HomeMy WebLinkAbout2026-06-16; Community Development Commission; Resolution 584Exhibit 16
RESOLUTION NO. 584 .
A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF CARLSBAD, CALIFORNIA, ADOPTING AMENDED CITY COUNCIL
POLICY NO. 95 AS THE COMMISSION’S AND CARLSBAD HOUSING
AUTHORITY’S COST RECOVERY POLICY
WHEREAS, on March 14, 2023, the Community Development Commission adopted City of
Carlsbad City Council Policy No. 95 – Cost Recovery Policy for Fees and Charges for Services to set forth
cost recovery targets, timelines for fee increases and annual cost inflation adjustments, and frequency
for comprehensive review for fees over which it has authority; and
WHEREAS, on June 18, 2024, the Community Development Commission adopted changes to
City of Carlsbad City Council Policy No. 95 to reflect current cost recovery needs and to reiterate limits
on certain housing services fees; and
WHEREAS, the City of Carlsbad has completed a comprehensive cost of service study update
that was presented to the Community Development Commission on May 19, 2026; and
WHEREAS, this comprehensive cost of service study update identified many fee activities
recovering costs below their appropriate range outlined in City of Carlsbad City Council Policy
Statement No. 95; and
WHEREAS, phasing in proposed changes in these fee levels over several years may be
recommended or necessary; and
WHEREAS, amendments to City Council Policy No. 95 are necessary to allow any such changes
to be made over a period greater than three years.
NOW, THEREFORE, BE IT RESOLVED by the Community Development Commission of the City of
Carlsbad, California, as follows:
1.That the above recitations are true and correct.
2.That the proposed action to amend City Council Policy No. 95 is exempt from
environmental review under California Environmental Quality Act, or CEQA, Guidelines
Sections 15061(b)(3) and 15378(b)(5) as it can be seen with certainty that there is no
possibility the proposed action may have a significant effect on the environment.
3.That the Commission adopts the amended City Council Policy No. 95 (Attachment A) as
the Commission’s and Carlsbad Housing Authority’s cost recovery policy.
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PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the Community Development
Commission, the City Council of the City of Carlsbad, the Board of Directors of the Carlsbad Municipal
Water District, the Board of Directors of the Carlsbad Public Financing Authority, and the City
Council as Successor Agency to the Carlsbad Redevelopment Agency held on the 16th day of June,
2026, by the following vote, to wit:
AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.
NAYS: None.
ABSTAIN: None.
ABSENT: None.
______________________________________
KEITH BLACKBURN, Chairperson
______________________________________
GEOFF PATNOE, Secretary
(SEAL)
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Attachment A
Policy No. 95
Date Issued
Resolution No.
Subject: Cost Recovery Policy for Fees and Charges for Services
Purpose
It is important for the city to have a sound and consistent cost recovery policy that will serve as
a management tool for establishing, implementing, and evaluating fees and charges.1 This
policy ensures that the city’s fees and charges are managed in a manner that will:
•Provide for the delivery of quality services
•Maintain and enhance service delivery
•Support a balanced budget through evaluation and review of the city’s total estimated
and reasonable cost of providing services
•Set fee amounts in accordance with local goals as pertains to code compliance, cost
recovery, economic development, and community values
•Ensure that any action to establish, increase, or impose a fee is conducted in a manner
that satisfies the requirements of state law
The City of Carlsbad is authorized to adopt and implement fees and charges for certain
municipal services, provided the fees and charges do not exceed the reasonable cost of
providing such services. This policy sets forth cost recovery targets, timelines for fee increases,
annual cost inflation adjustments, and frequency of comprehensive review for all city fees and
charges.
Background
The city’s fees for services, products, and regulatory activities are not taxes requiring voter
approval under California State Constitution, Article XIII C, Section 1 (a voter initiative added by
Proposition 218 and amended by Proposition 26) if the fees do not exceed the reasonable cost
of the services, products or regulatory activities. In addition to the Constitution, state and local
laws also provide authorization to charge fees for services. For example, Government Code
66014 governs many fees as it pertains to development approvals. The language of
Government Code 66014 mirrors the reasonable cost limitation expressed by the Constitution.
This policy addresses all city fees and charges included in the city’s Master Fee Schedule, with a
few exceptions. Fees for services not subject to this policy typically require different analyses
and adoption processes than the fees that are subject to this policy.
1 The policy, as it applies to Carlsbad Municipal Water District fees and housing services fees, was approved by
the Board of Directors of Carlsbad Municipal Water District of the City of Carlsbad on June 16, 2026, by Resolution
No. 1809 and the Community Development Commission on June 16, 2026, by Resolution No. 584.
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City Council Policy Statement
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Page 2
Subject to this Policy
Not Subject to this Policy
•
fees
• Special events fees
• Streetlight energizing fees
• City Clerk’s Office fees
• Library fees
• Fire fees:
o Fire extinguishing and
alarm systems permit fees
o Annual inspections and
fire code permits
o Other fire fees
• Fees for development
applications, including
entitlements, plan review, permit
issuance, inspections
• Police administrative and service
fees
• Utility account fees for
residential customers
• Fees charged on an hourly, time
and materials, or actual cost of
service basis
• Permit fees required to operate a
business
• Any fees prohibited by law from
exceeding the reasonable cost of
providing services
•
• Safety Training Center facility fees
• All fees for rental or use of city facilities
and/or equipment
• Administrative citation penalties
• Vehicle, traffic and parking civil penalties
• Development impact fees, utility
connection fees
• Trash collection rates
• Fees set through contracts with third-
party vendors
• Water and wastewater service rates and
property related fees and taxes governed
by Proposition 218
• Utility services fees, recycled water and
wastewater fees, third party hydraulic
modelling fees, and other utility fees
• Fees set by external agencies
• Other monetary exactions imposed on a
project on an ad hoc basis in connection
with the approval of a development
project
• Business license taxes
• Emergency medical services, paramedic
and ambulance fees
• Parks & Recreation and Library & Cultural
Arts program and class fees2
• All fees for services set by state or federal
Statement of policy
It is the policy of the City of Carlsbad that the following guidelines will be used in establishing
and maintaining fees and charges:
1. Revenues for individual fees and in aggregate for any fee program shall not exceed the
reasonable cost of providing services.
2 Resolutions No. 2008-192 and No. 2015-173 authorized the City Manager or a designee to set all fees included in
the Community Services Guide provided that fees both do not exceed the cost of providing the program and that these fees are no lower than the lowest fee charged for similar programs in the cities of Oceanside, Vista, San
Marcos, Escondido, or Encinitas.
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City Council Policy Statement
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2. Comprehensive review of all city fees and charges shall occur every five to seven years.
3. In certain circumstances where cost recovery may be unrealistic or undesirable, the City
Council may subsidize a portion of or an entire fee program and/or individual fees.
4. In certain circumstances where immediate adjustments to full cost recovery may be
impractical, it may be appropriate to phase in fee increases over multiple years.
5. The procedures for adopting fees for development applications or projects shall follow
the procedures for adopting various fees provided by Government Code sections 66016-
66019, or other applicable law, and shall be effective no sooner than 60 days following
the final action.
6. Fees and charges should be sensitive to the “market” for similar services.
7. A unified approach should be used in determining cost recovery levels for various
programs and their individual fees and charges based on this policy.
Influential Factors to Cost Recovery Policy
Reasonable, routinely reviewed, and well managed fees for services are one of the many
responsible financial steps needed to support the city’s overall financial sustainability. When
considering whether fees and charges should be adopted to recover 100% of the costs of
providing services, city staff and the City Council will consider the following influential factors:
• The level of cost recovery should consider the degree to which the public benefits from
the service versus the degree to which the user of the service themselves benefits.
• The level of cost recovery should consider how the pricing of services can affect the
demand and subsequent level of services provided.
Based on the consideration of factors that influence cost recovery policy, the degree to which
pricing for services recovers the city’s costs of providing the service will vary.
• Low-level cost recovery services should aim to recover between 0%-30% of their costs.
These include services where there is no intended relationship between the fee and the
benefit received, that are essential to community safety, or for services where
collecting fees would discourage compliance.
• Mid-level cost recovery services should aim to recover between 31%-80% of their costs.
These include services where the specific user of the service receives a higher level of
benefit than the general taxpayer, but where the city has an interest in encouraging
compliance by subsidizing the cost of the service.
• High-level cost recovery services should recover between 81%-100% of their costs.
These include services where the individual primarily and directly benefits from the
service, not the community at large. These may be services that could otherwise be
provided by the private sector or use of the service is not encouraged.
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City Council Policy Statement
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Service/Program Cost Recovery
Target
Pricing Strategy
General and Administrative Fees – Finance, Clerk, City Manager
community benefit from
Special Events Fees
events sponsored by the city or a non-profit
organization with a community-wide benefit
benefits from the service
where admission or fees for participation and the community benefit
Library Fees
interlibrary loans, general day-to-day service benefits from the service
Fire Fees
regulatory inspections (both state-community benefit from
fees for development services (e.g.,
sprinkler, alarms, new construction)
from the service. Fees
should generally be set at
the higher end of the mid-
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Police Fees
other items which are not limited per state
or federal statute
from the service, or fee is
administrative as pertains
Utility Administrative Fees
for delinquent accounts to the extent not
limited by SB 998,3 all other fees subject to
this policy
from the service
Land Development Permitting & Inspection Services
and processing, including but not limited to
general plan amendment, rezone, local
coastal plan amendment, conditional use
permit, coastal development permit, site
HIGH (81%-100%)
Individual directly
benefiting from the
permitted action pays a
majority, if not all the
permit processing costs
Minor Discretionary Permit (review and
processing, including but not limited to
permits that are more administrative in
nature (i.e., accessory dwelling units))
LOW (0%-30%)
essential regulatory codes
and standards by
minimizing the permit
Ministerial Permit (review and processing,
including but not limited to building,
grading, map, and improvement plan)
HIGH (81%-100%)
benefiting from the
permitted action pays a
majority, if not all the
3 SB 998 limits the amount that qualifying low-income residential water customers must pay for service
reconnections after shutoff to $50 during normal business hours and $150 after normal business hours. These
figures are subject to annual inflationary adjustments for changes in the Consumer Price Index. See California Health and Safety Code 116914. Details for residential water customers are available in the Carlsbad Municipal
Water District’s Residential Water Service Shutoff Protection Policy for Nonpayment of Charges.
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City Council Policy Statement
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processing, including but not limited to
minor commercial or industrial tenant
improvements, adjustment plats, right-of-
MID (31%-80%)
essential regulatory codes
and standards by
minimizing the permit
Administrative Ministerial Permit (review
and processing, including but not limited to
minor and/or routine residential repairs
LOW (0%-30%)
essential regulatory codes
and standards by
minimizing the permit
Permit Inspection Services HIGH (81%-100%)
benefiting from the
permitted action pays a
majority, if not all the
Procedures
This Cost Recovery Policy establishes a scheduled program to comprehensively review the fee
schedule to determine if the current fee amounts are reflective of the costs to provide such
services and are consistent with best practices and statutory requirements.
• A comprehensive analysis of city service delivery costs associated with fees and charges
shall be made approximately every five to seven years.
• Off-cycle updates will occur annually, where fees will be adjusted by a percentage equal
to the change in the San Diego Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics or another reasonable inflationary factor.
• Individual fees may be adjusted during the interim period based on supplemental
analysis whenever there have been significant changes in costs.
• The City Council shall have the opportunity to review and the authority to approve any
changes to the Master Fee Schedule.
• The City Council may decide to increase fees over a period of five years in certain
circumstances where immediate adjustments to targeted cost recovery amounts may
be unrealistic. In exceptional cases, city staff may recommend that the City Council
consider a phase-in period exceeding five years to achieve targeted cost recovery rates.
Comparability with Other Communities
Comparing the city’s fees to other communities provides useful background information in
setting fees. It allows the city to assess the market price of the service as compared to other
agencies as well as to learn about alternative methods of charging fees for certain services.
However, fee surveys should never be the sole or primary criteria in setting city fees as there
are many factors that affect how and why other communities have set their fees at their levels.
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Terms and Limitations
1. All rights and obligations existing under any user fee schedule in effect prior to the
effective date of a resolution approving a user fee update, shall continue in full force
and effect. Updates to user fee schedules should not affect or disrupt the continuity of
the city’s business or administration of its law, including:
• Actions and proceedings that began before the effective date of the resolution.
• Prosecution for ordinance violations committed before the effective date of the
resolution.
• The amount, or collection, of license, fee, penalty debt, forfeiture, or obligations
due and unpaid as of the effective date of the resolution.
2. This Cost Recovery Policy does not invalidate any action taken prior to its effective date
if the action was proper under the law governing the action at the time the action was
taken.
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