User Fees and Charges
Payments collected by city government from individuals who use specific services — water bills, building permits, park admission, recreation program fees.
How It Works
User fees operate on the principle that the direct beneficiary of a service should pay for it, rather than funding it through general taxation. Common city user fees include water and sewer charges, building permits, plan review fees, park and recreation fees, parking meter revenue, and ambulance transport charges. User fees have grown as a revenue source as cities face political resistance to tax increases. Critics argue that excessive user fees are regressive and can deter low-income residents from accessing services.
Related Terms
- Enterprise Fund — A self-supporting government fund that operates like a business — charging user fees to cover costs for services like water, sewer, electric, or transit.
- Revenue Diversity — The degree to which a city's revenue comes from multiple sources (property tax, sales tax, fees, grants) rather than being concentrated in a single stream.
About This Definition
This definition is part of the CitySpend Municipal Finance Glossary — 59 terms explaining how city governments fund and manage public services. All definitions are written in plain language for taxpayers, journalists, students, and municipal bond investors.