Ordinance 1090-85 - Laserfiche WebLink

ORDINANCE NO. /09,0 - g5^ AN ORDINANCE establishing a uniform system for the determina- tion of actual cost for Sewer and Water Division Work and repealing Section 1 of Ordinance No. 102-70, Section 2 of Ordinance No. 31-69, Section 2 of Ordinance No . 4218 and Section 13 of Ordinance No. 4085. WHEREAS, conformity with generally accepted accounting principles requires a cost allocation plan which forms the basis for the over- head percentage cost rate; and WHEREAS, efficient management and control of City of Everett over- head costs would be aided by the development and adoption of a standardized procedure for annual calculation of the overhead percentage cost rate; and WHEREAS, the City' s principles and standards for determining costs shall be in accordance with "Cost Principles for State and Local Governments", U. S . Office of Management and Budget Circular A-87. Circular A-87 which states that for the City to recover overhead costs on grants , the grantee must have a cost allocation plan, which forms the basis for the overhead percentage cost rate . To be acceptable, the plan must cover all overhead costs of the department administering the grant, and the costs of other agencies that will be charged against the grant; and WHEREAS, the overhead percentage for the Sewer and Water Divisions have been the same for a number of years, inspite of the fact that the Everett Municipal Code clearly sets forth a formula to be followed for Water Division work but none exists for Sewer Division work; and WHEREAS, the City of Everett ' s adoption of an annual overhead per- centage calculation has been recommended by the State Examiner for both Sewer and Water; and WHEREAS, there is a need to establish a uniform system for the determination of the actual cost for all Sewer and Water Division work; and NOW, THEREFORE, the City of Everett does ordain : Section 1: Authority. Accounting and financial reporting of overhead percentage cost rate is required by two Federal Office of Management and Budget circulars : Circular A-102 , "Uniform Requirements for Assistance to State and Local Governments" , and Circular A-87 (formerly 74-4) , "Cost Principles for State and Local Governments" and generally accepted accounting principles (GAAP) as promulgated by Governmental Accounting Standards Board (GASB) Statement No. 1, "Authoritative Status of NCGA Pronouncements and AICPA Industry Audit Guide . " Section 2 : Accountability . The City 's Finance Department shall demonstrate good management by annually calculating the overhead percentage for the Sewer and Water Divisions . Section 3 : Rules and Regulations . The Finance Department is hereby authorized to promulgate rules and regulations to effect- uate an annual overhead percentage calculation along with necessary procedures to accomplish the intent of this ordinance . Section 4: Basis of Calculations . For the purpose of all work performed for any person or other agency or City Department by the Water Division or Sewer Division, the "cost" or "actual cost" of the work performed shall include the direct cost of all labor plus direct employee benefits , the direct cost of all materials , all other direct costs incurred in connection with the work plus an annual overhead percentage which shall be calculated by the City ' s Finance Department . The annual overhead percentage