Exhibit 14
RESOLUTION NO. 2026-127
A RESOLUT
ION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, ADOPTING AMENDMENTS TO CITY COUNCIL POLICY NO. 95 –
COST RECOVERY POLICY FOR FEES AND CHARGES FOR SERVICES
WHEREAS,
on March 14, 2023 , the City Council adopted City Council Policy No. 95 – Cost Recovery Policy for Fees and Charges for Services to set forth cost recovery targets, timelines for fee increases and annual cost inflation adjustments, and frequency for comprehensive review for all city fees and service charges; and
WHEREAS, on June 18, 2024, the City Council amended City Council Policy No. 95 to reflect current cost recovery needs and to reiterate limits on certain fees charged by the Utilities Department; and
WHEREAS, the city has completed a comprehensive cost of service study update that was presented to the City Council on May 19, 2026; and
WHEREAS, this comprehensive cost of service study update identified many city fee activities recovering costs below their appropriate range outlined in City Council Policy No. 95; and WHEREAS, phasing in proposed changes in these fee levels over several years may be recommended or necessary; and
WHEREAS, amendments to City Council Policy No. 95 are necessary to allow any such changes to be made over a period greater than three years.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows:
1. That the above recitations are true and correct.
2. Th at th e proposed action to amend City Council Policy No. 95 is exempt from environmental review under California Environmental Quality Act, or CEQA, Guidelines Sections 15061(b)(3) and 15378(b)(5) as it can be seen with certainty that there is no possibility the proposed action may have a significant effect on the environment.
3. That the City Council adopts the amendments to City Council Policy No. 95 as reflected in Attachment A.
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Docusign Envelope ID: EC574C28-EE41-8112-82BD-B665E154CC26 PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the City Council of the City of Carlsbad, the Board of Directors of the Carlsbad Municipal Water District, the Board of Directors of the Carlsbad Public Financing Authority, the Community Development Commission, and the City Council as Successor Agency to the Carlsbad Redevelopment Agency held on the 16th day of June, 202 6, by the following vote, to wit:
AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.
NAYS: None.
ABSTAIN: None.
ABSENT: None.
____________________
__________________
KEITH BLACKBURN, Mayor
____________________
__________________
SHERRY FREISINGER, City Clerk
(SEAL)
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Attachment A
Policy No. 95
Date Issued
Resolution No.
Subject: Cost Recovery Policy for Fees and Charges for Services Purpose
It is important for
the city to have a sound and consistent cost recovery policy that will serve as a management tool for establishing, implementing, and evaluating fees and charges.1 This policy ensures that the city’s fees and charges are managed in a manner that will:
• Provide for the delivery of quality services
• Maintain and enhance service delivery
• Support a balanced budget through evaluation and review of the city’s total estimated and reasonable cost of providing services
• Set fee amounts in accordance with local goals as pertains to code compliance, cost recovery, economic development, and community values
• Ensure that any action to establish, increase, or impose a fee is conducted in a manner that satisfies the requirements of state law
The City of Carlsbad is
authorized to adopt and implement fees and charges for certain municipal services, provided the fees and charges do not exceed the reasonable cost of providing such services. This policy sets forth cost recovery targets, timelines for fee increases, annual cost inflation adjustments, and frequency of comprehensive review for all city fees and charges.
Background
The city’s fe
es for services, products, and regulatory activities are not taxes requiring voter approval under California State Constitution, Article XIII C, Section 1 (a voter initiative added by Proposition 218 and amended by Proposition 26) if the fees do not exceed the reasonable cost of the services, products or regulatory activities. In addition to the Constitution, state and local laws also provide authorization to charge fees for services. For example, Government Code 66014 governs many fees as it pertains to development approvals. The language of Government Code 66014 mirrors the reasonable cost limitation expressed by the Constitution.
This policy addresses all
city fees and charges included in the city’s Master Fee Schedule, with a few exceptions. Fees for services not subject to this policy typically require different analyses and adoption processes than the fees that are subject to this policy. 1 The policy, as it applies to Carlsbad Municipal Water District fees and housing services fees, was approved by the Board of Directors of Carlsbad Municipal Water District of the City of Carlsbad on June 16, 2026, by Resolution No. 1809 and the Community Development Commission on June 16, 2026, by Resolution No. 584.
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2026-127
Docusign Envelope ID: EC574C28-EE41-8112-82BD-B665E154CC26 City Council Policy Statement
June 16, 2026
Subject to this Policy
Not Subject to this Policy
• Miscellaneous administrative
fees
• Special events fees
• Streetlight energizing fees
• City Clerk’s Office fees
• Library fees
• Fire fees:
o Fire extinguishing and
alarm systems permit fees
o Annual inspections and
fire code permits
o Other fire fees
• Fees for development
applications, including
entitlements, plan review, permit
issuance, inspections
• Police administrative and service
fees
• Utility account fees for
residential customers
• Fees charged on an hourly, time
and materials, or actual cost of
service basis
• Permit fees required to operate a
business
• Any fees prohibited by law from
exceeding the reasonable cost of
providing services
• Deposits and securities
• Safety Training Center facility fees
• All fees for rental or use of city facilities
and/or equipment
• Administrative citation penalties
• Vehicle, traffic and parking civil penalties
• Development impact fees, utility
connection fees
• Trash collection rates
• Fees set through contracts with third-
party vendors
• Water and wastewater service rates and
property related fees and taxes governed
by Proposition 218
• Utility services fees, recycled water and
wastewater fees, third party hydraulic
modelling fees, and other utility fees
• Fees set by external agencies
• Other monetary exactions imposed on a
project on an ad hoc basis in connection
with the approval of a development
project
• Business license taxes
• Emergency medical services, paramedic
and ambulance fees
• Parks & Recreation and Library & Cultural
Arts program and class fees
2 • All fees for services set by state or federal
statute
Statement of policy
It is the policy of the City of Carlsbad that the following guidelines will be used in establishing and maintaining fees and charges:
1. Revenues for individual fees and in aggregate for any fee program shall not exceed the reasonable cost of providing services.
2 Resolutions No. 2008-192 and No. 2015-173 authorized the City Manager or a designee to set all fees included in the Community Services Guide provided that fees both do not exceed the cost of providing the program and that these fees are no lower than the lowest fee charged for similar programs in the cities of Oceanside, Vista, San Marcos, Escondido, or Encinitas.
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2. Comprehensive review of all city fees and charges shall occur every five to seven years.
3. In certain circumstances where cost recovery may be unrealistic or undesirable, the City Council may subsidize a portion of or an entire fee program and/or individual fees.
4. In certain circumstances where immediate adjustments to full cost recovery may be impractical, it may be appropriate to phase in fee increases over multiple years.
5. The procedures for adopting fees for development applications or projects shall follow the procedures for adopting various fees provided by Government Code sections 66016- 66019, or other applicable law, and shall be effective no sooner than 60 days following the final action.
6. Fees and charges should be sensitive to the “market” for similar services.
7. A unified approach should be used in determining cost recovery levels for various programs and their individual fees and charges based on this policy.
Influential Factors to Cost Recovery Policy
Reasonable, routinely reviewed, and well managed fees for services are one of the many responsible financial steps needed to support the city’s overall financial sustainability . When considering whether fees and charges should be adopted to recover 100% of the costs of providing services, city staff and the City Council will consider the following influential factors:
• The level of cost recovery should consider the degree to which the public benefits from the service versus the degree to which the user of the service themselves benefits. • The level of cost recovery should consider how the pricing of services can affect the demand and subsequent level of services provided.
Based on the consideration of factors that influence cost recovery policy, the degree to which pricing for services recovers the city’s costs of providing the service will vary. • Low-level cost recovery services should aim to recover between 0%-30% of their costs.
These include services where there is no intended relationship between the fee and the benefit received, that are essential to community safety, or for services where collecting fees would discourage compliance.
• Mid-level cost recovery services should aim to recover between 31%-80% of their costs.
These include services where the specific user of the service receives a higher level of benefit than the general taxpayer, but where the city has an interest in encouraging compliance by subsidizing the cost of the service.
• High-level cost recovery services should recover between 81%-100% of their costs.
These include services where the individual primarily and directly benefits from the service, not the community at large. These may be services that could otherwise be provided by the private sector or use of the service is not encouraged.
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Service/Program Cost Recovery
Target
Pricing Strategy
General and Administrative Fees – Finance, Clerk, City Manager Appeals to City Council MID (31%-80%) Both individual and community benefit from
the service
Business license master list of new/active
licenses
HIGH (81%-100%) Individual benefit received
from the service
Community facilities district annexation
services
HIGH (81%-100%) Individual benefit received
from the service
Miscellaneous services where amount of the
fee is not set by state or federal statute
HIGH (81%-100%) Individual benefit received
from the service
Special Events Fees
City-sponsored special events. Special
events sponsored by the city or a non-profit
organization with a community-wide benefit
that are free and open to the public
LOW (0%-30%) Community primarily
benefits from the service
Special events that are open to the public
where admission or fees for participation
are not charged
MID (31%-80%) Both the event sponsor
and the community benefit
from the service
Special events where admission is ticketed
or fees for participation are charged
HIGH (81%-100%) Individual benefit received
from the service
Library Fees
Library card replacement, hold requests,
interlibrary loans, general day-to-day service
fees
LOW (0%-30%) Community primarily
benefits from the service
Refund processing initiated by customer LOW (0%-30%) Community primarily benefits from the service
Fire Fees
Fire code permits, annual occupancy
regulatory inspections (both state-
mandated and non-mandated)
MID (31%-80%) Both individual and
community benefit from
the service
Fire/life safety plan check and inspection
fees for development services (e.g.,
sprinkler, alarms, new construction)
MID (31%-80%) Individual benefit received
from the service. Fees
should generally be set at
the higher end of the mid-
range
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Police Fees
Patrol and general enforcement services MID (31%-80%) Community primarily benefits from the service
Copies of reports for victims of crimes MID (31%-80%) Ensure access to valuable service
All fees for records management, towing, or
other items which are not limited per state
or federal statute
MID (31%-80%) Individual benefit received
from the service, or fee is
administrative as pertains
to a violation of code/law
Utility Administrative Fees
New account set up, reinstating of service
for delinquent accounts to the extent not
limited by SB 998,
3 all other fees subject to
this policy
MID (31%-80%) Individual benefit received
from the service
Land Development Permitting & Inspection Services
Discretionary Entitlement Permit (review
and processing, including but not limited to
general plan amendment, rezone, local
coastal plan amendment, conditional use
permit, coastal development permit, site
development plan)
HIGH (81%-100%)
Individual directly
benefiting from the
permitted action pays a
majority, if not all the
permit processing costs
Minor Discretionary Permit (review and
processing, including but not limited to
permits that are more administrative in
nature (i.e., accessory dwelling units))
LOW (0%-30%)
Ensure compliance with
essential regulatory codes
and standards by
minimizing the permit
application costs
Ministerial Permit (review and processing,
including but not limited to building,
grading, map, and improvement plan)
HIGH (81%-100%)
Individual directly
benefiting from the
permitted action pays a
majority, if not all the
permit processing costs
3 SB 998 limits the amount that qualifying low-income residential water customers must pay for service reconnections after shutoff to $50 during normal business hours and $150 after normal business hours. These figures are subject to annual inflationary adjustments for changes in the Consumer Price Index. See California Health and Safety Code 116914. Details for residential water customers are available in the Carlsbad Municipal Water District’s Residential Water Service Shutoff Protection Policy for Nonpaym ent of Charges.
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Minor Ministerial Permit (review and
processing, including but not limited to
minor commercial or industrial tenant
improvements, adjustment plats, right-of-
way use or encroachment agreements)
MID (31%-80%)
Ensure compliance with
essential regulatory codes
and standards by
minimizing the permit
application costs
Administrative Ministerial Permit (review
and processing, including but not limited to
minor and/or routine residential repairs
LOW (0%-30%)
Ensure compliance with
essential regulatory codes
and standards by
minimizing the permit
application costs
Permit Inspection Services HIGH (81%-100%)
Individual directly
benefiting from the
permitted action pays a
majority, if not all the
permit processing costs
Procedures
This Cost Recovery Policy establishes a scheduled program to comprehensively review the fee schedule to determine if the current fee amounts are reflective of the costs to provide such services and are consistent with best practices and statutory requirements. • A comprehensive analysis of city service delivery costs associated with fees and charges shall be made approximately every five to seven years.
• Off-cycle updates will occur annually, where fees will be adjusted by a percentage equal to the change in the San Diego Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics or another reasonable inflationary factor. • Individual fees may be adjusted during the interim period based on supplemental analysis whenever there have been significant changes in costs. • The City Council shall have the opportunity to review and the authority to approve any changes to the Master Fee Schedule.
• The City Council may decide to increase fees over a period of five years in certain circumstances where immediate adjustments to targeted cost recovery amounts may be unrealistic. In exceptional cases, city staff may recommend that the City Council consider a phase-in period exceeding five years to achieve targeted cost recovery rates.
Comparability with Other Communities
Comparing the city’s fees to other communities provides useful background information in setting fees. It allows the city to assess the market price of the service as compared to other agencies as well as to learn about alternative methods of charging fees for certain services.
However, fee surveys should never be the sole or primary criteria in setting city fees as there are many factors that affect how and why other communities have set their fees at their levels.
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Terms and Limitations
1. All rights and obligations existing under any user fee schedule in effect prior to the effective date of a resolution approving a user fee update, shall continue in full force and effect. Updates to user fee schedules should not affect or disrupt the continuity of the city’s business or administration of its law, including:
• Actions and proceedings that began before the effective date of the resolution. • Prosecution for ordinance violations committed before the effective date of the resolution.
• The amount, or collection, of license, fee, penalty debt, forfeiture, or obligations due and unpaid as of the effective date of the resolution.
2. This Cost Recovery Policy does not invalidate any action taken prior to its effective date if the action was proper under the law governing the action at the time the action was taken.
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