Memorandum

City of Lawrence

Planning & Development Services

TO:	Building Code Board of Appeals
FROM:	Barry Walthall, Building Codes Administrator
C:	Scott McCullough, Planning and Development Services Director
Date:	August 23, 2013
RE:	Request for change in permit fees for solar panel projects

Attached is a request from Aron Cromwell of Cromwell Environmental/Solar to consider an alteration in the permit fee schedule for solar panel projects. The City Commission received this request at their meeting on August 6, 2013 and referred the request to the Building Code Board of Appeals for recommendations.

Staff Analysis

Building permit fees are determined based on the estimated permit value at the time of application in accordance with Section 5-177 of the City of Lawrence Code:

The value to be used in computing the permit fee is the total value of all construction work for which the permit is issued, including materials and labor, as well as all finish work, painting, roofing, electrical, plumbing, heating, air conditioning, elevators, fire-extinguishing systems and any other permanent equipment. This total value of construction is the basis for the calculation of the permit fee based on the Schedule of Permit Fees as published in Section 5-176 of the City of Lawrence Code (attached).

There is precedent in assessing standardized permit fees for specific projects. In 2008 the Mechanical Code Board of Appeals received a similar request for the installation of residential mechanical equipment. The stated intent with that request was to create a level playing field for all mechanical contractors pulling permits for residential installation and replacement of mechanical equipment. Some mechanical contractors were concerned that different fees were assessed based on differing valuations for very similar work. For that request staff researched the value of mechanical work that was being reported on permit applications, the average permit fees assessed for residential mechanical permits, and the resources expended in providing services. The result was a standard fee of $65 per piece of equipment for mechanical permits to install or replace mechanical equipment for residential projects. This $65 fee was determined to roughly approximate the expenditure of resources by the City to provide permitting and inspections services. Similar methodology was used in 2010 when contractor licensing fees were adjusted to discontinue collecting fees for contractor continuing education. A license application fee of $65 was established, and license fees were reduced from $200 to $65 for both initial licenses and annual renewals. These fees are intended to cover the cost of providing review and inspection services as well as overhead costs.

A report from Eileen Horn, the City/County Sustainability Coordinator is attached that provides information regarding best practices for assessment of fees for solar panel installations, and an email supporting the request for a change in the permit fee structure from Scott W. White, Chair of the City of Lawrence Sustainability Advisory Board. Ms. Horn’s report supports the concept of a standardized fee for solar panel installations as a best practice, as does the correspondence from Mr. White.

Recommendation

Staff recommends that Section 5-176 of the City of Lawrence Code regarding the Schedule of Fees be amended to establish a standardized fee of $65 for standalone solar panel installations as follows:

5-176 Schedule of permit fees.

On buildings, structures, electrical, gas, mechanical and plumbing systems or alterations requiring a permit, a fee for each permit shall be paid as required, in accordance with the schedule as established by the applicable governing authority. (Ord. 8583)

Permit Fee Schedule

TOTAL VALUATION	FEE
$1 to $500	$23.50
$501 to $2,000	$23.50 for the first $500 plus 3.05 for each additional $100 or fraction thereof, to and including $2,000
$2,001 to $25,000	$69.25 for the first $2,000 plus $14.00 for each additional $1,000 or fraction thereof, to and including $25,000
$25,001 to $50,000	$391.25 for the first $25,000 plus $10.10 for each additional $1,000 or fraction thereof, to and including $50,000
$50,001 to $100,000	$643.75 for the first $50,000 plus $7.00 for each additional $1,000 or fraction thereof, to and including $100,000
$100,001 to $500,000	$993.75 for the first $100,000 plus $5.60 for each additional $1,000 or fraction thereof, to and including $500,000
$500,001 to $1,000,000	$3,233.75 for the first $500,000 plus $4.75 for each additional $1,000 or fraction thereof, to and including $1,000,000
$1,000,001 to $5,000,000	$5608.75 for the first $1,000,000 plus $3.15 for each additional $1,000 or fraction thereof, to and including $5,000,000
$5,000,001 to $15,000,000	$17,980.92 for the first $5,000,000 plus $1.54 for each additional $1,000 or fraction thereof, to and including $15,000,000
$15,000,001 and above	$33,562.30 for the first $15,000,000 plus $1.02 for each additional $1,000 or fraction thereof

Other Inspections and Fees:

(A) Inspections outside of normal business hours	$47.00 per hour* (minimum charges - two hours)
(B) Re-inspection fees when assessed by the building official under the provisions of Section 108.8	$47.00 per hour*
(C) Inspections for which no fee is specifically indicated	$47.00 per hour* (minimum charge - one-half hour)
(D) Additional plan review required by changes, additions, or revisions to approved plans	$47.00 per hour* (minimum charge - one-half hour)
(E) Permits for Residential Furnaces and Air Conditioners	$65.00**
(F) Standalone solar power projects	$65.00

*Or the total hourly cost to the jurisdiction, whichever is the greatest. This cost shall include supervision, overhead, equipment, hourly wages and fringe benefits of the employees involved.

** Per piece of equipment.