Building costs too high? Residents question whether high costs are result of 'more critical areas' or inefficiencies

With its open spaces, miles of shoreline and environmental consciousness, Bainbridge Island's building costs are almost 10 times higher than other cities in the region

By JOHN WALDO/ Staff Writer
Bainbridge Review

11/7/02

Bainbridge Island, WA - With its open spaces, miles of shoreline and environmental consciousness, Bainbridge Island isn’t like other cities in Western Washington.

But are those differences sufficient to explain why the costs of issuing a building or planning permit are higher on Bainbridge than in certain other cities in the region – in some cases, almost 10 times as high?

“There are more critical areas here, the process is more complicated so it takes longer,” said Mayor Darlene Kordonowy, who said she thought conditions specific to the island drove up permit costs.

Bainbridge City Council chair Michael Pollock was less sanguine.

“I think there may be some inefficiencies,” he said. “As legislators, we can’t get involved in this, but it may be something the administration wants to take a look at.”

A recent consultants’ report, prepared in connection with an examination of whether the city should increase the fees it charges to builders, listed the level of activity and the overall costs for Bainbridge Island and six other communities – Bellevue, Bellingham, Kirkland, Mercer Island, Redmond and Vancouver.

The city’s costs are a combination of direct costs in building and planning staff time, support costs – uch things as legal and training costs – and general administrative costs – such things as planning administration and pro-rata costs of building occupancy and a share of general city overhead.

Last year, Bainbridge Island incurred direct and indirect costs of $1.6 million to issue 495 building permits, a cost per permit of $2,342. That was more than twice the per-permit cost of $1,113 in Bellevue, the next highest city. Building permit costs in the other five cities were lower still, ranging from $725 in Mercer Island down to $329 in Redmond.

On the land-use-planning side, Bainbridge Island incurred costs of $1.67 million to issue 235 permits, a per-permit cost of $7,115. The next-highest cost was registered in Kirkland, at $5,879.

City Planning Director Stephanie Warren said some of the cost differences stem from the character of the island.
“We have a lot of vacant land and a lot of new construction, which takes longer to inspect than a remodel,” she said.

Cost categories

Mainly, though, Warren said that the cost numbers are driven by what the city’s accountants decide to include within the cost categories.

City Finance Director Ralph Eells agrees.

“We have a new, expensive city hall, and we’re charging a pro-rata portion of that to building and planning,” City Finance Director Ralph Eells said. “That’s a substantial amount.”

The consultant’s report, based on city-furnished data, shows an “occupancy” cost for the building and planning department of over $500,000, which works out to more than $700 for each permit.

Some of the costs come from the level of scrutiny applied, Eells said. “We have a significantly higher standard of care for the community in terms of looking at environmental issues,” he said.

The purpose of the consultant’s report was to aid in determining whether the city should recover a greater percentage of its costs from the applicants. Presently, the city charges applicants some 73 percent of the costs it incurs in issuing a building permit, but only 22 percent of city costs of issuing a planning permit, such as a subdivision application.

While the other cities recovered a higher percentage of their costs, Bainbridge’s dollar recoveries were in line with the other cities. Bainbridge charged $1,713 per building permit, well above charges in other cities that ranged from $1,113 in Bellevue down to $304 in Redmond.

On the planning side, Bainbridge fell in the middle in terms of dollar recoveries. The $1,549 it charged per planning permit was well below the $2,833 charged in Redmond or the $2,490 charged by Kirkland, but topped the $894 charged in Mercer Island and the $456 charged by Vancouver.

Apple to apple?

Consultant Tracey Dunlap cautioned against making judgments based on the cost comparisons, because the cities derive their figures in different ways.

“In a gross way, you can say that something costs more or less, but you can’t really say whether it’s twice as much or three times as much without going into much more detail. And when you do, you may find that it ought to cost more.”

Cost discrepancies can highlight areas for inquiry, she said.

“Information like this may raise questions,” she said, “but it doesn’t tell you why something costs what it does, nor does it let you make a judgment as to whether something is good or bad.”

Allan Ferrin, chair of the citizens committee studying the costs, said the committee favored a higher level of cost recovery on the planning side, but did not believe applicants should have to pay for inefficiencies.

He said the city was taking steps to deal with efficiency problems, and his personal belief was that it should be given more time to implement those measures before any major fee changes are enacted.

“I would like to reconvene the committee in six months and see where we are,” he said.

City council finance committee chair Bill Knobloch said the fee question is in “political limbo,” and would become part of the overall discussion of the city budget.

“We have not gotten to the planning department yet, but the efficiency issue will be one of the thing set look at as the budget discussion goes forward,” he said.