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Auburn council rejects proposed fee increases after heated debate over FY26 shortfall
Summary
City staff tied proposed fee changes to a projected FY26 shortfall of about $190,000; after hours of public comment and council discussion about equity and process, the council voted not to adopt the full Appendix A fee package.
City Manager Phil Croll told the July 21 workshop the ad hoc fee committee's recommendations were intended to align user fees with the city's costs and to reduce tax-subsidies for services. Croll said council action would address an estimated $190,000 shortfall and that some changes (rental and program fees) already took effect July 1.
The council and members of the public spent the bulk of the evening debating how much of municipal services should be covered by direct fees versus general taxation. Supporters of the fee package, including the city manager and several councilors, said many current fees do not fully recover staff time and inspection costs and cited comparisons to peer towns. Opponents said the changes would disproportionately affect moderate- and fixed-income homeowners and urged a slower, more transparent process.
At issue were several buckets of revenue the city built into the adopted FY26 budget: building-permit adjustments (staff estimated Appendix A would generate roughly $140,000 from building-related changes), parking-permit revenue (projected about $50,000) and a new private-vacant-lot program (initially estimated at $65,000). Croll illustrated typical impacts using his staff's square-footage model (a 900-square-foot small residential permit under the proposal would carry a roughly $295 base-plus-sq-ft fee; larger projects reach higher levels). He also noted the city expects continued permit growth: "we've been averaging around 25 or so percent of growth in our building permits," he said.
Public commenters and some councilors asked why the council was voting on the fee package now when the budget had already been adopted. One attendee, Jason Lee, urged caution: "You never assume a line item for income based upon a future action the council must act on," he said, arguing the council had not fully debated the proposal previously. Council members who opposed immediate adoption cited similar process concerns and the potential regressive impact on homeowners doing modest additions.
By the end of the evening the council took a formal vote on the order to adopt the revised fee schedule (Appendix A) and did not adopt it. The motion to adopt failed after extended debate. Councilors who voted against the package said they would return with alternatives to close the budget gap that did not depend on the most contested fee changes.
What happens next: staff told the council that if the package is not adopted, the city has three broad options to handle the projected shortfall: (1) adopt some or all of the proposed fee changes at a later meeting after narrower adjustments; (2) open the FY26 budget to reduce expenditures or use fund balance (with careful attention to reserve and bond-rating implications); or (3) increase the tax levy, which would require a later procedural step and different public notifications.
