Item 3: Ratification of Unanimous and Non-Uanimous IGR Actions

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• Under the bill, thirty-three percent of permit fees would be collected after the City’s work has been completed. With the recent economic recession and associated impacts on construction, there is inadequate cash on hand to provide services prior to payment without exhausting reserves. For various reasons, permits can take months or years to complete. Eugene currently has 114 active building permits older than three years and 619 active building permits for 2008 through 2010. How would the Building Division handle cash flow to meet service needs over such an expansive time frame? • Paying fees all at one time reduces administrative processing time and is more cost- effective. Three installment payments for each project would require a new method for collecting the second and third payment, likely by billing all customers. Using FY10 as an example, staff would process approximately 19,000 additional billings at a conservative estimate of $35.00 per billing or $665,000 in additional costs over the span of a year. Late payments and non-payments would increase costs even more due to the collections process, and in extreme cases placing liens on properties. These activities would require at least one new staff person to process billings and manage the collections process. The bill would prohibit the City from charging any fees other than the amount specified at the time a permit is issued. Fees assessed after permit issuance typically result from either services requested by, or the performance of, our customers. Last fiscal year just over $1 million in fees were assessed AFTER permit issuance (approximately 20 percent of total revenue). Following are issues related to the inability to charge additional fees: • Services that are currently provided at the request of our customers would potentially be eliminated. Examples: • A customer desires to temporarily occupy a building before construction is finished, requiring additional inspections and administrative activities. (78 requests in FY10 or $14,500) • A customer requests to have inspections performed after standard work hours or on weekends, when labor contracts require staff be compensated at 1 ½ times normal salary. (44 requests in FY10, or approx. $8,680) • BPS would lack the funding to respond to some of the realities of construction, such as: • Customer-initiated changes to projects, requiring additional plan review, inspection and administrative activities. (1,800 hours in FY10, or $144,000) • Customer begins work but doesn’t finish before permit expires, requiring staff to visit the site to ensure that no health or life safety issues result from the partially finished project. ($45,000 in fees in FY10) These fees, which do not apply to the majority of projects, are assessed directly to projects requiring the services. Under the guidelines established in HS 2620, if these services were to still be provided, the costs would have to be included in base permit fees, funded by all. Implementing this bill as an emergency would also pose a challenge for Eugene. The building permit and cashiering systems would need major updates to accommodate changes in permit and payment processing. Hiring a new staff person to manage billings 14