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Home My WebLink AboutBuilding Department Quarterly Report.pdfPage | 1 ` Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Bob Risk, Chief Building Official Jason Shrauger, Fire Chief Chuck Winn, Assistant City Manager SUBJECT: Building Inspection 2nd Quarter FY10 Update October 1 – December 31, 2009 MEETING DATE: February 8, 2010 AGENDA ITEM TYPE: Action RECOMMENDATION: Accept this report detailing the financial and workload position of the Building Inspection Division for the quarter ending December 31, 2009. DISCUSSION: In the spring of 2008, we recognized that the significant changes in the local building industry were having an effect on the finances and workload of the City’s Building Inspection Division. We held a number of policy and budget discussions that spring/summer deciding how to estimate this activity and balance the FY09 budget. As a part of that process, we committed to making quarterly status reports to the Commission. The reporting proved very beneficial and has continued into FY10. This report represents the sixth such quarterly report. Basics of the Building Inspection Fund: The City’s Building Inspection programs are funded solely from the revenues derived from building inspection permits and plan review fees. The fees we collect are spent to pay inspectors, plans examiners, administration, clerical workers, and fund their training and operating costs. There are no tax dollars or general fund support dedicated 172 Page | 2 to the program. We maintain a separate fund to account for these revenues and associated expenditures. There is a special set of annual audit procedures for this fund proscribed by the state. By law, we can have no more than one-year’s operating costs in the fund as a reserve. During the booming construction years, the Building Division actually had to Decrease building inspection fees because we were in danger of having too much money in reserve. At the end of FY07 we had in excess of one million dollars in reserve. Building permit fees have not been increased since 2005. A. REVENUES: Without an increase in current fees, we estimated receiving approximately $71,200/month. This estimate was based on average monthly building permit activity during FY2009 and equals our estimated monthly expenditures (and a balanced budget) for FY10. Last fiscal year, the average monthly revenue was $73,000 with actual monthly revenues ranging between $108,000 and $28,000. For this fiscal year, the monthly average for the first two quarters was $51,800or $20,000 below our monthly budget estimate. Customarily, the 2nd and 3rd quarters of the fiscal year are the lowest revenue producing months in the Division. It is likely that the 3rd quarter revenues will be at or below the 2nd quarter average. Second Quarter Revenues FY08 FY09 FY10 October $106,200 $96,000 $41,000 November $58,500 $28,000 $33,400 December $91,000 $30,000 $33,250 Average Monthly Revenues: $85,233 $62,000 $36,500 Now that we are halfway through the fiscal year our FY10 revenue stands at $309,350 which is $117,400 short of our budgeted revenue of $426,750. B. EXPENDITURES: Our estimated monthly expenses for FY 10 are $71,125. Our monthly expenditures for the 2nd Quarter totaled $173,700. ($57,900 average per month) 173 Page | 3 Actual Expenditures FY10 2nd QTR October $59,100 November $58,500 December $56,100 Average Monthly Expenditures: $57,900 For the first six months of the fiscal year our actual expenses were a total of $51,341 below our estimated average monthly expenditures. This is due to staff paying close attention to our budget and actual revenues along with careful planning about when some of our necessary spending will occur. Some necessary expenditures that have been postponed include, out of state staff training, office equipment upgrades, vehicle repair, and front counter handicap accessibility upgrades. Building Division Revenue/Expenditure Comparison- 2009 0 20,000 40,000 60,000 80,000 100,000 120,000 Revenues Expenditures C. CASH RESERVE: The Building Inspection Fund Cash Reserve was $634,657 at the beginning of the 2nd quarter. At the end of the 2nd Quarter the cash reserve balance was $566,819, a drop of $67,838. This reserve balance represents 63% of our recommended FY10 Budget. 174 Page | 4 Going forward, we recognize that the 3rd quarter of this fiscal year may see Reserve declines similar to the 2nd quarter which averaged $22,500/month. However, we anticipate that the 4th quarter revenues from spring building activity will cover the current division costs for that quarter. During the FY09 budget development, the Commission was not in support of raising Building Division fees until the Fund’s reserve level hit 50% of annual expenditures. Last spring, as we were nearing that level in the FY09 budget, we brought the issue of a Building Division fee increase to the Commission. At that time they declined to raise fees. D. BUILDING PERMIT NUMBERS: The total number of new permits for the 2nd Quarter FY10 was 619, down 133 permits (17.6%) from the same period last year. 175 Page | 5 Permit Type 1st Qtr FY09 2nd Qtr FY09 3rd Qtr FY09 4th Qtr FY09 1st Qtr FY10 2nd Qtr FY10 Building 358 298 184 419 450 191 Plan Check 205 141 101 183 183 125 Electrical 181 141 99 125 157 93 Plumb/Mech 259 148 146 158 175 184 Fire Systems 19 21 17 17 20 19 Moving 3 0 0 1 0 0 Demolition 8 3 7 10 4 7 Total Permits 1033 752 554 913 989 619 Permit and Inspection Staffing Level 12 11 8 7 7 7 E. INSPECTION WORKLOAD: “Inspections per Inspector Day” has historically been used to measure the workload of building inspectors. The accepted level of inspections per inspector day is 15. We reviewed the actual inspections per inspector day averages for FY05 through FY09 and the results are in the table below. Fiscal Year Inspections/Inspector Day Standard 15 2009 14.59 2008 15.45 2007 2006 2005 5 year average inspections per day- 12.56 13.01 14.27 13.97 During the second quarter of FY10 our monthly inspection averages are up over last year’s averages (see table below) 176 Page | 6 Fiscal Year 2010 – 2nd QTR Inspections/Inspector Day Standard 15 October 20.43 November December 16.67 23.10 2nd QTR average inspections per day 19.61 Total Monthly Inspections for 2009 In addition to the historical inspector workload, the field inspection staff is performing inspection related computer entries that were previously completed by the permit technician. Also, to help compensate for the permit technician staff reduction and the increased volume of building permit applications and inspection requests we are receiving, the building division code enforcement officer has been trained to accept permit applications, issue building permits, and to provide general office coverage as needed. STAFFING PLAN: With our current and projected workload, the Building Division is currently at the minimum staffing level needed to provide the minimum services mandated by the Administrative Code of Montana, City of Bozeman Ordinances, the International Building Code and Current Building Division Policies. 177 Page | 7 Currently, the building division staffing level includes: ½ Fire Chief, ½ Deputy Chief Inspections, 1 Chief Building Official, 2 Plans Examiners, 3 Building Inspectors, 1 Code Compliance Officer, and 1 Permit Coordinator. FISCAL EFFECTS: Our revenues for the 2nd Quarter FY10 averaged $36,500/month while our actual monthly expenditures for the quarter averaged $57,900/month. The Building Division Reserve Fund balance at the end of the 2nd Quarter was $568,439 which represents 63% of the FY10 budget. ALTERNATIVES: As suggested by the City Commission. Attachments: None Report Compiled On: January 22, 2010 178