New Search
3/8/90 Exhibit A <br /> To: Johnny Medlin <br /> From: George Jessie <br /> Subject: CENTRAL SERVICES ALLOCATION: INDIRECT RATES <br /> The City of Eugene's General Fund provides centralized support functions to <br /> various operations throughout the city. These functions typically include <br /> General Administration, Payroll, Personnel, Data Processing, etc. Through <br /> the City's Central Service Cost Allocation Plan (CSA), the costs of these <br /> functions (overhead) are allocated to all City operations that benefit from <br /> their services e.g. Airport, Sewer Utility, Emergency Medical Services, etc. <br /> This allocation process insures that each City operation pays it's full cost <br /> of providing a City service, including overhead costs. <br /> The allocation of these overhead costs through the CSA should approximate the <br /> actual benefits received from the support functions to the operating depart- <br /> ments or funds. As a result, the City chooses different bases for allocating <br /> the overhead costs (see below). These bases were chosen with consideration <br /> for equity (should approximate the benefits received) and availability of <br /> data. <br /> Central Support Function Allocation Basis <br /> City Attorney Hours billed to Depts. /Divisions <br /> City Manager Personnel Services <br /> Intergovernmental Relations " <br /> Finance Administration <br /> Public Works Administration <br /> Personnel Average number of employees <br /> Data Processing Number of terminals, CPU time <br /> Accounting Number of postings to General <br /> Purchasing Number of purchase orders <br /> Upon identifying and allocating central overhead costs to operating divi- <br /> sions, the City then adds indirect costs within specific operating divisions. <br /> This sum is called Total Indirect Costs. The Total Indirect Costs are divid- <br /> ed by the sum of Direct Personnel Costs to arrive at an Indirect Rate <br /> Total Indirect Costs = Indirect Rate <br /> Direct Personnel Costs <br /> For FY 90, the Indirect Rate was calculated using the following figures <br /> derived from the City's Budget and General /Ledger information systems. This <br /> information is summarized in the City's Central Service Allocation Plan that <br /> is submitted to the Federal Government for reimbursement for work or projects <br /> involving federal funds. <br />