ClearSource study says Belvedere recovers about 53% of user-fee costs; new schedule adopted

Terry Madsen of ClearSource Financial Consulting briefed the finance committee on a comprehensive user-fee study that the council adopted April 14 and set to take effect July 1, 2025. Madsen told the committee the study focused on service-based, regulatory fees — building permits, plan review and inspection — and not on taxes or utility rates. He said the analysis found Belvedere’s fees recover far less than the program’s cost and that moving to a full-cost recovery target helps avoid subsidizing private construction from the general fund.

"So we felt like we had about 53% cost recovery," Madsen said, summarizing the study’s central finding and the fiscal implication: roughly $2 million in fee-related services annually versus about $1 million in typical fee collections, leaving an estimated general-fund subsidy of about $968,000. The consultant and staff forecast an initial-year fiscal impact from the new fee schedule of about $594,000, with smaller incremental impacts in subsequent years and an annual inflation indexing mechanism to keep fees aligned with regional cost changes.

Committee members pressed staff about carryover projects and phase‑in mechanics. Staff said permits filed and accepted before July 1 will generally be processed under the then-applicable schedule, while subsequent applications will be charged under the fee schedule in effect at the time of application. Members also questioned whether the city has adequate authority and capacity to audit contractor or homeowner cost estimates that underpin valuations used for fee calculations; staff said the city has strengthened preconstruction and final-valuation procedures but that case-by-case audits are costly and therefore used selectively.

Several residents spoke during discussion and public-comment portions, some praising the update as a necessary correction and others urging caution because higher fees affect homeowners undertaking reconstruction. Staff said the fee changes free up general-fund resources for other services and that the council had deliberately targeted differing cost-recovery levels for select fees (for example, partial recovery for long-range planning work like general-plan updates).

The committee did not take formal final action on the fee schedule at this meeting (the council had already adopted the schedule); the presentation informed the budget discussion that followed and staff said they will monitor realized revenue closely during the first year before relying on it in future budgets.