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Redding staff proposes study of building and planning fee changes to recover more overhead
Summary
Staff proposed that the council direct analysis of development services fees to capture some overhead and reduce general‑fund subsidy. Estimated additional revenue ranges from about $100,000 (targeted changes) to $300,000 (full cost recovery); staff recommended time studies and phased implementation.
City staff asked the Redding City Council for direction to begin a formal review of building and planning fee practices to capture currently unrecovered overhead and administrative costs.
Tippin and development services staff described how building permit fees are presently set to recover direct plan‑check and inspection costs (about a 65/35 split in staff estimates), but do not routinely capture departmental overhead, administrative support, software, counter time, pre‑application consultations, or other indirect costs. "What we don't capture in that, and we never have captured in that, is any overhead costs, administrative, operational expense, training," staff said.
Options highlighted by staff ranged from a modest overhead add‑on (2–5% additional revenue, roughly $100,000 annually) to a full‑cost recovery approach (estimated at about a 10% increase or roughly $300,000). Staff recommended initial time‑and‑motion studies and a phased approach, with some simple changes (for example, reinspection fees or staged plan‑review fees) implemented as early as June and more comprehensive changes in mid‑2026 after a full analysis. Staff said any fee changes must comply with California legal constraints on fee recovery (staff referenced Proposition 26) and with council direction.
Council comments and conditions: council members said they supported exploring fee changes but wanted policy safeguards to ensure fees improve service or change behavior (for example, a reinspection fee or a discount for plans that meet requirements on first submittal). Council member Josh Johnson and others urged accompanying policy changes to clarify counter time limits and turnaround expectations before raising fees.
Why it matters: the development services function is subsidized by the general fund today. Staff said modest changes could reduce that subsidy by about $100,000 per year and that more comprehensive cost allocation could yield larger savings, but would require staff time to implement and legal review.
Ending and next steps: staff will return with a scope of work, time studies and draft fee schedules for building and planning fees; council asked that staff present parameters and policy options before finalizing fee increases.
