HomeMy WebLinkAbout7.b. Administrative Fee PolicyEXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: November 19, 1991
AGENDA ITEM:
AGENDA SECTION:
Administrative Fee Policy
New Business
PREPARED BY:
May, Director
AGEND(ft
Jeff Finance
ATTACHMENTS:
Copy of Administrative Fee Policy F-3
=AP6VED 'VIY:
Attached for your consideration is a policy regarding the charging
of administrative fees to all funds. The purpose of the policy is
to assign the costs of providing administrative services to each
appropriate City fund and to reimburse the General Fund of the City
for these costs.
Staff has worked with our auditors in achieving a fair and
equitable way to charge other funds for costs, that historically,
the General Fund has paid. In talking to other communities, it was
discovered that most communities do charge other funds in some form
or another. The problem that we found was that nobody has any
policy in writing that covers their procedures.
We felt that it was appropriate to put our ideas in writing so that
we have a guide in the future that will enable us to consistently
and fairly charge other funds for the administrative costs that are
paid by the General Fund. The resulting document is before you for
your consideration and approval.
RECOMMENDED ACTION:
Motion to approve Administrative Fee Policy F-3.
COUNCIL ACTION:
November 19, 1991
CITY OF ROSEMOUNT
POLICY TITLE: ADMINISTRATIVE FEE POLICY
POLICY NUMBER: F - 3
PROPOSED BY: ADMINISTRATION
DATE APPROVED
BY CITY COUNCIL:
PURPOSE
The purpose of this policy is to explain the assignment of the
costs of providing administrative services to each appropriate City
fund.
These Services and Costs Include:
Maintenance of Cash
Maintenance of Accounting Records
Management of Receipts and Disbursements
Auditing Services
Associated Overhead Costs:
Electric Utility
Gas Utility
Phone Utility
Refuse Utility
Building Maintenance
Labor
Operating supplies
Computer Operations
The Administrative Fee for each fund was calculated based upon the
average market rate being paid to outside consultants by Rosemount
for similar services. This amount was then increased two and one-
half times to reflect the additional services outlined within as
well as the associated overhead costs.
For each fund, the base fee remains constant or is increased
dependent upon the level of administrative services it requires.
The specific dollar amount that will be charged to the various
accounts will be presented to the City Council for adoption, by
resolution, each year as part of the budget process.
r
The administrative fee is applied as follows:
(additional levels will be added as warranted)
1 Fund is charged the City basic flat fee.
Funds include: Paid -Up Debt Service Bond Fund
MSA Fund
Severance and Retirement Fund
Diamond Path Project Fund
Water and Sewer CIP Program Fund
Water and Sewer Core Funds
Active Debt Service Funds
2 Fund is charged double the City basic flat fee.
The administrative work for this type of fund is estimated to
be approximately double of that required for a basic flat fee
fund.
Funds Include: Five Year CIP Program
Park Improvements Fund
5 Fund is charged five times the City basic flat fee
This type of fund demands a much greater volume of
administrative work requiring several employees. In addition,
the overhead for this type of fund is higher.
Funds Include: Economic Development Authority/
Port Authority Fund
National Guard Armory Project Fund
Enterprise Funds
OTHER A four percent (0) administrative fee is charged to
construction projects.