AUBURN — The City Council on Monday voted down a new fee structure that was built into this year’s budget, a move that will force officials to either reopen the budget or raise the property tax rate.

The 4-3 vote came two weeks after the council had initially voted it down after councilors opposed increasing fees for building permits, parking and recreation programs.

An ad hoc committee that was tasked with reviewing the city’s fee system recommended raising fees to account for staff time required on such programs, but several councilors disagreed with how the building permit fees in particular could hurt development momentum. Councilors also appeared to be blindsided that the fee system was built into city revenues in the budget prior to getting council approval.

City administration had urged councilors to adopt the new fee system in order to avoid reopening the budget, also arguing that raising fees would allow the city to capture “targeted revenue growth in areas like building and recreation — allowing the city to maintain essential services without reducing public programs or staff.”

A staff presentation on the issue during an earlier workshop said the proposed fees already align with the adopted budget, and approval would ensure “a balanced financial plan without the need to reopen the budget process.” Failing to approve the new fees leaves the city with a $190,000 shortfall.

“In contrast, initiating a tax levy adjustment after commitment would require formal budget revisions, public hearings, recalculated tax bills, and significant administrative effort,” staff said.

Several councilors supported the new fees because of how they compare with other cities, arguing that Auburn would still be competitive with many municipalities while still appearing cheap compared to places like Portland. The building permit fees would increase to between $295 for a 900-square-foot home to $930 for a 3,000-square-foot home.

In Bangor, the fee for a smaller, 900-square-foot building is more than $1,400. In Portland, it’s more than $4,600.

Right now in Auburn, the fee is a flat $25. In 2021, under former Mayor Jason Levesque, fees were drastically reduced in order to encourage new housing and economic activity like building additions and accessory dwelling units.

During an earlier workshop, Mayor Jeff Harmon said there’s “no evidence” that building permit numbers increased as a result of the decreased fees, and that the changes were “level setting this back to how it was.” He also argued that councilors should have been “well-aware” based on budget deliberations this past spring that fee structure changes would be coming.

During public comment, Levesque said the city should have never assumed future income based on the council approving something down the line. He also believes that the 2021 changes did result in increased permits, and made the costs “fair and equitable.”

“It’s doing everything it was designed to do,” he said. “If you want to be less business friendly, so be it. That’s what you’ve been doing.”

According to Eric Cousens, executive director of public services, fiscal year 2025 saw the most building permits issued on record, and the second highest permit value on record behind fiscal year 2022. The city saw roughly $74 million in permit value in 2022, and $64 million this past year.

Councilor Steve Milks, who voted against the new fees, said the fees will only hurt moderate-income people looking to build additions or improve their homes. But others, like Councilor Adam Platz, said Auburn is taxing higher in order to subsidize what should be fee-based services.

“I do not believe permit numbers will take a hit,” he said, adding that even with the proposed increase, Auburn’s fees are still far behind other large cities.

“We’re pretty damn competitive,” said Councilor Rick Whiting. “I’m totally fine doing this.”

Councilor Leroy Walker questioned how the council found itself debating budget items for a budget year that’s already begun.

“I’ve never seen us do this in 14 years,” he said.

Councilors Milks, Walker, Belinda Gerry and Ben Weisner voted in opposition.

Following the vote, Harmon said he’ll be expecting those who opposed the fees to come forward with an agenda item at a future meeting, because “we’re currently in a situation with an unbalanced budget.”