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TO: Mayor Thomas J. Weisner
FROM: Jim Pilmer, Director of Neighborhood Standards
DATE: May 21, 2015
SUBJECT:
Staff is requesting approval for a proposed change in fees associated with the Rental Licensing Program conducted by the Division of Property Standards.
PURPOSE:
The primary role of property inspections conducted by the Division of Property Standards is the approval of Rental Licenses in support of the objectives of the Crime Free Housing Ordinance. A strategic goal for the City of Aurora to provide "quality of life" for every resident. According to most recent census data, Aurora has an estimated 60,000 housing units. The data estimates 20,000 of those units are non-owner occupied. Attached to the resolution is like data of our comparable communities. Each community surveyed varies greatly as to the scope and method of property inspections. It should be noted that Aurora inspections are comprehensive in comparison to others. From feedback received in forums with various professional organizations, management of Property Standards has become aware of several variations to the licensing process. Some communities, such as Rockford and Naperville, are considering the adoption of a program similar to Aurora. The property inspection comes with a proposed fee that more fairly distributes the associated costs among the program participants by making the cost more of a user fee.
BACKGROUND:
The fees associated with the operation of Aurora's rental licensing program were adjusted most recently in 2006 and, prior to that, in 1994. In 2008, Aurora began inspecting all rental units including single family homes. Approximately 10,000 properties are licensed in the program. The licensing process begins with the annual property registration and $40.00 fee due by August 31. Late fees are currently $250.00 for 30 days past due and $500.00 for 60 days past due. The proposed change is an annual license fee increase to $80.00 with an additional late fee of $80.00 for 30 days past due and $160.00 for 60 days past due. Currently, properties that are under an inspection bye receive a waiver from the annual fee and the inspection. The waiver of the fee and the inspection can be for a one or two year period. The proposed change would eliminate the practice of a fee waiver of the annual license fee.
Following the registration and license fee payment, units are scheduled for a General Inspection (GI) during the licensing year. Prior to the GI, a comprehensive check list for the inspection is mailed to the landlord. In addition, property owners are given the checklist in the required Landlord Training Class conducted by Property Standards and the Aurora Police Department. A high number of properties and landlords are not prepared for the initial inspection and require a re-inspection. Currently, Aurora does not charge for the first re-inspection. The proposed change includes an $80.00 fee for the first re-inspection. Further re-inspection fees will remain the same.
This timeline, under current fees, allows a property owner over 90 days after the initial inspection to meet compliance. Under this current practice, up to four inspections can occur with fees of $190.00. Under the proposed changes, $320.00 of fees will be charged for the same number of inspections. The intent of Property Standards is to create a financial incentive and urgency to achieve compliance by having properties meet the property maintenance code on the first inspection. The second intent, creating an urgency for property owners to meet the property code requirements, is to lessen the burden on the administrative hearing process.
To provide a brief overview of the costs to the City associated with each inspection, the average resource allocated to the first inspection is approximately 1.5 hours of labor, in addition to vehicle and technology costs. Re-inspections typically result in one hour of labor cost plus vehicle and technology. The salary and benefits of an inspector averages to $59.46 an hour, equaling $88.74 per 1.5 hour inspection.
In addition to the aforementioned proposed fee changes, a new inspection fee of $200.00 for rental properties requiring an emergency inspection for a life safety issue is being proposed. This includes inspections occurring between 5:00 pm and 7:00 am Monday through Thursday, and from 5:00 pm Friday to 7:00 am Monday.
Once a property is found in violation, following a 90 day period of re-inspection, the owner receives a summons to appear for an administrative hearing. Frequently, landlords use this summons period to complete the violations just prior to the administrative hearing. This process is time consuming and incurs additional legal costs that would be better allocated to the daily responsibilities of the department.
DISCUSSION:
Currently, license fees and fines do not cover the City's operating costs of the Rental License Program. Other municipalities surveyed also do not operate the program to cover the associated costs with the program. However, it is prudent for the City of Aurora to charge the property owners for the cost to operate this program, as they are functionally operating a commercial business within the community. A financial incentive to landlords is to pass the license inspection at the first inspection. For properties that remain in compliance with all codes, the annual fee collected by the City of Aurora is $80.00. Property owners and landlords who operate rental properties that are not in compliance will pay escalated fees to cover the cost associated with inspections and compliance. Maintaining property code enforcement provides "quality of life" and safe living conditions for Aurora citizens. An additional resulting outcome is the stabilization of property value for the rental property and surrounding properties in the neighborhood.
IMPACT STATEMENT:
The proposed fee changes are requested as the Division of Property Standards prepares for the annual registration process. The new fee income will help to make this program pay for itself as a user fee. It is the intent to have the increase fines provide as an incentive to pass the scheduled inspection on the first attempt. In doing so, this would allow for the more efficient work flow in performing the required General Inspections on all properties and fewer re-inspections of properties in meeting compliance.
RECOMMENDATIONS:
I propose the resolution be adopted as presented.
cc: Alderman O'Connor, Chairman
Alderman Mervine
Alderman Bohman
Alderman Peters, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution setting fees for the City of Aurora's Rental Licensing Program.
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, licensing fees under the City of Aurora's Rental Licensing Program are in need of being increased to more accurately reflect the cost of the program, and:
WHEREAS, the rental license program in collaboration with the Crime Free Housing Ordinances provides quality of life and property stabilization through property code enforcement.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that the fees for Aurora's Rental License Program set forth in the attached Exhibit "A" are hereby approved, and these fees will take effect with the licensing year effective August 31, 2015