6.7. SR 02-08-1999
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ITEM #6.7.
MEMORANDUM
River TO:
Mayor and City Council
FROM:
Patrick D. Klaers, City Ad~r
February 8, 1999
DATE:
SUBJECT: County Request Regarding City Fees
The county has requested that the city consider a reduction in some of the
fees related to the county jail construction project. Please see the attached
letter dated January 5,1999, from County Administrator Dave Loch. Also
attached is a response to this request from Building Official Cliff Skogstad.
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The county request is really for two different issues. The first issue is
consideration of a reduction in the sewer availability charges (SAC) and
water availability charges (WAC). Additionally this SACIW AC request is
two-part. One for the 52 bed, double bunking project, and the other for the
180 bed jail expansion project. The second issue requested in the county
letter is for a possible reduction in the building permit and plan review fees.
It should be noted that the county jail project is about a $13 million project,
and anything that we can provide them by way of a fee reduction is small in
comparison to the total project... but every little bit helps.
The simplest issue to discuss is the request for a building permit and plan
check fee reduction. The building official's memo provides information about
the city performing this work instead of state. I don't believe that the state
government would provide the county with any discount, simply because it is
a county project. Cliffs memo also notes the high level of service that the city
is providing the county with this project, versus the level of service the
county could expect from the state. Finally, Cliffs memo legitimately
comments on his concern over consistency in the fees which the city charges.
I agree with the building official's position for no change in the permit or fees
and also with having the county's building permit charges being bases on the
fees that were in place at the date of the January 5, 1999, county letter.
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It is much more complicated to discuss the SAC and WAC issue. I would like
to first note that at the beginning of the third paragraph of the county's
letter, it states that the sewer access charges have increased in the last year.
This is not correct. The WAC increased, but the SAC did not. Next, I would
like to indicate that the city has adopted and follows the Metropolitan Waste
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 . TDD & Phone: (612) 441-7420. Fax: (612) 441-7425
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Control Commission (MWCC) formula in determining SAC and WAC units.
The city did this in order to remain consistent with most metropolitan
municipalities, and to remain consistent with how we treat all building
permits within the city. For your information, a single family house is one
unit, and all other buildings have units assigned based on a formula and
various perimeters established by MWCC. SAC and WAC fees are collected
as a buy in to the existing sy'stems.
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One of the reasons that the city changed the motel SACIWAC units was
based on economic development concerns. Motel room availability is one of
the most frequently asked questions to the director of economic development
when he is "courting" new businesses and industries. The director of
economic development and the EDA came to believe that the only way to
attract additional quality motel rooms into Elk River was to provide a
reduction in SACIW AC fees. Accordingly, last summer the reduction was
approved. The City Council has had similar discussions regarding restaurant
SACIW AC fees, and in the past has offered to allow restaurants to pay their
fees over time. Additionally, a special central business district restaurant
SACIW AC rate has been considered based on downtown economic
development concerns. Providing the county jail a reduction in SACIW AC
fees would not be done for the same type of economic development reasons.
Nonetheless, being the county seat and having major county facilities in Elk
River is definitely a positive economic development factor for the city.
Comparing jails to motels and to apartments is difficult because apartments
and motels pay an extra SACIWAC fee for kitchen and laundry areas,
whereas jails do not. Another factor to consider is vacancy rates, and in this
regard it is believed that motels have a much higher vacancy rate than
apartments or the jail. Finally, it has to be noted that each 2 ~ beds at the
jail is considered one unit, and 2 ~ beds are more than what is typically
found in a motel room.
Staff discussed this county issue last summer when the motel was given a
reduced SACIW AC rate. At that time, (and still today), staff felt comfortable
in recommending apartment status for the county jail facility. By this, I
mean that 2 ~ beds will equal .8 SACIW AC units. Additionally, this issue
was discussed last August prior to the permit being issued in September.
Therefore, it is recommended that this .8 status apply to the 52 unit, double
bunking project. Assuming the Utilities Commission agrees, the savings to
the county for the 52 bed and the 180 bed projects would amount to 18.56
units, which translates into $49,184 in savings between the city SAC and
utilities WAC fees.
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Recommendation
It is recommended that the City Council approve 2.5 jail beds being at a .8
SACIW AC unit rate, and this fee apply to the 52 bed, double bunking project
(September 1998 permit), and the upcoming 180 bed jail expansion project.
It is recommended that no reduction in building permit and plan check fees
be provided to the county, but that their building permit fee be at the
January 5, 1999, rate.
SEPT 1998
52 Beds
SAC($1300)
current 2.5 beds = 1 unit
recommended 2.5 beds = .8 units
requested 2.5 beds = .5 units
$27,040
$21,630
$13,520
WAC($1350)
current 2.5 beds = 1 unit
recommended 2.5 beds = .8 units
requested 2.5 beds = .5 units
$28,080
$22,464
$14,040
TOTALS: CURRENT RATE
RECOMMENDED RATE
REQUESTED RATE
$245,920
$196,734
$122,960
SPRING 1999
180 Beds
$93,600
$74,880
$45,800
$97,200
$77,760
$48,600
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MEMORANDUM
River TO:
DATE:
Pat Klaers, City Administrator () 0
Cliff Skogstad, Building Official G6
January 21, 1999
FROM:
SUBJECT:
Unit SAC Charge to Sherburne County
In response to County Administrator, David Loch's letter dated January 15, 1999, I wish
at this time to comment on the following two areas in his letter.
1. Sherburne County is requesting that the SAC unit charge be lowered to .5.
2. The County is requesting a reduction in the building permit plan review fee for
phase two of the project.
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In regards to the first item, I would like to give a little background as to why we reduced
the hotels from one unit to .5. When the Country Inn Hotel filled out their building
permit application, they requested that our sac units be lowered from 1 unit to .5.
Staffhas always felt that with using the Metropolitan Waste Councils formula for
determining sac units that we were consistent with most metropolitan areas. However,
with further research into comparable sac charges using the MWCC, staff found that
hotels would be closer to an apartment at .8. However, since hotels do not have kitchen
facilities a.8 unit would not be an appropriate sac charge. If this hotel would have a
commercial kitchen or laundry, these areas would be charged separately. Staff felt that
since these were an additional charge that a .5 unit charge would be appropriate for a
hotel.
When comparing the County Jail to a hotel, stafflooked at the use of the two and found
that ajail being charged 1 unit for every 2 ~ beds, and not charging for their commercial
kitchen or laundry, the jail would be more comparable to an apartment building. Keep in
mind that an apartment building would be charged a full 1 unit if they had a washer and
dryer in their units. Staff recommends .8 units per 2-112 beds to be comparable with
other facilities.
Item number two regarding the permit pricing:
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The City of Elk River has contracted with the State of Minnesota for doing facilities such
as jails, schools, etc. If this contract was not signed, the State of Minnesota would be
doing the inspections and plan reviews and therefore the County would not receive a
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330. TDD & Phone: (612) 441-7420. Fax: (612) 441-7425
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discount their permits. With the City doing the permit applications, the County is
receiving a higher level of service for inspections such as staff attending all of the
construction meetings and doing additional inspections when warranted. Also, if
decisions have to be made for code interpretation they can contact me daily instead of
waiting for a response from the State Building Code Division.
To my knowledge, the City of Elk River has never issued a permit and lessened the price.
Staff has always felt that this permit should be consistent to everyone. If this permit is
lowered, the repercussions would be everyone who has built or is going to build would
want a reduction on their permit price. However, with the expansion of this new facility
and since I am doing the plan review at this time, we could go under 1994 Table lA
instead of using the 1997 Uniform Building Code Table lA. This would save the
County approximately 11 % on their permit price and would allow us to be consistent
with other building applications that have and will be processed.
If you have any questions or concerns regarding my findings, please call me at 441-4903.
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