FIN-2.08.02 Cost Allocation Criteria and Metrics

CFMP Procedure

The criteria for determining the costs to be allocated through the General Fund Overhead Model (GFOH) include:

• If the service provides a benefit to all City bureaus
• If the service provides an oversight or regulatory function for City bureaus
• If the service exists within the General Fund
• If the bureau demand for a service is difficult to predict from one fiscal year to the next
• If the costs of a service are difficult to charge to customer bureaus through a rate times unit model

The cost allocation system shall include a methodology that provides for the stability, predictability, and equity of charges – in that order of priority. The primary metrics available to be used for allocating costs are the size of a fund’s budget (based on actual expenditures) and the number of positions.

To provide stability to costs allocated through the GFOH model, a three-year rolling average shall be used for the metrics. Following the close of each fiscal year, the City Budget Office shall update the GFOH model based on actual metrics from the prior fiscal year. The updated model shall be the basis for allocating the cost of GFOH services for the subsequent budget year.

Responsibility

City Budget Office