Slowdown in building brings sharp drop in fees for the town

Written by Joan Lownds
Wednesday, 04 November 2009 14:23

Signs of economic storm clouds may be brewing over next year’s budget, if the sharp drop in building continues along with the associated revenue from town permit fees generated by construction activity.

Sandy Dennies, the town’s chief financial officer, told the Board of Selectmen Monday that licenses, permits and building inspectors’ fees for the town are down $1.5 million in revenue this year from the same time last year.

“If there is no change, we’ll have an issue this year,” Ms. Dennies said.

The town has only accumulated $74,000 in building permit revenue this year, she said.

Low numbers from building permits also mean less funds from such things as fire inspection fees, worsening the problem.

“Of all the numbers, I’m most concerned with licenses and fees, because you could easily be $1 million over on your forecast,” Ms. Dennies said.

Last year, the town collected approximately $1.8 million in licenses, permits and fees, out of total town revenue of almost $102 million, with the largest chunk coming from property taxes, amounting to more than $95 million.

In April, the Board of Finance adopted a town budget for 2009-10 which estimated more than $1.3 million in revenue from licenses, permits and fees, but Ms. Dennies said the drop in actual collections may be much more precipitous. Similarly to 2008-09, the largest portion of revenue for 2010 is expected to come from $97 million in property taxes. The total revenue is estimated to be almost $103 million.

The decrease in funds from licenses and fees “means folks are doing simple renovations as opposed to building the new wing on the house. The number of housing starts are down as well,” Ms. Dennies told the Bulletin.

The volatility of the market has created a climate of unpredictability, she said. “When you put together a budget in late fall for the fiscal year beginning the following July, in this time of inconceivable market turns, you really need to have a good crystal ball.”

Ms. Dennies also said revenue from parking tickets has declined. “We had a budget number of $5,000 and we have only realized $700 of that through the end of October. Even the police chief thought that that was a significant change when we spoke about his operating budget last month,” she told The Bulletin.

“I’m very concerned about this year’s budget,” said First Selectman William Brennan at Monday’s meeting. “It’s going to be a tough row to hoe. We’re continuing to meet with Sandy and trying to keep ahead of schedule.”

One strategy the town is considering is streamlining costs through tighter coordination of town departments, Mr. Brennan said. The plan was discussed at the recent tri-board meeting of the Board of Selectmen, the Board of Finance and the Board of Education.

The tri-board meetings first began in the spring to “recognize increasing economic stress in our community to discuss how the town could actively address a possible severe economic downturn,” Mr. Brennan.

At the most recent tri-board meeting last month, a “townwide purchasing function” was considered, which would centralize and consolidate purchasing for all departments, Mr. Brennan said. The tri-board and town officials have met with representatives of the National Executive Service Corps (NESC) to work on the plan, Mr. Brennan said.

A similar proposal would be to consolidate payrolls, which could lead to further savings, he said. “This might not have much effect on this year’s budget, but it could have long-term effects,” he said. “We’re getting it organized.”

NESC is a New York-based non-profit that helps organizations in New York, Connecticut and New Jersey “solve their managerial and operational problems, operate more efficiently and seize strategic opportunities that can spur their growth,” according to the NESC Web site.

NESC has urged the town to share services among town departments such as the Board of Selectmen and the Board of Education, and thereby save costs.

Municipal services are basic services including sanitation, water, energy, building maintenance, transportation, and health department issues such as food inspections.