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Staff cuts at county follow housing woes

About 30 building department employees could lose their jobs or be reassigned because of a decline in permit applications.

By Jeff Switzer and David Chircop
Herald Writers

Snohomish County could lay off or reassign dozens of employees from its building department after a "huge loss in revenue" and a sharp drop in the number of building permits being issued.

About 30 employees could find out Friday whether they will lose their jobs or be reassigned, said Craig Ladiser, county director of Planning and Development Services. Another 20 positions that are already vacant will be eliminated.

The proposed cuts amount to about one-quarter of the department's 197 positions. The cuts will cover the bulk of a $4.4 million shortfall projected this year. The drop in revenue is huge and forced quick action, Ladiser said.

"Making this move, it's the right move for us," Ladiser said. "It's hard and very scary for staff."

Many of the employees could be reassigned to the Public Works Department to take the place of outside consultants. If layoffs are needed, workers would be cut from the county payroll June 30. What happens in the building industry between now and then might prevent any possible layoffs, Ladiser said.

"I'm hoping that between Friday and June 30, I can find solutions for everybody," Ladiser said.

The county expected building permit revenue to fall off this year, but not by as much as it did. Officials budgeted $26.3 million in revenue from fees for 2008, about an 11 percent drop compared with 2007, or about $3 million.

News from the building industry worsened this year and projections for the number of permit applications plummeted. The county expects to process about half the number of housing permits as it did during its peak in 2005.

That means fewer fees that pay salaries in the county's building department.

Ladiser started making cuts. He cut $1.6 million in discretionary spending and temporary employees from his budget in the face of the drop in revenue.

"All that's left is people," Ladiser said. The salaries for 50 positions for the second half of the year adds up to $2.8 million, Ladiser said.

The department still is processing building and land-use permit applications from the tail end of the county's building boom last fall.

"Who would have thought with all these (building) lots out there and an interest rate down at 5.5 percent that would have dropped that far," Ladiser said. The county doesn't expect the housing market "to come roaring back this year.

The planning department and the Public Works Department have been working closely to come up with a plan for the affected workers.

About 25 of the 30 employees, including biologists, engineers and planners, might be shifted to design and review work on county road and surface water projects, said Steve Thomsen, director of the county's Public Works Department.

Those workers would keep their desks and take the place of outside consultants the county would otherwise have to hire for individual road projects, Thomsen said.

"We've got a lot of work and, all of a sudden, I've got a pool of trained staff who can start working immediately," Thomsen said. "That's great."

The county has an aggressive road-and-sidewalk construction plan this year, Thomsen said. About $66 million in work is planned, an increase from last year's $48 million.

Thomsen's department typically relies on outside consultants to design and review about one-third of the county's road projects or up to $10 million. Reassigning workers means time and money saved on negotiating and paying a slice of those contracts, he said.

The move also banks workers and their skills until the market turns around, Thomsen said.

"Not only does it reduce costs, it protects people's jobs," Ladiser said.

Ladiser and Thomsen are working with union officials on a labor agreement regarding the fate of the jobs. Seniority affects those who face possible layoffs.

Union officials "realize that everyone could be on a layoff register if it wasn't for the opportunity for Public Works and PDS to partner up on this," Thomsen said.

County managers could have handed out walking papers without accommodating employees, said James Trefry with Washington State Council of County and City Employees, the union that represents planning department employees.

"Anytime management is talking about budget cuts, people are obviously sensitive and concerned for their jobs," Trefry said. "But at the same time, we're optimistic that we'll avoid as many layoffs as possible by working with management in an innovative way."

Union members will meet again today with county managers.

It is not clear yet how many employees will reassigned, how long they will work on other projects and whether they'll keep their seniority, pay scale and current benefits, Trefry said. More details are expected to be released Friday.

The last layoffs in the county were in the planning department in 2003 after the economy sank in 2002. Like now, permit fees dropped. The county cut 19 positions, seven of which were vacant.

At the time, all but a handful of workers were transferred to other county jobs, human resources director Bridget Clawson said.

The building industry's surges and cycles never match the county's annual budgeting process, which means the county is always trying to catch up or cut back the number of county workers to match the number of permits applied for, Ladiser said.

Home sales are continuing in the south parts of the county, but not in the north, Ladiser said.

Snohomish County always has been dependent on house construction as part of its economy, Ladiser said. That may shift to multifamily housing in the future as the county continues to urbanize, he said.

It might take the county longer to process permits once any cuts or reassignments take place, Ladiser said.

A pending permit fee increase scheduled to go into effect in coming months will help bolster the department's bottom line, Ladiser said.

County Council Chairman Dave Somers said reassignments can help absorb the whipsaw effect of a booming housing market gone soft.

"It's the best we can do," said Somers, who is also chairman of the county planning committee. "It's like business. When you're not making money, you've got to cut. The plan is doing that with the least amount of pain."

County Councilman John Koster asked Ladiser if the county's building boom will ever hit as high as it did in recent years.

"Never," Ladiser said.

Reporter Jeff Switzer: 425-339-3452 or jswitzer@heraldnet.com.