City Council Staggers Building Valuation Increase, Sets Second Hearing For May 18th

(KNSI) – A proposed update to St. Cloud’s building permit fees and valuation table will return for another public hearing on May 18th after the city council amended the ordinance during Monday night’s meeting.

Five people spoke against the proposed increases, including representatives from Central Minnesota Habitat for Humanity and the Central Minnesota Builders Association. They felt that changing the fees would freeze building in the city.

The change, introduced by Council President Mike Conway, staggers a key increase to the city’s Building Valuation Data table rather than implementing it all at once. The valuation table is used to calculate the value of residential structures for permit fee purposes, and St. Cloud has been using a version from 2015. Surrounding cities, including Sartell, Sauk Rapids, and Waite Park, currently use the 2025 table.

Under the amendment, St. Cloud will adopt the 2020 valuation table first and then move to the current valuation data on July 1st, 2027.

The valuation table and the fee schedule are two separate pieces of how a building permit is priced. The valuation table, produced by the International Code Council, sets a dollar value for a residential project based on its square footage rather than what the applicant says it cost to build. Once that valuation is set, the fee schedule kicks in. The fee schedule is the rate the city charges to actually issue the permit, and it’s applied to that valuation.

So updating the valuation data changes the underlying value of the project on paper, while updating the fee schedule changes how much the city collects on that value. The proposed ordinance does both. Conway explained to KNSI News the staggered approach is meant to give builders time to adjust their budgets and avoid sudden cost shocks on projects already in the pipeline. “I didn’t want them to be surprised like, holy cow, that’s going to be huge. But I realized that the city needs to start having those services paid for by the people that use the service.”

The fee schedule portion of the ordinance brings St. Cloud’s permit rates closer to those charged by neighboring jurisdictions. City staff project the rate increases will generate roughly $500,000 in additional permit revenue based on recent permit volumes. For a typical $160,000 single-family, two-family, or townhome project, the combined impact of the valuation and rate changes would total $917. For a $500,000 home, the combined increase would be $4,363. A $1,100,000 commercial or industrial building permit would see an increase of about $3,536.

Conway says the additional revenue is restricted by the city charter and is intended to reduce the general fund’s subsidy of the permitting office. “The increase in fees is directly to pay for the personnel that runs the permitting office. Currently, like I said, $1.5 million is coming out of the general fund. So all the taxpayers in the city are already subsidizing that department.”

Because the council amended the ordinance during the meeting, the city charter requires another public hearing before final adoption. Residents who did not get a chance to comment Monday night, or who want to weigh in on the staggered valuation change, will have an opportunity to do so at the May 18th meeting.

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