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Building and Safety enterprise fund posts FY25 deficit; staff hold vacancies and curb consultants
Summary
Staff reported the enterprise fund ended fiscal year 2025 with a reported shortfall driven by lower-than-projected permit revenue. Department leaders said they have held vacant positions, limited consultant usage and travel, and plan a fee study to address projected shortfalls.
For the record, Michael Cunningham, deputy community development director, told the committee that the Building and Safety enterprise fund finished fiscal year 2025 in the red. He reported revenue of about $13,000,897, which he said was roughly 84% of projections, and expenditures of about $16,000,069, yielding a year-end deficit of approximately $2,180,228.
Cunningham attributed the shortfall primarily to a slowdown in permit submissions. He also noted a large June transfer to rectify deferred revenue accounts; that accounting entry made the June structural-permit line appear negative because funds were moved into deferred revenue. Cunningham said funds remain available and will be recognized as projects complete.
On expenditures, staff spent less than budget in several discretionary lines, including professional services; Cunningham said professional-services spending ran at about 70% of budgeted levels, which reduced expenses while internal staff absorbed more work. He emphasized the department is minimizing consultant use and discretionary travel, limiting overtime, and holding multiple vacant positions to restrain costs.
Cunningham provided a two-month FY26 update showing about 15% of projected revenue collected (a little over $1 million) and expenses at about 14%; he said July and August still showed losses. The department has filled two inspector positions after retirements but is holding other inspector, permit technician, ASA and supervisory positions vacant for now.
On the June transfer figure, a committee member asked for the exact dollar amount; Cunningham said he would provide the precise transfer number at the next meeting.
