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Building fees may increase

Tuesday, April 11, 2006

Brad Vaughan and Danny Seacrest, both employees of Malloy's Custom Concrete, set concrete forms.
SIKESTON -- When it comes to construction and inspection fees, the city's cost of doing business is exceeding the money collected.

If all goes as planned, that will change this summer.

The Sikeston City Council will be asked to approve an increase in fees during the next regular monthly meeting scheduled for May 1.

If approved, the new fees would go into effect in July, according to City Manager Doug Friend, allowing for a phase-in period.

These fees have not been adjusted in Sikeston in 32 years, according to Friend, although the need for a fee adjustment was recognized long ago and has been brought up several times over the years. "Ever since I came to the city of Sikeston 20 years ago it has been suggested," he said.

After extensive research and a comparative study by Linda Lowes, director of governmental services, along with some help from Trey Hardy, community redevelopment coordinator, city officials now have the hard numbers needed to arrive at a decision.

"The numbers justified an increase," Friend said. "We are trying to break even."

In Fiscal Year 2005, the city issued 252 permits on $14 million worth of local construction and collected $11,653 in fees, according to Lowes.

The city spent $65,000 to perform required inspections and issue permits, however, according to the 2005 audit.

"We're not trying to make a profit, we're just trying to cover our costs," Lowes said.

Hardy said the city's construction and inspection fees are based on the 1974 construction rate of $18 per square foot - well below the International Code Council's current construction rate for the Midwest of $86 per square foot. The national average for construction costs today is about $105 per square foot.

"We were low - we did the survey and it showed we were low," Friend said.

City staff are recommending the city's rate be raised to $50 per square foot.

Information on 15 other Missouri cities was gathered to compare current and proposed rates with, according to Lowes.

When comparing permit fees alone, Sikeston's was the second-lowest residential permit fee among the 16 communities.

As potential developers and builders also pay tap fees for water, sewer and electrical service, staff also compared costs after adding in tap fees to get a true picture of construction permit costs.

The proposed commercial rate schedule, if approved, would result in Sikeston's fees remaining far below those charged in Cape Girardeau, Poplar Bluff, Miner and Jackson when tap costs are included.

As any fee change must comply with Missouri's Hancock Amendment, city staff looked at the costs associated with performing permit and inspection functions.

To determine the city's annual cost for services associated with the fees, city staff estimated 30 percent of the code officers' time is devoted to construction plan review and inspections.

The total expended by the code enforcement division last fiscal year was $223,350.

Fuel and maintenance for four code enforcement vehicles was also figured in as was the cost of maintaining an office with office supplies, computers and software, phones and radios, and record retention costs.

The goal for city staff was then to make fee adjustments so the revenue gathered from permits would come close to, but not exceed, this figure, Lowes said.

With the proposed increase in fees, Sikeston's rates would be, when compared with other cities in the area, "not the highest, not the lowest - in the middle," Lowes said.

Contractors are likely to be disappointed but not surprised with the increase in fees as they have reportedly made comments over the years about how low Sikeston's fees were.

"We typically were either the lowest or among the lowest 10 percent of the other cities that were surveyed," Friend said.

As part of the fee adjustment, city staff will also request an increase for meeting fees on the city's two boards that rule on building code variance requests.

Presently the cost to call a meeting of the Board of Adjustments is only $15 and there is no cost to schedule a Board of Appeals meeting.

If city staff's recommendations are approved, a Board of Adjustments meeting will cost $35 to call and there will be a $15 cost to make the Board of Appeals meet.

Results from the city's study are available at City Hall for contractors and residents to review and anyone is welcome to review the study, Friend said. "We welcome comments," he said.

Also, an informational meeting for contractors and other interested parties is scheduled for 7 a.m. April 20 at the Clinton Building, according to Lowes. Any resident with questions regarding the new fees is encouraged to attend or contact City Hall.