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Recent hail storms likely to boost Regional Building Department's already swollen reserves

Their cup runneth over

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Hail storms could send more cash to Regional Building’s coffers. - J. ADRIAN STANLEY
  • J. Adrian Stanley
  • Hail storms could send more cash to Regional Building’s coffers.
Nine months after Pikes Peak Regional Building Department officials — outed by the Independent for giving surplus money to charity — vowed to adopt a donations policy, no guidelines exist. But building commissioners have started drafting a plan on how they could dole out money from RBD’s burgeoning reserve fund, the product of fees charged for construction oversight (from new roofs to big box stores) in a boom time for new construction and hail repairs.

RBD had no policy governing gifts as it doled out nearly $1 million to various local causes in 2016 and 2017. This year, the agency has made no donations (it turned away one request), and has watched the reserve mount to $10.3 million, or 71 percent of its annual budget, despite an intergovernmental agreement (IGA) restriction that the fund contain “no less than 25 percent, nor more than 50 percent of the annual budget.” (And that $10.3 million reserve doesn’t include $3.1 million paid to RBD by Nor’wood Development Group last year for downtown land for which RBD, so far, has no specific spending plan.) To whittle that down, commissioners recently slashed fees by 25 percent across the board for the rest of the year and will hire more inspectors to handle work stemming from explosive growth in both residential and commercial construction activity that has put 2018 on pace to be the busiest since the 2008 recession.

And that doesn’t include construction resulting from whatever damage has been dealt by severe hail storms this summer. That’s important because the extraordinary hail event of July 2016, which resulted in more than 50,000 permits issued for repairs to windows, roofs and siding, helped drive RBD’s reserve sky-high.

“Unfortunately,” deputy building official Jay Eenhuis tells the Indy via email, “we do not know the true impact of these latest storms at this time. It can take up to 120 days after a storm to make a well-educated prediction.”

It’s unclear when a new donations policy will be adopted, considering a draft was just presented to the board on July 25.

“We’re trying to do the right thing,” says RBD commission member and El Paso County Commissioner Mark Waller. But he notes that it’s impossible to predict impacts of storms, which cause coffers to swell, or know for sure when a downturn will undercut the construction industry, which could force the agency to tap its reserves.

The RBD, a government entity that safeguards life and property through building codes, inspections and licensing, covers Colorado Springs, Fountain, Manitou Springs, Green Mountain Falls, Monument, Palmer Lake and El Paso County.
At issue are donations RBD made in 2016 and 2017 totaling $912,830, despite the IGA saying the agency shall not make a profit and shall establish fees to support itself, adjusting them as needed. RBD gifts included Springs Rescue Mission ($200,000), Colorado Springs Chamber of Commerce and EDC ($70,000) and Council of Neighbors and Organizations ($16,600), among others. It also waived $150,000 in permit and inspection fees for the new Children’s Hospital.

Ordinarily, however, if revenues surged, RBD fees were lowered to diminish excess cash. When RBD’s reserve exceeded 50 percent of budget in 2016 and 2017, for instance, RBD cut fees by 20 percent from April 1 to Dec. 31, 2017, which ate up $1.3 million, and it sacrificed about $250,000 last year by giving discounts for license renewals to contractors who remained in good standing for three consecutive years.

Asked about RBD donations in October, Colorado Springs City Councilor Tom Strand, a commission member who voted for the Children’s Hospital waiver in August 2017, told the Independent, “How did we get so involved with charitable kinds of things? I’m going to look into it, I promise you that. There shouldn’t be any extra [revenue for donations].”

During a Nov. 27 City Council meeting where RBD’s budget was discussed, several Council members grilled RBD building official Roger Lovell, including Don Knight, saying, “What gives the right for the board to spend money that was not specifically identified in the budget [for donations]?”

But three months later, Knight urged RBD to waive fees for the Flying W Ranch, a Western-themed tourist attraction that lies in Knight’s district and was destroyed in the 2012 Waldo Canyon Fire. After Knight learned owners of 347 homes destroyed by the fire received no such waivers, he asked if RBD had another program that could help Flying W with the fee, such as an economic development fund. Today, though, Knight tells the Indy he stands by his previous stance that no government entity should support charities with public money.

After Mayor John Suthers’ Chief of Staff Jeff Greene also championed the Flying W request, Strand made a motion on March 28 to grant the fee waiver, but it failed for lack of a second from either Waller or RBD’s third commissioner, Green Mountain Falls Trustee Tyler Stevens.

Strand says he backed the request because Greene and Knight supported it, adding, “I just love the Flying W. They’re historic.”

Waller says he opposed the waiver because Flying W is a profit-making venture and the commission lacks a donations policy, which he says should involve input from all seven RBD partners. “This is about making sure everyone is singing from the same sheet of music,” he says. “I’m not signing off on anything until member governments weigh in.”

RBD refused to release the draft policy, but Waller and Strand report it would restrict donations to only nonprofits and require requests be related to the building industry in a way as yet undefined.

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