The village manager wants to look at village operating costs for street maintenance in comparison to a group of nearby municipalities. She has asked you to calculate annual costs per mile for street maintenance and a four-average annual cost per mile from -2016 through 2019. As a part of this process, the manager has asked you to contact the other nearby villages and coordinate with them in calculating and comparing the average per-mile street maintenance cost for the last four years.

1. Is the average cost per mile a "unit cost" according to the definition provided by the Michel reading? Why or why not?

2. To calculate a per-mile cost for street maintenance are there any expenditures in the list of "Operating Expenditures" that you would want to exclude from this unit cost calculation because they don't appear to be street maintenance costs? Please identify those expenditures you would exclude and explain why. In particular, discuss if you will include employee benefits in calculating per-mile costs.

3. In the spreadsheet provided - calculate the per-mile cost for each year, based on your decisions about excluding costs in question 2 above. Then calculate a four-year average per mile cost across all four years in the table (2016 through 2019).

4. What options would you have when you communicate with the other nearby villages so that your estimate of per-mile costs will be consistent and comparable for your manager? Explain.

5. Looking at the annual percent change figures in the table, are there any expenditure areas that appear to represent fixed costs for highway services? Explain.

6. After communicating with the other villages you find that they treat the costs of the Village Clerk-Treasurer's expenditures as indirect costs for streets and other services (see Michel chp. 3). The Clerk-Treasurer provides a variety of support activities to village departments, including -payment of bills, payroll management and personnel paperwork, etc. The clerk-treasurer's office in your village indicated that they did not have good records for allocating the cost of their services across the three affected departments - Police, Fire, and Streets. As a first cut at allocating these indirect costs, you decide to calculate a four-year average of the total expenditures for each department and use those averages to calculate a percent of total spending by the department to use for allocation. Total spending for the Clerk-Treasurer, and the Police, Fire, and Street Departments are in the "Clerk-Treasurer" tab on the Excel workbook. Select that tab in the workbook to calculate the averages and then use the percent of the four-year average for highway expenditures of the average total costs across all three services. Go ahead and make this calculation to allocate Clerk-Treasurer expenses and adjust your four-year average cost per mile. How much did the four-year average cost per mile increase after including indirect costs from the clerk-treasurer's expenditures?

7. After you calculate these revised costs per mile your manager reminds you that about 40% of the street department's labor is used for picking up residential leaves and other garden debris over the year. Describe what adjustments you would make to acknowledge this labor cost change in calculating revised total street costs. You do not need to calculate this change in the spreadsheet - describe the adjustments you would make.

Use the documents below with the reading linked at the beginning.

Operating Expenditure	Expense Description
Street- Central Garage -Operating	Routine operating costs for the street department garage, including: utilities, trash removal, cleaning, etc.
Street Department Personnel	The payroll costs for regular full-time and part-time street department employees.
Street Improvement (Chips)	Expenditures for major street improvements, primarily street repaving
Snow Removal - Materials	The cost of salt and sand for winter street maintenance services
Off-Street Parking -Non-Personnel	The cost for parking striping, and other personnel and contractual to maintain village parking lots
Parks/Recreation -Non-Personnel	The non-personnel costs of operating and maintaining village parks
Trees - Non-Personnel	The materials and contractual costs of maintaining and planting trees adjacent to village streets.
Total Streets - operating	The total of the above expense categories
Capital And Debt Service
Debt Service - Street Department Truck	Cost of current principal and interest payments on street truck loans or other debt instruments
Transfers to Capital Projects	The transfer of amounts for future street capital projects
Employee Benefits
State Retirement	Payments for the village portion of payments to the state retirement system for street department employees
Social Security (Village Share)	Payments to the Social Security Administration for retirement benefits for street department employees
Workers Compensation Insurance	Annual insurance payments for workers compensation
Unemployment Insurance	Annual payments for unemployment insurance
Medical Insuance (Village Share)	Payments for the village portion of payments for street department employee health insurance
Total Employee Benefits	The total for employee benefit items list above
Total Expenditures	The combined total for all expenditures listed above

Multi-year Street Department Costs - Village of Typical New, York	Annual Percent Change
Operating Expenditure	2016	2017	2018	2019	2016-17	2017-18	2018-19
Street- Central Garage -Operating	$17,927	$15,698	$29,407	$12,350	-12%	87%	-58%
Street Department Personnel	$358,157	$345,910	$369,696	$397,000	-3%	7%	7%
Street Improvement (Chips)	$0	$83,060	$109,834	$50,000		32%	-54%
Snow Removal - Materials	$10,020	$39,193	$37,959	$30,000	291%	-3%	-21%
Off-Street Parking -Non-Personnel	$1,361	$1,678	$1,428	$2,300	23%	-15%	61%
Parks/Recreation -Non-Personnel	$19,096	$4,753	$9,771	$11,300	-75%	106%	16%
Trees - Non-Personnel	$9,568	$11,472	$7,876	$11,500	20%	-31%	46%
Total Streets - operating	$416,128	$501,764	$565,970	$514,450	21%	13%	-9%
Capital And Debt Service
Debt Service - Street Department Truck	$22,872	$23,245	$0	$15,030
Transfers to Capital Projects	$0	$0	$0	$32,500
Employee Benefits
State Retirement	$56,589	$54,654	$58,412	$62,726	-3%	7%	7%
Social Security (Village Share)	$27,399	$26,462	$28,282	$30,371	-3%	7%	7%
Workers Compensation Insurance	$7,521	$7,264	$7,764	$8,337	-3%	7%	7%
Unemployment Insurance	$337	$3,139	$2,095	$5,200	833%	-33%	148%
Medical Insuance (Village Share)	$78,881	$60,895	$69,452	$97,547	-23%	14%	40%
Total Employee Benefits	$170,727	$152,414	$166,005	$204,180	-11%	9%	23%
Total Expenditures	$609,727	$677,424	$731,975	$766,160	11%	8%	5%
Total Expenditures Per Mile
4 Year Average Total Expenditures Per Mile

Multi-year Costs -Various Departments - Village of Typical New, York
	2016	2017	2018	2019
Clerk--Treasurer	$ 70,485	$ 67,527	$ 68,811	$ 70,027
					Four Year
Total Expenditures by Deparment					Average
Police Department	$ 395,754	$ 416,253	$ 423,784	$ 448,959
Fire Department	$ 211,685	$ 192,471	$ 218,161	$ 227,076
Street Department	$609,727	$677,424	$731,975	$766,160
				Total
			Street Percent of Total
Clerk Treasurer Costs Allocated to Streets
Revised Total Street Department Costs
(including Clerk-Treasurer Allocation)
Revised Total Expenditures Per Mile
Revised 4 Year Average Total Expnditures Per Mile
			Difference in Four Year Average
			(Compare to Village Street tab)