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Home My WebLink About11/18/2025 Item 7a, Loew Michael Loew < To:E-mail Council Website Subject:11-18-2025 City Council Meeting, Agenda Item 7.a Dear Mayor Stewart and Council Members, I write to provide information relevant to the City’s consideration of new local amendments to the 2025 California Building Standards Code. The facts summarized below come directly from the City’s adopted Financial Plans, the 2024 Fee Study, and the City’s own year-end performance reporting. It is important that these discrepancies and performance indicators be transparently understood as the City evaluates additional regulatory obligations for the Building & Safety Division, and in light the $4- million surplus. I. Discrepancies Between the Fee Study and Adopted Budgets The City’s adopted Financial Plans for FY 2019–2025 show that the Building & Safety Division was programmed to generate a cumulative surplus of $7,271,935. These figures (presented in Exhibit A) reflect actual planned revenue exceeding expenditures for fee-supported services over the six-year period. By contrast, Exhibit B (page 11 of the City’s 2024 Comprehensive Citywide User Fee Study) asserts that the division recovers 96% of its costs, operates at a $145,474 deficit, and incurs approximately $3.9 million annually in Building & Safety operational costs. Review of historic expenditures shows that the division has never expended the $3.9 million in annual “costs” attributed to it in the fee study. This discrepancy raises concerns under Government Code §§ 66014 and 66016, which require that development fees reflect the reasonable cost of providing the service and that cost-of-service data disclosed to the public be accurate and tied to actual expenditures. Simply put: The 2024 fee study misrepresents the Building and Safety Division’s documented financial history. II. Surplus Understated and Unfunded Mandates The Building & Safety Division’s surplus is further understated because its cost center includes Code Enforcement, a citywide general service unrelated to fee-supported permit activity. Code Enforcement expenditures exceed $500,000 annually (5 FTE). Removing this cost reveals a substantially greater surplus generated by Building & Safety services than the budget alone indicates. In addition, the City’s adoption of the 1997 Uniform Code for the Abatement of Dangerous Buildings, which is being considered as part of the Municipal Code update in Section 15.02.140 of this draft ordinance, requires the establishment of a Repair and Demolition fund, as set forth in Section 802.1 1 of the code. This fund is intended to support mitigation, repair, or demolition of structures deemed hazardous to life and safety. However, none of the City’s recently adopted budgets include any allocation to establish this fund. III. Division Performance Relative to Council-Adopted Standards The Year-End Performance Report presented to the Council on November 4, 2025 shows that Building & Safety did not meet several of the service-level standards established by the City Council. According to the report, only 60% of Code Enforcement cases were investigated within established timelines (target: 85%), and only 59% of building permit reviews were completed within adopted cycle times across all departments (target: 85%). These outcomes reflect constraints that have persisted across multiple budget cycles. The report also documents spending reductions that were financial in nature rather than operational. It states that “Contract Services expenditures came in 41% under budget,” due to contracts that were “paused or not initiated, and subsequently closed out.” Staff were further directed to “complete more work in-house to reduce costs.” The Year-End Performance Report is what presents financial concerns as justification for withholding resources from the Building & Safety Division. It reveals that the division is not meeting the Council’s own service-level standards, yet the report describes its unspent funds as “savings” and documents contract cancellations and spending pauses. These reductions occurred during the same period the City’s adopted budgets show a cumulative $4 million surplus. IV. City’s Response The administration’s November 4, 2025 agenda-report memo includes statements that cast false aspersions on my competence and motives. When such characterizations appear in an official, publicly distributed agenda correspondence, they are defamatory because they create a materially false impression of my actions and mislead the public about the issues raised. Labor Code § 1102.5 prohibits retaliation or any action that deters an employee or former employee from disclosing information they reasonably believe evidences a violation of law or noncompliance with regulations. This protection applies to post-employment retaliation and includes attempts to discredit or publicly disparage the individual who made the disclosure. The First Amendment likewise protects public speech on matters involving public funds, legal compliance, and government operations. Their response is not new to me and is a clear example of the kind of retaliatory conduct I endured during my tenure as Chief Building Official when attempting to address these fiscal policy discrepancies and practices impacting public safety outcomes. The administration took great offense to me raising these concerns; however, regardless of any intent, conflicting financial figures and inaccurate representations must be corrected so the City’s reporting is reliable, lawful, and clear to the public. This is precisely the fiscal oversight a City Council is elected to provide. Sincerely, Michael Loew, MPA, CBO Exhibit A: Building and Safety Division Revenue vs. Expenditures 2 Fiscal Total Budgeted Actual Revenue Total Budgeted Actual Surplus Year Revenue Resources Expenditures 2024-$4,008,849 Not reported $3,194,956 Not reported Planned: 25 $813,893 2023-25 2024-25 Financial Plan, Supplement, p. Actual: p. 99 24 Not Reported 2023-$3,821,743 Not reported $3,085,371 Not reported Planned: 24 $736,372 2023-25 2023-25 Financial Plan, Financial Plan, p. Actual: p. 99 168 Not Reported 2022-$3,280,700 Not Reported $2,133,870 $2,895,572 Planned: 23 $1,146,830 20-21 2023-25 2024-25 Supplement p. Financial Plan, p. Supplement, p. Actual: 29 168 24 Not Reported 2021-$4,471,776 $4,297,186 $3,283,056 $3,235,392 Planned: 22 $1,188,720 22-23 2023-25 Financial 22-23 2023-25 Financial Supplement p. Plan p. 99 Supplement p. 24 Plan, p. 168 Actual: 29 $1,061,794 2020-$3,399,000 $4,815,383 $1,714,476 $2,506,262 Planned: 21 $1,684,524 19-21 Financial 19-21 Financial 2022-23 22-23 Plan, on page Plan p. 123 Supplement, p. Supplement p. 24 Actual: 160 29, Table G-8 $2,309,121 2019-$3,339,000 $4,036,291 $1,637,404 $2,475,372 Planned: 20 $1,701,596 19-21 Financial 21-23 Financial 19-21 Financial 21-23 Financial Plan p. 123 Plan p. 102 Plan, on page Plan p. 152 Actual: 160 $1,560,919 3 2018-Not Reported Not Reported $1,720,946 Not Reported Not 19 Reported 19-21 Financial Plan, p. 160 2017-Not Reported Not Reported $1,694,458 $1,834,809 Not 18 Reported 17-19 Financial 19-21 Financial Plan p. D4-7 Plan, on page 160 2016-Not Reported Not Reported $1,721,817 Not Reported Not 17 Reported 17-19 Financial Plan p. D4-7 2015-Not Reported Not Reported $1,871,444 Not Reported Not 16 Reported 15-17 Financial Plan p. E-152 Exhibit B: May 17, 2024 Fee Study Page 11 4