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Staff proposes charging surface water fund full indirect costs, estimating $700K to general fund
Summary
Sammamish finance staff recommended applying the full indirect cost allocation to the surface water enterprise beginning in the 2027–28 biennium, estimating roughly $700,000 in additional annual revenue to the general fund under the current model; staff said a rate study will offset the change and protect the enterprise.
Finance staff recommended applying the full indirect cost allocation to the surface water utility starting in the 2027–28 biennium to better recover central administrative costs. Vicki Carlson said the current practice had surface water paying only a portion of indirect costs (primarily facilities and fleet) and that a full allocation would increase transfers to the general fund.
Carlson said the model drafted from 2024 actuals and the 2025–26 budget suggests surface water paying full indirect costs would add roughly $700,000 in ongoing revenue to the general fund. She told council a rate study scheduled for the next biennium would incorporate the change so surface water rates could be adjusted to keep the utility fiscally whole. Several council members asked about fund balance, timing and whether customers would be charged twice; Carlson said the general government side also pays surface water charges and staff has discussed the change with the utility.
Council did not formally block the recommendation; staff will include the ICA for surface water in the budget modeling and in an upcoming rate study for council review.
