Loading...
HomeMy WebLinkAbout5. Presentation of Springsted Study on Building Permit, Development, and Engineering Fees L':;.~ - CITY OF SHAKOPEE Actual 2005 Building and Construction Fees Revenues and Expenses ACTUAL 2005 Current! 2005 Actual Frequency Average Fee Revenue Building Permit - Basement Finish 237 199.45 47,270.25 Building Permit - Commercial/Industrial (Heavy) - Additions - - - Building Permit - Commercial/Industrial (Heavy) - Alterations/Remodel 5 22,558.75 Building Permit - Commercialllndustrial (Heavy) - New Construction 3 4,040.75 Building Permit - Commercial/Industrial (Heavy) - Reroof 3 240.92 Building Permit - Commercialllndustrial (Heavy) - Siding - - - Building Permit - Commercial/Industrial (Light) - Additions - - - Building Permit - Commercial/Industrial (Light) - Alterations/Remodel 43 2,017.18 Building Permit - Commercial/Industrial (light) - New Construction 33 3,361.66 Building Permit - Commercial/Industrial (Light) - Reroof 3 791.57 Building Permit - Commercial/Industrial (Light) - Siding - - - Building Permit - Deck 293 118.73 34,788.25 Building Permit - Demolition Permit (Razing) 11 239.36 2,633.00 Building Permit - Duplex 4 1,619.25 6,477.00 Building Permit - Fences 2 79.50 159.00 Building Permit - Garages/Accessory Buildings 25 287.94 7,198.50 Building Permit - Grading/Foundation 2 3,494.25 6,988.50 Building Permit - Institutional/Education - Additions - - - Building Permit - Institutional/Education - Alterations/Remodel 2 649.25 Building Permit - Institutional/Education - New Construction 1 123,956.75 Building Permit - Institutional/Education - Reroof 1 423.75 Building Permit - Institutional/Education - Siding - - - Building Permit - Miscellaneous - - - Building Permit - Moving - - - Building Permit - Multifamily Units - Per Unit 120 474.93 Building Permit - Other 56 444.09 Page 1 Prepared by: Springsted Incorporated 6/7/2006 CITY OF SHAKOPEE Actual 2005 Building and Construction Fees Revenues and Expenses ACTUAL 2005 Currentl 2005 Actual Frequency Average Fee Revenue Building Permit - Pools 16 491.67 7,866.75 Building Permit - Porch (3-Season) 27 265.81 7,176.75 Building Permit - ReRoof - Residential 129 64.71 8,347.68 Building Permit - Res/Old System - - - Building Permit - Single Family Units - Septic (Sq. Ft. < 4000) 6 2,980.50 17,883.00 Building Permit - Single Family Units - Septic (Sq. Ft. > 4,000) 2 3,644.25 7,288.50 Building Permit - Single Family Units - Sewered (Sq. Ft. < 4,000) 327 2,077.18 679,237.53 . Building Permit - Single Family Units - Sewered (Sq. Ft. > 4,000) 15 2,502.18 37,532.64 Building Permit - Townhouse Units - Per Unit 194 1,308.69 253,886.24 Building Permit - Window Replacement 49 110.60 5,419.25 Fire Permit - Fire Alarm System 21 160.41 3,368.70 Fire Permit - Fire Suppression/Sprinkler System 73 323.02 23,580.11 PERMIT FEES 1,703 1,690,328.02 Plan Review - Building - Basement Finish 237 23.39 5,544.48 Plan Review - Building - Commercial/lndustrial (Heavy) - Additions - - - Plan Review - Building - Commercial/Industrial (Heavy) - Alterations/Remodel 5 14,663.19 73,315.95 Plan Review - Building - Commercial/Industrial (Heavy) - New Construction 3 2,626.49 7,879.47 Plan Review - Building - Commercial/Industrial (Light) - Additions - - - Plan Review - Building - Commercial/Industrial (Light) - Alterations/Remodel 43 1,295.17 55,692.39 Plan Review - Building - Commercial/Industrial (Light) - New Construction 33 2,185.09 72,107.92 Plan Review - Building - Deck 293 23.44 6,869.11 Page 2 Prepared by: Springsted Incorporated 6/7/2006 c '- " " - CITY OF SHAKOPEE Actual 2005 Building and Construction Fees Revenues and Expenses ACTUAL 2005 Current! 2005 Actual Frequency Average Fee Revenue Plan Review - Building - Duplex 4 766.16 Plan Review - Building - Garages/Accessory Buildings 25 22.27 Plan Review - Building - Institutional/Education - Additions - - - Plan Review - Building - Institutional/Education - Alterations/Remodel 2 422.01 Plan Review - Building - Institutional/Education - New Construction - - - Plan Review - Building - Miscellaneous - - - Plan Review - Building - Multifamily Units - Per Unit 120 163.85 19,661.41 Plan Review - Building - Other 56 139.22 7,796.59' Plan Review - Building - Pools 16 23.50 376.00 Plan Review - Building - Porch 27 34.15 921.96 Plan Review - Building - Single Family Units - Septic (Sq. Ft. < 4,000) 6 1,937.33 Plan Review - Building - Single Family Units - Septic (Sq. Ft. > 4,000) 2 2,368.77 Plan Review - Building - Single Family Units - Sewered (Sq. Ft. < 4,000) 327 927.91 Plan Review - Building - Single Family Units - Sewered (Sq. Ft. > 4,000) 15 1,573.75 23,606.21 Plan Review - Building - Townhouse Units - Per Unit 194 362.80 70,383.34 Plan Review - Fire - Fire Alarm System 20 53.73 1,074.68 Plan Review - Fire - Fire Suppression/Sprinkler System 33 68.53 2,261.34 Plan Review - Fire - Flammable/Combustible Liquid Storage 10 139.33 PLAN REVIEW FEES 1,471 Building Permit - Inspection Fee 8 - Electrical Permit 1,342 18.76 Fire Permit - Flammable/Combustible Liquid Storage 10 240.74 HV AC - Mechanical Permit - Commercial/Industrial (Heavy) 6 9,632.01 HVAC - Mechanical Permit - Commercial/Industrial (Light) 72 564.09 Page 3 Prepared by: Springsted Incorporated 6/7/2006 CITY OF SHAKOPEE Actual 2005 Building and Construction Fees Revenues and Expenses ACTUAL 2005 Current! 2005 Actual Frequency Average Fee Revenue HVAC - Mechanical Permit - Fireplace/Woodstove 466 45.00 20,970.00 ' HVAC - Mechanical Permit - Furnace and A/C Replacement 49 45.84 2,246.00 HVAC - Mechanical Permit - Garage Heater 11 - - HV AC - Mechanical Permit - Gas Line 7 45.00 315.00 HV AC - Mechanical Permit - Institutional/Education 2 24,866.33 49,732.65 HV AC - Mechanical Permit - Residential - Central Air Conditioning 42 1.43 60.00 HV AC - Mechanical Permit - Residential - Single Family 807 88.39 71,331.05 Plumbing Permit - Alterations/Replacements/Repairs (Basement Finish) 164 44.73 7,335.00 Plumbing Permit - Commercial/Industrial (Heavy) 6 132.84 797.04 Plumbing Permit - Commercial/Industrial (Light) 65 433.78 28,195.73 Plumbing Permit - Institutional/Education 1 20,876.33 20,876.33 . Plumbing Permit - Lawn Sprinkler 120 44.63 5,355.00 Plumbing Permit - Residential (New Construction) 743 93.49 69,460.50 Plumbing Permit - Water Heater (Replacements Only) 39 2.31 90.00 Plumbing Permit - Water Softener (Replacements Only) 173 15.61 2,700.00 Sewer/Water Permit - Sewer 2 48.15 96.30 Sewer/Water Permit - Sewer and Water 565 69.22 39,109.01 Sewer/Water Permit - Water 3 1,160.30 3,480.90 OTHER FEES-PERMITS AND INSPECTIONS 4,703 448,144.09 TOTAL BUILDING PERMITS AND INSPECTION 7,877 2,811,609.19 GAP Page 4 Prepared by: Springsted Incorporated 6/7/2006 ...c.".. .. CITY OF SHAKOPEE, MINNESOTA Reconciliation from Model to Annual Report 2005 Indirect Allocations (1) Actual 12/31/05 Reallocated General Ledger General Ledger Balance Government Information Balance 12/31/05 Buildings (2) Technology (3) Legal (4) Shop (5) 12/31/05 GENERAL FUND Administration 379,656.30 24,114.47 13,458.15 - - 417,228.92 City Clerk 323,593.74 23,890.97 9,480.52 - - 356,965.23 Community Development 398,185.28 29,701.97 8,972.10 - 1,671.34 438,530.69 Engineering 773,574.14 59,809.77 25,166.75 - 10,028.07 868,578.73 Finance 662,711.29 17,854.79 5,981.40 - - 686,547.48 Fire 1,194,609.72 420.11 7,476.75 - 20,059.60 1,222,566.18 Government Buildings 532,314.12 (245,261.79) - - - 287,052.33 Information Technology 207,853.73 - (207,853.73) - - - Inspections 855,864.31 47,472.74 13,458.15 - 10,028.07 926,823.27 Legal 285,754.14 - - (193,194.69) - 92,559.45 Mayor and Council 70,250.93 35,121.42 1,495.35 - - 106,867.70 Park Maintenance 912,954.61 224.06 3,987.60 - 81,049.80 998,216.07 Police 4,107,360.33 4,159.11 74,019.85 193,194.69 99,621.84 4,478,355.82 Shop 402,364.03 224.06 3,987.60 - (401,237.09) 5,338.60 Street 1,152,924.27 224.06 3,987.60 - 178,778.37 1,335,914.30 Unallocated - - - - - - TOTAL GENERAL FUND 12,259,970.94 (2,044.27) (36,381.88) - (0.00) 12,221,544.77 ECONOMIC DEVELOPMENT AUTHORITY FUND 91,914.13 - - - - 91,914.13 RECREATION FUND 1,888,209.85 1,876.22 33,391.18 - - 1,923,4 77 .25 SANITARY SEWER FUND 2,336,030.74 - - - - 2,336,030.7 4 STORM DRAINAGE FUND 996,916.35 - - - - 996,916.35 TELECOMMUNICATIONS FUND 182,224.48 168.05 2,990.70 - - 185,383.23 TRANSIT FUND 688,535.71 - - - - 688,535.71 18,443,802.20 (0.00) 0.00 - (0.00) 18,443,802.18 Page 1 Prepared by:. Springsted Incorporated 6/7/2006 CITY OF SHAKOPEE, MINNESOTA Reconciliation from Model to Annual Report Actual 12/31/05 (1) Indirect Allocations are those costs that are incurred for a common or joint purpose benefiting more than one service or activity and not readily assignable to the service or activity benefited (i.e., central services, government buildings maintenance, information technology, fleet maintenance, etc.). (2) Government Buildings - Provides for the operation and maintenance of City Hall, the Senior Center and the Library. Costs associated with the departments located in City Hall have been allocated to those departments based on 46.074637 ofthe total expenditures. This amount was spread between the various departments based on personnel count in each department. Remaining balance represents costs associated with the Senior Center and Library. (3) Information Technology - Provides for the operation/maintenancelreplacement of the City's computer systems in City Hall, Police Department, Public Works building, Fire Stations and Recreation. Allocation was based on physical inventory of desktop/laptop units, and major peripherals. (4) Legal- Provides for civil and prosecution services. Allocation of prosecution services to the Police Department based on actual cost. (5) Shop - Provides for the operation/maintenance of the Shop have been allocated based on actual hours logged for each department. Remaining balance represents cost associated with the SPUC which should have revenue to offset the expenditures. NOTE - The City utilizes Internal Service Funds for Buildings and Equipment and then charges back a rental fee to the various buildings and/or departments. Included in these rental charges are depreciation and any related debt. 0 Page 2 Prepared by: Springsted Incorporated 6/7/2006 CITY OF SHAKOPEE, MINNESOTA Building Permit and Inspections - Report Revenues and Expenditures Fee Based Activities. Building Permits and Inspections (1) Actual 12/31/05 Reallocate L t er ees- Balance Plan Review Permits & EXPENDITURES 12/31/05 Permit Fees Fees Inspections Total % of Balanc GENERAL FUND Administration 417,228.92 - 0.00% City Clerk 356,965.23 7,293.04 2,245.99 20,098.30 29,637.33 8.30% Community Development 438,530.69 55,271.91 45,972.95 101,244.86 23.09% Engineering 868,578.73 82,200.15 82,200.15 9.46% Finance 686,547.48 4,920.09 4,721.39 9,641.48 1.40% Fire 1,222,566.18 - 0.00% Government Buildings 287,052.33 - 0.00% Information Technology - - 0.00% Inspections 926,823.27 371,099.65 226,330.12 288,553.62 885,983.39 95.59% Legal 92,559.45 - 0.00% Mayor and Council 106,867.70 - 0.00% Park Maintenance 998,216.07 - 0.00% Police 4,478,355.82 - 0.00% Shop 5,338.60 - 0.00% Street 1,335,914.30 - 0.00% Unallocated - - 0.00% TOTAL GENERAL FUND 12,221,544.77 1,108,707.21 9.07% ECONOMIC DEVELOPMENT AUTHORITY FUND 91,914.13 - 0.00% RECREATION FUND 1,923,477 .25 28,690.42 21,035.12 49,725.54 2.59% SANITARY SEWER FUND 2,336,030.74 - 0.00% STORM DRAINAGE FUND 996,916.35 - 0.00% TELECOMMUNICATIONS FUND 185,383.23 - 0.00% TRANSIT FUND 688,535.71 - 0.00% Total 18,443,802.18 467,275.12 377,784.32 313,373.31 1,158,432.75 6.28% CityWide Overhead (2) 69,904.36 56,516.53 46,880.65 173,301.54 Total Fee Based Activities 537,179.48 434,300.85 360,253.96 1,331,734.29 Line 10 Page 3 Prepared by: Springsted Incorporated 6/7/2006 CITY OF SHAKOPEE, MINNESOTA Building Permit and Inspections - Report Revenues and Expenditures Actual 12131/05 (1) Fee Based Activities are the result of establishment of "benchmark" costs, by department, for each permit type. This process included the definition of all tasks performed in the permitting process by person within each Department. This benchmark cost for each permit type is then multiplied by the number of permits processed during 2005. (2) City Wide Overhead is representative of those underlying costs incurred by support activities that must be undertaken in order forthe direct labor personnel to successfully complete their tasks. This percentage is based on how a person spends their time - overhead activities (human resources, public relations, accounts payable, mayor & council, etc.); department administration, fee based activities (building, development, recreation or other); general departmental activities (street maintenance, comp plan updates, etc). or transfer charges (service provided to funds OTHER than the General Fund). Page 4 Prepared by: Springsted Incorporated 6/7/2006 CITY OF SHAKOPEE, MINNESOTA Building Permit and Inspections - Report Revenues and Expenditures Fee Based Activities. Building Permits and Inspections ActuaI12/31/05 Other Fees - Plan Review Permits & REVENUES Permit Fees Fees Inspections Total . 2005 Fee Revenue Associated With.Building Permits and Inspections Building Permits -101-4251 1,659,321.51 1,659,321.51 Plan Review Fee -101-4259 673,137.38 673,137.38 Plumbing Permits - 101-4261 134,272.00 134,272.00 Mechanical Permits -101-4265 238,966.82 238,966.82 Electrical Permits - 101-4267 (3) 125,637.00 125,637.00 Reduce by 80% payable to Electrical Contractor (100,509.60) (100,509.60) Sewer & Water Permits -101-4272 40,800.87 40,800.87 Fire Inspection Permits -101-4274 33,481.21 33,481.21 Reduced for Fireworks & Display Permits (2,475.00) (2,475.00) Inspections - 101-4275 8,977.00 8,977.00 Revenue Per General Ledger 1,690,327.72 673,137.38 448,144.09 2,811,609.19 - - - - Revenue Per Model 1,690,327.72 673,137.38 448, 144.09 2,811,609.19 Line 6 Line 7 Line 8 Line 9 (3) Electrical permits are collected by the City with all revenues coded to 101-4265, however, the City only retains 80% ofthe fee collected, The costs calculated for the electrical permits represent only the 20% - or the processing charge for this permit type. FEES IN EXCESS OF RELATED EXPENSES AS OF DECEMBER 31, 2005 1,479,874.90 Page 5 Prepared by: Springsted Incorporated 6/7/2006 1[1 1[1 III 1[1 1[1 1[1 . III 1[1 . DRAFT Cost of Services Study City of Shakopee, Minnesota June 1, 2006 Springsted ([I ([I [[I III Table of Contents 1 INTRODUCTION ................................................................................... 2 . Background................................................................................. 3 Purpose...................................................................................... 4 II Annual Reporting Requirements. ..........................,...........................4 . 2 M ETHODOLOG V ................................................................................ 5 Study Approach............................................................................ 5 . 3 FINDINGS....... ............... .............................................................................................................................. 1 0 II Administrative Overhead Allocation. .................................................10 Transfer Charges.................................................. ...................... 11 II 4 INDIVIDUAL FEE ANALYSIS ..............................................................12 . DEPARTMENT TIME ALLOCATION .................................................... EXHIBIT A . . . . . 1[1 1[1 1[1 1[1 I[) Springsted provides high quality, independent financial . and management advisory services to public . and non-profit organizations, and works with them . in the long-term process of building their communities II on a fiscally sound and well-managed basis. . II . . II II Springsted II II II Introduction 2 III 1 Introduction Springsted Incorporated has been engaged to assist the City of Shakopee with a ([I cost of services study in order to provide the City with information relating to II current fee levels and the potential availability of new and/or increased fees. The study was also undertaken to provide the City with additional information which II was systematically developed and documented so that managerial and policy II decisions could be made based on more complete information than was previously available. In addition, the study identifies costs incurred for services provided by . the City's General Fund to other various funds, and provides Shakopee with more D revenue options to diversify the General Fund Revenue base. . The user fee study consists of two phases. The first phase includes a review of . the general level on existing user fees and a determination of whether or not other user fees might be charged. This phase of the study also includes the . identification of indirect costs which the City incurs when providing services associated with user fees. This portion of the study emphasizes the development II of an accurate overhead allocation that reflects real City staff time and how that . time is allocated among the various City departments. In addition, this information will be used to determine the value of time spent by tax-supported areas. II . The second phase of the study involves a more detailed and comprehensive analysis of each of the user fees currently charged. II II Upon completion of this study, the City will have a summary and analysis of the information gathered relating to its user fees and a final report which will make . long-term recommendations regarding current and future user fees for the City of IITI Shakopee. . The goals of this user fee study are to: . Assist the City in defining and selecting services for which user fees may be . . appropriate. s As~is~ In identifying new services for which user fees may be charged. . " Provide a m.ore diversified revenue base for the City. . . Provide a comprehensive and detailed analysis of the real cost of providing various services. . . Establish charges and transfers that are logical and defensible. . . . . . II Springsted City of Shakopee, Minnesota II Introduction 3 1[1 III Background The User Fee Study consists of two phases. Phase I includes a review of existing ([I user fees and the general level of the fees, a determination of whether other user II fees might be charged, and the identification of indirect costs that the City incurs when providing services associated with user fees. This Phase emphasized the II development of an administrative overhead allocation and an examination of City II user fees. . Phase II involves a more detail-comprehensive analysis of each of the user fees currently charged by the City of Shakopee. The Study made estimates regarding D hourly rates for each of the departments that provide services to City residents and U other users. The hourly rate for each department is a fully funded rate that includes direct and indirect costs for employees who provide specific services. If D more than one employee provides the same service and their salaries and wages are different, an average of the employees' salaries and wages is calculated and II applied to the service cost. 1[1 The value of this Study rests, in part,on the information obtained through personal D interviews conducted with senior management and other pertinent staff members. II The validity of the Study therefore depends upon the accuracy of the data which is based on personal observation, personal experience, and management intuition. II In some cases, there are detailed time records relating to the performance of duties directly connected to services provided. In other cases, the Study reports II only best-guess estimates concerning the allocation of time devoted to services. II This Study examines approximately one hundred forty four (144) fee types and . charges related to construction and development. The data generated by this report permits the City to evaluate whether there should be changes to existing fee . structures. III As part of this Study, a review of the allocation of General Fund Resources to . other funds was examined in light of actual costs. The City's General Fund 1[1 currently provides services to the Economic Development Authority Fund, Recreation Fund, Sanitary Sewer Fund, Storm Drainage Fund, III Telecommunications Fund, and the Transit Fund. . . 11\ III . . III Spri.ngsted ciiY oj shakopee; Miniiesoia . . Introduction 4 . . Purpose The purpose of this Study is: II ~ To undertake a systematic review of the City's current user fee system to II determine if current user fee amounts are sufficient to recapture the II actual cost of providing the related service; ~ To identify other services currently being performed that might generate . new fees; and ~ To assist the City in developing a user fee system that demonstrates a . direct relationship between the payments made for services and the . services delivered. . Annual Reporting Minnesota Statutes ~ 168.685 requires that each municipality annually . Requirements report by July 1 all construction- and development-related fees collected by the municipality from developers, builders, and subcontractors. The report must II include: (1) the number and valuation of units for which fees were paid; (2) the I![I amount of building permit fees, plan review fees, administrative fees, engineering fees, infrastructure fees; and (3) the expenses associated with the municipal . activities for which fees were collected. I![I The form, as prescribed by the Minnesota Department of Labor and Industry, II provides for the inclusion of all costs including salaries, benefits, transportation, II office, and other operating expenses, as well as such indirect costs as service expenses from other departments for building, utilities, finance, personnel, IT, 1[1 planning and engineering. . The information derived from this Study and the Model that has been developed . will provide relevant information for completion of the annual reporting forms. The . reports will also provide "reconciliati~n" from the books of record of the municipality 1m to the resulting information used on the reporting forms. III III II II . II III . . Springsted City of Shakopee, Minnesota II . . Methodology 5 . 2 Methodology . . Study Approach The specific methodology which was employed in the Study is outlined below. . Collection and Review of Records and Documents . The gathering of a number of City records and documents was necessary for the . completion of this Study. The initial part of the Studyrequired the review of the actual revenues and expenditures for 2005. Also collected and reviewed were all . City ordinances and resolutions which related to General Fund fees and charges. . The organizational chart of the City, along with detailed listings of al/ City employees and their actual salaries for 2005, were obtained and reviewed. The . collection of this information allowed Springsted to create baseline information . which is critical to the detailed analysis required in the Study. . Determination of Administrative Overhead and Interfund Transfers . Underlying any fee study is the necessity to identify all costs which are incurred . when providing a service. Without this information, an accurate determination of the appropriate level to set fees at becomes difficult, if not impossible. . . The obvious component of any service cost is the direct labor and supplies committed to any activity. Not as obvious are the indirect costs incurred by . support activities that must be undertaken in order for the direct labor personnel to successfully complete their mission. An analogy for this is the military axiom that . requires six to eight "behind the lines" personnel (transportation, office staff, etc.) . to support each combat participant. Just as combat soldiers require support, it is important to realize that police officers, firefighters, street maintenance personnel, . and parks employees are supported behind the scenes by administrative . personnel who pay bills, issue payroll checks, coordinate purchasing functions, and help to define policy goals and direction. When determining the total cost of . providing various services to the community, these administrative overhead costs must be included. . . In order to determine such administrative overhead, extensive personnel interviews were conducted with City Staff. These interviews were used to . determine the amount of personnel time devoted to specific City programs and to determine the cost of that time as it relates to those functions. Interviews were . conducted with various staff members and took several days. . Follow-up interviews and clarification discussions were conducted as necessary 1[1 over the course of the study. Interviews were conducted with the following City . personnel and department representatives: 111 Springsted City of Shakopee, Minnesota . . . Methodology 6 . . City Administrator . Finance Director . . City Clerk . Planning, Zoning and Development . . Inspections . . Engineering and Public Works . Public Safety (Fire and Police) . . Leisure Activities (Recreation and Parks) . . Selected Staff: 0 Administrative Assistants . 0 Secretaries II 0 Billing and Payroll Clerks . During the interview process, it was determined that numerous departments . perform special tasks for certain "self-supporting" funds. Those funds were the Economic Development Authority, Recreation, Sanitary Sewer, Storm Drainage, II Telecommunications, and Transit Funds. The information was gathered in orderto determine the appropriate transfer of direct charges which should occur from these . funds to the General Fund. These transfers and charges are typically necessary in . order to recognize the true costs of services provided to these "self-supporting" funds and to reduce or eliminate taxpayer subsidies to these funds. . Direct Cost of Service Per Unit . . A schedule of "benchmark" direct costs for services per unit was developed. Direct costs were determined by multiplying the estimated amount of time each . employee devoted to each service, on average, by the salary or wages of each . employee who spends time providing the service. The time assigned to each service was arrived at by interviewing the department heads and appropriate . individual employees and analysis of time keeping records. Each department head was asked to define the specific components of each service and then . allocate the time each component took among the various department employees. . When each department had been interviewed and the estimated time for each . service allocated to the total cost of wages, then salaries and administrative . overhead were applied to each department budget according to the allocations of time devoted to the service. A schedule was then created that combined the costs . of services and a "benchmark" cost per service was arrived at. Based on a study of the available data, the following direct cost of service formula was developed: . II (Labor Costs + Other Costs + Indirect Costs)/Service Volume = Cost Per Unit . . . . Springsted City of Shakopee, Minnesota II Methodology 7 II II Comparison of Existing Fees to Actual Per Unit Costs II It After the costs of seNice per unit were determined, they were combined with the existing fee schedule for the City of Shakopee. The total costs of seNice per unit . will be compared to the actual fee charged for the seNice performed. Where a comparison shows that the real costs were not being recovered, it may warrant . consideration by the City to adjust fees. This information attempts to prevent II unintended services from being subsidized by the general taxpayer or by other service areas. II II Proposed Fees III As a part of this Study it is customary to provide some guidance on proposed fee structures. Keeping in mind that while some fees are established by statute, the 1[1 final decision as to how to structure fees lies with the governing body and is a III policy decision. Other considerations should be given to the fact that each City provides its services differently and the related costs will also differ. The following III will identify the current fee structure and some possible alternatives for . establishing fees related to building permit activities: . Buildina Permits: Building permits include, but are not limited to, new construction, remodel, III alterations, additions, HV AC, plumbing, electrical, and sewer and water on . residential (single units and multi-family), commercial, industrial, institutional and educational activities. Minnesota Rules Chapter 1300.0160, in conjunction with . Statutes, provides guidance on the establishment of building related fees. . Minnesota Rules 1300.0160, Subp. 2 states, "Fees established by the municipality . must be by ordinance and must be fair, reasonable, and proportionate to the actual cost of the service for which the fee is imposed." Minnesota Rules 1300.0160, . Subp. 4 goes on to say, "Building permit fees shall be based on valuation. . Exceptions: A. one- and two-family dwelling maintenance permits for roofing, siding, windows, doors, or other minor projects may be charged a fixed fee; B. 1[1 permits for plumbing, mechanical, electrical,. or other building service equipment . systems may be based on valuation or charged a fixed fee; and C. replacement of a residential fixture or appliance cannot exceed the permit fee limitation ., established by Minnesota Statutes, section 16B.665." . Building permits in the City of Shakopee are currently calculated based on III valuations with that valuation then applied to a fee table to calculate the permit fee. The statutory formula relying on valuation makes it difficult to correlate fees and . costs. . 1m Springsted City of Shako pee, Minnesota . . Methodology 8 . . Based on existing rules the City must calculate certain permits based on valuation, however, they do have the option to apply a '1actor" to the valuation to bring the . permit fee up or down in order to cause it to be fair reasonable and proportionate . to the services being rendered. Consideration could be given to calculating building permits fees based on a percentage of the calculated fee and could . contain a minimum andlor a maximum fee for a particular permit type. . Some fees, such as reroofing and plumbing or those identified in the rules could . be converted to flat fees in order to eliminate the variations based on valuations. . Plan Review Fees: . Plan review fees are generally calculated as a percentage of the related building permit- not to exceed 65%. Minnesota Rules 1300.0160, Supb. 5 states ''When . submittal documents for similar plans are approved under subpart 6, plan rev.iew fees shall not exceed 25% of the normal building permit fee established and . charged by the jurisdiction for the same structure." . The City of Shakopee currently applies the calculation of 65% of the related . building permit with the exception of educational facilities for which the State . performs the plan review, and for existing similar plans for which the maximum of 25% of the building permit is calculated as the fee. . Plan review fees can be based on the "benchmarked" cost of the service being . provided or continued to be calculated as a percent of the building permit value. If . the City bases the plan review fee on the building permit, consideration should be given to establishing a minimum fee in order to ensure that the costs associated . with the service are recovered accordingly. . Other Fees: . The City currently imposes other fees that are directly related to construction and development activities. These include, but are not limited to, planning and . engineering fees and charges. . These fees are currently established based on project valuation, flat fees, flat fees . plus unit or acre charges and fees based on sizes or extent of projects. These II fees may alsobe the ones where the City will see small to large deviations from the established "benchmark" activities. . In order to ensure the City is recovering all costs on these types of fees and II charges, one possible solution is to establish a flat fee for the tasks that are . relatively constant in all processes regardless of size, and in addition to the flat fee establish an escrow that will be paid up-front and drawn on during the process. . This method eliminates a good share of the risk for the City in the beginning of the . process and ensures that "difficulf' applicants will pay for the extra time involved during the process. II Springsted City of Shakopee, Minnesota II . Methodology 9 . . The aforementioned proposed fee structures are just that, proposed and singular . methods of establishing fees. Again, the City Council must make the final decision . in the establishment of fees. . Identify Potential Service Charges . During the personal interviews with department heads and other City staff, . discussion about new fees for services occurred. If new charges seemed appropriate for unpaid service delivery, they will be included in the Study's final . recommendations. . . . . . . . . . . II .. . . . . . . II . . . Springsted City of Shakopee, Minnesota . . . Findings 10 . 3 Findings Based upon the 2005 actual activity and the methodology described in the . previous section of this report, the following findings can be made: . Administrative Overhead . Allocation The interview process revealed the departments and tasks which can be properly classified as overhead or support activities to direct line functions. As mentioned . earlier in this report, these are activities which are undertaken in order to support . employees that are providing direct services to the citizens of Shakopee. Various departments, ranging from City Council to Public Works, were identified as . providing support services such as policy direction, accounting and reporting, . budgeting, and management information services. Also included in the overhead calculation are the costs of providing building maintenance, vehicle and . mechanical maintenance and insurance. . Figures A-1 through A-14 in Exhibit A display the allocation of staff time in each . City department by function and the relative dollar amount of each department's budget for those functions. This information was used to determine categories . which are considered for inclusion in the administrative overhead allocation, and II areas where service is being provided to other funds by General Fund personnel. II Figure 1 displays the total amount of calculated administrative overhead for the City of Shakopee for actual 2005. The total dollar amount of this overhead is II $1,597,783 which translates to an overhead rate of 14.96%. In other words, for . each dollar spent on providing a direct service, another approximately 15ft is incurred providing support services for that task. When determining the total cost II of providing a service, this overhead must be included with identifiable direct costs. II Figure 1 . Wages and Supplies and Capital . Deoartment General Sunnort Cateoorv Benefits Services Miscellaneous Outlav Totals GENERAL FUND . Administration City Administration $296.553 $89,008 $43 $14,816 $400.420 City Clerk City Administration 171,878 68,560 30 4,248 244,717 Community Development City Administration 33,468 16,721 12 35 50,237 . Engineering City Administration 10,449 2,051 6 16 12,523 Finance City Administration 231,505 452,744 41 147 684.436 Legal City Administration 0 92,559 0 0 92,559 III Mayor and Council City Administration 46,122 59,673 1.036 37 106,868 RECREATION FUND . Recreation Pronrams Citv Administration 3022 960 34 7 4.024 Totals $792,997 $782,278 $1,202 $19306 $1 595,783 111 Total Funds $18,443,802 Less: Non-General Funds (6183831 . Total General Fund 12,259,971 Total Support Costs (1 595,783' Overhead Denominator $10,664,188 . City Overhead Percentage 14.96% II . Springsted City of Shakopee, Minnesota . . . Findings 11 . Detailed worksheets compiled during the interview process and used in the calculation of the information displayed in Figure 1 and Appendix A are on file. . . Transfer Charges As described in the Methodology section of this study, the interview process identified several departments that were providing direct services to various City . funds which, for the most part, should be self-supporting. By using the direct costs . identified with these funds and adding the administrative overhead allocation previously calculated,' the City may consider appropriate adjustments to the . transfers from these funds to the General Fund. . . . . . . . . . . . . . . . ., . . . . 1m . . I![) Springsted City 01 Shakopee, Minnesota . . Individual Fee Analysis 12 . 4 Individual Fee Analysis . This section will reflect the analysis of all fees and charges for the City of . Shakopee that were included in this study. Many fees include costs that are associated with more than one department because different departments perform . different duties connected with the particular service. This analysis attempts to . determine the appropriateness of current fees and charges. The individual fee analysis will contain: . 1) The "benchmark" cost per unit of each fee, . 2) The current service fee or charge, . 3) The current surplus or subsidy, . Transfer charges to the General Fund generally do not fully compensate the . General Fund for services provided to other funds. This Study will provide the City with the information necessary to consider appropriate adjustments to the transfers . from these funds to the General Fund. . The following is a list of the fees, by category, that were included in the Study. II The final report will include all of the above information on each fee listed. . . II . . . . . . III .. III . . 1m . Springsted City of Shakopee, Minnesota . . Individual Fee Analysis 13 . . FEE TYPE . Building Permits Basement Finish II Commercial/Industrial (Heavy) - Additions Commercial/Industrial (Heavy) - Alterations/Remodel . CommerciaVlndustrial (Heavy) - New Construction Commercial/Industrial (Heavy) - Reroof II Commercial/lndustrial (light) - Additions Commercial/lndustrial (light) - Alterations/Remodel . Commercial/Industrial (light) - New Construction CommerciaVlndustrial (light) - Reroof . Deck Demolition (Razing) . Duplex Electrical Permits . Fences Garages/Accessory Buildings II Grading/Foundations Inspection Fee . Institutional/Education - Additions Institutional/Education - Alterations/Remodel I[J Institutional/Education - New Construction Institutional/Education - Reroof III Moving Multi-Family Units - Per Unit . Other/Miscellaneous Pools . Porch (3-Season) Residential- Reroof . Single-Family Units - Septic (Sq. Ft. < 4,000) Single-Family Units - Septic (Sq. Ft. > 4,000) III Single-Family Units - Sewered (Sq. Ft. < 4,000) Single-Family Units - Sewered (Sq. Ft. > 4,000) 1[1 Townhouse Units - Per Unit Window Replacement I![I Engineering Building Permit/Grade Check Fee - Multifamily/Commercial/Industrial . Building Permit/Grade Check Fee - Single Family Grading Permit - Cost Greater than $200,000 . Grading Permit - Cost up to $200,000 Flood Plain Verification III Private Development - Streets and Utilities - Escrow Private Development - Watermain - Escrow 1[1 Public ROW - Curb Cut Permit Public ROW - Degradation Fee If Public ROW - Delay Penalty Public ROW - Excavation - Emergency Hole II Public ROW - Excavation - Hole Public ROW - Excavation - Hole for New Service 1[1 Public ROW - Excavation - Trench Public ROW - Obstruction Permit . Public ROW - Permit Extension Public ROW - Registration Fee . Public ROW - Unauthorized Work Permit Wetland Act Administration - Certificate of Exemption Fee II Springsted City of ShakOpeli; MinMsllla II . Individual Fee Analysis 14 . . Wetland Act Administration - Replacement Plan Fire . Fire Alarm System Fire Suppression/Sprinkler System . Fireworks - Consumer/Retail- Consumer Retail Sales Facility Fireworks - Consumer/Retail- Mixed Mercantile Sales . Fireworks - Display Flammable/Combustible Liquid Storage . Fuel Dispensing System - Attended Fuel Dispensing System - Unattended . Tent and Canopy HV AC/Mechanical . Commercial/Industrial (Heavy) Commercial/Industrial (Light) . FireplacelWood Stove Furnace and AlC Replacement . Garage Heater Gas Line . Institutional/Education Residential- Central Air Conditioning . Residential- Single Family Plan Review - Building . Basement Finish Commercial/Industrial (Heavy) - Additions . Commercial/Industrial (Heavy) - Alterations/Remodel Commercial/Industrial (Heavy) - New Construction . Commercial/Industrial (Heavy) - Reroof Commercial/Industrial (Light) - Additions . Commercial/Industrial (Light) - Alterations/Remodel Commercial/Industrial (Light) - New Construction . Commercial/Industrial (Light) - Reroof Deck II Duplex Garage/Accessory Buildings II Institutional/Education - Additions Institutional/Education - Alterations/Remodel . Institutional/Education - New Construction Multifamily Units - Per Unit . Other/Miscellaneous Pools . Porch (3-Season) Single-Family Units - Septic (Sq. Ft. < 4,000) .' Single-Family Units - Septic (Sq. Ft. > 4,000) Single-Family Units - Sewered (Sq. Ft. < 4,000) . Single-Family Units - Sewered (Sq. Ft. > 4,000) Townhouse Units - Per Unit 1m Plan Review - Fire Fire Alarm System 1m Fire Suppression/Sprinkler System Flammable/Combustible Liquid Storage . Planning Annexation - Application Fee Annexation - Review Fee/Escrow . Appeal of City Administration Decision - Board of Adjustment and Appeals . Appeal of City Administration Decision - City Council Comp Plan AmendmenVMUSA Expansion . Springsted city bj Shako pee, Minnesota II . Individual Fee Analysis 15 . . Concept Review by Planning Commission Major Subdivisions - Final Plat - Application Fee . Major Subdivisions - Final Plat - Review Fee/Escrow Major Subdivisions - Pre-Application Meeting Fee It Major Subdivisions - Preliminary Plat - Application Fee Major Subdivisions - Preliminary Plat - Review Fee/Escrow . Major Subdivisions - Preliminary Plat & Final Plat (concurrently) - Application Fee Major Subdivision - Preliminary Plat & Final Plat (concurrently) - Review Fee/Escrow . Minor Subdivisions - Lot Division/Lot Reassembly Minor Subdivisions - Registered Land Surveys . PUD - Amendment to Planned Unit Development - Application Fee PUD - Amendment to Planned Unit Development - Review Fee/Escrow II PUD - Amendment to Planned Unit Development (agreement to pay actual) PUD - Concept Review Ii PUD - Concept Review Determination by Planning Commission PUD - Planned Unit Development - Application Fee . PUD - Planned Unit Development - Review Fee/Escrow PUD - Planned Unit Development (agreement to pay actual) II Vacations - Public Easements Vacations - Rights-of-Way . Variance - All Others Variance - Appeal to City Council .' Variance - Single Family Residential Plumbing II Alterations/Replacements/Repairs (Basement Finish) Commercial/Industrial (Heavy) . Commercial/Industrial (Light) Institutional/Education . Lawn Sprinkler Residential (New Construction) m Water Heater (Replacements Only) Water Softener (Replacements Only) . SewerlWater Sewer . Sewer and Water Transfer Charges . Economic Development Authority Fund Recreation Fund . Sanitary Sewer Fund Storm Drainage fund . Telecommunications Fund Transit Fund . I[( III . . . . . Springsted City of Shakopee, Minnesota . II {[II fI 1[1 II . . . mJ 1[1 Department Time Allocation by . Summary Line Item Category 0 . . 1[1 0 II . a . . II . . 0 . 19 . It . .' . . II Exhibit A 17 II II Figure A-1 Administration Department . 2005 Actual Breakdown Supplies % Staff Wages and and Capital . Cateaorv Time Benefits Services Miscellaneous Outlay Total Citv Administration (a) 95.96% 296,553 89,008 43 14,816 400,420 . Fee Based Activities. Development 2.24% 6,917 2,076 1 346 9,340 ransfer Charaes . II Economic Development Authorilv 0.90% 2,766 830 0 139 3,735 Telecommunications 0.90% 2,766 830 0 139 3,735 . TOTALS 100.00% 309,002 92,744 44 15,440 417,230 . (a) General support (overhead) cost IfJ . Figure A-2 II City Clerk Department 2005 Actual Breakdown Supplies . % Staff Wages and and Capital Category Time Benefits Services Miscellaneous Outlay Total . Citv Administration (a) 68.55% 171,878 68,560 30 4,249 244,717 Cash Receipting 11.79% 29,568 11,794 5 731 42,098 Fee Based Activities. . Buildina 5.12% 12,833 5,119 2 317 18,271 Development 8.14% 20,408 8,141 5 504 29,058 1& Enaineerina 0.64% 1,615 644 0 40 2,299 Other 4.72% 11,837 4,722 2 293 16,854 Transfer Charaes . ., Economic Development Authoritv 0.70% 1,718 685 0 42 2,445 Utility Commission 0.34% 859 343 0 21 1,223 '. TOTALS 100.00% 250,716 100,008 44 6,197 356,965 . (a) General support (overhead) cost . IlIl Figure A-3 Community Development - Planning Department . 2005 Actual Breakdown Supplies III % Staff Wages and and Capital CategorY Time Benefits Services Miscellaneous Outlay Total City Administration (a) 11.46"10 33,468 16,721 12 36 50,237 II Department Administration 12.27% 35,859 17,915 13 37 53,824 Fee Based Activities. . Buildina 3.63% 10,604 5,298 4 11 15,917 Development 56.28% 164,410 82,141 60 171 246,782 Information Technology Administration 5.16% 15,087 7,538 5 16 22,646 . Inspections Administration 3.26% 9.518 4,755 3 10 14,286 Transfer Charges. . Transit Fund 7.94% 23,210 11,597 8 23 34,838 TOTALS 100.00% 292,156 145,965 105 304 438,530 . (a) General support (overhead) cost II . I[J Springsted City of Shakopee, Minnesota 0 . Exhibit A 18 1[1 1[1 d Figure A-4 II Engineering Department 2005 Actual Breakdown Supplies . % Staff Wages and and Capital Category Time Benefits Services Miscellaneous Outiav Total . City Administration (al 1.44% 10,449 2,051 6 17 12,523 Department Administration 16.42% 119,010 23,362 69 184 142,625 Fee Based Activnies . . Buildina 7.14% 51779 10,165 30 80 62,054 Development 7.06% 51,157 10,042 29 79 61,307 . Enaineerina 62.81% 455,229 89,364 262 704 545,559 Other 0.15% 1,101 216 1 2 1,320 Fleet Maintenance Administration 0.80% 5,805 1,140 3 9 6,957 . Park Maintenance Administration 0.80% 5,805 1,140 3 9 6,957 Street Maintenance Administration 2.40% 17,416 3,419 10 28 20,873 II Transfer Charges - Sanitary Sewer Fund 0.48% 3,506 688 2 6 4,202 Storm Drainage Fund 0.48% 3,506 688 2 6 4,202 0 TOTALS 99.98% 724,763 142,275 417 1,124 868,579 1[1 (a) General support (overhead) cost . . Figure A-5 D Finance Department 2005 Actual Breakdown Ii Supplies % Staff Wages and and Capital Category Time Benefns Services Miscellaneous Outiay Total II City Administration (al 99.69% 231,505 452,744 40 147 684,436 Fee Based Activnies - Buildinll 0.31% 714 1398 0 0 2,112 II TOTALS 100.00% 232,219 454,142 40 147 686,548 . (a) General support (overhead) cost II . Figure A-6 II Fire Department 2005 Actual Breakdown . Supplies % Staff Wages and and Capital Category Time Beneftts Services Miscellaneous Outiav Total . Fire Protection 100.00% 530,5311 690,2311 6151 1,190 1,222,567 TOTALS 100.00% 530,5311 690,2311 6151 1,190 1,222,567 II (a) General support (overhead) cost . 0 0 II . Springsted citY of shakopee; Minnesota . Exhibit A 19 . III III Figure A-7 [II Government Buildings Department 2005 Actual Breakdown 91 Supplies % Staff Wages and and Capital Category Time Benefits Services Miscellaneous Outlay Total 1[1 FacilitY Maintenance 82.29% 49,967 185,822 437 0 236,226 ransfer Charges - {[II Recreation Fund 17.71% 10,751 39,981 94 0 50,826 TOTALS 100.00% 60,718 225,803 531 0 287,052 II (a) General support (overhead) cost . . Figure A-a ill Inspections Department 2005 Actual Breakdown {[II Supplies %Slaff Wages and and Capital Category Time Benefits Services Miscellaneous Outlay Tolal . Fee Based Activities. Building 90.45% 597,228 237,244 3,089 754 838,315 II Inspections Administration 9.55% 63,055 25,048 326 80 88,509 TOTALS 100.00% 660,283 262,292 3,415 834 926,824 . (a) General support (overhead) cost II . Figure A-9 . Legal 2005 Actual Breakdown II Supplies %Slaff Wages and and Capital Category Time Benefits Services Miscellaneous Outlay Total . CitY Administration (a) 100.00% 01 92,5591 01 0 92,559 TOTALS 100.00% 01 92,5591 01 0 92,559 . (a) General support (overhead) cost . 0 Figure A-10 . Mayor and Council . 2005 Actual Breakdown Supplies %Slaff Wages and and Capital II Category Time Benefits Services Miscellaneous Outlay T olal City Administration (a) 100.00% 46,1221 59,6731 1,0361 37 106,868 . TOTALS 100.00% 46,1221 59,6731 1,0361 37 106,868 . (a) General support (overhead) cost . . II Springsted CitY of ShakopElEl, Minnesota . . . Exhibit A 20 . . Figure A-11 Park Maintenance II 2005 Actual Breakdown Supplies % Staff Wages and and Capital III Cateaorv Time Benefits Services Miscellaneous Outlav Total Fee Based Activities - Other 0.33% 1747 1239 277 14 3277 1[1 Park Maintenance 95.54% 508 533 360571 80 597 3978 953 679 Street Maintenance 4.13% 22,002 15,600 3487 172 41,261 TOTALS 100.00% 532,282 377,410 84,361 4,164 998,217 1[1 (a) General support (overhead) cost 1[1 III Figure A-12 1[1 Police Department 2005 Actual Breakdown II Supplies % Staff Wages and and Capital Cateaorv Time Benefits Services Miscellaneous Outlav Total II Police Protection 88.28% 2,992,5661 900,132\ 2,6851 35,302 3930,685 Sunoort Services 11.72% 399,5441 120,1791 3581 4,713 524,794 TOTALS 100.00% 3,392,1101 1 ,020,31 iT 3,0431 40,015 4,455,479 mil (a) General support (overhead) cost . d Figure A.13 . Street Maintenance 2005 Actual Broakdown 0 Supplies % Staff Wages and and Capital Catooorv Time Beneftts Services Miscellaneous Outlav Total . Reet Maintenance 2.49% 15,335 17,243 155 574 33,307 Park Maintenance 5.40% 33 238 37,373 337 1,243 72,191 Street Maintenance 55.28% 340018 382 313 3444 12716 738,491 . ransfer Charnes . Sanilarv Sewer Fund 9.78% 60,135 67,615 609 2,249 130,608 . Storm Drainaae Fund 27.05% 166,359 187,052 1,686 6,221 361,318 TOTALS 100.00% 615,085 691,596 6,231 23,003 1,335,915 .. . (a) General support (overhead) cost . . Figure A-14 Recreation Fund . 2005 Actual Breakdown Supplies % Staff Wages and and Capital II Cateaorv Time Beneltts Services Miscellaneous Outlav Total cTtV Administration la) 0.21% 3023 960 34 8 4,025 II FaCilliV Maintenance 13.00% 105,818 140,434 20 5 246,277 Fee Based Activities - Recreation 68.82% 737,918 562,056 2,872 630 1,303,476 II Buildinaand Develoomen! 9.46% 146,169 32,512 370 82 179,133 Ice Arena Manaaemenl 5.71% 40,433 67,658 0 0 108,091 Parks and Recreation Administration 1.70% 24,176 7,681 270 59 32,186 . Sunnnrt Services 1.10% 15698 4988 175 38 20 899 TOTALS 100.00% 1,073,235 816,289 3,741 822 1,894,087 II (a) General support (overhead) cost . Springst<::d ciiY of Shakopee, Minnesota .