On February 16, 2021, a Future Agenda Item Request (FAIR) was brought forward by Councilmember Salas to seek Council approval for a discussion about a citywide comprehensive cost recovery policy.  The FAIR was introduced and received the support of the Council for future discussion.  

Staff will seek Council direction on this FAIR and with the approval of four or more Councilmembers, staff will develop a citywide comprehensive cost recovery policy.

The City of Flagstaff does not currently have a city-wide policy related to cost recovery.  Historically, discussions related to cost recovery occurred when the staff brought forward formal user fee studies and were seeking Council adoption of increased and new fees.  When discussing cost recovery during fee adoption, staff used two components to assist in considering what level of recovery the city would like to adopt for the fees.  First, a user fee study would address the full cost of services for each individual fee and second would consider who benefits from the service being provided by the city.   

The City charges fees for many services it provides to the community. The City must have statutory authority to adopt fees. The City is not able to adopt fees for all services it provides. Per law, fees must be reasonable and related to the services being received by the individual. The City may charge fees that are less than the actual costs of providing services but is not able to charge fees to generate revenue for other city operations.