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Laguna Woods proposes insourcing building inspections and adopts modest fee increases tied to the change
Summary
City staff proposed bringing building-permit, inspection and code-enforcement work in house, adding a planning and environmental services director and up to eight full‑time equivalents; council signaled support and approved a fee schedule increase (effective July 1) that reflects the planned staffing change.
The Laguna Woods City Council heard a multi-part proposal from staff to insource building-permit, plan-review, inspection and code-enforcement services that are currently provided by consultants, and then approved a separate fee-study resolution to set new permit and planning fees timed to the staffing change.
City Manager Chris Macon said the city has contracted building services for many years but that rising contract labor costs and the desire to better manage long‑term permit fee growth motivated a proposal to move most services onto city payroll. "The only way for us to manage the growth of building permits over time is to take control of the single largest cost driver by a mile in those permits, which is labor," Macon told the council. He proposed authorizing a building official, three building inspectors, two permit technicians, one code-enforcement officer and one new planning and environmental services director — a net authorized staffing increase from 10.25 to 18.25 full‑time equivalent positions, with seven of the proposed positions currently provided by consultants.
Macon and staff emphasized the change is intended to moderate permit-fee increases by controlling the labor-cost component. Macon said the city would still plan to use contracted inspection firms to augment staff during demand spikes, but that moving the core service in house should make year‑to‑year fee growth more predictable and avoid outsized annual increases tied to a consultant’s fully burdened hourly rate.
Terry Madsen of ClearSource Financial, the city’s fee-study consultant, presented the updated cost-of-service analysis and recommended adoption of fee adjustments based on the staffing change. Madsen said Laguna Woods’ hourly rates "align very well to the region, but to the lower end of the region," and told the council the current recommended adjustments are relatively modest: roughly a 3% aggregate change on building fees, about 2% on planning fees and about 5% on engineering fees. Staff proposed an effective date of July 1, 2025, to match the anticipated in‑house staffing transition and to provide the 60‑day notice required by state law.
Council members and public commenters generally expressed support for the insourcing idea while asking questions about timing, delays in permit processing and fiscal risk. City staff said the city has enough restricted AB 2766 (air-quality) funds to purchase electric vehicles for inspectors — reducing mileage costs — and that the item would be revisited during the next annual fee update once the new employees are on payroll and detailed time‑on‑task can be measured.
After public comment and council discussion, the council voted to adopt a resolution setting the new building, planning and encroachment fee schedule effective July 1, 2025. The staffing proposal itself was advanced for inclusion in the upcoming two-year budget; council members voiced support and directed staff to proceed with recruitment and to return with final budget adoption materials in June.
