Agenda Item No: O.1
AGENDA REPORT
DATE: March 17, 2026
TO: Mayor and Council
FROM: David Gassaway, City Manager
SUBJECT: CD Presentation of Draft 2026 Build Fee Study Update
Presentation and Discussion Regarding the Proposed 2026 Building Fee Update
Funding Source: N/A
Contact: Jeff Thomas, (707) 428-7442
RECOMMENDED ACTION
Receive report, open discussion, and provide direction to staff.
STATEMENT OF ISSUE
The Building Safety Division (Division) last completed a comprehensive fee study five years ago.
Since then, operating costs have increased, and the current fees no longer fully recover the cost of providing services. The proposed fee updates will more accurately reflect the costs of providing services and reduce the impact on the general fund.
DISCUSSION
The Division aims to operate as a cost-recovery service; however, over the past two fiscal years, the General Fund has subsidized services because fees have not kept pace with rising operational costs. This has been caused by several factors, including:
Increased building code requirements, such as the new high fire regulations Increased costs in technology
Increased liability costs
The California Construction Cost Index (CCI) is not keeping pace with the division’s operating costs
If fees are not adjusted, the Division will require increasingly more General Fund support. The proposed fees realign true operational costs on each permit and project type. Applicants will see a reduction in most basic permits , and home remodel permits, such as water heaters, heating
and air conditioning, roof-mounted solar, and kitchen and bath remodels. Most of these permits would see reductions ranging from approximately 4% to over 20%.
Conversely, the study found that new construction permits were found to under -recover costs.
Under the proposed update, new construction permits may increase by up to approximately 15%.
The following is an example of the impact under the proposed update for a new residen tial produced home permit.
Example: Single Family Dwelling 2,000-sf with a 400-sf garage. Current fee (effective July 1, 2026): approximately $5,115 Proposed fee (effective July 1, 2026): approximately $5,850.
This increase reflects a more accurate al location of plan review, inspections, and administrative costs.
The intent of the fee update is not a revenue -generating increase, but a structural realignment to match actual service delivery costs. The proposed update reduces fees for many common homeowner renovations and home upgrade permits while modestly increasin g fees for larger, more complex projects that require significantly more plan review, inspection time, and staff resources. By aligning fees with actual costs, the Division will be more financially sustainable.
FINANCIAL IMPACT
If adopted, the proposed fees should result in improved cost recovery beginning in fiscal year 2027, reducing the impact on the General Fund by approximately $300,000 if permit activity remains steady.
PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION
N/A
ALTERNATIVE ACTION
Provide staff direction to modify the proposed fee structure or maintain the current fee structure, which may result in additional impacts to the General Fund.
COORDINATED WITH
Finance Department
STAFF CONTACT
Jeff Thomas, Chief Building Official
(707) 428-7442
[email protected]
ATTACHMENTS
Attachment 2: Proposed Fee Structure