Council approves amendment to InterWest building-and-safety contract, shifts to hourly compensation
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Summary
Lake Forest City Council approved a third amendment to its contract with InterWest Consulting Group on March 4, 2025 to extend the agreement, switch compensation from a permit-fee split to hourly rates effective May 1, 2025, and add approximately $972,000 for the extended term.
The Lake Forest City Council on March 4, 2025 approved a third amendment to its building-and-safety agreement with InterWest Consulting Group that extends the agreement through April 30, 2026 and changes the compensation model from a percentage-of-fees split to hourly rates, with an estimated additional cost of roughly $972,000 for the extended term.
City staff presented data showing that plan-check and permit revenues have declined and stabilized as the city’s major residential build-out nears completion; staff noted permit and plan-check revenue decreased by about 48% between fiscal years 2022 and 2024. Management analyst Arianna Young told the council that the city and InterWest previously split permit and plan-check fees, with InterWest receiving 52% and the city retaining 48% to cover staff and overhead, but that months have occurred when revenue did not cover InterWest’s costs under that model.
Staff recommended switching to an hourly compensation structure, effective May 1, 2025, to align payment with hours worked and to make it easier to monitor performance metrics such as turnaround time. The proposed staffing adjustment would reduce the InterWest team by one permit technician and one building inspector compared with 2024 staffing; staff said operating hours at the permit counter would be adjusted if necessary to match peak times. The presentation estimated an additional $972,000 would be needed to fund services through the amended term; staff said sufficient funds are available in the operating budget to cover that amount.
During public comment Andrew O'Connor argued the city should “cut the cord” and move building and permit services in-house, and raised questions about inspector vehicle use. In response to council questions about the $972,000 figure, Arianna Young said, “This is the additional compensation needed,” and clarified the amount is an estimate for the next 12 months under the transition.
Councilman Benjamin Yu moved approval of the amendment; Councilman Tetimer seconded. The motion passed unanimously. Staff said they will release a request for proposals in spring 2025 to solicit proposals for future building-and-safety services and will conduct a comprehensive study of building permit fees to ensure fees reflect time required for permit, plan check and inspection services.
What the amendment does - Extends the InterWest agreement through April 30, 2026. - Changes compensation from a percentage-of-fees split to hourly rates effective May 1, 2025. - Adjusts staffing downward by one permit technician and one inspector from 2024 levels; staff said adjustments will prioritize maintaining service during peak counter times. - Adds an estimated $972,000 in compensation for the extended term; staff said funds are available in the operating budget.
Council directed staff to publish an RFP in spring 2025 and to study fee structures and the option of operating building-and-safety services in-house in future fiscal years.
