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Crain’s Detroit Business published the following opinion column by Mark Miller, Director of Economic Development and Community Development for the City of Troy, on November 28, 2011:
Communities across Michigan are responding to Governor Snyder’s call to reduce costs and operate more efficiently. A bill introduced in Lansing will remove a big stumbling block and deserves fast action by the legislature.
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Cities, villages and townships throughout Michigan use private companies to enforce the Michigan Building Codes. The current legislation doesn’t specifically permit this privatized model of providing building inspection and plan review services. House Bill 5011 will update the state construction code and permit a cost-effective and customer-friendly method of providing building inspection and code enforcement for communities throughout the State of Michigan.
This legislation was introduced by a bipartisan, geographically diverse group of legislators. The Michigan Municipal League, Michigan Townships Association, Michigan Association of Counties, Michigan Home Builders Association and Associated Building Contractors all support it.
Communities already innovate to find the best combination of people to handle construction approval. Some use state or county inspectors. Some share their own staffs with other communities. Some township supervisors are also the building official. Many hire outside inspectors and plan reviewers for electrical, plumbing and mechanical inspections because of the certifications required.
The city of Troy addresses the reduction in tax revenues and state revenue sharing by regionalization, consolidation and privatization of services, where feasible.
In the case of privatization, managed competition is used to allow city employees the ability to compete with the private sector. In building inspection and code enforcement, privatization has reduced spending by about $1 million a year.
This legislation will give Michigan cities, townships and villages the flexibility and authority to find their best solution. We’ve seen in the past few years how much real estate development levels can fluctuate. This ebb and flow of private business means building departments need flexibility in staffing.
Managed competition is the best way for communities to get the greatest value in these services. For-profit businesses will compete with each other and with public agencies to deliver the best service at the lowest cost.
Local control of the approval and inspection process will boost economic development. Communities will be able to staff up quickly and as needed as soon as a new project is proposed.
Builders lose money for every day and every hour that they wait for an inspector to show up. Communities with better service levels gain a reputation for being a good place to build and develop, thus attracting new development.
