16.B.
City Council Meeting - FINAL
- Meeting Date:
- 01/20/2026
- From:
- Rick Tadder, Management Services Director
TITLE:
Consideration and Adoption of the Citywide Cost Recovery Policy
STAFF RECOMMENDED ACTION:
Approve the Citywide Cost Recovery Policy
Executive Summary:
The Citywide Cost Recovery Policy establishes a comprehensive framework for setting, reviewing, and managing user fees and rates for services provided by the City of Flagstaff. The policy ensures fairness, transparency, and sustainability in cost recovery while maintaining accessibility to essential services. It introduces clear guidelines for determining cost recovery levels based on community versus individual benefit, periodic fee reviews, and reporting requirements. Adoption of this policy will standardize practices across all divisions, improve financial accountability, and align fee structures with actual service costs.
Financial Impact:
There is no financial impact to adopting the plan. By implementing the plan, the city will see additional revenues from services provided.
Policy Impact:
By adopting the Citywide Cost Recovery Plan, it will set forth the policy for adopting changes to user fees and rates by City Council.
Previous Council Decision or Community Discussion:
On September 26, 2023, city staff and our consultant, MGT Consulting, presented a high-level overview of what goes into a cost recovery policy.
Options and Alternatives to Recommended Action:
- Approve the Citywide Cost Recovery Plan as submitted
- Amend and approve the Citywide Cost Recovery Plan
- Do not approve the Citywide Cost Recovery Plan
Background and History:
The purpose of this policy is to provide consistent guidelines for establishing and managing user fees. It addresses the need for equitable cost recovery, ensuring that those who benefit most from City services contribute proportionately to their costs. The policy also supports transparency and stakeholder engagement in fee-setting processes.
The Citywide Cost Recovery Plan provides staff with the key framework to develop, analyze, and propose rates and fees adjustments to City Council for consideration. This plan covers the following components of cost recovery:
The Citywide Cost Recovery Plan provides staff with the key framework to develop, analyze, and propose rates and fees adjustments to City Council for consideration. This plan covers the following components of cost recovery:
- Cost Recovery Levels: Defines cost recovery levels based on benefit classification (Community, Individual, or Mixed Benefit). Establishes factors influencing fee levels, including affordability and market comparisons. Proposed cost recovery levels are identified in Appendix A of the plan.
- Periodic Reviews: Setting forth a plan to complete a periodic review helps assure rates and fees are within the cost recovery expectations and sets forth a schedule to reduce or increase rates and fees based on current services provided. The rates and fees review schedule is set on a 5-year plan and can be found in Appendix B of the plan.
- Data Analysis
- Rates and Fees Oversight
Connection to PBB Priorities and Objectives:
High Performing Governance: Maintain the organization’s fiscal stability through strong financial policies and best practices
Connection to Regional Plan:
None
Connection to Carbon Neutrality Plan:
None
Connection to 10-Year Housing Plan:
None