Routt County Regional Building Department drops permit fees 10 percent
Steamboat Springs — Routt County commissioners voted unanimously Tuesday to accept the recommendation of the Building Department Oversight Committee and reduced building permit and plan review fees by 10 percent — a sign that the region’s construction industry is on the mend.
County Manager Tom Sullivan said Tuesday the step, intended to bring permit fees in line with the building department’s revenues and costs, reflects rising permit valuations from new construction since the local economy turned the corner on the Great Recession.
“I recommended the decrease last year when I was responsible for the Building Department” on an interim basis before the hiring of Ben Grush in October 2014 to be the new building official, Sullivan said. “I felt we were taking in more revenue than we needed to have a solid reserve fund.”
Building permit fees are based on the valuation of the building described in the permit application. It’s not the same as retail value. The 10 percent drop in fees represents a modest savings on a modest $400,000 residential project in the city. That’s because the 10 percent is applied to building department fees only, which represent a fraction of the total collected when a building permit is issued.
Grush said Tuesday that the county’s combined permit and plan review fees represent about 25 percent of the total fees collected by various governments when a building permit is issued, including building use tax (sales tax on building materials) and other fees collected by the city.
So, for that residential project in the city valued at $400,000, the building department’s permit fee prior to Sept. 1 would have been $2,673, and as of Sept. 1, that fee will drop to $2,450.
Similarly, the building department’s plan review fee was $1,738 on that same project and will now be $1,592. However, the total fees collected on the same house would have been about $17,011 prior to Sept. 1 and $16,642 after.
For a $3 million commercial building project in the city, the building department permit fee only would have been $12,908 prior to Sept. 1 and will be $11,813. The building department plan review fee would have been $8,390 and will be $7,678. But the total permit fee would have been $146,549 before Sept. 1 and would now be $144,742.
Emblematic of the modest revival in the building industry are a handful of noteworthy permits issued in August including homes with permit valuations of $861,000 and $910,000 on Silver Spur Street in West Steamboat, a home with a permit valuation of $668,730 on Park Place in Old Town, a permit valued at $940,495 on McWilliams Lane in the Lake Catamount neighborhood and another permit valued at $1.152 million for a home to be built on Boulder Ridge Road off Fish Creek Falls Road.
The building department is self-funded, and with its revenues tied to new construction activity, its fiscal fortunes can rise and fall with the economy. In November 2009, with the construction industry here in the doldrums and the building department having already been cut from 13.7 full-time equivalents to nine, permit fees were raised to avoid deeper personnel cuts and further erosion into department reserves.
With one month remaining in the calendar year in 2009, permit fees were estimated to reach $80 million compared to the record $155 million in 2000.
“Fees were increased because the construction industry wanted us to maintain a certain level of staffing and were concerned the fund balance might get too low,” Sullivan said. “Now, there’s room in the building department’s fiscal picture to reverse the recession era increases.”
The Building Department Oversight Committee, which includes government officials and representatives of building industries, recommended that the department’s reserve fund be maintained at no less than 75 percent of the proposed budget for that budget year and no more than 1.1 times the proposed budget.
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