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Instructions for Using the Cost Sharing Software of the Cost Sharing Toolkit 35
Using The Cost Sharing Model
Sequence of Steps in the Model
When you open the workbook, you will automatically be taken to the model's menu
(Exhibit 9-2). The menu presents the four basic steps associated with the model:
1. Enter service data.
2. Enter expense data.
3. Compute fully allocated costs.
4. Compute the price of service.
The model contains various navigation buttons throughout the workbook to take you to the var-
ious entry and output sheets in the workbook. Simply click on these buttons to complete the task.
Before You Start: Organize Your Data
You may use the model for two purposes: (1) computing the fully allocated cost of a contract the
agency contemplates entering into with a human service agency or (2) evaluating the profit and loss
from an existing or past contract. Depending on your purpose, you should collect either projected
service and budget data or actual service and budget data for the model as shown in Table 9-1.
When using the model for either purpose, both budget and service data should represent the
same time period, preferably on a fiscal year, calendar year, or other 12-month basis.
Step 1: Enter Service Data
Click on the "Go" button to enter service data. You will be taken to a brief data entry screen
where you will be asked to enter information about your transit system (Exhibit 9-3).
Exhibit 9-2. Cost Sharing Model main menu.
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36 Sharing the Costs of Human Services Transportation
Table 9-1. Types of data to use
for various purposes.
If you want the model For your service For your budget
to . . . data . . . data . . .
Price a proposed Use projected Use projected data
service data
Estimate revenue Use current actual Use current actual
profit/loss on an data or historical data or historical
existing or past contract data data
First, indicate which modes of service your system operates by selecting the option from the box.
The options are the following:
· Fixed route.
· Demand response.
· Both modes.
Second, enter service data, under the appropriate mode, for fixed route and demand response
services. These entries are for the entire system. Remember, the time period for these service param-
eters should follow the guidance provided in Table 9-1. We recommend that you use data for an
entire fiscal year in the model. The model requires three inputs:
1. Vehicle hours.
2. Vehicle miles.
3. Number of peak period vehicles (fixed route only).
You may use either total vehicle miles and total vehicle hours or revenue hours and revenue
miles. Whatever unit you use in Step 1, be sure to use the same units in Step 3. If you do not oper-
Exhibit 9-3. Data entry screen.
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Instructions for Using the Cost Sharing Software of the Cost Sharing Toolkit 37
ate fixed route services, simply leave that box blank. The total boxes will automatically add both
fixed route and demand response entries; do not make your own entries in these cells.
Note: When entering service data, enter numbers without commas or separators (e.g., 999999
rather than 999,999). The cell will automatically format your data.
Also, you can click on the "Back to Menu" button to return to the menu and select the next
step, or you can click on the workbook tab at the bottom of the page to move to the next sheet
when done with service data entry.
Step 2: Enter Budget or Expense Data
Budget or expense information for your system should be based on the same time period as the
service data entered in the previous step. In other words, if budget data are next year's projected
budget, the hours and miles data also should be next year's projection. If expense data are based on
last year's numbers, service data similarly should be based on last year's actual performance.
As noted in the introduction, the budget format employed in the model follows that incorpo-
rated into the Uniform System of Accounts used for NTD reporting (Exhibit 9-4). Use of this for-
mat has several advantages:
· The objects of expenditure are well known to many transportation agencies.
· This system has been the basis for transportation system reporting for many years.
· The chart of accounts is expressly constructed for transportation services.
Exhibit 9-4. Chart of accounts.
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38 Sharing the Costs of Human Services Transportation
If you are not familiar with the line items in the chart of accounts, additional help is available.
For each item, a definition is incorporated into a comment field in each cell. To see the definition
for a particular line item, move your cursor over any cell that has a small red triangle in the right
side of the cell. The comment window will appear with the definition of the account (Exhibit 9-5).
The total of all of your entries will automatically be calculated for all data entered. Check this
figure to make sure that it equals your total budget or expense figures. If you do not enter all of
your costs, the prices calculated by this model will be less than your total expenses, and you will
lose money on your transportation services.
Note: When entering budget data, enter numbers without commas, separators, or dollar signs
(e.g., 999999 rather than $999,999). The cell will automatically format your data.
Also, the Cost Sharing Model provides, at the user's discretion, the opportunity to include depre-
ciation in the computation of fully allocated costs. In most cases, however, it is recommended that
the user not include depreciation in the model's computations. This decision typically will rest on
the following factors:
· Agencies may not readily maintain depreciation schedules for capital assets.
· The Office of Management and Budget (OMB) does not allow the depreciation of assets acquired
with federal funds to be charged as an allowable expense to another federal grant.
· Local shares of capital costs can vary substantially and may not be known to all agencies.
· Different states have different rules and levels of participation in capital funding.
Exhibit 9-5. Definition comment field.
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Instructions for Using the Cost Sharing Software of the Cost Sharing Toolkit 39
The vast majority of the users of the Cost Sharing Model probably will be in the same situation
(i.e., using federal funds for capital purposes). As long as all participants follow the same proce-
dures (e.g., everyone excludes capital costs), the Cost Sharing Model still will provide reasonable
guidance for allocating costs among stakeholders.
For more information about depreciation, see Appendix E.
Step 3: Compute Fully Allocated Costs
Once service and budget data are entered, you can now compute the fully allocated costs asso-
ciated with any service. From the Menu, click Step 3.
First, indicate if the service for which you want to compute the fully allocated cost is a fixed route
service or a demand response service. Click on the appropriate button to signify the mode of ser-
vice (Exhibit 9-6). The model allocates fixed expenses differently depending upon the mode of ser-
vice. You must choose one of the modal options in this screen.
Next, you will need to enter three measures associated with the service you wish to cost:
· Vehicle hours.
· Vehicle miles.
· Passengers.
Exhibit 9-6. Cost calculator.
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40 Sharing the Costs of Human Services Transportation
If you are costing a fixed route service, you also will need to enter the number of vehicles that
will be assigned to the service at peak periods.
Once you enter these service parameters, the fully allocated cost of the service will be automat-
ically calculated in the last blue cell on this screen.
The computations for calculating the fully allocated cost of the service are not visible in these
spreadsheets. For details on the computation steps being performed, see Chapter 8 of this Toolkit.
Step 4: Compute the Price of Service
Pricing the Specified Transportation Service
Now that you have computed the fully allocated cost of a service, you can express that cost in
common pricing terms. The Cost Sharing Model provides three options for pricing transporta-
tion services:
1. Price per mile.
2. Price per hour.
3. Price per trip.
Select your pricing choice by clicking on the appropriate button. Based on data you entered in
Steps 2 and 3, the price, per unit of service selected, is shown in the blue cell in this window
(Exhibit 9-7).
If you wish to see the price generated by another unit of service, simply click another button; the
pricing automatically will be updated in the blue output cell. For example, if you have already cal-
Exhibit 9-7. Pricing options.
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Instructions for Using the Cost Sharing Software of the Cost Sharing Toolkit 41
culated the price per passenger trip, you also could calculate the cost per mile or the cost per hour.
Different agencies may require different units of service for billing.
Pricing Another Transportation Service
Once you have entered the budget and service data in Steps 1 and 2, you can use this model
repeatedly to price other transportation services as long as the pricing analysis requires the same
temporal data as originally entered. First, save your initial calculations. Second, make a copy of
these calculations. Then, as long as the information on projected service and budget or expense
data that you entered in Steps 1 and 2 remains the same, you merely need to enter new data in
Step 3 to obtain valid results (in Step 4) for the fully allocated cost of another transportation ser-
vice or contract.
