Feeling the pain: Nevada County sees job cuts, dip in building permits | SierraSun.com

Feeling the pain: Nevada County sees job cuts, dip in building permits

Lower revenue from a weak building market, a disappearance in permits for “spec homes” and state restrictions have resulted in the loss of 11 jobs at the county this month, officials said.

Though some county workers who lost their jobs are expected to be placed in other departments, it was a grim reminder of a real estate market clobbered by a lending crisis elsewhere in the state and a sluggish economy nationwide.

“Nobody has a crystal ball,” said Brian Washko, director of the county’s building department.

The decline of the real estate market nationwide has impacted the nation’s economy. Last week, the Federal Reserve announced another round of interest rate cuts in an attempt to head off a recession.

Some residents argue the county could have been more proactive – having seen the falloff coming, as well as well as being more cautious about granting raises to workers and managers last year. Nonunion workers, not just union ones, received raises.

In Nevada City last week, mayor Sally Harris called for a review of raises among city workers and managers to avoid her concern of laying off people shortly after raises were granted – worrying about a short-sighted policy.

The total number of building permits issued so far in 2007-2008 is slightly lower then last year, but when compared with two years ago, some months show a noticeably deeper divide.

In September 2005, 408 building permits were issued compared to only 267 during the same month last year.

Other months show less fluctuation, because a growing number of permits for remodels offset losses in building of new homes, said Steve DeCamp, agency director for the county’s community development agency, that oversees the building department.

But even remodels have dropped off, DeCamp said.

“At a certain point people run out of fixing what they were going to,” DeCamp said.

Developers who build “spec homes” have all but disappeared – representing half of all the new homes built in the county a few years ago.

“It’s gone,” DeCamp said. “Nobody’s got money they are willing to gamble with.”

In December, builders scrambled to buy 48 permits for single family homes before a new set of building requirements set by the State Fire Marshall went into effect at the start of the year, Washko said.

Since then, only one new building permit has been issued, he said.

Builders can sit on a permit upwards of a year before they are required to build, DeCamp said.

The department compounded its financial woes when it exhausted its savings, or Fund Balance. Section 17951 of the State and Health Safety Code restricts county building departments to charge no more than the cost to operate, DeCamp said.

In 2006-2007, the building department used $400,000 from its fund balance and $300,00 for this year.

“It’s essentially gone, but its not like we squandered it,” DeCamp said explaining that the department used the money to pay for fuel, heating and salaries.

The state guidelines that prevent building departments from making a profit in the robust years, also make it difficult to start over after a lean period because many of the trained staff have been let go and recruiting qualified staff is expensive, DeCamp said.

“We run the risk of being behind the curve,” he said.

DeCamp estimates a recovery won’t be any time soon and could come as late as 2010.

2005/2006 – 2006/2007 – 2007/2008

July 266 – 240 – 257

Aug. 379 – 300 – 278

Sept. 408 – 285 – 267

Oct. 256 – 295 – 279

Nov. 231 – 207 – 214

Dec. 160 – 162 – 154

* Includes all permits issued by the building department, from residential reroofs to new commercial buildings.

Building permit revenue by fiscal year

2003/2004 – $1,720,846

2004/2005 – $1,819,789

2005/2006 – $2,089,012

2006/2007 – $1,540,609

2007/2008 – $1,540,812 (Projected revenue)

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