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
t.A.).  From some of these assumptions, basic program parameters are
calculated  (I.B.).  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 (II.B.).  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.B.).  These are
calculated on a present dollar basis.

Both initial and recurring costs to the program operator are then
"annualized" 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.).

From 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 lower 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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                                                  Cost Calculation Worksheet:  I/M Program
                                          Generalized Lane Program:  State of 'Jontractor Operated
I-     PROGRAM PARAMETERS
A.   Assumptions
 1..
 2.
 3.
 4.
 5.
 6.
 7.
 8.
 9.
 10.
 11.
 12.
 13.
 14.
 15.
 16.
 17.
 18.
 19.
    POP = Present Auto Population
    CRT •» Annual Auto Population Growth Rate (%)
    INF = Annual Inflation Rate (%)
    INT = Annual Interest Rate (%)
    PRL = Program Length  (.yrs)
    HRS = Annual Operating Hours
    Cars/hr = Hourly Lane Throughput
    STR = Stringency Factor (%)
-a., fa
7%
3o
XTR = Annual Percent Additional Tests
$LAND/ft2
$CONS/ft2
                                            (%)
                Land Acquisition  Cost  per  square  foot
                Construction  Costs  per square  foot
             T
     $PAVG/ft'~ = Paving Costs  per  square foot
     Mech/1,000 = Mechanics Required per 1,000  autos
     SMCH = Training Cost  per  Met-.hanic
     $IPI = Initial Public Information  Costs
     $RPI = Recurring Public  Information Costs
     $IDE = Initial Program Design,  Eng.  &  Eval.
     $RDE = Recurring Program  Design, Eng.  & Eval.
     CPT " Computer Processing Cost  Per Test
20.  PRT =  Property Tax  Rate  per  Full  Value  (contractor
                                              program only)
                                                                                     B.   Parameter Calculations
                                                                                          1.   Average Annual Auto Population = AAP
            PRL-1
             I    (1-K5RT)
                       (POP)  x
                                    PRL
2.    Average Annual Tests Performed ° TST

          AAP (1 + STR + XTR)  •= f, Ofc ?/
                        3.   Annual Lane Capacity ° CAP
        HRS x Cars/hr
                                                                                                                                             TST
                                                                           CAP
                                                                                      -P-
                        4.   Total Test Lanes Required ° LAN
                                                                                                         TST
                                                                                                         CAP
                                                                                                                                            LAN

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                      -5-
(I.A., cont.)
 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.
                      T.'ibii: 1

      VohicJc ,J.h£iHi)'.hpMl	(Cf'ril_PS:r_JllliII.l)	!'>' Prorram Format
Program                           OptJiMl                    Projected
Format.	Throughput	Efficiency	Throughput
State/City -
operated idle-                      20-25         50-63Z         10-16
mode test using
tachometer
State/City -
operated idle               ..      30-36         50-64%         15-23
mode test with
safety  inspection
no tachometer
Contractor -                       20-22         61-65%         12-14
operated
loaded mode
test                                                          	
 8.  Stringency Factor (SIR);  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 Variarion in Land Acquisition Costs
I,o en 1:1 on
Chicago
Denver
Portland
>iew Jersey
Ciiic. Jnnati
Si . Louis
Ivan Gas
Town
Nebraska
Year
1974
1974-75
1975
1975
1976
1976
1978
197C
1978
Coat 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 Frame     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,OOP);  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.

17. Inital Program Design, Engineering and Evaluation  ($IDE):
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 contractor-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

     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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                                 -9-
          (I.B.l,  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 (1ST):   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 Smqgville 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
          the 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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                                                                                                          Centralized-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
fCOOO
ft2
Additional
per Lane
7-eoO ft2

LANES
(per Lane)
SoOft2

OFFICE, ETC.
Basic per
Facility
foe

Additional
per Lane
fee ft2

PAVING
Basic per
Facility
£eoeft2

Additional
per Lane
feeo ft2

           2.  Allocation of Lanes and Square Footage Requirements
                  LANE ALLOCATION
                                              LAND
                                                                                         BUILDING
Lanns per
Facility
Mode
l> Facilities
This Size/Mode
                     Total
                     Lanes
  Each
Facility
LANES
                                           Total
                                                   Each Facility
                                                                 Total
                    OFFICE, ETC
                                                                          Each Facilitx
                                                                                    Total
                                     PAVING
                                                                                             Each Facility    Tjital
                              r*
                        Wooo
        rttt.ooo
                                                                             700
                                                36
                                                                                                   9 OOP
                                                                                                                                      o
                          VAJUf )
701 AL
     PAC =  IP     LAN
        +•  F M^Jiar
                                        LND =
                                                            LNS
                                                                                    OFC
            3.   Inspection Facility Personnel Hiring and Training Requirements
                                                                                              f *» W^l
            Position
                         Facility
                         Requirement
                                       Annual
                                       Salary
                                                                  Duration
                                                               of Instruction
 Direct Costs I   Total
of Instruction!  Training
  per Trainee I    Cost
                                                             Hiring Costs
                                                             per Employee
                                              Total Training
                                               plus Hiring
            Station
            Manager
                      1 per facility
                                                                 s«/oo    f/m
            Asst. Station
            Manager
                        Per facility or
                        r lane
                                                                   Voo
                                                                  ir
            Inspection
            Technicians
                 JfjaL
                per Idle Mode lane
                           to
                       //To
                                                                                                          »r
                                       tnf
                              per Loaded Mode lane
            Clerks
                                  lane
                                                                                   So
                                                                                                 >f

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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.j 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) 4- 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
           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

-------
B.
Calculation"of  Facility Investment Costs

1.    Construction  and Land Acquisition Costa

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

     b.  Paving -  $PAVING - PVG x $PAVG/ft2
                                                                                      2.
          c.  Construction - $CONSTR - (OFC+LNS)  x $CONS/ft   •

          d,  Total Building - $BUILDING - $PAVING + $  CONSTR
     3.    Facility Preparation and Equipment Costs
   Per
(Category)
          Number
                    Site Preparation
                    Each
                              Total
                       Test  Equipment
                                         Each
                                                    Total
                                                                                                                        Centralized-3
                                                                   Inspection Facility Personnel Hiring and Training  Costs

                                                                   a.
                                                                                           b.
                             Station Managers:      .   .
                                  $  f 4O*7  x FAC O f I

                             Assistant Station Managers:
                                  $	X FAC
                             or
                                                                   d.

                                                                   e.
                                                                                                Inspect lonTechnicians:
                                                                                                 $  1 ItX  x  JT.T   x LAN [IDLE]
                                                                                                                  x LAN [LOADED]

                                                                                                                          x LAN
                                                                                                Clerks:  $
                                                                                           TOTAL INSPECTION FACILITY PERSONNEL
                                                                                            HIRING & TRAINING - FIELDPERS
Office & Other Equlpmt.
                                                                Each
                                                                             Tot.il
                                                                                         Dnt.i Processing Equlpmt.
                                                                                                Knch
                                                                                                             T.M.I 1
                                                                                                                             TOT ••!
                                                                                                                                        _    ^
                                                                                                                                       -^0977
                                                                                                                -
                                                                                                              -**»
Facility
            <7jfT
Soce

Idle Lane
                                                                                              To* a
Central
Office
                                               /***£>
                                                                                                      O 000
TOTAL
                                                                                                                  $EQUIP -

-------
                           -14-


          (II.B.2,c, cont.)

          employees per lane, by the total number of lanes for that
          mode.  Again, Smogvllle planners count mobile vans as 1/2
          lane each.

          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 personnel 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 Costs

         1.    Start-Up Personnel
I'osition Area
Program Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff
                                        Prs-Yr-
SUBTOTAL
Overhead, Fringe and Contingency
                                                  Cost
TOTAL
                                       $CSP
      D.
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 • $ADMIN  •

 6. SUBTOTAL
    $FIELDPERS + $EQUIP + $ADMIN - $STARTUP'

 7. Total Initial Costs
    " $LANDACQ + $BUILDING + ^STARTUP
                                                                                                                   Cantralizca-4
                                                          2.    Calculation of Start-Up Administrative Costs

                                                               a.   Start-up Personnel            = $CSP

                                                               b.   Initial Public Information    = $IPI
                                                                                                                    -PW
                                                              c.   Initial Program Design, Eng. and Eval.
                                                                                                 " $IDE
                                                                                                                                     oo Q
                                                              d.   Mechanic Training (State Operated Program Only)

                                                                        Mech/1,000 x -~Q x $MCH

                                                              e.   Total Start-up Administrative Costs
                                                                                   O_  (NO  Depreciation)

                                                                                       (Depreciation over  20 years)
                                                                                                                                  • $ADMIN
                                                                                                                                                 .  Ln
                                                                                                                                                    I
                                                                 VT7
                                                                                       (Depreciation over life
                                                                                                  of Program)

-------
                        -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.

     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.

-------
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
                                         3  '
SUBTOTAL
Overhead,  Fringe and Contingency  (
                                  too s
TOTAL = $CSTAFF
                                                 Cost
                                                                                                                             Centrftlized-5
Inspection Facility Operating  Staff

a.   Station Managers:   $
d.

e. .
                                                                                                               x FAC
b.   Assistant Station Managers:  $
                                       CM)

                                       _ x FAC

                                       ?_ * LANt*T)
     Inspection Technicians:
      $  t*6tV   x (   g.
                                                                                                          x LAN [IDLE
Clerks:  $

SUBTOTAL
                         x  LAN  [LOADED] )

                              x
f.   Overhead and Fringe Benefits  (  X>  %)

g.   TOTAL INSPECTION FACILITY OPERATING STAFF
                                                                                                                                            = $FSTAFF
                                                                                                                                                  00
                                                                                                                                                   1

-------
                                        Centralized-6
IV. MINUALIZED COSTS TO PROGRAM OPERATOR
B. Miscellaneous Total Recurring Costs
1. Support Se.rvices to Facilities
$ basic per facility
$ additional per lane
TOTAL SUPPORT SERVICES = = SSUPT
2. Travel
$ d O • per facility C' ' / " J 5 O O •> $TRAV
3. Public Information
or SPPI X AAT •T*1%ff+* ° ' 75*?S"O = SAPUB
4. Equipment Maintenance
^5.1 x $EQUIP f4f7fOC> = r?^Sfet> -- $MAINT
5. Annual Program Design, /
Engineering and Evaluation = y9 . = ADESG
SRDE
or $RDE x AAP • *
. Computer Processing of Tests ^Jr
CPT x TST • - ^ . $CMPR
7. Insurance Costs (where applicable)
$ fi'ofc x LAN + f0C$xFAC- Y**«** ** ° $INS
8. Personnel Costs _.—
SCSTAFF + $FSTAFF - *f^^*^* * " $STAFF
9. Additional Mechanic Training (State Operated Program Only)
Mech/1,000 x ^=|9Z X$MCH f - $AMT
10. Property Taxes (Contractor Operated Program Only)
/ EBI :L.(SBUILDING+$LANDACO:t$EOUIP) - (*O t/ 5^ - $TAX
U.^Totlr*0*"*70*1'**'^'^***^ */ t ft
Recurring Costs " *T 5***>^O " $RECUR
A. Average Recurring^ Costs
Accounting for Inflation
For each item, take:
E (1 + INF)1 /
ITEM A ' 1=° T
PRL «J
* " SSUPT,
• • • 	 i
* • STRAV.
	 i
•*• " SAPUB,
	 i
* - SMAINT.
•* - SADESG
* - SCMPR,
I
-* ' - SINS,
+ - $STAFF,

	 1
* 5*^^*L^^^ " SRECUR
          (Does  Not  Include Amortization of  Initial  Costs)

-------
                    -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.B.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-
1,000 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 from 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.,.$LANDACQ, $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.

-------
                                                                                                                                    Centralized-7
                                                                                                                               Q »
      B.   Amortization  of  Initial  Costs                                                                                           *

          General Formula                                                            Calculation for Specific Initial Cost Elements

        1.   DEPR = Depreciation Period of  Item                               1.  Land Acquisition!
           SITE*  x  JSgSk  .  VAE   r^^Sr1"8                      «° °—— V- - ^7CQ

                                                                                                            (Landacq)
        ,       VAE         „_„    (Present Discounted Value                   „   _  ... ,.       ._   ^.
        2'    nj.TMT>PRL  °PDV    of  Item Remaining at  end                   2"  »""«"«*:    9V SV6O

             N1U              °f  Pr°8ram)                                    DEPR -20 Yea«
                                                                                                         $PM^Building)

      3.   SITEM -'PDV = PRIN     (^"e °* ^"^P16 to  be                    3.  Other Startup               ..   ,._„
                       .    -     Paid off Over Length of Program)            	c               t^OVt^^

                  ™Tn±^^'^F*L             ti „ ,a1 Pnv™^^                    DEPR = PRL! VAE =  °'> PRIN = *$STARTUP
      A    PRTN  x  INT(1 + INT)       =   SPMT   (Annual Payment                                             &
                  (1«NT)PRL   1        $(Uem) of Initial Loan                                            ^fiartup)
                  -      \ r            (Item) pl"S .Interest)
      (NOTE:   Interest Rate Already Accounts  for  Inflation)                  A.   Total Annual Payment Plus Interest
                                                                                     For  Initial  Costs
                                                       C.   Total Annualized Costs to Program Operator

                                                            $RECUR + $PAYMENT s   JT.  90 T» tf^C*    =  $ANNUAL
V.   DISTINGUISHING STATE FROM CONTRACTOR OPERATED PROGRAM

     A.   State Operated Program
                                             -   ft/*
                                                                           B.    Contractor Operated Program
                                                                                                                                    $PAYMENT
                                                                                                                                                     I
                                                                                                                                                    ISJ
Inspection Fee •»   '     —         •   1 / T	                              1.   Total Annualized Costs  to  Contractor


                                                                                                         =  $ANNUAL

                                                                                2.   Contractor's Net Return
                                                                                         3.  Total Annualized Contractor's
                                                                                                   Program Costs  ~ $CON
                                                                                                                                         - $CONTR

-------
                             -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.E., 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)
                                                                                                                        Centrallzed-8
A. Inspection Facility Monitor Requirements


Individual basis
Program Total
B. ' Initial

Facility
Requirement
• >«* facility
• *Vj x FAC = ,!> .
Coses
Annual Salary
'St?-*
tAl7fc6= $FMS

Duration of Direct Cost of Total Total Training
Instruction Instruction Training Costs Hiring Costs plus Hiring
n4k vMLS Vott f O t *V '^'f t O »7
J^** . $FTRN

1. Central Administrative Personnel 2. Total Initial Costs to State

Position Area
Program Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff
Prs-Yrs
f
f
*
f
SUBTOTAL
Overhead, Fringe
TOTAL
and Contingency (•nL. %)
Cost
^*H/*/^
I^OY?

tlor?
&8£V$
\\t •v,*y /
$CAPIN - f £>^ %ttf
a. Inspection Facility Monitor Training
- $FTRN - f t> >*
b. Central Administrative Personnel «,«*«» VJ
- $CAPIN - fGrl'O'
c. Initial Priy^e Mechanic Training
fech/1,000 x ^— £_ x $MrH - W f «» *
rf. Tnral Tnlt-lal flnara ro Sfnl-p • ",' *•
• $STW

                                                                                                                                                     Ui
                                                                                                                                                      I

-------
                        -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
          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

-------
                                                                                                                      Centralized-9
     JC. Recurring Costs
1. Central Administrative Personnel.

Position Area
Program Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff
SUBTOTAL f ^,
Number
f
„
t
f

Overhead, Fringe and Contingency (C£.%)
TOTAL • $CAPAN «•

Cost
^WM*-

l^1r^\
til>9*
(* °°
                                                                               d.  Total  Recurring  Costs  to  State
                                                                                                                                         =  $STRC

                                                                           VII.   TOTAL OVERALL PROGRAM COSTS  FOR CONTRACTOR OPERATED PROGRAM


                                                                               A.   Total Annualized Program Costs
                                                                                         $ STATE
                                    $TOTL
                                                                               B.   Annual Fee to Motorists
                                                                                    Average Annual
                                                                                    Program Cost
                                                                                    per Vehicle
$TOTL
 AAP
                                                                                                                   - Inspection
                                                                                                                     Fee

-------
                               -28-
          (VI.D.I,  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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                                                  Cost Calculation Worksheet:   I/M Program
                                          Centralized  Lane Program:   Stace or  uontractor Operated
I-      PROGRAM  PARAMETERS
A.   Assumptions
                                                                                     B.    Parameter Calculations
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  (yrs)
6.  HRS = Annual Operating Hours
7.  Cars/hr = Hourly Lane Throughput
8.  STR = Stringency Factor (%)
9.  XTR = Annual Percent Additional Tests  (%)
            2
10. $LAND/ft  = Land Acquisition Cost per square foot
            2
11. $CONS/ft  = Construction Costs per square foot
            2
12. $PAVG/ft  = Paving Costs per square foot
13. Mech/1,000 = Mechanics Required per 1,000 autos
14. $MCH = Training Cost per Mechanic
15. $IPI = Initial Public Information Costs
16. $RPI = Recurring Public Information Costs
17. SIDE = 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)
                                                                                          1.
                                                                                               Average Annual Auto Population = AAP

                                                                                                      PRL-1
                                                                                                            (1+GRT)
                                                                                        (POP) x
                                                                                                      i=0
                                                                                                      PRL
                                                                                                                                             AAP
                                                                                          2.    Average Annual Tests Performed ° TST
                                                                                                    AAP (1 + STR + XTR)
                                                                                          3.    Annual Lane Capacity
                                                                                                                      CAP
                                                                                                  HRS x Cars/hr
                                                                                                                                           = TST
CAP
                                                                                          4.    Total Test Lanes Required = LAN
                                                                                                         TST
                                                                                                         CAP
LAN

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                                                                                                                       Centralized-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
'" ft'
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










# Facilities
This Size/Mode









FAC =
Total
Lanes









LAN = .
LAND
Each
Facility










Total









LND =
BUILDING
LANES
Each Facility









Total









LHS =
OFFICE,
Each Facility









ETC
Total









OFC =
PAVING
Each Facility









TVG =
Total










3. Inspection Facility Personnel Hiring and Training Requirements
Position
Station
Manager
Asst. Station
Manager
Inspection
Technicians
Clerks
Facility
Requirement
1 per facility
1 per facility or
	 pi>r lane
. 	 _per Idle Mode lane
per Loaded Mode lane
per lane
Annual
Salary





Duration
of Instruction





Direct Costs
of Instruction
per Trainee





Total
Training
Cost





Hiring Costs
per Employee





Total Training
plus Hiring






-------
                                                                                                                           Centralized-3
B.
Calculation of.Facility Investment Costs

1.    Construction and Land Acquisition Costs

     a.  Land Acquisition = $LANDACQ = LND x $LAND/ft2

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

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

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

                                                                                             a.    Station Managers:
                                                                                                       $ 	 x FAC                  =  	
                                                                                             b.
                                                                                                  Assistant Station Managers:
                                                                                                       $ 	'    x FAC
                                                                                                                                x LAN
                                                                                                  Inspection Technicians:
                                                                                                   $ 	 x 	 x LAN [IDLE]
                                                                                                                          x LAN [LOADED]

                                                                                                                                  x LAN
                                                                                             d.   Clerks: $
                                                                                             TOTAL INSPECTION FACILITY PERSONNEL
                                                                                              HIRING & TRAINING = FIELDPERS
Per
(Category)
Facility
Loaded Lane
Idle Lane
Central
Office
TOTAL
Number


' '


Site Preparation
Each




Total





Test
Each





Equipment
Total




Office & Other Equipmt.
Each




i
Total





Data Processing Equipmt.
Each





Total






TOTAL




$EQUIP =

-------
                                                                                                                Centralized-4
C.    Start-Up Administrative Costs

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




SUBTOTAL
Overhead, Fringe and Contingency ( 	 %)
Cost






TOTAL = $CSP =
  D.    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 = $ADMIN

       6.  SUBTOTAL
           $FIELDPERS + $EQUIP +  $ADMIN = $STARTUP

       7.  Total Initial Costs
           • $LANDACQ + $BUILDING + $STARTUP
                                                                 2.    Calculation of  Start-Up Administrative Costs

                                                                      a.   Start-up Personnel            = $CSP

                                                                      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 y^lg- x $MCH

                                                                     e.   Total Start-up Administrative Costs
(No Depreciation)

(Depreciation over 20 years)
(Depreciation over life
           of Program)
                                                                                                                               = $ADMIN

-------
                                                                                                                          Centralized-5
 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




SUBTOTAL
Overhead, Fringe and Contingency ( 	 %)
Cost






TOTAL = $CSTAFF
Inspection Facility Operating Staff
a.   Station Managers:  $ 	
                                                                                                           x FAC
                                                                    b.   Assistant Station Managers:   $ 	
                                                                                         or  $ 	x
                                               x FAC
                                                x LAN
                                                                         Inspection Technicians:
                                                                          $ 	 x  (	
                                  x LAN [IDLE]
                                                                                             x  LAN  [LOADED] )
                                                                    d.   Clerks: $
                                                                         SUBTOTAL
                                                                    f.   Overhead  and Fringe Benefits (_
                                              x LAN
                                                                         TOTAL INSPECTION FACILITY OPERATING  STAFF
                                                                                                                                            $FSTAFF

-------
                                        Centralized-6
IV. JINNUALIZED COSTS TO PROGRAM OPERATOR
B.
1.
$
$
2.
$
3.
4.
5.
Miscellaneous Total Recurring Costs
Support Services to Facilities
basic per facility
additional per lane
TOTAL SUPPORT SERVICES
Travel
per facility = =
Public Information
$RPI
or $RPI x AAP ~ ~
Equipment Maintenance
	 ,% x $EQUIP
Annual Program Design,
Engineering and Evaluation = =
6.
7.
8.
9.
10.
11.

SRDE
or $RDE x AAP
Computer Processing of Tests
CPT x TST
Insurance Costs (where applicable)
$ x LAN + x FAC =
Personnel Costs
$CSTAFF + $FSTAFF
Additional Mechanic Training (State Operated Program Only)
M^.ii/i rinn v "A ,.?__?. „ CMCMI

Property Taxes (Contractor Operated Program Only)
PRT x ($BUILDING+$LANDACQ+$EQUIP) = .
Total .' ' . ' ' .
Recurring Costs = ' =
A. Average Recurring Costs
Accounting for Inflation
For each item, Egj^e:
E (1 + INF)1
ITEM x ~-°
J.1LM A pRL
$SUPT ->• = $SUPT,
• • 	 i
$TRAV -*• = $TRAV
$APUB -* = $APUB.
	 Y i
$MAINT -> = SMAINT,
	 v ±
ADESG -»• = $ADESG
$CMPR * = $CMPR
	 	 . i
$INS ->• ' = $INS,
$STAFF -»- = SSTAFF,
$AMT •* = $AMT,
$TAX -> = $TAX,

$RECUR •* = $RECUR.
         (Does Not Include Amortization  of  Initial  Costs)

-------
                                                                                                                               Centralized-7
 B.    Amortization of Initial Costs
      General Formula
   1.   DEPR =  Depreciation Period of Item
      $ITEM  x '•
     DEPR-PRL
       DEPR
                              VAE
                                  (Value of  Item Remaining
                                   at end of Program)
   2.
VAE               (Present Discounted Value
    PRL           of Item Remaining at end
        (1+INT)
 3.   $ITEM - PDV = PRIN
 4.   PRIN  x
              INT(1 + INT)
                             of Program)
                 (Value of Principle to be
                 Paid off Over Length of Program)

               PRL
                     PRL
                        SPMT  (Annual
                         (Item) °f Initial Loan
                         (Item) Plus Interest)
             (1+INT)


(NOTE:   Interest Rate Already Accounts for Inflation)
          Calculation for Specific Initial Cost Elements

1.   Land Acquisition:

          No Depreciation; VAE = $LANDACQ


                                 (Landacq)        	
                                                                      2.  Building:

                                                                          DEPR =  20 Years

                                                                                                    $PMWlding)  =

                                                                      3.  Other Startup

                                                                          DEPR =  PRL; VAE =  0; PRIN =  $STARTUP
                                                                       4.   Total  Annual  Payment  Plus  Interest
                                                                                 For  Initial  Costs
                                                                                                                                $PAYMENT
                                                  C.   Total Annualized Costs to Program Operator

                                                       $RECUR + $PAYMENT *  	
                                                                                                       $ANNUAL
DISTINGUISHING STATE FROM CONTRACTOR OPERATED PROGRAM
A.   State Operated Program

                        $ANNUAL
     Inspection Fee
                          AAP
                                                                     B.   Contractor Operated Program

                                                                          1.  Total Annualized Costs to Contractor

                                                                                                   = $ANNUAL

                                                                          2.  Contractor's Net Return = 	%

                                                                          3.  Total Annualized Contractor's
                                                                                    Program Costs  = $CON
                                                                                                                                      $CONTR

-------
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
Prs-Yrs




SUBTOTAL
Overhead, Fringe and Contingency ( 	 %)
Cost






TOTAL $CAPIN
                                                                           2.
                                                                                Total Initial Costs to State
                                                                                a.   Inspection Facility Monitor Training
                                                                                                        and Hirinc
                                                                                b.  Central Administrative Personnel
                                                                                c.  Initial Private Mechanic Training
                = $FTRN



                = $CAPIN
                                                                                     Mech/1,000 x
                                                                                                   POP
x $MCH
                                                                                                  1,000

                                                                                d.  Total Initial Costs to State
                                                                                                                                         $STIN

-------
c
in
m
3
O
o
H
vo
00
o»
Ul
I
          .'C.  Recurring Costs
               1.   Central  Administrative Personnel
Position Area
Program Administrators
Technical Officers
•)atn Analysis/Statistical Staff
Clerical and Secretarial Staff
SUBTOTAL
Number





Overhead, Fringe and Contingency (^ 	 %)
Cost






TOTAL • $CAPAN =
          D.
               Annualized Costs to State
     1.  Amortization of Initial Costs to State
                                  PRL
      $STIN
                    INT (1 + INT)

                   (1 -I- INT)PRL - 1
     2.  Recurring Costs to State Accounting  for  Inflation
           $STRC
                            PRL
     3.  Total Annualized Program Costs to State
                    SSTPT + $SANN
                                                                 $STPT
                                                                 '$SANN.
                                                               SSTATE
                                                                                                                            Centralized-9
                                                                                 2.    Total  Recurring Costs to State
                                                                                      a.  Inspection Facility Monitors
                                                                                      i)                  Annual  Salary  =  $FMS
                                                                                      ii)   Overhead, Fringe  and  Contingency (	%)
                                                                                     . ill)      Travel  $ .,	 per Monitor
                                                                                                   or  $	x  FAC
                                                                                      b.  Central Administrative  Personnel
                                                                                                                        = $CAPAN
                                                                                      c.  Annual Additional Mechanic  Training
                                                                                          $MCH x AAP"|^P  x  Mech/1,000
                                                                                      d.  Total Recurring Costs to State
                                                                                                                                               = $STRC
                                                                                VII.   TOTAL OVERALL PROGRAM-COSTS FOR CONTRACTOR OPERATED PROGRAM

                                                                                     A.   Total Annualized Program Costs
$STATE 4- $CONTR
                                                                                                                                                $TOTL
                                                                                     B:   Annual Fee to Motorists
                                                                                        = Average Annual
                                                                                          Program Cost
                                                                                          per Vehicle
            $TOTL
             AAP
Inspection
Fee

-------