St. Cloud City Council Again Delays Vote on Building Permit Fee Hikes

(KNSI) – For the second time, the St. Cloud City Council has delayed a final decision on a sweeping package of building permit fee increases.

The council voted 5-2 Monday night to postpone the vote until August 17th. Council members Dave Masters and Tami Calhoun cast the dissenting votes.

Monday’s hearing was itself a required do-over after Council President Mike Conway introduced an amendment at the May 4th meeting that staggers when the city adopts updated building valuation tables. Because the ordinance was amended, the city charter required a second public hearing before final adoption.

The latest delay came at the suggestion of Ward 2 Councilperson Karen Larson, who told KNSI News after the meeting that she wants the additional time to allow developers, business interests and city administrators to brainstorm ways to attract more development. “We can’t let other cities get ahead of us with creative solutions. We got to get in there and do our own homework and have a better sense of being on the same page than I saw here tonight with an important community, i.e. the development community.”

Central Minnesota Builders Association Government Affairs Consultant Steve Gottwalt was encouraged by the council’s decision to take more time. He said raising permit fees on multiple fronts could undercut the housing growth St. Cloud says it needs. “They need to be very concerned that as they raise fees of all kinds, it’s going to have a chilling effect on the housing they need. The City of St. Cloud says they need 1,000 plus units of housing every year for 15 years. They are nowhere near that right now. That has to be a deep concern for them.

Gottwalt added that the CMBA wants to be part of the upcoming conversations, but cautioned that even August may not be enough time, particularly with builders busy during the summer construction season. The CMBA represents more than 300 builders, developers and contractors in the region.

The amended ordinance under consideration would adopt the International Code Council’s Building Valuation Data table in two phases. St. Cloud would first move from the 2015 table it currently uses to the 2020 table, then adopt the most current table on July 1st, 2027.

The fee schedule and the valuation table work together to set the cost of a permit. The valuation table assigns a dollar value to a project based on square footage. The fee schedule is then applied to that valuation to determine what the city collects.

City staff estimate the new fee structure would generate about $1.58 million annually, up from roughly $1.08 million under current rates.

Community Development Director Matt Glaesman has told KNSI the city is not currently recovering the full cost of providing permit services, with the remainder subsidized by property taxpayers and utility ratepayers. He showed a chart indicating the city has been losing money on permitting fees since 2017.

For homeowners, residential roofing and siding permits would each rise from $60 to $100. A combined roofing and siding permit would jump from $75 to $200. Plumbing fixture fees would increase from $10.50 per fixture with a $30 minimum to $15 per fixture with a $50 minimum. Residential HVAC permits for furnaces, air handlers and ductwork would go from $40 per unit to $50 per unit.

The largest revenue gains would come from the commercial side. Commercial building permit revenue is projected to rise from about $354,000 to nearly $580,000, while commercial plan review fees would climb from roughly $230,000 to $377,000.

According to city projections, a typical $160,000 single-family, two-family or townhome project would see a combined permit cost increase of $917 once both the valuation and rate changes are fully in effect. A $500,000 home would see an increase of $4,363, and a $1.1 million commercial or industrial building permit would rise by about $3,536.

The Central Minnesota Builders Association, Greater St. Cloud Development Corporation, Dale Gruber Construction and Central Minnesota Habitat for Humanity have all submitted letters to the council urging a more measured approach. Seven people representing these and other groups spoke against the increases at Monday’s hearing.

The council will take the issue up again at its August 17th meeting.

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