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Building & Safety enterprise fund projects multi‑year shortfall; board eyes fee study and expense controls
Summary
City of Las Vegas Building & Safety staff told the Enterprise Fund Board the division has run monthly deficits since August, projects a roughly $2 million shortfall for FY25, and faces a larger FY26 gap without fee adjustments or higher permit volumes. Staff said reserves and potential fee studies will be used to manage the shortfall.
Michael Cunningham, deputy community development director and building official for the City of Las Vegas, told the Building & Safety Enterprise Fund Board that permit revenues have declined and the division has recorded monthly deficits since August.
Cunningham said the division projects FY25 revenue of $14,298,930, down from a budgeted $16,498,000 — a shortfall of just over $2 million. On the expenditure side he reported projected FY25 expenses of $15,878,585 compared with a budgeted $17,871,000, which would put the fund “in the red at the end of the year by a little over almost $2,000,000.”
For the tentative FY26 budget, Cunningham said updated finance projections put revenue at $16,565,607 and expenses at $19,512,941, widening the gap. He told the board the enterprise fund’s reserve balance remains healthy at about $6,680,011 and that the division could use reserves to cover shortfalls while pursuing longer-term fixes.
Cunningham described two primary responses staff are weighing: tightening discretionary spending and conducting a fee study to move toward cost-neutral permitting. He said the last fee increase was in 2019 and that the city typically hires a consultant to compare permit fees to permanent-volume-based costs and peer jurisdictions. "If the consultant comes back and says ... you should increase 30% ... that's when we'd kinda pull back that number with working with the stakeholders ... we're only gonna do 15%," Cunningham said, describing how staff would balance cost recovery and industry impact.
Board members asked about the general government cost allocation — charges the enterprise fund pays to the city for services such as vehicle maintenance, IT, insurance, facility charges and other central services. Cunningham identified the general government allocation on the FY26 draft at about $3,200,000 and said the line covers vehicle capital recovery, software and computer support, insurance, rent and related items. He agreed to provide the board with a detailed breakdown of the allocation at the next meeting.
Cunningham also outlined line items for professional services: the budget includes $1,600,000 budgeted for consultants across plan review and inspection, with current-year projected use around $1,300,000. He said the division uses a mix of in‑house staff and consultants and that staffing vacancies or retirements will shape whether the city fills positions or relies more on consultants.
No fee change has been proposed yet; Cunningham said any fee study would include stakeholder outreach, industry meetings and a phased effective date to avoid mid‑project impacts.
The board did not take action on the budget at the meeting; members asked for additional detail on the cost-allocation breakdown and the planned fee‑study process.
