Pikes Peak Regional Building Department’s 2018 budget was approved by Colorado Springs City Council on Tuesday, but not before a lengthy discussion about RBD’s policy of giving extra revenue back to several projects and nonprofits that spent money on building permits in 2016-17.
Councilor Don Knight even proposed an amendment to the budget resolution, that would have required the department to distribute additional money without council approval. That amendment was voted down, 5-4, with Knight, Andy Pico, Jill Gaebler and David Geislinger in the minority. The budget passed by a 7-2 vote, with Knight and Pico dissenting.
The governmental agency is self-supporting, but not allowed to make a profit. A 2016 hail storm resulted in more permits pulled and fees paid to the agency. The extra money, totaling close to $1 million, was dispersed to local nonprofits — the Children’s Hospital of Colorado, El Paso County Parks and Springs Rescue Mission. That decision was approved by the RBD’s 10-person advisory board and three-person building commission, of which City Councilor Tom Strand is a member.
None of the city councilors opposed the department’s proposed budget of $14.5 million — they just didn’t agree with the way the extra funds were handled. They said donating to nonprofits was not part of the department’s mission, and Knight suggested the money could have been given back to developers and builders who purchased the permits.
“We were in a situation where we had excess revenue because of all the permits taken out to fix damage from the huge hail storm, and our commission decided to do some good things with it,” said Regional Building Official Roger Lovell.
He said that RBD lowered new building permit rates by 20 percent in an attempt to get back under the revenue cap dictated by RBD’s intergovernmental agreement with El Paso County, the city of Colorado Springs, Fountain, Manitou Springs, Green Mountain Falls, Monument and Palmer Lake.
But even after changing the payment structure, the department had extra money, and couldn’t keep the cash, Lovell said.
A story written by Pam Zubeck in the Colorado Springs Independent (a sister paper of the Colorado Springs Business Journal) brought to light the donations from the building department.
City Chief of Staff Jeff Greene said that amending the budget — and giving money back to developers — would force it to go back to the Board of El Paso County Commissioners for approval. County commissioners approved RBD’s 2018 budget in November.
Strand, who is on the building department’s board that also includes County Commissioner Mark Waller and Chairman Tyler Stevens, mayor of Green Mountain Falls, said that Knight’s proposed amendment would hold up the budget, force it to go back to the county and put RBD “in a horrible position going into 2018.”
“If we don’t approve [the budget],” Strand said, “[RBD will] have to stop operations in 2018.”
‘RIGHT THING TO DO’
No organization received money that hadn’t paid fees or permit costs during the year, Lovell said. The largest amount ($200,000) went to Springs Rescue Mission, which had a $6.4 million project to expand its facilities. Children’s Hospital got $150,000 back after accumulating fees of $287,000, Lovell said, noting that Children’s contractors did many of the inspections, which saved RBD considerable expense. El Paso County Parks got back $100,000 which Zubeck said was used to purchase Elephant Rock Open Space, a 63-acre parcel near Palmer Lake and the New Santa Fe Regional Trail, and to develop the trap and skeet facility at the Cheyenne Mountain Shooting Complex.
“I’m not trying to grease anybody’s skids,” Waller said. “We all voted for these things. I think it’s the right thing to do with this money, since RBD can’t keep it.”
Knight and Pico argue that the excess money could be given back to builders, developers and homeowners who paid for the permits that created extra funds. Waller, Strand and Lovell say that giving money back to the builders and developers — who they argue have already charged homeowners for those fees — doesn’t guarantee the refund will get back to the homeowner.
“This is quite a complex issue,” Lovell said. “This is revenue generated by people pulling permits, and there was oversight on each donation. We looked at it as a benefit to the community. Springs Rescue Mission and Children’s Hospital make El Paso County a better place to live and do business.”
‘NO WAY TO WIN’
Regional Building’s IGA includes a written policy on how excess funds should be handled (Lovell and his lawyers say that policy was followed) — but that method, Lovell said, will be reviewed again.
“My goal is not to have more people in the approval process, but make sure there is adequate discussion,” said Lovell, who has worked at RBD since 2002. “I’m not ready to go into detail, because I haven’t talked to our lawyers yet, but instead of going to our advisory board and commission once, maybe we go to each of them twice for discussion.”
Strand assured his fellow councilors that if a situation occurs again where RBD has excess funds, it would be handled to the satisfaction of all.
“Our eyes are on this issue now,” he said.
Waller called it a “perfect storm” that created the excess funds, but Knight noted that it could happen again at any time.
Waller said refunding fees to builders — in the hopes it would reach the homeowners’ hands — or cutting fees even more for contractors and developers instead of giving the money back to certain organizations as they did, would have created a different controversy.
“I think Andy Pico said he’s still waiting to get his $6 back,” Waller said. “But I bet he didn’t pull the permit; his contractor did. So, will his contractor give that money back to him? And if we cut fees more, it’ll benefit contractors and developers and people will say we’re in their pocket. Apparently, there was no way to win in this situation.”
Lovell was simply grateful the storm had passed following council’s approval of his 2018 budget.
“I’m pleased the budget passed,” Lovell said just minutes after council’s vote. “It took a lot of work to get to this point.”