PCCA Bulletin Board

[Bunky]

I am interested in knowing how different municipalities are handling permit fees when they use third party inspection services.

I know that third parties are limited to 200% of L & I's fee schedule, and different municipalities have different budgets, i.e. police force, urban vs. rural.

Bunky

[Bart]

Hi Bunky,

Third parties are not limited by anything other than the free market for what they charge. Their prices can be competitive or have considerable differences. I have found there is a great deal of difference in what they are able to provide and how well they do their job but little difference in the prices.

TPA are often fee paid by the applicant and do not affect the municipal budget.

[Bunky]

Hey Bart,

Correction, not 200% but 150%. At a BCO Essentials Seminar this amount was mentioned as the limit TPA's may charge for their fees. I may have missed if that was for certain TYPES of inspections i.e. accessibility, but the restriction was supposedly in place. (My seminar handout is @ work. I can research the statement later.) The 150%-of amount would be a significant fee, don't you think?

Bunky

[Bart]

150% is the correct figure but I believe the bill is in the legislature and hasn't made it to law yet.

150% sounds high but do they limit what anyone else can charge for anything (except Milk) in the state? Should we limit McDonalds to 150% of what the state cafeteria charges? Or will they require Ford to sell TPA's cars at no more than the state motor pool pays? Where should it stop?

Just asking. I would like to think we are still in a free society and that free enterprise will set the rates. For example if someone is gouging $1000 or more to do a simple single family home in an area where $450 could do the job there seems to be a buisness opportunity.

I would also like to point out that L&I does not have to worry about wages, office space, expence, workmans comp, liability insurance, etc. Those items are life and death to a TPA especially the liability issue. I imagine if L&I went over budget or got sued for something they would dip into the bottomless pockets of the treasury to help out. I saw noting in the legislation that allows TPA's to do the same thing.

Seems kinda' funny the legislature wants to regulate someone elses wages doesn't it?

[homebild]

Bunky is correct.

The fee limitation for 3rd parties is 150%.

Although this may seem high, I don't think it is considering that the 3rd party agency must cover all of its expenses via permit fees alone, unlike a municipal code office which may receive parts of its budget from other than permit fees.

If I remember correctly, there was no limit to the 150% as to types of inspections.

While 150% is the limit, the reality is that increased competition brings these fees down to a more equitable level, even to the point of driving 3rd parties out of business in some cases when it no longer becomes profitable to even drive to a remote location for an inspection.

Remember also, that TPAs (Third Party Agencies) often have to cover multiple counties just to survive in many rural locations, and a single inspection could literally involve a several hundred mile round trip and hours just getting too and from the inspection site.

If you check the counties in which TPAs work, you will find this to be true.

Municipal inspections can be done for far less in most cases.

[jar546]

Do not forget that many TPAs are under contract with the municipality to give a percentage of revenues back to the municipality.

[Guest]

There is currently NO cap on fees that third-party agencies may charge. There is a bill in the Legislature, but it has not been passed. As mentioned in an earlier posting, third-party agencies may charge whatever the market will bear, or whatever they have negotiated as part of their contract with the municipality. Not all municipalities are collecting a percentage of those fees--it really depends on the terms of the contract (if there is one). Some municipalities are charging their own administrative fee above what the third-party charges, some are directing applicants to their contracted third-party agency, and some providing applicants with a list of third-parties to choose from. (Or a combination of any of the above!)

[bob]

Michelle is thoroughly correct --- there are no CAPS at this time on TPA fees. A bill was introduced, but has not seen any recent action.

Keep in mind that some municipalities have a BCO on staff who collects fees and issues permits/COs and the TPA does some or all inspections (and maybe plan review).

Other municipalities do not have a BCO on staff....they contract with the TPA to do everything, including fee collection and permit issuance.

The variety of ways in which this is handled is broad. The fees charged by TPAs to municipalities is also broad, but for the most part, the market is highly competitive, and this has driven fee schedules DOWN.

And....how much municipalities charge for administering the UCC, with or without a TPA, ranges from $0 to $Big Bucks.

Final point....the MPC (Municipalities Planning Code) requires that municipal fees for services must be reasonable and justifable, or else they could be considered an illegal tax (if challenged by someone).