Housing market troubles lead to Hillsborough layoffs
By BILL VARIAN
Published April 21, 2007
TAMPA -- The ripple effect of Florida's collapsing housing market has reached the halls and cubicles of government, with Hillsborough County pondering layoffs for some employees who oversee new construction.
County officials are looking at other options as well, such as shutting down their building services division once every two weeks, forcing employees to take an unpaid day off.
And they also will ask commissioners May 2 whether to increase fees charged to builders and other contractors to review and inspect their work.
The county pays its Building Services Division employees largely through those fees.
Through February, building permit fees collected this fiscal year are down 26 percent compared to the same period a year ago, despite a robust commercial construction market.
And they are expected to fall by 34 percent by year's end.
Because of that, the pool of money that pays for those employees and other division costs is projected to end up with a nearly $7-million deficit. The hit will largely deplete reserves that help cover costs when the market fluctuates.
With the residential market declining, building officials had expected to tap their reserves this year -- to the tune of $3-million -- but the drop in permit requests has been more severe than they projected.
"This is an industry that goes through cycles," said Deputy County Administrator Wally Hill. "Several years ago, we had a great run-up in activity. Now we're slumping."
County government only oversees construction in unincorporated areas beyond city limits. Just a few years ago, prospective home buyers were waiting in lines and participating in lotteries for the right to bid on lots in those rising new neighborhoods.
No more. And other once bustling bedroom areas, including Pasco County, are reporting similar slow-downs.
In response, Hillsborough's Building Services Division has already imposed a hiring freeze. And Hill said supervisors are being told not to authorize any overtime work.
Department supervisors told employees this week that they were likely to opt with closing offices every other Friday, but Hill said, "that decision has not been made."
But news of a possible periodic shutdown of Building Services' offices, and even layoffs, spread quickly through the local construction industry late this week, to poor reviews.
Many contractors already complain that it takes too long to have their plans assessed, and that drives up costs.
"I heard about it this morning and my jaw hit the floor," said John Hermes, a partner and project manager with the Perry Co., based in Ybor City, that is the general contractor for a new Bright House Networks office building for which he's awaiting permits. "I have a $15-million building to get started. Tell me how much a plans examiner makes an hour and I'll pay it."
Todd Scime, owner of Scime (pronounced See-me) for Permits, a company that helps people navigate the review process, called the prospective cutbacks "a disgrace." He learned of the possibilities this week, then dropped into a commission meeting to voice his objections.
"You haven't done anything about high taxes on people and residential insurance (costs), and now you're going to crush your own citizens again by closing the building department, and you're going to hurt your employees?" he told a reporter later.
Representatives of the Tampa Bay Builders Association have been meeting with county officials periodically for more than a year, seeking to speed up the review process. Jennifer Motsinger, director of governmental affairs for the industry trade group, said the county had been making progress.
But she said there is still room for improvement, and worried that cutbacks would erode the progress, either through a loss of people reviewing construction plans, or from the poor morale of those who have to pick up the slack.
"We're just now getting to the point where we're looking at the fees and how they are structured, so that this kind of stuff doesn't happen just because of a blip in the market," Motsinger said. "I don't want to take one step forward and two steps back."
Hill, the deputy county administrator, said all options are being evaluated, and a detailed analysis will be presented to commissioners. But he said that cutting back staff or their work hours won't fully make up the projected deficit by the end of the fiscal year.
Staff writer Bill Varian can be reached at (813) 226-3387 or varian@sptimes.com.
FAST FACTS: CONSTRUCTION PERMITS
Single-family home construction permits issued in unincorporated Hillsborough County, by fiscal year (Oct.-Sept).
2004: 8,655
2005: 10,920
2006: 7,133
2007: (Year-to-date, October 2006-March 2007) 1,602
Commercial permits
2004: 518
2005: 506
2006: 549
2007: (Year-to-date, October 2006-March 2007) 275