‘Private provider’ inspections discount back on the table
Discount is currently 33%'; staff proposes 15%
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Development Services – Private Provider Discount Justification (11.12.25 COW)(1)
The city of Cape Coral may cut its “private provider” inspection discount by more than half.
The discount, currently 33%, is offered to property owners and builders who use a "private provider for inspection and/or plan review services for building permit fees." City staff again proposes to reduce the discount to 15%
State statutes require that when an owner or contractor hires a private provider for plans review or inspection services, the local jurisdiction must reduce the
permit fee accordingly.
“The reduction must reflect the cost savings realized by the local enforcement agency (since the agency is not performing those services),” the staff presentation to be made to the Cape Coral City County Wednesday states.
“The local jurisdiction may not charge inspection fees if the owner/contractor uses a Private Provider for those inspections,” the presentation states.
However, the jurisdiction may charge a reasonable administrative fee, limited to actual costs incurred, including:
A. Labor costs of personnel providing the administrative service
B. Clerical and supervisory assistance necessary to process, review, and record Private Provider documentation
C. Any directly attributable overhead costs tied to administering those Private Provider services
“The key standard is that the administrative fee must be cost-based, not profit-generating or duplicative of services already performed by
the Private Provider,” city officials said.
After running the numbers, the city estimates that the discount is estimated at “approximately 15% of variable Personnel costs, representing the practical reduction in City labor utilization after administrative, compliance, and oversight responsibilities are considered.”
Reducing the discount was discussed last month with council directing staff to bring back more information after the building community raised concerned about the change.
The meeting, which is open to the public, will take place at 9:30 a.m. Wednesday, Nov. 12, in City Council chambers, 1015 Cultural Park Blvd.