HomeMy WebLinkAboutStaff Report 8437
City of Palo Alto (ID # 8437)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 9/19/2017
City of Palo Alto Page 1
Summary Title: Development Services Cost of Services Study Phase Two and
Reserve Fund Policy
Title: Discuss and Recommend the City Council Adopt an Ordinance
Amending the Fiscal Year 2018 Municipal Fee Schedule to Reflect
Development Services Cost of Services Study and a Reserve Fund Policy
From: City Manager
Lead Department: Development Services Department
Recommendation
Staff recommends that the Finance Committee recommend that the City Council adopt an ordinance
(Attachment A) to adopt a reserve policy for the Development Services Department (Attachment B) and
amend the Fiscal Year 2018 Municipal Fee Schedule to adjust the Development Services Municipal Fees
(Attachment C), based on the completion of Phase Two of a Cost of Services Study.
Executive Summary
The Development Services Department (DSD) has completed Phase Two of a Cost of Services Study
which analyzed construction project fees that are determined by the value of the project, otherwise
known as valuation based fees. In addition to updating fees based on this study, DSD is recommending
the implementation of a reserve policy to ensure operational continuity and provide City Council with
alternative funding options during unpredictable financial periods.
Background
In 2015, the DSD retained the services of Capital Accounting Partners (CAP) to complete a cost of
services study in two phases. This was the first cost of services study for development fees to come after
the DSD was created in 2012 as an outcome of the City Manager’s “Development Center Blueprint”
project. The goal of the project was to restructure and adopt a more holistic approach to integrated
development review, permitting services, and staff coordination in order to improve organizational
efficiencies and minimize unnecessary costs and delays to property owners and developers. DSD is made
up of key representatives from various different departments including the Planning and Community
Environment, Public Works, Utilities, and Fire Departments. DSD works closely with these departments
to ensure efficient, predictable, and transparent compliance with all development related construction
regulations. DSD is responsible for post entitlement activities on private property. It does not oversee or
have authority over the entitlement phase of development or construction occurring within the City’s
right of way such as streets or sidewalks. DSD does support construction of City facilities; however,
these projects also pay fees for DSD services similar to city facilities paying for utilities.
City of Palo Alto Page 2
A new cost of services study was prudent for several reasons. First, DSD is a relatively young City
department with a new management structure. Second, DSD is using more technology solutions to
provide services than the City previously had. Third, changes to the uniform building codes and the
City’s local amendments (e.g. green building and electrical codes) have added new and complex
functions to the DSD in recent years. Finally, in 2015, the City Council adopted a policy of full cost
recovery for DSD services. CAP determined the cost of doing business for non-valuation based fees in
Phase One and is now presenting the results of the valuation based fees and a reserve in Phase Two.
Phase One was presented to the Finance Committee on November 15, 2016, where members discussed
and recommended that the City Council adopt an ordinance amending the Development Services
Department’s Municipal Fee Schedule. Committee members expressed concerns about the increase in
fees as related to low income citizens, requested information about comparing the new fees to existing
fees for a standard project and questioned if the some of the proposed fees were higher than the
product or fixture, therefore leading to citizens to not request a permit. Committee members also
briefly discussed the concept of a reserve policy but were reminded that the topic of reserve would
return as part of the Phase Two. The Committee approved the staff recommendation with a 4-0 vote
and advanced the recommendation to City Council.
On December 12, 2016, the City Council held a public hearing to adopt the ordinance amending the
Fiscal Year 2017 Municipal Fee Schedule to reflect the DSD cost of services study and the Fiscal Year
2017 annual adjustment. At this meeting, staff addressed the Committee’s concerns about support for
fixed or low income citizens. Additionally, staff provided a standard service cost comparison using old
fees versus new fees. Council members discussed the notion of the new fees being higher than the
product or fixture, therefore leading to citizens to not request a permit. Council discussion also led to
questions about the definitions of “project” vs. “maintenance” as well as about the impact of special
event fees. With an 8-0 vote, Council adopted the ordinance to update the Fiscal Year 2017 Municipal
Fee Schedule to adjust DSD municipal fees, based on the cost of services study and adjusted the annual
inflator applied to municipal fees from Fiscal Year 2016 to Fiscal Year 2017, with the exception of fees
that could impact community events. Council directed staff to return to the Finance Committee with a
definition of a “project” versus “maintenance” and an analysis about the community (special event)
fees.
On June 19, 2017, staff advanced an informational report to City Council clarifying the definitions of
“project” and “maintenance” based on the California Building Code. Additionally, staff informed City
Council that the special event fees will not be adjusted and will be reviewed within the context of the
Special Event Application process led by the Police Department. The staff reports from aforementioned
meetings are attached.
Discussion
City Council’s action in 2016 implemented Phase One of the cost of services study. In this phase non-
valuation based or “flat” fees were adopted and implemented in March 2017. The Phase One study
conducted by CAP for non-valuation fees utilized an activity-based costing model to calculate the full
cost of providing specific services. This methodology identified activities in DSD and assigned the cost of
each activity with the resources to all services according to the consumption by each. The model
assigned a direct and indirect cost to each fee and as a result, the fees were calculated at full cost
recovery. This is in line with City Council’s May 18, 2015 adoption of the User Fee Recovery Level Policy.
City of Palo Alto Page 3
Phase Two of the study targets the valuation based fees as well as recommends implementing a reserve
fund for the DSD.
Phase Two of Fee Study
In February 2017, CAP began the Phase Two of the cost services study. The study recommends a more
objective fee model based of the International Code Council (ICC) methodology of calculating fees as
opposed to the current model, which allows the applicant discretion to provide the given valuation of a
project. As noted in the attached report, “construction values can vary even though the cost to the City
in providing plan check and inspection services may not. A traditional example is two custom built
homes. They each have the same floor plan, the same number of bathrooms, kitchens, outlets, etc. One
home is built by a builder of high end homes with the best fixtures available. The other home is built by
a retired relative of the home owner, built with second tier materials and fixtures from the local big box
store. Even though the two homes will require similar plan review and inspection services the two
valuations will be wildly different and thus generate different fees to the City. Using the ICC table
eliminates these differences and establishes a consistent valuation and therefore a consistent fee for
similar projects.” The ICC calculates fees based on construction, occupancy type, and square footage
provides more equity and consistency.
The Phase Two study reviewed and updated the fee schedule; calculated the total cost of fee generating
services; calculated the cost of plan check and inspection services from valuation based fees; reviewed
valuation data to calculate the valuation multiplier; analyzed cost recovery levels; developed a cost
model based on the current organizational structure; reviewed the results with staff; and provided
recommendations or methodologies on how to adjust fees annually.
DSD provided a year of budget expenditure data and nine months of project activity data to CAP to be
used for analysis. Using that data along with the ICC table, CAP calculated the valuation based fees at full
cost recovery. In addition, CAP did the calculation of fees that assumes a reserve as part of the
department’s costs, equivalent to approximately three months of DSD’s operating expenses and built
over a five year period. To further understand the methodology for calculating fees please refer to the
attached ICC Building Valuation Data (Attachment D).
Furthermore, in applying the new methodology to valuation based fees CAP conducted an analysis of
existing non-valuation fees. This analysis led CAP to recommend new non-valuation fees which provides
a more streamline service delivery. These fees are listed in Attachment C. Due to the creation of these
fees and the reallocation of department overhead across the new fees, all non-valuation fees have been
realigned. Additionally, similar to Phase One, Public Works related fees used the Questica Calculator
methodology through the Office of Management and Budget and therefore no changes are being
recommended to those rates at this time. Staff may bring forward additional fee changes during the
Fiscal Year 2019 budget process. Moreover, staff is not recommending a change to the Business Registry
Fee. Staff will return to City Council before December 31, 2017 with an update to the Business Registry
program which may include fee changes. Finally with the recommended creation of a reserve,
adjustments were made to all non-valuation fees to assist in recovering costs associated with the five
year phase in of the reserve.
Reserve Fund
During the November 15, 2016 Finance Committee meeting, the idea of reserve for DSD was discussed.
Committee members questioned the need given that DSD is within the General Fund and that the
City of Palo Alto Page 4
General Fund maintains a reserve. Additionally, Committee members asked about the specific uses of a
DSD reserve. When DSD was developed, the longer term goal was to transition the operations both
centrally for a one-stop shop for customers, but also financially so that all activities would be supported
by the revenues generated. This would potentially result in establishing a special revenue or enterprise
fund. This type of fully cost recoverable operation would normally have a reserve as it would need to
independently manage financials in both positive and negative cycles such as an economic downturn.
Attached is the recommended DSD Reserve Fund Policy (Attachment B). The policy provides a target of
25 percent or three month operating reserve which is established by a five (5) percent fee increase over
a five year period. This will create a balance of $3 to $4 million reserve.
Reserves are the cornerstone of financial prudence and safety. In determining the need for a reserve,
DSD conducted a risk assessment and benchmark research. The results of the risk assessment indicated
that due to revenue volatility, a 25 percent reserve would provide operational continuity, financial
flexibility, and leverage. For example a reserve would allow active continuous improvement programs to
be completed or phased down in an organized fashion. Furthermore it will allow DSD to maintain highly
skilled staff to ensure that key projects stay on schedule which correlates to earlier economic recovery.
With respect to the benchmark research, the results indicated that 100% of government agencies
surveyed have a reserve with one third having a dedicated development services reserve. Finally, a
noteworthy element of DSD is the fact the department has a responsibility to provide services once an
applicant submits a plan.
Given the value of real estate in Palo Alto and the investment citizens and businesses make in their
properties, management strongly believes in a dedicated DSD reserve. The reserve will ensure DSD
continued service delivery during tough times. More importantly the reserve will further stabilize the
General Fund to ensure City services and City Council priorities are managed in an even more orderly
manner.
Resource Impact
The actions recommended in this report would increase the estimated revenue generated by the DSD
valuation and non-valuation fees. Given the changing economic environment and the unknown
potential impacts of the increases on activity levels (estimated to be minor), no adjustment to the
budget is assumed. Revenue collections will be monitored and factored into the annual development of
the budget as data is available and adjustments are found to be necessary.
Environmental Review
Adoption of an ordinance amending Development Services Municipal Fees is not a project for the
purposes of the California Environmental Quality Act (CEQA) and therefore no environmental review is
necessary.
Attachments:
Attachment A - Ordinance of the Council of the City of Palo Alto to Update the Fiscal
Year 2018 Municipal Fee Schedule to Adjust Development Services Department Fees
Attachment B - Reserve Fund Policy
Attachment C - Municipal Fee Schedule
Attachment D - International Code Council Building Valuation Data Table
Attachment E - Capital Accounting Partners - Fee Study
City of Palo Alto Page 5
Attachment F - 6-19-17 Staff Report
Attachment G - 12-12-16 Staff Report
Attachment H - 11-15-16 Staff Report
Not Yet Approved
1
Ordinance No. ____
Ordinance of the Council of the City of Palo Alto to Update the Fiscal Year 2018
Municipal Fee Schedule to Adjust Development Services Department Fees
The City Council of the City of Palo Alto does hereby ORDAIN as follows:
SECTION 1. Findings and declarations.
A. In 2016, the Development Services Department completed Phase I of a fee study to
update certain non‐valuation‐based fees for services, reserving an update of valuation‐based
fees for Phase II of the fee study.
B. In 2017, the Development Services Department completed Phase II of the fee study,
which recommended adjustments to the Department’s valuation‐based fees, the adoption of
an operating reserve, and associated changes.
C. On September 19, 2017, the Finance Committee reviewed the fee study and
recommended adoption of an ordinance updating Development Services Department fees in
accordance with the study’s recommendations, adjusted by the annual salary and benefits
adjustment of 5.5 percent.
SECTION 2. The Council of the City of Palo Alto adopts the Development Services
Department Reserve Fund Policy, as set forth in Exhibit “1” and incorporated herein by
reference.
SECTION 3. The Council of the City of Palo Alto adopts the changes to the Municipal
Fee Schedule as set forth in Exhibit "2" and incorporated herein by reference. When effective,
such fees shall supersede any prior inconsistent fees charged by the Development Services
Department.
SECTION 4. The amount of the new or increased fees and charges is no more than
necessary to cover the reasonable costs of the governmental activity, and the manner in which
those costs are allocated to a payer bears a fair and reasonable relationship to the payer's
burden on, or benefits received from, the governmental activity.
SECTION 5. Fees in the Municipal Fee Schedule are for government services provided
directly to the payor that are not provided to those not charged. The amount of this fee does
not exceed the reasonable costs to the City of providing the services. Consequently, pursuant to
Art. XIII C, Section l(e)(2), such fees are not a tax.
SECTION 6. Effective Date. The fee increases proposed for FY 2017 described in
Exhibit A shall become effective no sooner than sixty (60) days from the date of adoption of this
ordinance.
2
SECTION 7. CEQA. The adoption of user fees is exempt from environmental review
under the California Environmental Quality Act (CEQA). (See CEQA Guidelines Section 15273.)
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Deputy City Attorney City Manager
____________________________
Director of Development Services
____________________________
Director of Administrative Services
Page 1 of 2
Development Services Department
Reserve Fund Policy
Section 1. Purpose
The purpose of the Development Services Department Reserve Fund (DSDRF) is to build and
maintain an adequate level of unrestricted funds available to cover any unforeseen shortfalls
that arise outside of the regular budget planning process, as well as one‐time, nonrecurring
expenses that will build long‐term capacity The fund may not be used to create or hire new full
time benefited positions. The department intends for the operating reserve to be used and
replenished within a reasonable period of time. This policy will be implemented in conjunction
with the other financial policies of the City and is intended to support the goals and strategies
contained in those related policies and in strategic and operational plans.
Section 2. Definitions and Goals
The DSDRF is a designated fund set aside by action of the City Council. The target of the DSDRF
is equal to three (3) months of average recurring operating costs; with a range of 23 (minimum)
to 27 (maximum) percent with a target of 25 percent of average recurring operating cost.
The DSDRF is dynamic and will be reviewed and adjusted in response to internal and external
changes. In addition to calculating the actual reserve at the fiscal year‐end, the reserve fund
minimum, target and maximum can be adjusted by the Council as necessary each year during
the annual budget development process. These reserves will be reported to the Finance
Committee and City Council.
Section 3. Funding of Reserves
The DSDRF will be funded by a five (5) percent increase to all Development Services
Department fees as listed in the City’s Municipal Fee Schedule beginning in Fiscal Year 2018,
upon City Council approval, through Fiscal Year 2022. The City Council may, from time to time,
direct that a specific source of revenue be set aside for the DSDRF.
Section 4. Accounting for Reserves
The DSDRF will be recorded in the City’s accounting system and financial statements titled as
the Development Services Department Reserve Fund. The DSDRF will be maintained in
accordance with the City’s investment policy.
Section 5. Authority to Use the DSDRF
Authority to use the DSDRF will remain with the City Council. The City Manager will submit a
request to use the DSDRF to the City Council. The Director of Development Services
Department will prepare the report identifying the need for access to the DSDRF and confirm
that the use is consistent with the purpose of the reserves as described in this policy.
Determination of need requires analysis of the sufficiency of the current level of reserve funds,
the availability of any other sources of funds before using reserves, and evaluation of the time
period for which the funds will be required and replenished.
Page 2 of 2
Section 6. Fee or Rate Stabilization
DSDRF may be added to the Development Services Department revenue projections by action
of the City Council and held to manage the trajectory of future year rate increases.
Section 7. Reappropriation of DSDRF
At the end of each fiscal year the DSDRF will be reappropriated to the following fiscal year in
accordance with Palo Alto Municipal Code Section 2.28.090.
Section 8. Relationship to Other Policies
The City Manager maintains City Council approved policies, which may contain provisions that
affect the creation, sufficiency, and management of the DSDRF. It will be the responsibility of
the City Manager and Director of Administrative Services Officer to notify the Director of
Development Services if changes to city‐wide policies impact the DSDRF. These policies may be
City Council approved policies such as the Investment Policy or administrative policies within
the confines of the Municipal Code.
Section 9. Reporting, Monitoring and Review of Policy
The Director of Development Services is responsible for ensuring that the DSDRF is maintained
and used only as described in this policy. Upon approval of the use of DSDRF, the Director of
Development Services and the Director of Administrative Services will maintain records of the
use of funds and plan for replenishment. Staff will provide reports to the City Council within the
annual budget process, or sooner if warranted by internal or external events.
Municipal Fee Schedule
Proposed Fee
Business Registry Fee $50.00
Technology Surcharge
Note: This surcharge will be added to all fees in Development Services.
1.8% per fee
A. $1.00 ‐ $1,000.00 Delete
B. $1,000.01 ‐ $2,000.00 Delete
C. $2,000.01 ‐ $25,000.00 Delete
D. $25,000.01 ‐ $50,000.00 Delete
E. $50,000.01 ‐ $100,000.00 Delete
F. $100,000.01 ‐ $500,000.00 Delete
G. $500,000.01 ‐ $1,000,000.00 Delete
H. $1,000,000.01 and Up
Delete
Building Permit Fee Restructured to be 1.44% of Construction
Valuation based on the ICC Table
I. Building Demolition Permit $498.00
J. Commercial Interior Non‐Structural Demolition Permit $179.00
Commercial and Multi‐Family Projects greater than or equal to $25,000.00 in
Valuation
$305.00
See Above
Current Fee
$412.00 per permit
$1,895.94 for the first $100,000.00 plus $10.63 for each additional $1,000.00 or
fraction thereof, to and including
$500,000.00
$6147.94 for the first $500,000.00 plus $9.03 for each additional $1,000.00 or
fraction thereof, to and including
$1,000,000.00
$10,662.94 for the first $1,000,000.00 plus $7.12 for each additional $1,000.00 or
fraction thereof
If valuation exceeds $5,000,000.00, an alternative fee arrangement may be
established by the Chief Building Official to achieve full cost recovery.
$431.00 (does not include C&D fees) per permit
$196.00 (does not include C&D fees) per permit
Construction & Demolition
Building Permit Fees
$73.00 Base Fee
$73.00 for the first $1,000.00 plus $5.80 for each additional
$100.00 or fraction thereof, to and including $2,000.00
$131.00 for the first $2,000.00 plus $26.53 for each additional $1,000.00 or fraction
thereof, to and including
$25,000.00
$741.19 for the first $25,000.00 plus $19.69 for each additional $1,000.00 or
fraction thereof, to and including
$50,000.00
$1,233.44 for the first $50,000.00 plus $13.25 for each additional $1,000.00 or
fraction thereof, to and including
$100,000.00
DEVELOPMENT SERVICES
Business Registry
$50.00 per business
Miscellaneous
1.8% of each transaction
Building
Municipal Fee Schedule
Single Family and Two Family Projects greater than
$25,000.00 and less than $75,000.00 in Valuations1
$163.00
Single Family and Two Family Projects greater than
$75,000.00 in Valuation1
$210.00
A. Base Fee $115.00
B. New or Remodeled Square Footage Delete
Air Conditioners $70.00
Busway, Power Duct, or Floor Duct Per Foot $58.00
Conditional Utility Agreement $236.00
Each Additional Meter $153.00
Fixtures, Switches, and Outlets $58.00
Lighting, Power and/or Control Panel Board, Switchboard Cabinet or Panel $70.00
Motor $58.00
Motor Generator $441.00
Range, Electric Clothes Dryer, or Water Heater $58.00
Service Conductor/Switch ‐ Greater than 800 amp $209.00
Service Conductor/Switch ‐ Less than 200 amp Delete
Service Conductor/Switch ‐ Less than 800 amp $367.00
Special Circuit (Not Listed Herein)$58.00
Temporary Power Pole $58.00
Temporary Wiring for Construction $58.00
Commercial (Level 1 and 2)$357.00 plus $67.00 for each additional
station
Commercial (Level 3 and 4)$426.00 plus $83 for each additional
station
Residential (Level 1 and 2)$154.00
Residential (Level 3)$235.00
Commercial System (less than 10 kW)$557.00
Commercial System (10kW ‐ 49kW)$557.00
Commercial System (greater than 49kW)$748.00
Residential Systems (greater than 10kW)$357.00
$976.00 each
$340.00 each
$518.00 plus $102.00 for each additional station each
$188.00 per station
$264.00 per station
Electrical Permits ‐ Photovoltaic Systems
$600.00 each
$901.00 each
$181.00 each
$75.00 each
$75.00 each
$75.00 each
Electrical Permits ‐ Electrical Vehicle Charging Stations
$427.00 plus $83.00 for each additional station
$75.00 each
$75.00 each
$75.00 each
$75.00 each
$272.00 each
$136.00 each
$0.02 per square foot per square foot
$91.00 per unit
$75.00 each
$265.00 each
$75.00 each
$75.00 each
DEVELOPMENT SERVICES
$172.00 per permit
$252.00 per permit
Electrical Permits
$92.00 per permit
Municipal Fee Schedule
Residential Systems (less than 10kW)$165.00
Address Change $505.00 single; $244.00 each additional
All Other Publications $16.00
Construction/Maintenance Vehicles $80.00
Electric Service and Safety Inspection $197.00
Extension of Building Permit or Building Permit Application $79.00
Inspections and Investigations ‐ Outside Normal Business Hours
Note: Inspections and investigations outside normal business hours (2‐ hour minimum).
$369.00 per 1.5x OT Hour; $492.00 per
2.0x OT hour
Inspections and Investigations ‐ Unclassified
Note: Inspections and investigations for which no fee is specifically indicated (2‐hour
minimum).
$246.00
Reactivation of Expired Building Permit ‐ All Others $222.00
Reactivation of Expired Building Permit ‐ Final Inspection Only $256.00
Reactivation of Expired Building Permit Application $156.00
Real Property Research Fee (1‐hour minimum)$229.00
Records Retention $6.00 per plan sheet
Reinspection Fee ‐ Multi‐Family Residential and Non‐ Residential $137.00
Reinspection Fee ‐ Single Family Residential $76.00 each secondary inspection type;
$141.00 each primary inspection type per
Request for Release of Building Plans $77.00
Residential Inspection Guidelines
Note: Available free online
No Change
Alterations and additions for single and multifamily > 1,000 sq ft $728.00
Alterations and additions for single family and multifamily < 1,000 sq ft and
increases conditioned space
$441.00
If the project is over $100,000 Energy Star is required after 12 months of
occupancy
$144.00$140.00 per review
$247.00 each secondary inspection type; $315.00 each primary inspection type per
inspection
$85.00 each
$37.00 each
Green Building
$708.00 per review
$429.00 per review
50% of original Building Permit Fee not to exceed the full cost to perform
remaining inspections as determined by the Chief Building Official
$283.00 or 50% of original Building Permit Fee, whichever is less
$211.00 per permit plus Plan Check Fees as applicable per permit
$271.00 per hour
$6.00 per plan sheet
$315.00 each
$18.00 each
$81.00 per space per week. This includes FY 18 adjustment rate of 6%.
$169.00 per hour
$95.00 per application
$408.00 per 1.5x OT Hour; $544.00 per 2.0x OT hour
$254.00 per hour
$91.00 each
General & Miscellaneous Fees
$399.00 single address; $192.00 each additional address
DEVELOPMENT SERVICES
Municipal Fee Schedule
Landscape Inspection $190.00
Landscape Plan Review ‐ Non‐Residential & Multi‐Family $1,939.00
Landscape Plan Review ‐ Single Family Residential $1,193.00
Multi Family New Construction of 1‐3 (attached) units $949.00
Multi Family New Construction of 4 or More $1,523.00
New Commercial >50,000 SF $1,810.00
New Commercial 1,000 ‐ 25,000 SF $1,236.00
New Commercial 25,001 ‐ 50,000 SF $1,523.00
New Single Family $949.00
Tenant improvements, renovations or alterations > $200,000 in valuation (and
not triggered by a Calgreen Tier)
$662.00
Tenant improvements, renovations or alterations > 5,000 SF Note: includes
replacement or alteration of at least two of the following: HVAC systems, building
envelope, hot water system, or lighting system and project greater than $200,000
$662.00
A. Base Fee $115.00
B. New or Remodeled Square Footage Delete
Air Handlers up to and including 10,000 cfm $47.00
Boilers, Compressors and Absorption Systems: For the installation or
reloacation of each boiler or compressor up to 30 hp or each absorption
system up to and including 1,000,000 Btu/h
$93.00
Boilers, Compressors, and Absorption Systems: For the installation or
relocation of each boiler or compressor exceeding 30 hp, or each absorption
system exceeding 1,000,000 Btu/h
$93.00
Furnace, Flue and Associated Ducts $93.00
Miscellaneous
Note: For each appliance or piece of equipment regulated by this code, but not classed
in other appliance categories, or for which no other fee is listed.
$47.00
Process Piping System $46.00
Process Piping System ‐ Hazardous $47.00
Swimming Pool Heater $56.00
Ventilation and Exhaust $47.00$60.00 each
Plan Review Fees
$182.00 each
$182.00 each
$60.00 each
$60.00 per permit
$145.00 per permit
$72.00 per permit
$644.00 per review
Mechanical Permits
$92.00 per permit
$0.02 per square foot
$60.00 each
$122.00 each
$1761.00 per review
$1202.00 per review
DEVELOPMENT SERVICES
$1481.00 per review
$923.00 per review
$644.00 per review
$185.00 per inspection
$1886.00 per review
$1161.00 per review
$923.00 per review
$1481.00 per review
Municipal Fee Schedule
Additional Plan Review
Note: Required by changes, additions, or revisions to plans including Alternative Means
and Methods (2‐hour minimum). For Elective (3rd party) and over‐the‐counter reviews
(half hour minimum).
$191.00
Building Plan Check 75%
Certified Access Specialist (CASp) Review/Consultation $367.00
Elective Plan Check 35%
Fire and Life Safety Plan Check 54%
Public Works Plan Check 44%
Zoning Plan Check 35%
A. Base Fee $115.00
B. New or Remodeled Square Footage Delete
Atomospheric‐type vaccum Breakers $115.00
Backflow protective device other than atomospheric‐type $167.00
Gas Piping System $167.00
Industrial Waste Pretreatment Interceptor
Note: Including trap and vent, except kitchen‐type grease interceptors functioning as
fixture traps
$167.00
Medical Gas Piping System $167.00
Plumbing Fixtures
Note: For each plumbing fixture on one trap or a set of fixtures on one trap (including
water, drainage piping, and backflow protection).
$116.00
Plumbing Fixtures: For each building sewer $112.00
Rain Water Systems Delete
Solar Hot Water System
Note: Does not include Plan Check fee.
$167.00
Storm Drain System $167.00
Swimming Pool $56.00
Water Heater, Vent or Other $84.00
Water Piping
Note: Installation, alteration or repair of water piping, water treatment equipment or
both
$84.00
Clotheswasher System $70.00
Complex System $167.00
Simple System $70.00
SB 1473 Fee
$109.00 each
$109.00 each
Plumbing Permits ‐ Graywater Systems
$91.00 each
$217.00 plus plan review at cost
$91.00 plus plan review at cost
$91.00 each
$145.00 each
$91.00 each
$217.00 each
$217.00 each
$72.00 each
DEVELOPMENT SERVICES
$109.00 each
$217.00 each
$217.00 each
$217.00 each
$217.00 each
45% of Building Permit fee
12% of Building Permit fee
30% of Building Permit fee
Plumbing Permits
$92.00 per permit per permit
$0.02 per square foot
$225.00 per hour
80% of Building Permit fee
Actual cost of CASp Consultant plus 15% per hour. Restructured to a flat fee.
35% of Building Plan Check fee
Municipal Fee Schedule
A. $1.00 ‐ $25,000.00 Permit Valuation No change
B. $25,001.00 ‐ $50,000.00 Permit Valuation No change
C. $50,001.00 ‐ $75,000.00 Permit Valuation No change
D. $75,001.00 ‐ $100,000.00 Permit Valuation No change
E. Each $25,000.00 Increment or Fraction Thereof Above
$100,000.00
No change
F. Minimum No change
Commercial No change
Residential No change
Certificate of Use and Occupancy $1,095.00
Certificate of Use and Occupancy ‐ Replacement $228.00
SB 1186 Mandated Fee
Note: Does not include fees collected by the Fire Department.
No change
Temporary Occupancy Permit ‐ Multi‐Family Residential, Non‐Residential, and
Other Commercial
$826.00
Temporary Occupancy Permit ‐ Single Family Residential and Commercial
Tenant Improvement less than 10,000 sq. ft.
$606.00
Additional Non‐Residential Long‐Term (More than 5 days) Monthly No Change
Dumpster, Container No Change
Non‐Residential ‐ Single Day No Change
Non‐Residential Long‐Term (More than 5 days)No Change
Non‐Residential Short‐Term (Less than 5 days)No Change
A. 101 ‐ 1,000 cubic yards No Change
B. 1,001 ‐ 10,000 cubic yards No Change
Public Works
Engineering
$197.00 for the first 100 cubic yards, plus $197.00 for each additional 100 cubic
yards or fraction thereof
$1970.00 for the first 1,000 cubic yards plus $186.00 for each additional 1,000
cubic yards or fraction thereof
Encroachment Permit
$746.00 per month
$310.00 each
$1,249.00 each
$2,039.00 each
$1,466.00 each
$123.00 each
DEVELOPMENT SERVICES
$1.00 each
$673.00 each
$498.00 each
$1.00 minimum
Strong Motion Instrument Program
$28.00 per $100,000.00 permit valuation ($0.50 minimum)
$13.00 per $100,000.00 permit valuation ($0.50 minimum)
Use & Occupancy Permits
$287.00 each
$1.00 per valuation increment
$2.00 per valuation increment
$3.00 per valuation increment
$4.00 per valuation increment
Add $1.00 per valuation increment
Municipal Fee Schedule
C. 10,001 or more cubic yards No Change
Tree Inspection for Private Development No Change
Construction in Public Right‐of‐Way ($1.00 ‐ $5,999)
Note: Including public or private subdivision streets
No Change
Construction in Public Right‐of‐Way ($6,000 ‐ $25,999)
Note: Including public or private subdivision streets
No Change
Construction in Public Right‐of‐Way ($26,000 ‐ $100,999)
Note: Including public or private subdivision streets
No Change
Construction in Public Right‐of‐Way ($101,000 +)
Note: Including public or private subdivision streets
No Change
Storm Drain Plan Check Fee No Change
Temporary Discharge to Storm Drain from Construction Site Dewatering No Change
Additional Temporary Discharge to Storm Drain from Construction Site
Dewatering
No Change
Wet Season Construction Site Stormwater Inspection Note: MRP requirement
for sites >1 acre and/or high priority (hillside, near creek, prior violation)
No Change
Emergency Response Fee ‐ Hazmat (PAMC 17.24.050)$350.00
Installation or Closure Without Approved Plans and/or Permits No Change
Emergency Planning Guide No Change
Long‐term Offsite Document Storage No Change
Microfilm Copy/Print No Change
Photographs No Change
Fire
$30.00 first print; $0.55 each additional print
Hazardous Materials Classification Permits
Up to $1,212.00 for each incident up to 100% cost recovery
$275.00 ‐ $813.00 average fee range
Documents
$253.00 each
$0.25 per page
$3.25 per blueprint page; $0.30 per specification/ calculation page
$4,093 per request to discharge
$313.00 per week for the duration of dewatering activities
DEVELOPMENT SERVICES
$287.00 per month, charge monthly October through April
Compliance Fees
Permit Fees
$712.00 per occurrence
$712.00 + 8.8% of value greater than $6,000.00
$2472.00 + 10.8% of value greater than $26,000.00
10,572.00 + 9% of value greater than $100,000.00
$743.00 per project
$3830.00 for the first 10,000 cubic yards plus $711.00 for each additional 10,000
cubic yard or fraction thereof
Inspection Fees
$139.00 per inspection
Municipal Fee Schedule
Compressed Gas $351.00
Corrosives $351.00
Cryogenic Fluid $351.00
Flammable and Combustible Liquids $351.00
Flammable Gas $351.00
Flammable Solids $351.00
Health Hazard (Liquids & Solids)$351.00
Liquefied Petroleum Gases $351.00
Organic Coatings $351.00
Organic Peroxides $351.00
Other Hazardous Materials ‐ Unclassified
Note: Inspections and investigations for which no fee is specifically indicated (1‐hour
maximum)
$351.00
Ovens ‐ Industrial Baking or Drying $351.00
Oxidizers (Liquids & Solids)$351.00
Oxidizing Gas $351.00
Pyrophoric Gas $351.00
Pyrophoric Materials (Liquids & Solids)$351.00
Pyrotechnical Special Effects Material $351.00
Radioactive Materials $351.00
Refrigeration Equipment $351.00
Spraying/Dipping $351.00
Tire Recapping/Tire Storage $1,397.00
Toxic, Highly Toxic, Moderately Toxic, Health Hazard Gas
Note: Includes pesticides, fumigants, and etiologic agents.
$351.00
Toxic, Highly Toxic, Moderately Toxic, Health Hazard Materials $351.00
Unstable Reactive Gas $351.00
Unstable Reactive Materials (Liquids & Solids)$351.00
Water Reactive Materials (Liquids & Solids)$351.00
Additional Approvals for Hazardous Materials Storage Permit Note: Additional
approval for permit to construct, temporary closure, permanent closure, otherwise
modify a hazardous materials storage facility. See CEQA for additional fees.
$761.00 per occurrence plus $498.00 per
hour for time above two hours per
occurrence
Business Plan (HMBP)$498.00
Late Fee for Hazardous Materials Storage Permit No Change
$848.00 per occurrence plus $554.00 per hour for time above two hours per
occurrence
$554.00 per location annually
25% of total Hazardous Material permit fee
$391.00 annually
$391.00 annually
$391.00 annually
$391.00 annually
$391.00 annually
Hazardous Materials Storage Permits
$391.00 annually
DEVELOPMENT SERVICES
$391.00 annually
$391.00 annually
$391.00 annually
$1,561.00 annually
$391.00 annually
$391.00 annually
$391.00 annually
$391.00 annually
$391.00 annually
$391.00 annually
$391.00 annually
$391.00 annually
$391.00 annually
$391.00 annually
$391.00 annually
$391.00 annually
$391.00 annually
$391.00 annually
$391.00 annually
$391.00 annually
Municipal Fee Schedule
Level I Facility
Note: Minimal storage as defined by having no hazardous materials over CFC permit
amounts as specified in CFC section 105.
$351.00
Level II Facility
Note: Quantities exceeding CFC permit threshold, but less than 50 gal., 500lbs or 200 cu.
ft. Category also includes dry cleaning, fixed medical gas, auto or aircraft repair, and
service stations.
$703.00
Level III Facility
Note: Quantities exceed 50 gal. 500lbs, or 200 cu. ft. and not categorized as Level II.
$1,406.00
Petroleum Aboveground Storage Tank
Note: Includes 2 hrs inspection time.
$703.00
Provisional (6 Month)$703.00
Additional Inspection or Reinspection Fee $699.00 for up to 2 hours reinspection plus
$349.00 per hour (during business hours)
After Hours Inspection Fee
Note: Fee for before or after normal business hours; weekends and holidays included.
Fee is to be paid in advance of inspection.
$524.00
As‐Built Plan Check and Additional Work $699.00
Care Facility Inspection Including Fire Clearance $349.00 for facilities with 7‐25 clients;
$699.00 for facilities with more than 25
Christmas Tree Lot/Pumpkin Patch $349.00
High Rise Building ‐ Certificate of Compliance
Note: Certificate of compliance inspection for each high rise building which is required
by state law to be inspected and certified annually as meeting minimum compliance
with applicable state of California fire and life safety standards for existing high rise
b ildi (CFC11143)
$1456.00 annually for up to 4 hours;
$349.00 for each additional hour
Outside Cooking Booths $524.00
Standby Fire Watch
Note: Per person.
$349.00
Use and Occupancy Fire Inspection $349.00
Additional Hours Over Plan Review/Inspection $249.00
Alternate Means and Methods Application
Note: 2 hr maximum.
$746.00
Appeals to Decisions $349.00
Consultation Fee $349.00
Hydrant Flow Fee $349.00$391.00 per occurrence
Life Safety & Fire Protection
$148.00 per inspection
Investigations & Consultations
$308.00 per hour
$735.00 per application
$391.00 per hour
$391.00 per hour
$390.00 for facilities with 7‐25 clients; $780.00 for facilities with more than 25
clients per inspection
$391.00 each
DEVELOPMENT SERVICES
$1626.00 annually for up to 4 hours; $391.00 for each additional hour
$210.00 each
$391.00 per hour
$782.00 annually
$782.00 plus other hazardous materials classification permit fees if applicable.
Includes 2 hrs inspection time.
Inspection Fees
$781.00 for up to 2 hours reinspection plus $390.00 per hour (during business
hours) per inspection
$585.00 per hour; 4 hour minimum
$780.00 per review
$391.00 annually per location. Includes 1 hr inspection time.
$782.00 annually per location plus other hazardous materials classification permit
if applicable. Includes 2 hrs inspection time.
$1565.00 annually per location plus other hazardous materials classification permit
if applicable. Includes 4 hrs inspection time.
Municipal Fee Schedule
Hydrant Installation/Modification ‐ Private $175.00
Automatic Fire Sprinkler Installation/Modification
Note: Includes hydrostatic test
$1543.00 for 1‐19 Sprinkler Heads;
$1,724.00 plus $3.00 per head for 20 or
Express Fire Protection Plan Check Fee No Change
Fire Alarm System Installation and Modification $948.00 plus $21.00 a device or contract
point
Fire and Life Safety Plan Check ‐ Commercial
Note: Includes one inspection and reinspection.
$0.54
Fire Prevention Inspection of Private Schools $699.00
Fire Protection and Fire Access Plan Review for New Single Family Dwellings
or Additions
$773.00
Multifamily dwellings, hotels & motels 51‐100 units $699.00
Multifamily dwellings, hotels & motels greater than 100 units $1,048.00
Multifamily dwellings, hotels, motels 4‐50 Units $349.00
Other Automatic Fire Extinguishing System
Note: Includes hood and duct, FM 200, Inergen, and C02. If a system has a release
panel, Fire Alarm fees apply as well.
$948.00
Site Disaster Planning $349.00
Standpipe System ‐ Wet, Dry, or Combination $699.00
Temporary Certificate of Occupancy $757.00
Underground Fire Service Line
Note: Includes 4 hrs of inspection and 1 hr of plan check
$1,647.00
Verification of Fire Protection System Maintenance and Certification $64.00
Aerosol Products $437.00
Bowling Alley and Pin Refinishing Involving the use of Flammable Liquids $1,019.00
Candles and Open Flames in Assembly Areas $349.00
Carnivals and Fairs $1,456.00
Cellulose Nitrate Storage/Nitrate Film $102.00
Hot Work (Welding) Operations No Change
Liquid or Gas‐Fueled Powered Equipment/Generator $349.00
Malls ‐ Covered $699.00
Occupant Load Increase ‐ Temporary Public Assembly $349.00
Open Burning $349.00
$113.00 annually
$391.00 each
$391.00 each
$782.00 annually
$391.00 each
$391.00 each
DEVELOPMENT SERVICES
Specific Hazard Permits
$488.00 annually
$1,138.00 each
$391.00 annually
$189.00 each
$1,090.00 per occurrence
$390.00 per hour
$780.00 per riser
$377.00 per occurrence
$1,870.00 per occurrence
$88.00 annually
The Fire and Life Safety Plan Review Fee is 45% of the Building Plan Check Fee and
is collected by the Building Division at the time an application of a Building Permit
is submitted.
$780.00 annually
$894.00 each
$780.00 annually
$1,170.00 annually
$391.00 annually
$195.00 per device
$780.00 for 1‐19 Sprinkler Heads; $1,724.00 plus $4.80 per head for 20 or more
Sprinkler Heads
$173.00 per occurrence
$1090.00 plus $23.00 a device or contract point
Municipal Fee Schedule
Open Flame/Flame Producing Devices $349.00
Operate a Tank Vehicle to Transport Flammable/Combustible Liquids $495.00
Parade Float $351.00
Place of Assembly $703.00
Place of Public Assembly ‐ Temporary $349.00
Tent or Air Supported Structure
Note: Tent or air‐supported structure having an area in excess of 200 sq. ft. or canopies
in excess of 400 sq. ft. Fee includes a public assembly permit of $125.00 for all tents.
$734.00
Commercial & Residential windows, skylights and doors, New and alteration
(structural) (per 5)
$279.00
Commercial & Residential windows, skylights and doors, New and alteration
(structural) (per 10)
$140.00
Residential Reroof $279.00
Residential Reroof (overlay)$70.00
Commercial and multifamily reroof (first 5000 sf)$279.00
commercial and multifamily reroof (each additional 2500 sf)$70.00
Kitchen (non structural) per each $210.00
Bathroom (non structural) per each $279.00
Commercial & Residential Siding replacement or repair $140.00
commercial & Residential Stucco replacement or repair $210.00
Commercial doors, new and alteration (structural) per 5 doors $210.00
Commercial doors, new and alteration (structural) per 10 doors $140.00
Residential dry rot repair and replacement $70.00
Deck, new or repair up to 1000 sf $210.00
Deck, new or repair each additional 1000 SF $70.00
Sign permit $116.00
Residential and commercial window awnings (group of 5)$70.00
Cell Tower Equip $210.00
Building New Fees
$391.00 each
$553.00 per vehicle
$122.00 per hour
$782.00 per occurrence
$391.00 each
$307.00 each
Municipal Fee Schedule
Utilities Handling Fee $116.00
Progress and partial inspections $56.00
Green Building ‐ Special Inspector applications and qualifications (internal
review)
$395.00
Green Building ‐ Special Inspector applications and qualifications (renewal
update)
$197.00
Special Inspections ‐ materials testing lab certification (up to 4 hours)$1,579.00
Miscellananeous Building ‐ base fee $115.00
Retaining Walls ‐ first 100 LF $93.00
Retaining Walls ‐ each additional 100 LF $46.00
Fees not listed above will either be based on an applicable hourly rate or at
the given valuation
TCO fee for Vendors/Stock Occupancy (requires at least one additional
inspection
$1,125.00
Emergency Responder Radio Coverage (testing) fee $492.00
Fire New Fee
Certifications
Building Valuation Data – AUGUST 2017
The International Code Council is pleased to provide the
following Building Valuation Data (BVD) for its members. The
BVD will be updated at six-month intervals, with the next
update in February 2018. ICC strongly recommends that all
jurisdictions and other interested parties actively evaluate and
assess the impact of this BVD table before utilizing it in their
current code enforcement related activities.
The BVD table provides the “average” construction costs per
square foot, which can be used in determining permit fees for
a jurisdiction. Permit fee schedules are addressed in Section
109.2 of the 2015 International Building Code (IBC) whereas
Section 109.3 addresses building permit valuations. The
permit fees can be established by using the BVD table and a
Permit Fee Multiplier, which is based on the total construction
value within the jurisdiction for the past year. The Square Foot
Construction Cost table presents factors that reflect relative
value of one construction classification/occupancy group to
another so that more expensive construction is assessed
greater permit fees than less expensive construction.
ICC has developed this data to aid jurisdictions in determining
permit fees. It is important to note that while this BVD table
does determine an estimated value of a building (i.e., Gross
Area x Square Foot Construction Cost), this data is only
intended to assist jurisdictions in determining their permit fees.
This data table is not intended to be used as an estimating
guide because the data only reflects average costs and is not
representative of specific construction.
This degree of precision is sufficient for the intended purpose,
which is to help establish permit fees so as to fund code
compliance activities. This BVD table provides jurisdictions
with a simplified way to determine the estimated value of a
building that does not rely on the permit applicant to determine
the cost of construction. Therefore, the bidding process for a
particular job and other associated factors do not affect the
value of a building for determining the permit fee. Whether a
specific project is bid at a cost above or below the computed
value of construction does not affect the permit fee because
the cost of related code enforcement activities is not directly
affected by the bid process and results.
Building Valuation
The following building valuation data represents average
valuations for most buildings. In conjunction with IBC Section
109.3, this data is offered as an aid for the building official to
determine if the permit valuation is underestimated. Again it
should be noted that, when using this data, these are
“average” costs based on typical construction methods for
each occupancy group and type of construction. The average
costs include foundation work, structural and nonstructural
building components, electrical, plumbing, mechanical and
interior finish material. The data is a national average and
does not take into account any regional cost differences. As
such, the use of Regional Cost Modifiers is subject to the
authority having jurisdiction. Permit Fee Multiplier
Determine the Permit Fee Multiplier:
1. Based on historical records, determine the total annual
construction value which has occurred within the
jurisdiction for the past year.
2. Determine the percentage (%) of the building
department budget expected to be provided by
building permit revenue.
3.
Example
The building department operates on a $300,000 budget, and
it expects to cover 75 percent of that from building permit fees.
The total annual construction value which occurred within the
jurisdiction in the previous year is $30,000,000.
Permit Fee
The permit fee is determined using the building gross area, the
Square Foot Construction Cost and the Permit Fee Multiplier.
Permit Fee = Gross Area x Square Foot Construction Cost
X Permit Fee Multiplier Example
Type of Construction: IIB
Area: 1st story = 8,000 sq. ft.
2nd story = 8,000 sq. ft.
Height: 2 stories
Permit Fee Multiplier = 0.0075
Use Group: B
1. Gross area:
Business = 2 stories x 8,000 sq. ft. = 16,000 sq. ft.
2. Square Foot Construction Cost:
B/IIB = $165.19/sq. ft.
3. Permit Fee:
Business = 16,000 sq. ft. x $165.19/sq. ft x 0.0075
= $19,823
Bldg. Dept. Budget x (%)
Total Annual Construction Value
Permit Fee Multiplier =
$300,000 x 75%
$30,000,000
Permit Fee Multiplier = = 0.0075
Important Points
• The BVD is not intended to apply to alterations or
repairs to existing buildings. Because the scope of
alterations or repairs to an existing building varies so
greatly, the Square Foot Construction Costs table
does not reflect accurate values for that purpose.
However, the Square Foot Construction Costs table
can be used to determine the cost of an addition that is
basically a stand-alone building which happens to be
attached to an existing building. In the case of such
additions, the only alterations to the existing building
would involve the attachment of the addition to the
existing building and the openings between the
addition and the existing building.
• For purposes of establishing the Permit Fee Multiplier,
the estimated total annual construction value for a
given time period (1 year) is the sum of each building’s
value (Gross Area x Square Foot Construction Cost)
for that time period (e.g., 1 year).
• The Square Foot Construction Cost does not include
the price of the land on which the building is built. The
Square Foot Construction Cost takes into account
everything from foundation work to the roof structure
and coverings but does not include the price of the
land. The cost of the land does not affect the cost of
related code enforcement activities and is not included
in the Square Foot Construction Cost.
Square Foot Construction Costs a, b, c
Group (2015 International Building Code) IA IB IIA IIB IIIA IIIB IV VA VB
A-1 Assembly, theaters, with stage 233.95 225.89 220.42 211.39 198.92 193.15 204.70 181.63 174.97
A-1 Assembly, theaters, without stage 214.40 206.35 200.88 191.84 179.53 173.76 185.16 162.23 155.58
A-2 Assembly, nightclubs 182.86 177.56 173.06 166.05 156.54 152.22 160.22 141.73 136.94
A-2 Assembly, restaurants, bars, banquet halls 181.86 176.56 171.06 165.05 154.54 151.22 159.22 139.73 135.94
A-3 Assembly, churches 216.47 208.41 202.95 193.91 181.79 176.02 187.23 164.50 157.85
A-3 Assembly, general, community halls, libraries,
museums 180.57 172.51 166.04 158.00 144.89 140.11 151.32 127.59 121.94
A-4 Assembly, arenas 213.40 205.35 198.88 190.84 177.53 172.76 184.16 160.23 154.58
B Business 186.69 179.79 173.86 165.19 150.70 145.02 158.70 132.31 126.48
E Educational 197.52 190.73 185.77 177.32 165.32 156.97 171.23 144.39 140.26
F-1 Factory and industrial, moderate hazard 111.86 106.71 100.58 96.68 86.77 82.81 92.61 72.75 68.09
F-2 Factory and industrial, low hazard 110.86 105.71 100.58 95.68 86.77 81.81 91.61 72.75 67.09
H-1 High Hazard, explosives 104.68 99.53 94.40 89.50 80.80 75.84 85.43 66.78 N.P.
H234 High Hazard 104.68 99.53 94.40 89.50 80.80 75.84 85.43 66.78 61.12
H-5 HPM 186.69 179.79 173.86 165.19 150.70 145.02 158.70 132.31 126.48
I-1 Institutional, supervised environment 187.63 181.26 176.01 168.60 155.33 151.11 168.69 139.15 134.82
I-2 Institutional, hospitals 314.17 307.27 301.34 292.67 277.18 N.P. 286.18 258.79 N.P.
I-2 Institutional, nursing homes 217.67 210.77 204.84 196.17 182.68 N.P. 189.68 164.29 N.P.
I-3 Institutional, restrained 212.42 205.52 199.59 190.92 177.93 171.25 184.43 159.54 151.71
I-4 Institutional, day care facilities 187.63 181.26 176.01 168.60 155.33 151.11 168.69 139.15 134.82
M Mercantile 136.25 130.95 125.45 119.44 109.43 106.11 113.60 94.63 90.83
R-1 Residential, hotels 189.35 182.99 177.74 170.33 156.80 152.58 170.42 140.62 136.29
R-2 Residential, multiple family 158.84 152.48 147.23 139.81 127.05 122.83 139.91 110.87 106.54
R-3 Residential, one- and two-family d 148.17 144.14 140.42 136.90 131.89 128.41 134.60 123.40 116.15
R-4 Residential, care/assisted living facilities 187.63 181.26 176.01 168.60 155.33 151.11 168.69 139.15 134.82
S-1 Storage, moderate hazard 103.68 98.53 92.40 88.50 78.80 74.84 84.43 64.78 60.12
S-2 Storage, low hazard 102.68 97.53 92.40 87.50 78.80 73.84 83.43 64.78 59.12
U Utility, miscellaneous 80.38 75.90 71.16 67.61 60.99 57.00 64.60 48.23 45.92
a. Private Garages use Utility, miscellaneous
b. For shell only buildings deduct 20 percent
c. N.P. = not permitted
d. Unfinished basements (Group R-3) = $21.00 per sq. ft.
Capital Accounting Partners Page 1
Development Services Fee Study
Restructuring Valuation Based Building Fees
September 2017
CITY OF PALO
ALTO
Development Services
Department
CAPITAL ACCOUNTING PARTNERS, LLC
Daniel B Edds, MBA, PMP
3570 Buena Vista Dr.
Sacramento, Ca 95864
916.670.0001
2
Contents
Development Services Department ........................................................................................................................... 3
Introduction and Scope ................................................................................................................................... 3
Restructuring Valuation Model ................................................................................................................ 3
Summary of Costing Methodologies ............................................................................................................... 4
Assuring Quality Results .................................................................................................................................. 7
Quantitative ............................................................................................................................................. 7
Qualitative ................................................................................................................................................ 7
Summary of Results ................................................................................................................................................ 9
General Observations of Building Valuations .................................................................................................. 9
Calculating the Cost of Valuation Based Fees ........................................................................................10
Summary of Results by Division or Work Unit ...............................................................................................11
Observations and Recommendations .....................................................................................................................12
Monitoring Revenues .............................................................................................................................12
Adjusting the Fee Schedule ....................................................................................................................12
Building Reserves ...................................................................................................................................12
3
Development Services Department
The City’s Development Services Department is comprised of four divisions or functions:
1. Building;
2. Fire prevention;
3. Planning; and
4. Public works.
Together, they form a valuable resource for home owners, businesses, contractors, developers, and
citizens to build safe buildings that comply with the code requirements of the City. The long-term
objective of the Department is to become an enterprise fund. Financially, this means that fees for its
various services must be sufficient to recover the cost of the Department.
Introduction and Scope
This is phase two of a two phase project. The first phase reset the fee schedule to align with the
California Building Code. In addition, we calculated the full cost of each flat fee as opposed to building
fees that are calculated as a function of construction value. Phase two calculated the building fees that
are a function of construction value. With additional changes in the fee schedule and the Department
budget, all fees are impacted.
Restructuring Valuation Model
To date, the City has been calculating building fees as a function of provided or given construction
value. This is a traditional model used by many jurisdictions nationally as well as in the State of
California. However, construction values can vary even though the cost to the City in providing plan
check and inspection services may not. A traditional example is two custom built homes. They each
have the same floor plan, the same number of bathrooms, kitchens, outlets, etc. One home is built by a
respected builder of high end homes with the best fixtures available. The other home is built by a
retired relative of the home owner, built with second tier materials and fixtures from the local big box
store. Even though the two homes will require similar plan review and inspection services the two
valuations will be wildly different and thus generate different fees to the City. Another example is a
remodel. In one remodel the home owner is contracting with a respected builder. In another the home
owner is doing the work himself. Both remodeling projects are identically the same but the given
valuation of construction will be very different. Using the ICC table eliminates these differences and
establishes a consistent valuation and therefore a consistent fee for similar projects.
The International Code Council (ICC) publishes an independent and standard set of valuations based on
construction, occupancy type, and size. In effort to move away from using provided or given
construction value as the method of calculating new construction building fees, the Department
determined that using values from the ICC table was more equitable and would create fees that were
more consistent. Therefore, a primary objective of this study was to restructure valuation based
building fees from provided or given construction value to value as established by the ICC table.
Changing valuations does not change revenues as a simple multiplier is calculated to generate a level of
revenue that is consistent with City requirements.
4
This involved significant review of project data. For the last 12 months, the City has been collecting
valuation data based on the ICC table. This was a requirement to the project.
Therefore, the scope of this study included the following:
• Review and update the fee schedule;
• Calculate the total cost of fee generating services;
• Calculate the cost of plan check and inspection services from valuation based fees;
• Review valuation data to calculate the valuation multiplier;
• Analyze cost recovery levels;
• Develop a cost model based on the current organizational structure;
• Review the results with staff; and
• Provide recommendations or methodologies on how to adjust fees annually.
Summary of Costing Methodologies
Driver Based Costing Models
Developing driver based costing models is a detailed and robust method of calculating the cost of
a specific service. It is based on the principles of activity based costing so it seeks to understand
cost at an operational level. This means it relies on understanding the time staff invests in core
business processes to provide fee and non-fee services. This provides the ability to understand
staff time and cost as each staff position participates in providing fee services.
5
Project Steps and Process
Virtually all of our cost of service studies uses some form of a driver based costing model. The following is
provided to give the reader an overall summary of the steps in created these models.
Step 1: Collect Data – This first step involves discussions with staff to identify those positions within the
department that provide and support direct services. It also involves collecting departmental budget and
expenditure data, identifying the salary and benefits for each position, and identifying non-personnel
expenditures, as well as any departmental and City wide overhead. Specifically, the steps involve the
following:
• Identifying staff positions – This includes identifying both position titles and names.
• Calculating the number of productive hours – For each position, vacation time, sick leave, paid
holidays, professional development (training), routine staff meetings, and daily work breaks are
deducted from the standard 2,080 annual hours. The result is a range of hours available for each
position on an annual basis. This range is typically 1,500 to 1,600 hours. Factors that influence
this range are length of service with the jurisdiction and local policies for holiday and personal
leave time. However, based on previous work with the City where the calculated number of
productive hours was almost exactly 1600 hours, and at the request of the Office of
Management and Finance, we set all positions at 1600 productive hours.
• Identifying and allocating non-personnel costs – Costs for materials and supplies are allocated
to the salary and benefits for each position.
• Assigning any other expenses that are budgeted in other areas – There are often expenses that
should be included with the total cost of services. Examples of such costs might include
amortized capital expenses for vehicles and technology.
• Identifying core business processes or activities – This step also involves discussions with staff
to understand, at an operational level, the work of the operating unit. Core business processes
used to provide services are identified and then defined by the tasks that are involved.
Processes are also organized by direct and indirect categories:
• Direct processes and activities – Those processes that directly contribute to the processing of
an application or permit are first identified. Examples of a direct activity are permit intake, plan
review, and building inspection.
• Indirect processes and activities – Those processes that support, but do not directly apply to the
processing of a specific application or permit. An example of an indirect activity is customer
service or staff training to maintain certifications.
Step 2: Building cost structures – This second step involves significant interaction with staff and the
development of time estimates for both direct and indirect processes in each department. Specifically,
this step is at the core of the analysis. There are four processes that comprise this step:
• Gathering time estimates for direct processes – By interviewing staff in individual and group
meetings, an estimate of time was assigned to each service by the process that is indicated. For the
most part, the processes included three primary steps:
• Permit intake;
• Plan review; and
6
• Construction inspections.
In this analysis, staff time is estimated and assigned to each step. The sum of all the process steps is
the total time that is required to provide that specific service.
• Assigning indirect and annual process time – An annual time estimate is gathered from staff for
those indirect or support processes in which they are involved. These may include activities such as
program administration, customer service, and department administration. These costs are
allocated to all services proportionately to all services provided by the department.
• Calculating fully loaded hourly rates and the cost of service – Once the total time for each direct
and indirect service is estimated, the cost of service is calculated by using the fully loaded hourly
rates for each staff member or position that is involved with the service. The fully loaded hourly
rate for each employee is based on the employee's salary and benefit costs plus a share of non-
personnel and City overhead costs divided by the employee's available work hours (i.e. 2,080 hours
minus all leave hours). Thus, the direct and indirect cost by activity also includes departmental and
Citywide overhead as well as non-labor costs. The source of City indirect costs and non-personnel
costs is from the annual budget or cost allocation that has been established by the City.
• Gathering activity or volume data – A critical element in the analysis is the number of times a given
service is provided on an annual basis. This is critical data for three reasons:
• It allows a calculated projection of current revenue based on current prices. This is compared
with actual revenue to see if there is a close match as the data should match.
7
• It allows for a calculated projection of revenue at full cost. This is compared to actual
expenditures to see if there is a close match as the data should match.
• It allows for a calculation of total hours consumed. Hours consumed must closely match actual
hours available.
If any of the three calculations do not approximate actual numbers, then time estimates and/or volume
data need to be re-evaluated. These are critical quality checks for costing accuracy.
Step 3: Calculating the full cost of services – This third step calculates the full cost of service for each
direct service in the department. In the previous step, the cost of service was calculated for each direct
and indirect service. In this step, the cost layers are brought together to establish the full cost of service
for a specific direct service, program, or activity. As previously mentioned the cost of each direct service
is calculated. To determine the full cost of service, the cost of indirect services is allocated to each direct
service. The indirect services costs are allocated to each direct service based on each direct services
proportion of labor spent processing each permit and application. By summing the direct and allocated
indirect costs and multiplying that by the activity data, a total cost of service is calculated for both an
individual service and the operating unit as a whole.
Step 4: Setting fees
Based on any new, existing, or revised cost recovery policies, the recommended fees can be established.
The recommended fees will be established based on City staff recommendations and Council discussion
in the future. The fee analyses in this report are based on full cost recovery.
Assuring Quality Results
In our analysis we utilize both quantitative and qualitative tests for quality.
Quantitative
Our process incorporates substantial input from both individuals and groups. Our belief is that we get
the best data from group interviews. For example, in determining how much time is required for any
specific type of building inspection, we want to hear the perspective of an inspector, the supervisor, and
the counter tech or project manager. Each will have a perspective. Each will contribute value to the
estimate. When all perspectives agree, we have a good sense of confidence in our results.
Qualitative
We also utilize four qualitative measure of quality data. When each of these measures match and there
are no major disagreements with the qualitative assessment, we have significant confidence in our
results. These qualitative measures are:
Quantitative Analysis Targeted Margin of Error
1) Budgeted expenses entering the cost models must equal total expenses accounted for in the
costing model.
0%
2) Projected revenue from fees must closely match actual revenue from fees. + or – 5%-10%
8
3) Available staff time must be fully accounted for in the costing models. 0%
4) Total revenues from fees and contributions from the general fund or other sources must match
total expenses.
0%
9
Valuations
Total Job Cost (current valuation)394,166,970$
Total Valuation (Calculated from ICC Table)276,628,520$
Summary of Results
Department Revenue Projection and Reserve Fund Calculations
Based on our modeling we project a shortfall of revenue of $1,102,130 for fiscal year 2017-2018. Obviously, this will
not build reserves to protect the Department from future economic cycles.
Revenue at Full Cost of
Services
Projection of
Revenues at
Current Fees
Annual Surplus
(subsidy)
$ 14,077,204 $ 12,975,074 ($1,102,130)
Based on discussions with staff a determination was made that the Department should target a 3-month operating
expense to be held in reserve and to build this up over 5 years. This adds an additional $652,317 of revenue to
meet both current operating expenses and building a reserve fund.
Given Construction Value Vs. International Code Council (ICC)
As stated earlier, (Introduction and Scope) the building plan check and inspection fees are based on a multiplier of
project valuation. A major objective of the study was to calculate building permit and plan check fees based on an
independent and objective assessment of value. This contrasts with the current method of calculating plan check
and inspection fees based on given or construction value. The International Code Council (ICC) provides a valuation
table for each of the major building projects and construction types. The formula is simple: total square footage X
ICC multiplier = total valuation. For example, a 5,000 SF custom home is going to carry a value based on the ICC
table of $563,250. This contrasts with construction value which can vary with construction materials, furnishings,
quality and experience of the contractor and regional market forces. However, the cost to provide plan check and
inspection services by the City do not change relative to these same market forces.
Observations of Building Valuations
Assessing the annual building valuation as defined by the ICC was a critical part of the project. The only way to
calculate an accurate multiplier is to know total project valuation. To do this, Plan Reviewers tracked a second set
of project data as part of their normal fee calculations. These additional data included:
1. Building occupancy type such as Assembly – theaters; Assembly – churches; Business; Mercantile,
Residential homes; Storage facilities, etc.
2. Construction type; and
3. Construct size (square footage).
These data gave us the ability to project forward a total annual valuation number based on the ICC table and
thus determine a multiplier. We did not use an entire year of data as it was not available at the time of the
analysis. However, the sample size was 9 months and over 900 data records, which should be sufficient sample
size to determine annual valuation as defined by the ICC. The comparative results follow:
10
Fees Generate as a Percentage of the Permit Fee Total Valuations Target Revenue Required Sum Permit Values Required % Multplier Current Fee
Total Plan Check Cost (from cost model, assumes
reserves)
276,628,520$ 2,988,332$ 3,996,139$ 74.8%Varies
Fire and Life Safety Plan Check (from cost model) *218,809,753$ 1,718,935$ 3,160,896$ 54%45%
Public Works Plan Check (from cost model) *56,853,663$ 363,442$ 821,300$ 44.3%12%
Zoning Plan Check (from cost model) *166,115,084$ 833,314$ 2,399,676$ 34.7%30%
* Assumes build up of reserves
Comprehensive Plan Update (base: per $1,000 of valuation)300,000$ 276,629$ 1.08$ 0.55$
As the reader can see, valuation based on a given job cost creates total valuations that are very different than
using the ICC table. However, because both use a multiplier to calculate a fee, the critical number is not valuation
but the multiplier.
Calculating the Cost of Valuation Based Fees
Calculating the correct multiplier is relatively simple. By knowing the annual valuation and by knowing the annual
cost of inspection services we can calculate the correct multiplier. The following graphic illustrates:
The multiplier of 1.45% is what creates the permit fee for inspection services or the permit cost. Therefore, when
applied to the valuation of an individual project, a project with a $100,000 valuation creates a permit fee of $1,440.
The building plan check fee is a function of the permit fee = 74.8%. Thus, the total permit and building plan check
fee is $1,440 + (74.8% x $1,440) = $2,517.
Four other fees are driven off the valuation and permit fee. These include:
1. Zoning plan check fee, (as a percentage of the building permit);
2. Fire and life safety plan check fee, (as a percentage of the building permit);
3. Public Works plan check fee, (as a percentage of the building permit); and
4. Comprehensive plan update fee, (as a cost per $1000 of valuation).
The results follow:
While the multipliers are increasing, it should be noted that valuations are, on average, going down. Therefore, it is
difficult to say if the actual fee charged is going to change by a significant amount.
Total Valuations Target Revenue Required Valuation (Permit)
Multiplier
Total Permit Cost (from cost model, assumes reserves) 276,628,520$ 3,996,139$ 1.44%
11
Fee Type
Projected Fee
Revenues at Full
Cost (w/ reserves)
Projected
Revenues at
Current Prices
Difference
(Potential New
Revenue)
Valuation
Bldg Permit & Plan Check $ 6,984,471 $ 6,577,408 $ 407,062
Fire and Life Safety Plan Check $ 1,718,935 $ 1,057,088 $ 661,847
Public Works Plan Check $ 363,442 $ 193,838 $ 169,604
Zoning Plan Check $ 833,314 $ 983,696 ($150,382)
Total Valuation $ 9,900,162 $ 8,812,030 $ 1,088,132
Non-Valuation
Building Total 1,742,844$ 1,511,676$ $231,169
Construction & Demolition 162,203$ 167,487$ ($5,284)
Mechanical 139,767$ 134,147$ $5,620
Plumbing 217,548$ 202,000$ $15,548
Electrical 421,572$ 367,170$ $54,402
Green Building 510,868$ 496,988$ $13,880
Use and Occupancy 290,886$ 143,884$ $147,002
Fire Prevention Total 1,704,096$ 1,850,605$ ($146,509)
Public Works Total 645,585$ 569,596$ $75,989
Building Admin and Reinspection Fees 217,950$ 231,167$ ($13,217)
Miscellaneous Building Fees 518,884$ 0$ $518,884
Total Resources Consumed $ 14,729,521 $ 12,975,074 $ 1,754,447
Summary of Results by Division or Work Unit
The following graphic outlines various levels of recovery for each of the major work units within the Development
Services Department.
Project Revenues Based on Current Activity Levels
12
Observations and Recommendations
Monitoring Revenues
The fee schedule and the model of calculating fees is changing significantly. Therefore, we would strongly urge
careful monitoring of revenues. The calculations of value require Project Coordinators to identify and input new
data into the permitting system. In addition, for some projects, given value is the only way of calculating value.
Therefore, care should be taken that revenues neither significantly exceed cost nor under recover costs. Our
recommendation is that Development Services leadership and managers carefully monitor Project Coordinators
during the early phases of adoption. In our view managers should be onsite and available for questions and
assistance to support Project Coordinators.
Adjusting the Fee Schedule
Given the changes in structure we would recommend regular reviews to compare actual vs projected revenues
and a report to Council if revenues are significantly out of scope with projections. This may require adjustments
to fees during the fiscal year.
In addition, we also recommend that fees be adjusted annually. For flat fees we recommend using a simple CPI
type increase that is attached to the City’s labor cost. For example, if the labor cost for the City goes up by 2%
then adjust each fee by 2%. This is the simplest and most common method of adjusting fees. It is our observation
that the regulatory requirements change enough within three to five years that a comprehensive review of costs
is then warranted. We understand that the City’s policy is to adjust fees annually based on changes to salaries
and benefits. We would affirm this practice and find that those cities that do this, maintain better cost recovery
levels over the long term.
For the valuation based fees we would recommend adjusting the ICC multiplier each time the ICC table is
adjusted or at a minimum, annually. This valuation table is adjusted by the ICC at regular intervals and we would
highly recommend that these valuations be monitored and maintained.
Building Reserves
We regularly recommend 6-12 months of operating expenses as a reserve. Based on discussions with Department
leadership and the Office of Finance and Management a decision was made to target 3 months of operating
expenses as a reserve. This has been built into the fee models as part of the department's expenses. Based on our
modeling, this should add $652,317 to the department's expenses in the first year. However, we would fully expect
this to be even higher due to seasonal fluctuations in activity and larger projects requiring services across multiple
years.
13
DEVELOPMENT SERVICES FEE TABLE
The following table details the individual unit costs of each fee in the Department and provides annual revenue
impacts for each fee and all fees collectively.
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name Unit/Notes Actual Work
Volume Direct Cost Indirect Costs Other external
costs
Total Cost
Assigned /
Annual
Revenues
Current
Fee / Revenue
Unit Surcharge or
(Subsidy)
Unit Cost Summary
BUILDING FEES
1,165 Business Registry Fee per business -$ 50.00$ $50
-$
Building New Construction (Valuation Based Fees, Annual Revenues
and Expenses)-$
Total Building Permit Costs/Revenue 1 2,200,076$ $1,631,970 $3,832,046 3,572,026.00$ ($260,020)
Building Plan Review Fees
80% of Bldg
Permit Fee 1 1,645,228$ $1,220,395 $2,865,623 2,997,912.25$ $132,289
Elective Plan Check
35% of current
Bldg Plan Check -$ 7,470.00$ $7,470
Fire and Life Safety Plan Check
45% of Bldg
Permit Fee 1 1,161,234$ $471,091 $1,632,324 1,057,087.57$ ($575,237)
Public Works Plan Check
12% of Bldg
Permit Fee 1 228,484$ $32,402 85,515.00$ $346,401 193,838.00$ ($152,563)
Zoning Plan Check
30% of Bldg
Permit Fee 1 685,066$ $97,152 $782,219 983,696.33$ $201,478
Residential Swimming Pools (includes strucural, mechanical,
electrical)New 153$ $114 $267 ($267)
Commercial and Multi Family Swimming Pools (includes strucural,
mechanical, electrical)New 230$ $171 $401 ($401)
-$
1,217 I. Building Demolition Permit 177 274$ $203 $478 431.00$ ($47)
1,218 J. Commercial Interior Non-Structural Demolition Permit 39 98$ $73 $171 196.00$ $25
-$ -$
1,207 Additional Plan Review per hour 117 105$ $78 $183 224.00$ $41
1,202 -$ -$
1,208 Certified Access Specialist (CASp) Review/Consultation Hourly 202$ $150 $352 276.00$ ($76)
1,203 -$ -$
1,204 Address change - single address 278$ $206 $485 399.00$ ($86)
1,206 Address change - each additional address 135$ $100 $234 192.00$ ($42)
-$ -$
-$ -$
Construction & Demolition -$
1,198
Commercial and Multi-Family Projects greater than or equal to
$25,000.00 in Valuation per permit 89 168$ $124 $292 412.00$ $120
1,200
Single Family and Two Family Projects greater than $25,000.00 and
less than $75,000.00 in Valuations per permit 18 90$ $66 $156 172.00$ $16
1,199
Single Family and Two Family Projects greater than $75,000.00 in
Valuation per permit 71 116$ $86 $201 252.00$ $51
-$
Va
l
u
a
t
i
o
n
B
a
s
e
d
F
e
e
s
(
A
n
n
u
a
l
Re
v
e
n
u
e
s
a
n
d
C
o
s
t
s
)
-$
Capital Accounting Partners Page 1 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name Unit/Notes Actual Work
Volume Direct Cost Indirect Costs Other external
costs
Total Cost
Assigned /
Annual
Revenues
Current
Fee / Revenue
Unit Surcharge or
(Subsidy)
Unit Cost Summary
BUILDING FEES
ELECTRICAL PERMITS
1,228 Air Conditioners per unit 39 38$ $28 $67 91.00$ $24
1,230 -$
1,226 Base Fee per permit 1,696 63$ $47 $111 92.00$ ($19)
1,240 Busway, Power Duct install, repair or replace per permit 20 32$ $24 $56 75.00$ $19
1,229 per permit -$
1,249 Additional meter (groups of 5)per permit 2 84$ $63 $147 75.00$ ($72)
1,234 Fixtures, Switches, and Outlets (groups of 20 per permit 1,633 32$ $24 $56 75.00$ $19
1,241
Lighting, Power and/or Control Panel Board, Switchboard Cabinet or
Panel per permit 43 38$ $28 $67 75.00$ $8
1,236 Motors per permit 13 32$ $24 $56 75.00$ $19
1,235 -$
1,227
1,237 Range, Electric Clothes Dryer, or Water Heater per permit 2 32$ $24 $56 75.00$ $19
Installation of a generator New 40 243$ $180 $423 -$ ($423)
1,248 Service Conductor/Switch - Greater than 800 ampre per permit 2 115$ $85 $200 272.00$ $72
1,246 -$
1,247 Service Conductor/Switch - Less than 800 ampre per permit 139 202$ $150 $352 181.00$ ($171)
1,238 Special Circuit (Not Listed Herein)per permit 26 32$ $24 $56 75.00$ $19
1,250 Temporary Power Pole per permit 149 32$ $24 $56 75.00$ $19
1,251 Temporary Wiring for Construction per permit 32$ $24 $56 75.00$ $19
-$ -$
Electrical Permits - Electrical Vehicle Charging Stations -$ -$
1,232 Commercial (Level 1 and 2)17 196$ $146 $342 427.00$ $85
1,233 Commercial (Level 1 and 2) - each additional station 79 37$ $27 $64 83.00$ $19
1,233 Commercial (Level 3 and 4)1 235$ $174 $409 518.00$ $109
1,234 Commercial (Level 3 and 4) - each additional station 46$ $34 $79 102.00$ $23
1,231 Residential (level 1 & 2)per station 57 85$ $63 $147 188.00$ $41
Residential (level 3)129$ $96 $225 264.00$ $39
Electrical Permits - Photovoltaic Systems -$ -$
Residential System (less than 10 kw)127 91$ $68 $159 91.00$ ($68)
1,242 Residential System (greater than 10 kw)each 196$ $146 $342 340.00$ ($2)
1,243 Commercial System (less than 10 kW)each 307$ $227 $534 600.00$ $66
1,244 Commercial System (10kW - 49kW)each 3 307$ $227 $534 901.00$ $367
1,245 Commercial System (greater than 49kW)each 1 412$ $305 $717 976.00$ $259
MECHANICAL PERMITS
Swimming Pool Heater 23 31$ $23 $53 72.00$ $19
1,254 Admin base fee 1,021 63$ $47 $111 92.00$ ($19)
1a -$ -$
Capital Accounting Partners Page 2 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name Unit/Notes Actual Work
Volume Direct Cost Indirect Costs Other external
costs
Total Cost
Assigned /
Annual
Revenues
Current
Fee / Revenue
Unit Surcharge or
(Subsidy)
Unit Cost Summary
BUILDING FEES
1b Furnace, Flue and Associated Ducts 98 51$ $38 $89 182.00$ $93
1c -$
1d -$
2 -$
3 -$
Boilers, Compressors, and Absorption Systems:-$
4a
Up to and including 30 HP, absorption system up to and including
100,000 Btu/h 51$ $38 $89 122.00$ $33
4b
For the installation or relocation of each boiler or compressor
exceeding 30 hp, or each absorption system exceeding 1,000,000
Btu/h 86 51$ $38 $89 182.00$ $93
4c -$
4d -$
4e -$
5 Air handlers up to and including 10,000 cf per cfm…26$ $19 $45 60.00$ $15
-$
7a Ventilation and exhaust 78 26$ $19 $45 60.00$ $15
7b -$
7c -$
Miscellaneous -$ -$
9
Each appliance or piece of equipment regulated by this code, but
not classed in other appliance categories for which no other fee is
listed in this table 26$ $19 $45 60.00$ $15
-$ -$
10a 4 -$ 97.66$ $98
10b -$ 54.11$ $54
Process Piping System 26$ $19 $45 60.00$ $15
11a Process Piping System - Hazardous 26$ $19 $45 145.00$ $100
11b -$ 54.11$ $54
11c -$ 130.12$ $130
11d -$ 130.12$ $130
PLUMBING PERMITS - GRAY WATER SYSTEMS
1,266 Admin base fee 1,310 63$ $47 $111 92.00$ ($19)
1 Plumbing fixture on one trap or set of fixtures (set of 5)82 64$ $47 $111 91.00$ ($20)
2 For each building sewer 135 62$ $46 $107 145.00$ $38
3 -$ -$
4 -$
6 For each water heater, vent, or both 56 46$ $34 $80 109.00$ $29
7 Gas Piping System 142 92$ $68 $160 217.00$ $57
8 Gas Piping System Repair 46$ $34 $80 48.70$ ($31)
Capital Accounting Partners Page 3 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name Unit/Notes Actual Work
Volume Direct Cost Indirect Costs Other external
costs
Total Cost
Assigned /
Annual
Revenues
Current
Fee / Revenue
Unit Surcharge or
(Subsidy)
Unit Cost Summary
BUILDING FEES
9 Interceptor, including trap and vent 92$ $68 $160 217.00$ $57
10
Installation, alteration or repair of water piping, water treatment
equip or both 1 46$ $34 $80 109.00$ $29
11 -$
12 -$
13A Atmospheric-type vacuum breakers 46$ $34 $80 109.00$ $29
13B -$
14 Backflow protective device other than atmospheric-type (any size)78 92$ $68 $160 217.00$ $57
Plumbing Permits - Graywater Systems -$ -$
1,271 Clothes washer System 38$ $28 $67 91.00$ $24
1,273 Complex System 1 92$ $68 $160 217.00$ $57
1,272 Simple System 3 38$ $28 $67 91.00$ $24
16 -$
17 -$
18 Medical Gas Piping Systems 92$ $68 $160 217.00$ $57
-$
-$ -$ -$
Solar hot water system 92.060$ 68.288$ 160.35$ 217.00$ $57
1,190 Storm drain system 92$ $68 $160 217.00$ $57
1,191 Swimming pool 31$ $23 $53 72.00$ $19
Use & occupancy Permits
1,187 Certificate of Use and Occupancy each 155 603$ $447 $1,050 287.00$ ($763)
1,188 Certificate of Use and Occupancy - Replacement each 125$ $93 $218 123.00$ ($95)
1,189 -$ -$
1,186
Temporary Occupancy Permit - Multi-Family Residential, Non-
Residential, and Other Commercial each 33 455$ $337 $792 673.00$ ($119)
1,185
Temporary Occupancy Permit - Single Family Residential and
Commercial Tenant Improvement less than 10,000 sq. ft.each 155 334$ $247 $581 498.00$ ($83)
-$
FIRE FEES
Hazardous Materials Classification Permits -$ -$
1,367 Compressed Gas annually 28 237$ $96 $334 391.00$ $57
1,363 Corrosives annually 54 237$ $96 $334 391.00$ $57
1,364 Cryogenic Fluid annually 42 237$ $96 $334 391.00$ $57
1,365 Flammable and Combustible Liquids annually 172 237$ $96 $334 391.00$ $57
1,368 Flammable Gas annually 28 237$ $96 $334 391.00$ $57
1,366 Flammable Solids annually 237$ $96 $334 391.00$ $57
1,373 Health Hazard (Liquids & Solids)annually 33 237$ $96 $334 391.00$ $57
1,381 Liquefied Petroleum Gases annually 10 237$ $96 $334 391.00$ $57
Capital Accounting Partners Page 4 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name Unit/Notes Actual Work
Volume Direct Cost Indirect Costs Other external
costs
Total Cost
Assigned /
Annual
Revenues
Current
Fee / Revenue
Unit Surcharge or
(Subsidy)
Unit Cost Summary
BUILDING FEES
1,354 Organic Coatings annually 237$ $96 $334 391.00$ $57
1,374 Organic Peroxides annually 1 237$ $96 $334 391.00$ $57
1,355 Ovens - Industrial Baking or Drying annually 4 237$ $96 $334 391.00$ $57
1,375 Oxidizers (Liquids & Solids)annually 16 237$ $96 $334 391.00$ $57
1,369 Oxidizing Gas annually 34 237$ $96 $334 391.00$ $57
1,356 Parade Float per hour 237$ $96 $334 391.00$ $57
1,357 Place of Public Assembly per occurrence 475$ $193 $667 391.00$ ($276)
1,370 Pyrophoric Gas annually 1 237$ $96 $334 391.00$ $57
1,376 Pyrophoric Materials (Liquids & Solids)annually 4 237$ $96 $334 391.00$ $57
1,358 Pyrotechnical Special Effects Material annually 237$ $96 $334 391.00$ $57
1,377 Radioactive Materials annually 28 237$ $96 $334 391.00$ $57
1,359 Refrigeration Equipment annually 237$ $96 $334 391.00$ $57
1,360 Spraying/Dipping annually 17 237$ $96 $334 391.00$ $57
1,361
Tent or air-supported structure having an area in excess of 200
square feet; or canopies in excess of 400 square feet (includes a
public assembly permit of $125.00 for all tents)each 496$ $201 $697 307.00$ ($390)
1,362 Tire Recapping/Tire Storage annually 944$ $383 $1,327 1,561.00$ $234
1,371 Toxic, Highly Toxic, Moderately Toxic, Health Hazard Gas annually 11 237$ $96 $334 391.00$ $57
1,378 Toxic, Highly Toxic, Moderately Toxic, Health Hazard Materials annually 38 237$ $96 $334 391.00$ $57
1,372 Unstable Reactive Gas annually 1 237$ $96 $334 391.00$ $57
1,379 Unstable Reactive Materials (Liquids & Solids)annually 237$ $96 $334 391.00$ $57
1,380 Water Reactive Materials (Liquids & Solids)annually 237$ $96 $334 391.00$ $57
Other Hazardous Materials - Unclassified 237$ $96 $334 391.00$ $57
Hazardouis Materials County Reimbursement -$ -$
Hazardous Materials Storage Permits -$ -$
1,311
Additional Approvals for Hazardous Materials Storage Permit (first 2
hours)514$ $209 $723 848.00$ $125
1,312
Additional Approvals for Hazardous Materials Storage Permit (per
hour for time above 2 hours)336$ $136 $473 554.00$ $81
1,308 Business Plan (HMBP)annually 234 336$ $136 $473 554.00$ $81
1,312 Late Fee for Hazardous Materials Storage Permit -$ -$
1,305 Level I Facility 81 237$ $96 $334 391.00$ $57
1,306 Level II Facility 119 475$ $193 $667 782.00$ $115
1,307 Level III Facility 191 949$ $385 $1,335 1,565.00$ $230
1,309 Petroleum Aboveground Storage Tank annually 26 475$ $193 $667 782.00$ $115
Capital Accounting Partners Page 5 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name Unit/Notes Actual Work
Volume Direct Cost Indirect Costs Other external
costs
Total Cost
Assigned /
Annual
Revenues
Current
Fee / Revenue
Unit Surcharge or
(Subsidy)
Unit Cost Summary
BUILDING FEES
1,310 Provisional (6 Month)475$ $193 $667 782.00$ $115
-$ -$
-$ -$
Fire Inspection Fees -$ -$
1,313
Additional Resinspection Fee (up to 2 hours during normal business
hours)150 472$ $191 $664 781.00$ $117
1,313 Additional Resinspection Fee (each additional hour)236$ $96 $332 390.00$ $58
1,314 After Hours Inspection Fee 354$ $144 $498 585.00$ $87
1,316 Care Facility annually -$ -$
1,317 Care Facility Inspection Including Fire Clearance (7-14 clients)472$ $191 $664 390.00$ ($274)
Care Facility Inspection Including Fire Clearance (more than 14 236$ $96 $332 780.00$ $448
1,315 Christmas Tree Lot/Pumpkin Patch each 236$ $96 $332 391.00$ $59
1,321 High Rise Building - Certificate of Compliance (annually up to 4 984$ $399 $1,382 1,626.00$ $244
1,322 High Rise Building - Certificate of Compliance (each additional hour))236$ $96 $332 391.00$ $59
1,318 Outside Cooking Booths each 354$ $144 $498 210.00$ ($288)
1,320 Standby Fire Watch or After Hours at Fire or Incident Scene per hour 236$ $96 $332 391.00$ $59
1,319 Use and Occupancy Fire Inspection per inspection 155 236$ $96 $332 148.00$ ($184)
As-Built Plan Check and Additional Work each 75 472$ $191 $664 780.00$ $116
-$ -$
Investigations & Consultations -$ -$
1,325 Additional Hours Over Plan Review/Inspection each 168$ $68 $237 308.00$ $71
1,323 Alternate Means and Methods Application per application 75 504$ $205 $709 735.00$ $26
1,324 Appeals to Decisions per hour 236$ $96 $332 391.00$ $59
1,322 Consultation Fee per hour 475 236$ $96 $332 391.00$ $59
1,328 -$ -$
1,327 Hydrant Flow Fee per occurrence 75 236$ $96 $332 391.00$ $59
1,326 Site Disaster Planning per hour 236$ $96 $332 391.00$ $59
-$ -$
-$ -$
Life Safety & Fire Protection
1294A Automatic Fire Sprinkler Installation/Modification 1- 19 heads 1,043$ $423 $1,465 780.00$ ($685)
1,295 Automatic Fire Sprinkler Installation/Modification (plus per head)2$ $1 $3.32 4.80$ $1
Capital Accounting Partners Page 6 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name Unit/Notes Actual Work
Volume Direct Cost Indirect Costs Other external
costs
Total Cost
Assigned /
Annual
Revenues
Current
Fee / Revenue
Unit Surcharge or
(Subsidy)
Unit Cost Summary
BUILDING FEES
1,301 Express Fire Protection Plan Check Fee 50% of usual fee -$ 173.00$ $173
1,296 Fire Alarm System Installation and Modification 641$ $260 $900 1,090.00$ $190
1,297
Fire Alarm System Installation and Modification (plus a device or
contact point)14$ $6 $19.91 22.00$ $2
1,303
Fire Protection and Fire Access Plan Review for New Single Family
Dwellings or Additions each 523$ $212 $735 894.00$ $159
1,298 Hydrant Installation/Modification - Private 118$ $48 $166 195.00$ $29
1,295 Other Automatic Fire Extinguishing System 641$ $260 $900 1,090.00$ $190
1,297 Standpipe System - Wet, Dry, or Combination 25 472$ $191 $664 780.00$ $116
1,300 Temporary Certificate of Occupancy per occurrence 511$ $207 $719 377.00$ ($342)
1,299 Underground Fire Service Line
per 200LF of pipe
(inspection,
reinspection - 150 1,113$ $451 $1,564 1,870.00$ $306
1,304 Verification of Fire Protection System Maintenance and Certification annually 43$ $18 $61 88.00$ $27
Food truck permits 118$ $48 $166 210.00$ $44
Multifamily dwellings, hotels & motels -$ -$
4-50 units 236$ $96 $332 391.00$ $59
51-100 units 472$ $191 $664 780.00$
Greater than 100 units 708$ $287 $995 1,170.00$ $175
Fire Prevention Inspection of Private Schools 472$ $191 $664 780.00$ $116
1294B Automatic Fire Sprinkler Installation/Modification 19+472$ $191 $664 1,724.00$ $1,060
Specific Hazard Permits -$ -$
1,329 Aerosol Products annually 295$ $120 $415 488.00$ $73
1,330 -$ -$
1,331 -$ -$
1,332 Bowling Alley and Pin Refinishing Involving the use of Flammable each 688$ $279 $968 1,138.00$ $170
1,333 Candles and Open Flames in Assembly Areas annually 236$ $96 $332 391.00$ $59
1,334 Carnivals and Fairs each 984$ $399 $1,382 189.00$ ($1,193)
1,335 Cellulose Nitrate Storage/Nitrate Film annually 69$ $28 $97 113.00$ $16
1,337 -$ -$
1,336 -$ -$
1,338 -$
1,339 -$ -$
1,340 -$ -$
1,341 Delete -$
1,342 High-piled Combustible Storage Delete -$ -$
1,343 Hot Work (Welding) Operations Delete -$ 391.00$ $391
1,349 Liquid or Gas-Fueled Powered Equipment each 236$ $96 $332 391.00$ $59
1,344 each -$ -$
Capital Accounting Partners Page 7 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name Unit/Notes Actual Work
Volume Direct Cost Indirect Costs Other external
costs
Total Cost
Assigned /
Annual
Revenues
Current
Fee / Revenue
Unit Surcharge or
(Subsidy)
Unit Cost Summary
BUILDING FEES
1,350 annually -$ -$
1,345 Malls - Covered annually 472$ $191 $664 782.00$ $118
1,351 Occupant Load Increase - Temporary Public Assembly each 236$ $96 $332 391.00$ $59
1,352 Open Burning each 236$ $96 $332 391.00$ $59
1,348 Open Flame/Flame Producing Devices each 236$ $96 $332 391.00$ $59
1,353 Operate a Tank Vehicle to Transport Flammable/Combustible Liquids annually 334$ $136 $470 553.00$ $83
1,347 Place of Public Assembly - Temporary each 236$ $96 $332 391.00$ $59
1,346 Temporary Kiosks -$ -$
Place of Assembly 236$ $96 782.00$ $782
Fire Miscellaneous Fees -$ -$
TCO fee for Vendors/Stock occupancy (Requires at least one
additional inspection)250 760$ $308 $1,069 1,212.00$ $143
1,288 Emergency Response Fee - Hazmat (PAMC 17.24.050)Per hour 236$ $96 $332 369.00$ $37
1,289 Installation or Closure Without Approved Plans and/or Permits Fine -$ 275.00$ $275
Fire plans revision 76 -$ -$
Building Admin and Reinspection Fees
1,176 All Other Publications each -$ 16 $16 18.00$ $2
1,201 -$ -$
1,172 Electric Service and Safety Inspection per hour 162$ $23 $185 169.00$ ($16)
1,181 Extension of Building Permit or Building Permit Application per application 31 65$ $9 $74 95.00$ $21
1,174
Inspections and Investigations - Outside Normal Business Hours
(1.5xOThour)1 303$ $43 $346 408.00$ $62
1,175
Inspections and Investigations - Outside Normal Business Hours
(2.0xOThour)52 404$ $57 $462 544.00$ $82
1,173 Inspections and Investigations - Unclassified per hour 202$ $29 $231 254.00$ $23
1,184
Reactivation of Expired Building Permit - All Others (50% Bldg permit
fee)19 182$ $26 $208 -$ ($208)
1,183 Reactivation of Expired Building Permit - Final Inspection Only 16 211$ $30 $240 283.00$ $43
1,182 Reactivation of Expired Building Permit Application 16 128$ $18 $147 211.00$ $64
1,178 Real Property Research Fee (1-hour minimum)per hour 189$ $27 $215 271.00$ $56
1,177 Records Retention per plan sheet 20,234 5$ $1 $6 6.00$ $0
1,180 Reinspection Fee - Multi-Family Residential and Non-Residential each 2 113$ $16 $129 315.00$ $186
1,179
Reinspection Fee - Single Family Residential (each secondary
inspection type)14 62$ $9 71$ 247.00$ $176
1,180
Reinspection Fee - Single Family Residential (each primary inspection
type)116$ $16 132$ 315.00$ $183
Capital Accounting Partners Page 8 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name Unit/Notes Actual Work
Volume Direct Cost Indirect Costs Other external
costs
Total Cost
Assigned /
Annual
Revenues
Current
Fee / Revenue
Unit Surcharge or
(Subsidy)
Unit Cost Summary
BUILDING FEES
1,171 Request for Release of Building Plans each 63$ $9 $72 85.00$ $13
1,175 Inspection Guidelines each -$ 37.00$ $37
Conditional Utility Agreement 187 194$ $27 $221 265.00$ $44
Emergency Responder Radio Coverage (testing) fee.25 405$ $57 $462 663.00$ $201
PUBLIC WORKS
1,166 Protected Tree Removal 56 459$ $65 $524 280.00$ ($244)
1,283 Grading: A. 101 - 1,000 cubic yards (first 101 CY)30 105$ $15 $120 197.00$ $77
1,284
Grading: A. 101 - 1,000 cubic yards (plus each additional 100 CY or
fraction thereof)105$ $15 $120 197.00$ $77
1,284 Grading: B. 1,001 - 10,000 cubic yards (first 1000 CY)30 1,048$ $149 $1,196 1,970.00$ $774
1,285
Grading: B. 1,001 - 10,000 cubic yards (each additional CY or fraction
thereof)105$ $15 $120 186.00$ $66
1,285 Grading: C. 10,001 or more cubic yards (first 10,000 CY)5 1,452$ $206 $1,658 3,838.00$ $2,180
1,286
Grading: C. 10,001 or more cubic yards (each additional 10,000 CY or
fraction thereof)105$ $15 $120 711.00$ $591
248 Tree Inspection for Private Development per inspection 55 237$ $34 $270 139.00$ ($131)
1,287 -$
1,288 Wet Season Construction Site Storm Water Inspection Per month 20 182$ $26 $208 ($208)
1,286 -$
1,171 Dumpster, Container 40 156$ $22 $178 310.00$ $132
Bldg Non-residential single day Current 55 656$ $93 $749 1,249.00$ $500
Bldg Non-residential long-term (more than 5 days)25 761$ $108 $869 2,039.00$ $1,170
Bldg Non-residential long-term (less than 5 days)25 420$ $60 $480 1,466.00$ $986
Bldg Residential (encroachments)4 536$ $76 $612 501.00$ ($111)
Bldg VTA Bus Shelter installation/relocation Hourly -$ 352.00$ $352
GREEN BUILDING FEES
Bldg
Alterations and additions for single and multifamily < 1,000 sq ft and
increases conditioned space Residential 99 162$ $267 $429 429.00$ ($0)
Bldg Alterations and additions for single and multifamily > 1,000 sq ft Residential 166 267$ $441 $708 708.00$ ($0)
Bldg Multi Family New Construction of 1-3 (attached) Units 4 348$ $575 $923 923.00$ $0
Bldg Multi Family New Construction of 4 or more units Residential 559$ $923 $1,481 1,481.00$ ($0)
Bldg New Single family and duplex Residential 7 348$ $575 $923 923.00$ $0
Bldg
Tenant improvements, renovations, or alterations > 5,000 sq ft that
includes replacement or alteration of
at least two of the following: HVAC system, building envelope, hot
water system, or lighting
system and project value greater than $200,000.Non-Residential 34 243$ $401 $644 644.00$ $0
Capital Accounting Partners Page 9 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name Unit/Notes Actual Work
Volume Direct Cost Indirect Costs Other external
costs
Total Cost
Assigned /
Annual
Revenues
Current
Fee / Revenue
Unit Surcharge or
(Subsidy)
Unit Cost Summary
BUILDING FEES
Bldg
C. Tenant improvements, renovations or alterations > $200,000 in
valuation (and not triggered by a Calgreen Tier) Non-Residential 42 243$ $401 $644 644.00$ $0
Bldg
If the project is over $100,000 Energy Star is required after 12
months of occupancy Non-Residential 53$ $87 $140 140.00$ $0
Bldg New commercial 1000 - 25,000 SF Non-Residential 21 453$ $749 $1,202 1,202.00$ ($0)
Bldg New commercial 25,001-50,000 SF Non-Residential 559$ $923 $1,481 1,481.00$ ($0)
Bldg New commercial >50,000 SF Non-Residential 664$ $1,097 $1,761 1,761.00$ $0
Bldg Landscape Review - plan review: Non-residential Non-Residential 60 706$ $1,180 $1,886 1,886.00$ ($0)
Bldg Landscape Review - inspection Non-Residential 60 69$ $115 $185 185.00$ $0
Bldg Landscape Review - plan review SFR 80 434$ $726 $1,161 1,161.00$ $0
Bldg Landscape Review - inspection SFR 80 69$ $115 $185 185.00$ $0
Bldg Landscape Review - plan review Multifamily 10 706$ $1,180 $1,886 1,886.00$ ($0)
Bldg Landscape Review - inspection Multifamily 10 69$ $115 $185 185.00$ $0
Bldg -$ -$
ADDITIONAL PUBLIC WORKS FEES
Bldg Fence (encroachment permit)1 1,121$ $159 $1,280 191.00$ ($1,089)
Bldg A. Constriction in public rght of way($1-$5,999)Base 130 364$ $52 $416 712.00$ $296
Bldg B. Constriction in public rght of way($6,000-$25,999)Base 50 364$ $52 $416 712.00$ $296
Bldg B. Constriction in public rght of way($6,000-$25,999)
Plus 3.9%
>$6,000 of value 50 491$ $70 5.85%($0)
Bldg C. Constriction in public rght of way($26,000-$100,999)Base 36 1,221$ $173 $1,394 2,472.00$ $1,078
Bldg C. Constriction in public rght of way($26,000-$100,999)
Plus 4.4% of
value >$26,000 of
value 36 1,830$ $260 4.5%($0)
Bldg D. Constriction in public rght of way(>$101,000)Base 7 3,948$ $560 $4,508 10,572.00$ $6,064
Bldg D. Constriction in public rght of way(>$101,000)
Plus 3.%
>$101,000 of
value 7 5,751$ $816 3.8%($0)
Bldg -$
Bldg Improvement plan review Deposit -$ 1,171.00$ $1,171
Bldg -$
Bldg Temporary Discharge to Storm Drain from Construction Site 15 2,189$ $310 $2,499 ($2,499)
Bldg
Temporary Discharge to Storm Drain (per week of discharge); this is
additional to other fee Current 150 151$ $112 $262 ($262)
Capital Accounting Partners Page 10 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name Unit/Notes Actual Work
Volume Direct Cost Indirect Costs Other external
costs
Total Cost
Assigned /
Annual
Revenues
Current
Fee / Revenue
Unit Surcharge or
(Subsidy)
Unit Cost Summary
BUILDING FEES
Bldg Current -$
Bldg Current -$
Miscellaneous Building Fees
1
Commercial & Residential windows, skylights and doors, New and
alteration (structural) (per 5)131 $153.43 $114 $267 ($267)
2
Commercial & Residential windows, skylights and doors, New and
alteration (non-structural) (per 10)$76.72 $57 $134 ($134)
3 Residential Reroof 29 $153.43 $114 $267 ($267)
4 Residential Reroof (overlay)$38.36 $28 $67 ($67)
5
6 Commercial and multifamily reroof (first 5000 SF)15 $153.43 $114 $267 ($267)
7 Commercial and multifamily reroof (each additional 2500 SF)$38.36 $28 $67 ($67)
8 Kitchen (nonstructural) (per each)245 $115.07 $85 $200 ($200)
9 Bathroom (nonstructural) per each 267 $153.43 $114 $267 ($267)
10 Commercial & Residential Siding replacement or repair 33 $76.72 $57 $134 ($134)
11 Commercial & Residential Stucco replacement or repair 14 $115.07 $85 $200 ($200)
12
13 Technology Surcharge (revenue requirement)250,000 1.8%1.81%
14
15 Commercial doors, new and alteration (structural) (per 5 doors)$115.07 $85 $200 ($200)
16 Commercial door replacement (nonstructural) (per 10)$76.72 $57 $134 ($134)
17 Residential dry rot repair and replacement 11 $115.07 $85 $200 ($200)
18 $38.36 $28 $67 ($67)
19 Deck, new or repair up to 1000 SF 24 $115.07 $85 $200 ($200)
20 Deck, new or repair each additional 1000 SF $38.36 $28 $67 ($67)
21 Sign permit $63.93 $47 $111 ($111)
22 Work without a permit
Twice Permit and
Plan Review Fees
23 Residential and commercial window awnings (groups of 5)1 $38.36 $28 $67 ($67)
24 Cell Tower Equip New 14 $115.07 $85 $200 ($200)
25 Utilities handling fee $63.46 $47 $111 ($111)
26 Progress and partial inspections $30.69 $23 $53 ($53)
27 Consultation (per hour)
28
29 Certifications:
Capital Accounting Partners Page 11 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name Unit/Notes Actual Work
Volume Direct Cost Indirect Costs Other external
costs
Total Cost
Assigned /
Annual
Revenues
Current
Fee / Revenue
Unit Surcharge or
(Subsidy)
Unit Cost Summary
BUILDING FEES
30
Green Building - Special inspector applications and qualifications
(initial review)$217.39 $161 $379 ($379)
31
Green Building - Special inspector applications and qualifications
(renewal/update)$108.70 $81 $189 ($189)
32
Special Inspections - materials testing lab certification (up to 4
hours)$869.57 $645 $1,515 ($1,515)
33
Special Inspections - materials testing lab certification (each
additional hour)$217.39 $161 $379 ($379)
34 Miscellaneous Building - base fee 665 $63.46 $47 $111 ($111)
35 Retaining Walls - first 100 LF $51.14 $38 $89 ($89)
36 Retaining Walls - each additional 100 LF $25.57 $19 $45 ($45)
37
Fees not listed above will either be based on an applicable hourly
rate or at the given valuation
Capital Accounting Partners Page 12 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name
BUILDING FEES
1,165 Business Registry Fee
Building New Construction (Valuation Based Fees, Annual Revenues
and Expenses)
Total Building Permit Costs/Revenue
Building Plan Review Fees
Elective Plan Check
Fire and Life Safety Plan Check
Public Works Plan Check
Zoning Plan Check
Residential Swimming Pools (includes strucural, mechanical,
electrical)
Commercial and Multi Family Swimming Pools (includes strucural,
mechanical, electrical)
1,217 I. Building Demolition Permit
1,218 J. Commercial Interior Non-Structural Demolition Permit
1,207 Additional Plan Review
1,202
1,208 Certified Access Specialist (CASp) Review/Consultation
1,203
1,204 Address change - single address
1,206 Address change - each additional address
Construction & Demolition
1,198
Commercial and Multi-Family Projects greater than or equal to
$25,000.00 in Valuation
1,200
Single Family and Two Family Projects greater than $25,000.00 and
less than $75,000.00 in Valuations
1,199
Single Family and Two Family Projects greater than $75,000.00 in
Valuation
Va
l
u
a
t
i
o
n
B
a
s
e
d
F
e
e
s
(
A
n
n
u
a
l
Re
v
e
n
u
e
s
a
n
d
C
o
s
t
s
)
Annual Revenue With
Reserves
Revenue at Full Cost of
Services
Projection of
Revenues at
Current Fees
Annual Surplus
(subsidy)
R
e
q
u
i
3 Months Reserve,
5 Year Build Full Cost / Unit With Reserves
ANNUAL REVENUE ANALYSIS INCLUDING RESERVES
Reserve RequirementsAnnual Revenue Impact
BUILDING FEES $ 652,317
1,165Business Registry Feeper business -$ 50.00$ $50 -$
-$ -$
-$ -$
Total Building Permit Costs/Revenue12,200,076$ $1,631,970 $3,832,046 3,572,026.00$ ($260,020)3,832,046$ $3,572,026 ($260,020)$164,093 $3,996,139 $3,996,139
Building Plan Review Fees11,645,228$ $1,220,395 $2,865,623 2,997,912.25$ $132,289 2,865,623$ $2,997,912 $132,289 $122,709 $2,988,332 $2,988,332
Elective Plan Check -$ 7,470.00$ $7,470 -$ 7,470.00$ $7,470
Fire and Life Safety Plan Check11,161,234$ $471,091 $1,632,324 1,057,087.57$ ($575,237)1,632,324$ $1,057,088 ($575,237)$86,611 $1,718,935 $1,718,935
Public Works Plan Check1228,484$ $32,402 85,515.00$ $346,401 193,838.00$ ($152,563)346,401$ $193,838 ($152,563)$17,041 $363,442 $363,442
Zoning Plan Check1685,066$ $97,152 $782,219 983,696.33$ $201,478 782,219$ $983,696 $201,478 $51,096 $833,314 $833,314
New153$ $114 $267 ($267)-$ $11 $279
New230$ $171 $401 ($401)-$ $17 $418
-$ -$
1,217I. Building Demolition Permit177274$ $203 $478 431.00$ ($47)84,528$ $76,287 ($8,241)$20 $498 $88,147
1,218J. Commercial Interior Non-Structural Demolition Permit39 98$ $73 $171 196.00$ $25 6,676$ $7,644 $968 $7 $179 $6,962
-$ -$ -$
1,207Additional Plan Reviewper hour117 105$ $78 $183 224.00$ $41 21,460$ $26,208 $4,748 $8 $191 $22,379
1,202 -$ -$ -$
1,208Certified Access Specialist (CASp) Review/ConsultationHourly202$ $150 $352 276.00$ ($76)-$ $15 $367
1,203 -$ -$ -$
1,204Address change - single address 278$ $206 $485 399.00$ ($86)-$ $21 $505
1,206Address change - each additional address 135$ $100 $234 192.00$ ($42)-$ $10 $244
-$ -$ -$
-$ -$ -$
Construction & Demolition-$ -$
1,198per permit89168$ $124 $292 412.00$ $120 25,861$ $36,462 $10,601 $13 $305 $26,968
1,200per permit18 90$ $66 $156 172.00$ $16 2,760$ $3,044 $284 $7 $163 $2,879
1,199per permit71116$ $86 $201 252.00$ $51 14,258$ $17,842 $3,584 $9 $210 $14,868
-$ -$
-$
Capital Accounting Partners Page 13 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name
BUILDING FEES
ELECTRICAL PERMITS
1,228 Air Conditioners
1,230
1,226 Base Fee
1,240 Busway, Power Duct install, repair or replace
1,229
1,249 Additional meter (groups of 5)
1,234 Fixtures, Switches, and Outlets (groups of 20
1,241
Lighting, Power and/or Control Panel Board, Switchboard Cabinet or
Panel
1,236 Motors
1,235
1,227
1,237 Range, Electric Clothes Dryer, or Water Heater
Installation of a generator
1,248 Service Conductor/Switch - Greater than 800 ampre
1,246
1,247 Service Conductor/Switch - Less than 800 ampre
1,238 Special Circuit (Not Listed Herein)
1,250 Temporary Power Pole
1,251 Temporary Wiring for Construction
Electrical Permits - Electrical Vehicle Charging Stations
1,232 Commercial (Level 1 and 2)
1,233 Commercial (Level 1 and 2) - each additional station
1,233 Commercial (Level 3 and 4)
1,234 Commercial (Level 3 and 4) - each additional station
1,231 Residential (level 1 & 2)
Residential (level 3)
Electrical Permits - Photovoltaic Systems
Residential System (less than 10 kw)
1,242 Residential System (greater than 10 kw)
1,243 Commercial System (less than 10 kW)
1,244 Commercial System (10kW - 49kW)
1,245 Commercial System (greater than 49kW)
MECHANICAL PERMITS
Swimming Pool Heater
1,254 Admin base fee
1a
Annual Revenue With
Reserves
Revenue at Full Cost of
Services
Projection of
Revenues at
Current Fees
Annual Surplus
(subsidy)
R
e
q
u
i
3 Months Reserve,
5 Year Build Full Cost / Unit With Reserves
ANNUAL REVENUE ANALYSIS INCLUDING RESERVES
Reserve RequirementsAnnual Revenue Impact
BUILDING FEES $ 652,317
2,606$ $3,549 $943 $3 $70 $2,717
-$
187,479$ $156,032 ($31,447)$5 $115 $195,507
1,114$ $1,500 $386 $2 $58 $1,161
-$
294$ $150 ($144)$6 $153 $306
90,919$ $122,475 $31,556 $2 $58 $94,813
2,873$ $3,225 $352 $3 $70 $2,996
724$ $975 $251 $2 $58 $755
-$
-$
111$ $150 $39 $2 $58 $116
16,908$ ($16,908)$18 $441 $17,632
401$ $544 $143 $9 $209 $418
-$
48,962$ $25,159 ($23,803)$15 $367 $51,059
1,448$ $1,950 $502 $2 $58 $1,510
8,296$ $11,175 $2,879 $2 $58 $8,651
-$ $2 $58
-$
-$
5,813$ $7,259 $1,446 $15 $357 $6,062
5,054$ $6,557 $1,503 $3 $67 $5,270
409$ $518 $109 $18 $426 $426
-$ $3 $83
8,401$ $10,716 $2,315 $6 $154 $8,761
-$ $10 $235
-$
20,132$ $11,557 ($8,575)$7 $165 $20,994
-$ $15 $357
-$ $23 $557
1,602$ $2,703 $1,101 $23 $557 $1,670
717$ $976 $259 $31 $748 $748
1,229$ $1,656 $427 $2 $56 $1,282
112,863$ $93,932 ($18,931)$5 $115 $117,696
-$
-$
Capital Accounting Partners Page 14 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name
BUILDING FEES
1b Furnace, Flue and Associated Ducts
1c
1d
2
3
Boilers, Compressors, and Absorption Systems:
4a
Up to and including 30 HP, absorption system up to and including
100,000 Btu/h
4b
For the installation or relocation of each boiler or compressor
exceeding 30 hp, or each absorption system exceeding 1,000,000
Btu/h
4c
4d
4e
5 Air handlers up to and including 10,000 cf per cfm…
7a Ventilation and exhaust
7b
7c
Miscellaneous
9
Each appliance or piece of equipment regulated by this code, but
not classed in other appliance categories for which no other fee is
listed in this table
10a
10b
Process Piping System
11a Process Piping System - Hazardous
11b
11c
11d
PLUMBING PERMITS - GRAY WATER SYSTEMS
1,266 Admin base fee
1 Plumbing fixture on one trap or set of fixtures (set of 5)
2 For each building sewer
3
4
6 For each water heater, vent, or both
7 Gas Piping System
8 Gas Piping System Repair
Annual Revenue With
Reserves
Revenue at Full Cost of
Services
Projection of
Revenues at
Current Fees
Annual Surplus
(subsidy)
R
e
q
u
i
3 Months Reserve,
5 Year Build Full Cost / Unit With Reserves
ANNUAL REVENUE ANALYSIS INCLUDING RESERVES
Reserve RequirementsAnnual Revenue Impact
BUILDING FEES $ 652,317
8,756$ $17,836 $9,080 $4 $93 $9,131
-$
-$
-$
-$
-$
-$ $4 $93
7,684$ $15,652 $7,968 $4 $93 $8,013
-$
-$
-$
-$ $2 $47
-$
3,495$ $4,680 $1,185 $2 $47 $3,645
-$
-$
-$
-$ $2 $47
-$
-$ $391 $391
-$
-$ $2 $46
-$ $2 $47
-$
-$
-$
144,810$ $120,520 ($24,290)$5 $115 $151,010
9,131$ $7,462 ($1,669)$5 $116 $9,522
14,467$ $19,575 $5,108 $5 $112 $15,087
-$
-$
4,490$ $6,104 $1,614 $3 $84 $4,682
22,769$ $30,814 $8,045 $7 $167 $23,744
-$ $3 $84
Capital Accounting Partners Page 15 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name
BUILDING FEES
9 Interceptor, including trap and vent
10
Installation, alteration or repair of water piping, water treatment
equip or both
11
12
13A Atmospheric-type vacuum breakers
13B
14 Backflow protective device other than atmospheric-type (any size)
Plumbing Permits - Graywater Systems
1,271 Clothes washer System
1,273 Complex System
1,272 Simple System
16
17
18 Medical Gas Piping Systems
Solar hot water system
1,190 Storm drain system
1,191 Swimming pool
Use & occupancy Permits
1,187 Certificate of Use and Occupancy
1,188 Certificate of Use and Occupancy - Replacement
1,189
1,186
Temporary Occupancy Permit - Multi-Family Residential, Non-
Residential, and Other Commercial
1,185
Temporary Occupancy Permit - Single Family Residential and
Commercial Tenant Improvement less than 10,000 sq. ft.
FIRE FEES
Hazardous Materials Classification Permits
1,367 Compressed Gas
1,363 Corrosives
1,364 Cryogenic Fluid
1,365 Flammable and Combustible Liquids
1,368 Flammable Gas
1,366 Flammable Solids
1,373 Health Hazard (Liquids & Solids)
1,381 Liquefied Petroleum Gases
Annual Revenue With
Reserves
Revenue at Full Cost of
Services
Projection of
Revenues at
Current Fees
Annual Surplus
(subsidy)
R
e
q
u
i
3 Months Reserve,
5 Year Build Full Cost / Unit With Reserves
ANNUAL REVENUE ANALYSIS INCLUDING RESERVES
Reserve RequirementsAnnual Revenue Impact
BUILDING FEES $ 652,317
-$ $7 $167
80$ $109 $29 $3 $84 $84
-$
-$
-$ $3 $84
-$
12,507$ $16,926 $4,419 $7 $167 $13,043
-$
-$ $3 $70
160$ $217 $57 $7 $167 $167
200$ $273 $73 $3 $70 $209
-$
-$
-$ $7 $167
-$ -$
-$ -$ -$ -$
Solar hot water system92.060$ 68.288$ 160.35$ 217.00$ $57 -$ $7 $167
1,190Storm drain system 92$ $68 $160 217.00$ $57 -$ $7 $167
1,191Swimming pool 31$ $23 $53 72.00$ $19 -$ $2 $56
Use & occupancy Permits
1,187Certificate of Use and Occupancyeach155603$ $447 $1,050 287.00$ ($763)162,714$ $44,485 ($118,229)$45 $1,095 $169,682
1,188Certificate of Use and Occupancy - Replacementeach125$ $93 $218 123.00$ ($95)-$ $9 $228
1,189 -$ -$ -$
1,186each33 455$ $337 $792 673.00$ ($119)26,152$ $22,209 ($3,943)$34 $826 $27,272
1,185each155 334$ $247 $581 498.00$ ($83)90,075$ $77,190 ($12,885)$25 $606 $93,933
-$ -$
FIRE FEES
Hazardous Materials Classification Permits -$ -$ -$
1,367Compressed Gasannually28 237$ $96 $334 391.00$ $57 9,343$ $10,948 $1,605 $18 $351 $9,839
1,363Corrosivesannually54 237$ $96 $334 391.00$ $57 18,018$ $21,114 $3,096 $18 $351 $18,974
1,364Cryogenic Fluidannually42 237$ $96 $334 391.00$ $57 14,014$ $16,422 $2,408 $18 $351 $14,758
1,365Flammable and Combustible Liquidsannually172 237$ $96 $334 391.00$ $57 57,392$ $67,252 $9,860 $18 $351 $60,437
1,368Flammable Gasannually28 237$ $96 $334 391.00$ $57 9,343$ $10,948 $1,605 $18 $351 $9,839
1,366Flammable Solidsannually 237$ $96 $334 391.00$ $57 -$ $18 $351
1,373Health Hazard (Liquids & Solids)annually33 237$ $96 $334 391.00$ $57 11,011$ $12,903 $1,892 $18 $351 $11,595
1,381Liquefied Petroleum Gasesannually10 237$ $96 $334 391.00$ $57 3,337$ $3,910 $573 $18 $351 $3,514
Capital Accounting Partners Page 16 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name
BUILDING FEES
1,354 Organic Coatings
1,374 Organic Peroxides
1,355 Ovens - Industrial Baking or Drying
1,375 Oxidizers (Liquids & Solids)
1,369 Oxidizing Gas
1,356 Parade Float
1,357 Place of Public Assembly
1,370 Pyrophoric Gas
1,376 Pyrophoric Materials (Liquids & Solids)
1,358 Pyrotechnical Special Effects Material
1,377 Radioactive Materials
1,359 Refrigeration Equipment
1,360 Spraying/Dipping
1,361
Tent or air-supported structure having an area in excess of 200
square feet; or canopies in excess of 400 square feet (includes a
public assembly permit of $125.00 for all tents)
1,362 Tire Recapping/Tire Storage
1,371 Toxic, Highly Toxic, Moderately Toxic, Health Hazard Gas
1,378 Toxic, Highly Toxic, Moderately Toxic, Health Hazard Materials
1,372 Unstable Reactive Gas
1,379 Unstable Reactive Materials (Liquids & Solids)
1,380 Water Reactive Materials (Liquids & Solids)
Other Hazardous Materials - Unclassified
Hazardouis Materials County Reimbursement
Hazardous Materials Storage Permits
1,311
Additional Approvals for Hazardous Materials Storage Permit (first 2
hours)
1,312
Additional Approvals for Hazardous Materials Storage Permit (per
hour for time above 2 hours)
1,308 Business Plan (HMBP)
1,312 Late Fee for Hazardous Materials Storage Permit
1,305 Level I Facility
1,306 Level II Facility
1,307 Level III Facility
1,309 Petroleum Aboveground Storage Tank
Annual Revenue With
Reserves
Revenue at Full Cost of
Services
Projection of
Revenues at
Current Fees
Annual Surplus
(subsidy)
R
e
q
u
i
3 Months Reserve,
5 Year Build Full Cost / Unit With Reserves
ANNUAL REVENUE ANALYSIS INCLUDING RESERVES
Reserve RequirementsAnnual Revenue Impact
BUILDING FEES $ 652,317
1,354Organic Coatingsannually 237$ $96 $334 391.00$ $57 -$ $18 $351
1,374Organic Peroxidesannually1 237$ $96 $334 391.00$ $57 334$ $391 $57 $18 $351 $351
1,355Ovens - Industrial Baking or Dryingannually4 237$ $96 $334 391.00$ $57 1,335$ $1,564 $229 $18 $351 $1,406
1,375Oxidizers (Liquids & Solids)annually16 237$ $96 $334 391.00$ $57 5,339$ $6,256 $917 $18 $351 $5,622
1,369Oxidizing Gasannually34237$ $96 $334 391.00$ $57 11,345$ $13,294 $1,949 $18 $351 $11,947
1,356Parade Floatper hour 237$ $96 $334 391.00$ $57 -$ $18 $351
1,357Place of Public Assembly per occurrence 475$ $193 $667 391.00$ ($276)-$ $35 $703
1,370Pyrophoric Gasannually1237$ $96 $334 391.00$ $57 334$ $391 $57 $18 $351 $351
1,376Pyrophoric Materials (Liquids & Solids)annually4 237$ $96 $334 391.00$ $57 1,335$ $1,564 $229 $18 $351 $1,406
-$ $18 $351
9,343$ $10,948 $1,605 $18 $351 $9,839
-$ $18 $351
5,672$ $6,647 $975 $18 $351 $5,973
-$ $37 $734
-$ $70 $1,397
1,371Toxic, Highly Toxic, Moderately Toxic, Health Hazard Gasannually11237$ $96 $334 391.00$ $57 3,670$ $4,301 $631 $18 $351 $3,865
12,680$ $14,858 $2,178 $18 $351 $13,352
334$ $391 $57 $18 $351 $351
-$ $18 $351
-$ $18 $351
-$ $18 $351
-$
-$
-$ $38 $761
-$ $25 $498
110,639$ $129,636 $18,997 $25 $498 $116,509
-$
1,305Level I Facility81 237$ $96 $334 391.00$ $57 27,028$ $31,671 $4,643 $18 $351 $28,462
79,414$ $93,058 $13,644 $35 $703 $83,628
254,926$ $298,915 $43,989 $71 $1,406 $268,452
17,351$ $20,332 $2,981 $35 $703 $18,272
Capital Accounting Partners Page 17 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name
BUILDING FEES
1,310 Provisional (6 Month)
Fire Inspection Fees
1,313
Additional Resinspection Fee (up to 2 hours during normal business
hours)
1,313 Additional Resinspection Fee (each additional hour)
1,314 After Hours Inspection Fee
1,316 Care Facility
1,317 Care Facility Inspection Including Fire Clearance (7-14 clients)
Care Facility Inspection Including Fire Clearance (more than 14
1,315 Christmas Tree Lot/Pumpkin Patch
1,321 High Rise Building - Certificate of Compliance (annually up to 4
1,322 High Rise Building - Certificate of Compliance (each additional hour))
1,318 Outside Cooking Booths
1,320 Standby Fire Watch or After Hours at Fire or Incident Scene
1,319 Use and Occupancy Fire Inspection
As-Built Plan Check and Additional Work
Investigations & Consultations
1,325 Additional Hours Over Plan Review/Inspection
1,323 Alternate Means and Methods Application
1,324 Appeals to Decisions
1,322 Consultation Fee
1,328
1,327 Hydrant Flow Fee
1,326 Site Disaster Planning
Life Safety & Fire Protection
1294A Automatic Fire Sprinkler Installation/Modification 1- 19 heads
1,295 Automatic Fire Sprinkler Installation/Modification (plus per head)
Annual Revenue With
Reserves
Revenue at Full Cost of
Services
Projection of
Revenues at
Current Fees
Annual Surplus
(subsidy)
R
e
q
u
i
3 Months Reserve,
5 Year Build Full Cost / Unit With Reserves
ANNUAL REVENUE ANALYSIS INCLUDING RESERVES
Reserve RequirementsAnnual Revenue Impact
BUILDING FEES $ 652,317
-$ $35 $703
-$ -$ -$
-$ -$ -$
-$
99,531$ $117,150 $17,619 $35 $699 $104,812
-$ $18 $349
-$ $26 $524
-$
-$ $35 $699
-$ $18 $349
-$ $18 $349
-$ $73 $1,456
-$ $18 $349
-$ $26 $524
-$ $18 $349
51,424$ $22,940 ($28,484)$18 $349 $54,153
49,766$ $58,500 $8,734 $35 $699 $52,406
-$
-$
-$ $13 $249
53,160$ $55,860 $2,700 $38 $746 $55,980
-$ $18 $349
157,591$ $185,725 $28,134 $18 $349 $165,953
-$
24,883$ $29,716 $4,833 $18 $349 $26,203
-$ $18 $349
-$
-$
-$ $78 $1,543
-$ $0 $3
Capital Accounting Partners Page 18 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name
BUILDING FEES
1,301 Express Fire Protection Plan Check Fee
1,296 Fire Alarm System Installation and Modification
1,297
Fire Alarm System Installation and Modification (plus a device or
contact point)
1,303
Fire Protection and Fire Access Plan Review for New Single Family
Dwellings or Additions
1,298 Hydrant Installation/Modification - Private
1,295 Other Automatic Fire Extinguishing System
1,297 Standpipe System - Wet, Dry, or Combination
1,300 Temporary Certificate of Occupancy
1,299 Underground Fire Service Line
1,304 Verification of Fire Protection System Maintenance and Certification
Food truck permits
Multifamily dwellings, hotels & motels
4-50 units
51-100 units
Greater than 100 units
Fire Prevention Inspection of Private Schools
1294B Automatic Fire Sprinkler Installation/Modification 19+
Specific Hazard Permits
1,329 Aerosol Products
1,330
1,331
1,332 Bowling Alley and Pin Refinishing Involving the use of Flammable
1,333 Candles and Open Flames in Assembly Areas
1,334 Carnivals and Fairs
1,335 Cellulose Nitrate Storage/Nitrate Film
1,337
1,336
1,338
1,339
1,340
1,341
1,342 High-piled Combustible Storage
1,343 Hot Work (Welding) Operations
1,349 Liquid or Gas-Fueled Powered Equipment
1,344
Annual Revenue With
Reserves
Revenue at Full Cost of
Services
Projection of
Revenues at
Current Fees
Annual Surplus
(subsidy)
R
e
q
u
i
3 Months Reserve,
5 Year Build Full Cost / Unit With Reserves
ANNUAL REVENUE ANALYSIS INCLUDING RESERVES
Reserve RequirementsAnnual Revenue Impact
BUILDING FEES $ 652,317
-$
-$ $48 $948
-$ $1 $21
-$ $39 $773
-$ $9 $175
-$ $48 $948
16,589$ $19,500 $2,911 $35 $699 $17,469
-$ $38 $757
234,590$ $280,500 $45,910 $83 $1,647 $247,038
-$ $3 $64
-$ $9 $175
-$
-$ $18 $349
-$ $35 $699
-$ $53 $1,048
-$ $35 $699
-$ $35 $699
-$
-$ $22 $437
-$
-$
-$ $51 $1,019
-$ $18 $349
-$ $73 $1,456
-$ $5 $102
-$
-$
1,338 -$ -$
-$
-$
-$
-$
-$
-$ $18 $349
-$
Capital Accounting Partners Page 19 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name
BUILDING FEES
1,350
1,345 Malls - Covered
1,351 Occupant Load Increase - Temporary Public Assembly
1,352 Open Burning
1,348 Open Flame/Flame Producing Devices
1,353 Operate a Tank Vehicle to Transport Flammable/Combustible Liquids
1,347 Place of Public Assembly - Temporary
1,346 Temporary Kiosks
Place of Assembly
Fire Miscellaneous Fees
TCO fee for Vendors/Stock occupancy (Requires at least one
additional inspection)
1,288 Emergency Response Fee - Hazmat (PAMC 17.24.050)
1,289 Installation or Closure Without Approved Plans and/or Permits
Fire plans revision
Building Admin and Reinspection Fees
1,176 All Other Publications
1,201
1,172 Electric Service and Safety Inspection
1,181 Extension of Building Permit or Building Permit Application
1,174
Inspections and Investigations - Outside Normal Business Hours
(1.5xOThour)
1,175
Inspections and Investigations - Outside Normal Business Hours
(2.0xOThour)
1,173 Inspections and Investigations - Unclassified
1,184
Reactivation of Expired Building Permit - All Others (50% Bldg permit
fee)
1,183 Reactivation of Expired Building Permit - Final Inspection Only
1,182 Reactivation of Expired Building Permit Application
1,178 Real Property Research Fee (1-hour minimum)
1,177 Records Retention
1,180 Reinspection Fee - Multi-Family Residential and Non-Residential
1,179
Reinspection Fee - Single Family Residential (each secondary
inspection type)
1,180
Reinspection Fee - Single Family Residential (each primary inspection
type)
Annual Revenue With
Reserves
Revenue at Full Cost of
Services
Projection of
Revenues at
Current Fees
Annual Surplus
(subsidy)
R
e
q
u
i
3 Months Reserve,
5 Year Build Full Cost / Unit With Reserves
ANNUAL REVENUE ANALYSIS INCLUDING RESERVES
Reserve RequirementsAnnual Revenue Impact
BUILDING FEES $ 652,317
-$
-$ $35 $699
-$ $18 $349
-$ $18 $349
-$ $18 $349
-$ $25 $495
-$ $18 $349
-$
-$ $18 $18
-$
267,165$ $303,000 $35,835 $57 $1,125 $281,340
-$ $18 $349
-$
-$
-$ $16
-$
1,172Electric Service and Safety Inspectionper hour 162$ $23 $185 169.00$ ($16)-$ $12 $197
2,293$ $2,945 $652 $5 $79 $2,442
346$ $408 $62 $23 $369 $369
24,015$ $28,288 $4,273 $30 $492 $25,584
-$ $15 $246
3,958$ ($3,958)$14 $222 $4,216
3,846$ $4,528 $682 $16 $256 $4,097
2,344$ $3,376 $1,032 $10 $156 $2,497
-$ $14 $229
113,606$ $121,404 $7,798 $0 $6 $121,027
257$ $630 $373 $8 $137 $274
997$ $3,458 $2,461 $5 $76 $1,062
-$ $9 $141
Capital Accounting Partners Page 20 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name
BUILDING FEES
1,171 Request for Release of Building Plans
1,175 Inspection Guidelines
Conditional Utility Agreement
Emergency Responder Radio Coverage (testing) fee.
PUBLIC WORKS
1,166 Protected Tree Removal
1,283 Grading: A. 101 - 1,000 cubic yards (first 101 CY)
1,284
Grading: A. 101 - 1,000 cubic yards (plus each additional 100 CY or
fraction thereof)
1,284 Grading: B. 1,001 - 10,000 cubic yards (first 1000 CY)
1,285
Grading: B. 1,001 - 10,000 cubic yards (each additional CY or fraction
thereof)
1,285 Grading: C. 10,001 or more cubic yards (first 10,000 CY)
1,286
Grading: C. 10,001 or more cubic yards (each additional 10,000 CY or
fraction thereof)
248 Tree Inspection for Private Development
1,287
1,288 Wet Season Construction Site Storm Water Inspection
1,286
1,171 Dumpster, Container
Bldg Non-residential single day
Bldg Non-residential long-term (more than 5 days)
Bldg Non-residential long-term (less than 5 days)
Bldg Residential (encroachments)
Bldg VTA Bus Shelter installation/relocation
GREEN BUILDING FEES
Bldg
Alterations and additions for single and multifamily < 1,000 sq ft and
increases conditioned space
Bldg Alterations and additions for single and multifamily > 1,000 sq ft
Bldg Multi Family New Construction of 1-3 (attached) Units
Bldg Multi Family New Construction of 4 or more units
Bldg New Single family and duplex
Bldg
Tenant improvements, renovations, or alterations > 5,000 sq ft that
includes replacement or alteration of
at least two of the following: HVAC system, building envelope, hot
water system, or lighting
system and project value greater than $200,000.
Annual Revenue With
Reserves
Revenue at Full Cost of
Services
Projection of
Revenues at
Current Fees
Annual Surplus
(subsidy)
R
e
q
u
i
3 Months Reserve,
5 Year Build Full Cost / Unit With Reserves
ANNUAL REVENUE ANALYSIS INCLUDING RESERVES
Reserve RequirementsAnnual Revenue Impact
BUILDING FEES $ 652,317
-$ $5 $77
-$
41,377$ $49,555 $8,178 $14 $236 $44,080
11,547$ $16,575 $5,028 $30 $492 $12,301
29,331$ $15,680 ($13,651)$34 $558 $31,247
3,588$ $5,910 $2,322 $8 $127 $3,823
-$ $8 $127
35,882$ $59,100 $23,218 $78 $1,274 $38,226
-$ $8 $127
8,289$ $19,190 $10,901 $108 $1,766 $8,831
-$ $8 $127
14,863$ $7,645 ($7,218)$18 $288 $15,833
-$
4,161$ ($4,161)$14 $222 $4,433
-$
7,138$ $12,400 $5,262 $12 $190 $7,604
41,175$ $68,695 $27,520 $49 $798 $43,865
21,720$ $50,975 $29,255 $57 $926 $23,139
11,997$ $36,650 $24,653 $31 $511 $12,780
2,447$ $2,004 ($443)$40 $652 $2,606
-$
42,474$ $42,471 ($3)$12 $441 $43,668
117,574$ $117,528 ($46)$20 $728 $120,881
3,691$ $3,692 $1 $26 $949 $3,795
-$ $42 $1,523
6,460$ $6,461 $1 $26 $949 $6,641
21,880$ $21,896 $16 $18 $662 $22,496
Capital Accounting Partners Page 21 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name
BUILDING FEES
Bldg
C. Tenant improvements, renovations or alterations > $200,000 in
valuation (and not triggered by a Calgreen Tier)
Bldg
If the project is over $100,000 Energy Star is required after 12
months of occupancy
Bldg New commercial 1000 - 25,000 SF
Bldg New commercial 25,001-50,000 SF
Bldg New commercial >50,000 SF
Bldg Landscape Review - plan review: Non-residential
Bldg Landscape Review - inspection
Bldg Landscape Review - plan review
Bldg Landscape Review - inspection
Bldg Landscape Review - plan review
Bldg Landscape Review - inspection
Bldg
ADDITIONAL PUBLIC WORKS FEES
Bldg Fence (encroachment permit)
Bldg A. Constriction in public rght of way($1-$5,999)
Bldg B. Constriction in public rght of way($6,000-$25,999)
Bldg B. Constriction in public rght of way($6,000-$25,999)
Bldg C. Constriction in public rght of way($26,000-$100,999)
Bldg C. Constriction in public rght of way($26,000-$100,999)
Bldg D. Constriction in public rght of way(>$101,000)
Bldg D. Constriction in public rght of way(>$101,000)
Bldg
Bldg Improvement plan review
Bldg
Bldg Temporary Discharge to Storm Drain from Construction Site
Bldg
Temporary Discharge to Storm Drain (per week of discharge); this is
additional to other fee
Annual Revenue With
Reserves
Revenue at Full Cost of
Services
Projection of
Revenues at
Current Fees
Annual Surplus
(subsidy)
R
e
q
u
i
3 Months Reserve,
5 Year Build Full Cost / Unit With Reserves
ANNUAL REVENUE ANALYSIS INCLUDING RESERVES
Reserve RequirementsAnnual Revenue Impact
BUILDING FEES $ 652,317
27,029$ $27,048 $19 $18 $662 $27,789
-$ $4 $144
25,243$ $25,242 ($1)$34 $1,236 $25,953
-$ $42 $1,523
-$ $50 $1,810
113,185$ $113,160 ($25)$53 $1,939 $116,344
11,070$ $11,100 $30 $5 $190 $11,379
92,870$ $92,880 $10 $32 $1,193 $95,462
14,761$ $14,800 $39 $5 $190 $15,173
18,864$ $18,860 ($4)$53 $1,939 $19,391
1,845$ $1,850 $5 $5 $190 $1,897
-$
1,280$ $191 ($1,089)$84 $1,363 $1,363
54,069$ $92,560 $38,491 $27 $443 $57,601
20,796$ $35,600 $14,804 $27 $443 $22,154
46,800$ ($46,800)$37 6.14%$49,140
50,173$ $88,992 $38,819 $91 $1,485 $53,451
81,000$ ($81,000)$136 4.725%$85,050
31,557$ $74,004 $42,447 $294 $4,803 $33,619
66,500$ ($66,500)$429 3.99%$69,856
-$
-$
-$
37,490$ ($37,490)$163 $2,663 $39,939
39,341$ ($39,341)$11 $274 $41,026
Capital Accounting Partners Page 22 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name
BUILDING FEES
Bldg
Bldg
Miscellaneous Building Fees
1
Commercial & Residential windows, skylights and doors, New and
alteration (structural) (per 5)
2
Commercial & Residential windows, skylights and doors, New and
alteration (non-structural) (per 10)
3 Residential Reroof
4 Residential Reroof (overlay)
5
6 Commercial and multifamily reroof (first 5000 SF)
7 Commercial and multifamily reroof (each additional 2500 SF)
8 Kitchen (nonstructural) (per each)
9 Bathroom (nonstructural) per each
10 Commercial & Residential Siding replacement or repair
11 Commercial & Residential Stucco replacement or repair
12
13 Technology Surcharge (revenue requirement)
14
15 Commercial doors, new and alteration (structural) (per 5 doors)
16 Commercial door replacement (nonstructural) (per 10)
17 Residential dry rot repair and replacement
18
19 Deck, new or repair up to 1000 SF
20 Deck, new or repair each additional 1000 SF
21 Sign permit
22 Work without a permit
23 Residential and commercial window awnings (groups of 5)
24 Cell Tower Equip
25 Utilities handling fee
26 Progress and partial inspections
27 Consultation (per hour)
28
29 Certifications:
Annual Revenue With
Reserves
Revenue at Full Cost of
Services
Projection of
Revenues at
Current Fees
Annual Surplus
(subsidy)
R
e
q
u
i
3 Months Reserve,
5 Year Build Full Cost / Unit With Reserves
ANNUAL REVENUE ANALYSIS INCLUDING RESERVES
Reserve RequirementsAnnual Revenue Impact
BUILDING FEES $ 652,317
-$
-$
35,009$ ($35,009)$11 $279 $36,508
-$ $6 $139
7,750$ ($7,750)$11 $279 $8,082
-$ $3 $70
-$
4,009$ ($4,009)$11 $279 $4,180
-$ $3 $70
49,106$ ($49,106)$9 $209 $51,209
71,355$ ($71,355)$11 $279 $74,410
4,410$ ($4,410)$6 $139 $4,598
2,806$ ($2,806)$9 $209 $2,926
-$
250,000$ $0 ($250,000)$0 250,000$
-$
-$ $9 $209
-$ $6 $139
2,205$ ($2,205)$9 $209 $2,299
-$ $3 $70
4,810$ ($4,810)$9 $209 $5,016
-$ $3 $70
-$ $5 $116
-$
67$ ($67)$3 $70 $70
2,806$ ($2,806)$9 $209 $2,926
-$ $5 $115
-$ $2 $56
-$
-$
-$
Capital Accounting Partners Page 23 of 24 BldCostCalcs
Palo Alto Building Dept
Building Valuation and Flat Fees
Service
# If
Any
Fee Name
BUILDING FEES
30
Green Building - Special inspector applications and qualifications
(initial review)
31
Green Building - Special inspector applications and qualifications
(renewal/update)
32
Special Inspections - materials testing lab certification (up to 4
hours)
33
Special Inspections - materials testing lab certification (each
additional hour)
34 Miscellaneous Building - base fee
35 Retaining Walls - first 100 LF
36 Retaining Walls - each additional 100 LF
37
Fees not listed above will either be based on an applicable hourly
rate or at the given valuation
Annual Revenue With
Reserves
Revenue at Full Cost of
Services
Projection of
Revenues at
Current Fees
Annual Surplus
(subsidy)
R
e
q
u
i
3 Months Reserve,
5 Year Build Full Cost / Unit With Reserves
ANNUAL REVENUE ANALYSIS INCLUDING RESERVES
Reserve RequirementsAnnual Revenue Impact
BUILDING FEES $ 652,317
-$ $16 $395
-$ $8 $197
-$ $65 $1,579
-$ $16 $395
73,510$ ($73,510)$5 $115 $76,658
-$ $4 $93
-$ $2 $46
-$
Annual Revenue
Impact
Revenue at Full Cost of
Services
Projection of
Revenues at
Current Fees
Annual Surplus
(subsidy)With Reserves
14,077,204$ 12,975,074$ ($1,102,130)$14,729,521
Capital Accounting Partners Page 24 of 24 BldCostCalcs
City of Palo Alto (ID # 8175)
City Council Staff Report
Report Type: Informational Report Meeting Date: 6/19/2017
City of Palo Alto Page 1
Summary Title: Clarification to FY2017 Muni Fee Schedule for Development
Services
Title: Clarification to FY2017 Municipal Fee Schedule for Development
Services
From: City Manager
Lead Department: Development Services Department
Recommendation
This is an informational item; no Council action is required.
Executive Summary
This is an Informational Report clarifying the definitions of “Project” and “Maintenance” items
in building construction. This report responds to a request from the December 12, 2016 Council
hearing for the Adoption of an Ordinance Amending the FY 2017 Municipal Fee Schedule to
Reflect Development Services Cost of Services Study and FY 2017 Annual Adjustment.
During that same meeting, Council also directed that proposed changes to Special Event fees be
removed from the fee schedule prior to the second reading. After reviewing the Fee Schedule
proposal and the Council’s comments, the Development Services Department and Fire Marshal
have chosen not to re-introduce the “Special Event” fee in question in the proposed FY 2017
fee schedule. The Fire Marshal will continue to work with the Special Events Committee
(headed by the Palo Alto Police Department) to ensure the public safety at large events, but has
no control over the fees charged by the other departments involved.
Background and Discussion
“Projects” and “Maintenance” Definitions
The California Building Code (CBC) requires building permits when any owner or owner’s agent
intends to construct, enlarge, alter, repair, move demolish or change the occupancy of a
building or structure or to install, enlarge, alter, repair, remove, convert or replace any
City of Palo Alto Page 2
electrical, gas, mechanical or plumbing system. A permit is to be obtained from the
Development Services department to ensure that the work performed is in compliance with the
code.
Within the CBC, there are exceptions to when a permit is required. For building permits, the
following exceptions apply to structures:
1. One-story detached accessory structures used as storage sheds and playhouses and
similar uses with a floor area not greater than 120 square feet, s.f.
2. Fences not over 7-feet high.
3. Retaining walls that are not over 4-feet in height measured from the bottom of the
footing to the top of the wall.
4. Sidewalks and driveways not more than 30 inches above the adjacent grade and not
over any basement or story below.
5. Painting, papering, tiling, carpeting, cabinets, counter tops and similar finish work.
6. Swings and other playground equipment accessory to detached one and two family
dwellings.
7. Non-fixed and movable fixtures, cases, racks, counters and partitions not over 5 feet and
9 inches in height.
For Electrical Residential Permits:
1. Minor repairs and maintenance, including the replacement of lamps or the connection
of approved portable electrical equipment.
For Gas & Mechanical Residential Permits:
1. Portable heating appliance
2. Replacement of any minor part that does not alter the equipment to make is unsafe.
3. Portable ventilation equipment
4. Portable cooling unit
5. Steam, hot or chilled water piping within any heating or cooling equipment
For Plumbing Residential Permits:
1. The stopping of leaks in drains, water, waste or vent piping.
2. The clearing of stoppages or repairing leaks in pipes, valves or fixtures and the removal
and reinstallation of water closets (toilets).
New building construction, additions to existing buildings, remodeling kitchens and bathrooms
are the most common residential projects that apply for building permits. These projects often
combine the aspects of multiple construction disciplines, such as structural engineering,
architectural life safety, mechanical, electrical and plumbing design and construction. Even
small projects of kitchen and bathroom remodels can encompass multiple construction trades
in its design and construction.
City of Palo Alto Page 3
Some components, such as faucet and toilet replacements, repairing of plumbing piping and
mechanical duct leaks are often performed on an individual basis. Unless performed as part of
a larger project, this type of work is considered a maintenance item, which may be exempt
from permit requirements. Even though some of the maintenance items do not require
building permits, the work is required to comply with the applicable code and state regulations.
Council had a question about the need for a permit to replace a single fixture in a bathroom or
kitchen. Single fixture replacements fall in the category of maintenance and do not trigger the
need for a building permit. Upon review of the building sub-permits (e.g., Plumbing,
Mechanical and Electrical stand-alone permits) that were issued in 2016, there were no records
of a single fixture permit, e.g., water-closet, faucet, receptacle outlet, etc., found to be issued.
However, when work combines multiple construction trades, e.g. bathroom “like for like”
remodels, and work that combines construction trades with minor structural alterations, e.g.,
kitchen remodel that relocates a bearing wall, or adds a window to an exterior wall, then the
proposed work will be considered a project that does require a building permit, which includes
plan review and field inspections.
Fire Marshal’s Review of Special Events
Staff has revisited their permitting process in response to the council’s question about the
extent to which permits are needed for special events. It was council’s desire to reduce hurdles
and unnecessary obstacles in the permitting of special events. While the previously proposed
“Special Event” fee was removed, the Fire Department is bound by the California Fire code to
permit and evaluate all tents and membrane structures having an area in excess of 400 square
feet (CFC Sec. 3103.2). In response to council’s direction, staff has simplified the approval
process and will simply continue using the existing tent permit fee structure from the 2016 fee
schedule. Staff feels they can work with applicants to properly inspect these tents within the
existing fee structure.
Attachments:
City Council Action Minutes_12.12.16
City of Palo Alto (ID # 7525)
City Council Staff Report
Report Type: Action Items Meeting Date: 12/12/2016
City of Palo Alto Page 1
Summary Title: Development Services Cost of Services Study
Title: PUBLIC HEARING: Adoption of an Ordinance Amending the FY 2017
Municipal Fee Schedule to Reflect Development Services Cost of Services
Study and FY 2017 Annual Adjustment
From: City Manager
Lead Department: Development Services Department
Recommendation
Staff and the Finance Committee recommend that the City Council adopt an ordinance
(Attachment A) to update the Fiscal Year 2017 Municipal Fee Schedule to adjust Development
Services Municipal Fees, based on the completion of a Cost of Services Study (Attachment B)
and adjusted by the annual inflator applied to Municipal Fees from Fiscal Year 2016 to Fiscal
Year 2017.
At the Finance Committee meeting of November 15, 2016, the Development Services Municipal
Fee amendments were approved 4-0 without any recommended changes.
Executive Summary
The Development Services Department (DSD) initiated a Cost of Services Study in 2015 to
evaluate development related service fees incurred by applicants seeking a construction related
permit. These fees had not been reevaluated for many years, and the resulting
recommendations -- if approved -- would increase fee revenues and lower General Fund
subsidies consistent with the Cost Recovery Policy adopted by the City Council in May 2015.
The proposed changes would amend the fee schedule to reflect current International Code
Council (ICC) unit fee schedule structures and the City’s Green Building and Energy Ordinances
by eliminating some fees, proposing new fees, consolidating or expanding others, and adjusting
certain fees to a single flat-fee per permit. The City Council has the discretion to determine the
level of cost recovery for each of these fees. However, under State law, fees cannot be set
above the cost of service.
The consultant report is discussed in detail below, and the proposed ordinance adopting fee
changes (Attachment A) and the full text of the consultant report (Attachment B) are attached.
City of Palo Alto Page 2
This study was completed based on FY 2016 data, therefore an annual inflation value of 5.5%,
as recommended by the Office of Management and Budget for all Citywide fees in Fiscal Year
2017, has been included in the fees detailed in Attachment A as part of the final ordinance
action for City Council consideration.
Background
In July 2010, the City Manager launched the comprehensive “Development Center Blueprint”
(Blueprint) project to restructure and adopt more holistic approaches to integrated
development review, permitting services, and staff coordination in order to improve
organizational efficiencies and minimize unnecessary costs and delays to customers. Since the
inception of the Blueprint, DSD has implemented new technologies, acquired additional space,
upgraded the existing space, and consolidated into a central department, that consists of
Building (formerly within the Planning department), Planning, Public Works, and Fire Prevention
divisions. Development Services is now a “one-stop” shop, located in a leased space across
from City Hall. Design development projects now have a single point of contact that facilitates
the customers’ experience throughout the permitting and construction process.
As part of the Fiscal Year 2014 Adopted Budget, and in efforts to better align the budget with
the current operational structure, the City Council created the Development Services
Department. Development Services embodies all development-related activities, including staff
allocations, resources, and associated service fees across multiple departments. The operating
budget currently relies on development review fees, permitting fees, and a subsidy from the
General Fund. Though the fees have been adjusted annually for inflation factors, it has been at
least five years since the fee schedule and structure were last subject to a full evaluation.
The Development Services Department is made up of key representatives from four different
departments including the Building, Planning, Public Works, and Fire divisions. These
representatives are physically stationed at the Development Center (285 Hamilton Avenue) or
elsewhere in the City, and provide development-related services to applicants seeking a
construction-related permit. In the current budget structure, representatives are allocated
proportionally to Development Services based on their time involved in the review process.
Approximately 80
employees are fully or
fractionally budgeted to the
department, resulting in a
total of 40 FTE. For
example, Development
Services has watershed
protection representatives
in the Public Works
department and
transportation planners in
the Planning department
City of Palo Alto Page 3
that review building permits. In addition to personnel costs, Development Services has specific
overhead and indirect charges such as the rent, administrative functions, and city support
services like Administrative Services, City Attorney, and Human Resources that must also be
accounted for. As a department that operates based on fee revenues, the incoming fees must
offset all expenses which include personnel, overhead, and indirect charges.
On May 18, 2015 the City Council adopted the User Fee Recovery Level Policy (CMR 5735) that
suggests levels of cost recovery (high, medium, and low) based upon policy considerations. As
referenced in the table below, activities in which participants receive most or all of the benefit
from the service provided (i.e. issuance of building permits), or which are regulatory in nature,
fall within the “high” cost recovery level group.
The City retained the services of Capital Accounting Partners (CAP) to complete a cost of
services study to identify the total cost of providing services for which the City charges fees,
Phase I of which is included as Attachment D. CAP has prepared hundreds of cost allocation
plans for cities, counties and special districts throughout California, Texas, Washington and
more. Some of their clients include San Diego, Glendale, Los Gatos, Santa Barbara, Burbank and
Sacramento. Dan Edds is a project manager with CAP and has more than 15 years of experience
consulting within the public sector. His operational improvement work has involved problem
solving and process improvement opportunities for core business processes.
CAP uses an activity-based costing model to calculate the cost of a specific service (detailed
further in Attachment B), which identifies activities in an organization and assigns the cost of
each activity with resources to all services according to the consumption by each. The model
assigns direct and indirect costs to each fee, and therefore, calculates the cost of each fee at full
cost recovery. As discussed below, Phase I of the study includes recommendations for the
Department’s flat fees only.
Discussion
Fees and Fee Structure:
Development Services fees are structured in two ways: flat or project valuation-based. Based
on estimated FY 2016 revenues, approximately 75%, or $8.6 million, of departmental revenue is
derived from project valuation-based fees. Major project valuation-based fees include the
Building Permit and Plan Check fees. Industry practice correlates the valuation of a job to its
complexity, in the aggregate, and building permit and plan check fees are then calculated based
on a percentage of a project’s valuation. In contrast, flat rate fees are based on time and
materials and activity levels. These fees comprise the remaining Development Services
revenue. The following represents the projected breakdown of FY 2016 revenues evaluated as
part of the fee study, at current fee levels:
FY 2016 Development Services Projected Revenue
City of Palo Alto Page 4
Fee Study Project Steps and Process:
CAP was tasked to prepare a detailed cost analysis of its Development Services user fees with
the objective of ensuring that the Development Services Department is fully accounting for all
costs and recovering adequate revenues to cover expenses. Based on the current organizational
structure, CAP developed a costing model to analyze the total cost of fee generating services
and recommend adjustments necessary to reach full recovery.
As the study progressed, it was determined that additional data points were necessary to
recommend adjustments for valuation-based fee activities. Therefore, the report includes only
a high-level assessment of aggregated building permit and plan check activities. Staff is
currently in the process of implementing new data collection fields in the permit system and is
expanding the existing study to include a survey of other comparable City valuation tables and
alternative permit fee structures for what are currently valuation-based fees.
The study conducted by CAP for all Non-Valuation-based fees, or “flat rate” fees, utilized an
activity-based costing model to calculate the full cost of providing specific services. This
methodology identifies activities in an organization and assigns the cost of each activity with
resources to all services according to the consumption by each. The model assigns direct and
indirect costs to each fee, where all proposed fees have been calculated at full recovery. A
summary of how CAP builds cost structures follows:
1. Direct Costs
Through meetings with staff, CAP identified all direct staff time spent on fee-related activities
or services, where direct time is indicative of workers who are directly involved with activities
of a specific fee or service. Average salaries and the City Standard productive rate of 1,600
hours/year were used for these calculations. Additionally, CAP identified other operational
costs that are directly attributed to certain services, such as the Department’s use of on-call
consultants for inspections in the Building and Fire divisions.
2. Indirect Costs (citywide administration)
City of Palo Alto Page 5
These costs include processes that support, but do not directly apply to any specific activity or
fee, such as the Citywide and Departmental Overhead. The Citywide overhead costs are
allocated to departments based on the City’s Cost Allocation Plan. These represent expenses of
supporting departments including the offices of the City Manager, City Attorney, City Auditor,
City Clerk, Administrative Services, Human Resources, Information Technology, and Facilities
Maintenance.
3. Overhead (departmental administration)
Department Overhead is represented in two aspects: 1) Development Services as a whole; and
2) Divisional Overhead. Development Services overhead includes the salaries of the Director,
the Director’s Administrative Assistant, and the Senior Management Analyst, as well as rent,
and other supplies commonly used by all divisions of the department (Building, Planning, Public
Works, and Fire Prevention). These are not assigned to any particular service, but are allocated
to all fees since these professionals support all the activities of the department as a whole.
The Divisional Overhead represents costs associated with managers, supervisors, and support
staff and common purpose operational costs of the Public Works, Planning, and Fire
Departments. For example, direct staff is allocated as a percentage of an FTE to Development
Services based upon activity levels for Public Works, while divisional overhead which reflects
the Public Works administrative costs such as budget, contract, and executive leadership costs
are calculated as a rate that is applied to the salaries allocated to Development services and
executed through a year-end adjustment. The rate assumes that the same level of
administrative support provided to the Public Works Department is provided to the Public
Works division within Development Services. These are not assigned to any particular service,
but are allocated to all fees in the respective division.
4. Reserve
A reserve fund provides a mechanism to finance future unanticipated events and other
identified or planned needs of the department. For purposes of the calculation, the reserve
amount is allocated to all fees, similar to Overhead. As part of the study, the consultant
recommended that the City set a specific reserve policy, and included an illustrative calculation
based on the common practice of building 6-12 months of operating expenses over a three year
period. This is equivalent to a $2.3 million reserve within the annual cost structure of the
department, and the study’s results show the full cost of fees with and without a reserve.
However, due to the significant changes recommended to move closer towards cost recovery,
and the anticipated future adjustments valuation-based fees, staff does not recommend the
establishment of a reserve at this time. As such, the proposed fees presented in Attachment A
do not include any assumption for reserve costs.
Projections:
The study indicates a total projected General Fund subsidy in FY 2016 of $1,787,985, excluding
impacts of one-time activities, such as deferred revenue for large projects and expense savings.
Once adjusted for one-time revenues, the net general fund subsidy in FY 2016 is approximately
City of Palo Alto Page 6
$294,000.
Drivers of Cost Recovery Variances:
Staff believes the following to be key drivers for cost recovery variances within the Public
Works, Planning, and Fire Prevention divisions:
1. Length of time since last comprehensive Fee Study. While fees have been adjusted annually
for inflation factors, it has been at least five years since the fee schedule and structure were last
subject to a full evaluation.
2. Fee levels in Planning, Public Works, and Fire have historically been set below full cost
recovery.
3. As part of the creation of Development Services, the cost structure for Planning, Public
Works, and Fire divisions has significantly changed. For example, divisions are now responsible
for overhead allocations such as rent, Development Services managerial staff, and other
commonly used operating expenses (e.g. scanning services, office supplies, etc.).
Findings & Recommendations:
Modifications to flat fees, representing approximately 25% or $2.7 million of departmental
revenues, are representative of current resources, activities, and activity levels, as well as
changes to California Building and Fire Codes, and/or state mandates. Recommended
modifications to fees included re-naming fees, altering tiered fees and triggers, removing, and
creating new fees. The proposed fees, including a description of changes where applicable, are
included in Attachment A.
Fire Prevention
The largest impact of the Fee Study is anticipated in the Fire Prevention Division. Fire
Prevention fees have historically been set below cost recovery, or were provided at no cost,
and a complete fee study or evaluation has not been completed in at least five years. Further,
as part of creating Development Services, all Fire Prevention staff and associated costs were
moved to Development Services offices resulting in the need for additional space. Moving Fire
Prevention entirely out of the Fire Department and into Development Services means that this
division is now subject to a different cost structure that includes overhead allocations such as
rent, Development Services managerial staff, and other commonly used operating expenses
(e.g. scanning services, office supplies, etc.).
All fees in Fire Prevention were calculated according to the consultant’s activity-based model,
where fees have been proposed at full cost based on current activities, activity levels, and
proposed resources. These proposed fees are included in the fee study and are proposed to be
increased as recommended by CAP.
City of Palo Alto Page 7
Public Works
Public Works, like Planning, has a host of fees. However, many of their fees can be applied to
both development and non-development-related work. The differentiating factor is that
development-related work is entirely the result of private development. For example, a
commercial developer has to apply for a street work permit to work in the right-of-way. That is
entirely due to the impacts associated with their project. That work is driven by private
interests and it has been the direction from Council to ensure that those fees are set at full cost
recovery. Those fees are collected by and reside in Development Services as do the subsequent
direct, indirect and overhead Public Works costs associated with providing those services.
For purposes of this study, private development work is separate and distinct from non-
development related work. Therefore, those services and fees are provided by Public Works as
a whole, and the fees are set by Public Works as a whole through the Public Works
departmental municipal fee schedule. Public Works, with direction from the City Council,
decides how close to full cost recovery they should set those fees. The CAP study did include
analysis of the Public Works Department, however, subsequent to the kick-off of the consultant
study, updated analysis on staff allocations, time estimates, and fee volumes were obtained
and staff was unable to incorporate this more current data into the consultant’s final results.
Therefore, Public Works municipal fee proposals included as part of the development of the
Adopted Fiscal Year 2017 Municipal Fee Schedule are reflective of a full cost recovery model,
however, were not reflective of the specific methodologies and assumptions used in the CAP
study. The FY 2017 Adopted Fees utilized the Questica Calculator launched by the Office of
Management and Budget as opposed to those fees recommended in the CAP study. The
Adopted amendments to Public Works’ fees in the Development Services Department
represent significant recommended increases from the 2016 fees, and are expected to bring
the Public Works fees much closer to cost recovery. As part of the FY 2018 budget process, the
Office of Management and Budget, Development Services and Public Works will review these
fees and ensure they are at full cost recovery and/or bring forward recommended adjustments
to the fees and appropriate based on FY 2017 actual activity levels and estimated FY 2018 costs.
Building
Non-valuation fees were updated to reflect current ICC unit fee schedule structures, per
California State code. Similar to Fire Prevention, a complete fee study or evaluation has not
been completed in the last five years, and all fees are proposed at full cost according to the
consultant’s activity based model and current activities, activity levels, and resources.
The most significant changes recommended within the Building division are a result of
restructuring Mechanical, Plumbing, and Electric Permit fees. These fees are charged in
conjunction with the Building Permit and generally charge a Base Fee (representing
administrative costs to process) and new or remodeled supplemental fee (based on square
footage and representative of inspection costs). As a result of the study, current processing and
inspection times have both decreased. At full cost, the base fee is proposed to decrease to $82,
from $92, and the square footage fee to decrease to $0.02, from $0.11 per square foot.
City of Palo Alto Page 8
Mechanical, Plumbing, and Electric fees can also be charged as stand-alone permits. These fees
are structured as a Base fee (representing administrative costs to process) plus a supplemental
permit fee (representing inspection costs). The base fee is proposed to decrease to $82 from
$92 as stated above, where the unit of measure for the supplemental permit is proposed to
change from “each” to “per permit”. The current unit of measure is reflective of time estimates
for each incremental measure of an activity, such as the inspection of each individual light
fixture or switch at $0.50/each. Determining the incremental unit of time is incredibly difficult,
hard to justify, and is no longer a method promoted by ICC. As such, Development Services has
revised these fees on a per permit basis, using time estimates of an average project (5,000 sq.
ft.). In the case of the light fixture, the permit would be issued at a total cost of $82 for the
Base Fee, representing administrative processing costs, plus $68 for the inspection of any
number of light fixtures.
Green Building
Development Services continues to expand and develop the Green Building program in efforts
to follow the City Council’s lead and maintain a leadership role in environmental sustainability.
Fees were updated and new fees implemented to comply with State mandates, such as a
Landscape review and permit management, as well as the current Green Building and Energy
Ordinance. The cost structure of these fees includes consulting services associated with the
integration and management of sustainable building practices and policies, Landscape review
and permit management, as well as staff training, quality control, reporting, and informational
outreach to the community.
Use & Occupancy
Use & Occupancy fees were included in the study; however, staff does not propose to adjust
these fees at this time. These fees will be studied separately with the integration of the
Business Registry fee where staff anticipates that drivers to calculate cost, such as activities and
resources, will change as the program is developed.
Next Steps:
Development Services strives to operate as a revenue-supported department within the
General Fund with the ultimate goal of being an enterprise fund. The ultimate goal of
Development Services is to reach full cost recovery in all divisions and the adoption of the Fees
outlined in Attachment A represents the next step towards this goal of full cost recovery.
The department will continue to track revenues and expenditures at a divisional level through
Fiscal Year 2017 in order to analyze their cost-recovery performance and will work
collaboratively with the Office of Management and Budget, and the City Attorney’s Office to
identify and define a reserve policy that is appropriate and specific to the Development
Services. Staff anticipates returning to City Council with iterative recommendations, including
adjustments to valuation-based fees and the inclusion of reserve costs, through subsequent
budget processes.
City of Palo Alto Page 9
Resource Impact
The actions recommended in this report would increase the estimated revenue generated by
the Development Service Department flat fee activities. Given the changing economic
environment and the unknown potential impacts of the increases on activity levels (estimated
to be minor), no adjustment to the budget is assumed. Revenue collections will be monitored
and factored into the annual development of the budget as data is availabe and adjustments
are found to be necessary.
Environmental Review
Adoption of an ordinance amending Development Services Municipal Fees is not a project for
the purposes of the California Environmental Quality Act (CEQA) and therefore no
environmental review is necessary.
Attachments:
Attachment A: Municipal Fee Proposals (PDF)
Attachment B: CAP Cost of Services Study (PDF)
Attachment C: 11-15-16_FCM-Excerpt-Item-3 (PDF)
City of Palo Alto (ID # 7347)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 11/15/2016
City of Palo Alto Page 1
Summary Title: Development Services Cost of Services Study
Title: Development Services Cost of Services Study Including Fiscal Year 2017
Fee Proposals
From: City Manager
Lead Department: Development Services Department
Recommendation
Staff recommends that the Finance Committee recommend that the City Council adopt an
ordinance amending to Development Services Municipal Fees as described in Attachment A,
based on the completion of a Cost of Services Study (Attachment B) and adjusted by the annual
inflator applied to Municipal Fees from Fiscal Year 2016 to Fiscal Year 2017.
Executive Summary
The Development Services Department (DSD) undertook a Cost of Services Study in 2015 to
evaluate development related service fees incurred by applicants seeking a construction related
permit. These fees had not been reevaluated for many years, and the resulting
recommendations -- if approved -- would increase fee revenues and lower General Fund
subsidies consistent with the Cost Recovery Policy adopted by the City Council in May 2015.
The proposed changes would amend the fee schedule to reflect current International Code
Council (ICC) unit fee schedule structures and the City’s Green Building and Energy Ordinances
by eliminating some fees, proposing new fees, consolidating or expanding others, and adjusting
certain fees to a single flat-fee per permit. The City Council has the discretion to determine the
level of cost recovery for each of these fees. However, under State law, fees cannot be set
above the cost of service.
The consultant report is discussed in detail below, and the recommended fee changes
(Attachment A) and the full text of the consultant report (Attachment B) are attached. This
study was completed based on Fy2016 data, therefore an annual inflation value of 5.5%, as
recommended by the Office of Management and Budget for all Citywide fees in Fiscal Year
2017, is not included in the fees detailed in Attachment A but staff does recommend that this
increase be applied to all Development Services related fees in order to capture their cost in FY
2017 and included as part of the final ordinance action for City Council consideration.
City of Palo Alto Page 2
Background
In July 2010, the City Manager launched the comprehensive “Development Center Blueprint”
(Blueprint) project to restructure and adopt more holistic approaches to integrated
development review, permitting services, and staff coordination in order to improve
organizational efficiencies and minimize unnecessary costs and delays to customers. Since the
inception of the Blueprint, DSD has implemented new technologies, acquired additional space,
upgraded the existing space, and consolidated into a central department, that consists of
Building (formerly within the Planning department), Planning, Public Works, and Fire Prevention
divisions. Development Services is now a “one-stop” shop, located in a leased space across
from City Hall. Design development projects now have a single point of contact that facilitates
the customers’ experience throughout the permitting and construction process.
As part of the Fiscal Year 2014 Adopted Budget, and in efforts to better align the budget with
the current operational structure, the City Council created the Development Services
Department. Development Services embodies all development-related activities, including staff
allocations, resources, and associated service fees across multiple departments. The operating
budget currently relies on development review fees, permitting fees, and a subsidy from the
General Fund. Though the fees have been adjusted annually for inflation factors, it has been at
least five years since the fee schedule and structure were last subject to a full evaluation.
The Development Services Department is made up of key representatives from four different
departments including the Building, Planning, Public Works, and Fire divisions. These
representatives are physically stationed at the Development Center (285 Hamilton Avenue) or
elsewhere in the City, and provide development-related services to applicants seeking a
construction-related permit. In the current budget structure, representatives are allocated
proportionally to Development Services based on their time involved in the review process.
Approximately 80 employees are fully or fractionally budgeted to the department, resulting in a
total of 40 FTE. For example, Development Services has watershed protection representatives
in the Public Works department and transportation planners in the Planning department that
review building permits. In addition to personnel costs, Development Services has specific
overhead and indirect
charges such as the rent,
administrative functions,
and city support services
like Administrative Services,
City Attorney, and Human
Resources that must also
be accounted for. As a
department that operates
based on fee revenues, the
incoming fees must offset
all expenses which include
City of Palo Alto Page 3
personnel, overhead, and indirect charges.
On May 18, 2015 the City Council adopted the User Fee Recovery Level Policy (CMR 5735) that
suggests levels of cost recovery (high, medium, and low) based upon policy considerations. As
referenced in the table below, activities in which participants receive most or all of the benefit
from the service provided (i.e. issuance of building permits), or which are regulatory in nature,
fall within the “high” cost recovery level group.
The City retained the services of Capital Accounting Partners (CAP) to complete a cost of
services study to identify the total cost of providing services for which the City charges fees,
Phase I of which is included as Attachment D. CAP has prepared hundreds of cost allocation
plans for cities, counties and special districts throughout California, Texas, Washington and
more. Some of their clients include San Diego, Glendale, Los Gatos, Santa Barbara, Burbank and
Sacramento. Dan Edds is a project manager with CAP and has more than 15 years of experience
consulting within the public sector. His operational improvement work has involved problem
solving and process improvement opportunities for core business processes.
CAP uses an activity-based costing model to calculate the cost of a specific service (detailed
further in Attachment D), which identifies activities in an organization and assigns the cost of
each activity with resources to all services according to the consumption by each. The model
assigns direct and indirect costs to each fee, and therefore, calculates the cost of each fee at full
cost recovery. As discussed below, Phase I of the study includes recommendations for the
Department’s flat fees only.
Discussion
Fees and Fee Structure:
Development Services fees are structured in two ways: flat or project valuation-based. Based
on estimated FY 2016 revenues, approximately 75%, or $8.6 million, of departmental revenue is
derived from project valuation-based fees. Major project valuation-based fees include the
Building Permit and Plan Check fees. Industry practice correlates the valuation of a job to its
complexity, in the aggregate, and as such fees are calculated based on a percentage of a
projects valuation. Currently, the department uses the construction value for labor and
materials of the permitted work as the basis for determining the total Building Permit fee. An
additional Plan Check fee is assessed on top of the Building Permit, which is based on a
percentage of the total Permit fee. The Plan Check fee is intended to recover costs associated
with the Building, Fire & Life Safety, Zoning, and Public Works review of applicant plan
submittals. In contrast, flat rate fees are fees costed based on time and materials and activity
levels. These fees comprise the remaining Development Services revenue. The following
represents the projected breakdown of FY 2016 revenues evaluated as part of the fee study, at
current fee levels:
City of Palo Alto Page 4
FY 2016 Development Services Projected Revenue
Fee Study Project Steps and Process:
CAP was tasked to prepare a detailed cost analysis of its Development Services user fees with
the objective of ensuring that the Development Services Department is fully accounting for all
costs and recovering adequate revenues to cover expenses. Based on the current organizational
structure, CAP developed a costing model to analyze the total cost of fee generating services
and recommend adjustments necessary to reach full recovery.
As the study progressed, it was determined that additional data points were necessary to
recommend adjustments for valuation-based fee activities. Therefore, the report includes only
a high-level assessment of aggregated building permit and plan check activities. Staff is
currently in the process of implementing new data collection fields in the permit system and is
expanding the existing study to include a survey of other comparable City valuation tables and
alternative permit fee structures for what are currently valuation-based fees.
The study conducted by CAP for all Non-Valuation-based fees, or “flat rate” fees as referenced
earlier in this report, utilized an activity-based costing model to calculate the full cost of
providing specific services. This methodology identifies activities in an organization and assigns
the cost of each activity with resources to all services according to the consumption by each.
The model assigns direct and indirect costs to each fee, where all proposed fees have been
calculated at full recovery. A summary of how CAP builds cost structures follows:
1. Direct Costs
Through meetings with staff, CAP identified all direct staff time spent on fee-related activities
or services, where direct time is indicative of workers who are directly involved with activities
of a specific fee or service. Average salaries and the City Standard productive rate of 1,600
hours/year were used for these calculations. Additionally, CAP identified other operational
costs that are directly attributed to certain services, such as the Department’s use of on-call
consultants for inspections in the Building and Fire divisions.
City of Palo Alto Page 5
2. Indirect Costs (citywide administration)
These costs include processes that support, but do not directly apply to any specific activity or
fee, such as the Citywide and Departmental Overhead. The Citywide overhead costs are
allocated to departments based on the City’s Cost Allocation Plan. These represent expenses of
supporting departments including the offices of the City Manager, City Attorney, City Auditor,
City Clerk, Administrative Services, Human Resources, Information Technology, and Facilities
Maintenance.
3. Overhead (departmental administration)
Department Overhead is represented in two aspects: 1) Development Services as a whole; and
2) Divisional Overhead. Development Services overhead includes the salaries of the Director,
the Director’s Administrative Assistant, and the Senior Management Analyst, as well as rent,
and other supplies commonly used by all divisions of the department (Building, Planning, Public
Works, and Fire Prevention). These are not assigned to any particular service, but are allocated
to all fees since these professionals support all the activities of the department as a whole.
The Divisional Overhead represents costs associated with managers, supervisors, and support
staff and common purpose operational costs of the Public Works, Planning, and Fire
Departments. For example, direct staff is allocated as a percentage of an FTE to Development
Services based upon activity levels for Public Works, while divisional overhead which reflects
the Public Works administrative costs such as budget, contract, and executive leadership costs
are calculated as a rate that is applied to the salaries allocated to Development services and
executed through a year-end adjustment. The rate assumes that the same level of
administrative support provided to the Public Works Department is provided to the Public
Works division within Development Services. These are not assigned to any particular service,
but are allocated to all fees in the respective division.
4. Reserve
A reserve fund provides a mechanism to finance future unanticipated events and other
identified or planned needs of the department. For purposes of the calculation, the reserve
amount is allocated to all fees, similar to Overhead. As part of the study, the consultant
recommended that the City set a specific reserve policy, however included an optional common
practice to build 6-12 months of operating expenses over a three year period. The original
consultant study incorporates a $2.3 million reserve within the cost structure of the
department, where results show the full cost of fees with and without a reserve. However, due
to the recommended significant changes to move closer towards cost recovery, and the delay
necessary to adjust valuation-based fees, staff does not recommend the establishment of a
reserve at this time. As such, the proposed fees presented in Attachment A do not include any
assumption for reserve costs.
Projections:
The study indicates a total projected General Fund subsidy in FY 2016 of $1,787,985, excluding
City of Palo Alto Page 6
impacts of one-time activities, such as deferred revenue for large projects and expense savings.
Once adjusted for one-time revenues, the net general fund subsidy in FY 2016 is approximately
$294,000.
Drivers of Cost Recovery Variances:
Staff believes the following to be key drivers for cost recovery variances within the Public
Works, Planning, and Fire Prevention divisions:
1. Length of time since last comprehensive Fee Study. While fees have been adjusted annually
for inflation factors, it has been at least five years since the fee schedule and structure were last
subject to a full evaluation.
2. Fee levels in Planning, Public Works, and Fire have historically been set below full cost
recovery.
3. As part of the creation of Development Services, the cost structure for Planning, Public
Works, and Fire divisions has significantly changed. For example, divisions are now responsible
for overhead allocations such as rent, Development Services managerial staff, and other
commonly used operating expenses (e.g. scanning services, office supplies, etc.).
Findings & Recommendations:
Modifications to flat fees, representing approximately 25% or $2.7 million of departmental
revenues, are representative of current resources, activities, and activity levels, as well as
changes to California Building and Fire Codes, and/or state mandates. Recommended
modifications to fees included re-naming fees, altering tiered fees and triggers, removing, and
creating new fees. The proposed fees, including a description of changes where applicable, are
included as Attachment A (excluding the recommended 5.5% increase to align with FY 2017
costs).
Fire Prevention
The largest impact of the Fee Study is anticipated in the Fire Prevention Division. Fire
Prevention fees have historically been set below cost recovery, or were provided at no cost,
and a complete fee study or evaluation has not been completed in at least five years. Further,
as part of creating Development Services, all Fire Prevention staff and associated costs were
moved to Development Services offices resulting in the need for additional space. Moving Fire
Prevention entirely out of the Fire Department and into Development Services means that this
division is now subject to a different cost structure that includes overhead allocations such as
rent, Development Services managerial staff, and other commonly used operating expenses
(e.g. scanning services, office supplies, etc.).
All fees in Fire Prevention were calculated according to the consultant’s activity-based model,
where fees have been proposed at full cost based on current activities, activity levels, and
City of Palo Alto Page 7
proposed resources. These proposed fees are included in the fee study and are proposed to be
increased as recommended by CAP.
Public Works
Public Works, like Planning, has a host of fees. However, many of their fees can be applied to
both development and non-development-related work. The differentiating factor is that
development-related work is entirely the result of private development. For example, a
commercial developer has to apply for a street work permit to work in the right-of-way. That is
entirely due to the impacts associated with their project. That work is driven by private
interests and it has been the direction from Council to ensure that those fees are set at full cost
recovery. Those fees are collected by and reside in Development Services as do the subsequent
direct, indirect and overhead Public Works costs associated with providing those services.
For purposes of this study, private development work is separate and distinct from non-
development related work. Therefore, those services and fees are provided by Public Works as
a whole, and the fees are set by Public Works as a whole through the Public Works
departmental municipal fee schedule. Public Works, with direction from the City Council,
decides how close to full cost recovery they should set those fees. The CAP study did include
analysis of the Public Works Department, however, subsequent to the kick-off of the consultant
study, updated analysis on staff allocations, time estimates, and fee volumes were obtained
and staff was unable to incorporate this more current data into the consultant’s final results.
Therefore, Public Works municipal fee proposals included as part of the development of the
Adopted Fiscal Year 2017 Municipal Fee Schedule are reflective of a full cost recovery model,
however, were not reflective of the specific methodologies and assumptions used in the CAP
study. The FY 2017 Adopted Fees utilized the Questica Calculator launched by the Office of
Management and Budget as opposed to those fees recommended in the CAP study. The
Adopted amendments to Public Works’ fees in the Development Services Department
represent significant recommended increases from the 2016 fees, and are expected to bring
the Public Works fees much closer to cost recovery. As part of the FY 2018 budget process, the
Office of Management and Budget, Development Services and Public Works will review these
fees and ensure they are at full cost recovery and/or bring forward recommended adjustments
to the fees and appropriate based on FY 2017 actual activity levels and estimated FY 2018 costs.
Building
Non-valuation fees were updated to reflect current ICC unit fee schedule structures, per
California State code. Similar to Fire Prevention, a complete fee study or evaluation has not
been completed in the last five years, and all fees are proposed at full cost according to the
consultant’s activity based model and current activities, activity levels, and resources.
The most significant changes recommended within the Building division are a result of
restructuring Mechanical, Plumbing, and Electric Permit fees. These fees are charged in
conjunction with the Building Permit and generally charge a Base Fee (representing
administrative costs to process) and new or remodeled supplemental fee (based on square
City of Palo Alto Page 8
footage and representative of inspection costs). As a result of the study, current processing and
inspection times have both decreased. At full cost, the base fee is proposed to decrease to $82,
from $92, and the square footage fee to decrease to $0.02, from $0.11 per square foot.
Mechanical, Plumbing, and Electric fees can also be charged as stand-alone permits. These fees
are structured as a Base fee (representing administrative costs to process) plus a supplemental
permit fee (representing inspection costs). The base fee is proposed to decrease to $82 from
$92 as stated above, where the unit of measure for the supplemental permit is proposed to
change from “each” to “per permit”. The current unit of measure is reflective of time estimates
for each incremental measure of an activity, such as the inspection of each individual light
fixture or switch at $0.50/each. Determining the incremental unit of time is incredibly difficult,
hard to justify, and is no longer a method promoted by ICC. As such, Development Services has
revised these fees on a per permit basis, using time estimates of an average project (5,000 sq.
ft.). In the case of the light fixture, the permit would be issued at a total cost of $82 for the
Base Fee, representing administrative processing costs, plus $68 for the inspection of any
number of light fixtures.
Green Building
Development Services continues to expand and develop the Green Building program in efforts
to follow the City Council’s lead and maintain a leadership role in environmental sustainability.
Fees were updated and new fees implemented to comply with State mandates, such as a
Landscape review and permit management, as well as the current Green Building and Energy
Ordinance. The cost structure of these fees includes consulting services associated with the
integration and management of sustainable building practices and policies, Landscape review
and permit management, as well as staff training, quality control, reporting, and informational
outreach to the community.
Use & Occupancy
Use & Occupancy fees were included in the study; however, staff does not propose to adjust
these fees at this time. These fees will be studied separately with the integration of the
Business Registry fee where staff anticipates that drivers to calculate cost, such as activities and
resources, will change as the program is developed.
Next Steps:
Development Services strives to operate as a revenue-supported department within the
General Fund with the ultimate goal of being an enterprise fund. The ultimate goal of
Development Services is to reach full cost recovery in all divisions and the adoption of the Fees
outlined in Attachment A represents the next step towards this goal of full cost recovery.
The department will continue to track revenues and expenditures at a divisional level through
Fiscal Year 2017 in order to analyze their cost-recovery performance and will work
collaboratively with the Office of Management and Budget, and the City Attorney’s Office to
identify and define a reserve policy that is appropriate and specific to the Development
City of Palo Alto Page 9
Services. Staff anticipates returning to City Council with iterative recommendations, including
adjustments to valuation-based fees and the inclusion of reserve costs, through subsequent
budget processes.
Resource Impact
The actions recommended in this report would increase the estimated revenue generated by
the Development Service Department flat fee activities. Given the changing economic
environment and the unknown potential impacts of the increases on activity levels (estimated
to be minor), no adjustment to the budget is assumed. Revenue collections will be monitored
and factored into the annual development of the budget as data is availabe and adjustments
are found to be necessary.
Environmental Review
Adoption of an ordinance amending Development Services Municipal Fees is not a project for
the purposes of the California Environmental Quality Act (CEQA) and therefore no
environmental review is necessary.
Attachments:
Attachment A_Municipal Fee Proposals (PDF)
Attachment B_CAP Cost of Services Study (PDF)