A GUIDE TO COSTING MUNICIPAL SERVICES 

What is the full cost of collecting and disposing of trash in your community? 

How much does it cost to provide fire protection? 

 What would it cost to increase service levels? 

How much could be saved by reducing services? 

 If you charge fees for municipal services, what percentage of the cost of service do they cover? 

Under what circumstances should fees be increased? 

 Could some municipal services be provided more efficiently by private firms? 

 As a local official – whether you are a mayor or selectman, manager or executive secretary, auditor or accountant, department head, member of the finance committee or any other member of municipal government – you may have asked these or other questions related to the cost of municipal services. Costing is a management and policymaking tool that helps to answer these questions.

 It differs from traditional municipal budgeting and accounting in three ways: 

 1. Costing looks at the cost of all resources used to provide services rather than expenditures made to operate municipal departments; 

 2. Costing includes all costs of providing a service, not just those found in the budget or financial reports of the department responsible for the service; 

 3. Costing focuses on the cost of the resources used to provide a service during a given period of time, regardless of when cash disbursements are made to purchase these resources. The purpose of costing is not simply to collect cost data, but to provide municipal managers and officials with information they can use to make better management decisions in several areas: