Memo for fiscal year 2020, updated 2019-03-28

[Archived] Question #54: Question #17 suggests the Old Town Farmers’ Market costs around $51,000; this year’s budget suggests the FY19 cost is $90,000. What does the $90,000 include that the $51,000 does not?


The answer to question #17 suggests the Old Town Farmers’ Market costs the City around $51,000; page 11.41 of this year’s budget suggests the FY19 cost is $90,000. What does the $90,000 include that the $51,000 does not? (Vice Mayor Bennett-Parker)


The FY 2019 budget for the Farmer’s Market, detailed below, is $50,992. FY 2020 Proposed Budget page 11.41 details the Priority Based Budgeting (PBB) results of $85,982.

The PBB allocations shown on page 11.41 include staff support costs from programs outside of the Farmer’s Market and External Services program whereas the FY 2019 PBB cost shows the full personnel costs of staff support from the Facilities Management and Leadership & Management programs.

The PBB allocated cost is higher because of that administrative overhead. While only the Farmer’s Market manager is budgeted in the Farmer’s Market account, other staff spend at least some time working on the Farmer’s Market which is what the PBB cost allocation model displays differently from the FY 2019 budget allocations.

The City’s budget is aligned mostly along organizational units; i.e. direct service costs and some indirect administrative costs are budgeted in the programs that provide them, while other centralized administrative costs are budgeted in separate administrative programs such as the director’s office or an administrative services program within a department or as a separate administrative department. PBB attempts to identify the “full cost” of a service by reapportioning the centralized costs to services on a percent basis. It is done outside of the City’s financial systems using actual financial system data and is useful in providing a general estimate of what services cost for the purposes of prioritization without being precise to the transactional level. Reapportioning administrative costs on a transaction by transaction basis within the financial system would be significantly more complicated. It should be noted that PBB only goes as far as reapportioning additional indirect costs within departments. Reapportionment across departments was considered too much to take on in the initial implementation of PBB.

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