Cash-strapped city considers raising building fees

Las Vegas officials have proposed dramatic increases in building fees to make up revenue that has been lost because of the economic downturn and the lack of new building activity.

The proposed ordinance calls for an increase of 65 percent to 70 percent in the fees for plan checks, building permits and inspections. Those fees pay for the work of the Building and Safety Department.

While the city says construction trade groups are reluctantly on board, at least one entity is sharply critical, saying "bloated" salaries should be cut before fees are increased.

Building permit activity is one-third of what it was in 2004 and the Building and Safety Department has adjusted by shedding staff, paring a 124-person staff to 49 employees.

Further staff cuts are "impossible" if the city wants to continue providing adequate services, Chris Knight, the building department's director, said at a recent hearing to discuss the ordinance. Without a fee increase, however, more cuts would be necessary, he added.

The increases would not be imposed all at once.

"Since the existing economy cannot support that drastic an increase, the proposal is an incremental increase over several years, with an immediate initial 25 percent increase," according to a city summary of the ordinance.

That would add $1.5 million to the department's revenues, increasing them to almost $7.8 million.

In addition to the initial hike, the proposal calls for a 15 percent increase in 2012 and a 10 percent increase in 2013.

"Should the economy improve so that the future increases are not necessary, the (building department) would bring forward a bill to eliminate the pertinent increase," the summary states.

There are costs the city should eliminate before raising fees, according to the National Association of Industrial Office Properties' Southern Nevada Chapter.

The organization declined an invitation to comment for this story. But remarks submitted to the city blasted Las Vegas for maintaining salaries and raises that "are much higher than any other municipality for the same position."

"Fee increases are being proposed to offset increases to already bloated (salaries), but not to increase service delivery to the development and business community," the written remarks state.

According to the association, the city needs to institute minimum turnaround times for certain applications and ensure that building inspections occur within one day. And, if salaries can't be adjusted, the building department's functions should be contracted to a private entity that can be required to work faster and more cheaply.

Department employees, like most city workers, are covered by a collective bargaining agreement that governs pay, benefits, raises and other personnel issues. Employees must agree to renegotiate those agreements once they're in place; the city cannot change them unilaterally.

Las Vegas tried to negotiate salary cuts with employee groups earlier this year, with mixed results.

The Las Vegas City Employees Association, which includes building department workers, could not reach an agreement with the city.

A City Council subcommittee is scheduled to consider the fee increases today. The proposal is also on Wednesday's council agenda as an item that's ready for final passage.