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Commissioners press staff on indirect-cost charges to CATS and solid waste and potential fee impacts
Summary
Commissioners questioned newly budgeted indirect cost allocations for the CATS and solid-waste enterprise funds — roughly $53,000 for CATS and $61,000 for solid waste — and asked whether recording those costs will raise tipping fees or require the board to absorb the revenue loss in the general fund.
At the June 3 work session, commissioners pressed county staff about newly budgeted indirect-cost allocations to enterprise funds — particularly Caswell Area Transit (CATS) and the solid-waste fund — and how those charges would affect user fees.
Staff explained that the county is aligning its budget with audit accounting practice by allocating central-service costs (county manager, finance, HR, IT, building maintenance) to enterprises. The county cited an established cost-allocation plan used during audits; staff said these indirect costs have been recorded in prior audits but not previously shown in the budget. For FY27 staff put the charges into the budget to reflect anticipated audit treatment.
Commissioners asked whether the indirect charges were calculated before or after enterprise fees were set. Staff said the solid-waste fee increases were determined before the indirect cost was added to the budget, and the department realigned other budget categories to absorb the charge. Nonetheless, staff said removing the indirect charge would eliminate about $100,000 of revenue that would otherwise be budgeted to the general fund and would require finding an alternative source (such as an equivalent tax increase) to fill the gap.
Solid-waste specifics provided by staff: the availability fee would increase from $55 to $64 and the disposal (tipping) fee from $75 to $83; staff estimated those changes would generate approximately $186,000 in additional revenue. Environmental compliance requirements (monitoring wells, surface water sampling, roadway access and groundwater monitoring) were cited as adding roughly $118,800 in costs this year.
Some commissioners expressed concern that recording the indirect charge after fees were established looks like shifting money "from one pocket to another," meaning internal transfers may have the practical effect of raising fees on residents. Staff recommended that if the board decides not to charge indirect costs to enterprise funds it should record that policy decision in a motion so auditors will not expect those amounts to be recorded in enterprise financials.
Ending: Staff committed to provide the cost-allocation detail and a clearer estimate of the fee impact if the board asks departments to revisit rates or the allocation methodology prior to adoption.
