Staff Report
City Council
Item No. 4.B
Meeting Date: April 22, 2026
From: Kevin Biersack, Financial Services Director
Title: City User and Regulatory Fees Annual Update
RECOMMENDATION:
Staff recommend City Council conduct a Public Hearing and Adopt by Resolution an annual adjustment to the City’s Master 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.
On April 8, 2026, staff presented to City Council the findings and recommendations from the recently completed annual update. With user and regulatory fees established by City Council, staff received direction and feedback to proceed with conducting a public hearing 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. With a full cost-of-service study completed every five (5) years, incremental updates occur in the years in between comprehensive studies. This update represents an interim year update with minor, incremental, corrections/changes proposed incorporating feedback received along with any new fees added during the past year since last year’s adoption of the current fee schedule.
During these interim years, the inflationary adjustment is 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 2627 – Final, the changes/recommendations are listed below:
Administrative Fees Section, page 1
Administrative Appeal Fee, existing fee inadvertently left off the schedule in prior years
Credit Card Transaction Processing Fee. Increasing the fee from 2.75% to
3.0%.
Building Fees, page 2
Service Panel Upgrade, existing fee that was inadvertently removed from the schedule in the prior year
Building Fees, page 7
Clarification of refund policy, no fee refunds once work covered by them is commenced
Cannabis Licensing and User Permit Fees, page 10
Odor 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
Release of Notice of Pendency, correction of error, fee should have been set to $265 rather than the $662 listed in the prior year schedule Plastic 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. Per Government Code 66016, the fee increases highlighted above, the updated hourly billing rates, and the inflationary adjustments do not exceed the costs to provide these City services.
In anticipation of this Public Hearing, the City Clerk sent/published the following notices to:
Agua Caliente, BIA of So Cal, Desert Valley Builders Association (DVBA), Riverside County BIA, So Cal Gas, So Cal Edison on April 3, 2026
Desert Sun 1 st publication on April 2, 2026
Desert Sun 2 nd publication on April 8, 2026
With this attached Master Schedule of User and Regulatory Fees 2627 – Final being adopted by City Council on April 22, 2026 along with a 60-day ratification period, these changes will become 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. Illustration of Current and Proposed Fees 2627 - Final
2. Master Schedule of User and Regulatory Fees 2627- Final