Title
Approval of an Ordinance Relating to Permit Fees
Recommended Action
Committee Recommendation:
Move to approve Finance Committee recommendation to approve an Ordinance revising fees for Engineering, Building, Fire and Land Use Plan Review, Permits and Inspections.
City Manager Recommendation:
Move to approve on first reading, and forward to seconding reading, an Ordinance revising fees for Engineering, Building, Fire and Land Use Plan Review, Permits and Inspections.
Report
Issue:
Whether to approve an Ordinance revising fees for Engineering, Building, Fire and Land Use Plan Review, Permits and Inspections.
Staff Contact:
Susan McLaughlin, Director, Community Planning and Economic Development, 360.280.3146
Presenter(s):
None - Consent Calendar Item
Background and Analysis:
The City of Olympia collects fees to offset a portion of the cost of reviewing applications for new development and inspecting new construction. Fee amounts are adopted by the City Council and codified in Olympia Municipal Code Title 4. They include Engineering Fees (OMC 4.04), Building Code Review and Permit Fees (OMC 4.36), Fire Plan Review and Permit Fees (OMC 4.38), and Land Use Application Review (OMC 4.40).
In 2004, the City Council conducted a Permit Cost Recovery Study and established a goal to recover 85% of the cost of delivering development review services from permit fees. In 2015, the City conducted an updated Cost Recovery Study and the City Council adopted Resolution No. 6983 creating a Development Fee Revenue Fund.
In 2020-21 the City again conducted a Cost Recovery Study and examined the operation of the Development Fee Revenue Fund. That analysis found that
the City was not recovering 85% of the cost of delivering development review services. The study recommended the City update its development fees annually to reflect increased labor costs, since those are most of the costs of providing development services to permit applicants. City staff also completed a comparison of Olympia development fees to those of neighboring cities in 2021. The City Council has since updated development fees annually by ordinance.
Finance Committee recommends the attached adjustments to development fees to align with increased labor costs, more closely maintain the City’s cost recovery rate, and remain relatively aligned with development fees in neighboring cities. The City Council received a briefing on November 3, 2025.
Climate Analysis:
This agenda item is not expected to directly result in impacts to greenhouse gas emissions. However, development review services enable energy-efficient construction consistent with the City’s Comprehensive Plan policies for more dense patterns of development. This will support increased use of alternative transportation modes that help reduce greenhouse gas emissions.
Equity Analysis:
One of the goals of the City’s budget process is to ensure that city services are provided equitably to our residents and business communities, as well as the greater Olympia community. This agenda item is not expected to further impact known disparities in our community.
Neighborhood/Community Interests (if known):
Members of the community will likely have an interest in this agenda item as it deals with City finances and fiscal governance. Stakeholders in the development construction and finance industry have a direct interest in costs to obtain required permits and inspections.
Financial Impact:
Revenue from development fees is deposited into the City’s Development Fee Fund and are exclusively used to fund the cost of delivering development review services. The attached ordinance adjusts development fees commensurate with the City’s expected labor cost increases in 2026 to help projected revenues keep pace with the increased cost of delivering development review services.
Options:
1. Move to approve on first reading, and forward to seconding reading, an Ordinance revising fees for Engineering, Building, Fire and Land Use Plan Review, Permits and Inspections.
2. Do not approve the Ordinance.
3. Approve the Ordinance with specific changes
Attachments:
Ordinance