Introduce Ordinance #13-11 Amending 2013 Rates and Fees Related to Residential Rental Licensing Fee Structure for New Construction and Septic Pumping Permits

Part 1 - Rental License

Chapter 26 of the Ramsey City Code requires a Rental License for residential dwelling units in buildings of three (3) or more units that share hallways, main entrances, and exits. Detached single-family and most attached single-family (for example: town homes) are exempt from the license requirement. The rate for the license is $75 and covers two (2) years of license ($37.50 per year). The license covers two (2) aspects:

1. Administration of License
2. Inspection

The administration of the license includes the initial setup in the software system, mailing, and data entry of the results. Costs incurred to the City include, but are not limited to Staff time (data entry, financial management, IT), software costs, and overhead. The costs also ensures adequate revenue to cover ongoing costs of follow-up, response, and future set-up. The license also requires an inspection of units and common areas.

Staff recommends a 50% credit for new construction where the Final Inspection required for the Building Permit and Certificate of Occupancy covers the same items as the required inspection for the Rental License. As the Rental License is two-part, sufficient fees would be collected to cover the administrative tasks.

Part 2 - Septic Pumping

Per Minnesota Rules 7080, owners of Subsurface Sewage Treatment Systems (SSTS) must visually inspect for damage to private septic systems. The owner must also measure or remove certain accumulations at a frequency of not less than once every three (3) years. There are some exceptions based on measured levels. At this point, the City is responsible for administering the septic program for the community in compliance with Minnesota Rules 7080. The current fee for the Septic Pumping Permit is $10. After a cursory review, it appears that the expenses related to administering the program exceed the revenue generate for the program. Based on current volume levels for all permits administered by the City, there is not sufficient personnel resources to administer the program. The City will continue to fall further out of compliance if an adjustment to the program is not made. With that in mind, Staff is recommending an amendment to the Septic Pumping Permit Fee.

It is noted that Staff has already made a number of adjustments to the program to make it more efficient, including implementing a new software system, beginning a process to revise the Permit Application, contract for bulk mailing services, and shared resources with other departments for data entry.

The recommended rate for the Septic Pumping Permit is $20. The current rate is $10.

No notification is required. Proper notification will be provided in the City's Official Newsletter.

Part 1 - Rental License

Concern has been raised by the most recent builder subject to the Rental License. The question has arisen that the Rental License requires an inspection; however, the City will already be inspecting the building as part of the Building Permit and request for Certificate of Occupancy.  It has been suggested that the City in essence is charging twice for the same inspection.

Staff agrees that the Final Inspection required for the Building Permit and Certificate of Occupancy is adequate to cover the same inspection required for the Rental License. To streamline and reduce costs, Staff would recommend a 50% credit for new construction that requires a Final Inspection that covers the same items as the Residential Rental License. This would still provide adequate resources to administer the initial license, tracking, and set up for future renewals.

Part 2 - Septic Pumping Permit

As noted, the City is currently responsible for administering septic regulations for owners of private septic systems. There are currently approximately 4,200 private systems in the community. Approximately 1,500 letters are sent annually as reminders for the required three-year inspection, which could include a requirement for pumping.

On the May 14, 2013 Personnel Committee Agenda, the Committee discussed this topic in terms of human resources required to administer the program. The impetus of the rate change is to provide a sustainable funding source to provide adequate staffing to administer the program.

The resources required to administer the program include:

1. Staffing
2. Software for tracking
3. Mailing supplies
4. Permit Applications (Three [3] part carbon copy for multiple copies)
5. Data storage (digital archive)

The process involved in administering the program include:

1. Searching for systems without record of required inspection or pumping (software system)
2. Preparing reminder mailings
3. Scan to archive
4. Searching for duplications and/or inaccurate reminders
5. Send mailing
6. Respond to numerous phone calls, emails, and inquiries based on reminder
7. Enter data as permits are submitted
8. Scan to archive
9. Update database

Currently, there is not sufficient staff resources to begin the program for 2013 based on current volume levels within the Community Development Department. In addition, it appears clear that the current rate does not cover all costs associated with administering the program. It is also noted that the $20 per Pumping Permit likely also does not cover all costs associated with the program, but does bring it to an acceptable level.

The City recently implemented a new software tracking system. As with any new system, there are minor complications to update as the software is rolled out. There are a number of database updates that are required with the new system that is above and beyond the base rate. Staff has searched and identified some potential funding sources for 2014 that Staff suggests the City explore to further improve and update the program. Staff will bring forward these opportunities in the future as they are available.

Staff recommends that the City Council adopt an ordinance to amend the 2013 Rates and Fees to adjust the Residential Rental License Fee for new construction to provide a 50% credit to account for existing inspections related to a Certificate of Occupancy and amend the Septic Pumping Permit to $20.

Amending the 2013 Rates and Fees related to Initial Rental Licenses is being handled as part of regular Staff duties.

Motion to introduce Ordinance #13-11 amending 2013 Rates and Fees related to Residential Rental Licenses for new construction and Septic Pumping Permits.