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

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

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

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

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

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

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

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

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

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

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

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

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

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

2.  Will inspection  personnel also perform vehicle repairs?

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

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

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

4.  How will quality control be implemented?

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

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

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

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

I.   PROGRAM PARAMETERS

      A. Assumptions

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

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

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(I.A.2, cont.)

planning  data,  survey  information,  etc.   The 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  7%.

4.   Annual Interest Rate (INT);   Lending  institutions  typi-
cally  set  interest  rates about 3.5% higher  than  the  inflation
rate,  subject to the1  constraints of the market.   Ten  to  twelve
percent is  a  reasonable estimate at present,  if  area-specific
information is  not  available.   Occasionally, public projects
can obtain slightly  lower than commercial rates,  e.g.,  through
bond issues.  In the  Smogville program, the  state will  pay the
same rate as private  garages, at 12% per annum.

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

6.   Stringency Factor  (STR);   The  stringency  factor   to  be
applied is  derived  from EPA's 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%.

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

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

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(I.A.8, cont.)

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

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

10.   Mechanic and Inspector Training Costs per Garage (MITG);
Program designers have  several  options  with respect to mechanic
and  inspector  training requirements,  again  reflecting  their
basic conception of the program.  The state may subsidize such
training, or  may require the trainees  or the  garages  sponsor-
ing  the trainees  to  pay  the  cost,  since  they  will  derive
economic  benefits  from the  program.   If  vehicle inspectors
will  be  primarily  experienced  mechanics   responsible   for
repairs as  well, training for  the two  areas  of responsibility
may  be combined  into  one course.   If the  two functions  are
separated,  or  requirements  for  certification  as  a vehicle
inspector not as stringent,  separate  courses may be  offered.
Again,  policy makers may exact  a  fee  from the individuals  or
garages  being  certified,   or  may  simply  apply  part of  the
states'  portion of  the  inspection  fee to  costs   for  such
courses.

Current  estimates range  about $15-$30 for supplies,  teaching
equipment and instructor salaries for  an 8-10 hour course  for
either function separately.   This would  also include  examina-
tion and  certification of the  trainee  by the state.   In Smog-
ville,  it  is assumed  that the  two functions  will be performed
by the same individual.  A combined  training  course is offered
for $30 tuition, paid  for  by the garage or the mechanic  taking
the course.

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

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        (I.A., cont.)

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

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

      Vehicle Throughput (Cnrs per hour) by Program Format
Program                           Optimal                    Projected
Fo rrnfi t.	Throughput	Efficiency	Throughput
Stotc/City -
operated idle-                    .  20-25         50-C32         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         61-652         12-1/1
operated
loaded mode
test

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(I.A., cont.)

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

           Price Variation in Land Acquisition Co.sts
location
Chicago
Denver
Tort land
New Jersey
• Cincinnati
St. Louis
Kansas
Iowa
Nebraska
Year
1974
1974-75
1975
1975
1976
1976
1973
1978
1978
Cost per Square Foot
$4.00
$2.00-3.00
$2.75
$1.00-9.00
$0.92
$1.00-30.00
$3.15
$0.93
$0.81
                                                9
 15.  Construction Costs per Square Foot (CONS/ft );   Construc-
 tion  of referee facilites  should include office,  storage  and
 lab areas, and  should  account  for possible  expansion of facil-
 ities  or  changes  in  test mode.   Specifications  considered
 should  include:
 Steel  Frame          Overhead  Doors      Forced Air MVAC
 Concrete  Floor       Painted Walls       Underfloor and Roof
 Finished  Office      Small  Restrooms          Exhaust System

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(I-iA. 15, cont.)

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

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

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

19.  Inital Program Design, Engineering and Evaluation ($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, pro-
gram  planning,   system  design  and  analysis,  etc.,  are often
contracted  or subcontracted out to  a separate  firm,  or  can be
performed by a  small auxiliary or temporary staff.   This item
may  also  include  software  development.   On  a  per vehicle
basis,  $.15  to $.25 is  suggested  for  this  item.   Smogville
planners  prefer  to  consider  this  as  a  lump sum,  and   are
budgeting $150,000 for  this purpose.

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                                  10

 (I.A., cont.)

          20.  Recurring Program Design,  Engineering and Evaluation ($RDE):
          This Is  the  extension and updating of  initial  program design
          functions and  evaluation  performed  beyond  the scope  of  the
          regular  administrative  staff.   Some  programs will  prefer to
          simply  incorporate   this   item  with  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).

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

B. Parameter Calculations

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

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

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                                                 Cost Calculation Worksheet:  I/M Program

                                                   Decentralized Private Garage Program
                                                       'SMOGrN/ICCe. V
I.   PROGRAM PARAMETERS
A.   Assumptions

 1.  POP = Present Auto Population
 2.  CRT = Annual Auto Population Growth Rate .(%)
 3.  INF = Annual Inflation Rate (%)
 4.  INT = Annual Interest Rate (%)
 5.  PRL = Program Length (years)
 6.  STR = Stringency Factor (%)
 7.  STA/1,000 ° Stations per 1,000  Autos
 8. .MPH = Garage Costs per Hour (Wages +  Overhead)
 9.  GTI • Garage Time per Inspection  (hours)
 10. MITG = Mechanic/Inspector Training Cost per Garage
 11. FCH » Percent of Failures Challenging
 12. CTP • Challenge Facility Hourly Lane
           Throughput (cars/hr)
 13. CHR'- Challenge Facility Annual Operating Hours
 14. $LAND/ft2 " Land Acquisition Costs
             9
 15. $CONS/ft  = Construction Costs
 16. $PAVG/ft2 *> Paving Costs
 17. IPI = Initial Public Information  Cost
 18. RPI • Annual Public Information Cost
 19. IDE • Initial Program Design, Eng. &  Eval.
 20. RDE » Annual Program Design,  Eng. & Eval.
 21. CPT • Computer Processing Cost per Test Result
                                                                                    B.    Parameter Calculations
1 SO/ 00
      (7
 t l.
j /IS,
 * &.
    &. to
                         1.   Average Annual Auto Population ° AAP

                                     PRL-1
                                (POP) £    (1-fCRT)
                                      PRL
                                                                            AAP
                          2.    Inspection Stations Required"  STRQ
          AAP
         1,000
                                            STA/1,000
                          3.    Projected  Challenge Tests - CHT

                                    FCH x STR x AAP     =     ft t
                          4.    Annual Challenge  Lane  Capacity " CAP
                                         CTP x CHR
                                                                           STRQ
                                                                          . CHT
                                                                            CAP
5.   Total Challenge Lanea Required" LAN

               CHT            _       Q .
               CAP            "  	
                                                                         - LAN

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

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

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

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

II.  COSTS TO PRIVATE GARAGES

     A.  Initial Investment Costs

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

     B.  Annually Recurring Costs

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

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

-------
II.  COSTS TO PRIVATE GARAGES
     A.    Initial Investment Costs
                                                                                                                      Decentralized-2
C.   Annualized Total Costs to  Private Garages
1.    Per Garage             ^
     Analyzer and Equipment
     Mechanic Training (MITG)
          Total per Garage
2.    Program-Wide         ,
          PGI x STRQ
     B.    Annually Recurring Costs
                                       t "
                                             3 O
                                                      PWI
                                                                                    1.    Araortizat ion of  Initial Costs
                                                                                                           ,PRL
          PWI x
 INT (1 + INT)
(1 + INT)PRL  -1
                                                                                    2.    Annual  Costs with  Inflation
                                                                                        PWA   x
                               INF)
                                                                                                   1=0
                                                                                                        PRL
     3.   Total Annualized Program
          Cost to Private Garages
                                                                                                                    .  37?
                                                                                                                                        TPPG
          1.    Per Garage                        ,
               Equipment Repair  and  Replacement   '  **A **
               Calibration Gasses
                    Total per Garage             ?  37 &  °  PGA
          2.    Per Test
               Garaee -Inspector's Time and  Overhead
                    CTI x MPH               =  '  T» 0 0  =  PTA
          3.    Program-Wide                  {
            (PGA x STRQ)+(PTA x AAP) (1+STR) °  ''^_AZ_/"  PWA

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

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

     C.   Annualized  Total Costs to Private Garages

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

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

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

III.  INITIAL COSTS  TO THE  STATE

     A.   Station Examiner Requirements

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

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

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

     A.    Station Examiner Requirements

Individual basis
Progi'am Total
Number .
Required
1 per ^7 O stations
x(STRQ) - />= EXS
Annual Salary
11.0**
f&fOO*= SES
Duration of
Instruction
So krt

Direct Cost of
Instruction
Wo*

Total
Training Costs
* 9oo

Hiring Costs
?>r

Total Training
plus Hiring Costs
*92~T
/f, tQD - SETH
     B.   Administrative Startup Costs
1. Central Administrative Personnel

Position Area
Program Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff
Prs-Yrs
(
$
3
/
SUBTOTAL '
Overhead, Fringe and Contingency Y^^'%)

Cost
j?lyy/V
*ft> 31 f
41. ti» o
33 ^6 ^
7o?^y/
2ctf/?£/
TOTAL SCAPIN - W£ TW "^
2.    Total Administrative Startup Costs

     a.   Central Administrative  Personnel •= $CAPIN

     b.   Training and Hiring of  Station
                             Examiners = $SETH

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

     e.   Mechanic Training  (when sponsored by the State)
                                                                                                 MITG(s) x STRQ

                                                                                 f.  Total Administrative Startup Costs
                                                                                                                                 /I >f 60
                                                                                                                                    . OOP
                                                                                                                                     .  006
                                                   137.V7*
                                                    '   " ADMIN

-------
                               16


(III., cont.)

B. . Administrative Startup Costs

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

     2.  Total Administrative Startup  Costs;

          a.   Take  the  total  figure for  central administrative
          startup  personnel  from the previous  section, III.B.1-.

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

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

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

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

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

C.  Initial  Investment  Costs for State Challenge Lanes

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

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

  C.    Initial  Investment Costs for State Challenge Lanes

       1.    Facility Square Footage Requirement Estimates
                                                                              Decentrallzed-4
Test
Mode
. IDLE
LOADED
LAND
Basic per
Facility
fO.006 ft2
ft2
Additional
per Lane
foot) ft2

LANES
(per Lane)
/OOO ft2

OFFICE, ETC.
Basic per
Facility
Boo ft2

Additional
per Lane
/oo ft2

PAVING
Basic per
Facility
SlOO ft2

Additional
per Lane
,?/e>o ft2

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




I

J.
Mode
T







It Facilities
This Size/Mode
7







ITOTAL FAC - /
Total
Lanes
/







LAN = /
LAND
Each
Facility
/Sooe>







Total
ifoe a







LND = /,S"OO •
BUILDING
LANES
Each Facility
fOC Z>







Total
I oo o







LNS = f C O 3
OFFICE, ETC.
EacFTFacTIIty
/v«o







Total
/V««







OFC = ( l^OO

PAV
liach Facility
//Joo







INfi
Total
ttlob







PVG - // SO d
           3." Challenge  Facility Personnel Hiring and  Training Requirements
          Position
          Asst.  Station
          Manager
          Inspection
          Technicians
          Clerks
         Facility
         Requirement
           *
    i per facility or
    per lane
 3 per  Idle  Mode lane
                              per Loaded Mode lane
»7*Per la"e
Annual
Sala
  , ooe>
                                                      It,
   Duration
of Instruction
 Direct Costs
of Instruction
   er Trainee
 Total
Training
  Cost
                                  Ft*
Hiring Costs
 er Employee
                                                                                                                          Total  Training
                                                                                                                            lus  Hiring

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

Thus, given  the estimates shown  for  the Smogville program,  a
typical one-lane (0.6 lanes rounded off) facility would  require
(5,000) x  (1)  + (10,000) =  15,000  square  feet of  total land.
Of this  space,  (1,000)  x (1) = 1,000 square feet for  the test
lane, plus  (400) x (1)  + (800)  = 1200 square  feet for  office
space,  etc.,  would  be  allocated  to  construction.   Another
(3,100)  x  (1)  +  (8,200) = 11,300  square  feet would  be allo-
cated to  external   paving  for queing  area,  employee  parking,
etc.  The  remaining 1500 square  feet  (10% of  total land area)
is allocated to landscaping.

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

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

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

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

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

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

4.  Challenge Facility Construction and Land Acquisition  Costs:

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

     b.  Repeat step a. for paving costs.

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

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

5.  Challenge Facility Personnel Hiring and Training Costs;

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

     b.   Repeat  step  a.  for  assistant  station  managers.

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

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

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

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

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

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

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

7.  Total  Challenge  Facility  Initial Costs;

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

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

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

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

-------
                                                                                                  Decentrallzed-5
4. Challange Facility Construction and Land Acquisition Costs
a. Land Acquisition = $LANDACQ = LND x $LAND/ft2
b. Paving = $PAVING = PVG x $PAVG/ft2 = //
*31,S
,?o'
5. Challenpfi raciiiiy rersonnei niring
0*

c. Construction = $CONSTR » (OFC+LNS) x $CONS/f t2 - Sf, VO O
d. Total Building = $BUILDING - $PAVING + $ CONSTR
*>SX$<
9ft

and TraininR Costs


a. Station Managers: J
S 	 / SJ& x FAC " ^«5T7S
b. Assistant Station Mnn.igurs: ^
$ //"»>T x FAC • ff? \
c. Insoe^Lan TechnicLans: .,
$ pSfc x ^5 x LAN [IDLE) - *<»C
$ x x LAN I LOADED ]-
d. Clerks :4
^»
> c
^° x / xLAN . •>-/ 0
e. TOTAL FIELD PERSONNEL ^->
HIRING & TRAINING - $FIELDPER • O * ^"
6. Challange Facility Preparation and Equipment Costs

Per
(Category)
Facility
Loaded Lane
Idle Lane
Central
Office
TOTAL
Number
f

f


Site Pr<
Each
Soot>

£00

>
iparation
Total
^"00 €>
i"O t)

^ro^>
Test Equipment
Each
JToeO

/oed

4
r
Total
.fo • o

«/60«

So«

•Veo

f
Total
>Jofe

J^« ft

•>7»a
Data Processing Equipmt.
Each
iSooe

J"oo o
/ S-0«rO

^"oo o
/r*,«*»
/^e.ooa

TOTAL
?7rXO »

?y 7^O
/ ^"tt / o o ^
$EQUIP = tf"7t XO O
^
^
7.   Total Challenge  Facility  Initial  Costs
        /
     a.  $LANDACQ

     b.  $BUILDING

     c.  $FIELDPER   -

     d.  $iiQUIP


     e.  Total c,  d

     f.  Total a,  b,  e
CHLST=
=V°'>'»
Total Challenge Lanes
Initial Cost
                                     (no depreciation)

                                     (20 years)
                                    (depre - PRL)

-------
                                    22
          (III.C., 7 cont.)

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

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

IV.  RECURRING COSTS TO THE STATE

     A.  Administrative and Surveillance Costs

          1.  Personnel;

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

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

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

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

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

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

     A.    Administrative and Surveillance Costs

          1.    Personnel

               a.   Central Administrative Personnel
Position Area
Program Administrators
Technical Officers
Data Analysis/Statistical Staff
Clerical and Secretarial Staff
Number
1
t
3
>
SUBTOTAL
Overhead, Fringe and Contingency /OQi)
TOTAL ' $CAPAN
Cost
^*y«/VV
/fS, 5*93"
«/7.?feo
/fey 71 V
xia, £V2~
*-/*,:fri-
^f. OH
               b.   Station  Examiners

                    annual  salaries
                        SES
                    Overhead and
                     Benefits  (
                WSJ
     Total Station Examiner Costs

c.    Total Recurring Personnel Costs

           $CAPAN + $SEAC
                                                                   $SEAC
                                                                =  REPC
                                                                              3.
                                                                              4.
                                                               2.   Surveillance Costs
                                                                    a.  per station
                                                                          or per examiner
                                                                         (i) Travel Costs

                                                                         (ii)Calibration
                                                                                    Equipment
                                                                                        (iii) Total per Station
                                                                                                or per Examiner
                                                                                   b.  Program-wide Total
                                                                                             SCPS x STRQ
                                                                                         or  SCPX x EXS
                                                                                   Annual Public Information
                                                                                                                       PWSC
                                                                              RDI
                                                                          or  RPI x AAP

                                                                    Annual Program Design,  Engineering
                                                                    and Evaluation
                                       -  7%.  1&  .
                                                                                                                                      PWRPI
               RDE
            or RDE x AAP                -  	*

5.   Computer  Processing of Test Results

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

6.   Total Administrative and Surveillance Costs
                                                                                            REPC  + PWSC
                                                                                   + PWRPI + PWRDE + PWCPT
                                                                                                                      - PWRDE
                                                                                                                                       PWCPT
                                                                                                                                       REASC

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                              24
     (IV.A., cont.)

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

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

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

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

B.  Challenge Facility Operating Costs

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

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

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

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                                                                                                      Decentralised-?
B.
Challenge Facility Operating Costs

1.   Field Facility Personnel

     a.   Station Managers:
                                    x FAC

b.  Assistant Station Managers 5fy9+3 x FAC
c.  Inspection Technicians  _
   $  /*>dgO   x (     \J  x LAN [IDLE]
                                                         / ?
     d.   Clerks:  $

     e.   SUBTOTAL
                                   x LAN [LOADED]
                                   x   . 7JT x LAN
          f.   Overhead & Fringe Benefits

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

5.   Insurance Costs
                                     ,%  x  $EQUIP
                                              x LAN
      6.   Total Annual Challenge Lanes
            Operating Costs
                                                      . Bfe. oo/
V.   ANNUALIZED COSTS TO STATE

     A.   Amortized Initial Costa

          1.   Land Acquisition

               $LANDACQ x INT

          2.   Building

             $BUILDING x INT

                    x /I +
                                                                                *
                                                                                                   PRL
                                                                                                DEPR x  [(1+INT)
                                                                                                         PRL
                                                                         3.    Other  Startup

                                                                              (ADMIN + CHLST) x
                                                                                                     "«T(l+HIT)
                                                                                                              m
                                                                                                (1+INT)
                                                                                                      PRL
                                                                                   Total Annual  Payment with Interest
                                                                RECHL
                                                                                                                                            • STAPI
                                                                                                                                          NJ
                                                                                                                                          Ul

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

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

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

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

V.  ANNUALIZED COSTS TO THE STATE

     A.  Amortized Initial Costs

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

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

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

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

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

     B.  Average Recurring Costs Accounting For  Inflation

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

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

     C.  Total Annualized Program Costs to the State;

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

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

VI.  TOTAL OVERALL PROGRAM COSTS

     A.  Total Annualized Overall Program Costs

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

-------
B.    Average Recurring Costs  with  Inflation
     1.  Total Recurring Costs
               REASC + RECHL              ='

     2.  Recurring Costs with Inflation
                 STANN  x
                              i=0
                                     (1 +  INF)
                                      PRL
       C.    Total Annualized  Program  Costs to State
                               STAPI
                                                                STANN
                                                              STANN
                                                              TPST
                                                                                                               Decentrallzed-8
  VI.   TOTAL OVERALL PROGRAM COSTS
       A.    Total Annualized Overall Program Costs
                 TPPG + TPST
                                           '/  ^ ' *' * 'f"
                                                          TOTAL
<<>,  ill,
                                                                               B.    Average Annual Program Cost per Motorist

                                                                                                       TOTAL
                                                                                       T     ....   IT
                                                                                       Inspection Fee
                                                                                                                 „
                                                                                                                                                oo

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

B.  Average Annual Inspection Fee to Motorists

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

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                                                  Cost Calculation Worksheet:  I/M Program
                                                    Decentralized Private Garage Program
I.  PROGRAM PARAMETERS
A.   Assumptions
                                                                                          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 (years)
 6.  STR = Stringency Factor (%)
 7.  STA/1,000 = Stations per 1,000 Autos
 8.  MPH = Garage Costs per Hour (Wages' + Overhead)
 9.  GTI = Garage Time per Inspection (hours)
 10. MITG = Mechanic/Inspector Training Cost per Garage
 11. FCH = Percent of Failures Challenging
 12. CTP = Challenge Facility Hourly Lane
           Throughput (cars/hr)
 13. CHR = Challenge Facility Annual Operating Hours
 14. $LAND/ft  = Land Acquisition Costs
 15. $CONS/ft  = Construction Costs
 16. $PAVG/ft2 = Paving Costs
 17. IPI = Initial Public Information Cost
 18. RPI = Annual Public Information Cost
 19. IDE = Initial Program Design,  Eng.  & Eval.
 20. RDE = Annual Program Design,  Eng.  & Eval.
 21. CPT = Computer Processing Cost per Test Result
                                                                                          1.    Average Annual Auto Population = AAP
            PRL-1
       (POP) E    (1+GRT)
            i=0
2.
            PRL
     Inspection Stations Required= STRQ

          AAP
         1,000
                x STA/1,000
3.   Projected Challenge Tests = CHT
          FCH x STR x AAP
4.   Annual Challenge Lane Capacity ° CAP
               CTP x CHR
5.   Total Challenge Lanes Required° LAN

               CHT
               CAP               	
                                                   AAP
 STRQ
                                                   CHT
                                                   CAP
LAN

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                                                                                                                        Decentralized-2
II.   COSTS TO PRIVATE GARAGES
     A.    Initial Investment Costs
                            C.   Annualized Total Costs to Private Garages
          1.    Per Garage
               Analyzer and Equipment
               Mechanic Training (MITG)
                    Total per Garage
          2.    Program-Wide
                    PGI x STRQ
     B.    Annually Recurring Costs
                                                    =   PGI
=  PWI
                                                                                     1.    Amortization  of  Initial  Costs
                                      PWI x
 INT (1 + INT)
(1 + INT)PRL -1
                                                         PRL
                                 2.    Annual Costs with Inflation
                                                                                         PWA   x
    PRL-1
     i=0
                                                      (1 + INF)
                                                                                                          PRL
                                 3.    Total Annualized Program
                                      Cost to Private Garages
                                                                                                                                       = TPPG
          1.    Per Garage
               Equipment  Repair  and  Replacement
               Calibration Gasses
                    Total  per  Garage
          2.    Per  Test
               Garage Inspector's Time and Overhead
                   GTI  x MPH                =    	
          3.    Program-Wide
            (PGA x STRQ)+(PTA x AAP)  (1+STR) =    —
            PGA
            PTA
            PWA

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                                                                                                                        Decentralized-3
III.   INITIAL COSTS TO STATE

     A.    Station Examiner Requirements

Individual basis
Program Total
Number
Required
1 per 	 stations
x(STRQ) = = EXS
Annual Salary

= SES
Duration of
Instruction


Direct Cost of
Instruction


Total
Training Costs


Hiring Costs


Total Training
plus Hiring Costs

= SETH
     B.    Administrative Startup Costs

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





Overhead, Fringe and Contingency ( %) •
Cost






TOTAL SCAPIN = •
2.    Total Administrative Startup Costs

     a.   Central Administrative Personnel = $CAPIN

     b.   Training and Hiring of Station
                              Examiners = $SETH

     c.   Initial Public Information = IPI
                                  or  IPI x POP
     d.   Initial Program Design,  Engineering
                    and Evaluation = IDE
                                  or  IDE x POP
                                                                                     e.   Mechanic Training (when sponsored by the State)

                                                                                                      MITG,  .  x STRQ              = 	

                                                                                     f.   Total Administrative  Startup Costs       = 	
                                                                                                                                           ADMIN

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                                                                                                         Decentralized-4
C.   Initial Investment Costs for State Challenge Lanes




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

LANES II OFFICE, ETC.
(per Lane) 1
. ft2

1 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
LANK ALLOCATION
Lanes pex~
Facility








Mode








// Facilities
This Size/Mode








TOTAL FAC =
Total
Lanes








LAN = '
LAND
Each
Facility








LND =

Total









BUILDING
LANES
Each Facility








LNS =
Total









OFFICE, ETC.
Each FaciTity








Total








OFC =
1 PA
Each Facility








ING
Total








PVG =
         3.  Challenge Facility Personnel Hiring and Training Requirements

Position
i
Station
Manager
Asst. Station
Manager
Inspection
Technicians
Clerks


Facility
	 Requi r emen t
1 per. facility
1 per facility or
per lane
per Idle Mode lane
per Loaded Mode lane
per lane


Annual
Salary






Duration
of Instruction
^ 	





	 i
Direct Costs
of Instruction
per Trainee





p •
Total
Training
Cost






Hiring Costs
per Employee






Total Training
plus Hiring
====£==—

- — : — —



-------
                                                                                                                 Decentralized-5
4.  Challange Facility Construction and Land Acquisition Cost£


       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
6.  Challenge Facility Preparation and Equipment Costs
5.   Challenge Facility  Personnel Hiring
     and Training Costs

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

     c.   Inspection Technicians:
        $	x  	 x  LAN  [IDLE]
                                                                                            d.   Clerks :£,
                                  x  LAN  ILOADEDJ=

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





Site Preparation
Each




Total





Test Equipment
Each




Total





Office & Other Equipmt.
Each




Total





Data Processing Equlpmt.
Each




Total





TOTAL




$EQUIP =
  7.   Total Challenge Facility Initial Costs
a.
b.
c.
d.
e.
$LANDACQ
$BUILDING
$FIELDPER =
$t:QUIP
Total c, d
	
_


= CHLST =
        f.  Total a, b,  e
               Total Challenge Lanes
               Initial Cost
                                                    (no depreciation)

                                                    (20 years)
                                                    (depre = PRL)

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                                                                                                                        Decentralized-6
IV.   RECURRING COSTS TO STATE

     A.    Administrative and Surveillance Costs

          1.   Personnel

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




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







               b.   Station Examiners

                    annual salaries  =  SES  =

                    Overhead and Fringe
                     Benefits (____»)-
                    Total Station Examiner Costs  =
                    Total Recurring Personnel Costs
                          $CAPAN + $SEAC
=  $SEAC
   REPC
               2.   Surveillance Costs
                    a.   per station
                          or per examiner
                         (i) Travel Costs

                         (ii)Calibration
                                    Equipment
                                                                                3.
                                                                                          (iii)  Total  per  Station
                                                                                                  or per Examiner
                                                                                    b.   Program-wide  Total
                                                                                               SCPS  x  STRQ
                                                                                           or  SCPX x  EXS
                                                                                     Annual Public  Information
                                                                                               RDI
                                                                                           or  RPI x  AAP

                                                                                    Annual  Program Design,  Engineering
                                                                                    and  Evaluation
                              RDE
                           or RDE x AAP
5.   Computer Processing of Test Results

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

6.   Total Administrative and Surveillance Costs

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

-------
                                                                                                       Decentralized-7
                                                                    V.
B.
Challenge Facility Operating Costs


1.   Field Facility Personnel

     a.  Station Managers: $	
                                      	 x FAC


          b.   Assistant Station Managers _$	 x FAC

          c.   Inspection Technicians

             $	 x (	 x LAN [IDLE]
          d.   Clerks:  S_

          e.   SUBTOTAL
                                   x LAN [LOADED]
                                   x           x LAN
          f-   Overhead & Fringe Benefits

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

5.   Insurance Costs

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


A.   Amortized Initial Costs


     1.    Land Acquisition


          $LANDACQ x INT


     2.    Building


        $BUILDING x INT
                                                                                                           PRT
                                                                                            DEPR  x  [(1+INT)    -1]
                                                                                                     INT(1+INT)
                                                                                                               PUT
                                                                         3.   Other Startup

                                                                              (ADMIN -I- CHLST) x
                                                                              4.   Total Annual Payment with  Interest
                                                              - RECHL
                                                                                                                                                STAPI

-------
   »
  ic
  m
               B.   Average  Recurring Costs with  Inflation


                    1.   Total Recurring Costs

                              REASC + RECHL
                                                                      STANN
                                                                                                                        Decentralized-8
oo
?
V
                    2.   Recurring Costs with Inflation
                                             (1 +  INF)
                        STANN  x
                                             PRL
              C.   Total Annual!zed Program Costs to State
                             STANN  + STAPI
                                                                       STANN,
                                                                      TPST
         VI..  TOTAL OVERALL PROGRAM COSTS

              A.   Total Annualized Overall Program Costs
                        TPPG + TPST
                                                                  TOTAL
                                                                                            B.   Average Annual Program Cost per Motorist



                                                                                                                     TOTAL
                                                                                                       Inspection Fee
                                                                                                                         AAP

-------