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San Jose council questions steep fee increases; staff cites updated cost-recovery analysis and plans for phased changes
Summary
Councilmembers pressed staff on large year‑over‑year jumps in certain permit and application fees — notably the commercial linkage application and cannabis initial application — and urged automation, fee calculators and phased increases to reduce burdens on small businesses and childcare providers.
San Jose councilmembers questioned staff about large increases in several application fees during the budget study session, pressing for automation and fee‑calculator tools to reduce time and cost burdens on small businesses.
Councilmembers identified two application fees with notable year‑over‑year increases: the commercial linkage fee standard application (roughly a 51% increase) and the cannabis initial application (roughly a 44% increase). Councilmember Mulcahy and others asked why seemingly routine application fees rose so sharply.
Jim (budget staff) said the annual fees-and-charges review seeks cost recovery and that departments have updated the assumed time and staff mix devoted to each task — sometimes using a time‑study approach. “There are times when the department reassesses the time spent doing a particular item of work, and so that gets updated as part of the fee process,” he said.
Housing staff explained that as part of a broader fee review they adjusted how labor costs are allocated (reducing overhead charged to lower fees) and in some cases applied an inflator where historic time‑use data was unavailable. One housing staffer said, in some cases, previous fee calculations had omitted fringe and overhead; the commercial linkage application increase also reflects adding those fully burdened costs.
Councilmembers urged automation to reduce staff hours and lower fees in the long run. Councilmember Campos suggested a “TurboTax‑like” self‑service tool to let applicants input data and receive an automated fee estimate. “We should make these things simpler and more digitized,” Campos said.
Councilmember Campos also asked whether the city provides fee waivers or reductions to encourage community‑serving businesses (for example, child‑care operators). Staff replied that the Parks Department and Public Works have waiver authority in some areas; departments sometimes phase in large increases over several years or set aside funds to offset permit costs for social‑service providers.
On library fines, the city librarian said last year’s trial waiver of late fees for adult materials is being considered for permanent elimination through a manager’s budget addendum so that all late‑fee waivers could become permanent without a revenue impact.
No fee increases were adopted during the session; staff said proposed fee changes are part of the budget process and that large single‑year increases are often phased in as staff completes time‑use analyses and considers waivers or other mitigation.
