Clark County has built one of the state’s best systems for calculating the cost of issuing building permits, a state audit found Tuesday.

But the audit also showed that the county building division’s multimillion-dollar losses from 2006 to 2008 dwarfed the losses in the other seven Washington counties under review.

The performance report by state Auditor Brian Sonntag’s office, ordered by state legislators last winter, didn’t judge whether counties have actually priced their building permits fairly.

But it did find that Clark County was the one best prepared to calculate a fair price.

“Only Clark County appears to have all of the necessary systems and processes in place to determine both direct and indirect costs,” the authors wrote.

The county and builders are negotiating this winter over how to recalibrate permit prices.

Clark County’s high marks from the state auditor reflect three years of self-scrutiny by the local community development department, local Building Industry Association lobbyist Mike Bomar said Tuesday.

“The county has done a great job at evaluating what tasks are taking the most amount of time,” he said. “From that point we can start working together to improve the system.”

Bomar’s group, which last year won a class-action lawsuit against Clark County’s old pricing system, was a major force behind the recent effort.

Years in the red

Other counties didn’t fare so well in the audit.

Skamania County, for example, had been setting its permit prices based on 1994 figures, with no system for readjusting them. And its building fees go straight into the county’s general budget instead of being set aside for building permit costs.

The other seven counties, however — Klickitat, Pacific, Pend Oreille, Skamania, Walla Walla, Whatcom and Yakima — have all kept far tighter purse-strings than Clark.

Annual losses in Clark County’s building division topped $1 million in 2006 and grew to nearly $2 million in 2008. Those huge deficits gobbled up the reserves Clark County had built during its fat years, deepening job cuts to courts and cops once the recession hit.

Of all the other counties, only Yakima lost more than $100,000 in a single year since 2006.

Five rounds of layoffs since 2008 and a major fee hike in 2009 reduced Clark County’s losses to $100,000 this year.

“We’ve been undercharging,” said Clark County Community Development Director Marty Snell, who came to the job in April 2008. “And we didn’t shed some of our variable costs, our staffing costs, until late in the game.”

Snell, Bomar and county commissioners are now working on a new fee system.

A new system will probably retain flat fees for building permits, Bomar said.

But if a building project costs much less than expected, the county might issue a refund; and if it costs more than expected, the county could charge the applicant extra.

Michael Andersen: 360-735-4508 or michael.andersen@columbian.com.

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