Discussion Regarding Contracted Building Official Services

Strategic Goals
As part of the 2012 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 2012 Strategic Goals note a comprehensive review of all required permits and inspections. Staff has not completed this full analysis of all expenses related to the administration of the Building Code, but is nearing completion of this analysis. Staff is currently exploring ways to reduce costs now and into the future in order to effectively and efficiently deliver these services. Staff is currently exploring such things as ePermits, electronic/wireless field data entry, and streamlined/automated reporting. In addition, Staff has recently submitted a similar analysis to ICMA as part of the performance measurement program they provide. Staff is awaiting the results of that analysis to better focus further analysis. Staff is forwarding the Building Official discussion due to time considerations and to finalize details of the 2013 Preliminary Budget related to the Building Division. As the Building Division completes plan review on major projects currently under review and completes many of the administrative projects that need completion in the near future, Staff will complete the analysis as requested by the City Council.

Background
In December, 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. This six (6) month review period would also coincide with the 2013 budget discussion. The case was discussed by the Personnel Committee and City Council on December 13, 2011.

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 40 hours per week of building inspection and plan review services. It is anticipated that the building inspection and plan review services will drop to 20-30 hours per week upon completion of plan review of two (2) major projects and Staff catching up with two (2) larger projects that have been on hold pending plan review completion. During other times of the year, the hours per week could reduce even further.

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 will need to be revised to reflect the services provided. It is anticipated that this would be reflected in the 2013 budget.

Current Structure
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 Senior Planner. 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.

The current contracted services provided by Inspectron, Inc. have been positive and have provided good customer service in a timely manner.

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 and is more costly, assuming a Building Official at a full-time equivelent. 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 would 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 equivelent 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 Senior Planner 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.

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.

Based on discussion.