At last month’s Coffee with the Council event a business owner asked me a reasonable question. He asked why selected business and other fees had been increased. He specifically wanted to know what additional work or other changes had occurred in the city’s responsibilities that created the need for the increases. Together with Mayor Pro Tem Paul Foster I answered this question based on our general knowledge of the city’s current fees. I have summarized that answer here for the benefit of other business owners who may have similar concerns.
The primary reason many Redlands fees (not just business) have been increased is because in the past we have not been collecting sufficient revenues to cover the costs of the services provided. It’s important to stop here and note the philosophy behind charging a fee is that the city must regulate certain activities and charges fees to cover the costs for this work. Fees result in the purchase of a privilege or authorization and are applied to such activities as inspections, building permits, or various licenses.
But back to the point about why fees were increased. A study of the current Redlands city fees, to update the previous study completed in November 2006, was begun in the latter part of Fiscal Year 2010-2011 and approved in November 2012. This study showed the current fees in many cases did not come close to covering the costs of the service provided. This means the average Redlands taxpayer was subsidizing those who received inspections, permits, licenses, or other privileges. In my mind this is not fair. Taxes should go for city activities and services that most residents receive or enjoy. Those who receive specific benefits should pay the full costs for the city’s work to get this work done. There are some exceptions; for example, we do not recover the full cost of recreation programs or bike licenses in an effort to make them more attractive to residents.
So the City Council increased fees for many services, some substantially. Where that was the case, we phased it in over two or three years to lessen the impact. Other reasons for higher fees could be new Federal or State mandated regulation which creates additional workload, or inflationary increases. The biggest reason for the recent increases was the above noted lack of increases over the past several years, which created a major gap in the revenue generated to cover the full costs of the work required to provide services. One might say the increases were aimed at ensuring a more equitable revenue generation approach for the city based on who receives the primary benefits.
I hope this helps a bit in explaining the recent fee increases.