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Oak Ridge staff highlight new Matrix cost‑allocation tool; changes to enterprise fund allocations expected
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Summary
City staff and Matrix consultants presented a joint cost‑allocation study and said the city purchased the study tool to update allocations annually; reallocations will affect enterprise funds (electric, water/wastewater) and require coordination with TVA and budget adjustments in FY27.
City staff on April 21 presented the results of a long-running joint cost‑allocation study conducted with Matrix and said the city has purchased the software used to produce the analysis so allocations can be updated year to year.
Miss Hickman introduced the Matrix work and said consultants spent “a lot of hours asking questions of each department” to measure how services are used and how indirect costs should be allocated. Councilmember Gleeson called the study “a herculean lift” and asked whether the analysis is derived from payroll and time‑card data. Staff replied the study draws on multiple sources, “including payroll,” and other department data to produce the labor and cost matrices used for allocation.
Staff said the city bought the Matrix tool used in the study so future updates can be run internally and audited: “We will be able to update it year after year,” staff said. Officials warned the reallocations will produce changes in enterprise fund accounting, and staff are discussing the impacts with TVA and the city manager’s office to determine how to treat electric, water and wastewater allocations in the FY27 budget.
Councilmembers asked about smoothing year‑to‑year variance after reallocations. Staff said annual updates and trend analysis (they began with FY24 and transitioned into FY25 to capture trends) will be used to adjust allocations over time and recommended periodic independent reviews to guard against internal bias.
Council did not take formal action at the work session; staff said they would follow up with affected departments and bring budget recommendations to council as needed ahead of the June budget meeting.