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January 14, 2007
Enterprise In The Red
 |
| Some departments of the City of Chico perform
services using "Enterprise
Funds" (see page 12). Fee structures are set up
for the services provided by the City and those fees go into the funds
as revenue. Against
that revenue
City staff bill hours worked and expenses for projects. The desired result is that the fees received from the public balance against the time billed by the City workers. This allows the service provided by the City to pay for itself. This whole process is set up to break even, and profits are not expected. But all is not well in the world of Enterprise Funds. |
| Enterprise Funds associated with private development
and subdivision development are expected to be $5.3 million in the red
in 2007 ($9mil in '08).
That's
up from $2.6 million in the red in 2006. This dramatic increase in debt
is pulling the sum of all of the Enterprise Funds (which include sewer services, parking
revenue, and airport operation) into the red as well. See the fund
balances here. So what's causing the dramatic losses? It's essentially being blamed on the permit and appeals process for construction. When the City Manager talks of streamlining the permit process it's the costly churning of appeals that is driving the need for a new way of "doing business". But it's a difficult problem to solve. The Enterprise fee to file an appeal to construction or development is $200. This price is affordable for most people, and dramatically increasing the cost would make it difficult for the average joe to afford. Increasing the fee would reduce the number of appeals but significantly diminish the voice of neighbors to an unwanted project. One estimate I've heard for the appeals process is that it costs about $12,000 in staff time to complete. Builders pay about $7,000 per home for permits etc (this is in addition to the $11,000 per home development impact fee). So permits and fees already add about $22,000 to the cost of a new home in Chico (based on a 20% profit margin). The losses the City incurs from appeals is not currently paid by the builders, and therefore not incorporated into new home prices. Successfully streamlining this process will eventually come down to two things. The first is to have builders pay more of the bill for appeals. The second is to hear fewer appeals reducing the City staff workload and the cost of "churning" designs through the process. Based on the make-up of the new Planning Commission I doubt the second option will occur without intervention from the City Council. Without some protection from purely obstruction based appeals to construction local builders will be unlikely to embrace paying more into the Enterprise fund. Mr. Jones has his work cut out for him. |
Posted by Lon at January 14, 2007 12:00 AM
Comments
Science Officer Jones: "Sensors indicate the hull temperature is approaching critical."
Kirk: "It doesn't matter. I'm not part of the crew anymore"
Mr. Scott: "But Capn'! If we continue to expend energy like this it'll blow fer sure!"
Yeoman Flynn: "It needs more positive energy!"
Dr. McBertagna: "Dammit Flynn, I'm a city councilor, not an engineer!"
Ensign Schwabb: "I wasn't aware of anything. Everything is fine, there is nothing wrong."
Lt. Holcombe" "We should convert the escape pods to evacuate the homeless members of the crew first."
General Wahl (from Starfleet): "I told you if you all keep carrying on like this there will be a tear in the fabric of monetary space-time that will collapse our localized universe. Turn back now while you can.
Posted by: Anthony Watts at January 15, 2007 08:11 PM
Very funny,
I'll have to post the video of the Democratic congressman who used a Star Trek analogy to describe the Bush administration and I think the war in Iraq.
On a side note, could you begin reporting some warmer weather soon?
Lon
Posted by: Lon at January 16, 2007 08:35 AM
I could begin reporting it (warmer weather), but then it wouldn't be true.
Patience, 'global warming' will certainly overcome this cold snap.
Posted by: Anthony Watts at January 16, 2007 09:19 AM