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Lake Forest council approves amendment shifting InterWest building-safety pay to hourly; extends contract through April 2026
Summary
The City Council voted unanimously to approve a third amendment to the InterWest Consulting Group agreement that changes compensation from a revenue-share to hourly rates, extends the contract to April 30, 2026, and authorizes about $972,000 in additional funds for the coming year.
Lake Forest — The City Council on March 4 approved a third amendment to the city's agreement with InterWest Consulting Group to continue outsourced building and safety services through April 30, 2026, and to switch compensation from a percentage of permit fees to hourly billing effective May 1, 2025.
City staff said the change is prompted by a sustained drop in permit and plan-check revenue following near-completion of large housing developments. Management analyst Arianna Young told the council plan-check and permit revenues fell about 48% between fiscal years 2022 and 2024 as the Opportunities Study Area and Meadows neighborhoods completed build-out. "This marks the end of our presentation. If you have any questions, staff are happy to clarify," Young said during the presentation.
The amendment also reduces InterWest staffing relative to 2024 by one permit technician and one building inspector, and staff estimated additional compensation of about $972,000 would be required to cover the cost of services through the extended term. Staff said sufficient funds are available in the city's operating budget to cover the increase and characterized the switch to hourly rates as a way to link pay directly to hours worked and to make performance monitoring easier.
Councilmembers asked staff and the consultant to monitor service levels and to adjust staffing if needed. Councilman Benjamin Yu moved approval of the amendment; Councilman Tetimer seconded the motion and it passed unanimously.
Staff said the amendment will be followed by a spring 2025 request for proposals to solicit new offers for building and safety services and by a comprehensive review of building permit fees to ensure they reflect the time required for plan check, inspections and related services. Staff also said the city will evaluate whether providing building and safety services in-house would be feasible in the future.
Public comment included repeated criticism from resident Andrew O'Connor, who said earlier outsourcing had been a "money loser" and urged the council to bring services in-house. Councilmembers responded that the change reflects predictable shifts in workload as the city transitions from a high-development phase to a maintenance phase.
The council record shows the contract life-to-date not-to-exceed amount is $7.3 million; staff described the $972,000 figure as the additional compensation anticipated for the extended term and transition to hourly billing.
Looking ahead, staff will issue the RFP in spring 2025, review the fee schedule in a follow-up study and report back to the council on service-level metrics and any proposed counter-hour adjustments.
