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Los Altos Hills committee reviews fee study that would raise many permit charges and add an administrative plan-review fee
Summary
FIC members pressed staff and consultants for clearer assumptions after seeing a draft fee study that proposes valuation multipliers, a new one‑hour planning charge on permits and separate plan‑check and building‑administration fees; staff will provide side‑by‑side examples and a revised fee comparison ahead of the May 11 follow‑up meeting.
Town finance staff and fee‑study consultants presented a detailed draft development services fee study and cost‑allocation plan at the May 4 FIC meeting, outlining how the town would move toward fuller cost recovery for planning, building and engineering services.
Thomas, the town finance lead, summarized the context: rising contract costs — notably an approximately $700,000 increase in the sheriff’s contract — and long‑term expenditure pressures have made the fee study necessary to shore up revenues. He said the full budget document would be published on May 8 and asked the committee whether members could meet again on May 11 to reconcile revenues and permit‑volume assumptions.
The fee study presentation explained the methodology: direct labor, indirect overhead and fully loaded rates were used to calculate per‑service costs. Consultants proposed using national ICC building‑valuation tables adjusted by a local multiplier (roughly 2.07 in the presenter’s analysis) so valuation‑based fees better match local construction costs; remodels would generally be valued by remodeled square footage. The presenter said that adopting the master fee schedule would make changes effective 30 days after council adoption.
On specific changes, staff and the consultant described three components that would affect permit applicants: a base building‑permit fee tied to valuation, a plan‑check fee (a percentage of the base building permit), and a new building‑administration fee intended to recover in‑house administrative costs and residual plan‑review amounts. The study also proposes adding a one‑hour planning charge on every building permit and reclassifying some revenue lines, which together are projected to increase 'charges for services' in the general fund.
Public‑facing impacts highlighted in the meeting included sample calculations showing different outcomes depending on project type. For a 4,000‑sq‑ft, $2 million valuation example discussed in the session, staff reported a combined homeowner charge (plan check plus administration) of about $8,679 under the proposed schedule; presenters acknowledged some examples in the packet produced lower per‑project charges than today while still projecting net revenue growth across the program. The committee repeatedly requested clearer, side‑by‑side comparisons of current vs. proposed fees for bread‑and‑butter permit types so residents are not surprised.
The consultants also presented an 80/20 analysis showing revenue concentration: a small number of fee categories historically produce most revenue. The study removes some legacy fees (for example, an energy fee and plan‑retention fee) and reallocates their recovery across other fee lines, which complicates year‑to‑year comparisons.
On housing incentives, staff noted that the proposed schedule would not charge impact fees for ADUs up to 800 square feet, which the consultant described as the primary in‑schedule ADU incentive.
What happens next: Committee members asked staff to (a) provide a complete budget document by May 8, (b) circulate the most recent fee schedules and a updated comparison table before the next meeting, and (c) prepare clear, side‑by‑side examples (including sample homeowner totals) to validate the revenue projections. The committee tentatively scheduled a follow‑up meeting on May 11 to focus on revenue/permitting assumptions.
