The St. Cloud City Council is set to reconsider a raft of major building fee increases at its August 17 meeting, and CMBA is urging members to attend the meeting.  CMBA remains opposed to the proposed building fee increases.

The City Council was set to approve the increases in May, but chose to delay action after CMBA and others testified against the fee increases.  In choosing to delay, the Council also directed city staff to explore and provide a "comprehensive list" of new strategies for spurring more building.  CMBA has participated in stakeholder meetings over the last several weeks discussing that list of new strategies.

The raft of valuation and building fee increases has been pushed by city staff who argue they need another $500,000 per year in fee revenues to cover staff and systems costs of delivering building permits and inspections. Without those increases, they warned St. Cloud would have to continue subsidizing their $1.3 million permit and inspections budget with property taxes and utility charges.

According to city projections, a typical $250,000 single-family, two-family or townhome project would see a combined permit cost increase of about $2,000 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.

CMBA and its members showed-up to let City Council members know building fee increases will hurt, not help, residential building at a time when the city says it needs more than 1,000 units of new housing each year for the next 15 years.

"St. Cloud is nowhere near the numbers it says it needs," said CMBA government affairs consultant Steve Gottwalt. "Neighboring communities have higher fees [than St. Cloud], and are still building more units of housing," he said.  CMBA tracks residential building permits across several area communities, and those statistics show a sharp decline in St. Cloud building in recent years, compared to increases in neighboring cities.

"We are challenging city leaders to honestly ask the question 'Why are builders choosing not to build in St. Cloud?'", Gottwalt testified before the Council in May. "Then work with [CMBA members] to seek honest answers and real solutions." In addition to the special meetings over the last several weeks, CMBA regularly meets with area mayors and community development directors to discuss what can be done to spur more housing in which people can afford to live.

"Community leaders consistently tell us housing is an urgent need," said Gottwalt.  "So, is their priority covering costs of staff, or getting more housing built?" he added, "The City Council needs to look at the big picture, and 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."

Gottwalt also cautioned the St. Cloud City Council and city officials against fee increases that could violate state law.  Minnesota Rules Part 1300.0160, specifies "Fees established by the municipality must be by legal means and must be fair, reasonable and proportionate to the actual cost of the service for which the fee is imposed."  At the May 18 City Council meeting, St. Cloud Mayor Jake Anderson reported 25% of fees are diverted to the city's non-specific Development Fund, which could be a violation of the state law.  A handful of Minnesota cities, including St. Paul, Duluth, Dayton and Corcoran have faced lawsuits over similar building fee structures.

CMBA urges members to attend the August 17 St. Cloud City Council meeting, which begins at 6:00 p.m.  While CMBA supports the city's newest measures toward boosting development, it remains opposed to the valuation and building fee increases that will hamper new development, increase housing costs and potentially violate state law.

For more information:  Steve Gottwalt, CMBA Government Affairs, steve@cmbaonline.org, 952-923-5265.

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