May 19, 2026
Finance Department
AGENDA
REPORT
DATE: May 19, 2025
TO: Mayor Martinez and Members of the City Council
FROM: Emily Combs, Director of Finance
Mubeen Qader, Deputy Director of Finance
Antonio Banuelos, Accounting Manager
Subject: Master Fee Schedule Update
FINANCIAL IMPACT: The Master Fee Schedule update adjusts fees to cover the cost of services provided by various City
departments.
Based on the level of activity in FY2025-26, the proposed fee adjustments would generate additional annual
revenue totaling $459,321 across various departments
and funds.
PREVIOUS COUNCIL
ACTION:
June 3, 2025
STATEMENT OF THE
ISSUE:
Sections 2.34.040 (Schedule of fees and service
charges) and 13.45.020 (Approval of adjustments by City Council) of the Richmond Municipal Code authorize
periodic adjustments to all City levied fees and charges, subject to approval by the City Council. The City staff are requesting adoption of an Ordinance creating new
fees as outlined in the proposed Master Fee Schedule.
RECOMMENDED ACTION: HOLD a public hearing; and INTRODUCE an ordinance (first reading) establishing certain fees for the proposed Master Fee Schedule – Finance Department (Emily
Combs/Mubeen Qader/Antonio Banuelos 510-620-6741).
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DISCUSSION:
Section 2.34.040 of the Richmond Municipal Code (RMC) (Schedule of fees and service charges) establishes the City’s process for reviewing and adjusting fees to ensure they reflect the costs of providing services. Under this provision, the City Manager reviews fees on a regular schedule and makes adjustments as needed to support cost-recovery for City operations.
Sections 13.45.010 and 13.45.020 further outline the responsibilities of the Finance Department in maintaining and updating City-levied taxes, fees, and charges. These sections require the Director of Finance to adjust fees annually, or as needed, based on changes in the Bureau of Labor Statistics Employment Cost Index (ECI) for State and Local Government Workers. They also require the City to complete a comprehensive fee study at least once every five years.
In addition, these sections require the Director of Finance to present an annual report to the City Council listing all proposed fee adjustments. Fee changes do not take effect until approved by the City Council. The City Council may accept or reject individual adjustments but may not modify them.
USER FEES
This update of the Master Fee Schedule (MFS) adjusts user fees by the Bureau of Labor Statistics Employment Cost Index (ECI). The ECI adjusts wage rate inflation in local governments. In this update, City staff is proposing to update fees by 4.1 percent for the fees subject to the yearly ECI update. The 4.1 percent corresponds to the change of the ECI from the previous fee adoption date of June 3, 2025.
The MFS proposed for adoption by the City Council includes the following changes and/or adjustments:
Employment Cost Index (ECI) Adjustment: The fee schedule is adjusted to reflect the change in the ECI, as provided in Section 13.45.010 of the RMC. The adjusted fees become effective 30 days after final City Council approval of the ordinance amendment and adoption of the resolution.
Fire Department: Updates align fees with the 2025 California Fire Code and improve clarity, equity, and consistency across operational permit categories.
Added / Revised: New permits for Energy Storage Systems and Fumigation/Insecticidal Fogging; clarification of Cannabis Cultivation/Plant Extraction; introduction of a tiered fee structure for scrap-tire storage including a new category for properties under 5,000 sq. ft. and updates to Other Occupancy categories and State Licensed Care Facilities to reflect current California Fire Code definitions
Removed: Elimination of obsolete Highly Combustible Storage permit categories; removal of the outdated operating-permit reference column in the Fire Department
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section of the MFS; and replacement of the previous O-4 scaled-fee model with a single capped fee for occupancies over 20,000 sq. ft. for the Fire & Life Safety Inspections the Other Occupancy buildings
Police/Code Enforcement: Moving certain administrative fees from the Police Department section to the Community Development – Code Enforcement section better aligns fees with the responsible department.
Reassigned to Code Enforcement: Taxi permit fees (new driver and annual renewal), and alcohol and tobacco licensing fees
Remaining with Police: Alcohol and tobacco decoy‑ operation fees, which remain with the Police Department as decoy operations are Police‑ run functions and should stay within the Police fee schedule
Police Department: Updated the Concealed Weapons permit process to include comprehensive background investigations and proposed adjustments to the associated fee(s) to reflect the required staff time to complete the process.
Community Development Department: This fee section has been reorganized to improve clarity and a new category of Tobacco Retail License fees is proposed, including application, annual licensing, appeal, suspension, and revocation charges.
Public Works Department: Updated the Encroachment section to improve clarity and organization.
Community Services Department (Recreation): A new Non-Resident fee tier set at 25 percent above resident rates is introduced to support equitable cost recovery. Additional updates include new Tool Library fees, including late, cleaning, and replacement charges, and revised rental and park reservation fees for the Memorial Auditorium Main Flor and Civic Center Plaza.
City-wide Employee Hourly Rates: Updated and included all currently authorized positions listed in the Position Control Report, ensuring alignment with the current approved staffing structure.
Subregional Transportation Mitigation Program (STMP): STMP fees included in the Impact Fees section are set by the West Contra Costa Transportation Advisory Committee (WCCTAC). The updated rates are effective July 1, 2026 (Attachment 4).
Master Fee Schedule Format Improvements: The MFS has been updated to improve usability and navigation. A new cover page provides direct quick‑ link access to key Community Development resources, including Planning, Building, Land Development, and the Impact Fee Calculator. In addition, a comprehensive table of contents has been added to help users quickly locate fee sections across all departments.
May 19, 2026
IMPACT FEES – Phase-In Approach
Due to the significant increase in developer impact fees, the City Council adopted a multi- year phase-in approach to gradually implement the approved increases. For non-residential properties, developer impact fees would be revised over two years. Future annual increases will follow the ECI until a new study occurs in three to four years. For residential properties, the phase-in approach that began in 2024 will end in 2028. Afterwards, fees will be revised annually according to the ECI, or a new study will be conducted.
Assembly Bill 602 Requirements
On January 1, 2022, new requirements went into effect for California jurisdictions implementing impact fees. Among other changes, California Assembly Bill (AB) 602 added Section 66016.5 to the Government Code, which set guidelines for impact fee nexus studies.
Four key requirements from that section which concern the nexus study are:
66016.5. (a) (2) When applicable, the nexus study shall identify the existing level of service for each public facility, identify the proposed new level of service, and include an explanation of why the new level of service is appropriate.
66016.5. (a) (4) If a nexus study supports the increase of an existing fee, the local agency shall review the assumptions of the nexus study supporting the original fee and evaluate the amount of fees collected under the original fee.
66016.5. (a) (5) A nexus study adopted after July 1, 2022, shall calculate a fee imposed on a housing development project proportionately to the square footage of proposed units of the development. A local agency that imposes a fee proportionately to the square footage of the proposed units of the development shall be deemed to have used a valid method to establish a reasonable relationship between the fee charged and the burden posed by the development.
66016.5. (a) (6) Large jurisdictions shall adopt a capital improvement plan as a part of the nexus study.
One key change described above is the methodology used to calculate residential impact fees. Previously, like many jurisdictions, the City of Richmond calculated these fees based on the number of dwelling units. Going forward, residential impact fees will be calculated based on the square footage of each unit. This updated approach is intended to provide a more equitable fee structure by aligning fees more closely with the scale of development, so that smaller dwelling units are assessed lower fees than larger units.
NEXT STEPS:
Due to recent legislation, additional technical work is required to support the Traffic Impact Fee update. This work involves developing a long-term plan that demonstrates how the City will expand its transportation infrastructure to accommodate and mitigate the impacts of new
May 19, 2026
development. The Public Works Department is currently refining a list of transportation projects with assistance from one of the City’s on-call consultants. These projects may include improvements that support traffic flow, enhance safety, and address multimodal needs consistent with Senate Bill 743 (e.g., complete streets, bicycle and pedestrian facilities, and transit improvements). City staff will return to the City Council with proposed updates to the Developer Impact Fees, with a focus on the Traffic Impact Fee component.
The City has also retained Willdan Financial Services to complete a comprehensive User Fee Study for all City departments, in addition to preparing the Traffic Impact Fee Report.
This City-wide study is intended to modernize the City’s fee structure, improve transparency, and better align fees with the actual cost of providing services. The User Fee Study is expected to be completed in Spring 2027.
In parallel, the City will begin a Storm Drainage Rate Adjustment Study in 2027. Consistent with statutory requirements, any proposed adjustments to storm drainage rates are expected to be presented to voters in Spring 2027.
DOCUMENTS ATTACHED:
Attachment 1 – Master Fee Schedule including Proposed Impact Fees Attachment 2 – Ordinance
Attachment 3 – Presentation
Attachment 4 – STMP Fee Adjustment Memorandum