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Walnut Creek reviews comprehensive user-fee study and weighs nonresident rates, phased increases
Summary
City staff and consultants told the council a comprehensive review of 475 fee line items found about $33 million in fee‑based service costs and current fee revenue of roughly $21 million (about 65% recovery). Councilmembers discussed a cost‑recovery framework, resident discounts versus nonresident premiums, phased increases and annual indexation ahead of Finance Committee and future council decisions.
City staff and consultants presented a comprehensive update to Walnut Creek’s master fee schedule at the council’s June 2 meeting, saying the city provides about $33 million in fee‑based services while current user fees recover roughly $21 million, or about 65% of the full cost.
Kirsten Lucas, administrative services director, said the study — the city’s first comprehensive fee review since 2010 — used a bottom‑up methodology to compute fully burdened hourly rates and time assumptions for each activity. “This is the city’s first comprehensive fee study since 2010,” Lucas said, noting the analysis excluded development impact fees and state‑regulated charges and that some community services will appropriately remain subsidized.
A Matrix Consulting vice president who led the analysis told the council the firm reviewed nearly 475 fee line items, compared local peers and calculated maximum justifiable fees based on staff time, overhead and supplies. The consultant said community‑oriented services (youth and senior programs) typically warrant lower cost‑recovery levels, while private‑benefit services (facility rentals, regulatory permits) can justify higher recovery or market‑based pricing.
Council discussion focused on policy choices rather than a single rate recommendation: whether to adopt a three‑tier cost‑recovery framework that distinguishes high community benefit, mixed benefit, and private/market services; how to treat residents vs. nonresidents (staff cited comparable agencies that levy nonresident premiums of 10–25%); and whether to phase large adjustments to avoid sudden price shocks. Several councilmembers favored offering a resident discount for documented city residents rather than framing the price change as a surcharge on nonresidents.
On the mechanics of annual adjustments, staff proposed tying fee updates to an objective benchmark such as CPI or another cost index while allowing exceptions (market‑priced services, intentionally subsidized programs). Staff also proposed not imposing single‑year increases beyond a defined cap and phasing larger catch‑up increases over several years.
The council directed staff to return to the Finance Committee on June 23 with detailed fee recommendations and a draft cost‑recovery policy, and to bring updated recommendations to the full council for feedback on July 21 with final adoption anticipated on Aug. 18.
Quote: “The appropriate balance between cost recovery and community benefit is one of the key policy discussions before council this evening,” Lucas said.
What’s next: Staff and Matrix Consulting will prepare proposed fee adjustments and a draft user‑fee policy for Finance Committee review on June 23, with council hearings planned in July and August.
