Posting on behalf of Kim Rosenberg
Manzanita’s water fund isn’t a separate entity from the City. The city maintains and operates the water system. Some of that work is done by Dan Weitzel and the Public Works crew but city staff like the City Manager and Accounting Manager use their time, their city offices, supplies, computers, and printers to do billing and payroll and other work to maintain and operate the water system. The City does this for the water system and the City Charter allows those indirect or overhead costs to the city to be paid out of the water fund.
In Section 22 (i) the Charter states that one of the many duties of the City Manager is to supervise the operation of the public utility. That’s our water system.
I asked Dan Weitzel, Director of Public Works, at July’s Coffee with Councilors for an example of what the CM does in regard to the water system since she’s not out laying pipe or running a backhoe. Weitzel told the group about the recent 2.7 million dollar grant for city water projects that CM Aman applied for and received. It takes time and research to write a grant that will be funded.
Weitzel told those of us at the coffee talk that he speaks with the CM daily and if there’s a problem, more than that. The CM is his boss and the responsibility for the water system doesn’t end at 5pm Friday. In fact, the responsibility for keeping everything running in town including the water, is the CM’s.
This is how I understand indirect or overhead costs. Let’s say the city buys a box of pens and a stack of legal pads to use in their day to day. Staff use their pens and their legal pads for both city stuff and water fund stuff. The same pads and pens are used by both entities so how do you determine the exact cost used by the water fund? And what about office machines like a copier or printer? How do you determine the cost to the water fund of toner they use in a year and what about wear and tear on that printer? Who pays for paper? And then you’ve got stuff like the electric bill because the city offices are where the administrative work of the water fund happens. And if the CM covers city business and water business in the same meeting—how do you keep an exact record?
There’s been a suggestion to have administrative staff use timesheets to track their minute by minute but that’s never been done by any of the city managers we’ve had since the dawn of time. Not even the guy who continues to suggest it, kept a time sheet. Time sheets have probably never been used because CMs wear a bunch of hats and it’s impractical to constantly keep track of how much time is spent on each area. For example, in a conversation about time spent on IT issues, do you separate out the time spent talking about how it affects the water billing system versus other billing systems?
You can so easily get all up in the weeds trying to figure out the minutiae of this stuff.
Which is why governments, corporations and other entities everywhere do an indirect cost allocation to cover the cost of the shared support and services provided to another entity.
You do your best to estimate the time and cost and charge accordingly.
Kim Rosenberg
loretta.kim.rosenberg@gmail.com