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Portland’s Bureau of Development Services is looking to raise Land Use Services Division fees in the wake of a marked reduction in the number of large commercial construction projects and a surge in bureau operating costs.

The fee increases are proposed to take effect April 1 at an average rate of 5 percent. They will affect charges associated with land use services, including land use reviews, early assistance services and plan checks. Most site development fees on land use reviews will also be increased.

A first reading of the ordinance was held Feb. 20, and a second reading is scheduled on the Feb. 27 council agenda.

Higher fees are necessary because of a decrease in construction activity and an increase in operating costs, Elshad Hajiyev, the BDS‘ senior business operations manager, told the Portland City Council on Wednesday.

鈥淥verall, development activity has declined, contributing to lower revenue collections for the program,鈥� he said. 鈥淪pecifically, the decline (is) in large multifamily construction.鈥�

The Land Use Services Division is funded entirely by fee revenues, and it had a healthy amount of financial reserves during the building boom of the past several years. The bureau has kept Land Use Services fees at the same rate for nearly five years, while the cost of providing services has increased due to cost of living adjustments, merit pay and PERS contribution increases, and an increase in pay associated with a new union contract.

As revenues have declined, the bureau has been forced to: draw from reserve funds that are now below minimum levels, keep positions vacant, eliminate spending on training and overtime, and, most recently, cut positions in the Land Use Services Division.

Though the fee increases will average about 5 percent, the costs of some services will remain the same and others will increase drastically. The sharpest surges in pricing will be for historic landmarks designations, which will jump from $2,000 to $4,000 for an individual property and from $4,200 to $9,200 for multiple properties and districts. Some adjustment reviews will increase in cost by 50 percent, and design advice requests will increase nearly 40 percent to $3,500.

The fee increases, which are estimated to generate approximately $700,000 per year in additional revenues, are supported by the bureau’s Development Review Advisory Committee. Kimberly Tallant, manager of the Land Use Services Division, told the City Council that land use fees are minor in comparison with system development charges.

鈥淭he development community regularly tells us that they’d be willing to pay more if they could get faster service, because time is money,鈥� she said.

At the same time, Tallant said, with understanding that not everyone is able to pay more, fee waiver protocols are in place for low-income individuals and nonprofits that directly serve low-income individuals.

Relying on a funding source that is tied entirely to an industry cyclical in nature is a challenge, Tallant said. Maintaining a skilled workforce and delivering services through periods of massive layoffs followed by massive hiring and training hampers the bureau’s ability to respond nimbly to quick changes in the building industry, she said.

鈥淭hose kinds of dramatic cycles will always leave us behind the curve, and unable to catch up,鈥� she said. 鈥淚t’s also hard on morale, and doesn’t help us 鈥� attract and retain great employees.鈥�