Utility cuts contribute to a reduction in overall service-life of pavements. This results in an additional financial burden of costly rehabilitation and maintenance work by municipalities to maintain prematurely deteriorated pavements. Cities are allowed to recover the costs they incur as a result of allowing utility companies to use its roads to install their distribution systems. The City of Toronto, faced with this dilemma, decided to recoup such costs by developing a fair pavement degradation fee structure that is technically justified and legally defensible. The paper will discuss the following topics: – Background and terms of reference for the pavement degradation fee study – The experimental design – Quality assurance measures that guaranteed reliability of field information gathered – The statistical tests that were used to identify impacts – The economic evaluation undertaken to estimate the value of the impacts – The development of the pavement degradation fee structure. The paper presents the final fee structure and a quick comparison with other jurisdictions’ charges with explanations of potential differences.