Tucson Council Adopts Tentative Budget and Fee Hikes; Cunningham Pushes to Defer Development Fees

TUCSON — The Tucson City Council on Tuesday adopted a tentative budget for fiscal year 2026-27 and passed four fee-increase packages covering planning, water, transportation and environmental services. The planning and development fee ordinance, amended to include affordable-housing fee relief and a one-year impact review, passed 4-1 over Council Member Paul Cunningham's objection that the council should defer the vote to June 9 for further public hearing. Vice Mayor Lane Santa Cruz was absent and excused from the May 19 meeting.

Planning and Development Fee Increases Pass 4-1; Cunningham Pushes Delay to June 9

The council passed Ordinance 12253, revising fees charged by the Planning and Development Services Department, by a 4-1 vote, with Council Member Paul Cunningham dissenting. The ordinance, which takes effect July 1, 2026, includes increases to plan review, permitting and building inspection fees, as well as amendments to floodplain use permit fees under city code chapters 16 and 26.

Cunningham said he supported the underlying staff work — "I told you in your office, I agree with everything" — and told amendment sponsors he was "good with them having all the amendments they want." But he argued the full package should be held until the council's June 9 meeting and given a second public hearing. "There's way too much going on for me to be comfortable moving [forward]," he said. "If we have to have another public hearing on it, I'm willing to."

On policy, Cunningham drew a sharp line between two categories of fees. The city should be willing to grant relief on permitting and processing fees for affordable-housing projects, he said, but should never waive impact fees: "Make them pay their impact fees. We shouldn't be giving those up. They're too important." He noted that under state law, any impact-fee waiver requires the city's general fund to make up the lost revenue. He also pushed back on building-industry testimony that the fee increases would chill construction. "Our fees are still competitive with half the cities in the state. We're right in the middle. So the fee increases — that's kind of a red herring. Sorry, Ben. I love you, but I'm just not gonna accept that as fact."

Council Member Miranda Schubert successfully added a friendly amendment directing the Department of Transportation and Mobility, Planning and Development Services, and Housing and Community Development to work together to develop fee relief for affordable housing projects, with staff directed to return within 90 days with an ordinance. Mayor Regina Romero added a second amendment requiring a one-year review of the fees' impact on housing production; both amendments also passed 4-1.

Representatives of the Southern Arizona Home Builders Association, the Arizona Multifamily Housing Association, and the Greater Vail Area Chamber of Commerce testified against the increases. Ben Buehler Garcia, representing the Arizona Multifamily Housing Association, told the council that apartment permits in Tucson had fallen from 1,244 in 2023 to a projected 415 this year — roughly one-third. David Godlowski of the Southern Arizona Home Builders Association said the shift to a new ICC construction valuation table alone would add an estimated $250 to $300 per home.

Water Rate Increases Approved 5-0; Mobile Home Park Billing Abuses Raised

The council unanimously passed Ordinance 12255, amending Tucson Code Chapter 27 to increase water rates and miscellaneous fees for fiscal years 2027 through 2030 under Tucson Water's updated five-year financial plan. The vote was 5-0.

Sandra Alvarez, representing Poder Casas Móviles — a project of the Tucson Alliance for Housing Justice that organizes mobile-home park residents — testified that park managers, who serve as master-meter customers of Tucson Water, were billing residents inflated administrative fees, charging tenants for leaks in aging infrastructure they refused to repair, and in at least one documented case shutting off water for more than 24 hours during last summer's extreme heat with children present in units. She said residents who disputed inflated bills faced eviction proceedings. Council Member Schubert cited bills as high as $1,750 per month for individual mobile home residents and said Ward 6 staffer Ray Winch is also involved in the group's organizing. Council Member Cunningham challenged Tucson Water staff to develop a formula allowing low-income rates to flow through master meters to qualifying renters, and Mayor Romero suggested alerting the state attorney general's office to investigate predatory billing practices at mobile home parks.

Transportation Fee Package, Including New Lane Closure Fee, Passes 5-0

The council unanimously adopted Resolution 24118, approving revised fees for the Department of Transportation and Mobility, including a new "loss of use" lane closure fee proposed on a three-year phase-in, with the first year set at one-third of the full rate.

Multiple speakers — including representatives of the Metro Pima Alliance, the Arizona Multifamily Housing Association, and local contractors — asked the council to delay the lane closure fee, arguing it disproportionately burdens infill development where staging space is constrained. Buehler Garcia estimated that a student-housing high-rise under construction at Speedway Boulevard and Euclid Avenue could face approximately $365,000 in lane closure fees over a two-year construction timeline — $500 per day for 730 days, even at the reduced first-year rate. He framed the fee as a competitive pressure that could push infill projects to neighboring municipalities: "It might be $365,000 that determines whether they build an infill project in Tucson or they build in Marana." Cunningham said he would not grant relief, citing four simultaneous major thoroughfare obstructions in Ward 2 with no accountability for project delays. City Manager Timothy Thomure said staff would return within 90 days — combined with the PDSD affordable housing fee-relief package — with a holistic framework including proposed uses of the loss of use fee revenue to support impacted small businesses and traffic optimization along construction corridors.

FY2027 Tentative Budget Adopted 5-0

The council adopted Resolution 24123, setting the tentative budget for fiscal year 2026-27 and establishing the date and location for a public hearing on the final budget and primary and secondary tax levies. The vote was 5-0. Cunningham said before voting that he had "struggled" with the budget and intended to raise concerns in the coming weeks before final adoption. A special meeting to adopt the final budget will be scheduled separately; the next regular council meeting is June 9, 2026.

Environmental Services Fee Increase and Clean City Fee Adopted 5-0

With no public testimony offered, the council passed Ordinance 12254 unanimously, amending Tucson Code Chapter 15 to increase Environmental Services rates and miscellaneous fees for fiscal years 2027 through 2030 and creating a new Clean City fee, effective July 1, 2026.

Also discussed:

The council unanimously approved renaming the basketball courts at Palo Verde Park the Judith Blair Courts, honoring the mother of former University of Arizona player Joseph Blair. Blair and partners including the Kyle Kuzma Foundation, TJ McConnell and NBA Cares raised approximately $125,000 for two covered, full-length outdoor courts with scoreboards. A dedication ceremony is scheduled for May 30 at 9 a.m.
Council Member Schubert reported seven traffic incidents since the previous council meeting, including four fatalities. Mikhail Stepanov, an associate professor in the University of Arizona mathematics department, was killed May 7 after being struck by a truck. Dan Chavez, a Sam Hughes resident and photographer, was struck at University Boulevard and Euclid Avenue on May 9 by a driver who ran a red light and died of his injuries Sunday, May 10. A 58-year-old driver was killed May 11 in a three-vehicle crash on the east side, and on the same day a 56-year-old pedestrian was killed on the south side in a hit-and-run involving a driver traveling above the posted 35 mph speed limit.
Council Member Schubert announced the Ward 6 office would open a cooling center called the "Chill Space," beginning May 26, open Sunday through Thursday, 11 a.m. to 5 p.m., with no identification or sobriety requirements.
City Manager Thomure announced the city's Department of Housing and Community Development is seeking proposals from qualified organizations to develop a community food hub and related services as part of the $50 million Community and Infrastructure grant the city received previously.
The consent agenda was approved 5-0, including approval of water system revenue obligation Series 2026, general obligation bonds Series 2026, a lease amendment with the USDA Forest Service, and an intergovernmental agreement with Sunnyside School District for shared maintenance of Sunnyside School pool, among other items.