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Las Vegas enterprise fund board reports nearly $3 million shortfall; fee study delayed to fall
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Summary
Deputy community development director Michael Cunningham told the committee the building and safety enterprise fund faces a projected shortfall of roughly $3 million for FY2026; staff plan to finish a fee study this year and aim to implement changes in the fall to correct revenues while holding positions and limiting discretionary spending.
Michael Cunningham, deputy community development director and building official, told the Enterprise Fund Committee that permit volume has not recovered and that the fund is operating with a material shortfall. He said a January reconciliation required transferring $923,000 from the department's deferred revenue account back into the operating account, which temporarily improved cash flow.
Cunningham said the department now projects revenues for the fiscal year to finish at $13,488,941, about 15% below earlier projections, while total expenses across discretionary and labor accounts are projected at $16,432,496—leaving the fund roughly $3 million in the red. He attributed lower labor expense to several frozen positions the department is holding while revenues lag.
The department is pursuing a fee study to recalibrate permit and plan-review fees. Cunningham said the study uses an average (“baseline”) year for workload and assumes a fully staffed organization when modeling the fee schedule. He told the committee the original goal was implementation at the start of the fiscal year (July 1) but that the schedule will likely slip; the next fee-study meeting is scheduled for next week and Cunningham estimated the implementation window is now closer to the fall once the business-impact analysis, industry notification and council agenda placement are complete.
During questioning, Member Tatum asked how staff balance short-term market-driven revenue declines against fee adjustments intended to sustain baseline staffing and services. Cunningham said the fee study aims to set fees based on an average workload so the department can afford a full staffing profile if volumes return; in the near term the department is managing by keeping positions vacant rather than enacting layoffs, and it will first reduce consultant spending if necessary.
Cunningham repeated that the department will treat the FY2027 tentative budget as a “deficit budget” and continue withholding discretionary spending until the fee-study outcomes and permit-volume trends provide a clearer picture of sustainable revenues.
The committee did not take a budget adoption vote at this meeting; Cunningham said he will return with updated figures and a fee-study progress report at a future meeting.
