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Report regarding a resolution approving Budget Amendment Number 26.057 appropriating $600,000 in permit fee revenue and $300,000 in professional services expenditures in the Fiscal Year 2025-26 Economic & Community Development Department operating budget. (Erik Rietdorf, Chief Building Official)
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RECOMMENDATION
Recommendation
Staff recommends City Council adopt a resolution approving Budget Amendment No. 26.057 appropriating $300,000 in expenditures and $600,000 in revenue in the General Fund, Economic & Community Development Department, Building Division operating budget for Fiscal Year 2025-26. Specifically, this Budget Amendment appropriates $300,000 in additional professional services expenditure authority and recognizes a corresponding increase of $600,000 in projected permit fee revenue.
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BACKGROUND/DISCUSSION
The estimated budgeted revenue for the Building Division for Fiscal Year (FY) 2025-26 was established based upon four criteria: past historic performance, current permitting data, global economic conditions, and a survey of prominent developers with entitled projects in South San Francisco. Combing this data formed the basis for the estimated permit revenue to be generated in FY 2025-26.
The Building Division accounted for more revenue during the first half of FY 2025-26 than originally anticipated. Currently, the Building Division has brought in 80% of its expected year end revenue. Attachment 1 includes examples of larger projects that submitted for plan check or pulled permits so far in FY 2025-26. With approximately five months remaining in this fiscal year, staff expects revenue to exceed the previously adopted budget.
Permit fee revenue is closely tied to professional services because much of the Building Division’s permitting work is performed by consultants. As noted, permit activity has exceeded initial projections due to higher-than-anticipated development and construction demand. This surge requires additional consultant support to maintain timely processing, uphold service standards, and ensure regulatory compliance. The increased expenditure authority will allow the Division to respond to this workload effectively, while the corresponding rise in permit revenue offsets these added costs and keeps the program financially sustainable.
FISCAL IMPACT
The additional General Fund expenditure appropriation request totals $300,000. These adjustments address increased permitting activity that has exceeded initial projections, requiring additional consultant support to maintain service levels. The estimated revenue increase from permit fees is $600,000, resulting in a net positive impact of $300,000 to the General Fund.
CONCLUSION
Staff recommends that the City Council adopt a resolution approving Budget Amendment Number 26.057 appropriating $300,000 in expenditures and $600,000 in revenue in the General Fund, Economic & Community Development Department, Building Division operating budget for FY 2025-26.