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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.