Council approves annual fee increases tied to CPI, directs study of square‑foot basis for development impact fees

The Salinas City Council on May 6 approved two related items updating city fees and development impact fees for fiscal year 2025‑26.

Annual fee schedule: Acting Assistant Finance Director Abe Pedroza recommended using the Consumer Price Index (CPI) to adjust city fee groups and presented a staff recommendation of a 2.8% CPI increase for citywide fees for FY 2025‑26. Pedroza reported the CPI is the established metric in the Salinas Municipal Code for annual adjustments and told the council the Finance Committee had recommended the 2.8% increase. The council adopted the fee schedule adjustment by roll call vote.

Development impact fees: Public Works presented the statutory nexus and the Engineering News‑Record construction cost index adjustment required by local code to keep impact fees aligned with construction costs. Staff said the ENR index for 2024–25 shows a substantial rise and recommended adjusting development impact fees accordingly (staff cited an 11.06% increase in the ENR index for that period). Staff also presented balances for existing fee funds and emphasized that impact fees are restricted for capital facilities that serve new development. The council approved the ENR‑indexed increase effective July 1 and directed staff to return with an analysis of residential development impact fees assessed on a per‑square‑foot basis (rather than the current per‑unit/bedroom methodology) to evaluate whether that change would better support housing outcomes. That direction was adopted as a motion and recorded in the meeting minutes.

What the council said: Councilmembers asked about cannabis revenue trends (staff reported a decline to an estimated $800,000 for FY 2025‑26), the need for a full fee study (staff said the city has not completed a comprehensive fee study since 2015 and recommended a study be scheduled), and how impact fees are managed in separate accounts. Councilmember Barajas specifically requested staff explore assessing residential impact fees by square footage rather than per unit to better align fees with housing types.

Votes at a glance: The citywide fee schedule (CPI 2.8%) and the development impact fee adjustment (ENR index) were approved by roll call; the council also approved the staff direction to develop a square‑foot methodology for residential fees and return with findings.