Board approves central-services cost-allocation plan after extended debate on impacts to departments and grants

After a lengthy discussion that included department directors and outside consultants, the Okeechobee County Board of County Commissioners voted unanimously to accept a central services cost-allocation plan prepared by Maximus US Services and to begin phasing implementation in fiscal year 2025–26.

Staff explained the plan’s purpose: allocate indirect (centralized) administrative costs — such as human resources, finance, purchasing and facilities maintenance — across county operating departments and enterprise funds using objective allocation bases (FTE counts, expenditures, occupancy, work orders). Jessica Viseras and consultants from Maximus presented the methodology and proposed allocations based on FY2023 audited data.

County staff recommended several adjustments to Maximus’s original totals before board approval: exclude depreciation from the central-services pool, reduce certain BOCC and County Attorney allocations, and apply a credit to Facilities Maintenance due to incorrect labor-hour inputs in the report. Those adjustments reduced Maximus’s recommended total indirect allocation from approximately $8.39 million to about $7.23 million. Staff also proposed phasing allocations by increasing department allocations by 5% in FY2026 and applying a capped approach so departments would not face an immediate, large one-year increase.

Commissioners voiced concerns about the effects of allocating costs across funds that are funded by special assessments, gas tax, or other non-ad valorem sources. Debate centered on whether allocations simply “rob Peter to pay Paul” or whether they permit the county to recover administrative costs from non-general-fund revenue and improve the county’s ability to claim administrative allowances on federal and state grants. Supporters argued that documenting indirect costs will allow the county to recover administrative portions of some grants and reduce the general fund burden; skeptics worried about potential new costs to special-assessment payers and operational complexity.

After extended discussion and clarifying examples from staff — including that some federal grants allow a portion of funds to be used for administrative costs — the board asked that FY2026 allocations be included in next year’s budget with the recommended 5% increase or a minimum offset to begin phasing. The motion to approve the FY2023-based allocation plan with staff adjustments and to phase it into the FY2026 budget passed unanimously.

Ending: Staff said they would return with final allocation tables and implementation steps and that the board could revisit percentage or cap decisions during budget adoption.