TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Javier Carcamo, Finance Director
PREPARED BY: Ashley Lopez, Accounting Supervisor
SUBJECT:
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Public Hearing for Fiscal Year 2025/26 Citywide User Fee Schedule Update
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RECOMMENDATION
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Conduct a Public Hearing updating the City’s User Fee Schedule; and
Adopt Resolution No. 25-4819 entitled: A Resolution of the City Council of the City of Murrieta, California, Approving the City’s Updated User Fee Schedule for Fiscal Year 2025/26.
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PRIOR ACTION/VOTE
On February 7, 2023, a workshop was held to present the Proposed Citywide User Fee Update. City Council direction was provided to staff regarding the updated Citywide fee structure to be incorporated for adoption at a future City Council meeting.
On March 21, 2023, the City Council adopted Resolution No. 23-4653, adopting the Fiscal Year 2023/24 User Fee Schedule and an annual update of fees at the lesser of the Consumer Price Index(CPI) or 5% (Vote 4-1).
On May 7, 2024, the City Council conducted the first reading of Ordinance No. 603-24, adopting the User Fiscal Year 2024/25 User Fee Schedule (Vote 4-1).
On June 4, 2024, the City Council conducted the second reading and adopted Ordinance No. 603-24, adopting the User Fiscal Year 2024/25 User Fee Schedule (Vote 5-0).
CITY COUNCIL GOAL
Maintain a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency.
BACKGROUND
In October 2021, the City of Murrieta contracted with Willdan Financial Services to conduct a Comprehensive User Fee Study and to prepare a full Cost Allocation Plan to assist the City in determining appropriate fee levels for the various services provided by the City. It is considered a financial best management practice for local governments to review and update their User Fee Schedules periodically. A workshop was held on February 7, 2023, to present the results of the User Fee Study and gather input from the public and the City Council. The report and presentation focused on the purpose of the study, process, methodology, policy considerations, and recommended User Fee adjustments. Based on the City Council's and public feedback, staff updated the fee recommendations. On March 21, 2023, the City held a public hearing after staff presented the User Fee Study, and the Fiscal Year 2023/24 User Fee Schedule (Fee Schedule) was adopted by the City Council.
Historically, the City of Murrieta updated and adopted its Fee Schedule for City services every year; however, due to staffing constraints, the Fee Schedule was not updated between January 16, 2018, and March 21, 2023, resulting in increases that were larger than normal when the City did update the Fee Schedule in 2023. Because of this, the adopted resolution stated that the City would adjust fees each year based on the Bureau of Labor Statistics Consumer Price Index (CPI) for the Riverside-San Bernardino-Ontario area using the year-over-year percentage change from March to March, or five percent (5%), whichever is lower. When the Fiscal Year 2024/25 Fee Schedule was adopted last year, the City Council agreed to use the January-to-January rate to allow time for the future fee schedules to be implemented at the beginning of each fiscal year, July 1st. As a best practice, the City will perform a full User Fee Study every five years. This is the second CPI adjustment that the City has made to the Fee Schedule and the third year of the current User Fee Study.
The Fiscal Year 2024/25 Fee Update was adopted by Ordinance due to the Taxpayer Protection and Government Accountability Act (Act) being a potential item on the November 2024 Ballot as the ballot measure, if adopted, would require all fees to be adopted by ordinance. Ultimately, the Act was not eligible for the State ballot. As a result, and because Section 4 of Ordinance 603-24 allowed the fees to be modified by resolution if allowed by State law, the City can continue adopting fee updates by resolution, as was done prior to 2024.
Fee Schedule Changes
Consumer Price Index
From January to January, the year-over-year CPI for the Riverside-San Bernardino-Ontario area was released on February 10, 2025, at 2.9%. The U.S. Bureau of Labor Statistics news release information is included in this report as Attachment 4. The Proposed Fee Schedule is included in this report as Attachment 2. Attachment 3 provides details of the dollar and percentage change for each proposed fee. All fees have been adjusted by the 2.9% change in CPI unless they are statutory fees imposed by the Municipal Code, the State, or other County agencies and cannot be increased.
Other Changes
Other changes to the Fee Schedule, along with the reasons for these changes, are summarized in Attachment 5. Changes other than the CPI increase include clean-up items, such as changes in verbiage, removing fees that are listed in multiple places within the Fee Schedule, and adding additional details or notes to fees. The City is also proposing to add three Planning related Plan Check Fees under the Engineering Section for services that are currently provided but not charged for. The proposed fee update is reducing three fees under Business License based on time to complete the tasks and increasing one fee under Library while remaining below the cost determined in the User Fee Study.
Fees Set by Other Agencies
The Fee Schedule includes current fees set by the State of California, the County of Riverside, and other external agencies. The City collects and remits these fees to the respective agencies as mandated. These fees will not change as part of this proceeding.
Downtown Application Fee Reduction Program
The Downtown Application Fee Reduction Program was established by Resolution No. 18-3910 in 2018 and provides a fee reduction to certain development applications for projects within the Downtown Murrieta Specific Plan. Ordinance 603-24 maintained this program. Resolution No. 25-4819 will continue this program.
Public Notice and Notifications
A public notice was published in the Press Enterprise, Daily Bulletin, and San Bernardino Sun newspaper on March 17, 2025, and made available for public review on March 17, 2025. The City Clerk's Department notified interested parties with an active notice on file.
FISCAL IMPACT
As currently drafted, the anticipated cumulative revenue impact of the proposed changes is approximately $246,185 for Fiscal Year 2025/26, which is dependent on the level of service activities provided. It is important to note that adjusting the Fee Schedule will provide a fiscal impact in the form of additional revenue. The revenue is not intended to fund new services; rather, the revenue is intended to offset the costs of providing existing services that are recoverable from fees. Consequently, while fees may rise annually, labor and contract services costs (the primary driver of fee-related costs) also increase annually. Recalibrating these fees provides an offset of existing expenditures/needs rather than a source of funding for expanded service levels.
ATTACHMENTS
1. Resolution No. 25-4819
2. FY 2025-26 Fee Dollar Amount Changes
3. USBLS CPI January to January 2025 News Release
4. Summary of Changes Other than CPI
5. Ordinance 603-24