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Home My WebLink About12 Budget overheards Agenda Item # TRUCKEE - Public Utility District Memorandum To: Board of Directors From: Mary Chapman, Administrative Services Manager Date: October 10, 2007 SUBJECT: Discussion of overheads and other appendices as they relate to the budget,with possible direction or action by the Board 1. WHY THIS ITEM IS BEFORE THE BOARD As part of the annual budget we attach a series of appendices to the back of the budget to show how certain calculations are arrived at which are used throughout the budget. Since we have already covered some of the appendices with the Board at the last meeting(Labor, Employee Benefits and Debt), I have excluded them from this presentation. I will review the interdepartmental rent calculation and the overhead calculations. Alan will review the vehicle replacement schedule. 2. HISTORY 6. Manage the District in an effective, efficient and fiscally responsible manner. Goal 6.1 —District will utilize modern, cost effective work methods and equipment. Goal 6.3—District will provide work conditions and procedures that encourage employee growth, productivity and retention. Goal 6.6—Develop appropriate financial procedures to assure responsible financial management 2. NEW INFORMATION The District has been allocating overheads to all work performed in almost the same way for many years. By doing this we arrive at a truer cost of performing the various tasks that we do. The only change that I would like to make is in the Transportation Overhead. In the past we allocated the overhead as a percent of labor. We are proposing to allocate the overhead as a dollar amount per hour. This overhead is only charged to labor where vehicles and equipment are used. These overheads are all estimated based on the numbers provided by each department head in the budget. The engineers, planners and work order accounting staff use these percentages when estimating and billing projects. This way we are consistent from month to month during the year when dealing with billable jobs. RECOMMENDATION: That the Board confirm that staff should proceed with preparing the budget using the proposed interdepartmental rent, overheads and vehicle replacement schedule. a fYY� Mary Chaff an, Admin General Manager John L. Ulrich, Interim General Manager APPENDIX I INTERDEPARTMENTAL RENT DISTRICT HEADQUARTERS: Building operation/PM/repair 358,388 Depreciation of jointly used assets 191,743 Building rental income (2,025) TOTAL COSTS $548,106 The above costs are paid by the electric fund; the water fund will be charged with 50%, which is $274,053 through a monthly rental charge of$22,837 APPENDIX IV TRANSPORTATION OVERHEAD This appendix assumes that the cost of operating, maintaining and replacing District vehicles and equipment will be recognized as an overhead charged against direct labor that uses the vehicles. TRANSPORTATION& EQUIPMENT EXPENSE Vehicle operation, repair, fuels& misc expenses $496,926 Interest expense (vehicle debt service) 9,545 Insurance 40,772 Replacement(depreciation expense) 264,810 TOTAL TRANSPORTATION EXPENSE $812,053 DIRECT LABOR HOURS General Manager 2,024 Administrative Services 3,982 Conservation 792 General Services 1,476 Electric Operations 35,035 Water Operations 2,797 Power Supply 34,726 TOTAL DIRECT LABOR HOURS 80,832 TRANSPORTATION/EQUIPMENT OVERHEAD PER HOUR COST ($812,053 DIVIDED BY 80,832) $10.05 APPEND V INVENTORY OVERHEAD P URCHA SI NG/WA REHO USI NG Labor $85,412 Accounts Payable 10, 192 Overhead.- Labor 71,447 Administrative 1,106 Warehouse Operations: Utilities & Building Maintenance 16,976 Miscellaneous (insurance) 4,500 TOTAL COST $189,633 ESTIMATED INVENTORY ISSUES Support Services $20,000 Electric Operations 704,761 Water Operations 418,500 TOTAL ESTIMATED ISSUES $1, 143,261 INVENTORY OVERHEAD 16.59% APPENDIX VI ADMINISTRATIVE OVERHEAD COMMON SUPPLY COSTS. Purchasing/Warehousing of Common Supplies Labor $9,490 Accounts Payable 1,133 Overhead: Labor 7,938 Administrative 113 Warehousing Operating Costs Utilities & Building Maintenance 1,886 Miscellaneous (insurance) 500 Subtotal $21,060 Common Supplies Outside staff supplies $17,000 Inside staff supplies 13,000 Joint department supplies 9,000 Subtotal $39,000 TOTAL COMMON SUPPL Y COSTS $60,060 TOTAL PRODUCTIVE LABOR $5,195,393 ADMINISTRATIVE OVERHEAD 1.16% APPENDIX Vll CONSTRUCTION OVERHEAD Step 1 General direction and general construction costs from budget. Electric Operations $245,169 Water Operations 56,689 GIS& Mapping 103,689 Total $405,547 Step 2 Determine capitalized labor as a percent of total labor: Capitalized Labor = $1.022,481 = 32.38% Total Electric& Water Labor $3.157,742 Step 3 Determine construction overhead to be capitalized: Total General direction& construction costs $401,547 of labor to be capitalized 32.38% General direction& construction costs to capitalize $130,021 Construction accounting costs to capitalize 165,950 $295,971 Step 4 Calculate construction overhead to be applied to capital improvements: Capital Overhead = $295,971 - 28.95% Capital Labor $1,022,481 CONSTRUCTION OVERHEAD= 28.95 VEHICLE REPLACEMENT SCHEDULE UNIT# DESCRIP77ON DEPARTMENT CONDMON Mlles REPLACEMENT 28 1998 GMC Pickup 4WD 314 Ton Service Body Electric Good 111 K 2008 13 1987 Caterpillar Backhoe Electric Fair na 2008 14 1987 John Deere Backhoe 4WD Water Fair na 2008 43 1998 GMC 4WD Service Body Water Good 86K 2006 23 1992 GMC Sonoma Pickup 4WD Power Supply Fair 89K 2009 25 1998 GMC Pickup 4WD 314 Ton Water Good 93K 2009 3 1991 int'l Service Truck Water Good 68K 2009 9 1997 GMC Pickup 4WD 314 Ton Water Good 116K 2009 6 1969 Intl Dump Truck, 10 yd Water Good 26K 2009 44 1998 GMC 4WD 314 Ton Service Body Electric Good 73K 2009 34 19921nt'l.2 Axle Dump Water Good 41 K 2010 20 2000 GMC Jimmy 4WD Water Good 73K 2010 10 1991 Intl Digger/Derrick Truck, 4WD Electric Good 49K 2010 1 1993 GMC Jimmy 4WD Power Supply Fair 141K 2010 15 1985 Caterpillar F35 Forklift Support Services Poor 1 Fair na 2010 7 2000 GMC Jimmy 4WD Electric Good 63K 2011 45 1999 Ford F250 4WD Utility Truck Water Good 85K 2011 24 2001 Ford F550 4WD Utility Trucks Water Good 54K 2011 29 2001 Ford F550 4WD Utility Trucks Water Good 50K 2011 30 2001 Ford F550 4WD Utility Trucks Water Good 69K 2011 8 1997 GMC Pickup 4WD 314 Ton Support Services Good 89K 2011 4 2000 GMC Jimmy 4WD Electric Good 44K 2012 49 2002 Chevy Blazer 4WD Electric Good 53K 2012 12 2000 GMC Pickup 4WD 314 ton Electric Good 37K 2012 48 2002 Chevy Blazer 4WD Water Good 29K 2012 46 2002 GMC Dura-Max Diesel 4WD Utility Truck Water Good 42K 2012 47 2002 GMC Dura-Max Diesel 4WD Utility Truck Water Good 39K 2012 75 1995 928F Caterpillar Wheeled Loader Water/ElectriclSupport Svcs Good na 2012 50 2002 GMC Dura-Max Diesel 4WD Utility Truck Support Services Good 19K 2012 42 1996 4WD Flatbed w/Knuckle Boom Electric Good 20K 2013 27 2000 GMC 112 Ton Pickup 4WD Electric Good 34K 2013 26 1998 Intl Digger/Derrick 4WD Electric Good 35K 2013 73 1998 Dump Trailer Water Good na 2013 74 1998 410E John Deere Backhoe Water Good na 2013 VEHICLE REPLACEMENT SCHEDULE UNIT# DESCRIPTION DEPARTMENT CONDITION Mlles REPLACEMENT 11 1999 Intl Double Bucket Truck 4WD Electric Good 28K 2014 104 2006 Ford Escape Hybrid 4WD Admin Services Good 25K 2015 101 2006 Ford Escape Hybrid 4WD General Manager Good 12K 2015 80 2001 Trackless Snowblower Electric Good 3K 2015 103 2006 Ford Escape Hybrid 4WD Electric Good 11K 2015 202 2006 GMC 112 Ton Pickup Electric Good 24K 2015 203 2006 GMC 112 Ton Pickup Electric Good 18K 2015 204 2006 GMC 314 Ton Pickup Electric Good 20K 2015 205 2006 GMC i Ton DRW Electric Good 5K 2015 102 2006 Ford Escape Hybrid 4WD Water Good 15K 2015 301 2006 GMC 1 Ton DRW Water Good 8K 2015 302 2006 GMC 1 Ton DRW Water Good 8K 2015 303 2007 Chevy Silverado 1500 Water Good 2K 2016 304 2007 Chevy Silverado 1500 Water Good 1K 2016 305 2007 Chevy Silverado 1500 Water Good <1K 2016 501 2007 Chevy Silverado 1500 Support Services Good <1 K 2016 77 1987 Welding Trailer Water Good 78 1989 Backhoe Transport Trailer Water Good 16 1985 GMC Truck 4WD(portable generator) Water Fair 85 Snowmobile Trailer Electric/Water Fair 81 1993 Fleming Spool Trailer Electric Good 82 1963 Pole Trailer Electric Fair 83 1972 HGDAV Spool Trailer Electric Fair 86 Wire Puller Electric Fair 87 Air Compressor Electric Fair 71 Ingersol-Rand Air Compressor Water Good 2 Truck mounted generator Water Good 70 Enclosed Trailer Water Good 76 1994 Vactor Trailer Water Good