DBI outlines $23M operating deficit and plans phased fee increases after November fee study

The San Francisco Department of Building Inspection told the Building Inspection Commission on Sept. 20 that it faces an operating structural shortfall and plans staged fee increases based on a consultant’s fee study due in November.

Deputy Director for Administration Alex Koskinen presented the department’s financial status, saying DBI holds roughly $77 million in cash but that much is committed; the more relevant available fund balance is about $29 million. Koskinen said the department is budgeted to spend about $23 million more than it expects to collect this fiscal year and, without intervention, the fund balance could be exhausted by fiscal year 2026.

Koskinen described the fee study methodology — a fully loaded hourly rate for staff multiplied by time to deliver each service — and said inspections are the area most undercharged. The department will not immediately raise every fee to its full cost‑recovery level. Instead, DBI plans to phase in increases over several years to avoid rate shock and use remaining fund balance in the near term to soften the impact on customers.

Commissioners asked for comparative jurisdiction data, details on which fees would rise most (inspections vs. plan review), and legal guidance on whether certain community‑based organization (CBO) expenditures could be paid for with fees. Staff said the fee study contract includes a jurisdictional analysis and that questions about using fee revenue for CBOs will be referred to city attorneys and the consultant.

DBI also noted recent ordinances that affect revenues: an Aug. 28 ordinance raised DBI fees by 15% and other fee‑waiver and development‑fee ordinances are moving through city processes. The department said it expects to present the consultant’s full report to the commission when available and requested that commissioners receive the full study, not only slide decks.