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Who Should Pay Fees? <br />Council can set fees to fully recover the cost of a service or set a lower fee to provide a certain level of <br />subsidy, or alternatively, reduce costs by reducing the level of service. <br />Some programs and services may justify a subsidy from a tax based or alternative revenue source. For <br />example, community supported public services based on social, safety, or general community welfare. <br />Services supporting the general public, such as public safety, are supported by tax and other non -fee <br />revenues, while services more elective in nature and of specific benefit to individuals are typically <br />supported by charging fees to the user. <br />Within the services typically funded by user fees, there are several reasons a Council may not advocate for <br />full cost recovery of services. The following factors are some key policy considerations when setting fees <br />at less than 100 percent of cost recovery: <br />■ Encouragement of desired behaviors. Keeping fees for certain services below full cost recovery <br />may provide better compliance from the community. For example, if the cost of a permit for a <br />residential tree removal is higher than the cost of the actual removal of the tree, many citizens will <br />avoid getting the permit. <br />Effect on demand for a particular service. Sometimes raising the "price" charged for services <br />might reduce the number of participants in a program. This is largely the case in recreation programs <br />such as camps or enrichment classes, where participants often compare the city's fees to surrounding <br />Jurisdictions or other options for leisure activities. <br />Benefit received by user of the service and the community at large is mutual. Many services <br />that directly benefit a group or individual equally benefit the community as a whole. Examples <br />include recreation programs, planning design review, historical dedications, and certain types of <br />special events. <br />Who Benefits <br />Type of Service <br />Tax v Fees Policy <br />Example Services <br />Community <br />Public <br />100% taxes <br />Police patrol <br />Primarily the community with <br />some individual benefits <br />Public/Private <br />Mostly taxes and some <br />fees <br />Code enforcement <br />Primarily individual with some <br />community wide benefits <br />Private/Public <br />Mostly fees and some <br />taxes <br />Youth sports <br />Individual benefit only <br />Private <br />100% fees <br />Development services <br />When reviewing fees keep in mind which fees should be supported and subsidized and which should be <br />privately paid. <br />Page 218 of 273 <br />