cost allocation plans, rate model, identifying system efficiencies/leveraging funds

Cost Allocation Plans, Rate Model, Identifying System Efficiencies/Leveraging

Funds

TD Trivia

TD Trivia

• What day will Transportation Disadvantaged Day take place on in 2013?

March 21, 2013

TD Trivia

• True or False, A CTC should not use the rate model to determine non-emergency Medicaid transportation rates because these are set by state statutes?

False

TD Trivia

• How many years has the Commission been hosting the Transportation Disadvantaged Best Practices & Training Workshop?

20 Years!

TD Trivia

• True or False, the rate model comprehensive budget spreadsheet tab cover two years of calculations?

False – It’s 3 years

TD Trivia

• Name the two best ever TD Commissioners.

Your Thoughts

• What did you hope to learn in this session?

Cost Allocation Plan

• Should develop plan before CTD rate model– Allocation plan should support 1st year of financial

model• Any rate(s) adopted by a CTC should be

supported by an exclusive cost pool made up of projected identifiable and allocable costs

Cost Allocation Plan

• Should be cost-based• Assigning costs to multiple distinct cost pools

(services/rates)• Amount of expenditure dependent on

measure related to the provision of service– Assign number of employees to cost pool– Allocate overall costs among different cost pools

• Fully allocated• Allocated indirect

General

• Major classifications of costs– Administration (overhead: executive direction,

administrative and clerical, finance & accounting, etc.)

– Management (specific to TD program: customer eligibility, scheduling, dispatch, customer record keeping, invoicing, etc.)

– Operations (direct operations: driver labor, vehicle capital and operating costs, insurance, etc.)

Methodology

• Basis for allocation– Cause-and-effect – Benefits derived– Fairness, or ability to bear

• Ethics• Change

Methodology

• Ratio / Percentage based– % of personnel– % of benefit

• Use based– Number of trips per program– Number of miles or hours

• Space based– Square footage

– KEEP BASIS REASONABLE!

Direct Costs

• Direct program benefit– Program specific personnel– Fuel– Vehicle

• Easily traceable back to specific program

Indirect Costs

• Not program specific• Timeliness• Consistency• Accuracy• Audit - AID– Accumulation– Identification– Distribution method

Uncollectable Budgeted Costs

• The following should not be considered for rate-making purposes:– Co-pays not paid;– No-show, no pay; – Match requirements; and– Shortfalls in other rates.

Non-Recoverable Costs

• The following should not be considered for rate-making purposes:– Costs covered by federal, state, or local capital

acquisition or operating subsidies;– Costs covered by co-pay/farebox revenues;– Costs covered by special contracts for service; and– Costs covered by any other special rate or

revenue.

Unallowable Cost

• Liquor / Lotto• Lobbying• Bad debt• Who’s gotten a speeding ticket while on work

related travel?• Entertainment• Land

Allocation Model

• Cost Model– Revenue

• Eligibility• No duplications

– Expenses– Data

• Passenger miles• Passenger trips

• Assign line item expense accounts• Calculate average unit costs• Document rationale for assigning costs

Cost Allocation Activity

2012-13 Rate ModelsCommon Areas of Interest

General

• Develop a cost allocation plan for the services being priced.

• Start with the latest version of the Rate Model from CTD website. Currently Ver 1.4.

• Process approval from CTD staff before going to the LCB. Ideal time is around January.

Comprehensive Budget Tab1 of 2

• Enter correct fiscal period in cells H10 and H11.• Provide explanation for revenues.

– Identify source of funds when not specific;– Explain changes 10% or $50,000 between any two periods.– Identify use of revenue between capital VS trips VS system

subsidy;– Confirm grant funding match ratios and sources;– Explain all rows with “other”;– Identify bus pass program revenue & expenses;– Confirm expenses for fixed route service only reflect what

you pay for bus passes;– Include any in-kind or contributed services;

Comprehensive Budget Tab2 of 2

• Provide explanation for revenues (continued) –– Include allocated indirect cost unless fully allocated in each

line item;– Check that grant funded equipment and match is indicated

in rows 175-178;– Confirm you haven’t omitted any non-grant funded

depreciation expenses in row 171;– List all Contracted Transportation Service providers; and– If program revenue has been realized, notate how these

gains are reinvested in the following year(s).

Budgeted Rate Base Tab

• Confirm proper revenue and match by trip purchasing grants/programs have been moved to column “J” (the Rate Base). At a minimum this includes:– At least 10% match for CTD non-sponsored grant;– At least 10% match for Shirley Conroy grant;– At least 50% match for 5311 operating grants drawn down

on a unit price basis;– Whatever the match is for other capital grants.

• If making a rate base adjustment in cell F184, confirm use of proper positive or negative number.

Program Wide Rates Tab

• Confirm the passenger mile figures you enter are the passenger mile basis you use in your billing (If you bill by the passenger mile).

What's Next?

• Analyze feedback and comments from workshop.

• Update Rate Model for next cycle accordingly.

• Review the 2009-2013 summary report of Rate Model pricing available on CTD website (and handout).

Index Card Response Activity

Identifying System Efficiencies & Leveraging

Resources

System Efficiencies

• TD bus pass program and/or flex-routes• Issue reduced fare/TD ID cards• ADA bus stop improvements• Gas vouchers• Client and volunteer mileage reimbursements• Trip scheduling criteria• Maximizing vehicle load• Fare policy and enforcement

System Efficiencies

FREE LABOR!

Leveraging Funds

• Use TD funds to match New Freedom grants as available

• Identify in-kind matching opportunities• Corridor grants/Section 5311• Partnerships with colleges• Vehicle sharing among recipients and sub-

recipients of federal programs• More coordinated planning!

Coordination Efforts

• Education and marketing efforts– Elected officials– Human Service Agencies– Customers– General Public

• You have resources– CTD– UWR– CTAA– FDOT

Efficiency Activity

• What is your agency’s major cost contributor?• Identify an efficiency improvement

implemented to reduce costs.• Explain if the improvement was effective.• How did you get management, staff, or

customer buy-in on the improvement?

Questions