4.5. SR 02-16-1999
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ITEM 4.5.
MEMORANDUM
River TO:
Mayor and City Council
FROM:
J oni Pearson, Admin. Secretary
DATE:
February 16, 1999
SUBJECT: County Request Regarding City Fees
Due to the fact that there was no county representation in attendance at the
2/8/99 City Council meeting, council moved to postpone the county's request
regarding city fees to the 2/16/99 meeting. Attached is the memo and back-
up that was prepared for the 2/8/99 City Council meeting.
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13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330. TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425
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ITEM #6.7.
MEMORANDUM
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 SAC/W 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 systems.
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One of the reasons that the city changed the motel SAC/W AC 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 SAC/W AC fees. Accordingly, last summer the reduction was
approved. The City Council has had similar discussions regarding restaurant
SAC/W AC fees, and in the past has offered to allow restaurants to pay their
fees over time. Additionally, a special central business district restaurant
SAC/W AC rate has been considered based on downtown economic
development concerns. Providing the county jail a reduction in SAC/W 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.
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Comparing jails to motels and to apartments is difficult because apartments
and motels pay an extra SAC/W AC 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 Y:l beds at the
jail is considered one unit, and 2 Y:l 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 SAC/W 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 Y:l beds will equal .8 SAC/W 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 ur;it, 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
SAC/W 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
W AC($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
JAri Z Q 1~.2~
Patrick Klaers
City Administrator
City of Elk River
13065 Orono Road
Elk River, MN 55330
Sherburne County
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January 15, 1999
A DAfINISTRA TOR
DA VID LOCH
Dear Pat,
13880 Highway 10
Elk River, MN 55330-4601
(612) 241-2701 0 1-800-433-5229
website: www.co.sherburne.mn.us
I am writing this letter to formally request the City of Elk River to reduce the SAC and WAC
charges for the current Jail Expansion (double bunking) Project in our new jail and for the Phase
II Jail Expansion Project which is slated to begin very soon. These are two separate projects.
The City's Municipal Utility billed us $28.080 recently for the doubl~ bunking project an
amount we have not yet paid. We will be seeking the permit for Ph~$e II within the next several
months. This project contemplates construction of a 180 bed jail for the boarding of pre-
adjudicated prisoners for the US Marshall's Office. The project budget is approximately
$11,236,015, construction alone; total budget for Phase II is $13,265,959. We are attempting to
hold at this level, but from past experience;, bids could come in considerably higher.
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The electrical service and cOlmection fees, sewer access charges, water cOlmection charges and
permits, building permit, building permit surcharge and plan review fees tor the Pha~e ! prqject
have amounted to $138,777.29. 'JIt'e will also pay an assessment of $169,494.96 to the City for
the construction of the service drive. We requested the service drive connection for safety
reasons, ease or access onto TH 10 and fire hydrant service required by the Fir~ Chief The total
we will have paid for this project is $336,352.25.
Since our original permit in 1997, sewer access charges have increased from $1,200 per unit in
1997 to$I,350 per unit in 1998. A short while ago, the City agreed to reduce the SACand WAC
charges for the Country Inn Hotd from 1.0 per unit to .5 per unit We are requesting
consideration for the same accommodation. The rational for the reduction of the per unit fee for
the hotel should apply to our multi-unit housing facility. Please note that we are asking for this
consideration for both the double bunking of the Phase I jail and the 180 bed addition of the
Phase II jail. We also respectfully request a reduction in the building permit and plan review fees
for Phase II in order to keep the project within budget.
Thank you for consideration of our request
iZ
David Loch
Admiriistrator
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MEMORANDUM
FROM:
Pat Klaers, City Administrator () 0
Cliff Skogstad, Building Official ~
January 21, 1999
DATE:
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 a jail being charged 1 unit for every 2 Y2 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 2-1/2 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.
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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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