Salinas finance committee backs 2.8% CPI increase to citywide fees for FY 25-26

The Salinas Finance Committee on April 8 voted 3-0 to recommend that the City Council adopt a 2.8% Consumer Price Index (CPI) increase to the citywide schedule of fees and service charges for fiscal year 2025-26.

Acting Assistant Finance Director A. Pedroza told the committee that staff "recommends that the finance committee provide input and direction on the proposed citywide schedule of fees and service charges for FY 2526" and that the recommendation follows the CPI. Pedroza said outreach was conducted with the Salinas Valley Chamber of Commerce, SUBA and the nonprofit Alliance of Monterey County and that staff "did not receive any notice of objection or issue in regards to the proposed fee schedule for next year." The item is scheduled for presentation to City Council on April 22.

Why it matters: the fee schedule covers many user charges the city levies for discrete services; staff said the CPI-based adjustment is intended to maintain fee levels relative to inflation rather than to fully recover direct service costs. Pedroza summarized the last nine years of fee changes and said staff recommends the 2.8% CPI adjustment for FY 25-26 to align with recent practice.

Details of staff presentation: the staff report notes 12 new fees proposed, 52 fees that cannot be changed because of mandates, 74 fees unchanged due to an agreement with Monterey County on bridal services, and 70 airport fees recently increased that remain unchanged under department process. Excluding those groups, staff said 96% of fees are recommended for CPI increases while the remaining 4% are increased by a different metric, unchanged, or decreased at department discretion. Pedroza said the CPI-alone adjustments are projected in the staff report to yield about $25,000 in additional revenue from the fees that are being adjusted.

Committee conversation and context: Committee members asked about outreach and the role of CPI versus a formal cost-of-service update. One committee member asked why the Chamber, SUBA and the nonprofit alliance were selected; Pedroza replied that those groups are the ones the city has historically contacted. A committee member asked whether the CPI figure reflects direct operational costs; Pedroza said the CPI-based adjustment does not directly equate to the city's operational cost recovery and that some fees are set by prior cost studies or are part of enterprise funds. Finance staff said a new cost study is planned next fiscal year to better align fees with the cost of providing services.

Formal action: a motion to recommend the 2.8% increase passed unanimously with Councilmember D'Arrigo voting "Aye," Councilmember De La Rosa voting "Aye," and Mayor Donahue voting "Yes." The committee's recommendation will go to the City Council for final action on April 22.

Next steps: the staff report and fee schedules will accompany the April 22 council presentation; staff said they will supply a follow-up breakdown of the aggregate dollar contribution that fees make to the General Fund upon request.