HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 09/06/2011 - RESOLUTION 2011-082 CLARIFYING THE BASIS FOR THE SDATE: September 6, 2011
STAFF: Ann Turnquist
Steve Dush
AGENDA ITEM SUMMARY
FORT COLLINS CITY COUNCIL 35
SUBJECT
Resolution 2011-082 Clarifying the Basis for the Setting of Development Review and Building Permit Fees.
EXECUTIVE SUMMARY
At the June 14, 2011, Work Session, Council discussed a proposed change to the City’s cost recovery philosophy for
Building Permit and Plan Check Fees and an increase to these fees. Council directed staff to conduct outreach to
affected boards and interests, and bring the issue back to Council for formal consideration. This proposal is consistent
with the City’s practice of ensuring that new development pays for the development related service costs. It represents
a change of philosophy to move from a goal of collecting 80% of the cost of the entire Development Review Center
through fees, toward recovering 100% of the cost of Fee-Related Services though Building Permit and Plan Check
Fees. This approach would result in an increase of 0.5% to 6.5% in Building Permit and Plan Check fees, and yield
an additional $714,098 in fee revenue to support the Development Review Center. Fee increases would be
implemented January 1, 2012.
BACKGROUND / DISCUSSION
For many years, the City had a Land Use Code policy to recover 80% of the costs of development through the
collection of fees on development. Though this official policy was eliminated in the adoption of a more recent Land
Use Code, the organization has continued to operate with the expectation that it should recover a similar percentage
of these development-related costs. In 2008, staff examined its cost recovery performance and found that less than
half of the costs of the Development Review Center were recovered through fees. A combination of a lower number
of permits and development applications and a number of years without fee increases led to a lower cost recovery.
Adjustments to Building Permit and Plan Check fees were discussed with the Council Finance Committee at that time,
but staff received direction to postpone any increases until the economic situation in the community improved. Staff
returned to City Council with a new proposal for consideration by the Finance Committee and the City Council at a
work session and received direction to continue to develop a proposal and seek community input.
Proposal:
Staff has developed a proposal for Council’s consideration which would increase the Building Permit and Plan Check
fees to reflect the current costs associated with providing these services, and at the same time, update the
philosophical underpinnings of the City’s method for calculating fees. In the past, Council had expressed a desire to
recover 80% of the Development Review Center’s costs though fees, with 20% of the costs being attributed to
community good. Since the fee formula has not been updated for many years, and the City has experienced less
construction activity in recent years, current cost recovery is approximately 60% of the Development Review Center’s
costs.
The Resolution, if adopted, clarifies that the City Manager is authorized to set a fee based on the costs of providing
development and building permit review services, pursuant to City Code Section 7.5-2. The result would be that the
City Manager will implement a fee for these services designed to recover 100% of the fee-related services (with some
exceptions for items such as water heaters) through the City’s Building Permit and Plan Check Fees. To determine
the cost recovery goal, expenses of the Development Review Center have been divided between fee-related services
and non-fee related services. Fee-related services are those which are directly tied to new development or
construction. Non-fee related services represent those activities of the department which are not suitable for being
funded through fees, either logistically or as a matter of public purpose. The cost breakdown of services allocated to
the Fee-related services category include the following:
September 6, 2011 -2- ITEM 35
2011 Fee Study: Recoverable Costs
Services % Costs
Recovered
Services % Costs
Recovered
Current Planning 20% Water Development Review 100%
Zoning 50% Wastewater Development Review 100%
Customer and Administration 90% Stormwater Development Review 100%
Building Inspection 75% Historic Preservation 50%
Plan Review 90% Green Building Enforcement 100%
Construction Inspection 100% Community Development Neighborhood
Services (CDNS) Hourly Staff
100%
Engineering Survey Development
Review
100% Management Information Services (MIS)
– Development Tracking
System/Licensing
100%
Engineering Development Review 35% MIS – Development Review Geographic
Information Services (GIS)
100%
Traffic Development Review 100% Development Review Laptop
Replacement
100%
Light and Power Development
Review
100%
Within the Development Review Center (DRC), activities which link directly to development include such services as
plan checking, proposal submission and review, issuing building permits, inspections, among others. Non-fee related
services might include such things as Conceptual Review, zoning questions not related to a specific project, special
projects, Service Area Requests, work for other organizations (reviewing a plan for Larimer County, Poudre School
District, etc.)
An analysis of the cost breakdown between fee-related services and non-fee related services found that 70% of DRC
expenses result from fee-related services and 30% from non-fee related services. This breakdown is further illustrated
in Attachment 1, 2011 Fee Study—Building Permit and Plan Check Fees, Figure 1.
In order to reach the goal of recovering 100% of the costs of fee-related services, the City is currently approximately
$700,000 short of covering fee-related services with fee revenue. In the current budget, that funding comes from the
General Fund and reserves, but adjusting fees would result in a 100% cost recovery fee schedule for 2012.
Attachment 1, the 2011 Fee Study, Building Permit and Plan Check Fee proposal, provides additional detail about the
proposed approach to setting fees, the City’s relative position in the local construction market (before and after
implementation of the proposal), and the impact of the fee change on a variety of types of building permits and
valuations.
Attachment 2 includes the City’s current and proposed Plan Review and Building Permit Fee Schedules.
FINANCIAL / ECONOMIC IMPACTS
This fee increase will apply to all building permits, including both new construction and remodel/renovation projects.
The impact on permit holders will be between 0.5% and 6.5%, depending on the valuation of the project receiving the
permit. The fee increase will result in approximately $715,000 in new fee revenue to support the City’s Development
Review Center.
September 6, 2011 -3- ITEM 35
STAFF RECOMMENDATION
Staff recommends adoption of the Resolution.
BOARD / COMMISSION RECOMMENDATION
Affordable Housing Board
The Affordable Housing Board raised several questions about valuations and the impact of fee changes on affordable
housing units (see Attachment 3). Following two discussions with the Board, it provided the following recommendation
to Council:
"The Affordable Housing Board respects and understands the need to increase permit fees to allow
the City to be reimbursed for the direct costs it incurs with each type of building project. While we
believe that the fee increases will have an effect on a builder/developer’s ability to construct affordable
housing, we understand that these fee increases are a responsible approach in the current economy.
We also believe that it is essential to seek funding alternatives in the future to help support programs
to keep home ownership affordable."
Building Review Board
Staff met with the Building Review Board on May 26 and July 28. The Board asked for some additional information
which is included as Attachment 5. The Board voted 6-1 to recommend adoption of the fee increase, using a phased
approach of a 50% increase on January 1, 2012 and the remaining 50% increase on January 1, 2013 with the
provision that the fee be looked at regularly, every 2 years, in conjunction with the City’s Budgeting for Outcomes
process.
Economic Advisory Commission
Staff met with the Economic Advisory Commission on June 15 and August 17. The Board passed a motion to provide
the following recommendation to City Council regarding the proposal:
“The Economic Advisory Committee agrees with the philosophy of cost recovery as articulated in the
Plans Check and Building Permit Fee Study proposal. The Committee does not believe that there
will be significant economic impact from its implementation.”
PUBLIC OUTREACH
In addition to outreach through the boards, staff has also met with the Chamber of Commerce and Homebuilders’
Association, who provided the following comments and feedback on the proposal.
Chamber of Commerce, Local Legislative Affairs Committee
On August 26, City Staff met with the Chamber Local Legislative Affairs Committee (LLAC) for the second time to
discuss the proposed fee change. The Committee’s feedback included the following suggestions or comments:
1. The Committee would prefer that this fee adjustment be implemented in a phased time line with a two year
phasing minimum, or three years preferred.
2. The Committee asked of the City: “Why wasn’t this increased funding need covered from the tax increase
surpluses?”
3. The City should continue to look at continuous improvement of its processes in this area and explore
outsourcing of these services.
September 6, 2011 -4- ITEM 35
Homebuilders Association
Staff met with the Homebuilders Association on August 9 to provide the Board with background information about both
the current funding levels and the proposed approach to modifying the Building Permit and Plan Check Fees. The
Board’s discussion focused on the difficulty of adding any additional costs to construction in a difficult building climate.
Boardmembers noted that their industry has been hit hard by the economic downturn, so adding any costs to a building
permit can “make or break” a deal. Several Boardmembers noted the high level of professionalism they experience
when working with City staff, and that such service levels make their process more predicable and less costly than in
some communities. They did express concern about an additional cost increase on top of the recent sales tax increase
and Green Building Code compliance costs.
A related issue that the Board raised was in the way that the City establishes valuations for permit costs. Though they
could not point to a better way that other communities establish these costs, they believe that the City could do better
at capturing all the sales and use taxes due to it, while making the process simpler and fairer to all contractors.
ATTACHMENTS
1. 2011 Fee Study—Phase I: Building Permit and Plan Check Fees, City of Fort Collins, June 6, 2011
2. Current and Proposed City of Fort Collins Plan Review and Building Permit Fee Schedule
3. Affordable Housing Board Fee Study Follow-up: Questions and Answers
4. Affordable Housing Board minutes, July 7, 2011
5. Building Review Board Questions and Answers
6. Building Review Board minutes, July 28, 2011
7. Economic Advisory Commission minutes, August 17, 2011
8. Work Session Summary, June 14, 2011
9 Resolution 2006-113
10. Resolution 2011-013
11. Staff powerpoint presentation
2011 Fee Study
Phase 1: Building Permit and Plan Check Fees
Page 1
2011 Fee Study—Building Permit and Plan Check Fees
City of Fort Collins
August 2011
Executive Summary
City Council directed staff to examine the various fees which are charged for development
related services and which support the operation of the City’s Development Review Center. This
report summarizes the findings of this analysis and recommends that City Council consider
increasing the City’s Building Permit and Plan Check fees to more effectively cover the costs of
these services. In addition, the report recommends a change in philosophy from the City’s past
goal of recovering 80% of the total cost of the Development Review Center operations toward a
goal of recovering 100% of the development related costs of the Center.
Background
For many years, the City had a Land Use Code policy to recover 80% of the costs of
development through the collection of fees on development. Though this official policy was
eliminated in the adoption of the Land Use Code in 1997, the organization has continued to
operate with the expectation that it should recover a similar percentage of these development-
related costs. In 2008, staff examined our cost recovery performance and found that we were
recovering less than half of the cost of the Development Review Center budget offer through
fees. In 2010, this recovery amount increased to slightly over half, but remains below the 80%
target. A combination of a lower number of permits and development applications and a number
of years without fee increases led to a lower cost recovery. The economic decline resulting in
reduced development activity was a factor leading staff to reduce 7.2 FTE and a total expense
reduction of over $800,000 during the 2010 Budgeting for Outcomes (BFO) process. These
reductions helped bring the Center’s costs more in line with revenues, but still indicated a gap in
cost recovery. Adjustments to fees were discussed with the Council Finance Committee in 2008,
but staff received direction to postpone any increases until the economic situation in the
community improved.
In 2010, Red Oak Consulting was engaged to review the City’s fee methodology and structure
and to compare Fort Collins’ practices to those of other communities. Following the completion
of that study in July 2010, staff began to address the issues that were identified in two phases:
Phase 1: Development Review Center fees: August 2010 – April 2011
Phase 2: Capital Expansion and Impact Fees: Fall 2011
Attachment 1
2011 Fee Study
Phase 1: Building Permit and Plan Check Fees
Page 2
This report represents a summary of the work on Phase 1 of the project.
Approach
Staff has conducted a detailed analysis of the costs associated with the Development Review
Center. Staff particularly examined whether each specific activity should have a fee charged to
pay for those costs. For example, some activities such as plan checks, inspections, issuance of
building permits, development review, etc. are clearly activities which can be assigned to a
specific builder or developer who is conducting development activity in the community. Other
activities, such as Conceptual Review, questions at the Development Review Center counter
about zoning, development review for other entities like Larimer County, work on special
projects, or the many other types of questions or services provided do not readily lend
themselves to charging a fee.
By conducting this analysis, staff postulates that some of the costs of the Development Review
Center should be categorized as Fee Related Expenses and others as Non-fee Related Expenses.
The Fee Related Expenses include a portion of staff time in the Development Review Center,
direct expenses of providing services, and support or overhead costs for those services (e.g.
computer systems, fuel, vehicles, and equipment). Non-fee Related Expenses include the
remaining portion of staff time in the Development Review Center, and shares of the support or
overhead costs that support services not directly tied to development.
Staff’s analysis resulted in the following costs:
Development Review Center Expenses and Revenue, 2011 (projected)
Expenses 2011
Fee related Expenses
$2,292,664
Non-fee related
services/activity expenses
$1,065,333
Total Cost, Development
Review Center and
associated costs
$3,357,997
Revenue 2011
Current Fee Revenue
$1,450,566
Current General Revenue (G.F.,
Transp. Fund, etc.) $1,193,333
Total Current Revenue (all
sources) $2,643,899
Expenses less Revenue
<Shortfall> <$714,098>
By separating Fee Related Services from Non-fee Related Services, we can more clearly determine the
amount of revenue which should be generated by development related fees. Staff has built into its analysis
an assumption that development and construction should pay 100% of the cost for those services which
are tied directly to new construction, while general and other revenues should cover remaining costs. With
a Fee Related Service Revenue target of $2,292,664 in 2011, current revenues fall short of paying 100%
of the cost by $714,098. A conceptual explanation of this philosophy is illustrated in Figure 1.
2011 Fee Study
Phase 1: Building Permit and Plan Check Fees
Page 3
Current: 80% of
Total Cost of
Development
Review Center
Proposed: 100%
of Fee-related
Service Expenses
Total Cost of Development Review Center
$3.358 Million
Current Revenue Gap to
80% Goal
General
Fund
Portion
80% Goal
Current Actual
Cost Recovery
(53%)
Current Revenue Gap
($714,098)
Non-fee
Related
Service
Expenses
100% Revenue goal = $2.3 Million
Cost Recovery Approach Change
Proposed June 2011
Figure 1. Cost recovery proposal
Plan Check and Building Permit Fee Recommendation
Staff recommends that the fee tables for Plan Check and Building Permits be adjusted so that they recover
100% of the cost of Fee Related Services. To accomplish this, staff developed a new fee table to maintain
appropriate relationships between the costs of various permits and activities (plan check, inspection,
building permit, etc.) while generating additional revenue. The fee table, which is tied to valuations of
various projects and the relative cost of providing each service becomes the formula for calculating the
fee for each customer. A 2011 City of Fort Collins Fee Table will replace the 1982 UBC Fee Table
which has been in use by the Development Review Center for many years. Though the valuations used
with the 1982 UBC Table have increased as the local market has changed, the base fee in the table has not
changed since its adoption. This proposal would result in changes to the base fee in the table, driving all
other fees up to more closely match the actual cost of providing those services.
Impact
The impact of these fee changes for Plan Check and Building Permit services will vary from 0.5% to
6.5%, depending on the valuation of the project. Examples of the impact of these changes are included in
2011 Fee Study
Phase 1: Building Permit and Plan Check Fees
Page 4
Attachments 1A and 1B, including five sample projects which have received a permit from the City in the
recent past. A typical single family residence (2000 square feet), a small industrial warehouse, a small
commercial office, a retail building and a mixed-use building are all included to show the variation in
impact on different types and valuations of construction. See summary, Figure 2.
The largest percentage impact is on the single family residence with a 6.53% increase over current fees.
This reflects the valuation of $214,000. As the valuations increase over other properties, the percentage
increases are smaller because they reflect the assumption in the Fee Table that, while the cost of providing
Plan Check and Building Permit services are greater for a larger, more complex building, they do not go
up at a steady rate. A cost curve built into the formulas reflects the reduced cost per dollar of value for
more expensive buildings. An example might be that a $200,000 house would cost $18,000 in permit
fees, but a more expensive commercial office ($1,300,000) doesn’t cost 7 times as much in development
related costs. It still only has one permit issued, one plan checked (though more complex), a few
bathrooms and electrical systems to inspect, and other similar services. Similarly, a more expensive
house might have a more expensive finish (granite countertops rather than laminate, cherry woodwork
rather than painted pine, etc.) but that increased valuation doesn’t necessarily translate to higher
permitting or inspection costs. This formula configuration is common to most jurisdictions which issue
building permits and represents an industry standard.
Staff believes that this approach to adjusting the fee table allows the City to match revenues and expenses
more closely, while not recovering fees for services which are not closely tied to a development or
Impact on Sample Permits
$5,308.10
$5,044.63
$4,971.94
$3,436.49
$1,154.00
$
Change
Mixed-Use $948,629.13 $953,937.23 0.56%
Retail $263,469.32 $268,513.95 1.91%
Commercial Office $123,878.89 $128,850.83 4.01%
$79,420.73 $82,857.22 4.33%
Industrial
Warehouse
$17,679.90 $18,833.90 6.53%
Single Family
Residence
%
Change
100%
Services
Recoup
2011
Permit Type Current
Figure 2. Impact of proposal on sample permits
2011 Fee Study
Phase 1: Building Permit and Plan Check Fees
Page 5
building activity. The proposed increases are modest, and closely tied to the cost of providing the
services. The balance of the cost of the Development Review Center continues to be paid through
General Government revenues, reflecting the “community good” aspects of the services provided.
In addition to analyzing the impact of the proposed fee increase on sample projects, staff has compared
Fort Collins’ fees to those of neighboring communities to evaluate the relative cost of fees. 2010 and
2011 studies conducted by the City and Red Oak Consulting gathered data comparing development fee
related costs, both for Building Permit and Plan Check Fees and Capital Expansion Fees. In both cases,
Fort Collins is near or below the median of comparable communities in fees charged. With this data in
mind, staff does not believe that the proposed fee adjustments will significantly effect Fort Collins’
position relative to the local market for new development costs. (See Figures 3 and 4).
Figure 3. Permit and Plan Check Fee Comparison
(Single Family Residence - 2,500 square feet with valuation of $300,000)
$1,866.00
$2,725.81
$2,747.88
$2,770.91
$3,190.00
$3,487.69
$3,487.69
$3,645.83
$3,752.19
$3,802.15
$4,510.00
$2,853.56
$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000
Fort Collins-Current
Windsor
Johnstown
Larimer County
Greeley-Zone 3
Fort Collins-Proposed
Broomfield
Loveland
Longmont
Timnath
Boulder
Louisville
Jurisdictions
Amount
Permit &
Plan Check
Note: Permit and Plan Check fee estimates from current 2011 fee information checks.
2011 Fee Study
Phase 1: Building Permit and Plan Check Fees
Page 6
Figure 4. Permit Fee Regional Comparison
Includes: Permit, Plan Check, Sales & Use Tax, Non-Utility and Utility Capital Expansion Fees
(Single Family Residence - 2,500 square feet with valuation of $300,000)
$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000
Larimer County
Greeley-Zone 3
Johnstown-Redstone Hills
Longmont
Johnstown-Riverbend
Fort Collins-Current
Timnath-Fairview Village
Fort Collins-Proposed
Windsor
Timnath-Harmony Club
Loveland
Boulder
Louisville
Broomfield
Jurisdictions
Amount
Permit &
Plan Check
City/Cty
Sales Tax
Non-Utility
Cap. Exp
Utility Cap.
Exp.
Note: Utility and Non-Utility Capital Expansion Fee Estimates from Red Oak study (Fort Collins information updated in accordance with current fee schedules); Permit
and Plan Check fee estimates from current 2011 fee information checks.
Other Recommendations
The timing of charges for the Transportation Development Review Fees (TDRF) is an additional issue
that staff believes should be addressed at the same time fee increases are implemented. Currently,
virtually all of the TDRFs are charged early in the Development Review process. These fees can be
substantial, and have created financing problems for some developers working through the process. Staff
proposes that the Planning Development Review Fee and the TDRF be combined in the fee tables, with
30% of the fee charged at application (early in the process) and 70% of the fee charged at the time of the
project’s public hearing. This should alleviate the impact of the timing of the TDRF for developers, but it
may cause the City some cash flow issues initially because most of the fees will be delayed until much
later in the development cycle. Further analysis of current year projections will be required to identify
potential delayed revenue.
ATTACHMENTS:
1A. 2011 Fee Study Summary--Impact on Sample Permits
1B. Impact of Fee Increase, All Fees Summary Graphics
Attachment 1A
Extra Revenue
Generated by Sample
Permits
$768,541
$975,098
Permit Type 2011 Current
100% Services Recoup
$750K Target % Change
94 UBC Fee Table
Unmodified % Change
Single Family Residence $17,679.90 $18,833.90 6.53% $19,178.89 8.48%
Industrial Warehouse $79,420.73 $82,857.22 4.33% $83,647.22 5.32%
Commercial Office $123,878.89 $128,850.83 4.01% $128,997.46 4.13%
Retail $263,469.32 $268,513.95 1.91% $268,615.92 1.95%
Mixed-Use $948,629.13 $953,937.23 0.56% $957,579.31 0.94%
Approx. 85.53% increase in plan check and permit revenues if we implement the unaltered 94 UBC fee table calcs + base permit
fee of $25
Note: The above presumes that the permits collected for the year being analyzed equal (in valuation) the subset of permits tested
here (2009/2010).
Permits less in valuation would result in less revenues than shown. Permits greater in valuation would result in more.
2011 Fee Study
Summary--Impact on Sample Permits
Implementation Options:
Approx. 67.41% increase in plan check and permit revenues if we implement the $750K target + base permit fee of $25.
Attachment 1A--Page 1
2011: Current Fees
$20.25 Base
100% Recoup for
Fee Services
$25.00 Base
94 UBC Table
(Unmodified)
$25.00 Base
Plan Check Fee $468.33 $843.38 $955.50
Permit Fee $972.68 $1,751.63 $1,984.50
Sales/Use Tax (City and County) $4,984.89 $4,984.89 $4,984.89
Capital Expansion $9,099.00 $9,099.00 $9,099.00
Utilities $2,155.00 $2,155.00 $2,155.00
Total: $17,679.90 $18,833.90 $19,178.89
Total $ Difference: $1,154.00 $1,498.99
from 2008 #s from 2011 current from 2011 current
% Difference: 6.53% 8.48%
% change-2011 crt % change-2011 crnt
CIEs
Comm Park $1,889.00 $1,889.00 $1,889.00
Neigh Park $1,695.00 $1,695.00 $1,695.00
Fire $203.00 $203.00 $203.00
Ggov $257.00 $257.00 $257.00
Police $140.00 $140.00 $140.00
Library $0.00 $0.00 $0.00
S/O - City $2,842.00 $2,842.00 $2,842.00
S/O - County $273.00 $273.00 $273.00
School $1,800.00 $1,800.00 $1,800.00
$9,099.00 $9,099.00 $9,099.00
Utilities
Elec: City Sales Tax $1.70 $1.70 $1.70
Elec: Comm. Rev. $44.19 $44.19 $44.19
Elec: PILOTS $2.64 $2.64 $2.64
Elec: Sec Service $813.00 $813.00 $813.00
Elec: Temp Pedestal $152.61 $152.61 $152.61
S/W Dev Rev $148.21 $148.21 $148.21
S/W PIF $992.65 $992.65 $992.65
$2,155.00 $2,155.00 $2,155.00
Single-Family Detached Residence
Valuation: $214,403.80; Square Feet - 2,068; DUs: 1
(Changed from original permit used in 2008 -- Adj valuation and sq. ft. accordingly for 2008 #s)
2011 Fee Study
Page 2
2011: Current Fees
$20.25 Base
100% Recoup for
Fee Services
$25.00 Base
94 UBC Table
(Unmodified)
$25.00 Base
Plan Check Fee $2,231.46 $3,708.25 $3,757.00
Permit Fee $4,854.60 $8,349.75 $8,447.63
Sales/Use Tax (City and County) $30,225.00 $30,225.00 $30,225.00
Capital Expansion $59,287.11 $59,287.11 $59,287.11
Utilities $27,280.72 $27,280.72 $27,280.72
Total: $123,878.89 $128,850.83 $128,997.46
Total $ Difference: $4,971.94 $5,118.57
from 2008 #s from 2011 current from 2011 current
% Difference: 4.01% 4.13%
% change-2011 crnt % change-2011 crnt
CIEs
Comm Park $0.00 $0.00 $0.00
Neigh Park $0.00 $0.00 $0.00
Fire $2,838.14 $2,838.14 $2,838.14
Ggov $3,178.20 $3,178.20 $3,178.20
Police $1,974.93 $1,974.93 $1,974.93
Library $0.00 $0.00 $0.00
S/O - City $43,945.44 $43,945.44 $43,945.44
S/O - County $7,350.40 $7,350.40 $7,350.40
School $0.00 $0.00 $0.00
$59,287.11 $59,287.11 $59,287.11
Utilities
Elec: City Sales Tax $0.00 $0.00 $0.00
Elec: Comm. Rev. $0.00 $0.00 $0.00
Elec: PILOTS $0.00 $0.00 $0.00
Elec: Sec Service $0.00 $0.00 $0.00
Elec: Temp Pedestal $0.00 $0.00 $0.00
Sewer Dev Rev $128.00 $128.00 $128.00
Sewer PIF $7,100.00 $7,100.00 $7,100.00
S/W Dev Rev $749.13 $749.13 $749.13
S/W PIF $5,626.34 $5,626.34 $5,626.34
Construction Water $17.22 $17.22 $17.22
Water 6% PILOT Fees $1.03 $1.03 $1.03
Water Dev Rev $128.00 $128.00 $128.00
Water Meter $151.00 $151.00 $151.00
Water (Raw) $5,850.00 $5,850.00 $5,850.00
Water PIF $7,530.00 $7,530.00 $7,530.00
$27,280.72 $27,280.72 $27,280.72
Note: Electric fees were not
charged on permit - was billed
separately. So, not included here.
Commercial Office
Valuation: $1,300,000; Square Feet - 13,079; DUs: 0
(F&F Valuation - $60,000)
2011 Fee Study
Page 3
2011: Current Fees
$20.25 Base
100% Recoup for
Fee Services
$25.00 Base
94 UBC Table
(Unmodified)
$25.00 Base
Plan Check Fee $1,573.33 $2,690.19 $2,946.94
Permit Fee $3,267.68 $5,587.31 $6,120.56
Sales/Use Tax (City and County) $20,808.75 $20,808.75 $20,808.75
Capital Expansion $27,512.00 $27,512.00 $27,512.00
Utilities $26,258.97 $26,258.97 $26,258.97
Total: $79,420.73 $82,857.22 $83,647.22
Total $ Difference: $3,436.49 $4,226.49
from 2008 #s from 2011 current from 2011 current
% Difference: 4.33% 5.32%
% change-2011 crnt % change-2011 crnt
CIEs
Comm Park $0.00 $0.00 $0.00
Neigh Park $0.00 $0.00 $0.00
Fire $1,140.00 $1,140.00 $1,140.00
Ggov $1,273.00 $1,273.00 $1,273.00
Police $779.00 $779.00 $779.00
Library $0.00 $0.00 $0.00
S/O - City $21,280.00 $21,280.00 $21,280.00
S/O - County $3,040.00 $3,040.00 $3,040.00
School $0.00 $0.00 $0.00
$27,512.00 $27,512.00 $27,512.00
Utilities
Elec: City Sales Tax $0.00 $0.00 $0.00
Elec: Comm. Rev. $0.00 $0.00 $0.00
Elec: PILOTS $0.00 $0.00 $0.00
Elec: Sec Service $0.00 $0.00 $0.00
Elec: Temp Pedestal $0.00 $0.00 $0.00
Sewer Dev Rev $128.00 $128.00 $128.00
Sewer PIF $7,100.00 $7,100.00 $7,100.00
S/W Dev Rev $1,921.75 $1,921.75 $1,921.75
S/W PIF $3,431.97 $3,431.97 $3,431.97
Construction Water $17.22 $17.22 $17.22
Water 6% PILOT Fees $1.03 $1.03 $1.03
Water Dev Rev $128.00 $128.00 $128.00
Water Meter $151.00 $151.00 $151.00
Water (Raw) $5,850.00 $5,850.00 $5,850.00
Water PIF $7,530.00 $7,530.00 $7,530.00
$26,258.97 $26,258.97 $26,258.97
Note: Electric fees were not
charged on permit - was billed
separately. So, not included here.
Warehouse - Industrial
Valuation: $895,000; Square Feet - 19,000; DUs: 0
2011 Fee Study
Page 4
2011: Current Fees
$20.25 Base
100% Recoup for
Fee Services
$25.00 Base
94 UBC Table
(Unmodified)
$25.00 Base
Plan Check Fee $1,909.70 $3,386.50 $3,403.08
Permit Fee $4,216.73 $7,819.88 $7,905.27
Sales/Use Tax (City and County) $25,610.32 $25,575.00 $25,575.00
Capital Expansion $97,083.13 $97,083.13 $97,083.13
Utilities $134,649.44 $134,649.44 $134,649.44
Total: $263,469.32 $268,513.95 $268,615.92
Total $ Difference: $5,044.63 $5,146.60
from 2008 #s from 2011 current from 2011 current
% Difference: 1.91% 1.95%
% change-2011 crnt % change-2011 crnt
CIEs
Comm Park $0.00 $0.00 $0.00
Neigh Park $0.00 $0.00 $0.00
Fire $3,128.92 $3,128.92 $3,128.92
Ggov $3,503.82 $3,503.82 $3,503.82
Police $2,177.27 $2,177.27 $2,177.27
Library $0.00 $0.00 $0.00
S/O - City $80,169.64 $80,169.64 $80,169.64
S/O - County $8,103.48 $8,103.48 $8,103.48
School $0.00 $0.00 $0.00
$97,083.13 $97,083.13 $97,083.13
Utilities
Elec: City Sales Tax $0.00 $0.00 $0.00
Elec: Comm. Rev. $0.00 $0.00 $0.00
Elec: PILOTS $0.00 $0.00 $0.00
Elec: Sec Service $0.00 $0.00 $0.00
Elec: Temp Pedestal $0.00 $0.00 $0.00
Sewer Dev Rev $658.00 $658.00 $658.00
Sewer PIF $31,490.00 $31,490.00 $31,490.00
S/W Dev Rev $2,151.49 $2,151.49 $2,151.49
S/W PIF $14,960.46 $14,960.46 $14,960.46
Construction Water $130.65 $130.65 $130.65
Water 6% PILOT Fees $7.84 $7.84 $7.84
Water Dev Rev $658.00 $658.00 $658.00
Water Meter $293.00 $293.00 $293.00
Water (Raw) $39,000.00 $39,000.00 $39,000.00
Water PIF $45,300.00 $45,300.00 $45,300.00
$134,649.44 $134,649.44 $134,649.44
Note: Electric fees were not
charged on permit - was billed
separately. So, not included here.
Retail Building
Valuation: $1,101,519; Square Feet - 14,419; DUs: 0
(F&F Valuation - $99,137)
2011 Fee Study
Page 5
2011: Current Fees
$20.25 Base
100% Recoup for
Fee Services
$25.00 Base
94 UBC Table
(Unmodified)
$25.00 Base
Plan Check Fee $13,118.95 $14,595.75 $15,733.25
Permit Fee $27,497.48 $31,328.78 $33,833.36
Sales/Use Tax (City and County) $186,000.00 $186,000.00 $186,000.00
Capital Expansion $365,400.72 $365,400.72 $365,400.72
Utilities $356,611.98 $356,611.98 $356,611.98
Total: $948,629.13 $953,937.23 $957,579.31
Total $ Difference: $5,308.10 $8,950.18
from 2011 current from 2011 current
% Difference: 0.56% 0.94%
% change-2011 crnt % change-2011 crnt
CIEs
Comm Park $85,278.00 $85,278.00 $85,278.00
Neigh Park $76,494.00 $76,494.00 $76,494.00
Fire (Com) $2,036.11 $2,036.11 $2,036.11
Fire (Res) $9,211.00 $9,211.00 $9,211.00
Ggov (Com) $2,280.07 $2,280.07 $2,280.07
Ggov (Res) $11,590.00 $11,590.00 $11,590.00
Police (Com) $1,416.83 $1,416.83 $1,416.83
Police (Res) $6,283.00 $6,283.00 $6,283.00
Library $0.00 $0.00 $0.00
S/O - City $99,353.46 $99,353.46 $99,353.46
S/O - County $16,558.25 $16,558.25 $16,558.25
School $54,900.00 $54,900.00 $54,900.00
$365,400.72 $365,400.72 $365,400.72
Utilities
Elec: City Sales Tax $0.00 $0.00 $0.00
Elec: Comm. Rev. $0.00 $0.00 $0.00
Elec: PILOTS $0.00 $0.00 $0.00
Elec: Sec Service $0.00 $0.00 $0.00
Elec: Temp Pedestal $0.00 $0.00 $0.00
Sewer Dev Rev $2,879.00 $2,879.00 $2,879.00
Sewer PIF $156,767.00 $156,767.00 $156,767.00
S/W Dev Rev $1,200.53 $1,200.53 $1,200.53
S/W PIF $7,486.60 $7,486.60 $7,486.60
Construction Water $400.70 $400.70 $400.70
Water 6% PILOT Fees $24.04 $24.04 $24.04
Water Dev Rev $2,879.00 $2,879.00 $2,879.00
Water Meter $372.76 $372.76 $372.76
Water (Raw) $144,669.07 $144,669.07 $144,669.07
Water PIF $39,933.28 $39,933.28 $39,933.28
$356,611.98 $356,611.98 $356,611.98
Note: Electric fees were not
charged on permit - was billed
separately. So, not included here.
Mixed-Use Building
Valuation: $8,000,000; Square Feet - Square Feet 47,696 (Residential) & 9,383 (Commercial); DUs:
61
(F&F Valuation - $203,342)
2011 Fee Study
Page 6
1
Impact of Fee Increase on
Sample Permits
August 2011
Attachment 1B
2
2011 Fee Study: Single-Family
$17,679.90 $18,833.90 $19,178.89
Single-Family Detached Residence
(Value: $214K; Sq. Ft.: 2,068; DUs: 1)
12% 12% 12%
51% 48% 47%
28% 27% 26%
6% 9% 10%
3% 4%
5%
$0.00
$3,000.00
$6,000.00
$9,000.00
$12,000.00
$15,000.00
$18,000.00
$21,000.00
2011: Current Fees
$20.25 Base
100% Recoup for Fee
Services
$25.00 Base
94 UBC Table
(Unmodified)
$25.00 Base
Options
Amounts
Utilities Capital Expansion Sales/Use Tax (City and County) Permit Fee Plan Check Fee
Attachment 1B
3
2011 Fee Study: Commercial Office
Commercial Office
(Value: $1.3M; Sq. Ft.: 13,079; DUs: 0)
22% 22% 21%
47% 46% 46%
25% 23% 23%
4% 6% 7%
2% 3% 3%
$0.00
$20,000.00
$40,000.00
$60,000.00
$80,000.00
$100,000.00
$120,000.00
$140,000.00
2011: Current Fees
$20.25 Base
100% Recoup for Fee
Services
$25.00 Base
94 UBC Table
(Unmodified)
$25.00 Base
Options
Amounts
Utilities Capital Expansion Sales/Use Tax (City and County) Permit Fee Plan Check Fee
$123,878.89 $128,850.83 $128,997.46
4
2011 Fee Study: Warehouse
$79,429.73 $82,857.22 $83,647.22
Warehouse
(Value: $895K; Sq. Ft.: 19,000; DUs: 0)
33% 32% 31%
35% 33% 33%
26% 25% 25%
4% 7% 7%
2% 3% 4%
$0.00
$15,000.00
$30,000.00
$45,000.00
$60,000.00
$75,000.00
$90,000.00
$105,000.00
2011: Current Fees
$20.25 Base
100% Recoup for Fee
Services
$25.00 Base
94 UBC Table
(Unmodified)
$25.00 Base
Options
Amounts
Utilities Capital Expansion Sales/Use Tax (City and County) Permit Fee Plan Check Fee
5
2011 Fee Study: Retail
Retail
(Value: $1.1M; Sq. Ft.: 14,419; DUs: 0)
50% 50% 50%
37% 36% 36%
10% 10% 10%
1% 1% 1%
2% 3% 3%
$0.00
$40,000.00
$80,000.00
$120,000.00
$160,000.00
$200,000.00
$240,000.00
$280,000.00
2011: Current Fees
$20.25 Base
100% Recoup for Fee
Services
$25.00 Base
94 UBC Table
(Unmodified)
$25.00 Base
Options
Amounts
Utilities Capital Expansion Sales/Use Tax (City and County) Permit Fee Plan Check Fee
$263,469.32 $268,513.95 $268,615.92
6
2011 Fee Study: Mixed-Use
$948,629.13 $953,937.23 $957,579.31
Mixed-Use
(Value: $8M; Sq. Ft.: 47,696-Res/9,383-Comm; DUs: 61)
37% 37% 37%
39% 39% 38%
20% 19% 19%
3% 3% 4%
1% 2% 2%
$0.00
$150,000.00
$300,000.00
$450,000.00
$600,000.00
$750,000.00
$900,000.00
$1,050,000.00
2011: Current Fees
$20.25 Base
100% Recoup for Fee
Services
$25.00 Base
94 UBC Table
(Unmodified)
$25.00 Base
Options
Amounts
Utilities Capital Expansion Sales/Use Tax (City and County) Permit Fee Plan Check Fee
Current Plan Review and Building Permit Fees
January 2011
Formula used for calculating building permit fees (as noted in the fee estimate calculator above) This table is Table 3A in the 1982
Uniform Building Code.
Total Valuation Plan Review Building Permit Fee
$1 to
$500
None $20.25
$501 to
$2,000
None $10 for the first $500 plus $1.50 for
each additional $100 or fraction
thereof to and including $2,000
Take this total times 1.35
$2,001 to
$25,000
No plan review fee for valuations under $3,000.
Over $3,000 -- $32.50 for the first $2,000 plus
$6 for each additional $1,000 fraction thereof to
and including $25,000.
Take this total times .65
Use the formula in the column to the
left, but take this total times 1.35
$25,001 to
$50,000
$170.50 for the first $25,000 plus $4.50 for
each additional $1,000 or fraction thereof to and
including $50,000 Take this total times .65
Use the formula in the column to the
left, but take this total times 1.35
$50,001 to
$100,000
$283 for the first $50,000 plus $3 for each
additional $1,000 or fraction thereof to and
including $100,000.
Take this total times .65
Use the formula in the column to the
left, but take this total times 1.35
$100,001 to
$10,000,000
$433 for the first $100,000 plus $2.50 for each
additional $1,000 or fraction thereof.
Take this total times .65
Use the formula in the column to the
left, but take this total times 1.35
$10,000,001
and up
$25,183 for the first $10,000,000 plus $0.10 for
each additional $1,000 or fraction thereof.
Take this total times .65
Use the formula in the column to the
left, but take this total times 1.35
Attachment 2
p. 1
Proposed Plan Check and Building Permit Fees
January 2012
Proposed City of Fort Collins Fee Table
Total Valuation Plan Review Fee Building Permit Fee
$1 to $500 None $25.00
$501 to $2,000 None $25 for the first $500 plus $2.75 for each
additional $100 or fraction thereof to and
including $2,000
Take total times 1.35
$2,001 to
$25,000
No plan review fee for valuations under $3,000. Over
$3,000 -- $66.25 for the first $2,000 plus $10.25 for each
additional $1,000 or fraction thereof, up to and including
$25,000.
Take this total times .65.
Use the formula in the column to the left, but
take this total times 1.35
$25,001 to
$50,000
$302.00 for the first $25,000 plus $8.50 for each
additional $1,000 or fraction thereof, up to and including
$50,000.
Take this total times .65
Use the formula in the column to the left, but
take this total times 1.35
$50,001 to
$100,000
$514.50 for the first $50,000 plus $6.00 for each
additional $1,000 or fraction thereof, up to and including
$100,000.
Take this total times .65.
Use the formula in the column to the left, but
take this total times 1.35
$100,001 to
$500,000
$814.50 for the first $100,000 plus $4.00 for each
additional $1,000 or fraction thereof, up to and including
$500,000.
Take this total times .65.
Use the formula in the column to the left, but
take this total times 1.35
$500,001 to
$1,000,000
$2,414.50 for the first $100,000 plus $3.50 for each
additional $1,000 or fraction thereof, up to and including
$1,000,000.
Take this total times .65.
Use the formula in the column to the left, but
take this total times 1.35
$1,000,001 to
$10,00,000
$4,164.50 for the first $100,000 plus $2.50 for each
additional $1,000 or fraction thereof, up to and including
$10,000,000.
Take this total times .65.
Use the formula in the column to the left, but
take this total times 1.35
$10,000,001
and up
H:\Agenda 2011\0906\Development Fees.att 3.doc
City Manager’s Office
300 LaPorte Avenue
PO Box 580
Fort Collins, CO 80522
970.221.6505
970.224.6107 - fax
fcgov.com
MEMORANDUM
TO: Affordable Housing Board
FR: Ann Turnquist, Policy and Project Manager
Steve Dush, Community Development and Neighborhood Services Manager
DT: June 30, 2011
RE: Fee Study Follow-up: After City Council’s June 15 Work Session
On May 5, 2011 staff met with the Affordable Housing Board to review proposed changes to the
City’s methodology for calculating Building Permit and Plan Check Fees. The Board asked for
some additional data regarding the impact of fee increases on lower cost housing units, and asked
about how valuations are arrived at for affordable units and for homes built from stock plans.
These specific questions from the AHB are addressed in Attachments 1 and 2.
On June 15, 2011, City Council and staff met to review the proposal in Work Session. The
Agenda Item summary and Work Session follow-up memorandum to City Council are attached
for your information. (See Attachment 3 and 4)
Staff proposed changing the methodology for calculating fees from a target of 80% of the cost of
the Development Review Center to recovering 100% of fee-related service costs through
Building Permit and Plan Check Fees. Council reviewed comparative data including regional
communities, the impact of a fee increase on different types of construction projects, and
discussed the history of previous changes to these fees.
Councilmembers were supportive of the proposed change and agreed to consider the proposal at
First Reading on August 16.
Staff will be available at the AHB meeting on July 7 to further discuss the proposal and address
any additional questions from the Board. The Board previously expressed an interest in
providing feedback to Council prior to First Reading on August 16. The materials for this
Council meeting will need to be completed by August 3.
ATTACHMENT 3
Affordable Housing Board Fee Questions
Plan review fees and building permit fees are established and based on the project’s valuation.
Valuation is considered the cost to replace a structure “in-kind” including labor, materials, and
profit. The City accepts the construction valuations established by the nationally published
construction magazine, Building Safety Journal, which sets a dollar cost per sq. ft. based on the
type of construction used (such as steel, concrete, or wood) and the occupancy of the building
(such as office, restaurant or dwelling).
1) Stock Plans (AKA Master Plans)
Production builders of single family homes oftentimes will construct the same home floor
plan numerous times. In order to help reduce the cost of plan review for an identical plan,
the City offers the “stock plan” system. The first time a builder submits a new model
floor plan, the City will collect a full plan review fee based on the homes minimum
valuation and the plan review staffs will make all necessary code compliance notes onto a
master plan. A stock plan number is then assigned to the new model. When the builder
applies for a building permit to construct second and subsequent homes using that model
and stock plan, the City collects a processing fee in the amount of $1.00 per $1,000 of
valuation in lieu of the full plan review fee, and the plan review section of the application
is automatically approved.
Sample home. 2,000 square foot, 2 story home, on 1,000 square foot unfinished
basement:
Base minimum valuation established on a dollar cost per sq. ft.:
2,000 sq ft @ $85.90/ sq. ft. finished area $171,800
1,000 sq ft @ $15.00/ sq. ft. unfinished basement $ 15,000
Total $186,800
First time full plan review on $186,000 valuation $422.83
Subsequent homes fees collected @ $1.00/$1,000 of valuation $186.80
Stock Plan Savings: $236.03
2) Affordable Housing Valuations
The Building Safety Journal has currently set the minimum valuation for newly
constructed single family homes at $95.91 per square foot.
In order to assist the affordable housing sector, the City has established a minimum
valuation per square foot for three sizes of homes, (the larger homes usually being more
expensive and not considered “affordable housing”)
Base minimum valuation established on a dollar cost per sq ft, finished floor area, not
including basement and garage
a.) Less than 1600 sq ft, valuation is $75.90/ sq. ft.
b.) 1600 sq ft to 2500 sq ft, $85.90/ sq. ft.
c.) Over 2500 sq ft $95.90/ sq. ft.
Examples of affordable housing savings using City’s lowered sq. ft. valuation:
City valuations Building Journal
valuations
1600 sq ft home $121,440 $153,440
Plan check fee $317.20 $369.20
Base permit fee $658.80 $766.80
Total Fees $976.00 $1136.00
Savings $160.00
2000 sq ft home $171,800 $191,800
Plan check fee $398.45 $430.25
Base permit fee $827.55 $895.05
Total Fees $1226.00 $1325.30
Savings $99.30
Building Review Board Questions
July 2011
General information: Plan review fees and building permit fees are established and based on the project’s
valuation. Valuation is considered the cost to replace a structure “in-kind” including labor, materials and profit.
The City accepts the construction valuations established by the nationally published construction magazine,
Building Safety Journal, which sets a dollar cost per sq. ft. based on the type of construction used (such as steel,
concrete, or wood) and the occupancy of the building (such as office, restaurant or dwelling).
1. What is included in the fee-services costs that are being recouped?
Staff performed an analysis of all services and staff groups associated with Development Review processes.
As a result, a percentage of time spent on fee vs. non-fee services was developed. The corresponding
budget amount was then added to the appropriate fee or no-fee category, forming part of the base amount to
be recovered. Additionally, costs for Management Information Systems’ staff who directly support and/or
provide services to Development Review, equipment, maintenance and licensing/enhancement costs were
also added. Items such as building utilities and maintenance, vehicle replacement, and general
administrative costs for things such general government, finance, legal or similar services were not built
into the costs. The percentage breakdown and other costs that have been included in the calculation include
the following:
2011 Fee Study: Recoverable Costs
• Current Planning – 20%
• Zoning – 50%
• Customer & Admin – 90%
• Building Inspection – 75%
• Plan Review – 90%
• Construction Inspection – 100%
• Engineering Survey Dev. Review – 100%
• Engineering Dev. Review – 35%
• Traffic Dev. Review – 100%
• Light & Power Dev. Review – 100%
• Water Dev. Review – 100%
• Wastewater Dev. Review – 100%
• Stormwater Dev. Review – 100%
• Historic Preservation – 50%
• Green Building Enforcement
• CDNS Hourly Staff
• MIS – Development Tracking
System
• MIS – GIS Services
• Laptop Replacement
• System Enhancement/Licensing
2. What is the current cost recovery?
The current cost recovery based on the costs that have been included as fee services and the
projected revenues that are currently in place to cover these items is approximately 68%.
3. How do we compare to other jurisdictions?
With regard to permit and plan check fees at the current rate, we are lower than all other
jurisdictions. Under the proposed increase, Fort Collins falls in the middle.
Attachment 5
4. What fee tables are other jurisdictions using?
We found that jurisdictions are currently using the following as a basis for their fees:
Entity Fee Table Used
Boulder
Broomfield
Fort Collins
Greeley
Johnstown
Larimer County
Longmont
Louisville
Loveland
Timnath
Windsor
Unique based on ICC 2010 Cost Data
1997
1982
1997
1997
Modified 1994
Unique – higher than 1997
Unique – higher than 1997
1997
1997
Modified 1991
The International Building Codes were implemented in 2000 and no longer included a standard
fee table. Jurisdictions that have moved away from the standard fee tables are now creating their
own unique tables.
Attachment 5
p. 2
Minutes to be approved by the Board at the August 25, 2011 Meeting
FORT COLLINS BUILDING REVIEW BOARD
Regular Meeting – July 28,2011
1:00 p.m.
Chairperson: Alan Cram Phone: 472-1752(H)
Council Liaison: Kelly Ohlson Staff Liaison: Mike Gebo (416-2618)
A regular meeting of the Building Review Board was held on Thursday, July 28, 2011 in the Council
Chambers of the Fort Collins Municipal Building at 300 LaPorte Avenue, Fort Collins, Colorado.
BOARD MEMBERS PRESENT:
Alan Cram
Andrea Dunlap
Brice Miller
Jim Packard
Rick Reider
Jeff Schneider
George Smith
BOARD MEMBERS ABSENT:
None
STAFF MEMBERS PRESENT:
Delynn Coldiron, Customer & Admin. Services Manager
Mike Gebo, Chief Building Official
AGENDA:
1. ROLL CALL
The meeting was called to order.
2. APPROVAL OF MINUTES
A motion was made by Packard to approve the June 30, 2011 minutes as written. The motion was
seconded by Reider.
Vote:
Yeas: Smith, Packard, Schneider, Dunlap and Reider
Nays: None
Abstain: Cram and Miller
3. Fee Study Presentation and Recommendation: Ann Turnquist with the City Manager’s office stated that
she first presented the Fee Study information to the Building Review Board at its May, 2011 meeting.
She added that the information was presented to City Council at a June work session where they reviewed
the fee study proposal and requested that staff return with a formal proposal at their September 6th
meeting. Turnquist stated that there was some additional information provided in the Board’s current
packet, including feedback from the Affordable Housing Board, but that none of the fee rates had been
changed.
ATTACHMENT 6
BRB July 28, 2011, Pg. 2
In response to an earlier request from the Building Review Board, Turnquist explained that staff would be
meeting with the Home Builders Association at their next regular meeting in August. She noted that
today, staff was here to answer any additional questions the Board had on this item and was seeking a
recommendation from the Board for City Council.
A Board member asked if a time frame had been established for re-evaluation of the fee structure. He
added that because fees had not been increased for a long time, the impact to builders would be
significant and that the impacts would be potentially detrimental to the progress of the recovery.
Turnquist stated that City Council has asked staff to periodically review fees and that staff is suggesting
that the review be tied to the budget cycle which occurs every two years.
A Board member asked about the checks and balances that would be in place for future increases.
Turnquist responded that the Budgeting for Outcomes process creates downward pressure on costs.
Departments are asked to identify increases, justify the need, and to implement efficiencies and cuts
where possible to keep costs low. She explained that every individual budget offer is reviewed by a staff
team, boards and commissions, the Budget Lead Team, and by City Council.
A Board member stated that the Green Building Code which will go into effect next year will have an
impact on the cost of building a house. He was concerned about the added impact of a fee increase.
Turnquist stated that if this was the sentiment of the Board, it is valid feedback to provide to City Council.
A Board member asked if the increase being considered will cover the cost to the city of providing
development review services. Turnquist stated that the point of the fee study was to closely tie costs
related to development to the fee, and confirmed that staff felt that the increase would be adequate.
A Board member asked if the proposed fee increase could be phased. Turnquist replied that if the Board
chose to make that recommendation, it would be forwarded to City Council.
Cram made a motion to recommend to City Council that they approve the fee increase and consider
implementing the fees in an incremental or stepped fashion rather than levying them all at once. He also
moved that the fees be reviewed on a more even schedule rather than waiting for several years causing a
significant increase. The motion was seconded by Miller.
Board Discussion:
A Board member asked Turnquist if part of the reason for the fee increase was to be more aligned with
fees charged by other communities. Turnquist stated that the information regarding the relativity of Fort
Collins fees with other communities was provided to City Council to indicate awareness of the market. A
Board member asked if the proposed fee increase accurately reflected the true cost to keep the
organization alive or whether staff was targeting being in the middle of the playing field so the City
looked good in relation to the rest of the communities. Turnquist stated it was a happy coincidence that
Fort Collins fees ended in the middle of the pack but stated that staff did not pick the number that would
put the city in the middle of the market and back into it. She explained that staff analyzed the costs and
then backed into the fees.
There was some discussion on the complications that might arise if the increase were implemented in
steps since another fee review would be required as part of the 2013-2014 budget efforts. As a result, fees
could go up or down, despite an adjustment scheduled for 2012 and possibly also in 2013 as a result of
the current fee study. Turnquist stated that this could be worked out.
There was also discussion that the cost side of the equation seemed heavily dependent upon volume of
work. The question arose as to how volume would impact the individual fees. Turnquist stated that with
the last budget cycle, City Council allowed the Development Review Center to hire additional hourly
employees as volume increased. If volume increases then the fee revenue will also increase, and it gives
BRB July 28, 2011, Pg. 3
the center the opportunity to match the demand with the revenue. According to Turnquist, in that sense,
the Development Review Center is operating more like a business to cover the variable costs, but also
acknowledging that there are some costs that are fixed. Likewise, as has been done over the past few
years, as work has decreased, resource levels and related expenses were reduced. A sustained decrease in
volume would result in lower costs and a possible decrease in fees. There was some feeling that should
volume significantly increase, the building industry should expect fees to decline since this should bring
in revenues in excess of the costs. It was mentioned that there would also be an increase in costs
associated with providing the higher level of service, but that a regular review of the costs and fees would
help ensure that this stayed in check.
There was additional concern expressed about the increases coming with Green Building, as well as the
increase in these fees, and how this would impact low to moderate income homes. Turnquist mentioned
that this item was reviewed by the Affordable Housing Board and, although there was some concern on
their part, they understood the issues the City was facing in this regard, and recommended to City Council
approval of the increase.
A Board member asked if there has been discussion about reviewing the way sales taxes or use taxes are
collected on building permits, especially on alterations, additions and remodels. It was his opinion that if
this process changed, there may be no need to move forward with this fee increase. There was some
discussion regarding City audit processes that are currently in place and the reduction in resources that
have created challenges in this regard. It was noted that Finance staff had the expertise in this area and
would be the ones responsible for forwarding changes in sales tax collection and/or audit processes.
Coldiron was asked to restate the motion. Coldiron stated that the Building Review Board was
recommending adoption of the fee increase using a phased approach of a 50% increase on January 1,
2012 and the remaining 50% increase on January 1, 2013, with the provision that the fees be looked at
regularly, every 2 years, in conjunction with the City’s Budgeting for Outcomes process.
Vote:
Yeas: Cram, Dunlap, Miller, Packard, Reider, Smith
Nays: Schneider
C:\Documents and Settings\sagonzales\Local Settings\Temporary Internet Files\OLK2\work session follow up june 14 Fee Study.doc
City Manager’s Office
300 LaPorte Avenue
PO Box 580
Fort Collins, CO 80522
970.221.6505
970.224.6107 - fax
fcgov.com
MEMORANDUM
TO: Mayor and City Councilmembers
FR: Ann Turnquist, Policy and Project Manager
Steve Dush, Community Development and Neighborhood Services Director
TH: Darin Atteberry, City Manager
DT: June 16, 2011
RE: Work Session Summary – June 14, 2011, Fee Study Recommendations
On June 14, City Council (Weitkunat, Ohlson, Manvel, Poppaw, Horak) and Staff (Turnquist, Dush,
Delynn Coldiron, Mike Gebo) met to review proposed changes to the City’s methodology for calculating
Building Permit and Plan Check Fees.
Staff proposed changing the methodology for calculating fees from a target of 80% of the cost of the
Development Review Center to recovering 100% of fee-related service costs through Building Permit and
Plan Check Fees. Council reviewed comparative data including regional communities, the impact of a fee
increase on different types of construction projects, and discussed the history of previous changes to these
fees. Councilmembers noted that the Council Finance Committee had considered a similar proposal in
2009, but had deferred any action because of the uncertain economic climate at that time.
Councilmembers were supportive of the proposed change and agreed to consider the proposal at First
Reading on August 16. Council also asked for additional information regarding two questions:
1. How is Sales Tax calculated on the Building Permit? Why doesn’t the Development Review
Center collect State Sales Tax and include this information in the comparative data?
Sales and Use Taxes collected at the time of building permit are calculated based on one-half of
the estimated construction cost of the project. This calculation is based on the assumption that
50% of the job will be materials (taxable) and 50% of the job will be for labor (non-taxable).
The City does not collect tax for the State because this tax will be collected at the point of sale,
regardless of where the transaction occurs. The City of Fort Collins wants to ensure that the tax is
collected at the time the building permit is taken out so that if the builder buys materials
somewhere other than within Fort Collins, the local Sales and Use Tax has already been collected
and follow-up with builder is not required to ensure that local taxes have been paid.
2. What services are included in the category of “Non-fee Services?”
• Permits with no fees or that are below the actual cost of the service provided:
No-review residential permits for things such as furnace and water heater
replacements, air-conditioner installations or electrical service changes
Fort Collins Housing Authority Permits
ATTACHMENT 8
• Rental housing and dangerous building inspections and related activities
• Conceptual and Staff Reviews
• Historic Preservation efforts not related to building permit reviews
• Pre-submittal meetings for commercial construction projects
• County Referrals
• Master Plans
• Special projects. Some examples include:
Code updates and contractor training classes
Digital signs
Medical Marijuana Dispensaries
Service Area Requests (SARs)
• Neighborhood Meetings
• Presentations and training classes for PFA and CSU
• Historic Preservation efforts not related to building permit reviews
• Building Review Board, Planning & Zoning Board, Landmark Preservation Commission and
Zoning Board of Appeals prep work and presentations
• Customer service and staff support related to Neighborhood Services
• Proactive enforcement, Stop Work Orders and follow-up
• Updating and creating informational handout sheets
• Processing revisions to utility plans (no fee to encourage them to keep plans updated and
correct)
Staff looks forward to bringing this item forward for Council’s formal consideration on August 16.
ATTACHMENT 9
ATTACHMENT 10
Attachment 11
1
1
2011 Fee Study
Implementation
September 6, 2011
2
Issue: Building Permit and Plan Check
Fees
• Fee Formula not changed since 1982 (1982 UBC)
• Finance Committee reviewed proposed change in
2009—Deferred action because of economic
conditions
• Finance Committee in March 2011
• Council Work Session June 14
• Community and Board Outreach Summer 2011
ATTACHMENT 11
Attachment 11
2
3
Shift of Philosophy
• Current Goal: recover 80% of total cost of
Development Review Center through fees
• Proposed: Cover 100% of cost of Fee-related
Services
4
Total Cost, $3,357,997
Development
Review Center
and assoc. costs
Non-fee $1,065,333
services/activity
expenses
Fee related $2,292,664
Expenses
Expenses 2011
Expenses less Revenue <$714,098>
<Shortfall>
Total Current Revenue $2,643,899
(all sources)
$1,193,333
Current General Revenue
(G.F., Transp. Fund,
etc.)
Current Fee Revenue $1,450,566
Revenue 2011
Revenue v. Expenses
Attachment 11
3
5
Current: 80% of
Total Cost of
Development
Review Center
Proposed: 100%
of Fee-related
Service Expenses
Total Cost of Development Review Center
$3.358 Million
Current Revenue Gap to
80% Goal
General
Fund
Portion
80% Goal
Current Actual
Cost Recovery
(56%)
Current Revenue Gap
($714,098)
Non-fee
Related
Service
Expenses
100% Revenue goal = $2.3 Million
Cost Recovery Approach Recommended Change
June 2011
6
Permit and Plan Check Fee Comparison
(Single Family Residence - 2,500 square feet with valuation of $300,000)
$1,866.00
$2,725.81
$2,747.88
$2,770.91
$3,487.69
$3,487.69
$3,645.83
$3,752.19
$3,802.15
$4,510.00
$3,190.00
$2,853.56
$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000
Fort Collins-Current
Windsor
Johnstown
Larimer County
Greeley-Zone 3
Fort Collins-Proposed
Broomfield
Loveland
Longmont
Timnath
Boulder
Louisville
Jurisdictions
Amount
Attachment 11
4
7
Permit Fee Comparison
Includes: Permit, Plan Check, Sales & Use Tax, Non-Utility and Utility Capital Expansion
Fees
(Single Family Residence - 2,500 square feet with valuation of $300,000)
$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000
Larimer County
Greeley-Zone 3
Johnstown-Redstone Hills
Longmont
Johnstown-Riverbend
Fort Collins-Current
Timnath-Fairview Village
Fort Collins-Proposed
Windsor
Timnath-Harmony Club
Loveland
Boulder
Louisville
Broomfield
Jurisdictions
Amount
Permit &
Plan
Check
City/Cty
Sales
Tax
Non-
Utility
Cap. Exp
Utility
Cap.
Exp.
Note: Utility and Non-Utility Capital Expansion Fee Estimates from Red Oak study (Fort Collins information updated in accordance with current fee
schedules); Permit and Plan Check fee estimates from current 2011 fee information checks.
8
Impact on Sample Permits
$5,308.10
$5,044.63
$4,971.94
$3,436.49
$1,154.00
$ Change
Mixed-Use $948,629.13 $953,937.23 0.56%
Retail $263,469.32 $268,513.95 1.91%
Commercial Office $123,878.89 $128,850.83 4.01%
Industrial Warehouse $79,420.73 $82,857.22 4.33%
$17,679.90 $18,833.90 6.53%
Single Family
Residence
%
Change
100% Services
Recoup
2011
Permit Type Current
Attachment 11
5
9
2011 Fee Study: Single-Single -Family
$17,679.90 $18,833.90 $19,178.89
Single-Family Detached Residence
(Value: $214K; Sq. Ft.: 2,068; DUs: 1)
12% 12% 12%
51% 48% 47%
28% 27% 26%
6% 9% 10%
3% 4%
5%
$0.00
$3,000.00
$6,000.00
$9,000.00
$12,000.00
$15,000.00
$18,000.00
$21,000.00
2011: Current Fees
$20.25 Base
100% Recoup for Fee
Services
$25.00 Base
94 UBC Table
(Unmodified)
$25.00 Base
Options
Amounts
Utilities Capital Expansion
Sales/Use Tax (City and County) Permit Fee
Plan Check Fee
10
Resolution
• City Manager is authorized by code to set
administrative fees
• Resolution by Council:
– reaffirms the procedures and standards for
administrative adoption of these fees
– endorses formula/methodology for calculating
RESOLUTION 2011-082
OF THE COUNCIL OF THE CITY OF FORT COLLINS
CLARIFYING THE BASIS FOR THE SETTING OF
DEVELOPMENT REVIEW AND BUILDING PERMIT FEES
WHEREAS, in the past the City Council has acted by resolution to establish a process for
establishing and implementing various types of fees, including capital improvement expansion fees,
user fees, permit fees, and others; and
WHEREAS, more specifically, the City Council in 2006 adopted Resolution 2006-113,
providing a process for implementing City fee increases, and then earlier this year adopted
Resolution 2011-013, staying the application of Resolution 2006-113, pending further action to
clarify its intent and scope; and
WHEREAS, pursuant to Article I of Chapter 7.5 of the City Code, the City Manager is
empowered to establish fees for administrative services and City facilities, based upon the cost of
providing the related service or facility; and
WHEREAS, City Code Section 7.5-2 allows the City Manager to determine the extent to
which fees will be set to recover costs based on the nature of the facilities or services, the nature and
extent of the benefit to the feepayers, the level of demand for a particular service or facility, and ease
of collection; and
WHEREAS, that provision further authorizes the City Manager to structure administrative
fees so as to make distinctions among feepayers, in terms of the amounts to be paid by such
feepayers for the use of a particular service or facility, provided that any such distinctions are
reasonably related to a legitimate municipal purpose; and
WHEREAS, Section 2.2.3(D) of the Land Use Code authorizes the City Manager to set
development review fees, and requires that such fees be based upon the costs of providing
development review; and
WHEREAS, staff has conducted a thorough review of the costs associated with providing
development and building review services (“Building Permit and Plan Check Fees”), along with the
cost-recovery performance resulting from the fees that have been in effect for those services; and
WHEREAS, at the City Council’s June 14, 2011, Work Session, the Council reviewed the
results of staff’s analysis, and considered the options for changing the cost-recovery approach on
which Building Permit and Plan Check Fees are based; and
WHEREAS, based on staff’s new and rigorous accounting for the costs of processing
building permit applications, including plan checking, the City Manager has proposed administrative
Building Permit and Plan Check Fees that would recover all direct costs of those services as
authorized under the existing Code provisions; and
WHEREAS, the City Council intends that the fee provisions of Chapter 7.5 of the City Code
and 2.2.3(D) of the Land Use Code govern the setting of administrative and other fees as described
therein, and consequently seeks to clarify in this Resolution that resolutions previously adopted
establishing standards or providing direction with respect to the setting of fees addressed in Chapter
7.5, and specifically Resolution 2006-113 and Resolution 2011-013, are no longer in effect.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That the City Council hereby reaffirms the procedures and standards for
administrative adoption of Building Permit and Plan Check Fees as described herein, and endorses
the City Manager’s determination that the Building Permit and Plan Check Fees should recover all
related direct costs.
Section 2. That Resolution 2006-113 and Resolution 2011-013, and such other
resolutions as may dictate the requirements associated with the setting of fees under Chapter 7.5 of
the City Code and Section 2.2.3(D) of the Land Use Code, are hereby declared to be of no further
force or effect.
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 6th
day of September A.D. 2011.
Mayor
ATTEST:
City Clerk
Note: Permit and Plan Check fee estimates from current 2011 fee information checks.
$26,664.50 for the first $10,000,000 plus $1.00 for each
additional $1,000 or fraction thereof.
Take this total times .65.
Use the formula in the column to the left, but
take this total times 1.35
Attachment 2
p. 2