The council adopted Ordinance 25-12-04 to create a development services special revenue fund that separates building permit, licensing and development-application fees into dedicated subfunds for building code enforcement and planning and development activities.

Staff and the city manager explained the fund responds to statutory requirements about how permit fees may be collected, spent and carried forward; staff said the fund will improve transparency and enable mandatory annual reporting of permit and inspection utilization. The manager told council the fund becomes effective immediately on adoption and that staff will work with the finance director to create the required accounts and reporting structure.

Council members asked whether the enterprise fund would be self-sufficient, what salary and overhead charges could be allocated to the fund, and whether reserves could be maintained. Staff said state statute places limits on allowable reserves and on what the fees may be used for, and noted that if the fund balance grows too large the city is obligated to roll back fees or use the funds for allowed building-department expenses.

The ordinance passed on second reading. Staff will implement new accounting practices and post the required utilization report annually.