Today’s post is by Craig Mangum, a fellow construction attorney with Smith Cashion & Orr.  Craig has an undergraduate degree from Boston College and a law degree from Florida State.  He also worked with the Construction Industry Licensing Board at the Florida Department of Business and Professional Regulation.

A bill to raise the building and permits fees currently charged by the City of Nashville is headed for its third and final reading on Tuesday, April 20, 2010.  According to Terry Cobb, the Department of Codes and Building Safety Director, the increase is necessary to achieve “full cost recovery for construction related services." (pdf) 

The Department of Codes commissioned a private company, Maximus, to perform a study of whether the fees charged by Nashville were appropriate and in line with other jurisdictions. The study showed that a 30% increase in fees is necessary to achieve “full cost recovery.”

Interestingly, the Department of Codes provided a comparison of fees charged by 14 peer communities. The comparison demonstrated that Nashville already has some of the highest fees for the selected cities and that the proposed fees would send Nashville to nearly the top of the list. (Fee Survey .pdf).  Indeed, some of the proposed fees are three and four times the amounts charged by cities such as Knoxville, Louisville, and Austin.

Maximus stated in its fee analysis that:

Admittedly, comparisons can help Metro leaders understand the market environment to help make market-based or political decisions, but such comparisons do not reveal any objective information or identify the true relationship of the fees to costs to help make cost-based decisions. (Code Analysis .pdf)

According to the third-party company, these figures can be misleading and that a more in-depth analysis would be necessary to truly compare the fees charged by the fourteen cities.

However, a closer look at the numbers by any layperson demonstrates that the already high fees in Nashville may reach even greater heights.  If the Department of Codes is going to commission another study, perhaps it would be more beneficial to see if building codes departments in other cities operate more efficiently.  In other words, Nashville may be able to reduce the costs and thereby forego any increase in fees. Perhaps these other peer cities just do it better.