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Implementation of the Tallahassee Transportation Management Association (TMA) : phase III : final report


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Implementation of the Tallahassee Transportation Management Association (TMA) : phase III : final report
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University of South Florida. Center for Urban Transportation Research
Florida. Dept. of Transportation
Florida State University
Center for Urban Transportation Research (CUTR)
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Tampa, Fla
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IMPLEMENTATION OF THE TALLAHASSEE TRANSPORTATION MANAGEMENT ASSOCIATION ('IMA) PHASE ill Final Report INTRODUCTION This project was a continuation of the cooperative effort, begun under a previous contract between the Center for Urban Transportation Research (CUTR), Florida Department of Transportat io n (FOOT), and Florida State University (FSU) to initiate the Tallahasse e TMA demonstration project. FSU, as the project manager assumed the lead role and provided the major effort to complete the tasks as described in its agreement with the State FSU also arranged for the contractual partic ipa tion of CUTR. CUTR served as a resource and prov ided technical ass i stance to FSU as appropriate to the $7,500 budget PROJECT DESCRIPTION Work e fforts during this phase of the project focused on TMA internal operations These tasks commenced Ju ly I, 1992, and ended June 30, 1993. Specific actions are detailed below. Task 1: Provide Technical Expertise in the Development ofTMA Organizational Structure T he tec hni cal expeni s e prov ided under this t ask included assistance with the deve lopm ent of the TMA organizational structur e, membership dues, and c h anges to legal documents, such as bylaws. In order to complete this task, the work effort included weekly correspondence or telephone contact with t he Executive Director of the T MA regarding status of projects marketing and work plans, and day-to-day activities In addition, almost bi-weekly contact was made to provide the Board and staff wit h current news clippings, publication s, and other materials as rela t ed to organizational structure and TMA activities in gene r al. Following the resignation of the TMA Executive Director in May telephone contact was maintained with the Florida Institute for Marketing Alternative Transportat i o n (FIMA T) Executive Director. Assistance was offered in the recruitment for this and other a vailabl e positions. Appendix A contains a copy of suggested funding strategies for the TMA as well as suggested changes t o the bylaws to support membership dues. Th is document was submitted at th e request of the Executive Director in March 1993. An annual meeting is schedul ed for July 1993. The bylaws changes will be conside r e d at that m eeting.


Tallahassee TMA Phase III Final Report Task 2: Provide Artistic and Technica l Services Under the contract for the previous year, CUTR provided graphic design and editorial services to produce marketing and promotional materials. Assistance was prov i ded to the staff in securing magnetic and camera-ready copies of the TMA logo and selection of stock for the printing of brochures and newsletters . Technical assistance was also provided to the staff in the form of r e search and information for newsletter articles, such as employee tax benefits, telecommuting, and other TOM general information. There was considerable ove r lap between this task and other on-going projects with FOOT, such as TOM Certification and Training Program and the TMA Clearinghouse. Efforts were made to share information and exchange ideas with the TMA s taff as related to the TMA and these two projects For example, CUTR staff acted as a liaison at times between Marty Bishop, Coordinator of the Department of Management Service s Telecommuting Project and the TMA Task 3: Develop Budget Technical assistance was provided to the TMA staff in the deve l opment of a program budget to include all elements, such as the marke t ing, TOM programs, staffing, and overhead. This assistance was used by the TMA in developing is budget for continued funding as a demonstration project. Consideration was also given to future seed funding and beyond. The information in Appendix B was made available to the Executive Director. The section on Public and Not-for-Profit Budgeting provides a good typology of budgeting for the public and nonprofit sectors Although all items may not be relevant, it points out some of the idiosyncracies of budgeting for such entities The same observations can be made of the section on Basic Budgeting. Task 4: Provide Support and Assistance to RideShare and DigiMap Software The work effort under this task involved interaction with the Executive Director and Florida State University students regarding the use of the software Prior to this contract year, the TMA began using Map/nfo as the software mapping program CUTR staff compared the Tallahassee TMA's experience with this program with that of Bay Area Commuter Services (BACS) The TMA's personal computer hardware and software procurement procedures and specifications were also useful to BACS. 2


Tallahassee TMA Phase lil Final Report This task also overlapped with work on the two FOOT projects previously mentioned. It should aid future development of commuter assistance projects in the state SUMMARY This project, between CUTR and FSU, continued the development of the Capital City (Tallahassee) TMA. The technical assistance, support, and resources provided by CUTR continued the partnership of the instiTUtions, the cooperative agreement between the two and the Sta t e, the advancement of the Capital City Transportatio n Management Association and has served to enhance the work effort of other FDOT projects Although the two universiti es do nOt have an agreement for a fourth year, it is anticipated that the re will be continued cooperation on this project through the TMA Clearinghouse project and through other related work. Furure cooperation may include the exchange of information on the new software being developed by BACS evaluation and monitoring technical assistance to new TMA staff, and so on. 3


Tallahassee TMA Phase Ill Final Report APPENDIX A FUNDING STRATEGIES FOR CAPITOL C ITY TM A Membel'ship Dues o B ase on n umber of employee o Begin conservatively-what marke t will bear--Sl-2/employee o Attach a value to du es Provide brochure describing services members receive TDM plans ETC trainingff A Free ridematching services, etc. Provide certificate o f membership Membel'ship entitles elig ib ility for election to BOD o Amend bylaws to reflect dues structure and membership classes" o (Note proposed a mendm ent to n umber of board members) .. Loca l Funds o TMAs!TMOs in the Tampa area have been suc cessful in securing dollars from the county and city. Tbe governments basically feel that the organizations are a "good thing" and little effort has been needed to sell the idea o Explore possibility of city and county funding -contact both transportation departments Amendment attached. 4


Tallahassee TMA Phase III Final Report Beyond membership dues TMA institutional means of improving level-of-service (L OS) May not be necessary to sell idea ; TMA recommended in comp plan State Funds o FDOT: Clarify status of TMA -demonstration project, when will seed funding begin? Seed funding to begin within next 1 8 months, begin securing in-kind service commitments, at le ast immediately Exp lore possibility of special project or partial regional commuter se rvic e program funding from district TMA operates more like regional commuter service program, e.g., rideshare matching, larger service area, strong county/multi-county link In creased respo nsibilities should equa l increased state support o Begin exploring grants from various s tat e agencies. Remember the TMA has services and the skills of staff to sell to the agencies and their clients beyond thei r membership dues. Dues entitle the agencies to certain services for their staff, howe ve r, a number of state agencies have a client ba se that significantly impacts or has the potential to impact trave l demand. The opportunity to shift these travelers to alternative modes is not covered by dues however, the TMA should be willing to lend its expert s e rvices for a nomi na l fee. DCA, specifically Florida Energy Office (FEO}: beginn i ng with baseline information, track num ber of carpools, vanpool s and other alternative mode shifts and calcu l ate Btus saved annually DER: beginning with bas el i n e information, track n umber of carpools, vanpools, and other alternative mode shifts and calculate amount of nitrogen oxides (NOx} and hydrocarbons offset annually Other state agencies, such as Departm en t of Education, Department of Health and Rehabilitative Services (HRS), Department of Labor, and DCA again, through the Community Services Block Grant Program may have an interest in providing small grants to th e T MA to aid in service delivery by 5


Tallahassee TMA-Phase III Final Report coordinating transportation for clients or developing TOM plans for sites where parking is a problem. Department of Education has funding for pupil transportation and may be interested in small grant to study more efficient routes or demonstration project using alternative modes HRS has tons of money through the Welfare Reform Act, JOBS program to transport Aid to Families with Dependent Children (AFDC) mothers to jobs, job training, and education. The s e entrants to the workforce should be encouraged not to become SOV users. HRS should be interested in ridematching and vanpooling Good opportunity for demonstration project or small continuing grant Department of Labor has funds for transportation through various programs which aid peop l e to find jobs or to attend job training. These funds can be matched with local or other federal dollars to fund vanpools or other mode shifts (bicycles, for one) Finally, DCA has funding for CAP agencies (These are nonprofit organizations which provide various community services. They tend to have a broad missions which include economic development, low income house energy assistance ( LIH EAP), Headstart Programs, etc ) It may be possible to work directly with DCA t o do some type of demonstration project with th e local CAP agency in the area of mor e efficient use of agency vehicles through ridematching o F AMU/FSU: These are of particular interest. I've seen the "Red and Gold shuttle of sorts, however ... The opportunity is great, but so is the challenge. Most of t he universities in the state system make a Jot of money from parking tickets and fear any innovation which would decrease this source of revenue. Work with Departments of Parking Services and appropriate Vice Presidents. Change name to Department of Transportation Work to ensure that universities budgets include line item for shuttle with funds from increase in student activity fee Departments of Transportation become responsible for shuttle 6


Tallahassee TMA Phase Ill Final Report Parking still ts a source of revenue for departments, but should be restructured Core parking and core parking violations more expensive than peripheral Sell bike decals to pay for racks, showers, etc. Decal sales also buy assistance in recovery in case of theft. Shutt les can provide jobs for students as drivers, dispatchers, schedulers etc. Universities shou l d c oo rdinate w ith TaiTran as described bel ow o TaiT ran Despite its current operations the re is lots of opportunity Tai Tra n c a n get money for Universities shuttle system at 80/20 federal-local match ratio can assist shuttle system operations and p l anning can provide maintenance for shuttles TaiTran can purchase vans for vanpools at 80/20 Piggyback on TalTran's National Transportat ion Week activities Seek small grant from TaiTra n to provide marketing services o MPO/Federal Funds Since population less than 200k, not a congestion management area; hence MPO has no Congestion Management Air Quality (CMAQ) Improvement Program funds. However, ... Federal Surface Transp ortat ion Program funds available through the state to the MPO that can be used for TMA Federal T ransit Administration (FT A) has direct funds for demonstration grants through the Office of Mobility Enhancement. Other funds available through ISTEA under Sections 3, 9, 16, and 18 Section 3 i s for capita l purchases and usually goes to the 7


Tallahassee TMA Phase III Final Repon state or the Section 9 agency, TaiTran Sections 9 is operating funds for TaiTran. Section 9 agencies do not like to give up these funds. The one exception is usually marketing. Sec t ion 16 is for capital purchases, usually vehicles, for elderly and disabled services. The Section 16 designated agency has to be a nonprofit agency. The agency which employees the TD Commission's Community Transponation Coordinator is probably the designated agency. Although you probably will never be able to get any of the funds unless you want to deve lop commuter vanpo ols for the elderly or disabled, the designated recip i ent that is the recip ien t could be interested in your ridematching services which are not free. (The recipient agency has to have operating funds for the v ehic les in order to get the capital funds.} Section 18 funds are for nonurbanized areas (populations less than 50K}. Big Bend Transit is the Section 18 provider in your area and Ted Waters is good to work with. He may be interested in marketing services. Your ridematching capabilities also may assist him with routing and scheduling. In most states, Section 18 funds are split into three pots with the following match ratios + Administration 80/20 + Operating 50150 + Capital 80/20 Administration funds could be used to buy marketing or ridematching services Operating, forget about it Capital funds can be used the same as Sectio n 9, v ehicle purchases for vanpools, related equipment, etc. Federal Highway Administration (FHW A) funds are mor e plentiful than 8


Tallahassee TMA Phase III Final Report those of FT A. They also have direct funding of demonstration projects. Other sources of FHW A funds can be FOOT through the central office or the district and the MPO. Don't forget you've got good friends at EPA. Also the Fede ra l Department of Ene rgy is a soft touch right now Federal Aviation Administration (FAA) has fund ing for surface to air transportation. This may be sticky because the rental car agencies make so much mon ey in Tall ahassee. The opp011unity i s there th ough to maybe do something wit h TaiT ran and F AA when the legis la tu re i s in session or with the uni versities and FAA dur i n g football and basketball seasons. Transit Store : This is the one big idea that I am ready t o d o as a j o int proposaL o Services : o Ho ok Sell matchlists Provide tran s it system maps schedules, and transit marketing Rent s pace t o th e environmental g r oups to display/sell mem berships/paraphernalia Provide/sell/rent supplies, g oods, s e rvic es (e. g lockers, patch kits, sui tabil i ty maps, etc.) to cyclists, pedest rian s Promote the T MA/sell parapherna li a with TMA's logo Sell g e neral paraphernalia which promotes TDM, good earth theme Source o f campus work study jobs Good FIMAT project Links College of Bu siness with t angible economic pursuit and transportati o n Strategically p l ace store in order to give FIMAT exposure Cou l d give high profile to TMA with in communiry o Other benefits 9


Talla hass e e TMA Phase I1I Final Report 1 need to write anothe r proposal Gary would like thi s CUTR TOM Uni t wants to do a tran s it store Tally TMA should take a l eadership role in the state -always the innovator I like the idea Private Fou ndations o C heck FSU Lib rary for founda t ion info rm ation; specifically oil companies i.g Exxon, Amoco, etc A lso Ford an d others o Some of th e above ide a s cou ld be funded by p ri vate foundations o Ditto for state or l oca l foundations 10


Tallahassee TMA Phase Ill Final Repott ATTACHMENTS' ARTICLE IV MEMBERS Section I Classes of Members The C orporation shall have classes of membership, established as follows: (a) Members J!" classes of regular voting members w ith qua l ificatio n s and, ... Section 4 Dues .. ARTICLE m-BOARD OF DIRECTORS Section I -Number The shall have Directors and collectively they shall be known as the Board of Directors. The Note: Changes noted in If((..1 Deletions struck through thre11gh. II


Tallahassee TMA Phase III Final Report number may be changed by amendment of these Bylaws, or, by res pe ct of these Bylaws and adoption of new By laws, as provided in these Bylaws; however, there shall never be less than three Directors, as sta t ed in the Articles of Incorporat ion 12


Tallahassee TMA Phase Ill Fin a l Report APPENDIX B PUBLIC AND NOT-FOR-PROFIT BUDGETING' The Budget E xecution Process Esse ntial Elements of a Management Control System l Responsibility must be assigned in advance. 2. Policies must be set to guide decisions and to handle cont ingencies if something goes wrong. 3.. Information systems must send a steady stream of information o n progress to responsible officials. 4 Relevant performance standards m ust exist against which information on progress can be compared. 5. Responsible officials must compare progress information to performance standards 6 There must be a means by which appropriate corrccti ve action can be ta ken when necessary. Agency Accountability Tools Lega lity I Line -item budget 2 Budgetary and encumbrance account and reporting 3 Funds systems and the segregation of monies 4 Allotment systems 5 Personnel approvals and position controls 6 Requisition and purchase order systems 7. Clearance of contracts, equipment purchases, and other large expenditures 8. Travel controls 9. Financial and compliance audits I 0. Budget transfers and amendment procedures II. Reversions to Treasury 12. Preaudit 1.3


Tallahassee TMA Phase Ill Final Report Operational I Organixational and methods srudies 2. Workload standards and staffing ratios 3 Production reporting 4 Centralixed purchasing 5. Forms control 6. OMB can withho ld funds to promote efficiency 7. Performance budgeting 8. Performance a udits 9 Cost accounting I 0. Preaudits ll. Competitive bids 12. Management by objectives 13. Performance moni t oring Policy Conformance I. Appropriation provisos 2. Reduce future appropriations to noncomplying agencies 3. Exert pressures for removing certain officials from their positions 4. Te lephone calls from key l egislators 5. Letters of interest 6. Directives contained in hearings, co m mittee language, r eports, and floor debates 7. Justification book 8. Autho riza tions Program Accomplishments I. Program budgeting 2. Visits to departments by oversight committees 3. Outcome evaluations 4 Cost -bene fit analysis S. Cost-effectiveness analysis 6. Fix responsibility for each program to a specific office 7. Management by objectives 8. Performance monitoring 14


Tallahassee TMA Phase Ill Final Report Agency Auditing Process Audi[ an examination of records or othe r search for evidence that i s conducted by an independent authority for the purpose of supporting an opinion on: a the adequacy and reliability of infonnation contro l sys t ems; b the effic i ency and effec ti veness of programs and operations; c. the faithfulness of administrative adherence to prescribed rules and po l icies; and/or, d. the fairne ss of financia l s t atemen ts and perfonnance reports. 15


T allahassee T MA Ph a se fl1 Final Report I Genie Stowers, and Nat-far P rofit University of A l abama at Binniogham, Spri ng 1990 and G G rizzle, Florida Stat e U niversity Department of Public Administration 16


Tallahassee TMA Phase Ill Final Report BASIC BUDGETING' Budgetingthe allocation of scarce resources among different purposes so as to achieve greater return. Components of Budgeting Financia l Management Sysiem I. Budgeting plans for how organization to develop; 2 Accounting keep track of how expenditures made; compare to budget; Feedback Loop 3. Performance Measurements measure performance of employees; subjective measurements, generally; 4. Auditing looks at all of the above to judge if done correctly. Knowledge of theory enables you to understand overall context/perspec t ive The process is a needs assessment. A planning and management tool. NOT-FOR PROFITS Many Funding Sources Board of Directors Appointed (Members appoint other members) Executj vc Director 17


Tallahassee TM A P h ase III Final Repon Vol unteers Co-pro du c tion service provided by v o lunt ee r s RE VENUE SOURCES (Unc ertain Environment) Charges for services Fund-raisins Governments (Fede r al, State, L ocal) Grants Taxes (Earmarked or Set-asid e s) Licenses a nd permits (Impac t fees) OTHER REVENUE Interest Earnings Rents Contributio n s Sale of Exc ess Property Roya l ties 18


Tallahassee TMA Phase III Final Report Step I. REVENUE PROJECTION METHODS Proportionate Change Method Each source of revenue must be project on its own The proport i onate change method can be used if the revenue has been used for the p ast few years and i f record s have kept indicating past experiences. EXAMP L E OF PROPORTIONATE-CHANGE METHOD fiscal Year FY A FY B FYC FYD FY E FY F (present year) Revenue : Advertising $23,000 $24,300 $27,300 $30,000 $34,300 $38,800 F ina the difference in collections between each year. For example, the difference b etween FY B and FY C is Step 2. $27,300 (FY C) cZ4.3QO (FY B) $ 3,000 (Difference To find the percentage change, div ide th e diffe rence by the first year's collections. For examp l e: $J.0Q0 = I Z N ll. l < 24,300 19


Tallahassee TM A Phase Ill Final Repon Steps 3 and 4. Repeat steps I and for the other yearly pairs. Total the percentage changes, rounding to t h e closest percent. Step 5. Year FYA FY B F Y C FYD FY E FY F Collections ($) 23 000 > 24 300 > 27 30 0 > 30,300' 34 300 > 38,800 Change(%) $.6$ 13.20 T o t al Chan ge 55 29 The most conservative estimate for the next year s revenue results from averaging the present change for the given six fiscal years. First determine t he number of changes. Th e example shows five (5) To determine the average take the 1otal percent change (55%) and divide it be the number of percent chang e s (5) = " 5 With this information the r even u e for FY G can now be p r ojected Multiply the revenue for FY F ($38,800) by the average p e rcentage change (II%) $38,800 )\ ']I $ 4,268 The product ($4,268 is the expected increase for FY G over the total collection received in FY F The total revenue from this source for the upcoming year are es t imated to be $38,800 (collected in FY F) + 4.268 (increase expected) $43,068 (total advet1ising revenue expected for FY G) 20


Tallahassee TMA Phase III Final Report EXAMPLE OF LEAST S QUARE TREND METHOD' Calculation of a trend-line let s the analyst better estimate future revenues, but the trend line shou l d serve only as the basis for making revenue projections. Step I. I dentifY t he central year. When there are an odd number of yea r s the middle year is the central year. Fiscal Yeat !FYl Years from Central Year FYA FY B -1 ITC 0 FYD +1 FYE Step 2. Calculate the value of cross-products [(B) X (C)) and yea r s squared (Cf Years from C r oss Years F iscal Year Collections Central Year Products Squared (A) (B) (C) (B)x(C) (C)x(C) FY A $142,800 -2 -285.6 4 FYB 105,800 -I -105.8 I FY C .!66,500 0 0 0 FYD 173,000 + 1 + 173.0 I FYE 213,900 +2 +427 8 Total $802,000 0 +209.4 10 Step 3. Calculate th e s l ope Slope = cross-produc t total = 209.4 = +20.9 years squared t otal I 0 21


Tallahassee TMA Phase lii Fina l Report Step 4. Calculate the level in the central year. Le ve l in cen tral year = total colle ctions = 802.0 = 160.40 n u m ber of years 5 S tep 5. A f te r calculat i ng th e level in the c entral year an d the s lo pe, you can compute the values of the tre nd-line f o r each fisca l ye ar i n the past seties an d projec t the tr end-line to future yea rs 22 .


Tallahassee TMA Phase Ill Final Report CAPITAL BUDGETING Items of Value> One Year Match time horizons with value of money 3 5 Year Planning 23


Tallahassee TMA P ha se III Final Repon Feedback Loop < BUDGET PREPARATION Decide Format Expenditures/Revenue Histories ( Reven ue earmarked; intergovernmen t al, grants, taxes, etc .) Deadlines to meet/Hearings to Att e nd/Presentations Person ne l Issu es Pe'form a nce Capital Budgets User Charges Grants Management C utback M anagement Policy/Budget Enactment Approval Process Money A u tho rized/ Appropriate d Deal with Politics of Budgeting Budget Execution (Set u p F unds) (Accountin g Syste m) Administrative Cont r ols Financial S ta tements (P r ocedure to C hange Budget) (Changes Approved b efore Exp e n ditures ) 24


Tallahassee TMA Phase Ill Final Report COST I. Cost allocation sets forth a standardized way to compile the costs of operation and uses this information, in conjunction with the resource variables {hours miles), for the purpose of evaluation, budgeting and bidding. A It is a subse t of accounting uses the data gathered in the accounting cycle B Cost accounting redistributes accounting data in a logical manner to help meet the need of lo oki ng a t the cost and feasibility of individual facets of operations 11. Classifications and terms A Capital Administrative and Operating I. Capital costs extend beyond one operating fiscal period; have a usefu l life of over one y ear 2. Operating costs expire wi th in a one year fiscal period 3 Administrative costs also expire within a one year fiscal period, may be required by grantor to be separated from "operating" Ex.: utiliti es, office rent, administrative salaries B. Fixed and variable I. Fixed costs do not change with volume of services, e.g., administra ti ve salaries, rent 2. Variable costs do change wi th volume of services, drivers salaries, fuel, vehicle maintenance C. Direct and Indirect I. Direct costs can be rela ted on a one to one basis with a gtven service/project, e.g.,drivers sa l aries, fue l vehicle depreciation 25


Tallahassee TMA Phase III Final Report 2 Indirect costs canno t be related on a one-to one basis with a gtven service/project, e.g. administrative salaries, utilities, office rent D Fully Allocated and I ncremental I. Fully allocated cos t s both direct and indirect allocated to t ally 2. Incremental cos t s costs that are associated with the increase of services or expenses Ill. The goal of cost alloca t ion is to determine how much it cos t s to operate an exit i ng service/program A. Uses: distributing costs to individua l programs; preparing cost estima te s; cost cen t er/p r ogram comparisons B. Developing a Fully Allocated Cost Model I. Choose resource variables service s (resources can be measured by different units, e.g . hours, mi les, number of veh i cles 2. Designate Expense Accounts allocate indirect costs to the transporta t ion subdivision convert to a standardized account assign all costs 3. Calcula t e the Average Uni t Cost u sing the cos t s from the assigned expense accounts, divide by the appropriate resource variable C. Assumptions I. All costs can be allocated to programs based on the level of service provided 2 Average unit c osts can be used to estimate service level cost D The one variable model (refer to examp l e) I. S60,000 I 6 000 hours = $ 10/hour 26


Tallahasse e TMA Phase III Final Report 2. Use: gross estimate of cost to operate center, in a macro sense, but does not consider program d i fferences E. The m ulti-varia ble mod e l (refer to examp le) F. Resource variables: major variables used in transportation programs, hours, miles and number of veh i cles G. The first step is the allocation of any ind ir e ct (s hared) cost s to the transportation function l (Refer t o example o f admi ni strator's salary) 2. Next is th e con v ersion of accounting data t o standardized accounts 3 Then create a matrix between expense accounts and the resource variables of hours miles and vehic les 4 Next calculate the average unit cost; hours, m iles and vehi cles 5. Formu las for annual and daily t o t al costs ar e thus deriv ed Annual = ($8.46 X H) + ($0.11 X M) + ($ 18,800.00 X V) Daily = ($8.46 X H) + ($0.11 X M) + ($72.31 X V) 6. Now, having a way of det e rmining the value of the services rendered, the above fonnula may be u sed in establishing an estimate of individual program costs 7. This i s a basic model to demonstrate the method of fully allocat ed cost in developing the average u n it cost of se rvices rendered 8 Publicly-donated services include dona t ed services by a local government. These are allowable for some programs and the value of the services sho uld be recorded in an account Privately-donated services include private enterprise or individuals 11tese may not be allowable; however, if useful, sho u ld also be recorded. 27


Tallahassee TMA Phase Ill Final Report 9. The above formula can b e used to estimate the costs of adding a new contract IV. Future Year Budgets/Proposals A. Cost Adjustments I. Operating/Administrative costs will need to b e adjusted for inflation and/or known cos t changes, (e.g., salary increases) 2. Capital n ee d to be adjusted for the replacement val ue of existing assets B. Resourc e Varia b les adjustments for any incre a se in se r vice hours mil es, or number of vehicles need to be made C. Preparation of budget I. OperatingfAdministrative a. after identifying all the operating cost elements, take the current year costs, apply the inflation o r known cost increase factors, and calculate the estimated annual costs 2. Capital (I) Labor / fr inges will usually have a n incremental cost increase if salary increases are not tied to cost of living (inflation) mcreases (2) Management must use the best information at its disposal in calculating increases in costs a. After identifying all the capital cost elements, calculate depreciation for all capital assets. Then d e termine if dep reciation will change by the addition and/or retirement of any new /o ld assets. Calculate the new depreciation figure a nd use in the new budget period V. These average budgeted unit costs can be applied to each program to develop a budget that can be negotiated 28


Tallahassee TMA P hase II! Fina l Report I, Beve r l y G. \Yard. Basic Budgeting, .. Regi01r IV Tee/mica/ Traini1 1 g W orkshops Nashville. TN, June 22. 1992. 2. Jeffrey M. Dunbar. A Cost A ccoum ing Sem inar, (Bim lingham AL: A Jabama H ighwa y Department). October, 1989. 3. Ibid., p. 38-40 29

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