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CR 92-30 Inspection Agreement With Wazata \ 1 y 0 January 14, 1992 "'" o P K Council Report No. 92-30 INSPECTION AGREEMENT WITH WAYZATA FOR 1992 Prooosed Action. Staff recommends the following motion: Move to extend the current aareement between the City of Wayzata and City of Hopkins for insoection services for 30 days and authorize the Mayor and City Manaaer to ent~r into a contract with Wayzata for inspection services for the budaet year 1992. Approval of this motion will allow the Mayor and City Manager to execute an agreement with Wayzata to provide inspection services to Wayzata for the 1992 budge~ year. Overview. The City of,Wayzata lost their Building Official and contacted the Hopkins Inspection Department about providing temporary inspection services until a replacement was found. On August 5th the Hopkins City Council approved an agreement with Wayzata to provide temporary inspection service until approximately October 1st. The agreement was extended by the Council until January 31st to allow the Inspection Division to explore the possibility of a longer term agreement. Wayzata has recently notified the staff they would like to enter into an agreement thru the 1992 budget year. The fees generated from Wayzata will help the department meet or exceed budget revenues projected and maximize the utilization of staff. Primary Issues to consider. o will the fees collected cover the associated costs. o will additional staff be necessary o Will the service to Hopkins residents suffer. o What liability will the City incur. o What does the staff recommend. o Alternatives Supportina Information. -~j]~ Thomas Anderson City Building Official Activity CR 92-30 Page 2 Primary Issues to Consider. o will the fees collected cover the associated costs? The fees in the current agreement are $40.00jHR for all inspection time and 50% of the building permit fees for plan checks when a plan is required. The longer term agreement that has been proposed to Wayzata would be a straight 55% percent of all the fees they collect for their permit activity. We have looked at the fee's they have generated over the last several years and feel the percentage proposed will more than cover our costs and be more easily administered. Wayzata will still be required to group inspections and attempt to schedule them first thing in the morning and last thing in the afternoon. This will be put into the agreement to reduce driving time since three of the Hopkins inspectors live beyond Wayzata. This fee structure should allow us to more than cover our costs. o will additional staff be necessary? It will not be necessary to hire any permanent or full time staff. The Inspection Division will be able to handle the additional work load with existing staff during the slower winter months. It maybe necessary, however, dependant on permit activity next year, to hire additional temporary help during the summer months to insure no loss in service to either Wayzata or Hopkins residents. The department has researched the possibility of hiring if needed an intern to assist with the more routine activities in both cities. Several of the larger cities do use this method with great success. These individuals are available thru the community college program at a very low cost in order to gain experience. We have been unable to utilize this method in the past because of our low construction value and the complexity of the projects. with the addition of Wayzata's building activity and projects we will be able to utilize an intern and thereby maximize utilization of our Staff. Permit revenues gained from Wayzata will far exceed any additional temporary employee costs we might encounter. o will the service to Hopkins residents suffer? We feel confident that this project can be taken on for. the budget year 1992 with little or no drop in service to the Hopkins residents if properly managed. The division will need to monitor very closely the permit activity and expected activity. If permit revenues and activity exceed certain levels that justify additional temporary staff, we will need the flexibility to hire a temporary intern. The Inspections Department has issued more CR 92-30 Page 3 permits than last year but has not had the one or two large projects we customarily do. Consequently the department revenues from Hopkins alone are below last years. The revenues we received from Wayzata from September thru December 1991, amounted to about $12,000. Wayzata normally has a larger percentage of bigger projects which will help with our overall construction activities. o What liability will the City incur? As in the current temporary contract, the city of Wayzata will be required to hold harmless and indemnify the city of Hopkins, its employees and Council against all losses, claims, damages or expenses incurred, including legal fees, arising as a result of this agreement. The city of Hopkins must maintain workers compensation on all of the employees assigned to inspections in Wayzata. If the Council approves an agreement, workers compensation will be automatically extended to this function by our insurance carrier at no additional cost to the city. o What does the staff recommend? The staff recommends the Council extend the current agreement with Wayzata for 30 days and authorize the Mayor and city Manager to review and execute an longer term agreement with Wayzata for the 1992 budget year. There appears to be adequate staff to perform inspection services without affecting service to the Hopkins residents. The funds generated will exceed any additional temporary help that might be necessary and therefore will help the department's budget revenues in 1992. Alternatives 1. Approve staff's recommendation. 2. Disapprove staff recommendation. staff will inform Wayzata that the city of Hopkins will not be able to provide inspection services in 1992. 3. Continue for further information. Due to the loss of Wayzata's inspector, Wayzata is in some what of a difficult situation and needs to have the City of Hopkins continue service's until either a longer term relationship is approved or they hire their own Building Official. WAYZATA BUILDING ACTIVITY 1987 1988 1989 1990 VALUATION $11,934,947 $6,136,937 $7,459,060 $12,613,619 TOTAL PERMIT REVENUES $95,019 $71,842 $57,923 $93,033 , HOPKINS REVENUES @ 55% $52,260 $39,513 $31,857 $51,168 1991 FIGURES WERE NOT AVAILABLE AT THIS wRITING BUT THEY WERE COMPARABLE TO 1989 THRU SEPTEMBER OF THIS YEAR. The estimate of cost to the City for one intern is approximately $13,000. This assumes 32hr per week for six months during the summer and no Community College participation in the cost. This is a worst case scenario and could be less dependant on permit activity and college participation. The $13,000 figure includes a salary of $10.00/hr, FICA, liability insurance and personal mileage. At 55% of Wayzata's permit fee's in their slowest year, 1989, Hopkins would have collected about $32,000 in revenues from Wayzata and possibly paid out about $13,000 in additional part-time employee costs. This would have left the city with $19,000 that could have been credited toward our full-time employee costs. In Wayzata's best year, 1987 and assuming we may have needed two interns, we still would have placed $26,000 toward our permanent employee costs The key to proper management of this relationship is to provide Wayzata with good quality timely service without affecting a drop in service to Hopkins residents, and at the same time put some of the proceeds of the relationship toward Hopkins existing permanent staffing costs.