Minnesota electrical contractors still smarting ... - Finance & Commerce

Posted: 7:30 am Mon, December 5, 2011
By ?BRIAN JOHNSON
Tags: Dave Carlberg, electrical inspectors, James Honerman, John Ploetz, Lowell Bradbury

An electrical switch gear inspection at the University of Minnesota. (F&C file photo)

Last July?s state government shutdown is having a lingering effect on electrical inspections, creating challenges for contractors and costing the state?s Department of Labor and Industry an estimated $700,000 in annual inspection fee revenue.

The shutdown temporarily halted electrical inspections normally done by the state, prompting dozens of municipalities to take on those responsibilities within their jurisdiction.

After the shutdown ended, about two dozen cities chose to continue their own electrical inspections instead of turning those duties back over to the state.

While at least one such city says the change has worked well, industry advocates say the situation has been a headache for electrical contractors who now have to navigate multiple jurisdictions and cope with less consistency in the inspection and permitting process.

?Instead of dealing just with the state to do permits and schedule permit inspections, they may have to deal with six to eight different entities,? said John Ploetz, member services director for the Minnesota Electrical Association.

Unlike the state, some municipalities require a trip to the city desk to fill out paperwork, which is time-consuming, he said.

Another issue: The state offers consistency in inspections, and there is a ?built-in process? to get things resolved if a concern arises, he said. But at the city level, if you disagree with an inspector?s interpretation, ?you are stuck with that.?

Before the shutdown, 53 municipalities, including the University of Minnesota and the state fairgrounds, handled their own electrical inspections, and another 56 cities adopted electrical inspection ordinances during the shutdown, said James Honerman, communications director for the Minnesota Department of Labor and Industry.

Twenty-five of those 56 cities adopted permanent electrical inspection ordinances post-shutdown, for a current tally of 78 municipalities.

This adds up to about 10,000 fewer electrical permits issued by the state annually, a projected fee loss of $700,000, Honerman said.

Overall, the department is looking at about a 10 percent reduction in both permit counts and inspection fee revenue, he noted.

The contractors? concerns and the budgetary impact to the department are yet another aftershock from the 20-day state government shutdown, which stemmed from a budget impasse between the governor and legislative leaders.

Minnesota Management & Budget recently released a report that said the state spent about $10 million in ?preparation and recovery? costs, lost $49.7 million in ?unrecoverable revenue? and saved $65 million in payroll because of the shutdown.

But the report did not include other expected costs, including the contractor claims resulting from the disruption of approximately 100 road construction projects ? and the loss of inspection fee revenue.

Lowell Bradbury, a contract electrical inspector in Vergas, Minn., and a board member of the Contract Electrical Inspectors Association of Minnesota, sympathizes with the contractors? concerns.

?Every time you have more entities doing the inspections, you are going to have more inconsistency for the contractors,? he said. ?They [municipalities] all have their own fee schedules. There is a lot better continuity if they would all stay with the state. They have one form to fill out,? which can be done online.

Bradbury said the cities? defection puts ?another financial burden? on the Department of Labor and Industry, which is already dealing with budgetary challenges.

Every year since 2007, as previously reported by Finance & Commerce, about $1.5 million in building permit fees that are supposed to pay for electrical inspections has been diverted to the general fund.

Those transfers ? and reduced permit-fee revenue due to the lack of construction in a soft economy ? have resulted in an overall reduction in revenue streams to the Department of Labor and Industry.

With the funding situation at the state level, more municipalities will be ?going on their own,? Bradbury predicted.

Andover is one of the cities that opted to keep doing its own inspections. The city has received ?very favorable? comments so far, said Dave Carlberg, the city?s community development director.

The city hopes to at least break even with the process but does not see inspections as a revenue generator, he said.

Andover could amend its ordinance and go back to state inspections if it chose to do so, but the city plans to continue with the current process ? at least for now ? because of the positive response, Carlberg said.

Applicants can fill out their paperwork in person or mail it to the city, and those applications are turned around in short order, Carlberg said.

?They are getting their inspection within a day or two of making the application,? he said. ?We have heard nothing but positive comments about the turnaround time. ? No complaints that I am aware of.?

This entry was posted on Monday, December 5th, 2011 at 7:30 am and is filed under Construction & Development, Energy, Top Story. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Source: http://finance-commerce.com/2011/12/minnesota-electrical-contractors-still-smarting-from-shutdown/

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