HomeMy WebLinkAbout1990-02-23 CC Packet
Agenda Packet
City Council
Meeting Date:
1990-02-23
Year:
1990
Doc ID
CC Packets - QFL
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February 23, 1990
M E M 0
TO:
FROM:
SUBJECT:
MAYOR AND COUNCIL
MARY LOU JOHNSON, CITY CLERK
SPECIAL COUNCIL MEETING - TUESDAY, FEBRUARY 27, 1990, 4:30 P.M.
Thi s is a reminder to Council that a Speci al Meeti ng is schedul ed for Tuesday
afternoon, February 27, 1990 at 4:30 P.M. to discuss the following:
1. The need to retain two Building Inspectors.
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2. Possible adjournment to Executive Session - Labor Relations Item.
3. Any other business Council may wish to discuss.
(Council is also reminded that the meeting must end by 6:00 P.M. because of
the Precinct Caucuses being held that evening.)
CITY HAll: 216 NORTH FOURTH STillWATER, MINNESOTA 55082 PHONE: 612-439-6121
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THE BIRTHPLACE OF MINNESOTA . J
TO:
FROM:
DA TE :
SUBJECT:
MAYOR AND CITY COUNCIL
STEVE RUSSELL, COMMUNITY DEVELOPMENT DIRECTOR
FEBRUARY 22, 1990
BUILDING INSPECTION STAFFING FOR 1990
BACKGROUND:
In November during budget hearings for the Community Development Department,
staffing levels for the Building Inspection Division was considered. At that
time no change in staffing level was made.
Subsequently the subject was raised by Council members and a work session was
set for February 28th to reconsider the subject. The purpose of this report is
to provide the City Council with information that may help in your
consideration.
1980 - 1989 BUILDING ACTIVITY -
Since the November Council meeting, final building permit figures are in for
1989. The figures indicate that permits for nearly $15 million valuation was
issued in 1989. This is the third highest year for the ten year 1980-1989
period. This compares with $17.5 million in 1988, $23.9 million in 1987, $11.2
million 1986, and $8.7 million in 1985. For the 1980-84 five year period the
average permit valuation was $4.1 million or 27% of the 1989 valuation.
Valuation for residential permits for the 1980 to 1988 period was usually
greater than commercial valuation. For 1989 residential permit valuation was
39% of total valuation. The number of permits issued follows permit valuation
Graphs 1 & 2 and Table 1 show residential activity for the 1980~89 period.
1987 was the highest residential construction year with 511 permits issued
with a valuation of $13 million. For last year 325 permits were issued with a
valuation of $5.8 million.
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Graphs 3 & 4 and Table 1 show commercial permit activity for the ten year
period. As with residential activity, 1987 was the highest year with 80
permits with a valuation of $10.7 million. For the ten year period, average
building permit activity was $5.8 million. For 1989 permits for $7.2 million
valuation were issued.
Graphs 5 & 6 show overall building permit activity. The average building
permit value for that period was $11 million. Since 19871s high $24
million, building permit activity has decreased to $17 million in 1988 and
$15 million in 1989.
Historically, building permit activity is affected by many factors outside of
local government control, such as tax policy, interest rates, and market
factors. Overall, the permit figures indicate an upward trend in building
activity from a low of $3.2 million in 1981 to $23.0 million in 1987. The
years with higher permit figures are due to large commercial or residential
projects.
CITY HALL: 216 NORTH FOURTH STILLWATER, MINNESOTA 55082 PHONE: 612-439-6121
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For example in the 1986-87-88 period River Heights, Press On and INCSTAR's
expansions account for higher commercial permit figures. The Cottages project
raised the 1987 residential figures to $7.5 million.
1990 DEVELOPMENT
Based on planning approvals and recent conversations with developers, it is
possible to get an idea of what permit activity is likely to occur in 1990.
The Oak Glen situation has dampened single family construction. Other
residential projects that are scheduled to start in 1990 include the Heritage
Townhouses Project along Cottage Drive (first phase 24 units $1.5 million 84
unit project), the Cottages of Stillwater Third Phase (54 units $3.0 million)
and the Ernst Subdivision behind Greeley Square commercial center. Other
scattered site new single family construction is expected in the Interlachen
area and Sunset Ridge Estates. A recent article projects more remodeling and
additions to existing residences. Remodeling activity is generally more
complicated and takes more time for plan checks and inspection than new
construction.
Regarding commercial construction, the Desch building ($1.9 million) is
scheduled to begin this Spring along with the Conspec Building in the
Industrial Park. Other commercial projects in the Brick Pond area may proceed
but plans have not been approved at this point.
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STAFFING
Based on 1989 activity, it is difficult to conclude that less staff will be
needed in 1990. The economy seems to be slowing down regionally and that may
or may not affect Stillwater construction. Approved major projects that
probably will be constructed this year include 78 attached multi-family units
(estimated value of $4.5 million) and commercial construction of $4 to $5
million.
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If building permit activity continues to slow as it has for the first two
months of 1990, the Building Inspector can take on other activities such as
House Code or Fire Code inspections. This concept has been discussed with
Chief Seim. This would relieve the Chief of some inspection activity and allow
him to do other things (see memo). Housing Code inspection is another area
where more time could be spent to develop a systemized inspection program
possibly in conjunction with the Fire Department inspections.
If the Council does eliminate one position from the building division,
possible part time assistance will be needed dependent on building activity.
If two inspectors are kept for 1990, building division staffing could be
considered again when the work program and budget is considered for 1991.
BUILDING PERMIT FEES
As can be seen by the attached memo dated November 13, 1989 regarding building
permit fees, building permit fees are paying the cost of the inspection
service. Again, it is suggested that fees be increased as needed to cover
increased 1990 costs rather than cut the level of service.
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RECOMMENDATION:
This report is prepared to assist the Council in their consideration of the
level of Building Department staffing.
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fit DAVID MAWHORTER
PUBLIC SAFETY DIRECTOR
POLICE CHIEF
GORDON SEIM
FIRE CHIEF
DEPARTMENT OF PUBLIC SAFETY
DIVISION OF FIRE
TO:
Dave Mawhorter
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FR:
Gordon Seim, Fire Chief
DA: 2-22-90
RE: Fire Inspector
In the year 1989 we participated in 400 inspection related
activities, xew ox these were OX an annual nature. One ox our goals
in the inspection area ox this department is to establish a routine
annual inspection ox all commercial buildings and businesses and
residential 3-p1ex and over. Thi~_has not been accomplished because
we have been busy with new construction and acting on-complaints,
plus gathering inxormation on Right To Know Laws (Haz Mat etc>.
~ We do inspections xor the xollowing reasons:
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1) For our own protection
2) For the protection oX the people that work, shop or utilize these
buildings
3) We are required to do so by state law and local ordinance
4} For the protection oX property
Do to lack ox work in the Stillwater Building Department it seems
that one oX the inspectors will be releaved oX duty. This person
could be assigned to do xire inspections to keep him busy. We would
be able to start a program oX annual inspections that would be OX
great benexit to the city. The inspector in question is in my
opinion an excellant codes person and has 25 years experience with
the xire service. This would xit our needs ix this could be
arrainged.
At the present time 80% OX my time is spent on code related items and
as you know it does not leave much time xor doing policy on
operational procedures etc. and we are xal1ing behind in this area.
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Form 2091 OI';K STW 1
212 North Fourth Street, Stillwater, Minnesota 55082
Police Phone: 612-439-1314 or 612-439-1336
Fire Phone: 612-439-6120
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\16 TH~ WALL STREET JOURNAL THURSDAY, FEBRUARY 22, 1990
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. "RENOVATE AND, WAIT may be the I
motto as hom~owners sit out iffy market. '
. , A slowdown in home-price, appreciation, I
high interest rates that inhibit movement t
and a bulge of nicely settled baby-boomers ~
, who already have ~'traded up" ,homes en- ~
courag~ a refocus on remodeling. Cahners !
" Building and Construction estimates total -:: '
residential remodeling outlays . will jump;
9.6% this year after a paltty 3.4% gain iri
1989. Money spent on, additions and altera-
tions is likely to soar the most-ll.4%. "In
the '60s and '-70s, if you wanted to improve
you traded up to:a nicer house: People' are
rethinking that": Cahners'~ Kermit Baker.
. '" Kitchens and bathrooms remain the most
popular jobs, together accounting for 60% of ,
all remodeling planned for this year, accord-' .
ing to Cahners. What's a reasonable amount
to recoup when it comes time to sell? 'QR
Inc., publisher of Qualified Remodeler, 'says .
the median price of an average ,remodeled
kitchen in 198~ was, $11;888 and the "value
added",/;was 'about\$3,000.:Remodeling a
bathroom :costan av:erage';$9,193~';of which
the. homeowner could add about:$2,000t~ ~e,
~?C~:: ~ ;P.~iS;!.,:~:~Y.~8~"jt!~itf:~:g<.~~~~::;.::~:~)}::
", ' ,~::;~~'t':The:deluie":bath 'is"out)A 'Cahners's \>: , ,
" ,,;,survey 's'ays buyers prefer two !ull.p_ath~ '~.
, ,.-::ov~r,onegia.n~ bath plus' pOtpd~T:100m."';::
',<::..' ..;..l,:.':~~':)_~", _,t,'. "~.",.:."'-' ';!.. ~ . ".>' . - .,~.. " ..:' '.
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SUIIIIIClrj' of Building Permits ,I .-.{~ (
January I, 1980 - December 31, 1989
Residential
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989
Classification No. Valuation No. Valuation No. Valuation No. Valuation No. Valuation No. Valuation No. Valuation No. Valuation No. Valuation No. Valuation
-------------------------------------------------- ----------------1 ----------------1 ---------------- ~---------------I ----------------1 ----------------1 ----------------- ----------------1 ----------------1
New Homes 4 $181,000 7 $465,194 1 8 $688,500 I 33 $3,083,446 27 $2,362,500 I 34 $3,157,250 I 53 $5,568,822 I 74 $7,542,329 49 $5,496,390 I 32 $3,453,728 I
Townhomes 4 $1,979,000 I 3 $330,000 I 6 $760,000 11 $630,000 t 2 $249,000 I I 5 $531,000 5 $495,000 I 5 $493,944 I
Duplex I 1 $100,000 I 14 $1,054,199 1 $90,000 I 1 1 $80,000 I I 1 $72,000 I
Four plex I I 2 $300,000 I I I 1 $100,000 I I
Eight plex I I 1 $380,000 I I I 4 $2,522,000 I I
Six plex 1 I $417,780 I I I 5 $900,000 t I
Dwelling Additions 22 $248,300 19 $249,900 I 23 $228,384 I 36 $443,400 39 $2,000 I 24 $505,413 I 15 $258,800 I 16 $213,196 18 $390,050 I 18 $289,700 I
House moved in 1 $42,500 2 $52,000 1 1 $1,500 I 1 $4,000 1 $152,511 I I I 1 $52,800 I I
Remodel/repair Ext. & Int. 52 $234,645 41 $243,330 I 37 $640,450 I 44 $758,900 24 $162,564 I 61 $311,018 I 45 $287,158 I 41 $249,455 42 $224,251 I 48 $407,713 I
New garages/carports 22 $101,127 18 $90,283 I 21 $103,637 I 20 $107,131 29 $9,000 I 31 $167,750 I 20 $110,425 I 18 $115,900 23 $109,190 I 25 $143,872 I
Garage additions 3 $2,000 9 $17,100 r 4 $10,650 I 2 $8,300 3 I 5 $16,100 I 2 $3,700 I 6 $34,118 5 $18,090 I 9 $41,650 I
Garages moved in 2 $3,500 1 I $145,330 r ' I 2 $7,000 I I I I
Reroof dwelling 58 $102,623 44 $72,275 r 57 $112,927 I 53 $87,616 62 $148,806 I 66 $147,501 I 53 $119,038 I 32 $97,384 I 43 $124,806 I 36 $111,842 I
Reside dwelling 18 $80,290 13 $64,710 I 20 $91,613 I 17 $114,974 27 $47,300 I 21 $116,996 I 26 $157,812 I 33 $235,710 I 35 $308,310 29 $204,106 I
Decks/patios/deck additions 14 $19,200 I 20 $49,650 I 20 $47,793 I 22 $61,450 22 $49,090 I 17 $36,050 I 31 $69,650 I 30 $103,781 I 26 $52,740 34 $79,553 I
Porches new/repaired 17 $53,800 I 24 $114,300 I 27 $83,900 I 19 $109,200 12 $54,200 I 26 $127,250 I 26 $119,300 I 22 $154,485 I 27 $221,700 25 $236,990 I
Basements new/repaired 7 $34,623 I 5 $28,500 I 5 38500 I 4 30300 5 $85,000 I 1 4000 t 2 9000 I 1 $15,000 I 1 $18,000 3 $21,000 I
Fire damage 3 $13,700 I I 1 $6,000 I 1 $24,000 I 5 I 4 $50,900 I 4 $167,000 I 2 $36,200 t 3 $81,000 4 $44,000 I
New fireplace 6 $11,000 1 $2,150 I 2 $7,500 I 2 $4,900 I I 4 $15,626 I I 3 $6,800 I 6 $21,600 4 $9,500 I
Repair Croixwood fireplaces I I I I 6 $13,400 I 5 $10,884 I 178 $452,761 I 58 $135,493 19 $36,050 I
Storage buildings 6 $4,000 2 $2,000 I 2 $3,500 1 1 $1,000 I 4 $12,600 r 1 4 $11,400 I 1 $4,000 I 5 $7,728 I
Swinming pools 12 $98,700 16 $151,100 I 6 $59,000 I 16 $156,800 I 11 $113,156 I 9 $95,939 I 12 $131,400 I 18 $181,675 I 19 $163,985 11 $98,330 I
Enclosed pool I 1 $125,000 I I 1 I I 1 I
Soffet/Facia 1 $1,000 I 5 $10,200 I 1 $1,346 I 1 $1,800 I 3 $5,630 I I 1 $2,000 I 5 $12,230 I
Foundation & footings I I 8 $19,000 I 1 $9,500 I 2 $4,400 I 1 $6,000 I 7 $28,500 I 5 $35,785 2 $13,500 I
Demolish buildings I I 1 $2,000 I I 2 $3,000 I 2 $5,500 I 3 $13,200 t 1 $1,500 2 $500 [
New garage & dwelling addition I I I I I I 6 $226,700 I I
Miscellaneous 15 $22,546 12 $22,944 I 11 $19,465 I 5 $10,700 I 14 $40,669 I 7 $33,890 I 16 $30,450 I 9 $44,132 I 4 $6,350 I 3 $18,200 I
Reroof & reside I I I I I 1 I 1 4 $29,550 [
Garage & Deck 1 $15,000
Total 266 $3,232,554 I 234 $1,626,436 I 255 $2,708,519 I 308 $7,142,662 I 300 $4,913,806 I 325 $5,061,113 I 320 $7,153,339 I 511 $12,910,326 I 376 $8,857,040 I 325 $5,840,686 I
Overall Total Residential $59,446,481
Overall Total Commercial $59,446,481
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SUIlIIlaIY of Building Permits (PL~
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January 1, 1980 - December 31, 1989
Coamercial
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989
Classification No. Valuation I No. Valuation I No. Valuation I No. Valuation 1 No. Valuation 1 No. Valuation I No. Valuation I No. Valuation I No. Valuation I No. Valuation 1
--------------------------------------------------1 ----------------1 -----------------1 -----------------1 -----------------1 ----------------1 -----------------1 -----------------1 -----------------1 -----------------1
New Buildings 6 $1,103,000 I 4 $516,000 1 4 $1,512,000 I 4 $703,000 I 4 $2,815,000 I 6 $2,022,000 I 3 $1,730,000 I 5 $1,680,000 I 5 $3,905,320 I 6 $6,145,000 1
Building Additions 3 $127,500 1 4 $277,500 I 1 $840,000 1 4 $3,566,000 I 5 $5,404,000 I 2 $1,085,000 I 1 $570,863 I 5 $5,514,000 I 3 $3,040,000 I 2 $1,765,000 1
Buildings Moved in 1 I 3 $20,000 I I I I I I I I
Mall I 1 I I I 1 I 1 $2,000,000 I 1 $600,000 I I
Remodel/Repair Ext/Int 29 $635,600 I 21 $353,500 r T1 $384,070 I 30 $789,600 I 15 $739,625 1 18 $432,700 I 21 $1,047,015 I 22 $628,300 I 19 $364,230 I 19 $562,830 I
Garages I 1 $7,500 I I I 1 1 $16,000 I 1 $24,000 I I 1 $26,000 I 1 $23,883 I
Reroof Building 7 $55,750 I 15 $216,495 r 8 $53,298 I I 4 $6,245 I 6 $20,410 I 9 $114,700 I 3 $89,000 I 4 $78,600 I 7 $461,600 I
Reroof & Repair I 1 $28,000 I I 6 $158,700 I I I 1 I I I
Gas Tanks/Canopies etc. 2 $76,000 r 3 $14,000 I 2 $24,600 I 1 $12,500 I I I I 2 $24,000 I 1 $25,000 I 2 $37,000 I
Storage Buildings 3 $72,500 I 3 $31,500 I 3 $34,000 I 1 $50,000 I 1 $8,000 I I 2 $217,000 I 1 $1,400 I I 1
Fire Damage 1 3 $72,000 I 1 $31,500 I 1 $53,600 I 1 $15,000 r I I 1 $5,000 I I 1
Signs 2 $7,500 r 3 $20,900 I 4 $5,800 1 7 $7,600 I 4 $8,900 I 4 $12,000 1 2 $7,500 I 18 $72,400 I 13 $29,782 I 6 $13,900 I
Sprinkler Systems 2 $47,500 I I 3 $36,800 I 1 $47,000 I 2 $14,300 I 7 $10,722 I 6 $80,200 I 9 $316,400 1 6 $138,359 I 4 $75,491 1
Reside Building 1 I r I t 1 1 $10,000 r I r I
Demolish Building 1 I 3 $12,500 I 2 $7,000 I 3 $18,075 r 1 1 $50,000 r 1 $3,500 r I t
Foundation/Footings 1 I I 1 $23,400 I I f 1 $100,000 I 5 $100,000 I 6 $350,000 I 1 $25,000 I
Fences I I 1 $2,000 I I I 1 $3,000 f 1 1 I I
Coamercial Pool I I I I I 1 1 $80,000 I I I 1
Parking Lot I 1 I 1 I I 1 1 $98,400 f I I
Water Main I f 1 f f I r 1 $160,000 I 1 $129,000 I 1
Steel Framework I r I I t I r 1 I 1
Temporary Classrooms I r I I I I I I I 1
Miscellaneous 3 $2,500 I 3 $32,500 I 5 $20,630 I 2 $39,500 I 6 $60,600 I 2 $9,600 I 2 $5,200 I 5 $30,500 I 7 $67,630 I 2 $7,200 I
1 t I I 1 I I I 1 I
Total 57 $2,127,850 I 61 $1,569,895 I 65 $2,977,198 I 60 $5,457,900 I 45 $9,089,745 1 47 $3,611,432 I 51 $4,036,478 I 80 $10,722,900 I 67 $8,753,921 I 50 $9,116,904 I
Total per year for commercial
and residential 323 $5,360,404 295 $3,196,331 320 $5,685,717 368 $12,600,562 345 $14,003,551 372 $8,748,845 371 $11,189,817 591 $23,966,226 443 $17,610,961 375 $14,957,590
Overall Total Commercial $57,464,223
Overall Total Residential $59,446,481
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RESIDENTIAL BUILDING PERMITS
1980-1989 NUMBER OF PERMITS
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200
100
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1980 1981 1982 1983 1984 1985 1986 1987 1988 1989
YEARS
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RESIDENTIAL BUILDING PERMITS
1980-1989 VALUATION (CURRENT DOLLARS)
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12
1 1
10
9
8
7
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4
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1980 1981
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1982 1983 1984 1985 1986 1987 1988 1989
YEARS
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90
80
70
V) 60
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COMMERCIAL BUILDING PERMITS
1980- 1989 NUMBER OF PERMITS
11
1981
1982
1983 1984 1985
1986
1987
1988 1989
YEAR
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COMMERCIAL BUILDING PERMITS
1980-1989 VALUATION (CURRENT DOLLARS)
10
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9
8
7
4
2
1
1 980 1 981
1982 1983 1984 1985 1986 1987 1988 1989
YEARS
TOTAL BUILDING PERMIT ACTIVITY
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1980-1989 NUMBER OF PERMITS
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580
560
540
520
500
2 480
..
c 460
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- 440
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cJ 420
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:.:: 400
380
360
.40
320
300
280
1980 1981
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YEARS
1988 1989
~4
23
22
21
20
19
18
17
16
15
14
n 13
2:
3 12
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~ 11
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10
9
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6
5
4
3
1 980 1 981
TOTAL BUILDING PERMIT ACTIVITY
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1980-1989 VALUATION (CURRENT DOLLAR)
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YEAR
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THE BIRTHPLACE OF MINNESOTA J
FROM:
DATE:
SUBJECT:
MAYOR AND CITY COUNCIL
STEVE RUSSELL, COMMUNITY DEVELOPMENT DIRECTOR
NOVEMBER 13, 1989
BUILDING PERMIT FEES
TO:
BACKGROUND
At a previous Council meeting Staff recommended the City Council consider
increasing the building permit fees for the City from the 1982 fee level to
the current fee schedule.
The City currently uses the 1982 fee schedule. A schedule for selected 1982
and comparable 1985 fees is shown below.
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1982 1985
e VALUATION FEE VALUATION FEE %+
$500.00 $10.00 $500.00 $15.00 50%
2,000.00 32.50 2,000.00 45.00 38%
50,000.00 286.00 50,000.00 414.50 45%
$100,000.00 433.00 $100,000.00 639.50 48%
1 mill i on $2,908.00 1 mi 11 i on $3,539.50 21%
The major costs attributable to the building inspection .tru€tura is attached
for 1988 and 1989 (Table 1 & 2). In 1988 the cost for building inspection was
$98,783.94 and permit fees $96,394.57, for 1989 to date the costs are
$106,057.91 while the fees for the January 1 - October 31 ten month period is
$75~814.00~
RECOMMENDATION:
Increase building permit fees by 50% of the 1985 fee schedule for 1990 and
consider remaining 50% increase for 1991.
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CITY HALL: 216 NORTH FOURTH STILLWATER, MINNESOTA 55082 PHONE: 612-439-6121
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1988
FEES
Buil di ng Permits
Heating Permits
Plumbing Permits
$72,186.29
15,725.59
8,482.69
$96,394.57
COSTS
Allen
Vern
Steve
Shirley
$34,938.00 + $6,289.00 =
29,652.00 + 5,930.00 =
40,315.00 + 7,257.00 = $47,572 @ 10% =
25,501.00 = 4,176.00 = $29,677 @ 25% =
TOTAL
Office Supplies
General Supplies
Auto Fuel
Tires
Air Fare
Seminars
Housing
Forms
Insurance
Dues
Sub.
Misc.
$100.00
285.75
598.56
108.40
308.00
720.00
442.00
143.70
6,648.18
200.00
146.25
98.10
$9,798.94
TOTAL
GRAND TOTAL = $98,783.94
TABLE 1
$41,227.00
35,582.00
4,757.00
7,419.00
$88,985.00
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FEES - JANUARY 1 - OCTOBER 31, 1989
1989
FEES
B u i 1 din 9 Perm it s
Heat in 9 Permits
Plumbing Permits
Total thru 10/31/89
EXPENDITURES
COSTS
$51,767.40
16,902.70
7,145.97
$75,814.00
$44,023.00
34,786.00
7,794.00
5,056.00
$91,659.00
$381.80
294.48
226.74
95.03
328.00
365.00
531. 36
7,042.00
134.50
5,000.00
$14,398.91
Total $106,057.91
+ Supplies, rest of year.
Allen
Vern
25% Shirley
10% Steve
Office Supplies
General Supplies
Auto Fuel
Repair Supplies
Ai r Fare
Semi n ars
Housing
Insurance
Sub.
Auto - Depr. (2)
(Full year)
(Full year)
TABLE 2
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u!1conscionable to think in this day and age that any income-
producing asset, whether it's a building or a golf course or a
sign or anything else, can be worth half of what it cost to build
it. "
The newspaper also found that billboard companies were
grossly underpaying taxes on billboards in the counties. In
estimating replacement value to determine compensation costs
to the local government, for instance, Naegele Outdoor
Advertising said that a billboard's value should be equal to all
the money the billboard could earn over a 10-year period plus
the replacement cost. But for tax purposes, none of Naegele's
billboards in Durham County were valued at more than
$15,000, and most were valued at less than $1,000. An
attorney for Durham County noted that, "It's just amazing how
the value of the signs change from tax purposes to taking
purposes. You're talking about over a quarter of a million
dollars for a billboard that only has value because it fronts on a
public-built and maintained thoroughfare."
As a result of the investigative series, North Carolina has
adopted a new tax valuation guide that taxes billboards like
other personal property.
Gainesville! Alachua County, Florida. In July, the lAkeland
Sun reported that the Alachua County appraiser had instructed
his staff to reappraise every billboard in the county. The
reappraisal is in response to charges by County Commissioner
Penny Wheat and the Sun that the biggest billboard company
in the counry, Peterson Outdoor, paid only $1,400 in property
taxes last year for 120 billboards. Last spring, billboard
companies had claimed that the signs were worth between
$40,000 and $60,000 each when legislation was under
consideration that would have required taxpayer-funded
payment for billboard removal or alterations. In Alachua
County, about $25 in taxes are paid for every $1,000 in
valuation. Doing some arithmetic, Wheat figured out that
Peterson Outdoor was paying about $10 in taxes per sign,
meaning that they were valued at about $400, which is only
one percent of the lower end of the industry's estimate of their
worth.
The Alachua County appraiser does not expect a windfall to
the county from the reappraisal, but it is clear that some
changes need to be made to secure a more accurate valuation
and to make sure that the billboard companies are paying their
fair share of taxes. The county expects to increase its revenues
from anywhere between $20,000 and $40,000, instead of the
$1,400 it now collects.
Jefferson County, Missouri. A July issue of the Jefferson
Coun.ty Journal announced that billboards and other signs-a
source of tax revenue never before tapped in Jefferson
County-would add nearly $3 million to the county's
valuation. Along with a general reassessment of property
values, the county assessor believes that county taxpayers may
actually have lower tax bills in the coming year.
County Assessor Ron Dougherty told the Journal that he
was "shocked" to find out that the signs had never been taxed
before. "Taxing signs isn't something new; it's done in other
counties and should have been done here all along. The
companies are making a lot of money off those signs, and they
should be paying taxes on them." A search by his office staff
found 429 signs on 362 parcels that will now be taxed at the
commercial rate of 32 percent. The tax revenues generated by
a billboard valued at $20,000 will be equivalent to the
revenues generated by a house valued at $34,000 (the
residential tax rate is 19 percent).
2
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A Guide to Action
Scenic America's findings do not end with the case studies
listed here. Virginia Beach, Virginia, Houston, San
Francisco, and Reno are al~o cited as places that have
discovered great discrepancies between billboard company
claims of value for determining adequate compensation to
prevent takings and their claims ofvalue for tax purposes.
And, in each of these places, the taxes paid by the biIlboard
companies have been minimal in comparison to the estimates
of billboard worth.
If your community wants to try to recoup lost tax revenues
from billboards, Scenic America suggests the following.
1. Determine if all local billboards are listed on property
tax rolls. If a list ofbiIlboards in your city is not
available, start at the state Department of Transportation
where licenses are issued for billboards on federal aid
highways under the Highway Beautification Act.
Although this will be only a partial list of billboards in
your city, it should give you the names of the main
billboard companies in town.
2. Go to the county or city tax assessor's office to check to
see if those billboard companies are listed. If they will let
you see a complete list of billboards, you're in business.
If not, you may receive total valuations on all biIlboards.
You should still be able to determine which companies
are not listed at all or are shirking paying on many of
their billboards.
3. Find out how much money your city generates in taxes
from each billboard each year.
4. Determine if billboards that are listed on the tax rolls are
assessed at full market value, original cost, replacement
cost, or other. If your county is not helpful, bear in mind
that they may be following a state department of revenue
advisory .
5. Find out how other personal property is taxed. If
billboards are taxed at a lesser rate, why? Do any local
businesses pay gross receipt taxes? Do billboards pay
gross receipts taxes? Does your city or state impose any
road user taxes, toll fees, or other fees? Do billboards
pay any of these?
6. Ascertain how the value billboard companies claim for
compensation purposes compares to the value they claim
for taxation purposes.
7. The state department of revenue and the state department
of transportation both must determine "fair market
value." Find out if they differ. Usually, county assessors
follow department of revenue guidelines.
8. Get photos of any billboards not listed. Contact your
local press and Scenic America to start a publicity
campaign.
You can write to Scenic America at 216 Seventh St., S.E.,
Washington, DC 20003, or phone them at 202-546-1100.
~
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Making a Big Project
Work in a Small City
Community leaders in many small and midsize cities cannot
help but be envious of the new hotels, convention centers,
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, ,
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festival marketplaces, and performing arts centers that are
popping up in the downtowns of large cities. These projects
seem like the perfect way to reverse a local economic
downturn because they bolster the local tax base, encourage
reinvestment in properties near the new development, and
combat the drawing power of suburban developments. Large
developments are also attractive for political reasons. Other
than just one-upmanship of neighboring communities, local
leaders may have hidden agendas that can be satisfied by doing
something dramatic and visible like reeling in a major
downtown development. But the financial and political risks
involved in putting together a big project in a small city are
also very high. An article by Donald E. Hunter in '
Commentary magazine (spring 1989) provides a good risk vs.
rewards analysis for small-city officials interested in landing
that big project.
e
A Recipe for Success
Regardless of the reasons, many communities' comprehensive
plans and economic development strategies state a need or
desire to attract major developments downtown. But local
developers in small and medium-size towns usually prefer to
stick to the suburban developments that made them successful,
rather than undertaking a high-risk, downtown project in
which they have no expertise. Furthermore, large developers
from outside the area are turned off by the relatively small
market size and a perceived risk of doing these projects in
untested places.
Hunter notes, however, that there are several different
tested procedures for packaging and developing large-scale
downtown development projects. They are based on building
community support from the beginning and being realistic
about what the project can do for the downtown and the entire
community. The most successful of these processes follows
this sequence of events:
Sponsorship. A downtown development organization, city
government, or a private developer puts forth the idea to
develop a certain parcel in the downtown. A sponsor
motivated more by community benefits (expanding the tax
base, retaining existing businesses, generating employment,
etc,) than by profit, will most often be more successful in
drumming up community support in the early stages.
Feasibility studies. Independent consultants are hired or city
planning staff conduct market studies, prepare concept plans,
and do preliminary financial analyses, all of which detail the
elements of the project and outline the process for completing
it.
e
Assembling the development team. For several reasons,
most downtown projects usually become public/private
partnerships. These reasons include the cost ofland, difficulty
in assembling sites, the use of tax increment financing, and
public demand for amenities that the project developers would
not include on their own. Development teams most often
include landowners, developers and their financial partners,
prospective tenants, local governments, and quasi-public
development organizations.
Detailed preliminary planning. The predevelopment
planning period includes preparation of detailed market
studies for the first development phase, preliminary drawings,
and complex financing plans. This stage also includes the
preparation of detailed management and marketing strategies,
and' agreement on construction procedures. Approval by the
planning commission and zoning boards is also secured at this
stage.
Land assembly. If the key players on the development team
do not already own the land, the site must then be assembled.
If word gets out about the project, the team will likely have to
pay inflated prices for the land. Land cost may have to be
written down by local government, or the parcel may only be
available through a complex leasing arrangement.
Project financing. Elaborate public/private financing
mechanisms are common for major downtown developments.
The package that is put together for the first phase of the
development can make or break the entire project. The public
component usually includes federal grants, tax increment
financing, or general obligation bonds. The private
components for these projects are increasingly taking the form
of cash equity from wealthy individuals, corporations, and
institutions rather than from other debt-heavy devices
commonly used in the past.
Getting Off the Ground
There are at least three prerequisites for getting a large
downtown development off the ground. First, there must be
proper sponsorship at the outset. To ensure community
support, a quasi-public development organization that is
civically motivated and involves community leadership is, in
most communities, a more appropriate sponsor than city
government.
Second, 'a step-by-step procedure, or plan of action, to guide
the predevelopment activities should be agreed upon by all
involved parties. This should outline what information is
needed from the feasibility studies, who should be on the
development team, and what is needed from the preliminary
design and financing plans. This preliminary plan of action
will minimize conflicts, head off unforeseen roadblocks, and
ensure the broadest amount of community support.
A third prerequisite for success is to obtain the best
professional, technical, and political advice possible. Most
small cities will have to go outside the community for
professional services from parties who are experienced in
large downtown projects. Advice should be sought from
people who have constructed and operated projects of the type
envisioned, not just professional consultants who have never
had to follow their own advice.
..
~
The Pitfalls
Hunter provides several reasons why many large downtown
projects never get built or are financial failures after
completion. One of the most common is overhype. Promises
are made and expectations are created in the community that
cannot be fulfilled. A common mistake when seeking support
for projects is to go public too early.
Another common cause of project failure is professional
error. Many projects fail because their sponsors got bad advice
early in the predevelopment process. Careful screening of
consultants-extensive checking of references, site visits to
other projects the consultants worked on, and securing a
commitment by the team leader to the project rather than to
subcontractors-can help to ensure valuable professional
. guidance. Also, parties doing the feasibility studies should not
be penalized for professional honesty if they predict that the
project will not fly.
Many project strategies involve a "primary planft for the
3
~optimum project, plus a "fallback plan" to keep a lesser project
alive if the optimum one is found to be infeasible. If
modifications cannot be made to achieve feasibility and
accomplish the sponsor's objectives, the project should be
abandoned before substantial investment is made.
Major downtown developments are not out of the question
for small and midsize communities. The key to is to be
realistic about what type of project will work best given
community circumstances and to get the best professional help
possible to guide the predevelopment process.
Michigan Cities Face
Big Sewer Bills
The October 19 issue of Engineering News-Record (ENR)
reports that Michigan cities are being faced with huge bills to
fix sewer systems that allow sewage to overflow into lakes and
rivers. The overflow usually occurs when storm water or
melted snow overburden the system. The Michigan
Department of Natural Resources (DNR) has already
threatened to ban any new construction permits for Detroit by
not allowing any sanitary sewer hookups to the city's system.
The state mandate is being carried out to bring local water
treatment in line with state and federal standards. Steven
Holmi, a DNR environmental engineer, told ENR, "We're
refocusing the communities' attention on discharge of raw
sewage. It's going to be a very expensive and protracted
process." DNR will send permit requirements to SO to 60 cities
over the next six months. Communities are facing the
possibility of having to build multimillion-dollar retention
basins. Less costly solutions might be possible, however,
including separation of sanitary and storm sewers and
treatment at wastewater plants.
The response from the cities so far has been a cry of "foul."
DNR admits that it has tolerated such overflow for years but
insists that it has been warning communities during that time
that the tolerance period would come to an end. The director
of Detroit's Water and Sewerage Department argued that the
city's wastewater treatment plant meets all operating permit
requirements. Detroit is in the process of constructing a new
pumping station to reduce overflows into the Rouge River.
City officials also point out that much of the overflow can be
attributed to suburban communities that send their stormwater
through the city system and that it is unfair for the city to pay
for problems caused by those communities. Officials from
Lansing and Saginaw also promise to fight any efforts to force
them to build retention basins.
The P AS M~,"o is a monthly publication for subscribers to the Planning Advisory
Service. a subscription research service of the American Planning As.<ociation: Israel
Stoll man. Execulive Director: Frank S. So. Deputy Executive Director.
The PAS M~mo is produced at APA: James Hecimovich and Marya Morr;.,. Editors:
Adele Rothblall. Assistant Editor.
Copyright 1989 by American Planning Association. 1313 E. 60th St.. Chicago. IL
60637. The American Planning Association has headquarters offices at 1776
Ma.'S8Chuselt' Ave.. N. W.. Washington. DC 20036.
All rights reserved. No part of this publication may be reproduced or utilized in any
form or by any means. electronic or mechanical. including photocopying. recording. or
by any information storage and retrieval system. withOUl permission in wriling fn,m the
American Planning Association.
4
PAS Memo Index for
1989
The following index lists the stories published in the PAS
Memo and Public Investment News in 1989. Annual indexes
for the Memo have appeared in the December issue since
1982. A subject index for the PAS Memo for 1971 through
December 1985 was published as the April 1986 Memo.
Copies of these indexes are available to PAS subscribers on
request.
January:
February:
Image Processing in Planning and Design
Why Should We Revise the Zoning
Ordinance?
March (PIN): Survey Finds Cities "Very Satisfied" with
Privatization; Want a Hot Tax Tip? How
About Low-Income Housing?; Supreme
Court Ruling Jeopardizes Set-Aside
Programs
April: Effective Job Descriptions: Part I. Jobs
for Planners in a Medium-Size City
May: Effective Job Descriptions: Part 2. Jobs in
Small Agencies and Specialized Planning
Positions
June (PIN): Are User Fees Becoming Abusive?; Twin
Cities Say "No More Plastics"; Want
UMT A Money? Ante Up; Florida's
Growth Management Plan Hits
Infrastructure Snag; HUD Announces
Grant Priorities
July: Parking Standards-Problems, Solutions,
Examples
August: Manufactured Housing Developments for
Older Adults
September (PIN): TIF- Your Money's Worth and a Whole
Lot Less?; Minibonds Reap Maxi
Benefits; New Wave Fiscal Planning in
McKinney, Texas; Impact Fee Usage on
the Rise; Illinois Tightens Restrictions on
Impact Fee Use; Report on the Costs of
Flooding
October: Site Planning for Housing for Older
People
November: States Mandate Local Planning for
Growth; A New Lease on Life for Upper-
Level Floors; Design Competition Hopes
to Cure Bridge Woes
December (PIN): A Taxing Proposition for Billboards;
Making a Big Project Work in a Small
City; Michigan Cities Face Big Sewer
Bills
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DAVID T. MAGNUSON
AITORNEY AT LAW
SUITE #260
THE GRAND GARAGE & GALLERY
324 SOUTH MAIN STREET
STILLWATER, MINNESOTA 55082
(612) 439-9464
February 21, 1990
Richard C. Ilkka
Mr. Wally Abrahamson, Mayor
216 North Fourth Street
St~water, MN 55082
~ty Council of Stillwater
City Hall
216 North Fourth Street
Stillwater, MN 55082
Re: Outlot D, Cottages of Stillwater
Dear Mayor and Council Members:
Outlot D of the Cottages of Stillwater is a parcel of land along
the easterly boundary of the Cottages property that is encumbered
by a city sewer and is the proposed location of a future roadway.
This outlot was not dedicated when it should have been some years
back and we have recently gotten the deed to the parcel from Paul
Emerson who is the owner. When we attempted to record this deed,
we found delinquent taxes against the parcel that prohibit the
recording of the instrument.
When we obtained a printout of the delinquencies, we find that if
the delinquencies were paid, $702.16 of the taxes would corne back
to the City in addition to a large portion of the penalty and
interest.
Diane, Nile and I think it would be cheaper and quicker to have
the City pay the delinquent taxes and then receive them back as
part of the settlement. That way, the title to this land would
be forever in the City and a problem could be closed out with
very little expense.
Accordingly, we request a check payable to the Washington County
Auditor in the amount of $868.42. My office will advance the
Mr. Wally Abrahamso
Stillwater City Cou cil
February 21, 1990
Page 2
recording fees whic should be $20.00 and bill the City for this
amount when we know the exact number.
Very truly yours,
DAVID T. MAGNUSON
DTM:kn
c: Nile Kriesel
Diane Deblon
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