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South Pasadena staff warn House Bill 803 will force wide permit-fee and software overhaul
Summary
City staff told commissioners that state House Bill 803 requires municipalities to stop basing permit fees on project value and instead set fees on actual per-permit costs, prompting an urgent fee-analysis and software reprogramming effort with consultant proposals between about $50,000 and $70,000.
City staff told the South Pasadena commission that a recent state law will require the city to rewrite how it charges building-permit fees and to reprogram permitting software.
"The legislation came down that we're not allowed to charge permit fees based on the value of the project anymore," said Terry, head of the Community Improvement department, describing the change staff must implement statewide. Under the new approach, she said, the city must calculate permit charges from the actual cost to provide inspection and permitting services and then reconfigure the software that runs the permit workflow.
Terry told commissioners she has solicited three implementation proposals to accomplish the work: two independent consultants priced around $50,000 and a second vendor option tied to the current permitting vendor, Tyler, at about $70,000. She said the first necessary step is a fee analysis to determine per-permit costs and break-even volumes; only after that analysis can consultants reprogram the permitting system and staff bring an ordinance change to public hearing.
The change also affects operational practice: re-inspections and any additional inspections would become billable events. "If you fail an inspection and we have to come back out to do another inspection, you'll be charged for that extra inspection," Terry said, noting the city currently absorbs some re-inspection costs that outside contractors charge at higher rates.
Staff and commissioners debated the schedule and potential penalties. Several participants said earlier communications had referenced a July 1 deadline, but others flagged that some exemptions and fee-restructuring deadlines may extend to a later date under related legislation. Staff recommended proceeding with the fee analysis immediately and said the ordinance update and public hearing would follow once the analysis is complete.
Because the bill changes how fees must be set, staff said a software update is unavoidable: the city's permitting system currently calculates charges as a percentage of project value and must be retooled to assign per-permit fees. Terry said she has been working with Tyler representatives at a building-officials conference to identify what can be done in the vendor's system, but that local configuration and consultant work will still be necessary.
Next steps outlined to the commission included selecting a consultant to perform the fee analysis, vetting software-implementation proposals, and, if needed, returning to the commission with a budget amendment to fund the work in the current fiscal year.
Authorities and references recorded during the discussion included House Bill 803 and a separate reference to House Bill 399 regarding certain exemption deadlines; staff said they would review the statutory language to confirm which components are immediately required and which can be phased in.
