Palm Coast City Manager’s Comments on Reducing Building Permit Fees are Disingenuous
The reduction is required by law. They’ve been over-collecting for years.
Palm Coast, Florida – July 14, 2008 – The City of Palm Coast, Florida has been collecting too much money for building permit fees for years. The accumulated surplus (with interest) now stands at more than $7 million. The outcome of a council workshop last Tuesday was a proposed reduction in fees to bring them into line with actual administrative costs, as required by Florida law. The proposed cuts will be considered at tomorrow’s City Council meeting. The workshop failed to address the disposition of the existing surplus.
Palm Coast City Manager Jim Landon was quoted in a News-Tribune article covering the workshop as saying "….there’s a big push to reduce the cost of construction via fees as an incentive for construction to grow. So right now the timing is good from the standpoint of trying to reduce our fees." He further said, "It’s not just to stimulate construction, but also to encourage and help people trying to make improvements."
Let’s cut to the real reason for the reduction. Florida statutes allow collection of building permit fees to cover the administrative and training costs associated with the services provided; no more, no less. Over the years, Palm Coast has collected fees substantially higher than those required to cover their actual costs, to the tune of $7 million (including accumulated interest). This represent about $100 for each man, woman and child in Palm Coast. Landon’s comments not withstanding, Council’s current action has nothing to do with stimulating construction. It has everything to do with answering the Flagler Home Builders Association (FHBA) queries regarding fee levels and the surplus. The city did not voluntarily initiate the action. The FHBA started the ball rolling when it raised the issue in January (see story). The proposed fees will simply bring the city into compliance with Florida law. Landon glossed over the real reason when commenting on the fees saying only, "State law says you’re supposed to keep that in balance."
Why are they patting themselves on the back? If you paid permit fees for a home improvement or if you bought or built a new home in the past seven years, you overpaid. The contractors were assessed the fees when they obtained the permits. The fees were passed onto the consumer. If the shoe were on the other foot, the contractor overcharging the city for services would be cited for fraud. Tomorrow’s council vote will only reduce future fees. It will not address the current surplus, which remains in the city’s hands accumulating interest at over $300,000 per year.
When asked if any other fees, such as impact fees, were being reduced, Landon responded, "We are not proposing any changes other than building permit fees." Building permit fees account for only 10% of the average $18,600 in total fees charged builders before a permit is issued for a typical single-family home. The rest are impact fees. The proposed fee decrease will represent a reduction of $463.00 on a single family residence valued at $236,000, or about 2% of all fees. Don’t waste your time watching for the rush in new construction this will bring about.
If the council were truly interested in stimulating construction, they would consider reducing impact fees and/or deferring collecting fees until the Certificate of Occupancy (CO) is issued. The impact of a new residence on city services (police, parks, schools, etc.) isn’t likely to begin until after the house is occupied. The logic behind impact fees is that growth should pay for itself, but should it pre-pay?
Come to tomorrow’s meeting at the Community Center to watch or speak out. It begins at 9:00 (agenda). I will be there taking notes.
disingenuous: adj: lacking in candor; also: giving a false apearance of simple frankness
Thank You !
Thanks Toby for Doing Our Homework for us and keeping an eye on our "elected officials". With you in their rearview mirror, maybe they will be a bit more honest and forthcoming in the future.
I appreciate all you do to keep us informed and up to date.
Permit Fees
I agree that bringing fees in line with what the law requires does not constitute an economic stimulus package. I think the city should either: 1)issue refunds; or 2) grant a substantial reduction (e.g. 50% or more) of their soon to be adjusted fees and charge the discounted amount against the $7 million surplus until it is depleted. This would give Palm Coast a competitive advantage vs. other local governments in trying to attract new residential, commercial, and industrial investment.
Doing the right thing
It seems to me that the only right thing to do in this situation is to return all the illegally collected funds, plus interest, to those who were illegally charged the fees. No funds that were illegally collected, nor the interest that has accumulated, should go towards the expense of figuring out who gets what. Those costs should be borne by the city and not the homeowners. I would tend to think that that is the right thing to do and would forego any punitive damages against the city which is always a very real possibility whenever fraud is involved such as this situation.
How about this
Has anyone ever wondered that maybe the surplus is due to the building department management not blowing the money the recieve like other city offices on frivolous things. Prehaps thier management have been looking out for the hard times to come. Would anyone be fussing if they were short and struggling like the other departments. They have not ask for anything from other departments instead others are asking them. In hard times people want everyone to be in the same position they are in and want someone to blame for it. Just look before casting stones.
Reply to gitta
Florida law prohibits accumulating a surplus in the building fees account. Even if allowed, the $7 million would be excessive.