PDS Council, Management Board back task force recommendations

At its November 17th meeting, PDS Management Board members approved a recommendation regarding infrastructure inspection fees. This action ended a months-long effort by staff to analyze costs and expenses for the program and recommend a funding strategy that would provide 90 percent cost recovery for the inspection service moving forward.

“Earlier this year Kenton County elected officials serving on the PDS Council challenged staff to complete an analysis of the financial condition of the infrastructure inspection program, and to determine whether the fees paid by developers were coving the cost to perform those inspections”, said Scott Hiles, CPC, Director of Infrastructure Engineering at PDS.

“When inspection fees don’t cover the cost of performing the inspections, the deficit is covered by taxpayer dollars, which is why it’s important that we perform the analysis. We began by forming a task force of elected officials and representatives of the Home Builders Association.”

The task force met for three months, focusing on fee and expense data that spanned a 16-year period. Members determined that at the end of FY16, there was approximately enough money left in the program fund to cover the cost of the inspections left to be performed.

“That showed that based on the 16 years of data we studied, the program was just about where it needed to be at that time,” said Hiles.

Components of the recommendation that PDS Council endorsed and the Management Board members approved included the following:

1.    Leave current inspection fees unchanged through the end of FY17.
2.    Increase inspection fees annually in an amount equal to the Metro Cincinnati CPI-U beginning with FY18.
3.    Analyze staff’s project-by-project data for FY15, 16, and 17 to determine if fees charged are covering roughly 90 percent of costs associated with providing the services. Assure that the costs of inspections to be provided in the future are included in this analysis.

“The annual adjustment of fees referenced in recommendation #2 will help the program fund stay current with the cost of living,” said Hiles. “We’ve never done this before which resulted in actions that no one liked—not staff and not developers.”

“This not only caused the fund to fall behind our targeted cost recovery, but also forced us to propose higher-than-normal fee increase periodically to catch up to where we needed to be. This incremental adjustment should eliminate this in the future.”

Staff began collecting fee and expense data on a project-by-project basis in FY15, rather than just aggregate totals for the year.

“Beginning in FY18, staff will begin analyzing cost recovery using the project-by-project data”, said Hiles. “It’s another useful tool that will help us assure that fees are covering costs.”