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HomeMy WebLinkAbout#03 - Planning & Building Departments Operational Audit ReportSTAFF REPORT DATE: November 4, 2021 TO: Honorable Mayor and City Council AGENDA ITEM: Planning & Building Departments Operational Audit Report SUBMITTED BY: Jake Dickson, Assistant City Administrator BACKGROUND: The City has been working to have an operational audit performed for every department. The City Council authorized advertising for proposals to perform an operational audit of the Planning and Building Departments in February. In June the City Council awarded a contract to Raftelis to perform the operational audit. Raftelis studied the Lake Elmo Planning & Building Departments in regards to a scope of work including but not limited to staffing, fees, departmental structure, opportunities for growth, and future improvements. ISSUE BEFORE COUNCIL: Does the City Council have any additional questions about the Planning & Building Departments Organizational Assessment? PROPOSAL DETAILS/ANALYSIS: Mark Olson of Raftelis will present their findings and recommendations to the City Council. ATTACHMENTS: - Planning & Building Departments Organizational Assessment CITY OF Lake Elmo Organizational Assessment – Building Department / Planning & Zoning Department October 2021 CITY OF LAKE ELMO ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT This page intentionally left blank to facilitate two-sided printing. 19 Garfield Place, Suite 500 Cincinnati, OH 45202 www.raftelis.com October 28, 2021 Kristina Handt City Administrator City of Lake Elmo 3880 Laverne Ave., N. Suite 100 Lake Elmo, MN 55042 Subject: Organizational Assessment of the Building Department and the Planning & Zoning Department Dear Ms. Handt: We are pleased to provide this report regarding the City’s land development functions provided through the Building Department and the Planning & Zoning Department. This report assesses the current organizational structure, staffing arrangements, outside support, policies, and procedures of the respective departments. The recommendations included in this report are informed by interviews with staff, feedback collected from stakeholders, data review and analysis, and comparative research. This assessment is intended to create an environment where continued improvements and adaptations can take effect. Implementation of these changes will take time; the current land development approach and associated processes developed over decades, so making improvements will not happen overnight. Leadership and staff should begin a long-term commitment to improving the land development process. Thank you for the opportunity to serve the City of Lake Elmo and your community. Sincerely, Michelle Ferguson Vice President - Organizational Assessment CITY OF LAKE ELMO ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT This page intentionally left blank to facilitate two-sided printing. CITY OF LAKE ELMO ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT Table of Contents EXECUTIVE SUMMARY ........................................................................ 1 INTRODUCTION ..................................................................................... 3 BACKGROUND AND METHODOLOGY .......................................................... 3 ABOUT LAKE ELMO ....................................................................................... 3 Structure ...........................................................................................................................4 Staffing..............................................................................................................................5 Budget...............................................................................................................................5 Fees ...................................................................................................................................6 ISSUES, ANALYSIS, AND RECOMMENDATIONS .............................. 9 Organizational Structure .................................................................................................9 Financial Management & Resource Administration ................................................... 20 Operations – Building Department ............................................................................... 24 Operations – Planning & Zoning Department .............................................................. 26 Performance Measurement and Reporting .................................................................. 32 CONCLUSION ...................................................................................... 38 CITY OF LAKE ELMO ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT List of Tables Table 1: List of Report Recommendations ...............................................................................2 Table 2: Community Development Related Staffing Levels (FTE) by Department 2017 – 2021 ......................................................................................................................................................5 Table 3: Major Development-Related Revenues, 2017 – 2021 ................................................6 Table 4: Community Development Related Expenditures by Category, 2017 – 2021 ...........6 Table 5: Building Permit Fees in the Metropolitan Region .....................................................7 Table 6: Preliminary Plat Fees in the Metropolitan Region .....................................................8 Table 7: Recommended Community Development Performance Measures by Function .. 33 List of Figures Figure 1: New Residential Units by Year ..................................................................................4 Figure 2: Lake Elmo Community Development Function Organizational Structure, FY2021 ......................................................................................................................................................5 Figure 3: Average Annual Building Permits per Building FTE ............................................. 11 Figure 4: Proposed Building Department Organizational Structure with Assistant Building Official ....................................................................................................................................... 12 Figure 5: Planning FTEs and Annual Residential Building Permits ..................................... 14 Figure 6: Proposed Planning Department Structure ............................................................. 16 Figure 7: Monthly SFD Building Permits, January 2017 – August 2021 .............................. 17 Figure 8: Minimize Total Costs – Internal vs Contract Service Provision ........................... 18 Figure 9: In-House vs Contract Services ................................................................................ 19 Figure 10: Watershed Management Organizations, Metropolitan Counties ........................ 29 Figure 11: Watershed Management Organizations, Lake Elmo Corporate Boundaries ..... 30 Figure 12: As-Built Inspection Status ..................................................................................... 35 List of Appendices APPENDIX A: ............................................................................................................................ 39 CITY OF LAKE ELMO ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT This page intentionally left blank to facilitate two-sided printing. ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 1 Executive Summary In May 2021, the City of Lake Elmo (City) engaged Raftelis to conduct an operational assessment of the Building Department and the Planning & Zoning Department. The respective departments comprise the core community development function for the City. There are several factors that have impacted the operations of the Departments and results from community development efforts. First, the community has only recently agreed to support significant development within its boundaries. This, and the rapid transition to high growth rates, has led to a lack of organizational support, direction, and resources associated with traditional community development activities. Second, the Departments have experienced significant and continuing staff turnover, requiring additional levels of effort and resources to support and regulate community development. Finally, the lack of operational stability and resources have required the City to make use of contract services to fill service gaps and meet community commitments. Given this developing organizational and operational environment related to these Departments and their responsibilities, the City Council was interested in assessing operations as they are and as they should be. The Council’s focus on “Capability Maturity Modelling” can be a helpful approach to identify an organization’s capacity for self-improvement. The focus of this approach does not necessarily target best in class performance; rather the approach identifies where an organization is and how best to make progress towards more mature levels of organization and operation. The project team adopted this approach to assess operations, results, and recommendations for improvement. The general project scope included assessment of the operations, staffing, and resources of the Departments. The project goal was to identify strategies and techniques for the Departments to efficiently and effectively manage the high level of growth that is occurring within the community. To complete this assessment, the project team interviewed staff members from the City departments that participate in the land development process to better understand the existing business processes and identify strengths and potential improvement areas. As part of that effort, the project team also developed and utilized City and regional data, as well as engaged with various development stakeholders to understand the development environment from multiple perspectives. Through this comprehensive project approach, the project team identified organizational and operational issues and challenges impacting the City and its development efforts. The actionable recommendations in this report will help the City, the Building Department, and Planning & Zoning Department better serve both customers of the development process and the community. These recommendations should serve as the starting point for an ongoing commitment supporting continuous improvement. This approach will help the City to create a culture and operational environment that embraces change and improved customer service, allowing the development process to better meet the needs of the community. The following table summarizes the recommendations included in this report. It also indicates whether the recommendation is primarily directed at the Building Department or the Planning & Zoning Department. 2 CITY OF LAKE ELMO Table 1: List of Report Recommendations Number Recommendation Organizational Structure 1 Return to past practice with a full-time City Building Official position and decrease reliance on contracted services 2 Create and fill an Assistant Building Official position 3 Create and fill a full-time Senior Planner position 4 Support proactive code enforcement with a full-time Code Enforcement Officer position 5 Use operating data to make informed decisions on how the City provides community development services Financial Management & Resource Administration 6 Develop a data directory to assist in future development of the Minnesota Municipal Fee and Expense Report 7 Review and implement streamlined development escrow account policies 8 Expand acceptance of payments via credit card for community development fees and charges Operations – Building Department 9 Review City criteria for acceptance / denial of the Certificate of Occupancy 10 Use standardized data input templates for PermitWorks system 11 Implement technology to better support field operations for community development activities Operations – Planning & Zoning Department 12 Formalize submission intake process with the Planning Department 13 Clarify responsibility for review and approval of development plans and associated surveys 14 Improve communication of the role and requirements imposed by the Valley Branch Watershed District on Lake Elmo development Performance Measurement and Reporting 15 Develop and implement a performance measurement program for the community development functions 16 Review and incorporate regular performance reporting in contracts for outsourced services ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 3 Introduction Background and Methodology The purpose of this assessment is to assist the continuing improvement of the City’s community development function supported by the Building Department and the Planning & Zoning Department. Faced with continuing and possibly increasing levels of residential and commercial development, the assessment identifies strategies and techniques for the respective departments to efficiently and effectively manage the high levels of growth that are occurring within the community. Specific areas examined in this assessment include the processes for plan review and approval, building permit review and approval, and the inspection process. The review of relevant processes and procedures revealed which processes require adjustment and improvement. The assessment also considers the existing organizational structure and technology tools supporting the development process to identify opportunities to improve the efficiency, effectiveness, and resiliency of the City’s development functions. Operational information was also developed through 11 in-person interviews with Department staff members and City management, a group discussion with development stakeholders, and follow-up virtual meetings with City staff, elected leaders, and additional stakeholders. The project team also reviewed and analyzed City data against data collected from peer communities in the metropolitan area. About Lake Elmo Lake Elmo is a city of 24 square miles that has historically been noted for its rural character and slow rates of growth. It is located on the outskirts of the Minneapolis – St. Paul metropolitan region, though Interstate 94 passes through the southern part of the City and provides easy access to the metropolitan center. The City’s growth had been slow and steady for decades, growing from 5,296 in 1980 to 8,069 in 2010. The City has been protective of its rural character and was notably involved in a dispute with the Metropolitan Council over mandated growth rates between 2000 and 2005. As related in the City’s Comprehensive Plan, the City’s commitment to preserving its rural character ended in 2005 in a Minnesota State Supreme Court decision that mandated that the City allow for and plan for the extension of urban services in its Comprehensive Plan, dictating that the City must grow and change beyond its historical rural land use patterns.1 Since the resolution of the dispute and with agreement on the State-required Metropolitan Council System Statement outlining the planning obligations for Lake Elmo, growth within the City has greatly accelerated. In the 2020 U.S. Census, Lake Elmo’s population had grown to 11,335 residents. Between 2017 and 2019, Lake Elmo had the fifth highest average annual number of detached single family (SFD) homes constructed, as reported to the Metropolitan Council. Only the City of Blaine, the City of Lakeville, the City of Woodbury, and the City of Plymouth saw greater numbers of SFD construction. Figure 1 shows the number of new residential units by year in Lake Elmo, as listed in the 2020 Comprehensive Annual Financial Report. The figure exemplifies the transition the City has experienced from a slow growth community to the rapid growth of recent years. Between 2017 and 2020, new residential units were built at a rate of over eight times what was recorded from 2011 to 2014. 1 “Background Report,” City of Lake Elmo Comprehensive Plan 2040. 4 CITY OF LAKE ELMO Figure 1: New Residential Units by Year2 STRUCTURE The community development functions in the City are managed by two departments, the Planning & Zoning Department and the Building Department. The Planning & Zoning Department leads and coordinates the development process for the City. This Department serves as the primary City staff support to the City’s Planning Commission and coordinates planning-related interests within the City, including the Fire Department, the City Engineer, and the Valley Branch Watershed District. The Building Department ensures that construction within the City is in compliance with building regulations as codified in the City’s Code of Ordinances to ensure safe and quality construction, as well as in compliance with property regulations from the City’s Zoning Code. The Planning & Zoning Department consists of only two positions: the Planning Director and the City Planner. The Building Department is led by the Building Official, who supervises the two Building Inspectors and the Permit Technician. The leaders of both the Building Department and the Planning & Zoning Department report to the City Administrator, and their organizational structures are shown in Figure 2. Also shown in Figure 2 are two shaded boxes that represent supporting components within the community development function: the contracted engineering services and the contracted inspection services. The City uses a contract engineer through FOCUS Engineering, Inc. to serve as its City Engineer. The City Engineer plays a significant role in plan review and ensures private developers build appropriate and required public infrastructure in their respective developments. The MNSPECT, LLC contract services are included in the Building Inspection 2 Published in 2020 Comprehensive Annual Financial Report 0 50 100 150 200 250 300 350 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 New Residential Units by Year ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 5 Department. They provide building inspection capacity to the City and have also been filling the role of Building Official for the City while that position has been vacant. City Administrator MNSPECT Contract Services Building Official (1 FTE) Planning Director (1 FTE) FOCUS Engineering Contract Services Building Inspector (2 FTE) Permit Technician (1 FTE) City Planner (1 FTE) Planning & Zoning Building & Inspections Community Development Function Figure 2: Lake Elmo Community Development Function Organizational Structure, FY2021 STAFFING The number of approved, full-time equivalent (FTE) positions in the Planning & Zoning and Building Departments have remained steady in recent years. The number of approved positions does not represent the functional staffing history of the departments, however, due to significant turnover. Table 2: Community Development Related Staffing Levels (FTE) by Department 2017 – 2021 Department 2017 Budget 2018 Budget 2019 Budget 2020 Budget 2021 Budget Percent Change 2017 to 2021 Planning & Zoning 2.0 2.0 2.0 2.0 2.0 0.0% Building 4.0 4.0 4.0 4.0 4.0 0.0% Total 6.0 6.0 6.0 6.0 6.0 0.0% BUDGET Municipalities collect a variety of development-related fees to offset the costs incurred to review, oversee, inspect, and certify development projects. The Minnesota Department of Labor requires municipalities to submit an annual report (Municipal Fee and Expense Report) that summarizes the city’s development-related revenues and expenses with the expectation that, over time, development-related revenues should be justified by their related expenses. 6 CITY OF LAKE ELMO The City of Lake Elmo collects two major sources of development-related revenues: building permits and plan check fees. The City collects other development-related revenues (e.g., zoning & subdivision fees), but these sources comprise a significantly smaller share of revenues than building permit and plan check fee revenues. Building permit and plan check fee revenues from the community development functions represented approximately 38% of total City General Fund revenues in 2017, falling to approximately 25.5% of total General Fund revenues projected in 2021. Table 3 shows some of the major development fee revenues from 2017 to 2021. This subset of revenues declined 4.2% from 2017 to 2021 (projected). Except for 2019 when these revenues fell to $1.35 million, these revenues have remained relatively constant (between approximately $1.8 and $1.9 million). Table 3: Major Development-Related Revenues, 2017 – 20213 Fee Type 2017 Actual 2018 Actual 2019 Actual 2020 Actual 2021 Projected Percent Change 2017 to 2021 Building Permit $1,146,350 $1,044,126 $780,104 $1,137,150 $1,029,854 (10.2%) Plan Check $580,817 $566,532 $460,523 $701,220 $669,405 15.3% Planning & Zoning Review $69,524 $29,300 $26,600 $34,200 $30,000 (56.8%) Zoning & Subdivision Fees $54,956 $93,710 $81,695 $48,517 $45,000 (18.1%) Total $1,851,647 $1,733,668 $1,348,922 $1,921,087 $1,774,259 (4.2%) The annual expenditures of the Planning & Zoning Department and the Building Department are projected to grow 168.6% from 2017 to 2021. This large rate of growth overstates the growth in baseline spending as most of the growth in expenditures is attributable to the need for temporary contract inspection services within the Building Department. Inspector Contract Service expenditures began in 2019 and are projected to grow to $866,530 in 2021. A portion of the Inspector Contract Services was used to fill the role of the Building Official in the absence of a City-employed Building Official. At the time of this report’s writing, the City had just hired a new Building Official, and it is expected that these Inspector Contract Services will decline in 2022. The spending in the Planning & Zoning Department is projected to decline 7.5% from 2017 to 2021. Table 4: Community Development Related Expenditures by Category, 2017 – 2021 Department 2017 Actual 2018 Actual 2019 Actual 2020 Actual 2021 Projected Percent Change 2017 to 2021 Planning & Zoning $286,042 $254,327 $249,467 $236,344 $264,698 (7.5%) Building (Less Inspector Contract Services) $319,004 $296,893 $326,324 $342,360 $493,895 54.8% Inspector Contract Services $0 $0 $142,283 $755,966 $866,530 N/A Total $605,046 $551,220 $718,074 $1,344,670 $1,625,123 168.6% FEES The City collects fees to offset the costs it incurs to oversee and regulate growth. This study was tasked with determining whether the City’s fees are reasonable in comparison to other cities in the region. Municipalities, even within the Minneapolis – St. Paul metropolitan region, can have different approaches to fee naming conventions, 3 Data obtained from recent City budgets. ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 7 definitions, and processes. It is difficult to make a one-to-one comparison of all the City’s development-related fees. However, two fee areas lend themselves to comparison based on similar formats across peers: building permits and preliminary plats. Table 5 lists the building permit fees as defined by peer communities in the metropolitan region. Building permit fees are based upon the valuation of the construction. The minimum permit amount (a valuation of $500) shows significant variability across communities, ranging from a low of $23.50 in Dayton to a high of $75.00 in Blaine. Lake Elmo’s building permit fee for a project with a $500 valuation is $28.00. For larger construction valuation amounts, there is less variation in permit costs across communities. For instance, for a $1 million valuation, building permit fees range from a low of $5,608.75 in Dayton and Maple Grove to a high of $6,715.30 in Oakdale and Woodbury. The equivalent fee for Lake Elmo is $6,636.65. Table 5: Building Permit Fees in the Metropolitan Region4 Cities Construction Valuation $500 $2,000 $25,000 $50,000 $100,000 $500,000 $1,000,000 Blaine $75.00 $75.00 $391.75 $643.75 $993.75 $3,233.75 $5,608.75 Cottage Grove $26.50 $77.50 $437.00 $717.00 $1,107.50 $3,601.00 $6,246.00 Dayton $23.50 $69.25 $391.25 $643.75 $993.75 $3,233.75 $5,608.75 Lake Elmo $28.00 $83.50 $464.15 $764.15 $1,186.65 $3,886.65 $6,636.65 Lakeville $30.00 $73.75 $413.00 $681.75 $1,056.75 $3,456.75 $5,956.75 Mahtomedi $30.00 $82.50 $452.80 $744.05 $1,151.55 $3,751.55 $5,991.55 Maple Grove $50.00 $69.25 $391.75 $643.75 $993.75 $3,233.75 $5,608.75 Oakdale $30.00 $84.75 $466.55 $770.30 $1,195.30 $3,915.30 $6,715.30 Plymouth $40.00 $73.75 $413.00 $681.75 $1,056.75 $3,456.75 $5,956.75 Ramsey $26.00 $75.00 $420.00 $690.00 $1,080.00 $3,500.00 $6,000.00 Savage $28.00 $83.50 $464.15 $764.15 $1,186.65 $3,886.65 $6,636.65 Victoria $26.24 $77.39 $436.88 $719.99 $1,109.38 $3,613.38 $6,228.38 Woodbury $30.00 $84.75 $466.55 $770.30 $1,195.30 $3,915.30 $6,715.30 Table 6 lists the Preliminary Plat fees of some of the peer communities contained above in Table 5. The fee structures vary from city to city, as do the escrow structures, though those are omitted for purposes of simplicity. Many of the fee structures are dependent upon the number of lots, so a direct comparison in total fee costs is impossible, but Lake Elmo’s Preliminary Plat fees are not out of line compared to other communities. 4 Data obtained from most-recent published fee schedules of peer communities. 8 CITY OF LAKE ELMO Table 6: Preliminary Plat Fees in the Metropolitan Region5 City Preliminary Plat Fees Blaine $600 + $30 / lot + legal fees Dayton $300 Lake Elmo $1,850 Lakeville $500 Maple Grove $500 + $10 / lot Oakdale $550 Rosemount $2,000 + $10 / unit Victoria $500 + $10 / lot Woodbury $500 + $50 / lot As part of this study, Raftelis spoke to several stakeholders from the development community. None expressed concerns over the amount of fees that the City charges. The stakeholders were more concerned with the timeliness of the development process, as discussed later in this report. Given the similarity in fee levels with other communities in the metropolitan area as well as the minimal concern over fee levels expressed by stakeholders contacted as part of the assessment, we are not recommending adjustment to fee levels by the City. A comprehensive review of fees incorporating market comparisons and internal service costs should occur every three to five years as part of the City’s budget development process. 5 Data obtained from the most-recent published fee schedule from the respective city website. ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 9 Issues, Analysis, and Recommendations This report identifies opportunities and provides recommendations that will improve the efficiency, effectiveness, and resiliency of the City’s community development functions. The community development functions have suffered from high turnover and vacancy rates in recent years, and the effects of such turnover are compounded by a lack of established processes and procedures. At the time of this report’s writing, a new Planning Director and Building Official has been hired. Transitions to new departmental leadership take time, but if they focus on establishing and documenting policies and procedures, the City’s community development functions will be strengthened. ORGANIZATIONAL STRUCTURE Recommendation 1: Return to past practice with a full-time City Building Official position and decrease reliance on contracted services. The City’s Building Official position has a history of frequent turnover. Most recently, this position had been vacant since March 2020 and has proven difficult to fill even with the use of a recruitment service. The City filled the position and the new Building Official started employment with the City in early October 2021. In the absence of a City employee in this role, the City contracted with MNSPECT to provide the services of a Building Official. MNSPECT has also provided a building inspector to the City to supplement the work of the City’s two building inspectors. The use of a contracted Building Official has several drawbacks. First, from an organizational perspective, the contracted Building Official directs the work of the two City building inspectors but is not their actual supervisor, resulting in an unusual, disjointed supervisory structure in which the City building inspectors’ direct supervisor is the City Administrator. Second, as a non-City employee, the contracted Building Official lacks the authority necessary to approve the required spending to support the function, leading to inefficiencies. Third, the cost to the City of the contracted Building Official and associated services is higher than if the function were provided by a City employee. The agreement calls for the vendor to supply, at the vendor’s expense, all personnel, materials, supplies, equipment, and tools required to provide the services under the contract. The contractor currently provides additional building inspection services through vendor-assigned staff members to augment the existing two City building inspectors. The resulting total cost of all vendor services is sufficiently high that the current contracted Building Official has elected to work no more than 20 hours per week for the City to contain total costs. This approach has effectively limited the services received to approximately one-half of the Building Official position. In the three budget years that the City has used MNSPECT (2019 – 2021), the average cost was over $580,000 per year. Excluding contract inspection service costs, the Building Department had never spent more than $400,000 in one year until 2021. The City has three options to address the Building Official position. The first option is to fully commit to the use of contract services for the Building Department. The advantage to this approach would be that the responsibility for staffing the needs of the Building Department would rest with the contractor. The primary disadvantage is that this would likely be a highest-cost option. An additional disadvantage to this approach includes the lack of control; the contractor’s employees would represent City interests but may not have the same level of accountability as City employees. 10 CITY OF LAKE ELMO The second option is to employ a Building Official to bring the duties of the position in-house. The City has recently moved forward with this approach. The employment of a Building Official as a City employee will address the existing issues including function supervision, efficient operation, and reduced costs. A third option for the City is to continue use of contracted inspection services on a more limited basis. This hybrid approach could allow the City to meet peak period service demands more effectively at periods during the year as well as provide unique or technically challenging inspection services to better support development in the community. The contracted inspection services would be limited to support and provided at the direction and discretion of the City’s full-time Building Official. To support an approach that represents City values, is responsive to the community, and is flexible to meet varying service demands, the recommendation is to build on the City’s action to directly employ a Building Official with the third option to retain an agreement with the third-party vendor to augment internal services as necessary. These services may be necessary to provide specialty expertise related to specific development initiatives or to meet peak period demands. The City should also incorporate Recommendation 5 below to better understand service demands, their relative costs, and proactively determine the most advantageous mix of in-house and contracted service levels. Recommendation 2: Create and fill an Assistant Building Official position Many of the challenges that the Planning & Zoning Department and the Building Department have experienced in recent years are connected to the frequent turnover in staff and the difficulty recruiting and retaining suitable candidates. This dynamic negatively impacts the City’s organizational resiliency and the City should take action to identify the root causes to address staff turnover and more effectively identify replacements. The Building Department’s current organizational structure is shown in Figure 2. The Building Department currently consists of the Building Official, two Building Inspectors, and the Permit Technician. However, to meet its inspection demand, the City has been functionally using a third Building Inspector provided through its contract with MNSPECT. Figure 3 below presents the number of annual building permits per building department FTE. Lake Elmo’s staff handle more building permits per building department FTE (61) than the sample average (45) of its metropolitan peers. ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 11 Figure 3: Average Annual Building Permits per Building FTE6 A number of the communities in the metropolitan area employ Assistant Building Officials. The development and use of a secondary management position can provide several benefits that support improved performance, operational effectiveness, and organizational resiliency. First, the additional position would constitute a “working manager,” taking on both supervisory assignments delegated from the Building Official as well as providing professional inspection services. This would build internal operating capacity and minimize the need for additional contracted inspection services, in turn supporting some or all of the budgetary costs associated with the new position. The Assistant Building Official would be required to possess certification as a Minnesota Certified Building Official, but this position could be ideal for someone who has just earned his or her certification. The Assistant Building Official would also assist the Building Official in inspection and review of major construction projects. Second, the Assistant Building Official could be tasked with efforts to further develop the building inspection function, including improved use of existing systems and associated operating practices. Success with efforts focusing on continuous improvement require a level of organizational commitment not reflected in the current operating resource levels. Most importantly, the development of a secondary management position like the Assistant Building Official can better support succession planning and organizational resiliency. The Assistant Building Official can be exposed to and may assume some of the position requirements of the Building Official. This can position the Assistant Building Official to step in on a temporary basis to fulfill the role in the event of vacancy in the Building Official position. In time with continued development of the incumbent’s knowledge, skills, and experience, the Assistant Building 6 Building permit data obtained from the Metropolitan Council. Building FTE data obtained from peer communities’ budgets and Annual Financial Reports. - 10 20 30 40 50 60 70 80 90 Average Annual Building Permits per Building FTE 12 CITY OF LAKE ELMO Official position may provide an appropriate candidate to assume the Building Official role. The Assistant Building Official position would also support organizational resiliency by creating a “career path” in the department. Creating the potential for staff development and advancement through promotion can help reduce position turnover. A proposed organizational chart of the Building Department with an Assistant Building Official is shown in Figure 4. Permit Technician Asst. Building Official Building Official Building Inspector (2) Figure 4: Proposed Building Department Organizational Structure with Assistant Building Official In 2020 and 2021 (projected), the City will have spent more on the contract Inspection Services than it will have on the rest of the community development effort. Reducing reliance on the contract Inspection Services can greatly reduce expenses and free up budgetary space for an Assistant Building Official. The Assistant Building Official would still be expected to conduct building inspections, and as such would largely replace the City’s contract building inspector that the City currently utilizes. An example Position Description for an Assistant Building Official is included in the Appendix to this report. The Position Description is for the Town of Payson, a small but growing community in Arizona. Depending on current rates for contract inspection services and wages and benefits for City employees, the Assistant Building Official position may approach revenue neutrality compared to current conditions. Recommendation 3: Create and fill a full-time Senior Planner position. The Planning Department currently consists of two positions: Planning Director and the City Planner. In discussions with City staff, there were two general concerns raised. The first issue concerned potential for gaps that may exist between the respective roles and responsibilities of the planning positions and the knowledge, skills, and abilities of staff members. The second issue concerned the total staff capacity of the function, given limited staff resources. The City Planner’s duties were mostly centered on parks, reactive code enforcement, and some minor plan review work. Most planning development involving large scale or greater complexity was the responsibility of the Planning Director. Given the breadth and depth of responsibilities supporting the planning function, the limitations due to such a small team can create operational challenges. The existing position descriptions for the planning positions identify a Planning Director focused on development, management and coordination of community planning, intergovernmental coordination, development review, and code enforcement. The City Planner supports the efforts ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 13 of the Planning Director with assigned planning projects, Comprehensive Plan reviews, stakeholder management, and project management. Both positions are expected to operate with minimal direction and provide direct support to the Council, other City staff, and clients in the community regarding complex and technical development and planning issues. Given the breadth and depth of technical knowledge required by each position, the respective knowledge, skills, and abilities of the staff may not meet the broad requirements of the individual positions. This can create a deficit or “skills gap” that the other position must fill. For example, a skills gap between the two positions can create a situation in which large or complex development projects could only be handled by a single individual. The resulting delegation of work can also create downstream issues of resiliency for the organization and workload for the individual. The relatively large skills gap between positions can also impact professional development and limits opportunities for career progression. An individual in a subordinate position lacking possible career advancement opportunities is likely to have to look outside of the organization if they are to advance their career. The second issue concerns the overall workload facing the two planning positions in a growing community and their ability to effectively meet this service demand. It is common for some functional areas of municipal services to benchmark their staffing levels according to the size of a municipality (e.g., population or area) or for communities to compare themselves to other communities of the same size as a guidepost for appropriate staffing levels. However, staffing decisions for municipal services such as planning are best guided when they are based on levels of demand. Lake Elmo is rapidly growing, and the Planning Department should be staffed for the workload the City is experiencing. For comparison purposes, peer communities from within the Metropolitan Council service area were selected based upon the average annual number of SFD building permits issued over the 2017 to 2019 period (at the time of this assessment, 2020 data was not yet available). SFD building permit volume was used as a general proxy for overall development effort in a community and resulting workload for planning staff. Peers were selected if they reported at least half as many SFD building permits as Lake Elmo issued (250). Based on the request of City staff, the City of Mahtomedi and the City of Oakdale were also included in the peer communities despite not meeting the growth-based inclusion criterion because of their proximity to Lake Elmo. The City of Minneapolis was excluded as a matter of scale. Figure 5 shows the average annual number of residential building permits per planning FTE in the peer communities using building data from the Metropolitan Council and staffing data from the peer communities. With two FTEs assigned to support the planning function, Lake Elmo has the highest number of residential building permits per planning FTE at 152 permits. The average number of residential building permits per planning FTE among the peer communities (excluding Lake Elmo) is 73 permits. (Mahtomedi is excluded in this analysis as it has no planning staff.) Adding one additional staff resource to the planning function would bring this ratio down from 152 permits per FTE to approximately 101 permits per FTE. Adding a second additional staff resource would bring the ratio down further to approximately 76 permits per FTE, roughly in line with the average among the peer communities at 73 permits per FTE. 14 CITY OF LAKE ELMO Figure 5: Planning FTEs and Annual Residential Building Permits7 To create additional service capacity and to support more flexible assignment of staff to various tasks, it is recommended that the City add a position of Senior Planner that reports to the Planning Director. The role of the Senior Planner would be non-supervisory but would be sufficiently skilled and experienced to be able to handle most, if not all, planning reviews brought to the City and would be able to represent City staff before the Planning Commission and the City Council on a regular basis. In addition to addressing workload issues, a Senior Planner provides several other benefits to the City. First, the Senior Planner provides additional professional capacity to meet workload demand issues while maintaining quality and timely services to the community. Second, the Senior Planner position acts to bridge the existing gap between the Planning Director and the City Planner positions, providing support to both as needed and may aid with retention of incumbents in the City Planner position. Third, a Senior Planner would be qualified to step into the role of Planning Director, at least on a temporary basis, should the need arise, thereby improving the resiliency of the organization. Finally, using an intermediate position can create a more feasible career path for professional development in the Planning Department. As the City incorporates the Senior Planner into the staffing mix and the three planning positions develop and exercise their areas of responsibility, the maturity of the function will develop and create subsequent opportunities. In the future, the City may elect to consolidate the building and planning areas under a Community Development Director. This subsequent action can support a comprehensive and holistic approach to planning and management of development in the community. An example Position Description for a Senior Planner is included in the Appendix to this report. Like the Assistant Building Official position, the Position Description is for the Town of Payson, Arizona. 7 Building permit data sourced from Metropolitan Council and Planning FTEs sourced from most recent city budgets and financial reports. - 20 40 60 80 100 120 140 160 Average Annual Building Permits per Planning FTE ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 15 Recommendation 4: Support proactive code enforcement with a full-time Code Enforcement Officer position. Code enforcement is a necessary function for every municipality. Code enforcement efforts ensure that businesses and residents are in compliance with public health, safety, public works, consumer protection, business activities, building standards, and more. Code enforcement in Lake Elmo has historically only been performed on a reactive, complaint basis, with issues of code enforcement handled by the City Planner position as time allows. As the City grows, code enforcement complaints and service demands are likely to grow as well, not just due to population growth, but also as new residents bring new expectations for code enforcement. The current approach does not provide adequate staff coverage to support both reactive and proactive enforcement for code compliance and for the City Planner to conduct non-code enforcement duties. Adding a staff position with primary responsibility for both reactive and proactive code compliance will meet community needs at a critical point in the community development cycle. As the City’s development continues, code compliance issues involving existing homes and businesses will grow. It is important that the City clearly communicate the community’s expectations in an environment of continuing new development as well as property owner changes and enhancements to existing homes. The presence of a full-time code enforcement position will provide the capacity to address not just complaint-driven code enforcement issues, but also conduct proactive code enforcement efforts. As the City grows with new types of development, namely multifamily and commercial developments, a proactive code enforcement program will allow the City to communicate community expectations from the outset. Code enforcement officers are commonly located in either the Building Department or the Planning & Zoning Department of municipalities, as code enforcement functions are naturally related to activities in both departments. It is recommended that the code enforcement position reside in the Planning & Zoning Department, as that is where those activities have traditionally been housed in the City and there is no operational advantage to moving them to the Building Department. A full-time code enforcement position can also provide the capacity to develop and execute a strategic communication plan designed to inform the community of what expectations are contained within the code. See Recommendation 15 for descriptions of potential performance metrics that may be used to assess code enforcement activities. Figure 6 shows the proposed structure of the Planning & Zoning Department following the recommendation for a Senior Planner contained in the previous recommendation and the recommendation for a Code Enforcement Officer contained in this recommendation. Both new positions are shaded gray in the figure. In this structure, the Planning Director would supervise three positions, and none of those three positions would have supervisory duties. 16 CITY OF LAKE ELMO Code Enforcement Officer Senior Planner Planning Director City Planner Figure 6: Proposed Planning Department Structure In order to provide more productive capacity among the planning function staff members as well as prepare for an increasing volume of code enforcement issues and cases in the community, it is recommended that the City move forward with creation of a Code Enforcement position. While implementing a proactive approach to inspections can create changes for staff and residents, it is likely that these changes will enable the Department to foster closer ties with the community, increase awareness of code enforcement activities and resident obligations, reduce reactive complaints, and prevent future violations from occurring. This will also allow professional planning staff to better align their efforts and position the City to proactively communicate and educate the community on standards and expectations, minimizing the relatively more expensive reactive code enforcement efforts. Recommendation 5: Use operating data to make informed decisions on how the City provides community development services. Municipalities routinely contract with private companies to provide a wide array of services. The decision whether to contract, or outsource, municipal services is influenced by a variety of factors, including the level of specialization or expertise required, the available market for the services, the service levels required by the municipality, and whether a private contractor can provide a service more affordably than the public entity. The City has become reliant on contracted services for critical community development activities, such as the Building Official, Building Inspectors, City Engineer, and landscape architect needs. Some contracted services, such as the contracted Building Official, have been obtained on a temporary, as-needed basis, while others, such as the City Engineer, are identified as a longer-term service delivery mechanism. The City should periodically reassess the contracted service levels as the needs of the City may change. Developing core in-house service capability where practical and supplementing where needed with contract services can reduce total operating costs while meeting increased service demands. Using contracted services to augment core service provision through in-house resources can serve to limit relatively higher cost contracted services while improving internal service capacity, service communication, and service sustainability. A specific example of this approach involves building inspections. The City has an unofficial goal of providing inspections within two business days of a service request. The number of inspection requests made per day fluctuates both daily and seasonally. The City can use its building inspection contract to meet surge demands. Tracking the ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 17 usage of this contract building inspection service can also inform the City when it may be appropriate to add additional Building Inspectors to the City’s staff. Identifying the consistent, core service levels as well as estimating total service demands across time periods will allow the City to identify opportunities for beneficial changes in resourcing those services, whether those services are contracted out or performed in-house. Figure 7 shows trends in the number of permits issued for new SFD construction in the City using data between January 2017 and August 2021. The figure displays the average number of new SFD permits each month, as well as the maximum and minimum number of permits each month. Looking at the average number of permits issued each month, there does not appear to be significant seasonality in permitting activity. However, examining the maximum number of permits issued each month shows the extreme variability that can exist from month to month in the number of permits. In the case of building inspections, the City may be well served to maintain contract inspection services to handle surge demands. However, effective use of this strategy would require the City to establish metrics that trigger the use of contract inspectors. Figure 7: Monthly SFD Building Permits, January 2017 – August 20218 The City can use data like this to assess when to use contract services to replace or augment City staff capacity. This example uses information relating to SFD permits as a general measure of service demand. The City can and should develop more discriminating information on the relative processing times and associated costs for a range of internal services and contracted services. This information can be used to identify the existing service demand profile (here presented as monthly maximum and average SFD permit demand). This information can be used to better understand how services are provided, as well as to develop spreadsheet models that seek to meet identified operating constraints while minimizing total costs for the service. 8 Data provided by City. 0 10 20 30 40 50 60 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DECSFD Building PermitsMonthly SFD Building Permits, January 2017 - August 2021 Maximum Average Minimum Linear (Average) 18 CITY OF LAKE ELMO In this example, the project team developed a spreadsheet model to identify the levels of effort provided either internally or through contracted services that would serve to minimize total costs. The model considers how the decision points might adjust as the difference between contractor and in-house costs (the percentage additional paid to the contractor per transaction compared to in-house costs). As presented in Figure 7 above, the average monthly volume of SFD permits trended around 23 permits per month and the decision points in Figure 8, below, range around that volume of permits as well. Impacts based on the change in relative costs for service provision (identified as the percentage increase in cost per service for contractor provided services) were tested at values ranging from 5% cost increase to 50% cost increase. Figure 8: Minimize Total Costs – Internal vs Contract Service Provision The figure above shows that as the price for contract services exceeds the cost for services provided in-house, the volume of processing handled by in-house staff should increase to minimize total costs. This example model supporting management decisions would advise that the City could, on average, minimize total costs by taking the following actions based on relative processing costs:  From 5% premium to 15% premium – Staff internal service provision to provide approximately 17 permits per month throughout the year. Contract services would be used to provide permits more than this based on the low-cost differential. 0 5 10 15 20 25 30 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%Monthly Volume of SFD Permits Provided with City StaffCost Increase for Contracted Services Minimize Total Costs Internal vs Contract Service Provision ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 19  From 20% premium to 35% premium – Staff internal service provision to provide approximately 23 permits per month throughout the year. Contract services would be used to provide any permits in excess based on the higher cost differentials.  From 40% premium to 50% premium – Staff internal service provision to provide approximately 24-25 permits per month throughout the year. Given the increasing cost differentials, contract services provide the few excess permits required or the City accepts temporarily delayed permits in the short-term for in-house resources to recover and process. This model approach can support City management decision making regarding sourcing individual services. In this example, using the model to minimize total costs to meet the existing monthly and annual service demands yields relative recommended effort between in-house and contract services, as displayed in Figure 9. Figure 9: In-House vs Contract Services As the relative cost for contract services to process permits increases, the relative share of the total work handled by the contractor should decrease with greater reliance on in-house staff. However, even with a significant cost difference, it can still be advantageous to use contract services when workload varies throughout the year rather than increasing in-house staff to meet these peak periods of demand. This example identifies the value of the data available to the City for review, analysis, and management decision purposes. These models can be developed to focus on maximizing services, minimizing costs, or other criteria. However, the value of the modeling approaches to the organization will be predicated on the validity and accuracy of the data identified and used in their development. Important factors impacting data elements include the following:  Service demand o How modelled service demand varies throughout the year o Identifying the appropriate element for measurement (unit of demand / service)  Service supply 31.7% 16.5%13.2% 68.3% 83.5%86.8% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 15.0% 35.0% 50.0%Relative Permit WorkloadContractor Cost Difference In-House vs Contract Services In-house Contract 20 CITY OF LAKE ELMO o Sources of labor / service provision supply o Total operating costs per transaction for modelled services (internal City cost and contracted service provider cost)  Ensure consistent interpretation of data elements (data dictionary)  Ensure consistent development and collection of data over time The City should develop appropriate decision support models to identify how best to provide services. While past practice can provide a guide, the City will need to move beyond its experience to address new demands. Using a data-driven and analytical approach can provide a foundation for greater understanding of the services provided, their relative benefits and costs, and alternative approaches to consider providing quality services on a timely basis to meet the community’s demands while minimizing operating costs. This approach is especially important when addressing changing conditions and community expectations. FINANCIAL MANAGEMENT & RESOURCE ADMINISTRATION Recommendation 6: Develop a data directory to assist in future development of the Minnesota Municipal Fee and Expense Report. The City is required to submit an annual Municipal Fee and Expense Report to the Minnesota Department of Labor and Industry, in which the City details development-related costs and revenues. The report solicits information in the following areas:  Municipality – Name / Address / Contact Information  Building Construction Permits – Type of Permit / Number / Valuation  Fee Revenue and Expenses Associated with Building Code Enforcement – Fee Revenue (by Type) / Permit, Plan Review & Inspection Expenses  Fee Revenue and Expenses Associated with Development – Fee Revenue (by Type) / Expenses (by Type)  Fee Revenue and Capital Expenditures Associated with Development-Related Infrastructure – Fee Revenue (by Type) / Capital Expenditures (by Type) The report also provides detailed descriptions of each data element requested and measurement focus. The purpose is to provide a comprehensive dataset to support a municipality’s internal operations and management as well as a consistent dataset to compare one agency against another and/or across time through multiple annual reports. The latest report provided for the reporting period ending December 31, 2020, was prepared by the Finance Department. The effort to develop this report was confounded by significant variability between the prepared 2020 information against report information developed in past years, when the reports were developed by staff in the Building Department. The project team was not able to develop ties between data in past reports and financial reference documents (Budgets / Comprehensive Annual Financial Reports). The project team’s assessment of this issue was confirmed by the City’s Finance Director. This required annual report should serve as a valuable source of comparative performance information for the City. To ensure that this resource can warrant the time applied to develop it, the City should build on the current efforts of the Finance Department to develop and document a data “map” identifying each data element requested for the report form to the City data source (including any necessary adjustments / calculations) that supports the individual data request. Once the procedures necessary for the report data development have been identified and catalogued, ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 21 the City can return to the collaborative team effort use to develop the data, which includes staff from the Building Department. This initiative can be accomplished using in-house staff working collaboratively and with marginal impacts to organizational cost. The greatest benefit to the organization is not necessarily the fulfillment of this annual requirement, but rather the better understanding of organizational operations, data development, and reporting that will derive from this effort. Implementing this recommendation will serve to improve the efficiency of future filings as well as provide resiliency in the event of future staff turnover. Recommendation 7: Review and implement streamlined development escrow account policies. In addition to development-related fees, municipalities require developers and builders to deposit escrow funds based on the type of permit activity (e.g., plan review, building permit) and often a proxy for the level of complexity of the project (e.g., number of residential units, number of acres). If municipalities incur development-related costs that are not covered by permit fees, they can charge a developer’s escrow account to recover their costs. Upon satisfactory completion of the project, the developer can request that the municipality refund the remaining balance in their escrow account. Escrow accounts reduce the financial exposure of the municipality, speed the development process, and incentivize the satisfactory completion of development projects according to the municipality’s requirements. Both City staff and development stakeholders highlighted issues with the City’s escrow administration. Due to the tandem issues of frequent staff turnover and deficient policies and procedures to guide staff, the City has been challenged with possibly inconsistent and inaccurate treatment of escrow accounts leading to inadequate accounting of funds and delayed reimbursement. The City’s escrow program had been administered by the Permit Technician position but is currently overseen by the Finance Department. Issues associated with the escrow program appear to have originated with prior staff who lacked appropriate policies and procedures. The lack of effective procedures was compounded by staff turnover in the Building Department and the Finance Department. Complaints from development stakeholders have been focused on the difficulty of receiving refunds of their escrow balances upon completion of their projects. It is recommended that the City continue to review and implement streamlined development escrow account policies. At the time of this review, both Finance Department and Building Department staff were in the process of organizing existing escrow funds, implementing more rigorous procedures for tracking new escrow deposits, and attempting to identify the owners of older, unclaimed escrow funds. Further, to improve communication with developers, the Building Department should institute a policy to respond to requests for escrow refunds within a reasonable time period (e.g., two business days), and the response should include a checklist of what steps the developer has completed or satisfied, as well as specific descriptions of what steps the developer must take to satisfy escrow refund requirements. Written Standard Operating Procedures (SOPs) documenting the more rigorous procedures implemented in both the Building Department and the Finance Department should be created to support continuing operational effectiveness in the event of future staff turnover. An additional issue impacting return of escrow accounts involves instances where the City has determined that either required conditions have not been met or that there is an unacceptable variation from the original approved project plans. The escrow fund approach constitutes a form of insurance for the City to ensure that projects will be completed as approved, with escrow funds providing a source to incentivize remediation by the developer or as a funding source for the City to remedy a deficiency. One area where a deficiency has led to retained escrow accounts involves “as- built” grade certifications. As presented in the City of Lake Elmo Municipal Code: 22 CITY OF LAKE ELMO As built grades certification. Amounts collected by the city and held in escrow as security to ensure completion of construction projects for any activity which requires a permit shall be held until the builder or the property owner has provided the city with a certificate of a registered surveyor or civil engineer attesting to the “as built” grades of all building corners and site corners; and, the certificate shows all the grades to be consistent with the plot or site plan attached to the building permit application.9 The balance of the escrow accounts has hovered between $1.7 million and $1.8 million over the last four years. These funds do not belong to the City, so they are treated as a liability reported in the Deposits Payable category of the General Ledger. Following completion of a project, if these funds remain unclaimed, they will eventually transfer to the State as “unclaimed property.” However, should the City identify an outstanding issue, such as the variance in the grading reports, these funds can remain in the City account as leverage to compel the developer to fix the deficiency, in this case regrade the property to match the original grading plan. As discussed later in Recommendation 9, the City may want to address the minimal progress made moving developers to remediate issues on their property through a negotiated settlement approach that seeks to find common ground. Recommendation 8: Expand acceptance of payments via credit card for community development fees and charges. Much of American commerce is now facilitated through electronic payments, most commonly using credit cards and debit cards due to their convenience and safety. The City of Lake Elmo currently accepts electronic payments for utility payments through a secure payment portal operated by their payment processor, Payment Service Network. For a fee, the payment card processing service provider works with a government to accept and process payment card payments. By establishing an account in the processor’s system, customers can access the following services:  Pay by checking/ savings/ credit card  Set up Auto-Pay  View their bills  Choose to opt out of paper bills  View payment history  Print receipts  Change their payment profile Utility services and other areas with frequent, reoccurring payments were initial adopters of electronic payments by government agencies. Local governments have expanded the areas with available electronic payment services to meet community expectations. The Government Finance Officers Association (GFOA) identifies acceptance of electronic payments as an area of best practice for local government, with some of the benefits to government including the following:10  Enhanced customer service and convenience  Increased certainty of collection 9 Lake Elmo, Minnesota. Municipal Code. 151.027 Construction Site Erosion Control. 10 Best Practices – Accepting Payment Cards and Selection of Payment Card Service Providers, Government Finance Officers Association. ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 23  Accelerated payments and the availability of funds  Improved audit trail  Reduced cashiering costs  Improved overall cash flow and forecasting  Lessened delinquencies  Reduced return check processing costs  Reduced collection costs The City does not currently accept credit cards for payment of permit fees. Payment for development fees and charges are accepted via cash and check through the mail or an in-person visit. Developers, home builders, and residents are familiar with and have come to expect that payment via credit card will be accepted for requested services either in- person, via the phone, or through a web transaction. The City should accept the use of credit cards for community development fees and charges as a matter of convenience for residents. The City does not actively participate in the electronic transaction with the payment processor handling confidential financial information on behalf of the City and customer through a secure system. The customer’s payment information never resides in any of the City’s systems or communications. An important element to support acceptance of the payment information from the processor to the City is the use of a unique identifying number for the customer and/or the transaction. In the case of the City’s utility payments, this is provided through the customer’s utility account number. The City will need to adjust processes in the community development areas. Currently, permit fee payment is made after the review has been completed and the customer is contacted to pick up their permit. To support electronic payment, the City will need to communicate an identifying number to the applicant with the payment information and link to the payment processor’s system. Once the payment is made by the customer, the City will receive payment reconciliation information from the payment processor indicating the identifying number, payment date, and payment amount. The City will then distribute the permit to the customer, who can choose to receive the information in person, via mail, or through an electronic document attachment in a locked PDF format. Credit card companies do charge fees for the use of the cards, usually based on a percentage of the amount charged. To recover these fees, the City could elect to follow the practices of other municipal governments and charge a “credit card convenience fee.” The convenience fee could be set-up in a variety of formats including:  Mirror the percentage charge from the credit card processor to fully recover the cost of each transaction  Apply flat charges based on value ranges for payments to more closely tie to the true cost of the transaction  Apply a single flat convenience fee against any transaction Accepting credit cards for payments can provide convenience to the customer as well as support effective processing of the payment by the City. The City has recently expanded credit card payment services to its utility customers. Expanding such payment services to the development community and residents will improve cash handling, financial processing, improve receipt and accounting of funds, and improve the customer service experience. 24 CITY OF LAKE ELMO OPERATIONS – BUILDING DEPARTMENT Recommendation 9: Review City criteria for acceptance / denial of the Certificate of Occupancy. Development efforts in the City of Lake Elmo culminate with the issuance of a Certificate of Occupancy (CO) by the Building Official that verifies with other City staff that all site and development requirements have been met prior to issuance. As provided in the City Code: C. Certificate of Occupancy. No vacant land shall be occupied or used and no buildings hereafter erected, altered or moved shall be occupied until a certificate of occupancy has been issued by the Building Official. Such certificates shall show that the building or premises or part thereof and the use thereof are in conformity with the Minnesota State Building Code and the provisions of this chapter. Such certificate shall be issued only when the building or premises and the use thereof conform to all the requirements of the City Code.11 Within the standard development agreement, the City includes its remedies for developers’ unapproved deviations from their development plans, including the denial of COs. The City has employed this approach by denying COs for non-building issues, such as incomplete site work. However, in at least one case, COs were denied for homes on lots that were not affected by the incorrect site work and were no longer owned by the developer. The City should review the criteria by which they issue or deny the CO. There are clear issues of public health and safety which may warrant the denial of a CO, but the City may wish to consider what conditions the City is trying to correct, who is affected by the of denial of a CO and how they are affected, and whether there are other remedies the City might pursue that would more effectively address the City’s concerns. As an example of an alternative approach, the State of Minnesota provides itself with flexibility in rule making and implementation by considering “need and reasonableness.”12 This means that the State agency must set forth the reasons for its proposed change, and the reasons must not be arbitrary or capricious. In this context, “need” and “reasonableness” are separate; “need” has come to mean that a problem exists that requires administrative attention, and “reasonableness” means that the solution proposed by the department is appropriate. The City should employ a similar approach to work with the community to identify true needs that warrant developing collaborative and reasonable solutions. This approach can support resolution of outstanding issues with a particular development and successful completion of the project. Recommendation 10: Use standardized data input templates for PermitWorks system. The City uses an Electronic Records Management system (ERM) known as PermitWorks to issue, track, and record development permits. PermitWorks, like any other ERM, contains a variety of data fields into which the user can record relevant information. However, staff report a lack of consistency as to the quality and level of detail that is input by the users. This variability in data input can negatively impact operational effectiveness, particularly when multiple inspectors are working on the same project during its development schedule. Without proper, adequate, and consistent documentation, inspectors may not be aware of issues identified by other inspectors, nor can they successfully communicate with builders regarding potential issues found on previous inspections. 11 Lake Elmo, Minnesota. Municipal Code. 154.103 Permits, Certificates and Licenses. 12 2020 Minnesota Statutes, 14.131 Statement of Need and Reasonableness. ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 25 The Building Department should develop and implement a standard template for data entry across the various data fields in the PermitWorks system to support more effective understanding, development, and use of the available data. Data standardization may take several forms, ranging from pre-filled dropdown menus to clear, written expectations for the level of detail expected in inspection documentation. If a building inspection is failed, the inspector should clearly note the reason for the failure, the precise location of the non-compliant construction, and the remedy required to bring the work into compliance. Developing standardized data entry will provide more consistency in the Building Department’s work product and will enhance both intra-departmental and customer communication. This initiative will also allow for data comparisons across projects in a consistent manner to identify issues for management understanding and action. Undertaking this recommendation is unlikely to require extra budgetary measures unless outside consulting work is needed to facilitate development of new drop-down data entry boxes in PermitWorks. The City should also incorporate a quality assurance review of randomly selected files to identify, address, and correct any issues with staff understanding, acceptance, and implementation of this initiative. Recommendation 11: Implement technology to better support field operations for community development activities. The City uses the PermitWorks system to issue, track, and record development permits. Most modern Electronic Records Management systems (ERMs) provide modules that allow their clients to limit the purchase of software capabilities that the clients deem sufficiently useful. Many municipalities that conduct field operations have implemented the use of remote, tablet based ERMs so that vital recordkeeping, scheduling, and communication can take place in the field. The City’s field staff lack access to technology for use in the field and must rely on manual and hardcopy information as reference material and for notes. The current work process requires manual notetaking followed by a return to the office at the end of the day to transcribe notes into the required fields in PermitWorks. Such efforts are duplicative and create the potential for inaccurate and incomplete recordkeeping. The purpose of the field work is to develop information supporting business processes. Manually accessing and collecting this information requiring later, duplicate entry takes additional time that could be better used on higher priority tasks. The project team recommends that the City issue tablets with integrated software to the inspection staff to facilitate digital data entry, access, use, and communication in the field. This will support improved business processes and reduce total and individual transaction operating costs. PermitWorks has a remote inspector module that, assuming the City is not intending to switch to a new ERM, could be added to their existing system, allowing inspectors to enter inspections results, send correction notices, look up properties to see all associated information, as well as see their schedules as they are updated. Improving City staff capability and capacity through mobile computing and communications presents an opportunity for improved operational efficiency and data integrity. The City would incur technology equipment and software acquisition expenses as well as continuing operational expenses for mobile communications in the devices to support remote work. City staff would also require training to effectively use the devices and software, as well as how to effectively communicate and share data to maximize effectiveness. In tandem with the adoption of the technology, the City should develop assessment criteria to determine whether staff have adopted and are effectively using the technology to support improved business performance. 26 CITY OF LAKE ELMO OPERATIONS – PLANNING & ZONING DEPARTMENT Recommendation 12: Formalize submission intake process with the Planning Department. The state of Minnesota requires that plan reviews be conducted within 60 days of receiving an application, with some limited exceptions for proscribed situations. City staff related the difficulty in receiving applications from developers of sufficient quality and completeness in order for the City to begin its review. However, there does not appear to be a standardized intake process nor are there established review criteria to determine whether a submission is complete. In many cases, the lack of effective review of the initial submission can require re-submittals by the applicant. A common and recommended practice that can serve as a first step in formalizing the intake process is to define what constitutes a complete application for the City and verify that these materials have been included with each application at the time of submittal. A useful format for conveying these requirements can take the form of an intake checklist. The City does use a checklist as part of its combined Commercial Permit Application and Plan Review Submittal. This can serve as a model for a similar effort supporting residential development. The intake checklist identifies the information that must be presented at the time of submittal for a given application type, such as a residential building permit, a proposed subdivision, or a commercial site plan or design review. A responsive intake checklist identifies the information that staff will need to conduct and conclude a development review. The specific items on the list can vary based on the type of permit and the specific requirements of the City and other reviewing agencies. The City provides general guidance in a handout available on the website identifying when City permits are required by type of activity. However, the document is not all-inclusive and does not include application requirements. Applicants are directed to contact City staff via phone for questions and clarifications. A short document describing the permit process for clients identifies the following general steps:  Consult the document “When Are City Permits Needed?” or contact the Building Department to determine whether a permit is required  Pick up an application at City Hall or download application available on-line  Determine if a Site Plan and Survey are required (enlarge the footprint of the house through addition, porch, or deck, or install a pool or accessory building)  Submit completed application and plans to the Building Department at City Hall  Materials are reviewed at the counter to ensure that all necessary information is included in the application packet City staff relate that an effective review of materials at time of submittal may not take place. Simple to moderately complex projects should be screened at the counter for completeness before being accepted by the Building Department. A Building Department staff member familiar with the application type should verify that all required items are present. When all the required items have been located, the application can be accepted as complete and routed for staff review. If there are items that are missing, these should be highlighted on the checklist and explained, then the application returned to the applicant for resubmission with the missing items. An intake meeting can be used for application types that would require lengthy counter checking or a range of different skills to verify that they are complete. An intake meeting can provide an opportunity to assemble multiple project reviewers together with the applicant and their design team to conduct a live assessment of the application elements for completeness. The intake meeting should take less than one hour. The City should only accept complete applications with any deficiencies discussed at the intake meeting. ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 27 Formalizing the submission intake process using a comprehensive checklist and review sign-off can identify deficiencies earlier in the process before scheduling a meeting regarding the submission. The Planning Department already requires developers to attend a pre-submittal meeting. This meeting can be structured to include a greater focus on submission requirements and examples of what quality of work is required. Recommendation 13: Clarify responsibility for review and approval of development plans and associated surveys. A major step in the development process requires developers to submit a Certificate of Grading (“as-built” survey) that shows their developments have been graded in accordance with their approved grading plan from the Certificate of Proposed Survey. As-built surveys must show the graded lots within 0.2 feet of the approved plan. The as-built surveys have been a source of contention between the development community and City staff. The City is clear with the development community as to what is required of the as-built surveys; the requirements for the Certificate of Proposed Survey and the Certificate of Grading (“as-built”) are virtually identical. However, variances can exist between these documents that can result from either changes made by the developer or incomplete review of submitted materials by City staff. In some cases, a variation may exist because of a change made by the developer. The intent may have been to correct a mistake on the original survey that was missed during the original review. The City should work with the developer to confirm both the original mistake and that the proposed solution is appropriate to the original intent of the project plans. This can become a very subjective assessment, and the City should implement quality assurance steps in the original reviews to minimize incidence of this result. However, the approval process for as-built surveys has been muddled in recent years with perhaps varying levels of review conducted by different staff members. A variation between the surveys could also exist because the developer did not comply with the original plan for some other reason. In this instance, the City should identify the variation, discuss the issue with the developer, and fail the inspection unless there is a compelling reason not to do so. In other cases, a variation may exist because the initial review of the submitted survey by City staff was incomplete or inaccurate. There has been significant turnover among City staff members providing review and oversight to this process. City staff also relate that members of the City review team may not have been prepared through formal education, professional training, or personal experience to provide the technical reviews necessary to meet process objectives. As development continues, the City should take the following actions to support more effective reviews and results:  Identify which staff members are responsible for the review and approval of the proposed survey and the “as- built” grading survey  Identify the criteria impacting survey review and approval  Test the knowledge, skills, and abilities of the reviewing staff and proactively address any gaps or issues, especially during periods of staff turnover  Implement a formal peer review and quality assurance check throughout the permitting process to identify issues and respond to stakeholder comments or complaints  Identify available subject matter experts for consultation on topical issues as they arise for the designated reviewers, or to step in when designated staff are not available 28 CITY OF LAKE ELMO The City has experienced grading issues in several of its developments in recent years. Ensuring that critical reviews are conducted in compliance with approved plans will support better communication, understanding, and acceptance of City actions related to development criteria and requirements. Recommendation 14: Improve communication of the role and requirements imposed by the Valley Branch Watershed District on Lake Elmo development. Land development in Minnesota may be regulated by multiple entities. In addition to the City of Lake Elmo, property development within the City boundaries must also comply with regulations and requirements of three independent watershed districts. As described by the Minnesota Association of Watershed Districts,13 watershed districts are local, special-purpose units of government that work to solve and prevent water-related problems. The boundaries of each district follow those of a natural watershed and consist of land in which all water flows to one outlet. The districts are usually named after that watershed. The state elected to manage these natural resources on a watershed basis because water flows move beyond political boundaries, providing for a more holistic approach to resource management and conservation. Minnesota has 42 watershed districts across the state, each governed by a Board of Managers appointed by the Boards of Commissioners of the counties that have land in the district. Watershed Districts were authorized by the Legislature in 1955 when it passed the Watershed Act (MSA103D) establishing the role and responsibilities for watershed districts in Minnesota. The City follows the Lake Elmo Local Surface Water Management Plan (LSWMP) as a guide for conserving, protecting, and maintaining the quality of its surface waters, ground water, and natural resources. The City follows the water management strategies and regulations set forth by the governing watershed districts. According to the Metropolitan Surface Water Management Act of 1982, local units of government in the seven-county metro area prepare and implement comprehensive surface water management plans through membership in a watershed management organization (WMO) or a watershed district (WD).14 Figure 10 below identifies the water management organizations responsible for regulation and oversight of land development and water resource use in the seven-county metropolitan area.15 There are only very small areas of Hennepin County, Carver County, and Scott County that are not subject to a water management organization. 13 Minnesota Association of Watershed Districts, About Watersheds, https://www.mnwatershed.org/what-is-a- watershed-district/ 14 City of Lake Elmo, 2040 Comprehensive Plan, Local Water Management Plan, 2019. 15 Minnesota Association of Watershed Districts, Metro Watershed Organizations Map, https://www.mnwatershed.org/metro-watershed-management-organizations-metro-wmos ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 29 Figure 10: Watershed Management Organizations, Metropolitan Counties There are three watershed management organizations responsible for water resource management and conservation within the boundaries of the City of Lake Elmo:  Brown’s Creek Watershed District (BCWD) (far northeast area)  South Washington Watershed District (SWWD) (far southwest area)  Valley Branch Watershed District (VBWD) (remaining corporate area) Lake Elmo’s LSWMP avoids duplicating efforts of others by adopting or referencing the standards and policies of the three respective watershed districts, the Metropolitan Council, State of Minnesota agencies such as the Minnesota Pollution Control Agency (MPCA), the Minnesota Department of Natural Resources (MnDNR), the Minnesota 30 CITY OF LAKE ELMO Department of Health (MDH), and the Board of Soil and Water Resources (BWSR), plus Federal agencies, most notably the Environmental Protection Agency (EPA) where applicable.16 As depicted in Figure 11 below, the Valley Branch Watershed District comprises approximately 90%-95% of the land in the incorporated area of the City. Figure 11: Watershed Management Organizations, Lake Elmo Corporate Boundaries The Valley Branch Watershed District requires submission of proposed development materials to support review and approval of a permit.17 This detailed information includes the following:  Completed and signed application form  Evidence of ownership of the site  Required permit application fee 16 City of Lake Elmo, 2040 Comprehensive Plan, Local Water Management Plan, 2019 17 Rule 1: Administrative Procedures, Required Submittals and Exhibits, Valley Branch Watershed District. ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 31  Grading Plan / Mapping information  Hydrologic / Hydraulic Design information  Erosion Control and Sedimentation Prevention information  Construction plans for all proposed stormwater management facilities  Maintenance Agreement  Wetland Delineation Report (four copies)  Part 1 of the Combined Wetland Permit Application (CWPA) (five copies)  Wetland Replacement Plan (five copies)  Draft Declaration of Covenants that lists the VBWD-required minimum floor elevations  Other exhibits required to show conformance with rules and regulations City staff and some development stakeholders relate that the range and depth of materials required by the Valley Branch Watershed District goes beyond similar requirements from other water management organizations in the metropolitan area. These additional requirements may cause delays with submission, incomplete submissions, or delays in review, impacting the timing of approvals and progress on a development project. While these issues and possible impacts are the result of requirements imposed by an outside agency, process participants may perceive the variance in requirements as well as the incumbent delays to the development process to be the result of actions by the City and its required review processes. While the Valley Branch Watershed District may impose additional requirements beyond the typical experience of developers, these issues and their impacts are beyond the ability of the City to provide relief:  Virtually all land areas in the metropolitan area are subject to the requirements of a water management organization  Any organization developing property in the metropolitan area will expect and must meet the requirements of these regulatory agencies  It is appropriate for the City to defer to the requirements of the respective water management organizations regulating land in its corporate boundaries  No development can proceed without review, approval, and the required permits from the respective watershed district To the extent that the Valley Branch Watershed District requirements vary significantly from other water management organizations in the area, the City should work to identify these variances impacting developers and the progress on their projects. The City should then develop and provide additional process information to inform development applicants on these differences in requirements to support their more effective application development, timely submission and review, and successful application result. The City should work with a stakeholder group to identify the specific areas where the Valley Branch Watershed District requirements appear to differ from other agencies. In tandem with this effort, the City should identify these areas of concern with the respective watershed district to explore possible adjustments in either the requirements themselves or the communication of the requirements to facilitate greater understanding while continuing to support a necessary and valuable regulatory process. The documentation and clear communication of water management requirements will better support the permitting process and future development in the City. 32 CITY OF LAKE ELMO This initiative will require both City staff time and communication / coordination with a developer stakeholder group to research and develop strategic and tactical communications. The effort provides value to the community by supporting effective development processes, minimizing unnecessary delays and additional costs, as well as improving the reputation of the City as a partner in appropriate and effective community development. PERFORMANCE MEASUREMENT AND REPORTING Recommendation 15: Develop and implement a performance measurement program for the community development functions. The City’s 2021 Goal Setting initiative produced a roadmap identifying shared goals, objectives, and priorities for the City to pursue in the short-, medium-, and long-term.18 The effort refined the City’s Mission Statement, Values Statements, and identified four areas as shared 2021-2022 Recommended Goals. One of these goals states: “Continue organizational audits to identify staffing, process and service improvements to develop 5-year plan for each Department with appropriate metrics and dashboards in order to create a culture of continuous improvement.” As the City moves forward with these plans for organizational and operational review, it will be important for the City to identify appropriate and meaningful metrics against which to track operational performance, change over time, and progress towards organizational goals. The current level of effort tracking and reporting in both the Building Department and the Planning & Zoning Department is limited to transactional measures; these represent ad hoc tracking of effort to move projects and tasks through various development processes. Implementing use of performance measures will help the City gauge how well the organization is making progress toward their identified priorities, as well as evaluate the overall effectiveness of community development programs and services. Performance measurement provides an organization with numerical data used to evaluate the effectiveness and efficiency of its operations. For the City, this data will allow the City Administrator and the City Council to make more informed choices about how to improve and when to change the organization’s programs and services. Both the Building Department and the Planning & Zoning Department currently track limited performance and workload information. This information may be shared with the Council through ad hoc reports at the Council’s request. Some highly summarized information is provided in the City’s Comprehensive Annual Financial Report as “Operating Indicators by Function / Program” in the Statistical Section. However, this presentation is limited and does not provide context linking goals, resources, and results. The City will need to expand its range of available information regarding operational performance through a comprehensive performance measurement approach that will help the City to better understand the workload that goes into each program, the efficiency of each program, and the impact of each program. A comprehensive performance measurement program includes three types of measures:  Workload measures, which quantify the amount of work completed in service of a particular goal or task. Examples of workload measures could include the number of zoning code enforcements performed or the number of special events planned and managed.  Efficiency measures, which describe how effectively the organization uses its resources. They are often expressed as ratios or averages. Examples of efficiency measures could include the average number of work hours spent responding to each help desk call each year or the average cost to repair a pothole. 18 City of Lake Elmo 2021 Goal Setting Report, April 2021. ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 33  Outcome measures, which indicate how well a program or service accomplishes its intended purpose. Examples of outcome measures could include the average number of days required to process a zoning compliance permit or results of a satisfaction survey for program participants. The City should identify workload, performance, and outcome measures for the major programs in each department to help ensure they gather comprehensive data required to judge the relative value and performance of each program. Metrics should be tied to specific City programs and should be easily quantifiable and trackable. For each metric, the City should identify who will collect the data, how the data will be collected, and how often the data will be collected. Data should be regularly reported to staff, Department leadership, and City leadership. Over time, performance measurement trends will become a critical aspect of evaluating the City’s strategic goals and inform strategic planning updates. The data will also enhance the City’s transparency and help staff more effectively illustrate City programs to the City Council and the public. This approach will also allow the City to build a business case for potential decisions, especially as part of the budget development process. A business case is defined as a comprehensive justification for a proposed project or program. Businesses cases should include the following:  An overall statement of the strategic benefit of a particular decision, including challenges that the decision will address  A statement on how the decision would advance the City’s strategic goals  The estimated one-time and ongoing costs associated with the decision, including the cost of staff time  Any estimated efficiencies, revenue, or cost savings that the City will realize following implementation  A discussion of other nonmonetary benefits that are expected to be achieved by implementing the program, such as enhanced customer service Establishing business cases for potential City programs or initiatives will help ensure that the City is considering all relevant factors when choosing and dedicating resources to the programs with the greatest impact on quality of life. Performance and workload metrics can play a valuable role in illustrating the benefit of a particular initiative. An effective performance measurement approach will require staff time and resources to implement and manage but will allow for enhanced transparency and better decision making for the community. The following table suggests some key performance measures for the community development functions in the City. Table 7: Recommended Community Development Performance Measures by Function Function Sample Workload Measures Sample Efficiency Measures Sample Outcome Measures Engineering  Total plans reviewed by type  Total number of capital projects managed  Staff hours per plan review, by type  Staff hours per $1,000 in capital projects  Average number of calendar days to complete one round of plan review  Percentage of capital projects milestones completed on schedule 34 CITY OF LAKE ELMO Function Sample Workload Measures Sample Efficiency Measures Sample Outcome Measures Community Development (General)  Number of inspections performed, by type  Number of permits issued, by type  Labor hours (total cost) per inspection  Labor hours (total cost) per permit issued  Percentage of permits and inspections completed within X business days of initial request  Total valuation of permits, by type Planning  Number of residential plan reviews received by month  Number of commercial plan reviews received by month  Number of zoning cases supported by month  Number of final plats reviewed by month  Percentage and cost of residential plan reviews completed within 5 days by month (measure against goal)  Percentage and cost of commercial plan reviews completed within 10 days by month (measure against goal)  Percentage of approved projects in compliance with comprehensive plan priorities / guidance. Zoning  Number of zoning applications by month  Number of zoning ordinance violations by month  Number of special use applications by month  Number of variance applications by month  Average cost and workdays to process zoning applications to approval by type  Percentage of special use / variance applications to the total development applications Building  New residential permits issued by month  New commercial permits issued by month  Inspector average daily workload by month  Residential plans average cost and days in review by month (measure against goal)  Commercial plans average cost and days in review by month (measure against goal)  Percentage of residential plans reviewed within 14 days by month (measure against goal)  Percentage of commercial plans reviewed within 30 days by month (measure against goal)  Residential permit valuations  Commercial permit valuations Code Enforcement  Number of violations of City codes for property maintenance by month  Number of resident contacts inspectors report by month  Average cost and number of days by month for property inspection following notice from the public (measure against a stated goal)  Change in number of violations (3-month moving average) from period 12 months prior  Number of required re- inspections / re- enforcement actions on same property  Figure 12 presents an example of an outcome metric, in this case the rate of as-built inspection failures. Changes in inspection failure rates can be indicative of changing community development performance or could be indicative of external changes to which the City may be able to adapt. ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 35 Figure 12: As-Built Inspection Status As depicted in Figure 12, performance metrics can provide information on work volumes accomplished, the resources (time or money) necessary to accomplish this performance and impacts to operational performance. The value of the measures lies not just in communicating where the organization is, but also where the organization needs to move, or what areas need additional research to understand changes in performance. Recommendation 16: Review and incorporate regular performance reporting in contracts for outsourced services. Local government can apply a variety of resources to meet operating demands, as discussed in Recommendation 5. A government may elect to use in-house staff as the service provider with costs measured by allocated salaries and benefits. An alternative could involve shared services with another unit of government with an agreement to reimburse the providing government through an intergovernmental agreement (contractual service) for the services provided. A third approach involves contracting for the service from an outside provider under a variety of contracting scenarios. The City of Lake Elmo has made significant and consistent use of the third approach using contracted services provided by an outside provider for a variety of service needs. Some of these contractual arrangements supporting community development in the City include the following:  Agreement for Building Inspection and Building Official Services – MNSPECT, LLC o Provide an individual who meets statutory qualifications to serve as a Designated Building Official o Perform plans examination services for all eligible permit applications o Perform all requested field inspections o Prepare and provide inspection records and other necessary information 87.7% 59.5% 52.5% 12.3% 40.5% 47.5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2019 2020 2021 As-Built Inspection Status Pass Fail 36 CITY OF LAKE ELMO o Inspector shall complete all permit and plan reviews for applications related to residential properties within ten (10) days of receipt of complete submittals o Inspector shall complete all permit and plan reviews for applications related to commercial properties within fifteen (15) days of receipt of a complete submittal  Landscape Architecture Services Agreement – Wenck Associates, Inc. o On a work order basis, services will include studies and reports, plan review, preparation of design standards and policies of the City, design, preparation of working drawings and specifications, construction administration and construction observations, mapping, preparation of cost estimates, and other related tasks.  Professional Engineering Services and General Consulting Services – FOCUS Engineering, Inc. o Serve as the designated “City Engineer” to perform professional engineering services as directed by the City Council and under the direction of the City Administrator o Provide assistance on day-to-day matters acting as the City Engineer o Attend meetings of the City Council or other committees to address engineering matters o Participate in internal and external meetings involving engineering questions and issues o Act as City liaison and representative with other communities and county, state, and federal agencies o Respond to and address constituent requests and issues o Provide engineering services, including:  Preparation of studies and reports, designing, and preparation of working drawings and specifications  Construction administration and construction observations, utility mapping, and maintaining engineering records and correspondence  Preparing cost estimates, capital improvement planning, and department budgeting  Maintaining the Municipal State Aid System  Maintaining the MS4 NPDES Permit  Providing engineering support to other City departments and guiding and overseeing the design and construction of public infrastructure systems through private development projects  Preparing requests for proposals, assisting with selecting outside professional services consultants for certain projects, and managing the professional services contracts  Other related tasks of a type normally associated with infrastructure and facility planning, design, construction, operations, and/or maintenance o Provide project engineering services on an hourly basis to support other departments including:  Permit and plan reviews (grading, site plans, CUP and PUD applications)  Reviewing development applications and plans for conformance with City standards  Meeting with developers and members of the public on proposed development projects  Guiding and overseeing the design and construction of public infrastructure through private development projects  Providing engineering support to the public works department as requested for maintaining the MS4 NPDES Permit, right-of-way applications, and overseeing the annual street maintenance projects  Preparing requests for proposals, and assisting with selected outside professional services consultants for certain projects, and managing the professional services contracts; and  Other related tasks ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 37 The City has relied on professional contracted services for a variety of reasons. Outside firms have been used to provide subject matter expertise beyond the current in-house staff capabilities to cost-effectively provide services only on an as-needed basis, and outside providers have acted to augment internal staff resources during periods of peak service demand or to cover during a staff position vacancy due to staff turnover. Services are provided to the City to support the Building Department and the Planning & Zoning Department through formal contracts for service. While these contracts sufficiently cover required elements such as scope of services, project contacts, rates and compensation, and liability, the contracts do not include provisions for regular, required performance reporting. As discussed in Recommendation 15, the City has identified a strategic priority around developing relevant performance metrics in order to apply them to management decisions and improved organizational performance. This focus is also reflected in the current initiative to complete regular City department reviews (including this project) that will result in recommendations for improvement as well as recommendations for performance metrics for each City area of operation. Performance metrics and performance reporting are important tools supporting management and operations. Developing and incorporating these performance measures for services provided with in-house resources is an important starting point. However, the City does not have a current mechanism to support development of performance measures for services provided through contracts with outside vendors. Given the City’s current and possible continued use of significant outside contract services, the City should include performance reporting as a service contract element with each outside provider. Each service contract should include provisions for regular reporting of services provided within the reporting period and year-to-date. The services reported should be linked to associated costs requested for reimbursement in order to provide sufficient range and depth of information to identify both appropriate workload measures and efficiency measures. If the service is identified as providing support to reach an overarching outcome, the reporting should include information on progress towards that outcome. Where the contracted services augment internal staff efforts, the required performance reporting should mirror the reporting developed internally providing measures of workload, efficiency, and outcome. This will allow the City to compare the relative services volumes provided and associated total and unit costs. This information can then be used to refine choices on sourcing these services to focus on the more effective approach generally (in-house or contract) as well as to identify specific service areas best provided by internal or contract services. Where contracted services are unique and do not augment internal staff efforts, the required performance reporting can be used to identify areas for improvement and provide additional information to consider alternative service providers if desired. As with any performance reporting initiative, this effort will require some additional staff and management effort to develop the performance information accurately and consistently, as well as additional management resources to interpret and apply the information to management decision making. The City will also need to expand the initiative to contract services. This will require developing and including relevant performance measures and reporting requirements in contract documents with each vendor. The information developed will provide critical business intelligence regarding City services and the resources required to provide them. Judicious application of performance systems and reporting can provide value far more than the development and management costs. 38 CITY OF LAKE ELMO Conclusion This organizational assessment was undertaken to identify key focus areas for the community development function in Lake Elmo necessary to improve service delivery. The report provides guidance on organizational and staffing needs, financial management and resource administration, operational business processes in both the Building Department and the Planning & Zoning Department, and performance measurement and reporting. The recommendations in this report were developed to support the City’s desire to move away from past practices and support continued planned development in the community. The recommendations were developed to address issues from the perspective of current City policies, practices, and operations. Implementation of these recommendations will move the City forward to make meaningful and impactful change. The challenge for the City is acknowledging that achieving systemic change as communicated by the Council will require changes to the way the organization identifies its role in the community and how it provides services to the public. These recommendations set a course for the City to develop real solutions that will position the community for continued growth and success. The City of Lake Elmo is fortunate to be staffed with a core group of key staff. Using this report as a guide, the City can further improve its operations and services as it responds to changing community resources and demands. ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 39 APPENDIX A: SAMPLE POSITION DESCRIPTIONS 40 CITY OF LAKE ELMO Town of Payson Job Description Position Title: Assistant Building Official FLSA Classification: Non-Exempt Pay Grade: 62 Department: Community Development Reports To: Chief Building Official Approved By: The fundamental reason this classification exists is to direct the activities of a major division of the Community Development Department, including coordination of field and office work in the enforcement of construction regulations. Work involves reviewing building plans, site plans, construction documents, inspection reports and development proposals for compliance with applicable Town codes and ordinances and issuing related permits. Supervision is exercised over staff working in various sections that are responsible for inspecting buildings, reviewing plans and issuing construction permits. Work assignments are very broad in scope and are performed with considerable independence. GENERAL PURPOSE Responsible for the administration and supervision of the day-to-day technical aspects of the Building Division. Manages highly complex and multi-disciplinary development services activities. Incumbents receive only nominal supervision and have substantial responsibility in working with staff and heads of other departments on problems relating to property development activities. Work assignments are very broad in scope and are performed with considerable independence. Work is performed under the direction of the Chief Building Official and is reviewed based on results obtained. This is the fifth of six classifications. SUPERVISION EXERCISED Responsible for supervision of field inspection and plan review staff within the Building Division and in the absence of the Chief Building Official is responsible for the supervision of all Building Division personnel. ESSENTIAL DUTIES AND RESPONSIBILITIES  Supervises and coordinates the activities and training of all personnel assigned to the division, as directed by the Chief Building Official;  Assists in developing standards and procedures for the conduct of the division;  Provides general guidance to the work program of the division and aids in interpreting policy;  Acts as technical advisor to employees in solving difficult assignments and in reviewing the objectives, feasibility, and techniques of execution and resultant findings in their work;  Assists in formulating division operating budget for review and approval of the Community  Development Director;  Assists in advising department management in the establishment of personnel policy;  Participates in code development with appropriate agencies and jurisdictions; ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 41  Assists in presenting the division’s policies and positions in meetings, negotiations and communications with the public, citizen and industry groups, Town Manager, Mayor and town Council, the media and other public forums within assigned areas of authority;  Participates in formulation of department policies, goals and objectives as a member of the senior management team;  Acts as the Chief Building Official in their absence;  Provides for the efficient operation of the field inspection staff;  Responsible for the enforcement of building construction codes adopted by the Town;  Coordinates building plan review to ensure reviews are performed consistent with division policies;  Trains inspection and plan review staff;  Ensure building division operations are effectively conducted in a professional timely manner;  Provides assistance and information to the public regarding building matters through correspondence, interviews, presentation, reports and telephone calls;  Prepares for the adoption, revision and new provisions of building codes as directed by the  Chief Building Official;  Works with other Town departments to ensure proper implementation of building policies;  Demonstrates continuous effort to improve operations, decrease turnaround times, streamline work processes, and work cooperatively and jointly to provide quality seamless customer service. PERIPHERAL DUTIES  Performs other duties, which may be assigned from time to time. MINIMUM QUALIFICATIONS Education and Experience:  High School Diploma or G.E.D certificate.  Four (4) years experience in general construction and related fields.  Minimum six (6) years experience within a building inspection department or private inspection agency.  Two (2) years supervisory experience.  Any equivalent combination of education and experience that provides the required skills and abilities for the position. Certifications & Licenses:  Must possess, or be able to obtain by the time of hire, a valid Arizona drivers license without record of suspension or revocation in any state.  Plans Examiner certification from the International Code Council.  Building Official certificate from the International Code Council, preferred. OR obtained within eighteen (18) months of appointment. Knowledge, Skills and Abilities:  Extensive knowledge of the principles and practices of Building plan review and inspections.  Some experience in supervising building plan review and inspections.  Extensive knowledge of local and State laws governing building construction, use and occupancy. 42 CITY OF LAKE ELMO  Thorough knowledge of approved methods and materials used in building construction, including concrete, masonry, framing, plumbing, electrical, heating ventilation and cooling and allied construction work.  Ability to establish effective working relationships with fellow staff members, contractors, designers, boards, Town Council and the general public.  Ability to interpret complex construction plans and specifications.  Ability to direct and supervise technical staff.  Ability to conduct technical investigations and research in the area of building construction.  Ability to manage the technical affairs of the Building Division.  Ability to communicate effectively orally and in writing.  Ability to work under stressful conditions with frequent interruptions. Additional Requirements:  Some positions may require the use of personal of Town vehicles on Town business. Individuals must be physically capable of operating the vehicles safely, possess a valid driver’s license, and have an acceptable driving record. Use of a personal vehicle for Town business will be prohibited if the employee is not authorized town vehicle or if the employee does not have personal insurance coverage.  Some positions may require the performance of other essential and marginal functions depending upon work location, assignment, or shift. TOOLS AND EQUIPMENT USED Personal computer, including word processing, and database software; calculator, copy and fax machine, phone, mobile or portable radio, automobiles telephones, ladder or scaffolding, and tape measure. PHYSICAL DEMANDS The Physical demands described herein are representative of those that must be met by an employee to successfully perform the essential functions of this job. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. The duties listed above are intended only as illustrations of the various types of work that may be performed. The omission of specific statements of duties does not exclude them from the position if the work is similar, related or a logical assignment to the position. Work is performed mostly in office settings. Some outdoor work is required in the inspection of various land use developments and construction sites. Hand-eye coordination is necessary to operate computers and various pieces of office equipment. The employee must occasionally lift and/or move twenty-five (25) pounds. Specific vision abilities required by this job include close vision, distance vision, color vision, depth perception, and the ability to adjust focus. The employee is occasionally required to stand, walk, sit, climb or balance, stoop, kneel, crouch, or crawl. The employee is occasionally required to use hands to finger, handle, grasp, feel and operate instruments or controls, and reach with hands and arms. Requires repetitive ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 43 movements standard in office related activities such as typing, sitting and standing, talking in person and via the telephone. WORK ENVIRONMENT The work environment characteristics described here are representative of those an employee encounters while performing the essential functions of this job. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. While performing the duties of this job, the employee occasionally works in outside weather conditions. The employee occasionally works near moving mechanical parts in high, precarious places and is occasionally exposed to wet and/or humid conditions, or airborne particles. The noise level in the work environment is usually moderately quiet in the office. MENTAL ACTIVITIES Reasoning: Ability to apply common sense understanding to carry out assigned duties. Ability to reason with a diversity of cultures and individuals and difficult conditions and often strong and vocal viewpoints. Logic: Ability to perform basic skills, including organizational and process management. Language/Communication: Demonstrable ability to communicate clearly and concisely orally and in writing. All job descriptions have been reviewed to ensure that only essential functions and basic duties have been included. Peripheral tasks, only incidentally related to each position, have been included. Requirements, skills and abilities included have been determined to be the minimal standards required to successfully perform the position. In no instance however, should the duties, responsibilities and requirements be interpreted as all- inclusive. Supervisors as deemed appropriate may assign additional functions and requirements. In accordance with Americans with Disabilities Act, it is possible that requirements may be modified to reasonably accommodate disabled individuals. However, no accommodation will be made which may pose serious health or safety risks to the employee or others or which may pose undue hardships on the organization. This job description does not constitute an employment agreement between the employer and employee and is subject to change by the employer as the need of the employer and requirements of the job change. Employee Signature Date 44 CITY OF LAKE ELMO Town of Payson Job Description Position Title: Senior Planner FLSA Classification: Non-Exempt Pay Grade: B14 Department: Planning and Development Reports To: Planning and Development Director Approved By: The fundamental reason this classification exists is to provide advanced analysis of technical data and major project work in the field of urban planning. Senior Planners are responsible for major planning functions or projects requiring combinations of skill in research, analysis, development, presentation, or interpretation of concepts and data pertaining to planning and implementation of plans. Work is performed with general instructions from a supervisor with considerable latitude for independent initiative and judgment. A Senior Planner is distinguished from a Planner by the size, complexity, creative demands, public relations problems, and independence of performance of assigned projects or functions. GENERAL PURPOSE To plan, review and implement the activities and operations for the effective enforcement of zoning regulations. To coordinate assigned activities with other Town departments and outside agencies. To provide highly responsible and complex administrative support to the Zoning Administrator and Community Development Director. This is the third of four classifications. SUPERVISION EXERCISED None. ESSENTIAL DUTIES AND RESPONSIBILITIES  Coordinate large processes such as application screenings, annexations, regulatory license requests, school district notifications, text amendments, and the preparation of interpretation letters;  Reviews site and building plans for residential, commercial and industrial development to ensure compliance with zoning regulations;  Provide staff assistance to the Planning and Zoning Commission and the Board of  Adjustments when requested by the Zoning Administrator or Community development  Director;  May be requested to prepare and present staff reports and other necessary correspondence;  Assists the Zoning Administrator with the address assignment program for new development and periodically reviews effectiveness of current addressing program;  Provides direct customer service at the Community Development counter for inquiries regarding zoning regulations, application procedures and property information;  Identifies violations of the zoning regulations through citizen complaint or drive by inspections and takes appropriate action to bring all violations into compliance;  Compile and maintain information, documents, pictures and interviews for complaint case files; ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 45  Confers with engineers, developers, architects, attorneys, property owners, consultants, agencies and the general public in acquiring information, coordinating department matters and discussions of Town requirements for proposed developments;  Assist the Zoning Administrator in reviewing site plans for commercial and industrial developments to ensure compliance with Town zoning regulations;  Assists with residential site plan reviews as needed;  Assists the Zoning Administrator in reviewing applications for compliance and issues  Temporary Use Permits (TUPs), tree permits and sign permits;  Assists in monitoring the above permits after issuance;  Assists the Zoning Administrator in reviewing business license applications to ensure compliance with the Town zoning regulations;  Responds to and resolves complex and sensitive citizen inquiries regarding violations of the zoning regulations;  Demonstrates continuous effort to improve operations, decrease turnaround times, streamline work processes, and work cooperatively and jointly to provide quality seamless customer  service. PERIPHERAL DUTIES  Performs other duties, which may be assigned from time to time. MINIMUM QUALIFICATIONS Education and Experience:  Bachelor’s degree in Urban Planning, social sciences, law enforcement, or related field.  Two (2) years experience working with zoning code enforcement programs, law enforcement programs, issuance of construction permits, or planning programs where various techniques and data analysis methods are used.  Any equivalent combination of education and experience that provides the required skills and abilities for the position. Certifications & Licenses:  Must possess, or be able to obtain by the time of hire, a valid Arizona driver's license and have an acceptable driving record. Knowledge, Skills and Abilities:  Knowledge of Arizona State laws pertaining to zoning and subdivision of land.  Skillful in the operation of computers, including word processing, photo processing and planning software.  Knowledge of modern and complex principles and practices of planning and zoning code enforcement programs.  Knowledge of modern theories, principles and practices of urban planning and development as applied to the preparation of designs, plans and specifications for development projects.  Knowledge of land use principles and applicable redevelopment responsibilities. 46 CITY OF LAKE ELMO  Knowledge of methods and techniques of effective report preparation and presentation to groups, committees, boards, and other organizations.  Ability to establish effective working relationships with the general public, staff, and applicants for service.  Ability to gain cooperation through discussion and persuasion.  Ability to analyze problems, find alternate solutions, project consequences or proposed actions, and Implement recommendations in support of goals.  Ability to identify and respond to Town Council and management issues and concerns.  Ability to analyze and systematically compile technical and statistical information and prepare technical reports to include graphic displays.  Ability to interpret, apply, and ensure project compliance with local, State and Federal rules, leas and regulations particularly pertaining to municipal planning and zoning  codes.  Ability to clearly communicate in both written and verbal form.  Ability to work under stressful conditions with frequent interruptions. Additional Requirements:  Some positions may require the use of personal of Town vehicles on Town business.  Individuals must be physically capable of operating the vehicles safely, possess a valid driver’s license, and have an acceptable driving record. Use of a personal vehicle for Town business will be prohibited if the employee is not authorized town vehicle or if the  employee does not have personal insurance coverage.  Some positions may require the performance of other essential and marginal functions depending upon work location, assignment, or shift. TOOLS AND EQUIPMENT USED Personal computer, including word processing, database and planning software; calculator, copy and fax machine, phone, mobile or portable radio, automobiles telephones, digital camera, drafting equipment, measuring tapes, and scales (engineering and architectural). PHYSICAL DEMANDS The physical demands described herein are representative of those that must be met by an employee to successfully perform the essential functions of this job. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. The duties listed above are intended only as illustrations of the various types of work that may be performed. The omission of specific statements of duties does not exclude them from the position if the work is similar, related or a logical assignment to the position. Work is performed mostly in office settings. Some outdoor work is required in the inspection of various land use developments and construction sites. Hand-eye coordination is necessary to operate computers and various pieces of office equipment. The employee must occasionally lift and/or move twenty-five (25) pounds. Specific vision abilities required by this job include close vision, distance vision, color vision, depth perception, and the ability to adjust focus. The employee is occasionally required to stand, walk, sit, climb or balance, stoop, kneel, crouch, or crawl. The employee is occasionally required to use hands to finger, handle, grasp, ORGANIZATIONAL ASSESSMENT – BUILDING DEPARTMENT / PLANNING & ZONING DEPARTMENT 47 feel and operate instruments or controls, and reach with hands and arms. The employee is required to perform moderate lifting and to operate a motor vehicle. Requires repetitive movements standard in office related activities such as typing, sitting and standing, talking in person and via the telephone. WORK ENVIRONMENT The work environment characteristics described here are representative of those an employee encounters while performing the essential functions of this job. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. The noise level in the work environment is usually moderately quiet in the office. MENTAL ACTIVITIES Reasoning: Ability to apply common sense understanding to carry out assigned duties. Ability to reason with a diversity of cultures and individuals and difficult conditions and often strong and vocal viewpoints. Logic: Ability to perform basic skills, including organizational and process management. Language/Communication: Demonstrable ability to communicate clearly and concisely orally and in writing. All job descriptions have been reviewed to ensure that only essential functions and basic duties have been included. Peripheral tasks, only incidentally related to each position, have been included. Requirements, skills and abilities included have been determined to be the minimal standards required to successfully perform the position. In no instance however, should the duties, responsibilities and requirements be interpreted as all- inclusive. Supervisors as deemed appropriate may assign additional functions and requirements. In accordance with Americans with Disabilities Act, it is possible that requirements may be modified to reasonably accommodate disabled individuals. However, no accommodation will be made which may pose serious health or safety risks to the employee or others or which may pose undue hardships on the organization. This job description does not constitute an employment agreement between the employer and employee and is subject to change by the employer as the need of the employer and requirements of the job change. Employee Signature Date