Sent Via Email
DATE: March 25, 2026
TO: Fairfield Chief Building Official Jeff Thomas
FROM: Lisa Vorderbrueggen, East Bay Executive Director for Gov’t Affairs
RE: Fairfield Building Division User Fee Study, dated March 9, 2026
Dear Mr. Thomas:
The Building Industry Association of the Bay Area submits this letter in response to the Fairfield Building Division User Fee Study dated March 9, 2026, prepared by Willdan Financial Services.
We appreciate the city's commitment to cost recovery and sound fiscal management, and we recognize that periodic fee studies are both appropriate and necessary. However, after careful review of the study and consultation with BIA members actively building in Fairfield, we have identified significant methodological concerns that we believe warrant the city's attention before the study is adopted.
Chief among them is the proposed 17.7 percent increase to the Building Valuation Table base rates — a double- digit, single-step hike that, if adopted as proposed, will have a material negative impact on housing production and affordability in Fairfield at a time when the city is obligated to meet sub stantial Regional Housing Needs Assessment targets.
We respectfully request that the city address the questions and concerns set forth below before finalizing and adopting the study.
I. Cost Recovery Baseline and Supporting Documentation
The study's foundational cost recovery figures require greater transparency and independent verification before they can serve as a reliable basis for fee-setting.
1. The study states the Building Permit program is currently operating at 85 percent cost recovery based on fiscal year 2025 activity levels. How was that figure derived? Is there a reconciliation showing actual permit revenue collected against actual fully burdened costs incurred, or is it a modeled estimate based on assumed permit volumes?
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2. The study notes that overhead amounts in Appendix A "will not reconcile to City budgets" because certain costs were excluded. If the figures don't reconcile to the budget, what is the authoritative source document that can be used to verify them?
3. The study identifies 70 fee increases, 92 decreases and 26 unchanged flat fees, with a net average increase of 2 percent. However, the valuation-based Building Permit program is recommended to increase by 17.7 percent. What is the total projected annual revenue impact of each category? The 2 percent average figure could mask a situation where the valuation table increase — which applies to all new construction — generates far more actual revenue than the nominal average suggests.
II. Overhead Allocation Methodology and Nexus to Building Services The study's overhead allocations must reflect a demonstrable and reasonable relationship between the costs recovered and the services provided to permit applicants.
4. Appendix A shows the Building Division carries a $207,265 indirect allocation, representing 9 percent of its cost base, derived from the city's Cost Allocation Plan. Which specific central service departments are included in that allocation? Does the list include departments — such as the city attorney, city manager or public safety functions — whose connection to building permit processing is indirect and would require an explicit nexus justification under California law?
5. The CD Admin allocation to Building is $572,464, representing 25 percent of the Building Division's cost base. What activities within Community Development Administration are covered by that allocation, and is any portion attributable to functions serving the general public broadly rather than permit applicants specifically?
6. Does the Cost Allocation Plan itself reconcile to the adopted budget? Has the plan been independently audited and when was it last updated?
III. Productive Hours and Fully Burdened Hourly Rate Calculations The fully burdened hourly rate is the product of total costs divided by productive hours. Errors in either the numerator or denominator directly inflate the resulting fee. The following questions go to the integrity of that calculation.
7. The study applies a uniform assumption of 1,650 productive hours annually across all positions. Is that figure validated against the adopted budget's full -time equivalent allocations and actual payroll records, or is it a standard consultant default? Does it reflect actual patterns of leave, non- billable time and training across Building Division classifications?
8. What was the data collection period used for staff time estimates? The Fairfield study says time estimates were gathered through staff interviews, but interviews are even less rigorous than a two-week monitoring period — were time logs or actual billing records used to validate interview responses?
9. Are any Building Division staff splitting time with other city programs — the Capital Improvement Program, code enforcement, general plan administration or other non-Building activities? If so, has that time been properly excluded from both the cost numera tor and the productive hours denominator? Misalignment between these two figures will distort the fully burdened hourly rate in either direction.
10. The study shows $2,258,442 in Building Division salaries and benefits. How many full -time equivalents does that represent, and does that count match the adopted budget? If vacant positions are included in Page | 3
the budget but not currently filled, are those vacancies' hours included in the productive hours denominator — which would artificially lower the fully burdened hourly rate — or excluded, which could artificially raise it?
IV. Public Information and General Public Benefit Cost Recovery Not all Building Division costs represent private benefits to permit applicants. Activities that serve the general public should be funded, at least in part, by the General Fund rather than recovered entirely through permit fees.
11. What portion of CD Admin costs covers general public benefit activities — pre-application consultations available to any member of the public, counter walk -in inquiries, website maintenance and public outreach — versus activities directly tied to processing a specific permit application?
12. Fairfield's adopted budget language reportedly distinguishes between fee -supported activities and those that "support the Community, pre-development work, appeals and public information, and non-project- related activities." If the budget itself acknowledges that those categories are not appropriate for full cost recovery, how does the study treat them, and why?
V. Fund Classification and the Limits of 100 percent Cost Recovery The appropriate cost recovery target for any given activity depends in part on the fund structure under which the Building Division operates and the nature of the benefit provided.
13. Is Fairfield's Building Division operating under a Special Revenue Fund or an Enterprise Fund designation? That classification has direct policy implications. Special Revenue Funds are typically supported in part by the General Fund; treating them as fully self-sustaining Enterprise Funds — recovering 100 percent of all costs through fees — may be inconsistent with standard governmental accounting practice and with the expectations of property owners who already fund city operations through property taxes.
14. The study acknowledges the city may elect to set fees at less than 100 percent cost recovery. Has the City Council made any explicit policy determination — outside of this study — identifying which categories of service are appropriate for General Fund subsidy? Without such a framework, there is no principled basis for evaluating whether the 100 percent recovery target is appropriate for each individual fee type.
VI. Phase-In of Fee Increases
Where fee increases are significant, a phased implementation approach protects housing production and allows the development community time to adapt.
15. The proposed 17.7 percent increase to the valuation-based Building Permit table is a meaningful single - step increase. Has the city evaluated a phase -in approach, particularly given that the current program is already at 85 percent cost recovery — meaning only a 15-percentage-point gap exists? An immediate jump to 100 percent on the valuation table is difficult to justify when the program is already substantially self- sustaining.
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16. For the 70 flat fees that are increasing, what is the range of individual increases? A 2 percent average could mask individual fees increasing by significantly more. Are any individual fee changes large enough to warrant a phase-in recommendation independent of the valuation table?
17. Has the city conducted an economic feasibility analysis to assess whether the combined effect of all proposed fee changes on a typical single -family residential project or infill multifamily development is consistent with Fairfield's housing production goals and RHNA obligations? Such an analysis is standard practice in jurisdictions actively working to facilitate housing production.
VII. Peer Jurisdiction Comparison
The study includes no comparison of proposed fees or fully burdened hourly rates against comparable jurisdictions. Fairfield should conduct a meaningful peer comparison before adopting the study.
18. The study does not compare proposed fully burdened hourly rates or resulting permit fees against comparable Solano County cities. What do Vacaville, Dixon, Benicia and Suisun City charge for equivalent permits at representative valuation levels?
19. The proposed fully burdened hourly rate for the Building Plans Examiner is $115.82 per hour and for the Chief Building Official is $176.26 per hour. How do those rates compare to equivalent positions in comparable Solano County jurisdictions and similarly sized East Bay cities?
20. For a prototypical 20 -unit infill apartment building at $5 million construction cost — a project type central to Fairfield's RHNA compliance — what is the total proposed Building Permit fee under the new valuation table, and how does that compare to what the same project would pay in Vacaville or Benicia?
VIII. Third-Party Contracting and Potential Double-Recovery Where a city contracts building services to outside consultants, the fee study must clearly account for those costs to avoid charging applicants twice for the same service.
21. Does Fairfield use any outside plan check consultants, contract inspectors or third -party review services for any portion of its Building Division workload? If so, are those contract costs reflected in the study's cost basis, passed through to applicants s eparately from the fully burdened hourly rate -based fees, or both?
22. The study includes a fee for "inspection by outside consultant" charged at actual cost per hour, which implies consultant usage exists. What is the annual volume and cost of that outside consultant work, and does any portion of it also appear in the overhead allocation or cost basis in a way that could create double recovery from applicants?
23. The study acknowledges that fees "will not reconcile to City budgets" in part because "contract costs" charged directly to applicants were excluded from the overhead calculation. Is there a complete accounting of all contract costs passed through to applicants separately, with confirmation that there is no overlap with overhead costs already recovered through the fully burdened hourly rate?
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Conclusion
BIA|Bay Area respectfully urges the city to pause adoption of the study and address the questions and concerns raised in this letter before proceeding.
The concerns identified here are not unique to Fairfield — independent peer reviews of comparable Willdan fee studies for Hollister and Morgan Hill identified many of the same methodological issues, and in both instances the proposed fees were found to significantly exceed those of comparable jurisdictions.
We are committed to working constructively with the city toward a fee structure that achieves genuine cost recovery while remaining reasonable, transparent and supportive of Fairfield's housing production goals.
Fairfield has a significant RHNA obligation, and permit fees that are higher than necessary — or that rest on a methodology that cannot withstand independent scrutiny — directly undermines the city's ability to meet that obligation.
We welcome the opportunity to meet with you and your staff to discuss these questions and to review any supplemental documentation the city can provide. We ask that the city refrain from scheduling the study for adoption until these issues have been addres sed and BIA|Bay Area has had a reasonable opportunity to review the city's responses. Thank you for your attention to this matter.
Sincerely,
Lisa A. Vorderbrueggen
BIA|Bay Area East Bay Executive Director for Government Affairs 1000 Burnett Ave., Ste. 340, Concord, CA 94520
925-348-1956 (cell)
[email protected]