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DBI fee study pending; department proposes holding FY15–16 base budget as revenues are reconciled
Summary
DBI staff told the commission the fee study (MGT America) is near completion; staff estimated a potential 15% reduction in fee revenue (~$9.7M) and proposed maintaining base expenditures ($72–73M) while using fund balance and awaiting final fee legislation and controller reconciliation.
Peg Stevenson of the Controller's Office and Deputy Director Taris Madison briefed the Building Inspection Commission on the status of DBI's fee study and the department—s proposed biennial budget.
Stevenson said MGT America has completed much of the fee-study work but remains reconciling large projects, ensuring full cost capture and aligning the study with CAFR year-end revenue results; she anticipated returning with a full fee proposal and final reconciliations within about two weeks. Madison said the temporary 7% fee reduction has been extended through the end of the current fiscal year and that actual fee legislation will be required to adopt a new schedule.
DBI staff presented a conservative budget approach: hold the 2015-16 and 2016-17 base budgets at roughly $72–73 million while the fee study and revenue estimates are finalized; in the short term the department plans to use available fund balance and project funds (including about $7 million in technology project funding and other continuing-project dollars) to bridge the timing gap. Staff used a working assumption of a 15% reduction in charges for services, yielding an estimated $9.7 million reduction compared with the most recent budget year; the department will refine that estimate after final controller reconciliation.
Commissioners raised staffing and service-capacity concerns tied to incoming RAD rehabs and other new initiatives and pressed staff to assess whether existing vacancies and planned hires can meet the anticipated inspection and outreach demand. Deputy Director Madison said the department has vacancies and that hiring will take time; commissioners discussed the prudent size of the repair-and-demolition reserve and the trade-offs between drawing fund balance and preserving emergency reserves.
Next steps: final controller reconciliation and MGT deliverables, a full fee proposal to be presented next month, and a special meeting to vote on the budget scheduled for Feb. 3.
