Miamidade Countys Building Department Could Increase Fees To Combat Dwindling Reserves
Written by Risa Polansky on August 14, 2008
By Risa Polansky
Reeling in the aftermath of the residential bubble burst, Miami-Dade County’s Building Department is proposing a fee hike to bolster its dwindling coffers.
The local construction slowdown, among other factors, has cost the department $14.5 million during the past two years, leaving only $2.2 million in its reserves.
"We can’t operate with a $2.2 million reserve," Director Charles Danger said. "It’s impossible."
If passed by the county commission in September, fees would increase 25% across the board beginning Oct. 1.
Miami-Dade Building, which serves only unincorporated areas of the county, is completely self sufficient and receives no support from county general funds.
Without raising fees this year, the department would be forced to cut staff, Mr. Danger told members of the development community at an informational meeting last week.
To make ends meet this fiscal year, he already has eliminated more than 100 positions — a 32% decrease in employees.
The development community has felt the effects.
"You cannot lay off one more person," said Judi Witkin, a zoning consultant, lamenting lengthy permitting lines. "We are dying down here."
She said builders don’t necessarily oppose the proposed fee hike but that they would like the increase phased in to soften the blow during tough economic times.
Anthony Seijas, regional vice president of Lennar Homes and incoming president of the Latin Builders Association, said the same, stressing that builders are losing money and could use the break.
The county plans to give them one in increasing its road impact fees to developers. Should the proposed hike pass, fee payers are to receive declining discounts of 70% to 10% over the next five years. They’d begin paying the full new charge in 2014.
But Building Department officials say, though they’d like to, they can’t wait.
The department last increased fees in 2000 and rode the wave of the housing boom afterward, with increased revenues negating the need to raise charges.
"For seven years I was free and clear of this meeting — I was so happy," Mr. Danger said.
But as building activity slowed during the past two years, so did the department’s revenue.
On top of that, a boom in roofing business after Hurricane Wilma in 2005 also wound down.
And as new cities formed and others annexed once-unincorporated areas of Miami-Dade, building business shifted to the municipalities’ permitting departments, siphoning customers from the county.
The Building Department has lost 30% of its business that way, Mr. Danger said.
To compensate for the multi-faceted slowdown, officials dipped into the reserves to avoid passing costs onto customers. But there’s no where left now to dip.
"I have no place to cut," he said.
Mr. Danger does have plans for the future.
The department is considering beginning a four-day work week, saving facility operations costs by closing the office three days a week.
Officials are mulling also consolidating space and renting areas of the department’s building, 11805 SW 26th St. in West Dade, to other entities.
And Mr. Danger hopes to begin next year a new program that would charge permittees for the amount of service they actually use.
Now, essentially, builders pay flat fees for inspections and permits.
But if they submit incomplete or shoddy documents, new versions must be re-reviewed. And if they fail inspections, the building department has to send follow-up inspectors.
Those who are thorough pay the same but require less service.
Should Mr. Danger’s plan move forward, "we’re going to provide you the services" if more than one review or inspection is needed — "but you’re going to pay for it."
He said he hesitates to throw extra costs at the development community, especially those builders who respect the system.
Raising permit fees punishes those who do the right thing and go through the legal permitting process, he said — but many don’t.
An ideal solution, he said: taxing building materials and issuing permits for free. That way, everyone who builds pays, rather than just those who disclose that they’re building.
Mr. Danger said he has proposed the idea to a state lawmaker, but it’s never taken off.
Some at the meeting warmed to the idea but doubted its feasibility.
Though perhaps logical, "it’s politically undoable," said Truly Burton, Miami-Dade County government affairs director for the Builders Association of South Florida.
Still, Mr. Danger encouraged the building community to unite and take the cause to Tallahassee.
"If we don’t start barking, nobody listens."