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12/11/2012 17 Engineering Design Review Fees and Inspection of Privately Built Public Inafrastructure Fees; Ordinance Revisions 4. �firtij )1.t5 .l', • v 1.. BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. For Meeting of: December 11, 2012 a; t),* 7st , kat,,F. 7ASO.,,tM', '*l , = 1 ,*10 , 1r. :7: a G v =. e., u 1 t 44:,:4, ITEM TITLE: Revision of two ordinances related to fees paid for Engineering Design review and inspection of Privately built Public Infrastructure. SUBMITTED BY: Steve Osguthorpe - Director of Community & Economic Development CONTACT Douglas Mayo, City Engineer, 576 -6678 PERSON /TELEPHONE: SUMMARY EXPLANATION: As set forth in the recently adopted 2013 City budget and in conjunction with the City's Preliminary Five -Year Financial Forecast, we seek Council approval to amend Ordinance Chapter 8.72 YMC pertaining to fees assessed for issuance of permits for excavations and obstructions within public rights of way and public property and Ordinance 12.20 YMC pertaining to rates charged by the City's Engineering Division to review the design documents for, and inspect the construction of, public works improvements in conjunctin with subdivision, development and redevelopment of real property by private parties. Resolution Ordinance X Other (specify) Contract: Mail to: Contract Term: Amount: Expiration Date: Insurance Required? No Funding Phone: Source: APPROVED FOR City Manager SUBMITTAL: ‘1:1A16‘E4541114- STAFF RECOMMENDATION: @import url( http:// cityagenda /CuteSoft _Client /CuteEditor /Load.ashx? type = style &file= SyntaxHighlighter.css); Adopt the amended Ordinances BOARD /COMMISSION RECOMMENDATION: @import url(http: / /cityagenda /CuteSoft Client/CuteEditor /Load.ashx? type = style &file= SyntaxHighlighter.css); ATTACHMENTS: Click to download ❑ Memorandum ❑ Procedures Manual ❑ Comparison of Expenses vs. Development Fees Paid ❑ Ordinance 1 ❑ Ordinance 2 Memorandum December 11, 2012 To Honorable City Mayor, City Council Members, and City Manager From: Douglas Mayo, City Engineer Subject: Promote Fiscal Sustainability of the Development Plan Review and Inspection Program During the Council meeting of July 31, 2012, the Council discussed the City's Preliminary Five - Year Financial Forecast. The first of four Key Goals listed was Ensuring a financially sustainable future. With that key goal in mind, the Engineering Division has revisited the fiscal issue of the City's service of reviewing and inspection of privately built public infrastructure. HISTORY: In response to City Council's 2011 Major Policy Issue titled, "Engineering Review and Inspection Fee Increase ", the Engineering Division proposed and Council adopted the following changes: 1. Charge Owners /Developers a portion of the engineering review and inspection fee at the time of plans submittal. 2. Update the unit bid price worksheet from which the engineering review and inspection fee is calculated. At the same time, staff proposed to update the Procedures Manual for Public Improvements Constructed by Private Parties. YMC Chapter 12.01.050 states, "the City Engineer shall establish and maintain a manual describing procedures for the City Engineer's review, permitting and inspection of public improvements constructed by private parties. This manual shall include a schedule of fees for such review, permitting and inspection approved by the City Council." This - was accomplished. During preparation of the 2012 budget, the need to further reduce expenses from the General Fund was a Council directive As requested, staff searched for services that could be transferred to the Private Sector One opportunity found was to modify the role the Engineering Division has toward inspection of Private Development of Public Infrastructure. We proposed to amend the City's policy to more closely reflect the current policy of several counties and cities across the state, by which the developer is provided the opportunity and obligation of primary inspection of their projects. This would require them to engage the services of a private engineering firm. By accepting this change, we were able to meet our budget requirement of reducing our staff by one inspector. Review of the expense /revenue of this task, revealed that the General Fund (GF) subsidized this activity well over $100,000 per year (over 50 %). The savings to the general fund, from this proposal, were about $74,000 per year. Even with this change, the GF continued to subsidize this activity. The City still performed design review, oversight inspection of all projects, and inspected the most critical activities. Therefore, we did not propose any reduction of review /inspection fees with this proposal. In the spring of 2012, City Management enacted the privatization of the opportunity and obligation of primary inspection of such projects. City upper management and staff met several times with representatives of the Central Washington Home Builders Association (CWHBA). The CWHBA had serious concerns with the City's action of privatization. During at least two of these meetings, CWHBA members offered to pay up to double the existing fees so that the City could retain this service. (NOTE: Please refer to attached e-mail dated November 16, 2012 from Joe Walsh of the CWHBA that refers to the doubling of fees as their proposal.) A few weeks later, per the directive of the Acting City Manager, the engineering division, with one less employee and no fee increase, again took on all inspection duties for such construction. On the spreadsheet titled Comparison of Development Fees paid vs. Related Expenses, you can see that for each year (2010, 2011, and through October of 2012), the cost of providing this service has been subsidized by the City's General Fund well over $100,000. In order to promote the fiscal sustainability of this service and reduce the financial strain on the general fund by shifting the cost to those receiving the service, we present, for your consideration and approval, a revised YMC 12.020 and YMC 8.72 that doubles the existing fees charged to Private developers of public infrastructure. 11/30/2012 2 Hey Doug, I see that the City Manager is moving forward with our proposal to double fees to developers. My question is this: What has happened with the CITY OF YAKIMA:PROCEDURES MANUAL FOR CONSTRUCTION OF PUBLIC IMPROVEMENT PROJECTS UNDER PRIVATE CONTRACTS. Joe Walsh Government Affairs Director CW H BA 3301 W. Nob Hill Blvd. Yakima, WA. 98902 509 -454 -4006 phone 509 - 454 -4008 fax jwalsh@cwhba.org www.cwhba.org • Comparison of Expenses vs. Development Fees Paid 2010 Development Labor Equipment xx Revenue 283 -02 Devel Review (office) 95,878.95 60,430.35 283 -06 PVT /Inspections 15,304.00 2,437.50 283 -28 Street Break 32,069.00 5,123.63 8,541.25 37,192.63 4.35 sub -total 143,251.95 7,561.13 68,971.60 23% Specific Projects sub -total 32,548.21 9,940.14 - 156,108.80 2 Total 2010 175,800.16 17,501.27 68,971.60 193,301.43 136% 193,301.43 # # # # # # ## 2011 Development Labor Equipment xx Revenue 84 -02 Devel Review (office) 81,933.85 19.50 90,433.68 84 -06 PVT /Inspections 23,676.98 3,295.50 84 -28 Street Break 39,641.16 5,187.00 7,653.00 44,828.16 5.9 sub -total 145,251.99 8,502.00 98,086.68 17% Specific Projects sub -total 48,087.61 11,188.14 - 168,201.58 1.9 Total 2011 193,339.60 19,690.14 98,086.68 146% 213,029.74 # # # # # # ## 2012 Development rhrough October Labor Equipment xx Revenue 455 -02 Development.Review (off 78,340.13 19.50 66,275.00 455 -06 PVT /Inspections 37,204.92 5,299.13 455 -28 Street Break 34,649.45 4,056.00 14,500 00 38,705 45 2.67 sub -total 150,194.50 9,374.63 80,775.00 37% (78,794.13) Specific Projects sub -total 32,414 62 6,893.26 - 160,171.56 2.4 Total 2012 (Jan -Oct.) 182,609.12 16,267.89 80,775.00 141% 198,877.01 # # # # # # ## ORDINANCE NO. 2012 - AN ORDINANCE establishing the rates to be charged by the City's Engineering Division to 1) review the design documents for, and inspect the construction of, public works improvements in conjunction with subdivision, development and redevelopment of real property by private parties and 2) to provide required site inspection and document review for Street Break Permit applications; and addamending sections 12.20.010, 12,20.020 and 8.72.010 tof the City of Yakima Municipal Code. WHEREAS, the City of Yakima (City) is authorized by Title 35 RCW to establish design and construction standards for public works improvements within the City limits, and; WHEREAS, it is the City Engineer's responsibility to ensure that these standards are used for public work improvements performed by private parties, and; WHEREAS, it is prudent that the City Engineer be compensated by the Owners /Developers for whom the review and inspections are performed, and: WHEREAS, Section 12.01.050 of the Yakima Municipal Code states that a schedule of fees for such review and inspection should be developed and adopted; and, WHEREAS, the City Council determines that the review and inspection fees contained in this Ordinance are fair, just and reasonable, Now, Therefore, BE IT ORDAINED BY THE CITY OF YAKIMA Section 1. Section 12.20.010 tof Title 12 of the City of Yakima Municipal Code (YMC), fists amended to read as follows: 12.20.010 Review and Inspection Fee for Public Work Improvements The review and inspection fee shall be based on the construction cost estimate obtained from the Public Works Improvement Bid Item Prices sheet provided in YMC 12 20.030. For items that are not included in YMC 12.20.030, the Consulting Engineer shall provide the per unit cost to be reviewed and approved by the City Engineer. The review and inspection fees shall be calculated as follows: 0 147% of the calculated construction cost up to $25,000, plus - 612% of the calculated construction cost between $25,000 and $50,000, plus 106% of the calculated construction cost, for costs in excess of $50,000. Section 2. Section 12.20.020 of Title 12 of the City of Yakima Municipal Code is amended to read as follows: 12.20.020 Payment Payment of the review and inspection fees shall be as follows: ♦ $250 00 or 10% of the calculated review and inspection fee, whichever is gr ter, shall be paid at the time of plans are submitted to the City Engineer and shall be a non - refundable charge. ♦ Remainder of fee balance, if any, shall be paid following review and prior to approved plans being released to the Consulting Engineer /Owner /Developer. Section 3. Section 8 72.010 of Title 8 of the City of Yakima Municipal Code is amended to read as follows: 8.72.010 Permit required —Fee. A. Permit Required— Administration of Chapter. (1) It is unlawful for any person, firm or corporation to dig up, break, excavate, use, occupy, tunnel, undermine or in any way obstruct or disturb any street, alley, sidewalk, highway, thoroughfare or other public place, or fill in, place, leave or deposit in or upon any sidewalk or public place any article, material or thing whatsoever tending to obstruct, disturb or interfere with the free use of the same, without first having obtained a permit therefor The issuance of such permits and the administration and enforcement of provisions of this chapter shall be performed by the office of the director of community and economic development or designee. (2) In case of an emergency arising outside of office hours when an immediate excavation may be necessary for the protection of life and property, it shall be reported to the director of community and economic development or designee on the first working day thereafter The permit for said work shall be obtained at the time of reporting (3) Classification For the above - described purpose of regulating excavations and obstructions by permits, there are established two classifications of permits one to be known as the "utility classification," and the other to be known as the "non- utility classification." The utility classification shall include all such permits issued to franchise utilities or their subcontractors for such work incidental to installation, repair, modification, or removal of utility lines or related components The non - utility classification shall include all other permits issued. B. Fee. (1) Basic Fee. A basic fee shall be paid by the applicant for each permit issued pursuant to this chapter. Effective May 1, 1091 January 15, 2013, there are imposed the following permit fees: (a) Utility Classification: €i tyOne Hundred dollars per permit for the first hour or part thereof which shall include (1) on -site inspection and (2) one -half of the street inspector's time traveling to and from each site; provided, that each hour of inspection after the initial hour shall be charged at € tySixty dollars per hour or prorated to the nearest one - quarter hour if less than one hour. (b). Non - Utility Classification. FiftyOne Hundred dollars per permit. (2) Additional Fee. (a) In the event a permit issued pursuant to this chapter allows the digging up, breaking, excavation or undermining of any city street within a period of five years following its initial construction or following a major reconstruction of its driving surface, then an additional permit fee shall be paid by the applicant, the amount of which additional fee shall be equal to the estimated cost of restoring the street to its original condition prior to the performance of the work for which the permit is issued. The additional fee required by this subsection is separate from, but equivalent to, such cost of restoration; and payment of the additional fee does not relieve the permit holder from complying with requirements of this chapter to restore the street to its original condition at the expense of the permit holder. (b) The "additional fee" shall not apply when an emergency exists because of unforeseen disruption of utility services which is located in public rights -of -way requiring immediate repair to protect life and property. Further, the "additional fee" shall not apply when it can be reasonably determined by the director of public works that the necessity to dig up, break, excavate, or undermine a newly constructed or reconstructed street within the five -year period could not reasonably have been foreseen (c) Prior to the new construction or major reconstruction of any street, the owners of record of all property abutting on the street and all utility service firms operating pursuant to a city franchise will be notified in advance of commencement of the work so as to allow reasonable time for the installation, adjustment or extension of underground lines and associated structures (d) Revenue from the additional fee required by this subsection shall be deposited in the street maintenance account of the street division for general city street maintenance purposes. Section 42. This ordinance shall be in full force and effect 30 days after its passage, approval and publication as provided by law and by the City Charter. PASSED BY THE CITY COUNCIL, signed and approved this 11 day of December, 2012. Micah D. Cawley, Mayor ATTEST City Clerk Publication Date: Effective Date: ORDINANCE NO. 2012 - / AN ORDINANCE establishing the rates to be charged by the City's Engineering Division to 1) review the design documents for, and inspect the construction of, public works improvements in conjunction with subdivision, development and redevelopment of real property by private parties and 2) to provide required site inspection and document review for Street Break Permit applications; and amending sections 12.20.010, 12,20.020 and 8.72.010 of the City of Yakima Municipal Code. WHEREAS, the City of Yakima (City) is authorized by Title 35 RCW to establish design and construction standards for public works improvements within the City limits, and; WHEREAS, it is the City Engineer's responsibility to ensure that these standards are used for public work improvements performed by private parties, and; WHEREAS, it is prudent that the City Engineer be compensated by the Owners /Developers for whom the review and inspections are performed, and: WHEREAS, Section 12.01.050 of the Yakima Municipal Code states that a schedule of fees for such review and inspection should be developed and adopted; and, WHEREAS, the City Council determines that the review and inspection fees contained in this Ordinance are fair, just and reasonable, Now, Therefore, BE IT ORDAINED BY THE CITY OF YAKIMA Section 1. Section 12.20.010 of Title 12 of the City of Yakima Municipal Code is amended to read as follows: 12.20.010 Review and Inspection Fee for Public Work Improvements The review and inspection fee shall be based on the construction cost estimate obtained from the Public Works Improvement Bid Item Prices sheet provided in YMC 12.20.030. For items that are not included in YMC 12.20.030, the Consulting Engineer shall provide the per unit cost to be reviewed and approved by the City Engineer. The review and inspection fees shall be calculated as follows: ♦ 14% of the calculated construction cost up to $25,000, plus 12% of the calculated construction cost between $25,000 and $50,000, plus 10% of the calculated construction cost, for costs in excess of $50,000. Section 2. Section 12.20.020 of Title 12 of the City of Yakima Municipal Code is amended to read as follows:. 12.20.020 Payment Payment of the review and inspection fees shall be as follows: ♦ $250.00 shall be paid at the time of plans are submitted to the City Engineer and shall be a non - refundable charge. • Remainder of fee balance, if any, shall be paid following review and prior to approved plans being released to the Consulting Engineer /Owner /Developer. Section 3. Section 8.72.010 of Title 8 of the City of Yakima Municipal Code is amended to read as follows: 8.72.010 Permit required —Fee. A. Permit Required— Administration of Chapter. (1) It is unlawful for any person, firm or corporation to dig up, break, excavate, use, occupy, tunnel, undermine or in any way obstruct or disturb any street, alley, sidewalk, highway, thoroughfare or other public place, or fill in, place, leave or deposit in or upon any sidewalk or public place any article, material or thing whatsoever tending to obstruct, disturb or interfere with the free use of the same, without first having obtained a permit therefor The issuance of such permits and the administration and enforcement of provisions of this chapter shall be performed by the office of the director of community and economic development or designee. (2) In case of an emergency arising outside of office hours when an immediate excavation may be necessary for the protection of life and property, it shall be reported to the director of community and economic development or designee on the first working day thereafter. The permit for said work shall be obtained at the time of reporting. (3) Classification. For the above - described purpose of regulating excavations and obstructions by permits, there are established two classifications of permits: one to be known as the "utility classification," and the other to be known as the "non- utility classification." The utility classification shall include all such permits issued to franchise utilities or their subcontractors for such work incidental to installation, repair, modification, or removal of utility lines or related components. The non - utility classification shall include all other permits issued. B. Fee. (1) Basic Fee. A basic fee shall be paid by the applicant for each permit issued pursuant to this chapter. Effective January 15, 2013, there are imposed the following permit fees: (a) Utility Classification: One Hundred dollars per permit for the first hour or part thereof which shall include (1) on -site inspection and (2) one -half of the street inspector's time traveling to and from each site; provided, that each hour of inspection after the initial hour shall be charged at Sixty dollars per hour or prorated to the nearest one - quarter hour if less than one hour. (b) Non - Utility Classification One Hundred dollars per permit. (2) Additional Fee. (a) In the event a permit issued pursuant to this chapter allows the digging up, breaking, excavation or undermining of any city street within a period of five years following its initial construction or following a major reconstruction of its driving surface, then an additional permit fee shall be paid by the applicant, the amount of which additional fee shall be equal to the estimated cost of restoring the street to its original condition prior to the performance of the work for which the permit is issued. The additional fee required by this subsection is separate from, but equivalent to, such cost of restoration; and payment of the additional fee does not relieve the permit holder from complying with requirements of this chapter to restore the street to its original condition at the expense of the permit holder. (b) The "additional fee" shall not apply when an emergency exists because of unforeseen disruption of utility services which is located in public rights -of -way requiring immediate repair to protect life and property. Further, the "additional fee" shall not apply when it can be reasonably determined by the director of public works that the necessity to dig up, break, excavate, or undermine a newly constructed or reconstructed street within the five -year period could not reasonably have been foreseen. (c) Prior to the new construction or major reconstruction of any street, the owners of record of all property abutting on the street and all utility service firms operating pursuant to a city franchise will be notified in advance of commencement of the work so as to allow reasonable time for the installation, adjustment or extension of underground lines and associated structures (d) Revenue from the additional fee required by this subsection shall be deposited in the street maintenance account of the street division for general city street maintenance purposes. Section 4. This ordinance shall be in full force and effect 30 days after its passage, approval and publication as provided by law and by the City Charter. PASSED BY THE CITY COUNCIL, signed and approved this 11 day of December, 2012. Micah D. Cawley, Mayor ATTEST City Clerk Publication Date: Effective Date. Doug Mayo Tuesday, December 11, 2012 4de 1:58:442 PM PT Subject: RE: Engineering review and inspection fees BT.-KY Date: Tuesday, December 11, 2012 1:14:38 PM PT I , // ; , h - ll 1 From: Joe Walsh < jwalsh @cwhba.org> 1 To: Mayo, Doug <dmayo @ci.yakima.wa.us> Thanks Doug, I had presumed that was adopted with the preliminary budget since the intention to double fees was laid out in it. Our position remains the same. Our developers felt strongly that the City should retain inspection responsibility even if it meant increasing project fees. I am curious though. Given the findings of the State Auditor recently, has there been any discussion about creating an administrative enterprise fund for the development activities strictly identified within RCW 82.02.020? We would be in favor of that change. Please pass this along to the City Manager too. Joe Walsh Government Affairs Director CWHBA 3301 W. Nob Hill Blvd. Yakima, WA. 98902 509- 454 -4006 phone 509 - 454 -4008 fax jwalsh @cwhba.org www.cwhba.org From: Mayo, Doug [mailto:dmayo @ci.yakima.wa.us] Sent: Tuesday, December 11, 2012 10:36 AM To: Joe Walsh Subject: Engineering review and inspection fees Joe, Wanted to be sure that you were aware that tonight Council will consider the proposal to double the fees the Engineering division assesses for design review and inspection. This is proposed to make this activity more closely self supporting. Doug