Report Highlights:
- The city increased building permit fees in fiscal year 2013 in order to improve services, did not first conduct an analysis of appropriate fees prior to increasing them.
- The Office of Buildings has a $28 million surplus because of the fee increases, but wait times for building permits have grown to as long as 51 days — well beyond the city's goal of issuing permits within 10 to 15 days. That figure includes the time customers may have taken to respond to city requests.
Most electrical, plumbing, and mechanical permits — the bulk of the permits in fiscal years 2013 and 2014 — were issued within one to two days of permit acceptance.
Roughly three years ago, the City of Atlanta increased its building permit fees, saying it needed the additional funds to improve services and issue permits faster.
But Atlantans are still waiting for that efficiency to arrive. In fact, according to a blistering new report from City Auditor Leslie Ward, residents are seeing even longer wait times. Meanwhile, the Office of Buildings has collected a $28 million surplus – about three years worth of operating costs.
The report raises questions about whether the city has been slow to enact needed service improvements, or is overcharging its residents — a potential violation of state law, Ward said. Many permit fees doubled under the hike. For instance, a residential certificate of occupancy increased from $50 to $100. And an initial permit fee increased even more, from $75 to $200.
“It certainly suggests that they are charging too much,” Ward said of the surplus. “The fact is, it’s state law. You’re supposed to base the fees on actual costs. … A three-year operating surplus is beyond reason.”
In a report sparked by allegations of kickbacks to city employees, Ward spells out a variety of concerns, including that the city: did not first conduct an analysis of appropriate fees prior to increasing them; has failed to make the technological upgrades and hirings that officials used to justify the fee hike; and doesn’t provide proper oversight of staff conflicts of interest during the permitting process.
Jenna Garland, a spokeswoman for Mayor Kasim Reed, acknowledged problems in the Office of Buildings and said the administration has already implemented reforms to address them. Chief among them is the recent hiring of urban planner Tim Keane to serve as the new commissioner of Planning and Community Development, which oversees the buildings office.
Keane replaces former commissioner James Shelby, who abruptly resigned in 2014.
The administration has called for an operational analysis and best-practices review and is working with the accounting firm BKD to identify needed improvements, Garland said. The review is being funded by the Atlanta Committee for Progress, a group of local CEOs and academic leaders.
Reed officials anticipate the planning department will need the bulk of the surplus to enact those improvements, Garland said, such as hiring and training additional staff, and implementing new technology. Keane will lead that charge.
“Providing top-notch customer service to all customers of the City of Atlanta is our priority, and the Department of Planning and Community Development is working to ensure the Office of Buildings delivers on this promise,” Garland wrote in a statement.
Councilman Alex Wan, chair of the finance committee, said the report affirms some of his concerns. Council members have long heard “horror stories” from residents about the city’s building permit process, he said.
“We created an enterprise fund to make improvements and we don’t seem to be seeing those,” Wan said. “In fact, it sounds like we’re slipping in the other direction.”
The council’s finance committee is expected to hold an executive session with the city’s law department on Wednesday to discuss what, if any, the potential legal ramifications are of having such a surplus, he said. The council will hold a work session in August to analyze the report.
Though the audit found electrical, mechanical and plumbing permits were issued quickly and efficiently — and accounted for about 75 percent of all permit applications in 2013 and 2014 — some Atlantans had to wait as long as 50 days to receive building permits in fiscal year 2014.
However, that figure also includes the time residents took to respond to the Office of Buildings, providing a less clear picture of the overall delays. The city’s goal is to issue those permits in 10 to 15 days, according to Ward’s report.
Residents need such permits for everything from renovating their home to building a new one.
The city’s law department is conducting an investigation into allegations of employees accepting gifts in exchange for better service, Garland said.
In the report, Ward found evidence that some employees bypassed system protocols to allow certain applicants to receive permits ahead of others, despite owing the city outstanding fees. Her office was unable to obtain data from the department by the report’s deadline, however, that would have allowed auditors to study how each employee performed.
Ward said she launched the audit after receiving several complaints of kickbacks. The report comes a year after Atlanta Ethics Officer Nina Hickson found evidence of favoritism and conflicts of interest inside the office, such as employees accepting lunch from expediters — people paid by residents to help obtain building permits.
Councilman Howard Shook said he wants the answers to why the buildings office has so far failed to make key improvements. He suspects the holdup is due in part to changing leadership and a slow hiring process.
He’s also concerned about how to spend the surplus.
“There will be a lot of pressure to spend the money. That’s fine, as long as it’s done the right way,” he said. “If a spending spree is initiated just to get rid of this embarrassing pile of cash, then probably very little is going to get accomplished.”
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