Santa Maria is considering a new fee structure for city services, and it wants to hear from residents and educate the public about what such a change would mean for the community.
The city contracted with a third party consultant to prepare an objective, year-long, user fee study. It reveals how much Santa Maria would need to increase the price of its services in order to have enough revenue to recover annual costs. The city’s last user fee study occurred in 2005. Since then, it has increased revenues annually, keeping pace with inflation. But even so, the cost of city services has outpaced those increases, City Public Information Officer Mark van de Kamp told the Sun.
According to the recent study, the city could bring in more than $3 million additional revenue dollars each year if it raised certain user fees.
Many city services are currently subsidized by tax dollars, van de Kamp explained. If the City Council follows the report’s recommendation to increase fees, it would allow some of the tax dollars that normally supplement those services to be used elsewhere and would also help balance the budget. Van de Kamp said the city is in its 12th year of costs exceeding revenues.
An example of a commonly tax-subsidized city service, van de Kamp said, is a city pool. Santa Maria’s Paul Nelson Aquatic Center costs about $1 million to operate each year, he said, but the annual revenue the city brings in from charging the public for pool services only covers a fraction of the operating cost. The rest is made up through tax dollar subsidies.
“A case can be made that it’s good to subsidize, because you have the recreational benefit, the health benefit, that you’re helping to keep the population healthy and active by going swimming, and that’s desirable,” van de Kamp explained.
But with 245 different user fees in Santa Maria, and many of them at least partially subsidized, the study recommends that users should shoulder more of the costs—particularly for things like business or dwelling inspections, which only serve the individual and not the community at large.
“It’s up to the City Council to decide, do we want to have it this way, or do we want to change it so that the cost of a building permit or an inspection or a review … is actually borne by the person who owns the property,” van de Kamp said. “Should the taxpayer help offset those costs, or should it be the user?”
For services like leisure and recreation, the study recommends that the city consider these separately, since “recreation services are highly market driven and subject to a variety of external factors including value to the city’s character, consumer demand, location, facility amenities, demographics, and competing service providers,” the study states.
The city is seeking to educate the public and get residents’ input on the matter at two public workshops, one of which was held on Feb. 23 and the second being slated for March 11. A city statement said the workshops aim to “invite comments, explain to residents, businesses, and the City Council what it costs to provide existing city services, and why the consultant is recommending most fees be increased and the taxpayer subsidies be eliminated.”
At the first workshop, City Manager Jason Stilwell said it boils down to the question of where taxpayer dollars should go.
“Should we be using our taxpayer money only on those things we all benefit from, or also on those things only the person using the service benefits from?” he asked.
Van de Kamp said that no changes have been made yet to the city fees and subsidies: It’s ultimately up to the City Council, which could take the study’s findings in a number of directions. If the council moves forward with changes to the fee structure, van de Kamp said those changes would likely be adopted before the new fiscal year begins on July 1.
“Basically, the big goal right now is we want to educate the community and the City Council about the study, and get feedback from the council,” van de Kamp said. “Our goal is to really be transparent and just lay it out for everyone.”
This article appears in Mar 11-18, 2021.