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MCCOG board approves 20% building fee increase

A construction worker bangs a sheet of plywood into place as he works on top of the Cousin's Country Inn expansion in The Dalles Wednesday, Oct. 2.

A construction worker bangs a sheet of plywood into place as he works on top of the Cousin's Country Inn expansion in The Dalles Wednesday, Oct. 2. Photo by Mark Gibson.

Mid-Columbia Council of Governments board approved an increase to Building Code Services fees Oct. 2, but contractors mustered enough opposition to the plan to convince board members to suspend plans for additional increases — for the time being, at least.

But that may not be enough for one retired electrical contractor, Wayne Lease, who promised to collect signatures for a petition with the Electrical and Elevator Board to force an investigation.

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A RAINBOW BEAMS down from storm clouds early Wednesday evening, behind construction at the Goodwill Industries construction site on East Sixth Street.

Wasco County Commissioners Steve Kramer and Rod Runyon were the only board members to vote against the plan, which will implement a 20 percent across-the-board fee increase effective Jan. 1, 2014, but will leave decisions on the need for additional increases to a future board. The original proposal also included 10 percent increases in July 2014 and July 2015.

“I would have supported 10 percent, but not 20,” said Runyon, who had encouraged the modification

of the motion to include just one increase.

Lease argued against an across-the-board increase, advocating cost-based accounting to determine the cost of service. Such a change would mean visits to sites at a farther distance from the department in The Dalles would pay more for travel costs. He said changing to cost-based accounting would reduce the amount chargeable under the state’s 12 percent surcharge.

He also questioned the legality of two loans made using Building Codes reserves, saying they violated a state law that requires money collected for electrical specialty code enforcement to be used exclusively for that purpose.

Other contractors in the full audience at the Northern Wasco County PUD meeting room also had plenty to say in opposition to the increases, particularly in connection with the tenuous economic recovery.

Dave Gildersleeve of Design Structures LLC said his company has been happy with the performance of the Building Codes Services staff, but said the increase would cause the company to lose business.

“About 20 percent would walk away,” Gildersleeve said, estimating the “substantial” effect the increase would have on Design Structures’ $6 million to $7 million a year in business.

Gildersleeve said he recalled promises when the council of governments took over the function from the state that the fees would not be increased.

“It is vivid in my memory,” he said.

Ron Nelson of Oregon Equipment and other contractors present urged the board to wait on the increase until the budget impact of looming large construction projects could be gauged, including the $600 million Google data center addition announced last week, and the future Walmart construction.

When the council of governments took over operation of Building Codes Services in 2007, wind farm construction was at a high in Sherman and Gilliam counties. Building Codes did not increase staff, so the added fees yielded a surplus. When those projects died out after federal tax incentives expired, that fee revenue died out. Over the past two years, the agency has had to dip into its reserves to cover shortfalls, more of which are expected in coming years if construction-related fees continue at the current level.

Contractors want to see if looming large projects will narrow or halt the deficit.

But commissioners from Sherman and Gilliam counties warned about waiting for development that may never materialize. Gilliam County Judge Steve Shaffer told of waiting over the past several years for fully permitted wind farms to start construction that never did. Sherman County Commissioner Mike Smith, who serves as council board chair, echoed his county’s experience of waiting years for permitted wind farms: “They weren’t coming,” he said.

Construction consultant Scott Hege, also a county commissioner but not a council board member, asked the board to take a closer look at overhead costs charged to Building Codes.

“What are the overhead expenses? How much is the cost of overhead? It’s seems like it’s probably quite a bit,” Hege said. “I’d like to know what the actual costs are.

“The market is in the tank. The economy is in the tank. There’s not a lot of construction going on.”

The board’s initial reaction to public testimony was to amend the motion to spread out the increases over most of three years, instead of 18 months. But the changed met with opposition from Wasco County commissioners.

Hood River City Councilor Ed Weather made the motion that shaped the final fee structure to limit the increase to 20 percent only effective Jan. 1, 2014. He was seconded by The Dalles City Councilor Carolyn Wood, prior to approval.

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