The cost of construction and development in Rancho Santa Margarita will rise 7 percent due to inflation.
The Rancho Santa Margarita City Council unanimously approved on April 27 a 7 percent increase the prices of city planning services—including permits for restaurants, bars, clinics, beauty or barber shops, offices, factories, and schools.
The increase is based on an annual 7 percent increase in the Consumer Price Index (CPI) for the Los Angeles, Long Beach, and Anaheim area, according to the U.S. Bureau of Labor Statistics.
“As we know, inflation has taken the country by storm,” City Manager Jennifer Cervantez said during the meeting. “And when we look back at the Consumer Price Index ... the March 2022 CPI ... [is] more than we’ve increased in the past based on CPI.”
However, Cervantez said if the city had used April’s CPI instead of March, the increase would have been almost 9 percent.
A 7 percent increase, for instance, for an environmental impact report, which is a state requirement for some building projects, will increase by nearly $1,000, according to the city.
In the past three years, the annual CPI increase for this area has remained at an average of 2 percent—with an increase of 2.5 percent in March 2019, 3.4 percent in March 2020, and 1 percent in March 2021, according to a recent city staff report.
This year, however, the CPI for the area is more than three times the average rate at 7.4 percent.
Since Rancho Santa Margarita uses this CPI to set the cost of city planning services for the upcoming fiscal year, the city must increase those costs by 7.4 percent.
The City of Rancho Santa Margarita reviews the CPI for the Los Angeles, Long Beach, and Anaheim area every March in order to set city planning rates for the upcoming fiscal year.
“This provision allows city fees to keep pace with increased costs for services without having to procure and conduct a new study each year,” the staff report reads.
The price increases will go into effect July 1, 2022.
City Finance Director Stephanie Turner did not respond to a request for comment by press deadline.
