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CITY OF REDWOOD CITY, CALIFORNIA <br />Cost of Services (User Fee) Study <br />Matrix Consulting Group Page 9 <br />the continuum of benefit received. <br /> Within the services that are typically funded by user fees, the Matrix Consulting <br />Group recognizes several reasons why City staff or the Council may not advocate the <br />full cost recovery of services. The following factors are key policy considerations in <br />setting fees at less than 100 percent of cost recovery: <br />• Limitations posed by an external agency. The State or an outside agency will <br />occasionally set a maximum, minimum, or limit the jurisdiction’s ability to charge <br />a fee at all. An example includes time spent copying and retrieving public <br />documents in the City Clerk’s office. <br /> <br />• Encouragement of desired behaviors. Keeping fees for certain services below <br />full cost recovery may provide better compliance from the community. For <br />example, if the cost of a permit for changing a water heater in a residential home <br />is higher than the cost of the water heater itself, many citizens will avoid pulling <br />the permit. <br /> <br />• Affect on demand for a particular service. Sometimes raising the “price” <br />charged for services might reduce the number of participants in a program. This <br />is largely the case in Recreation programs such as camps or enrichment classes, <br />where participants often compare the City’s fees to surrounding jurisdictions or <br />other options for leisure activities. <br /> <br />• Benefit received by user of the service and the community at large is <br />mutual. Many services that directly benefit a group or individual equally benefit <br />the community as a whole. Examples include Recreation programs, Planning <br />Design Review, historical dedications and certain types of special events. <br /> <br /> The Matrix Consulting Group recognizes the need for policies that intentionally <br />subsidize certain activities. The primary goals of a User Fee Study are to provide a fair <br />and equitable basis for determining the costs of providing services, and assure that the <br />City is in compliance with State law. <br /> Once the full cost of providing services is known, the next step is to determine <br />the “rate” or “price” for services at a level which is up to, and not more than the full cost <br />amount. The Council is responsible for this decision, which often becomes a question of <br />7.A. - Page 21