Recovering 100 percent of costs from users could mean several things: For Provo city, it could mean more revenue for city projects and a more sustainable budget. For residents, it could mean increased fees for services like the recreation center, building inspections or maybe even the library.
The city council on Tuesday decided to have the city’s finance department do a sampling of user fees charged by the city and figure out how much of those fees cover direct and indirect costs — a direct cost would be the cost of employee time and materials to teach a rec class; an indirect cost would be the cost of maintenance at the rec center where that class is held. The council will talk about a resolution to evaluate all user fees and increase where necessary again on Jan. 6.
Councilwoman Kim Santiago, who is part of the council’s budget committee, said having user fees cover costs is a necessary step toward creating a stable city budget over the next 20 years. There are capital improvement projects in the city that need to be done but are waiting on a list for money, partly because the city is subsidizing so many fees.
“We can’t afford to subsidize (fees),” she said. “We need to be able to have a sustainable budget.”
On the other side of the issue — kind of — is Mayor John Curtis, who points out that the city’s budget is balanced every year (state law requires it) and that a lot of what government does is subsidized. Just look at roads, the airport, bridges, even FrontRunner, he said. It costs half a billion dollars to build FrontRunner, and it’s unlikely the user fees (fares) are even covering operational costs at this point.
“We’re not coming close to covering direct costs at the rec center,” he said. … “Would our residents want a rec center if they had to pay $20 at the door instead of $5?”
Curtis also pointed out that the council has spent time and resources on investigating fee increases before, but, when it came down to it, didn’t vote to increase anything. In fact, when the council debated increasing business license fees, it ended up lowering them.
And at one point the council agreed on an intent statement to increase property taxes to keep up with inflation but then it decided it wasn’t the right thing to do.
“Are we really willing to charge only those people who go to the library what it really costs to maintain the library?” he said.
But Curtis said he isn’t really opposed to the effort and possible fee increases. His suggestion wasn’t to change direction, but slow down a little and start with a handful of fees to evaluate instead of going all-in and taking on a possibly monumental task of a full-fee investigation that could result in the council doing nothing.
After checking with the other members of the budget committee, Santiago asked to continue any decisions until January. The mayor said the fee evaluation samples will be done then, too.