The DPS recently took a 10% budget hit in the House budget as shown:

 

		2009	2010	change
	Administration / Staffing	$2,771,301	$1,913,530	-$857,771
	Staffing Budget	$5,273,285	$5,218,357	-$54,928
	Elevator Inspector Retained Revenue	$1,818,600	$1,818,600	$0
	Building Training Retained Revenue	$130,000	$130,000	$0
		$9,993,186	$9,080,487	-$912,699

It should be noted that inspector staffing for all divisions come out of the first two line items with the bulk of it coming from the second line.

It appears that the House simply did a 10% cut across the board.  How this will impact the Senate Budget time will only tell. 

Can we make a difference?  Possibly.  It is anticipated that the House budget is the high water mark, which means the Senate will take deeper cuts. 

What to do:  send this letter to the House and Senate budget committees and your local Representatives and Senators. 

 Please personalize it and send it to your SENATORS and those on the SENATE WAYS AND MEANS.

 Believe it or not, as the Department goes, so does the Industry and your license.

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 ____/____/____

 

Dear ______________________,

 

 

On the budget issue, the Department has worked hard to reduce elevator and boiler inspection backlogs but without the inspectors, the Department can not get the job done.  They have attempted every method to increase inspector efficiency including placing GPS phones on them (not very popular with the inspectors).  Currently 34% of all the elevators in the Commonwealth are not inspected (that is 34% of 37,000 = 12580 elevators.  Each year there are approximately 1,500 new elevators constructed in the Commonwealth.  Each inspection generates a minimum of $400 per inspection and takes on average 2 hours to perform.  If we had enough inspectors to complete all the inspections it would generate a minimum of 12580 x $400 or $5,0320,000 dollars back to the general fund. 

 

Each elevator inspector can complete approximately 700 units each year.  This means the Department would need and additional 18 State Elevator Inspectors to be able to meet their statutory mandate.  State Elevator Inspectors cost ~$80,000 per inspector.  80,000 x 18 = $1,440,000 needed to bring the staffing levels in the Elevator Divsion to where they need to be.

 

Let me put it clearly, if you invest $1,440,000 for inspectors, the Department could produce ~$5,000,000.  That is a win/win for everyone.  Owners will be happy their units are inspected, Elevator Companies will be able to employ more people to get the work done, and the General Fund will increase, and the Department can meet their statutory mandates.

 

Additionally, we have close to 3,000 boilers and air tanks that need to be completed.  Engineering Inspectors complete ~500 units a year.  The Department would need an additional 6 District Engineering Inspectors just to break even.  Experience has shown that with increased enforcement we also generate additional licensing revenue.  5 years ago I did a study that demonstrated that a District Engineering Inspector generates $96,000 per year back to the General Fund and cost approximately $85,000 per inspector.  Again, it is a simple net gain back to the General Fund for each inspector added.

 

Finally, the Department should supplement their funding by charging a certificate fee for each inspection they perform.  Nine states charge these fees running from $5 to $40 per certificate.  At a rate of $20 per device, with over 70,000 boilers and pressure vessels certified in the Commonwealth, and 37,000 elevators,  the Department could easily generate an additional 1,400,000 + 740,000 = $2,140,000 back to the General Fund just on certificate fees.

 

Historical data shows that for every $1 you invest in the Department, it produces $3.  I have provided the historical financial data for your interest.  It all supports what I have stated above.

 

Bottom line:  If you invest in the Department and earmark the money directly to inspector new hires, you will see increased revenue back.

 

I URGE you to supplement the Department budget by an amount that would enable them to hire 18 State Elevator Inspectors and 6 District Engineering Inspectors. (increase by $1,950,000)

 

You can't generate the revenue if you don't invest and have the bodies to do the work.

 

Sincerely,