Case #1804 City of Stockton Community Development Department Permit and Plan Check Fees Reason for Investigation:

Builders today may be paying excessive fees for combination permits and plan checking because of a misinterpretation made in 2001. This misinterpretation has generated more than $40,000,000 during the past five fiscal years.

The $40,000,000 surplus that has been transferred to the General Fund and has not been reinvested in the Community Development Department or the Building Division to support its needs.

Stockton City Council did approve the permit fee increase in 2001 (resolution 01- 0279). The Grand Jury finds that the fee increase was owed to a misinterpretation of the fee schedule document. This misinterpretation was used as the study (analysis) required for the city council to approve the fee increase.

The City of Stockton, with justification from the former Interim City Attorney and the City Auditor, may be charging more than the cost to provide service for combination and plan checking fees. This has allowed the City of Stockton to use the Building Division as a source of revenue and may violate California Health and Safety Code '17951 and California Government Code '66014.

The Grand Jury finds that the actual cost to provide service for the Building Division has not been determined. The actual cost to provide service must include the Building Division’s budget in addition to other support costs provided by other city departments.