City Council Provides Operations Fee Guidance

Salem City Council is considering changes to the City Operations Fee in response to concerns about fairness, particularly for small businesses. At its February 17 work session, the Council offered guidance to help City staff begin the process. Community engagement will be key in shaping the final plan.

Currently, non-residential accounts pay the same rate, regardless of the demand they place on City services. Residential properties pay based on whether they are single-family homes or multi-unit buildings.

Why is this happening?

In 2025, the City launched a new utility billing system that allows for a more flexible fee structure. To meet the Council's goal of more fairness in the basis for the fee, City staff proposed options such as property type, size and activity levels to calculate fees more fairly. This change could better reflect how properties impact City services.

What does this mean for me?

The City Operations Fee funds services in the General Fund like public safety, cleaning programs and fire response. The proposed changes aim to make the fee fairer for all property owners. Council will further discuss whether to design the changes to remain revenue-neutral, maintain a minimum rate, or increase rates to fund services to meet the growing needs in the community, particularly relating to public safety.

In the 2025 Community Satisfaction Survey, residents surveyed ranked homelessness and public safety as the two biggest issues facing the City.

What's next?

City staff will lay the foundation for fee restructuring, including:

• a process for maintaining and updating fee data
• a structure for administering the fee, including a classification appeals process
• programming to implement the new fee methods as part of the utility billing system

The Council will consider public input and staff recommendations before finalizing changes. The Operations Fee currently provides about $15 million annually, nearly 10 percent of the City's general fund.