# Fees and BVD



## Code Neophyte (Feb 8, 2011)

We are thinking about transitioning to a BVD-based fee system.  I have two questions:

1.  What are the drawbacks?

2.  How do you schedule fee increases (or do you?) in ordinance?  Can you state that it shall be based on the "August" publication as published each year (so that it happens automatically)?  Or do you stick with your (example) August 2007 values and adjust the multiplier periodically?

It seems like a more equitable way to go (than our current, flat s.f. system), but I don't want to realize any major surprises when it's too late!!!


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## mtlogcabin (Feb 8, 2011)

We use the contractors bid or Architects estimate. The price to build a SFR is anywhere from $65 sq to $165 sq ft. Neither a flat s.f. system or the BVD-based fee system is equitable IMHO

We have used the BVD sytem in the past and the language in the adopting ordinace was something similar to "The latet BVD table as published by the ICBO"


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## High Desert (Feb 8, 2011)

We use that in Oregon. The only drawback right now is that the cost per square foot has gone down because of the value of homes in this economy. So the fees are somewhat smaller than there were in the boom time. We have statute and Oregon Administrative Rule that allows us to utilize the latest ICC one published each April. I used that in my fee resolution.


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## Code Neophyte (Feb 8, 2011)

In running some test scenarios this evening, we're going to have to make a more abrupt change than I'd initially thought.  My current residential flat rate and commercial flat rates don't mesh well with the table as published.  If I base the multiplier on our existing residential fees, the commercial's too low; if I base it on our existing commercial, the residential fees take a ridiculously huge jump.  Does anyone use different multipliers for one- and two-family than for "other than one- and two-family"??


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## Daddy-0- (Feb 8, 2011)

We use a flat fee system that is based on the average number of inspections to be performed based on the type of project. You can get burned when you charge the same permit fee for a 1500sqft ranch and a 8000sqft mansion. No way is perfect.


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## Mule (Feb 9, 2011)

Code Neophyte said:
			
		

> We are thinking about transitioning to a BVD-based fee system.  I have two questions:1.  What are the drawbacks?
> 
> 2.  How do you schedule fee increases (or do you?) in ordinance?  Can you state that it shall be based on the "August" publication as published each year (so that it happens automatically)?  Or do you stick with your (example) August 2007 values and adjust the multiplier periodically?
> 
> It seems like a more equitable way to go (than our current, flat s.f. system), but I don't want to realize any major surprises when it's too late!!!


1. Drawbacks; Sometimes the cost from the BVD is lower than the actual cost of the project.

2. Fee increases. Our fee ordinance addresses this.

Building Permits. Per the following table, building valuation is based on estimated construction cost for the project but not less than the data published by the International Codes Council (as published in Building Safety Journal) *most current addition.* Single-family residential structures shall be based on the estimated construction cost for the project but not less than the value using the "residential" value for the living area and the "utility, miscellaneous" value for the garage.

......We specify cost of construction OR the most current BVD. This keeps us up to date on costs.


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## fatboy (Feb 9, 2011)

FWIW, here is the amendement that we use;

*109.3 Building permit valuations. *The applicant for a permit shall provide an estimated permit value at time of application. Permit valuations shall include total value of work, including materials and labor, for which the permit is being issued, such as electrical, gas, mechanical, plumbing equipment and permanent systems. If, in the opinion of the building official, the value listed on the application is underestimated on the application, the building official may use the greater of either the application value, or the square foot value from the most recent _Building Valuation Data table_, published in the _Building Safety Journal_, by the International Code Council, using a regional cost adjustment of 99%. Final building permit valuation shall be set by the building official.


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## FredK (Feb 9, 2011)

Old office tied it to the cost of living increases.  Must be giving money back these days.


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## Code Neophyte (Feb 10, 2011)

Mule said:
			
		

> Building Permits. Per the following table, building valuation is based on estimated construction cost for the project but not less than the data published by the International Codes Council (as published in Building Safety Journal) *most current addition.* Single-family residential structures shall be based on the estimated construction cost for the project but not less than the value using the "residential" value for the living area and the "utility, miscellaneous" value for the garage.......We specify cost of construction OR the most current BVD. This keeps us up to date on costs.


Thanks, Mule!  I like the way this ordinance is written, with the "not less than BVD" language.  As I've looked around our region, most jurisdictions base their fees on value, but not many make reference to the BVD, and if they do, it's made to sound like an option of last resort, as in it's only rarely used in the most contentious situations, where the applicant declares that the value of his 5,000 s.f. house is $100,000.  I'd like to make it more of an automatic - it is now (as a flat s.f. rate), so I don't want to get into the inevitable arguments with applicants about value.  I _really_ don't want to get into the practice of asking them to submit copies of contracts, etc. - sounds painfully messy.

Anyone else have ordinances similar to Mule's, where the wording is more in the vane of "fees shall be calculated as follows...."?


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## Mule (Feb 10, 2011)

We did have some problems even when we used the BVD system. We had like you said 5000 sq. ft. houses that actually cost more than the BVD table. That's where we stipulated on the estimated cost of construction. The BO (me    ) has the authority to reject any estimate that I do not feel is within reason!

We have several multi-million dollar homes being constructed and the BVD spit them out way below what the actual cost was. We know the builders fudge just a bit on the low side but most of them do pretty good. Those "large" homes take quite a bit of time to inspect. There were time when two inspectors went out and spent 5 to 6 hours performing a framing inspection.


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## Code Neophyte (Feb 10, 2011)

How ugly do those situations get when you invoke your 'authority to reject'?  And what do you use as a basis for your suggested fee on those multi-million-dollar homes?  Do you ask for contracts?


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## Mule (Feb 10, 2011)

It hasn't gotten ugly yet. It's a mutual respect between the building department and our builders. You give me a reasonable estimate and I won't be nit picky!

I've been in this business a looooooong time so I know when a valuation is within reason. I guess it's one of those things you learn with time. I'm not going to push my weight around over a few thousand dollars of evaluation though. If a valuation comes in low in my opinion I discuss it with the builder. If I feel they are being up front and honest with me I'll go with their valuation or the BVD whichever is highest.

We are under the 2009 I-Codes. Section 109.3 gives the BO the authority to deny a permit until the valuation is within reason. If the builder thinks his valuation is correct then the builder has the resposibility to prove his valuation is correct by providing contracts.

From 109.3

unless the applicant can show detailed estimates to

meet the approval of the building official. Final building permit

valuation shall be set by the building official.


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## peach (Feb 11, 2011)

Personally, I think it's magic.. make up an arbitrary system and go with it.. put a limit of $1M on permit fees and pick what works for you.. it makes about as much sense...


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