Keizer staff propose ESU-based police fee, chamber urges phased relief for small businesses

Assistant City Manager Wood presented a staff plan to restructure Keizer's police service fee, moving commercial accounts from a door-front charge to an Equivalent Service Unit (ESU) model and phasing residential increases in two steps. Wood said the residential monthly fee would rise from $6.90 to $10.62 on Sept. 1 and then to $14.34 on Jan. 1; the commercial non-dwelling rate would initially be billed on an ESU basis (Sept. 1), with staff proposing a temporary $6.90 ESU for some businesses as the model is phased in.

Why it matters: the change is intended to align fees with calls for service and true cost of policing, but it creates large differences among businesses. Staff told the council that commercial accounts generate about $431,000 annually and that a small number of large, multi-tenant meters account for a disproportionate share of revenue — for example, the Keizer Station account includes roughly 10 different businesses under one meter and is one of the largest commercial payers.

Wood said the city has about 307 commercial accounts totaling roughly 3,793 ESUs and about 15,000 residential ESU equivalents. He warned councilors that the conversion is administratively challenging because a single water meter can serve multiple, changing tenants: "I went through and did my best to try to identify what the predominant business was associated with that meter," Wood said, noting 129 accounts serve multiple businesses and that tenant turnover complicates precise classification.

Staff also reviewed charge examples councilors requested: using the staff's average ESU calculations, some business categories show large annual bills (staff cited an illustrative average annual restaurant fee around $906 and sports facilities averaging about $4,224 annually), while a typical household under the first-step residential rate would pay about $127 annually. Wood acknowledged the changes are significant: "It makes my stomach burn when I think about this," he said of the planned increases, adding staff used ARPA funds and prior budget restraint to delay rate hikes for two to three years.

Council discussion focused on three policy choices: whether to group small businesses (the chamber recommended billing 1- to 3-ESU businesses as 1 ESU), whether to set a minimum floor so a business does not pay less than a residence during the transition, and whether to cap bills for very large users. Staff estimated a 1-ESU billing floor for the 1'to'2 category would reduce commercial revenue by roughly $18,000 — an amount staff said could be absorbed without immediately increasing residential rates.

Chamber board director Jonathan Thompson and Chamber president Louis Ryser, both Keizer business owners, told the council they supported the package'but urged targeted relief for small businesses. "There seems to be some natural breaks if you look at the 01/01/2027 revenue," Thompson said, recommending grouping lower ESU categories and considering a cap or phased approach for large retailers so residents do not end up bearing the brunt of the change.

Several councilors warned against creating disincentives for businesses to call the police. Councilor Fuller raised that concern directly: "Somebody says, 'I can't have more than 5 calls to law enforcement this month, or I'm going to get charged more' — so therefore I just won't call law enforcement when I really should,'" Fuller said. Chief Copeland and staff clarified the intent is not to penalize calls for service; rather, categories are set on historical call patterns so firms in high-call categories are billed at a level that reflects that use.

Staff commitments and next steps: councilors asked staff to return with modeling for several options — (1) grouping 1'to'3 ESUs into a single 1-ESU billing class, (2) grouping larger middle bands (4'to'6) into a step, (3) testing an inverted or curved rate structure to limit per-ESU charges for the largest users, and (4) scenarios showing the residential impact of each choice. Wood said staff will produce the requested scenarios and return to council with revised models before final adoption.

No formal motions or votes were taken during the work session; the meeting ended after the requests for additional modeling and direction. The council adjourned at 7:30 p.m.