HomeMy WebLinkAboutItem 12 Springfield Municipal Code Section 7 Rentals AGENDA ITEM SUMMARY Meeting Date: 6/4/2012
Meeting Type:Work Session/Reg. Mtg
Staff Contact/Dept.: Len Goodwin, DPW
Staff Phone No: 726-3753
Estimated Time: 20 minutes/10 minutes
S P R I N G F I E L D
C I T Y C O U N C I L
Council Goals: Provide Financially
Responsible and
Innovative Government
Services
ITEM TITLE: SPRINGFIELD MUNICIPAL CODE SECTION 7 - RENTALS
ACTION
REQUESTED:
Work Session: Review Amended Municipal Code – Section 7 Rentals, particularly
7.340 definition.
Regular Meeting: Adopt/not adopt the following ordinance: AN ORDINANCE
AMENDING THE SPRINGFIELD MUNICIPAL CODE, SECTION 7
“RENTALS”, SECTION 7.340, “DEFINITION” AND DECLARING AN
EMERGENCY.
ISSUE
STATEMENT:
On May 21st, 2012 the City Council requested a review of the amended Springfield
Municipal Code Section 7 – Rentals (7.340) to include triplex, duplex and single
family rental units. Amendment to the code was adopted by Ordinance on July 5th,
2011.
ATTACHMENTS: 1. Council Briefing Memorandum
2. Council Briefing Memorandum date 7/5/2011
3. Draft Notification Postcard
4. Summary of Services Related to Business License Fee
5. Draft Ordinance Repealing
DISCUSSION/
FINANCIAL
IMPACT:
See Council Briefing Memorandum
M E M O R A N D U M City of Springfield 5/31/2012Page 1
M E M O R A N D U M City of Springfield
Date: 6/4/2012
COUNCIL
BRIEFING
MEMORANDUM
To: Gino Grimaldi
From: Len Goodwin, Development and Public Works
Bob Duey, Finance Director
Subject: Municipal Code Business License Review
ISSUE: On May 21st, 2012 the City Council requested a review of the amended Springfield
Municipal Code Section 7 – Rentals (7.340) to include triplex, duplex and single family rental
units. Amendment to the code was adopted by Ordinance on July 5th, 2011.
COUNCIL GOALS/
MANDATE:
Financially Responsible and Stable Government Services
Adopted City policies recognize that the funding sources for different services vary greatly from
full cost recovery to full tax subsidy to outside grants to a combination of many different
sources. Review of rates, sources and cost recovery models on a regular basis is important to
ensure that citizens are able to receive maximum service for the resources available.
BACKGROUND: Each year, Council and staff review existing fees and charges for
appropriateness of the rates for meeting cost recovery targets as well as reviewing for areas
where new or additional fees should be considered. During discussions in Spring 2011, a
number of additional fees were proposed. A change in the existing rental license fee was
proposed to include single family, duplex and triplex rentals in addition to the then-current
licensing requirement for four units or more. Attachment 2 is the briefing memorandum that was
provided to Council in connection with this particular proposal. The various proposals were
discussed at work sessions on March 20, April 13, and May 23. At the same time, the City’s
budget committee was considering a proposed budget for Fiscal Year 2012. The 2012 budget, as
proposed by the City Manager, and as approved by the Budget Committee, presumed that the
Council would enact this fee change, and projected an additional $46,000 in General Fund
revenue for FY 2012, an increase from the FY 2011 projection, which was $62,000 in revenue
collected for the fourplex and above business license. That budget was adopted by the Council
on June 20, 2011.
At that same meeting, the Council conducted a public hearing, and a first reading on ordinance
changes, for some of the fees, including the proposed expansion of the rental license. No one
spoke with respect to this proposal at that hearing.
In July of 2011 staff began work on Phase I of implementation of the revised business license
fee:
• Worked with Lane County to develop a list of duplex and triplex units included in Phase
I
• Recognizing the existing system from the 1980’s lacked capacity and compatibility with
other City systems staff purchased and installed a software system
• 1581 notices mailed out in April 2012 notifying property owners of the required
business license.
Attachment 1
Page 1 of 3
5/31/2012 Page 2
Attachment 1
Page 2 of 3
t notices own multiple units. To date 92 of the owners paid
The annual license fee helps fund Housing and Nuisance Code inspections and enforcement.
ce
nce
addition to the contacts with staff, several Councilors have received direct communications
n
on for
Council decides not to discontinue the expansion of the program, staff is prepared to proceed
During the FY 2013 budget process, staff recommended, and the Budget committee approved, a
projection of a total of $140,000 in business licensing revenue for the General Fund, of which
$108,000 is attributed to the Rental section of the Municipal code. Unfortunately, while a
number of large property managers were informed of the change in the fee, staff did not
effectively communicate with the broad range of property owners. By the time notices were sent
out in April, most owners, even if they were aware of the Council’s action in 2011 had forgotten
the change. As a result, there was more than usual comment on the new fee. In addition, the state
of the data available from Lane County Assessment and Taxation files did not appear to
accurately capture many properties which were duplexes but where the property owner occupied
one of the units.
Phase I - To date:
• 579 payments have been received
• 27 properties have been removed from the database as not meeting the definition of
“RENTAL”
• Staff has been contacted by approximately 75 owners. Of those, the majority were
requesting additional information, indicating their unit is owner occupied and roughly
50% of the callers opposed the fee, not having received prior notice.
• Approximately 1/3 of those paid have opted to pay the license fee for two years.
• Approximately 65% of the owners receiving notices live somewhere other than
Springfield.
• 59% of those who were sen
for multiple properties.
City staff routinely respond to calls and complaints from tenants about habitability and nuisan
issues. The inspection service is provided regardless of the number of units in the project.
There is no existing fee for the inspection service. Including all rental properties under the
business license requirement might be perceived as more equitable, because it spreads the
burden of supporting these General Fund activities across a larger base. It also reduces relia
on property taxes to support these activities, freeing up those resources to support other
programs.
In
from citizens. Most of these contacts have expressed displeasure at the program, either in
general or, in particular with the failure of staff to adequately give property owners advance
notice of the change. With the benefit of hindsight, it is obvious that in the nine months that
elapsed between Council action and the sending of license applications, staff should have bee
more proactive in keeping the community informed about the state of the program and its
planned implementation. Because of this level of concern, Council, on May 21, requested this
review. At that same meeting Council heard from two citizens under Business from the
Audience. One citizen objected to the imposition on the basis that her rental was an
”investment” not a “business.” Another individual indicated an understanding of the reas
the program and appeared supportive, noting that the cost was minimal, but did object to the lack
of communication. That citizen suggested that the Council direct staff to treat all payments as
covering the future (i.e., FY 2013), in effect waiving any fees for FY 2012.
If
with Phase II of the process which involves sending notices to owners of single family rental
properties. Given the lateness of approaching single family rental property owners, staff would
recommend not seeking to recover license fees for FY 2012. In addition, equipped with the
5/31/2012 Page 3
Attachment 1
Page 3 of 3
r the
ptions:
ear to be three options for Council to consider with respect to this program
nd
dverse revenue impact on both FY 2012 and FY 2013. In the
t has
2. that payments made apply for FY 2013. Conduct Phase II
the citizen’s suggestion at the May 21 meeting. While it would
3.
ould leave in place the current actions. Staff would communicate with
ot
uld
ECOMMENDED ACTION:
Staff is recommending option 2. Requiring a business license for all rental units is more
lessons learned through Phase I, staff will include a first contact with the identified rental
property owner to provide information on the business license and allow the property owne
opportunity to validate the property status. This will reduce the instances where a property is
misidentified as a rental, when it is, in fact, occupied by the owner. The business license
application mailing would follow.
O
There app
1. Repeal the Municipal Code Amendment – (draft ordinance attached) and refu
approximately 280 checks
This action would have an a
current year, not only would the projected revenue be lost, but the city would incur
additional expense in refunding payments already received. The Finance Departmen
estimated that it would cost about $976, or roughly $3.50 per check, to process a check
run with those refunds. The average refund would be $21.00. In the case of FY 2013,
the revenue projected in the approved budget would not be received. Staff does not
recommend this option
Delay implementation so
process as described.
This option would track
adversely affect FY 2012 revenue, the impact would be less than Option 1. There would
not be an adverse revenue impact on FY 2013. This option would further the original
purposes of expanding the fee of broadening the base for payment for the variety of
services provided to rental properties while reducing the need for support of those
activities by property taxes. Staff recommends this option
Do nothing
This option w
owners of one family rentals and bill for both Fiscal Year 2012 and 2013. Staff does n
recommend this option. It would not be responsive to the many legitimate concerns
raised by the citizens concerning how the program was implemented. Although it wo
have the less adverse financial impact it would not further the Council goal of
Promoting and Enhancing our Hometown Feel.
R
reflective of the Housing and Nuisance Code activities and is equitable.
Attachment 2
Page 1 of 4
M E M O R A N D U M City of Springfield
Date: 6/22/2011
To: Gino Grimaldi COUNCIL
From: Bob Duey, Finance Director BRIEFING
Subject: Springfield Rentals Ordinance Revision MEMORANDUM
Issue:
The Springfield Municipal Code defines rentals, for business license purposes, as “rooming houses,
hotels, motels and apartments and include all buildings, structures and dwellings containing four or more
units . . .”. As a response to the cost to the City for inspections and ensuring compliance with the City’s
Housing Code on all rental property, staff has recommended that the definition of rentals, for business
license purposes, be revised to read “rentals are single family homes, duplex houses, triplex houses, four
plex houses, rooming houses, hotels, motels and apartments and include all buildings, structures and
dwellings containing one or more units . . .”.
COUNCIL GOALS/
MANDATE:
Financially Responsible and Stable Government Services
Adopted City policies recognize that the funding sources for different services vary greatly from full
cost recovery to full tax subsidy to outside grants to a combination of many different sources. Review of
rates, sources and cost recovery models on a regular basis is important to ensure that citizens are able to
receive maximum service for the resources available.
BACKGROUND
The current proposal is requesting a change in the Springfield Municipal Code that regulates the need
for a business license within the City of Springfield for rental property. Currently a $10 annual license
fee is required for all rentals that have 4 or more units that are kept and maintained for sleeping or lodging
purposes and that are offered to the public for rental or hire for either steady tenants, roomers, or
transients. This proposal would change the requirement to include all rentals starting with those that
have just a single unit.
The City Building Inspectors routinely respond to calls and complaints from tenants about
habitability issues. The inspection service is provided regardless of the number of units in the project.
There is no existing fee for the inspection service. Over the course of the past several years, the number
of tenant complaints regarding non-compliance with assumed building and housing code violations has
risen significantly. The number of complaints received is especially high during the fall and winter
months when electrical, heating, plumbing and weatherproofing issues increase. As the rental stock
continues to age over time, these issues will become even more critical for the occupants of rental housing
within the City. When rental properties are not maintained, tenants may continue, or be forced, to live in
unsafe and or unhealthy housing conditions. In addition, neighborhood property values and the City’s
total assessed value can be impacted by rental units which are not properly maintained.
Attachment 2
Page 2 of 4
Partly in response to a series of calls from tenants about a particular building issue and a general
review of fees assessed through the Development Services Department, staff began a discussion about
adopting a Rental Housing Code that would include all rental housing units --similar to codes in the cities
of Eugene, Corvallis and Gresham. Staff met with City of Eugene staff and reviewed their process and
data systems. A rental housing code would: 1) adopt a set of minimum standards for habitability similar
but less restrictive than the existing Springfield’s Housing Code; 2) provide complaint-based inspections
and an avenue for resolution for all rental units that parallels an already existing compliance process; and
3) create a database for property information, tracking and collection of an annual fee for all rental units
within the City.
In essence, Springfield currently provides this service through complaint driven Housing Code
inspections. If deficiencies are found at the property, City inspectors work with the property owner to
obtain compliance. The inspectors are funded 90% through the dedicated Building Code Enforcement
Fund (Fund 224) and 10% through the General Fund (Fund 100). The business license fees collected for
four-plexes and above, including hotels and motels generates annual general fund revenue of
approximately $62,000. If the Business License Fee Schedule was amended to include tri-plexes,
duplexes and single-family rental properties, it would provide a more equitable means of covering the
cost of providing the service. Preliminary data indicates that there are 3,176 duplex and tri-plex units and
just over 12,000 single-family homes in Springfield. A conservative calculation estimating 10% of
single-family structures to be non-owner occupied would come to a total of just under 4,376 rental units
or roughly $ 46,000 in additional general fund revenues per year.
Municipal Code – Section 7 Rentals – Recommended Changes
7.340 Definition
Rentals are single family houses, duplex houses, triplex houses, rooming houses, hotels, motels and
apartments and include all buildings, structures, and dwellings containing one (four) or more units
that are kept and maintained for sleeping or lodging purposes and that are offered to the public for
rental or hire for either steady tenants, roomers, or transients.
7.342 License Required
No person shall establish, maintain or operate a rental property within the city unless a license for that
use is obtained. Every place or building where rentals are offered, whether for hire or not, shall be
deemed a rental property subject to the provisions of sections 7.340-7.344. Each licensee shall meet
the standards as described in sections 7.000 to 7.006.
7.344 License Fee
Each licensee shall be required to pay the applicable license fee as set by council resolution.
7.346 Recycling Containers
Every person establishing, maintaining or operating a rental comprised of four or more units shall
provide a location for the placement of recycling containers, complying with section 16.110(4)(d) on
the Springfield Development Code. (Section 7.346 added by Ordinance 6070, enacted December 01,
2003).
Springfield Housing Code – Article 7 Housing Code of the Springfield Building Safety Codes
Attachment 2
Page 3 of 4
The purpose of the Springfield Housing code is to provide minimum requirements for the protection
of life, limb, health, property, safety, and welfare of the general public and the owners and occupants of
residential structures. Adopted in 1982, the Code has served Springfield well allowing the City to address
complaints from tenants not being addressed by property owners. Complaints are handled through the
Building Safety Division. Inspectors contact the property owner and when necessary require the purchase
of permits for required repairs.
The Springfield Housing Code, in part, requires the following:
• Every dwelling unit is to be provided with a water closet, a lavatory, and a bathtub or shower.
Each dwelling unit shall be provided with a kitchen sink. All plumbing fixtures shall be
connected to a sanitary sewage disposal system. All plumbing fixtures shall be connected to an
approved water supply and provide hot and cold running water.
• Each dwelling and habitable room shall be provided with natural light by means of windows.
• Each dwelling shall be provided (in lieu of windows) a mechanical ventilation system.
• Every building shall be weather protected to provide shelter for the occupants against the
elements and to exclude dampness.
• Every dwelling unit and guest room shall be provided with heating facilities capable of
maintaining a room temperature of 68 degrees at 3 feet above the floor in all habitable rooms.
• All sleeping rooms must have an escape window with a minimum clear opening height dimension
of 24 inches.
• Where there is electrical power available within 300 feet of the dwelling, each habitable room
shall contain at least two supplied outlets and one light.
• The structure shall be equipped with smoke detectors.
• When a structure has been identified as having two or more deficiencies, the Building Official
may identify the structure as substandard and require corrective action.
Process as it Pertains to Business Licenses and the Inclusion of 1 to 3 unit Residential Investment
Properties:
July – November 2011
Create a detailed tracking system. The Current Business License System has been in place since
the 1980’s. The system is not able to support the level of detail currently maintained on each license.
It is likely that it does not have the capacity for an increase from 600 business licenses to
approximately 5,000. Staff is currently using an Excel spreadsheet in addition to the Business
License System to track the licenses. Viable systems options will continue to be explored.
Work with Lane County Assessment and Taxation and GIS staff to fine tune property lists.
Staff has obtained an initial list of properties that appear to be non owner-occupied. Staff will
Attachment 2
Page 4 of 4
continue to refine the list provided for the initial notification of the amendment to the business license
for residential investment properties.
Review all residential investment properties currently licensed. Identify all four-plexes that were
not licensed due to one unit being occupied by the property owner.
Notify all staff involved with the review of business licenses for residential investment
properties. The increase of licenses will impact Community Services, Planning and Fire
Department. Coordination with all staff involved to time the review process and efficiencies will be
key to the initial licensing of the proposed 1-3 unit investment properties.
December 2011 to April 2012:
Property owner notification.
• Notification and information on the proposed amendment will be sent to all interested parties.
After the notifications are sent staff will:
• Respond to all inquiries on the amendment.
• Correct the database using information provided by those noticed of the change.
• Input licensing information into the database.
• Respond and research all returned mail.
• All new licenses and license renewals mailed out.
July 2012:
All new license fees collected. Included in this process is:
• Collection of fees.
• Second notices.
• Enforcement and warnings on uncollected fees.
• Tracking of all letters and notices sent out.
RECOMMENDED ACTION:
Council is requested to hold a second reading on the proposed ordinance and adopt the ordinance to
re-define the definition of “rentals” for the purpose of requiring the purchase of an annual business
license.
225 Fifth Street
Springeld, OR 97477
Attention Rental
Property Owners
Recently, the Springeld City
Council adopted an ordinance
re-dening the denitions of
“rentals” that may aect you.
Please see reverse for more details...
225 Fifth Street
Springeld, OR 97477
Attention Rental
Property Owners
Recently, the Springeld City
Council adopted an ordinance
re-dening the denitions of
“rentals” that may aect you.
Please see reverse for more details...
DRAFT FOR PHASE II
DRAFT FOR PHASE II
Attachment 3
Page 1 of 2
Dear Rental Property Owner,
In June of 2011, the Springeld City Council adopted an ordinance to re-dene the denition of “rentals” requiring the
purchase of an annual business license. The Springeld Municipal Code now denes rentals, for business license
purposes, as “single family homes, duplex houses, triplex houses, four plex houses, rooming houses, hotels, motels and
apartments and include all buildings structures and dwellings containing one or more units...”
The annual license fee helps fund Housing Code and Nuissance Code inspection services provided by the City’s building
and code inforcement inspectors. The Springeld Housing Code allows the City to address tenant complaints that are not
being attended to by the property owner. Housing Code violations are often are related to the safety and habitability of
the dwelling, such as heating, weather protection, and re safety. Nuissance code violations include improper storage og
garbage, used materials, and stored vehicles.
In the coming weeks, you will receive an application for a business license for each rental property you own. The fee is
$10.50 per rental unit and is renewed on an annual basis. If you have questions regarding the City’s business licensing
program or think you have received this notice in error, please do not hesitate to contact me.
Sincerely,
Jackie Murdoch, Assistant Community Services Manager
541.726.3680
jmurdoch@springeld-or.us
Dear Rental Property Owner,
In June of 2011, the Springeld City Council adopted an ordinance to re-dene the denition of “rentals” requiring the
purchase of an annual business license. The Springeld Municipal Code now denes rentals, for business license
purposes, as “single family homes, duplex houses, triplex houses, four plex houses, rooming houses, hotels, motels and
apartments and include all buildings structures and dwellings containing one or more units...”
The annual license fee helps fund Housing Code and Nuissance Code inspection services provided by the City’s building
and code inforcement inspectors. The Springeld Housing Code allows the City to address tenant complaints that are not
being attended to by the property owner. Housing Code violations are often are related to the safety and habitability of
the dwelling, such as heating, weather protection, and re safety. Nuissance code violations include improper storage og
garbage, used materials, and stored vehicles.
In the coming weeks, you will receive an application for a business license for each rental property you own. The fee is
$10.50 per rental unit and is renewed on an annual basis. If you have questions regarding the City’s business licensing
program or think you have received this notice in error, please do not hesitate to contact me.
Sincerely,
Jackie Murdoch, Assistant Community Services Manager
541.726.3680
jmurdoch@springeld-or.us
Attachment 3
Page 2 of 2
Attachment 4
Page 1 of 2
Summary of Services related to Business License
Staff responds to complaints regarding violations of the Nuisance Ordinance; Springfield Development
Code land use regulations and Building Safety Codes.
Springfield City Code Section 5.002 Nuisances includes such things as:
• Accumulation of household garbage on private property;
• Accumulation of used materials on private property and in public view. This includes used
building supplies, tires, cartons, paper, scrap, junk, used furniture; appliances, etc.
• Abandoned, unattended, discarded ice‐boxes, refrigerators or other containers accessible to
children;
• Stored, inoperable or damaged vehicles whether licensed or unlicensed and partially or wholly
dismantled on private property;
• Conditions attracting rodents;
• Premises which are in such a state or condition as to cause an offensive odor;
• An accumulation of stagnant or impure water where mosquitoes or other insects may breed.
The Nuisance Ordinance is enforced inside City limits only.
Springfield Development Code:
• Enforcement of conditions of site plan approval, minimum development standards, variances,
refinement plan standards, home occupation standards, discretionary use permits, development
standards for all residential, commercial and industrial properties;
• Activities conducted in the wrong zone;
• Vision clearance problems;
• Setback violations;
• Fence setback and height ;
• Illegal use of recreational vehicles.
Building Safety Codes:
• Springfield Housing Code
• Vacant buildings which are open and accessible
• Dangerous or hazardous buildings
• Building without permits.
Land Use and Building issues are enforced both inside City limits and the Urban Growth Boundary.
Attachment 4
Page 2 of 2
The Springfield Housing Code, in part, requires the following:
• Each dwelling unit is to be provided with a water closet, a lavatory, and a bathtub or shower.
Each dwelling unit shall be provided with a kitchen sink. All plumbing fixtures shall be
connected to a sanitary sewage disposal system. All plumbing fixtures shall be connected to an
approved water supply and provide hot and cold running water.
• Each dwelling and habitable room shall be provided with natural light by means of windows
• Each dwelling shall be provided (in lieu of windows) a mechanical ventilation system.
• Every building shall be weather protected to provide shelter for the occupants against the
elements and to exclude dampness.
• Every dwelling unit shall be weather protected to provide shelter for the occupants against the
elements and to exclude dampness.
• Every dwelling unit and guest room shall be provided with heating facilities capable of
maintaining a room temperature of 68 degrees at 3 feet above the floor in all habitable rooms.
• All sleeping rooms must have an escape window with a minimum clear opening height
dimension of 24 inches.
• Where there is electrical power available within 300 feet of the dwelling, each habitable room
shall contain at least two supplied outlets and one light.
• The structure shall be equipped with smoke detectors.
• When a structure has been identified as having two or more deficiencies, the Building Official
may identify the structure as substandard and require corrective action.