Gilbert staff propose building-valuation overhaul, modest permit fee increases to close revenue gap

Town of Gilbert staff on Tuesday presented a development services fee update that recommends adopting a current International Code Council (ICC) building valuation table and modest increases to permit and miscellaneous fees to better align fees with actual processing costs.

The presentation, delivered to the Gilbert Town Council by a development services staff member identified in the meeting as Kyle and by Joseph Hewitt, laid out a multi-step fee study the town completed after council direction in 2024. Kyle said the update aims to ensure “growth pays for growth” and to stop subsidizing development review by general taxpayers.

The nut graf: Council members were told the town has not updated its valuation basis since 1999 and that the growing gap between development services revenues and processing costs widened in recent years because of market changes and added services. Staff recommended switching to the most current ICC valuation table and performing annual updates tied to ICC values so fees better reflect building cost changes.

Staff showed examples from actual recent Gilbert projects. Joseph Hewitt noted, “We haven't updated the valuation table since 1999,” and the presentation compared current and proposed valuation figures — for instance, a multifamily valuation example that used to be roughly $59 per square foot would be $148 per square foot under the current ICC table. Staff emphasized valuation is an input to several fee calculations and that increases in valuation do not translate dollar-for-dollar to permit fee hikes.

Staff also presented specific miscellaneous fee changes discovered during the study, including an example of a three-quarter-inch water meter set: parts alone cost about $190 while the current fee was approximately $115, meaning the town was subsidizing that service. Staff described a methodology that mapped each step of the development review process to personnel time and other costs (“swim lanes”) and said they considered competitive positioning with neighboring cities when recommending fee levels.

Stakeholder outreach included a presentation to the Chamber and to local builders. Staff reported most feedback noted Gilbert’s fees would still be lower than many neighboring communities and that the proposed revisions appeared fair, with a planned effective date of July 1 if adopted.

Discussion on the dais included a council question about whether the updated fees affect system development charges; staff answered the fee study would not change system development (impact) fees. Council member Jim Torgerson asked whether growth will in practice “pay for growth”; staff reiterated the goal and offered to answer follow-up specifics if requested.

The council voted to postpone separate public hearings for related items and subsequently voted 7-0 to close the public hearing on item 7 and accept the development services fees update as presented.

The presentation materials and staff comments indicated the town plans an annual automatic update to the valuation table tied to the ICC, and staff recommended additional outreach and opportunities to select different plan-review options depending on project needs. Further council direction would be needed to convert the study’s recommendations into ordinance or fee-schedule changes.