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LEVEL 4 / COSTING MODEL <br /> The goal of the costing model in the Competitive Service Delivery Assessment Tool is to provide a systematic <br /> approach to analyzing service delivery expenses for each of the identified Level 2 options. The model is a <br /> framework for decision making, not for budgeting purposes. <br /> The costing model will present guidelines in calculating the cost of service delivery by the City of Eugene and <br /> a proposed change in service, which could range from internal service improvement, to partnering with other <br /> agencies to an external service provider. The costing model is also one of four lenses that the Competitive <br /> Delivery Assessment Tool uses to assess a change in service delivery. <br /> The framework for setting up the Costing Model was developed using the "Make or Buy? Using Cost Analysis <br /> to Decide Whether to Outsource Public Services" article by R. Gregory Michel (Government Finance Review, <br /> August, 2004, Government Finance Officers Association). <br /> A. Internal Service Improvement <br /> In using the assessment tool, the user may have an idea of internal service change that would improve service <br /> delivery. This is called the "exit ramp" option. The user does not have to complete the full assessment to <br /> explore the internal service change. <br /> For costing model purposes, analyzing the impact of the internal change is comparing the expenses associated <br /> with delivery by the City of Eugene today with the expenses associated with delivery of the service after the <br /> internal improvement change tomorrow. The user would then reevaluate the need to continue with the service <br /> delivery assessment tool after that analysis. <br /> B. City of Eugene Service Delivery Costing Model <br /> The purpose of costing out current service delivery is to enhance understanding of the "cost centers" <br /> contributing to the financial expenses for any service, and to establish a baseline for comparison to the cost of a <br /> proposed change in service. Regardless of the service delivery option, the user will need to cost out the current <br /> expenses borne by the City of Eugene. <br /> A second step in the costing of current services identifies those costs that could be eliminated or avoided with a <br /> change in service delivery. These expenses can be incurred by performing the service in -house or sharing the <br /> service with another provider or by simply overseeing a contractor's performance of the service. <br /> 4 <br />