[Mpls] Re: City Council Votes to Eliminate Electrical Inspections

[Chris Johnson]

Dan McConnell wrote:

> the safety of the citizens of the  city.  As for the costs I am sure 
> that the city has a higher overhead  for this service than the state has 
> using independent contractors  however this move only affects the ten 
> members of the Electrical  Inspections Department so the only potential 
> savings is the wages of  these 10 employees compared to a revenue source 
> of $1.1 million that  the city will lose on permit fees.  Let say that 
> each inspector makes  approximately $60,000 per year, times ten is 
> $600,000 leaving a net  loss of $500.000 in revenue.

I have no argument with Dan's general points, and no horse in this race, so to 
speak.

I just wanted to correct a mistaken notion about the cost of or savings from 
lack of employees that is repeated above but has been seen on this forum a 
number of times.  That is the cost of an employee is only, or approximately, 
their salary.  Nothing could be further from the truth.

In one corporation where I worked, the "burden" of an employee -- that is, the 
additional cost beyond direct labor (salary), including health care and other 
benefits, office space (space, heat, lights, desk, phone, etc.), 
administrative support (payroll, personnel, clerical, management), etc. -- was 
generally calculated at 120% to 150% of salary.  At 120%, that means an 
employee whose salary was $50,000 a year was actually costing the company 
$50,000 plus 120% of $50,000 or $110,000 a year.

I have no idea what the "burden" or overhead or benefits costs are for 
employees of the Electrical Inspections Department.  But with today's health 
care costs, we can safely assume it is a lot more than 20%, and quite likely 
more than 100%.

It might be that the elimination of the Electrical Inspections Department 
saves the city $1 to $2 million, all told.  It's definitely not just 10 times 
the average salary.

--
Chris Johnson
Fulton