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2025 Interfund Rate packet 7-17-2024(1)Budget DePhartment MEMO TO: Alex Murray (Facilities & Mail Room) Jennifer Libby -Jones (Radio Services) Josh Metcalf and Tina Hemphill (Equipment Rental and Revolving) Becky Butler (Self -Ins. Admin., WC, UI, GL, PDR) Matt Jaeger (IT Services & Human Resources) FROM: Becky Butler, Budget Administrator DATE: 5/28/2024 SUBJECT: 2025 Preliminary Internal Service Rates 351 NW North Street Chehalis WA 98532 One of the initial steps in the annual budget process is preparing preliminary internal service rates. This year, the process will be somewhat different because we will be collaborating with.Matrix Consulting to develop a consistent rate structure for all Internal Service Funds. The consultant's work on the new rate methodology will align with your work preparing your 2025 preliminary budget projections. The goal is to finalize the 2025 preliminary rates on or before Monday, June 24. We will collaborate with Matrix Consulting and the Auditor's Office to ensure you have sufficient time to review the updated worksheets. If Matrix requires additional time to complete the 2025 Preliminary ISF rates, we will inform you before the deadline. If needed, we can provide last year's budget worksheets to work from. Don't hesitate to contact me and Rudy for any assistance with budget planning or reports from OpenGov or Munis. All interfund rates will be based on the original 2024 budget, subtracting any one-time expenditures and adding any known and approved increases for 2025, including costs from negotiated and BOCC-approved union agreements. We recognize that the updated ISF rate methodology might necessitate a review wit the BOCC if it impacts the budget. If you are aware of or anticipate increases in utility rates, equipment costs, service contracts, etc., please email a summary of all increases with justifications to the Budget Department when submitting the rates. This will inform the BOCC and allow for further guidance. As always, review your operations for potential cost savings and efficiencies. Pursuant to the Washington State Auditor's Office (SAO) Budgeting and Accounts Reporting System (BARS), internal service rates should sufficiently cover the costs of operation P.1 and provide for equipment replacement; charges to departments should be equitable, fair, and reasonable; assets and equipment should be properly tracked; and requires appropriate investment of reasonable and necessary reserves.. For additional information, see www.sao.wa.gov https://www.sao.wa.gov/bars gaap/accounting/interfund-activities/internal-service-funds/ Deficient or excess revenues for the portion(s) of your internal service rates that covered operations in your 2023 budget should be collected from or allocated back to departments that benefitted from those services. Pursuant to RCW 43.09.210, no Fund "shall benefit in any financial manner whatever by an appropriation or fund made for the support of another. " The following information will be provided to assist you in setting your 2025 preliminary rates: • 2025 preliminary salary spreadsheet. Each salary worksheet includes your employee step increases, if applicable, as well as a wage adjustment approved for 2025. Please review the employee information and notify Rudy and me if any changes are needed. • Included in your salary worksheets are the estimated 2025 rates for Workers' Compensation (596010), General Liability (596020) and Unemployment (596030). The Risk Department has completed an actuary study to ensure the county has sufficient reserves for current and future liability and will be working with the consultant to develop the annual rates. These rates will be attached to the employee record in payroll and charged against actual hours worked to reflect the full employee costs. If necessary, the BOCC may increase or decrease rates before the final budget to keep the reserve balance at an appropriate level. Again, your 2025 preliminary internal service rates are due to the Budget Department on Monday, June 24. If I can provide any additional information to assist you, please contact me at ext. 1198. P.2 matrix consulting group July 12, 2024 Results of Internal Service Fund Review Lewis County (County) retained Matrix Consulting Group (project team) to evaluate the methodologies in use by the County for its internal service funds (ISF): Self Insurance, Human Resources, Information Technology (IT), Radios, Facilities, and Fleet. These internal service funds have been in place for more than 10 years and have never been externally evaluated. The project team worked with County staff to review each ISF and identify areas where each model could be strengthened or improved. The following memo provides a brief overview of the project approach, current methodology in place, key strengths, and opportunities for improvement for all internal service fund models evaluated. Project Approach The scope of this analysis was limited to evaluating the methodologies used to calculate the chargebacks to County funds and departments for the six (6) internal service funds noted. The following points outline the steps taken by the project team to evaluate each ISF model: • Interviewed County Staff: The project team met with key County staff that work within the models to discuss the inner workings of each methodology and how it is utilized. Additionally, the project team also conducted interviews With staff from the different internal service funds to ensure that the model outputs appropriately represented the level of effort spent by staff. • Reviewed ISF models: Collected the model(s) / rates in use by the County and conducted an in-depth review of the different tabs, cost components, and calculation methodologies utilized. • Collected additional data: Collected additional metrics and information such as number of radios, work order hours for facilities, square footage, IT tickets, etc. • Evaluated chargeback methodologies: Based upon the review and documented understanding of each chargeback process, the project team evaluated the methodologies utilized to allocate the costs to county funds and departments and its conformance with industry best practices. Matrix Consulting Group P.3 Results of Internal Service Fund Review LEWIS COUNTY, WA • Developed Recommendations and Updated Templates: The evaluation of each methodology resulted in recommendations and updated templates for use by County staff. This study aims to provide recommendations to enhance and improve ISF models, enabling the County to accurately capture the support and costs associated with providing these services. The recommendations are presented in the subsequent sections of this memo. Self-hsurance Self -Insurance is part of the General Fund and captures the costs of administering the County's self-insurance program. This cost center houses expenditures associated with specific programmatic costs, as well as a portion of salaries and benefits related to staff responsible for administering the insurance. These costs are currently allocated to County funds and departments based on the proportion of Full -Time Equivalents (FTE) per fund and department. The County is In the midst of an actuarial study which will provide them with updated insurance rates to charge to funds and departments. Once the actuarial study is completed, the County should fold the self-insurance costs into each of the insurance funds. This will allow the administrative cost to flow and follow the insurance allocation. This would comply with industry standards, where insurance administration typically mimics or follows the methodology used for insurance allocation. As such, self-insurance would be eliminated as a separate internal service fund and folded into the risk internal service funds. Recommendation: Eliminate self-insurance as a separate chargeback rate and incorporate it into the risk funds and their respective allocation methodologies. Human Resources (HR) While not a true internal service fund, the County currently assesses a Human Resources (HR) chargeback. This chargeback accounts for the portion of HR services and costs provided to non -general fund departments only. The basis of the chargeback is non - general fund full-time equivalents (FTE). HR is not a typical Internal Service Fund, especially as it is a general fund department. As part of this project, the County is developing a General Fund Cost Allocation Plan. This plan will take the administrative costs associated with General Fund departments and allocate them to both general and non -general fund departments. It is recommended that Matrix Consulting Group 2 PA Results of Internal Service Fund Review LEWIS COUNTY, WA FIR be incorporated into that plan. This would create consistency with common allocation practices while ensuring that the costs associated with providing HR services are allocated to all county funds and departments. Recommendations: Human Resources should be eliminated as an internal service fund chargeback and incorporated into the General Fund Cost Allocation plan. Its services would then be charged back through the overhead allocation. Rad, ioS Radio used to be part of the 911 Communications department, as most of the county's radio services (infrastructure and equipment) were related to 911. It was separated from 911 Communications due to the desire to collect radio replacement rates. Therefore, Radio was divided into an internal service fund. Several years later, the replacement rate component of the calculation was removed, and the reason for radio being separate was eliminated. Currently, the Radio internal service fund captures the maintenance and upkeep of Countywide radios. These costs are allocated back to funds and departments based on the estimated time spent per fund and department. Time estimations were completed several years ago and have not been updated since. The estimated time spent per fund and department was previously based on timesheet information provided by Radio staff. As this information is no longer available, or tracked, the project team collected possible alternative metrics such as radio work orders and number of radios per fund and department. During reviews of this information, it was determined that neither of these metrics appropriately captured the staff's true level of effort. Due to the unique nature of radio services, and that staff are primarily supporting the 911 function, Radio should be folded back into 911 Communications. Any specific work that Radio staff conduct on behalf of County departments - Public Works, Coroner's office, sheriff, etc. can be billed directly to those departments through the 911 Communications allocation. This will allow for the most accurate capturing of support by Radio staff and eliminate the need for an additional ISF. Recommendations: The Radio ISF should be folded back into the 911 Communications budget. Matrix Consulting Group 9 P.5 Results of Internal Service Fund Review LEWIS COUNTY, WA Radios can be allocated the same way that 911 Communications is, with the exception of any specific work done on behalf of County departments. Those should be billed directly to the department based on the scope of work being performed. Facilities The Facilities Internal Service Fund captures the salaries, benefits, services, and supply costs associated with three distinct areas of service: 1. Facility Maintenance: This covers all routine reactive and preventive maintenance at County -owned and operated facilities. 2. Mail Services: Staff in facilities receive mail for the entire County and redistribute it to County funds and departments. 3. Custodial Services: Staff provide custodial and janitorial services to County - owned facilities. Currently, the County recovers these costs through facility and custodial charges. The facility charges account for both maintenance and mail service costs and is converted into a per -square -foot charge by dividing total costs by the total serviceable square feet. Funds and departments are then assessed a charge based on their associated square footage. Similarly, the custodial charge is derived by dividing total custodial costs by total serviceable square feet, with funds and department assessed a charge based on associated square feet. Additional factors for 24 hr. service, or other items may be added to a facility. This methodology was developed several years ago and has not been reviewed. While square footage is a traditional way to allocate facility support, it is not the only mechanism. The County has recently implemented a work order system, which tracks the hours spent per facility / department. The hours spent is typically a better indicator, as even though a facility might be large, it might not need as much support as smaller offices or facilities. Additionally, the square footage of the facility does not capture the level of support provided in relation to mail services. For custodial services, while square footage can serve as a good proxy, the best indicator is the number of hours spent per week at a facility. A facility might be large, but not heavily used by the public, and as such, may not require significant custodial support, while others that are more publicly used, can require significant effort and support. The project team is proposing to modify each methodology to better capture the level of effort spent by staff and the costs associated with each service area. The facilities methodology should only account for facility maintenance costs and utilize a Matrix Consulting Group 4 Results of Internal Service Fund Review LEWIS COUNTY, WA combination of facility work order hours and facility square footage. By utilizing a combination of hours and square footage for maintenance support, the County is better able to capture the nuance of large facilities, as well as those that are highly trafficked. Mail services should become its own allocation and be allocated equally to all departments that can and do receive mail. This equal to all methodology ensures that all departments share in the services being provided. Finally, custodial services should utilize weekly hours of service by facility as its allocation metric. This will ensure that services associated with highly trafficked areas are appropriately recognized. In addition to these components, the County is interested in a facility replacement rate for major systems. A set aside for facility replacements is typically based on the annual depreciation associated with a facility. However, depending on the facility, some may not need replacement, so it is recommended that a deeper look be taken at the facility replacement plan. The County should conduct a facilities conditions assessment, identify the systems and facility needs, and then use that to develop a replacement rate. Recommendation: Facility allocation methodology is being proposed to be based on facility work orders, facility square footage, equal to all departments (mail services), and custodial hours worked per week (custodial services). Facility Replacement Rate (ER&R) should be based on a facilities condition assessment and the anticipated need for facility and system replacements. Information Technology (IT) The Information Technology (IT) department manages the County's network, applications, and IT infrastructure, and allocates this support to County funds and departments based on a rate per type of device. There is a maintenance and systems (M&S) rate, there is an IT replacement (IT ER&R) rate, and then there is an equipment replacement (ER&R) rate. While a rate per device type can capture the different levels of support, it does not fully capture the support provided by IT to county funds and departments. The number of assets per department is still important, as more assets generally means more support. However, the County also has a ticketing system. The ticketing system allows the County to track the number of requests by fund and department. These requests better capture the variation in the level of work associated with each department. The IT Department also supports all County departments, as each employee has an email address and access to the County's various applications and systems. Therefore, another Matrix Consulting Group 5 P.7 Results of Internal Service Fund Review LEWIS COUNTY, WA mechanism to capture IT's support is based upon the County's full-time equivalents (FTE) per fund and department. The project team is proposing that for its maintenance and systems (M&S) rate the IT Department move away from a rate per device, and instead allocate its support to funds and departments based on a combination of the number of tickets per fund / department, number of IT assets per fund / department, and number of FTE. The IT ER&R rate is for all countywide systems. The original intention behind the rate was to try and capture the rate associated with countywide systems such as servers, or network switches. However, the County does not currently track those systems and does not have an appropriate tracking mechanism for the specific systems that are intended to be replaced. Therefore, it is recommended that this component of the rate be eliminated. If and when the County needs to purchase or replace assets that are not identified as a departmental asset, it can capture that as an annualized cost as part of the general IT budget, or a one-time capital expense, and then tie it into the larger ER&R rate. The general ER&R rate for IT assets, is for setting aside money annually to replace the assets (laptop, desktop, printer, etc.) when it is due for replacement. The.County's current methodology is to come up with a rate per asset and then summarize the total charges per fund and department. The replacement rate per asset is based on the projected replacement cost divided by the anticipated lifecycle of the asset. There is no change to the proposed methodology. The only item for consideration is to ensure that the projected replacement costs are reflective of current costs. This should continue to be assessed and tracked separately for greater transparency and financial accountability of use of funds. Recommendations: IT should alter its methodology from a per device rate per department to be based on # of IT Tickets, # of IT assets, and # of FTE, to capture the variety in the level. of effort. The IT ER&R for countywide assets should be eliminated and incorporated into the M&S budget or covered through capital expenses. The ER&R rate for IT should be retained and continue to be based on the type of asset, °its -anticipated -replacement costjand-ser.V-ioe-life.-it-should_be-identifaed.at�he-ass-et level and then consolidated at fund and department. The rate should continue to be charged separately to allow for greater transparency and financial accountability. Matrix Consulting Group on M Results of Internal Service Fund Review LEWIS COUNTY, WA "it The Fleet Internal Service Fund allocates costs associated with the Motorpool Shop and the Central Shop. These costs cover fuel, staffing, and preventive / reactive maintenance for County -owned vehicles and equipment. The County currently charges two separate rates: Motorpool and Central Shop. Within these rates, the County also incorporates the replacement component of the vehicles and equipment. The County tracks all fuel and repairs and maintenance by asset. The Motorpool shop allocates costs based on Motorpool maintained assets, and the Central Shop based on Central Shop maintained assets. As part of this process, the County also projects the replacement cost. This replacement cost is reviewed and updated annually to reflect the most recent price for replacing each vehicle or equipment. However, the County deducts an anticipated surplus from the anticipated replacement value, as a credit to the department. In addition to crediting the surplus, the County also deducts the ending balance of the asset. This is the amount that an asset has paid into the County to date. This ending balance is all-inclusive of maintenance and replacement but is only deducted from the replacement rate. The overall methodology in use by the County is consistent with typical practices. The fuel is based on actual fuel charges, and repairs / maintenance on actual repairs and maintenance. Labor and other overhead is allocated based on total number of assets. However, unlike other internal service funds, Fleet comingles maintenance and operations with replacement. It is recommended that Fleet have three rates: Motorpool, Central Shop, and ER&R. The ER&R rate would capture the fleet replacement component. The Fleet Replacement rate should also be based on the anticipated replacement value, netting out only the surplus. The ending balance of the contribution should not be considered when calculating the annual replacement chargeback. The balance that is being contributed for fleet replacement still needs to be tracked by asset, but only to understand when the vehicle / equipment comes due for replacement, the monies are available for that asset. Furthermore, the replacement rate should be smoothed or annualized based on an anticipated replacement rate for the year the vehicle / equipment is due for replacement. For example, if a vehicle was bought in 2019, but is due for replacement in 2027, the replacement cost should be based on the 2027 price, not the 2019 or the 2024 price. This anticipated replacement cost is typically calculated by taking the original price and applying a compounded inflationary factor. The anticipated replacement price then deducts any anticipated surplus to calculate the remaining replacement value. The Matrix Consulting Group 7 E Results of Internal Service Fund Review LEWIS COUNTY, WA replacement value is then divided by the lifecycle of the vehicle / equipment to come up with an annual replacement rate. This annual replacement rate would not change from year-to-year until the vehicle / equipment is replaced or retired. Additionally, the County currently tracks replacement rate as part of the annual rate for all vehicles / equipment other than those for the Sheriff department and Public Works. For those departments, no annual set aside is developed, but rather the full capital costs are charged in the year(s) that replacement vehicles / equipment is purchased. This was originally developed due to Commissioner and County staff concern that since replacement was not tracked separately, the fund balance would grow too quickly and too large and could be comingled with operational costs. This proposed modification would allow the County to track replacement fund(s) separately from its maintenance fund(s) and ensure that the fund balance is restricted to be used only for equipment / vehicle replacement. It is a best practice to account for Fleet Maintenance and Fleet Replacement separately. This modification will also allow the County to incorporate all vehicle / equipment replacements (Sheriff and Public Works) and treat them consistently. Recommendations: Fleet Maintenance costs can continue to be allocated based on the existing methodology of fuel, maintenance and repair charges, and overhead costs based on number of assets. Fleet Replacement should be separated from Central Shop and Motorpool rates and charged to funds / departments separately. The ending balance should be removed as a component of the calculation for the Fleet Replacement Chargeback. The Fleet Replacement Chargeback should be based on the anticipated replacement value of the vehicle / equipment, rather than a changing rate each year. This will allow for greater consistency in setting aside funding and should be set up as a restricted fund balance to be used only for vehicle / equipment replacement. This replacement rate should also incorporate Sheriff and Public Works vehicles / equipment. Summary of Internaa Service Fund Review --fhrough­ms process, it was etermin�lce -fhat oft -he six b) i—nTernal service funds -in the County, three (3) — Self -Insurance, Human Resources, and Radios should be eliminated and captured through other funding mechanisms. For the remaining three (3) funds that remain as internal service funds — IT, Fleet, and Facilities, methodology changes have been proposed. These methodology changes better align the funds with industry Matrix Consulting Group mile] Results of Internal Service Fund Review LEWIS COUNTY, WA practices, as well as capture the level of effort spent by County staff in supporting all funds and departments. Detailed ISF rate model(s) were developed for the three (3) remaining ISF funds and provided to County staff under separate cover. These model(s) incorporate the proposed recommendations and allow County staff to implement the proposed changes for the FY2025 budget cycle. Matrix Consulting Group 9 P.11 Lewis County Facilities Memo: Facilities Rates 7/12/2024 Facilities: 571 NW Prindle St Chehalis WA 98532 We have been working with Matrix to develop a new and improved rate allocation model based on best practices. The budget model presented represents the new rate allocation model being implemented. The Facilities Internal Service Fund captures the salaries, benefits, services, and supply costs associated with three distinct areas of service: 1. Facility Maintenance: This covers all routine reactive and preventive maintenance at County -owned and operated facilities. 2. Mail Services: Staff in facilities receives mail for the entire County and redistributes it to County funds and departments. 3. Custodial Services: Staff provide custodial and janitorial services to County owned facilities. Currently, the County recovers these costs through facility and custodial charges. The facility charges account for both maintenance and mail service costs and is converted into a per -square -foot charge by dividing total costs by the total serviceable square feet. Funds and departments are then assessed a charge based on their associated square footage. Similarly, the custodial charge is derived by dividing total custodial costs by total serviceable square feet, with funds and departments assessed a charge based on associated square feet. Additional factors for 24 hr. service, or other items may be added to the facility. This methodology was developed several years ago and has not been reviewed. While square footage is a traditional way to allocate facility support, it is not the only 0 360.740.1459 c 360.880.59.44 41ex Murray, Admnistratorof Facilities P.12 mechanism. The County has recently implemented a work order system, which tracks the hours spent per facility / department. The hours spent are typically a better. indicator, as even though a facility might be large, it might not need as much support as smaller offices or facilities. Additionally, the square footage of the facility does not capture the level of support provided in relation to mail services. For custodial services, while square footage can serve as a good proxy, the best indicator is the number of hours spent per week at a facility. A facility might be large, but not heavily used by the public, and as such, may not require significant custodial support, while others that are more publicly used, can require significant effort and support. To mitigate the above issues the Matrix project team proposed to modify each methodology to better capture the level of effort spent by staff and the costs associated with each service area. The facilities methodology should only account for facility maintenance costs and utilize a combination of facility work order hours and facility square footage. By utilizing a combination of hours and square footage for maintenance support, the County is better able to capture the nuance of large facilities, as well as those that are highly trafficked. Mail services now have its own allocation and can be allocated equally to all departments that can and do receive mail. This equal to all methodology ensures that all departments share in the services being provided. Finally, custodial will utilize weekly hours of service by facility as its allocation metric. This will ensure that services associated with highly trafficked areas are appropriately recognized. By implementing the above Rate Allocation Model, we believe that we can better achieve equity between customers, while properly accounting for and distributing costs based on customers' needs. In working through the Facilities Budget, it has become very clear that the previous Facilities Budgets were based primarily on the focus of the "whole pie" (Org) cost while neglecting to track, update, or modify the "slices" (Object) cost. The further we dove into the budget the more it was realized that individual line items were not a reflection of reality. A primary goal for 2025 is to clean up the Objects and gain a clear reflection of actual costs. The primary changes seen on the Facilities 2025 budget reflect these captured tr-ua-c�s- The primary increases identified by Facilities reflect the projected increase in costs as communicated by service providers, and the consumer price index. Items like postage (USPS released increase), Power, and Natural Gas, ;and insurance increases, as well as the expected increase/inflation of goods, materials, and supplies. Line items that decreased are primarily a reflection of our capturing true costs and cleaning up the line items within our budget. P.13 An ongoing challenge faced with the Facilities budget is the large changes that can occur due to factors not yet established such as the cost of Fuel, and again materials and supplies. The submitted budget represents the true cost to support and manage the services, facilities and assets under the Facilities Department responsibility. Over the last 2 years we have onboarded a large amount of additional square footage that affects both our maintenance and custodial services. Even with the addition of this square footage we have been successful in redistributing funds to appropriately reflect the reality of our work. Even with the large increase of square footage, additional assets and buildings, as well as additional services we have been able to minimize our overall increase to a conservative increase of only 3.5% year over year. Alex Murray Facilities Administrator P.14 Fund Dept Program Description Work Order Support Sq. Ft. Support Mail Support Custodial Support Total Facilities Maint. Allocate( Minus Mailroom 0010 001 0151160 BOCC $63,777 $3,230 $4,936 $19,146 $91,089 $86,153 0010 001 0151423 BUDGET $15,166 $563 $4,936 $19,146 $39,810 $34,874 0010 002 0251310 AUDITOR ADMIN $52,877 $7,117 $4,936 $19,146 $84,076 $79,140 0010 002 0251423 AUDITOR FINANCIAL SERVICES $0 $0 $0 $0 $0 $0 0010 002 0251430 AUDITOR RECORDING- SEE 1590 $0 $0 $0 $0 $0 $0 0010 002 0251481 AUDITOR LICENSING $0 $0 $0 $0 $0 $0 0010 003 0351440 ELECTIONS $0 $0 $0 $0 $0 $0 0010 004 0451424 ASSESSOR $53,823 $5,846 $4,936 $19,146 $83,751 $78,815 0010 004 0451481 OPEN SPACE -ASSESSOR $0 $0 $0 $0 $0 $0 0010 005 0551810 HR $14,097 $3,373 $4,936 $19,146 $41,552 $36,616 0010 006 0651422 TREASURER $18,959 $3.680 $4,936 $19,146 $46,721 $41,785 0010 007 0751230 CLERK $22,285 $24,084 $4,936 $43,459 $94,763 $89,828 0010. 008 0851221 SUPERIOR COURT $92,189 $38,796 $4,936 $43,459 $179,379 $174,444 0010 009 00951240 DISTRICT COURT $38,635 $38,796 $4,936 $43,459 $125,825 $120,889 0010 010 01051531 PAO ADVICE $28,953 $28,057 $4,936 $43,459 $105,404 $100,469 0010 010 01051570 PAO CRIME $0 $0 $0 $0 $0 $0 0010 010 01051580 PAO CHILD SUPPORT $15,433 $2,181 $4,936 $19,146 $41,695 $36,759 0010 012 01251900 SELF INS ADMIN $0 $0 $0 $0 $0 $0 0010 013 01351890 INTERNAL SERVICES -ADMIN & CAPF $14,150 $1,954 $4,936 $19,146 $40,186 $35,251 0010 014 014A1591 PUBLIC DEFENSE $0 $0 $0 $0 $0 $0 0010 014 014A1592 TRIAL COURT IMP. $0 $0 $0 $0 $0 $0 0010 015 01551310 COUNTYADMIN $0 $12,231 $4,936 $0 $17,166 $12,231 0010 020 02052110 CIVIL SERVICE $0 $0 $0 $0 $0 $0 0010 021 021A2110 SHERIFF ADMIN $30,038 $48,097 $4,936 $54,531 $137,602 $132,666 0010 021 021M2170 SHERIFF TRAFFIC $0 $0 $0 $0 $0 $0 0010 022 022A2310 JAIL ADMIN $693,988 $125,081 $4,936 $125,947 $949,952 $945,016 0010 023 02352710 JUVENILE ADMIN $93,532 $53,370 $4,936 $38,753 $190,590 $185,654 0010 052 05255430 ANIMAL SHELTER $29,296 $8,036 $0 $0 $37,332 $37,332 0010 053 0 BOUNDARY REVIEW BOARD - CASUA $0 $0 $0 $0 $0 $0 0010 060 06056320 CORONER $29,371 $5,748 $4,936 $11,072 $51,128 $46,192 0010 070 07057121 WSU EXT. SERVICES $1,069 $4,599 $4,936 $6,920 $17,523 $12,588 0010 080 08051424 BOARD OF EQUALIZATION - CASUAL $0 $0 $0 $0 $0 $0 1010 0 10152510 DEM $16,143 $1,459 $4,936 $19,146 $41,684 $36,748 1010 0 10152560 DEM EMPG $0 $0 $0 $0 $0 $0 1030 0 10356520 VETERANS $0 $0 $0 $0 $0 $0 1040 0 10456210 SOCIAL SVCS $0 $0 $0 $0 $0 $0 1050 0 10557220 LAW LIBRARY $0 $0 $0 $0 $0 $0 1060 0 10657370 SWWF $107,408 $2,727 $4,936 $0 $115,071 $110,135 1070 0 10752810 E911 COMMUNICATIONS $23,896 $6,245 $4,936 $19,146 $54,223 $49,287 1080 0 10851422 TREASURER 0&M $0 $0 $0 $0 $0 $0 1100 0 11051221 DRUG CRT SC $29,654 $0 $0 $0 $29,654 $29,654 1100 0 11051222 DRUG CRT FAMILY COURT $0 $0 $0 $0 $0 $0 1100 0 11051230 ITACLERK $0 $0 $0 $0 $0 $0 1100 0 11OJ1221 ITA COM SUPERIOR COURT $0 $0 $0 $0 $0 $0 1100 0 110J1535 ITA - PAO $0 $0 $0 $0 $0 $0 1100 0 11052360 DRUG COURT JAIL $0 $0 $0 $0 $0 $0 1120 0 11255360 NOXIOUS WEED $16,307 $3,258 $4,936 $11,072 $35,573 $30,638 1160 0 11657680 PARKS & REC $0 $0 $0 $0 $0 $0 1170 0 11754310 ROADSADMIN $79,346 $14,435 $4,936 $52,593 $151,309 $146,374 1170 0 11754490 ROADS ENG 0&A $0 $0 $0 $0 $0 $0 1170 0 11754290 ROADS MAINT O&A $254,339 $131,907 $4,936 $0 $391,181 $386,245 1170 0 117G4440 ROADS GIS $0 $0 $0 $0 $0 $0 1210 0 12152410 COMM DEV $46,555 $26,806 $4,936 $37,369 $115,666 $110,730 1210 0 12152420 COMM DEV BLDG INSP $0 $0 $0 $0 $0 $0 1210 0 12155860 COMM DEV PLANNING $0 $0 $0 $0 $0 $0 1370 0 0 CRIME VICTIM/WITNESS ASSISTANC $0 $0 $0 $0 $0 $0 1410 0 0 COVID-19 RESPONSE $0 $0 $0 $0 $0 $0 1420 0 0 AMERICAN RESCUE PLAN ACT $0 $0 $0 _$0 $0 $0 1520 0 0 ANIMAL SHELTER DONATIONS $0 $0 $0 $0 $0 $0 1590 0 15951430 AUDITOR O&M -RECORDING $0 $0 $0 $0 $0 $0 1900 0 19056210 PUBLIC HEALTH ADMIN $76,432 $53,482 $4,936 $26,758 $161,608 $156,672 1910 0 19156214 FOUNDATIONAL PUB HEALTH SRVCS $26,302 $12,152 $4,936 $47,519 $90,909 $85,973 1980 0 19855730 TOURISM PROMOTION $19,193 $17,123 $0 $11,072 $47,388 $47,388 3010 0 30151830 CAPITAL MAINTENANCE & REPAIR $0 $0 $0 $0 $0 $0 3250 0 0 GEN GOV CAPTL CONSTRUCTION $0 $0 $0 $0 $0 $0 4010 0 401A3700 SOLID WASTE $48,051 $24,437 $4,936 $0 $77,423 $72,488 4050 0 40554680 PACKWOOD AIRPORT $1,405 $0 $0 $0 $1,405 $1,405 4070 0 40754680 SOUTH COUNTY AIRPORT -Toledo $15,565 $4,550 $4,936 $0 $25,050 $20,114 -4f00---G 0-MIDDLEFORK-WATER=SEWER-SYSTEI $0 $U 4io $0 4200 0 42053400 VADER WATER $4,985 $0 $0 $0 $4,985 $4,985 5010 0 50154870 MOTOR POOL $9,441 $29,109 $4,936 $16,608 $60,094 $55,159 5010 0 50154860 CENTRAL SHOP $130,544 $23,850 $4,936 $0 $159,329 $154,393 5070 0 507A1830 FACILITIES ADMIN $0 $0 $0 $0 $0 $0 5070 0 507C1830 FACILITIES CUSTODIAL $0 $0 $0 $0 $0 $0 5070 0 507L1830 FACILITIES MAIL ROOM $0 $0 $0 $0 $0 $0 5070 0 507M1830 FACILITIES MAINT $0 $0 $0 $0 $0 $0 5120 0 512P1890 RISK PDR $38,576 $1,636 $4,936 $38,292 $83,439 $78,504 5200 0 52052880 RADIO SERVICES $1,321 $1,786 $4,936 $1,522 $9,565 $4,629 5400 0 54051881 INFORMATION TECHNOLOGY $110,382 $12,999 $4,936 $26,758 $155,075 $150,139 0 0 Other Other $91,501 $36,530 $0 $0 $127,031 $127,031 $2,454,986 $818,329 $167,811 $872,081 $4,313,207 $4,145,396 P.15 IT Services To: BOCC From: Matthew Jaeger, Director, IT Services, Interim HR Director Date: 7/12/2024 Re: 2025 IT Services Inter -Fund Rates Internal Service Provided Technology Services Operating Expenses Overview 360 NW North Street Chehalis WA 98532 2024 Revised 2024 Proposed Difference Salaries & Benefits $1,974,492 $2,000,478 $25,986 Other OpEx (Licenses, Subscriptions,etc..) $863,793 $892,334 $28,541 Totals Operating Expeditures $2,838,285 $2,892,812 $54,527 Explanation of Rates and Methodology We are presenting a new methodology based on recommendations from Matrix Consulting Group. While our previous methodology was reasonably sound and appropriate with a combination of direct charges and distributed rates based off assets, the recommendation now is to utilize our support requests and FTEs along with assets to distribute M&S rates. I agree with their recommendation as our data collection over the last several years allows us to more accurately reflect our rates utilizing 3 major metrics instead of 1. M&5: Maintenance and Support of County infrastructure, staff salaries, building costs, software licensing, development services, network services, hardware, network and cyber security, technology solutions, technical support, and other expenses associated with the IT Department. For 2025, we still have direct costs charged to departments (specific apps, software, subscriptions, support) and will distribute the rest of the rates through a percentage calculated as 10% Support Ticket Requests_(p-revio-us-TD_tickets)JOY6 Total Assets,- ndl41)lo-Department_FTES.ouat._These _ percentages were determined to correlate the best when comparing 2024 rates. Over the next several budget cycles, I would expect these percentages to be adjusted as we work with the new model. While total assets will always hold the majority calculation, Support tickets and FTE count would likely rise slightly in the Future to better balance the new method. o 360.740.1247 Matt Jaeger Director, IT Services P.16 In addition, we also collect M&S Rates from our Local Title Companies for specific access they need as well as the Police and Fire departments for their VPN connections back into the County. Finally, we also appropriately charge separate M&S rates to each individual department that have specific departmental needs that would not be appropriate to include in our general rates we set for equipment to ensure one department is not subsidizing another department for a service not used by them. Examples, we line -item charge rates for Spillman Support, Laserfiche usage, custom application support, DB support, and other various charges. ER&R. Collected for computer Equipment Repairs and Replacements. This is intended for existing equipment. For 2025, due to significant continued equipment cost increases, we also worked with Matrix to rework expected life -cycle and replacement costs to more accurately reflect the current marketplace and ensure we can continue to replace equipment as appropriate. IT ER&R: Matrix recommended that we eliminate IT ER&R as it is not tied to specific equipment. The purpose was to cover our major switching infrastructure, servers, backup, and storage solutions. The County did create the Technology Committee fund, however, there is no Funding (revenue) source. Options: 1. Incorporate major infrastructure expenses into M&S rates when they occur based on our strategic plan. The cons to this method is certain years can have significant rate fluctuations to the departments. 2. Determine another source of revenue to appropriately fund the Technology Committee Fund. **For 2024, IT already had to push back the replacement of our main Dell EMC Storage array with an estimated cost of $600,000. We did this by extending our support to run this system for 8 years. (Max lifecycle) We do not have sufficient funding for this and other major projects on our strategic plan over the next 2 - 5 years. Our 5 year strategic plans identifies nearly $2,000,000 in projects. Justification for any increases and future replacements Our preliminary Salaries & Wages / Benefits increased $25,896 compared to 2024 Revised Budget numbers. IT Services reduced our FTE count due to my appointment as Interim HR Director. We are not requesting additional FTEs for 2024. These increases include annual steps and approved COLA. Our preliminary operating expenditures excluding Salaries/Benefits increased $28,541 compared to 2024 Revised Budget numbers. This includes contract/licensing increases, typically 5%. 1 was able to keep most all contracts neutral this year, and the primary driver of this increase is a Tyler Munis Support Contract. I had budgeted $160,000 for 2024 and this was the firstyearwe incorporated the Tyler Munis Contracts in our standard M&S rate methodology. I had already slightly under -budgeted the contracts for 2024 and the estimated Tyler Munis Licensing and Support Costs for 2025 are nearly $190,0-00. Total Operating Expenditure Increase - $54,527, approx 1.9%. ER&R Our preliminary ER&R Collections increased by $103,736. Our evaluation With Matrix refreshed lifecycle management and current replacement costs to better reflect thecurrent market, I've, significant increases in previous years by attempting to extend the lifecycles by 12 - 24 months; equipment. It's strongly suggested to ensure we are always reflecting the most accurate mode_ on preferred lifecycle and marker costs, g based Cost Saving measures reviewed for 2025 - ARPA projects are -generally complete and not a significant driver for any cost savings in 2025. - Reviewed additional grant opportunities. They are reviewed as best as possibLe,r but some are not feasible to pursue due to complexity, or time needed to appropriately apply and secure funds. P.17 We did receive grant funding for 2024 for our Cyber Security Response plan for the County which is savings as this was a needed project regardless of funding. Contracts for services and software licenses were reviewed to determine if there was any non- critical services that we could eliminate. We maintain very strict control over our contracts and are running only what we believe are critical and necessary licenses and subscriptions to maintain the needed level of service for Lewis County. Unfortunately, due to the economic conditions and inflation, most vendors are increasing year overyear costs by an average of 6%. We continue to negotiate where possible and utilize State contracts if the pricing is better. Under/Over collection for 2023 Historically, if we year-end with a small operational savings, these funds were kept in our IT ER&R balance for County -Wide beneficial infrastructure replacements as to not conflict with the Washington State RCW that prohibits any department benefiting in any financial manner whatever by an appropriation or fund made for the support of another. - As of 2023, we are no longer keeping funds in our IT ER&R and IT ER&R is also being eliminated. Any over/under collections will be reconciled in the next budget cycle. Matthew A. Yaeger 7/12124 Matthew A. Jaeger, IT Director Date P.18 IT M&S AND ER&R 2025 ISF RATES CONTACT: Matt Jaeger UPDATED: FUND/DEPT # ORG DEPARTMENT NAME MAINT. / SERVICE /MUNIS- 591010 ER&R- 595020 2025 2024 Final 2025 Prelim CHANGE 2024 FINAL Prelim CHANGE 001 00151160 BOCC 45,056 48,158 3,102 4,272 5,285 1,013 001 00151423 BUDGET 18,552 15,211 (3,341) 1,488 2,535 1,047 002 00251310 AUDITOR ADMIN 11,280 14,484 3,204 972 1,155 183 002 00251423 AUDITOR FINANCIAL SERVICES 44,972 36,269 (8,703) 5,160 11,095 5,935 002 00251430 AUDITOR RECORDING- SEE 1590 - - - - 002 00251481 AUDITOR LICENSING 10,980 8,447 (2,533) 864 840 (24) 003 00351440 ELECTIONS 28,332 26,352 (1,980) 3,036 3,120 84 004 00451424 ASSESSOR 119,292 121,082 1,790 9,492 11,290 1,798 004 00451481 OPEN SPACE -ASSESSOR - - - - - 005 00551810 HR 30,642 38,658 8,016 2,796 4,760 1,964 006 00651422 TREASURER 62,597 71,327 8,730 6,144 6,870 726 007 00751230 CLERK 112,983 130,946 17,963 11,712 13.060 1,348 008 00851221 SUPERIOR COURT 92,732 97,451 4,719 27,860 29,940 2,080 009 00951240 DISTRICT COURT 140,401 143.752 3,351 32,612 34,595 1,983 010 01051580 PAO CHILD SUPPORT - - - - 010 010A1535 PAO ADMIN 132,301 146,256 13,955 12,084 25,175 13,091 012 01251900 SELF INS ADMIN 5,046 4,433 (613) 660 - (660) 012 012S1900 SELF INS SAFETY - 013 01351890 CENTRAL SVCS 7,800 5,404 (2,396) 792 280 (512) 014 014A1592 TRIAL COURT IMP. 312 1,140 828 168 300 132 014 014A1591 PUBLIC DEFENSE 3,660 - (3,660) 288 - 015 01551310 COUNTYADMIN 18,912 56,856 37,944 1,716 3,035 1,319 020 02052110 CIVIL SERVICE - - - - - 021 021 A21 10 SHERIFF ADMIN 313,020 270,446 (42,574) 27,132 47,635 20,503 021 021D2121 SHERIFF RSOA - - - - 021 021M2170 SHERIFFTRAFFIC - - - - - 022 022A2310 JAIL ADMIN 149,808 193,526 43,718 14,460 18,865 4,405 023 02352710 JUVENILE ADMIN 117,761 138,861 21,100 10,212 14,500 4,288 052 05255430 ANIMAL SHELTER 18,600 17,571 (1,029) 1,548 1,595 47 060 06056320 CORONER 30,432 30,915 483 2,676 3,985 1,309 070 07057121 WSU EXT. SERVICES 37,992 23,900 (14,092) 3,360 4,050 690 080 08051424 BOE OPERATIONS - - Total General Fund 1,553,463 1,641,445 87,982 181,504 243,965 62,749 1010 10152510 DEM 12,652 33,787 21.135 840 1,850 1,010 1010 10152560 DEM EMPG 8,160 - (8,160) 684 910 226 1030 10356520 VETERANS 3,660 3,179 (481) 288 435 147 1040 10456210 SOCIAL SVCS 22,512 33,519 11,007 1,884 3,250 1,366 1050 10557220 LAW LIBRARY 7,320 2,280 (5,040) 576 440 (136) 1060 10655730 SWWF DLC - - - - - 1060 10657330 SWWF INTERIM - - - - - - 1060 10657370 SWWF 24,872 37,432 12,560 2,028 2,240 212 1070 10752810 E911 COMMUNICATIONS 194,724 140,430 (54,294) 61,340 66,595 5,255 1080 10851422 11051221 TREASURER O&M DRUG CRT SC 4,200 15,972 5,099 18,066 899 2,094 504 1,632 440 1,715 (64) 83 1100 1100 11051222 DRUG CRT FAMILY COURT - - - - - 1100 11051230 ITA CLERK 4,160 1,640 (2,520) 288 375 87 1100 110J1221 ITA COM SUPERIOR COURT 3,660 - (3,660) 288 375 87 1100 110J1535 ITA -PAO 1,000 (1,000) - 1100 11052360 DRUG COURT JAIL - - - -1100 11-056229 11255360 NURSEFAMILY-PAR-T-NERSHIP NOXIOUS WEED 19,452 - - - - 21,286 1,834 1,932 2,330 - 398 1120 1160 11657680 PARKS & REC 23,900 30,737 6,837 1,656 2,260 1170 11754310 ROADS ADMIN 104,168 101,157 (3,011) 8,748 9,605 857 1170 11754490 ROADS ENG O&A 112,020 78.742 (33,278) 9,012 21,020 12,008 1170 11754290 ROADS MAINT O&A 111,397 101,489 (9,908) 8,532 8,140 (392) 1170 117G4440 ROADS GIS 39,279 30,624 (8,655) 3,804 6,710 2,906 1210 12152410 COMM DEV 56,772 53,235 (3,537) 4,332 5,555 1,223 1210 12152420 COMM DEV BLDG INSP 34,632 35,278 646 1,992 2,160 168 1210 12155860 COMM DEV PLANNING 30,852 19.978 (10,874) 2,892 2,850 (42) 1590 15951430 AUDITOR O&M - RECORDING 23,280 15,754 (7,526) 2,268 1,692 (576) 1900 19056210 PUBLIC HEALTH ADMIN 130,067 185,114 55,047 12,132 23,110 10,978 P.19 IT M&S AND ER&R 2025 ISF RATES CONTACT: UPDATED: ORG Matt Jaeger DEPARTMENT NAME MAINT. ( SERVICE IMUNIS- 591010 ERBR- 595020 FUNDIDEPT # 2025 2024 Final 2025 Prelim CHANGE 2024 FINAL Prelim CHANGE 4010 401A3700 SOLID WASTE ADMIN 66,792 75,513 8,721 5,412 6,895 1,483 4010 401T3700 SOLID WASTE TRANSFER STATION 7,620 - (7,620) 684 - (684) 4010 40155370 SOLID WASTE LANDFILL - - - - - - 4070 40754680 SOUTH COUNTY AIRPORT 4,260 5,003 743 504 540 36 4200 42053400 VADER WATER 3,960 6,930 2,970 396 540 144 5010 50154870 MOTOR POOL 33,662 43,271 9,609 2,208 3,730 1,522 5010 50154860 CENTRAL SHOP 22,500 23,809 1,309 1,944 2,730 786 5070 507A1830 FACILITIES ADMIN 42,444 55.851 13,407 4,032 5,720 1,688 5070 5071-1830 FACILITIES MAIL ROOM 3,660 2,682 (978) 288 - (288) 5070 507M1830 FACILITIES MAINT 31,960 28,812 (3,148) 1,728 280 (1,448) 5120 512P1890 RISK PDR 7,620 14,877 7,257 684 1,955 1,271 5200 52052880 RADIO SERVICES 14,940 8,913 (6,027) 1,260 1,620 360 Total Other Funds 1,228,129 1,214,487 (13,642) 146,792 188,067 40,671 Total Rate 2,781,592 2,855,932 74,340 328,296 432,032 103,420 P.20 1t I 351 NW North Street 911 Communications De)Oartment Chehalis WA98532 LEIW�ili COUN)T)Y TO: Board of County Commissioners (BOCC) FROM: Jennifer Libby -Jones, Director of 911 Communication DATE: July 10, 2024 SUBJECT: Preliminary Budget Development for 2025 Internal Service Rates Radio Services provides technical assistance in the procurement of new user equipment, preventative and corrective maintenance of user equipment and design, procurement, installation and maintenance of radio infrastructure which supports user operations. Radio Services also provides configuration and maintenance of 911 Communications integrated dispatch control equipment. 2025 Budget There was a minimal increase of $12,360 to the budget for 2025 due to personnel salary increases. Rate Methodology During the evaluation of 2025 Internal Service Rates with Matrix Consulting, it was determined that the previous rate model was based on outdated information obtained from previous radio staff manual timekeeping tracking. Current radio staff was able to provide information obtained from their Fiix asset and ticket tracking software, but this software is more tailored for tracking assets and information about the assets more than actual hours worked. Matrix was initially only able to provide an updated model based on department radio assets based on the data available to them. This model significantly increased rates to the Sheriffs department and reduced rates to Communications. This was immediately flagged as not accurate to the actual workload by staff. Radio Services spends most of its effort maintaining communications equipment but this time, again, is not necessarily reflected in the ticketing system as staff is not tracking for every hour worked. P.21 After further review internally and with Matrix, the following methodology was developed: • Determine per asset cost formula based on work required to maintain equipment and personnel costs. These are separate for Communications equipment and other users due to the increased complexity of core communications equipment. • Starting with the total budget, reduce amount by Communications portion, allocate remaining departments based on a weight of department assets divided by total assets. Matrix advised that this model more accurately reflects the level of effort associated with the maintenance of radio assets. These changes are reflected in the updated 2025 Radio Services Internal Service Rates based on an independent Radio Services Budget. Proposal to Combine Radio Services with Communications Radio Services was originally part of the Communications budget. In discussions with County staff, it was separated into its own fund due to accounting issues with ER&R contributions that could not be accurately separated using past accounting systems. That is not the case with current accounting software. Staff support moving Radio Services back under the Communications budget due to the bulk of their workload being dedicated to maintaining core communications equipment. This may also result in budget savings in administrative costs. Consider Alternative Billing Models to Internal Services Rates With proposed changes to the governance model of Communications, it maybe beneficial to consider alternatives to billing County departments for Radio Services costs. Option 1: Fixed -fee Support Agreement A fixed rate yearly agreement to provide set services by department could be executed based on a standard formula. This could follow the methodology determined for Internal Service Rates or a similar alternative. Examples of this include Public Works GIS billing to Communications for roads/MSAG maintenance. Option 2: Direct Time and Materials Billing Departments using radio services would have a support agreement with Communications to provide radio preventative maintenance and repair services at a set per hour billing rate and would pay any direct equipment costs. While this model reflects the true costs of services provided and equipment costs, departments ll-nnt-initi'ally h-av'e lea bn getz�tirn to n�niti l years. — Option 3: Interlocal Agreement Assuming a full split of Communications from the County, Radio Services to departments could be performed under an Interlocal Agreement based on any of the methodologies above. P.22 O Cn N Cp O r 0 W 0 d 0 c a N O �1 1 � 4 N N N Cn Cfl 0000 O O O -0 m m m QC) mU) m z z =v � Fri Cl) m -ri c < _ (D n D m sv Cf) Q m cn C A o 0 1® N O CD ' -� M Cn O Cp - - O) -P IV N -.L 00 00 co Cfl co W 11 O 00 00 A A A ul v cn �D -� O Cn W �1 Cn O N V �l -P J Cn - a)-N w N W W P. -� �1 " W O .P j 00 co W N O M� N 4�, N (J) V 0 0 0 c 0 0 O W N cn ul - D z p O N N D -I --I_ 0 CA Ill m 0 0 0 0 0 �c-c- O c D= o m 1 � < F m -o O Z n X o m o Tl o 9 N oz� m z z] z C- Z z D> ( v X a m m cn m n cn N O N w N O "' N �1 i m!^ 90P) C3� Cb co Cn V, cn N -1 cn 11 co W 00 1 >v O Q 0 r N O N C11 fD � n lD N OCp Oo O �i m N Cn �l N r v N O (C) W Co cn N m � 4 °� O o r 0 2 Z G) m _ 3 C) 00 W W 00 N O W O N 0-) WAI EM (FLEtT),2025 )NTACT: Josh Metcalf )DATED: 7/12/2024 u blapu "ORG DEPARTMENT NAME 202 004 00451424 ASSESSOR 004 00451481 ASSESSOR OPEN SPACE 021 021A2110 SHRF ADMIN 021 021B2123 SHRFSU DR 021 021C2121 SHRFINVST 021 021D2121 SHRFRSOA 021 021F2122 SHRF PATRO 021 021H2180 SHRFPROPR 021 021M2170 SHRFTRAFF 022 022A2310 JAILADMIN 022 022E2360 JAILTRNSP 023 02352730 JUVENILE LEGAL 023 02352740 JUVENILE 052 05255430 ANIMALSHELTER 060 06056320 CORONER TatiarGworalf6nd 1 1010 10152510 DEM ISF MP 1060 10655730 SW WA FAIR 1100 11051221 DRUG COURT 1100 11051222 DRUG COURT -,FRC 1100 11052360 DC JAIL IN 1060 PARKS & RECREATION 1120 11255360 NOXIOUS WEED CONTROL 1170 11754230 RDS MAINT 1170 11754240 RDS DRAINA 1170 11754250 RDS STRUCT 1170 11754264 RDS TC DEV 1170 11754266 RDS SNOW&I 1170 11754267 RDS ST CLE 1170 11754270 RDS ROADSI 1170 11754290 RDS MAINT 1170 11754310 RDS ADMIN 1170 11754420 RDS ENG IN 1170 11754440 RDS ENG PL 1170 11759510 CNSTRCTN E 1170 11759530 CNSTRCTN R 1200 12152420 COMM DEV BUILDING INSPECT] 1900 19055430 PUBLIC HEALTH-PHCCANMLC 1900 19056245 PUBLIC HEALTH-PHCCHAZWAS 1900 190A6216 PH BUSCMP 1900 190L6243 EH WATER QUALITY 1900 190N6244 EH OSS/LAND DEV 1900 190Q6241 EH FOOD INTRFND 1900 190R6258 PUBLIC HEALTH 4200 42053400 VADER WATER ADMIN 5070 507M1830 FACILITIES MAINT 5070 507L1830 FACILITIES MAIL ROOM 5200 52052880 RADIO 54Q0 544_Q51881 INFORMATinj�S�jt�[fCES Tatar Other Funds fatal ER&[{Rates 2 ! 1 RATES " MOTORPOOL-595030: 1,161,192 1,579,04,;, SH CENTi1ALOP 595646 4 FINAL ." 2025 PRELIM : CHANGE 2024 FINAL 2025 PRELIM CHANGE 68,604 47,184- (21,420) 62,980 ' (62,980) 47,235 (47,235) _ = 94,470 j (94,470) 598,332 9 $,736 340,404 10,272 6,- (3,312) 15,745 (15,745) 157,450 (157,450) 11,164 ' (11,164) 22,328 (22,328) 69,828 (69,828) 61,644' 61,644 7,932 7,295;, (636) 12,684 = -�8,048! 0,364 20,3640 1,087,90$_ (80 844y _ 10 272 6; 66 (µ 3,312 10,716 13,908'" 3,192 138,252-: 138,252 6,336 11460 5,124 6,336 (6,336) 5,580 47,124 41,544 17,388 i9,609 2,220 725,276 (435,916) 4,191,072 31,372' ,95 (239,700) 51,876 65,196. 13,320 15,060 (15,060) 36,732 , 6,384 7,140 (7,140) 20,292 (20,292) 12,444 114,840 102,396 14,376 ,60 54 (8,772) 32,688 76,716 44,028 7,488 21.0,101i 202,620 135,048 8,760 (126,288) 20,904 31,548; 10,644 11,744_ &45 , 1A74,856 (104,3§8) Q,191,"47 3,851i 72 (239;1n0 -Of .747.976 2 562.784" ','. ' (185.21.2) 4,201,344 1,958 331 (243.Z P.24 IN THE MATTER OF.- I RESOLUTION NO. 23-303 ADOPT A REVISED EQUIPMENT RENTAL AND REVOLVING (ER&R) FUND POLICY WHEREAS, the Lewis County Public Works Department operates the Equipment Rental and Revolving (ER&,R) Fund, through which vehicles and equipment are purchased, maintained,and replaced; and WHEREAS, the Public Works Director has drafted a new ER&R Fund policy; and WHEREAS, the policy applies to vehicles owned by the ER&R Fund and does not apply to vehicles owned and maintained outright by a department or office; and WHEREAS, the Public Works Director recommends the Board of County Commissioners rescind Resolution 83-29 and adopt the revised ER&R Fund policy, attached hereto. NOW THEREFORE BE IT RESOLVED that the Board of County Commissioners hereby rescinds Resolution 83-29 and hereby adopts the new ER&R Fund policy effective September 20, 2023. DONE IN OPEN SESSION this 19th day of September, 2023. APPROVED AS TO FORM: BOARD OF COUNTY COMMISSIONERS Jonathan Meyer, Prosecuting Attorney LEWIS COUNTY, WASHINGTON David Bailer Sean D. Swope By: David Bailey, Sean D. Swope, Chair —Chef —C.LNiil-D-ep-uty-P-r-o-s-e-c,uttn-g-Att-iar ATTEST OF Scott J. Brummer eott J. Brummer, Vice Chair Rieva Lester, CIVIC Rieva Lester, CMC, Clerk of the Lewis County Board of County Commissioners Gfve Lindsey R. Pollock, DVM Lindsey R. Pollock, DVM, Commissioner Page I of 1 Res. 23-303 P.25 e4a,/1. ,.4'/ 1 LEWIS COUNTY EQUIPMENT RENTAL AND REVOLVINGFUND POLICY Adopted. September 2023 Josh Metcalf, PE Public Works Director P.2 6 Lewis County Equipment Rental and Revolving Fund Policy Adopted., September 2023 Table of Contents 1 Overview............................................................................................................................................... 2 1.1 Purpose.........................................................................................................................................3 1.2 Administering the ER&R Fund.......................................................................................................3 2 Definitions.............................................................................................................................................3 3 Rate Setting .......... ....................... ........ ..................................... ........................................ ................. .....4 3.1 ER&R Vehicles- ................................................... 5 3.2 Non-ER&R Vehicles....................................................................................................................... 5 4 New, Replacement, and Disposal of Vehicles........................................................................................5 4.1 Replacement Criteria....................................................................................................................6 4.2 Requesting New Vehicles...... ....... .................... ........................................................................... 6 4.3 Replacement Vehicles ..................................... .......... ..... :............................................................... 7 4.4 Funding Upgrades......................................................................................................................... 7 4,5 Procurement.................................................................................................................................7 4.6 Receiving New Vehicles.................................................................................................................7 4.7 Surplusing Vehicles........................................................................................................................7 4.8 Transferring Vehicles.....................................................................................................................8 5 Pits and Quarries................................................................................................................................... 8 Page .1 of 9 P.27 Lewis County Equipment Rental and Revolving Fund Policy Adopted, September 2823 1 (lxeFY'8VV The Equipment Rental and Revolving (MR)Fund was established tumanage the maintenance and replacement funds to ensure sufflclent funds are available when needed. This allows the County to focus on maintenance and Increasing government efficiency by providing a way to allow expensive vehicles, equipment, and supplies toberented toall County departments and offices. Per RCW 36.BA.010,all counties are legally required toestablish anEH&RFund for operating county road departments. GRQRFunds may be expanded to provide services to other departments oroffices including public works, utilities, fire, and police. The Lewls County ER&R Fund was initially established and adopted by the Board of County Commiss(nnars/BOCC through Resolution inDecember 1977. |nJanuary 1983,the 8OCCapproved Resolution 83-29, Establishing Equipment Rental and Revolving Fund, which repealed and replaced Resolution 77-591 approved in 1977. All Lewis County vehicles purchased with County revenues fall under the authority of the BOCC.The Lewis County BOCC delegated administration of the Cotinty ER&R Fund to the Director of Public Works. P.28 Lewis County Equipment Rental and Revolving Fund Policy Adopted: September 2023 J A Purpose The purpose of this document is to rescind and replace Resolution 83-29 with a revised Equipment Rental and Revolving Fund Policy for Lewis County that provides specific guidance for managing and administering the fund as follows; • Manage, maintain, repair, and replace equipment and vehicles, including parts, materials, fuel, and supplies, • Manage and maintain aggregates and pits and quarries operations and inventories, • Identify procedures for establishing rental rates, replacement cycles, and service levels for all County owned vehicles, • Ensure the availability of safe, cost effective, and reliable vehicles that meet the County's needs. This Policy applies to vehicles owned by the ER&R Fund and does not apply to vehicles owned and maintained outright by a department or office. 1.�1 Adrnir stenr:g the ER&R Fund The ER&R Fund is an internal service fund and the purpose of this fund is to establish rates that both optimize costs and maintain the role and sustainability of the ER&R Fund. Revenues collected for the replacement of vehicles are the property of the ER&R Fund and shall be invested only in allowable investments and not transferred to other funds. The Public Works Director is responsible for ensuring that ER&R has adequate funds available to cover costs associated with both normal operations and annual vehicle replacement needs. ER&R must also have adequate reserves to cover expenses which may be incurred from unforeseen catastrophic events. The Fleet Services Manager maintains an asset record for each vehicle in the fleet. The asset record helps the Public Works Department capture a complete vehicle history for each individual asset including original purchase price, usage, fuel consumption, service, repair information, depreciation, and salvage value. These components are used to determine appropriate vehicle rental rates. The fund balance of the ER&R Fund shall reflect a level that is anticipated to ensure continued operation of the fund. Management policies shall support the amount of cash reserves necessary for continued operation of the fund and timely replacement of vehicles or equipment as determined during the rate setting process. 2 Definitions ER&R Balance — The remaining revenue applied to the replacement bank for an individual vehicle or piece of equipment after revenue is applied to the actual costs of maintenance and repairs of that vehicle or piece of equipment. • Fleet Management Program —Application used by the Fleet Services Division to track ER&R - vehicles, vehicle -use hours and miles parts -inventory, fuel usage, maintenance records, and vehicle work orders. This application is one of the tools used for the overall management of the County's ER&R Fund. Page 3 of 9 P.29 Lewis County Equipment Rental and Revolving Fund Policy Adopted: September 20:23 Fleet Services Division — A division of the Public Works Department responsible for the oversight and management of the Lewis County ER&R Fund and the maintenance, repair, and/or replacement df vehicles and equipment within the ER&R Fund, Internal Service Fund -- A fund primarily used for activities that provide goods and services to other offices, departments, or other governments on a cost reimbursement basis. If the contributed nonmonetary assets were originally acquired with restricted resources, the usage and disposal shall be monitored to ensure one fund does not benefit from another. Contributed capital to be managed for the benefit of the contributing fund. This fund requires 100% recovery of all costs to manage contributed capital until fully consumed or otherwise disposed of or all costs to manage contributed capital plus adequate funding for future asset replacement. + i.ife Cycle —The number of years estimated to be the useful life of a vehicle or piece of equipment (period in which the replacement rate is collected). Monthly Replacement Rate —A monthly rate used to accrue the ER&R Balance for the specific vehicle or piece of equipment over the life cycle of the vehicle or equipment. The rate is developed based on estimated replacement value, salvage value, and Life cycle for the specific vehicle or piece of equipment. Rental mate --The overall rate charged to an office or department for the use of vehicles or equipment within the ER&R Fund. A rental rate is the sum of the direct and fixed costs and the Monthly Replacement Rate (if applicable) of a vehicle or piece of equipment. Replacement Cost — The anticipated cost to replace the vehicle or piece of equipment at the end of Its life cycle (this should be reevaluated on an annual basis using market trends and changes). is Roads Fund —The Road Fund or "County Road Fund" as defined by RCW 36.81010 is the county fund where all revenues for use on county roads shall be credited or deposited. Management and oversight of the Roads Fund Is the responsibility of the County Engineer and shall be used in accordance with RCW 36.82.070. • Salvage Value — Projected value of the vehicle or equipment at the end of its life cycle. The salvage value is estimated based on current market values, historical market trends, vehicle condition and availability, or by using straight line depreciation. d Vehicles — Any piece of equipment, sedan, SUV, pickup, motorcycle, or other items owned within the ER&R Fund and managed by the Public Works Department. 3 Rate Setting The Public Works Director is responsible for the preparation of annual rates for all vehicles within the ER&R Fund and providing recommendations to the Board as part of the annual budget development process. The Fleet Services Manager shall develop rates for all office and department vehicles, and they Page 4 of 9 P.30 Lewis County Equipment Rental and Revolving Fund Policy Adopted: September 2023 will work in collaboration with the County Engineer on preparation of the rates for the Roads Division vehicles. The County Engineer shall be responsible for reviewing the proposed rental rates and certifying to the BOCC the proposed rates are an appropriate use of county road funds as per RCW 36.80. Rates shall reflect all applicable annual expenses, including inflation, fuel, labor and parts for repairs and service, insurance, indirect costs, and overhead. Rental rates for all vehicles within a department or office are calculated per class of vehicle (such as sedans, SUV's, light duty pickups, heavy trucks, equipment, etc.). Vehicles shall be tracked individually for operation, maintenance, depreciation, and replacement. Vehicles will be grouped with like units when possible. Rental rates for grouped vehicles will be averaged per hour. The BOCC approves rental rates each year as part of the annual budget development and approval process. The Public Works Director and County Engineer may make adjustments within any year to reflect rapidly changing cost factors. These factors could include, but are not limited to, increased expenses or changes in usage patterns. If deemed appropriate, the Public Works Director and/or the County Engineer will present interim adjustments to the BOCC for review and approval. 31 E RO Vshic les The rates are calculated on an annual basis and include the following elements: 1. Direct Costs — Operations (i.e., repairs, maintenance, fuel, and fuel surcharge, etc.) 2. Fixed Costs — Overhead (salaries, benefits, facilities, utilities, insurance, etc.) 3. Replacement— Replacement (salvage, new equipment, inflation, upfit costs, etc.) 3.2 Jon-ERO Vehicles Some departments offices within Lewis County choose to own their vehicles rather than have them be part of ER&R. The maintenance and replacement of a vehicle that is not part of ER&R is the responsibility of the office who owns the vehicle. The office may choose to utilize a third -party vendor for service and maintenance, or they can put in a request to the Fleet Services Manager for maintenance or service to be provided by Motorpool. If the Fleet Services Manager determines the Motorpool shop can accommodate the request, an appointment will be scheduled around the rest of the Motorpool ER&R work. Once the required work is complete, the office (who owns the vehicle) will be invoiced based on actual costs of the maintenance and/or repairs completed. The actual costs will include all labor, parts, and materials required to administer and complete the work. 4 New, Replacement, and Disposal of Vehicles The ER&R Fund will only fund replacement of equipment or vehicles accounted for in the ER&R Fund's existing asset schedule. New vehicles are typically purchased as replacements for older vehicles in the fleet. Replacement schedules are developed by evaluating a combination of factors, including years in service, mileage, cost of operation and available funding. These factors, together with the anticipated needs of the applicable departments and offices, determine replacement requirements. Planned replacement of vehicles keeps operational expenses in check, provides safe, reliable transportation for employees; and demonstrates responsible management of County fleet assets within the ER&R Fund. Page 5 of 9 P.31 Lewis County Equipment Rental and Revolving rund Policy Adopted: September 2023 New assets not listed in the asset schedule will need to be accounted for in the budget process and approved by the BOCC before purchasing. finless requested by a director or elected, all new vehicles will be assigned as an asset, added to the ER&R Fund, and placed on a replacement cycle. The Fleet Services Manager will coordinate with departments and offices when procuring new vehicles or surplusing old vehicles to make sure their ER&R information is accurate. The Fleet Services Manager will ensure all new vehicles purchased are placed In ER&R and included in the ER&R budgeting process and approved by the BOCC. 4.1 Replacement Criteria The Fleet Services Manager is responsible for maintaining the vehicle and equipment lists and identifying when a vehicle or piece of equipment qualifies for replacement. it is the County's intention to keep rental rates as low as possible. When purchasing vehicles, the intent is to procurd a vehicle that meets the office or department needs while being mindful of purchase price, fuel efficiency, appropriate class size, make, and model, The Fleet Services Manager will coordinate with departments and offices to determine when the vehicle should be replaced. If the elected or director is not satisfied with the Fleet Services Manager's decision, they may submit, In writing, reasons for disagreement to the Public Works Director for review. If a resolution is not achieved at this level, the issue will be referred to the BOCC for final resolution. Vehicle replacement will be done In accordance with the following criteria unless otherwise requested from a director or elected and approved by the BOCC. The County Engineer and/or Public Works Director, on a case -by -case basis, may make adjustments or accommodations for the replacement of heavy equipment used by the road maintenance shops. The replacement criteria. are as defined below: Sedan/SUV 15 yrs. of service and/or 180,0o0 miles Light Duty Trucks 8 -1� yrs, of service and/or 180,000 miles Medium Duty Trucks 7 -10 yrs. of service and/or 180,000 miles » patrol Vehicles 7 - 8 yrs. of service and/or 150,000 miles and/or dependability • Dump Trucks 15 - 20 yrs. of service and/or dependability • Equipment 10,000 —16,000 hrs.. and/or dependability and/or 20 years of service 4.2 Requesting New Vehicles The requesting department or office will be required to fund new or additional vehicle or equipment purchases (excluding replacement of existing vehicles or equipment already managed through the ER&R Fund). Requests must be made in writing to the Fleet Services Manager. The Fleet Services Manager will review the request and work with the department or office to help provide the information needed for budget approval. With approval from the Public Works Director, the Fleet Services Manager shall have esponsibilltyfor acquiriti Lewis-County-fieet-vehicies-using-a-method-that-complies-with the -Lewis-- - County Procurement Policy and all State and Federal procurement requirements. The Flea Services Manager shall be responsible for compiling the necessary information to support making the most cost-efficient purchase of all fleet vehicles, considering purchase price, maintenance, repair, operating costs, and resale value. Acquisition of fleet assets shall be selected, acquired, and Page & of 9 P.32 Lewis County Equipment Rental and Revolving Fund Policy Adopted: September 2023 utilized providing the best possible support of County operations and be environmentally responsible in accordance with the Fleet Management Plan and Procedures. 4.3 Replacement Vehicles Each vehicle purchased within ER&R will have a replacement value assigned when added to the fleet. Funding for a replacement vehicle shall come from the monthly replacement rate collected for that specific vehicle unless otherwise approved by the BOCC. If the vehicle being replaced was purchased from a fund other than the ER&R Fund, the department or office to which the vehicle is assigned shall budget for the replacement. 4:4 Funding Upgrades CY Replacement vehicles, including upfit materials, are to be of a similar size and value as the original vehicle or equipment. Upgrades to fleet vehicles shall be requested during the budget process. Changes in the type or size of fleet vehicles require advance approval by the BOCC or designated appointee. 4.5; Rrocurtmient The procurement of any new vehicle and equipment shall comply with all Local, State, and Federal procurement requirements. All vehicles shall be procured using a competitive bidding process unless the best economical rate can be obtained through one of the following government contracts; Sourcewell: This membership gives the county competitive purchasing power on a wide variety of products and services to include construction, fleet, roads, public safety, facilities etc. You can browse the website to view contractors and products. Contact Procurement department for more specifics. Washington State Department of Enterprise Services: As a county government we are allowed to participate in the Washington Statewide purchasing contract. • US General Services Administration: GSA Purchasing is a centralized procurement area for the federal government, GSA offers products, services, and facilities needed by federal agencies for serving the public. 4.6 Receiving New Vehicles The Fleet Services Manager or designated appointee will contact the department or office receiving the new asset to schedule a pick-up time. This will ensure the Fleet Services Division has sufficient time to: get any license work done; schedule and complete the necessary upfit; and inspection of the asset before putting it into service. The Public Works Accounting Division will submit the asset documentation to the Lewis County Auditor's office and the Fleet Services Manager will initiate a vehicle record in the Fleet Management program. 4.7 Surplusi7g Vehicles The County's standard business practice shall be to surplus vehicles on a regular schedule as defined in this plan. As a vehicle approaches the end of its designated life cycle, final disposition becomes a managerial decision based on a combination of factors. Each vehicle must be considered individually in terms of reliability, maintenance, safety, and salvage value. Adequate record keeping, and analysis of Page 7 of 9 P.33 Lewis County Equipment Rental and Revolving Fund Policy Adopted: September 2V23 vehicle costs are very important to timely and effective disposition. The Fleet Services Manager will review all pertinent vehicle information and work with department/office managers \inmaking final vehicle disposition decisions. Once a final decision Is made to remove a vehicle from the fleet, the method of disposal must be identified, the timing of disposition determined, and decommissioning procedures completed. The Fleet Services Manager will work with the Public Works Director on the preparation of a list of vehicles ready bnsurplus onanesneeded basis and present ittothe B0OCforapprpVm bzdeclare them surp|Us.Oncaepprova|hn8beenQivanbvtha8OOC,theF|eetServicemK4anmBg[wjU000rdinutevviththe department or office to have the vehicle delivered to the appropriate shop for decommissioning and preparation for surplusing. Decommissioning includes removing county decals,, radios, and any other parts that are valuable tothe county. Light bars, county decals, cages, and push bumpers shall be removed from all law enforcement vehicles. Surplus assets will be made available to the public through a local auction, online auction site, or other means as approved by the BOCC, Lewis County Code and Procurement Policy, The Fleet Services Manager will work to ensure the vehicle does not goinfor decommissioning until the replacement vehicle has been delivered and is ready to be put into service. Revenues resulting from the sale of a vehicle shall be returned to the ER&R Fund for the specific vehicle sold. 4.8 Transferring Vehicles A vehicle no longer needed by one department or office may benefit another The Fleet Services Manager may evaluate the possibility of re -assigning and/or repurposing a vehicle which a director or elected official decides is no longer needed, For all vehicles within ER&Rthe Fleet Services Manager may use their discretion to determine whether to re -assign any vehicle within ER&R or to another department or office, The receiving department or office will reimburse the ER&R Fund the current book value of the transferred vehicle, there will be no transfer of funds for a vehicle that has reached full depreciation as per this policy and the Fleet Management Plan and Procedures. The receiving department oroffice will assume the rental obligation and any upfit costs of the transferred vehicle. Any vehicle transfer must be approved by the Public Works Director. Exceptions to this plan can be made If due to some unforeseen circumstances the need arises for a new orreplacement vehicle and onew vehicle has not been budgetedpreviously. Arequest can bmmade by the specific director or elected official to the Public Works Director to consider utilizing one of the vehicles on the surplus list to fulfill the Deed. This request shall be considered on a case -by -case basis and e decision made based on what is most fiscally responsible for the County and its taxpayers. 5 Pits andOn Pits and quarry nperation� are funded with operating capital and shall berepaid bythe Roads Fund I --o—ckpjJe locations. Rates for the produdsshoUbeWehah[ishadhvtheCmumtyEo@ineerendshoUberev|ewedb'nmnannum|budstoonsuve they are still appropriate. The rates shall bedeveloped tminclude all costs associated with permitting, production, haul, maintenance, administration, and all other costs associated with the production, hauling, and stockpiling ofthe materials. Page S of 9 P.34 Lewis County Equipment Rental and Revolving Fund Policy F'lee%tSerrvic Manager Tim Mixer Public Works Director County ineer i Tim Fife, PE Adopted: September 2023 Page 9 of 9 P.35 Resolution: 23-303 SOCC Meeting Date., Sept. 19, 2023 1 Suggested Wording for Agenda Item: Agenda Type., Deliberation Adopt a revised Equipment Rental and Revolving (ER&R) Fund Policy Contact: josh Metcalf Phone: 3607402762 Department: PW - Public Works Description: Adopt a revised Equipment Rental and Revolving (ER&R) Fund Policy Approvals: Publication Requirements: Publications: User Status PA's Office Pending Additional Copies: Cover Letter To: Geoff Soderquist, Michael Kroll, Tina Hemphill P.36