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NOTES
THE ELEMENTS OF A FEE/SERVICE CHARGE POLICY 1
If not now a part of their operating process, municipal officials should consider the
adoption of a policy to guide their jurisdiction's existing service charge fee programs and their
possible expansion to other areas. Such action will provide the members of the governing body
with a comprehensive, thorough and rational approach to the use of this revenue source.
The contents of a fee and service charge policy should address the following matters and
activities:
! Determine the programs which can and should be financed from
non-tax sources, such as service charges or permit fees;
! Identify problems and ways to ameliorate them - possible problem
areas deal with revenue yield and collection costs, types of costs to
be recovered, enforcement processes, impacts upon users, scope of
tax subsidy, and the compulsory nature of services; and
! Conduct a periodic review of the non-tax revenue structure to
ensure it reflects current conditions and opportunities.
The periodic review is most critical because it provides a structured means to analyze fee
structures. These can become quickly dated in a changing economic environment. The
following are recommended stages in a fee review process:
! Prepare a comprehensive list of all services for which charges and
fees are currently levied.
! Codify these levies by department or functional area for easy
reference and amendment by ordinance.
! As part of the preparation of the operating budget, ask each
department to estimate the revenue expected from each charge and
the cost of providing each chargeable service.
! As part of the operating budget cycle, have the department heads
compile a list of all charges and the percent of each service
recovered through charges or fees. This list should be submitted
along with other revenue items for review by the manager or
secretary.
1 Adapted from: Pennsylvania Economy League, Western Division, Annual Report of Non-Tax
Revenues of Allegheny County Communities.
VIII-27