OBO proposes certification and compliance fees to fund staff and reduce a backlog of nearly 700 applications

The City of Houston's Office of Business Opportunity (OBO) on Tuesday presented options to charge vendors and partner agencies fees to help clear a backlog of certification applications and hire and retain staff.

"We have nearly almost 6,000 certified firms in our directory," the OBO presenter said while describing the office's work certifying MBEs, WBEs, SBEs, DBEs and other categories across a 10-county region. The office said it currently processes certifications for nearly 6,000 firms but has a queue of roughly 600–700 pending applications and about 77 applications awaiting committee review.

Vanessa Apoll Lettson, the office's Certification and Designations Division manager, described operational drivers of the backlog: high application volume after an online application rollout, a 35% turnover rate among staff and relatively low starting salaries (the office cited a $51,000 starting salary compared with higher pay at peer agencies). She said average processing time has improved from 234 days to 149 days but that sustained progress requires more staff.

OBO proposed several fee options. For certification applications the office suggested a $200 base fee plus $50 for each additional certification type, a $75 renewal fee, an expediting fee to reduce processing time by about 30 days and other administrative fees (out-of-jurisdiction, delist, and appeal costs). The department also proposed a $100,000 annual local/public agency fee from several partner entities (for example, Harris County and other regional partners) that would be intended to cover processing costs and staff pay; OBO estimated that specific package could generate roughly $1.6 million annually.

Staff modeled staffing impacts for different fee packages: the full-package revenue estimate could fund up to 17 full-time equivalents; a $600,000 agency-fee approach would fund roughly six FTEs and a smaller certification-only fee would add about 2.5 FTEs, OBO said. The office cautioned that fees could reduce application volume and used a conservative 20% assumed decline in demand when modeling outcomes.

Council members emphasized stakeholder engagement. Councilmember Joaquin Martinez asked for a breakdown of how many certified firms actually do business with the city and other partner agencies; OBO said it is beginning to track that information and will follow up. Vice Mayor Pro Tem Amy Peck and other members urged outreach to small-business stakeholders before finalizing any fee structure.

OBO said next steps include discussion with its advisory board and a policy committee and a goal of returning with a more formal proposal in the next two to three months. The presentation included software and platform costs used by the office (B2G Now and LCP Tracker) that staff said factor into the cost structure.

The committees did not vote on fee approvals during the meeting; members asked staff to gather stakeholder feedback and to provide additional metrics on certification utilization and historic backlog timing prior to any formal recommendation.