Despite its feared budgetary impacts, Missoula County commissioners on Tuesday agreed to postpone a planned increase in building fees until mid summer, saying the move could give contractors some temporary relief as the COVID-19 crisis cripples the economy.
But doing so could jeopardize the department’s budget as it continues to eat into its financial reserves, according to Public Works Director Shane Stack.
“The impact to our building inspection program, we were expecting to be around negative $140,000 this year, but by waiving the potential fee increase, we’re estimating that to be closer to 180,000,” said Stack.
County officials are also leery of the pandemic’s impacts on the building industry, and its subsequent impact on the department’s budget. It’s unknown if construction will play on or slow down as the crisis drags on.
“With the CIVID crisis, we’re not sure what that impact will be on the building industry, and whether they will continue to churn out houses and continue to contact us for permits, or if we’ll see a decrease in that,” said Stack. “That will have an impact on the budget as well.”
Commissioners approved the fee increases earlier this year and they were set to take effect this week. The new fees would have generated an additional $100,000 in revenue, covering what county employees described as the cost of providing service.
Nicole Whyte, the program manager with building and development, said the county has been losing revenue due to recent annexations by the city of Missoula and other changes in the building industry.
The department has been using cash reserves to cover its deficit for the past two years. If that keeps occurring, the department won’t have a healthy reserve, and the construction economy remains hard to predict.
“Even over the last couple weeks and last couple days, the number of permits and what we’re seeing in the contracting industry is changing day to day,” said Whyte. “It could go back up to normal and we could be okay, or this could take a big hit on the construction economy and we could be more like a $200,000 deficit this year. It really just depends, and it’s really hard to predict.”
Commissioners unanimously approved postponing the fees, but with trepidation. If the program doesn’t charge the actual cost of providing inspections and continues to lose money, it could be forced to lay off employees and reduce services, officials warned on Tuesday.
“One of the reasons I suggested we take a look at this, as we look at the suit of tools available to us to provide relief to folks in the community during the economic crisis, this might be one of them, but recognizing full well there will be a day of recognizing where we really do need to increase the fees to reflect the costs involved in our inspection program,” said Commissioner Dave Strohmaier.