1

A Review of Transportation Costs

Fiscal CommitteeApril 2, 2012

Current Rate

EEC reimburses IE and DTA providers at a rate of $9/Round Trip/day.

EEC reimburses IE and DTA providers at a rate of $6/one way/day.

EEC pays Supportive (DCF), Teen Parent, and Homeless providers an add-on rate of $17.22/day. This reimbursement rate includes the cost of transportation.

2

EEC Data: Number of Transported Children Based on Data from 7/2010 through 9/2011

Number of IE and DTA Children PER MONTH on Average Receiving Transportation

Infant 592 .044 Toddler 1,752 .132 PreSchool 3,419 .257 School Age 7,559 .567 TOTAL 13,322 1.000

Number of DCF Children PER MONTH on Average Receiving Transportation Using a factor of 80% of all children served in a month

4,552 (5,690 per month x 80%)

Subtotal: 17,875 children on average per month receive transportation. However, this figure includes one way trips and/or kids who received service for the partial month.

GRAND TOTAL: 15,382 children is the discounted on average per month number of children to receive transportation

3

EEC Data: Transportation ExpensesBased on Data from 7/2010 through 9/2011

Cost for Transporting IE and DTA Children PER MONTH on Average

Infant $100,298 .048 Toddler $306,073 .146 PreSchool $582,328 .277 School Age $1,111,795 .529 TOTAL $2,100,494 1.000

Cost for Transporting DCF Children PER MONTH on Average based on number of days in the month x $9 each day Using a factor of 80% of all children served in a month

$910,920

Grand Total: $3,011,414 spent on transportation on average per month

4

How Much More Will It Cost to Provide Transportation?

5

Cost per Child per Day Total Cost

Additional Cost per Year (Based on Average Number of Children and Average Cost) After Removing Current Annual Expenditure Total

Supportive Bid Transportation Cost $11.98 $48,096,130 $11,959,158

MADCA Estimate w ith Monitors $25.00 $100,367,550 $64,230,578

MADCA Estimate w ithout Monitors $18.96 $76,118,750 $39,981,778

Provider Estimate (March 2012) $15.00 $60,220,530 $24,083,558

Provider Estimates A, B, and C

A) Drivers w ithout Benefits. No Monitors $12.05 $48,377,159 $12,240,187

B) Drivers w ith Benefits. No Monitors $13.58 $54,519,653 $18,382,681C) Drivers w ith Benefit and Monitors on every vehicle $24.00 $96,352,848 $60,215,876

days 261Ave. # of children per day 15382Total annual transportation expenditure $36,136,972

This chart provides a summary of transportation costs from each source.

How Much More Will It Cost to Provide Transportation in All Caseload Accounts?

6

Cost per Child per

Day

Additional Cost per

Year

Additional Funds

Needed in IE

Additional Funds Needed

in DCF

Additional Funds

Needed in DTA

Supportive Bid $11.98 $11,959,158 $5,084,370 $3,567,620 $3,307,168

MADCA Estimate With Monitors $25.00 $64,230,578 $26,811,373 $19,302,133 $18,117,072MADCA Estimate Without Monitors $18.96 $39,981,778 $16,712,041 $12,013,240 $11,256,497Provider Estimate (March 2012) $15.00 $24,083,558 $9,916,974 $7,350,741 $6,815,843Provider Estimates A, B, and C

A) Drivers without Benefits. No Monitors $12.05 $12,240,187 $5,248,366 $3,627,910 $3,363,911B) Drivers with Benefits. No Monitors $13.58 $18,382,681 $7,762,983 $5,496,756 $5,122,942C) Drivers with Benefit and Monitors on every vehicle $24.00 $60,215,876 $25,137,240 $18,096,423 $16,982,213

Requirement: No Wait List for DTA and DCF. Additional Funds Needed to Pay for Transportation

What is the Impact on IE?

7

Cost per Child per Day

Additional Cost per Year

Number of IE Children We Cannot Serve to Pay for Tranportation

Supportive Bid $11.98 $11,959,158 671 MADCA Estimate #1 $25.00 $64,230,578 3,812 MADCA Estimate #2 $18.96 $39,981,778 2,781 Provider Estimate (March 2012) $15.00 $24,083,558 1,400 Provider Estimates A, B, and C

A) Drivers without Benefits. No Monitors $12.05 $12,240,187 703 B) Drivers with Benefits. No Monitors $13.58 $18,382,681 1,063 C) Drivers with Benefit and Monitors on every vehicle $24.00 $60,215,876 3,566

There is No Requirement to serve IE children. To provide Transportation at the Present Appropriation Level, the Number of Children we Serve Would be

We can measure the impact two ways: 1) Additional Funds Needed or 2) Fewer Children Served.

Human Services Transportation Office

HST has developed universal standards that apply to everyone.

They understand that there are unique standards that must also be applied.

HST does not dictate to a system what it should or should not do.

Devices are not required. Rates are established through the open market.

FY10 overall cost per trip on average ONE WAY: $18 DPH Early Intervention (EI) is $28.16 one way.

8

EEC Vehicle Data

Based on August, 2010, billing data for IE only, EEC paid transportation fees for 91 vendors who had 105 contracts for the transportation of 3072 children.

EEC released an informal survey to these programs asking three questions. We received 77 responses. Number of vans or buses you own or lease. ANSWER: 346

Do you subcontract to another vendor for all or some of your transportation services?

ANSWER: 44 of the 77 subcontract

If so, how many vans or buses do your subcontract vendors use?

ANSWER: 271

9

More Vehicle Data

Based on a review of billing data for IE Contracts, IE Vouchers, and DTA, it appears there are 660 vendors (contracts/vouchers)/providers (vouchers) that oversee 3217 providers ( actual provider name) who provide transportation.

If 77 providers own 346 vehicles (4.49 vehicles per provider), it MIGHT follow that 661 providers (all of whom provide transportation) have 2,963 vehicles in their own fleet.

10

Conclusion

EEC will update transportation costs using reports submitted through April 2012 for expenses for the period July, 2010, through March 2012, and report to the Committee at our next meeting.

11

Appendix

The following slides are offered in the Appendix as support for the summary slides presented earlier.

Some History: Supportive BidOne Provider’s CostsOne Provider’s Costs, ContinuedOne Provider’s Costs, ContinuedOne Provider’s Costs, ContinuedOne Provider’s Costs, ConclusionMADCA Cost Estimate #1MADCA Cost Estimate #2

12

Some History: Supportive Bid

In its FY10 RFR issued for Supportive Services (DCF, Teen Parents, Homeless), EEC asked respondents to respond to a survey asking about costs associated with the add-on rate of $17.22 per day. Among these costs is transportation.

Here’s what we learned: The add-on rate is $17.22 is inadequate. It should be

closer to $25.84 per day. The cost of transportation within the $25.84 is $11.98 or

46.3% of the total. The $11.98 is broken down as follows:

• Amount Paid to Another Provider: $ 4.32 or 36.07%• Cost of Salary and Fringe: 35.88% or $4.30• Average Salary and Fringe: $21,639.50 per year• Cost of Vehicles: 16.63% or $1.99• Cost of Fuel: 5.61% or $.67• Professional Development/Training: .08% or $.10• Other Costs: 5.0% or $.60

13

One Provider’s Costs

EEC approached one large vendor (FCC system and Center Based) with a fleet of approximately 100 vehicles to assess costs and research policies. Here’s what we learned:

Background InformationTransports children from 4 months old to 12 years oldPicks up at residence and drops off at school or FCC providerApproximately 2000 children in FY12.

Van InformationOwns 19 yellow buses.Subcontracts to one vendor.Owns 81 vans that are 8 passenger vans with center aisle.12 and 15 passenger vans are not safe: no center aisle, not easy to reach children.Owns all vehicles in the fleet with no encumbrances (which eliminates lease or interest payments.)Maintenance of vehicles done 24/7 to provide vehicle access during day routes.

14

One Provider’s Costs, Continued

Driver Payment On average, $14/hour, no benefits.

Typically work a 40 hour week. Averages about 140 hours/week in overtime.

CDL licenses earns $16 - $19/hour.

Other Salary Costs Eight (8) coordinators do all routing and scheduling.

Routes are constantly changing Different model of pick-up and delivery for FCC providers and center

based programs. Two (2) quality control drivers. Two (2) dispatchers (who overlap in the middle of the day) Two (2) mechanics on staff.

Payroll Costs One week’s payroll is approximately $53K (w/out benefits) Benefits, taxes, WC add $10,700 per week for a total weekly payroll

of $64.2K (drivers, mechanics, routers, dispatchers)

15

One Provider’s Costs, Continued

Monitors Monitors are on buses, but not on vans. A monitor on every van, working 40 hours per week and paid

$8.50 per hour plus payment for FICA, SUTA, and W/C, would cost roughly $396 per week or $20,592 per year.

If monitors were provided benefits, it would add $7,061 to the cost totaling $27,653 per year.

If you pay benefits (vacation time, health insurance, etc.) you might attract a higher quality workforce and reduce turnover.

16

One Provider’s Costs, Continued

Monitoring Devices The device comes with one button in the rear of the vehicle. The

device is activated when the ignition is turned on so the engine has to be running to use it.

When you go to the back of the bus and press the button at the back the alarm is deactivated. Then the ignition can be turned off without the alarm coming on.

A device at the back of the bus does not require the driver to look under the seats.

This provider installed another button under the seat so that both buttons would have to be pushed. This still does not ensure that the driver looks under all seats.

Cost: $150/$350 installed. Conclusion: There is no central way to monitor whether a vehicle’s

alarm system has, in fact, been deactivated. Broken devices are not reported. The devices pose a danger in requiring the engine to stay running while the driver leaves the driver’s seat.

Any instances of a child left in a vehicle have been the result of human error, not paying attention to the policies.

17

One Provider’s Costs: Conclusion

18

Breakeven Cost with No Monitors and Drivers w/out benefits: $12.05 per child per day.

Breakeven cost with benefits for drivers:$13.58 per child per day.

Breakeven Cost with Monitor on Each Vehicle: $24.00 per child per day.

The loss between the current rate of $9/day and the cost of $12.05/day is currently offset because of the Supportive add-on rate.

A Second Provider’s Costs March 2012

Total Client Transportation Billed (Inc.Eligible, Voucher, Supportive, Supportive add-on) $ 94,332

Agency-Provided Expense Breakdown

Drivers $ 38,297

Bus Monitors $ 11,791

Taxes/Benefits $ 11,656

Gas $ 11,426

Insurance $ 13,704

Maintenance $ 7,024

Lease $ 2,794

Telephone - (cell phone or other communications) $ 1,327

Vehicle Depreciation $ 2,793

Fees & Licenses $ 242

Total Direct Costs: $ 101,054

Total In-Direct Costs (8%): $ 8,084

Total Costs: $ 109,138

Cost per trip / Rate Calculation

Total Client Transportation Expense $ 109,138

Total Round Trips $ 7,267

Total Cost Per Round Trip (Client Transport expense divided by # of round trips) $ 15

Total Current DEEC Reimbursement Per Round Trip $ 9

Total Expense Not Covered by Current Reimb. Rate ($ differential per round trip x # of round trips) $ 43,735

Sum of additional money needed per trip to break even. $ 6

19

MADCA Cost Estimate #1

Presuming providing transportation to 268 children for 263 days (one year) and having a budget which requires the following:Director $ 59,125Drivers and Monitors $820,627Clerical $ 16,151Fringe Benefits $207,756Contract Services $ 54,186Cleaning $ 1,513Equipment $ 60,135 (Baby Seats/Electronic System)Insurance $ 65,231Recruitment $ 1,626Training $ 15,988Dues/Licensing $ 1,742Gas and Maintenance $434,109Program Supplies $ 5,086Office Supplies $ 1,387Misc. Supplies $ 762Uniforms $ 2,192 TOTAL: $1,754,282

The cost per child per day would be $25.20

MADCA Cost Estimate #2: No Monitors

Presuming providing transportation to 268 children for 263 days (one year) and having a budget which requires the following:Director $ 59,125Drivers (No Monitors) $492,376 Reduction based on monitors being paid $10/hour.

Clerical $ 16,151Fringe Benefits $124,654Contract Services $ 54,186Cleaning $ 1,513Equipment $ 60,135 (Baby Seats/Electronic System)

Insurance $ 65,231Recruitment $ 1,626Training $ 15,988Dues/Licensing $ 1,742Gas and Maintenance $434,109Program Supplies $ 5,086Office Supplies $ 1,387Misc. Supplies $ 762Uniforms $ 2,192 TOTAL: $1,336,263

The cost per child per day would be $18.96.21