Staff Report
City Council
Item No. 2.C
Meeting Date: April 8, 2026
From: Kevin Biersack, Financial Services Director
Title: City User and Regulatory Fees Update
RECOMMENDATION:
This item provides findings and recommendations from the recently completed updates to the City User and Regulatory Fees annual update. Upon incorporating City Council feedback, staff recommends the City Council hold a subsequent Public Hearing, whereby the City Council will be able to adopt this updated schedule of user and regulatory fees.
BACKGROUND:
In 1987, following the California State Supreme Court Nollan vs. California Coastal Commission decision, the California Mitigation Fee Act was passed. These actions set the stage for Assembly Bill 1600, and Government Code sections 66000-66011. Later, Ehlrich vs. City of Culver City (1993), Doland vs. City of Tigard (1994), and Proposition 218 (1997) (among others) occurred, enabling public agencies to impose a user fee for government services when:
The individual’s decision to use the governmental service is voluntary, and The fee charged is reasonably related to both the level and cost of the service to be provided.
Most recently on April 23, 2025, following the completion of a comprehensive user and regulatory fee study, the City Council adopted Resolution 2025-04 updating the City’s Master Schedule of User and Regulatory Fees. The amounts adopted were based on a formally established fee policy identifying general cost recovery targets for various services.
This report summarizes the findings and recommendations from the recently completed annual update. Since user and regulatory fees are set at the direction of the City Council, upon Council’s review and concurrence with the study’s results, a subsequent public hearing must be noticed and held in conformance with Government Code Section 66016.
DISCUSSION:
The fee schedule is intended to be reviewed annually by City staff as part of the normal course of operations. Typically, a cost-of-service study is anticipated to be completed every five (5) years with incremental updates occurring in the years in between comprehensive studies. This update represents an interim year update with minor, incremental, corrections/changes proposed incorporating feedback received during prior fee studies along with any new fees added during the past year, e.g. Odor Control Permit, subsequent to adoption of the City’s current fee schedule.
During interim years, i.e., during years in between comprehensive fee studies), City Council has authorized inflationary adjustments to fees. The inflationary adjustments are based on the annual percentage change in the Bureau of Labor Statistics (BLS) Consumer Price Index (CPI) for All Urban Consumers (CPI-U) for Riverside-San Bernardino-Ontario. For this measurement period (December 2025 over December 2024, published in January 2026), the annual percentage change in CPI was 3.28%.
In the attached Illustration of Current and Proposed Fees – Draft, recommended changes are highlighted in red. Those changes/recommendations are listed below:
Administrative Fees Section, page 1
oAdministrative Appeal Fee, existing fee inadvertently left off the schedule in prior years
oCredit Card Transaction Processing Fee. Over the past fiscal year (FY) (2024/2025), the city has seen an average cost of 3.2%. With the attached analysis and comparison of other agencies, staff recommends City Council consider raising this fee from 2.75% to 3.0%.
Building Fees, page 2
oService Panel Upgrade, existing fee that was inadvertently removed from the schedule in the prior year
Building Fees, page 7
oClarification of refund policy, no fee refunds once work covered by them is commenced
Cannabis Licensing and User Permit Fees, page 10
oOdor Control and Plan Review Permit Fees and Fines for Cannabis Nuisance Odor, new fees adopted by City Council since the previous schedule was adopted
Code Compliance Fees, page 11
oRelease of Notice of Pendency, correction of error, fee should have been set to $265 rather than the $662 listed in the prior year schedule oPlastic Beverage Straws fine, existing fine that was not previously included in the prior year
In addition, this illustration exhibit includes the same proposed 3.28% increase to the hourly billing rates for fee related services, see pages 56-62 (note – these fees are not highlighted in red).
If adopted by the City Council, staff recommend holding a subsequent Public Hearing on April 22, 2026, whereby the City Council will then be able to adopt this updated schedule of user and regulatory fees, making these fee changes effective July 1, 2026.
FISCAL IMPACT:
With the 3.28% CPI and equivalent (FY 2024/2025) license/permit/fee/service revenues, this increase could provide additional revenues up to $250,000 for FY 2026/2027.
FIVE-YEAR STRATEGIC PLAN:
The implementation of updated User and Regulatory Fees supports the following strategic plan goals:
GOAL C: FISCAL STABILITY AND SUSTAINABILITY Objective: Cathedral City has economically prospered by facilitating the investment of private dollars in high-quality development which benefits the community. We remain financially solvent by implementing prudent fiscal policies and transparent financial practices.
ATTACHMENTS:
1. Master Schedule of User and Regulatory Fees Draft v3
2. Illustration of Current and Proposed Fees Draft v3
3. Credit Card Fee Comparison