B. Conduct Comparison of Costs of Development0
MEMORANDUM
Phone: 952.227.1180
TO:
Todd Gerhardt, City Manager
CITY OF
Engineering
ANALYSIS
CHMNSEN
Strengthen the City's Financial Position
Kate Aanenson, AICP Community Development Director
7700 Market Boulevard
DATE:
May 23, 2011
PO Box 147
exercising financial stewardship, implementing best practices, and utilizing long -
Phone: 952.22 1140
Chanhassen, MN 55317
SUBJ:
Conduct Comparison of Costs of Development:
Fax: 952.227.1110
buildings pay a pro -rated SAC fee based on the estimated potential capacity of
Building Permit and Development Fees
Administration
Public Works
family home valued at $388,000.
Phone: 952.227.1100
Phone: 952.227.1300
Fax: 952.227.1110
BACKGROUND
Building Inspections
One of the priorities in the City Council's Key Financial Strategies was to
Phone: 952.227.1180
conduct a comparison study of building and development fees. The strategy is
Fax: 952.2227.118
stated below.
Engineering
ANALYSIS
Phone: 952.227.1160
Strengthen the City's Financial Position
Fax: 952.227.1170
Planning staff used two development scenarios based on actual developments in
Fax: 952.227.1404
Provide financial stability and resources necessary to achieve the city's vision by
Finance
exercising financial stewardship, implementing best practices, and utilizing long -
Phone: 952.22 1140
term financial planning tools.
Fax: 952.227.11110
single-family residence is charged one SAC unit, a base unit. Other types of
Park & Recreation
• Conduct Comparison of Costs of Development (building permit fees,
Phone: 952.227.1120
development fees)
Fax: 952.227.1110
ANALYSIS
Recreation Center
2310 Coulter Boulevard
Phone: 952.227.1400
Planning staff used two development scenarios based on actual developments in
Fax: 952.227.1404
the city. The first scenario was a commercial building valued at $1,230,000 with
two SAC units. (As determined by the Metropolitan Council, one SAC unit equals
Planning &
274 gallons of maximum potential daily wastewater flow capacity. A freestanding,
atural Resources
Phone: l Res rce
single-family residence is charged one SAC unit, a base unit. Other types of
Fax: 952.227.1110
buildings pay a pro -rated SAC fee based on the estimated potential capacity of
wastewater they will need). The second development scenario was a single -
Public Works
family home valued at $388,000.
7901 Park Place
Phone: 952.227.1300
A survey was conducted comparing 13 cities with Chanhassen, using these
Fax: 952.227.1310
development scenarios. Six of the 13 cities are key financial cities. The survey
included fees for the building permit, plan check, sewer surcharge, water and
Senior Center
sewer connection, and water meter.
Phone: 952.227.1125
Fax: 952.227.1110
Building permits fees are based in the 1997 Uniform Building Code. Almost all
Web Site
cities base their fees on the national schedule. Some cities have increased the
www.ci.chanhassen.mn.us
base fee to keep up with inflation. Chanhassen raised this building permit fee
only once by 3 percent in 2008. There are two components to the building permit
fee: the building permit, which is based on valuation of the building and covers
the inspection costs; and the plan check fee which covers the review of the plans.
- B
Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrow
Todd Gerhardt
Cost Comparisons of Development
May 23, 2011
Page 2
Water connection fees are an important source of revenue needed to pay for the expansion of the water
system and the water treatment plants. Water connection and platting fees did not increase in 2011.
Sewer connection fees are the source of revenue needed to expand and oversize the sanitary sewer
system to provide for future connections. The fee also funds future trunk lift station improvements.
Sanitary sewer connection and platting fees did not increase in 2011.
Comparing fees across the selected cities is somewhat problematic because of the different ways fees are
collected, specifically water and sewer connection. There is a significant range in total permit fees. In
the commercial survey, Champlin's sewer and water connection fees are project based. Therefore, they
were not included because they would skew the averages. In the residential survey, Champlin and
Andover include sewer and water connection fees as a part of the development contract, which are
project specific and not standardized. Again, they were not included and are skewing the averages.
In order to give a more accurate comparison of the survey, assumptions were made on the sewer and
water connection fees in those cities that used a development contract. The original survey was
duplicated except where there were no amounts for sewer and water connection, the respective average
was used (see Attachment #3 survey with highlights.)
FINDINGS
The range in the commercial building permit scenario varied 58 percent with a range from $15,719 to
$37,465. The average fees for the commercial scenario were $24,136. The fee for Chanhassen was
$26,734.54.
The range in fees for only the building permit and plan review varied 84 percent from $2,120.00 to
$13,037.48 for commercial and varied 75 percent from $1,330.00 to $5,333.63 for residential. The fees
for Shakopee are at the extreme low end of the spectrum and if excluded from the calculations the fees
vary only 20 percent for commercial and 22 percent for residential projects. (See Attachment #1)
The range in the residential permit scenario varied 62 percent with a range of $6,088 to $16,056. The
average fees for the residential scenario were $10,066. The fee in Chanhassen was $12,245 (see
Attachment #2).
CONCLUSION
The city is near the average for commercial development and in the upper one - fourth for
residential development.
The city must cover the cost to provide city water and sewer
ATTACHMENTS
1. Ranked order of Building and Plan Review fees.
2. Ranked order of total fees.
3. Survey results.
g: \plan\ka \fmancal strategies \costs of development 201 l.doc
Ranked order of building and plan review fees
Commercial: $1,230,000 V
Shakopee*
Andover
Carver*
Lino Lakes
Average
Chanhassen
Chaska
Median
Prior Lake
Savage
Inver Grove
Heights
Plymouth*
Rosemount
Victoria*
Farmington
Shoreview @
Champlin
Building Permit
$ 990.00
$ 6,333.25
$ 6,333.25
$ 6,448.25
$ 6,553.94
$ 6,639.50
$ 6,865.00
$ 6,865.25
$ 6,865.25
$ 6,865.25
$ 6,876.75
$ 6,876.75
$ 6,876.75
$ 7,094.23
$ 7,671.65
$ 7,671.65
$ 7,901.50
Plan Check
$ 1,130.00
$ 4,116.61
$ 4,116.61
$ 4,191.36
$ 4,292.47
$ 4,315.68
$ 4,462.00
$ 4,462.41
$ 4,462.41
$ 4,462.41
$ 4,469.89
$ 4,469.89
$ 4,469.89
$ 4,611.25
$ 4,986.57
$ 4,986.57
$ 5,135.98
TOTAL
$ 2,120.00
$ 10,449.86
$ 10,449.86
$ 10,639.61
$ 10,846.41
$ 10,955.18
$ 11,327.00
$ 11,346.64
$ 11,327.66
$ 11,327.66
$ 11,346.64
$ 11,346.64
$ 11,346.64
$ 11,705.48
$ 12,658.22
$ 12,658.22
$ 13,037.48
Residential: $388,000
Shakopee*
Chaska
Andover
Carver*
Lino Lakes
Average
Chanhassen
Prior Lake
Savage
Median
Plymouth*
Inver Grove
Heights
Rosemount
Victoria*
Farmington
Shoreview @
Champlin
Building Permit
$ 800.00
$ 2,781.50
$ 2,606.55
$ 2,606.55
$ 2,606.55
$ 2,693.46
$ 2,679.55
$ 2,781.50
$ 2,781.50
$ 2,781.50
$ 2,784.75
$ 2,784.75
$ 2,784.75
$ 2,910.22
$ 3,130.65
$ 3,130.65
$ 3,232.50
Plan Check
$ 530.00
1 $ 1,390.75
1 $ 1,694.26
1 $ 1,694.26
1 $ 1,694.26
$ 1,723.60
$ 1,741.71
$ 1,807.98
$ 1,807.98
$ 1,807.98
$ 1,810.00
$ 1,810.09
$ 1,810.09
$ 1,891.64
$ 2,034.92
$ 2,034.92
$ 2,101.13
TOTAL
$ 1,330.00
$ 4,172.25
$ 4,300.81
$ 4,300.81
$ 4,300.81
$ 4,417.06
$ 4,421.26
$ 4,589.48
$ 4,589.48
$ 4,589.48
$ 4,594.75
$ 4,594.84
$ 4,594.84
$ 4,801.86
$ 5,165.57
$ 5,165.57
$ 5,333.63
* Not a Financial Strategies Comparison Cities
G: \PLAN \BG \Development fees \Bldg Permit 2011.xls
Ranked order of total fees
Commercial
Shakopee*
Shoreview @
Plymouth*
Lino Lakes
Prior Lake
Chaska
Victoria*
Farmington
Median
I Average
I Chanhassen
I Rosemount
Champlin
Savage
Carver*
Andover
Inver Grove
Heights
$15,719
$15,835
$16,376
$17,240
$18,788
$19,199
$19,550
$22,008
$22,757
1 $24,136
1 $26,735
$28,007
$29,512
$30,220
$31,100
$34,283
$37,465
# - Valuation based - project specific
DC - determined as part of the development
* Not a Financial Strategies Comparison Cities
@ additional sewer and water area charges
Low High Percent difference
$15,719 $37,465 -0.58
Residential
Shoreview @
Plymouth*
Shakopee*
Chaska
Prior Lake
Victoria*
Savage
Andover
Median
Average
Rosemount
Farmington
Lino Lakes
Chanhassen
Champlin
Carver*
Inver Grove
Heights
$6,088
$6,591
$7,185
1 $8,443
$9,019
$9,114
$9,424
$10,058
$10,066
$10,325
$10,527
$11,151
$11,191
$12,245
$12,757
$15,020
$16,056
# - Valuation based - project specific
DC - determined as part of the development
* Not a Financial Strategies Comparison Cities
@ additional sewer and water area charges
Low High Percent difference
$6,088 $16,056 -0.62
Building Permit Fees
5/13/2011
Building Permit
Average
Median
Chanhassen
Andover
Carver*
Champlin
Chaska
Farmington
Inver Grove
Heights
Lino Lakes
Plymouth*
Prior Lake
Rosemount
Savage
Shakopee*
Shoreview @
Victoria*
Commercial: $1,230,000,2 SAC
Residential: $388,000
Building Permit
$ 6,553.94
$ 6,865.25
$ 6,639.50
$ 6,333.25
$ 6,333.25
$ 7,901.50
$ 6,865.00
$ 7,671.65
$ 6,876.75
$ 6,448.25
$ 6,876.75
$ 6,865.25
$ 6,876.75
$ 6,865.25
$ 990.00-
$ 7,671.65
$ 7,094.23
Plan Check
$ 4,292.47
$ 4,462.41
$ 4,315.68
$ 4,116.61
$ 4,116.61
$ 5,135.98
$ 4,462.00
$ 4,986.57
$ 4,469.89
$ 4,191.36
$ 4,469.89
$ 4,462.41
$ 4,469.89
$ 4,462.41
$ 1,130.00
$ 4,986.57
$ 4,611.25
Sewer Surcharge
$ 1,274.85
$ 592.00
$ 150.00
$ 1,405.21
$ -
$ 4,460.00
$ 100.00
$ 1,060.00
$ 592.00
$ -
$ 592.00
$ 4,460.00
$ 4,460.00
$ 592.00
$ 615.00
$ 592.00
$ 44.60
Water Connection
$ 7,997.32
$ 8,176.00
$ 11,361.20
$ 21,591.79
$ 11,434.00
#
$ 7,202.00
$ 4,320.00
$ 12,775.00
$ 3,760.00
$ 3,192.00
$ 1,200.00
$ 9,800.00
$ 9,150.00
$ 10,384.00
$ 1,292.50
$ 4,500.00
Sewer Connection
$ 4,017.05
$ 2,720.00
$ 4,268.16
$ 836.00
$ 9,216.00
#
$ 570.00
$ 3,970.00
$ 12,751.00
$ 2,840.00
$ 1,245.00
$ 1,800.00
$ 2,400.00
$ 9,150.00
$ 2,600.001
$ 1,292.50
$ 3,300.00
DC
$ 332.47
$ 285.00
$ 2,160.00
$ 5,725.00
$ 2,840.00
$ 415.00
$ 900.00
$ 1,200.00
$ 1,907.00
$ 1,300.00
$ 275.00
$ 1,650.00
Water Meter
$ 332.47
$ 327.00
$ 330.00
$
TOTAL
$ 24,135.63
$ 22,815.66
$ 26,734.54
$ 34,282.86
$ 31,099.86
$ 17,497.48
$ 19,199.00
$ 22,008.22
$ 37,464.64
$ 17,239.61
$ 16,375.64
$ 18,787.66
$ 28,006.64
$ 30,219.66
1 $ 15,719.001
$ 15,835.22
1 $ 19,550.08
# - Valuation based - project spcitic
DC - determined as part of the development
* Not a Financial Strategies Comparison Cities
@ additional sewer and water area charges
Building Permit
Average
Median
Chanhassen
Andover
Andover
Carver*
Champlin
Chaska
Farmington
Inver Grove
Heights
Lino Lakes
Plymouth*
Prior Lake
Rosemount
Savage
Shakopee*
Shoreview @
Victoria*
Residential: $388,000
Building Permit
$ 6,553.94
$ 6,865.25
Building Permit
$ 2,693.46
$ 2,781.50
$ 2,679.55
$
2,606.55
$ 2,606.55
$
3,232.50
$ 2,781.50
$ 3,130.65
$ 2,784.75
$ 2,606.55
$ 2,784.75
$ 2,781.50
$ 2,784.75
$ 2,781.50
$ 800.00'
$ 3,130.65
$ 2,910.22
Plan Check
$ 1,723.60
$ 1,807.98
$ 1,741.71
$
1,694.26
$ 1,694.26
$
2,101.13
$ 1,390.75
$ 2,034.92
$ 1,810.09
$ 1,694.26
$ 1,810.00
$ 1,807.98
$ 1,810.09
$ 1,807.98
$ 530.00'
$ 2,034.92
$ 1,891.64
Sewer Surcharge
$ 581.31
$ 194.00
$ 75.00
DC
$ 4,460.00
$ -
$
2,230.00
$ 35.00
$ 530.00
$ 194.00
$ -
$ 194.00
$ 2,230.00
$ 2,230.00
$ 10.00
$ 194.00
$ 194.00
$ 22.30
Water Connection
$ 3,048.38
$ 2,765.00
$ 5,393.00
DC
$ 9,150.00
$ 5,732.00
DC
$ 4,500.00
$ 3,601.00
$ 2,765.00
$ 5,335.00
$ 3,760.00
$ 1,064.00
$ 600.00
$ 2,175.00
$ 2,543.00
$ 4,136.00
$ 275.00
$ 2,250.00
Sewer Connection
$ 1,945.46
$ 1,650.00
$ 2,026.00
DC
$ 1,292.50
$ 4,608.00
DC
$ 332.47
$ 285.00
$ 2,160.00
$ 5,725.00
$ 2,840.00
$ 415.00
$ 900.00
$ 1,200.00
$ 1,907.00
$ 1,300.00
$ 275.00
$ 1,650.00
Water Meter
$ 332.47
$ 327.00
$ 330.00
$
181.91
$ 379.00
$
200.00
$ 350.00
$ 530.00
$ 207.55
$ 290.00
$ 323.00
$ 700.00
$ 327.00
$ 375.00
$ 225.00
$ 178.50
$ 390.09
$ 15,719.00
$ 15,835.22
$ 19,550.08
TOTAL
$ 10,324.69
$ 10,065.86
$ 12,245.26
$ 10,057.87
$ 15,019.81
$ 12,757.47
$ 8,443.25
$ 11,150.57
$ 16,056.39
$ 11,190.81
$ 6,590.75
$ 9,019.48
$ 10,526.84
$ 9,424.48
$ 7,185.00
$ 6,088.07
TOTAL
$ 10,324.69
$ 9,525.48
$ 12,245.26
$
4,482.72
$ 15,019.81
$
7,763.63
$ 8,443.25
$ 11,150.57
$ 16,056.39
$ 11,190.81
$ 6,590.75
$ 9,019.48
$ 10,526.84
$ 9,424.48
$ 7,185.00
$ 6,088.07
1 9,114.25
# - Valuation based - project specific
DC - determined as part of the development
* Not a Financial Strategies Comparison Cities
@ additional sewer and water area charges
Building Permit
Average
Median
Chanhassen
Andover
Carver*
Champlin
Chaska
Farmington
Inver Grove
Heights
Lino Lakes
Plymouth*
Prior Lake
Rosemount
Savage
Shakopee*
Shoreview @
Victoria*
Commercial: $1,230,000,2 SAC
Building Permit
$ 6,553.94
$ 6,865.25
$ 6,639.50
$ 6,333.25
$ 6,333.25
$ 7,901.50
$ 6,865.00
$ 7,671.65
$ 6,876.75
$ 6,448.25
$ 6,876.75
$ 6,865.25
$ 6,876.75
$ 6,865.25
$ 990.00
$ 7,671.65
$ 7,094.23
Plan Check
$ 4,292.47
$ 4,462.41
$ 4,315.68
$ 4,116.61
$ 4,116.61
$ 5,135.98
$ 4,462.00
$ 4,986.57
$ 4,469.89
$ 4,191.36
$ 4,469.89
$ 4,462.41
$ 4,469.89
$ 4,462.41
$ 1,130.00
$ 4,986.57
$ 4,611.25
Sewer Surcharge
$ 1,274.85
$ 592.00
$ 150.00
$ 1,405.21
$ -
$ 4,460.00
$ 100.00
$ 1,060.00
$ 592.00
$ -
$ 592.00
$ 4,460.00
$ 4,460.00
$ 592.00
$ 615.00
$ 592.00
$ 44.60
Water Connection
$ 7,997.32
$ 7,997.32
$ 11,361.20
$ 21,591.79
$ 11,434.00
$ 7,997.32
$ 7,202.00
$ 4,320.00
$ 12,775.00
$ 3,760.00
$ 3,192.00
$ 1,200.00
$ 9,800.00
$ 9,150.00
$ 10,384.00
$ 1,292.50
$ 4,500.00
Sewer Connection
$ 4,017.05
$ 2,840.00
$ 4,268.16
$ 836.00
$ 9,216.00
$4,017.05
$ 570.00
$ 3,970.00
$ 12,751.00
$ 2,840.00
$ 1,245.00
$ 1,800.00
$ 2,400.00
$ 9,150.001
$ 2,600.00
$ 1,292.50
$ 3,300.00
Water Meter
$ 332.47
$ 327.00
$ 330.00
$ 181.91
$ 379.00
$ 200.00
$ 350.00
$ 530.00
$ 207.55
$ 290.00
$ 323.00
$ 700.00
$ 327.00
$ 375.00
$ 225.00
$ 178.50
$ 390.09
TOTAL
$ 24,135.63
$ 22,756.98
$ 26,734.54
$ 34,282.86
$ 31,099.86
$ 29,511.85
$ 19,199.00
$ 22,008.22
$ 37,464.64
$ 17,239.61
$ 16,375.64
$ 18,787.66
$ 28,006.64
$ 30,219.66
$ 15,719.00
$ 15,835.22
$ 19,550.08
# - Valuation based - project spcific
DC - determined as part of the development
* Not a Financial Strategies Comparison Cities
@ additional sewer and water area charges
Building Permit
Average
Median
Chanhassen
Andover
Carver*
Champlin
Chaska
Farmington
Inver Grove
Heights
Lino Lakes
Plymouth*
Prior Lake
Rosemount
Savage
Shakopee*
Shoreview @
Victoria*
Residential: $388,000
Building Permit
$ 2,693.46
$ 2,781.50
$ 2,679.55
$ 2,606.55
$ 2,606.55
$ 3,232.50
$ 2,781.50
$ 3,130.65
$ 2,784.75
$ 2,606.55
$ 2,784.75
$ 2,781.50
$ 2,784.75
$ 2,781.50
$ 800.00
$ 3,130.65
$ 2,910.22
Plan Check
$ 1,723.60
$ 1,807.98
$ 1,741.71
$ 1,694.26
$ 1,694.26
$ 2,101.13
$ 1,390.75
$ 2,034.92
$ 1,810.09
$ 1,694.26
$ 1,810.00
$ 1,807.98
$ 1,810.09
$ 1,807.98
$ 530.00
$ 2,034.92
$ 1,891.64
Sewer Surcharge
$ 581.31
$ 194.00
$ 75.00
$581.31
$ -
$ 2,230.00
$ 35.00
$ 530.00
$ 194.00
$ -
$ 194.00
$ 2,230.00
$ 2,230.00
$ 10.00
$ 194.00
$ 194.00
$ 22.30
Water Connection
$ 3,048.38
$ 3,048.38
$ 5,393.00
$ 3,048.38
$ 5,732.00
$ 3,048.38
$ 3,601.00
$ 2,765.00
$ 5,335.00
$ 3,760.00
$ 1,064.00
$ 600.00
$ 2,175.00
$ 2,543.00
$ 4,136.00
$ 275.00
$ 2,250.00
Sewer Connection
$ 1,945.46
$ 1,907.00
$ 2,026.00
$ 1,945.46
$ 4,608.00
$ 1,945.46
$ 285.00
$ 2,160.00
$ 5,725.00
$ 2,840.00
$ 415.00
$ 900.00
$ 1,200.00
$ 1,907.00
$ 1,300.00
$ 275.00
$ 1,650.00
Water Meter
$ 332.47
$ 327.00
$ 330.00
$ 181.91
$ 379.00
$ 200.00
$ 350.00
$ 530.00
$ 207.55
$ 290.00
$ 323.00
$ 700.00
$ 327.00
$ 375.00
$ 225.00
$ 178.50
$ 390.09
TOTAL
$ 10,324.69
$ 10,065.86
$ 12,245.26
$ 10,057.87
$ 15,019.81
$ 12,757.47
$ 8,443.25
$ 11,150.57
$ 16,056.39
$ 11,190.81
$ 6,590.75
$ 9,019.48
$ 10,526.84
$ 9,424.48
$ 7,185.00
$ 6,088.07
$ 9,114.25
# - Valuation based - project specific
DC - determined as part of the development
* Not a Financial Strategies Comparison Cities
@ additional sewer and water area charges
G: \PLAN \BG \Development fees \Bldg Permit 2011.xls