construction costs and permit fees

[BSSTG]

Greetings all,

Am wondering how other jurisdictions handle construction costs relative to permit fees. The last 3 places I've worked there were no absolutes if the BO was doubting the const cost as put forth on the permit apps from contractors. I have had cause to question a few in the past but have never come up with a definitive method of costing projects if need be if they were questionable. Now I've had another one come up that our outside plan reviewer says is priced at about 1/2 the national average. (12,000 ft. buildout). I'm tempted to go with RS Means but I sure would like to get some feedback from you all. I might add that the kicker that seems to come into play is the price of a major remodel or build out. New buildings have not been an issue thus far.

thanksabunch

BS

 

[Mule]

It's not ethical to tell a contractor that he is lying! What I have done in the past is actually request to see the contract between the two parties or say something like WOW! I need you to come build the identical bulding at my house for that price.

Is that legal... don't know! Have not asked that too many times because I have a pretty good feel of what a job should cost. I guess it comes with age!!!

Of course I don't push the issue unless the contractor is being a real jerk!

 

[gbhammer]

On the rare occasion I may ask for a detailed break down of construction cost for a commercial application. When I say rare I mean that I've only done so 3 times in almost 4 years and about 850 + permits issued.

That does not include when a break down was given in order to meet a 50/50 or the 20% rule for ADA accessibility in existing building alterations.

 

[fatboy]

By amendment to our municipal code, stated value, or Building Valuation Date Table from ICC, whichever is greater. Tenant finishes are 20% of the new construction cost.

 

[Mark K]

You are on shaky ground if your process for determining cost of construction and fees is inconsistent.

I believe you could have a policy that allowed you, when you believed the construction cost was understated, to require the owner provide you with copies of the contract and change orders. The fee then being based on this accurate number.

 

[permitguy]

By amendment to our municipal code, stated value, or Building Valuation Date Table from ICC, whichever is greater. Tenant finishes are 20% of the new construction cost.

This is what I am used to. Works well.

 

[JBI]

When I had input on such things, we decided to ask for an estimated cost and then calculated a cost based on 'average' construiction costs as born out by our local experience (others use published standards...) but the kicker was that our fee schedule, adopted by the Town Board, provided that the higher of the two numbers would be used. We found we were penalizing the honest builders doing high end work, so we added a cap on single family home permits.

 

[iggentleman]

Some jurisdictions have a minimum construction cost for tenant fit outs. In Fairfax it is $15,000. Got silly on a recent small project where the scope of work was paint and adding one door, total cost less than $5000. The county not only wanted to base the cost of the fee on the $15,000 minimum, they also wanted to base the 20% ADA improvements on it.

 

[GCtony]

QUOTE=iggentleman;66539]Some jurisdictions have a minimum construction cost for tenant fit outs. In Fairfax it is $15,000. Got silly on a recent small project where the scope of work was paint and adding one door, total cost less than $5000. The county not only wanted to base the cost of the fee on the $15,000 minimum, they also wanted to base the 20% ADA improvements on it.

If the taxpayers would realize that that $15,000 permit fee is part of the reason they pay more for a hamburger in Faifax compared to say Richmond, I would suspect some supervisers would be answering some questions.

I just received a invoice for a project down 95 from you. A 30000 sq ft tenant buildout. I'm paying right around $8000.00 for a permit. (base on $0.__ per sq ft) Cost of construction is around $200.000. In the Richmond Metro area juristictions, that same permit would be about $1000.00. (based on cost of construction)

So why does Fairfax need $15,000, XXXX county needs $8000 and XXXXX county can do it all for $1000? Since contractors are dishonest and you want a way for them to prove the numbers, shouldn't the AHJ have to justify why they charge what they do for permits?

 

[Mule]

So why does Fairfax need $15,000, XXXX county needs $8000 and XXXXX county can do it all for $1000? Since contractors are dishonest and you want a way for them to prove the numbers, shouldn't the AHJ have to justify why they charge what they do for permits?

Because different counties have more expenses than others. Same as AHJ's. In my department I have 3 employees, permit tech, inspector and BO. However other departments are receiving a certain percentage of permit fee because of there part in the building permit process. If all I had to do was fund the building department I could charge a lot less for a permit.

It's not that way in the real world of permitting. You've got your planners, your engineers, secretaries etc that all have a piece of my pie!

 

[mtlogcabin]

So why does Fairfax need $15,000, XXXX county needs $8000 and XXXXX county can do it all for $1000? Since contractors are dishonest and you want a way for them to prove the numbers, shouldn't the AHJ have to justify why they charge what they do for permits?

Excellent question. Ask for a break down of the fees.

Typically the building department will collect all the various fees at the time a permit is issued.

Example

The fees for a typical SFR are $7,800 here. The building department gets about $800 (average 8 inspections) for the building permit and $50 (1 hour average) for the plan review the rest of the fees are impact fees for water, sewer, police, fire and transportation.. Neighboring city has no impact fees so there permits appear to cost less when in reality they charge about $1,200 for the same house

 

[permitguy]

So why does Fairfax need $15,000, XXXX county needs $8000 and XXXXX county can do it all for $1000?

Besides the various non-permit related fees probably included in that total, don't forget that this is what the elected officials approved. If people are upset enough about it, they'll vote in someone who will change it.

Since contractors are dishonest and you want a way for them to prove the numbers, shouldn't the AHJ have to justify why they charge what they do for permits?

They do have to, if you ask correctly, which they will usually help you do. I always love the shock and amazement on people's faces when they realize how easy it is to get the information they're looking for.

 

[iggentleman]

If the taxpayers would realize that that $15,000 permit fee is part of the reason....

Need to make a clarification. The minimum assumed construction cost is $15,000, and they base the fee on a percentage of the construction cost. For the minimum construction cost, the permit fee is around $550 if there are no revisions.

Fairfax County is reasonable. Arlington County is the one that hits you hard.

Still, they wanted us to spend $3000 for accessibility improvements with a construction cost of only $5000. Talked our way out of it, but had to get a certified estimate, completely itemized.

 

[GCtony]

Thank you all for the comments. After re-reading my first post, it kind of looked like I was looking for a battle. I'm not, I just trying to understand how the other side thinks and operates. This site is probably the most educational for anyone in the construction industry. The more educated I become, hopefully the easier it becomes doing business with the locval governments, especially for someone like us that works all over the mid-atlantic.

Mule, I hear what your saying but I don't agree. Regardless of where that project would be subbmitted, It should take roughly the same number of man hours to procees, review, issue and inspect that project. Lets just assume the AHJ has 40 man hours into a typical upfit valued at $200k; that's like $375 per hour. Now I know all building officials live high off the hog with the big house, fancy cars and membership to the county club, but really $375 per hour? What would an owner say if that toilet they paid $1000 for in smallville will cost them $8000 in bigtown?

Mtnlog, Oh I've asked "that will be $750.00 to process that application and $0.35 per square foot of space. All reinspections have a $300 charge paid before we reinspect. Do you still want the permit?" Of course most juristictions aren't quite as arrogant but it's generally the same attitude, "it is what it is, you either want it or you dont" (not like I can take my business elsewhere)

Fairfax County is reasonable. Arlington County is the one that hits you hard.Still, they wanted us to spend $3000 for accessibility improvements with a construction cost of only $5000. Talked our way out of it, but had to get a certified estimate, completely itemized.

We work all over the mid atlantic and I used to work all over the country, For what it's worth, I no longer work in Northern VA. The process has become so complicated and saturated with red tape that you can't get through it without the services of a permit expiditer. And then the administrative costs on our end (the contractors) become very costly that we're better off letting the project go to that "unsuspecting guy" (PWC has gotten pretty bad with this also)

This all being said, I often wonder if there would be a way to measure the local governments "policies" and the affect it has on the economy. How many hamburgers does mom and pop need to sell to pay for that permit or redo lighting so it meets the ECC?

I would charge for permits just like any other private business.

X number of man hours for plan intake.

it takes an ___average number of man hours for plans review multipied by cost.

this type of project we figure x number of inspections multiplies by cost of an inspector. (mr contractor, use them wisely)

close out/CO takes x number of hours

Like any business, one size doesn't fit all. Why do AHJ charge what they do? Because they can, it's not like we can go next door for a permit, it is what it is, take it or leave it.

 

[mtlogcabin]

Some of the powers to be see the building permit fees as a cash cow to be used as they wish especially when times where good. They need to be reeled in.

Our state laws allow use to build up a reserve which cannot exceed the last 2 fiscal year budgets. If we do fees have to be adjusted downward

Probably similar lanquage in this state where this link is about http://tdn.com/news/article_c5a3c476-e60d-11de-a35d-001cc4c03286.html''>http://tdn.com/news/article_c5a3c476-e60d-11de-a35d-001cc4c03286.html' rel="external nofollow">

http://tdn.com/news/article_c5a3c476-e60d-11de-a35d-001cc4c03286.html

 

[Mule]

I know that our city cannot "bank" any additional funds from permits. We can only charge what it takes to run the department.

GCtony, Let me throw this at you. We are a small city of around 30,000. We do not have as much overhead as the city adjacent to us with a population of 300,000. The same commercial building valuated at $500,000 costs more to permit in the larger city than it does here. I am the plan reviewer and BO.

In the larger city you have a separate plan reviewer and BO. In the bigger city you have more inspectors probably 25 or 30. You have several framing, plumbing, mechanical, electrical and energy inspectors. You still have to pay these salaries if you are building anything or not. All of these inspectors have cars, probably laptops, maintenance on vehicles, cell phones blah blah blah! Bigger building, more expenses to the building and so on.

Our department has one BO and one combination inspector, two trucks, two cell phones and so on. Now which city charges you more. In some....the smaller... just because like you said ... they can! Location has a lot to do with it also...... upscale town vs. low rent slum buckets..........

Our AHJ tries to only cover it's expenses. Yes there are additional costs in our department... a percentage of the planner, assistant planner... you get the jest of it. But all in all it depends on where you are and what that AHJ can get away with........... I agree it's not fair but............

 

[SCBO1]

Use current BVD from the ICC, and they need to somewhat be close or request additional information to verify the valuation number. You can still download this info off the site.

Local lumber yard was charging $14.95 for OSB and the deport was under $7.00 dollars when a material list was submitted awhile back!

pc1

 

[permitguy]

Regardless of where that project would be subbmitted, It should take roughly the same number of man hours to procees, review, issue and inspect that project. Lets just assume the AHJ has 40 man hours into a typical upfit valued at $200k; that's like $375 per hour.

You still seem to be inferring that the amount you write the check for is all a building permit fee. That is rarely the case. For example, in my last jurisdiciton water tap fees were higher than neighboring jurisdictions due to impact fees. These were necessary to secure contracts and ensure the availability of water which the city didn't have rights to otherwise. We also had an impact fee for the construction and maintenance of major roadways which were needed due to new development. Both of these impact fees were unique to our jurisdiction and had nothing to do with reviewing a plan or performing inspections; however, you still wrote the fat check when you picked up your permit.

I also know of jurisdictions that employee licensed engineers to double check every calculation. I'm not saying I agree with the practice, but if that is the level of service they have been directed to provide, it is obviously going to cost more to work there.

 

[fatboy]

I agree, average SFD, permit and plan review for us might end up around $2000, vs. the check being wrote at around $30K...............

 

[GCtony]

PermitGuy and Fatboy, I'm comparing apples to apples. I'm saying a commercial interior renovation (no tap, impact fees, ect) in my area costs $1000. If I build the exact same space 30 miles away in a differnt juristiction it costs $8000. I think Mtlogcabin hit the nail on the head, some governments choose to use the permit fees as a profit generation center. I guess it's one of the few departments where money is being taken in instead of being spent. I don't know but with all the budget cuts we're hearing about, maybe local governments are increasing the charges to the public to help make up for the cuts. Kind of like our game and fisheries did with hunt/fish licenses and the state park system did with increasing park fees. Budgets were cut but it still takes the same amount of money to run the programs.

 

[ICE]

We have a chart for construction cost that can be utilized at our option. The chart gives three columns for the quality of the construction. No kidding, there is below average, average and above average. Well those aren't the exact terms but I'm at home and don't recall the exact terms but that's the idea behind it. Contractors that are aware of the chart's existence all produce below average construction. The chart has no description for remodel work as it is geared toward added square footage so all bets are off when it comes to remodels.

The work in the picture was valued by the contractor at $28k. The work includes additions to the front and back of about 400 sq. ft.{one being a bathroom}, new room layout that required several flush beams, all new windows, complete overhaul as the only things retained were the exterior wall and roof framing. The low valuation sailed through plan check because the work description and plans were grossly incomplete. At the first inspection, I upped the valuation to $85{this will be way below average quality}

I had one that started out as $85k and when I disputed that, the contractor raised the valuation to $250k without balking.

There was a pool with an initial valuation of $18k. At the first inspection I questioned this and the contractor produced a signed contract showing $18k. What he didn't know was that the owner had shown me a contract for $125k. It was one helluva pool.

 

[Yankee]

PermitGuy and Fatboy, I'm comparing apples to apples. I'm saying a commercial interior renovation (no tap, impact fees, ect) in my area costs $1000. If I build the exact same space 30 miles away in a differnt juristiction it costs $8000. I think Mtlogcabin hit the nail on the head, some governments choose to use the permit fees as a profit generation center. I guess it's one of the few departments where money is being taken in instead of being spent. I don't know but with all the budget cuts we're hearing about, maybe local governments are increasing the charges to the public to help make up for the cuts. Kind of like our game and fisheries did with hunt/fish licenses and the state park system did with increasing park fees. Budgets were cut but it still takes the same amount of money to run the programs.

I guess my jurisdiction is the only place where the business community and Economic Development committee scream bloody murder about how unfriendly the fees are (no matter WHAT they are). FWIW, it is all in the hands of the voters. It's not like the departments set their own fees to cover the Corvettes that we drive around.