Developers target Montgomery County construction fees, surpluses

The group representing Montgomery developers has accused the county of accumulating large cash surpluses through excessive fees for building permits and inspections necessary to complete construction projects.

The Maryland-National Capital Building Industry Association asked County Executive Isiah Leggett (D) to revise the fees established by the Department of Permitting Services. The department, which is responsible for processing and approving construction plans, is projected to collect $42.5 million in fees $13million more than its original estimate for the fiscal year that ends June 30.

Robert Kaufman, the associations vice president for government affairs, said in written testimony submitted to the County Council on the fiscal 2015 budget that the fee structure is raising construction costs at a time when Montgomery is seeking to improve its economic competitiveness.

The permit fees paid come from the pockets of County homebuyers, businesses, property owners, tenants and our residents who make the conscious decision to relocate, expand or grow in Montgomery County, Kaufman said.

The associations protest is noteworthy, in part, because its membership includes some of the heaviest contributors to county political campaigns. Their pitch for lower fees comes two months before the June 24 Democratic primary.

Last year, after intense industry lobbying, Leggett agreed to lower two types of charges: fees for permits to build certain types of wood-frame apartment buildings and fees to support the departments IT operations.

But Leggett said Tuesday that he wanted to see a detailed study of the countys fee structure scheduled to be conducted this year before agreeing to further reductions.

We need to look at this comprehensively and not just pull at the threads, he said.

Unlike most county departments, Permitting Services depends entirely on user fees, and it receives no money from the tax-supported general fund. For several years 2007 to 2011 the agency operated in the red, a product of the economic slowdown and internal problems in collecting revenue.

In the past three years, however, the agency has been relatively flush, running up tens of millions in fund balances. The departments director, Diane Jones, said that fees were not raised and that the revenue stream reflects the ups and downs of the construction market.

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Developers target Montgomery County construction fees, surpluses