Rebates for Marshall Fire Rebuilding Permits
In the aftermath of the Marshall Fire, City Council considered various means to aid residents in rebuilding. One such means was a waiver—or, at least, a partial waiver—of building permit fees. City Council decided not to pursue such a waiver, principally because building permit fees cover a real cost incurred by the City: the cost associated with reviewing building plans. City Council indicated, though, that the City would investigate whether permit fees had been collected in excess of the actual cost once rebuilding was mostly completed. With so many households rebuilding—and some households rebuilding very similar homes—the possibility existed that an economy of scale would reduce the City’s costs. City Council did not promise to rebate any excess permit fees. The possibility of a permit fee rebate—or, at least, the aforementioned investigation into the possible overcollection of permit fees—was raised occasionally over the intervening years by residents and City Councilors. I wish to recount and provide my perspective on relevant developments this past year.
Before relating these developments, I wish to clearly state my position on rebating permit fees for Marshall Fire rebuilds: if the City demonstrably overcollected permit fees, then I support equitably rebating this excess revenue.
After talking to some interested residents, I proposed at City Council’s Finance Committee meeting in January 2025 that City staff develop a ballpark estimate of excess revenue from Marshall Fire rebuilding permits. Determining whether the City had overcollected permit fees—and, if so, by approximately how much—struck me as an entirely reasonable first step. The Finance Committee decided to have City staff pursue this task. After an initial report in March 2025, City staff returned with a method for estimating excess revenue in June 2025. The Finance Committee (and those other City Councilors in attendance) discussed the methodology of City staff’s estimate, which demonstrated an overcollection of permit fees between about $1 million and $2 million. Those City Councilors present did not engage in much discussion of whether to rebate permit fees, how to rebate permit fees, or how to fund such rebates. At the meeting’s conclusion I fully expected City Council to take up such discussion at a future City Council meeting. At its meeting in July 2025, the Finance Committee previewed the City’s 2026 supplemental budget. This budget included the possibility of rebating excess permit fees for Marshall Fire rebuilds in the form of a one-time expenditure from the general fund based on City staff’s estimates. The Finance Committee noted this possibility but did not engage in any substantive discussion. At this meeting’s conclusion I still fully expected City Council to take up such discussion at a future City Council meeting.
Consideration came unexpectedly to a point at City Council’s budget retreat, our annual meeting for initial but in-depth review of next year’s draft budget. The City’s 2026 supplemental budget continued to include the possibility of rebating excess permit fees for Marshall Fire rebuilds. With our focus on structurally balancing next year’s budget, I still did not expect City Council to discuss in full the possibility of rebating excess permit fees, so I was not fully prepared for such a discussion and, most certainly, not expecting to make any decisions. When the possibility of rebating excess permit fees arose, we nevertheless voted informally on whether to continue to include consideration of a permit fee rebate in next year’s budget discussions. I was not comfortable making such a commitment prior to a fuller discussion, so I voted not to include consideration.
I do not regret my decision at City Council’s budget retreat. City Council’s consideration of rebating excess permit fees for Marshall Fire rebuilds has not held to the standards of political and public discourse for which City Council should always strive. First, City Council should have treated the possibility of rebating excess permit fees as a standalone item, granting this possibility its deserved attention and enabling a full City Council discussion. Moreover, City Council did not have to include the possibility of rebating excess permit fees as part of its consideration of the City’s 2026 supplemental budget. If the City ultimately offers such rebates, then these rebates will be one-time expenses, almost certainly payed from the general fund, that City Council can choose to make whenever it pleases. One-time expenses do not factor into structurally balancing the City’s budget, the primary purpose of City Council’s budget retreat, which only requires that ongoing expenses do not outweigh ongoing revenues.
Second, City Council should have provided for adequate public input on the possibility of rebating excess permit fees. While members of the public could have commented at the aforementioned Finance Committee meetings or City Council’s budget retreat—a few interested residents did so—these meetings did not provide for adequate public input. The agendas for the Finance Committee meetings in March and June included explicit items concerning permit fee rebates, so residents could readily take these opportunities to provide input, but only the most interested or informed residents pay attention to the Finance Committee’s agendas. The agenda for the Finance Committee meeting in July and City Council’s budget retreat did not include explicit items concerning permit fee rebates, so residents would have to read through the meeting packets to learn about such considerations. An adequate public process would include an agendized item dedicated to permit fee rebates at a regular City Council meeting, providing City Council with an opportunity to hear feedback from all interested residents. I do not know how much interest the general public has in this issue, but the magnitude of the expected one-time expenditure may well create some interest.
Where does the possibility of rebating excess permit fees currently stand? After City Council approved the City’s 2026 supplemental budget in November, including permit fee rebates for Marshall Fire rebuilds, City staff began to develop a program to administer these rebates. This program will likely resemble those for building code waivers and use tax rebates for Marshall Fire rebuilds. City Council is tentatively scheduled to review this program at its meeting on 3 February. (This meeting’s agenda is quite full, so review may be delayed.) I hope that City Council will finally have the opportunity to fully discuss and receive adequate public input. Once we have undertaken these processes, I will support a program that equitably rebates excess permit fees for Marshall Fire rebuilds.
