Finance Committee Agenda and Packet 2025 09 18

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SUBJECT: INITIAL 2026 CITY MANAGER FEE DISCUSSION DATE: SEPTEMBER 18, 2025 PAGE 4 OF 5 Establishment of Subdivision and Annexation Fees — Section 16.04.065 Background: Annexation and Development fees total approximately $40,000 annually and are not material to the General Fund (0.1% of total revenues). Process: Annexation and Development fees are adjusted annually by an inflationary factor. Annual adiustments to Impact Fees — Section 3.18.040 - Development impact fees to be imposed Background: Impact Fee Revenues are tracked separately within its own Fund, an Impact Fee Trust Fund, and are designed to ensure that new development bears a proportionate share of the costs of City capital facilities. Process: Impact fees are adjusted annually by an inflationary factor every November. A complete and comprehensive review of Impact Fees is part of the City's 2026 Budget. Note: Building and Permit Fees are set by City Council by Resolution per Sec 15.08.040 — Section 106.5.2 amended Fee Schedule which states "...for buildings, structures, electrical, gas, mechanical and plumbing systems or alterations requiring a permit, a fee for each permit shall be paid in accordance with a fee schedule adopted by resolution of the City Council from time to time." Building and Permit fees are material to the Community Development Department and to the General Fund. Utility Billing Fees (Section 2.04.030 — CM Powers and Duties): such as Delinquent Fees Background: Final Bills and Transfers, Reconnection Fees, Red Tag Fees and Service Fees for Rejected Payments. This section does not set Utility Rates, which are set by City Council. Utility Billing fees are delegated to the Finance Director, total approximately $40,000 annually and are not material to the Utility Funds (0.2% of total revenues). These fees can be found in Rows 286 — 299 of Attachment 2. Process: Utility Billing fees are delegated to the Finance Director and are reviewed annually. No changes are being proposed. Billing fees will be reviewed within the confines of the future Utility Billing Software platform, slated to occur during 2026 — 2027. RELEVANT CITY FINANCIAL POLICY: Relevant City Financial Policy (link) — Section 4 — Revenue Policies, last revised November 4, 2019, states the following; 4.6 User Fees and Services Charges. The City will periodically recalculate the full cost of providing services in order to provide a basis for setting the associated user fee or service charge. Full cost shall incorporate direct and indirect costs, including operations (with City labor costs), maintenance, overhead, debt service, equipment, and capital charges. The intent of this policy is to set FINANCE COMMITTEE COMMUNICATION