The URL can be used to link to this page

Home My WebLink AboutCOW 2010-02-22 Item 2 - Presentation - Indirect Cost Allocation PlanCity of Tukwila INFORMATIONAL MEMORANDUM Jim Haggerton, Mayor TO: TUKWILA CITY COUNCIL FROM: Christy O'Flaherty, City Clerk DATE: February 19, 2010 SUBJECT: COPY OF PRESENTATION MATERIALS FOR INDIRECT COST ALLOCATION PLAN Attached please find a copy of the Powerpoint presentation that will be utilized at Monday evening's Council meeting. While presentation materials are not typically included in the Council packet, due to the complexities of this issue, the Council President asked that the documents be provided prior to the meeting. Thank you. 1 2 City of Indirect Cost Allocation Plan City Council Presentation February 22, 2010 Peter Moy, Principal FCS GROUP 425-867-1802 7525 166th Ave NE Suite D-215• Redmond, WA 98052 www.fcsgroup.com What is an Indirect Cost Allocation Plan? A method to calcu_ate the cost of support services that serve direct community services and programs i, Or... The Cost of Running the Business of Government 2 Why Implement an Indirect Cost Allocation lan? ...to :snow the f cost of providing services. Cacu1ate reimpursement for services _Irovicec 3y Genera_ Func: to of ter funcls, such as Water Func CaIcu cost -used user fees 77:o _lave sufficient cost of service information to sulport ot:ier cost recovery arrangements 3 Basic Analytical Steps P�. Examine Organization Identify all indirect and direct departments and functions Utilize Budget Data Compile total costs related to indirect services and program areas Determine Allocation Factors Form basis for the allocation of each indirect service Make Adjustments Adjust for non allocable costs, assigned costs, and other revisions Allocate Costs Allocate indirect costs based on proportions from allocation factors Calculate Full Overhead Identify each direct service's full share of indirect costs 4 Allocable costs of IN IRECT SERVICE PROGRAMS Two-Step Analytical Process costs costs DIRECT SERVICE PROGRAMS INDIRECT SERVICE PROGRAMS 5 share of indirect costs 5 Indirect Cost Centers City Council Mayor Administration Civil Service Examiner City Clerk Legislative Support Records Information Technology Human Resources City Attorney Public Works Facilities Public Works Facilities: Telephone Parks Maintenance City Buildings Finance: General Payroll AP Utilities State Auditor General Liability Insurance Property Insurance Vehicle Insurance Claims Judgments 6 Citywide Indirect Costs Indirect Service Department City Council Mayor Administration Mayor Civil Service Examiner City Clerk Legislative Support City Clerk Records Information Technology Human Resources Finance General Finance Payroll Finance AP Finance Utilities Finance State Auditor Finance General Liability Insurance Finance Property Insurance Finance Vehicle Insurance Finance Claims Judgments City Attorney Public Works Facilities Parks Maintenance City Buildings Public Works Facilities: Telephone Total Total Citywide Allocable Costs 261,235 683,466 66,780 131,384 158,867 676,421 506,660 510,707 201,019 369,989 249,685 42,734 303,277 88,186 54,261 320,606 490,671 1,461,678 57,399 129,439 6,764,464 7 Allocation Factors Indirect Service Department City Council Mayor Administration Mayor Civil Service Examiner City Clerk Legislative Support City Clerk Records Information Technology Human Resources Finance General Finance Payroll Finance AP Finance Utilities Finance State Auditor Finance General Liability Insurance Finance Property Insurance Finance Vehicle Insurance Finance Claims Judgments City Attorney Public Works Facilities Parks Maintenance City Buildings Public Works Facilities: Telephone Allocation Factor Agenda items Total actual expenditures Police Fire FTEs Agenda items Records count Computers FTEs Total actual expenditures FTEs Purchase orders Utility bills Total actual expenditures FTEs Property value and building square feet Vehicle Cost Total claims judgments by department Number of times general services used and total direct bills for special matters Square feet Staff time and square feet Telephone connections 8 Direct Service Department/Fund Allocated Indirect Costs General Fun Share of Citywide Percentage of Allocable Costs Allocable Costs 03 Mayor Human Services 42,314 0.6% 03 Mayor Boards Commissions 5,520 0.1% 03 Mayor Economic Development 41,818 0.6% 03 Mayor Animal Control/Public Health 234 0.0% 03 Mayor Other Programs 1,559 0.0% 04 City Clerk Reception 13,043 0.2% 04 City Clerk Licensing Passports 24,141 0.4% 07 Parks Administration 89,219 1.3% 07 Parks Recreation 717,626 10.6% 08 DCD Administration 41,284 0.6% 08 DCD Planning 316,036 4.7% 08 DCD Permit Coordination 35,508 0.5% 08 DCD Building 176,081 2.6% 08 DCD Code Enforcement Other 147,875 2.2% 09 Municipal Court 240,311 3.6% 10 Police 1,230,883 18.2% 11 Fire 932,428 13.8% 11 Fire Prevention 75,834 1.1% 13 PW Administration 172,247 2.5% 13 PW Maint Admin 43,207 0.6% 13 PW Development 58,757 0.9% 13 PW Engineering 163,119 2.4% 13 PW EOC 31,043 0.5% 15 Parks Maintenance Parks 125,815 1.9% 16 PW Street Maintenance 224,377 3.3% Subtotal General Fund 4,950,281 73.2% 9 Allocated Indirect Costs Other Funds Direct Service Department/Fund /Other Share of Citywide Allocable Costs Percentage of Allocable Costs FD 101 Hotel/MotelTax 86,193 1.3% FD 103 City Street 9,543 0.1% FD 104 Arterial Street 116,819 1.7% FD 107 Fire Equipment Cumulative Reserve 14 0.0% FD 207 Limited Tax G.O. Bonds, 1999 19,834 0.3% FD 208 Limited Tax G.O. Bonds, 2000 5,974 0.1% FD 209 Limited Tax G.O. Bonds, 2003 6,495 0.1% FD 210 Limited Tax G.O. Refunding Bonds, 2003 11,682 0.2% FD 301 Land Acquisition, Recreation Park Development 94,875 1.4% FD 302 Facility Replacement 23,848 0.4% FD 303 General Government Improvements 40,700 0.6% FD 401 Water 345,197 5.1% FD 402 Sewer 258,329 3.8% FD 404 Water /Sewer Revenue Bonds 6,043 0.1% FD 405 Bond Reserve 0.0% FD 411 Foster Golf Course 215,063 3.2% FD 412 Surface Water 201,399 3.0% FD 501 Equipment Rental 202,892 3.0% FD 502 Insurance Fund 107,030 1.6% FD 503 Insurance LEOFF 1 Fund 9,421 0.1% Other 6300 Bld. Tenants) 32,213 0.5% Other Library 20,620 0.3% Subtotal Other Funds Other 1,814,183 26.8% Grand Total I 6,764,464 I 100.0% 10 Allocated Public Works Costs 13 PW Facilities 13 PW Development 13 PW Engineering 13 PW EOC 16 PW Street Maintenance Subtotal General Fund FD 103 FD 104 FD 301 FD 302 FD 303 FD 401 FD 402 FD 412 FD 501 Subtotal Other Funds Division /Fund City Street Arterial Street Land Acquisition, Recreation Park Development Facility Replacement General Government Improvements Water Sewer Surface Water Equipment Rental Public Works Administration Division 106,570 53,285 53,285 21,314 127,884 362,339 10,657 10,657 79,928 37,300 95,913 53,285 287,740 Public Works Maintenance Administration Division 59,698 29,849 29,849 11,940 71,638 202,973 5,970 5,970 44,774 20,894 53,728 29,849 161,185 Total Public Works Administration Allocation 166,268 83,134 83,134 33,254 199,522 565,312 16,627 16,627 124,701 58,194 149,641 83,134 448,924 Grand Total 650,079 364,158 1,014,237 Note: Public Works Administration and Maintenance Administration costs were allocated using Public Works FTEs 11 urren vs. ropose Allocation n s irec os Current 2010 2010 ID C Plan PW Adm FD 101 Hotel/MotelTax 86,193 FD 103 City Street 9,543 FD 104 Arterial Street 639,936 116,819 16,627 FD 107 Fire Equipment Cumulative Reserve 14 FD 207 Limited Tax G.O. Bonds, 1999 19,834 a FD 208 Limited Tax G.O. Bonds, 2000 5,974 FD 209 Limited Tax G.O. Bonds, 2003 6,495 FD 210 Limited Tax G.O. Refunding Bonds, 2003 11,682 FD 301 Land Acquisition, Recreation Park Development 60,446 94,875 FD 302 Facility Replacement 23,848 FD 303 General Government Improvements 40,700 FD 401 Water 629,057 345,197 FD 402 Sewer 514,827 258,329 FD 404 Water /Sewer Revenue Bonds 6,043 FD 405 Bond Reserve FD 411 Foster Golf Course 28,633 215,063 FD 412 Surface Water 391,308 201,399 149,641 FD 501 Equipment Rental 210,063 202,892 83,134 FD 502 Insurance Fund 107,030 FD 503 Insurance LEOFF 1 Fund 9,421 6300 B1d. Tenants 32,213 Library 20,620 Total Other Funds 2,474,271 1,814,183 448,924 16,627 124,701 58,194 D ifference Total 86,193 86,193 9,543 9,543 133,446 (506,490) 14 14 19,834 19,834 5,974 5,974 6,495 6,495 11,682 11,682 94,875 34,429 23,848 23,848 57,326 57,326 469,898 (159,159) 316,523 (198,304) 6,043 6,043 215,063 186,429 351,040 (40,268) 286,027 75,964 107,030 107,030 9,421 9,421 32,213 32,213 20,620 20,620 2,263,108 (211,163) ;w1,� 12 utcomes Updated tie City's Indirect Cost Allocation R an metiodology, and a_ _ocated acministrative costs for Pulic WorZcs $6,764,000 in total 2008 indirect costs $2,263,000 in total costs aiocated to funds °tiler flan be Genera Fund (A__ Ober Funds), inc $1,814,000 in total indirect costs $449,000 in administrative costs for Public Works (includes costs for both the Administration and Maintenance Administration Divisions) 13 Outcomes (continued) The new allocation to Al__ Other Funds is $211,000 ess than the City's 20:.0 budgeted p .an, but Public Works Engineering is now billing funds directly for services, instead of being included as part of the plan. The overall net impact to the General Fund in 2010 could be positive if the engineering work billed to other funds is greater than $211,163. The new allocation for Public Works Administration is slightly lower than the allocation in 2004, but reflects the true cost of services. The Indirect Cost Allocation Plan portion has increased significantly (72 from $1,053,857 in 2004 to $1,814,183 for the new allocation. This reflects the true cost of services provided by the General Fund to All Other Funds. 14