Cape Elizabeth's town manager is proposing an increase in building-permit fees to help fund long-deferred traffic and road safety needs in the town center.

At their meeting Jan. 8, town councilors referred to the Finance Committee, a committee of the whole council, a proposal that would increase fees for building permits in the town, with a portion of that increase going to the Town Center Improvement account.

The current fee for a building permit is $25 for the first $1,000 of estimated building value, and $7 for each additional $1,000 of value.

Town Manager Michael McGovern's proposal would set the minimum fee at $25 for up to $2,500 of estimated value. Projects estimated at more than $2,500 would be charged 1 percent of that value for a building permit.

The current fee structure has been in place since July 2002.

McGovern's proposal for a new fee structure would place all of the minimum $25 fee, as well as 70 percent of any additional fee, into the general fund. Thirty-percent of the fee above the minimum would go to the Town Center Improvement account to fund improvements such as a traffic light at the High School entrance, sidewalk replacements and additions, and drainage improvements.

"In order to accomplish the long-deferred goals of the Town Center Plan there needs to be a revenue source," said McGovern in a memo to the Town Council.

"Traffic in the town center area is influenced by construction throughout the town and causes backups at the high school and other areas, which necessitate the installation of traffic lights and other improvements," he said.

Under this proposal, the burden of those improvements would be shared by the projects causing the growth, McGovern's memo says.

McGovern outlined a total of $1.2 million worth of Town Center projects in need of funding:

• High School entrance traffic light, $210,000;

• Shore Road/Scott Dyer Road, $100,000;

• Sidewalk Replacements and Additions, $400,000;

• Drainage Improvements, $540,000.

The Shore Road/Scott Dyer Road project includes a traffic light and site improvements and will be funded mostly with state and federal monies, but Cape Elizabeth will be responsible for a local match.

The sidewalk and drainage improvements, all on Ocean House Road in the town center, would replace the sidewalk from the town's welcome sign to Cumberland Farms; add a sidewalk from Jonesy's Service Station to the Cape Elizabeth United Methodist Church; add a sidewalk and drainage from the High School entrance to Fowler Road; add a sidewalk in front of the Town Hall and the condos next to Key Bank; and, improve drainage on the easterly side of Ocean House Road south of the Town Hall parcel.

The amounts needed for the projects are estimates, McGovern said. "It is hoped that a bond package could be put together to accomplish these needs with the bond amortization to be paid back in part through the increase in building permit fees," McGovern's memo says.

At the council's meeting, McGovern said he did not know how the proposal would evolve, but that he hoped the council would discuss it in its capacity as the Finance Committee.

McGovern estimated an additional $30,000-$50,000 each year in revenue under new building-permit fee proposal. The bond cost would be about $80,000 per year, his memo says.