Building permit bill could hit city coffers

HARLINGEN — City officials don’t want a new law to gouge their budget.

So they are changing the way they do business.

House Bill 852 will overhaul the system Texas cities use to charge for their residential building permits.

While the law would not significantly impact new homebuyers and builders, it could pump less revenue into city coffers.

“There’s a concern what the Legislature is doing will impact revenues,” Mayor Chris Boswell said yesterday. “Obviously, there’s a concern over it.”

For years, city officials have assessed building permits based on a new home’s construction value.

No more of that.

“The bill prohibits cities from setting the fee based on the value of the dwelling or the cost of the improvements being made,” Assistant City Manager Gabriel Gonzalez wrote in an executive summary presented to city commissioners Wednesday.

Now, the new law requires building permits to be assessed according to the home’s square footage.

Earlier this week, city commissioners considered charging a proposed fee of 25 cents per square foot.

At that rate, permit fees to build homes under about 2,000 square feet would generate less revenue than current fees.

“There would be a revenue impact,” City Manager Dan Serna said yesterday. “We’re going to be looking at the long-term impact.”

While fees to build homes larger than 2,000 square feet would generate more revenue, Serna believes fewer larger homes are being built here.

“I suspect many are going to fall into that lower category,” he said.

Serna said he was gathering information to determine the amount of money the new fees would generate.

If the proposed fee generates less revenue than current fees, staff will propose commissioners boost the proposed 25-cent fee, Gonzalez said.

“We’re trying to find out what the break-even point will be,” he said.

Proposed fee schedule
• 1,000 sq ft — current $295/proposed $250
• 1,500 sq ft — current $407/proposed $375
• 2,000 sq ft — current $490/proposed $500
• 2,500 sq ft — current $574/proposed $625