Commercial construction in El Paso County will sink by a third next year while new-home starts will stablize at one of their lowest levels in years, according to forecasts by Pikes Peak Regional Building Department.The projections are important because they serve as a barometer of the local economy, which is heavily dependent on the construction trades for jobs and taxes.The forecast was based on predictions by local economists, contractors, builders and Colorado Springs Utilities, which relies on such projections to set its budget and utility rates.When Springs Utilities underestimated building starts last year, its 2008 water revenues fell short by more than $20 million, prompting spending cuts and forcing a significant rate increase planned for next year.Regional Building’s outlook was contained in its 2009 budget proposal presented this week to El Paso County and Colorado Springs officials. The department is an independent enterprise supported solely by revenue from permits, inspections, plan review, interest earnings and rent.Next year’s budget of $9.9 million is nearly $800,000 less than this year’s budget and $1.4 million lower than the 2007 spending plan, reflecting the declining construction business.There will be no further layoffs, however, after the department cut its work force from 112 to 87 in the past two years; nor will permit fees change in 2009, Regional Building director Henry Yankowski said.”Times are fairly tough right now, and any increase is going to be detrimental to the industry,” he said.Through October, 1,442 residential building permits were issued, and Regional Building officials predict a total for the year of about 1,750, down from the original estimate for 2008 of 2,250.If 1,750 or fewer are issued, it would be the lowest number in roughly two decades.Through October, commercial permits totaled1,726, a little above average. Regional Building forecast 2,071 commercial permits this year. Next year’s projection is 1,449 permits.A bright spot, Yankowski said, is additions and alternations, which seem to be holding their own compared to previous years.Regional Building operations manager Bob Croft said additions, alterations and renovations usually follow new construction by a couple of years as homeowners finish basements or add decks, and a higher number of alterations might stem from homeowners adding a room rather than buying a new house when the economy is uncertain.While the numbers aren’t pretty, next year’s forecast is seen as upbeat, because it’s not worse than this year. Yankowski believes the local building industry has hit bottom and noted a recent uptick in the number of construction plans submitted for approval.”The national election is over, the pressure is on the federal government to make things right with the banks and get credit rolling,” he said. “So we’re somewhat optimistic for next year.”Yankowski also said when the upswing comes, El Paso County is apt to see a quicker turn-around than most cities. “Towns with military establishments bounce back faster,” he said.Utilities isn’t as optimistic. “We think it would be very unlikely for a quick recovery,” Utilities spokesman Dave Grossman said. “Our projections are conservative, and we’re showing a very gradual recovery in the home market. Not in 2009. Even for 2010 our projections are just slightly higher than in 2009.”Next year, Utilities predicts only 1,200 new home hookups in its service area, smaller than the county-wide reach of Regional Building, and 1,400 in 2010.The construction downturn has slammed Utilities financially, which must turn to ratepayers for make ends meet when other revenue sources dry up.”Builders pay $9,000 for each new home added to the system,” Grossman said. “So when you take that times the thousands of fewer homes being built, it adds up to $40 million less in 2009 for water and wastewater” than in a good construction year.After misjudging last year’s forecast due to infrequent updates, Utilities officials stepped up efforts, tracking economic indicators monthly, he said.Grossman said the rate increases proposed for 2009 will total $29 a month for a typical residential customer who now pays $154 a month for electric, gas, water and wastewater service.The breakdown: $3 for electricity; $10 for gas, a pass-through fuel cost increase; $11 for water, and $5 for wastewater.

nternationally known sculptor Patrick Dougherty worked on a site-specfic sculpture with elm and cottonwood saplings and twigs Tuesday at the corner of Cache La Poudre St. and Cascade Ave. Photo by Carol Lawrence, The Gazette

CAROL LAWRENCE,THE GAZETTE