Sponsored by Oregon Business

Dropoff in building fees squeezes city budgets

| Print |  Email
Archives - February 2009
Sunday, February 01, 2009

piggy.jpgDropoff in building fees squeezes city budgets


STATEWIDE Oregon cities big and small are grappling with a steep decline in all revenues, but none more alarming than dwindling building fees. When lending shriveled up over a year ago the building bubble burst, binding the hands of developers and stopping many new proposals dead in their tracks. The corresponding loss of fees is creating widening budget gaps for municipal governments already struggling to provide services.

The city of Ashland saw revenues through permit fees decrease from $4.1 million in fiscal year 2004-2005 to $2.1 million in fiscal year 2007-2008. Another 50% drop is expected for the current fiscal year, according to Ashland Permit Center manager Adam Hanks. As a result, one building inspector and two building and development department employees were laid off. What’s keeping Ashland afloat, Hanks says, is a $42 million school bond to update facilities.

In Portland, the slide arrived later. The total valuation of permits issued from July 1, 2008, through Dec. 31, 2008, dropped 26% from the year before. Portland’s building revenues had actually increased from $39.85 million in fiscal year 2006-2007 to $41.4 million in fiscal year 2007-2008, but that party ended abruptly. “We expect this year to be less than $41 million,” says Elshad Hajiyev, budget and finance section manager for Portland’s Bureau of Development Services. “It won’t even be enough to extend our expenditures.” As a result, 38 positions in the bureau have been left vacant, overtime has been eliminated and cost-saving measures are being studied.

In Baker City, permit activity is down 11% from last year, says planning director Don Chance. New housing development is slow, he says, but he’s still seeing some healthy business in remodels and additions. Baker City isn’t as fee-based as some, making it less vulnerable. And it actually runs a surplus, which it holds onto for such situations as this, says Chance.

Bend isn’t so lucky. Last year, as fee revenue trickled in slower and much less than planned, the city was forced to make budget cuts — three rounds of them to be precise. “But now we should be on track,” says Bend’s communications manager, Justin Finestone. “We cut deep early on.” A total of 44 workers were laid off in 2008, with another 55 positions left unfilled and a hiring freeze enacted.

Building fees have become increasingly vital to city governments since property taxes were limited in 1997 under Measure 50. Now that they are dwindling, municipalities are scrambling to find another cash cow to milk.   

“The long-term projections for cities are pretty bleak,” says former Hillsboro mayor Tom Hughes, past president of the League of Oregon Cities. “The amount the average city collects on the average home doesn’t pay for the costs of supplying services to that home. So we are all required to fall back on other revenues. Unfortunately, those other revenues aren’t holding up.”   

CHRIS MILLER


Have an opinion? E-mail This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

More Articles

Party Like It’s 1999

Contributed Blogs
Wednesday, February 25, 2015
pets-com-sock-puppetBY JASON NORRIS, CFA | OB GUEST BLOGGER

Pets.com, GeoCities, eToys, and WorldCom … blasts-from-the-past that all signify the late 1990s Internet bubble. Yet we believe the dynamics of the market, specifically in technology stocks, are much different today than it was during the late 1990s.


Read more...

Downtime with the president of NAI Norris, Beggs & Simpson

March 2015
Monday, February 23, 2015
BY JESSICA RIDGWAY | OB CONTRIBUTOR

Live, Work, Play: Catching up with Chris Johnson.


Read more...

Emperor of the Sea

April 2015
Friday, March 27, 2015
BY COURTNEY SHERWOOD | Photos by Jason E. Kaplan

Pacific Seafood, one of the world’s largest processors, is rebranding as a more transparent and consumer-friendly operation. A controversial CEO and monopoly accusations from coastal fishermen complicate the tale.


Read more...

Announcing the date of the 100 Best Green Workplaces in Oregon event

News
Friday, March 20, 2015
OBM-100-best-Green-logo-2015-250pxwBY OB STAFF

Join us to celebrate and network with Oregon’s best green workplaces!


Read more...

Much ado about data-driven organizations, for good reason

Contributed Blogs
Monday, April 13, 2015
bigdatathumbBY GRANT KIRBY | OP-ED CONTRIBUTOR

The mega-shift from technology-driven to data-driven organizations raises questions about Oregon’s workforce preparedness.


Read more...

Can small be large?

Linda Baker
Wednesday, April 01, 2015
040115-lindablogthumbBY LINDA BAKER

Leaders in Oregon's ag sector gathered this morning in Portland’s Coopers Hall winery/taproom to discuss the role of the region as an export gateway, impediments to exporting products and solutions to containerized shipping challenges.


Read more...

100 Best: The Power of the Worker

March 2015
Wednesday, February 25, 2015
BY KIM MOORE | OB RESEARCH EDITOR
AND AMY MILSHTEIN | OB CONTRIBUTOR

Technology is empowering people like never before and transforming how employees interact in the workplace. How can companies attract and keep staff engaged in this rapidly changing world?


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS