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Menlo Park staff proposes broad fee increases to raise city cost recovery; Council asks for a "sticker-shock" road‑map
Summary
Consultants presented a cost-of-services study that would raise the City’s fee recovery from about 42% to roughly 58%, adding an estimated $3.8 million in revenue; Council expressed concern about large increases to individual fees and asked staff to produce a short list of high-impact, high‑shock items for reconsideration before public notice.
City staff and consultant Government Consulting Partners presented a detailed cost-of-services study at the March 24 study session, and councilmembers raised concerns about large proposed increases to specific fees and the budgetary reliance on fee changes.
Finney Lay, Assistant Administrative Services Director, introduced the effort and consultant Cindy Sconce described the methodology: a bottom-up, per-unit analysis that pairs fully burdened hourly rates with average time estimates to calculate full cost for each fee-based service. "The goal is to develop a clear and accurate understanding of what it truly costs to deliver services," Sconce said.
Key proposals and headline numbers: staff said current fee revenue is about $10 million while their estimated cost of services is about $23.9 million (a current recovery rate of ~42%). The consultant projected that proposed fee adjustments would increase recovery to ~58%, yielding roughly $3.8 million in additional revenue under current assumptions. Specific recommendations included raising the technology surcharge against development fees from 3% to 9%, adding a 2.5% credit-card convenience fee, and implementing several new housing-division and public-works user fees. The Library and Community Services program group was identified as under-recovered and several program fees in that department were proposed for a 10% increase.
Council concerns and legal/contextual constraints: Councilmembers uniformly requested a clearer, easily readable disclosure of any "sticker‑shock" items — fees with large absolute dollar jumps even if they are low‑volume — and discussion of waiver or refund policies for low-income residents and small-scale applicants. Jeff Wakefield (consultant) explained that some appeal or project-processing costs can reach into five figures because they reflect substantial staff time and hearing preparation; staff said they could configure refunds or credits if an appellant prevails but that these are policy decisions.
Timeline and next steps: staff seeks direction to finalize the master fee schedule for public notice (April 10) and a Council public hearing (April 28) with the goal of implementing changes July 1 to match the fiscal year. Council asked staff to return with a prioritized "sticker‑shock" list (high-dollar increases), options for smoothing or phasing increases, and an explanation of how grants and existing subsidies affect the Library and Community Services cost recovery figures.
Outcome: Council did not adopt fees tonight but instructed staff to refine the proposal, provide clearer dollar-amount comparisons and phase-in or waiver options where appropriate, and to present a concise list of high-impact fee changes before public notice.
