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HomeMy WebLinkAboutCity Council - 12/07/2021 - Workshop APPROVED MINUTES CITY COUNCIL WORKSHOP & OPEN PODIUM TUESDAY, DECEMBER 7, 2021 CITY CENTER 5:00 – 6:25 PM, HERITAGE ROOMS 6:30 – 7:00 PM, COUNCIL CHAMBER CITY COUNCIL: Mayor Ron Case, Council Members Kathy Nelson, Mark Freiberg, PG Narayanan, and Lisa Toomey CITY STAFF: City Manager Rick Getschow, Police Chief Matt Sackett, Fire Chief Scott Gerber, Public Works Director Robert Ellis, Community Development Director Julie Klima, Parks and Recreation Director Jay Lotthammer, Administrative Services/HR Director Alecia Rose, Communications Manager Joyce Lorenz, City Attorney Dan Gregerson, and Recorder Nicole Tingley Workshop - Heritage Rooms I and II (5:30) I. RENTAL LICENSING City Manager Getschow provided an introduction to the presentation on rental licensing noting that the purpose is to provide a briefing on the subject. He noted that there would be some ordinance clean-up on rental licensing coming before the City Council in the next month or two. Chief Gerber stated that the presentation on rental housing and the rental licensing programs would cover the areas of staffing, licensing, inspections, disorderly use, and ordinance updates. First regarding staffing, Gerber shared that the Fire Prevention Division carries out the rental licensing program. This includes Assistant Chief of Training and Prevention Kurt Buchanan and 4 Fire Inspectors. He noted that one full-time-equivalent of a Fire Inspector is funded with rental housing revenue, but that all four Fire Inspectors work on the program. Gerber added that the Building Inspection Division also contributes to the program. That division includes the Building Official and four Building Inspectors. Gerber shared a slide that outlined the areas of responsibilities of the Fire Prevention Division. These are emergency response, permitting and licensing, inspections, code and ordinance enforcement, public education, plan reviews, HUD/Environmental review, hazardous materials storage and use compliance, and fire investigations. Gerber provided a breakdown of the time allocation for the fire inspectors. Gerber stated that 25% of their time is spent relating to rental housing, 29 percent to new construction, 30 percent on existing buildings, nine percent on combination which includes follow-up and other types of inspections, and seven percent related to firefighting. City Council Workshop Minutes December 7, 2021 Page 2 Next, Gerber gave an overview of the licensing process. He stated that the rental housing licensing program includes multi-family housing and single-family housing established within two sections of city ordinance: sections 5.72 and 9.11. Gerber explained that today the license year is January 1 to December 31, but that will be changing from February 1 to January 3. This is so that the following years fees can be captured as the fee schedule is approved by the City Council each December. Gerber stated that today new rental licenses have to be done through a paper process. A new applicant fills out the form and send it in, the City processes it, the applicant pays the fees, and then the license is issued. Mayor Case asked the rental license ordinance stipulates a percentage of the year to mitigate the short-term vacation rental issue. Gerber responded that the City is not doing short-term vacation rental licensing clarifying that if someone wants to rent out their home for any amount of time they have to pay for a license for the whole year. Gerber shared that the renewal process for rental housing licenses can be completed by paper or electronically. In the electronic process the new license is automatically sent at the end. Councilmember Freiberg asked if the license must be displayed on the property. Gerber replied yes. Councilmember Narayanan asked why there is a manual process. Gerber explained that they have to do it this way with the current systems they have. They are bound by LOGIS which is the IT consortium the City is a part of. Buchanan added that with the electronic system the license is issued right away and with a new license they want to inspect the property before the license is issued. Councilmember Nelson inquired if you can use a rental housing license for short-term rentals like Air BNB. Gerber stated that the rental housing licensing program is not promoted for the purposes of short-term rentals, but there is no stipulation on how long a rental must be. Buchanan added that he does not see anything in the ordinance that would prohibit short-term rentals with a license. Case asked if the City has incorporated short-term rental issues into the city code. Getschow responded that the City has not. He added that every now and then he will do an analysis of other cities and also check to see which properties on a short-term rental sites like Air BNB and VRBO. He stated that at this time there are not many Eden Prairie homes on these sites. Case commented that regulation does not need to be done immediately, but this is something the City should keep close tabs on. Freiberg asked if there are people renting in the City without a rental license. Gerber answered that he believes there are. Buchanan estimated that it is less than five percent. He City Council Workshop Minutes December 7, 2021 Page 3 explained there are 60 properties that had licenses in the past, but they are having trouble finding current owner information. These property owners may be renting, but they also may not be. Case asked for clarification if a property owner rents out their property only a few times a year or even once if they need a license. Gerber and Buchanan responded yes and stated that there are likely people doing that without a license. Councilmember Toomey asked if it because they do not know. Gerber responded that could be the case. Nelson asked if property owners can rent out their basements. Buchanan stated that they can, but they need to be licensed the exception being if it is family. The issue is they only find out by someone telling them. Sometimes a clue can be if the property is not homesteaded. Building Official Kevin Schmieg clarified that there needs to be an exchange of money or services to be a rental. For example, a gardener living in your home would require a rental license. He also explained there needs to be continual access between the lower and upper levels of a single-family home. If not, then it would be considered a duplex. Gerber continued the presentation by explaining that Section 9.11 of the rental housing ordinance entails of owner and occupant responsibilities as well as occupancy requirements and standards including both interior and exterior. Gerber then discussed fees. He stated that the current fees are $60 for single-family and $60 per building plus $11.25 per unit for multi-family housing. Gerber showed a table of other surrounding cities with their rental licensing fees and stated that Eden Prairie is charging significantly less. He explained that Minneapolis and St. Paul also charge and additional fee per inspection. Gerber stated that for 2022, fees are proposed to increase to $80 for single- family and $80 plus $12.75 per unit for multi-family housing. Narayanan asked when the last time the fee was changed. Schmieg responded that it is typically changed every two years. Case inquired why Eden Prairie’s fees are so much lower compared to the other cities. Gerber answered that each city’s program is different. For example, Minneapolis and St. Paul have separate rental inspection staff that do detailed rental inspections, so their costs are different. When Eden Prairie’s program was put into place, it was designed to be cost neutral. Gerber views lower fees as a good thing. Narayanan commented that it could also be an incentive for developers. Gerber displayed the actual rental housing revenue amounts for the years 2018 through 2020, the estimated revenue for 2021, and the forecasted revenues for 2022 and 2023. Gerber noted that the revenues in the 140 thousands for 2018 through 2020 meets the target of the program as the cost of a full-time equivalent fire inspector is approximately $130,000. City Council Workshop Minutes December 7, 2021 Page 4 Next in the presentation, Buchanan outlined what an inspection for the rental housing program looks like. Buchanan prefaced that education and prevention are the goal of the program. For single-family units are inspected once every five years and the focus is on resident life safety. Case asked if inspections are always announced. Buchanan said they typically are and added that they use the police department if needed to gain entry. If there are concerns, then a unit will be inspected annually. The City has approximately 1,600 single-family rentals. Freiberg questioned if every five years for an inspection is enough. He commented that increasing the fee to anything under $100 may be able to increase how often an inspection is completed. Buchanan explained that they do adjust how often inspections occur based on complaints and what inspectors see while driving by. The majority of single-family homes are inspected once every five years. Buchanan then discussed inspections for multi-family rental housing. He noted that one of the focuses is inspecting the building common spaces which includes fire protection systems. They also inspect fiver percent of the units also adjusted based on findings. Non-sprinklered buildings (17) are inspected annually, and sprinklered buildings (192) are inspected every 2 to 3 years. Buchanan summarized the common elements of an inspection. The first things checked are the size and location of numbers on the building, ability to access the building and fire protection systems through a key-audit, and the ability to get water to the building. Alarm systems are also checked to make sure annual testing and maintenance requirements have been met. Buchanan provided an overview of a new system added in 2019 called Compliance Engine. This system for contractors to enter maintenance and testing information which goes to the owners as well as the Eden Prairie Fire Department as well as provided notifications on items past-due and deficiencies. Owners pay a $15 charge per “element.” Buchanan added that it also helps find the most up-to-date owner contact information. Nelson stated that she believed that the fire inspectors were going into every unit of a multi- family building. She inquired how the City is making sure that the units have working appliances, heat, air conditioning, no mold, etc. Buchanan confirmed that the City does not inspect every unit and that it would take more resources. There are simply too many units. Getschow stated that there are not any cities that inspect every rental unit. The inspectors pick the sampling of the rooms which provides a good indication for the condition of the rest of the building. This is separate from complaints. Buchanan added that there are certain buildings they complete inspections on more often. Freiberg commented that he shared the same concerns as Nelson and because other cities do not inspect every unit it does not make it right or wrong. City Council Workshop Minutes December 7, 2021 Page 5 Case commented that he did not know of any issues that had been attributed to a single unit. He has heard more general issues like flooding in a certain part of the building or not changing carpet enough. He commented that the current practice is adequate, but we need to advertise to renters what they need to do if there is a problem with their apartment. Buchanan shared that the department also uses Home Line which helps solve disputes between landlords and tenants. Freiberg commented that the City needs to do a better job on communicating how to report issues and make sure people are comfortable as they often feel awkward and intimated to report issues. He stated that better communication on reporting and follow-up would help his concerns. Narayanan commented there needs to be a statistical analysis applied to what is inspected. He stated that if problems are found in the initial units inspected then there should be a method to determine how many more to inspect. Nelson commented that she has heard that there are buildings in which if tenants complain then the landlords will kick them out. There can also be the fear of this so tenants do not complain about issues. Buchanan continued by sharing more inspection components. For inspecting sprinkler systems, he stated that they make sure they are tagged, there is no corrosion, no leaks, the air compressors are being maintained, unobstructed, and extra sprinkler heads available. Fire extinguishers need to be visible, unobstructed, and have annual maintenance tags. Regarding fire escapes and egresses, fire doors need to close and latch as well as they should not be propped open or blocked. For smoke and carbon monoxide alarms, they check the location, age, and operation. Electrical hazards are a common finding and include broken fixtures, overloaded circuits, and receptacles that are not secure or do not have covers. He stated that by state statute and code, for rentals, electrical repairs must be made by a licensed contractor including single-family home rentals. Furthermore, they walk around the building to make sure there are not any grills on decks and balconies as open flames are prohibited on them. He noted that the majority of property managers are very good at enforcing that. One challenge is educating people on improper cigarette disposal. For water leaks they will order water leak remediations. Concerning mold, the inspectors are not experts so instead a third- party expert evaluation is ordered, and remediation based on the expert’s findings. Inspections are not completed for grading. Buchanan outlined impacts of the rental inspection program which include reduced fire loss overall, reduced fire loss at unsprinklered buildings, increased safety and quality of life for residents. Gerber continued the presentation by talking about rental housing complaints. He stated that the department receives complaints on maintenance, mold, landlord and tenant issues, and disputes. He showed bar graphs that depicted the number of complaints received divided by City Council Workshop Minutes December 7, 2021 Page 6 single-family housing and multi-family housing for the years 2019, 2020, and 2021. He noted the number of complaints was higher in 2021 than the other years not only because there are more complaints, but they have done a better job internally of how they track them. Gerber covered enhancements they are planning for the program. The first is mobileEyes which is a mobile software that will allow inspectors to do electronic inspections. Tablets and equipment have been acquired and configured. They are working on implementation currently and are hoping to go live in 2022. Additionally, ePlan review is currently being implemented. Gerber shared additional data regarding the program. The first was a bar graph showing the number of licensed rental units by single-family housing and multi-family housing for the years 2014 through 2021. In 2021, there are 7,420 residential rental units in total. Including businesses rental units there are approximately 10,000 inspectable units in the City. Gerber then displayed a bar graph with the anticipated rental unit growth. They estimate over the next 3 years based on current and projected projects an additional 2,216 residential rental units. Next, Gerber shared data regarding license and permit compliance. They have seen improvements regarding not only rental license compliance, but also hazardous materials permit compliance. As of the end of October 2021, they have completed 2,276 inspections. This is comprised of 809 business inspections, 740 rental inspections, and 727 of all other types. The other types include hood and duct type inspections and follow-up inspections. Narayanan asked about the fee for business inspections. Gerber responded that there is not currently a charge for business inspections. Freiberg followed up with asking why. Gerber stated that he believed it was not something that had been discussed or directed. Schmeig talked about the progression of the inspection program pointing out the order of building inspections, then rental, then exterior maintenance, then rental licensing, then point of sale, then change in occupancy. Case asked how often business inspections are complete. Buchanan answered that businesses are on a three-to-five-year tier depending on priority. All Hazmat high levels have inspections annually. Based on the conversation, City Council direction was provided to come back to the City Council with more information on how other cities charge for business inspections and what it would look like if the City of Eden Prairie did. Case stated that it did not have to be completed right away noting mid next year as a timeline. Buchanan added that out of 3,000 businesses, there are 200 businesses that are charged a Hazmat permit fee. Nelson asked what types of businesses are Hazmat. Buchanan answered that some examples are fueling and those with diesel generators or refrigerator systems. He noted that the businesses get rated on a tier system City Council Workshop Minutes December 7, 2021 Page 7 Narayanan inquired about the possibility of self-inspections in that the business has their own qualified individual complete the inspection and report the findings. Buchanan replied that through their education process they find a lot of businesses without any issues. There was not enough time to cover the disorderly use and ordinance update sections of the presentation. Gerber stated they could come to another workshop. He stated that in January the Fire Department will be proposing code changes to improve the program. Narayanan requested learning how many paper processes the City still has, what they are, and how the City plans to automate. Case agreed it would be interesting for the City Council to hear. Getschow responded that there is very little left noting that you can register for all parks and recreation programs, apply for building permits, and pay your utility bill all online. Case stated it would be beneficial to have a brief update of what’s left and plans for progress each year. Nelson stated that she has heard that there is machinery that can detect mold. She requested for the Fire Department to look further into it as a possibility. Open Podium - Council Chamber (6:30) II. OPEN PODIUM III. ADJOURNMENT