Tuesday, September 23, 2008
MONMOUTH -- A proposed increase in the price of building permits will be delayed to give home developers a chance to provide more input on the matter.
Monmouth City Council has been mulling a new fee schedule that raises the collective cost of structural, plumbing and mechanical permits on residential and commercial projects by an average of 35 to 40 percent.
The hike is seen as a way to generate more revenue for the building department, which has been hard hit during the past two years by the nationwide construction slowdown.
The department operates on money made from the issuance of permits, which are based on the total valuation of an enhancement to a property or the projected cost of a new building.
But the state must first approve an adopted fee schedule by the city before any changes could take effect, Building Official Larry Thornton said.
At the Sept. 16 council meeting, Thornton reiterated that permit costs haven't been raised since 2001. Some councilors acknowledged the need for higher fees, but worried about its effects.
"The timing is terrible," Councilor Chris Larsen said. "The real estate and building industry led the country into this recession and will lead us out."
"But I have a tough time seeing a 40-percent increase," he continued, "so when the economy does turn around, builders are probably not going to turn to Monmouth, where we've raised fees."
Total permit costs to erect a new $200,000 home would be $2,248 -- about $500 or 30 percent more then under the current schedule, Thornton said, noting that it was the permits for the smallest projects that would constitute the biggest fee percentages jump.
The change would put his department -- which lost an employee during this fiscal year -- at a break-even point.
"It's unfortunate that we need this substantial increase to get us back to normal," he said.
Some representing the building industry turned out for the meeting to voice concerns.
"We've been building in this city since 1960," said Terry Richards, a developer from Independence. "Nobody likes to increase fees for customers doing business ... this is a pretty good hit."
Mike Erdmann of the Marion-Polk Builders Association -- which has 800 members in the two counties -- said construction activity would not go back to 2005 levels for years, and that the city should look to cost saving options instead of raising fees.
"Take a close look and see if it makes sense to partner with other cities for an intergovernmental agreement to administer building department services," he said. "It's real tough for our folks to swallow 35 to 40 percent."
Ultimately, the council chose to table the item and to include builders in a review of the fee schedule at its Oct. 7 meeting.