The plan, which calls for a 3 percent increase in most municipal fees, is part of the city's broad effort to raise revenues and align local fees with the cost of providing services. The changes would raise the city's revenues in fiscal year 2013 by about $570,000, according to an estimate from Gail Wilcox, a management specialist at the Administrative Services Department.
The new schedule means that fees for renting rooms at the Junior Museum and Zoo would rise from a range of $275 to $500 to a range of $297 to $541, while the fee for boarding a cat at the animal shelter would go up from $15 to $16 per day. And while the cost of playing a game of golf at the Palo Alto Municipal Golf Course won't change, some fees at the course would increase slightly. Getting a large bucket of golf balls at the driving range, for example, would cost between $10 and $14 under the new fee schedule, compared to the current rate of $7 to $10. Renting a set of clubs for a nine-hole game would cost between $9 and $12, a slight bump up from the current rate of $8 to $11.
But while these changes are subtle and largely non-controversial, city officials are also planning for a much more substantive overhaul of municipal fees next year. Palo Alto has recently commissioned a consultant to perform a "cost of service study" — a comprehensive analysis of all city fees and the cost of funding the various programs and services. The study, which is being performed by the firm MGT of America and which is slated to be completed in September, is expected to pave the way for sweeping changes in fees and services, city officials said Tuesday.
"Given that the information will illustrate the extent to which certain services are being subsidized by taxpayers' funds, we expect one area of focus will be the question of who benefits from — and who should pay for — any given service," Wilcox wrote in a new report.
The Finance Committee, which discussed the ongoing study Tuesday, acknowledged that the study could lead to difficult conversations between the city and the community. Though Councilman Pat Burt said the study would only "inform" the council's decisions rather than determine them, he noted that the study could spell "a great change to the community."
City Manager James Keene concurred and called Tuesday's adoption of modest fee increases a "movie trailer" for the greater discussion in September.
"We expect it to be contentious," Keene said.
The changes are being driven to a great extent by the rapidly growing cost of employee health care and pension costs. Between fiscal year 2002 and 2012, citywide health care expenditures grew by 126 percent (from $6.6 million to $14.9 million), while its pension expense shot up from $3.8 million to $23.9 million, a 529 percent spike.
Palo Alto saw some good news this year on the revenue front, namely in stronger-than-expected sales-tax revenues. But rising expenses continue to outpace revenue growth, prompting the council to seek budget cuts and concessions from employee groups.
"It's not like 'happy days are here again' and 'we're on Easy Street,'" Keene said.
Chief Financial Officer Lalo Perez characterized the 3 percent increase the committee backed as the first phase in the city's effort to align fees with the services these fees are paid for. The second phase will come next year, after the cost of service study comes out and the council considers the study's recommendations.
The Tuesday meeting was the latest in a series of reviews by the Finance Committee of Keene's proposed budget for fiscal year 2013. Though the committee had unanimously endorsed most of Keene's recommendations, members split over a proposal that would have raised the rates for garden plots at community gardens. Staff had initially proposed doubling the fee from 50 cents per square foot to $1 per square foot, a proposal that was panned by local gardeners. A revised proposal, which staff presented Tuesday, would have raised the fees by 50 percent, to 75 cents per square foot.
Burt and Councilwoman Gail Price both supported an even less steep increase — one that would have raised the rate to 62 cents per square foot. The four-person committee split 2-2, with Chairwoman Nancy Shepherd and Vice Mayor Greg Scharff supporting the revised staff recommendation.
The committee also gave its tentative approval to the Community Services Department budget. In doing so, it rejected a proposal to trim the city's expenditures for the Summer Concert series by $5,000.
"That's the one thing that people really, really appreciate, and I think it's something we really need to keep up," Scharff said, referring to the annual concert series. "It would be a shame to make the experience less popular so it fades out."
Price was the lone dissenter in the vote, saying she is confident that staff would be able to make the event successful even under a tighter budget.
The full council is scheduled to hold a public hearing on the 2013 budget on June 11 and to formally adopt it on June 18.