All right, Sean.

Good afternoon and welcome to the Monday April 20th, 2026 meeting of the finance committee of the Olympic City Council called the order at 4:30.

And we have all three of the council member members of the finance committee in attendance.

We have an agenda that was set out ahead of the meeting.

I would like to make the motion.

I'd like to make motion.

Second.

We have an agenda for tonight.

Sean, do we have anybody sign up for public comment?

Excuse me.

Okay.

How about the minutes from the March 16th meeting?

Oh I would love to move to approve the minutes from the March 16th.

Right.

All in favor of approving the March 16th meeting minutes as published, say aye.

Aye.

Great.

We have a set of minutes approved.

That brings us right up to committee business.

We're gonna start unless giving us budget cost allocation spotlight.

Hi finance committee and numbers for the record, Joe budget and finance measure.

So of course we're gonna set what a cost allocations are, the different types that are available to us, other general contributions, and then have a question.

So cost allocations are um our way to administratively distribute fairly cost of internal services to the R2 types or internal and external.

So the cost out of each model that we have uses the different metrics to allocate all those costs to prove the funding.

So for example, human resources summits uh all these partnership device, and so um can't just say all that.

I think probably get it across based on uh split for personal TV and also we have two types of uh cost allocations, we have direct costs, and those are the ones that can be specifically identified to part of the city of it, and then indirect costs uh use the sort of methodology manager AD.

So the one thing that people need to realize is that for the indirect cost allocation, you're looking at the last completed year data, and so for example, um normally parts let's say the three send send new positions each year, but for some reason this year they're recording that cost won't be recognized as a cost allocation until 2025.

Adding it to you.

So some of the uh choices that people see are actually going back two years as wider increase.

I'm gonna say that happens a lot in departments as we put the budgets together and the finance team does indirect cost allocations, and partners will see that number fluctuate, and they'll say, Well, I didn't add anything this this this year, and I'm like well, no, it's two years ago, right?

You added these, and so that's why the indirect costs up across the board for departments.

So I would say, you know, during the budget processes I meet with partners, probably one of the most common questions I get in the financing yet, so is rather fluctuation of indirect costs.

So two questions on that, like if I just know why it needs to be then delayed.

How do budget like how does that help a budget manager plan what their budget is, and is that really meeting the intended purpose of when you're not exactly recruiting recouping funds at the time you service the way you would if you were at this, I don't know, seems so like it is it is delayed.

So you know we start our budget process in May.

Um, and so we don't even have a metric 2026 to use for 2027.

So we do have to use five, and then also it is um not necessarily a budgeting tool is recruited uh for the expenditures of services that you're seeing, and so you have to read four years, uh and then again, we're we're already starting to have six can't utilize the actual commercial to recruit those costs.

Um it is in some ways it's actually a kind of a nice thing because you can have a large spike and we do have your average by your average, and so there's a smoothie factor, so you shouldn't see too much like the true spike of what you get, um, but there is a lot of fluctuation, and then there's also you know, as um departments grow or are eliminated, or programs are all limited that changes the cost for everybody.

Um, and so uh those are things that people also have to realize is that doesn't necessarily mean I do something.

Um rent house allocations, we have city hall rent, maintenance center rent, those we can directly attribute to the person who programs we utilize that space is the allocated engineering rate, salaries all of them supply the does get allocated out to products that so there's some things that are true current year costs, and so like um the numbers I have are for 2024, but um we had allocated out the true 100% cost for it, it came up to 52 or during the balancing budget we've um process.

We decided not to fully load that for costs, and so we ended up just structing 377, and that was a balancing mechanism.

Um, and the same thing happens with kind of the maintenance there.

So we do have some flexibility to make adjustments of it for indirect cost allocations, those are for the city manager's office, and goal human resources information services the front desk is one of the uh cost centers and the first techniques, and um like I said, we there are many many different factors that are utilized, so like in finance and cost table and most costs.

Um we have uh a budget is the dollar, probably um payroll is legal is the number of requests that they process for each department, and so there are many different factors to make sure that everybody's taking their fair share.

But the other reason this is really important is we have lots of different funds, right?

So we don't just have a general fund, we have utilities, utilities look in utility rates because their fair share of indirect too.

So parks, every department has some share of these indirect that gets factored in your general fund budget, utility rates, parks fees, all those things take indirect costs to account as part of development budget.

And so this is just an example of the total administrative cost is 17.8 million.

Um utilized factors such as FTE count, number of agenda items for council, the overclass, number of unions for HR and recruitments and for IT devices, and so from that that cost gets allocated out.

That doesn't mean that all of it can allocate out 100%.

So there are some funds that we determined can't support the cost.

So the general fund has to absorb those.

So like housing homeless or HUD.

It still gets allocated out.

And then of course there's other general fund contributions, which you're aware of, you know, the general fund supports the dumb support facilities because there are buildings that are like facility for soft facilitating the building and all the repair maintenance and then um workers' compilers, which we need to have the state plan, and we have a legacy plan.

So those are still kind of general overview of cost that we're supposed to question John.

I I am wondering I um I I was just getting some other downtown rental rates, and so if you do forty if it was a thousand foot space, that'd be 4300 a month.

Um so I just what does that include that is it including utilities?

Does it include us budgeting for replacement of the city hall?

I where are we at?