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Paonia to again consider building permit fee

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Photo by Tamie Meck Construction on the 12-unit Silver Leaf cohousing development in Paonia began in 2017, substantially increasing the town's building fee revenue for the year. The town is contracting out its building department service and will consider

At next Tuesday's board meeting, on April 24, among several agenda items under "old business," Paonia trustees will consider a draft resolution setting the base fee for building permits at the flat rate of $35 and adjusting the existing fee schedule according to that base fee.

Trustees approved the drafting of the resolution by town attorney Bo Nerlin for consideration prior to the seating of a new board at the April 24 meeting. Trustee David Bradford voted against the motion.

The building department currently charges a $70 base permit fee for the first $500 of valuation.

Trustee Suzanne Watson brought the issue before the board in March. She and Mayor Charles Stewart were on the board at the time the resolution was adopted, which was unanimously approved. The resolution lists the base fee at "35 + formula." Watson believes the flat $35 base fee was "the intent of the board when this was voted on," arguing that the formula kicks in at $501 of valuation.

Mayor Stewart disagreed, but was unable to produce evidence of the formula that amounts to the additional $35. Trying to figure it out "is just a pointless exercise," said Stewart.

Town administrator Ken Knight said the confusion occurred in 2015 when the resolution was adopted. It lists a building permit base rate was $35 "plus formula." Then town manager Jane Berry made the decision "to simply set it at $70 because it was $35 plus $7 for each additional $100," said Knight. Since no permits at that time had been issued for less than $500, she "apparently just said, put down $70" on the new schedule.

Knight suggested three options for the board to consider: a base fee of $35; a base fee of $35, plus $7 for each $100 up to $70; and a flat base rate of $70. The board, he said, needs to make a decision based "on what the intent was in 2015."

The remainder of the existing building permit fee schedule is based on a flat base fee of $70, which will be adjusted to the $35 fee in the draft resolution. "It seems to me, for the research that we've done, and we've done hours, that it should have been $70," based on staff research, said Knight. He said he believes it should be set at $35 plus the additional $7 per $100. "I believe that's where all of the confusion occurred."

Previous town permit fee schedules presented by Watson list a flat base fee with no additional cost per $100. "This is what we used for many years," said Watson. "Three's no delineation of a breakdown for fees between $1-$500." Surrounding governments, including Delta and Hotchkiss, use the same model, said Watson. If the town starts changing the schedule to a different formula, "We're effectively changing the resolution."

Watson and trustee Bill Bear expressed concern that everyone who paid the $70 base fee on a permit could come back and ask for a refund. That isn't likely, Knight said. While people can request a refund, under state statute they would have to demonstrate that fees were collected under bad faith. "The fact of the matter is, nobody did anything in bad faith," said Knight.

In considering whether to vote on the issue at the meeting, attorney Nerlin argued against doing so since it was on the agenda as a discussion item, and to allow for more public comment.

Watson also suggested some housekeeping changes in the draft resolution. And while her last meeting is on April 24, she said she believes a few other building department issues will need to be discussed by the incoming board, including the one-year expiration on permits recently approved by the town. Since a renewal fee is also required, "It's the most expensive building permit on the Western Slope."

Those issues will be passed on to the new board. Also looming before the new board is the issue of the building department itself. The town is considering whether it should be managed in-house, or through contract services. Former City of Delta building inspector Dan Reardon was hired part-time in January after the release for "personnel" matters of former building inspector Dave Coleman.

Since releasing Coleman, the town has been unable to find a certified building official and has been hesitant to hire someone and pay for his or her certification.

In the interim, the town has contracted with Colorado Code Consulting to provide its building department services, for which Reardon is now a consultant. Under the CCC contract, Reardon is serving as both town building official and building inspector.

While permit fees are determined by the fee schedule, building department services will be charged according to the CCC contract, said Knight, pointing to a footnote to the resolution allowing the town the right to collect the actual cost of using an outside agency if it is higher than what the town charges. For example, CCC charges 65 percent of the valuation of the work under the permit fee for a plan review, which is significantly higher than the town's current fee of $50 per hour. "Those are costs the town cannot absorb," said Knight.

Watson, who has stated she opposes hiring an outside contractor, said the building department made a $20,000 profit last year.

Knight said last year's total revenue before costs was roughly $40,000 due to construction of the Silver Leaf subdivision on Second Street, which also brought in additional revenue for the water and sewer funds. It was an unusual year, said Knight. "That is much higher than average."

Trustee Chelsea Bookout, who serves on the town finance and personnel committee, has asked for a cost analysis for certifying a building inspector. Knight replied that it's about $4,300, but that the new hire would remain uncertified for the year it takes to obtain certification.

In considering the prospect of providing services in-house, "A town the size of Paonia should be able to get by with one person, if that person has the right experience," said Knight.

A good building department, said Knight, must maintain consistency. "The most important thing is that the department ensures that building standards are met and operates for the health, safety and well-being of the community."

Knight said he anticipates a work session in the near future to discuss whether the town wants to go with long-term contracts or to hire a building inspector. In the meantime, said Knight, the town is accepting applications for a building inspector.

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