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AGENDA RECOMMENDATION |
5.G.
City Council Regular Meeting
- Meeting Date:
- 09/14/2026
Agenda Item:
Resolution amending the City of Mankato Fee Schedule related to Rental Licensing.
Recommendation/Action(s):
Adoption of the attached resolution.
Summary:
Over several years, staff have identified several areas of the rental licensing process that would benefit from clarification or adjustment, particularly related to administrative penalties, inspections, and fees. These issues have become more apparent during the annual rental license renewal process and include:
The recommended fees are based on a review of the administrative time and costs associated with each process, as well as a comparison of rental licensing fees charged by similar cities, including Bemidji, Moorhead, Rochester, and St. Cloud.
It is important to note that rental license fees have not increased in 15 years, since September 2011. Currently, no increase is proposed to the per-unit rental license rates.
Instead, the following changes are recommended to address specific administrative and inspection-related costs.
Administrative Penalties for Delayed or Avoided Inspections
The following timeline relates to fees for the intentional avoidance or delay in scheduling an inspection, which were originally approved in 2004. These fees are not currently being used because the existing language does not clearly identify when the penalties should be imposed.
The penalties were established to address situations in which property owners repeatedly failed to schedule or reschedule required inspections. When inspections are not scheduled sufficiently in advance of a license expiration date, it becomes difficult for staff to adjust inspection schedules to accommodate requests made on short notice. This can also result in delays in completing required inspections and re-inspections.
In addition, there are circumstances in which inspectors are required to conduct more than two inspections at a property because violations identified during the initial inspection or reinspection have not been corrected.
To provide greater clarity and consistency in applying these administrative penalties, staff recommend the following adjustments:
Intentional avoidance or delay in scheduling an inspection and/or reinspection
These changes would establish clear deadlines and corresponding penalties while providing staff with a consistent process for addressing repeated delays in scheduling required inspections.
New Rental Application Fee
Second, staff recommend establishing a new rental application fee of $150 to help offset the administrative costs associated with the new rental license application process.
The new application process involves additional steps that are not required for standard renewal. Steps include reviewing floor plans to determine occupancy requirements, reviewing site plans for compliance with parking requirements, and completing other administrative reviews before any required inspection or reinspection occurs.
Currently, applicants pay only the rental license fee, which is based on the number of units: $45 per unit, with a rate of $12 per unit for units over six. This fee covers the inspection process and the rental license period but does not fully account for the additional administrative work associated with a new application.
A comparison of rental licensing fees in other cities found that nearly all the cities reviewed have a separate fee for new rental licenses, conversions, or initial applications. Establishing a $150 application fee would help more accurately reflect the administrative costs associated with the initial licensing process.
Rental License Renewal Late Fee
Third, staff recommend establishing a $100 late fee for rental license renewals when the renewal fee has not been paid by December 31 of the license expiration year.
Each year, staff spend a significant amount of time contacting rental license holders regarding required inspections and outstanding renewal payments. Currently, there is no additional fee or other administrative recourse when a renewal payment is not received by the December 31 expiration date.
Under the City Code, license holders have 30 days after the expiration date to submit their renewal payment. For licenses expiring on December 31, payment may therefore be submitted through January 30 of the following year. If the renewal fee is not received by January 30, the rental license is canceled.
The proposed $100 late fee would apply when payment is not received by December 31 and would provide an incentive for timely renewal while helping offset the additional staff time associated with following up on late payments.
Rental License Transfer Fee
Lastly, staff recommend increasing the rental license transfer fee from $15 to $25. The proposed increase would better reflect the administrative costs associated with processing a transfer and the potential need for an inspection as part of the process.
The proposed changes are intended to provide greater clarity and consistency in the administration of the rental licensing program, better reflect the costs associated with the various licensing processes, and encourage timely compliance by rental license holders.
The proposed changes include:
Attached is a copy of the fee schedule with the proposed amendments highlighted.
- Administrative penalties that do not clearly establish when fees for delayed or avoided inspections should be imposed.
- The need for additional inspections when property violations are not corrected after the initial inspection and reinspection.
- The significant amount of staff time required to repeatedly contact license holders who have not scheduled inspections or submitted renewal fees in a timely manner.
The recommended fees are based on a review of the administrative time and costs associated with each process, as well as a comparison of rental licensing fees charged by similar cities, including Bemidji, Moorhead, Rochester, and St. Cloud.
It is important to note that rental license fees have not increased in 15 years, since September 2011. Currently, no increase is proposed to the per-unit rental license rates.
Instead, the following changes are recommended to address specific administrative and inspection-related costs.
Administrative Penalties for Delayed or Avoided Inspections
The following timeline relates to fees for the intentional avoidance or delay in scheduling an inspection, which were originally approved in 2004. These fees are not currently being used because the existing language does not clearly identify when the penalties should be imposed.
The penalties were established to address situations in which property owners repeatedly failed to schedule or reschedule required inspections. When inspections are not scheduled sufficiently in advance of a license expiration date, it becomes difficult for staff to adjust inspection schedules to accommodate requests made on short notice. This can also result in delays in completing required inspections and re-inspections.
In addition, there are circumstances in which inspectors are required to conduct more than two inspections at a property because violations identified during the initial inspection or reinspection have not been corrected.
To provide greater clarity and consistency in applying these administrative penalties, staff recommend the following adjustments:
Intentional avoidance or delay in scheduling an inspection and/or reinspection
| Occurrence | Proposed Fee |
| First occurrence — failure to schedule before September 1 of the expiration year | $50 |
| Second occurrence — failure to schedule before November 1 of the expiration year | $100 |
| Reinspection fee for the third and each additional inspection required for compliance | $100 |
These changes would establish clear deadlines and corresponding penalties while providing staff with a consistent process for addressing repeated delays in scheduling required inspections.
New Rental Application Fee
Second, staff recommend establishing a new rental application fee of $150 to help offset the administrative costs associated with the new rental license application process.
The new application process involves additional steps that are not required for standard renewal. Steps include reviewing floor plans to determine occupancy requirements, reviewing site plans for compliance with parking requirements, and completing other administrative reviews before any required inspection or reinspection occurs.
Currently, applicants pay only the rental license fee, which is based on the number of units: $45 per unit, with a rate of $12 per unit for units over six. This fee covers the inspection process and the rental license period but does not fully account for the additional administrative work associated with a new application.
A comparison of rental licensing fees in other cities found that nearly all the cities reviewed have a separate fee for new rental licenses, conversions, or initial applications. Establishing a $150 application fee would help more accurately reflect the administrative costs associated with the initial licensing process.
Rental License Renewal Late Fee
Third, staff recommend establishing a $100 late fee for rental license renewals when the renewal fee has not been paid by December 31 of the license expiration year.
Each year, staff spend a significant amount of time contacting rental license holders regarding required inspections and outstanding renewal payments. Currently, there is no additional fee or other administrative recourse when a renewal payment is not received by the December 31 expiration date.
Under the City Code, license holders have 30 days after the expiration date to submit their renewal payment. For licenses expiring on December 31, payment may therefore be submitted through January 30 of the following year. If the renewal fee is not received by January 30, the rental license is canceled.
The proposed $100 late fee would apply when payment is not received by December 31 and would provide an incentive for timely renewal while helping offset the additional staff time associated with following up on late payments.
Rental License Transfer Fee
Lastly, staff recommend increasing the rental license transfer fee from $15 to $25. The proposed increase would better reflect the administrative costs associated with processing a transfer and the potential need for an inspection as part of the process.
The proposed changes are intended to provide greater clarity and consistency in the administration of the rental licensing program, better reflect the costs associated with the various licensing processes, and encourage timely compliance by rental license holders.
The proposed changes include:
- Establishing clear administrative penalties for intentional avoidance or delay in scheduling inspections and reinspections.
- Establishing a $150 new rental application fee.
- Establishing a $100 late fee for rental license renewals not paid by December 31 of the expiration year.
- Increasing the rental license transfer fee from $15 to $25.
- Maintaining the current per-unit rental license fees.
Attached is a copy of the fee schedule with the proposed amendments highlighted.