Several people have talked to me lately about the cost of building permits…they wonder what you get for the fee. This is a very sensitive subject for many building contractors today. It is especially sensitive to me in my dual role as building contractor and State Legislator.
The original intent of building permit fees was to allow jurisdictions to collect fees to offset the cost of the service provided. I totally agree with that philosophy. Since building inspections are directly related to the specific project, it is reasonable to expect the person in charge of the project to pay fees to cover the inspection costs.
Problems start to arrise when the cost of permits far exceeds the cost of operating a building inspection department. For example, in Northfield in 2002 the total cost of the building department was roughly $425,000 but the fees generated by the construction projects were well in excess of $700,000. The “missing” $275,000 was sent to the city general fund and used for other purposes.
Is setting fees that high proper? That is a good question. The Legislature two years ago required jurisdictions to gather information and complete forms outlining their inspection department costs versus revenue generated by permit fees. I’ve seen much of this city information…..cities are generating a lot of revenue from people who decide to build homes and buildings in thier municipalities.
I’d like to see building permit costs brought more in line with real, true building inspection department costs. I don’t think it is really right to ask a select group of people (homeowners and others doing building projects) to make an exceptionally large contribution to the operation of a city. It makes sense to me to closely tie permit fees to the departmental operational cost.