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Building Codes looks to increase fees

Wind farm inspection revenues declining

Local contractors have been worried about a proposed 40 percent increase in permit fees from the Mid-Columbia Building Codes Services originally proposed for Aug. 1, but for now, at least, they’re getting a reprieve.

During a July 23 meeting the Mid-Columbia Council of Governments board asked staff to come back with options for raising the fees incrementally over a period of years instead. The alternative plans will be presented at an Aug. 20 board meeting. Once the board comes to a consensus on which plan to pursue, a public hearing will be set.

John Arens, Mid-Columbia Council of Governments executive director, said Building Codes Services has seen a dramatic decrease in revenue over the last couple of years.

“What’s taken place is when we assumed the program from the state (in 2007) the wind farms were active,” he said. “Now they’re wrapping up.”

As new permits for wind farm construction have dried up, Building Codes Services has seen a decline of revenue from almost $1.6 million in 2010-2011 to $911,142 in 2012-2013. Last year the department faced a shortfall of $259,658, which it covered once again by dipping into its reserves.

“We’ve maintained our low rates as long as possible due to the economic downturn in order to keep costs down to the public,” Building Official Robert Futter wrote in an April 16 memo to the MCCOG board. “However, at the rate our reserves are currently being depleted, and without adjusting our fee schedule, our ability to continue providing services in the future is at a risk.”

In his memo, Futter wrote that MCCOG has been using the same fee schedule as the state, “the lowest statewide,” but does not receive the subsidies that the state offices do. He said the building codes office has already cut costs as much as it can, keeping only one inspector per

specialty, moving into the MCCOG offices on Kelly Avenue and implementing an e-permitting system.

Arens provided comparisons of fees from counties near MCCOG’s multi-county area, including Malheur, Hood River, Morrow and Deschutes. According to the numbers he provided, a 30 percent increase would keep some permit fees below the comparable average and other fees roughly the same as the average of the other four jurisdictions.

He said Morrow county’s fees are at roughly the same levels as MCCOG’s are currently, but covers significantly fewer people and fewer square miles.

“They’re seeing what we were seeing five years ago,” Arens said in reference to major energy-related construction projects that have been generating millions in permit revenue for Morrow.

He said the economic slow-down has negatively affected building permit revenues all over the country, and if it hadn’t been for the influx of wind farm revenue MCCOG would have probably had to raise its fees during the deepest part of the recession.

Arens said part of Building Codes’ once-large reserve fund is tied up in two loans. The office gave MCCOG an inter-fund loan at .5 percent interest to replace its commercial loan for its office building.

“By loaning ourselves the money it brought down our expenses, which enabled us to provide more services,” he said.

Later MCCOG also drew from the Building Codes reserves to provide a loan for the required matching funds for a large grant for a new transportation facility that has not yet been built.

Those loans are being paid back month by month, but Arens said it isn’t a fast enough pace to cover the quarter of a million dollars Building Codes has been using to cover its budget shortfall each year for the last couple of years. The MCCOG board doesn’t want to completely deplete the fund in the next couple of years, which is why it is raising the fees now.

“What’s of concern is, if we don’t maintain our reserve fund, things could get worse. What would be the discussion right now if we didn’t have a reserve fund?” he said.

As the board has been seeking input on a fee increase, Arens said some people have asked why MCCOG would favor an across-the-board increase instead of taking each fee individually.

“We have a whole system in place and if you hold something down, something else needs to go up. It seems more complicated,” he said.

He said he has also been asked how the fees compare to the actual cost of doing the inspection, but said it varies — taking a five minute drive to an inspection in The Dalles is a lot expensive than driving out to Antelope for the same type of inspection. It would be difficult to have a completely different fee schedule for different counties and cities, so it is better to look at the system as a whole, he said.

Arens said even if the MCCOG board can come to a consensus on a fee increase plan at the next meeting, whether it’s 10 percent a year or 40 percent all at once to save the reserve fund from being depleted any more, it will probably be at least November before the new fee schedule would go into place.

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