Steamboat Springs County commissioners Tuesday approved fee increases requested by the Routt County Regional Building Department, making the new rates effective Jan. 1 in unincorporated areas and potentially setting the tone for upcoming votes by local municipalities.
Discussion of the fee increases also included differing opinions about how best to spark the struggling construction industry.
“I really struggled with this,” Commissioner Diane Mitsch Bush said about her vote, citing concerns about raising fees for builders during a recession. But she noted that even with the fee increases — which include hikes of about 58 percent each for building permits and plan checks, depending on the scope of the project — Routt County’s rates are equal to or lower than those in many Western Slope jurisdictions. And because the Building Department is an enterprise fund, “it’s not a moneymaker” seeking to generate surplus, Mitsch Bush added — meaning the fees could be reduced should the building industry turn around. The Building Department operates solely with revenues generated by its services.
Commissioners added an open-ended sunset provision to the ordinance approved Tuesday, stating that the county’s building oversight committee will review the fees and revenues “periodically” to see whether the higher rates still are necessary.
The commissioners unanimously approved the fee increases, which will go into effect Jan. 1 in unincorporated areas including North Routt, Milner and Phippsburg. The Oak Creek Town Board is scheduled to address the fee increases Thursday, the Steamboat Springs City Council on Dec. 15, and the Yampa Town Board on Jan. 6, Building Department manager Carl Dunham said. Hayden contracts with Windsor-based SAFEBuilt Colorado for building services.
Dunham said each jurisdiction decides its own fee rates, meaning the increases could be approved in Steamboat Springs but not in Oak Creek, for example.
But Tuesday’s vote, in his mind, sent a strong message.
“It all hinged on the Board of County Commissioners,” he said about how local governments could view the proposed fee increases. Steamboat’s City Council gave initial approval to the increases last month, but it expressed a desire to see the county’s response before finalizing the decision.
Dunham provided figures for sample projects to show the impacts of the new rates. The fee increases would total $1,336 on construction of a 2,000-square-foot home valued at about $316,000, he said, and would total nearly $5,000 on a 10,000-square-foot office building valued at $1.5 million.
Dunham said the new rates “won’t cover all of our budget, but it will reduce our losses.” He said the Building Department’s revenues this year are at 49 percent of average revenues for the worst five years of this decade. The department is on pace to collect about $550,000 in revenues this year, he said, after anticipating collection of more than $1.4 million. Dunham also has said the Building Department’s fund balance has decreased by more than $800,000 this year.
“Right now, we need to create a sustainable situation,” Commissioner Doug Monger said.
Monger and Mark Halvorson, a Yampa Valley Construction Trades Association board member, said the potential economic impacts from a reduced Building Department — such as longer waits for permits and other construction delays — outweighed the cost of increased fees.
“In my opinion, the loss of service … far exceeds what we consider a nominal increase in fees,” Halvorson said. Michael Roberts, president of Habitat Construction and Design Co., countered that any increase would be painful to local builders.
“I really question whether this increase is warranted,” he said to commissioners. “I don’t see how it’s going to increase incentive for building. … Every extra cost that we add to the cost of building, no matter how small, is significant.”
All agreed the local construction industry faces a rough road in the near, and possibly long-term, future.
Halvorson said the next two to three years are expected “to be less than fruitful” for the industry. Mitsch Bush said a turnaround that could trigger a reversal of the fee increase might not happen soon.
“We’re assuming the construction industry is going to improve in 2010, 2011, 2012,” Mitsch Bush said. “I’m not so sure about that.”
Tom Fox, of Fox Construction, said that in numerous e-mails between Yampa Valley Construction Trades Association members, the sentiment is largely in favor of the fee increases.
“The majority of people are not in support of letting the Building Department go under,” Fox said.