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Kootenai County staff propose collecting larger portions of permit fees up front to avoid unpaid review work
Summary
Community Development staff told Kootenai County commissioners they want to collect more permitting fees up front to avoid unpaid review costs, citing roughly $449,922 in unpaid permits and a potential $80,000 in staff-review work at risk; commissioners asked staff to refine an incremental, stepwise billing approach.
Kootenai County Community Development staff on Thursday asked commissioners for direction to collect more permit fees up front so the county is not left covering the cost of plan reviews and other staff work when applicants abandon projects.
David Callahan, Community Development director, told the board the department often performs plan reviews and other services before collecting the full permit fee. "That is problematic," he said, explaining the department sometimes spends substantial staff time before a final payment is made.
Craig Davidson, Community Development, presented the department’s figures: $449,922 in permits outstanding, with planning fees representing roughly 17%–22% of that total (staff used 20% in examples). Davidson said shifting more of the known, hard-cost review fees to upfront collection could capture about $80,000 more in fees now being left unpaid. He noted the department currently collects a $134 application fee at submittal and that collecting known review fees up front would limit cases where staff has completed work but not been paid.
The commissioners and staff spent the bulk of the discussion on how to balance fiscal stewardship with customer service. Commissioners said they do not want permitting to become a de facto taxpayer subsidy, but they also want to avoid imposing disproportionate costs on homeowners or small developers who discover a project will not proceed after paying fees.
Commissioners pressed staff on whether the county could adopt an iterative billing model: collect a modest upfront amount for early, low-risk reviews and bill additional, larger known-review fees only as the project progresses (for example, when a project moves from pre-application to formal plan review). Staff said the county has the ability to refund fees in rare cases but needs to coordinate with the auditor and chief billing officer on any procedural change. The director and staff also noted neighboring cities (Spokane jurisdictions) already collect similar review fees up front; Rathdrum was cited as an exception.
Staff provided several examples of fees that could be collected at submittal (administrative exemptions, extension requests, pre-application fees) and presented typical review fees (commercial site-plan review, residential planning permit review) as examples of known hard costs that could be collected upfront. Davidson said there are nine "ready to issue" residential permits totaling about $55,000; if fees were not collected and those applicants walked away, staff work at risk would total about $11,000 for those nine permits.
Commissioners asked staff to return with a refined approach that could include: (1) a clear, stepwise billing structure so applicants understand the likely costs at each stage; (2) an exceptions and refund policy tied to code and state changes; and (3) staff coordination with the auditor’s office to ensure refund and accounting practices are workable. The board gave staff direction to continue working internally and with the auditor and to return with proposed language and procedures for an iterative or upfront-fee approach.
