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III. ESTABLISHING FEES AND CHARGES <br />PRICING STRATEGY <br />As the final step in the development of this methodology, pricing strategies were considered. Pricing <br />of services must be done on a service -by -service basis. A training on pricing was provided to staff and <br />information is included as Appendix B in this document. Definition of costs and fees as discussed are <br />provided here and followed by Criteria for Establishing Fees and Charges that align with pyramid levels. <br />Table 1: Definitions of Cost and Fees <br />DIRECT COST: Costs that are directly attributable <br />to efforts to put on or provide a program or <br />service. Examples are program specific supplies <br />and marketing, rental fees for facilities, and <br />applicable portions of full-time, part-time, and <br />seasonal staff, as well as corresponding benefits. <br />Cost associated with individual programs or <br />services are not easily identifiable, so some <br />reasonable assumptions may be necessary. <br />INDIRECTAND DIVISIONS OVERHEAD COST: <br />These costs are incurred by the Parks, Recreation, <br />and Seniors Divisions and are not directly <br />attributable to a specific program or service, <br />but are necessary to support the effort, and are <br />incurred for a common objective. Examples may <br />include applicable portion of staff and benefits <br />charges that are shared among multiple services, <br />gas and vehicle maintenance, insurance, fund <br />transfer charges, and staff overtime costs. <br />PARTIAL COST FEE: A fee recovering something <br />less than the cost calculation determined through <br />the chosen methodology. The remaining portion <br />of the costs are subsidized. <br />FULL COST FEE: A fee based on a traditional <br />price -cost relationship; recovers the total cost of a <br />service or program including all costs determined <br />through the chosen methodology, enabling the <br />break-even point to be reached. Full -cost fee is <br />often used as a strategy for services perceived as <br />"private;' benefiting only users while offering no <br />external benefits to the general community. <br />MARKET RATE FEE: Fee based on demand for a <br />service or facility. The market rate is determined <br />by identifying all providers of an identical service <br />(Examples: private sector providers, other <br />municipalities, etc.), and setting the fee at the <br />highest level that the market will bear. <br />65B-33 <br />