A sharp decline in construction activity in Spokane has caused the loss of nine city jobs.
The cuts announced Monday are the first layoffs at City Hall as a result of the economic downtown. Mayor Mary Verner and the City Council have relied on new utility tax revenue to prevent cuts and job losses. But an increase in utility taxes doesn’t help pay for jobs such as building inspectors, which are funded by permit and inspection fees.
In the last six months of 2008, the city issued only 75 permits for new homes. That’s down from 136 over the same period in 2007.
The city’s announcement comes about eight months after Spokane County began downsizing its building and planning department as a result of declining permits.
“Everybody held their breath and hoped they wouldn’t be in the same position,” said Joe Cavanaugh, president of Local 270, which represents most of the city employees who lost their jobs. “It’s hard to argue with the numbers.”
Spokane’s 2009 budget estimated collecting $4.1 million for its building services fund. Monday’s job cuts will enable the city to trim about $500,000 in spending, said Gavin Cooley, Spokane’s chief financial officer.
“We saw our revenue decline but hoped that we would stabilize,” Verner said. “As it continued to decline, and decline more and more drastically, we didn’t want to wait.”
Joel White, executive officer of the Spokane Home Builders Association, said much of the decline in construction has been caused by severe real estate downturns in California and elsewhere. Many of the people from out of state who would otherwise be moving to Spokane are stuck with homes they can’t sell.
“Right now, our members are definitely feeling the pinch,” White said. “A lot of people are on the sidelines.”
White added, however, that he believes the region will have an easier time recovering than many areas.
“We didn’t really overbuild,” he said.
Cavanaugh said exactly which employees will be without work is unclear while officials sort out civil service and union contract rules. The cut positions include four building inspectors, two clerks, a deputy building official, a plan reviewer and a part-time accounting position.
Verner said she and Economic Development Director Theresa Sanders met with the employees at a meeting Monday morning.
The laid-off workers may be eligible for other openings at City Hall that aren’t funded by building fees. Verner said that there is a freeze on the creation of jobs but that jobs that open as employees retire or quit are being filled.
“It certainly wasn’t a great way to start the week,” Verner said. “We felt that this had to be done as a smart business practice to make sure that we’re responding to a decline in revenue.”