Committee will discuss privatizing Routt County Regional Building Department

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— At 11:30 a.m. Friday, the Regional Building Department Oversight Committee will meet in the commissioner’s hearing room to discuss the possible privatization of the department.

The committee has been considering proposals for a software upgrade to replace its current permitting system, and along with that process, came the conversation about letting a private company, such as SAFEbuilt that runs Hayden’s building department, take over the department.

According to Routt County officials, the decision about what permitting software to pursue will drive the conversation about privatization.

The regional building department was formed by an intergovernmental agreement between the city of Steamboat Springs and Routt County and is an enterprise fund that depends on permit fees for its sole source of revenue.

The department has budgeted for a software purchase, according to Routt County commissioner and committee member Tim Corrigan, and departments such as planning and environmental health, which would use the permitting system, would contribute from their own reserves.

One of the major goals of the software search is to allow concurrent review between all the departments across governments that have to review permits. For example, Steamboat staff members review building permits for projects within city limits before they are issued. Currently, the paper permit is circulated to the different bodies that need to sign off on the project.

The oversight committee is a recommending body, but the city and county will make their own choices about what software suits all or some of their needs.

What is not up for discussion Friday is splitting the department. The 2007 attempt by the city of Steamboat to break away from the regional department and outsource the process failed, and all of the oversight committee members said it is not up for discussion now.

The regional department also provides services for Oak Creek and Yampa, which both have ex-officio members on the oversight committee.

Two of the three final proposals were for software packages only while SAFEbuilt paired software with outsourcing the department.

County Manager Tom Sullivan said it was incumbent upon him to do the cost analysis of the available options. City Manager Deb Hinsvark said evaluating the privatization option was part of her due diligence to determine what’s the best way forward for the department.

City Council president and committee member Bart Kounovsky said that this conversation is an opportunity to improve the function of the department.

Corrigan said he could support privatizing the department if it stayed unified, provided equal or better service for lower fees and showed some consideration for the regional department’s existing employees.

But Corrigan said he does have some concerns about a privatized building department.

“I worry that a privatized department won’t have the ability to accommodate unusual local situations,” he said about special circumstances that can arise from renovations of older or historic buildings.

Feedback from members of the building community who have experience with SAFEbuilt in Hayden is mixed. Some report longer wait times for inspections and higher costs associated with fees while others state that they have had no issues with the process or fees.

“We really need to hear from the building community,” Corrigan said about the upcoming decisions.

To reach Michael Schrantz, call 970-871-4206, email mschrantz@SteamboatToday.com or follow him on Twitter @MLSchrantz

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Comments

Martha D Young 2 months ago

Please do not outsource the building department. Unless there's a monumental cost savings to be gained, we Routt County citizens need our building department to be staffed by local people, not outsiders.

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Fred Duckels 2 months ago

The problem with doing matters in house is that the costs for future benefits are bankrupting government entities across the nation.

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mark hartless 2 months ago

Translation: Government (local, state or federal) can not control costs; private businesses can.

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mark hartless 2 months ago

Martha,

Government is working with OPM, a highly addictive substance. It is, in fact addicted to OPM. Therefore, it has little or no incentive to control costs, whether they be labor/pensions, material outlays, or operational.

In fact, often times there are built-in incentives to spend so that subsequent year's budgets are not cut.

I do, however, understand the desire to keep the building office "local". I have worked with these individuals in the past and found them to be quite reasonable and generally good folks; not haughty or abusive at all. Nevertheless, the taxpayers deserve to have their hard-earned money spent in the MOST economical manner possible, no?

OPM: Other People's Money (n). An increasingly rare and highly addictive substance that is commonly abused by local, state and federal governing bodies. Withdrawal symptoms occur at the slightest suggestion of a reduction in the daily dose, even when the patient is using dangerous and unsustainable amounts. Most addicts resort to borrowing, stealing, dishonest bookkeeping, and other nefarious means to keep the "high" going and to avoid returning to "reality" which is, apparently just for the suckers known as "taxpayers".

Taxpayer: (n) See Sucker, Patsy, Pawn, Puppet, Dupe, Gull

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Carl Dunham 2 months ago

Building department services are paid by the permit holders. This has been true since 1998. The building department even pays rent and other overhead costs associated with department operations. No public funds are used.

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mark hartless 2 months ago

That the "users" of the service are the ones paying for the operation of that department is indeed a good thing. It should be the case throughout more areas of government.

However, this does not mean that there can be no excesses, no waste. Nor does it mean that the community at large is not effected by those costs.

I think the average person would be absolutely shocked at the cost of a building permit for a simple 1,900 square ft home in Routt County, as well as in many other municipalities across the country.

Nor is there an "alternative" to the cost of a building permit. One can not "shop around" for a building permit, thus the costs have skyrocketed. I have ZERO research to back this up... ZERO, but I'll wager that permit costs have risen (in % terms) faster than almost any other cost of homebuilding in the last 30 years.

This community has often lamented the high cost of living here and engaged in many fruitless attempts to mitigate these costs so as to be a more attractive place for the workers it needs. We have all read the stories of how Steamboat can't seem to keep or attract needed employees.

It is unfortunate that so many who grapple with this and who seem determined to "fix" it with "solution" after "solution" do not recognize the significant percentage of those costs of living are attributable DIRECTLY to municipal regulation and over-bearing.

Add up the cost of a building permit, water tap fees, sewer, etc, etc. Then add in the city sales tax on every 2x4, yard of concrete, etc. Then add into the equation the significant additional material needed to build a home to todays Routt County standards vs homes constructed in 1988 (none of which are falling down from inferior construction by the way), and the costs are more and more prohibitive while the benefits of these additional requirements seem to be quickly rolling down the unproductive slope of the bell curve.

Sure, a perfectly insulated totally efficient home with LED lighting and solar panels is ideal, but the guy with a wife and 4 kids can no more afford this "luxury" home than he can afford a Lamborghini. Forcing everyone to drive a Lamborghini or nothing leaves a lot of people on foot. Ditto for housing.

Many who advocate for "affordable housing" or "living wages" or other "fixes" should also examine the costs and chilling effects of over-regulation and of monopoly.

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john bailey 2 months ago

don't forget tap fees . the cost to install a kitchen exhaust or a bath fan went up 50% in 09 I believe, but that was during the down turn as Carl said . the Question is , will it all go down when building picks up. if you have your permit on file with your suppliers your taxs are less. I actually crunched the numbers when we built our house , by , basically our selves mind you no General , with a few locals, the fees to my surprise were pretty much right on. of course this was 15 years ago. its the taps fees that get ya now. this is in Stagecoach , ya know that little place down RCR 14. no big xitty living , we're done with that , and you wouldn't believe how quiet it is........~;0) oh , and thank you Carl for always taking the time for me when I am not quite sure what to do when I get a curve ball on a job to meet the IMC.....

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Jon Quinn 2 months ago

I studied this issue in 2007 when the City was considering splitting off and going with a private firm. What I came to understand at that time was that there is little reason to consider privatization unless there is a lack of expertise locally to handle inspections. As Carl mentioned, the department is paid for by the fees that are collected through the permitting process, not by tax dollars. When you ask the folks who are most directly impacted by the building department, the contractors, they will all tell you that privatizing the system is an excellent way to guarantee more delays, and worse service. What you can be sure of is that privatization of the building department means more of the money, and more of the expertise, will leave our community.

I would encourage the county officials studying this to consider the real impacts of this decision, and I hope that they opt to keep these services in the hands of the locals who really know our community and have real experience in our valley. Don't be fooled by the fancy sales pitch!

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Carl Dunham 2 months ago

The regional building department did increase fees in 2009. We did this with the recommendation of the building department oversight committee along with approvals of the Commissioners, Council and Towns with the caveat that we would reduce fees if reserves increased. Please note that we raised fees from the UBC 1985 fee schedule to the 1997 fee schedule. With the slight upswing in construction now is the time to invest in increased and better services in any department that can link into a new web based software. With cost sharing we can keep it reasonable for the involved departments. The building department doesn't have any control over use taxes, city fees, tap fees, etc.

The move to privatization is being driven by the city. The county understands that one building department is best for the industry. If privatization is to be considered there needs to be a plan in place in case it doesn't work. There may not be good options to return to a local agency with local oversight.

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Fred Duckels 2 months ago

Is there no legacy cost associated with the bldg. dept. employees?

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Scott Wedel 2 months ago

From the perspective of the city, the building dept is already privatized because the building dept is an outside entity not managed by the city.

And it is a reasonable question whether a private building dept would be willing to pay the rent and the overhead charges being paid by the building dept. If the current employees were to take the building dept private then they'd find a smaller cheaper place to rent and find less expensive accounting and other services.

Similar situation as the county overhead charges being charged to the 3Wire restaurant at YVRA which are far higher than what a restaurant of that size would normally pay. So the restaurant operates at a loss, but does help cover the county's admin overhead.

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Fred Duckels 2 months ago

Who covers pensions. health care and other bennies and if a lawsuit arises who's paying for that?

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Carl Dunham 2 months ago

In response to Scott's first comment, the oversight committee is composed of two county reps and three from the city. The city is going to put the private company into the Elkins building, at no cost. According to the SAFEBuilt proposal rent will be negotiated later. Just the records from 1972 forward to today will fill that building. Accessibility could also be a problem. Scott's comments about overhead are an issue, but the gorilla in the room is, "How does profit figure into the building department function." The courts have determined that a building department can only collect fees to cover the costs of providing services.

Fred is correct, institutional knowledge (legacy)will be lost with a new staff. SAFEbuilt's proposal includes E&O insurance.

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Scott Wedel 2 months ago

I think there is very little, if any, benefit to the city's proposal.

A true free market proposal allows the customer to chose and the city forcing people to use this company vs that dept doesn't do that. Giving a private company a government sponsored monopoly is generally the worst solution since there are none of the benefits of competition but with the added costs to the customer of a contractually guaranteed profit.

The better solution for buildings would be similar to title companies where the government provides the basic service of recording and saving of documents while the public is free to chose among any number of private companies providing the value added service. Just as with title companies, the essential insurance policy requires the work be done well because the insurance company does not expect to pay claims and so requires evidence of properly done work in order to provide insurance.

But the city's objective is not better customer service and it isn't disgruntled customers that are pushing for a change, but the city sees a way to get money from contracting out the service. For that reason, the public should not support the city's proposal.

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John Weibel 2 months ago

I doubt that the city only sees a potential revenue stream from utilizing safebuilt. I would guess that the $1,000,000 in software fees are part of the problem. What happens if the economy takes another hit this year because of this that or the other and permit fees tank again?

If one simply extrapolated out what is happening today economically, you might believe that good times are back or just around the corner. However, the economy is being goosed by the printing of money, go look up M1 and M2 numbers, without the feds intervention, we would probably be into a period of significant deflation and that is not a fun economic environment to be in.

The city is trying to be fiscally prudent as it can be as its revenues are more driven by sales taxes, which are much more variable than the counties primary tax base - real-estate.

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