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CHAPTER 9 Instructions for Using the Cost Sharing Software of the Cost Sharing Toolkit Introduction This Cost Sharing Model is designed for use by transportation agencies that enter into agree- ments with human service agencies to provide transportation on behalf of agency clients. The model (1) computes a transportation provider's fully allocated costs and (2) translates those costs into three common pricing mechanisms: price per vehicle mile, price per vehicle hour, and price per passenger trip. This spreadsheet model is one component of TCRP Report 144, Volume 1, "The Transportation Services Cost Sharing Toolkit," which also includes all of this information in an easily searchable electronic format. The spreadsheet allows the user to enter budget and service information. The model then auto- matically calculates the parameters for systems to fully allocate transportation costs. Once budget and service information are entered, the spreadsheet can be used repeatedly to cal- culate the fully allocated costs of a proposed contract service and the price the agency should charge for the service, using one of three common unit-of-service pricing mechanisms. The Cost Sharing Model Software Considerations The Cost Sharing Model is a macro-enabled, Excel 2007 workbook. If you are using Excel 2007 and you wish to save your entries or work done using the model, you will be prompted to save your work using this format. If you attempt to save your work in another format (e.g., Excel workbook [*.xlsx] or Excel 97-2003 Workbook [*.xls]), you will receive a warning that you may lose features in the workbook. You must save all work using the macro-enable format. If you are using earlier versions of Excel (i.e., Excel 972003), the program either will not per- mit you to open the file or will generate a warning when you open the Cost Sharing Model, depend- ing on your macro security settings. In the first instance, from a blank workbook, go to the menu bar, go to "Tools" then "Options," and click on the "Security" tab. Click on the macro security button and select the medium level of macro security. Then open the Cost Sharing Model. In the second instance, Excel may generate the warning pictured in Exhibit 9-1. This standard Excel fea- ture is designed to warn users that macros have the potential to be harmful and that workbooks containing macros should be opened from trusted sources only. Click on the "Enable Macros" but- ton when confronted with this box. Enabling macros is necessary for the Cost Sharing Model to work properly. 33

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34 Sharing the Costs of Human Services Transportation Exhibit 9-1. Security Warning box. Basic Accounting Structure The budget and chart of accounts are based on a standardized chart of accounts--the Uniform System of Accounts (USOA) created by the Federal Transit Administration (FTA) of the U.S. Department of Transportation (DOT). This is the basic reference document for the National Transit Database (NTD). It contains the accounting structure required by federal transit laws (pre- viously Section 15 of the Federal Transit Act). For more information on the USOA, visit FTA's web- site at the following link: http://www.ntdprogram.gov/ntdprogram/pubs/reference/USOA.pdf. How the Cost Sharing Model Works Using service and cost data supplied by the person applying the Cost Sharing Model, the model performs calculations that generate unit cost figures (cost per mile, cost per hour, and cost per trip). The user provides data on the service alternative being examined, and the model generates the fully allocated cost of that service alternative. The model's user then can select one of the unit costs as a basis for creating a contract with the organization interested in purchasing the services described in that alternative. In greater detail, the steps in the model are as follows: The model's user enters previous data on Services for the entire transportation operation; Miles of service, hours of service, and, in some situations, the number of vehicles used; and Line item expense data for the entire transportation operation. The model assigns the line item expenses to one of three cost categories: fixed costs, costs that vary by the number of miles, and costs that vary by the number of hours. The user enters data for the service alternative being considered: projected vehicle miles, vehi- cle hours, and passenger trips, as well as whether the service being considered will be provided as fixed route or demand responsive service. Using the expense and service data previously entered, the model calculates the fully allocated cost of the service alternative being considered. The user specifies how the service is to be priced for the organization interested in this service alternative: price per hour, price per mile, or price per passenger trip. The model calculates the price to be charged to recover all of the costs of that transportation service; the price is specified in terms of the unit cost chosen by the model's user. This process can be repeated many times for different services and different purchasing agencies.