Submitted By: Tye Chighizola
presenter
Presentation By: Tye Chighizola
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Department: Growth Management
STAFF RECOMMENDATION (Motion Ready):
title
Adopt Budget Resolution 2022-140 reducing building permit fees to comply with Florida Statutes 553.80(7)(a).
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OCALA’S RELEVANT STRATEGIC GOALS:
Fiscally Sustainable, Economic Hub
PROOF OF PUBLICATION:
N/A
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BACKGROUND:
The Florida Statutes allows local governments to collect fees associated with the enforcement of Florida building codes (permits, plan reviews, inspections, training, and related costs). In July 2019, the Florida Legislature passed a bill (HB 447) that states that a local government cannot carry forward an amount exceeding the average of its operating budget for enforcing the Florida Building Code for the previous four fiscal years.
The four-year average (fiscal years 2018-2021) for expenses is $1,953,602 with an average revenue of $2,634,849. The fund balanced increased from $675,235 in FY18 to $2,342,931 in FY 2021. Currently, the fund balance, which includes revenue/expenses for the first two quarters of FY 2022, is approximately $2,890,030.
Since 2019, staff and the auditors have monitored the building revenue/expenses for compliance with Florida Statues 553.80(7)(a). In FY 2021, the City eliminated fees for specific single-family residential permits under $5,000. The increase in permits and the value/scope of those permits over the past year are likely to continue. Like many building departments in Florida, wages have been increased for staff; however, maintaining and recruiting is difficult.
Staff is proposing to reduce the building fees for the remaining five months of this fiscal year and fiscal year 2023 (see attached resolution with the changes highlighted in yellow). The proposed changes include reducing permits based on the value and square footage for building, electrical, plumbing, gas, and mechanical permits. All base fees and other permits will remain the same. For example, the changes would reduce a building permit for a new 50,000 square foot retail store costing six million dollars from $44,000 to $26,000. The changes would also reduce the electrical, plumbing, and mechanical permits from $3,900 to $2,400.
FINDINGS AND CONCLUSIONS: The proposed changes will help reduce the building reserve fund over the next 17 months to comply with F.S. 553.80(7)(a). The proposed changes are also consistent with changes made by Marion County on March 15, 2022. Staff will continue to monitor the market and recommend the adjustment of fees as needed.
FISCAL IMPACT: The four-year average (fiscal years 2018-2021) for expenses is $1,953,602 with an average revenue of $2,634,849. Currently, the fund balance is approximately $2,890,030.
PROCUREMENT REVIEW: N/A
LEGAL REVIEW: N/A
ALTERNATIVE:
Approve
Approve with changes
Deny
Table
BUDGET RESOLUTION 2022-140
A BUDGET RESOLUTION OF THE CITY OF OCALA, AMENDING THE FY 2021/2022 BUDGET BY REVISING THE FEE SCHEDULE FOR CERTAIN BUILDING, ELECTRICAL, GAS, MECHANICAL AND PLUMBING PERMITS
WHEREAS, the City may provide a schedule of reasonable fees, as authorized by Florida Statutes 166.222(2) for enforcement of the Florida Building Code, and these fees shall be used solely for carrying out the local government’s responsibilities in enforcing the Florida Building Code; and
WHEREAS, when providing a schedule of reasonable fees, the total estimated annual revenue derived from fees, and the fines and investment earnings related to the fees, may not exceed the total estimated annual costs of allowable activities; and
WHEREAS, a local government may not carry forward an amount exceeding the average of its operating budget for enforcing the Florida Building Code for the previous four (4) fiscal years; and
WHEREAS, pursuant to Florida Statutes 553.80(7)(a), local governments must use any excess funds that it is prohibited from carrying forward to rebate and reduce fees; and
WHEREAS, City Council finds that the carry forward amount currently exceeds the four (4) year average of its operating budget; and
WHEREAS, City Council previously reduced fees in FY 21 by adopting Ordinance 21- 4 eliminating certain fees concerning single-family permits less than $5,000; and
WHEREAS, the City Council has determined based on the number and type of building permits being submitted, a reduction in fees are needed from May 1, 2022 to September 30, 2022 (end of fiscal year 2022) to comply with Florida Statutes 553.80(7)(a).
NOW THEREFORE BE IT RESOLVED, BY THE OCALA CITY COUNCIL OF THE CITY OF OCALA, FLORIDA, duly assembled in regular session, that the FY 2022 Budget Fee Schedule for the Building Division be amended as follows:
Exhibit “A” FY 2022 --Revised Building Fee Schedule
This resolution adopted this ______ day of ______________________, 2022.
ATTEST: CITY OF OCALA
By: By:
Angel B. Jacobs Ire Bethea Sr.
City Clerk President, Ocala City Council
Approved as to form and legality:
By: _________________________________
Robert W. Batsel, Jr.
City Attorney
Reviewed for accounting accuracy & completeness:
By: _________________________________
Sandra Wilson
City Manager