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Not So Hidden Fees from Your Local Municipalities - PERMITS
By Richard Crawford, USSC Legislative Consultant
The United States Sign Council has been contacted, on a consistent basis, by member sign companies with concerns and complaints about apparently excessive local sign permit fees. Every situation is unique, of course, but invariably the scenario involves installing a small sign job (say $1000 value) and the local municipality charging a permit fee ($300) that is not in line or commensurate or in proportion to the value of the job or the amount of time required to review the application.
Based on all of the information at our disposal, it would appear that the current trend is toward spiraling sign permit fee costs. In part, many municipalities are interested in raising revenue across the board due to economic conditions. Secondly, increased costs may also be caused by the adoption of the International Code Council's (ICC) International Building Code (IBC) at the state and local levels across the US. The IBC contains certain technical provisions related to the permit process. These provisions were created in 2000 when the IBC was first published, but were not fully understood until the IBC gained traction by actual adoption and practice. The IBC is having a direct and unintended and/or unanticipated impact on the sign permit process and the total cost to Sign Owners, through sign companies, for sign work in general.
Sign permit fees cannot be revenue-raising devices
Moreover, in regard to permits for On-Premises signs, even more scrutiny is required when dealing with sign fees and rates at the local level. Constitutional issues are raised when a municipality creates a sign permit fee structure that is excessive, because it is applying the fee structure to Speech, even Commercial Speech that is protected by the First Amendment. Fees and rates applied to plumbing permits and electrical permits, for instance, do not raise the same constitutional issues; but On-Premise signs must be viewed in a different light.
Excessive fees on signs can act as a tax on Speech, and can raise legitimate issues of Prior Restraint under the First Amendment (conditioning the expression of speech on the prior approval of a government official - in this case conditioning the speech on payment of an excessive tax or fee). The fact that both Non-Commercial Speech and Commercial Speech may be affected is also highly relevant: Non-Commercial Speech has even greater protection under the First Amendment. Finally, the fact that some signs are typically exempt from the local fee structure can raise other legal and constitutional issues in regard to the outright discrimination between "speakers".
Why are sign permit fees an issue for the Industry?
Example: the Pizza sign name change
The job cost for this work is $1,002.00 + tax; this is an accurate ball park figure for this kind of job. The local town will require a sign permit fee of $300.00 on this simple sign face change (we have seen even higher fees for minor work FYI), valued at $1,002.00. A nearly 33% percent of cost permit fee.
The amount of time required to review this type of application, which is a common application, would be less than an hour for a professional Code or Building Official. The Code Official actually does not have to spend much time in review, because the sign cabinet and size remain the same, and the sign can be refaced "by right", whether the sign is conforming or not.
There is a question of whether the Building Official will conduct a field inspection of the sign faces, and actually bring a ladder out and climb up, open the sign cabinet, and measure the thickness of the plastic used, in order to confirm that the plans submitted were followed, in the interests of public safety. There may be a cost here. Some have argued that this is why a town can levy a charge for a sign face replacement. It certainly can't be based on the review of the name or speech or graphics, because those items (actual speech) are beyond the review of the local Code official, from a constitutional perspective.
But in reality, let's be honest, this never happens. This isn't even an occasional or once-in-a-while occurrence; it truly never happens. And it would seem inappropriate for a municipality to charge a fee for a task that it will not be completing.
Example: Cross Section of permit fees
Our task was to re-brand roughly 19 locations. The majority of the work involved new faces for existing sign cabinets, both freestanding and wall-mounted. There were very few truly "new" signs involved. This re-branding can give you a thumbnail view of the state of permit fees for fairly routine sign work. In this list, I omitted locations where little work was required and the locations where substantially more work was involved, to give you a sense of the average.
Branch B: -0-
Branch C: $132
Branch D: $264
Branch E: $385
Branch F: $60
Branch G: $55
Branch H: $435
Branch I: $500
Branch J: -0-
Branch K: $558
Branch L: -0-
First, you can see that 5 of the 12 municipalities charged minimal fees or required no permit fee to swap-out sign faces and perform routine graphic changes. Historically, this is the manner in which local municipalities approached sign face changes: permits and fees were not charged for routine plastic sign face changes.
For the remaining 7 municipalities, the average permit fee cost was $447.00. It is true that, in this case, the customer was not going to complain. It is also true that we advanced over $3000 on behalf of our customer at no interest for over 3 months, while the project was initiated and completed. And you can see the dilemma that sign companies face, as this was not the only project we were working on at the time, nor the only fees we had advanced for customers.
Questions to be asked
Questions that need to be asked are: what do surrounding municipalities charge for sign permits? What is the actual time required by a "professional" (Building Inspector or Zoning Officer) to review a simple Sign Permit application for a sign face change? A new freestanding Sign? A new 3' x 5' wood sign? What is the actual time required by professionals in other municipalities to review sign permit applications for the above types of signs?
Towns are cutting back of course. Some municipalities that cannot support a full time Zoning Officer or Building Official hire part time staff; in other situations, the local municipal manager sometimes reviews applications. The point here is that some towns have mistakenly assumed that the salaries and benefits of staff are to be funded by the permit and license fees collected by the town; the thinking is that if permits and license fees do not support the salary of the local official, then fees need to be raised. This is based on some sort of libertarian calculus, where the users of the township "services" need to pay for the salaries.
This again is a dangerous assumption because it is not permissible to treat permit fees as revenue-raising devices or taxes. The appropriate arrangement that can past legal review is where a municipality has a tax base - taxes are collected from a variety of sources - and then those taxes are apportioned by the residents to fund various municipal functions: township building, municipal employee salaries, street work, police department and so forth. Permit fees are merely incidental to municipal operations and serve to defray the cost of application review only.
Interestingly, the impact of this privatization arrangement has been not to drive fees and costs down but, are you ready for this.…you can guess…privatization has dramatically increased costs and fees to the consumer and/or business.
Here is an example of this type of situation, based on a recent synthetic monument sign permit application in the Mid-Atlantic region: Sign Zoning permit fee: $70; Sign Construction/ Building permit fee: $210.00; outside 3rd Party review: $250.00; Sealed plan by licensed Engineer: $475.00; total: $1,005.00. All of these fees were required for a simple monument sign sitting 5'-0" above grade with minimal excavation requirements, similar in fact to hundred and thousands of monument signs installed safely and professionally in many other jurisdictions.
Conclusion: Potential Action in the future
Option #1: Pay the fee / install the sign / challenge the fee structure
An applicant can pay the fee, under protest, install the sign, and then bring an action against the municipality in regard to excessive fees, for a refund and to have the sign permit fee schedule declared unconstitutional under both the applicable state law and the US Constitution.
Option #2: Refuse to pay fee / not install sign / challenge the fee structure
The Applicant can refuse to pay the fee, not install the sign, and then bring an action against the municipality in regard to excessive fees, to have the fee schedule declared unconstitutional under both the state law and the US Constitution, including a claim for a Prior Restraint of Commercial Speech in that if you can't pay the excessive fee amount, this Town is saying you cannot exercise your right to speak, whether Commercial or non-Commercial speech, and the fee is so high, it constitutes a tax on speech.
Option #3: Refuse to pay fee / install sign
This approach may place the applicant in the worst legal position in that the applicant or the sign owner will be cited by the municipality and dragged into court as a defendant. All the claims challenging the fee structure will be made during the proceedings, but will be clouded by the fact that the applicant already violated the local fee ordinance.
Option #4: Participate in the local legislative process
We have seen instances where a local sign company is successful in bringing the excessive fee issue to the attention of the local governing body, and the local governing body acts on the request to review the fee schedule and reduce the permit fees charged to a reasonable level. If a local chamber of commerce or business association can be involved, this will give strength to the request, and increase the chances that some positive action will be taken.
For further information on the sign permit fee issue, you can contact the author directly at: email@example.com or firstname.lastname@example.org
For a full list of supportive publications available from the United States Sign Council that cover a wide range of subject matter related to on-premise sign usage, marketing, construction, legibility, zoning, and traffic safety issues. Visit: http://ussc.org/publications.html
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