Rate Review Committee

Sensitivity Analysis of Draft Transaction Fees

April 12, 2006

In the attachment to Agenda Item II, Designing Transaction Fees for FY 2006-07, staff indicated that some data and parameters were still under internal review, and that staff would provide sensitivity analyses at the April 12 meeting around unresolved information.

The following table shows the average transaction fees that result when the indicated parameter varies. The “Preliminary Estimates” are taken from Table 4, Designing Transaction Fees for FY 2006-07.

Results of Sensitivity Analysis

Parameter    Transaction Fees  

 Reason for uncertainty    Scalehouse  Automated

Preliminary Estimates  $8.44  $2.81

Rounded  $8.50  $3.00

Accounts receivable costs  $8.25  $3.35

The current estimate (Table 1 in agenda attachment) is based on the    to $3.75

Metro Central Services Cost Allocation Model, which uses average factors

to allocate costs. Staff is deriving allocation factors specific to Accounts Receivable.

Scalehouse vs. automated transaction counts  $8.25  $2.97

Staff is studying the classification of loads as “scalehouse” vs.

“automated” for a sizeable number of transactions that enter as one mode, and exit as another.
The rates are not particularly sensitive to this issue, as transaction counts are used both as allocation measures and the revenue base (i.e., the rate denominator).

Users switch entry mode  Half Switch  All Switch

Metro’s revenue loss if users switch from the scalehouses

to the automated scales during a fiscal year.  $ 96,000  $ 48,000

Figures are based on 17,000 potential transactions able to switch.

   Price Elasticities  

Users go to another facility  10 percent  50 percent

Revenue loss if users switch to another facility during a fiscal year.  $ 32,400  $161,800

Rate Review Committee

Types of Metro Account Customers

April 12, 2006

At the March 29 meeting, committee members asked about the numbers of accounts held by various industry types.

The following table is based on Metro’s internal caption for “account type” within the Account Aging Report. Please note these types are maintained solely to aid internal administrative efficiency, and may not accurately reflect the industrial classification of the account name.

Also note that there is no category for “clean-up contractors.” A casual examination of account names reveals that these firms are currently categorized as “construction,” “hauler,” or “other.”

Current Metro Accounts

As of April 11, 2006

The whole list of Metro account names is available on request (17 pages).

T:\Remfma\committees\Rate Review Committee\FY 06-07\Attachments & Handouts\RRC041206 hnd.doc

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