HomeMy WebLinkAbout05/16/2023 Item 6e, Jackson - Staff Agenda CorrespondenceCity of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: May 16, 2023
TO: Mayor and Council
FROM: Emily Jackson, Finance Director
VIA: Derek Johnson, City Manager
SUBJECT: Item 6e – 2023-24 Central Services Cost Allocation Plan
Staff received the following questions, regarding the Cost of Services analysis and Labor
Rates, which Council will be considering adoption of on May 16, 2023. The questions are
below with staff’s response shown in italics:
1. On page 153 of the staff report. It seems like the amount in the text for FY 2023-
24 might be a little “off” from what’s in the table below it.
The different numbers are a typographical error, and the amounts should
match. The amount in the table ($2,400,800) is the correct amount, totaling up
the costs for the three enterprise funds for public safety and right-of-way
maintenance.
Item 6e – 2023-24 Central Services Cost Allocation Plan Page 2
2. In Attachment C – Labor Rates FY 2023-24 some job classes show different
numbers of “productive hours” than others. For instance, most staff seem to
be listed as having 1,808 productive hours, while Police and Fire have 1,776.
What accounts for this variation?
The productive hours can vary a bit from position to position, because they are
based in large part, on different provisions in MOUs. For example- all City
employees get 13 holidays, but certain Fire and Police employees can cash out
holiday time, so the productive hours calculation assumes that some
employees are taking the cash out and taking one less holiday than other
employees. In addition to that, the Fire MOU specifies that employees who
work 56-hours per week accrue vacation time at a higher rate than their
counterparts who work a 40-hour week; the increased vacation time factors into
Fire classifications overall and decreases the number of productive hours.
In reviewing Attachment C again, staff identified an error in the labor rates for
two classifications in Information Technology and all classifications in Public
Safety- Police and noted that labor rates for General Government services
managed by Public Works were inadvertently missing from the attachment.
This correspondence transmits the updated Attachment C to correct these
errors.
The adopted labor rates are primarily used when the City seeks reimbursement
for the reasonable cost of staff time from outside entities, such as granting
agencies or cost recovery activities. The labor rates represent a blending of
assumptions related to current employee costs (MOU provisions, assumptions
about time in service that drive pension costs, use of medical coverage, etc.)
to get at an estimated cost per employee. The labor rates do not factor into the
Cost Allocation Plan or Cost of Services Analysis, so the changes don't impact
the other items that the Council is being asked to consider with the adoption of
this item. Cost Allocation and Cost of Services are based on actual
expenditures from the most recently completed fiscal year, as noted in the
report.
ATTACHMENTS
A – Revised Labor Rates FY 2023-24 (replaces Attachment C)
2023-24 Cost Allocation Plan
Attachment C
Labor Rates -Revised