Audit questions higher fees for Richmond construction permits

RICHMOND, Va. -- A 15.5 percent increase in Richmond's construction permit fees may have been unnecessary, and it has failed to produce the promised improvements in inspection services, according to the city auditor.

Backed by 32 development professionals and then-Mayor L. Douglas Wilder, the City Council raised the fees in 2007 so the city could hire 10 inspectors and related staff to make the operation more efficient.

However, City Auditor Umesh V. Dalal said in a report late last week that only six inspectors and drafting technicians, plus a part-time computer analyst, were hired, and that three of the positions later were vacated or eliminated.

He said the justification for the increase also isn't clear because the city had been collecting an average of $1.5 million more than it was spending on the Department of Community Development's Construction Permits and Inspections Division. Any excess funds go to the city's general fund. The report identified $4.4 million in excess revenue during a three-year period.

"This would indicate that the city had the ability to hire additional staff to improve the timeliness of issuing permits and inspections without increasing fees," Dalal wrote.

The report is recommending that administration officials review the city's costs to issue permits and conduct inspections, and to adjust its fees accordingly.

Mayor Dwight C. Jones' administration had no comment but said in its response to Dalal that the costs would be reviewed and a fee adjustment would be offered if there's a gap between the permits division's revenues and operating expenses.

Jane Allman, who until recently secured city permits for Monument Construction, said Richmond's processes have improved in recent years and that snags during permit review are sometimes caused by applicants or their engineers who fail to submit complete plans.

"Once the city gets what it asks for, it's a pretty darn quick turnaround," she said.

Dalal's office also found that the expense per permit increased to $293 from $237 -- 24 percent -- from fiscal 2006-2007 to fiscal 2007-2008. At the same time, the number of permits fell to 14,273 from 14,694 -- 3 percent.

The report also noted that the division lacks an updated manual on policies and procedures, as well as a modern, efficient computer system. The division also does not formally monitor individual employee productivity, and it does not have a program to review the quality of employees' work.

In a separate report, the auditor's office recommended improvements to the system that handles payroll for about 5,000 city employees.

The report found that though employees generally are paid in a timely and accurate manner, the system is antiquated, forcing some payroll data for hourly employees to be based on estimates rather than actual time worked. Auditors also questioned the value of the city continuing to pay a vendor about $195,000 annually to maintain its payroll computer system.

Contact Will Jones at (804) 649-6911 or .