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LEVEL 4 / COSTING MODEL <br /> City of Eugene Service Delivery Costing Model, cont'd <br /> Assumptions <br /> The cost model for the City of Eugene assumes the following: <br /> ➢ Department and Division administrative costs and the Central Service Allocation are not <br /> included in the cost analysis. The underlying assumption is that change in how a service is <br /> delivered would not require a change in administrative functions. However, if the proposed <br /> service delivery change is large enough to affect these administrative units, then the <br /> administrative cost due to the service delivery change should be included as a component of the <br /> costing model. <br /> ➢ The model will use actual expense data for the proposed service delivery change and not budget <br /> data. <br /> ➢ Due to irregularities in a single year's worth of data or high sensitivity to the change in service <br /> delivery, the model may need to utilize several years of actual data. <br /> ➢ The user will provide a descriptive note of any equipment or assets that are used in the current <br /> form of service delivery but would not be in the proposed change option. <br /> ➢ The data will provide summary level data that is detailed enough to explain the costs. <br /> ➢ Finance Staff will be available to help gather the necessary data. <br /> ➢ The costing model utilizes only avoidable costs — those that are eliminated immediately or <br /> eliminated after a brief transition period due to a service delivery change. <br /> C. Alternative Service Delivery Costing Model <br /> The purpose of this step of the costing model is to provide a thorough picture of the net cost of an alternate <br /> way of providing a service. Although this step is described in terms of a competitive contracting situation, <br /> the same analysis would be completed for a major service reorganization, partnering with other agencies or <br /> a contracting out proposal. <br /> Assumptions <br /> The alternative service delivery option cost model includes the following: <br /> ➢ The alternative service provider 's bid for service delivery. <br /> ➢ The cost to administer the contract by the City of Eugene. <br /> ➢ Transition costs associated with moving from the current form of service delivery to an alternative <br /> method of delivering the service. <br /> ➢ Revenue changes that are tied to the alternative service delivery option. <br /> 5 <br />