What is The Municipal Service Charge?
Municipal Service Charge (MSC) is a calculated fee charged to operating funds outside of the General Fund. Its purpose is to recoup administrative costs borne by the General Fund for services rendered to other funds. For example, the City Attorney’s budget resides in the General Fund. The City Attorney provides services for all City funds and service areas. If a fund needs legal advice, the City Attorney can provide that service where they would otherwise have to pay a vendor.
This is a common practice amongst governments across the United States in order to provide a fair cost-sharing for all City funds and services. For example, similar to how all City facilities pay a bill for water service, all city facilities also are billed for costs for accounting, legal, payroll and other administrative services. These costs are paid for by each fund via the MSC charge.
The MSC is calculated by an outside company that specializes in cost allocation studies. Click here for a more detailed explanation of the MSC.