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07/27/2021 06. Preliminary Findings on Building Permit Fee Study1 ITEM TITLE: SUBMITTED BY: BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEM ENT Item No. 6. For Meeting of: July 27, 2021 Preliminary Findings on Building Permit Fee Study Tony Doan, Supervising Code Inspector Glenn Denman, Code Administration Manager SUMMARY EXPLANATION: This is a presentation on permit fees and where the Codes Division believes improvements can be made to cover the costs associated with issuing of permits, as well as increase customer service by streamlining processes. ITEM BUDGETED: NA STRATEGIC PRIORITY: Public Trust and Accountability APPROVED FOR SUBMITTAL BY THE CITY MANAGER RECOMMENDATION: Review reports and provide direction as appropriate ATTACHMENTS: Description Upload Date Type D Memo BuildingPermitFeeStudy 7/19/2021 Comer Memo C:i Exhibits_BuildingPermitFeeStudy 7/19/2021 Comer Memo 2 MEMORANDUM To: Joan Davenport, Director of Community Development From: Glenn Denman, Code Administration Manager Tony Doan, Supervising Code Inspector Date: July 19, 2021 RE: Permit Fee Increase Proposal The City of Yakima Codes Division has been researching current permit fees to see if the division is operating at a cost neutral level, and to see if the permitting process can be streamlined. RCW 82.02.020 gives municipal corporations the authority to cover the cost to process applications, review plans, and conduct inspections. Our research has determined that: • Building valuations determined by our current fee structure do not reflect actual valuations • Building, plumbing and mechanical permit fees have remained frozen since 2014 • Staff is conducting plan review on plumbing and mechanical plans without compensation (there is no current plan review fee for those, as there is for building plans) • Plumbing and mechanical permit fees do not come anywhere near covering staff time • Fire code permit fees have remained the same since their inception in 2002. Until January of 2014, building, plumbing and mechanical permit fees automatically adjusted in accordance with the Seattle Consumer Price Index (CPI). However, the table below shows that staff costs have risen 18`)/0 since that time. AFSCME CBA Wage Increase Year 2012 Wage Increase Percentage 0 Hourly Increase at Avg Staff Wage S 23.79 2013 0 $ 24.27 2014 2.50% S 24.77 2015 2.50% $ 25.27 2016 2.50% S 25.79 2017 2.50% $ 26.32 2018 2.00% S 26.85 2019 2.00% $ 27.40 2020 2.00% S 27.96 2021 2.00% $ 28.53 Total 18.00% $ 4.74 Building Valuation Building permit fees are based on assumed valuations assigned to buildings found in Building Valuation Data (BVD) tables. The International Code Council (ICC) provides an updated table every 6 months based on average construction costs (nationally) per square foot. Per ICC: "This degree of precision is sufficient for the intended purpose, which is to help establish permit fees so as to fund code compliance activities (providing) jurisdictions with a simplified way to determine the estimated value of a building that does not rely on the permit applicant to determine the cost of construction. Therefore, the bidding process for a particular job and other associated factors do not affect the value of a building for determining the permit fee. Whether a specific project is bid at a cost above or below the computed value of construction does not affect the permit fee because the cost of related code enforcement activities is not directly affected by the bid process and results." In 2002, the City of Yakima adopted the April 2001 BVD table from the International Conference of Building Officials (ICBO, now ICC). The 2002 table automatically adjusted at the beginning of each year based on the Seattle CPI. However, adjustments discontinued while Single Family Plumbing and Mechanical Permits Currently, all plumbing and mechanical permit fees are based on a per -fixture basis. It is found that this method does not come close to covering staff costs for processing those permits, and plan review is not covered at all. Some jurisdictions base those permit fees on a percentage of 0 the building permit (such as 8% of the SFR building permit) to cover staff time, include plan review and streamline permit issuance. The chart below shows a comparison of what those fees would look like: Commercial Plumbing and Mechanical Permits Commercial plumbing and mechanical permit fees are based on similar, per fixture fees that do 0 0 not cover plan review time let alone the time it takes to perform necessary inspections. In this proposal, a project valuation table would be established based on typical costs associated with