreements are attached for review purposes.  These agreements would be brought forward for formal consideration at the same time as final consideration of Ordinance #23-10.

After the introduction of Ordinance #23-10 and the review of the draft agreements, the next steps in the process are as follows:
At the June 13, 2023 City Council meeting, adopt Ordinance #23-10 and approve agreements with RRC and DOLI; and
Publish Ordinance #23-10, which will become effective 30 days after publication; and
Execute agreements and send them to DOLI; and
It becomes effective once DOLI accepts the ordinance and agreements; and
Upon DOLI approval, terminate existing building inspection services contract with Inspectron, Inc.

By conducting local plumbing plan reviews, Ramsey's building department will generate additional fee revenue. Although the exact amount remains uncertain regarding unknown remodeling, new commercial construction, and sizable public and commercial projects. The draft Agreement for Building Official Services with Rum River Consultants states the Contractor (RRC) will collect 85% of the plumbing plan review fees and the City of Ramsey will retain 15% to cover administrative fees. Staff supports the proposed fee transaction, as RRC will complete the majority of the work (plan review) and city staff will perform the administrative duties (receiving the application, disperse plan for review and issue the permit).

The 2023 adopted commercial plumbing fees are 1% of the job value, minimum $250.00 plus plan review fee for new construction and 1% of the job value, minimum $125.00 plus plan review fee for remodels and additions. The fees will remain in place for the remainder of the year. In the meantime, the Building Official will be evaluating the building permit valuation fee schedule, valuation spreadsheet and fees for fixed-fee permits which could result in proposed changes for 2024.