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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 <br />Allocation Basis <br />City Attorney <br />City - Manager <br />Intergovernmental Relations <br />Finance Administration <br />Public Works Administration <br />Personnel <br />Data Processing <br />Accounting <br />Purchasing <br />Upon identifying and allocating central <br />sions, the City then adds indirect costs <br />This sum is called Total Indirect Costs. <br />ed by the sum of Direct Personnel Costs <br />Total Indirect Costs = <br />Direct Personnel Costs <br />Hours billed to Depts. /Divisions <br />Personnel Services <br />a of <br />Average number of employees <br />Number of terminals, CPU time <br />Number of postings to General <br />Number of purchase orders <br />overhead costs to operating divi- <br />within specific operating divisions. <br />The Total Indirect Costs are divid- <br />to arrive at an Indirect Rate <br />Indirect Rate <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 />