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Las Vegas building division projects multi‑million dollar shortfall; staff to study fee increases
Summary
City of Las Vegas building division officials told the Enterprise Fund Board the division is running a projected revenue shortfall of roughly $2 million for the fiscal year and will pursue a consultant-led fee study while monitoring reserves and vacancies.
Michael Cunningham, building official for the City of Las Vegas, told the Building and Safety Enterprise Fund Board that the division is running a continuing revenue shortfall and will evaluate fee changes and hiring pauses to close the gap.
Cunningham said permit volume has not rebounded after an election-year slowdown and that the division has “been in the red every month since August.” He said a one-time transfer from deferred revenues produced a positive January, but “if you take that transfer out, that month would have been in the red as well.”
The division reported projected revenue of $14,298,930 for the current fiscal year versus a budgeted $16,498,000. Cunningham said projected expenses of $15,878,585 would leave the fund “in the red at the end of the year by a little over, almost $2,000,000.” He told board members the reserve balance remains healthy at $6,680,011 year to date, which gives “some runway” while staff work on options.
Cunningham described steps staff plan to take: delay or carefully evaluate filling upcoming retirements, review permit fees with a consultant, and compare local jurisdictions’ fees as part of that study. He said the most recent fee adjustments were made in 2019 and that previous changes had been partial rather than full cost recovery: “When I first started at the city in 02/2014, we did 1. I think we increased around 16% at that point. The 1 we did in 02/2019, he was recommending about a 30% increase, and I think we went with a I believe it was a 12 and a half percent increase.”
Board members pressed for detail on the division’s payments to the general fund. Cunningham identified a line item he described as the “general government cost allocation” (referenced in the backup materials as line item 59/599000) and said the cost allocation for the coming year is budgeted at about $3,200,000. He promised to provide a breakdown of what that line item covers at the next meeting.
Members also asked how staff would scope a fee study. Cunningham said the consultant would compare permit fees against actual expenditures, including salaries and services the division receives from the city, and would meet with stakeholders before returning a recommendation. He emphasized that previous fee studies never moved the division to full cost recovery and that any new increases would be phased in: “we always would give a grace period for everyone to adjust budgets.”
Votes at a glance
The board approved the minutes of the Nov. 18, 2024 regular meeting by roll call early in the session. The motion to approve passed with two recorded “Aye” votes and no recorded “No” or abstentions in the transcript excerpts provided; the board chair announced the motion passed.
What happened next
Staff will bring back a breakdown of the general government cost allocation and proceed with consultant procurement and stakeholder meetings if the board directs a fee study. No formal fee changes or hiring decisions were made during the meeting.
