Title
A Resolution of the City Council of the City of Colorado Springs, Colorado rescinding Resolution No. 183-24 and establishing fees and charges associated with the building permit applications for the Development Review Enterprise.
(Legislative)
Presenter:
Daniel Sexton, Planning Manager, Planning Department
Kevin Walker, Planning Director, Planning Department
Body
Summary:
Representative: City of Colorado Springs Planning Department
Location: City-wide
The City’s Planning Department is recommending changes to the fees and charges collected for the review and processing of building and ministerial permit applications for developments of all types throughout the City of Colorado Springs. The proposed fees and charges have been adjusted based on cost of service, capacity analysis and level of service programming for the Development Review Enterprise (DRE) of the Planning Department.
Background:
The Development Review Enterprise (DRE) is a financially self-sufficient Division (Enterprise) of the City Planning Department and is solely supported by the fees it collects. The DRE, which was created in 2000 (Ordinance No. 00-201), provides review, inspection and oversight services throughout the building permit process to ensure compliance with City land use and zoning regulations as well as conformity with all applicable Colorado laws. The DRE is comprised of two separate workgroups: (1) Planning and (2) Fire Construction Services (FCS). While the DRE budget is administered by the City Planning Department, the Planning staff report to the Planning Director and FCS staff report to the Fire Department’s Division of the Fire Marshal. The proposed DRE Fee Schedule ensures that Enterprise will be a financially self-sufficient organization supported by the fees it collects.
The recommended fees and charges have been calibrated based on current and forecasted costs of service, capacity analysis, and level of service programming, but additional considerations were given to the rightsizing of the DRE’s Reserve Fund and staffing levels. The DRE Reserve Fund functions as a safety net that allows the DRE to weather periods of low recognized revenue with surpluses captured during prosperous times. The DRE Reserve Fund has also been historically used for one-time expenditures that were not accounted for through the annual budget process. Staffing levels were also recalibrated during FY’2025 to support the volume of work administered by the DRE.
Cost of Service: A cost of service and capacity analysis for the proposed fees was completed. This analysis provided data on the full spectrum of service programming provided by each permit to implement designated processes and tasks. The DRE fees and charges support the review, inspection and oversight services throughout the building permit process, which also includes, but is not limited to, the administrative of financial assurances, compliance with the City’s Hillside Ordinance and Sign Permit program.
The data showed that modest adjustments to certain fee types were needed to balance forecasted revenue projections with anticipated expenditures. The recent volatility of the building and development industry, which is further compounded by federal and state decisions, has made it difficult for Staff to reasonably predict revenue and expenditures overages and shortfalls. City Planning is committed to annually auditing and, if needed, adjusting of fees to level-out market turbulence.
Capacity of Service: This analysis was critical to support the methodologies used for the proposed fees and charges. The efficiencies and improvements that were anticipated as a result of the refined regulatory environment and technological enhancements have been captured and benefit the customers of the DRE. City Planning continues to evaluate and implement opportunities to adjust and improve our service capacity.
Level of Service: The overall level of customer service and customer need was evaluated through feedback received by the Development Review Enterprise Advisory Committee (DREAC). In general, this analysis focused on review and inspection times, front counter staff availability to answer calls and customer inquiries, and service programming changes. With reduced revenue capturing, the DRE is doing more with less. It should be noted that during the period of analysis building permit applications were down.
Review Criteria:
There are no set criteria for determining the appropriate fees and charges for building and ministerial permit applications administered by the DRE. Per UDC Section 7.5.404 Fees, all “Application fees are established by City Council...”. Similar to the analysis above, prior fee and charge adjustments have been based on costs of service, capacity, and level of service analysis for the respective divisions of City Planning.
The DRE is committed to auditing its fees and charges with a participatory process that engages affected stakeholders and fee payers. DREAC has played a critical role in monitoring and evaluating the financial situation of the DRE quarterly and through each budget cycle.
Previous Council Action:
In November 2024, City Council approved Resolution No. 183-24 which set the current building and ministerial permit application review fees.
Financial Implications:
In recent years, a strategic drawdown of the DRE Reserve Fund has occurred in response to industry’s concerns regarding a ballooning balance. While modest contributions were anticipated at the end of 2024 and into 2025, reduced construction and development activities have limited those contributions. The proposed fee schedule, which recommends slight increases to certain fees, will be implemented concurrently with the 2026 budget and will lessen future reserve fund draws to maintain a stable balance.
For further reference, side-by-side comparisons of the DRE Fee Schedule current and proposed fee rates and structure are attached.
City Council Appointed Board/Commission/Committee Recommendation:
The City’s Development Review Enterprise Advisory Committee (DREAC) voted unanimously to approve the proposed DRE Fee Schedule at the August 28, 2025, meeting. The DREAC supports and recommends the modest fee increase as a balanced measure to stabilize revenue and lessen excess revenue going into the DRE Reserve Fund. A copy of the draft meeting minutes from the DREAC meeting held on August 25, 2025, is attached.
Recommended Action
Proposed Motions:
Should the City Council wish to approve the DRE Funding application, the following motion is suggested:
Adopt a Resolution rescinding Resolution No. 183-24 and establishing fees and charges associated with the building permit applications for the Development Review Enterprise.