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Facilities, a division of the Chief Administrative Office, recommending the Board approve and authorize the Chair to sign a Fiscal Year 2025-26 budget transfer increasing operating transfers from the Accumulated Capital Outlay (ACO) Fund to the General Fund, and increasing salaries and benefits appropriations in the General Fund, allowing an accounting change to maximize cost recovery through the Countywide Cost Allocation Plan. (4/5 vote required)
FUNDING: ACO Fund.
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DISCUSSION / BACKGROUND
Facilities staff perform work on various capital facilities projects that are recorded in the ACO Fund. During a recent review of the Countywide Cost Allocation Plan (Cost Plan), a discrepancy was identified whereby the current methodology results in reduced cost recovery through the Cost Plan. The Cost Plan is used to support the recovery of costs for central service functions, including Facilities, from departments with non-discretionary funding sources, such as state or federal grants. On August 12, 2025, the Board approved an item addressing the issue for Fiscal Year 2024-25.
Previously, salary and benefit costs for these projects were recorded directly in the ACO Fund via the payroll process. The recommended budget transfer will allow for the Fiscal Year 2025-26 salary and benefit costs incurred on capital projects to be transferred to the General Fund and then reimbursed by the ACO Fund. The result will reflect no net changes to the General Fund, as the increased salary expenses will be offset by a transfer in from the ACO Fund. Moving forward, the change in Cost Plan methodology and the recording of these costs in the General Fund will accurately reflect the Facilities Division Cost Plan calculations for Fiscal Year 2025-26.
ALTERNATIVES
If this accounting change is not recorded in Fiscal Year 2025-26, there will be a low or negative cost allocation for one of the Facilities Cost Plan functions, affecting the recovery received in Fiscal Year 2027-28.
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