Senior Manager

2. Advanced Fleet Budgeting Workshop Senior Manager Tony Yankovich Mercury Associates, Inc.

3. Workshop Agenda • Introduction • Fleet Operation Funding Principles • Types of Charge-back Systems • Rate Development • Conclusions

4. Introduction • Relevant Experience • Workshop Goals • Walk through the development of Service-based Charge-back Rates

5. Fleet Funding Principles

6. Link Behavior to Cost

7. Types of Charge-back Systems • Proportional Systems • Class-based Systems • Charged by time • Charged by usage • Service-based Systems • Mimics private sector approach “RUN IT LIKE A BUSINESS”

8. Rate Development • Identify Costs to be Distributed • Define Services • Allocate Costs • Calculate Rates • Update Rates Annually

9. Rate Development • Identify Costs to be Distributed (Setting the Rate Base) • Direct Costs • Indirect Costs • Facilities Costs • Depreciation Costs

10. Rate Development • Define Services • In-house Maintenance and Repair • Parts • Sublet Work • Fuel • Fleet Management • Vehicle Wash

11. Rate Development • Allocate Costs • Direct Costs • Indirect Costs

12. Rate Development

13. Rate Development

14. Rate Development

15. Rate Development • Calculate Rates • Identify Billable Unit of Service • Convert Cost of the Activity into a Rate

16. Rate Development

17. Rate Development • Update Rates Annually • Review Revenues vs. Expenses • Review Rate Base for Next Year • Review Billable Units of Service

18. Conclusions • Direct Appropriations vs. Charge-back Approach • Service-based Rate System • Accurate Rates Provide Clear Indication of Competitiveness of Fleet Operation • Manage Rates

19. Contact Information Tony Yankovich, Senior Manager Mercury Associates, Inc. tyankovich@mercury-assoc.com 913-568-5837 www.mercury-assoc.com