Council adopts immediate increase to building and planning fees; staff presented multiyear phase-in alternatives

The Garden Grove City Council voted to adopt an immediate adjustment to building and planning fees after a public hearing and a consultant’s presentation on the city’s cost-recovery gap for permitting services.

The action matters because the fee changes are intended to recover the cost of plan review and permitting services that the city currently subsidizes from its general fund; staff and the consultant estimated about $1.7 million in under-recovery across the fee portfolio.

Consultant Terry Madsen of Clear Source Financial explained the legal and practical framework for regulatory fee setting in California and presented results of a city-specific study and a regional comparison. He told the council these fees are service-based — plan review, permit processing and related activities — and that the city’s building fees were recovering roughly 80% of costs while many planning fees were at lower recovery levels. The consultant and staff provided three options for council consideration: a three-year phase-in to reach full cost recovery, a two-year phase-in, or an immediate single-step adjustment effective July 1, 2025, followed in subsequent years by inflation-indexed adjustments tied to regional cost measures unless the council revisits fees.

Staff recommended the three-year phase-in to reduce the short-term impact on applicants while moving fees toward full cost recovery. During the public hearing one resident urged the council to adopt a three-year plan and then review the automatic inflation adjustment before indexing fees annually by CPI.

Council deliberations focused on balancing the need to fairly recover the city’s costs against concerns that higher fees could discourage construction, including accessory dwelling units or smaller homeowner projects. Councilmembers expressed differing views on the pace of change: some urged an immediate adjustment to stop ongoing subsidy from the general fund, while others preferred a phased approach. The council ultimately adopted the immediate adjustment option.

The council vote was called after public comment and deliberation. Staff said the new schedule would take effect July 1, 2025; subsequent annual adjustments were described as tied to regional inflation measures unless the council elected to revisit the schedule with a new study.

Staff and the consultant said that if the council adopts the proposed fee schedule, Garden Grove’s fees will move from the lower end of the regional spectrum to about the mid-range for comparable Orange County cities. The immediate adoption directs staff to implement the revised fee schedule as recommended and to publish the new fee schedule and effective dates.