CITY OF MENIFEE
SUBJECT: 2026 Citywide User Fee and Development Impact Fee (DIF) Annual Adjustments
MEETING DATE: June 17, 2026
TO: Mayor and City Council
PREPARED BY: Amir Zaki, Finance Manager
REVIEWED BY: Travis Hickey, Chief Financial Officer
APPROVED BY: Armando G. Villa, City Manager
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RECOMMENDED ACTION
1. Receive and file the 2026 updated Citywide User Fee Schedule and Development Impact Fee (DIF) Schedule based on 2026 automatic adjustments.
DISCUSSION
On October 5, 2022, the City Council adopted the 2022 Comprehensive Cost of Services/User Fee Study and accompanying fee schedule with an effective date of January 1, 2023. The new fee schedule reflects a comprehensive review and analysis to accurately, fairly, and reasonably determine the full cost of providing services to individuals, residents, and businesses within the community. Ultimately, the revenue generated (fee amount) may not exceed the estimated reasonable cost of providing the services, with the goal of making the City “whole” as to costs.
In addition to the new fee schedule, effective January 1, 2023, the approval of the Fee Study included authorization for the City Manager to implement an annual Consumer Price Index (CPI) adjustment (increase or decrease) not-to-exceed 4% and effective July 1 each fiscal year, based on January to January of the previous year, with the first adjustment effective July 15, 2024.
Around the same time, the City completed the 2022 Citywide User Fee, and a comprehensive update was also completed for the existing 2019 Development Impact Fee (DIF) Study. DIF is designed to support and fund improvements to public facilities and the purchase of equipment related to the provision of essential services based on the demands created by new growth and development. Following the update, revised DIF fees were established to be effective beginning July 1, 2023, with automatic annual adjustments based on the Construction Cost Index (CCI) for July 1st of each fiscal year beginning July 1, 2024. Additionally, the revised DIF Schedule included a phase-in of fees for commercial/retail and office categories over the following five years.
City of Menifee Staff Report
2026 User Fee and Development Impact Fee (DIF) Annual Adjustments June 17, 2026
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Staff presented the proposed updated 2024 Citywide User Fee on May 15, 2024, introducing some new/updated fees across various departments, as well as revising the automatic annual adjustment from a December-to-December CPI to a January-to-January CPI based on the available CPI data. At that time, the City Council also requested an annual staff report summarizing the automatic adjustment for reporting and transparency purposes. 2026 Citywide User Fee Annual Adjustment and Other Updates The proposed 2026 User Fee automatic annual adjustment, which the City Manager has been authorized to implement, will be a CPI adjustment of 3.24% based on the January CPI. Existing fees are proposed to be adjusted accordingly, with the exception of the following:
1.Statutory-Based Fees: Fees set by federal/state regulation, such as passport fees, which cannot be modified.
2.Deposit-Based Fees: Not subject to automatic CPI annual adjustment.
3.Community Services Department Fees: Not subject to automatic CPI annual adjustment.
Reviewed annually by Parks, Recreation and Trails Commission (PRTC) for comprehensive updates. Most recent update completed in April 2026, effective 7/1/2026.
The updated Citywide User Fee Schedule is included as an attachment for reference and as a receive-and-file. This is also regularly available on the City website. 2026 Development Impact Fee (DIF) Annual Adjustment
The proposed 2026 DIF automatic annual adjustment, for which the City Manager has been authorized to implement, will be a CCI adjustment of 3.90% based on the most recent CCI. The commercial/retail and office categories reflect year 4 of the phased-in adjustment increases.
The updated DIF Schedule is included as an attachment for reference and for receipt and filing.
This is also regularly available on the City website.
Additionally, all City fees will be rounded to the nearest $0.05 (five-cent increments) to align with anticipated federal changes related to the elimination of the penny and to streamline cash handling.
STRATEGIC PLAN OBJECTIVE
Thriving Economy
FISCAL IMPACT
The fiscal impact of the automatic adjustments to fees is a revenue increase of 3.24% for user fees and a 3.90% revenue increase for DIF collected. The annual adjustments to both the Citywide User Fee Schedule and DIF Schedule provide continued revenue support to the City’s costs in delivery of services and/or capital investments. The adjustments help mitigate the impact of increased costs over time. No budget adjustment and/or appropriation action(s) is required.
City of Menifee Staff Report
2026 User Fee and Development Impact Fee (DIF) Annual Adjustments June 17, 2026
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ATTACHMENTS
1. 2026 Citywide User Fee Schedule
2. 2026 DIF Schedule