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Council signals preference for modest fee increases to reduce proposed tax‑rate impact; asks staff to model options
Summary
At a July 17 workshop staff presented a FY2026 revenue model that combined a proposed tax rate and two new monthly fees; council members directed staff to model a modest fee bump (roughly $1 residential / $4 commercial per fee) and to return with detailed proposals for commercial scaling and a longer fee‑study process.
City staff presented multiple revenue models at the July 17 workshop that paired a proposed tax‑rate plan with two new recurring fees intended to diversify revenue for parks and public safety.
Staff said the business plan filed for council review assumed a 0.75 (75‑cent) tax rate and two new monthly fees: a "community enhancement" fee (presented as $3 per month for a residential unit and $12 for a commercial unit equivalent) and a "public safety assessment" fee (also shown as $3/$12 in the plan). Staff said those two fees combined were modeled to generate roughly $3.6 million in recurring revenue in the FY2026 plan.
Council direction: several council members said they prefer to keep the adopted tax rate in the "sixties" rather than the 0.75 level presented in the business plan. During the workshop council asked staff to model a modest increase to the proposed fees in lieu of raising the tax rate further. Specifically, council directed staff to return with a vetted structure to scale commercial charges and to model a one‑dollar monthly increase to residential charges paired with a four‑dollar increase to commercial equivalents for each fee (i.e., an additional $1 residential / $4 commercial for each of the two proposed fees). Staff said that incremental change produces roughly the same revenue as a small fraction of a penny on the tax rate (staff estimated the fee move would equate to about 1.36 cents of tax‑rate revenue for modeling purposes) and asked for further guidance on how to scale commercial units by size or employment.
Staff also proposed a near‑term, lower‑effort step: an across‑the‑board 10% increase to many existing user fees as an interim measure while the city builds a more complete cost‑of‑service study. Staff emphasized the need for a detailed, service‑level review (permit reviews, recreation fees, etc.) before adopting a full cost‑recovery fee schedule and said that work could occur in the coming year.
Why it matters: staff and council framed fees as a way to diversify revenue away from property tax and to provide targeted funding for park replacement cycles and public‑safety operating costs. Staff noted some statutory and administrative limits on which fees can be increased and said commercial scaling will require legal review and careful design to avoid unintended burdens on small businesses.
Ending: Council asked staff to return with modeling that (1) applies an initial $1/$4 bump to the proposed fees for FY2026 modeling, (2) proposes options to scale commercial equivalents by size/employment, and (3) shows the effect of a 10% across‑the‑board fee increase as an interim step; staff will present more detailed fee‑policy options and a market‑study style cost‑of‑service analysis in a subsequent meeting.
