County eyes building code issue

After hearing a citizen complain for most of a year about how a regional agency oversees building codes operations, Wasco County is launching a task force to study the matter.

Officials with the agency being complained about, the Mid-Columbia Council of Governments, say they are surprised by the county’s move.

They contend the complaints raised by the citizen, Wayne Lease, have already been addressed and were unfounded.

Lease, meanwhile, claims to have gotten no satisfaction from MCCOG, which led him to seek help from Wasco County.

MCCOG Executive Director John Arens read a letter Feb. 18 to the county commission, which stated, in part, “Why haven’t you communicated with the MCCOG Board about any concerns prior to taking action on your own?”

The commission did not respond to the letter at the meeting, but later, Wasco County Commission Chair Scott Hege told the Chronicle that concerns with MCCOG have been going on for “a number of years” and “have definitely not been resolved.”

Wasco County representatives to MCCOG, of whom he is one, have voiced those concerns, which included voting against a building permit fee hike in 2013, Hege said.

He said Lease, who is a master electrician, was only one of several contractors who have raised concerns, “and we’re responding to that.”

Wind projects in Sherman and Gilliam counties created a large reserve in the building codes program several years ago and use of those reserves is the main point of contention for Lease.

He contends MCCOG is improperly co-mingling streams of permit fees – by law, electrical permit fees must be separated, he said — and improperly used reserves to re-roof a building and refinance a mortgage internally.

MCCOG officials said Lease is incorrect and his concerns are unfounded.

Hege said his own concerns tend to be more “operational. It’s an issue of management and it’s an issue of how they make decisions and where they put overhead.”

Hege added, “While it’s understandable they pull some [overhead costs] out [of permit fees], I’m not sure it’s not too much, maybe a lot too much.”

MCCOG is a five-county entity with 45 employees that provides a variety of services including transportation, senior services, workforce development and building codes. Its budget this year is $11 million, of which building codes is $2.5 million (which includes a $1.4 million reserve). Building codes has 5.5 employees.

Building codes was run by the state until 2008, when MCCOG took it over after the state wanted to divest itself of it. It remains a state function handled by MCCOG.

Hege even held out the possibility that Wasco County could seek to offer building codes services itself.

The county is in the midst of streamlining its public works and planning departments to be more efficient, and “looking at how building codes play into that,” he said.

Hege said, “Organizations like MCCOG can become fairly expensive in terms of how they operate programs and at times, they may not be the most efficient to run a program.” He said that could be the case for building codes. “I’m not convinced it’s a better way than possibly looking at it ourselves.”

Wasco County Commissioner Rod Runyon said the idea for a task force came from Tyler Stone, the county’s administrative officer, after meeting many times with Lease.

“We’re just going to do a process here to make sure everything’s good and try to narrow down his questions,” Runyon said of Lease. “Wayne is very broad in his concerns and it’s time to get this thing resolved.”

Runyon said the county has talked to other commissioners on the MCCOG board about its concerns. “It’s not like we haven’t shared this,” he said in response to Arens’ letter. “It’s not like we haven’t referred him [Lease] to our partners, but it keeps coming back to us.”

Stone hopes the task force will have a contractor, electrician, plumber, a design/build firm representative and someone from the state building codes division in Salem.

“We’re just asking the question: are there issues with building codes services from your perspective?” Stone said.

“What are we doing right? What are we not doing and how should we move forward from here because we’ve had a lot of feedback through the commissioners and through Mr. Lease about things that we should be looking into.”

Given the large reserves from windfarm projects, contractors were upset when MCCOG wanted to raise permit fees 40 percent in 2013.

But Mike Smith, chair of MCCOG and a Sherman County commissioner, said building codes has not paid for itself in five years, and it has not raised fees in more than 10 years before the 2013 increase.

“We’d been using those reserves to keep the costs of building codes down,” Smith said.

The building codes budget – funded entirely by fees, and no taxes — is based on an estimate of how much building will be done each year. “And that’s hard to do, and that’s why you need a large reserve,” Smith said.

Even with the 20 percent hike that was settled on in 2013, building codes was in the red this year and needed nearly $300,000 in reserve money, Arens said.

Lease said, “Praise the Wasco County [Commission] for what they wish to accomplish by forming a stake holders committee to explore the validity of my accusations.”

Lease said MCCOG improperly used $220,000 of building codes reserves to re-roof a MCCOG building and refinance a $500,000 MCCOG building mortgage.

MCCOG paid off a standard commercial mortgage that had a 6 percent rate and set a much lower self-repayment rate of .5 percent.

Smith said paying off the mortgage with building code funds “was legal and completely allowable.”

That low repayment rate is the same minimal rate of return received from the state investment pool, where the rest of the building codes reserves are located, Arens said.

“On both of those loans we are paying back into the building code reserve every month,” Arens said.

Lease also contends electrical permit fees were being co-mingled with other fees, contrary to state law.

The fees are kept in the same account, said Smith, but are tracked separately. “He feels they should be in a separate account, but that’s not required.”

Smith said Lease was “also very mistaken about how our audit works.” Lease contends the agency isn’t following accounting rules.

All of Lease’s complaints were studied and determined to be unfounded, Smith said.

“We didn’t know that Wayne had been lodging the same complaints [to the county] that had already been answered and were found to be incorrect. We made sure all of his questions were answered; we thought he had accepted that. Wasco County was at the same meetings and heard the same data.”

Smith said MCCOG was prepared to hand over documents to Lease, but wanted a $100 down payment on copying and research costs. Lease declined.

Lease said, “MCCOG doesn’t understand the word transparency.” He said no other building codes agency has sought 40 percent permit fee increases, as this one has (it settled on 10 percent in 2013), and no other building codes agency uses reserves the way MCCOG does. “No one else uses the reserves as their own personal bank accounts,” Lease said.

Lease said MCCOG’s attorney told them they couldn’t do interdepartmental transfers, so they changed the transfers to interdepartmental loans.

Hege said he cares about maintaining partnerships with other counties, but he said it can be particularly frustrating for Wasco County, which represents “80 percent of the deal, but in many cases we control almost nothing.”

Hege said an example of not having input into MCCOG was when contractors were promised an advisory committee for the building codes program, but it never happened. “I’ve expressed frustration over that many times.”

MCCOG said it tried to form the committee, but nobody was interested, Hege said, but he’s talked to contractors who don’t recall being asked to be on one.

The advisory committee idea was nixed at a recent executive committee meeting of MCCOG, out of fears it would be “Wasco County-centric,” Hege said. “I understood that.”

Hege said his frustrations with building codes dates back to when it was taken over by MCCOG in 2008.

“I didn’t support it at the time,” Hege said. He was in the construction industry then. There were fears of fee increases then. “Fast forward and when MCCOG came out and they requested a 40 percent increase in the fees, I had a number of concerns then.”

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