Central’s Permit Process- Understanding the Money

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By Dave Freneaux

In 2008 the City of Central signed a three year privatization agreement with CH2M HILL to manage, on a contract basis, the provision of “City Services” and the operation of Central’s Permit Office.  This decision has been lauded as visionary and has been looked to by many outside of Central as a model for the future.  Whether CH2M HILL is awarded the contract in 2011 is not a topic for this article.  It is, however, important to understand the role of ANY company who would operate this agreement, now, or in the future.

Our agreement for permitting is a 10%-10%-80% formula.   For every $100 dollars paid by an individual or business in Central for a permit, 10% is remitted to the City of Central as income, 10% is retained by by the private company operating the permit office, and 80% is paid to Safebuilt, a national company who actually does all of the physical work of the permit process, including plan review and site visits to ensure compliance.  As an example, this fiscal year's budget calls for $335,000 to be received for business and residential permits in Central, the distribution of the funds would be as follows.

$33,500 to the City of Central, which is received as revenue for the City.

$33,500 to CH2M HILL, out of which they must provide a permit clerk’s salary along with insurance and benefits, an office open to the public to house the permit process, including computer, telephone, internet access, etc, and general liability insurance.

$286,000 to Safebuilt, out of which they employ an Inspection Official and a Building Inspector with all related insurance and benefits, two vehicles with insurance, fuel and repairs, liability insurance, and office overhead such as computers and communication.

Whether any or all of these funds are well spent is open for debate, but it is important when discussing permit fees that we understand who all of the parties are and how much of the total revenue is realized by each party.