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Residents and council press city staff for clarity on administrative overhead recharges
Summary
Multiple public commenters and councilmembers at the April 15 hearing questioned the city’s method of allocating administrative overhead to enterprise funds after a resident flagged a perceived 78% recharge share; staff said they would supply detailed calculations and explained the city uses an even‑split method while acknowledging alternative allocation approaches exist.
During public input and council discussion at the April 15 budget hearing, residents raised repeated questions about how the City of Dubuque allocates administrative overhead charges (AOR) to enterprise funds.
Rob McDonald told the council in public comment that the administrative overhead recharges “are increasing 13.8%” and that, based on his review of the materials, the recharges made up roughly “78% of all expenses.” He asked the council to provide clearer ties between services used and the recharge amounts.
City staff acknowledged the concern and described the current approach as an even split across certain funds, noting multiple legitimate allocation options exist—by number of employees, payroll volume, total budget, or measured time usage. Staff cautioned that time‑tracking for every service would be an “administrative nightmare” and argued the chosen method balances practicality with fiscal fairness. Staff also said spreadsheets in the packet showed slightly different totals across uploads and agreed to produce a single reconciled backup explaining the differences.
Councilmembers asked whether the recharge methodology could be changed (to payroll, headcount or other measures) and what the effect would be on enterprise rates. Staff said those alternatives could be modeled, but doing so would require a deliberate study and an implementation strategy to transition allocations without sudden rate shocks to departments that also pay enterprise fees.
There were no formal votes on allocation methods in the hearing; staff committed to provide detailed AOR calculation worksheets and to walk the council through how enterprise fund shares are derived so council can consider whether to request changes during the remainder of the budget process.
Ending: City staff will supply reconciled recharge backup to the council; no allocation change was adopted at the hearing.
