Memorandum
City of Lawrence
Planning & Development Services
|
TO: |
Thomas M. Markus, City Manager |
|
FROM: |
Scott McCullough, Director Planning & Development Services |
|
CC: |
Diane Stoddard, Assistant City Manager Casey Toomay, Assistant City Manager |
|
Date: |
March 22, 2017 |
|
RE: |
Rental Licensing and Inspection Program Annual Report – 2016 Program Year |
The city-wide rental licensing and inspection program became effective on July 1, 2014. In 2016, Staff provided the first full year annual report (for 2015) that contained program highlights, a summary of program revenues and expenditures, and various performance measure tables.
The 2016 Annual Report provides statistical highlights, an analysis of program revenues and expenditures, and performance measure tables for 2016 and for 2016 compared to prior years of the program. These performance measures continue to assist Staff in identifying program effectiveness and workloads.
Highlights of the 2016 Program
· As of December 31, 2016, there were 6,128 rental licenses in good standing for 18,890 total dwelling units.
· In 2015, Staff completed 975 initial inspections and 531 re-inspections for a total of 1,506 inspections. In 2016, those numbers increased to 1,161 initial inspections and 812 re-inspections for a total of 1,973 inspections.
· In 2016, 2,173 violations were identified during rental inspections, with deficient smoke alarms and GFCI receptacles being the most common.
· In 2016, 32% of all rental units inspected had a Property Maintenance Code (PMC) case associated with them (347 PMC cases were initiated).
· In 2016, 28 cases were sent to prosecution.
· In 2016, one (1) tenant refused consent and an administrative search warrant was executed to complete the required inspection.
· In 2016, four instances of potentially dangerous natural gas leaks were detected during an inspection by inspectors, resulting in calls to Black Hills Energy and immediate resolution of the leaks.
· The numbers of units inspected in 2016 that qualified for the 6 year inspection incentive cycle was 95% compared to 92% in 2015.
Program Revenues and Program Expenditures
As identified in the table below, staff collected $352,400 in fees during 2016 (annual license fees/inspection fees), an increase of $26,506 (8.13%) from 2015. Staff issued 519 new licenses in 2016, with the majority of these licenses issued for properties that were identified by Staff in their continual efforts to identify unlicensed properties.
|
Program Revenues vs. Expenditures (2015 vs. 2016) |
2015 |
2016 |
|
|
|
|||
|
Program Revenues (License and Inspection Fees) |
325,894 |
352,400 |
|
|
|
|||
|
Program Expenditures |
|
|
|
|
Total Compensation for Staff Dedicated Solely to Rental Program (Gross Wages, Employer Paid Benefits & Health Insurance) |
|
||
|
Administrative Staff (2) |
108,553 |
113,144 |
|
|
Administrative Staff (part-time) |
16,256 |
[1]24,051 |
|
|
Rental Inspectors (2) |
134,077 |
[2]115,340 |
|
|
Field Supervisor (1) |
81,558 |
82,178 |
|
|
|
|||
|
Sub Total |
340,444 |
334,713 |
|
|
Total Compensation for Support Staff for the Program (Gross Wages, Employer Paid Benefits & Health Insurance) |
|
||
|
Code Enforcement Manager (50%) |
57,829 |
59,000 |
|
|
Assistant Director - Development Services (10%) |
11,225 |
11,400 |
|
|
Assistant Director - Planning (10%) |
11,186 |
11,239 |
|
|
Business Systems Analyst (10%) reduced from 15% in 2015 |
12,835 |
9,394 |
|
|
Director - PDS (5%) |
8,801 |
8,998 |
|
|
|
|||
|
Sub Total |
101,876 |
100,031 |
|
|
Annual Non-Personnel Operating Costs |
|
||
|
Printing, Marketing and Advertising(Return Envelopes/Postcards) |
5,450 |
0 |
|
|
Office Supplies and Apparel |
860 |
423 |
|
|
Vehicle Charges and Maintenance/Repair |
1,655 |
1,951 |
|
|
Vehicle Fuel |
1,075 |
1,017 |
|
|
Recruitment, Education and Subscriptions |
0 |
0 |
|
|
Utilities/data plans (Electric, Phone, I-pad) and Janitorial Services |
2,271 |
4,690 |
|
|
Computers, Printers and Software |
0 |
0 |
|
|
|
|||
|
Sub Total |
11,311 |
8,081 |
|
|
Total |
453,631 |
[3]442,825 |
Additionally, personnel expenditures will decrease in 2017 due to the elimination of one inspector position, which is discussed in detail below. For these reasons, it is anticipated the financial disparity between expenditures and revenues will decrease in 2017.
Personnel Summary
During 2016, Staff continued to review current and projected workloads of rental program inspection and administrative support staff. As a result, it was determined that the rental inspector position that became vacant in July 2016 would not be filled. This decision was made after a thorough analysis of the number of inspections completed in 2016 year-to-date, the projected number of inspections to be completed for the remainder of 2016, and the anticipated inspection workload for 2017.
Because the vacant inspector position will not be filled in 2017, the program’s personnel expenditures will decrease by an estimated additional $30,000 during 2017 from 2016. This rental inspector position will remain vacant throughout 2017 and beyond since inspections are not expected to increase due to the elevated percentage (92%-95%) of property owners that have received the incentive inspection cycle of a six year schedule vs. a three-year inspection cycle since the inception of the expanded program.
Program Initiatives and Enhancements
In 2016, Staff continued to make minor modifications to the rental website, performance measures, internal policies and processes. These modifications continued to help shape a more efficient program and one that focused on creating additional user friendly procedures for property owners, property resident agents and tenants without creating a negative impact to the overall objectives of the program. A noteworthy initiative in 2016 was the effort to identify and license previously unlicensed units which contributed to the increase in license and inspection fees collected in 2016. Staff will continue with this initiative throughout 2017.
The following tables identify statistical highlights for licensing and inspections.
Annual Rental License Summary Data
*The number of “Total Licenses Issued (at end of the year)” and “Total Units Licensed (at end of year)” in this report are different than the total number of “Active Licenses - New” and “Total Units” reported on the December 2014 and December 2015 monthly reports. This is because monthly reports have reflected license “Status” at a single point in time (the last day of the month). Since licenses frequently change, from “Issued” status to other statuses after issuance (such as to “NOV to Inspect”, “Probation” or “Prosecution”) or vice versa, the monthly point in time reports do not reflect a running total of new licenses issued in the Total column for each monthly report. This year-end report reflects the cumulative total of all licenses issued under the program thru 2016.
**This figure is not 100% because the data is captured at a point in time and there will be outstanding re-inspections not accounted for in this figure.
Other Program Statistical Data
The fees collected at the end of 2015 and 2016 differ slightly then the totals when adding up the monthly reports. This difference is primarily due to refunds being given in a different month than when the money was taken in. The above report is the most accurate.
As in 2015, smoke alarms and GFCI receptacles continued to be the top two cited code violations in 2016.
Top PMC violations generated from a Rental Inspection – Year-end 2016
As in 2015, dead bolt locks were the most cited violation of the PMC in 2016. Insect screen violations and plumbing fixture violations remained common violations.
Conclusion
The second full year of the expanded program continued to provide valuable data in regards to the revenues generated by the annual licensing and inspection fees compared to the expenditures. In regards to this data, staff’s forecast in the 2015 report that an increase in revenues was likely in 2016 came to fruition as the end-year financial report confirmed there was an 8.13% increase in revenues.
Staff estimates these revenues should remain comparatively stable or increase in 2017 due to the completion of numerous multi-family construction projects combined with Staff’s efforts in continuing to identify existing unlicensed units. In addition, compensation and benefit reductions related to the elimination of the one inspector position will assist in reducing the disparity between the revenues and expenditures totals that was identified in this year’s report and that may continue to occur in 2017. While the program will most likely never be cost-neutral due to the annual potential fluctuation on either side of the continuum, it is a goal of Staff that the program’s revenues vs. expenditures are reviewed annually to ensure the program is operating in a fiscal responsible manner not only to the City of Lawrence but to the stakeholders who are licensed and inspected per the program’s regulations.
It is Staff’s opinion that the information provided in this report continues to support the program’s purpose which is to systematically create safe, code compliant rental housing stock in our city by regulating the minimum code requirements established within the ordinance and the PMC by requiring a sampling (10%) of a property owner’s rental portfolio to be inspected on a periodic schedule. In support of this purpose; Staff completed 1,161 initial inspections in 2016 that resulted in 2,173 violations cited with another 347 cases opened for violations of the PMC.
In closing, Staff looks forward to another productive year in 2017. Staff believes the program since its inception on July 1, 2014, continues to yield valuable, measurable and positive statistical data that clearly demonstrates the program has a valued and important purpose in the community.