25C - AGMT INDIRECT COST ALLOC PLAN

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Stability in year-to-year impacts, both rate will assume a more rolling, if not to the ISF and to the department/fund users. Avoidance of conflicting behaviors or undesirable incentives within the City organization and its larger goals. TASK 4.3 1 DETERMINATION OF TOTAL CHARGE BY USER Upon completion of Task 4.2, ClearSource will identify the total allocation of internal service fund costs to each participating user of the services. In some cases, it is expected that this annual allocation may be the end result for the ISF, i.e., a total charge for service by user. Fundamentally, this allocation -based result provides a historical "snapshot" approach to cost recovery that sets cost recovery for the fiscal year once. In some aspects of an ISF, it may be the consensus or a necessity that ISF charges be assessed on a more "real- time" basis or be subject to a year-end "true -up" to actual activity, in which case, a rate is required (Task 4.4). TASK 4.4 1 ESTABLISHMENT OF RATE In internal service funds or aspects of the ISF where a total charge by department/fund is insufficient as a cost recovery structure, a rate by function of service will be established. ClearSource will develop a unit cost for the function by expressing the annual amount per unit of service, using a workload, use, beneficiary, or proportional metric selected from the accumulation developed in Task 2.2. Depending on the variable nature of the metric chosen, rates may be based on historical patterns in the underlying data set, rather than a single year snapshot. Or if consensus leans opposite of that, the "real-time" application. Rates will be reconciled to prevailing demographics from each participating user to ensure adequate revenue generation moving forward, absent unforeseen change. TASK 4.5 1 COMPARATIVE RATE/CHARGE IMPACTS ClearSource will compare resulting rates and/or overall charges for service to current cost recovery by each user department/fund. Reasons for any significant changes will be evaluated and explained. This comparison assists in presenting and communicating changes to cost recovery structure and amount. It also enables further testing of the reasonableness and accuracy of substantial changes to approach. TASK 4.6 1 DEVELOPMENT OF PROCESS FOR ACTUAL COST RECONCILIATION ClearSource will establish the methodology for reconciling budgeted charges to end users to charges calculated based on actual costs incurred once auditied expenditures become available. Task 5 1 Reporting and Tools The purpose of this task is to provide the formal documentation encompassing the work and outcomes of the study, as well as deliver the tools developed throughout the study for the City's ownership and future use. TASK 5.11 DRAFT REPORT ClearSource will prepare a narrative description of the study, describing key data and assumptions, financial plan and cost of service outcomes, rate and charge CLEARSOURCE PROPOSAL TO THE CITY OF SANTA ANA SECTION 4 25C-23