Consider Authorization to End Contracted Building Official Services and Recruit a Regular, Full-Time Building Official

 

Staff is seeking authorization to end contracted Building Official services and to recruit for a regular, full-time Building Official. Per Minnesota State Building Code, the City is required to have a Building Official, whom is responsible for the local administration of the code, in some capacity. The City currently chooses to contract for professional services for this role. This is more of a leadership role for the Building Division compared to solely building inspection and plan review services. By recruiting a regular, full-time Building Official, that position can take a more active role in the daily management of the division, thus reducing the workload of existing staff, allowing time for other important tasks. The City's approach to delivering inspection and plan review services by way of contracted employee would not change.

In December of 2011, the City began contracting for Building Official services due to a vacancy in the position. The City had already been contracting for building inspection and plan review services. As part of this restructuring, it was determined that the Building Official role would be evaluated in six (6) months to determine a long term solution to this role. On July 10, 2012, the City Council discussed the potential to recruit a Building Official in Work Session. At that time, City Council chose to continue to contract for Building Official services. The 2013 Strategic Plan identifies a potential recruitment of a Building Official.
 
The Building Division is currently comprised of a Building Official (contract services-40 hours per week), a Building Inspector (contracted services-10 to 40 hours per week), a Permit Technician, and is supervised by the Development Services Manager. As part of the expense analysis of the Building Division, Staff recommends that the Building Official is needed 40 hours per week in order to provide timely response to plan review, inspections, customer service inquiries, administrative projects, and code enforcement throughout the year. This analysis is based on current and trending permit levels. It should be noted that a portion of the Building Official's time is spent on activities that are not directly tied to an active Permit review or inspection (such as administrative tasks and code enforcement activities). Some of these activities are delayed during peak permit levels to allow Staff to focus on administration of active permits.

The current contracted services provided by Inspectron, Inc. have been positive and have provided good customer service in a timely manner. Staff would recommend to retain Inspectron for the remainder of the services, such as building inspection, currently provided by this firm.

No notification is required.

Strategic Goals
As part of the 2013 City Council Strategic Goals, Staff has been analyzing expenses related to the administration of building permits, as well as the most cost effective way to deliver these services while providing continuity and stability in an efficient manner. The 2013 Strategic Plan notes a recruitment of a Building Official, a position that is currently being served by contracted services. After a full calendar year of analysis of contracting for Building Official services, it appears that recruiting a Building Official as a full-time, regular City employee remains fairly budget neutral. In addition, Staff is currently exploring ways to effectively and efficiently deliver these services. Staff is currently exploring such things as ePermits, electronic/wireless field data entry, and streamlined/automated reporting; many of which have already been implemented. 

The current rate for contracted services with Inspectron is $50 per hour. Current service levels have required 40 hours per week of Building Official services and 20-30 hours per week of building inspection and plan review services. Specific to the Building Official function (not base inspection and plan review), it is assumed that the need is 2,000 hours of work hours required for the Building Official. The potential annual budgetary impacts are estimated at $100,000. However, in 2012, the budgetary impact was $91,000. Note: Due to the fact that the original contract was to provide building inspection and plan review services, and did not include providing Building Official services, it is anticipated that the contract may need to be revised to reflect the actual services provided in the future. Staff would recommend that the City remain with contract services for building inspection and plan review services on an as needed basis. Contracted services allow the City to respond better to seasonal variations in service level needs. In addition, the contracted services provide access to additional areas of expertise and review.

However, contracted services for the Building Official role presents the possibility of disruption in the continuity of delivery of services . There are two (2) options to consider for providing Building Official services, depending on the level of guaranteed coverage the City Council is comfortable in providing. Option 1 would be to hire a Building Official as a regular, full-time employee of the City. This option would appear to be the preferred option if the City Council decides 40 hours of coverage per week is necessary year round. However, Option 2 would be to continue with contracted services for the Building Official. This option would be acceptable if the City Council is comfortable in assuming that the Building Official hours could be reduced in the non-peak times, thus creating some gaps in coverage.

The City does not have full control over assignments directed by the contracted services. The contracted service could decide to re-assign its staff over time to other locations resulting in the loss of expertise and know how specific to Ramsey. As each community has slightly different processes, rates, and permit software, it is necessary to provide the individual contractor with professional development related to the City’s unique features and culture. Naturally, there are direct and indirect costs involved in contractor development and staff is concerned with potential turnover.

Staff would recommend an external recruitment to hire a full-time regular Building Official. Given the current fees paid for contracted Building Official services and the City’s current Building Official pay scale, the net savings to the City could be approximately $16,000 the first year with continued savings in years 2, 3, 4, 5. Year 6 (step 6---top of the scale) would be the only year when costs would be slightly more than the contracted rate (approximately $1,972.00 more). These calculations include salary and benefits, are based on the 2012 pay scale, and are estimates only. The current contract for services is for $50 per hour. Since the City does not pay vacation time to the contracted employee, the maximum number of hours paid for a full-time equivalent is 2,000 hours ($50 x 2,000 hours = $100,000). Savings would still be realized in monitoring contracted inspection hours and using only as needed. Finally, it is anticipated that the rate may increase slightly if the City chooses to continue to contract for Building Official services, which is in addition to the original scope of the contract. The current supervision structure is proposed to remain in place, with the Development Services Manager leading the Planning Division and the Building Division.

Note: The two (2) individuals currently serving Ramsey in contracted services would not be eligible for an internal recruitment. It is important to note that the contract with Inspectron includes a 'buy-out' clause if the City chooses to hire a current employee of Inspectron within one (1) of said employee providing service to the City. Said buy-out would be 10% of the employee's first year annual salary with the City. 

Alternatives

Alternative #1 - Recruit for a full-time, regular employee to serve as the Building Official. Based on the size of the City, size of the organization and department, and sustained permit levels, Staff recommends that the City recruit a full-time regular Building Official. Based on the Development Services Manager's observations over the past two (2) years, this appears to be the most efficient way for the City to deliver the services of administering the Building Code. Staff is comfortable is making this recommendation, as it appears to be fairly budget neutral in the early stages of the pay scale of the position. In terms of long-range goals for the Community Development Department, Staff recommends that this is the most logical way to deliver the services in an efficient, consistent, and quality manner.

Alternative #2 - Remain with the current contracted employee arrangement for Building Official services. For reasons already mentioned above, Staff does not recommend this alternative at this time. That being said, the current arrangement has worked in an effective manner. Staff would be comfortable in continuing this arrangement if the City Council is comfortable with the current service levels and potential for more frequent turnover in the position.

Staff recommends that the City Council authorize Staff to begin a recruitment to hire a regular, full-time Building Official.

The Building Official position, whether a regular, full-time employee or contracted services, is a component of the General Fund. Expenses of the Building Division are paid by Building Permit revenue collected when Building Permits are issued. Assuming revenue projections in the 2013 budget are met, the costs of the position would already be covered as part of the current Professional Services Line Item. In response to revenue projections, the base permit levels are currently exceeding those year to date in 2012.

Motion to recommend that the City Council authorize Staff to begin a recruitment to hire a regular, full-time Building Official.