Subject: Cost Recovery for Beaches, Parks & Recreation Services Index: Financial Services
Number: 201-15
Effective Date:
Prepared By: Beaches, Parks & Recreation Department
Supersedes: N/A
Approved By:
Policy And Procedure
PURPOSE:
The purpose of this policy is to establish a comprehensive and consistent framework for determining, setting, and updating the level of cost recovery for services provided by the Beaches, Parks & Recreation Department (“BPR Department”). This policy is intended to balance the community’s interest in accessible and affordable recreational opportunities with the City’s responsibility to ensure fiscal sustainability and accountability. This policy ensures fiscal responsibility in the allocation of public resources by balancing resident access with sustainable cost recovery practices.
By defining cost recovery tiers, standardizing discount practices, and requiring regular review and adjustment of fees based on economic conditions, the policy promotes transparency, equity, and efficiency in the use of public resources. It also ensures that San Clemente residents and local nonprofit organizations are prioritized in access and pricing, while commercial and non-resident users pay rates that reflect the true cost of providing services. Ultimately, this policy guides the City Council, staff, and community in making fair and consistent decisions about how recreation programs, facility rentals, and services are subsidized and supported.
ORGANIZATION AFFECTED:
Beaches, Parks & Recreation Department
Finance Division
Maintenance Services Division
Marine Safety Division
Community partners, facility renters, program participants, and event organizers REFERENCES:
Beaches, Parks & Recreation Department Master Fee Schedule (adopted by City Council Resolution No. 25-175) Cost of Service and Fee Study, Matrix Consulting Group (2025) Policy No. 204-1, Partnership of Activities, Facility Rentals, and Special Events Policy No. 702-5, Recreation Sports Partnerships
Policy No. 702-9, Youth Aquatics Partnerships
POLICY:
The guiding principles for the creation of an effective pricing policy are as follows:
Accessibility, fairness, and affordability based on the category of service and benefit level.
Effective and appropriate funding strategies from General Fund, user fees, and other sources.
Improved efficiency in the cost of providing programs, services, and facilities.
Financial sustainability by achieving established cost recovery targets.
Accessibility, Fairness, and Affordability
This Policy supports equity and fairness because it requires those who personally benefit from a program or service above what the general taxpayer receives to pay for that added benefit. Affordability should be based on both the level of benefit and the ability to pay. The type of service and benefit received will directly determine the cost-recovery level or pricing strategy to be used for services and products.
Cost Recovery Framework
The Department shall recover costs for programs, facilities, and services based on the balance of community benefit and individual benefit, using a tiered framework to guide pricing and subsidy levels. Programs that provide the highest community benefit will receive the most subsidy, while those that serve individuals or private interests will target higher cost recovery. A minimum non-waivable fee shall apply to all rentals or permits, either through an application fee (where applicable) or a base rental fee (for facilities such as, but not limited to, the Ole Hanson Beach Club or Community Center).
Discount Matrix
San Clemente Resident: Base rate
Resident Non-Profit: Greatest Discount. Must demonstrate 501(c)(3) status and majority San Clemente participation.
Non-Resident Non-Profit: Equal to or greater than the resident rate; may qualify for partial reduction if serving significant San Clemente residents.
Commercial/Private: Full cost recovery or market-based pricing; no discounts.
Non-Resident Fee Differential
The criteria for establishing the differential percentage charged for non-residents for programs, services, or facility rentals will generally be as follows:
A higher general fund subsidy by the City will justify a higher non-resident fee. Conversely, a lower general fund subsidy of a program or service will justify a lower or no fee differential.
Higher demand by City residents or limitations in capacity will justify higher non-resident fees. Conversely, a low demand or high capacity will justify a lower or no fee differential.
Where appropriate, San Clemente businesses may receive a resident rate.
The discounts will be incorporated into the Department Master Fee Schedule adopted by Resolution of the City Council.
The Department will publicize the price differential for City residents versus non-residents as a “resident discount.” This language more accurately reflects the City's policy of subsidizing some programs for residents through General Fund tax support.
Right of Exclusion and Exceptions
The City Manager or his/her designee may authorize exceptions for programs, rentals, or events deemed essential to community well-being or unique City priorities.
The City Manager or his/her designee is authorized to exclude individual programs from the Cost Recovery Policy under the following circumstances:
Programs shall be budgeted as approved by the City Council.
Programs shall not be required to meet Cost Recovery requirements and may operate below recovery levels for the program category.
Fee Review & Adjustments
Fees will be reviewed annually in conjunction with the City’s budget process and consistent with applicable legal requirements.
Staff shall recommend adjustments to the City Council based on:
Consumer Price Index (CPI) – All Urban Consumers (LA/Long Beach/Anaheim region).
Market conditions and comparable agency rates.
Service cost trends (labor, utilities, maintenance, equipment).
Actual cost of service.
Legal requirements.
CPI adjustments may be automatically applied administratively on an annual basis following a noticed public hearing and City Council approval of the Master Fee Schedule.
A comprehensive Cost of Service Study will be conducted at least once every 5 years or sooner if significant shifts in costs occur.
Fee increases, upward adjustments, and changes in tiers and discounts at a program level that result in users paying a higher fee require a duly noticed public hearing. Decreases in fees, waivers, or adjustments to tiers or discounts that result in the same or reduced fees do not require a noticed public hearing.
All changes or adjustments to fees shall comply with applicable law.
PROCEDURE:
Each service will be assigned a Cost Recovery Tier and discount category by staff during annual budget preparation.
Cost Recovery Tiers:
Tier 1 (0–20% recovery): Entirely community benefit (i.e., parks, playgrounds, open space, free community events).
Tier 2 (20–40% recovery): Mostly community benefit (i.e., senior services, neighborhood events).
Tier 3 (40–70% recovery): Balanced benefit (i.e., aquatics, youth sports, recreation classes, camps).
Tier 4 (70–90% recovery): Considerable individual benefit (i.e., adult leagues, facility rentals, specialty classes).
Tier 5 (90–100% recovery): Exclusive individual benefit (i.e., weddings, film permits, commercial use of facilities).
Staff will prepare an annual cost recovery report to the BPR Commission and City Council, summarizing compliance with targets.
The Master Fee Schedule shall be adopted by City Council resolution in compliance with applicable law and updated annually or as needed.
Fee Waivers
The City may consider fee waiver requests from bona fide non-profit organizations for rentals, permits, or programs that demonstrate substantial community benefit and align with the mission of the Department and/or the City of San Clemente. Fee waivers shall not apply to minimum non-waivable fees or application fees.
The Beaches, Parks & Recreation Director or designee may approve waivers up to twenty-five percent (25%) of the total rental fee or up to $600, whichever is less. Requests exceeding these thresholds must be approved by the City Council. Base Rental Fees or Application Fees will not be waived.
Organizations requesting a waiver must complete a Fee Waiver Application identifying the event purpose, anticipated community impact, and proof of nonprofit status.
Approved waivers should be tracked in an annual Fee Waiver Summary Report presented to the Beaches, Parks & Recreation Commission and City Council.
DEFINITIONS:
Application Fee: A non-refundable fee required to process rentals or permits.
Base Rental Fee: The minimum non-waivable charge for premium facilities.
Direct Costs: Staff time, benefits, supplies, and utilities directly tied to service delivery.
Indirect Costs: Administrative, overhead, and citywide support allocated to the service.
Individual Benefit Services: Services where only the user benefits. For these services, the Department should implement a pricing strategy to achieve full cost recovery. The price of this particular service is intended to recover all direct and indirect costs associated with providing the service.
Partnership Tiers: Designations for recognized youth sports and aquatics organizations that meet residency, participation, and operational standards set by the Department.
Partnership: Partnerships are advantageous collaborations that position both the Department and participating partner organization(s) to efficiently utilize resources, leading to cost-effective and efficient service delivery, bridging of markets, reductions in duplication of services and fragmentation of resources, and cooperative capital development and/or improvements.
Public and Individual Benefit Services: Services whereby the user receives a higher level of benefit than the general taxpayer because the service provides a more livable community, and the service has a good public benefit as well. Public and Individual Services can be priced using either a partial overhead pricing strategy or a variable cost pricing strategy. Partial overhead pricing strategies recover all direct operating costs and a portion of fixed indirect costs. Variable cost pricing strategies recover a determined portion of the fixed direct costs by adding a markup to the variable costs. The expectation is that the markup will contribute to meeting all or a part of fixed direct costs and generate some level of indirect cost recovery.
Public Services: Services the Department offers that provide all users the same level of opportunity to access the service. The level of benefit is the same for all users. Public services typically have low or no user fees associated with their use. The cost for providing these services is borne by the general tax base.
Subsidy: The portion of cost not recovered through user fees, supported by the General Fund.
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