Monroe County property and sales taxes have been subsidizing building permit fees to the tune of $2 million a year.
The Monroe County Commission took its first steps toward tweaking its antiquated building permit fee formula, which has not been updated since the 1980s, so the county can start breaking even.
In 2012, the county took in $2.6 million in revenue from building permit fees, but staff time processing and reviewing the permits accounted for $4.6 million, according to consultants who evaluated the county's fee structure.
On Wednesday, the commission was split on what formula to use. County Mayor Sylvia Murphy and Commissioner David Rice wanted a formula in which the county would have the developers and property owners paying the full cost of processing the permits, with direct and indirect costs included. Under that proposal, the county would charge $15,644 for building permits for a $475,000 single-family home. Currently, the county only charges $3,187 for that project.
The county would levy $238 in building fees for a cheaper $1,950 project, under the formula Rice and Murphy supported. The permit fees for that job currently cost $130.
"We've been picking up the tab," Murphy said. "People not getting anything out of these permits are picking up the tab. The taxpayers are subsidizing this, whether it is a neighbor's pool or a $2 1/2 million home. If you can't afford it, don't build it."
However, Commissioners Heather Carruthers, George Neugent and Danny Kolhage opted for a formula in which the county would subsidize some of the costs and not make the applicants pay indirect and legal costs. Under this formula, the county would charge $11,423 in permit fees to build a $475,000 home. And the permits for the $1,950 project would cost $189.
"It can be a benefit," Carruthers said of some subsidization of fees. "It's increasing property values in the county by improving the properties .... It can improve our built environment and our tax roll."
The county cannot make a profit on building fees, only break even, according to state law.
Contractor Rudy Krause lobbied to keep building permit fees reasonable. If the fees are too expensive, people will do the work illegally without obtaining permits, Krause said.
The county is revamping the entire process of determining how fees are calculated. Currently, it takes seven county workers to determine a building permit fee and the work includes counting how many electrical outlets are included in the project, county Growth Management Director Christine Hurley said.
The new process would be completely automated and based on a percentage of the monetary value of the project, Hurley said.
The county commission will adopt the new fees at its March meeting in Marathon and is looking at implementing the fee structure starting in October.