Council Reviews Proposal to Add Permit Surcharge to Finance Fire‑Department Addition

South Burlington City Council members discussed Resolution 2025‑10 on June 2, a staff proposal to add a small surcharge to select permits and registrations to fund a 2,000‑square‑foot addition to the city’s fire station.

The proposal would add a 0.5% capital assessment on construction permit valuations (capped per project), a 5% surcharge to rental‑registry and other fire‑prevention permits, and direct the money to a restricted capital account to pay for the addition. Fire Chief Steven Locke told the council the addition would provide office and public meeting space for the fire prevention team, which currently occupies a temporary trailer he described as cold in winter and hot in summer.

Locke said staff estimate the addition will cost about $1.9 million and that the fee package would generate roughly $175,000 a year under current assumptions, allowing the project to be paid off in about 10 years. He described the principal construction fee as “one‑half percent” on construction valuation and noted the state’s existing permit fee is $8.50 per $1,000 of construction value with a statutory cap of $300,000 for the state fee table.

Councilors pressed on equity and economic effects. Several members said the proposed structure places a relatively larger burden on smaller projects and small builders while the very largest projects would quickly hit the proposed cap and contribute no additional revenue beyond that cap. Councilor Andrew suggested raising the project cap so larger developments would pay more; other councilors proposed exempting small projects (variously suggested thresholds: $500,000 to $1 million) to avoid a regressive impact on individual homeowners or small businesses.

Locke and staff described the modeling behind the proposal: 600 construction permits issued since early 2015 had an aggregate valuation the presentation placed at about $670 million; a 0.5% surcharge on that portfolio would yield an average additional fee per permit in the low thousands, but large projects drive most revenue. Staff said 28 of the roughly 600 permits would have hit the originally proposed $20,000 cap and that excluding those high‑value projects, the average additional fee would be about $1,100 per permit.

Councilors also noted the rental‑registry surcharge portion (5% of existing registry fees) would produce modest revenue (staff estimated roughly $20,000 annually from that source) and that registry fees already project a surplus that could be applied to debt service. Several councilors asked that the resolution include an explicit sunset: the surcharge should end once the project is paid off. Staff confirmed the draft resolution ties the restricted fund to the project and allows the council to retire the fund earlier if desired.

No final vote on Resolution 2025‑10 was taken. Council members asked staff to revise the draft to consider (a) raising the project cap (comments mentioned $30,000–$40,000 was under consideration), (b) exempting smaller projects (suggestions included $500,000 or $1,000,000 thresholds), and (c) circulate the revised proposal for public comment before returning with a final resolution and financing plan.

Councilors framed the questions in light of competing priorities — funding needed space for staff who enforce safety and housing‑related work, while also seeking not to discourage small projects or disincentivize housing development that the city favors.

Staff next steps: return to the council later in June with a revised resolution, more detailed revenue modeling (including alternate cap and exemption scenarios), and a public‑engagement plan before the council considers final adoption or a public hearing.