Auburn officials approved a new fee structure for building permits, parking, recreation fees and more Monday after a prolonged debate that saw previous proposals voted down, causing a budget shortfall.

The council opposed previous versions of the fee structure due to concerns that increasing building permit fees would hinder development, while also questioning why the city waited to get council approval on the new fees until after the budget, which began July 1, was approved.

However, the decision left a $190,000 budget shortfall because the higher fees were built into the city’s revenue forecast for this fiscal year, putting officials at risk of having to increase the tax rate.

In response, city councilors Leroy Walker and Ben Weisner proposed reductions to the proposed fees for single-family and two-family residential construction while also increasing marijuana business licensing fees. Ultimately, the council landed on a 5% increase to marijuana business licenses, which combined with the other proposed fee increases balances the budget.

The new building permit fees retain a $25 flat fee, but add an additional 15 cents per square foot. Mayor Jeff Harmon gave an example that the fee for a modest, 1,500-square-foot home would be $225. The initial proposal would have increased building permit fees to between $295 for a 900-square-foot home and $930 for a 3,000-square-foot home.

Officials argued that the small increase to fees would help offset staff costs while still remaining far below permitting costs in other cities. In Bangor, the fee for a smaller, 900-square-foot building is more than $1,400. In Portland, it’s more than $4,600.

While the updates to fees were approved 6-1 Monday, Councilor Steve Milks remained opposed.

Milks, who was on the council in 2021 when the city slashed permitting fees, argued that the number of permits for “small things” like additions are “way up.”

“We’re punishing people who are fixing up their house, and doing things on their own,” he said. “We’re getting what we want from reducing the permit fees.”

Harmon argued that the higher fees are for new construction and will not impact homeowners fixing decks or putting in new windows. He also said there’s been “no indication that there’s a direct relationship between what the fees are and the amount of permits that have come out.”

“The real question is when people are doing this work, should they pay the fee for the inspections that occur, or are we going to burden the property taxpayer with these? Because it’s one or the other,” he said. “If we don’t raise the fees, we’d increase the tax levy to pay for it.”

During public comment, Republican state Rep. Quentin Chapman of Auburn said it was bad timing for the city to raise fees with other taxes and costs going up.

“It’s not a minimal cost for a guy like me who buys his own 2-by-4s and puts them together,” he said, urging councilors to “get more creative.”

Other councilors saw the vote Monday as a compromise, with the city needing to cover its costs to process permits and send staff out on inspections.

“Government isn’t exempt from inflation,” Councilor Rick Whiting said. “Last meeting we talked about dipping into the fund balance. Our previous finance director would have turned beet red at the thought.”

Whiting called the vote a compromise that “keeps increases at a reasonable level while allowing the city to recuperate costs.”

Regarding the marijuana business licensing fees, City Manager Phil Crowell said the fees have not been updated since they were put in place six years ago, and still remain below other cities of Auburn’s size.

He said Auburn handles 220 licenses between all marijuana business types and has to do several inspections for each.

“Even with the 5% increase, between the scheduling and on-site work, we’re not collecting all of our costs. The increase will help get us close,” he said.

Regarding councilor concerns over how Auburn ended up in this budget situation, Harmon said it was “not an unusual method” to account for the revenue in the budget prior to getting council approval.

But, he said, councilors made “a good point” and “in the future we will look at a different way to do this.”