As Deschutes County CDD makes up for projected $1.4 million shortfall, expect to pay more for most permits
(Update: Adding video, comments from CDD Director)
BEND, Ore. (KTVZ) – Deschutes County’s Community Development Department, funded mostly by planning and building permit fees, has eliminated 14 positions over the last 15 months and is proposing to cut eight more open positions in the coming fiscal year amid a slowdown in land use applications, cost increases and other factors.
"For the last two years, we've seen some decline in that activity. Our staffing needs to match that permit volume," CDD Director Peter Gutowsky said Tuesday.
"We'll continue to monitor our budget and the development activity month to month, year to year, and have the types of conversations that we had with the Board of County Commissioners as we think about budgets going forward," he added.
At Monday's commissioner work session, Commissioner Tony DeBone said he favored the department's second of three balanced-budget options, that would see a 16% increase in fees for most permits.
The new staff reductions - planned by eliminating unfilled positions and no further layoffs - would leave 50 FTE (full-time equivalent) employees with CDD, whose programs include land-use planning, regulation of onsite wastewater (septic) systems, building safety and code enforcement, Gutowsky and Senior Management Analyst Sherri Pinner noted in a fiscal year 2025 memo discussed with county commissioners Monday afternoon.
During the discussion, CDD proposed to retain current service levels in the 2025 fiscal year, using a combination of fee increases and reserve funds.
“For the current fiscal year, the department is experiencing permitting volume decreases of 1% to 30%, with revenue projected to be $2.3M less than anticipated,” the memo said. “CDD is maintaining its level of service, albeit with layoffs, reduced lobbying hours and fewer staff. Unlike years past, permit volumes are no longer compensating for modest fee increases."
“Going forward, cost of living increases in Central Oregon, inflation and interest rate hikes may temper higher permit volumes that Deschutes County experienced (excluding the Great Recession) from 2000 to 2021,” it stated.
Three budget-balancing options were outlined, each involving fee increases, such as the cost of a dwelling permit rising about 10% to 13.6%, but also using some reserve funds. That would mean the permit fee for a 2,700-square-foot home would rise from the current $8,996 to nearly or over $10,000.
In each case, Gutowsky noted that “budgeted expenditures are an estimated $1.4M more than budgeted revenues.”
“Strategies to balance include a combination of requested fee increases, reserve fund transfers, general funds and transient room tax request,” the presentation said.
In a footnote, Gutowsky pointed out that “Deschutes County is experiencing one of the highest cost of living increases in Oregon, impacting recruiting and retention efforts.”
Seeking commissioners’ input and direction, Gutowsky said, “While CDD’s budget is not vulnerable immediately, it is quite possible in the next five years that the department’s reserve funds, especially Fund 300, will not cover revenue deficiencies.”
“The Board should begin thinking about future service levels it wants CDD to provide for the community, especially if reserve funds diminish significantly,” the memo says. “If the expectation is to maintain current levels of service, higher fee increases and/or general fund contributions may be necessary.”
