CITY OF
PASO ROBLES
User and Regulatory Fee Study
(Phase 2 of 2)
Development Services Fees
City Council Meeting | March 17, 2026
• Background
• Fundamentals and Terminology
• Study Findings and Recommendations
• Next Steps
MEETING AGENDA
2 CLEARSOURCE PRESENTATION TO THE CITY OF PASO ROBLES
Background
• Communities generally use tax revenues to fund services that provide general (community-wide) benefit
• Public works
• Public safety
• Park maintenance
• Communities generally use fees and charges (direct
recovery) to fund services that provide direct benefit
• Plan Review
• Permitting
• Inspection
BACKGROUND
4 CLEARSOURCE PRESENTATION TO THE CITY OF PASO ROBLES
• Building Fees – construction permit processing, plan check, and inspection
• Planning Fees – entitlement review and review for compliance with zoning code
• Engineering Fees – review of development-related grading and public improvements; review and inspection of temporary encroachment in the City right-of-way
FOCUS OF CURRENT STUDY
• This update DOES NOT
examine taxes,
assessments, utility rates, or
development impact fees
5 CLEARSOURCE PRESENTATION TO THE CITY OF PASO ROBLES
• Staff presented study and proposed fee schedule to
Housing Constraints and Opportunities Committee (HCOC)
on February 12, 2026
• HCOC unanimously supported advancing the proposed fee updates to City Council
HCOC REVIEW
6 CLEARSOURCE PRESENTATION TO THE CITY OF PASO ROBLES
Fundamentals and Terminology
• Legal requirements
• Encourage direct recovery of costs incurred
to serve private interests/benefit or respond
to individual actions
• Provide opportunity for relief to General
Fund or other Funds where costs are
incurred
• Enable continuity of service levels by
improving cost recovery levels
MUNICIPAL FEES
• Why do Cities
Review Fees and
Charge Fees for
Services?
8 CLEARSOURCE PRESENTATION TO THE CITY OF PASO ROBLES
• Fees proposed are not taxes, as defined by
Article 13C of the California State Constitution
• Fees are set in accordance with parameters set
by Article 13C and by Section 66014 of the
California Government Code:
• Costs allocated to the payer should bear a fair or
reasonable relationship to the payer's burdens on or
benefits received from the governmental activity
• Fees should not exceed the reasonable cost of
providing the service for which the fee is charged
FEES ARE APPROVED BY THE CITY COUNCIL
The City Council has
authority to Directly
Approve User and
Regulatory Fees and
Increases to Fees
9 CLEARSOURCE PRESENTATION TO THE CITY OF PASO ROBLES
• Full Cost of Service
• Cost Recovery
• Subsidy
TERMINOLOGY
These terms of art
have specific meaning
across California
municipalities and
within the City
10 CLEARSOURCE PRESENTATION TO THE CITY OF PASO ROBLES
COST OF SERVICE
• The cost of service sets the
maximum limit of a cost-based
fee. It includes:
• Direct program costs for
labor, services, and supplies
• Departmental administration
• Citywide administration and
central support services
11 CLEARSOURCE PRESENTATION TO THE CITY OF PASO ROBLES
100%
0%Cost Recovery Targeted
Hourly
Rate for
Personnel
Providing
Services
Time
Required
to Perform
the
Service
Cost of x = Service
Fully Burdened
Hourly Rates:
• Direct and indirect
labor costs
• Services and supplies
• Agency overhead
Estimated or
Known Times for
Providing Services
Maximum Fee
Amount
Exclusively individual benefit
Considerable individual benefit
Balanced individual and
community benefit
Considerable community benefit
Mostly community benefit
Entirely community-wide benefit
COST RECOVERY POLICY FRAMEWORK
Cost recovery
policy reflects
local values
regarding the
presumed
beneficiaries for
each program
area, ranging from
community
benefit to
individual
benefit
12 CLEARSOURCE PRESENTATION TO THE CITY OF PASO ROBLES Cost Recovery Targeted
SUBSIDY
• The amount of a
program’s full cost of
service that is
supported by other
City revenue sources
13 CLEARSOURCE PRESENTATION TO THE CITY OF PASO ROBLES
100%
0%Cost Recovery Targeted
Full Cost
of Service
($)
Revenue
from
Current
Fee ($)
City Subsidy
Maximum Level of
Cost Recovery =
100%
Current Level of
Cost Recovery =
X%
Minimum Level of
Cost Recovery =
0%
Study Findings and Recommendations
• Continued use of deposit-based billings to recover
the cost of service:
• Paso Robles primarily collects fees for development review services based on the actual cost of providing service. • To facilitate the application review process, the City collects an application deposit for the project. Deposit may be replenished from time to time.
• Any remaining deposit will be refunded to the owner/applicant at the time of closeout.
DEVELOPMENT SERVICES FEES
15 CLEARSOURCE PRESENTATION TO THE CITY OF PASO ROBLES
• Time and materials deposit amounts have been adjusted to more closely reflect the anticipated cost of service. • The City’s hourly billing rates have been recalibrated to allow for full cost recovery for time & materials billings. • Fixed fees have been recalibrated to align to the City’s current cost of service.
DEVELOPMENT SERVICES FEES
16 CLEARSOURCE PRESENTATION TO THE CITY OF PASO ROBLES
• Generally, full cost recovery is targeted from fees
due to the regulatory nature of the fees and the high level of direct benefit resulting from construction activities including enjoyment of property enhancements, increased property values, and the desire to avoid having other Paso Robles residents and businesses subsidize an individual's private construction activities.
DEVELOPMENT SERVICES FEES
17 CLEARSOURCE PRESENTATION TO THE CITY OF PASO ROBLES
DEVELOPMENT SERVICES FEES
18 CLEARSOURCE PRESENTATION TO THE CITY OF PASO ROBLES
New Residential Single-Family Current Fees Proposed Fee Permit and Plan Review Fees
(included in this study)
$8,795 $11,947
All Other Fees
(not examined in this study)
$42,806 $42,806
Total $51,601 $54,753
Fiscal Impact of Proposed Changes
FISCAL IMPACT
20 CLEARSOURCE PRESENTATION TO THE CITY OF PASO ROBLES
• Since most of the City’s development services fees are collected via time and materials billings process, the fiscal impact of proposed fee changes will be dependent upon
development activity within the City, application review and corresponding inspection requirements.
• Consultant recommends that staff monitor actual permit activity, subsequent to adoption of the fee schedule before adjusting revenue forecasts
Next Steps
Staff recommends that City Council adopt resolution
updating fees and charges and authorizing annual
inflationary adjustments to fees
NEXT STEPS
22 CLEARSOURCE PRESENTATION TO THE CITY OF PASO ROBLES
Questions or Feedback