IMS-006/CW-2
  DECENTRALIZED PRIVATE GARAGE I/M PROGRAM
         COST CALCULATION WORKSHEET
                August 1979
      Inspection and Maintenance Staff
    Emission Control Technology Division
Office of Mobile Source Air Pollution Control,
    U.S. Environmental Protection Agency

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            Decentralized Private Garage I/M Program
                   Cost Calculation Worksheet
This  worksheet  is  designed  to  enable I/M  program  administrators  to
project total  costs  of a decentralized private  garage program at early
stages  of  planning.   The  factors  involved  in  initial  and annually
recurring  costs  are  systematically  organised  to  compute  an  annual
inspection  fee  which will cover all program  costs for the  total length
of the  program.   There is a separate  package for projecting  costs  of a
centralized,  state-  or contractor-operated program.   Costs of separate
fleet  inspections as  part of  the  I/M program  are  not  considered  in
either  of  the worksheets.   It  is  assumed  that  costs of administering
such a fleet inspection program would be covered by permit fees to fleet
owners.

The  worksheet computations  obviously  depend heavily upon assumptions
made  by the  user.   Since in many cases users  will  not  have detailed
information,  estimates have been  provided  which  may be substituted  to
allow rough  calculations.   An  example  is worked  through in the  text  of
the instructions  using  those estimates.  It is absolutely essential  that
users recognize  that the suggested estimates  are not intended to apply
to every  program.  They merely provide a reasonable  approximation where
no better  data  is  available,  and  worksheet  users are  expected to use
their  own  best  judgement in  applying or  adjusting   them  to  their own
program.  Users  should adapt  the worksheet to meet their own program's
unique structure.

To use  the  worksheet set, remove it as a unit from the back of  this in-
struction package.   Set the pages  alongside  the instructions, for  easy
cross-referencing  as progress  is  made through  the  calculations.   Flip
through  the  pages  while  reading  the following  introductory  summary.
This will allow  a sense of the overall  organization of the worksheet and
make  the  logic  of  the calculations  more  coherent.   It  is also a  good
idea  to make  several  copies of' the worksheet  itself,  particularly  if
users want  to compare several program  options or various basic  assump-
tions for their  effect  on the inspection fee.

The organization of  the worksheet set  is as follows:   First, assumptions
which  are basic  to  the cost calculations  are enumerated and coded for
easy reference as progress is made  through  the worksheet  (section I.A.).
From  some of these  assumptions, basic  program parameters are  calculated
(I.B.).  For  example,  the average annual auto population  (AAP) is calcu-
lated on the  basis of  the current population  (POP), the  estimated annual
growth  rate  (CRT), and  the program  length (PRL).   This result  is  used  as
the basis for the program requirements, since provision must be  made for
more  than the  current  population.

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All costs which pertain to the private garages administering  the  inspec-
tions are  then  calculated (section II).  These are.divided into  initial
investment  costs  (II.A.), such as equipment  and  mechanic training, and
recurring  operating  costs (II.B.) , .including equipment maintenance and
time and overhead  for the inspections themselves.  'These,  in turn, are
each converted  from a  per-garage or per-test basis  to an overall pro-
gram-wide figure.

The program-wide  costs for  garages  are  then "annualized" to take into
account  inflation  and  interest  costs (II.C.).   All  initial  investment
costs for  the  private garages are amortized  on the assumption that they
depreciate  completely  over the length of  the program.   Recurring costs
are multiplied  by a  factor  which provides for the average effect of  a
constant rate  of  inflation.   The annualized  costs are summed to yield
total program-wide average annual costs to the private  garages.

The remainder of the worksheet is devoted to  costs  incurred by the state
for  monitoring  and  administration  of  the  program.    Calculation   of
initial  costs  to  the  state  (section III) begins  with  estimates of the
state's  requirements  for examiners  to  monitor   the  operation  of the
private  garages (III.A.).  Costs  of  training and hiring these  station
examiners  are  included with personnel costs  of  the  central  administra-
tive  startup  staff  and  other administrative startup  costs (III.B.).
Several  segments are  then devoted to estimating investment requirements
and  costs   for  land,  construction, equipment and  personnel   for state-
operated referee inspection facilities (III.C.).

Annually recurring costs  to  the state are  then  computed  (section IV).
These are  also  divided between general costs of administration and sur-
veillance  of the  private garage program  (IV.A.) and  costs  pertaining  to
the operation of the referee facilities in particular (IV.B.).

All  costs   to  the  state  are  then "annualized",  as were  the costs  to
private  garages,   to  handle  inflation  and. interest  costs  for borrowed
capital  (section V).  The state, if. it operates referee facilities, will
make initial investments  which will retain  salvage value at  the end  of
the program.   Formulae for calculating annual payment  of  initial  costs
to  the  state are therefore slightly more complicated than  that used for
the private garages (V.A.).  The formula used for  calculating the effect
of  inflation on recurring costs,  however, is the same as that  for the
private  garages (V.B.).  The annualized costs are summed to  yield  total
annualized  program costs  to the state  (V.C.).

Finally, total  annualized costs to the state and  to  the private  garages
are combined (section VI).  The sum, divided by  the  average  annual auto
population,  represents  the  cost-covering  inspection  fee  for a decen-
tralized program.

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Before proceeding  with  the worksheet, users should pause to answer some
basic  questions regarding  the  character of  the  decentralized program
they  envision.   These questions regard  political,  rather than economic
choices.  But since  they involve basic parameters that vary widely from
program  to program,  and since  they  have a  strong' impact on  the cost
assumptions, the following issues should be considered:

1.  How much of a  station's overhead  resources will the inspection
function occupy?

Will stations perform tests only incidentally, or as a more specialized,
regular  occupation?   How many  tests will  each  station  be  expected  to
perform?   (i.e.,   over  how many  inspections may  the  station's capital
costs  be  defrayed?)  How  much  shop time  will be  dedicated  to each
inspection?  Will  stations  be set up to handle  only one  inspection at a
time,  or multiple inspections?   Will auto owners be  able  to drive  in,
have their cars tested,  and drive out, or will they be expected to leave
their cars at the  station for, say, a day or several hours?

2.  Will inspection  personnel also perform vehicle repairs?

How highly  trained - highly paid - must  inspection personnel be?  Should
they  be mechanics,  or  could they  be  lower  paid  station attendants?
Should  the  station  be  expected to absorb  some  costs  of the inspection
program  with  profits made on accompanying repairs, or should the  repair
and inspection  functions be separated?  Who should bear costs of special-
ized mechanic or inspector training?

3.  How  much use of  state-provided challenge facilities is projected?

Use,  of  course, will be a  function  of  availability, which will in  turn
be a  function of  projected use.  The decision as to how much  challenge
facilities will be used will be  in  part a self-fulfilling prophecy, in
part  a  function of  other elements of the program, such as separation of
inspection  and  maintenance functions, degree  of training of inspection
personnel, and  degree of specialization  of I/M stations.

4.  How  will quality control be  implemented?

How  often  will  garage instruments  be  calibrated?   Will  test  result
certification  require additional  instrumentation (e.g.,  to record  test
results)?   How often will  station  examiners visit inspection  stations?
What  procedures will station examiners  follow?  Will roadside  checks be
performed to measure garage inspection effectiveness?

Obviously  these questions are highly interrelated.   Costs of  a program
where  a  limited number  of stations do a  high  volume of inspections  with
low-cost personnel  and repairs  performed elsewhere  will  vary greatly
from  those of a program where almost  any  garage  does a very low volume of

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Inspections, and  the mechanic  repairs vehicles  on  the spot.  Likewise
the  type  of quality  control  implemented  and  availability of challenge
facilities  provided will  have  a  significant  effect  on  the  manner in
which the garages  carry out the program, and influence t.he distribution
of costs between the state and the garages themselveV.

The  example  worked through in  the instruction text is  that  of an ima-
ginary city called "Smogville".  Most assumptions made for the Smogville
decentralized  program  are parallel  to those made in  the worksheet de-
signed for  a  centralized program,  so. that cross-comparison of costs can
be made for the two major types of programs.  In response  to the questions
posed  above,   Smogville  planners envision  a  program where  each garage
performs  an  average of  fifteen inspections per  week,  as incidental to
its  other repair functions.  The  personnel  performing inspections will
usually be well-trained mechanics, who also perform such vehicle repairs
as are  necessary.   State  challenge facilities will  be made available,
but only.on a  limited basis; i.e., sufficient for about three percent of
the  vehicle  population, or  about  ten percent  of anticipated failures.
Private  garages  will be  required  to  calibrate their instruments about
four  tines  a  week,  and will be  subject  to a brief, unscheduled inspec-
tion  by  a state  examiner about once per month.  The state examiner will
also  check  the calibration  of the  garages'  test equipment  during his
inspection.  No extra  costs are included  to account  for any additional
enforcement of the program, aside  from  what  normal  administrative per-
sonnel  time  may be  taken up  by requiring evidence  of passing the in-
spection  for vehicle  registration.  Other pertinent assumptions made by
the  Smogville  program administrators will be pointed out  in the instruc-
tions.

I.   PROGRAM PARAMETERS

      A. Assumptions

          1.   Present Auto Population  (POP);  This will be a  function of
          the  geographic areas  to^. be covered  by  the  program and their
          population  densities, commuting patterns relative to neigh-
          boring jurisdictions,  and  concentrations  of vehicles subject
          to  the  inspection  program.   Subject vehicle  classes  may be
          defined  by  weight and model year  ranges,  or other character-
          istics,  or  by exclusion  from  exempt vehicle categories.  The
          information  needed  to derive  this figure  can usually be pro-
          vided by  the  area planning  commission, highway  patrol or motor
          vehicle  authority.   In Smogville, the current  auto population
          is 750,000.

          2.   Annual Auto Population  Growth Rate  (CRT);   This  can  be
          determined  over the  projected life  of  the  program by use of
          motor vehicle department records, census data,  transportation

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(I. A. 2, cont.)

planning  data,  survey  information,  etc.  The  Stnogville auto
population is growing at -the rate of Z.B^per year.
3.   Annual  Inflation Rate  (INF) ;   Economists'  estimates range
anywhere  from 5%  to  10%  or more.   Smogville administrators
anticipate a rate of 7%.

A.   Annual Interest Rate ' (INT) ;   Lending  institutions typi-
cally set  interest  rates about 3.5% higher than the inflation
rate, subject to the constraints of the market.  Ten to  twelve
percent is  a  reasonable estimate at present,  if area-specific
information is  not available.   Occasionally,  public projects
can obtain slightly lower than commercial rates, e.g.,  through
bond issues.  In the Smogville program, the state will  pay  the
same rate as private garages, at 12% per annum.

5.   Program Length  (PRL) ;   Estimates  will  vary for each pro-
gram.  The program may be set up in segments of five years,  if
it  is  not  clear  how long  the program will  be required.   In
that case,  use  the length of the planning segment.  Smogville
is using a  five-year planning segment.

6.   Stringency Factor  (STR) ;   The  stringency  factor  to   be
applied is  derived  from EPA's KOBILE1 program for  calculating
program benefits.  It corresponds to the percent of autos that
would be expected to fail the emissions criteria if there were
no I/M program.  In Smogville the stringency factor is  set  for
30%.

7.    Stations per 1,000 Autos (STA/1, OOP);     This  assumption
will  reflect  the  design   of   the  program  to the  extent  of
determining  how  "inspection-intensive"  each  private  garage
station must  be  (i.e.s  how many  inspections   each designated
station  will  be  responsible for  performing).  The per-1,000
auto  requirement can be easily  determined  by getting an idea
of how  many inspections each  station  should do on an  average
weekly  basis, and  dividing  1000/50  =  20  cars/week  by this
number  (this  assumes fifty operating weeks  per year) .   For  the
Smogville  program,  for  example,  planners  estimate that each
station  will  inspect  an  average of  fifteen  cars per week.
20/15 = 1.33; that is  1.33 stations are needed for  every 1,000
cars in the population.

8.   Garage Costs per Hour (MPH) ;   This  assumption  also   re-
flects  the basic design  of  the  program,  particularly with
respect to  the kind of  personnel  to be employed as  inspectors,

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(I.A.8, cent.)

and  the  extent  of each stations' resources to be dedicated  to
the  inspection  function.    In   the  Smogville  program,  since
well-trained  mechanics will  serve  as  the inspectors,  it  is
estimated that  inspectors'- time and overhead for garages will
typically come to $24 per hour.

9.   Garage.Time  per  Inspection  (GTI);   Again,  this assumption
hinges on  the basic  program design.   If  stations are  to  be
specialized  for  the emissions  inspection,  garage  time can  be
kept  close  to inspection  time  required  for  centralized pro-
grams  (say 5 or 6 minutes).  However, if stations are numerous
and  the I/M functions sporadic  in each station, mechanics will
have  to  spend  extra  time  readjusting equipment,  moving the
autos  into  place, handling  paperwork,  etc.   Garage  time per
inspection could then go  as high as  ten  or  fifteen minutes.
In  the  Smogville  program,  ten minutes  per  auto  is assumed
(i.e., 0.17 hours).

10.   Mechanic and Inspector Training Costs 'per Garage (MITG)t
Program designers have several  options with respect to mechanic
and  inspector  training  requirements, again  reflecting their
basic conception of the program.  The state may subsidize such
training, or  may require the trainees or the garages sponsor-
ing  the  trainees  to  pay  the  cost, since  they  will  derive
economic benefits from  the  program.   If  vehicle inspectors
will   be  primarily   experienced  mechanics  responsible  for
repairs  as well,  training  for  the two areas of responsibility
may  be combined  into  one  course.   If  the two  functions are
separated,   or  requirements  for  certification as  a vehicle
inspector not as stringent,  separate  courses  may be offered.
Again, policy makers may exact  a  fee  from the individuals  or
garages  being  certified,   or  may  simply  apply  part  of the
states'  portion  of  the  inspection fee  to  costs  for such
courses.
                        >
Current  estimates range about  $15-$30 for supplies, teaching
equipment and instructor salaries for an 8-10 hour course for
either function  separately.   This would also include examina-
tion and certification of  the  trainee by the state.  In  Smog-
ville, it  is assumed that the  two functions will be performed
by the same individual.  A combined  training course is offered
for  $30  tuition, paid  for by  the garage or  the mechanic  taking
the  course.

In programs where the  state will cover part of  training costs,
that part of  the cost paid by the  state should be noted separ-
ately.   If  the  garages  will pay  all  costs for more than one
kind of  course,  the  total  cost  of  all  courses  paid  by the
garage should be  listed.

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        (I.A., cent.)

        11.    Percent of Failures Challenging  (FCH);   For  purposes of
        the cost  analysis worksheets,  the state's provision of chal-
        lenge facilities  is based on  the projected  percent of garage
        inspection failures  who will want  to  challenge the results of
        the garage test.  For planning  and assumption purposes, however,
        this relationship might be reversed, and the demand on challenge
        facilities could be  a function  of their supply and popularity.
        There is no  reliable existing  data to predict demand on chal-
        lenge facilities; therefore  the worksheet users must use their
        own discretion  in evaluating this  program' element.  The Smog-
        ville program  predicts that  about 5%  of  all  failures will
        demand use of the challenge  facilities.

        12.   Challenge Facility Hourly Lane Throughput (CTP);  Factors
        to be  taken  into  account in  projecting  the number  of autos
        each  referee  lane  can inspect per  hour  include  test mode
        employed  (loaded vs.  idle,  use  of  tachometer,  parameter or
        safety inspection,  etc.),  data  handling techniques  (automated
        vs.   manual,   etc.),  inefficiencies  of  scheduling, personnel,
        weather,  mechanical difficulties,  and  so   forth.   Table  1
        suggests  hourly  lane  throughputs  for  three  general  test
        formats,  including  ranges  of   efficiency.   However,  more
        attention  probably  will  be   required  for  those  motorists
        challenging;  therefore, Smogville planners expect  a  throughput
        of around 10  cars per hour.
                      Table 1

      Vehicle Throughput (Cars per liour) by Proprnraformat
Pro&ran                        >  Optimal                    Projected
Format	Throughput	Ef fici-cncy	Throughput.
Stotc/City -
operated idle-                      20-25         50-03%         10-16
mode test vising
tachometer
State/City -
operated idlo                      30-36         50-64%         15-23
mode test with
safety inspection
no tachometer
Contractor -                       20-22         61-65X         12-1A
operated
loaded mode
test

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(I.A., cont.)

13. Challenge  Facility  Annual  Operating Hours (CHR);   This  is
the number  of  operating hours per year  for the state-operated
referee inspection  facility lanes.   Eight-hours daily  for  250
days  per  year would  yield 2,000  operating hours.  Ten hours
daily  would yield  2,500  hours.   The  Smogville  program will
keep  each  lane open eight hours per  day,  five days per week,
for fifty  weeks per  year, totaling  2000 hours per  lane  per
year.
                                                     2
14. Land Acquisition Costs per Square Foot ($LANT)/ft );   (For
referee  facilities) Land  acquisition costs  vary  widely from
locale  to  locale.   Local  estimates  should  be  obtained  in-
cluding possibilities of leasing site acreage.  Table  2 gives
an  idea of  the  idea variation  in  land costs  among  several
existing programs  and  proposals.  Obviously, where the state
can  utilize  land  it already  owns   or can  convert existing
facilities, these costs will be much  lower. .  In Smogville,  the
state  will be able to  purchase commercial land  at $2.50  per
square foot.
                          Table 2

           Price Vnriar5.cn in Land Acquisition Costs
7,or..i I'.i.on
Chicago
Denver
Portland
New Jersey
.. Cincinnati
St. Louis
Kanaas
Iowa
Nebraska
Ycnr
1974
1974-75
1975
1975
197f.
1976
1973
1978
Itl78
Cost per Square Toot
$4.00
$2.00-3.00
$2.75
$1.00-9.00
$0.92
$1.00-30.00
$3.15
$0.93
$O.R1
                                                2
15.  Construction Costs per Square Foot (CONS/ft );   Construc-
tion  of  referee facilites  should include office,  storage  and
lab areas, and should  account  for possible expansion of facil-
ities  or  changes  in  test mode.   Specifications  considered
should include:
Steel Frame         Overhead Doors      Forced Air  MVAC
Concrete Floor      Painted Walls       Underfloor  and Roof
Finished Office     Small Restrooms          Exhaust  System

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(I.A. 15, cont.)

Estimates  of  construction  costs range  around $26  -  $35 per
square  foot.    Again,  use  of existing -facilites  will  lower
these costs.  In Smogville, such construction  can be performed
for $26 per square foot.
                                           2
16.  Paving Costs per Square Foot ($PAVG/ft );   (For   referee
facilities) Present  estimates range  around  $1.00  per square
foot.  Smogville will use this estimate.

17.  Initial Public Information Costs ($IPI):   These  may in-
clude  expenditures  for  testing  clinics or  demonstrations,
media spots, mailings,  advertisements,  literature, workshops,
contact with public  interest groups and  officials,  and so on.
Some consultants have  suggested  that this may amount  to  up  to
$.29  per vehicle,  although  most  existing  programs  allocate
quite a  bit less to public information.  Still, public infor-
mation continues  to  assume greater importance for  its role  in
enabling  programs  to succeed.   Many  planners would prefer  to
budget this item as a lump sum rather than as  a per-auto  cost.
Either format is usable for the  worksheet.  Smogville  planners
prefer to budget a lump sum of $125,000.

18.  Recurring Public  Information Costs  ($RPI);  Public Infor-
mation  efforts  should  be maintained throughout  the  program,
including several  of  the items  listed above,  such  as  mailings
and  advertisements.   To  some extent it may be  possible  to
minimize  these  costs by,  for example,-including  I/M program
information in  other  motor vehicle department mailings.   Some
consultants  have  suggested  $.10 per  vehicle  annually; and
again this  is more than considered necessary  by most currently
operating programs.   Once more,  this assumption can be listed
either as a per-vehicle. cost or as a recurring lump sum  cost,
which may be  calculated as,  say, a fraction  of initial public
information  costs.   Smogville planners  conceive this  cost  in
the range of $.10 per auto.

19.  Inital Program Design, Engineering  and Evaluation ($IDR):
This  item accounts for  functions beyond those  of  the normal
administrative   staff,  which  are  handled  elsewhere  in  the
worksheet.   Such functions  as research and development,  pro-
gram  planning,   system  design and analysis,  etc., are  often
contracted  or subcontracted out  to a separate firm, or can  be
performed by  a  small auxiliary  or temporary  staff.  This item
may  also  include  software  development.  On a  per  vehicle
basis,  $.15 to $.25 is  suggested for  this   item.  Smogville
planners  prefer  to  consider this  as  a  lump  sum,  and are
budgeting $150,000 for  this purpose.

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                                  10

 (I.A., cont.)

          20.  Recurring Program Design, Engineering and Evaluation ($RDE);
          This Is  the  extension and updating of  initial  program design
          functions and  evaluation  performed beyond  the scope  of  the
          regular  administrative  staff.  Some  programs will  prefer to
          simply  incorporate  this   item  with  nonna-1   staff  functions.
          Smogville  is  taking this  approach  and  budgeting no  funds
          separately for this  function.   Other  programs will  want to
          maintain a- small extra engineering and evaluation project,  and
          an estimated  cost for  this  is about  $.05 to  $.08 per auto.
          (Can also be  projected as a lump sum).

          21.    Computer Processing Cost per Test  (CPT); .    This   cost
          category  is  provided for  situations  where costs  of software
          development  and  revision,   data  storage  and  retrieval,  and
          computer  time  are  not accounted for separately.  For example,
          if  a program  does  not  purchase its  own complete  data pro-
          cessing  system,  (costs  of. which are  handled  elsewhere), this
          item could account for fees to a commercial timesharing system.
          In other  cases costs of  computer processing of  test results
          may  be distributed  among  normal duties for the administrative
          data analysis, statistical,  and  clerical staffs, and software
          development may be  considered part  of initial program design.
          The  worksheet  is  designed  so that any  of  these planning con-
          cepts may be  applied.  Smogville planners believe that computer
          processing costs  are  accounted for  in other  planning cate-
          gories and are  budgeting  no  separate funds for this.  $.05 to
          $.15 per  test is  estimated  for other  situations,  with costs
          varying as a function of the sophistication  of  the data pro-
          cessing program.

B. Parameter Calculations

          1.   Average  Annual Auto Population  (AAP);  The  average annual
          population,  rather  than  the  maximum,  is used as the basis for
          requirements  calculations, for a given planning segment.  This
          will  minimize  both  unSerutilization  and overutilization of
          facilities.  The  function shown  on the  worksheet  yields the
          average  annual population by  computing the  populations  for
          each year of the  program, and dividing  the  sum by  the  length
          of the program planning segment.

          2.   Inspection Stations Required (STRQ);  The  function shown
          in the worksheet  multiplies  the per-thousand auto requirement
          for  I/M  stations  by  the  number of  thousands  in  the  annual
          average  population,   to  yield  the  number of  stations  to be
          required  for the course of the program.

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                                                 Coat Calculation Worksheet:  I/M Program
I.  PROGRAM PARAMETERS
                                                   Decentralized Private Garage Program

                                                                            */
A.    Assumptions

 1.  POP  Present Auto Population
 2.  CRT  Annual Auto Population Growth  Rate  (%)
 3.  INF  Annual Inflation Rate (?)
 4.  INT  Annual Interest Rate (%)
 5.  PRL  Program Length (years)
 6.  SIR  Stringency Factor (%)
 7.  STA/1,000 = Stations per 1,000 Autos
 8. .MPH - Garage Coats per Hour (Wages + Overhead)
 9.  GTI  Garage Time per Inspection  (hours)     v
 10.  MITG - Mechanic/Inspector Training Cost per Garage
 11.  FCH  Percent of Failures Challenging
 12.  CTP  Challenge Facility Hourly Lane
           Throughput (cars/hr)
 13.  CUR - Challenge Facility Annual Operating Hours
             2
 14.  $LAND/ft   Land Acquisition Costs
             2                                        ,
 15.  $CONS/ft  = Construction Costs
 16.  $PAVG/ft2 - Paving Costs
 17.  IPI - Initial Public Information Cost
 18.  RVI  Annual Public Information Cost
 19.  IDE  Initial Program Design, Eng. & Eval.
 20.  RDE  Annual Program Design,  Eng. & Eval.
 21.  CPT  Computer Processing Cost per Test Result
0./7
 30
 
 1 Sit
   . to
                                                                                    B.    Parameter Calculations
                       1.    Average  Annual Auto Population  "'AAP
                                   PRL-1
                              (POP)  D     (1-WRT)1
                                   PRL
                               "  737, SQ9   
                       2.    Inspection Stations Required- STRQ
                                AAP
                                1,000
                x STA/1,000
1.
3.   Projected Challenge Tests  CHT
                                 FCH x  STR x AAP
            -  STRQ
                                                                         CHT
A.   Annual Challenge Lane Capacity  CAP

               CTP x CHR      -     o*-xee  - CAP

5.   Total Challenge Lanes Required" .LAM
                                      CHT
                                      CAP
                                                -LAN

-------
                                     12
          (I.B.,  cont.)

          3.   Projected Challenge Tests  (CHT);   The  function  shown  in
          the  worksheet  takes  the  ^projected  average annual  number  of
          failures by  multiplying  the average annual  population by the
          stringency factor.  Multiplying  the  product by the percentage
          of  failures  challenging  the  private  inspection  yields  the
          total number of  projected  users of the  state-provided chal-
          lenge facilities.

          4.   Annual Challenge Lane Capacity  (CAP);   This is determined
          by  multiplying   projected   hourly  lane  throughput  by annual
          operating hours.

          5.   Total Challenge Lanes Required (LAN);   Divide  projected
          challenge tests  by per-lane capacity  of  challenge facilities
          to determine  the necessary number of challenge lanes.

II.  COSTS TO PRIVATE GARAGES

     A.  Initial Investment Costs

     Private garages would  normally  need only an emissions analyzer and
     tachometer  setup;   Costs  for  these  range  from  $2,500  to $3,500.
     For mechanic  and/or  inspector  training, insert  the  portion of the
     assumed cost  from section  I.A.  that applies to the private garages
     or mechanics.  The sum of  these values will  represent the average
     set-up cost  to each  garage.   Multiplying by  the  number of inspec-
     tion  stations required ("STRQ",   from  section  I.B.)  yields  the
     program-wide set-up  costs to private garages.

     B.  Annually Recurring Costs

     Equipment  repair  and  replacement  co'sts  should  be  estimated  as a
     percentage  of original equipment  setup  costs  as  determined  in
     section II.A.  Ten percent is  typical, and this  figure  is  used for
     the Smogville program.   Calibration.gasses can be purchased in 220
     ft  cylinders,  enough  to  provide  calibration for  about a year of
     operation  (1  ft   per  calibration,  200  calibrations per year) for
     $120-$200.  Smaller cylinders of e.g., 35 ft , can be purchased for
     convenience  in handling; but  the cost is approximately  the same as
     that of  the  larger  cylinders,  making the net  expense very high in
     comparison.

     The  per  test  cost   to the  garage  of  inspector's  time and other
     overhead  resources are obtained  by multiplying the  garage  per-hour
     costs  (MPH)  and  time  per inspection  (GTI), both  assumed  in section
     I.A.

-------
II.  COSTS TO PRIVATE GARAGES
     A.   Initial Investment  Costs
                                                                                                                       Decentralized-2
                                                                     C.   Annualized Total Coats to Private Garages
          1.    Per Garage
               Analyzer and Equipment
               Mechanic Training  (MITG)
          Total per Garage
2.    Program-Mlde
          PGI x STRQ
     B.    Annually Recurring Costs
                             7 ^L * $ Q
                                                      PGI
                                                                          1.   Amortization of Initial Costs
                                                                               PWI x
 INT (1 + INT)PRL
(1 + INT)PRL -1
                                                                                    2.    Annual Costs with  Inflation
                                                                                        PWA
                                                                                                         (1 + INF)
                                                                                                  .1-Q
                                                                                                         PRL
                                                                          3.   Total Annualized Program
                                                                               Cost to Private Garages
                                                                                                                     . 37?
                                                                                                                             - TPPG
1.   Per Garage                        ,
                                       .
     Equipment Repair and Replacement
     Calibration Gasses
                                               V
                                                   /
                   Total per Garage
          2.    Per  Test
                                      7  370  .
                                                     PGA
     Garaee Insoector's Time and Overhead
          CTI x MPH                 '   f..
3.    Program-Wide
  (PGA x STRQ)+(PTA x AAP)  (1+STR)
                                                              PTA
                                             A
                                            "  "'**   /    /^ '

-------
                                     14
     (II.B., cont.)

     Program-wide annual operating costs are obtained by multiplying the
     per-garage costs by  the  number -of stations required;  the per test
     costs by  the  annual  average number of  tests  (including the strin-
     gency factor  to account  for retests,) and adding  the two products
     together.

     C.   Annualized Total Costs to Private Garages

     Initial investment costs  to private  garages are expected to depre-
     ciate over the length of the program.  Thus the program-wide initial
     costs constitute a principle which can be paid off in annual payments
     (including interest) determined by the function shown in  the worksheet.

     Recurring costs  are assumed  to rise at a constant  annual  rate of
     inflation.  The  function shown  'averages  the  cumulative  effect of
     that annual  rate  over  the length  of  the  program  to  provide an
     average annual inflation factor which is multiplied by program-wide
     recurring costs to account for the average recurring costs including
     inflation.

     The  sum  of  annual  payment  of  initial  costs  and  annual  operating
     costs with inflation  yields total program-wide annualized costs to
     the  private  garages.   (This  total,  divided by  the average annual
     auto  population,   would  yield  the  part  of  the   inspection  fee
     incurred by costs to the private garages).

III.  INITIAL COSTS TO THE STATE

     A.   Station Examiner Requirements

     The table presented in the worksheet outlines  requirements for both
     initial and recurring costs, for state examiners monitoring the day
     to day  operation  of the priva-te  garage  stations.   Such monitoring
     of inspection procedures,   calibration  of  instruments,  and records
     of the private  station will be necessary to guarantee proper qual-
     ity control and execution of the public trust.

     In the Smogville  program,  each station will be  inspected once per
     month.   Each  examiner will  be  responsible  for covering about four
     stations  each day,  or ninety each month.  Based upon 1047 stations
     to be  inspected,  this requires 11.6 or 12 examiners.  Direct costs
     of instruction will include course materials,  overhead, and instruc-
     tors' fees.   Costs  of the  students' time at their hourly wage rate
     is added  to these costs, to arrive at total training costs.

-------
                                                                                                                    Decentralized-3
III.   _1NITUL COSTS TO STATE

     A.    Station  Examiner Requirements

Individual basis
Prog?'am Total
Number
Required
1 per ^7 O stations
x(STRQ)  />= EXS
Annual Salary
f3.od
fS4>.00* = SES
Duration of
Instruction
o ^Jrx

Direct Cost of
Instruction
Wee

Total
Training Costs
* 9*0

Hiring Costs
*%T

Total Training
plus Hiring Costs
*9i-f
/f, /O O  SETH
     B.   Administrative Startup Costs

         1.   Central Administrative Personnel
Position Area
Program Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff
Prs-Yrs
t
s:
5
/>
SUBTOTAL
Overhead, Fringe and Contingency (/CAJ 7.1
Cost
?^y/v
.3if
/"?,76>o
^^/
?oW
^o<\t^^
TOTAL SCAPIN = W 7f TW ^
2.   Total Administrative Startup Costs

    a.  Central Administrative Personnel    SCAPIN -

    b.  Training and Hiring of Station
                             Examiners  <*  $SETH   

    c.  Initial Public Information - IPI          -
                                 or  IPI x POP
    d.  Initial Program Design, Engineering
                   and Evaluation  IDE           	
                                 or  IDE x POP

     e.  Mechanic Training  (when sponsored by the State)

                     MITG, > x STRQ

     f.  Total Administrative Startup Costs
                                                                                                                                      . OOP
                                                                                                                              ?737,
                                                                                                                                       ADMIN

-------
                               16


(III., cont.)

B.  Administrative Startup Costs

     1.  Central Administrative. Personnel;.  This is. the staff  that
     will  initially  plan and  set up  the  program.   Since planning
     and setup  may  last more or less than one full year, personnel
     requirements are stated in terms of person-years.

     2.  .Total Administrative Startup Costs;

          a.   Take  the  total  figure  for  central  administrative
          startup  personnel  from the  previous  section,  III.B.I.

          b.   Insert  the program-wide  total cost for training and
          hiring of station examiners, as derived in section  III.A.

          c.   Enter  the total cost for initial  public information.
          If  this was  listed as a  lump-sum assumption  in I.A.,.
          enter  that.   if  it  was listed  as a per-vehicle assump-
          tion, multiply  that by the present auto population  (POP),
          and enter the product.

          d.   Repeat  step c.  for initial program design, engineer-
          ing and evaluation.

          e.   This  items is  to  be applied  only in programs where
          the  state  sponsors  part of  mechanic  or  auto inspector
          training.   In  such cases,  the  total amount  the state
          expends  for training for each  garage  should be disting-
          uished in section I.A., line  10.   Multiply this amount by
          the  number of  stations required,  and  enter the product.
          In  the  Smogville program,  all  training  costs  for me-
          chanic/inspectors are covered by the garages.

          f.   Add a.  through^ e.  for  total  administrative  startup
          costs  to the  state.

C.  Initial Investment  Costs  for  State  Challenge Lanes

     1.  Facility Square  Footage Requirements;   The table presented
     provides  spaces  for  listing  estimates of square  footage  require-
     ments for  land,  office and storage space, the inspection lanes
     themselves, and  external paving.   The  table is set  up  for  easy
     computation  using  an  "a(x)  +  b" formula, where  "x"  is  the
     number  of lanes  in a facility,  "a" is the amount of  square
     footage  in  a  certain  category  needed for each  lane  in  the
     facility,  and "b"  is a basic square  footage requirement  needed
     for  each  facility,  independent  of  the number of  lanes.   For
     construction  of  the  inspection  lanes  themselves, obviously,
     there  is  only  a per-lane requirement, and no basic  facility
     requirement.

-------
III.  Initial Costs to State  (Continued)




  C.    Initial  Investment  Costs  for St.itc Challenge  Lanes



       1.   Facility Square Footage Requirement Estimates
Decentralized-4
Test
Mode
IDLE
LOADED
I LAND
Basic per
Facility
fO OOO ft2
ft2
Additional
per Lane
O6e) ft2

LANES
(per Lane)
/oso ft2

OFFICE, ETC.
Basic per
Facility
B^o ft2

Additional
per Lane
A>o a2

PAVING
Facility
$100 ft2

per Lane
3V oe ft2

        2.  Allocation of Lanes and  Square Footage Requirements

Lanes pev
Facility
/




k>
f- 	

TOTAL
Mode
X








LANE ALLOCATION
// Facilities
This Size/Mode
/







FAC - /
Total
Lanes
/







LAN - /
LAND
Each
Facility
fSoo>



\



Total
/S~ot> *>







LND - f S 

	 LAN
Each Facility
{OO D







LNS  f C> O
ES 	 	
Total
fOO O







Q
BUILDING
OFF ICE.
^ach Facility
/^^>o







h 1 U .
Total
/T-& *


.




OFC - ( l*O &

	 EM
Lach Facility
/f3o







j^j 	  -
Total j
t/J>o S ,


,




PVG - // 3o d
           3.  Challenge  Facility Personnel Hiring and Training Requirements
Position
Station
Manager
Asst. Station
Manager
Inspection
Technicians
Clerks
Facility
Requirement
1 per facility
i ner facility or
per lane
3 per Idle Mode lane
per Loaded Mode lane
?A Pr la"2
Annual
Salary
^
JS>oO
1^,000
/I; OOC>

It ,oo<>
Duration
of Instruction
/6o /r$
' H*
$

9^>
Direct Costs
of Instruction
ffao
^OS
yod

z*
Total
Training
',<*
(l$
F<*

fl
Hiring Costs
uc
ar
^

ar
Total Training
fStf
Iflf
%%(

^1 0

-------
                           18
 (III.C.I,  cont.)

 Thus,  given the estimates  shown  for the Smogville  program,  a
 typical one-lane .(0-6  lanes rounded  off)  facility would require
 (5,000) x (1)  + (10,000)  =15,000 square vfBet 'of total land.
 Of  this  space, (1,000) x  (1)  =  1,000 square feet for the test
 lane,  plus (400)  x  (1) +  (800)  = 1200 square  feet for office
 space,  etc.,  would  be  allocated  to  construction.   Another
 (3,100)  x  (1)  +  (8,200)   = 11,300 square feet would  be allo-
 cated  to  external  paving   f.or queing area,  employee parking,
 etc.   The remaining 1500  square  feet (10% of total land area)
 is  allocated to landscaping.

 In  programs where  loaded   and, idle  facilities are  both used,
 planners  may want  to  use  different requirement  estimates for
each  mode.   Space   is  provided  in   the  table  for  such  use.

 2.     Allocation of Lanes  and  Square Footage Estimates:    The
 table  presented in  the worksheet is designed  to  allocate and
 compute the total square footage  requirements in each category
 among  the various   size facilities to be  built  in the program.
 First, at the  bottom of the column marked "Total Lanes", write
 the number derived  in section I.B.  (LAN) for  the total lanes
 required.   In the  first  column,  list various  facility sizes
 which  might  be  used  for the  program.    Allocate  the  total
 number of  lanes among  the various size  facilities.   Then sum
 to  find  the  total   number  of  facilities (FAC).  . In the Smog-
 ville  program, only 1.05 lanes will  be required.   This will be
 accommodated  by only  one  one-lane facility, kept  open for 15
 extra  days each year.

 For each  size of   stationary facilities,  the  square footage
 requirements  can  be found  by  applying the  "a(x)  +  b" formula
 from   the  previous  section.   Multiply  the  results  for  each
 facility  size  by the number which will be that  size, and enter
 the totals for all  sizes^for each category on the bottom line.

 3.   Challenge  Facility Personnel  Hiring and Training Requirements;
 In  this  table estimates   are made  of  the number,  types and
 costs  of  personnel  needed  to operate the  inspection facilities.
 Four  basic personnel  categories  are suggested, for simplicity
 of  calculation.   Since the Smogville facility will ordinarily
 be  open  40 hours per week  and facility requirements for inspec-
 tion  technicians  are  slightly padded.   Personnel requirements
 that  will vary with the  size of  the facility are estimated on
 a  per-lane  basis,   and  fractional  estimates  can be  used to
 indicate  overlapping or part-time scheduling.

-------
                         19
(III.C.3, cont.)

In  the  Smogville program, direct  costs  of personnel instruc-
tion include course materials, overhead and instructors' fees.
Costs of the students' time at their hourly wage rate is added
to these costs to arrive at total training costs.

4.  Challenge Facility Construction and Land Acquisition Costs;

     a.  Multiply the  total  square  footage  requirement for
     (from III.C.2.) by the assumed cost per square foot (from
     I.A.), to yield total land acquisition cost.

     b.  Repeat step a. for paving costs.

     c.   The  total  construction  square  footage  requirement
     will  be the  sum of  lane construction and  office space
     construction  (from 'III.C.2.).  Multiply  this  sum by the
     assumed  cost per square  foot  (from  I.A.)  to yield total
     construction costs.

     d.   Building  costs  consist  of  the sum  of  paving, and
     construction  costs.   This item  is  distinguished because
     its  depreciation  period  will  differ from both  that  of
     land and that of other initial investments.

5.  Challenge Facility Personnel Hiring and Training Costs:

     a.   Multiply  the  total training  and  hiring  cost per
     employee for station managers, taken  from section III.C.3.,
     by the number of facilities (assuming one station manager
     per facility).

     b.   Repeat  step  a.  for  assistant station  managers.

     c.   Some  programs may  mix   test  modes,  and  hiring and
     training  costs  or requirements may  be  different for the
     two modes. Spaces  are provided for calculating  inspection
     technician costs separately for the  two modes.  Otherwise
     simply  multiply  the costs per employee, by the number  of
     employees per lane, by the total number of  lanes  for  that
     mode.

     d.  Repeat for  clerks.    The  per lane requirement and per
     clerk costs will probably be  the same regardless  of mode.
     For  the  Smogville program  one  clerk  must  be  trained.

     e.  Sum a.  through d. to yield  total initial hiring and
     training costs for challenge  facility personnel.

-------
                         20
(III.C., cont.)

6.   Challenge Facility Preparation and Equipment Costs;   The
table  shown  in the  worksheet allows.for  both  the listing of
assumptions  and  the  computation of  total' -costs  for  all in-
spection  facility  investment  costs beyond  land acquisition,
construction, and personnel.   The table is  set  up on a prin-
ciple  similar  to that of section III.C.2. (for square footage
allocation).   For each category there is a basic cost assigned
per facility  independent  of  the number of lanes, and an addi-
tional cost  per  lane to account for the size of the facility.
Other  costs  not covered elsewhere in  the  worksheet  may be
considered in this  table as Central Office costs.

In the Smogville program,  for example, site preparation costs
will  include  landscaping,  hookup  of  utilities,   etc.   Test
equipment  will  include analyzers.,  calibration  gases, probes,
etc.,  and  backup equipment.   Office equipment for  the central
administrative staff  will be.  listed  under -personnel costs as
overhead,  although  it  could  be listed  here  instead.   Data
processing  equipment  will  include  terminals  for  the  lane,
storage  and  retrieval equipment for  the  facility,  and a main
central  processing  setup,  listed  under  central  office pro-
visions.

The  total  of  these  costs can  be  summed  by cost  category to
simplify an  analysis  of costs by category.   Or  all costs per
facility  can be  summed, that  number  multiplied  by the number
of facilities, and  the product added to  all per-lane and per
central office costs, to simplify calculation.

7.  Total Challenge Facility Initial Costs;

     a.  Land  acquisition costs from III.C.4.a.  These can be
     said  to retain  full, salvage  value  at the  end  of the
     program.           ^

     b.   Insert building costs from  III.C.4.d.    These can
     reasonably  be  said  to  depreciate over  a period  of 20
     years.

     c.    Insert  challenge   facility  personnel   hiring  and
     training costs from III.C.5.

     d.   Insert  challenge facility preparation and equipment
     costs from III.C.6.

-------
                                                                                                                  Decentralized-5
4.  Challangc Facility Construction and Land  Acquisition Cost


       a.   Land Acquisition - SLANDACQ - LND  x $LAND/ft2

                                            2                >
          b.  Paving = $PAVING - PVG x SPAVC/ft

          c.  Construction  $CONSTR = (OFC+LNS)  x $CONS/ft2 -    .5*7,

          d.  Total Building - $BUILDING - $PAVING + $ CONSTR
                                                                                         S.   ClialU-ngi-' Facility Personnel Hiring
                                                                                              and 7 rain in g Costs

                                                                                              a.   Station Managers:
                                                                                               .....
                                                                                           b.   Assistant Station Man.iccrs:
                                                                                              $  ^/">  >*    x  FAC
                                                                                              $_

                                                                                              $
                                                                                                           " Technlc^ns:
                                                                                                               x   ,3     x LAN UDLEJ -
                                                                                                                      	: X LAN I LOADED |

                                                                                                                       /    XLAN      .
                                                                                           d.   Clerks :
                                                                                              e.   TOTAL FIELD PERSONNEL
                                                                                                   HIRING & TRAINING - $PIELDPER
   6.  Challange Facility Preparation  and Equipment Coats
                                                                                                                                                5
   Per
(Category)
            Number
                         Site Preparation
                         ^3cTi  'T   To tal
 Test Equipment
EachTotal
Office & Other Equipmt.
  Each
                                                                                Total
Data Processing Equipmt.
   Each         Total
                                                                                                                                TOTAL
Facility
                                         ,"006
                                                           o  
Loaded Lane
Idle Lane

Central
Office
TOTAL
                          Soo
                                         /OOO
                                                                                                     o oo
                                                                                                                                o o O

                                                                                                                      $EQUIP - /T7/ VO O
     7.
       Total Challenge Facility Initial Costs

       a-   $LANDACQ

       b.   $BUILDING

       c.   $F1ELDPER   

       d.   $CQUIP
             Total c, d

          f.  Total a, b, e
                               - CHLST =
                  Total Challenge Lanes
                  Initial Cost
                                                       
-------
                                    22
          (III.C., 7 cont.)

               e.   Add  c  and d.   This sum  represents costs  that can
               reasonably  be  depreciated over  five years  or,  alterna-
               tively,  the  length  of  the  program'-planning  segment.

               f.  Total  initial investment costs  for  challenge facil-
               ities "can be obtained by adding a,b, and e.

IV.  RECURRING COSTS TO THE STATE

     A.  Administrative and Surveillance Costg

          1.  Personnel;

               a.   Central Administrative  Personnel:   This  staff  will
               continue  to coordinate and oversee  the  program.   In the
               Smogville program,  its duties will  include  the handling
               of  complaints,  investigation  of malfeasance  by  private
               garages,  program  design  and  evaluation,  and coordination
               with  other   state agencies,  among  other  administrative
               duties.

               b.  Station Examiners:  (i) Insert the program-wide  total
               salary cost  for station examiners, as derived in section
               III.A.   (ii) Add  a  percentage  for  overhead  and fringe
               benefits.    (iii)   Total  station  examiners'   salary and
               fringe benefit costs.

               c.   Add  personnel  and  overhead  costs  for  the  central
               administrative  staff  and station  examiners,  for   total
               recurring personnel/overhead costs to the state.

          2.   Surveillance Costs;   These -can be estimated  on either a
          per-examiner or  a per-statlon basis, whichever the  user prefers,
          In  the Smogville program, planners prefer to conceive of the
          station  examiner traveling about  600 miles per month, at $.20
          per mile,  for  about $1440 each per year.  They are also each
          expected  to use  up  about one  small  calibration gas cylinder
          per month, for an annual total of $1800.

          The  total  cost  per examiner  is  multiplied  by  the required
          number  of  examiners  (rounded  off  to  12 for  Smogville),  as
          found  in section III.A.   Alternately, the mileage and  cali-
          bration  cost  can be worked up on  a  per-garage basis, and the
          sum multiplied by the  required number of  stations, as derived
          in I.E.

-------
                                                                                                                       Decentralized-6
IV.   RECURRING COSTS  TO STATE

     A.    Administrative and Surveillance Costs

          1.    Personnel
               a.   Central Administrative Personnel
Position Area
Program Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff
Number
f
fe
3
y
SUBTOTAL
Overhead, Fringe and Contingency /t/y%)
TOTAL $CAPAN
Cost
^7, ?3v
-i.fi, T/2^
f3-l1lgii.
V>r, oi
b.  Station Examiners

     annual salaries    SES

     Overhead and^rJmge
      Benefits (J2>j*_*)	
Total Station Examiner Costs  

Total Recurring Personnel Costs
      $CAPAN + $SEAC
                                                                    $SEAC
                                                                    REPC
                                                           2.   Surveillance Costs

                                                                a.  per station
                                                                      or per examiner
                                                                     (i) Travel Costs

                                                                     (H) Calibration
                                                                                Equipment

                                                                     .(iii) Total per Station
                                                                             or per Examiner
                                                                b.  Program-wide Total
                                                            3.
                                                                                              SCPS x STRQ
                                                                                          or  SCPX x EXS
                                                                                    Annual Public Information
                                                                                              RDI
                                                                                          or  RPI x AAP
                                                                                                   " 3 &t
                                                                                                                                      - PWSC
                                                                               A.   Annual Program Design. Engineering
                                                                                  '  and Evaluation
                                                                                              RDE
                                                                                           or RDE x AAP
5.   Computer Processing of Test Results

          CPT x AAP x (1 + STR (1 + FCK)) - 	

6.   Total Administrative and Surveillance Costs
*'   '         '  ~"  ^    ^             9
              REPC  + PWSC              ^  <73|y
     + PWRPI + PWRDE + PWCPT            -   P*1
                                                                                                                      PWRDE
                                                                                                                                        -  PWCPT
                                                                                                                                                    U)
                                                                                                                                        - REASC

-------
                              24
     (IV.A.,  cont.)

     3.  Public Information;  List  a lump sum as  estimated  in the
     assumptions,   or  multiply  a   per-vehicle  assumption  by  the
     annual  average  auto, population  (AAP)  for   re'curring  public
     information costs.

     4.  Program Design, Engineering and Evaluation;  Repeat step 3
     for recurring costs of program design,  engineering and evalua-
     tion.    In the  Smogville program,  however,   these costs  are
     covered   under  regular  administrative  personnel  functions.

     5.  Computer Processing of Test Results;  Multiply the assumed
     cost per test by the average annual number of tests,  as deter-
     mined by  the function in the  worksheet,  including one retest
     for each  failure  expected,  and one re-retest for each failure
     challenging  the  private inspection.   The   Smogville  program
     assumes   these costs  under the  purchase of  data processing
     equipment and functions of the statistical staff.

     6.      Total Recurring Administrative and Surveillance Costs;
     Add the  totals for items 1 through 5 above.

B.  Challenge Facility Operating Costs

     1.   Challenge  Facility Personnel;   Multiply  the  appropriate
     per-lane  or per-facility   requirements  by  the salary  costs
     determined in  section  III.C.3.  Add a factor for overhead and
     fringe benefits,  to  yield  the total recurring personnel costs
     for the challenge facilities.

     2.  Support  Services  to  Facilities;   These   costs  may  include
     janitorial service, heating,  electricity,  linen and so forth,
     if  they  are  not  otherwise covered  under   overhead  costs or
     equipment  maintenance.  .They  may  be  calculated using  the
     familiar  format of a basic figure per facility, independent of
     the number of  lanes,  plus an  additional  amount  for  each lane
     in  the  facility.  In  the  Smogville program,  planners consi-
     dered these  costs to be handled under the categories of over-
     head  and  equipment maintenance,  and  therefore  no  cost . is
     listed here.

     ^*   Travel;    Smogville planners consider  that  to  maintain
     communication  and  efficient  management,  and  to  transport
     supplies  between  the  central  office and the referee facility,
     it will be  necessary  to travel  approximately 1500 miles per
     year  for  the  one facility.   At  $.20  per mile,  this is pro-
     jected  to cost $300 per  facility.

-------
                                                                                                        Decentralized-??
                                                                     V.
B.
Challenge Facility Operating Coats

1. .  Field Facility Personnel           '

     a.  Station Managers: $/jSTOOP    x FAC

     b.  Assistant Station Managers 3/ffao> x FAC

     c.  Inspection Technicians
        $
                                                         / 3>
                                          x LAN  [IDLE]
                                                    ^

                                                  "      *
                  4-       _ x LAN [LOADED]      "      * 
           -  Clerks: $ f[OO6  x   . 7jT  x LAN
          e.  SUBTOTAL

          f.  Overhead f, Fringe Benefits

          g.  Total Field Facility Personnel





     2.   Support Services to Facilities
     3.   Travel: $
 x FAC + $
	3
                                           x LAN
                                   x FAC
4.   Equipment Maintenance

5.   Insurance Costs
                                        x $EQUIP
                                              x LAN
      6.   Total Annual Challenge Lanes
            Operating Costa
ANNUALIZF.D COSTS TO STATE

A.Amortized Initial Costs

     1.   Land Acquisition

          SLANDACQ x INT

     2.   Building

        $BUILDINC x INT

               x
                                                                                   PRL
                                                                                            DEPR x [(H-INT)
                                                                                                           PRL-
                                                                          3.   Other Startup

                                                                               (ADMIN + CHLST)  x
                                                                                INT(1+INT)

                                                                                       PRL
                                                                                          PRL
                                                                                                 (1+INT)

                                                                          4.   Total Annual Payment with  Interest
                                                                                                                                           STAPI
                                                                                                                                            N3
                                                                                                                                            Ul

-------
                                   26
          (IV.B, cont.)

          4.   Equipment Maintenance; -  Recurring  equipment maintenance
          costs can  be estimated  as a percentage o initial equipment
          costs.   Costs  of  upkeep  on  landscaping,  data  processing
          equipment and so  forth are all considered in a single percen-
         tage  in the  Smogville  program.   20%  is taken  of  the  total
          initial expenditure derived in section III.C.6.

          5.   Insurance Costs;    This  cost  will  apply  only  to  those
          state-operated  programs where  states are  not self-insuring.
          Insurance costs themselves vary in a manner too  complex  to be
          thoroughly represented  in  a simple worksheet.  Elements  to be
          taken  into  account  would  include  construction  materials,
          location,  equipment  utilized,  and  operating hours   of the
          facilities.  In the worksheet, this is all reduced to a simple
          function including a basic 'factor per facility, independent of
          the number of lanes, and an additional amount for each  lane in
          the  facilities.   In the Smogville  program,  this  is estimated
          at  $1,000  per  facility  and $1500 per  lane,  or $2500 for the
          single one-lane facility.

          6.   Total Recurring Challenge Facility  Operating Costs;   Add
          items 1 through 5.

V.  ANNUALIZED COSTS TO THE STATE

     A.  Amortized Initial Costs

          1.   Land Acquisition;   Land is usually  assumed not to depre-
          ciate in  real value,  and  thus the salvage  value of the pro-
          perty at  the end  of the program is assumed  to  be equal to the
          original cost,  plus inflation.   The  annualized  cost  for the
          land  is  thus simply the interest on the original expenditure,
          $LANDACQ (from section Iir.C.7., line a).

          2.   Building;   The  equation shown in the worksheet calculates
          the  annual  payment  with  interest  for  items  which  may have
          varying  periods of depreciation.   Twenty years  is tradition-
          ally  assumed as  the  (straight line)  depreciation  period for
          buildings  ($BUILDING,  from section III.C.7.,  line  b), and is
          assumed  for  the  Smogville program,  although any depreciation
          period may be substituted  for "DEPR" in  the  equation.   For the
          Smogville  program,  with a  five-year  planning segment,  this
          implies  that the challenge  facility buildings will have 75%
          salvage value at the end of the program.

-------
                                   27
          (V.A.,  cont.)

          3.   Other Startup Costs;   These include administrative startup
          costs  (ADMIN, from  section III.B.2., line f)  and  any invest-
          ments  in  the  challenge  facility  that' are  anticipated  to
          depreciate  fully over  the  length  of  the  program  planning
          segment  (CHLST,  from  section  III.C.7.,  line  e).   Such  in-
          vestments will have no salvage value  at the  end  of  the pro-
          gram.

          4.    Total Annual Payment  With  Interest;   Add  the results  of
          calculations for  the  three  items,  above, to  yield  the total
          annualized  payment  of  initial  costs,  including  interest.

     B.   Average Recurring Costs Accounting For Inflation

          1.    Total Recurring Costs;   Add recurring costs for adminis-
          tration and  surveillance  (REASC, from  section IV.A.,  line 6)
          to operating costs for state challenge facilities  (RECHL, from
          section  IV.B.,   line  6),  for  total recurring  costs  to  the
          state.

          2.    Recurring Costs with Inflation;    As  for   the  private
          garages,  recurring  costs  are  assumed  to  rise  at a constant
          annual  rate  of  inflation.   The  function  presented  in  the
          worksheet (identical to  that used in section  II.C.2) averages
          the  cumulative effect  of  that annual rate over  the  length of
          the  program to  provide   an  average annual  inflation factor,
          which  is multiplied by  total recurring costs  to the state to
          yield actual anticipated  "average" recurring costs.

     C.   Total Annualized Program Costs to the State;

     Add  the  annualized payment of initial  costs  (STAPI, from section
     V.A.,  line  4),  to recurring  costs  with inflation  (STANNi) from
     section V.B.,  line  2),  to  yield  total  annualized  program costs to
     the state.

     At  this  point, the  states'  portion  of  the inspection fee can be
     calculated  by  dividing  the total annualized  program costs to the
     state (TPST) by the average annual auto population  (AAP).

VI.  TOTAL OVERALL PROGRAM COSTS

     A.   Total Annualized Overall Program Costs

     Add  total annualized  costs  to the  state  (TPST,  from section V.C.)
     to  total  annualized  costs  to   the  private  garages  (TPPG, from
     section  II.C.,  line 3),  to yield total  overall annualized program
     costs.

-------
      B_.    Avira;.;: i;..vr.rr i n-/.  f'.ost. s witli Inflation


           1.	Total  K'-'-iinMnu__Cf>Kt

                      KKASC.  -t-  KKCIII.              -I
                                                                  STANN
                                                                                                                     Decentraitzed-8
           2.
Costs wlthlnl' lat^lon


   I'KI.-l
                                     (1 + INK)'
                             --
                STANH  x     -- -- -
                                                                STANN
     C.    Tota1 Annualizcd  Program Costs to State
                     STANN  + STAPI
VI.  TOTAL OVERALL PROGRAM COSTS

     A.    Total Annua 1 Izcd Overall Program CoS'ts
                TPPG *- TPST
                                                            TOTAL
                                                                B.   Average Annual Program Cost per  Motorist


                                                                                           TOTAL
                                                                      '  Inspection Fee
                                                                                                                      AAP
                                                                                                                                                          to
                                                                                                                                                          00

-------
                               29
(VI., cont.)

B.  Average Annual Inspection Fee to Motorists

Divide total annualized overall program costs tiy the average annual
auto  population,  to  yield  the cost-covering  inspection  fee per
auto.

-------
                                                  Cost Calculation Worksheet:  I/M Program
                                                    Decentralized Private Garage Program
I.   PROGRAM PARAMETERS
A.   Assumptions
                                                                                     B.   Parameter Calculations
                                                 V
1.  POP = Present Auto Population
2.  CRT  Annual Auto Population Growth Rate  (%)
3.  INF  Annual Inflation Rate (%)
A.  INT = Annual Interest Rate (%)
5.  PRL " Program Length (years)
6.  STR  Stringency Factor  (%)
7.  STA/1,000  Stations per 1,000 Autos
8.  MPH = Garage Costs per Hour (Wages + Overhead)  .'
9.  GTI  Garage Time per Inspection (hours)
10. MITG = Mechanic/Inspector Training Cost per Garage
11. FCH  Percent of Failures Challenging
12. CTP - Challenge Facility Hourly Lane
          Throughput (cars/hr)
13. CHR " Challenge Facility Annual Operating Hours
14. $LAND/ft  - Land Acquisition Costs
15. $CONS/ft  - Construction Costs
16. SPAVG/ft2 - Paving Costs
17. IPI  Initial Public Information Cost
18. RP1 - Annual Public Information Cost
19. IDE  Initial Program Design,  Eng.  & Eval.
20. RDE - Annual Program Design,  Eng. & Eval.
21. CPT  Computer Processing Cost per Test Result
                                                                                          1.   Average Annual Auto Population  AAP

                                                                                                      PRL-1
                                                                                                  (POP)      (1+GRT)
                                                                                                      i-0
                                                                                                      PRL
                                                                                          2.   Inspection Stations Required" STRQ  .

                                                                                                    AAP
                                                                                                   1,000
                                                                                                          x  STA/1,000
                                                                                                                                              AAP
 - STRQ
                                                                                          3.   Projected Challenge Teats    CHT
                                                                                                    FCH x STR x AAP
                                                                                          4.   Annual Challenge Lane Capacity - CAP
                                                                                                         CTP x CHR
                                                                                                                                            - CHT
                                                                                                                                             CAP
                                                                                          5.   Total Challenge Lanes Required" LAN
                                                                                                         CHT
                                                                                                         CAP.
- LAN

-------
                                                                                                                        Decentralized-2
II.   COSTS TO PRIVATE GARAGES
     A.    Initial Investment Costs -
                         C.   Annualized Total Costs to Private Garages
          1.    Per Garage
               Analyzer and Equipment
               Mechanic Training (MITG)
                    Total per  Garage
          2.    Program-Wide
                    PGI x STRQ
     B.    Annually Recurring Costs
                                                      PGI
PWI
                                                                                     1.   Amortization  of  Initial  Costs
                                   PWI x
 INT (1 + 1ST)
(1 4- INT)PRL -1
                                                      PRL
                                                                                    2.   Annual  Costs with Inflation
                                                                                        PWA   x
           (1 + INF)
                                                                                                          PRL
                              3.    Total Annualized Program
                                   Cost to Private Garages
                                         - TPIG
          1.    Per Garage
               Equipment Repair and Replacement
               Calibration Gasses
                    Total per Garage              	
          2.    Per Test
               Garaee Inspector's Time and Overhead
                    GTI x MPH                -    	
          3.    Program-Wide
            (PGA x STRQ)+(PTA x AAP)  (1+STR) "    
                                                            -  PGA
      -  PTA
      -  PWA

-------
                                                                                                                        Decentralized-3
III.   INITIAL COSTS TO STATE

     A.    Station Examiner Requirements

Individual basis
Progi'am Total
Number
Required
1 per 	 stations
x(STRQ) = - EXS
Annual Salary

- SES
Duration of
Instruction


Direct Cost of
Instruction


Total
.Training Costa


Hiring Costs


Total Training
plus Hiring^ Costs

- SETH
     B.    Administrative Startup  Costs

          1.    Central Administrative Personnel
Position Area
Program Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff
Prs-Yrs
V



SUBTOTAL
Overhead, Fringe and Contingency ( 	 %)
Cost





1
TOTAL SCAPIN
2.    Total Administrative Startup  Costs

     a.   Central Administrative Personnel  $CAPIN = 	

     b.   Training and Hiring of Station
                              Examiners  $SETH    * 	

     c.   Initial Public Information = IPI          = 	
                                  or  IPI x POP
     d.   Initial Program Design, Engineering
                    and Evaluation  IDE            	
                                  or  IDE x POP     '

     e.   Mechanic Training (when sponsored by the State)

                      MITG, . x STRQ              -	
                                                                                     f.  Total Administrative  Startup Costs
                                                                                                                                          ADMIN

-------
                                                                                                         Decentralized-4
                     _Stnte Challenge Lanes^

                       ^ijjr^mpnt Estimates

                  ~LAND
                      .  	
C.   Initial Inve8Cmenc_iy"-"
         y            _
       2.  Allocation of Lanes and Square Footage Requirements
                                                                Reulren.enta
Direct Costs
f Instruction
 per Trainee
                                                                                                                               Total Training
                                                                                                                                 lus Hirin
                                                                                                    Hiring Coats
                                                                                                    per Employee
   Duration
of Instruction
                                 1 per  facility
                                 i ner facility or
                                 oer lane
Asst. Station
Manager
                                 per  Wle  Mode lane
            Inspection
            Technicians
                                 per Loaded Mode lane

-------
                                                                                                                 Decentrallzed-5
    Challenge Facility Construction anu Land AcqviisitionCngtB


       a.   Land Acquisition = $LANDACQ = LND x $LAND/ft2
                                            2
       b.   Paving = $PAV1NC = PVC. x $PAVG/ft

       c.   Construction = SCONSTR = (OFC+LNS) x $CONS/ft2 -

       d.   Total Building = $BUILDING = $PAVING + $ CONSTR
6.  Challange Facility Preparation and Equipment Costs
5.    Challenge Facility  Personnel Hiring
     and Training Costs

    a.   Station Managers:
        $	x  FAC
    b.   Assistant Station Managers:
        $	     x  FAC

    c.   Inspection Technicians:
        $	x	x LAN [IDLE]
                                                                                                                         x LAN I LOADED J=

                                                                                                                           x LAN
    d.   Clerks 4.
                                                                                            e.   TOTAL FIELD PERSONNEL
                                                                                                 HIRING & TRAINING - $FIELDPER
Per
(Category)
Facility
Loaded Lane
Idle Lane
Central
Office
Number



TOTAL
Site Preparation
Each




Tfotal
>


Test Equipment
Each




Total




Office & Other Equipmt.
Each




Total





Data Processing Equipmt.
Each





Total





TOTAL




$EQtJlP -
  7.    Total Challenge Facility Initial Costs
a.
b.
c.
d.
e.
JTAMTIArq  -m 	 
SBUILDING
SFIELDPER -
$tQUIP
Total c, d - CHLST =
       f.  Total a, b, e
              Total Challenge Lanes
               Initial Cost
                                                    (no depreciation)

                                                    (20 years)
                                                    (depre  PRt)

-------
                                                                                                                   Decentralized-6
RECURRING COSTS TO STATE

A.   Administrative and Surveillance Costs

     1.   Personnel
          a.  Central Administrative Personnel
Position Area
Program Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff
SUBTOTAL
Number





Overhead, Fringe and Contingency ( 	 .%)
TOTAL $CAPAN
Cost




>.


          b.  Station Examiners

               annual salaries  =  SES

               Overhead and Fringe
                Benefits (	Z)
               Total Station Examiner Costs  =

               Total Recurring Personnel Costs
                     SCAPAN + $SEAC
                                                               SSEAC
REPC
            2.    Surveillance Costs

                 a.   per station
                       or per examiner
                      (i) Travel Costs

                      (ii)Calibration
                                 Equipment
                                                                           3.
                      (iil)  Total per Station
                              or per Examiner
                 b.   Program-wide Total

                           SCPS x STRQ
                       or  SCPX x EXS
                 Annual Public Information
                           RDI
                       or  RPI x AAP
            A.    Annual Program Design,  Engineering
                 and Evaluation
                           RDE
                        or RDE x AAP
                                                                                                                                  = PWSC
            3.    Computer Processing of Test Results

                      CPT x AAP x (1 + STR (1 + FCH)) =	

            6.    Total Administrative and Surveillance Costs

                          REPC  + PWSC
                 + PWRPI + PWRDE + PWCPT            =  	
                                                                                                                                    PWRPI.
  PWRDE
  PWCPT
- REASC

-------
                                                                                                        Decentralized-?
                                                                     V.
B.
Challenge Facility Operating Costs

1.   Field Facility Personnel

     a.  Station Managers:  $	
                                      	 x FAC

          b.  Assistant Station Managers _$	 x FAC

          c.  Inspection Technicians
             $	 x (	 x LAN [IDLE]
          d.   Clerks: $_

          e.   SUBTOTAL
                                   x LAN [LOADED]
                                   x           x LAN
          .   Overhead & Fringe Benefits (_

          g.   Total Field Facility Personnel
     2.    Support Services to Facilities
                      x FAC + $
                                           x LAN
     3.    Travel:  $
                                   x FAC
     A.    Equipment Maintenance = 	

     5.    Insurance Costs

                         x FAC + $
                                _% x $EQUIP
      $
                                         x LAN
      6.  Total  Annual Challenge Lanes
           Operating Costs
ANNUALIZED COSTS TO STATE

A.   Amortized Initial Costs

     1.   Land Acquisition

          $LANDACQ x INT

     2.   Building

        $BUILDING x INT

               x 11 +
                                                                                                         PRL
                                                                                            DEPR x [(1+INT)PRL -1]
                                                                          3.   Other  Startup

                                                                               (ADMIN + CHLST)  x
                                                                                                        FRL
                                                                                                 (1+INT)

                                                                          l>.   Total  Annual  Payment with  Interest
                                                                                                                                                 STAPI
                                                                 RECHL

-------
C

m
X
z
z
H


O

o
O
m
o
 i
o
o
o
B.    Average Recurring Costs  with Inflation


     1.  Total Recurring Costs

               REASC  + RECHT,               =




     2.  Recurring Costs with Inflation
                        STANN   x
                                   PRL-1


                                     1=0
                                   INF)J
                                            PRL
              C.    Total Annual!zed Program Costs  to  State
                            STANN  + STAPI
                                                                                                                       Oecentralized-8
STANN
                                                        STANN,
                                                                     TPST
        VI.  TOTAL OVERALL PROGRAM COSTS


             A.   Total Annualtzed Overall Program Costa





                       TPPG + TPST
                                                   TOTAL,
                                                                               B.   Average Annual Program Cost per Motorlet



                                                                                                         TOTAL
                              Inspection Fee
                                                                                                                        AAP

-------