TO: Mayor and City Council
FROM: Philippe Eskandar, City Manager
BY: Isidro Figueroa, Community Development Director
DATE: September 9, 2026
SUBJECT: APPROVAL OF AMENDMENT NO. 2 TO THE
PROFESSIONAL SERVICES AGREEMENT WITH THE CODE
GROUP, INC. DBA VCA CODE FOR BUILDING PLAN
CHECK AND INSPECTION SERVICES AND RELATED
BUDGET ADJUSTMENTS
STRATEGIC PLAN CRITICAL SUCCESS FACTORS
Engaged and Connected Residents
Efficient, Responsive, and Effective City Services
Fiscally Responsible and Transparent City Government
BACKGROUND
The Community Development Department contracts with The Code Group, Inc. dba VCA Code (VCA Code) to provide building plan check and inspection services. VCA has been providing building inspection and plan check services for the City since 1990. VCA has also provided the City with other professional engineering services as required to assist staff in delivering services to residents, including fire prevention inspections and fire plan review.
On September 27, 2024, the City Council approved a three-year Professional Services Agreement with VCA Code through September 27, 2027. The agreement established an annual compensation limit of $221,000.
On March 11, 2026, the City Council approved Amendment No. 1 to add optional expedited plan review services.
Tony Chou, Mayor
Calvin Lo, Vice Mayor
Hunter Chang, Council Member
John Chou, Council Member
Gretchen Shepherd Romey, Council Member
The adopted Fiscal Year 2025-26 budget included $250,000 in Account No. 101-14-4104-6270, Contract Building and Safety Services, for VCA Code plan check and inspection services.
DISCUSSION
During Fiscal Year 2025-26, the City experienced a higher-than-anticipated volume and more complex level of development activity that required building plan check, fire plan check, fire inspection, and over-the-counter plan check services. A significant portion of the increased workload was associated with major capital projects at The Huntington Library, Art Museum, and Botanical Gardens, in addition to ongoing residential and other development activity throughout the City.
The cost of these services is offset by plan check, inspection, and related fees collected from project applicants. As development activity increases, the City also receives corresponding fee revenue.
Due to the increased demand for plan check and inspection services, Fiscal Year 2025-26 expenditures totaled $306,051.30. This exceeded the adopted budget of $250,000 by $56,051.30 and the agreement’s annual compensation limit of $221,000 by $85,051.30.
Staff recommends approving the Fiscal Year 2025-26 expenditures and a budget adjustment increasing the appropriation in Account No. 101-14-4104- 6270 by $56,051.30. Staff also recommends increasing the FY 2025-26 revenues in Account No. 101-14-3308-0000 by 56,051.30.
Development activity is expected to remain at a similar level during Fiscal Year 2026-27, including continued work associated with major projects at The Huntington. Based on Fiscal Year 2025-26 expenditures and anticipated demand, staff recommends increasing both the agreement’s annual compensation limit and the Fiscal Year 2026-27 appropriation to $350,000.
Use of the expedited plan review option may also increase expenditures in the Contract Building and Safety Services account. Those costs would be offset by additional fees paid by the applicant requesting expedited review.
The proposed Fiscal Year 2026-27 budget adjustment would increase Account No. 101-14-4104-6270 by $100,000, from $250,000 to $350,000. Staff also proposes a budget adjustment to Account No. 101-14-3308-0000 in the amount of $100,000.Staff will continue monitoring expenditures, contract authority, and related fee revenues throughout the fiscal year.
The cost of VCA Code’s services is offset by plan check, inspection, and related fees collected from project applicants and recorded in the applicable City revenue accounts, including Revenue Account No. 101-14-3308-0000, Plan Check Fees. A significant portion of the Fiscal Year 2025–26 expenditures was associated with major capital projects at The Huntington, which generated corresponding plan check and inspection fee revenue.
FISCAL IMPACT & PROCUREMENT REVIEW
Fiscal Year 2025-26 expenditures for VCA Code plan check and inspection services totaled $306,051.30. Approval of the recommended Fiscal Year 2025- 26 budget adjustments would increase appropriations in Account No. 101-14- 4104-6270 by $56,051.30 and revenues in Account No. 101-14-3308-0000 by $56,051.30.
Approval of the recommended Fiscal Year 2026-27 budget adjustment would increase appropriations in Account No. 101-14-4104-6270 by $100,000 and revenues in Account No. 101-14-3308-0000 by $100,000.
Amendment No. 2 would increase the agreement’s annual compensation limit from $221,000 to $350,000 through the remainder of the agreement term, which expires on September 27, 2027.
The Finance Director has reviewed this report and concluded that the recommended actions are in the best interest of the City.
LEGAL REVIEW
The City Attorney's office has reviewed and approved as to form.
RECOMMENDATION
Staff recommends that the City Council: (1) Approve Fiscal Year 2025-26 expenditures totaling $306,051.30 for plan check and inspection services provided by The Code Group, Inc. dba VCA Code; (2) Approve Fiscal Year 2025-26 budget adjustments to Revenue Account No. 101-14-3308-0000and Expenditure Account No. 101-14-4104-6270by $56,051.30; (3) Approve Amendment No. 2 to the Professional Services Agreement with The Code Group, Inc. dba VCA Code, increasing the annual compensation limit from $221,000 to $350,000 for Fiscal Year 2026-27 and the remaining term of the agreement and increasing the total contract amount accordingly; (4) Approve Fiscal Year 2026-27 budget adjustments to Revenue Account No. 101-14- 3308-0000 and Expenditure Account No. 101-14-4104-6270 by $100,000;and (5) Authorize the City Manager to execute Amendment No. 2. If the City Council concurs with staff’s recommendation, an appropriate motion would be:
“I move to approve the Fiscal Year 2025-26 VCA Code expenditures and related budget adjustments; approve Amendment No. 2 to the Professional Services Agreement with The Code Group, Inc. dba VCA Code; approve the Fiscal Year 2026-27 budget adjustments; and authorize the City Manager to execute the amendment.”
ATTACHMENTS
1. Professional Services Agreement with The Code Group, Inc. dba VCA Code (September 24, 2024)
2. Proposed Amendment No. 2
3. Exhibit 1 to Amendment No. 2 (VCA Scope of Work and Fee Schedule)