The State of Connecticut’s I-95 New Haven Harbor Crossing Corridor Improvement Project

1. The State of Connecticut’s I-95 New Haven Harbor Crossing Corridor Improvement Project TCA Application: UI-04-T02

2. The State of Connecticut’s I-95 New Haven Harbor Crossing Corridor Improvement Project • Certain Construction Costs can be deemed Non-reimbursable by the State of Connecticut Department of Transportation (CT DOT): • Used Life Credit (UI term) or Depreciation Reserve Credit (State of Connecticut term) • Allowable Overheads • Salary Cap for Consultants

3. Calculating Used Life Credit (ULC) • ULC (or DRC) is the credit allowance that the CT DOT takes for the accumulated depreciation on existing plant when it is replaced • When the original cost is known, the life expectancy of the asset and the number of years the asset was used is determined

4. Calculating ULC (cont.) • The percent of the asset’s life that was used is then determined • Finally, the original cost of the asset is multiplied by the percentage of life used to determine the ULC

5. Calculating ULC Example: • In 2004, UI removed 150 feet of UG cable originally installed in 1994 at a cost of $50,000 with a life expectancy of 30 years

6. Calculating ULC Example (cont.) • Determine Number of years asset was used (in service): • Date Removed (a)………………….2004 • Less Installed Date (b)……………..1994 • Years of Life Used (a – b)..………….. 10

7. Calculating ULC Example (cont.) • Determine the percentage of the cable’s life that was used: • Years of Life used (a – b)………………………..10 • Life expectancy (c)………………………………..30 • Percent of Life used (d)=[(a – b)/c] x 100….33.3% • Determine the DRC (or ULC) • Original Cost (e).…………………….…$50,000 • Depreciation (d)…………………….…….33.3% • DRC due to DOT (f)= (d) x (e)………..$16,665

8. State of Connecticut Allowable Overheads • Difference between CT DOT approved labor overheads (OH) and UI actual labor overheads UI Actual State Allowed % OH %OH % Diff. • 2002 59.74 54.66 5.08 • 2003 62.62 61.66 0.96 • 2004 69.89 68.88 1.01

9. Calculating Difference in Allowable OH Rates for State of Connecticut Construction ProjectsExample: • Determine the Difference in Allowable OH Costs if UI spent $100,000 in direct labor costs in 2004 • Difference in OH Rates = 1.01% • CT DOT Non-reimbursed UI OH Cost = $100,000 x 1.01% or $1,010.00

10. Capping of Consultant Salaries by CT DOT • State of Connecticut Auditors review the salary levels of the consultants personnel who will be working on the project. • As a result of this review, salary levels for various positions are capped at the State of Connecticut allowed level. • Any difference between the actual salaries and the cap is deemed non-reimburseable.

11. Total Estimated Project Cost for TCA Application: UI-04-T02 • Total Est. UI Construction Costs…..…….$10,672,710 • Total UI Est. Costs Not Reimbursed by CT DOT: • Less DRC (or ULC)……………..……………..$1,401,329 • Less Est. Diff. in Allowable Overheads………..$110,000 • Less Est. Salary Cap for Eng. Consultant…..….$45,358 $1,556,687 • UI Est. Request for Regional Cost Allocation: ………………..……………….…………..$1,556,687

12. TCA Application: UI-04-T02 Questions?