DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT: STREAMLINE PERMITTING PROCESS

9-A – 9-F
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT: STREAMLINE PERMITTING PROCESS
Problem Identification:
The permitting process for building and construction permits is not uniformly administered and is unnecessarily difficult and time-consuming for permit applicants.

Recommended Action:
The following actions are recommended:- Integrate and coordinate the permitting approval process of other city agencies (e.g., Fire Dept, Health Dept, etc.) with that of HCD through inter-agency group meetings (enhanced over time by data links) to: (a) establish deadlines for permit approvals; (b) review procedural problems and opportunities; and (c) review and resolve the list of unresolved permit applications. If cost-justified, the City should consider moving toward a single permitting department and location similar to that used in Baltimore County.
– Develop written procedures for permit application review and approval, and monitor through a process that includes random audits to ensure consistent implementation. (The current process of waiver approvals by the Deputy Commissioner should be streamlined or eliminated.)- Require Building and Housing Inspectors to proactively ‘police’ non-permitted construction projects when they are performing their core functions. While inspectors were visiting their assigned sites, they should:
1. Visit construction sites in the surrounding area and record the addresses of these sites;
2. When back at HCD, check to determine if permits were pulled for the work at these sites;
3. Issue citations as necessary for work being done without permits; and
4. Conduct follow-up activities as needed.
This initiative could generate a significant amount of currently uncollected permit fees and avoid faulty construction work.

– Train inspectors and clerks on the permitting process. Focus training on: (a) written codes and procedures; (b) customer responsiveness; and (c) use of existing data network system to approve permit applications ‘on line.’

– For increased customer satisfaction, develop clear and simple brochures to inform citizens of required permits (e.g. home improvements, pet licenses, electrician’s licenses, etc.), the permit process, the responsible agency, its location and telephone number, licensing or permitting requirements, fees, time for approval, customer service telephone number, etc. Link these in electronic format to the City’s website.

– Randomly poll permit applicants about their experience in order to flag process problems. Provide each applicant with a questionnaire asking them to evaluate the process and how it could be improved. Tabulate responses and establish goals through regular review by HCD leadership.

– Deploy hand-held devices and install voice mail and call forwarding for building inspectors. (See recommendation 8-A ‘ 8-H.)

– In the future, consider locating all City permitting at one location. Baltimore County provides a good model.

Classification:
Organizational, Revenue Enhancement, Service Improvement

Function/Operation Area:
HCD – Construction & Building Inspections Department

Estimated Annual Impact:
$1,375,000 in net revenue to HCD from construction permit fees.

Estimated Implementation Costs:
$125,000 (staff training)

Barriers to Implementation:
Inspector resistance to change and autonomy; union resistance; and finding funding for other implementation costs (e.g., training costs).

Projected Implementation:
180 days

Next Steps:
Develop written procedures for permit processing and approvals. Tie performance standards to performance evaluations. Identify training needs and contract a trainer. Assign person to call permit applicants to identify areas for improvement and report findings regularly to Deputy Commissioner.

Analysis:

Costs

Regular inter-agency group meetings to review procedural problems and opportunities and a list of unresolved permit applications would serve to integrate the approval process could be accomplished during normal business hours and integrated into regular duties for existing staff. Thus, there should be no cost associated with this activity.

Developing written procedures for permit application review and approval could also be integrated into regular duties of existing staff. Thus, there should be no cost associated with this activity.

Proactive ‘policing’ of construction projects without permits could be done by building and housing inspectors as part of their regular duties and would, therefore, not have any cost impact.

Developing performance standards should be a normal supervisory responsibility and should not have any cost impact.

Training of inspectors and clerks

Assumptions:
– Annual training, one week, on changes to laws/codes,
changes in departmental procedure, and a refresher course
on technical aspects of inspections.
– Training development and delivery will be contracted out.
– 40 hours of classroom time (in aggregate over a year).
– Average rate (fully loaded) per contractor employee: $100.

Development of one-week training includes:
– Background research; and
– Development of participants’ manual, exercises, overhead slides with instructor notes.
— Development time: 3 people X 240 hours/person = 720 hours
— Development cost: (3 people @ $100/hr.) X 240 hours/person = $72,000
— Development cost will be incurred annually because curriculum will change.

Delivery of training includes:
– Trainer preparation;
– Printing of participants’ manual, exercises, overhead slides (without instructor notes); and
– Actual training time.
— Trainer time: 10 hrs. preparation time and 40 hrs. training time = 50 hours
— Trainer cost: 50 hrs. X $100/hr. = $5,000
— Printing cost: $10 per course participant or $600 (assumes 60 participants per course)
$5,000 + $600= $5,600 per delivery

Training participation includes:
– Year one, at 100 percent attendance
— 20 employees X 40 hrs. @ $27/hr. (15) = $21,600
— 20 employees X 40 hrs. @ $16.20/hr (16) = $12,960

Total training participation costs $34,560 (17)

Total training costs for development, delivery, and staff time
(Year one) $112,160

Publishing brochures explaining the permitting process $ 10,000

Surveying customer satisfaction could be done as part of existing staff’s regular duties and should not have any cost impact. Installing a ‘hotline’ so that the public could call with questions or problems would have a nominal cost, and existing staff could incorporate responding to hotline calls into their regular duties.$ 1,000

Total Year One Costs $123,610

Benefits:

Currently, the City of Baltimore receives approximately $3,000,000 per year in revenue generated from construction permits. It is estimated that of all of the construction occurring
in Baltimore, permits are only pulled for 50% of the work. Of this 50%, permits are probably required for roughly half of the projects.

If HCD streamlined its permitting process, processed unresolved permits in a timely manner, and made sure that its staff were adequately trained, it would be able to generate permit fee revenue for the construction that is currently occurring without the requisite permits.

The amount of additional permit revenue the City should be able to collect is as follows:

$3,000,000 X 1.00 = $3,000,000 X 50%= $1,500,000

Total Benefits to HCD $1,500,000

(15) There are currently 20 building inspectors, 11 electrical inspectors, and 9 mechanical inspectors, each making an average of $20/hr. Fringe benefits are approximately 35%, or $7/hr. Average hourly burdened cost per inspector is $27.
(16) There are currently 20 administrative staff, ten who are relatively new, and ten who have worked in the department for many years. Average hourly wage for administrative staff is $12. Fringe benefits are approximately 35%, or $4.20. Average hourly burdened cost per administrative staff person is $16.20.
(17) Estimate a 5% escalation in salaries and fringe benefits for each additional year. Therefore, training participation costs in year two would equal $34,560 X 1.05 = $36,288.

Net Benefits to the City$1,376,390