Carpenters work through the December snow at the site of a new single-family home at the east end of Spruce Street in Old Town. Jessen Construction and Brooks Design Build are collaborating on the project.

Photo by Tom Ross

Carpenters work through the December snow at the site of a new single-family home at the east end of Spruce Street in Old Town. Jessen Construction and Brooks Design Build are collaborating on the project.

Steamboat, Routt County discuss Building Department’s finances

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— Steamboat Springs officials asked their Routt County counterparts this week for reassurances that the Routt County Regional Building Department will remain solvent during the construction downturn.

Steamboat Springs City Council member Scott Myller said during a joint meeting on Monday that he’s particularly concerned about the amount of county overhead being charged to the Building Department. He pointed out that that the estimated department revenues for 2010 are $680,000 and the overhead is a little more than $300,000.

“You couldn’t have a business run that way,” he said. “We’re kind of concerned you guys are driving the organization into the ground prematurely.”

The department is funded jointly by the county and city. It is unlike many departments in local government in that it is funded entirely by the fees it collects. The relationship the county and city have in the Building Department is in the form of an intergovernmental agreement.

City Council President Pro Tem Jon Quinn pointed out that the county assigns about 50 percent more overhead cost to each building department employee than the model used by the city.

“Is there any way to reduce these personnel costs and bring them more in line with the city’s?” Quinn asked.

County Commissioner Doug Monger reminded Quinn that the overhead figures in the 2010 budget still reflect a fully staffed Building Department. Employee levels since have been cut by more than half.

“We’re not treating this department any differently than any other department we have,” Monger said. “I don’t want the impression out there we’re dumping a bunch of costs in there that aren’t defensible.”

He said he would invite City Finance Director Deb Hinsvark to review overhead charges with County Finance Director Dan Strnad.

In the middle of a severe building slump, the building department has trimmed its staff from 13 to six.

Quinn asked what would happen if trends continue.

“When we look a couple years down the road at dwindling reserves, could the reserves go to zero? What happens if that happens?”

Chief Building Department Official Carl Dunham reassured Myller and Quinn that with $1.33 million in reserves, and assuming that permit revenues continue at current levels, the department should be adequately funded through 2016.

In a worst-case scenario, county officials acknowledged, they could borrow from their general fund to keep the building department afloat.

Monger told Myller and Quinn that the building department reserves consist of fees collected up front for inspections that sometimes happen two years later.

City Manager Jon Roberts praised Dunham’s work in guiding the department through the construction slump. He suggested the intergovernmental agreement be revisited to include a minimum reserve threshold, which it does not contain.

— To reach Tom Ross, call 871-4205 or e-mail tross@steamboatpilot.com

Comments

hubiem 4 years ago

maybe i'm missing something, but i don't understand why scott myller says that “You couldn’t have a business run that way,”

if the revenues are $680,000 and the overhead is only $300,000 that leaves $380,000 in profit. whats wrong with having the department make a profit? isn't making a profit how a successful business is run?

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Ken Reed 4 years ago

hubiem, I thought the same thing but figured I missed something. A samll business or startup would love those numbers!

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Scott Wedel 4 years ago

Because non overhead costs such as the personnel that review plans and inspectors that go into the field are also substantial. The department is losing a few hundred thousand a year.

While apparently the reserves based upon rate of loss would run out in 2016, it is not reasonable to suggest that all is okay until 2016 because that would be having no reserves while operating with a major annual loss. So then 2017 would mean radical budget cuts which would presumably result in a dept unable to meet the basic needs of the city and county. (If current staff is minimum skeleton staff that couldn't be cut by another $100K annually then how could it perform if having to cut a few hundred K when there is no more reserve?).

So by 2013 or most certainly 2014, it is reasonable to suggest that the County needs to cover most of the losses and take something like not more than 10% annually from the reserves.

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Tommie Belz 4 years ago

Didn't I just read that county employees are getting a holiday bonus, is that coming from the sale of office furniture?

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