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four junior accountants, one eighth of his or her salary (50%/4 personnel) <br /> and fringes should be allocated as "Direct Supervision" costs. <br /> • In addition to the above, the general management of the department should <br /> be added to the rate. This consists of the department head, his/her <br /> secretary, and the general expenses of the department. These costs are <br /> then divided by the direct salary costs of the rest of the department to <br /> determine the percentage which departmental overhead is of the direct <br /> departmental costs. <br /> 0 Citywide overhead (determined by this study to be approximately 33.89%) <br /> would be added to the result from the above step. <br /> Reviewing all of the above, the formula for determining the hourly rate <br /> would be a follows: <br /> rate = (hourly direct labor salary + direct fringe rate) x (1+:.:pervision <br /> overhead %) x (1+ departmental overhead %) x 1.3389 (Citywide <br /> overhead factor) <br /> If a rate for supervision or departmental overhead is not readily available, 15% <br /> and 5% will be used respectively. The actual rate, when calculated, will likely <br /> be higher than these, however. <br /> 5. F.qu;pment used. <br /> In addition to labor and materials used to repair/replace the damaged item, some <br /> operations require the use of City equipment. This includes passenger vehicles, <br /> police cruisers, and heavy equipment. The Support Services Division will <br /> provide an estimate of the appropriate hourly rate for passenger vehicles or Police <br /> cruisers. A heavy equipment rate can be developed by taking the original cost <br /> of the unit and dividing it by the anticipated number of hours of use it will get in <br /> its life. For example, if a "cherry-picker" gets used 3 days each week for 8 <br /> hours a day and is expected to last 8 years, the procurement cost would be <br /> divided by 9,984 (23 hours per week x 52 weeks per year x 8 years). For <br /> example, if the units cost $50,000.to procure, paint, decal, etc., the rate would <br /> be about $5/hour. In addition to this, the appropriate hourly share of the annual <br /> maintenance, gas, oil, etc., must be added. An easier and equally acceptable <br /> approach for many types of equipment is to -lse 85% of the cost of renting the <br /> unit on a commercial basis. The 85% factor is used to eliminate the profit aspect <br /> of such a rate. (This approach should only be used if the City does not have <br /> similar equipment in another department.) <br /> City of Pleasanton <br /> Fee Policy Page 7 May 1992 <br />