City attorney says Attorney General opinion narrows uses of permits-and-licensing 'excess funds' but supports city‑hall expansion approach

City Attorney summarized an Attorney General opinion on the permitted uses of "excess funds" in the city’s permits-and-licensing fund, telling the commission that the AG answered two questions in the city’s request and that the opinion affects how the city can apply those accumulated funds. Lede: City Attorney told the commission the Attorney General concluded the city may not use excess permits-and-licensing funds to construct a standalone building (including related site work such as stormwater improvements, parking, or design costs) nor use the funds to purchase a building for that purpose. "The attorney general's answer to that question was no," the city attorney said. Nut graf: The city has since shifted toward a plan to expand city hall to house permits-and-licensing staff; the city attorney said that AG guidance does not prohibit using the fund for an expansion of an existing municipal facility that would house permitting functions, and that other funding (for example impact fees) could cover portions of the project not eligible under the AG opinion. Details from the meeting: Commissioners had previously asked the city attorney to request an AG opinion. The city attorney said the two written questions submitted asked whether excess funds could be used to (1) construct a building to house building code enforcement (and whether project costs such as design, permitting, stormwater, parking could be included) and (2) whether, in lieu of construction, the city could use the funds to purchase a building. The attorney general’s written response said no to both. The city attorney then said staff presented a conceptual plan to expand city hall to house permitting; he explained that an expansion of city hall to accommodate the permits-and-licensing function would be an appropriate use of the excess funds. "To the extent that, some portions of that construction project could not or should not be funded by the excess funds based on the AG, they can be used the impact fees can be used for that," the city attorney said. Commission questions and next steps: Commissioners asked clarifying questions about whether landscaping, sidewalks and parking could be paid with impact fees as part of an expansion project; the city attorney responded affirmatively for items that are part of the expansion project and appropriate for impact‑fee use. Staff noted a conceptual project cost estimate of about $20 million, with an estimated $8 million from the excess permits-and-licensing funds and the remainder from general government impact fees, though commissioners and staff said detailed design and budgeting will follow. The AG opinion is not legally binding on the city courts but will be given deference in litigation, the city attorney said. The commission did not take a formal vote on funding at the meeting; the staff-desired next steps are to continue design and return budgeted requests for commission approval as required.