Proposed Rental License Fee Increases for February 2024City of Dubuque
City Council Meeting
Action Items # 01.
Copyrighted
February 5, 2024
ITEM TITLE: Proposed Rental License Fee Increases for February2024
SUMMARY: City Manager recommending City Council approve the recommended
rental license and inspection fee increases as proposed to be effective
for the calendar year 2024 licensing fees and effective March 1, 2024 for
inspection fees.
RESOLUTION Approving the increase in fees for the rental license and
inspection program
SUGGESTED Suggested Disposition: Receive and File; Adopt Resolution(s)
DISPOSITION:
ATTACHMENTS:
Description Type
MVM Memo City Manager Memo
Staff Memo Staff Memo
Resolution Increasing Fees Resolutions
THE C
DUjIBQTE
Masterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Proposed Rental License Fee Increases for February 2024
DATE: January 31, 2024
Dubuque
WAWca 914
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2007-2012.2013
2017*2019
Housing & Community Development Director Alexis Steger is recommending City
Council approve the recommended rental license and inspection fee increases as
proposed to be effective for the calendar year 2024 licensing fees and effective March
1, 2024 for inspection fees.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
v
Mic ael C. Van Milligen
MCVM:sv
Attachment
CC' Crenna Brumwell, City Attorney
Cori Burbach, Assistant City Manager
Alexis Steger, Housing & Community Development Director
Michael Belmont, Assistant Director of Housing & Community Development
Ben Pothoff, Deputy Code Official
Dubuque
THE CITY OF
DUB E
MI-Amerinqly
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11111.1
Masterpiece on the Mississippi
2017*2019
TO: Michael C Van Milligen
FROM: Alexis Steger, Housing and Community Development Director
DATE: January 31, 2024
SUBJECT: Proposed Rental License Fee Increases for February 2024
Background:
The Housing and Community Development Department manages fees and fines for
rental licensing and inspection activities. Fees and fines have not changed since July 1,
2020. The city requires a 90% self-supporting budget in the rental housing budget due
to the business nature of rental properties. 10% of the budget is sourced from the
general funds for activities completed by the rental inspectors that are unrelated to
rentals, such as vacant/abandoned building enforcement, nuisance/problem properties,
and homeowner enforcement for property maintenance.
A revenue and expense review was completed in December 2023 to prepare for the
fiscal year 2025 budget. This review showed that the last three years of salary
increases, inflation for equipment, and training cost increases is creating a less than
90% self-supporting in the rental housing budget for the current fiscal year and moving
forward into Fiscal Year 2025.
Rental licenses are sent to rental property owners on a calendar year basis. Calendar
year 2024 licenses have not been issued; therefore, it is possible to increase licensing
fees to ensure the rental housing activities are 90% self -supported.
Inspection fees prior to July 1, 2019, were $50 per inspection, with the first re -inspection
costing $0. This provided no incentive for property owners to pre -inspect their unit and
ensure code compliance before an initial inspection. The city changed the inspection
fees, offering the initial inspection for $0 and any re -inspection for $85. This has
significantly decreased the number of times an inspector has to revisit a unit to re-
inspect. Unfortunately, this is also why the city is receiving less revenue in Fiscal Year
2024 than anticipated; however, this is great news for the safety and well-being of our
residents.
Additionally, the city hired an additional inspector in Fiscal Year 2020 to work toward
achieving a 5-year cycle. The city has reached and exceeded the 5-year cycle and is
currently operating under a 4.5-year cycle. With current staff levels, we can
accommodate a 4-year cycle and possibly as short as a 3-year cycle. As more rental
units pass inspection on a first visit by an inspector, the more units can be inspected
each year. The pass rate for units is continuing to increase, as was the goal when
inspection fees were changed in 2019. This allows the city to decrease the rental
inspection cycle below 5 years.
This decrease in the rental inspection cycle would help Dubuque match the average
rental licensing cycle reported by the top 15 cities in Iowa. The following chart shows
the top 15 Iowa cities and their inspection schedules:
Des Moines
211,034
9 months -3.5 yrs
Cedar Rapids
136,429
3 yrs (Recently changed from 5 yrs)
Davenport
100,486
2 yrs - 4 yrs
Sioux City
85,497
4 yrs
Iowa City
75,233
2 yrs
Ankeny
72,222
3 yrs
West Des Moines
70,741
2 yrs
Ames
66,950
1 yr, 2 yrs, 3 yrs, and 4 yrs
Waterloo
66,562
3 yrs
Council Bluffs
62,405
3 yrs
Dubuque
58,873
5 yrs
Urbandale
46,648
1 yr and 2 yrs
Marion
41,864
2 yrs
Cedar Falls
40,746
3 yrs
Bettendorf
39,548
4 yrs
The city continues to need more housing units. Several new units have been proposed
and are in review or under development currently. Units under development will not
require an inspection for 3-4 years from rental licensing inspectors. The Certificate of
Occupancy issued upon completion of new units or fully rehabbed units serves as the
initial inspection for licensing; therefore, we do not anticipate these new units affecting
the inspection cycle for another few years.
Discussion:
After staff review of the FY 2024 budget (current year), revenue for re -inspections is
much lower than the adopted budget. This is due to the number of units passing
inspection during the first visit or passing the inspection by submitting a picture of a fix
required from the first inspection, so that an inspector did not need to revisit the unit.
2
Based on this data, staff proposed the following fee changes to the Dubuque Area
Landlord Association on January 25, 2024, to be in effect for rental licensing in calendar
year 2024.
Current Fee
Proposed Fee
Structure
$25
$35
Dwelling
$30
$40
Rooming Unit
$20
$30
Inspection
$0
$0
Re -Inspection
$85
$100
Picture Re -Inspection
$0
$50
These fees were based on the cost of an inspector's time (salary, benefits, training,
equipment) to complete the task being billed. The cost per hour for a rental license
activity is $100.
Based on the Dubuque Area Landlord Association Board feedback, it would be
preferred that picture re -inspection fees were lower, and an increase in the rental
licensing fees to balance revenue/expenses at 90% self-supporting, the following fee
schedule is being proposed:
Current Fee
Proposed Fee
Structure
$25
$45
Dwelling
$30
$45
Rooming Unit
$20
$30
Inspection
$0
$0
Re -Inspection
$85
$100
Picture Re -Inspection
$0
$25
This proposal reduces the cost of the picture fee and increases the rental licensing fees.
Budget:
The proposed fee schedule changes decrease the revenue budget for inspections and
increases the revenue budget derived from licensing. Licensing is a more stable source
of revenue and a more predictable expense for landlords. This will help both the city and
landlords anticipate expenses/revenues more efficiently.
Current
Budget
Proposed New
Budget
Difference
Licensing
$422,000
$600,000
$178,000
Inspection
$172,000
$20,000
$152,000
Additionally, District Court Fines/Fees revenue will decline with less units receiving
municipal infractions for non-compliance with property maintenance codes. The
licensing revenue increase will compensate for this change as well.
Recommendation:
I respectfully request the City Council consider the recommended rental license and
inspection fee increases as proposed to be effective for the calendar year 2024
licensing fees and effective March 1, 2024 for inspection fees.
3
CC: Michael Belmont, Assistant Director of Housing & Community Development
Ben Pothoff, Deputy Code Official
Prepared by Alexis Steger, Housing & Com.munitV Devel., 350 W. 0� St., Suite 312 563 690-6072
Return to Adrienne N. Breitfelder, City Cleric, 50 W. 1P St., Dubuque, IA 52001, (563) 589-4100
RESOLUTION NO. 32 - 24
RESOLUTION APPROVING THE INCREASE IN FEES FOR THE RENTAL LICENSE
AND INSPECTION PROGAM
Whereas, the Housing and Community Development Department is requesting a
fee increase to support the activities of the rental license and inspection program in order
to be self-supporting; and
Whereas, the current rental inspection cycle is 5 years and the Housing and
Community Development Department is proposing a shorter cycle of 3 years; and
Whereas, the effective date of the inspection fee increases will be effective March
15t, 2024, and the rental license fee increases will be effective for calendar year 2024 to
ensure the activity is self-supporting in Fiscal Year 2024.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA, THAT:
Section 1. That the rental licensing fee schedule will be changed effective February
5, 2024 as follows:
Dwelling unit fees will be increased from $30 to $45
Structure fees will be increased from $25 to $45
Rooming unit fees will be increased from $20 to $30; and
Section 2. That the penalty fee schedule will be changed effective March 1, 2024
as follows:
Reinspection fee will be increased from $85 to $100
Reinspection fee with picture only will be increased from $0 to $25.
Passed, approved and adopted this 5th day of February 2024.
0,
C .• .•yor
Attest:
Adrienne Breitfelder, City Clerk