Fees for dozens of city services — such as fire alarm inspections, building plan reviews and library room rentals — could climb higher as Santa Maria looks to recover its costs and boost its coffers.
The Santa Maria City Council recently agreed to hold at least two workshops on the recommendations included in the user-fee study.
“This analysis is important for the City Council and its residents and customers to understand what it costs to provide the services that the city provides,” City Manager Jason Stilwell said.
The council will decide whether some services, such as swimming lessons and other youth programs, should be subsidized by taxpayers, Stilwell said, and whether others, including home remodels, should be paid for by those who use them.
Last week marked the preliminary discussion on the topic that could lead to fee hikes, in some cases, and reductions, in more rare instances.
In all, the city consultant suggested Santa Maria could add $3.4 million annually to its coffers at a time the budget needs more revenue.
The study identified some 245 services — listing the current fee, staff costs and proposed new fee.
The city’s last user fee study occurred in 2005, with most increases annually since then based on the Consumer Price Index, according to Finance Director Mary Harvey.
“The city continually works hard to keep costs low,” Harvey said. “However, there are still costs providing all city services. The question then is what is the proportion of who pays for these costs — the taxpayer or the person benefiting from the service.”
A year ago, the city hired a consultant, Revenue and Cost Specialists, to conduct a comprehensive user fee study. The city has paid $25,773 to the firm so far, with the contract having a $31,880 cap.
RCS President Eric Johnson likened it to the cost of canned corn, including the expenses of getting the vegetable from the field to grocery store to a shoppers’s kitchen shelf.
“We have identified the full business cost of providing service to your customers,” Johnson said. “As a business, you will not stay in business very long if you don’t know this information.”
In some instances, the city may choose to subsidize services, such as recreation programs, while seeking full recovery of costs of others, such as for development, he added.
“These costs are occurring; the question now is who’s going to pay for these services — the person receiving the services or the taxpayer. These are your only options,” Johnson said.
Laurie Tamura from Urban Planning Concepts expressed concern about possible fee hikes, noting that the City Council previously chose to keep fees low to foster development, which would benefit city coffers eventually.
“This document missed the point that the guiding principle of the city of Santa Maria 15 years ago was to encourage development and generate new property tax, sales tax and other new benefits for the city,” Tamura said.
Pushing for 100% cost recovery would lead to unreasonable fees, she said, “especially when you’re talking about going from $1,000 to $18,000 in one bite.
“There’s just no justification for that,” she said.
The plan proposes generating $1.5 million by raising every fee in the Community Development Department five to ten times above the current rates, she said, adding that it was not consistent with city planning documents or recent policies.
The full user fee study can be found by clicking here.
The first workshop, where the City Council is expected to iron out policies regarding what fees to increase and those to subsidize, will occur virtually from 1:30 to 5 p.m. Feb. 23.
Council members asked for at least one more workshop, after normal business hours, to accommodate residents who work during the day.
Final approval would occur following a public hearing at a future City Council meeting, with plans for having the new fees in place by July 1, the beginning of the city’s next fiscal year.