County delays building fee increase

Trying not to slam “local middle class trying to make it here”

By Mark Reaman

After a public hearing on Tuesday, May 20, the Gunnison County commissioners deferred making a decision on adjusting and ultimately raising most building permit fees in the county. The expectation is that the conversation will continue on June 17. In the meantime, the board will accept further public comments on the issue until June 3.

The county staff had proposed simplifying the formula used to assess a permit fee. The current fee is based on valuation but it involves a complicated formula. The new proposal simplifies the building project permit fee to a flat 1% of total valuation. This would impact fees from the current policy primarily starting at projects valued at $750,000. Projects valued at $500,000 and below would essentially be charged a fee similar to what is currently in place.

Tuesday’s discussion hit on the philosophy on how to help middle class working families trying to make a life in the county. The public and commissioners both struggled with the increasing financial hits being taken by people that are not in the upper financial strata.

“The current fee structure is a regressive fee that hits less expensive projects more than expensive projects on a percentage basis,” explained assistant county manager for community and economic development Cathie Pagano. “The higher the valuation of a project, the lower the fee is overall on a percentage basis. We also want to adequately cover our costs of review and inspections.”

“Generally, the higher valuation projects require more staff time to review and inspect,” added county building and health official Crystal Lambert who said different Colorado counties apply different metrics for their building fees, and after review, Gunnison County staff landed on a 1% fee. A minimum building fee would be $300, which is up from the current minimum of $24.

“Is 1% the right percentage,” asked commissioner Laura Puckett Daniels. “I want to make sure we’re not punishing the folks trying to make it here. What’s the breaking point?”

Pagano said the $750,000 level is where the fee starts to change. She said there are many unknowns with valuations in the near future given increasing construction costs and impacts like possible tariffs. 

She admitted there would be years the department would collect more fees than the costs expended but also other years when the equation would be in the red.

“Talking to contractors, most folks are still quite busy,” she said. “The customer base includes a lot of higher-end financial people of means so maybe we are insulated in some ways.”

Commissioner Liz Smith said it was important for people to be able to understand the fee structure. “I hear it when people say that fees are helping to make everything more difficult, but they are reflective of actual costs,” she said. 

“I wrote down the need for simplification,” added Puckett Daniels

Contractor Ben Somrak said most of his clients wouldn’t care about a building permit fee increase given their financial situation, “but I want to go to bat for the people really affected by this, which is the real person trying to survive here. These types of changes described as small are like a frog in boiling water.”

Somrak detailed fee increases that have taken place over the last several years and noted that many have increased substantially already. He particularly pointed out not just county building fees, but fees imposed by the Crested Butte Fire Protection District. He said the typical $888 fire department plan review fee went to more than $10,000 for similar houses he was building in one swoop about two-and-a-half years ago.

“This is not a joke,” he said. “Access permits, fire suppression requirements, building permits all add up. The electric-ready code is the worst thing to happen to us as builders.

“The real person here is struggling just to make it,” Somrak continued as his allotted comment time expired. “They are struggling with more and more fees. I ask the commissioners to be respectful of what they are dealing with.”

Builder Fred Niederer said instead of simply complaining he wanted to present constructive potential solutions. “I’d propose a performance-based fee and inspection structure,” he suggested. He said the county could include seven basic field inspections as part of a building fee and if the larger, more expensive projects for example take 22 inspections, they should be charged for that. “If the goal is to cover county costs, make it performance-based,” he said. “That is equitable.”

Builder Dustin Dyer said most of his clients were not in the high-end range, but he supported the comments of Somrak and Niederer.

“There always seems to be a new hand in the pot taking money in projects,” he said. “There are so many additions to the codes and regulations that it is hard for working people here. We’re really struggling to build a very modest home for a local family for under a million dollars. The $750,000 point is great but honestly it is hard for local people to build for under a million.”

County manager Matthew Birnie said that the county has some authority over the applicability of the fire code in the unincorporated parts of the county and commissioners can have a discussion with CBFPD officials. “While the County has no direct authority over fee increases, there is a nexus with County authority that could warrant a discussion with the district about its fees,” he explained.

“It’s not the first time I’ve heard frustration with the CB fire department,” noted Puckett Daniels.

“Given all this I am hesitant to make a decision on the fees today,” said Smith. “There is a lot of detail discussed and more comments coming. I hear the frustrations. It’s real. It’s happening across the state. I am trying to keep the macro picture in mind. There is no perfect answer. It’s a Gordian knot. There is no silver bullet. I want to sit with this and think more while exploring options and incentives.”

“I appreciate the perspectives we heard today,” said Puckett Daniels. “I get the two different clienteles out there Ben described. How do we make it more equitable? I’m trying to figure out a structure to help working families. I agree with Liz that I’m not ready to make a decision today. It would be good to have Jonathan (Houck) here as well.”

The two commissioners agreed to close the oral public hearing but accept more written comment until June 3. Both will meet individually with staff members to talk about details and explore other options. The hope is to then look at the issue and make a decision on June 17. 

“I think the concern is real and it is becoming impossible for regular people to build,” concluded Smith. “We are always looking for ways to address that.”