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Who should staff this effort? <br />3.2 Building inspection services are now at capacity and will <br />be for years. Staff is suggesting that the HRA first review the possibility of contracting <br />for the inspection services through an outside agency such as the Housing Resource <br />Center. This option is currently being reviewed. Another alternative is to partner with <br />another city for the services such as Little Canada, Shoreview, New Brighton or Mounds <br />View. Whoever the new inspectors are, they will need access to existing records within <br />both the planning and building inspection files. <br />How will the program be funded? <br />3.3 Staff estimates that the cost to implement and run <br />the program would require between $50,000 to $80,000 expenditure annually depending <br />upon the structure. This does not include legal fees needed to gain compliance through <br />court actions. The Council has funded the HRA’s recommended HRA levy for 2006 <br />Staff has also <br />specifically to implement a single family rental license program. <br />requested estimates to contract for this service through the Housing Resource <br />Center as an alternative to hiring new staff and/or partnering with other <br />communities. Staff estimates these contract costs may be up to 40% less for this <br />option. <br />Possible Fee Structure <br />3.4: The cost of the new program will be partially offset by fees <br />paid by rental owners. Using Ramsey County data for single family non-homestead <br />properties, plus duplexes, triplexes and fourplexes, there are an estimated 450units <br />subject to annual licensing. Using the average fee per unit charged by other communities <br />(refer to attached chart) of $50 per unit with an 80% collection rate, a total of <br />approximately $18,000 could be collected in fees. The maximum charged by the <br />communities evaluated was $75 per unit which would generate an estimated $27,000 in <br />annual fees. At best, this revenue can support 40 to 50% of the estimated costs, if staff <br />must be hired. <br />Staff cautions the HRA and Council with relying solely upon fees to <br />support the program for several reasons. <br />A fee of $220 would need to be charged to cover a budget of <br />$80,000 which is far above that of other communities surveyed. <br />Also, there is a possibility, especially in the first year, that the <br />collection of the fee will be slow. <br />The first year of a new program will require a learning curve – <br />whether it is implemented by new staff or through a contract. <br />Addressing issues of high license fees above what other <br />communities charge will likely hinder the implementation and <br />inspection process. <br />If after the first year, the charge can be justified, a fee increase <br />could be evaluated and/or a larger penalty for non-compliance and <br />reinspection could be evaluated. <br />The goal of the program should ultimately be to improve the <br />housing condition no matter who lives in the home. Working <br />toward compliance without contention should be the goal. <br />RHRAD_ Rental Licensing (09-20-05) - Page 3 of 4 <br /> <br />