HomeMy WebLinkAboutItem 5d. Jackson and Malicoat - Staff Agenda CorrespondenceCity of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: March 3, 2026
TO: Mayor and Council
FROM: Emily Jackson, Finance Director
Prepared By: Debbie Malicoat, Deputy Finance Director
VIA: Whitney McDonald, City Manager
SUBJECT: ITEM #5D - 2026-27 CENTRAL SERVICES COST ALLOCATION PLAN
Staff received the following questions regarding the Cost Allocation Plan (CAP) and labor
rates. The questions are below with staff’s response shown in italics:
1) In the CAP, am I reading it correctly that Parking Admin (p 40) and
Tourism/BID (p 39) don’t have to pay any central services costs?
The allocations of central service costs from the General Fund that are charged to
individual Funds are reflected in columns that have the designation of
FD###[Name of Fund]. The $6,638 that appears for Tourism/BID Promotion on
page 39 should have been consolidated into the allocations for Fund 208, the
Tourism BID Fund and included with the costs reflected on page 44 under the
column FD208 Tourism/Bid. Staff will work with our consultants to correct the
mapping for these costs to reflect the total at the Fund level.
Similarly, the consolidated costs of all allocations to the Parking Fund appear on
page 46 and the blank column labeled Parking Admin on page 40 should have
been deleted from the document.
ITEM 5D - 2026-27 Central Services Cost Allocation Plan Page 2
From page 39 of the CAP:
From page 44 of the CAP:
ITEM 5D - 2026-27 Central Services Cost Allocation Plan Page 3
From page 40 of the CAP:
From page 46 of the CAP:
ITEM 5D - 2026-27 Central Services Cost Allocation Plan Page 4
2) Also, what is “unallocated” (p 47) and where does that go?
Unallocated costs represent items that cannot be specifically assigned or directly
matched to an operating division or program or are not costs associated with
central services. Examples include engineering costs that are allocated to specific
projects or grants provided to community groups. These costs are incurred by the
City but not allocated to direct cost programs.
3) Also, when it comes to the labor rates, how is it that some departments seem
to use a standard citywide rate, but some have two rates (citywide and
program) and those even vary by program? In other words, not all programs
seem to have the same citywide rate, or program rate.
Positions that are part of the central services costs (provide services to the
organization) have a Citywide overhead rate calculated at 21.79% this year based
on the cost of providing the central services divided by total costs. Positions that
provide services directly to the public and are not part of central services costs
have calculated citywide rates based on each division’s proportional share of
actual costs. In addition, positions that provide services directly to the public also
have departmental overhead costs that are allocated, reflecting the administrative
costs of the department.
For example, in the Police Department, Citywide indirect costs of $4,849,761
reflect the sum of each division’s allocations from the Cost Allocation Plan
Schedule C.002
These total costs are then divided by the total program costs of $24,238,272 to
arrive at the Citywide overhead rate of 20.01%. In addition, the labor rates reflect
the Police Department costs that provide administrative and support services
internal to the Police Department. These total $5,735,956 which is divided by the
total program costs of $24,238,272 to arrive at the program’s indirect cost
allocation of 31.00% this year.
ITEM 5D - 2026-27 Central Services Cost Allocation Plan Page 5
The calculations are summarized at the bottom of the page in this table: