CC 2019-03-26_08c Cost Allocation Plan
MEMORANDUM
TO: CITY COUNCIL
FROM: SHANNON ESENWEIN, DIRECTOR OF ADMINISTATIVE SERVICES
SUBJECT: CONSIDERATION OF APPROVAL OF COST ALLOCATION PLAN
DATE: MARCH 26, 2019
SUMMARY OF ACTION:
Approving the Cost Allocation Plan and amending the budget to reflect updated
calculations of costs will allow for more accurate accounting of the total cost of providing
city services.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
The General Fund receives resources from other funds to cover the cost of services
provided by the General Fund. The original budget estimated $1,102,700 for these
transfers; the updated Cost Allocation Plan calculates the amount at $1,109,300, an
increase of $6,600.
RECOMMENDATION:
It is recommended the City Council approve the Fiscal Year 2018-19 Cost Allocation Plan
and amend the budget as appropriate.
BACKGROUND:
A Cost Allocation Plan is a method of recovering the cost of General Fund services
provided to other funds. In March of 1996, the first Cost Allocation Plan was adopted by
the City Council. This was the first time that City costs were identified and divided between
direct and indirect costs.
Direct costs are expenses incurred in providing a specific cost objective, such as street
maintenance, police protection, landscape maintenance, and water service. Indirect costs
are expenses not readily identifiable with a particular operating program, but rather are
incurred for a joint purpose, which benefits more than one fund/department. Common
examples of indirect costs are accounting, purchasing, personnel, and building
maintenance. Though indirect costs are not readily identifiable with direct operating
programs, they can be allocated based on a rational, logical methodology.
Item 8.c. - Page 1
CITY COUNCIL
CONSIDERATION OF APPROVAL OF COST ALLOCATION PLAN
MARCH 26, 2019
PAGE 2
ANALYSIS OF ISSUES:
The Cost Allocation Plan is a method of allocating indirect costs, provided by the General
Fund, based on the proportionate share of benefits received. Different indirect costs have
different methods of allocation. For instance, payroll costs are allocated based on the
number of full time positions and building maintenance costs are allocated based on the
number of departmental square feet in City buildings.
The Cost Allocation Plan is based on the current year’s adopted budget. The budget is
used for allocation purposes, as the amounts identified therein are the best available
projection of costs. Each year, the Cost Allocation Plan is updated because the more
current the numbers, the better the allocation will reflect actual costs. More frequent
updating is not recommended as little additional value would be gained for the staff
resources that would be expended.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
- Approve the plan and amend the budget;
- Do not approve the plan and retain current cost allocation numbers;
- Modify and approve the plan;
- Provide direction to staff.
ADVANTAGES:
The Cost Allocation Plan provides revenue to the General Fund to reimburse costs for
services from departments funded by the General Fund, but provided to fee based
operations. Updating the Plan provides for the most current calculation of costs and,
therefore the most current appropriate reimbursement amounts.
DISADVANTAGES:
Reimbursements to the General Fund negatively impact other funds, particularly the
Water and Sewer Funds. However, the adjustment recommended in the cost allocation
plan are minimal and the reimbursements are necessary in order to account for the full
cost of providing services.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2.
Attachments:
1. Cost Allocation Plan
Item 8.c. - Page 2
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN
FISCAL YEAR 2018-2019
Item 8.c. - Page 3
ATTACHMENT 1
i
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN
TABLE OF CONTENTS
Page
Introduction
Overview-Purpose of Cost Allocation Plan ...................................................................................................................1
Determining Direct and Indirect Costs ..........................................................................................................................1
Allocating Indirect Costs ...............................................................................................................................................2
Uses of the Cost Allocation Plan ...................................................................................................................................3
Preparation Frequency ...................................................................................................................................................3
Indirect Cost Allocation
Summary of Direct and Indirect Costs...........................................................................................................................4
Schedule of Exclusions by Activity ...............................................................................................................................5
Schedule of Exclusions by Type ....................................................................................................................................6
Bases of Allocation of Indirect Costs ............................................................................................................................7
Summary of Departmental Indirect Cost Allocations and Rates ...................................................................................8
Summary of Indirect Cost Allocations ..........................................................................................................................9
Indirect Program Cost Allocations:
Legislation & Policy ........................................................................................................................................10
Administration .................................................................................................................................................11
Administrative Services-Accounts Payable .....................................................................................................12
Administrative Services-Payroll ......................................................................................................................13
Administrative Services-Administration .........................................................................................................14
City Clerk .........................................................................................................................................................15
City Attorney ...................................................................................................................................................16
Non Departmental ............................................................................................................................................17
Government Buildings Maintenance-Personnel ..............................................................................................18
Government Buildings Maintenance-Services/Supplies .................................................................................19
Auto Shop ........................................................................................................................................................20
Item 8.c. - Page 4
1
CITY OF ARROYO GRANDE
INTRODUCTION TO THE COST ALLOCATION PLAN
OVERVIEW
Purpose
The purpose of this cost allocation plan is to estimate the total costs of providing direct services to the citizens of Arroyo Grande. A separate cost
accounting analysis is required to do this, because in virtually all organizations, public or private, the cost of delivering services or producing goods
can be classified into two categories: direct and indirect costs.
Direct and Indirect Costs
Direct costs are those which can be specifically identified with a cost objective, such as police protection, street maintenance, or water service.
Indirect costs are support costs, which are not readily identifiable with a direct operating program, but are incurred for a joint purpose that benefits
more than one cost objective. Typical indirect cost activities in a government are accounting, legal services, and building maintenance. Although
indirect costs are generally not identifiable with direct cost programs, their cost should be reflected as an integral part of the total cost of providing
specific goods or services.
Budgeting and Accounting for Indirect Costs
All indirect costs could theoretically be estimated and charged to direct service programs, but practical considerations generally preclude such
handling. Instead most organizations separately budget and account for indirect costs, and provide a supplemental reporting vehicle to display
estimated total costs to provide a direct program service. Such is the purpose of cost allocation plans: to allocate indirect costs to direct service
programs in a logical and uniform manner.
Determining Direct and Indirect Costs
The first step in preparing the City’s cost allocation plan is determining direct and indirect costs. The costs of departmental programs that primarily
provide service to the public are identified as direct costs whereas the costs of programs which primarily provide services to the organization are
identified as indirect costs. In accordance with generally accepted accounting principles, only operating costs are utilized in allocation plans: debt
service, transfers, and capital outlay costs are excluded from calculations.
Item 8.c. - Page 5
CITY OF ARROYO GRANDE
Introduction to the Cost Allocation Plan
2
Allocating Indirect Costs
Indirect Cost Rates
For general purposes, a citywide indirect cost rate can be used as the basis for allocating indirect costs. Such a rate is simply the ratio between
indirect costs and direct costs, which can be computed for the City as a whole once the direct and indirect cost base has been determined. Provided
on page 4 is a summary of direct and indirect costs for Arroyo Grande based upon the 2018-2019 operating budget along with the citywide indirect
cost rate. By applying the overall indirect cost rate to any specific direct cost program, the total cost of that program can be determined. For example,
if the overall indirect cost rate were 20%, the total cost of a $100,000 direct cost program in Arroyo Grande would be $120,000.
Bases of Allocation
The general-purpose method above assumes that all indirect costs are incurred proportionately to each of the direct service programs. However, the
benefit received from certain support department programs by a direct service department may be more closely related to an activity indicator other
than cost. For example, if a service department does not have any City staffing associated with it; distributing personnel costs to it from a support
department would not be a reasonable allocation of costs.
Therefore, the cost allocation plan developed for Arroyo Grande establishes separate and variable basis of cost allocation for certain major
identifiable cost categories. Indirect costs can thus be allocated in a fair yet simple manner, and also consistently. Page 7 displays the primary
methods of allocation used for various indirect cost programs. Recognition is given to the concept that the cost of gathering and dividing information
to develop a reasonable cost allocation plan should not exceed the benefits likely to be gained from the study. In performing the cost allocations, all
indirect costs have been allocated only to direct programs rather than using a more complex sequential allocation system. Under a sequential system
for example, City Administration costs, or Administrative Services, or City Attorney costs would first be allocated to other indirect cost programs.
In turn, those expanded indirect costs would then be allocated to the direct cost programs. Such a process would be fairly time consuming. Although
there are some conceptual difficulties with this approach, the gain from a complex sequential allocation system would be insignificant, and the cost
of preparation and review is significantly reduced in the simpler approach utilized here.
Item 8.c. - Page 6
CITY OF ARROYO GRANDE
Introduction to the Cost Allocation Plan
3
USES OF THE COST ALLOCATION PLAN
This cost allocation plan can be used in numerous financial decision-making situations. The main areas of use of this basic analytical tool could be:
Water Enterprise, Sewer Enterprise and Other Utility Fund Accounting
A complete costing of Arroyo Grande’s water enterprise and sewer enterprise can be achieved by extended allocation of General Fund indirect
support costs to utility operations. The cost allocation plan could achieve such a goal.
General Fund User Charges
This cost allocation plan can be utilized to determine appropriate user fees for General Fund services such as planning applications and recreation
activities.
Grant Administration
Under Federal cost accounting policies (Circular A-87) it is permissible to include indirect costs in accounting for grant programs. By establishing
indirect cost rates, total costs can be applied for and recovered. Modest changes to allocations might be required under Circular A-87 when used for
this purpose.
Contracting Out Versus In-House
City employees could make frequent use of this cost allocation plan when comparing the cost of providing a service “in-house” to contracting with
an outside service provider.
PREPARATION FREQUENCY
In a true cost accounting system, indirect costs would be computed and allocated on an ongoing basis throughout the fiscal year based on actual
costs. However, frequent updating in municipal finance would not serve any specific purpose, but would consume significant accounting resources.
As such, it is recommended that the cost allocation plan be prepared annually.
Item 8.c. - Page 7
4
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Summary of Direct and Indirect Costs
Planning & Development 490,900$ Legislation and Policy 96,800$
Police 6,666,100
Engineering 517,400 City Manager 569,100
Building Safety 381,600
Administrative Services:
Public Works: Accounts Payable 352,380
Public Works Admin 610,300 Payroll 176,190
Sewer Maintenance 396,000 Business Licensing 58,730
Street Maintenance 706,800 Administrative Services Total 587,300
Water System Maintenance 4,990,900
Lopez Water System - Legislative & Information Svcs:
Parks Maintenance 441,500 City Clerk 323,400
Soto Sports Complex 234,100 Information Technology 545,900
Printing/Copying 34,600
Recreation:Legislative & Information Svcs Total 903,900
Administration 475,300
Other Recreation Programs 598,100 City Attorney 283,200
Other Budget Activity:Non Departmental 1,167,200
Landscape District Maintenance 5,700
Parkside Assessment District 30,000 Government Buildings
Gracelane Assessment District 7,100 Personnel 146,600
Transportation 20,000 Services/Supplies 85,300
Downtown Parking District 4,400 Government Buildings Total 231,900
Auto Shop 159,000
TOTAL DIRECT COSTS 16,576,200 TOTAL INDIRECT COSTS 3,998,400
Overall indirect cost rate:
(indirect costs divided by direct costs)
24.12%
Capital projects, capital equipment, transfers, and debt services costs are excluded from amounts shown, for calculating
indirect cost rates in accordance with generally accepted accounting principles. Only operating costs are utilized. See
pages five (5) and six (6) for schedules of exclusions.
DIRECT PROGRAMS COSTS INDIRECT PROGRAM COSTS
Item 8.c. - Page 8
5
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Schedule of Exclusions By Activity
Police:City Council:
Debt 133,900$ Capital items 1,000$
Capital items 24,500 158,400$
Parks:Administration:
Debt 20,500 Capital items 1,527,900
Recreation:Debt -
Capital items 1,200 Non Departmental:
Transportation Debt 11,600
Transfers 15,700 Transfers 45,000
Public Works Admin 56,600
Debt 1,400 City Manager/Sales Tax:
Streets Debt 20,000
Debt 20,300 Transfers -
Transfers 294,500 314,800 20,000
Engineering:
Capital items - Government Buildings:
Sewer Maintenance: Debt -
Capital items 611,300
Debt 8,700 TOTAL INDIRECT PROGRAM COSTS 1,605,500
Transfers 99,100 719,100
Landscape Maint:TOTAL DIRECT & INDIRECT 3,861,300$
Transfers 2,000
Grace Lane Maint:
Transfers 3,100
Parkside Maint:
Transfers 6,100
Water System:
Capital items 9,600 Capital items 2,175,500$
Transfers 986,900 Debt 229,800
Debt 13,400 1,009,900 Transfers 1,456,000
Downtown Parking:
Transfers 3,600 TOTAL DIRECT & INDIRECT 3,861,300$
TOTAL DIRECT PROGRAM COSTS 2,255,800$
SUMMARY OF EXCLUSIONS:
DIRECT PROGRAM COSTS INDIRECT PROGRAM COSTS
Item 8.c. - Page 9
6
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Schedule of Exclusions by Type
INDIRECT PROGRAM COSTS
Capital items:Capital items:
Police 24,500$ City Council 1,000$
Engineering - Administration 1,527,900
Recreation 1,200
Water 9,600
Sewer Maintenance 611,300 Total Capital Items Exclusion 1,528,900$
Total Equipment Exclusion 646,600$ Debt:
Government Buildings -
Debt: Non Departmental 11,600
Police 133,900 IT -
Parks 20,500 City Manager/Sales Tax 20,000
Public Works Admin 1,400 Total Debt Exclusion 31,600
Water 13,400
Sewer Maintenance 8,700 Transfers:
Streets 20,300 Non Departmental 45,000
City Manager/Sales Tax -
Total Debt Exclusion 198,200
Total Transfer Exclusion:45,000
Transfers:
Lopez - TOTAL INDIRECT PROGRAM COSTS 1,605,500
Landscape 2,000
Grace Lane 3,100
Parkside 6,100 TOTAL DIRECT & INDIRECT 3,861,300$
Streets 294,500
Transportation 15,700
Downtown Parking 3,600 SUMMARY OF EXCLUSIONS:
Water 986,900
Sewer Maintenance 99,100 Capital items 2,175,500$
Debt 229,800
Total Transfer Exclusion:1,411,000 Transfers 1,456,000
TOTAL DIRECT PROGRAM COSTS 2,255,800$ TOTAL EXCLUSIONS 3,861,300$
DIRECT PROGRAM COSTS
Item 8.c. - Page 10
7
Legislation and Policy Council Agenda Items
City Manager Total Operating Budget
Non Departmental Total Operating Budget
Administrative Services:
Accounts Payable (60% of Budget) Total Operating Budget
Payroll (30% of Budget)Full Time Equivalent (FTE) Staffing
Administration (10% of Budget)Total Operating Budget
Legislative & Information Services
City Clerk Council Agenda Items
Printing/Copying Total Operating Budget
Information Technology Total Operating Budget
City Attorney Total Operating Budget
Government Buildings:
Personnel Square Footage (w/o Fire Station)
Services and Supplies Dept. Square Footage
Auto Shop Vehicle Maintenance Budget
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Bases of Allocation of Indirect Costs
Item 8.c. - Page 11
8
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Summary of Departmental Indirect Cost Allocations and Rates
Indirect Direct Indirect Legis. &City Admin.City City Non-Govt. Bldg.Auto
Direct Program Program Rate Cost Cost Policy Admin.Services Clerk Attorney Depart.Maint.Shop
Planning & Development 56.44%490,900$ 277,067$ 38,759$ 34,028$ 24,485$ 129,489$ 8,383$ 34,549$ 7,374$ -$
Police 22.25%6,666,100 1,483,503 9,690 462,484 236,817 32,372 113,931 469,565 85,965 72,679
Building Safety 20.86%381,600 79,614 - 26,441 13,931 - 6,514 26,846 4,754 1,129
Public Works:
Engineering 22.70%517,400 117,467 968 35,868 19,539 3,234 8,836 36,417 7,374 5,231
Public Works Admin 30.79%610,300 187,936 14,539 42,305 21,172 48,575 10,422 42,953 6,841 1,129
Sewer Maintenance 25.27%396,000 100,075 1,936 27,475 15,869 6,468 6,768 27,896 6,841 6,821
Street Maintenance 34.88%706,800 246,503 14,539 48,973 25,354 48,575 12,064 49,723 6,841 40,434
Water System Maint.19.73%4,990,900 984,856 7,754 346,145 138,779 25,904 85,272 351,444 13,659 15,900
Total Public Works 22.67%7,221,400 1,636,837 39,736 500,766 220,713 132,756 123,362 508,432 41,556 69,515
Parks Maintenance 22.64%441,500 99,950 - 30,579 20,344 - 7,533 31,048 - 10,446
Recreation:
Administration 25.57%475,300 121,522 1,936 32,994 23,216 6,468 8,128 33,499 15,282 -
Other Rec. Programs 34.56%598,100 206,706 - 41,501 35,878 - 10,224 42,136 76,968 -
Soto Sports Complex 29.46%234,100 68,971 3,872 16,209 10,272 12,936 3,993 16,458 - 5,231
Total Recreation 30.38%1,307,500 397,199 5,808 90,703 69,366 19,404 22,344 92,092 92,250 5,231
Other Activity:
Landscape Maintenance 37.96%5,700 2,164 290 345 123 970 85 350 - -
Parkside Assessment District 22.27%30,000 6,681 290 2,069 740 970 510 2,101 - -
Gracelane Maint.34.72%7,100 2,465 290 460 164 970 113 467 - -
Transportation 39.08%20,000 7,815 968 1,380 493 3,234 340 1,401 - -
Downtown Parking 116.03%4,400 5,105 968 345 123 3,234 85 350 - -
TOTALS 24.12%16,576,200$ 3,998,400$ 96,800$ 1,149,600$ 587,300$ 323,400$ 283,200$ 1,167,200$ 231,900$ 159,000$
Item 8.c. - Page 12
9
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Summary of Indirect Cost Allocations
INDIRECT PROGRAM COST ALLOCATIONS
Legis. &Admin-City City Non-Gov. Bldg.Gov. Bldg.Auto
Direct Program Program Policy istration Acct.Payroll Admin.Clerk Attorney Depart.Staff Supplies Shop Total
Planning & Develop.38,759$ 34,028$ 10,430$ 12,316$ 1,738$ 129,489$ 8,383$ 34,549$ 4,662$ 2,713$ -$ 277,067$
Police 9,690 462,484 141,762 71,427 23,627 32,372 113,931 469,565 54,345 31,621 72,679 1,483,503
Building Safety - 26,441 8,105 4,475 1,351 - 6,514 26,846 3,005 1,749 1,129 79,614
Public Works:
Engineering 968 35,868 10,994 6,713 1,832 3,234 8,836 36,417 4,662 2,713 5,231 117,467
Public Works Admin 14,539 42,305 12,968 6,043 2,161 48,575 10,422 42,953 4,325 2,516 1,129 187,936
Sewer Maintenance 1,936 27,475 8,422 6,043 1,404 6,468 6,768 27,896 4,325 2,516 6,821 100,075
Street Maintenance 14,539 48,973 15,011 7,840 2,502 48,575 12,064 49,723 4,325 2,516 40,434 246,503
Water System Maint.7,754 346,145 106,102 14,994 17,684 25,904 85,272 351,444 8,635 5,024 15,900 984,856
Total Public Works 39,736 500,766 153,497 41,634 25,583 132,756 123,362 508,432 26,271 15,286 69,515 1,636,837
Parks Maintenance - 30,579 9,373 9,409 1,562 - 7,533 31,048 - - 10,446 99,950
Recreation:
Administration 1,936 32,994 10,113 11,417 1,686 6,468 8,128 33,499 9,661 5,621 - 121,522
Other Rec. Programs - 41,501 12,721 21,037 2,120 - 10,224 42,136 48,657 28,311 - 206,706
Soto Sports Complex 3,872 16,209 4,969 4,475 828 12,936 3,993 16,458 - - 5,231 68,971
Total Recreation 5,808 90,703 27,803 36,929 4,634 19,404 22,344 92,092 58,317 33,932 5,231 397,199
Other Budget Activity:
Landscape Maint.290 345 106 - 18 970 85 350 - - - 2,164
Parkside Maint.290 2,069 634 - 106 970 510 2,101 - - - 6,681
Gracelane Maint.290 460 141 - 23 970 113 467 - - - 2,465
Transportation 968 1,380 423 - 70 3,234 340 1,401 - - - 7,815
Downtown Parking 968 345 106 - 18 3,234 85 350 - - - 5,105
TOTALS 96,800$ 1,149,600$ 352,380$ 176,190$ 58,730$ 323,400$ 283,200$ 1,167,200$ 146,600$ 85,300$ 159,000$ 3,998,400$
Administrative Services
Item 8.c. - Page 13
10
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Indirect Program Cost Allocation
INDIRECT COST PROGRAM: Legislation & Policy
BUDGET: $96,800
BASE OF ALLOCATION: Council Agenda Items
BASE OF PERCENT COST
DIRECT COST PROGRAM ALLOCATION OF TOTAL ALLOCATION
Planning & Development 40 40.04%38,759$
Police 10 10.01%9,690
Engineering 1 1.00%968
Building Safety 0 0.00%-
Public Works:
Public Works Admin 15 15.02%14,539
Sewer Maintenance 2 2.00%1,936
Street Maintenance 15 15.02%14,539
Water System Maintenance 8 8.01%7,754
Parks Maintenance 0 0.00%-
Soto Sports Complex 4 4.00%3,872
Recreation:
Administration 2 2.00%1,936
Other Programs 0 0.00%-
Other Budget Activity:
Landscape Maintenance 0.3 0.30%290
Parkside Maintenance 0.3 0.30%290
Gracelane Maintenance 0.3 0.30%290
Transportation 1 1.00%968
Downtown Parking District 1 1.00%968
TOTAL DIRECT COST PROGRAMS 100 100.00%
TOTAL INDIRECT COST ALLOCATION 96,800$
Item 8.c. - Page 14
11
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Indirect Program Cost Allocation
INDIRECT COST PROGRAM: Administration
BUDGET: $1,149,600
BASE OF ALLOCATION: Total Operating Budget
BASE OF PERCENT COST
DIRECT COST PROGRAM ALLOCATION OF TOTAL ALLOCATION
Planning & Development 490,900$ 2.96%34,028$
Police 6,666,100 40.23%462,484
Engineering 517,400 3.12%35,868
Building Safety 381,600 2.30%26,441
Public Works:
Public Works Admin 610,300 3.68%42,305
Sewer Maintenance 396,000 2.39%27,475
Street Maintenance 706,800 4.26%48,973
Water System Maintenance 4,990,900 30.11%346,145
Parks Maintenance 441,500 2.66%30,579
Soto Sports Complex 234,100 1.41%16,209
Recreation:
Administration 475,300 2.87%32,994
Other Programs 598,100 3.61%41,501
Other Budget Activity:
Landscape Maintenance 5,700 0.03%345
Parkside Maintenance 30,000 0.18%2,069
Gracelane Maintenance 7,100 0.04%460
Transportation 20,000 0.12%1,380
Downtown Parking District 4,400 0.03%345
TOTAL DIRECT COST PROGRAMS 16,576,200$ 100.00%
TOTAL INDIRECT COST ALLOCATION 1,149,600$
Item 8.c. - Page 15
12
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Indirect Program Cost Allocation
INDIRECT COST PROGRAM: Administrative Services-Accounts Payable
BUDGET: $352,380
BASE OF ALLOCATION: Total Operating Budget
BASE OF PERCENT COST
DIRECT COST PROGRAM ALLOCATION OF TOTAL ALLOCATION
Planning & Development 490,900$ 2.96%10,430$
Police 6,666,100 40.23%141,762
Engineering 517,400 3.12%10,994
Building Safety 381,600 2.30%8,105
Public Works:
Public Works Admin 610,300 3.68%12,968
Sewer Maintenance 396,000 2.39%8,422
Street Maintenance 706,800 4.26%15,011
Water System Maintenance 4,990,900 30.11%106,102
Parks Maintenance 441,500 2.66%9,373
Soto Sports Complex 234,100 1.41%4,969
Recreation:
Administration 475,300 2.87%10,113
Other Programs 598,100 3.61%12,721
Other Budget Activity:
Landscape Maintenance 5,700 0.03%106
Parkside Maintenance 30,000 0.18%634
Gracelane Maintenance 7,100 0.04%141
Transportation 20,000 0.12%423
Downtown Parking District 4,400 0.03%106
TOTAL DIRECT COST PROGRAMS 16,576,200$ 100.00%
TOTAL INDIRECT COST ALLOCATION 352,380$
Item 8.c. - Page 16
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CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Indirect Program Cost Allocation
INDIRECT COST PROGRAM: Administrative Services-Payroll
BUDGET: $176,190
BASE OF ALLOCATION: Full Time Equivalent (FTE) Employees
BASE OF PERCENT COST
DIRECT COST PROGRAM ALLOCATION OF TOTAL ALLOCATION
Planning Division 5.5 6.99%12,316$
Police 31.9 40.54%71,427
Engineering Division 3.0 3.81%6,713
Building Safety Division 2.0 2.54%4,475
Public Works:
Public Works Admin 2.7 3.43%6,043
Sewer Maintenance 2.7 3.43%6,043
Street Maintenance 3.5 4.45%7,840
Water System Maintenance 6.7 8.51%14,994
Parks Maintenance 4.2 5.34%9,409
Soto Sports Complex 2.0 2.54%4,475
Recreation:
Administration 5.1 6.48%11,417
Other Programs 9.4 11.94%21,037
TOTAL DIRECT COST PROGRAMS 78.70 100.00%
TOTAL INDIRECT COST ALLOCATION 176,190$
Item 8.c. - Page 17
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CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Indirect Program Cost Allocation
INDIRECT COST PROGRAM: Administrative Services- Administration
BUDGET: $58,730
BASE OF ALLOCATION: Total Operating Budget
BASE OF PERCENT COST
DIRECT COST PROGRAM ALLOCATION OF TOTAL ALLOCATION
Planning & Development 490,900$ 2.96%1,738$
Police 6,666,100 40.23%23,627
Engineering 517,400 3.12%1,832
Building Safety 381,600 2.30%1,351
Public Works:
Public Works Admin 610,300 3.68%2,161
Sewer Maintenance 396,000 2.39%1,404
Street Maintenance 706,800 4.26%2,502
Water System Maintenance 4,990,900 30.11%17,684
Parks Maintenance 441,500 2.66%1,562
Soto Sports Complex 234,100 1.41%828
Recreation:
Administration 475,300 2.87%1,686
Other Programs 598,100 3.61%2,120
Other Budget Activity:
Landscape Maintenance 5,700 0.03%18
Parkside Maintenance 30,000 0.18%106
Gracelane Maintenance 7,100 0.04%23
Transportation 20,000 0.12%70
Downtown Parking District 4,400 0.03%18
TOTAL DIRECT COST PROGRAMS 16,576,200$ 100.00%
TOTAL INDIRECT COST ALLOCATION 58,730$
Item 8.c. - Page 18
15
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Indirect Program Cost Allocation
INDIRECT COST PROGRAM:City Clerk
BUDGET: $323,400
BASE OF ALLOCATION: Council Agenda Items
BASE OF PERCENT COST
DIRECT COST PROGRAM ALLOCATION OF TOTAL ALLOCATION
Planning & Development 40 40.04%129,489$
Police 10 10.01%32,372
Engineering 1 1.00%3,234
Building Safety 0 0.00%-
Public Works:
Public Works Admin 15 15.02%48,575
Sewer Maintenance 2 2.00%6,468
Street Maintenance 15 15.02%48,575
Water System Maintenance 8 8.01%25,904
Parks Maintenance 0 0.00%-
Soto Sports Complex 4 4.00%12,936
Recreation:
Administration 2 2.00%6,468
Other Programs 0 0.00%-
Other Budget Activity:
Landscape Maintenance 0.3 0.30%970
Parkside Maintenance 0.3 0.30%970
Gracelane Maintenance 0.3 0.30%970
Transportation 1 1.00%3,234
Downtown Parking District 1 1.00%3,234
TOTAL DIRECT COST PROGRAMS 100 100.00%
TOTAL INDIRECT COST ALLOCATION 323,400$
Item 8.c. - Page 19
16
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Indirect Program Cost Allocation
INDIRECT COST PROGRAM: City Attorney
BUDGET: $283,200
BASE OF ALLOCATION: Total Operating Budget
BASE OF PERCENT COST
DIRECT COST PROGRAM ALLOCATION OF TOTAL ALLOCATION
Planning & Development 490,900$ 2.96%8,383$
Police 6,666,100 40.23%113,931
Engineering 517,400 3.12%8,836
Building Safety 381,600 2.30%6,514
Public Works:
Public Works Admin 610,300 3.68%10,422
Sewer Maintenance 396,000 2.39%6,768
Street Maintenance 706,800 4.26%12,064
Water System Maintenance 4,990,900 30.11%85,272
Parks Maintenance 441,500 2.66%7,533
Soto Sports Complex 234,100 1.41%3,993
Recreation:
Administration 475,300 2.87%8,128
Other Programs 598,100 3.61%10,224
Other Budget Activity:
Landscape Maintenance 5,700 0.03%85
Parkside Maintenance 30,000 0.18%510
Gracelane Maintenance 7,100 0.04%113
Transportation 20,000 0.12%340
Downtown Parking District 4,400 0.03%85
TOTAL DIRECT COST PROGRAMS 16,576,200$ 100.00%
TOTAL INDIRECT COST ALLOCATION 283,200$
Item 8.c. - Page 20
17
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Indirect Program Cost Allocation
INDIRECT COST PROGRAM: Non Departmental
BUDGET: $1,167,200
BASE OF ALLOCATION: Total Operating Budget
BASE OF PERCENT COST
DIRECT COST PROGRAM ALLOCATION OF TOTAL ALLOCATION
Planning & Development 490,900$ 2.96%34,549$
Police 6,666,100 40.23%469,565
Engineering 517,400 3.12%36,417
Building Safety 381,600 2.30%26,846
Public Works:
Public Works Admin 610,300 3.68%42,953
Sewer Maintenance 396,000 2.39%27,896
Street Maintenance 706,800 4.26%49,723
Water System Maintenance 4,990,900 30.11%351,444
Parks Maintenance 441,500 2.66%31,048
Soto Sports Complex 234,100 1.41%16,458
Recreation:
Administration 475,300 2.87%33,499
Other Programs 598,100 3.61%42,136
Other Budget Activity:
Landscape Maintenance 5,700 0.03%350
Parkside Maintenance 30,000 0.18%2,101
Gracelane Maintenance 7,100 0.04%467
Transportation 20,000 0.12%1,401
Downtown Parking District 4,400 0.03%350
TOTAL DIRECT COST PROGRAMS 16,576,200$ 100.00%
TOTAL INDIRECT COST ALLOCATION 1,167,200$
Item 8.c. - Page 21
18
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Indirect Program Cost Allocation
INDIRECT COST PROGRAM: Government Building Maintenance Personnel
BUDGET: $146,600
BASE OF ALLOCATION: Department Square Footage
BASE OF PERCENT COST
DIRECT COST PROGRAM ALLOCATION OF TOTAL ALLOCATION
Planning & Development 646 3.18%4,662$
Police 7,528 37.07%54,345
Engineering 646 3.18%4,662
Building Safety 416 2.05%3,005
Public Works:
Public Works Admin 598 2.95%4,325
Sewer Maintenance 598 2.95%4,325
Street Maintenance 598 2.95%4,325
Water System Maintenance 1,195 5.89%8,635
Parks Maintenance - 0.00%-
Soto Sports Complex - 0.00%-
Recreation:
Administration 1,338 6.59%9,661
Other Programs 6,738 33.19%48,657
Other Budget Activity:
Landscape Maintenance - 0.00%-
Parkside Maintenance - 0.00%-
Gracelane Maintenance - 0.00%-
Transportation - 0.00%-
Downtown Parking District - 0.00%-
TOTAL DIRECT COST PROGRAMS 20,301 100.00%
TOTAL INDIRECT COST ALLOCATION 146,600$
Item 8.c. - Page 22
19
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Indirect Program Cost Allocation
INDIRECT COST PROGRAM: Government Building Maintenance Supplies
BUDGET: $85,300
BASE OF ALLOCATION: Department Square Footage
BASE OF PERCENT COST
DIRECT COST PROGRAM ALLOCATION OF TOTAL ALLOCATION
Planning & Development 646 3.18%2,713$
Police 7,528 37.07%31,621
Engineering 646 3.18%2,713
Building Safety 416 2.05%1,749
Public Works:
Public Works Admin 598 2.95%2,516
Sewer Maintenance 598 2.95%2,516
Street Maintenance 598 2.95%2,516
Water System Maintenance 1,195 5.89%5,024
Parks Maintenance - 0.00%-
Soto Sports Complex - 0.00%-
Recreation:
Administration 1,338 6.59%5,621
Other Programs 6,738 33.19%28,311
Other Budget Activity:
Landscape Maintenance - 0.00%-
Parkside Maintenance - 0.00%-
Gracelane Maintenance - 0.00%-
Transportation - 0.00%-
Downtown Parking District - 0.00%-
TOTAL DIRECT COST PROGRAMS 20,301 100.00%
TOTAL INDIRECT COST ALLOCATION 85,300$
Item 8.c. - Page 23
20
CITY OF ARROYO GRANDE
COST ALLOCATION PLAN FOR FISCAL YEAR 2018-2019
Indirect Program Cost Allocation
INDIRECT COST PROGRAM: Auto Shop
BUDGET: $159,000
BASE OF ALLOCATION: Vehicle Maintenance Budget
BASE OF PERCENT COST
DIRECT COST PROGRAM ALLOCATION OF TOTAL ALLOCATION
Planning & Development - 0.00%-
Police 32,000 45.71%72,679
Engineering 2,300 3.29%5,231
Building Safety 500 0.71%1,129
Public Works:
Public Works Admin 500 0.71%1,129
Sewer Maintenance 3,000 4.29%6,821
Street Maintenance 17,800 25.43%40,434
Water System Maintenance 7,000 10.00%15,900
Parks Maintenance 4,600 6.57%10,446
Soto Sports Complex 2,300 3.29%5,231
Recreation:
Administration - 0.00%-
Other Programs - 0.00%-
Other Budget Activity:
Landscape Maintenance - 0.00%-
Parkside Maintenance - 0.00%-
Gracelane Maintenance - 0.00%-
Transportation - 0.00%-
Downtown Parking District - 0.00%-
TOTAL DIRECT COST PROGRAMS 70,000$ 100.00%
TOTAL INDIRECT COST ALLOCATION 159,000$
Item 8.c. - Page 24