IMS-005/CW-1
           CENTRALIZED 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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                     Centralized I/M Program
                   Cost Calculation Worksheet
This worksheet is designed to allow I/M program administrators to
project total costs of a centralized program at early stages of planning.
The factors involved in initial and annually recurring costs are systema-
tically organized to compute an annual inspection fee which will cover
all program costs for the total length of the program.  Options are pro-
vided which allow this worksheet to be used for either a state-or a con-
tractor-operated program.  There is a separate package for projecting
costs of a decentralized, private garage based program.  Costs of separ-
ate fleet inspections as part of the I/M program are not considered in
any 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.E.).  For example, the annual average auto population
(AAP) is calculated 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 provi-
sion must be made for more than the current population.  •  ,,     •  .

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                             -2-

Initial costs to the program operator are then calculated (section II).
Inspection facility requirements are estimated for land, construction,
and personnel (II.A.), and from these requirements, costs are calculated
for those and other facility investment costs (U.S.).  Administrative
startup costs are estimated for personnel and other elements (II.C.).
Inspection facility and administrative initial costs are then organized
into categories of length of depreciation period, and summed for total
initial costs (II.D.).

Recurring costs are calculated in separate categories for personnel
costs of central administrative staff and inspection facility staff
(III.A.), and other annually recurring costs (III.3.).  These are
calculated on a present dollar basis.

Both initial and recurring costs to the program operator are then
"annualized11 to take into account inflation and interest costs (section
IV.).  Recurring costs are multiplied by a factor which provides for the
average effect of a constant rate of inflation (IV.A.).  Initial costs
are amortized on the basis of the assumed depreciation periods and
interest rate on borrowed capital (IV.B.).  The annualized costs are
summed to present total average annual cost to the program operator
(IV.C.).

Prom this point on procedures are different for contractor-operated
programs than for state-operated.  For the state-operated option, the
total annualized costs are divided by the annual average vehicle popula-
tion, to yield the cost-covering inspection fee for the life of the
program (V.A.).   For the contractor-operated option, the contractor's
net return must be added to the contractor's costs of operating the
program (V.B.),  and costs to the state for administration and monitoring
of the program must also be added (section VI).

Additional costs to the state for a contractor-operated program are
computed in three stages:  First, the state's requirements for field
personnel to monitor inspection^ facilities is evaluated (VI.A.).  This
evaluation includes both the estimate of recurring annual salary costs
and of initial training and hiring costs.  These initial field personnel
costs are added to other startup costs to yield total initial costs to
the state (VLB.).  The recurring field personnel costs are added to
other recurring costs to yield total recurring costs to the state
(VI.C.).  Initial and recurring costs to the state are then annualized
and summed (VI.D.), as costs to the contractor were in section IV.

Finally, total annualized costs to the contractor and those to the state
are combined, and divided by the average annual auto population (section
VII), to yield the cost covering inspection fee for a contractor-oper-
ated program.

The example worked through in the instruction text is that of an imaginary
city called "Smogville".  The Smogville program will employ an idle mode

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                                -3-


test and will be operated by a private contractor.  Other assumptions
made by the Smogville program administrators will be pointed out in the
instructions.

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
          planning data, survey information, etc.  The Smogville auto
          population is growing at the rate of 2.6% per year.

          3.  Annual Inflation Rate (INF);  Economists' estimates range
          anywhere from 5% to 10% or more.  Smogville.administrators
          anticipate a rate of 8%.

          4.  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 Iqwer than  commercial rates, e.g., through
          bond issues.  "Smogtesters^ Inc.," the  contractor for the
          Smogville program, is expecting to pay  a rate of 12%.

          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.  Annual Operating Hours  (HRS);  This is  the number of
          operating hours per year for the  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 intends to  make optional use of its
          facilites, and will keep each lane open twelve hours per day,
          six days per week, for fifty weeks per  year, totaling 3,600
          hours per lane per year.

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                                           Coat Calculation Worksheet!   I/M Program
                                   Generalized Lane Program;  State
PROGRAM PARAMETERS
perated
A.   Assumptions

 1..  POP - Present Auto Population
 2.   CRT • Annual Auto Population Growth Rate (Z)
 3.   INF » Annual Inflation Rate (X)
 A.   INT - Annual Interest Rate (%)
 5.   PRL » Program Length  (yrs)
 6.   1IRS = Annual Operating Hours
 7.   Cars/hr •» Hourly Lane Throughput
 8.   STR - Stringency Factor (Z)
 9.   XTR - Annual Percent Additional Tests  (X)
 10.  $LAND/ft  - Land Acquisition Cost per square  foot
 11.  $CONS/ft  • Construction Costs per square  fobt
             2
 12.  $PAVG/ft  • Paving Costs per square foot
 13.  Mech/1,000 • Mechanics Required per 1,000  autoa
 1A.  $MCH - Training Coat per Hec.lianic
 15.  $IPI - Initial Public Information Costs
 16.  $RPI - Recurring Public Information Costs
 17.  $IDK «• Initial Program Design, Eng. & Eval.
 18.  $RDE " Recurring Program Design, Eng. & Eval.
 19.  CPT • Computer Processing Cost Per Test
 20.  PRT • Property Tax Rate per Full Value (contractor
                                              program only)
                                                           £o. co
                                                                              B.    Parameter Calculations
1.   Average Annual  Auto Population • AAP
                                                                                 (POP) X
                                                                                               PRL-1
                                                                                                E    (1-HJRT)
                                                                                               PRL
2.   Average Annual  Tests Performed *• TST

          AAP  (1 + STR + XTR)  - ft Ofe ?/
                                                                                                                                     " TST
                                                                                   3.    Annual Lane Capacity • CAP
        HRS x Cars/lir
                                                                                                                                     - CAP
                                                                                   A.   Total Test Lanes Required •• LAN
                                                                                                  TST
                                                                                                  CAP
                                                  - LAN

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                      -5-
(I.A., cent.)
 7.   Hourly Lane Throughput  (Cars/hr.);   Factors to be taken
 into account in projecting  the  number of autos each 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.), ineffi-
 ciencies of scheduling, personnel, weather, mechanical diffi-
 culties, and so forth.  Table 1 suggests hourly lane through-
 puts for three general test formats,  including ranges of
 efficiency.  Smogville planners expect, a throughput of around
 12 cars per hour.	
                      Table 1
      Vehicle Throuf'hpMt (Cars per hour) by Program Format
Program
Format
 Optimal                    Projected
Throughput	Efficiency
State/City -
operated idle-
mode test using
tachometer
  20-25
50-63%
                             10-16
State/City -
operated idle
mode test with
safety inspection
no tachometer
  30-36
50-64%
15-23
Contractor -
operated.
loaded mode
test
  20-22
61-65%
12-14
 8.  Stringency FactorXSTR);   The stringency factor to be
 applied is derived  from EPA's  MOBILE1 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%.

 9.  Annual Percent  Additional  Tests (XTR);  In addition  to
 first-time failures (projected by stringency factor), extra
 tests will be run for  second-time failures, change-of-owner-
 ship situations, free  retests, post-repair checkups, etc.
 Smogville projects  that this will amount to about 5% of  the
 vehicle population.
                                                      2
 10. Land Acquisition Costs per Square Foot ($LAND/ft );  Land
 acquisition costs vary widely  from locale to locale.  Local
 estimates should be obtained  including possibilities of  leasing
 site acreage.  Table 2 gives  an idea of the variation in land

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                            -6-
(I.A.,  cont.)
          costs among several existing programs and proposals.  Ob-  •
          viously,  where program operators can utilize land they already
          own or can convert existing facilities,  these costs will be
          much lower.  In Smogville,  Smogtesters;Inc.  will be able to
          purchase commercial land at $2.50 per square foot.

              	—"~"~'       Table 2                       .  .

                   Price Variation in Land Acquisition  Costs
location
Chicago
Denver
Portland
New Jersey
Cincinnati
St. Louis
Kansas
Iowa
Nebraska
Year
1974
1974-75
1975
1975
1976
1976
197b
1978
1978
Cost per Square Foot
$4.00
$2.00-3.00
$2.75 .
$1.00-9.00
$0.92
$1.00-30.00
$3.15
$0.93
$0.81
                                                         2
          11.  Construction Costs per Square Foot (CONS/ft );  Construc-
          tion of testing facilites should include office, storage and
          lab areas,  and should account for possible expansion of
          facilities  or changes in test mode.   Specifications considered
          should include:

          Steel Fifame     Overhead Doors     Forced Air MVAC
          Concrete Floor  Painted Walls      Underfloor and Roof
          Finished Office Small Restrooms         Exhaust System

          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 $26 per square foot.
                                                    2
          12.  Paving  Costs per  Square Foot ($PAVG/ft );  Present estimates
          range around $1.00 per square foot.   Smogville will use this
          estimate.

          13.  Mechanics Required per 1,000 Autos (Mech/1,000);  Estimates
          range from  2-6 mechanics required per 1,000 autos.  These are
          private mechanics who will perform emissions-related repairs
          on vehicles failing the inspection.   Smogville anticipates the
          need of 3 mechanics for every 1,000 autos.

          14.  Training Cost per Mechanic ($MCH);  Current estimates
          suggest a range of about $15-20 for supplies, teaching equip-
          ment and instructor salary for an 8-10 hour course, and admin-
          istration of the examination and certification process by the

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                       -7-

(I.A.14, cont.)

state.  It would not include mechanics' wages for the period
of the course.  In programs where mechanic training costs are
not completely paid by the state, this figure should include
only that part paid by the state.  Smogville planners are
considering a more extensive course, to be sponsored by the
state, at $30 per mechanic.

15. Initial Public Information Costs ($IPI);  These may include
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 information
continues to gain greater credit 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.

16. 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.
                     ,1^-
17. Inital Program Design, Engineering and Evaluation  (SIDE);
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,
program 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.  Sroogville
planners prefer to consider this as a lump sum, and are
budgeting $150,000 for this purpose.

18. 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

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                        -8-
     (I.A.18, cont.)

     regular administrative staff.   Some programs will prefer to
     simply incorporate this item with normal 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).

     19. 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 processing '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 distri-
     buted 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 concepts may be
     applied.  Smogville planners believe that computer processing
     costs are accounted for in other planning categories 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 processing program.

     20. Property Tax Rate per Full Value (PRT);  This assumption
     is necessary only for a contractors-operated program.  Property
     tax rates generally range from 2% to 4%, sometimes reaching as
     high as 5%, of full value of land, improvements and capital
     installations.  The best information on rates, of course, is
     obtainable from the local tax assessor.  Keep in mind that the
     rate is often fixed for a less than full-value assessment, in
     which case the full-value rate is to be derived by taking the
     proportion of the millage rate equivalent to the assessed
     proportion of full value.  Smogville tax rates are 6% of
     assessed value, with assessment at 50% of full value.  This
     yields a full-value rate of 3%.

B. Parameter Calculations
    i  ;   .
     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 underutilization and overutilization of
     facilities.  The function shown on the worksheet yields the

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          (I.B.I,  cont.)

          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.   Over-utilization is the
          conservative approach.

          2.  Average Annual Tests Performed (TST);   This function adds
          retest rates to the average annual population,  to project the
          average  number  of tests to be performed annually.  Actually
          this number may slightly overestimate,  since in later years
          auto owners may adjust  to more regular  maintenance and fail
          less frequently.  However, this effect  is unpredictable, and
          in any event only signifies less over-utilization of facilities
          in the later years of the planning segment.

          3.  Annual Lane Capacity (CAP);  The hourly throughput rate,
          times the operating hours per year,  yields  the annual capacity
          of each  inspection lane.

          4. - Total Test  Lanes Required (LAN): Divide the annual number
          of tests by the capacity of each lane,  to find the total
          number of inspection lanes required. If test vans or mobile
          facilities are  to be used, simply include these under the
          category of test lanes  for the time being.   Since the cost and
          usage of such facilities varies so widely,  this worksheet does
          not attempt to  handle them directly. However,  it can be
          adjusted for that purpose. For example,  the Smogville program
          will use two such mobile vans, each with that capacity of
          about half that of a normal stationary  lane.  Thus the Smog-
          ville requirement is 25 lanes, which will consist of 24
          stationary lanes and 2x1/2=1 mobile lane.

II.  INITIAL COSTS TO PROGRAM OPERATOR

     A. Estimates  of Facility Requirements

          1.  Facility Square Footage Requirements:   The table presented
          provides spaces for listing estimates of square footage
          requirements for land,  office and storage space, the inspec-
          tion 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
          ithe facility, and "b" is a basic square footage requirement
          needed for each facility, independent of the number of lanes.
          For construction of dhe inspection lanes themselves, obviously,
          there is only a per-lane requirement, and no basic facility
          requirement.

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                                                                                                                      Centralired-2
II.  INITIAL COSTS TO PROGRAM OPERATOR

     A.  Estimates of Facility Requirements

          1.  Facility Square Footage Requirements
Test
Mode
IDLE
LOADED
LAND
Basic per
Facility
l&ft2

Additional
per Lane
foeo ft2

            2.   Allocation of Lanes and Square Footage Requirements
                    LANE  ALLOCATION
'II Facilities
This Size/Mode
                                                   LAND
                                                                                                   BUILDING
Lanes per
Facility
        Mode
    Total
    Lanes
  Each
Facility
                                                                         I-AN1JS
                                                       Total
                                                                Each Facility
                                                                                 Total
                                                                                                OFFICE,  ETC
                                                               Each Fact 1 its
                                                                                Total
                          PAVING
                                                                                          Each Factlltv
                                  Total
          T
           r
^
                                                                                                                                                       o
TOTAL
              FAC • /
                               LAN
                                            LNB
                                                                   I.HS
                                                                                             OFC
                                                                            0 0
                  +•  f  M6TSFI3-
                                    Poraonncl II t r Ing and Trai n Ing Rc-quiromcnt a
                                                                                 (^%&** &'V>+fl>t£wL
              POH! tlon
                                    Fecllity
                                    Requirement
                              Annual
                              Salary
                                                                         Duration
                                                                       >f Instruction
                                           Direct Coats
                                           >f InHtructlon
                                            per Trainee
 Total
Training
  Cost
                                                                                                 Hiring Costa
                                                                                                 per Employee
Total Training
 plus Hiring
              Station
              Manager
                                 1 per  facility
              Asst.  Station
              Manager
                                 l  per  facility or
                                -per  lane
                                                             Moo
              Iruipection
              Tccliniclano
rX
                             •*(•.. per  Idle Mode lane
                                  per Loaded Modo lane
              Clerks .

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                       -11-

(II.A.I, cont.)

Thus, given the estimates shown for the Smogville program, a
typical two facility requires (2,000) x (2) + (10,000) =
14,000. square feet of .total land.  Of ..this, space, (500) x (2)
= 1,000 square feet for test lanes, plus (100) x (2) + (500) =
700 square feet for office space, etc., is allocated to con-
struction.  Another (1,000) x (2) + (5,000) = 7,000 square
feet is allocated to external paving for queuing area, employee
parking, etc.  The remaining 5300 square feet is allocated to
landscaping.  A minimum, of 5% of the total land must be landscaped
for Smogville.

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.E. (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 add
to find the total number of facilities (FAC).  In the Smog-
ville program, 25 lanes will be distributed among two- and
four-lane facilities, and the mobile vans will count for 1/2
lane apiece.  For purposes of other (e-g., personnel) calcu-
lations they will also be counted as half-facilities.  Thus
there are 10 full facilities, plus 2 half-facilities for a
total of 11.

Obviously, there are no land and construction square footage
requirements for the .mobile vans.  For each size of stationary
facility, 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.  Inspection 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 Smogville stations will be open 72
hours per week, facility requirements for assistant station
managers and inspection 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.

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                          -12-
     (II.A.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.  Smogville
     planners have chosen to estimate needs for assistant station
     managers as a function of facility size, rather than merely
     have one per facility.

B.  Calculation of Facility Investment Costs

     1.  Construction and Land Acquisition Costs;

          a.  Multiply the total square footage requirement for
          (from II.A.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 II.A.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.

     2.  Inspection Facility Personnel Hiring and Training Costs;

          a.  Multiply the total training and hiring cost per
          employee for station managers, taken from section II.A.3.,
          by the number of facilities (assuming one station manager
          per facility).  For the Smogville program, each mobile
          lab is counted as 1/2 facility for purposes of this
          calculation.

          b.  Repeat step a. for assistant station managers.
          Notice that for the Smogville program, however, the
          number of assistant station managers was made a function
       1 >  of the number of lanes.  Therefore, a per-lane require-
          ment is multiplied by the number of lanes as determined
          in II.A.2., with each mobile van counting as 1/2 lane.

          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

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                                                                                                                           Centralized-3
B.
Calculation" of Facility Investment Costs

1.   Construction and Land Acquisition Costa
                                /ift'n'ff&sfcn if
     a.  Land Acquisition - OLANDACoT - LND x

     »>•  Paving • SPAVING - PVG x $PAVG/ft2
                                                                                        2.    Inspection facility  Personnel Hiring and Training Coats
                                                                      -
                                                                       51
                               stion Managers:
                                  $.
                                                                                                                     FAC
                                                                                             b.
     c.  Construction » $CONSTR - (OFC+LNS)  x $CONS/£t   •

     d>  Total Building " $BUILDING - $PAVING + $ CONSTR
                             Assistant Station Managers:
                                  $	X FAC
                                              x  .-If
                                                                                                  or
                                                                                                  InspectlonTechnlcianat
                                                                                                   $  t g*>S   x  f,JT   x LAN [IDLEJ
                                                                                                   $
                                                                                            d.    Clerks:  $
                                                                                                                    X LAN  [LOADED]   •

                                                                                                                            x LAN    •
     3.   Facility Preparation and Equipment Costs
                                                                                            TOTAL INSPECTION FACILITY PERSONNEL
                                                                                             HIRING & TRAINING - FIELDPERS
   Per
(Category)
          Number
                    Site Prepnratlon
                    Each
                               Total
Test Equipment
                                          Each
                                                     Total
Office & Other Equlpmt.
  Ench
                                   TOC.T!
D.ita Procps.-ilng Fqulpmt.
                                                                                             Enrh
                                                                                                                                TOT '-T
Facility
         D

Idle Lane
Central
Office
TOTAL
                                                                                                                    $EQUIP -

-------
                            -14-
          (II.B.2,c,  cont.)
          employees per lane,  by the total  number of  lanes  for that
          mode.   Again, Smogville planners  count  mobile vans  as 1/2
          lane each.     .                  ...
                                          * 4
          d.   Repeat for clerks.   The per lane requirement  and per
          clerk costs will probably be the  same regardless  of mode.

          e.   Sum a.  through d.  to yield total initial hiring and
          training costs for. inspection facility  personnel.
          Remember that the number of employees per  lane was  increased
          (padded) to handle a 72 hour work week.

     3.   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 inspection  facility
     investment costs beyond.land acquisition,  construction,  and
     personnel.   The table is set up on a principle  similar to that
     of section II.A.2. (for square footage allocation). For each
     category there is a basic cost assigned  per  facility independent
     of the number of lanes, and an additional 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, most  facility prepara-
     tion and equipment costs will apply only to  the stationary
     facilities, and the mobile vans will be  considered separately.
     Site preparation costs will include landscaping, hookup of
     utilities,  etc.   Test equipment will include analyzers,
     calibration gases, probes,  etc., and backup  equipment.   Under
     the category "other equipment", the Smogville 'program  will
     list the purchase and outfitting costs of the four mobile
     vans. Office equipment for the central  administrative staff
     will be  listed under  p-ersonnel costs as  overhead, although it
     could be listed here  instead.  Data processing  equipment will
     include  terminals for each of the lanes, storage and retrieval
     equipment for each facility, and a main  central processing
     setup, listed under central office provisions.

     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.

C.  Start-up Administrative Costs

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

-------
    C.    Start-Up Administrative  Cones

         1.    Start-Up  Personnel
I'osltion Area
Program Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff
                                        Prs-Yr!
SUBTOTAL
Overhead', Fringe and Contingency
                              )
                                                  Coat
                                                91997$
fft
TOTAL
      D.
                                       $CSP  -
Total Initial Costs to Program Operator

 1. Land Acquisition - $LANDACQ

 2. Total Building - $BUILDING      >.

 3. Field Personnel Training and
                    Hiring - $FIELDPERS

 4. Facility Preparation and
                    Equipment " $EQUIP

 5, Total Start-up Administrative Costs "  $ADM1N
            6. SUBTOTAL      '•
               $FIELDPERS + $EQUIP + $ADMIN -  $STARTUP'

            7. Total Initial Costs
             ' - $LANDACQ + $BUILDING + ^STARTUP
                                                                                                                   Centralized-*
                                                         2.   Calculation of  Start-Up Administrative Costs

                                                              a.    Start-up Personnel            - $CSP

                                                              b.    Initial Public Information    - $iri
                                                                   Initial Program Design, Eng. and Eval.
                                                                                                • $IDE
d.   Mechanic Training (State Operated  Program Only)
                        POP
          Mech/1,000 x -J-—Q x $MCH

e.   Total Start-up Administrative Coats           •
                                                                                                                                  - $ADMIN
                                                                                      (No Depreciation)

                                                                                      (Depreciation over 20 years)
                                                                            (Depreciation ovar life
                                                                                       of Progran)

-------
                        -16-
     (II.C.,cont.)

     2.  Calculation of Start-up Administrative Costs:  These will
     include all costs which are not facility investment costs.
                                          •* «
          a.  Take the total figure for central administrative
          start-up staff from the previous section, II. C.I.

          b.  Enter the total cost for initial program design,
          engineering and evaluation.  If this was listed as a
          lump-sum assumption in I. A., enter that.  If it was
          listed as a per-vehicle assumption, multiply that by the
          present auto population (POP), and enter the product.

          c.  Repeat step b. for initial public information costs.

          d.  This item is for a state-operated program only.  For
          a contractor-operated program, this cost will be computed
          in a separate section for costs to the state,  rather than
          in this section.  The number of mechanics needed per
          thousand autos (Mech/1,000) is multiplied by the number
          of thousands in the population.  Multiplying by the
          training cost per mechanic ($MCH)  yields the total
          initial cost of the mechanics' training program.

          e.  Total a,b and c for a contractor-operated program, or
          a-d for a state-operated program,  for total start-up
          administrative costs to the program operator.

D. Total Initial Costs to Program Operator "

     1.  Insert Land acquisition costs from II. B.I. a.  These can be
     said to retain full salvage value at the end of the program.

     2.  Insert building costs from II.B.l.d.  These can reasonably
     be said to depreciate over a period of 20 years.

     3.  Insert inspection personnel hiring and training costs from
     4.  Insert facility preparation and equipment costs from
     II. B. 3.

     5.  Insert total administrative start-up costs from II.C.2.e.
     1  ;                                     *

     6.  Add 3, 4, and 5.  This sum represents costs that can
     reasonably be depreciated over five years or, alternatively,
     the length of the program planning segment.

-------
                              -17-
          (II.D., cont.)

          7.   Total initial costs to the program operator can be obtained
          by adding 1, 2 and 6.  -

III.  RECURRING COSTS TO PROGRAM OPERATOR

     A. Personnel Costs

          1.   Central Administrative Staff:  This is the group coordina-
          ting and overseeing the entire program operation.   Worksheet
          users should adapt the table presented to their own conception
          of the needed administrative staff structure.

          2.   Inspection Facility Operating Staff;  These calculations
          are made on the basis of estimates made in the table for
          inspection personnel requirements, section II.A.3.  As in
          calculations for hiring and training costs of these personnel,
          the Smogville program is introducing a per-lane requirement
          for assistant station managers.  Insert annual salary figures
          where training and hiring costs had been used in computing
          start-up costs.  Overhead and fringe benefits are calculated
          at a smaller percentage than for central administrative staff
          for the Smogville program, because housing is not so elaborate
          at inspection facilities and because office equipment for the
          facilities is accounted for separately.

     B. Miscellaneous/Total Recurring Costs

          1.   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 a marginal factor for each lane in
          the facility.  In the Smogville program, planners considered
          these costs to be handled under the categories of overhead and
          equipment maintenance (see III.B.4.,), and therefore no cost
          is listed here.

          2.   Travel;  Smogville planners consider that to maintain
          communication and efficient management, and to transport
          supplies between the central office and the facilities, it
          will be necessary to travel approximately 1500 miles per year
          for each facility.  At $.20 per mile, this is projected to
          cost $300 per facility, including the mobile vans for the
          Smogville programs.

          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 recurring public
          information costs.

-------
Contr«H»«d-5
III. RECURRING COSTS TO PROGRAM OPERATOR
A. Personnel Costs
1. Central Operating Staff

Position Area
Program Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff

Number
f
1.
^
3 '
SUBTOTAL
Overhead, Fringe and Contingency (yP€) %)

Cost
§V *#^| %
•^gfVC
1/77 &d
•2-T«>f£
l*fl&*t»
/VJ IT-£
TOTAL - $CSTAFF - f3^Ol Cff-S*'
. 2. Inspection Facility Operating Staff
a. Station Managers: $ f*f^-C*% x FAC Of / - ^ V ^'-^
b. Assistant Station Managers: $ x FAC
or $15^0 x .^f KLANfr.
c. Inspe^ion Technicians: ^ - &
$ ?^dfV x ( &•$ x LAN [IDLEjCjl.J'l
+ O x LAN [LOADED] )
d. Clerk8: $ f&&"&7 x . Tjf x LAN^*V|
e. SUBTOTAL
f. Overhead and Fringe Benefits ( d@ X)
g. TOTAL INSPECTION FACILITY OPERATING STAFF
•
T/ " -SZ. 	 / 	

' . r^?«o^ '
.^,«/f^8*V
• ^j^'/S**/^^
- 3flf«/j£&B^
- 5FSTAFF
1
M
CX)
1

-------
                                                                                                                   Centralized-6
 B.   Miscellaneous Total  Recurring Coats


 I.  Support Services to Facllltiea

•  $	basic per  facility
  $             additional per  lane

       TOTAL SUPPORT SERVICES
 2.  Travel

  $      1>O>6  per facility
 3.  Public Information
        5RPI
     or $RPI x AAP • I*
 4.   Equipment Maintenance

 :*2&. % x  $EQUIP
 5.   Annual  Program  Design,

 Engineering and Evaluation
         SRDF.
      or $R1)E x AAP
     Computer Processing of Testa
             CPT x TST
 6.
 7.   Insurance Costs (where applicable)

     $ _J.£&*>'.   x LAN •*•  IQO&X FAC•
 8.   Personnel Costs
     5CSTAFF + $FSTAFF                  "   S
 9.   Additional Mechanic Training (State Operated Program Only)
     MecU/ 1,000 x
                            x  $MCH
 10.  Property Taxes  (Contractor Operated Program Only)
           5nUIIJDTNG+$LANDACQi$5gl[IiP
"il.
                                                                           IV.,_mNllALIZED COSTS TO PROGRAM OPERATOR

                                                                               A.    Average Recurring Costa
                                                                                       Accounting for Inflation

                                                                               For  each item, tflKei
$SUPT


$TRAV


$APU3


$MAINT


ADESG



$CMPR



$INS


$STAFF




$AMT


$TAX
      Recurring Coats
                                                                                    ITEM  x
                                                                                                 E     (1 + INF)'
                                                                                                i-o
                                                                                                     PRL
                                                                                                             $SUPT
                                                                                                             $TRAV
                                                                                                              $MAINT
                                                                                                              $ADESG
                                                                                                              $CKPR
                                                                                                              $STAFF
                                                                                                              $TAX
                                                                                     (Does Not Include Amortization of Initial Coats)

-------
                    -20-
(III.B., cont.)
4.  Equipment Maintenance;  Recurring equipment maintenance
costs are estimated as a percentage of initial equipment
costs.  Costs of upkeep on landscaping, and mobile vans, data
processing equipment and so forth are all considered in a
single percentage in the Smogville program.  20% is taken of
the total initial expenditure derived in section II.B.3.

5.  Recurring  Program Design, Engineering and Evaluation:
Determine these as for'public information costs.  In the
Smogville program, administrators considered these costs to be
covered elsewhere in the worksheet.

6.  Computer Processing of Test Results;  Multiply the assumed
cost per test by the annual average number of tests, as deter-
mined in section I.E.2.  In the Smogville program, these costs
are covered under equipment costs and regular staff functions.

7.  Insurance Costs;  This cost will apply to all contractor-
operated programs, but only to those state-operated programs
where states are not self-insuring.  Insurance costs them-
selves vary in a manner too complex to be thoroughly repre-
sented 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 in-
cluding a basic factor per facility, independent of the number
of lanes, and an additional factor for each lane in the facil-
ities.  In the Smogville program, these are estimated at
$1,000 per facility and $1500 per lane.

8.  Personnel Costs;  Insert the recurring costs for personnel,
overhead and fringe benefits as determined in section III.A.
This includes the total of both central administrative staff
and inspection facility staff.

9.  Additional Mechanic Training;  This item applies to a
state-operated program only.  The difference between the
average annual population (AAP) and the original population
(POP) gives the amount of annual increase in the population.
Additional mechanics need to be trained to cover this increase,
and the cost of training them is found by applying the same
formula as for initial training costs: i.e., multiply the per-
il, 000 auto requirement by the number of thousands of new
autos, by the training cost per mechanic.

In some programs recurring costs of mechanic training will
include refresher courses for mechanics who have already
received  special training.  Worksheet users must add such
costs at their own discretion.  In contractor-operated programs,
costs of mechanic training are included later under costs to
the state (unless the contractor administers the mechanic
training program).

-------
                                -21-
           (III.3., cont.)
          10. Property Taxes;  This item applies to a contractor-operated
          program only.  The property tax rate as listed in the assumptions
          applies only to land, buildings, equipment, and other site
          improvements.  Take these figures front-section II.D., lines
          1,2, and 4 only.  Multiply the sum by the assumed rate per
          full value.

          11. Total Recurring Costs:  Sum all of 1-10 above which are
          applicable to  the program in question.  This figure represents
          the present-dollar value of yearly program operating costs,
          once the initial capital investment is in place.

IV.  ANNUALIZED COSTS TO PROGRAM OPERATOR

     A.  Average Recurring Costs Accounting for Inflation

          The formula shown calculates a factor representing the average
          annual cost differential due to inflation.  At a rate of 7%,
          the Smogville  assumption, this factor would be 1.15.   For
          simplicity of  calculation, merely multiply this factor by the
          total arrived  at in section III.B., line 11.  If the worksheet
          will be used for more sophisticated analyses of cost elements
          and their proportion of the inspection fee, multiply this
          factor by each of the items listed in section III.B. individ-
          ually.

     B.  Amortization of Initial Costs

         General Formula

          The general formula presented consists of a series of equa-
          tions, broken  up so that the computations being made are
          transparent to the worksheet user.  Through this formula, an
          average annual payment is derived taking into account depre-
          ciation, interest, salvage value, and inflation, for each of
          three items distinguished by their depreciation schedule in
          section II.D.  (i.e., $LAtfDACQ, $BUILDING, and $STARTUP).

          1.  The first  equation computes a cost item's salvage value at
          the end of the program, as a proportion of the original cost.
          The proportion used is that fraction of the item's deprecia-
          tion period used up over the course of the program.

—.        2.  The second equation computes the present discounted value
          of the item's  salvage value at the end of the program.  The
          salvage value  is divided by the interest factor compounded
          over the length of the program.

          3.  The original value of the item, less the present dis-
          counted salvage value, is the current value of the principle
          to be paid off over the length of the program.

-------
     B.   Amortisation of Initial  Coats

          General Formula

       1.  DEPR « Depreciation Period  of  Item
                                       (Value of Item Remaining
     STTEM  x  DEPR-PRL
     *ITEM  x    DEPR
       2.
               VAE
            (1+INT)
             Mfo
                     at end of Program)


       __„   (Present Discounted Value
PRL  "        of Item Remaining at end
              of Program)
3.  SITEM - PDV -  PRIN    <*£!%;{ Jvert^tn°ofepro8ram)

                         PRL
             lOTd + INT) ""   .   $     (Annual Payment
*•  PRIN  x         ZZT-*     •   y™  v of Initial Loan
                  (1+INT)PRL
                                  (Item)
                                  (Item)
                                                   InterC8t)
      (NOTE;  Interest Rate Already Accounts for Inflation)
                                                                                                                                   Centraliced-7
                                       t
          Calculation for Specific Initial Cost Elements

1.  Land Acquisition;
                                  $"?oc»t>o
          No Depreciation; VAE - $LANDACQ

                                 (Landacq)

2.  Building;   Oo

     DEPR • 20 Years
                                                                                                        $PMWlding)  -
                                                                          •3.  Other Startup
                                                                               DEPR - PRL; VAE - 0; PRIN -  $STARTUP
                                                                                                        $P!frpfiartup)
                                                                     A.  Total Annual Payment Plus Interest
                                                                               For Initial Costs
                                                                                                                                  - $PAYMENT
                                                      C.   Total Annuallzed Costs to Program Operator

                                                           $RECUR + $PAYMENT «  ^".  &O fj, 0f(q»    -  $ANNUAL
V.
     DISTINGUISHING STATE FROM CONTRACTOR OPERATED PROGRAM

     A.   State Operated Program

          Inspection Fee •
                       $ANNUAL
                         AAP
                                                                 B.   Contractor Operated Program

                                                                      1.  Total Annuallzed Costs to Contractor

                                                                                               • $ANNUAL

                                                                      2.  Contractor's Net Return - ?O   I

                                                                      3.  Total Annuulized Contractor's
                                                                                Program Costs  - $COM

                                                                                                                                         - $CONTK

-------
                             -23-
          (IV.B., cont.)

          4.   Multiplying the principle value by the factor given
          yields the annual payment of principle and interest.
                                               » «

         Calculations for Specific Initial Cost Elements

          1.   Land Acquisition;  It is usually assumed that land does
          not depreciate in value.  The salvage value of the land at the
          end of the program would therefore be equal to the original
          cost (aside from the inflation factor, accounted for in the
          second equation).  "$LANDACQ" (from section II.D., line 1) can
          thus be directly substituted for "VAE" in equation 2, eliminating
          equation 1.  In this case, the entire formula collapses into
          simply "$LANDACQ x INT".

          2.   Building;  Twenty years is traditionally assumed as the
          depreciation period for buildings, although any depreciation
          period may be substituted for "DEPR" in equation 1 of the
          formula.  For the Smogville program, a five year program
          planning segment and twenty year depreciation period implies
          that the salvage value of buildings ($BUILDING,  from section
          II.D.,  line 2) is 75% of initial costs.

          3.   Other Startup Costs;  In the Smogville program, it is
          assumed that all other startup costs (including startup admin-
          istrative costs and inspection facility site preparation,
          equipment, and personnel hiring and training costs) completely
          depreciate over the five-year length of the program planning
          segment.  This implies that the present discounted salvage
          value of these items at the end of the program is $0.  "$START-.
          UP" from section II.D., line 6, can therefore be directly
          substituted for "PRIN" in equation 4.

          4.   The sum of the annual payments for each of the three items
          listed is the annualized payment of initial costs, including
          interest.

     C.  Total Annualized Costs to Program Operator

          Add the annualized recurring costs (from IV.A.)  to the annual-
          ized initial costs (from IV.B.), for total annualized costs to
          the program operator.

V.  DISTINGUISHING STATE FROM CONTRACTOR-OPERATED PROGRAMS

     A.  State-Operated Program

          The total annual inspection fee to motorists can now be deter-
          mined for a state-operated program.  Divide the total annual-
          ized costs from section IV.C. by the average annual auto

-------
                           -24-


          (V.A., cont.)

          population (AAP) from section I.B-, line 1.

     B.  Contractor-Operated Program

          The annual net return to the contractor can now be determined
          for a contractor-operated program.  For the Smogville program,
          Smogtesters, Inc., will receive a net return of 10% on the
          total annualized costs determined in IV.C. 7% to 12% is
          usually considered an equitable range for returns on such
          contracts.

          The worksheet user can determine at this point the part of the
          inspection fee attributable to the contractor's operations, by
          dividing the total annualized costs plus return to contractor,
          by the annual average auto population.

VI. PROGRAM COSTS TO THE STATE (CONTRACTOR-OPERATED PROGRAM ONLY)

     A.  Inspection Facility Monitor Requirements

          The table presented in the worksheet outlines requirements for
          both initial and recurring costs, for state employees monitor-
          ing the day to day operation of the contractor's inspection
          facilities.  Such monitoring will be necessary to guarantee
          proper quality control and execution of the public trust.  In
          the Smogville program, the state plans to assign each monitor
          responsibility for about four inspection facilities, and one
          more will monitor all four of the mobile vans.

          As in the table for training and hiring requirements for in-
          spection facility personnel in section II.A.3., direct costs
          of personnel instruction 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.       ^

     B.  Initial Costs to the State

          1.  Central Administrative Personnel:  The state must oversee
          and reinforce many functions covered by the contractor's
          administrative staff, to safeguard the public trust and pro-
          vide liason with other state offices.  As for the contractor's
          start-up administrative staff, requirements are stated in
          person-years, since planning and set-up may last more or less
          than a full year.

          2.  Total Initial Costs to the State;

               a.  The total program-wide costs of training and hiring
               of inspection facility monitors, from section VI.A., is
               inserted.

-------
VI. PROGRAM COSTS TO STATE  (Contractor Operated Program Only)i

     A.  Inspection Facility Monitor Requirements
                                                                                                                       Centrallzed-8
"I  Total Training
   plus Hiring
                          Facility
                         Requirement
           Annual Salary
Duration of
Instruction
                                           Direct Cost of
                                             Instruction
    total
Training Costs
Hiring Costs
Individual basis
 per
facility
Prognwn Total
                          x FAC -
                   - $FMS
     B. '  Initial Coses
          1.   Central Administrative Personnel
Position Area
Program Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff
SUBTOTAL
Overhead, Fringe and Contingency
                                       Prs-Yrs
         Z)
TOTAL
                              *CAPIN
                                                  Cost
                                            2.   Total Initial Costs to State

                                                 a.  Inspection Facility Monitor Training
                                                                         and Hirlnn
                                                 b.  Central Administrative Personnel

                                                 c.  Initial, Private Mechanic Training
                                                          ^*7%®fct®
                                                      Mech/1,000 x \ QQQ * $MC»

                                                 d.  Total Initial Costs to State
                                                             - $FTRN


                                                             • SCAPIN
                                                                                                                                      -  $STIN
                                                                                           I
                                                                                           Is)
                                                                                           Ul

-------
                        -26-
     (VI.B.2, cont.)

          b.   Insert  the total cost for the initial central admin-
          istrative personnel from Section VI.B.I.
                                           ' *
          c.   The cost to the state for initial training of private
          mechanics is inserted here (rather than in section II.C.2.,
          as it would be for a state-operated program).   Multiply
          the number  of mechanics needed per thousand autos, by the
          number of thousands in the population, by the training
          cost per mechanic, to yield the total initial cost of the
          mechanics'  training program.

          d.   Total a through c to yield the total initial costs of
          the program to the state.

C.  Recurring Costs to the State

     1.  Central Administrative Personnel;  In the Smogville plan,
     it is assumed that the start-up administrative staff will
     simply continue  to function in its role of overseeing the
     contractor operation.

   ..  2.  Total Recurring Costs to the State

          a.   Inspection Facility Monitors:  (i) insert the total
          program-wide annual salary cost from section VI.A. (ii)
          Add a percentage of total salary for overhead and fringe
          benefits, (iii)  Add a factor for monitors' travel between
          facilities  and the state central office.   This can be
          calculated  either on a per-facility or a per-monitor
          basis.  Smogville planners estimate 2,000 miles per year
          for each monitor.  At $.20 per mile, that comes to $400
          per monitor.

          b.   Insert  the total cost for the central administrative
          personnel,  from section VI.C.I.

          c.   The annually recurring cost of training additional
          mechanics is found by multiplying the assumed training
          cost per mechanic, by the number of thousands of new
          autos, by the number of mechanics required per thousand
          autos.  Refer to section III.B.9. for more detailed
      I    explanation.

          d.   Total a through c to yield the total recurring costs
          of the program to the State.

D.  Annualized Costs  to the State

     1.  Amortization of Inital Costs to the State:  In the con-
     tractor-operated program, the state makes no initial invest-
     ments which will retain any salvage value at the end of the

-------
     1C. Recurring Coats
1. Central Administrative Personnel

^Position Area
1'rogram Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff
SUBTOTAL 
-------
                               -28-
          (VI.D.1, cont.)

          program.  The amount of principle to be paid off over the
          period of the program will therefore be just the amount of
          total initial costs ($STIN), from section VLB.2., line d.  If
        •  the state is assumed to pay the same interest rate on borrowed
          capital as the contractor, this equation will be identical to
          equation 4 of the general formula presented in section IV.B.,
          with "$STIN" substituted for "PRIN".  The Smogville planners
          do make that assumption.

          2.  Recurring Costs to the State Accounting for Inflation;
          The inflation factor which is derived in section IV.A. should
          be applied to the total recurring costs to the state, from
          section VI.C.2., line d.

          3.  Total Annualized Costs to the State;  Add the annualized
          initial costs (from VI.D.I.) to the annualized recurring costs
          (from VI.D.2.), for total annualized costs to the state.

          At this point the worksheet user can determine the part of the
          inspection fee attributable to the state's administration of
          the contractor-operated program, by dividing the total annual-
          ized costs to the state by the average annual auto population.

VII.  TOTAL OVERALL PROGRAM COSTS FOR CONTRACTOR-OPERATED PROGRAM

     A.  Total Overall Annualized Program Costs

          Add the total annualized costs plus return to the contractor
          (from section V.B.) to the total annualized costs to the state
          (from section VI.D.3.), for total overall annualized program
          costs.

     B.  Annual Fee to Motorists

          Divide the total overall annualized program costs from VILA.
          by the average annual auto population, to yield the annual
          inspection fee for the contractor-operated program.

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                                                  Coat Calculation Worksheet;   I/M Program
                                          Centralized Lane Program;  Scace or Contractor Operated
       PROGRAM PARAMETERS
A.   Assumptions
                                                                                    B.   Parameter Calculations
 1..  POP • Present Auto Population
 2.   CRT " Annual Auto Population Growth Rate (Z)
 3.   INF • Annual Inflation Rate (Z)
 4.   INT • Annual Interest Rate (Z)
 5.   PRL - Program Length  (yrs)
 6.   HRS - Annual Operating Hours
 7.   Cars/hr » Hourly Lane Throughput
 8.   STR " Stringency Factor (%)
 9.   XTR • Annual Percent Additional Testa  (Z)
 10.  $1.AND/ft  - Land Acquisition Cost per square foot
             2                                   *>
 11.  $CONS/ft  - Construction Costs per square foot
 12.  $PAVG/ft  - Paving Costs per square foot
 13.  Mcch/1,000 • Mechanics Required per 1,000 autos
 14.  $MCH - Training Cost per Mechanic
 15.  $tPI • Initial Public Information Costs
 16.  $RPI • Recurring Public Information Costs
 17.  SIDE • Initial Program Design, Eng. & Eval.
 18.  $KDE - Recurring Program Design, Eng. & Eval.
 19.  CPT " Computer Processing Cost Per Test
 20.  PRT » Property Tax Rate per Full Value (contractor
                                              program only)
  1.    Average  Annual  Auto Population • AAP
(POP) x
              PRL-1
               £
              1=0
(1+GRT)
              PRL
                               - AAP
  2.    Average  Annual  Tests Performed " TST
            AAP  (1 + STR + XTR)  -
                               - TST
  3.    Annual Lane Capacity • CAP
          HRS x Cars/hr
                               • CAP
  A.    Total  Test Lanes  Required ** LAN
                 TST
                 CAP
                               - LAN
                   N

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                                                                                                                       Ccntralised-2
II.  INITIAL COSTS TO PROGRAM OPERATOR




     A.  Estimates of Facility Requirements




          1.  Facility Square Footage Requirements
Test
Mode
IDLE
LOADED
LAND
Basic per
Facility
ft2
ft2
Additional
per Lane
ft2

LANES
(per Lane)
ft2

• OFFICE, ETC.
Basic per
Facility
ft2

Additional
per Lane
ft2

PAVING
Basic per
Facility
ft2

Additional
per Lane
ft2

            2.   Allocation of Lanes and Square  Footage Requirements
LANE ALLOCATION
Lanes per
Facility









TOTAL
Mode










il Facilities
This Size/Mode









I;AC «
Total
Lanes









LAN "
LAND
Each
Facility



'K





Total









LND -

1ANES
Koch Facility









Total









I .US -
BUILDING
OFFICE, ETC
Each FacllitN









Total









OFC -
PAVINtt
Each Facility









Total









TVG -
              3.    Inspection Facility Personnel Hiring and Training Requirements
Position
Station
Manage!:
Asst. Station
M:\na jjer
Inspection
TcchnlcluiiH
Giurktt
Facility
Requirement
1 per facility
1 per facility or
	 por lone
per Idle Mode lane
per Loaded Modu lone
pur Imiu
Annual
Salary



•

Duration
of Instruction





Direct Costs
of Instruction
per Trainee
•




Total
Trntninf
Cost





Hiring Costs
per Employee





Total Training
plus Hiring






-------
                                                                                                                           Centrallzed-3
B.
Calculation-of Facility Investment  Costa

1.   Construction and Land Acquisition Coats

     a.  Land Acquisition - $LANDACQ  • LND x  $LANO/£t2

     b.  Paving - $PAVING - PVG x $PAVG/ft2

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

     d.  Total Building • $BUILDING • $PAVING +  $  CONSTR
     3.   Facility Preparation and Equipment  Costs
                                                                                       2.
Inspection Facility Personnel Hiring and Training Coats

a.
Station
     $
                                                                                                                  x FAC
                                                                                            b.



                                                                                            c.




                                                                                            d.

                                                                                            e.
     Assistant Station Managers:
          $ _ x FAC
     or
                                   x LAM
                                                                                            Inspection Technicians:
                                                                                             $ 	x	x LAN [IDLE]
                                                                                                                    x LAN [LOADED]  "

                                                                                                                            x LAN   "
     Clerks: $
                                                                                            TOTAL INSPECTION FACILITY PERSONNEL
                                                                                             HIRING & TRAINING - FIELDI'ERS
Per
(Category)
Facility
Loaded I.ane
Idle Lane
Central
Office
T~ 	 	
TOTAL

Number


-


Site Preparation
Each





Total





Teat Equipment
Each
V




Total





Office & Other Equipmt.
Each





Total
'




D.Tfn Processing Equlprit.
K.irh




Toi.il





rm M



•
SEQUIP -

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                                                                                                                Centrallzed-4
C.	Start-Up Administrative Costs

     1.    Start-Up Personnel
Position Area
Program Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff
Prs-Yr!




SUBTOTAL
Overhead, Fringe and Contingency ( 	 Z)
i
Cost


i



TOTAL - $csp "
2.    Calculation of  Start-Up Administrative Costs

     a.    Start-up Personnel            =  $CS?          -

     b.    Initial Public Information    •  $IPI
                                   or  •  $IPI x POP

     c.    Initial Program Design, Eng. and Eval.
                                       -  $IDE
                                   or  •  $IDE x POP

     d.   Mechanic. Training (State Operated Program Only)

              Mech/1.000 x ~~ x $MCH

     e.   Total Start-up Administrative Costs          -
  1).    Total Initial Costs to Program Operator

        1.  Land Acquisition - $LANDACQ

        2.  Total Building - $DUILDING     y

        3.  Field Personnel training and
                           Hiring - $FIELDPERS

        4.  Facility  Preparation and
                           Equipment - $EQUIP

        5.  Total Start-up Administrative Costs -  $ADMIN

        6.  SUBTOTAL
           $FIELDPERS + §EQUIP + $ADMIN • $STARTUP

        7.  Total Initial Costs
           - $LANDACQ + $BUILDING + $STARTUP
                  (No Depreciation)

                  (Depreciation over 20 years)
                   (Depreciation over life
                              of Program)
                                                                                                                               - $ADHIN

-------
                                                                                                                               Centralized-5
III.   RECURRING COSTS TO PROGRAM OPERATOR

     A.    Fersonaal Coses

          1.   Central Operating Staff
Position Area
Program Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff
Number




SUBTOTAL
Overhead, Fringe and Contingency ( 	 Z)
TOTAL = SCSTAFF
Cost







Inspection Facility Operating Staff

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

                                                                                              or $
                                               x ?AC
                                                x LAM
                                                                              Inspection Technicians:
                                                                                $             x (	
                                  r. LAN [IDLE]
                                                                         d.   Clerks: $
                         x LAN [LOADED] )

                               x
x LAN
                                                                         e.   SUBTOTAL

                                                                         f.   Overhead  and  Fringe Benefits  (	X)

                                                                         g.   TOTAL INSPECTION FACILITY OPERATING STAFF
                                                                                                                                               - $FSTAFF

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B.   Miscellaneous Total Recurring Coats

1.  Support Services to Facilities
 $ 	basic per facility
 $ 	additional pet lane
      TOTAL SUPPORT SERVICES            -
2.  Travel
 $ 	 per facility           •
3.  Public Information
       $RPI
    or $RPI x AAP
4.  Equipment Maintenance
 	.% x $EQUIP
5.  Annual Program Design,
Engineering and Evaluation              •
        SRDE
     or $RUE x AAP
,   Computer Processing of Testa
            CPT x TST
7.  Insurance Costs (where applicable)
     $ __ .___ x LAN + _ x FAC "   _
8.  Personnel Costa
     SCSTAFF + $FSTAFF                  •   _ _
9.  Additional Mechanic Training (State Operated Program Only)
Mcch/1,000 x
                  A AP_P
                             $MCH
10.  Property Taxes (Contractor Operated Program Only)
   PRT x ($BUILDING+$LANDACQ+$EQUIP)    •
11.  Total
                                                                      IV. ANNHALIZEP COSTS  TO PROGRAM OPERATOR
                                                                           A.    Average Recurring  Costa
                                                                                   Accounting for  Inflation
                                                                           For each item, ta£ei
                                                                                            £    (1 + INF)1
                                                                               ITEM  x     —n
     Recurring Costa•
$SUPT

$TRAV

$APUB

$MAINT

ADESG

$CMPR


$INS

$STAFF


$AMT

$TAX

$RECUR
                                                                                                PRL
                                                                                                         $SUPTJ
                                                                                                              i

                                                                                                         $MAINT1

                                                                                                         $ADESG

                                                                                                         $CMPR.
                                                                                                         $STAFF
                                                                                                              $RECUR.
                                                                                     (Does  Not  Include Amortisation of Initial Costs

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                                                                                                                                   Centralised-7
B.   Amortization of Initial Costa •

     General Formula

  1.  DEPR " Depreciation reriod of It«m
               DEPR-PRL      ,,.„  (Value of Item Remaining
     $ITEM  x    DEPR     ~  VAE   at end of Program)


          VAE        _ tf    (Present Discounted Value
  2<          PRL  "        of Item Remaining at end
        (1+INT>              of Program)
                               (Value of Principle to be
     3.  $ITEM - PDV - PRIN     pflld of£ Over Length of Program)
                              PRT
                  INTd + INT)      _  <.PMT  (Annual Payment

               X                              of Inltlal L
                                                   Interest)

      (NOTE;   Interest Rate Already Accounts for Inflation)
                                                                                    Calculation for Specific Initial Coot Elements

                                                                          1.  Land Acquisition!

                                                                                    No Depreciation; VAE • $LANDACQ


                                                                                                        $PMKndacq)   '	

                                                                          2.  Building;

                                                                                DEPR -  20 Years
                                                                                                    $PMWlding)  -

                                                                      3.  Other Startup

                                                                           DEPR - PRL; VAE - 0; PRIN - $STARTUP
                                                                      A.  Total Annual Payment Plus Interest
                                                                                For Initial Costa
                                                                                                                                  - $P.AYMENT
                                                       C.   Total Annualized Costa  to  Program Operator

                                                            $RECUR + $PAYMENT «  	  -   $ANNUAL
V.
DISTINGUISHING STATE FROM CONTRACTOR OPERATED PROGRAM

A.   State Operated Program

     Inspection Fee -
                             SANNUAL
                               AAP
B.   Contractor Operated Program           4

     1.  Total Annualized Coats to Contractor

                              - $ANNUAL

     2.  Contractor's Net Return • 	X

     3.  Total. Annualized Contractor's
               Program Costa  - $CON
                                                                                                                                          - $CONTR

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VI. PROGRAM COSTS TO STATE  (Contractor Operated Program Only) ;


     A.  Inspection Facility Monitor Requirements
                                                                                                                       Centralized-8

Individual basis
Program Total
Facility
Requirement
per
facility
x FAC -
Annual Salary

- §FMS
Duration of
Instruction


Direct Cost of
Instruction


Total
Training Costs


Hiring Costs


Total Training
plus Hiring

- $FTRN
     B.   Initial Costs
          1.   Central Administrative Personnel
Position Area
Program Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff
SUBTOTAL
Prs-Yrs





Overhead, Fringe and Contingency ( 	 %)
Cost



>.


TOTAL *CAPIN •
                                                                           2.    Total Initial Coata to State
                                                                                a.   Inspection Facility Monitor Training
                                                                                                       and Hirinn
                                                                                b.  Central Administrative Personnel


                                                                                c.  Initial Private Mechanic Training
                                   - $FTRN




                                   - $CAPIN
Mech/ 1,000 x
                                                                                                  Pnp
                                                                                                 —
                                                                                                       x $MCH
                                                                                d.  Total Initial Costa  to State  '
                                                                                                                                       - $STIN

-------
                                                                                                                      Centr.allred-9
     1C. Recurring Costs
          1.   Central Administrative Personnel
                                                            2.   Total Recurring Coata to State
Position Area
Program Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff
Number




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







     D.   Annuallzed Costa to State

1.  Amortization of Initial Costs to State
                             PRL
$STIN
 INT (1 + INT)

(1 + INT)?RL - 1
2.  Recurring Costs to State Accounting for Inflation
      $STRC
                         (1 + INF)
                       PUL
3.  Total Annuallzed Program Costs to State

               $STPT + $SANN
                                                         - $STPT
                                            $SAHN
                                         - $STATE
                                                                               a.  Inspection Facility Monitors
                                                                                1)                 Annual Salary - $FMS           «
                                                                                li)  Overhead, Fringe and Contingency  ( _ X)    -
                                                                                iii)      Travel  $ _ per  Monitor
                                                                                             or   $
                                                                               b.  Central Administrative Personnel

                                                                                                                  • $CAPAN

                                                                               c.  Annual Additional Mechanic Training
                                                                                           AAP— PHP
                                                                                    $MCH x  i Ooo   x Mech/ 1,000
                                                                               d.  Total Recurring  Costs to  State
                                                                                                                                         - SSTRC

                                                                           VII.  TOTAL OVERALL PROGRAM COSTS  FOR CONTRACTOR OPERATED PROGRAM
                                                                 A.   Total Annualized Program Costa
     $STATE + $CONTR
                                                                 B.   Annual Fee to Motorists
Average Annual
Program Cost
per Vehicle
                                                                                       ijTOTL
                                                                                        AAP
      STOTL
Inspection
Fee

-------