statewide 9-1-1 level rate study
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Statewide 9-1-1 Level Rate Study. Thomas A. Petee, Ph.D. Auburn University at Montgomery Center for Government & Public Affairs. jStatewide 9-1-1 Level Rate Study. Alabama 9-1-1 Board commissioned AUM to conduct a study and determine a Statewide level rate - PowerPoint PPT PresentationTRANSCRIPT
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Statewide9-1-1 Level Rate
Study
Thomas A. Petee, Ph.D.
Auburn University at MontgomeryCenter for Government & Public Affairs
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j Statewide 9-1-1 Level Rate Study
• Alabama 9-1-1 Board commissioned AUM to conduct a study and determine a Statewide level rate
• A level rate can be determined through a calculation of:– Revenue (wireless) paid by the Wireless Board to each
Emergency Communication District (ECD) for FY 2010-11, plus any other revenue that should have been paid in that fiscal year
– Revenue generated through the 9-1-1 system for land line/VoIP to establish a baseline for each ECD for wire line services
– Total eligible wireless and land line/VoIP connections that are available in the State of Alabama
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Statewide 9-1-1 Level Rate Study
To ensure accuracy in the estimation of land line/VoIP rates, ECD’s were categorized into one of three groups:– ECD’s that have not changed their rate since October
1, 2010 – ECD’s that increased rates between October 1, 2010
and September 30, 2011– ECD’s that increased rates between October 1, 2011
and April 30, 2012
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Statewide 9-1-1 Level Rate Study
ECD’s that have not changed their rate since October 1, 2010 were asked to provide:– Data on surcharge fees collected for the highest
revenue generating year of the past five fiscal years (2008-2012)
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Statewide 9-1-1 Level Rate Study
ECD’s that changed their rates between October 1, 2010 and September 30, 2011 were asked to provide:– The month in which they first collected fees under the
newly established rate– The average monthly revenue for those months in
which fees were collected under the new rate; this would then be annualized by multiplying the average figure by 12 months
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Statewide 9-1-1 Level Rate Study
ECD’s that changed their rates between October 1, 2011 and April 30, 2012 were asked to provide:– Specific information as to the amount of the increased
rate for the emergency service charge– A copy of notification to the primary telephone
provider of the district as to when the new increased rate is to go into effect
– The line counts for each month of fiscal year October 1, 2010 – September 30, 2011
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Statewide 9-1-1 Level Rate Study
Telephone Providers were asked to provide data for the month of December, 2012 on:
- The number of wire line 9-1-1 surcharges - The number of post-paid wireless 9-1-1 surcharges - The number of pre-paid wireless 9-1-1 surcharges
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Statewide 9-1-1 Level Rate Study
For the calendar year 2012, the average surcharge rates were:
Wire line - $3.79 (combined business/residential)
Wireless - $0.70 (for both pre- and post-paid)
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Statewide 9-1-1 Level Rate Study
From the data provided by the ECD’s, we calculated an annual baseline revenue estimate for 2012:
Wire line/VOIP $72,964,165.48
Wireless $32,188,151.86
TOTAL $105,152,317.34
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Statewide 9-1-1 Level Rate Study
In addition to the baseline revenue, a number of adjustments needed to be factored in to arrive at a target revenue estimate:
- a 2% ECD revenue buffer (not including pre-paid wireless)- a 20% cost recovery for wireless- the 7% add-on for pre-paid wireless point of sale - the fee paid to the Examiners for Public Accounts for auditing
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Statewide 9-1-1 Level Rate Study
The calculation of those costs were as follows:
Baseline revenue $105,152,317.342% revenue buffer $1,967,856.1120% cost recover for wireless $6,437,630.387% add on for pre-paid point of sale $473,165.84Auditing costs $1,390,322.30TARGET REVENUE ESTIMATE $115,421,291.97
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Statewide 9-1-1 Level Rate Study
From the telephone providers, we determined the following line estimates per month for each type of telephone line:
Landline/VOIP 1,603,970Post-paid Wireless 2,965,589Pre-paid Wireless 794,192
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Statewide 9-1-1 Level Rate Study
Annualized, those estimates are as follows:
Landline/VOIP 19,247,640Post-paid Wireless 35,587,068Pre-paid Wireless 9,530,304TOTAL LINE SURCHARGES 64,365,012
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Statewide 9-1-1 Level Rate Study
Consequently, the estimated level rate was calculated as follows:
$115,421,291.97/64,365,012 =
$1.7932
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Statewide 9-1-1 Level Rate Study
Using that rate (rounded up to $1.80), the estimated post-implementation surcharge collections would be as follows:
Landline/VOIP $34,645,752.00 Post-paid Wireless $64,056,722.40 Pre-paid Wireless $17,154,547.20