N.J. Admin. Code § 5:23-4.17

Current through Register Vol. 56, No. 21, November 4, 2024

Section 5:23-4.17 - Municipal enforcing agency fees

(a) Ordinance: The municipality shall set enforcing agency fees by ordinance for the following activities: plan review, construction permit, certificate of occupancy, certificates of continued occupancy, demolition permit, elevator permit and sign permit.

1. The municipality shall include in any such ordinance all fees pertaining to the operations of the enforcing agency, including those for which the department has not set standards, such as fees for reinstatement of lapsed permit. All minimum fees shall be stipulated. Fees may be rounded to nearest dollar amount if the municipality's ordinance so provides.

(b) On or before February 10 of each year, in a municipality that budgets according to the calendar year (January 1 to December 31), or on or before August 10 of each year, in a municipality that budgets according to the State fiscal year (July 1 to June 30), the construction official shall, with the advice of the subcode officials and in consultation with the municipal finance officer, prepare and submit to the governing body a report detailing the receipts and expenditures of the enforcing agency and indicating his or her recommendations for a fee schedule, based on the operating expense of the agency.

1. The report shall be structured in accordance with (c) below and with such guidelines as shall be issued from time-to-time by the Commissioner so as to accurately portray true enforcing agency expenses in general and for structures of different use groups. This report shall serve as the basis for the ordinance to be enacted by the municipality, as it may deem appropriate, establishing the fee schedule.

2. A copy of the construction official's report recommending a fee schedule and setting forth enforcing agency revenues and expenses shall be filed with the Department when prepared and a copy of the ordinance, together with the fee schedule, shall be filed with the Department when enacted or amended.

3. The appropriation and expenditure of construction code fee revenues generated from the fee schedule established pursuant to (b)1 above shall be audited annually by an independent auditor acceptable to the Department and a copy of the auditor's report shall be provided to the Department when it is issued to the municipality. Submission of a copy of the annual municipal audit required to be submitted to the Division of Local Government Services at the time that it is required to be submitted to that Division shall constitute compliance with this requirement provided, however, that the annual municipal audit tests and contains an opinion that all expenditures of construction code fees have been made for purposes herein permitted.

4. The report shall also include the measures taken by the municipality pursuant to N.J.A.C. 5:23-4.4(e) to ensure inspections are performed in a timely manner. This report shall take into account projected work and agency resource needs for the next budget year.

(c) Costs: The fee schedule shall be calculated to reasonably cover the municipal costs of enforcing the regulations.

1. It is the purpose and intent of this subsection to facilitate the accumulation by municipalities of the funds necessary to offset future construction code enforcement expenses, to ensure that construction code revenue is used only for construction code enforcement purposes, and to provide a means of making such revenue readily available for such purposes from year to year.

2. All fees collected pursuant to the fee schedule established in accordance with (b)1 above shall be appropriated in accordance with the requirements of the Uniform Construction Code Act and the Local Budget Law to be applied solely to meet the municipal costs of enforcing the regulations, which costs shall be defined as including only the following:

i. Salaries and employee benefits for licensed code enforcement officials and inspectors and clerical personnel assigned to the enforcing agency, in an amount proportionate to the time spent in performing work for the enforcing agency provided, however, that detailed time records are kept where employees divide their time between Uniform Construction Code and Non-Uniform Construction Code duties;

ii. Cost of motor vehicles in an amount proportionate to their use by or for the enforcing agency. Payments for this purpose may be in the form of mileage reimbursement paid to employees for use of their own motor vehicles, cost of purchase of motor vehicles by the municipality for the exclusive use of the enforcing agency (which cost may not be amortized), depreciation and operating expenses of motor vehicles made available to the enforcing agency by another municipal agency, and cost of rental of motor vehicles for use by the enforcing agency;

iii. Direct costs in support of the agency such as equipment, supplies, furniture, office equipment maintenance, standardized forms, printing, and safety equipment that are supplied directly to the enforcing agency for its sole use;

iv. Professional expenses of enforcing agency personnel that are directly related to the enforcement of the regulations, including publications, membership dues, license fees, and authorized travel to conferences, meetings and seminars;

v. Fees for services performed under contract by private on-site inspection agencies;

vi. Documented charges for legal services required in connection with construction code enforcement litigation;

vii. Fees for the annual audit of the dedicated fund by an independent auditor; and

viii. Subject to the limitations set forth in (c)3 below, indirect, overhead, and other expenses of the municipality in support of the enforcing agency, including:

(1) Legislative and Executive expenses;

(2) Administration, including personnel, payroll, and general training services provided to the agency in common with all other municipal offices;

(3) Central services shared jointly with other municipal offices, such as telephone, reproduction, centralized computer services, etc.;

(4) Insurance except for group insurance premiums included under employer fringe benefits;

(5) General building maintenance expenses;

(6) Finance, including bookkeeping, purchasing, and auditing;

(7) Office space expenses, including rent or interest and debt service on municipal capital facilities; and

(8) Such other expenses as may be properly allocable to construction code enforcement.

3. Indirect and overhead expenses charged to the construction code fee revenues shall not exceed 12 percent of all other costs of the enforcing agency unless the indirect and overhead expenses of the municipality exceed 12 percent of the entire municipal budget, in which case indirect and overhead expense may be charged to construction code fee revenues in proportion to the general municipal overhead and expense ratio. A detailed written justification for any charge for indirect and overhead expenses in excess of 12 percent shall be prepared and made available for inspection both by the Department and by the public.

4. This subsection shall not be construed as precluding the use of money from the general fund of the municipality to pay costs of code enforcement when the construction code fee revenues generated from the fee schedule established pursuant to (b)1 above are insufficient for that purpose or when necessary to compensate the enforcing agency for work done without fee pursuant to statute or ordinance.

(d) The fee for development-wide inspection of homes after issuance of a certificate of occupancy ordered pursuant to 5:23-2.35 shall be an amount equal to twice the hourly base salary paid to any licensed code official performing the work or the hourly fees charged to the municipality by a professional contracted to provide such services pursuant to N.J.A.C. 5:23-2.35, subject to the accounting procedures and limits set forth below.

1. Such charges or fees shall be only those that are reasonable and necessary in order to ascertain whether a violation exists or to verify that any work performed has abated the violation.

2. The municipality shall place in escrow all monies paid by the developer for this purpose. The escrow shall be held in any account maintained by the municipality in the same manner as that established for the deposit of escrow funds paid for professional review services, inspection fees and performance and maintenance guarantees as provided for at 40:55D-53.1.

3. The developer shall post an initial deposit in the amount of $ 200.00 per home or an amount determined by the municipality to be necessary to cover the estimated cost of two months' inspection activity, whichever is greater. At monthly intervals, the developer shall increase the amount in the escrow fund so that it shall be sufficient to pay the cost of the next two months' inspection activity or the cost of completing the inspections, whichever is less.

4. Standards for hourly charges for development-wide inspection of homes after issuance of a certificate of occupancy shall be as follows:

i. Hourly charges shall be limited only to municipal or consulting professional charges for inspections, review of plans and supporting documents and preparation of reports and documents and shall accurately reflect the hours engaged in these activities.

ii. The only costs that shall be added to any such charges shall be actual out-of-pocket expenses of any consulting professional engineer or registered architect hired for this purpose including normal and typical expenses incurred in performing inspections and reviewing plans and supporting documents for the required corrective work.

iii. The developer shall not be billed and no charge shall be made to any escrow account or deposit for any municipal clerical or administrative functions, overhead expenses, meeting room charges, or any other municipal costs and expenses except as provided for in this subsection, nor shall a municipal enforcing agency professional add any such charges to his expenses.

iv. Where licensed municipal code officials perform these inspections, the fee shall be 200 percent of the hourly base salary of the inspector(s) multiplied by the number of hours spent on inspections and review of plans and supporting documents for any necessary corrective work.

5. Payments shall be charged to the escrow, and shall be made by the Chief Financial Officer of the municipality, and a final accounting shall be provided, in accordance with the procedure set forth in paragraphs c and d of 40:55D-53.2. Payments shall be made from any such escrow by the Chief Financial Officer only upon approval by the Construction Official.

6. Appeals of any charges levied by the municipality pursuant to this subsection shall be made to the construction board of appeals, in accordance with the procedures set forth in 40:55D-53.2a and N.J.A.C. 5:23A.

(e) Interlocal enforcement: When two or more municipalities or a county and one or more municipalities enter into an agreement to administer and enforce this chapter pursuant to 5:23-4.6(b) and the Uniform Shared Services and Consolidation Act (40A:65-1 et seq.), there shall be one uniform fee schedule which shall be applied by all parties to the agreement. Said fee shall be collected by the interlocal enforcing agency performing the administration and enforcement of the regulations. No additional fee shall be required to be paid or be paid by an applicant to any municipality or county for any Uniform Construction Code enforcement service. The enforcing agency shall maintain financial records showing for each municipality the amounts of money collected and expended in the enforcement of this chapter.

N.J. Admin. Code § 5:23-4.17

Amended by R.1982 d.401, effective 11/15/1982.
See: 14 N.J.R. 495(a), 14 N.J.R. 1300(a).
Added (d). Prior to recodification of N.J.A.C. 5:23, this section was codified at 5:23-4.8.
Amended by R.1982 d.402, effective 11/15/1982.
See: 14 N.J.R. 943(a), 14 N.J.R. 1300(b).
Added to (b)2 that copy of report ... must be filed every two years.
Emergency amendment, R.1989 d.405, effective 7/3/1989 (expires September 1, 1989).
See: 21 N.J.R. 2127(b).
In (a): added "certificates of continued occupancy, certificate of approval" and deleted "moving of building permit ...".
In (a)1: added language regarding rounding of dollar amounts in fees.
Adopted concurrent proposal, R.1989 d.512, effective 9/1/1989.
See: 21 N.J.R. 2127(a), 21 N.J.R. 3086(a).
Provisions of emergency amendment R.1989 d.405 readopted without change.
Amended by R.1990 d.115, effective 2/5/1990 (operative March 1, 1990).
See: 21 N.J.R. 3348(a), 22 N.J.R. 352(a).
Requirements added at (c) for the establishment of a mechanism (dedication by rider) to ensure construction fees are used for no other purpose than to fund annual costs for the operation of enforcing agencies.
Amended by R.1990 d.489, effective 10/1/1990.
See: 22 N.J.R. 1871(a), 22 N.J.R. 3147(a).
Amended to state that appropriation of municipal construction code fees may be done by rider or by estimates in advance, in accordance with the Local Budget Law, N.J.S.A. 40A:4-1 et seq.
Amended by R.1992 d.148, effective 4/6/1992.
See: 24 N.J.R. 169(a), 24 N.J.R. 1399(a).
Construction official may report based on the municipality's fiscal year.
Amended by R.1996 d.544, effective 12/2/1996 (operative February 1, 1997).
See: 28 N.J.R. 3996(a), 28 N.J.R. 5071(a).
Amended by R.2006 d.355, effective 10/2/2006.
See: 38 N.J.R. 1789(a), 38 N.J.R. 4175(a).
Added new (d); and recodified former (d) as (e).
Administrative correction.
See: 38 N.J.R. 5355(c).
Administrative correction.
See: 44 N.J.R. 2947(a).

Amended by 56 N.J.R. 469(a) effective 4/1/2024