Base Building Permit Fee: The City of Ramsey formulates their base building permit fee with two numbers; valuation and the suggested UBC fee (table).  "Valuation" is determined by establishing a per square foot value of newly constructed home and then multiplying by the total number of square feet in that home.  The City of Ramsey uses per foot valuations developed by the State of Minnesota; which are updated annually.  In regards to the Universal Building Code (UBC) table, cities within the metro nearly exclusively use the UBC table.  Unfortunately, the UBC no longer exists.  Therefore, nearly all cities in the metro are using the 1997 UBC table to formulate their building permit calculations.  Some cities have tweaked the table to fit their needs; however, they still use the 1997 UBC table.  The reason the table is still viable today is because valuation changes over the years, which allows the building permit fee to adjust to the market.  Finally, another reason the 1997 table is still exclusively used is the result of  law suits that took place in the early 2000's (Elk River and Shakopee).  Cities were being sued for either over charging developers or not delivering on a service that was paid for (i.e. inspections).  In response, most cities either stayed with or re-adopted the UBC fee table.  After contacting the League of Minnesota Cities (LMC), MetroCities, the State of Minnesota, LOGIS, by conducting the development costs study, and by reviewing UBC handbooks staff was unable to determine the exact methodology was used in determining the 1997 UBC fee tables. 

Plan Review Fee:  The plan review is calculated by multiplying the base building permit fee by 65%.  Based on the development costs study and by contacting multiple other cities, the 65% rule for plan review fees is nearly exclusively used.  It should also be noted that recent changes in state law that the plan review on repetitive plans are charged at 25% plan review fee. 

The State of Minnesota and the League of Minnesota Cities both suggest that cities calculate building permit fees by balancing total revenues and total expenses of the building department.  Furthermore, the State of Minnesota regulates that cities' building departments by requiring annual reports of revenues and expenditures.  After review, staff has concluded that the total expenses for the building department are significantly higher than total revenues.  Please see the attached 2010 annual report filed with the State of Minnesota ($423,330 revenue, $1,146,287 expenses).

A second fee calculation example:  On average, it takes 10 inspections for a single family home.  The cost that the city charges is $47 per inspection per the fee schedule, this rate has not been adjusted since the adoption of the UBC schedule.  NOTE: this number is listed in the 1997 UBC table.  At first glance, the cost of the city is $470.  However, staff would like to note that the actual cost is significantly higher that $47 per inspection.  The actual cost per inspection goes up or down due to the allocation of fixed capital costs (i.e. building, vehicles, software, equipment) depending on the year (i.e. different number of building permits per year) and the staffing allocation performing the work.  In the early 2000's development was paying for a large share of it's costs, and in the past few years development has not been paying for a large share of it's costs.

Taking a third perspective of the actual costs of the building department, staff estimates that any given given inspection takes 30-45 minutes.  The base rate of the building inspector is $38.65.  If that rate is multiplied by 2.3 (multiplier used for other scenarios) we arrive at $88.89 per hour.  Therefore, the actual costs to the city for a 30-45 minute inspection is $44.44-$66.48.  When compared to the 1997 UBC inspection charge of $47, which the city is currently using, the actual costs are higher than what is charged.

Example Building Permit:
In the November meeting, staff was directed to provide an example building permit for an average sized home.  Attached to this case is an example building permit for a $165,000 home (2011).  In summary, the charges are: $4.00 Certificate of Occupancy, $5.00 License Verification, $940.39 Plan Review, $75 City Sewer Connection, $75 City Water Connection, $1,500 Erosion Control Escrow, $100 Erosion Control Admin Fee, $1,446.75 Base Building Permit, $150.00 Mechanical Permit, $434.59 Water Meter/Horn, $200 Plumbing Permit, $2,230 SAC, $200 SAC Handling Fee, $102.50 State/County Surcharges.  NOTE: the $1,500 erosion control escrow is returned to the builder upon completion of an erosion barrier.

Copper Vs. Plastic Pipe:
Staff was asked to follow up on the use of plastic pipe versus copper pipe to connect a building to the property line.  This item was discussed in detail in two public works meetings (05/18/10 &07/20/10).  In summary, staff was directed to wait for the technology, regarding the use of plastic pipes, to improve before Ramsey adopted it's use.  The main concerns were regarding the detection of the pipe and a solution to pipes that freeze.  At this point in time, staff is not comfortable with the available solutions.  Attached to this case are the meeting minutes from both public works cases.

Developer Vs. Builder Costs:
In the November meeting, it was suggested to use the certificate of occupancy (CO) as a tool for ensuring that site improvements take place in a new development.  Furthermore, there seemed to be some confusion between the requirements/charges placed upon developers versus builders.  Staff would like to note that there is an important distinction between developer requirements and builder requirements and that it may be problematic if that distinction is not clear--most of the time developers are different parties than builders and development (i.e. site improvements) take place months/years before building takes place (i.e. the construction of a home).