Committee backs 15% flat permit fee for DPS, funds one new safety position and defers fast-track hire

The Montgomery County Economic Development Committee on May 1 recommended a flat 15% increase to Department of Permitting Services (DPS) permit fees, concluding a county-executive proposal to split increases by type (25% commercial / 10% residential) would be cumbersome and riskier for businesses. The committee also agreed to fund one of two requested DPS positions tied to enforcement and safety, while deferring the second fast-track specialist position pending further review.

Council staff opened the discussion with an overview of DPS's FY27 request and a 2023 fee study that found permit fees below cost recovery. Staff noted that pandemic-era revenue swings left DPS's fund balance below the council's 30% policy level and that the executive's budget assumes roughly $7.4 million in additional revenue from fee changes. Staff advised a flat-rate increase could be cleaner to implement than the executive's split-rate approach and displayed OMB modeling for 10%, 15% and 20% flat increases and their projected fund-balance effects.

Rabia Sabakan, DPS director, framed the request as a service-preservation move. "We're here to ensure the safety, protection, you know, sustainability, and also economic vitality of our community," she said, describing the department's workload — about 40,000 permits and more than 150,000 inspections annually — and warning that doing nothing risks service declines. Sabakan said staffing and wage decisions are set by the council, and declines in permitting activity had eroded reserves.

Committee members pushed back on the executive's split-rate rationale. Council Member Glass noted fees had not changed since FY20 and questioned the optics of favoring homeowners over multifamily housing. Mr. Ali, council staff, highlighted legal and practical complications: commercial fees often fund a disproportionate share of fixed department costs, but raising commercial fees risks reducing commercial activity and worsening the fund balance.

After discussion, the chair called for a voice consensus and the committee agreed without objection to recommend a flat 15% increase to permit fees for council consideration. The committee emphasized that staff would monitor revenues and return next year if further adjustments are necessary.

On staffing, DPS had requested two positions: one focused on fire-code compliance tied to a prior multifamily emergency-safety plan law and a second to pilot a commercial fast-track "concierge" program aimed at small-business permit turnaround. Deputy Director Ihsan Moutazi explained the compliance role is essential to implement the earlier law and that DPS pared the original five-position estimate down to a single dedicated staffer. The committee voted to fund the fire-code compliance position (item 2.1) and deferred the fast-track position (item 2.2) for further consideration and potential piloting or cross-training alternatives.

Council members also asked DPS to return with clearer enforcement and fee-collection plans; staff noted an enforcement revenue projection of roughly $1.3 million over six years tied to more active application of investigation/enforcement fees. Members requested post-implementation reporting and urged the department to minimize downstream impacts on multifamily housing and small businesses.

The committee's recommendation to adopt a flat 15% fee increase and the partial approval of the staffing request will be forwarded to full council with staff-provided clarifications on implementation and the reconciliation list treatment for positions and budget recharacterizations.

What happens next: The committee forwarded the fee recommendation and staffing decisions to full council for final budget action and asked DPS and OMB to report back on enforcement revenue plans and the effect of the fee change on permit activity.