Legislation Details

File #: 25-0641    Version: 1
Type: Work Session Item Status: Filed
File created: 1/23/2026 In control: Visalia City Council
On agenda: 6/1/2026 Final action: 6/1/2026
Title: Fiscal Year 2026-27 Rates and Fees - Receive, review, and discuss proposed new fees, increases, and adjustments to the City's Rates and Fees Schedule for Fiscal Year 2026-27.
Attachments: 1. Attachment A - Fiscal Year 26-27 Proposed Rates and Fees Document, 2. Work Session powerpoint 5-27

 Agenda Item Wording:

title

Fiscal Year 2026-27 Rates and Fees - Receive, review, and discuss proposed new fees, increases, and adjustments to the City's Rates and Fees Schedule for Fiscal Year 2026-27.

body

 

Agenda Date:  06/01/2026

 

Prepared by: Jana Ferguson 559-713-4429, jana.ferguson@visalia.gov; Renee Nagel 559-713-4375, renee.nagel@visalia.gov

 

Department Recommendation:  It is recommended that the City Council receive, review, and discuss the proposed new fees, increases, and adjustments to the City's Rates and Fees Schedule for Fiscal Year 2026-27.

 

Summary:

Each year, the City reviews its fees to ensure they reflect changes in the cost of living for the upcoming fiscal year. Impact Fees and Business Taxes are automatically adjusted annually based on specific Consumer Price Indices (CPI) established in City ordinances. These inflation-based adjustments help City departments keep pace with rising costs while reducing reliance on the General Fund, allowing those resources to be directed toward essential services such as public safety.

 

The City holds two meetings to review the Rates & Fees for Fiscal Year 2026-27. The first meeting, on June 1, 2026, focuses on receiving, reviewing, and discussing the proposed changes to the fee schedule. The second meeting, on June 15, 2026, includes a Public Hearing and adoption of the City’s Rates & Fees Schedule for Fiscal Year 2026-27.

 

If approved, fees will take effect on July 1, 2026. Impact Fees will become effective on August 14, 2026, to comply with the required 60-day notice period.

 

Background Discussion:

Fee increases are based on established indices. The City uses the California Consumer Price Index for All Urban Consumers (CCPI-U) as the basis for most fee adjustments. Impact Fees are required by City ordinance to use a building industry index, specifically the Engineering News-Record Construction Cost Index (ENRCCI).

Similarly, City ordinance dictates that Business Tax Fees be adjusted using the Consumer Price Index for All Urban Consumers, U.S. City Average (USCPI-U), calculated as the average over the most recent three years. Impact Fees and Business Tax Fees are adjusted annually in accordance with these ordinances.

Attachment A, “Fiscal Year 2026-27 Proposed Rates and Fees Document,” provides a comprehensive list of all rates and fees and includes the current fiscal year’s rates for comparison. Changes beyond standard CPI adjustments are highlighted for ease of reference; these highlighted items are the focus of this report.

Throughout the Rates and Fees Document, there are instances where some or all departmental rates and fees are not increased due to specific circumstances. Examples include:

•                     Ordinances and Fees Set by Other Governmental Agencies - Certain fees, such as those related to Code Enforcement, may require an ordinance amendment prior to adjustment. Additionally, some fees are established by external governmental agencies and cannot be modified by the City, as is the case with certain Police fees.

•                     Legal Requirements (Proposition 218 Fees) - Some fees require compliance with Proposition 218 notification procedures before any increase can be implemented. This applies to most Solid Waste and Sewer fees.

•                     Contracted Services - Certain fees are based on contracted service rates and are therefore tied to contract pricing, such as Sidewalk and Drive Approach Improvement fees.

•                     Minor Administrative Fees - Certain fees associated with minor administrative tasks are minimal in amount and/or infrequently applied; therefore, they are not being increased. Examples include copy fees and payroll fees.

•                     Department Discretion - Some fees are not being increased based on departmental recommendations. In certain cases, departments may choose to remain competitive within their industry, where a fee increase could be detrimental to business activity.

This staff report does not address rates proposed to increase solely by the allowable indices (as described above) or those subject to minor adjustments for cash-handling purposes. Cash-handling adjustments consist of rounding to the nearest dollar and range from $0.01 to $0.99.

Table 1, “Proposed Index Period Changes,” identifies the applicable indices and the corresponding fee effective dates.

Table 1

 

 

Impact Fees - Each year, in accordance with Visalia Municipal Code 16.44.070, the ENRCCI rate is calculated as the average of the indices for Los Angeles and San Francisco. For the current year, this calculation results in a rate of -0.79%, While the nationwide ENRCCI reflects an increase of +2.6%, the Los Angeles area index declined by -1.9%. When averaged with San Francisco’s +0.40%, this produces the negative adjustment.

The City’s Impact Fees are based on nexus studies, which are currently underway by the Engineering and Buildings Department, with additional studies planned in the next fiscal year. These studies are required to evaluate the relationship between development and the infrastructure needed to support growth, ensuring that fees charged to developers are proportional to impacts on public facilities, including roads, schools, parks, and public safety services, and remain compliant with State law.

Resolution 2019-06 adopted June 4, 2019, and Municipal Code 16.44.070, provide that adopted fees may be adjusted annually based on the ENRCCI or, if the index does not adequately reflect actual costs, the City Engineer may prepare an updated fee schedule for consideration.

“the adjustment of adopted fee resolutions annually subject to the current Engineering News Record Construction Cost Index (ENRCCI) or, alternatively, if such index adjustment is insufficient to meet the actual costs of planned facilities, the City Engineer may compute a new schedule of fees for adoption;”

 

Given the ongoing multiple nexus studies, the several scheduled to begin in the new budget cycle, and the City Engineer’s authority to recommend alternative adjustments, staff proposes no changes to the current impact fee schedule at this time. This approach is reflected in the Proposed Rates & Fees Document (Attachment A).

Rounding of Fees - During last year’s review of the Rates & Fees, Council directed staff to evaluate the feasibility of rounding fees to improve clarity and simplify calculations. In response, staff analyzed the basis of each fee, as well as the legal and procedural implications associated with rounding adjustments.

The City currently maintains approximately 1,600 individual fees, nearly half of which are subject to restrictions on inflationary adjustments. Of those restricted fees, 34% are established by ordinance and would require formal amendments to modify, while more than 18% are subject to Proposition 218 requirements, necessitating voter approval for any changes.

Staff also evaluated payment methods across applicable divisions. Seven divisions process transactions for fees that may be administratively adjusted. Survey results indicate that cash transactions represent approximately 11% of total transactions, with most divisions processing less than 5% in cash. The Transit Division has the highest cash utilization at 26% and currently rounds fares to the nearest quarter dollar ($0.25) for cash payments.

Staff further analyzed the cumulative impact of rounding. Over the past 15 years, the average Consumer Price Index (CPI) increase has been approximately 3% annually. Analysis indicates that rounding introduces variances between calculated and actual cost recovery that compound over time, particularly for fees used as inputs in subsequent calculations, such as Building fees where the fee is multiplied by square footage.

Table 2 illustrates the cumulative impact of rounding fee calculations over time. While the initial variance between actual and rounded fees may appear minimal, the difference grows in later years as annual adjustments are applied. In this example, the Base Fee of $2.36 is rounded to $2.50 in FY 26-27 and results in a $140 variance per 1,000 square feet, which increases to over $400 in FY 29-30. This occurs because rounding is applied to the prior year rounded rate, causing the variance between actual cost recovery and rounded fees to compound over time. As demonstrated, rounding does not tend to self-correct and instead produces increasing discrepancies, particularly for fees used as the basis for further calculations.

Table 2

Rounding fees downward would have the same compounding effect over time. Each incremental reduction, though minor on its own, accumulates annually and prevents the City from fully recovering the actual cost of providing services. Over multiple adjustment cycles, this approach would create an ongoing gap between revenues and expenditures.

Based on the analysis conducted, staff does not recommend implementing a policy to round all rates and fees.

The following are proposed fees for the upcoming fiscal year, effective July 1, 2026. Note: The page numbers referenced for each fee refer to the page number in the Proposed Rates & Fees Document, which is attached.

 

 

NEW FEES

 

Parks & Recreation - General Fees (pg. 17)

At Council’s direction, Parks & Recreation staff evaluated the implementation of a non-resident fee. A review of California municipalities found that differentiating between resident and non-resident users for recreation programs and facility rentals is a common and established practice.

A non-resident fee structure is consistent with the Department’s Fee Policy, as residents support recreational facilities through local taxes. Applying a non-resident rate ensures equitable cost recovery by requiring non-residents to contribute a proportionate share toward operational and maintenance expenses, particularly for high-demand amenities and organized use, while preserving resident access.

A review of comparable California agencies, including the cities of Cupertino, Santa Barbara, Ventura, Martinez, and California City indicates non-resident fees for recreation programs typically range from 15% to 30% above resident rates, and 30% to 80% for facility rentals. Analysis of City of Visalia Parks & Recreation transaction data from 2021-2025 shows approximately 12% of customers are non-Visalia residents

Staff recommends establishing a Non-Visalia Resident rate set at 25% above resident fees for recreation programs and facility rentals. Consistent with the Parks & Recreation Department Fee Policy, which provides a subsidy for youth programs classified under Category B and Category C, non-residents will continue to receive the initial subsidy with the 25% fee added. The proposed 25% non-resident is reflected in Attachment A (Proposed Rates & Fees for FY 2026-27), the Parks & Recreation Fee Policy (page 7), and the detailed fee schedules (pages 17-20). Staff plans to recommend completely eliminating the non-resident youth subsidy in next year’s rates and fees.

While most approved rates will take effect July 1, 2026, staff recommends implementing the non-resident fee for Recreation program enrollment on August 10, 2026, to align with the Fall 2026 program cycle and avoid confusion to summer programming.

FEE INCREASES EXCEEDING CPI

 

Parks & Recreation - General Fees (pg. 17)

The Parks & Recreation staff are recommending increasing the capacity per person charge for all Indoor Facility Fees from $0.35 to $0.50 per person. This fee is designed to recover proportional costs such as utilities, custodial services, routine maintenance, administrative overhead, and payment processing. The proposed increase ensures a more accurate recovery of rising operational costs. These fees are not intended to generate revenue beyond the costs of service. This rate is calculated per person based on the facility capacity. The proposed increases are consistent at 42.86% with a value range of $2.09 to $27.84 over the approved CPI.

 

This table reflects the Resident Rate, if approved, the Non-Visalia Resident Rate will be calculated at plus 25%.

 

Fire - General Fees (pg. 27)

The Fire Department charges for the use of our Type 1 Engine/Pumper and Aerial Ladder Truck with rates dictated by the FEMA Schedule of Equipment Rates. These two rates have been increased this year by FEMA and exceed the approved CPI rate for the City. These rates represent increases of 61.65% and 18.12% or $58.84 and $33.15, respectively above the CPI. Labor costs are not included in this rate.

 

Also, the FEMA rate for the Aerial Ladder truck no longer calls out the size/length of the vehicle, instead combining them into one rate, so the department would like to do the same.

 

 

Airport - Enterprise Fees  (pg. 46)

The Airport is proposing to raise the fee for Overnight Parking Twin-Engine plane. This increase brings the expense closer to the industry standard and closes the gap caused by not increasing the fee since FY 23-24. The increase equates to 25% or $2.63 over the approved CPI.

 

 

Solid Waste - Enterprise Fees (pg. 71)

The proposed cost increases for Replacement Cans/Bin, Replacement Keys, and Replacement Locks are based on the city’s purchase prices for these items. These fees are listed as “actual replacement costs to the City” and includes the item cost, sales tax, shipping costs, plus ½ hour of staff and vehicle time. The rate increase for the replacement can is 61.65% or $58.84 over the approved CPI. The increase for the 1 Yard Bin equates to 18.12% or $33.15 over the approved CPI. The key increase is 4.47% or $0.29 over the CPI and the lock exceeds the CPI by 5.90% or $0.92.

 

 

Transit - Enterprise Fees (pg. 77 & 78)

Based on the recommendation of the contracted advertising agency, Transit staff would like to increase the Interior Ad space advertising rates for Fixed Route buses and the VLine. The Fixed Route increases are 5.56% or $0.44 over the approved CPI, and the VLine rates would increase 4.55% or $0.32 over the approved CPI.

 

 

 

 

 

 

 

 

 

ADJUSTED FEES

 

The following are the proposed fees that have increased by less than the annual CPI, decreased, changed based on the City's salary and benefit changes, or have a change in the fee description.

 

General Government & Finance - General Fees (pg. 10)

The Finance Department is proposing to revise the description of a Tax Roll fee to include “Lien Releases.” This update would allow departments to charge a fee for releasing property liens, which are used to ensure the collection of fees for services. The fee reflects the actual cost charged by the County, as well as the City staff time required to process the lien release.

 

 

Convention Center - Enterprise Fees (pg. 58, 60, & 61)

The Convention Center would like to more clearly define a few of the pricing categories. They are wanting to add the word “Custodial” to the Maintenance charge for Staff Services to include cleaning services, and the word “Bare” to the tables description to make sure it is understood that a table rental does not automatically include linens. The Wi-Fi Services description for Wired DSL High Speed Internet should be adjusted to read “CAT 5/6 Cable (Ethernet)” to more accurately describe the service received.

 

 

Solid Waste - Enterprise Fees (pg. 71)

The replacement costs for several commercial bin sizes and lid replacements are adjusted down due to the reduction in the City’s cost to purchase these items. The decreases range from -0.68% to -21.51% or -$0.33 to -$628.69 from what would be allowable with a CPI increase. Some items have increased over prior year pricing, however are still under the CPI.

 

FEES WITH SALARY & BENEFIT CHANGES

 

The following rates are associated with specific job positions and have been adjusted based on salary and benefit contractual increases for the budget year. Rate increases range from 4.12% to 6.67%, and amounts over CPI range from $0.38 to $35.84.

 

Engineering & Building - General Fees  (pg. 16)

 

Planning and Community Preservation - General Fees  (pg. 22)

 

Police - General Fees  (pg. 29)

 

Solid Waste - Enterprise Fees  (pg. 70)

 

EXISTING FEES - PREVIOUSLY NOT LISTED IN THE DOCUMENT

 

Convention Center - Enterprise Fees (pg. 57, 59, & 60)

In reviewing rental options at the Convention Center, staff identified a few rates that are presented to clients but not listed in our rates and fees document. These fees are presented with the requested CPI increase for FY 2026-27.

 

DELETED FEES

 

Business Tax - General Fees (pg. 12)

The Business Tax division would like to remove the fees of copies from their listing. These fees are covered by fees listed in the General Government & Finance section. Additionally, the new software system they have implemented allows citizens to access information online and produce and print documents on their own.

 

 

Fire - General Fees (pg. 27)

This fee is no longer applicable due to FEMA combining all sizes of Aerial Ladders into one category. Fees for the use of the City’s Aerial Ladder are noted in the Fees Exceeding CPI section above.

 

 

Convention Center - Enterprise Fees (pg. 59 & 60)

The Convention Center is updating all of the lift rentals per ½ hour rentals with an operator. These two fees are redundant with this change and should be removed to eliminate confusion.

 

 

ANNUAL ADJUSTMENTS AUTHORIZED BY ORDINANCE

 

The following are the proposed fees where fee increases are required by ordinance.

 

Business Tax

Annual increases are calculated using the three-year average of the Consumer Price Index for All Urban Consumers (CPI-U), U.S. City Average, as previously approved by the City Council and authorized by City Ordinance. This adjustment is not subject to Proposition 26 because it represents an automatic inflationary adjustment rather than a new tax, levy, charge, or exaction. A fee is considered imposed at the time it is approved by the governing body, not when it takes effect.

An inflationary adjustment to an existing levy, charge, or fee is treated as part of the original fee structure set to take effect at a future date. Therefore, it is not considered a fee increase when adjusted for inflation (see Government Code Section 53750(h)(2)(A)).

The applicable index for Fiscal Year 2026-27 is 3.09%, and the adjusted fees will take effect on July 1, 2026.

 

Impact Fees

The ordinance approving cost-of-living increases for Impact Fees is based on the Engineering News-Record Construction Cost Index (ENRCCI). The applicable index for Fiscal Year 2026-27 is -0.79%.

Other: The following committees and commissions have reviewed the proposed rate and fee adjustments and recommend to the City Council the adoption of the adjustments to the City’s Rates and Fees for Fiscal Year 2026-27.

 

 

Fiscal Impact including annual maintenance and operating costs: The proposed increase in City rates and fees are intended to help departments recover costs and reduce reliance on the General Fund. There are no ongoing annual maintenance or operating costs associated with the Rates & Fees.

 

Prior Council Action: The Council reviewed and approved new fees and adjustments to the Rates and Fees on June 16, 2025, for Fiscal Year 2025-26.

 

Alternatives: N/A

 

Recommended Motion (and Alternative Motions if expected):

recommendation

There is no action required at this time. This item is for review and discussion only. Council comments and direction are requested. Formal action will be during the Public Hearing at the June 15, 2026, Council meeting.

 

Environmental Assessment Status:  N/A

 

CEQA Review:  N/A

 

Deadline for Action:  06/01/2026

 

Attachments:  Attachment A - Fiscal Year 2026-27 Proposed Rates & Fees document; Attachment B - Power Point Presentation

 

Strategic Goal: Indicates which City Strategic Goal(s) this item supports. Check all that apply.

 

☒Economic Vitality

☒ Organizational Excellence

☒Fiscal Strength

☒ Infrastructure & Growth

☒ Quality  of Life