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<br />D11 MAR 2 31991 89 i, it �s��
<br />• Current Problem
<br />Even with the actions taken to date, the building division's
<br />expenditures still exceed revenues on a monthly basis. This,
<br />however, was not entirely unexpected. Attached to this item are
<br />excerpts from the county administrator's FY 91-92 and FY 92-93
<br />budget messages. As indicated in those statements, county staff
<br />anticipated that a funding shortfall might continue into FY 1992-
<br />1993.
<br />At present, building division revenues total approximately $43,000
<br />a month. Expenditures vary by month depending upon a number of
<br />factors ( including number of pay periods and when certain costs are
<br />charged) but can be estimated at $69,500. As is evident from those
<br />figures, there is still a problem with revenues not being
<br />sufficient to cover expenditures.
<br />While reducing expenses is essential and has been done, it has also
<br />been necessary to ensure that the building division adequately
<br />perform its functions. These functions involve accepting permit
<br />applications, processing the applications, reviewing plans, issuing
<br />permits, inspecting construction, and licensing contractors. In
<br />cutting costs, staff must make sure that these activities are not
<br />only done well, but done in a timely manner. Otherwise, the
<br />construction industry, itself, could be adversely affected.
<br />ALTERNATIVES & ANALYSIS
<br />For the past several months, staff has met on a regular basis to
<br />assess the building division's financial situation and develop
<br />alternatives to resolve the problem. Consisting of County
<br />Administrator Jim Chandler, Budget Director Joe Baird, Community
<br />Development Director Bob Keating, and Building Division Director
<br />Ester Rymer, this staff group analyzed the problem, reviewed cash
<br />flow projections, and developed several alternatives to resolve the
<br />operating shortfall.
<br />Initially, staff focussed on the expenditure side of the building
<br />division operation. Because of the substantial cuts already made
<br />in the building division's budget, including the staff reductions,
<br />capital cost elimination and operating cost reductions, staff was
<br />concerned that further cuts would adversely affect the building
<br />division's service. For that reason, staff felt it necessary to
<br />consider the revenue side of the building division's operation,
<br />including revenue collected and service provided by function.
<br />In assessing the building division's revenue situation, staff made
<br />several findings. First, staff determined that Indian River County
<br />was one of the few jurisdictions which did not support its building
<br />division contractor licensing operation through a required annual
<br />competency card renewal program with a required annual fee.
<br />Second, staff found that the building division's fee structure was
<br />lower than the fee structure of most other jurisdictions in the
<br />Treasure Coast area. While the building permit fees are lower here
<br />than in other jurisdictions, the major difference was in
<br />miscellaneous (fence, sign, etc) and sub -permit (electrical,
<br />plumbing, etc) fees. Finally, staff found that the building
<br />division performs various functions for which fees are not charged.
<br />These include minimum housing code enforcement and hazardous
<br />building inspection and enforcement.
<br />As part of its analysis, staff estimated the cost of providing
<br />service for each of its functions and compared that cost to the
<br />revenue received for the service. The staff also compared fees
<br />charged by Indian River County to fees charged by other
<br />Jurisdictions. Based upon its analysis, staff determined that the
<br />major variance occurred with respect to miscellaneous and sub -
<br />permits. Many of these permit fees, some as low as $4.00, were
<br />much less than the cost of providing the service, which includes
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