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NL contractor licensing on hold

NORTH LIBERTY– Lack of a full council halted North Liberty’s action on a new rule requiring builders to be licensed to build in the city.
The city council’s Oct. 27 agenda contained the second reading of an ordinance requiring general contractors to obtain a license, similar to those electricians, mechanical workers and plumbers must have before being issued building permits. The first reading passed on Oct. 13, 4-0 with councilor Annie Pollock absent. Last week, two of the three council members in attendance had more questions, and council member Coleen Chipman voiced reservations about the ordinance, concerned it would create an extra layer of paperwork for city staff and undue burden on contractors who may face different rules in each of Johnson County’s municipalities.
City Attorney Scott Peterson reminded the three that anything other than a unanimous vote would result in failure of the measure.
“Since there are only three of you here tonight, if you are not inclined to go forward, at least an option for your consideration is to table it. That would give staff a chance to look at it more closely or for you to ask questions or meet with us, rather than defeating it,” Peterson said. “If it’s not passed three to zero, then we have to start the process over and we are hoping to keep this moving.”
The council avoided sending staff back to the drawing board by delaying the item on a 2-1 vote, with Chipman and councilor Terry Donahue voting to table it.
Chris Hoffman said he supported the ordinance as written, but Chipman and Donahue both said they wanted more discussion on the matter.
According to Building Official Tom Palmer, the proposed change was prompted by a small number of builders who fail to meet building codes in a timely manner. The city’s current laws for dealing with problem contractors only allows the city to file municipal infractions and, if problems remain unresolved, eventually take the contractor to court. Peterson told the council, one recent case resulted in the city issuing over $10,000 in municipal fines and spending nearly three years working with those individuals, ultimately settling in court so the property could be sold and finished by another builder.
Furthermore, the city has no mechanism to keep problem contractors from applying for additional permits to build on other properties, said City Administrator Ryan Heiar.
“Right now, if a contractor not fulfilling their obligations for House A comes in and wants to get a permit for House B, we have no recourse other than to issue a permit for House B and risk the same thing to happen,” said Heiar. “The difference is, with what is proposed, on House B we can say ‘No, we are not issuing you a permit, you are not meeting your obligations.’”
Under the proposed ordinance, a builder would have to provide proof of insurance, professional references and a list of project experience, none of which are currently required to obtain a building permit. Eventually, the ordinance would also require contractors to pass standardized testing, likely obtained through the International Code Council, though details of the testing requirement have not been finalized, and therefore, were not included in the proposed language.
Chipman agreed poor building practices must be addressed, and strongly urged city staff to require insurance, references and experience history, but she fell short of endorsing the licensing requirement.
“I don’t think the licensing is what we need to do. That creates another layer of paperwork the city has to manage,” Chipman said. “What I don’t like about it is that it’s for North Liberty only. Then we have Iowa City, Coralville, Solon, Swisher…they could all do their own ordinance and that creates a burden on the contractor. We don’t want to do that. We have to protect our citizens, and we have to protect the staff. You are spending an inordinate amount of time on these and we don’t want you to do that either.”
Palmer said he spoke with the cities of Council Bluffs and Davenport, the only other Iowa cities that require contractor licenses, and the time commitment for city staff is nominal, as is the fee to partner with the International Code Council to obtain testing results.
Further, he indicated city officials have broached the proposal with other municipal and county representatives. At a joint governmental meeting Oct. 19, North Liberty Mayor Amy Nielsen introduced the topic to the entities present to assess their interest in developing reciprocity of licenses between jurisdictions, and those in attendance said they were curious to learn more about North Liberty’s proposal.
Last Thursday, Oct. 29, Palmer met in person with officials from the cities of Coralville, Iowa City and Johnson County as well.
“We gave them a copy of the ordinance, and they listened to what we want to do, but they couldn’t comment further,” Palmer said in a phone interview last Friday. “They did indicate their boards or councils would not be considering it at this time, and would probably see how it works in North Liberty before going forward.”
The Greater Iowa City Area Homebuilders’ Association (HBA) has expressed general approval of the ordinance, but they, too, had reservations about some of its language.
Karyl Bohnsack and Tim Ruth, both representing the HBA, told the council their concern was too much subjectivity in the ordinance’s language, leaving it up to the discretion of one person to grant or deny licenses and lacking specific, unbiased criteria to do so.
“We just want to make sure there are objective standards for licensing and that it is uniformly applied to all applicants,” said Bohnsack. “We appreciate that North Liberty has some ongoing situations, and we are well aware of them. But it’s the objectivity (that concerns us).”
Peterson said he felt their concerns would be addressed by adding a testing requirement, but Ruth said successful testing does not always equate to good building practices.
“Even with testing, what if the ‘Joe Blow’ that you don’t want here can pass the test? Keep that in mind,” Ruth said. “As for insurance, the State of Iowa requires every general contractor to be registered, which means having proof of insurance. You should include that on your permit (application).”
Ruth concluded by reiterating the HBA’s position on the purpose of the ordinance.
“We want to help you. We want to be part of this because we are just as opposed to bad builders as you are,” he said.
Because the city has no way to deny permits to contractors with problematic histories, Peterson indicated a delay in adopting the ordinance brings the potential for future problems.
“The problem is, court orders take time, and they can be contested. Sometimes it takes months to get into place. Then we are back in the situation where someone, in the meantime, comes in and asks to start on another property,” Peterson said.
Chipman was not swayed.
“I want it back (before the council),” she said. “We need to do something. I just don’t want it to be a burden on the city or upon the contractor. If we can address it some other way than licensing, I can go along with it.”
Heiar said the item will appear on the council’s next agenda at its regular meeting Nov. 10.