Introduce Fully Burdened Cost Centers

There is evidence that some cost centers are paying other departments for some services. This practice needs to be expanded so that all cost centers are fully burdened. In other words if Department A does work for Department B than the value of that work should show up as an expense for Department B and a revenue for Department A. This will give taxpayers the ability to see exactly the total cost of each service and not unfairly burden departments providing services. This must include the cost of HR, Finance and building maintenance among others.

Amortization Expense
Each department’s budget must include amortization expense so taxpayers can see exactly the real full cost of each department.  In my review I didn’t see any evidence that cost centers were responsible for the capital expenditures they were consuming to deliver their services. For example, if the city provides a department with a new $50,000 vehicle in a capital acquisition and the life expectancy of that vehicle is 5 years, then the department uses 20% of the capital cost each year and needs to show that as an amortization expense during the 5-year life of the vehicle.

Taxpayers need to see the real total cost of each department. Fully burdening each unit will allow give taxpayers the transparency they need to have confidence in how the city is spending their tax dollars.

Improved Transparency
Furthermore all departments need to be shown in the audit financials and not combined with others as they have been in the past. Combining the Library, the Art Gallery, the Bayshore and the Rec Center under one budget labeled, Recreation and Cultural services denies taxpayers of the visibility required to monitor how their tax dollars are being spent.