PISMO BEACH CITY COUNCIL STAF REPOR
Agenda Item #11.A
Meetin Date: March 17, 2026
TITLE:
New Major Encroachment Permit Fee and Update on Counter Encroachment Permit Fee Effective May 16, 2026
RECOMMENDATION:
1. Conduct a Public Hearing to receive input from the public on the proposed user fee;
2. Adopt a Resolution adding a new Major Encroachment Permit fee to the Fee Schedule adopted by Resolution R-2025-013, effective May 16, 2026; and
3. Provide direction on Counter Encroachment Permit fee amendment.
DISCUSSION:
The purpose of this public hearing is to review the proposed Major Encroachment Permit fee, which has been updated based on Council direction provided at the November 18, 2025, City Council meeting; open the public hearing for public comment; and review, modify, and adopt the resolution (Attachment 1) adding a new Major Encroachment Permit fee. This staff report also includes a minor change to the City’s Comprehensive Fee Schedule for Public Works Department, Engineering Division fees to include tree removal without related building permits or sidewalk repair without related building permits under the Counter Encroachment Permit fee.
The City charges user fees to individuals or groups for the use of City facilities, resources, or services. As part of the City’s cost recovery strategy, user fees help fund programs and services that provide a private benefit rather than a direct, citywide benefit. Without appropriate cost recovery, general tax revenues would subsidize private benefits, limiting funds available for essential community-wide services such as public safety and community programs.
The general standard is that individuals or groups who receive a private benefit from a service should pay 100% of cost. However, the City may choose to subsidize certain fees for policy reasons, such as encouraging participation in public programs, ensuring compliance when cost is prohibitive, and promoting access to essential services.
City Council Direction
On October 7, 2025, the City Council requested that staff return with a report on Encroachment Permits. An Encroachment Permit authorizes individuals or contractors to perform work within, or make use of, the City’s right-of-way or easements. A permit is required for any activity occurring within these areas to ensure the appropriate and proper use of public property, protect the integrity of City infrastructure, and maintain public safety.
Council Agenda 3-17-2026 11.A-1
On November 18, 2025, staff presented an overview of encroachment permits and related permit fees. The Council directed staff to return with options for the following potential additions to the City fee schedule as it pertains to Encroachment Permits:
Reduced-fee permits for residential property owners voluntarily repairing a portion of sidewalk within existing contiguous sidewalk.
Reduced-fee permits for tree removal, potentially tiered to reflect the size of the tree or extent of infrastructure disrupted.
A new Major Encroachment Permit fee to better capture the actual cost to the City of permitting and inspecting the work for large projects.
Reduced-fee Permits for Sidewalk Repairs and Tree Removal To address reduced-fee permits for sidewalk repairs and tree removal, staff first evaluated the associated workload. The administrative review, processing time, and inspection coordination required for standalone (no related building permit) sidewalk repair permits and standalone (no related building permit) tree removal permits are substantially similar to the workload required to issue a Counter Encroachment Permit. Given this comparable level of staff effort, it is appropriate to utilize the existing Counter Encroachment Permit fee, currently set at $95 per permit, which includes a 66% subsidy from general tax revenues, for these activities.
Accordingly, staff recommends updating the City’s Comprehensive Fee Schedule to clarify that tree removal without a related building permit and sidewalk repair without a related building permit are processed under the Counter Encroachment Permit fee, and adding a corresponding note to the fee schedule for transparency. Since the Counter Encroachment Permit fee already exists and the proposed amendment simply reduces the fee for standalone tree removal and sidewalk repair, a public hearing is not required.
Major Encroachment Permit fee
To establish a new Major Encroachment Permit fee that more accurately reflects the City’s actual costs for permitting and inspecting large encroachment projects, staff evaluated the anticipated workload associated with these types of improvements. For major encroachments, the required administrative review, plan check, coordination of technical studies, interdepartmental review, inspection oversight, and project closeout are comparable in scope and complexity to the work performed under the existing Public Improvement Plan Check/Inspection process.
The current Public Improvement Plan Check/Inspection fee is structured as a deposit equal to 10% of the Engineer’s estimate of the improvement, with additional charges billed at fully allocated hourly rates for all personnel involved, plus any outside consultant costs, if the initial 10% deposit does not cover the City’s actual costs. Staff has determined that this methodology appropriately reflects the level of effort required for large encroachment projects and provides a defensible nexus between the fee charged and the services provided.
Council Agenda 3-17-2026 11.A-2
Accordingly, staff recommends amending the City’s Comprehensive Fee Schedule to establish a new Major Encroachment Permit fee using the same cost-recovery structure:
10% of the Engineer’s estimate of the improvement as an initial deposit, with additional charges at fully allocated hourly rates for City staff and any outside costs if necessary to recover actual expenses. Because this is a new fee category, adoption would require a public hearing in accordance with applicable fee-setting requirements.
Conclusion and Recommendation
Staff recommends that the Council:
Conduct a Public Hearing to receive input from the public on the proposed user fee;
Adopt a Resolution adding a new Major Encroachment Permit fee to the Fee Schedule adopted by Resolution R-2025-013, effective May 16, 2026; and Provide direction on Counter Encroachment Permit fee amendment.
FISCAL IMPACT:
The fiscal impact of adopting the attached resolution creating a new Major Encroachment Permit fee would create a formal cost-recovery mechanism to reimburse the City for staff time, plan review, inspections, and any outside consultant costs associated with processing and overseeing large encroachment projects.
Amending the Counter Encroachment Permit fee to clarify that it applies to tree removal without a related building permit and sidewalk repair without a related building permit (currently $95 per permit) would result in a reduction in the fee charged for those activities.
Specifically, the change would reduce the fee by approximately $1,345 per permit compared to the existing Surface Encroachment Permit fee, and by approximately $2,027 per permit compared to the existing Subsurface Encroachment Permit fee.
ATTACHMENTS:
1. Resolution
2. Comprehensive Fee Schedule for Public Works Department, Engineering Division Submitted by: Nadia Feeser, Administrative Services Director City Manager Approval:
Council Agenda 3-17-2026 11.A-3
RESOLUTION NO. R-2026-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH,
CALIFORNIA ADDING A NEW MAJOR ENCROACHMENT PERMIT FEE TO THE FEE SCHEDULE ADOPTED BY RESOLUTION R-2025-013, EFFECTIVE MAY 16, 2026
WHEREAS, the City of Pismo Beach has conducted an extensive and exhaustive analysis of its services, the costs reasonably borne of providing those services, the beneficiaries of those services, and the revenues produced by those paying fees and charges for special services; and
WHEREAS, the City wishes to comply with both the letter and the spirit of Article XIIIC of the California Constitution and Sections 66014 and 66016 of the California Government Code, which state in relevant part that, absent voter approval, any non-tax fee must be in an amount that is no more than necessary to cover the reasonable costs of the governmental activity; and
WHEREAS, the City desires to establish a policy of recovering the full costs reasonably borne of providing special services of a voluntary and limited nature, such that general taxes are not diverted from general services of a broad nature and thereby utilized to subsidize unfairly and inequitably such special services; and WHEREAS, the City may choose to subsidize certain fees for policy reasons, such as encouraging participation in public programs, ensuring compliance when cost is prohibitive, promoting access to essential services, and reducing barriers to small businesses; and
WHEREAS, a schedule of fees and charges to be paid by those requesting such special services needs be adopted so that the City might carry into effect its policies; and WHEREAS, notice of public hearing has been provided per California Government Code Section 6062a, oral and written presentations made and received, and the required public hearing held; and
WHEREAS, it is the intention of the City Council to add a new Major Encroachment Permit fee and add a note to the City’s Fee Schedule regarding Counter Encroachment Permit fees, both of which are modifications to the fee schedule adopted by Resolution R-2025- 013.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Pismo Beach hereby resolves as follows:
1. Adoption and Incorporation of Recitals. The recitals set forth above are true and correct and are incorporated by reference herein.
Council Agenda 3-17-2026 11.A-4
Attachment 1
2. Fee Schedule Adoption. The City Council hereby approves a Major Encroachment Permit fee, effective May 16, 2026, set at 10% of the Engineer’s estimate of the improvement as an initial deposit, with additional charges at fully allocated hourly rates for City staff and any outside costs if necessary to recover actual expenses. The City Council hereby approves the addition of a note to the City’s Fee Schedule to clarify that tree removal without a related building permit and sidewalk repair without a related building permit are processed under the Counter Encroachment Permit fee, effective May 16, 2026. The City Council specifically finds that the fees adopted are reasonable and do not exceed the cost of providing the services.
3. Collection and Listing of Fees. The Major Encroachment Permit fee is hereby directed to be computed by and applied by the various City departments, and to be collected by the City Administrative Services Department for the herein listed special services when provided by the City or its designated contractors. The Major Encroachment Permit fee shall be charged and collected for the enumerated services.
4. Separate Fee for Each Process. The fee set forth by this resolution is for each identified process; additional fees shall be required for each additional process or service that is requested or required. Where fees are indicated on a per-unit of measurement basis the fee is for each identified unit or portion thereof within the indicated ranges of such units.
A. Added Fees and Refunds. Where additional fees need to be charged and collected for completed staff work, or where a refund of excess deposited monies is due, and where such charge or refund is ten dollars ($10.00) or less, a charge or refund need not be made.
5. Interpretations. This resolution may be interpreted by the several City department heads in consultation with the City Manager and, should there be a conflict between two fees, then the lower in dollar amount of the two shall be applied.
A. It is the intention of the City Council to review the fees and charges as determined and set out herein based on the City’s next Annual Budget and all the City’s costs reasonably borne as established at that time and, as and if warranted, to revise such fees and charges based thereon.
6. Severability. If any fee, rate, or charge adopted or modified by this resolution is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such fee, rate, or charge shall be deemed a separate, distinct, and independent provision of this resolution, and such holding shall not affect the validity of the remaining fees, rates, and changes adopted or revised herein. The City Council hereby declares that it would have adopted the resolution and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional.
Council Agenda 3-17-2026 11.A-5
Attachment 1
7. Listing of Fees. A copy of the User Fee Schedule that includes the Major Encroachment Permit fee shall be maintained in the Administrative Services Department Office and in the City Clerk’s files for review by the public during business hours. Except for the addition of the Major Encroachment Permit fee, and the clarifying notes relating to tree removal without a related building permit and sidewalk repair without a related building permit, all other fee line items in the City’s User Fee Schedule remain unchanged in full force and effect.
8. CEQA. The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it consists of an administrative activity of government that will not result in direct or indirect physical changes in the environment.
9. Effective Date. This resolution shall go into effect immediately, and the fee adopted hereby shall go into full force and effect on May 16, 2026.
UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 17th day of March 2026, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
IN WITNESS WHEREOF, I have hereunto set my hand and official seal of the City of Pismo Beach on _______________________.
________________________
Erica Inderlied, City Clerk
Council Agenda 3-17-2026 11.A-6
Attachment 1
Public Works Department, Engineering Division Fee Schedule # Fee ID Description Unit Notes Fee
1 S-041 Public improvement plan check / inspection
10% of the Engineer's estimate, plus charges at the
fully allocated hourly rates for all personnel
involved, plus any outside costs, if over the standard
number of plan checks and inspections
10%
2 S-042 Final Parcel Map review Per map Includes 2 plan reviews. Additional fees apply for subsequent plan reviews.$8,211.00
3 S-043 Final Tract Map review Per map plus:$8,211.00
4 Per lot for every lot over 4 lots per lot $208.00
5 S-043A Final Condominium Map Per map plus:$8,211.00
6 Per Unit Per unit $796.00
7 S-045 Lot line adjustment review Per application $1,932.00 8 S-045A Lot merger Per application $1,787.00
10 S-049 Counter encroachment permit Per permit
Includes tree removal without related building
permit or sidewalk repair without related building
ermit
$95.00
11 S-050 Encroachment permit
12 Surface encroachment Per permit $1,440.00
13 Subsurface encroachment Per permit $2,122.00
14 S-051 Encroachment agreement
Per application, plus actual cost for City
Attorney if a title report is needed then the
costs are paid out of this fee.
$2,371.00
15 Annual Utility Encroachment Permit
Per year to Utility companies for routine
maintenance in the City Right of Way to
existing facilities and new services not
requiring a separate permit (trenching less
than 30 sq. ft.)
$3,284.00
16 Major Encroachment Permit Per permit
10% of the Engineer's estimate of the improvement,
plus charges at the fully allocated hourly rates for all personnel involved, plus any outside costs, if the
10% deposit does not cover actual costs
10%
17 S-053 Wide/overweight/long load review Fees are set by California State Administrative Code 1411.3
18 Daily Permit $16.00
19 Annual Permit $90.00
Council Agenda 3-17-2026 11.A-7
Attachment 2
Public Works Department, Engineering Division Fee Schedule # Fee ID Description Unit Notes Fee
20 Bid Protest Fee Per protest evaluation of bid protest $377.00 21 Public Facilities Fee
Per unit for Residential, Per lot per Commercial
development related to changing land
subdivisions, including changes to a tract or
parcel map.
$460.00
22 Undergrounding in-lieu Fee
23 For undergrounding all utility transmission facilities Per lineal foot of project frontage $300.00 24 For undergrounding all utility transmission facilities, except primary PG&E electric distribtuion facilities Per lineal foot of project frontage $100.00 Council Agenda 3-17-2026 11.A-8
Attachment 2