Rental License and Inspection Fees Amendment Copyright 2014
City of Dubuque Action Items # 4.
ITEM TITLE: Rental License and Inspection Fees Amendment
SUMMARY: City Manager recommending amendment to the approved rental property
inspection fees that are to be effective retroactively to April 6, 2015,
including doubling the License Fees for units previously operating without
a license.
RESOLUTION Approving the Increase in the Structure Fee for the Rental
Licensing and Rental Inspection Program
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt Resolution(s)
ATTACHMENTS:
Description Type
❑ Amended Rental License and Inspection Fees-MVM Memo City Manager Memo
❑ Memo Staff Memo
❑ Fee Amendment RESOLUTION Resolutions
THE CITY OF Dubuque
U E I
erica .i
Masterpiece on the Mississippi 2007-2012-2013
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: FY15-16 Rental Property Inspection Fee Amendment
DATE: May 13, 2015
Housing and Community Development Department Director Alvin Nash is
recommending an amendment to the approved rental property inspection fees that are
to be effective retroactively to April 6, 2015. As a part of this recommendation there are
several Rental Licensing and Inspection process and policy changes that must be
considered to offset the proposed reduction in fees.
On March 16, 2015 City Council approved the City Manager's budget recommendation
to increase the rental licensing fees and rental inspection fees. The increases while
substantial were necessary to eliminate the General Fund subsidy of State mandated
rental property inspections. The fee increases allowed the Inspection program to
become self-sustaining and relieved the property tax payers' obligation to support this
activity by charging only property owners who were operating rental units for the
services.
Following City Council adopting the resolution to increase these fees the City Council
requested that the Housing & Community Development Department perform an internal
review of rental property licensing and inspections processes to determine if there were
opportunities for improvement that could provide relief from the fee increases. In
cooperation with the Dubuque Area Landlords Association the City has identified a
value based approach in charging for services that ensures the cost of housing
inspection services is accurately and fairly distributed. While these changes in fees do
not meet the expectations of the Landlord's Association, they are an improvement from
the previous fee schedule.
After performing a comprehensive internal review Housing and Community
Development Department Director Alvin Nash found opportunities to increase operating
efficiency and reduce expenses and is making the six following recommendations to
amend the inspection fee schedule and inspection processes so that the City can
continue to provide a high quality inspection at the lowest cost.
1.) Inspection fee reduction as follows:
RECOMMENDED APPROVED 3/16/15
DWELLING UNIT INSPECTION $ 50.00 $ 70.00
ROOMING UNIT INSPECTION $ 30.00 $ 40.00
CSC DWELLING INSPECTION $ 90.00 $ 110.00
This recommendation provides an effective reduction of between 18-29%
2.) Reduced inspections for pre-approved rental units subject to independent 3rd
party inspections performed by another government agency including units
participating in one of the following:
a. HOME program — Iowa Finance Authority (IFA)
b. Low Income Housing Tax Credit (LIHTC) — Iowa Finance Authority (IFA)
c. Project Based Section 8 — HUD/IFA
d. CBDG — Property rehabilitation
e. OTHER — Subject to City Manager Approval
Units that have received incentives from these programs are subject to
inspections by IFA and/or HUD on a regular basis and therefore are typically
found to be compliant with local codes. To ensure they maintain these
standards, Dwelling and/or Rooming Unit inspections will be carried out on a
random selection of 25% of the participating units. If those units are found to be
in compliance the remaining 75% of the units will be allowed to be self-inspected
and certified by the property owner or their agent.
The units inspected would be subject to the standard inspection fees, however
the units that are self-certified would have a reduced rate of$20 per dwelling unit
or $15 per rooming unit in order to cover the cost of related administrative work
associated including property file maintenance, data verification, and data entry.
RECOMMENDED PREVIOUSLY APPROVED
QUALIFYING 3RD PARTY INSPECTED DWELLIGN UNITS(INSPECTED) $ 50.00 $ 70.00
QUALIFYING 3RD PARTY INSPECTED DWELLING UNITS(SELF CERTIFIED) $ 20.00 $ 70.00
QUALIFYING 3RD PARTY INSPECTED ROOMING UNITS(SRO's)(INSPECTED) $ 30.00 $ 40.00
QUALIFYING 3RD PARTY INSPECTED ROOMING UNITS(SRO's)(SELF CERTIFIED) $ 15.00 $ 40.00
This recommendation provides an effective reduction of between 25-71
3.) College dorm rooms identified and pre-approved for dormitory status by Housing
Inspections will be inspected by the Dubuque Fire Department at a reduced rate.
Fire department staff will determine the number of units to be inspected and all
dormitory units will be billed at a flat rate of$15 when the dorm building is
inspected. This flat fee covers the administrative costs associated with these
inspections.
RECOMMENDED PREVIOUSLY APPROVED
FIRE DEPARTMENT INSPECTION ELIGIBLE DORM ROOM $ 15.00 $ 40.00
This recommendation provides an effective reduction of 63%
4.) Revisions to the inspections process to include the following:
a. Eliminate physical re-inspection of basic non-life safety code violations.
b. Provide smoke alarm batteries when the only violation in a unit is a non-
working smoke alarm and a new battery remedies the violation.
2
c. Improve, maintain, and utilize an approved interpretations log and create
internal policies to prevent un-necessary appeals that can slow the
inspections and repair process.
This recommendation increases efficiency of inspections
5.) General Fund subsidy to replace approximately 7% or $34,480 of the Housing
Inspections operating budget. This amount was prescribed based on the fact
that approximately 5-10% of Housing Inspection staff is spent responding to
complaints, welfare checks, or other neighborhood concerns that relate to owner
occupied properties and therefore should not be charged as a part of rental
property licensing and inspections. The funding will come from additional
Land/lease resources.
This recommendation more accurately recovers costs of services provided
from the appropriate source
6.) Housing Inspection staff identifies rental properties in the City that are being
operated without appropriate Licenses or Inspections on a regular basis. Past
policy was to allow property owners to license the property with no penalty. This
method provides little incentive for rental property owners to proactively abide by
the licensing and inspections requirements. The following approach has been
successfully utilized by other communities to bring non-licensed rental properties
into compliance:
a. Create amnesty period ending August 1 , 2015, during which the City will
coordinate a multi-faceted press release that will clearly state the licensing
requirement and warn of the impending penalty that will begin on August
1 , 2015, which will include a doubling of the license fee.
b. Beginning August 1 , 2015 any rental property operated without the
required license will be subject to doubling licensing fees for the initial
licensing and a Municipal Infraction for $750 + court costs if verified non-
compliant by Housing Inspection staff.
c. If property owner continues to operate a rental property without the
required license or inspections a Municipal Infraction will be issued for
each month of non-compliance following the initial notification of violation.
This recommendation helps to ensure fair and equitable inspections
and code enforcement for all rental properties in the City
It is estimated there are a minimum of 150 landlords who are unlicensed and operating
rental units that have never been inspected.
The resolution also adopts the creation of a penalty for residential rental property
operating without the required license and inspections following a period of amnesty
ending August 1 , 2015.
3
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Mic ael C. Van Milligen'
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
Alvin Nash, Housing & Community Development Department Director
4
THE CITY OF
THE C1]Y cE Dubuque
DUB E DUB E 'IIIA'
Masterpiece on the Mississippi
Masterpiece on the Mississippi
TO: Michael Van Milligen, City Manager
FROM: Alvin Nash, Housing & Community Development Director
DATE: May 12, 2015
RE: FY15-16 Rental Property Inspection Fee Amendment
INTRODUCTION
This memorandum includes a recommend amendment to the approved rental property
inspection fees that are to be effective retroactively to April 6, 2015. As a part of this
recommendation there are several Rental Licensing and Inspection process and policy
changes that must be considered to offset the proposed reduction in fees.
This recommendation includes:
1. Reduction in fees charged for required Rental Housing Inspections
2. Reduced inspection requirements and amended fee schedule for pre-approved
rental units inspected by another government agency (e.g. HUD, IFA)
3. College dormitories to be inspected by the Fire department at a reduced rate
4. Revisions to inspection processes that will allow increased inspection efficiency
and reduced re-inspections
5. Explanation of revised General Fund subsidy
6. Addition of a penalty and process to gain compliance for outstanding non-
licensed rental units
BACKGROUND
City Council's Policy Agenda for 2014-2016 includes Housing Code and Inspections as
one of 7 High Priority agenda items. In order to improve quality of services provided
and improve effectiveness of Code Enforcement, the Housing & Community
Development Department is in the initial stages of a comprehensive overhaul of our
services, code, and fee structure. One of the first steps necessary in this process was
to develop a new fee structure that would incentivize compliance with local codes,
participation in Housing Choice Voucher program, and fully fund the Housing Licensing
& Inspections division of the Housing & Community Development Department.
1
On March 16, 2015 City Council voted to increase the rental licensing fees and rental
inspection fees as recommended by the City Manager. The increases while substantial
were necessary to eliminate the General Fund subsidy of State mandated rental
property inspections. The fee increases allowed the Inspection program to become
self-sustaining and relieved the property tax payers' obligation to support this activity by
charging only property owners who were operating rental units for the services.
Following City Council adopting the resolution to increase these fees the City Manager
and Council requested that the Housing & Community Development Department
preform an internal review of rental property licensing and inspections processes to
determine if there were opportunities for improvement that could provide relief from the
substantial fee increases. Additionally the City of Dubuque in cooperation with the
Dubuque Area Landlords Association has identified a value based approach in charging
for services that ensures the cost of housing inspection services is accurately and fairly
distributed.
DISCUSSION
After performing a comprehensive internal review we are pleased to have uncovered
opportunities to increase operating efficiency and reduce expenses. We are therefore
able to make the six following recommendations to amend the inspection fee schedule
and inspection processes so that we can continue to provide a high quality inspection at
the lowest cost.
1 .) Inspection fee reduction as follows:
RECOMMENDED APPROVED 3/16/15
DWELLING UNIT INSPECTION $ 50.00 $ 70.00
ROOMING UNIT INSPECTION $ 30.00 $ 40.00
CSC DWELLING INSPECTION $ 90.00 $ 110.00
This recommendation provides an effective reduction of between 18-29%
2.) Reduced inspections for pre-approved rental units subject to independent 3rd
party inspections performed by another government agency including units
participating in one of the following:
a. HOME program — Iowa Finance Authority (IFA)
b. Low Income Housing Tax Credit (LIHTC) — Iowa Finance Authority (IFA)
c. Project Based Section 8 — HUD/IFA
d. CBDG — Property rehabilitation
e. OTHER — Subject to City Manager Approval
Units that have received incentives from these programs are subject to
inspections by IFA and/or HUD on a regular basis and therefore are typically
found to be compliant with local codes. To ensure they maintain these
standards, Dwelling and/or Rooming Unit inspections will be carried out on a
random selection of 25% of the participating units. If those units are found to be
2
in compliance the remaining 75% of the units will be allowed to be self-inspected
and certified by the property owner or their agent.
The units inspected would be subject to the standard inspection fees, however
the units that are self-certified would have a reduced rate of$20 per dwelling unit
or $15 per rooming unit in order to cover the cost of related administrative work
associated including property file maintenance, data verification, and data entry.
RECOMMENDED PREVIOUSLY APPROVED
QUALIFYING 3RD PARTY INSPECTED DWELLIGN UNITS(INSPECTED) $ 50.00 $ 70.00
QUALIFYING 3RD PARTY INSPECTED DWELLING UNITS(SELF CERTIFIED) $ 20.00 $ 70.00
QUALIFYING 3RD PARTY INSPECTED ROOMING UNITS(SRO's)(INSPECTED) $ 30.00 $ 40.00
QUALIFYING 3RD PARTY INSPECTED ROOMING UNITS(SRO's)(SELF CERTIFIED) $ 15.00 $ 40.00
This recommendation provides an effective reduction of between 25-71
3.) College dorm rooms identified and pre-approved for dormitory status by Housing
Inspections will be inspected by the Dubuque Fire Department at a reduced rate.
Fire department staff will determine the number of units to be inspected and all
dormitory units will be billed at a flat rate of$15 when the dorm building is
inspected. This flat fee covers the administrative costs associated with these
inspections.
RECOMMENDED PREVIOUSLY APPROVED
FIRE DEPARTMENT INSPECTION ELIGIBLE DORM ROOM $ 15.00 $ 40.00
This recommendation provides an effective reduction of 63%
4.) Revisions to the inspections process to include the following:
a. Eliminate physical re-inspection of basic non-life safety code violations.
b. Provide smoke alarm batteries when the only violation in a unit is a non-
working smoke alarm and a new battery remedies the violation.
c. Improve, maintain, and utilize an approved interpretations log and create
internal policies to prevent un-necessary appeals that can slow the
inspections and repair process.
This recommendation increases efficiency of inspections
5.) General Fund subsidy to replace approximately 7% or $34,480 of the Housing
Inspections operating budget. This amount was prescribed based on the fact
that approximately 5-10% of Housing Inspection staff is spent responding to
complaints, welfare checks, or other neighborhood concerns that relate to owner
occupied properties and therefore should not be charged as a part of rental
property licensing and inspections. The funding will come from additional
Land/lease resources.
This recommendation more accurately recovers costs of services provided from
the appropriate source
6.) Housing Inspection staff identifies rental properties in the City that are being
operated without appropriate Licenses or Inspections on a regular basis. Past
policy was to allow property owners to license the property with no penalty. This
3
method provides little incentive for rental property owners to proactively abide by
the licensing and inspections requirements. The following approach has been
successfully utilized by other communities to bring non-licensed rental properties
into compliance:
a. Create amnesty period ending August 1 , 2015, during which the City will
coordinate a multi-faceted press release that will clearly state the licensing
requirement and warn of the impending penalty that will begin on August
1 , 2015, which will include a doubling of the license fee.
b. Beginning August 1 , 2015 any rental property operated without the
required license will be subject to doubling licensing fees for the initial
licensing and a Municipal Infraction for $750 + court costs if verified non-
compliant by Housing Inspection staff.
c. If property owner continues to operate a rental property without the
required license or inspections a Municipal Infraction will be issued for
each month of non-compliance following the initial notification of violation.
This recommendation helps to ensure fair and equitable inspections and
code enforcement for all rental properties in the City
It is estimated there are a minimum of 150 landlords who are unlicensed and operating
rental units that have never been inspected.
Code enforcement has a vital role in our community and can have a significant impact
on crime, poverty, and quality of life in a city. Community developers have found the
long-term success of their revitalization work often depends on clean up and
redevelopment of problem properties in the neighborhood. These properties can deter
investors, frustrate existing residents, and contribute to an environment of fear, disorder
and crime. Effective code enforcement is part of a balanced neighborhood revitalization
plan that can prevent and reduce the number of problem properties while increasing
awareness and access to community resources. I am confident that the
recommendations included in this memorandum do not compromise our ability to
effectively enforce the City's Housing Code in a fair and equitable manner.
BUDGETIMPACT
The improvement level budget and recommended fee increases will result in total
projected revenue of$498,166. The improvement package will maintain the 5 year
inspection cycle and allow for a variable inspection cycle to addresses marginal
properties. This projects request $34,480 (7%) from the General Fund, $86,816 CDBG
(18%) expenses, and $372,320 (75%) from Licensing and Inspection Fees.
The improvement level budget projects $498,166 for general housing budget which
consist of licensing, rental inspections, single-family inspections, and code enforcement.
4
The maintenance level budget recommendation proposes a fee increase to generate
$156,885 in revenue from rental licensing and inspection fees. The budget below
(without the recommended fee increases) represents the current fee structure at current
staffing levels. The General Housing Program employs 4.2 FTE employees. There are
2.5 FTE General Housing Inspectors'. Fiscal year 2016 expenses are estimated at
$498,166 and revenue without the fee increases is projected as follows:
$372,320 Licensing and Inspection Fees
$ 4,550 Abandoned court appeal fees
$34,480 General Fund
$ 86,816 CDBG
$498,166 General Housing Enforcement Budget
This Budget does not reflect revenues from unlicensed landlords since the amount is
unknown, however adjustments will be made to the 2016-17 Budget to calculate
additional landlord payments
ACTION STEP
It is recommended that City Council adopt the attached resolution, which will modify the
fee structure rental inspection program effective retroactively to April 6, 2015 (including
discussion items 1 , 2, &3). The resolution also adopts the creation of a penalty for
residential rental property operating without the required license and inspections
following a period of amnesty ending August 1 , 2015.
s
RESOLUTION NO. 179-15
A RESOLUTION APPROVING THE INCREASE IN THE STRUCTURE FEE FOR THE
RENTAL LICENSING AND RENTAL INSPECTION PROGRAM
WHEREAS, the Housing and Community Development Department is
requesting an increase in the structure licensing and rental fees in order to self -sustain
the General Housing Code Enforcement Department; and
WHEREAS, the effective date of licensing fees is Januaryl, 2016 and the
effective date of rental inspection fees is April 6, 2015; and
WHEREAS, the following increase in the licensing and rental fees are hereby
proposed:
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. That the license fee for structure be increased from $12 to $25;
Dwelling unit be increased from $12 to $20;
Rooming unit be increased from $3 to $10;
Section 2. That the penalty fees be as follows: late payment penalty fee be increased
from 10% to $25;
a. The No show fee (CGI) would remain the same;
b. The Re -inspection fee for 3rd and subsequent re -inspections be decrease from
$25 to $40;
c. The Re -inspections fee for 2nd and subsequent re -inspections be increased
from zero to $70;
d. Addition room re -inspection fee for 3rd and subsequent re -inspections be
decreased from $5 to zero;
e. Confirmed complaint inspection with penalty to $85
Section 3. That the Inspection fees be reduced as follows:
Dwelling Unit Inspection
Rooming Unit Inspection
CSC Dwelling Inspection
$50.00
$30.00
$90.00
a. Reduced inspections for pre -approved rental units subject to independent 3rd
party inspections performed by another government agency including units
participating in one of the following:
1. HOME program — Iowa Finance Authority (IFA)
2. Low Income Housing Tax Credit (LIHTC) — Iowa Finance Authority (IFA)
3. Project Based Section 8 — HUD/IFA
4. CBDG — Property rehabilitation
5. OTHER — Subject to City Manager Approval
The 2nd and 3rd Party Fees shall be as follows:
Inspected Dwelling Units (Inspected) $50.00
Inspected Dwelling Units (Self -Certified) $20.00
Inspected Rooming Units (SRO's) (Inspected) $30.00
Inspected Rooming Units (SRO's) (Self -Certified) $15.00
Fire Department Inspection Eligible Dorm Room $15.00
Section4.Adoption of this Certificate of Structural Compliance, (CSC) inspection
for new rental property inspection during which additional documentation and
inspection work is completed including sketch of basic floor plans to be maintained the
property record establish record of all habitable space establish maximum occupancy
at the successes successfully passing CSE inspection a certificate of structural
component to be issued. CSCs are transferable to new owners
Sections.AdoptionoftheDwelling UnitlnspectionFee. This fee is waived if the unit
has been inspected by the City of Dubuque's Housing Inspectors in the past two years
for Housing Choice Voucher Section 8 participation.
Section6.Adoption of the rooming unit inspection fee which is charged similar to
the dwelling inspection fee.
Section 7.AdoptionoftheConfirmedComplaintlnspectionFee. This fee is charged
once the tenant has provided written proof of maintenance request to property owner
and/or registered agent. In addition, the tenant has allowed acceptable time for the
property owner/agent to make necessary repairs and the City Inspector has verified to
the complaint has not been repaired and is a housing code violations.
Section 8. Adoption of a Period of Amnesty for Non -Licensed Landlords
a. Create amnesty period ending August 1, 2015, during which the City will
coordinate a multi -faceted press release that will clearly state the licensing
requirement and warn of the impending penalty that will begin on August 1,
2015. Any rental property operated without the required license will be
subject to double license fees for that initial licensing.
b. Beginning August 1, 2015 any rental property operated without the required
license will be subject to doubling licensing fees for the initial licensing and a
Municipal Infraction for $750 + court costs if verified non- compliant by
Housing Inspection staff.
c. If property owner continues to operate a rental property without the required
license or inspections a Municipal Infraction will be issued for each month of
non-compliance following the initial notification of violation.
Section 9. This resolution requires that all penalty fees charged are subject to
appeal through the Housing Code Board of Appeals.
Passed, approved and adopted this 18th day of May, 2015.
vL- Lynn Sutton, Mayor -Pro Tem