User fee revenue is income municipalities collect from charges for specific services used by individuals or businesses, including recreation program fees, facility rentals, permit and license fees, transit fares, and utility charges. User fees apply the principle that service beneficiaries should pay for services rather than spreading costs across all taxpayers. User fee revenue represents a significant portion of municipal revenues, often 20-30% alongside property taxes and grants. Setting user fees involves balancing cost recovery, affordability, market comparisons, and policy objectives like encouraging beneficial activities. Full cost recovery means fees cover all service costs; partial cost recovery means taxpayers subsidize remaining costs. User fee policies establish principles guiding fee-setting decisions.