Council to consider 30 percent hike in construction-related fees

Monday, March 15, 2010 at 12:28am

A carefully studied proposal to increase building permit fees and other construction-related charges by 30 percent overall has made its way to the Metro Council where it will be heard on second reading this week.

The plan’s arrival, in the form of an ordinance, comes after yearlong analysis performed by an outside consulting firm that determined Metro had not been collecting a sufficient level of dollars through fees administered to acquire building, plumbing, electrical, mechanical and other permits.

“When you have an economic downturn, you have less construction, you have fewer permits, and you have less revenues,” said Terrence Cobb, director of the codes department. “That was driving the revenue line down, and drove it down at a faster rate than the decline in expenditures.”

The altered fee structure, which would be the first of its kind since 2004, accounts for a lower number of permit requests, while aligning Nashville’s fee rates closer to those applied in similar sized cities such as Birmingham, Ala. and Charlotte, N.C.

Under the proposal, the average building permit fee to construct a single-family residence in Nashville would jump 15 percent from $915 to 1,056; the mechanical fee, $178 to $273; the electrical fee, $197 to $267.40; and the plumbing fee, $172 to $265.

According to Cobb, builders currently pay around $1,500 worth of fees when constructing a new house. With the changes, they would pay approximately $2,000.

In total, changes would generate a projected $2.48 million in additional revenues to the codes department, dollars that are delivered to Metro’s general fund.

Metro’s fee structure is constantly monitored, Cobb said, to ensure dollars are collected in an equitable fashion. Though Metro currently finds itself with a fee shortage, he said the department was over-collected just four years ago.

“Construction-related services that are provided by the government are recovered through charging user fees,” Cobb said. “What you desire to achieve as a government is that the fees offset the costs. You don’t want to be collecting in surplus nor do you want to be under-collecting.”

5 Comments on this post:

By: JeffF on 3/15/10 at 6:28

Oddly enough this is one of the "non tax" revenue streams that will be tapped for the convention center albatross. This is simply table setting.

By: JoeArtist on 3/15/10 at 10:33

This is one of the DUMBEST policies I've heard of locally! I would expect this from Washington, but from METRO NASHVILLE?!!! HELLO!!! We're in a DEEP recession and new home building is DOWN. So, Metro's brilliant idea is to penalize the contractors and businesses that ARE able to build. How about THIS novel idea: CUT SPENDING! OR incentivize building IN Nashville by giving tax incentives with a sunset date if you REALLY want to help boost revenues. I guess Metro isn't learning ANYTHING by Washington's failures since they seem to be adopting the same TAX AND SPEND policies. FAIL! FAIL!! FAIL!!!

By: JeffF on 3/15/10 at 10:52

Joe you will shortly be reading shrill cries that use the words "evil developers", "sprawl, "downtown", "transit", and other words the Sierra Club uses to stop the building of new homes in locations people actually want to live.

By: Anna3 on 3/15/10 at 11:49

Is this the beginning of the "Other Shoe" beginning to drop with the Convention Center. Karl Dean must hang on without a tax increase through this last year and a half of his 1st term so that he can "Stick it to us" in his second term. This will be Karl's legacy. Are we stupid enough to reelect this guy? He's done nothing but line the pockets of his supporters through this term and the office staff is a joke! Mayoral Aide Toby Compton squealed about the email Walt Baker sent out creating a huge controversy and costing the City several Conventions. Could this controversy not be handled privately? Sometime the Dean crowd is all thumbs and as far as I'm concerned, they (Walt Baker, Butch Spyridon, Dean, and Ralph Schultz) all deserve each other.

By: idgaf on 3/16/10 at 10:26

Need money take the art money. They way overpaid for that broken rollar coaster [/sarcasim]

and forgettabout the Sounds.