Administration - Erik Thorvig, Community Development Director
Title
Title
Approval of Residential Building Inspections Contract with Rum River Consulting
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Executive Summary
Due to unanticipated large commercial projects, which includes multiple apartments and increasing level of residential single-family & townhome construction, staff is requesting contracting for back-up residential inspection services.
Background
On April 18, 2022, the City Council approved a contract with MNSPECT for residential inspection services in the amount of $89,600. Unfortunately, MNSPECT has not been able to commit an inspector to the City of Blaine. They are unable to provide a timeline of if/when an inspector will be made available. Given the urgency to obtain additional help, staff is proposing to cancel the contract with MNSPECT and hire Rum River Consulting. Rum River Consulting submitted a proposal for the initial request. The proposal is to enter a 7-month contract (June-December), 5 days/week. Rum River Consulting charges $120/hour, so the total amount of the contract would be $134,400. Unfortunately, there is a limited pool of companies that provide this type of service.
Staff contacted Rum River Consulting and they confirmed they would have a residential inspector available immediately. Staff also asked about the possibility of hiring a second inspector for 3-months (June-August). Rum River Consulting believes they would have another inspector available. This would cost an additional $57,600.
Residential single-family home and townhome construction has increased recently which has affected the typical customer standard of one-week plan review and five-day inspection lead time. Due to the delays, several complaints have been received and staff would anticipate this trend to continue if additional staffing is not provided. Contracting with a company to provide additional residential inspections accomplishes increased levels of customer service, mainly related to reduced timing for residential inspections and plan review. It also will shift time from commercial inspectors who also perform residential inspections, and our residential inspectors to assist with the apartment projects.
The department has made other efforts to improve plan review and inspection timelines including hiring two interns (budgeted 2022 expense) in May that assist with basic inspections and plan review, approving budgeted overtime allowing inspections to occur outside of typical business hours, including weekends, and completing multiple inspections at a jobsite when able.
In 2021, 527 single-family/townhome units were permitted versus 267 the prior year. As of May 31, 2022, the city of Blaine has issued 211 single-family/townhome permits. A total of 603 units have been permitted between single-family, townhome and multi-family projects. Blaine ranks third behind Woodbury and Lakeville for single-family/townhome permits issued and third in overall units behind Edina and Minnetonka. In addition to the new residential activity, Blaine is also experiencing development in the commercial/industrial sector with projects such as Lexington Meadows, Blaine 35, Sanctuary Business Center, etc. Homeowner permits for decks, fences, sheds, etc., will also increase now that the summer months have arrived.
The city of Blaine has issued three apartment projects in 2022 (the fourth project was permitted at the end of 2021). Permit revenue for the three projects is $730,361. The finance department estimated overall building permit revenues for 2022 to be $1.3M. Based on discussions with the Finance Department, the increased revenue from the apartment projects will create approximately $600,000 in additional revenue not projected as part of the 2022 budget. Therefore, the cost of hiring a contractual residential inspector would be funded through the revenue from the three apartment projects issued in 2022.
Because apartment construction/inspections are typically over a 16-18-month period, an assessment of possible future inspection services will need to be made before the contract expires. Hiring a contractor to assist in this work is a preferred method versus hiring a full-time staff person as the level of need will likely decrease at some point in the future.
Financial Impact
This need was not identified in the 2022 budget. The city of Blaine has issued three apartment projects in 2022 (the fourth project was permitted at the end of 2021). Permit revenue for the three projects is $730,361. The Finance Department estimated overall permit revenues for 2022 to be $1.3 million. Based on discussions with the finance department, the increased revenue from the apartment projects will create approximately $600,000 in additional revenue not projected as part of the 2022 budget. Therefore, the cost of hiring a contractual residential inspector is covered through the revenue from the three apartment projects issued in 2022.
Staff Recommendation
Staff is asking the City Council to consider approving a 7-month contract with Rum River Consulting totaling $134,400. Staff is requesting the City Council to consider an addition to the contract for an inspector for a 3-month period at a cost of $57,600.
The action is by motion, to accept the proposal by Rum River Consulting for residential building inspection services and authorize the City Manager to execute any necessary contracts.