Memorandum

City of Lawrence

Planning & Development Services

 

TO:

David L. Corliss, City Manager

 

FROM:

Barry Walthall, Building Safety Manager

 

C:

 

Scott McCullough, Planning and Development Services Director

Date:

September 6, 2012

 

RE:

Building Permit Fees and Multi-Family Dwelling Permit Totals

 

 

Inquiries regarding Permit Fees and Multi-Family Dwelling Permit Statistics

At the August 21, 2012 City Commission meeting Commissioner Carter asked the following questions related to apparent discrepancies in permit fees and multi-family dwelling permit unit count totals:

 

  1. The YTD Total Valuation and the YTD Permit Fees do not seem to align, i.e., 2008 had higher Total Valuation but a lower number of fees were collected compared to 2012.  What inputs are used for this calculation?

 

  1. Are the YTD permit numbers and unit count numbers for Multi-Family correct given the number of apartment projects recently and currently under construction?

 

Question #1 Response

Severable variables can affect the relationship between total valuation and permit fees, including waived fees, changes to the fee schedule over time, and the numbers and types of permits issued.

 

Permit fees are assessed in accordance with the Permit Fee Schedule found in Section 5-176 of the City Code, a copy of which is attached.  The calculation is based on the Total Valuation of a construction project.  Sample calculations for projects valued at $10,000 and $100,000 are as follows:

 

 

Total Valuation = $10,000

Permit Fee = $69.25 for the first $2,000 + $14.00 for each additional $1,000 or fraction thereof

Permit Fee = $69.25 + ($14.00 * ($10,000 - $2,000)) = $181.25

 

Total Valuation = $100,000

Permit Fee = $643.75 for the first $50,000 plus $7.00 for each additional $1,000 or fraction thereof

Permit Fee = $643.75 + ($7.00 * ($100,000 - $50,000)) = $993.75

 

The values for all projects are included in the report, as are all permit fees.  Fees are not assessed for City projects, or for affordable housing projects for which the City waives fees to provide matching contributions for grant funds received under the Home Investment Partnerships Program (HOME).  Through June 2012, seven permits have been issued for City projects for which fees in the amount of $13,358 were not assessed, and nine HOME projects for which fees in the amount of $9,800 were waived.  So in any given month, total valuations can appear high even if permit fees were not collected for the projects.

 

A review of permits issued in April of 2008 compared to permits issued in April 2012 provides good insight into variables that can affect the ratio of permit fees compared to valuation.  The total valuation for permits issued in April 2008 was $19,402,345, resulting in permit fees assessed of $77,670; compared to $19,791,910 and $119,012 in April of 2012.  Despite similar total valuation there was a significant difference in fees assessed.  One factor for the difference in fees was the lower fee schedule in effect in 2008.  The permit fee schedule was temporarily lowered for 2008 to 95% of the 2007 fee schedule.  The fee schedule returned to the 2007 rate on January 1, 2009 and has remained unchanged since.  Factoring in the increased fee rate, April 2008 permit fees would have been $81,758.  The following table illustrates these figures as well as YTD totals through June of 2008 and 2012:

 

Month/Year

Total Valuation

Total Fees

Adjusted Fees

(2012 Rate)

April 2008

$19,402,345

$77,670

$81,758

April 2012

$19,791,910

$119,012

N/A

YTD through June, 2008

$70,275,628

$351,791

$370,305

YTD through June, 2012

$50,184,985

$373,236

N/A

 

The reason for the remaining differences has mostly to do with the number and nature of the permits issued.  For instance, the work for the one permit issued for the Wal-Mart project at 550 Congressional Lane in April 2008 was valued at $9,500,000.  This resulted in permit fees of $23,651.  In April 2012, the work for the 21 permits issued for the Westfield Place Apartments was valued at $8,325,652, resulting in permit fees ranging from $1,592.95 to $3,566.25 that totaled $55,286.  Although the total value of work for the apartment project was lower, the number of permits issued resulted in higher fees because of the base permit fee assessed for each individual permit.  Factoring out these two projects the relationships between valuation and fees is much more closely aligned.  This is summarized in the table below:

 

 

# of Permits

Total Permit Valuation

Total Permit Fees

Adjusted Fees (2012 Rate)

Wal-Mart

 April 2008

1

$9,500,000

$23,651

$24,895

Westfield Place Apts

April 2012

21

$8,325,652

$55,286

N/A

All Other Projects

April 2008

188

$9,902,345

$54,019

$56,862

All Other Projects April 2012

215

$11,465,258

$63,726

N/A

 

Review of the June 2012 permit fee statistics revealed an error in the amount of fees reported.  Fees collected for planting street trees for new single-family dwellings were inadvertently included in the report as permit fees.  An error in the use of Innoprise, the department’s new permit tracking software, was the cause of the discrepancy, and procedures have been adjusted to eliminate the error.  Actual permit fees for June were $71,825.30, bringing the YTD total fees to $373,236.55.  The result is a reduction to both totals of $3,995.  Revised permit reports and summary for June are attached.

 

Question #2 Response

Since the monthly building reports track YTD data, many of the units recently and currently under construction are not yet reflected in the reports submitted for Commission review.  For example, during the months of July through December of years 2008 through 2011, 801 units were permitted for Multi-Family projects.  These units will be reflected in the monthly building permit reports as these months are captured in 2012 and will be reported to the Commission.

 

The annual statistics reflecting the number of Multi-Family units for which permits have been issued is summarized in the table below.  The number of One- and Two-Family units for which permits were issued is included for comparison.  The 2012 totals are through June.

 

Year

# of Multi-Family Permits

# of Multi-Family Units

# of One- & Two-Family Units

2008

27

557

126

2009

15

172

142

2010

7

275

166

2011

19

363

103

2012 (through June)

22

184

67

Total

 

1,551

604

 

The five largest projects, by number of units, since 2008 have been:

 

Rank

Address

# of Units

Issue Date

1

3150 Ousdahl Rd

324

August 2008

2

550 Stoneridge Dr

300

September 2011

3

4000 W 24th Pl

226

October 2008

4

4301 W 24th Pl

172

March 2009

5

204 Eisenhower Dr

131

April 2012

 

Reported statistics for multi-family dwelling units for which permits have been issued through June 2012 require correction.  The April permit report incorrectly stated that permits were issued for 306 apartment units.  The actual number of units for which permits were issued is 184.  This includes 21 apartment buildings with 131 units at 204 Eisenhower Drive, and 1 building with 53 units at 1043 Indiana Street.  All other information contained in the report related to these apartment permits is correct, including number of permits, valuation, and fees. 

 

The reported statistics for multi-family dwelling units issued in 2010 also require correction.  The permit issued for the mixed use building at 901 New Hampshire was reported as a new business on the October 2010 permit report.  The report did not capture the 55 apartment units constructed, which brings the total number of units for the year to 275.  Revised permit reports for April 2012 and October 2010 reflecting these adjustments are attached.