Salem City Council Considers Restructuring Operations Fee

Proposed changes aim to make the fee fairer and generate more revenue for city services.

Published on Feb. 23, 2026

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The Salem City Council is discussing ways to restructure the city's operations fee, which is a monthly charge tacked onto utility bills to help pay for services like police and fire. The current three-tier system charges a flat rate that some councilors say is unfair, with a small business paying the same as a large manufacturer. The council is considering options like an algorithm that assesses a property's reliance on city services to determine the fee, as well as potentially charging the state government more due to its heavy use of public safety resources.

Why it matters

The operations fee is an important revenue source for Salem's general fund, which has been running a deficit as costs increase. Restructuring the fee could help put the city's finances on a more sustainable path, but there are concerns about raising costs on businesses and residents.

The details

The current operations fee charges $16.28 for residential properties, $13.02 for multifamily, and $78.47 for commercial/industrial/institutional/public properties. Councilors want to tie the fee more closely to a property's usage of city services, potentially using metrics like traffic and police/fire response. They're also considering creating different fee tiers for small, medium, and large businesses. Another idea is charging the state government more since it relies heavily on Salem's public safety resources.

  • The Salem City Council discussed restructuring the operations fee at a meeting on February 17, 2026.
  • The city's pilot program expanding police, cleaning crews, and mental health crisis response is currently funded through a mix of resources and is set to cost $2.7 million annually to continue.

The players

Salem City Council

The governing body of the city of Salem, Oregon, responsible for making decisions about the city's operations and finances.

Josh Eggleston

Salem's Chief Financial Officer, who presented options for restructuring the operations fee during the council meeting.

Paul Tigan

A Salem City Councilor who brought the motion to reevaluate the operations fee to the council in December.

Vanessa Nordyke

A Salem City Councilor who suggested charging the state government a higher operations fee due to its heavy use of public safety resources.

Krishna Namburi

Salem's City Manager, who agreed that funding new services in the future is aspirational and that balancing the budget should be the priority.

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What they’re saying

“Even these things identified in the staff report are, to be honest, aspirational. Like the thing that an adjustment to the operation fee might do is help us balance the budget in 2029, without any additional services to the community.”

— Paul Tigan, Salem City Councilor (salemreporter.com)

“The state doesn't pay for its usage of our public safety services. It has never adequately compensated us for the millions of dollars that our firefighters, our police officers and others spend in response to services needed.”

— Vanessa Nordyke, Salem City Councilor (salemreporter.com)

“The other piece of it is also, as we are trying these pilot programs, I think it is important that before we ask the community to pay for more, or whether it is cost neutrality … before we ask for more money from this community, we need to show the community what we can do with that dollar amount.”

— Krishna Namburi, Salem City Manager (salemreporter.com)

What’s next

City staff will now focus on developing a process for managing its data, getting community input on the matter, and figuring out administrative processes for restructuring the operations fee.

The takeaway

Restructuring Salem's operations fee is a complex challenge, as the city tries to balance the need for more revenue to maintain services with concerns about fairness and the impact on businesses and residents. The council's discussions highlight the difficult tradeoffs involved in finding a sustainable path forward for the city's finances.