Dallas’ development community will face a laundry list of new building permit fees starting in May.
The Dallas City Council voted Wednesday to approve an amendment that increases over 200 fees for Development Services Department (DSD) work effective May 1, 2024.
The primary goal of the fee adjustment is for DSD to achieve 100% cost recovery and unburden the City’s taxpayers from subsidizing the department’s roughly $22 million budget deficit.
The reason DSD’s operating losses climbed to such a figure was purportedly due to the department undercharging for its services and not having updated its fee schedule since 2015, as previously reported by The Dallas Express.
While DSD was considering a multi-phase approach to the fee update, District 14 Council Member Paul Ridley asked DSD Director Andrew Espinoza during Wednesday’s meeting to have the changes ready by the end of April. Otherwise, he said the City would incur $1.8 million in costs every month that the fee schedule gets deferred.
“We’re never going to make that up, so I urge you to keep to that schedule if at all possible,” he said.
DSD Assistant Director Vernon Young said the department was working with its vendor to update and test the system to ensure everything runs smoothly.
Despite most service fees receiving an increase, Espinoza admitted that the department had to make some concessions based on consultant recommendations. However, based on internal forecasts, Espinoza said he expects DSD to meet its goal of full cost recovery.
“As director of development services, my commitment is to identify workflow delays and bottlenecks,” said Espinoza. “I think what we’ve done is establish a good plan to roll out updated technology and make sure it aligns with our current technology.”
Instead of waiting nine years for the next fee update, Espinoza said the department will revise its fee schedule every three years, noting that it also has the discretion to do it sooner.
“I understand people’s hesitation and concern and what this means to the development community, but we need to sort of change that narrative and say, well, you had a big break for a long time,” said District 12 Council Member Cara Mendelsohn, referring to DSD not updating its fees since 2015. “On the other hand, there needs to be some restraint on spending because the costs for this department have gone up astronomically, especially in the last three years. And so there just has to be that balance.”
Since DSD’s costs are bound to rise from inflation, District 1 Council Member Chad West said the department needs to create internal efficiencies to save money.
“As costs go up, the developers aren’t just eating that. They’re passing that on to our people who are renting the homes and to our small businesses that are renting commercial space. So, it’s impacting our residents, our voters, and our taxpayer, ultimately,” he said.
Espinoza confirmed that future fee studies will include new cost-saving efficiencies through clear performance metrics, recruiting, and training.
“I’m going to be expecting you to say at some point, ‘Look at these cost savings we found,’ not just, ‘It’s going up,’” said West.
“Well taken, and please hold me accountable to that,” Espinoza responded.
To view DSD’s fee study and a list of fee changes, click here.