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DBI budget down amid pandemic; staff flag reserves and sustainability concerns
Summary
Deputy Director Tyrus Madison told the commission the adopted FY21 budget is roughly $89.5 million, with new revenue budgeted at about $47.4 million — down roughly $20 million from the prior year due to the pandemic. First-quarter collections show electrical and plumbing permits outperforming forecasts, but staff warned prolonged low permit valuation would require budget reductions despite reserve balances.
Deputy Director Tyrus Madison presented the Department of Building Inspection’s finance reports on Oct. 21, laying out an adopted FY21 budget of about $89.5 million and conservative revenue assumptions driven by the pandemic.
Madison said the budgeted new revenues total about $47.4 million this fiscal year, a decline of roughly $20 million from the previous year’s collections. "These revenue estimates were actually submitted in June... So these are very conservative estimates," he said, noting the adopted budget uses reserves and fund balance to bridge the difference between revenues and expenditures.
The first-quarter actuals (July–September) showed better-than-budgeted collections in some categories; Madison said electrical and plumbing permit revenues were strong enough that, preliminarily, DBI projects it could exceed the conservative revenue estimate by about $2.8 million. Still, plan-review and building-inspection revenues and permit valuation remain down considerably year-over-year.
Madison outlined that DBI holds roughly $42 million in a rainy-day fund and about $30 million earmarked for employee retirement benefits. He warned, however, that if reduced permit valuation persists, the department will need to consider lowering the budget because sustaining an $89 million budget on significantly reduced revenues would be unsustainable.
Commissioners acknowledged the cautious outlook and asked for continued monthly oversight; President McCarthy said sustainability was his primary concern and signaled additional monthly review of financials going forward.
Next steps: staff will continue to monitor collections, report monthly comparisons of budget versus actuals and assess whether and when budget reductions or rebalancing would be required.
