Title
Review of the Proposed FY 2027 Master Fee Schedule Update and Annual Rate Adjustments
Staffreport
COUNCIL PRIORITY
• Fiscal Sustainability and Transparency
SUMMARY AND RECOMMENDATIONS
Staff recommend the City Council Finance Committee review proposed FY 2027 Master Fee Schedule changes and move forward to City Council for adoption.
BACKGROUND
Master Fee Schedule
The Master Fee Schedule is a compilation of City Council approved fees for services provided to residents and businesses. The City strives to balance maximizing cost recovery with manageable fees to facilitate economic investment in San Leandro, ensure programs and services are accessible to the community as well to incentivize compliance with regulatory requirements.
It is best practice to review fees in depth every several years to ensure fees are aligned with current costs and business processes for service delivery. To this end, the City prepared a User Fee Study for cost-based user fees governed by Proposition 26, Article XIIIC§1(e) that was completed in 2024. The FY 2026 Adopted Master Fee Schedule incorporated these results.
A fee study for the Park Facilities Development Improvement Fee was adopted by City Council in July 2025 with resolution 2025-106 and was incorporated into the FY 2026 Adopted Master Fee Schedule.
Business License Fees, Emergency Medical Services Tax, and Emergency Communications System Access Tax
The San Leandro Municipal Code Sections provide for annual rate adjustments to the Business License tax, the Emergency Medical Services tax, and the Emergency Communications System Access tax.
Analysis
Master Fee Schedule
A fee schedule maximizing cost recovery opportunities through appropriate fee revenues is a critical component of the City’s ongoing financial stability. Agencies are allowed to set fees at rates providing for recovery of reasonable costs incurred in providing the service or product, which is critical to minimizing use of general tax revenues for services that provide a benefit to specific user groups.
All user fees and service charges are reviewed annually and adjusted based on criteria such as change in the Consumer Price Index (CPI) for services, Construction Cost Index for construction-related items, comparable fees in other cities, review of direct costs, etc. to stay aligned with the cost to provide the service.
The following indices were used to update the majority of fees for FY 2027. For adjustments that were not updated with the indices below, such as items that may be set by State statute, justification is provided for that item on the Proposed FY 2027 Master Fee Schedule.
• 3% CPI (Consumer Price Index) - calculated using the Bureau of Labor Statistics for the Consolidated Metropolitan Statistical Area (CMSA covering San Francisco-Oakland-Hayward) year-over-year change from December 2024 to December 2025 was applied to most service-based fees.
• 2.8% CCI (Construction Cost Index) - calculated using the Engineering News Report year-over-year change from January 2025 to January 2026.
• Other Fee Adjustment Factors - some fees adjusted to align with market rates or direct costs. Some fees may not be increased if capped by State statute or municipal code.
Business License Fees, Emergency Medical Services Tax, and Emergency Communications System Access Tax
Business licenses are permits allowing an organization to conduct business in the City. Organizations may be a sole proprietor, a company, or other business entity with a product or service to sell. Depending on the business classification, business license fees are a flat annual fee or a base fee and a per unit fee.
The Emergency Communications System Access Tax requires subscribers of telephone services within the City to pay for improvements and operations of the 911 communication (call processing and call dispatch) system. The 911-communication system provides immediate access to emergency services. The access tax is imposed on a per line basis, made up of single access lines, trunk lines, and super trunk lines.
The Emergency Medical Services Tax allows for providing paramedic emergency services. The paramedic engine company program ensures residents receive timely responses from paramedics to all medical emergencies. The tax is calculated based on a Benefit Unit. The number of benefit units charged to a property is determined by use of the property.
To cover the increasing costs of providing services, each tax is adjusted annually by the amount of the change in the Consumer Price Index (CPI). Municipal Code §2-2-500, §2-13-140, and §2-18-210 guide annual CPI adjustments. The change in CPI is calculated using the Bureau of Labor Statistics for the Consolidated Metropolitan Statistical Area (CMSA covering San Francisco-Oakland-Hayward) year-over-year change from December 2024 to December 2025. In accordance with the Municipal Code, the tax schedules for business licenses, EMS, and 911 access are adjusted by 3% as follows:
• Business Licenses: annual base fee and the unit fee for retail, wholesale/distribution (large local seller), and manufacturing will increase from $171.00 to $176.13 and from $52.70 to $54.28 (per each owner and each employee).
• Emergency Communications System Access Tax: single access line rate for 911 will increase from $3.22 to $3.32
• Emergency Medical Services and a benefit unit tax under the EMS will increase from $22.60 to $23.28.
Financial Impacts
Master Fee Schedule
If adopted and approved, most of the proposed changes for the FY 2027 Fee Schedule will go into effect July 1, 2026. Development-related fees go into effect 60 days after Council adoption.
Estimating the fiscal impact from the changes in the Master Fee Schedule relies on assumptions related to the demand for fee-based services. These assumptions are included in the Proposed FY 2027 Mid-Cycle Budget revenue assumptions.
Business License Fees, Emergency Medical Services Tax, and Emergency Communications System Access Tax
There is no additional fiscal impact as revenue estimates are included in the FY 2027 Mid-Cycle Budget.
ATTACHMENTS
A. Proposed FY 2027 Master Fee Schedule Update
B: Proposed FY 2027 Master Fee Schedule Update Presentation
PREPARED BY: Felicia Silva, Assistant Finance Director, Finance Department