REPORT TO COUNCIL
SUBJECT
Title
Public Hearing: Action on the Adoption of the Proposed FY 2026/27 Municipal Fee Schedule
Report
BACKGROUND
Many of the City of Santa Clara’s fees, rates, and charges (“Fees”) are contained in a municipal fee schedule, which is adopted by the City Council by resolution. Generally, the fee schedule is updated annually which helps ensure that the Fees comply with applicable law, including the California Constitution as well as provide transparency in the fee structure for the City’s development-related and other municipal fees.
California Constitution Article XIIIC and other applicable laws enable local agencies to set fees without voter approval; provided, among other things, the fees do not exceed the reasonable cost of service. To the extent that a fee has been set based upon a presumption of 100% cost recovery, the City cannot generally waive the fee unless it covers the cost of such waiver out of another permissible funding source such as the General Fund or as otherwise allowed under state law.
California Government Code Section 66016(a) and 66018 states that prior to imposing a new fee or increasing an existing one, a local agency shall hold at least one open and public meeting at which oral or written presentations can be made as part of a regularly scheduled meeting and notice of such hearing must be published. Pursuant to Government Code section 66018, notices for this public hearing have been published in the Santa Clara Weekly on April 1 and April 8, 2026. Staff has also notified all interested parties that have requested to be notified regarding proposed fee updates. This item and staff’s recommendations are intended to be considered upon completion of the public hearing. The public hearing provides all interested parties with an opportunity to comment or request clarification regarding any of the Fees.
The FY 2026/27 Proposed Municipal Fee Schedule (“Fee Schedule”) is based on the results of a recently completed comprehensive study of the current costs of providing fee-related services prepared by ClearSource Financial Consulting that is included as Attachment 1 to this Report to Council.
A Study Session was held on April 14, 2026, on the FY 2026/27 Proposed Fee Schedule (Attachment 2). Responses to the City Council as well as public feedback and questions are summarized in the discussion section below and detailed in Attachment 3.
DISCUSSION
The City’s Municipal Fee Schedule generally contains Fees for City services which include, but are not limited to:
• Planning Fees, for services such as entitlement review and review for compliance with the zoning code
• Building Fees, for services such as permitting of new construction or modifications to existing structures
• Engineering Fees, for services such as map review, encroachment permitting, and public improvement review
• Fire Fees, for services such as annual inspections and construction review to ensure compliance with the fire code
• Utility Fees, for services such as requests for sewer lateral inspections, and restoration of discontinued service
• Police Fees, for services such as vehicle impound and false alarm response
• Recreation Fees, for services such as program participation, and facility rentals
• Administrative Fees, for services such as requests for public records
Over 1,200 individual fees were reviewed as part of the comprehensive fee study done in preparation of the FY 2026/27 Proposed Fee Schedule. As shown in the table below, 63% of the proposed fee changes reflect cost of service increases of 10% or less, with 1% of fees reflecting cost of service increases above 10%. An additional 1% of the fees incorporate increases above 15% to account for the planned phase-in of increases to reach cost recovery. Fees that are adjusted based on various price indices make up 9% of the changes and 17% of the Fees are unchanged. There are a limited number of fees that are decreased, restructured, new or deleted.
Proposed FY 2026/27 Municipal Fee Schedule
Summary of Fee Changes
There are 22 fees proposed to be increased above 10%. Of that amount, eight are in the Community Development Department’s Planning Division and are recommended to be phased-in over time to achieve full cost recovery. Four fees are under the Community Development Department’s Building Division and another two under the Planning Division; all of these fee increases reflect updates in personnel costs. Three fees fall under the Parks and Recreation Department that reflect fee amounts for the Aquatic Facility Rental that was approved previously by the City Council on December 9, 2025. The remaining five fees are spread out amongst the Electric Utility Department and Department of Public Works’ Streets Division.
The Proposed Fee Schedule also includes the recommended restructuring of ten fees under the Planning Division (one), Department of Public Works’ Engineering Division (eight), and Streets Division (one). Each of these are existing fees that have been broken out for enhanced clarity.
There are 73 fees that are proposed to be decreased. A significant portion of these fees (40) are within the Engineering Division, while the remaining are spread out amongst the Community Development, Electric Utility, Finance, Fire, Parks and Recreation, Police, and Public Work Departments. These decreases reflect updated costs for providing services.
The Fee Schedule includes 12 new proposed fees intended to recover the costs of services that are not currently assessed. These fees are described in the table below.
Staff is also recommending the deletion of 14 fees, as described in the table below. These fees are recommended for deletion because they are duplicative (e.g., stormwater management plan review and lithium batteries), they are being consolidated (e.g., right to inter cremations in the Mausoleum), the services are no longer available through the City (e.g., rental of the Youth Activity Center), or the fees are obsolete/not used (e.g., right to inter three cremations in a grave).
Feedback from the April 14, 2026 Study Session
During the Study Session, the City Council had questions and comments regarding the Proposed Fee Schedule, primarily focused around the proposed expansion of Parking Fees for Levi’s Stadium events at the Youth Soccer Park and Reed & Grant Park facilities. There were also questions and comments regarding phase-in fees and fee deferrals, impact of development fees to small businesses, customer service resources, youth fees, and the payment method of fees as they relate to the penny shortage.
Responses to these questions and comments are included in Attachment 3.
Changes to the FY 2026/27 Proposed Fee Schedule from Study Session
As noted during the April 14, 2026 Study Session, adjustments to the rounding of certain fees under the Engineering Division are included. Fees have been rounded down to the nearest nickel, as opposed to the initial nearest whole dollar.
Additional adjustments to the Impact Fees within the Fee Schedule are also recommended. The Housing Division and Engineering Division sections include Impact Fees as detailed below:
• Housing Division
o Affordable Housing Impact Fees (12 fees); Resolution 17-8482
• Engineering Division
o Traffic Impact Fees (seven fees); Resolution 18-8584
o Tasman East Specific Plan Area Impact Fee (one fee); Resolution 20-8911
o Patrick Henry Drive Specific Plan Area Impact Fee (two fees); Resolution 22-9064
As part of the establishment of these impact fees, language was included in each Resolution noting that each of these fees are automatically adjusted at the beginning of each fiscal year based on the Construction Cost Index. As such, these fees are no longer recommended to be rounded and the Fee Schedule will reflect the fee amount based on the approved calculation methodology. These updates are detailed in Attachment 4.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to section 15378(b)(4) of Title 14 of the California Code of Regulations in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
FISCAL IMPACT
It is important to note that while adjusting fees and billing rates will provide a fiscal impact in the form of additional revenue, the revenue is intended to be used to offset the costs of providing existing services that are recoverable from fees. Consequently, while fees may rise annually, typically labor costs (the primary driver of fee-related costs) also rise annually. Recalibration of these fees simply provides an offset of existing expenditures/needs rather than a source of funding for expanded service levels.
COORDINATION
This report has been coordinated with the City Attorney’s Office and the City departments with fees included in the Municipal Fee Schedule.
PUBLIC CONTACT
On April 1, and April 8, 2026, notices of the public hearing were published in the Santa Clara Weekly in the manner set forth in Government Code Sections 6062a and 66018. Additionally, the City notified all interested parties that had requested to be notified regarding proposed fee updates. Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov.
RECOMMENDATION
Recommendation
Adopt a Resolution for the “City of Santa Clara 2026/27 Municipal Fee Schedule” which
1. Sets new fees, rates and charges (collectively “fees”);
2. Amends existing fees; and
3. Deletes certain fees; for various City departments effective on July 1, 2026.
Staff
Reviewed by: Kenn Lee, Director of Finance
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. User and Regulatory Fee Study 2026/27
2. FY 2026/27 Proposed Municipal Fee Schedule
3. Responses to City Council Questions
4. Changes to FY 2026/27 Fee Schedule from Study Session
5. Resolution Adopting the FY 2026/27 Municipal Fee Schedule