*\[Editor\'s Note: This chapter provides an example of the part of an
Implementation APD that addresses cost/benefit analysis. This example
illustrates the summary or key information that ACF considers important.
Among the most important factors are detailed descriptions of benefits
and clear establishment of a baseline for later cost/benefit measurement
and reporting. This guide does not mandate a format. It does illustrate
a sufficient level of detail for ACF\'s purposes since this section (and
the other chapters) underwent review in ACF\'s program offices.\]*

**Implementation Advance Planning Document (Section IV)**

**Cost/Benefit Analysis**

+----------------+-----------------------------------------------------+
| **Overview:**  | The State has evaluated the feasibility of and      |
|                | alternatives for modernizing the information        |
|                | technology and processing procedures supporting its |
|                | benefits programs. As detailed in the feasibility   |
|                | study, this systems project has the following       |
|                | primary objectives:                                 |
+----------------+-----------------------------------------------------+
|                | -   Reduce system operational costs, primarily in   |
|                |     the area of clerical and caseworker salaries,   |
|                |                                                     |
|                | -   Eliminate delays caused by obsolete technology  |
|                |     and system bottlenecks, and                     |
|                |                                                     |
|                | -   Provide more timely services to the public.     |
+----------------+-----------------------------------------------------+
|                | During the alternatives analysis, the State         |
|                | selected (and justified the selection of) two       |
|                | alternatives for evaluation of costs and benefits   |
|                | in comparison to the status quo. Both alternatives  |
|                | are considered viable solutions, serving to         |
|                | distribute some degree of processing and to achieve |
|                | the system objectives with equivalent quantitative  |
|                | benefits. Alternative 1 is the State\'s selected    |
|                | approach for implementation because it is           |
|                | cost-beneficial and will breakeven in the fifth     |
|                | year of the systems life. See the chart on the next |
|                | page and table on page 3-34.                        |
+----------------+-----------------------------------------------------+

+----------------+-----------------------------------------------------+
|                | ![](media/image1.wmf)                               |
+----------------+-----------------------------------------------------+
|                | \[The status quo (central data processing center    |
|                | and dumb terminals) is not a viable alternative,    |
|                | but is costed out as required by ACF                |
|                | instructions.\]                                     |
+----------------+-----------------------------------------------------+
| **Costs:**     | The costs evaluated in this analysis are those that |
|                | directly relate to the systems design, development, |
|                | conversion, implementation, and operation. For the  |
|                | status quo, recurring costs include site and        |
|                | facility, equipment and software lease and          |
|                | maintenance, travel, training, supplies, security,  |
|                | and personnel salaries (including benefits) and     |
|                | support services *directly* supporting systems      |
|                | development and operation. The same categories are  |
|                | evaluated for the alternatives.                     |
|                |                                                     |
|                | Nonrecurring costs for the status quo include a     |
|                | systems upgrade planned and budgeted for the third  |
|                | year of the systems life. Nonrecurring costs for    |
|                | the alternatives include costs for new site and     |
|                | facilities, equipment, system testing, conversion,  |
|                | studies, procurement, database preparation, and     |
|                | overhead. Details are provided in the requirements  |
|                | analysis.                                           |
|                |                                                     |
|                | Cost spreadsheets are attached beginning on page    |
|                | 3-37.                                               |
+----------------+-----------------------------------------------------+

+----------------+-----------------------------------------------------+
|                | \[As provided in ACF\'s cost/benefit guide, total   |
|                | project costs are analyzed regardless of funding    |
|                | source (State and Federal) and regardless of cost   |
|                | allowability for purposes of Federal Financial      |
|                | Participation, both of which are addressed by other |
|                | documents.\]                                        |
+----------------+-----------------------------------------------------+
| **Benefits:**  | The status quo is not considered a viable           |
|                | alternative: no benefits are evaluated.             |
|                |                                                     |
|                | Both alternatives are expected to generate the same |
|                | specific quantitative benefits:                     |
|                |                                                     |
|                | -   Reduction in clerical staff,                    |
|                |                                                     |
|                | -   Reduction in caseworkers\' overtime pay,        |
|                |                                                     |
|                | -   Controlled staff expenditures in meeting        |
|                |     caseload growth,                                |
|                |                                                     |
|                | -   Reduction in service bureau\'s processing       |
|                |     costs,                                          |
|                |                                                     |
|                | -   Reduction in courier service costs, and         |
|                |                                                     |
|                | -   System upgrade cost savings.                    |
|                |                                                     |
|                | Note that three benefits address the effect of the  |
|                | new system on clerical and caseworker staff costs.  |
|                | Specifically, they project the effect of the new    |
|                | system on:                                          |
|                |                                                     |
|                | -   Current clerical staff,                         |
|                |                                                     |
|                | -   Caseworker overtime expenses, and               |
|                |                                                     |
|                | -   Future caseworker staffing requirements.        |
+----------------+-----------------------------------------------------+
|                | By establishing three distinct benefits for the     |
|                | effect of the system on staffing, the State has     |
|                | established three discrete, meaningful,             |
|                | quantitative performance goals and measures as      |
|                | well. In addition, the effect of caseworker         |
|                | productivity improvements without an immediate      |
|                | budgetary effect --- the State will not decrease    |
|                | current staff --- will be measured as a             |
+----------------+-----------------------------------------------------+

+----------------+-----------------------------------------------------+
|                | qualitative benefit. The State values staff         |
|                | productivity as both a system goal and performance  |
|                | measurement goal.                                   |
|                |                                                     |
|                | The program cost avoidances and cost savings offset |
|                | the systems development cost, thereby achieving net |
|                | benefits for the project. Benefit spreadsheets are  |
|                | attached beginning on page 3-41.                    |
|                |                                                     |
|                | In addition, qualitative benefits are anticipated   |
|                | to accrue by:                                       |
+----------------+-----------------------------------------------------+
|                | -   Eliminating processing delays caused by         |
|                |     obsolete technology,                            |
|                |                                                     |
|                | -   Providing more timely services to the public,   |
|                |                                                     |
|                | -   Providing strategic support of agency program   |
|                |     goals,                                          |
|                |                                                     |
|                | -   Implementing systems architecture compatible    |
|                |     with long-range strategies,                     |
|                |                                                     |
|                | -   Ensuring system flexibility, and                |
|                |                                                     |
|                | -   Implementing proven technology with access to   |
|                |     off-the-shelf software.                         |
|                |                                                     |
|                | -                                                   |
+----------------+-----------------------------------------------------+
|                | Although these qualitative benefits cannot be       |
|                | measured in dollars for offsetting systems          |
|                | development costs, several provide performance      |
|                | measurement goals and will be measured by the       |
|                | State.                                              |
+----------------+-----------------------------------------------------+
| **             | Actual costs will be measured against the selected  |
| Cost/Benefit** | alternative\'s projected costs by the finance       |
|                | office, subject to review and approval by the       |
| *              | program office. Costs will be measured by category, |
| *Measurement** | but reported in the aggregate annually to ACF.      |
|                | Variances of over 10% will be explained by          |
| **Plan:**      | supporting documentation which addresses            |
|                | expenditures by category. The chart and table below |
|                | depict the cumulative and annual baselines against  |
|                | which actual project costs will be measured.        |
+----------------+-----------------------------------------------------+

+----------------+-----------------------------------------------------+
|                | See pages 3-37 through 3-40 for cost spreadsheets   |
|                | for the selected alternative over the systems life. |
|                |                                                     |
|                | *\[Editor\'s Note: As a reminder, the costs         |
|                | measured against are the projected costs for the    |
|                | selected alternative from the cost/benefit          |
|                | analysis. Status quo costs are not used, present    |
|                | value discounted costs are not used, nor are        |
|                | measurement dollars discounted.\]*                  |
+----------------+-----------------------------------------------------+
|                | ![](media/image2.wmf)                               |
+----------------+-----------------------------------------------------+

+------------------+-------+-------+-------+-------+-------+----------+
| **SYSTEM LIFE    |       |       |       |       |       |          |
| ANNUAL COST      |       |       |       |       |       |          |
| BASELINE**       |       |       |       |       |       |          |
+------------------+-------+-------+-------+-------+-------+----------+
| **Description**  | *     | *     | *     | *     | *     | *        |
|                  | *Year | *Year | *Year | *Year | *Year | *Total** |
|                  | 1**   | 2**   | 3**   | 4**   | 5**   |          |
+------------------+-------+-------+-------+-------+-------+----------+
| Projected Costs: | 5,32  | 1,62  | 79    | 79    | 79    | 9        |
|                  | 1,868 | 1,868 | 6,145 | 6,145 | 6,145 | ,332,171 |
| Alternative 1    |       |       |       |       |       |          |
+------------------+-------+-------+-------+-------+-------+----------+

  ---------------- ------------------------------------------------------
                   Benefits will be measured in accordance with the
                   measurement plan listed at the end of each narrative
                   benefit description in the following pages.

                   The following chart and table depict the cumulative
                   and annual baselines against which actual project
                   benefits will be measured.
  ---------------- ------------------------------------------------------

  ----------------- ------------ --------------- --------------- --------------- --------------- ----------------
  **ANNUAL AND                                                                                   
  SYSTEM LIFE                                                                                    
  BENEFITS                                                                                       
  BASELINE**                                                                                     

  **Description**   **Year 1**   **Year 2**      **Year 3**      **Year 4**      **Year 5**      **Total**

  Benefit 1         0            409,507         409,507         409,507         409,507         1,638,028

  Benefit 2         0            150,000         150,000         150,000         150,000         600,000

  Benefit 3         0            481,920         1,034,120       1,257,510       1,420,660       4,194,210

  Benefit 4         0            610,995         702,644         808,041         929,247         3,050,927

  Benefit 5         65,000       130,000         130,000         130,000         130,000         585,000

  Benefit 6         0            0               655,000         0               0               655,000

  **Total**         **65,000**   **1,782,422**   **3,081,271**   **2,755,058**   **3,039,414**   **10,723,165**
  ----------------- ------------ --------------- --------------- --------------- --------------- ----------------

  ---------------- ------------------------------------------------------
                   The State also plans to measure whether qualitative
                   improvements are achieved. Specifically, the State has
                   established project goals to improve productivity,
                   eliminate processing delays, and provide more timely
                   services to the public.

  ---------------- ------------------------------------------------------

+----------------+-----------------------------------------------------+
|                | Currently, the State experiences processing delays  |
|                | in three categories: input processing, internal     |
|                | control checks, and report transmission. Input      |
|                | processing is the time taken from receipt of        |
|                | information from the client until the data has been |
|                | entered into the central database. Internal control |
|                | checks involve the steps taken to verify client     |
|                | identity and eligibility and cross-check for        |
|                | duplicative entry. Report transmission begins after |
|                | system processing is complete and continues until   |
|                | receipt of the information by the requesting party. |
|                |                                                     |
|                | Regarding more timely provision of services to the  |
|                | public, two measures are critical: the time elapsed |
|                | from initial client contact until (1) notification  |
|                | of acceptance of client data and (2) delay until    |
|                | provision of benefits.                              |
|                |                                                     |
|                | The table below shows the current operational       |
|                | performance and the target performance for the new  |
|                | system. Current data was developed based on         |
|                | management records on file in the State.            |
+----------------+-----------------------------------------------------+

  ----------------------- ----------------------- -----------------------
  **PERFORMANCE BASELINE                          
  AND TARGET**                                    

  **Category**            **Baseline Average**    **Target Average**

  Administrative overhead 8 hours per week        4 hours per week

  Input processing        7 days                  Same day

  Internal control checks 3 days                  1 day

  Report transmission     4 days                  Same day

  Delay to notification   3 weeks                 1 week

  Delay to benefits       3 months                1 month
  ----------------------- ----------------------- -----------------------

  ---------------- ------------------------------------------------------
                   *In summary, this cost/benefit measurement plan
                   provides that the State will measure performance
                   against both program and system goals --- and against
                   cost and benefit values. This information will serve
                   as the baseline for reporting \"actuals\" in future
                   APD Updates. See the table on page 3-36.*

  ---------------- ------------------------------------------------------

+---------------+------------------------------------------------------+
| **Response    | We thoroughly evaluated the performance of and       |
| to**          | described the systems life costs of the status quo   |
|               | in the feasibility study, alternatives analysis, and |
| **ACF\'s      | cost/benefit analysis.                               |
| Criteria:**   |                                                      |
|               | During the alternatives analysis, we considered a    |
|               | broad range of alternatives. We addressed six        |
|               | alternatives, varying in terms of technology and     |
|               | source. Those alternatives included systems          |
|               | modification and transfer. The reasons for selection |
|               | of the two alternatives for cost/benefit analysis    |
|               | are documented in the alternatives analysis.         |
|               |                                                      |
|               | We applied cost/benefit analysis to the status quo   |
|               | and two viable alternatives. We evaluated all on a   |
|               | systems life basis, using present value discounting  |
|               | at 7%. Constant dollars were used.                   |
|               |                                                      |
|               | We consider the evaluation and documentation of      |
|               | costs and benefits to be thorough, detailed, and     |
|               | well documented. Back-up documentation and studies   |
|               | will be maintained in the State throughout the       |
|               | systems life of the project. The cost and benefit    |
|               | projections are well documented and provide a sound  |
|               | basis for cost/benefit measurement.                  |
|               |                                                      |
|               | Net benefits (costs), benefit/cost ratios, and       |
|               | breakeven points were calculated for the two         |
|               | alternatives. (See page 3-35) We consider the        |
|               | selected alternative reasonable and fully capable of |
|               | meeting our systems objectives.                      |
|               |                                                      |
|               | We have set forth a clear set of projected costs and |
|               | benefits against which actuals can be measured. We   |
|               | have also set forth qualitative measures, linked to  |
|               | program objectives, which can be measured.           |
|               |                                                      |
|               | A narrative description of benefits (with benefit    |
|               | measurement plans), a cost/benefit profile for the   |
|               | selected alternative, and a comparison of            |
|               | alternatives follow.                                 |
|               |                                                      |
|               | *\[Editor\'s Note: This section is based on the      |
|               | criteria set forth in ACF\'s \"Feasibility,          |
|               | Alternatives, and Cost/Benefit Analysis Guide\" on   |
|               | pages 1-5 and 1-6.\]*                                |
+---------------+------------------------------------------------------+

**Benefit 1:**

**Reduction in Clerical Staff**

**\[Effect of New System on Current Staff\]**

+----------------+-----------------------------------------------------+
| **Scenario:**  | Under the current system, clerical staff support    |
|                | caseworkers in routine clerical functions, such as  |
|                | filing, typing letters, and copying. The new system |
|                | will reduce the need for these services through     |
|                | capabilities such as centralized electronic files,  |
|                | automatic notice generation, and on-demand, on-site |
|                | printing.                                           |
|                |                                                     |
|                | These improvements will result in a clerical staff  |
|                | reduction of 13 positions. \[Clerical staff will be |
|                | reassigned from the benefits program to the         |
|                | State\'s consumer services program.\]               |
+----------------+-----------------------------------------------------+
| **Basis for    | Clerical workload distribution was documented using |
| Numbers:**     | automated work measurement techniques and time and  |
|                | motion analysis conducted over two week intervals   |
|                | at four separate review periods during the last     |
|                | fiscal year. Management records and observation     |
|                | were used to verify that the performance of duties  |
|                | did not vary significantly from the norm during     |
|                | this time period.                                   |
|                |                                                     |
|                | Once the distribution of work by category and time  |
|                | was known, the effect of elimination of certain     |
|                | functions through automation was assessed. With     |
|                | automated filing, notice, and printing, the State   |
|                | has planned to transfer thirteen clerical staff     |
|                | outside the benefits program.                       |
|                |                                                     |
|                | The analysis and findings are documented in the     |
|                | State\'s study, *Time Distribution of Clerical      |
|                | Duties.* A copy of this study will be retained in   |
|                | the State\'s files as an aid to future cost and     |
|                | benefit measurement.                                |
+----------------+-----------------------------------------------------+
| **             | No major changes will take place in the duties      |
| Assumptions:** | assigned to clerical staff over the systems life.   |
+----------------+-----------------------------------------------------+

+----------------+-----------------------------------------------------+
| **Initial      | The current average clerical salary of \$25,100,    |
| Calculations** | times the State\'s average fringe rate of 25.5%,    |
|                | times 13 clerical positions, yields an annual cost  |
| **of           | savings of \$409,507.                               |
| Benefit\'s     |                                                     |
| Value:**       | \[Data on average salary, current fringe rate, and  |
|                | average weeks worked were provided by the State\'s  |
|                | personnel office.\]                                 |
|                |                                                     |
|                | This information is shown in the cost/benefit       |
|                | analysis for both alternatives, as indicated by the |
|                | following excerpt. There is no corresponding        |
|                | benefit for the status quo. \[Note that constant    |
|                | dollars are used, since State personnel salary      |
|                | increases over the time period have not been        |
|                | approved by the legislature and budgeted.\]         |
+----------------+-----------------------------------------------------+

  ----------------- -------- --------- --------- --------- --------- -----------
  **SYSTEM LIFE                                                      
  BENEFITS PROFILE:                                                  
  ALTERNATIVES**                                                     

  **Description**   **Year   **Year    **Year    **Year    **Year    **Total**
                    1**      2**       3**       4**       5**       

  Benefit 1         \-       409,507   409,507   409,507   409,507   1,638,028
  ----------------- -------- --------- --------- --------- --------- -----------

  ---------------- ------------------------------------------------------
  **Measurement    Once the new system is operational, clerical staff
  Plan:**          workers will be reassigned and the benefits claimed as
                   program cost savings.

  ---------------- ------------------------------------------------------

**Quantified Benefits Worksheet: Systems Life**

<table>
<colgroup>
<col style="width: 9%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 9%" />
<col style="width: 1%" />
<col style="width: 8%" />
<col style="width: 3%" />
<col style="width: 7%" />
<col style="width: 4%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="12"><strong>BENEFIT CATEGORY / DESCRIPTION</strong></td>
</tr>
<tr class="even">
<td colspan="12"><p><strong>Benefit Number:</strong> 1</p>
<p><strong>Description:</strong> Reduce Clerical staff</p></td>
</tr>
<tr class="odd">
<td colspan="12"><strong>STATUS QUO BENEFIT VALUE</strong></td>
</tr>
<tr class="even">
<td colspan="12"><strong>Assumptions:</strong> None. No benefit is
claimed for the status quo</td>
</tr>
<tr class="odd">
<td colspan="3"><strong>Numbers</strong></td>
<td colspan="4"><strong>Basis</strong></td>
<td colspan="5"><strong>Source</strong></td>
</tr>
<tr class="even">
<td colspan="3">Current Measure/Volume:</td>
<td colspan="4"></td>
<td colspan="5"></td>
</tr>
<tr class="odd">
<td colspan="3">Projected Increase/Decrease Over Time:</td>
<td colspan="4"></td>
<td colspan="5"></td>
</tr>
<tr class="even">
<td colspan="3">Current Value:</td>
<td colspan="4"></td>
<td colspan="5"></td>
</tr>
<tr class="odd">
<td colspan="12"><strong>System Life Benefits Profile: Status
Quo</strong></td>
</tr>
<tr class="even">
<td>Year 1</td>
<td>Year 2</td>
<td>Year 3</td>
<td>Year 4</td>
<td>Year 5</td>
<td colspan="2">Year 6</td>
<td colspan="2">Year 7</td>
<td colspan="2">Year 8</td>
<td>Total</td>
</tr>
<tr class="odd">
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td>0</td>
</tr>
<tr class="even">
<td colspan="12"><strong>ALTERNATIVE 1 BENEFIT VALUE</strong></td>
</tr>
<tr class="odd">
<td colspan="12"><p><strong>Assumptions</strong>: No major change will
take place in the duties assigned to</p>
<p>clerical staff over the systems life</p></td>
</tr>
<tr class="even">
<td colspan="3"><strong>Numbers</strong></td>
<td colspan="4"><strong>Basis</strong></td>
<td colspan="5"><strong>Source</strong></td>
</tr>
<tr class="odd">
<td colspan="3">Measure/Volume at implementation: 13 clerical staff
transferred</td>
<td colspan="4">Staff reduction projected as result of automated system
support improvements</td>
<td colspan="5">"Time distribution of Clerical duties" (program
office)</td>
</tr>
<tr class="even">
<td colspan="3">Projected Increase/Decrease Over Time: Stable</td>
<td colspan="4">No change anticipated</td>
<td colspan="5">Time distribution of Clerical duties" (program
office)</td>
</tr>
<tr class="odd">
<td colspan="3">Initial Value at Implementation</td>
<td colspan="4">$25,100 average annual salary X 1.255 to calculate
loaded rate X 13 staff = $409,507</td>
<td colspan="5">Loaded hourly rate from personnel office</td>
</tr>
<tr class="even">
<td colspan="12"><strong>System Life Benefits Profile: Alternative
1</strong></td>
</tr>
<tr class="odd">
<td>Year 1</td>
<td>Year 2</td>
<td>Year 3</td>
<td>Year 4</td>
<td>Year 5</td>
<td>Year 6</td>
<td colspan="2">Year 7</td>
<td colspan="2">Year 8</td>
<td colspan="2">Total</td>
</tr>
<tr class="even">
<td>-</td>
<td>409,507</td>
<td>409,507</td>
<td>409,507</td>
<td>409,507</td>
<td>-</td>
<td colspan="2">-</td>
<td colspan="2">-</td>
<td colspan="2">1,638,028</td>
</tr>
</tbody>
</table>

**Benefit 2:**

**Reduction in Caseworkers\' Overtime Pay**

**\[Effect of New System on Overtime Expenses\]**

+----------------+-----------------------------------------------------+
| **Scenario:**  | Under the current system, caseworkers spend 20% of  |
|                | their time performing routine administrative        |
|                | functions, including tickler file maintenance,      |
|                | routine work scheduling, and manual tracking of     |
|                | cases. (See graph below.)                           |
+----------------+-----------------------------------------------------+
|                | ![](media/image4.wmf)                               |
+----------------+-----------------------------------------------------+
|                | The new system will automate these functions,       |
|                | reducing caseworker administrative overhead 50%, to |
|                | 10% of their time, enabling more time to be spent   |
|                | on case analysis. The most immediate effect of      |
|                | productivity improvement will be the reduction in   |
|                | caseworkers\' overtime pay.                         |
|                |                                                     |
|                | Under the current system, the State budgets         |
|                | \$150,000 annually for overtime pay to caseworkers. |
|                | The State projects that overtime pay for caseload   |
|                | processing will not be required after               |
+----------------+-----------------------------------------------------+

+----------------+-----------------------------------------------------+
|                | system implementation, due to reductions in         |
|                | administrative duties.                              |
+----------------+-----------------------------------------------------+
| **Basis for    | The workload distribution information was           |
| Numbers:**     | documented using automated work measurement         |
|                | techniques and time and motion analysis conducted   |
|                | over two week intervals at four separate review     |
|                | periods during the last fiscal year. Management     |
|                | records and observation were used to verify that    |
|                | the performance of duties did not vary              |
|                | significantly from the norm during this time        |
|                | period. The analysis and findings are documented in |
|                | the State\'s study, *Time Distribution of           |
|                | Casework.* A copy of this study will be retained in |
|                | the State\'s files as an aid to future cost and     |
|                | benefit measurement.                                |
|                |                                                     |
|                | Components of the administrative duties category    |
|                | include maintaining tickler files, performing work  |
|                | scheduling, manually tracking cases, and reporting  |
|                | to management. The time distribution of             |
|                | administrative duties, by caseworker per week, is   |
|                | shown in the table below. Expected improvements are |
|                | reflected in the column to the right. (These        |
|                | improvements will be monitored and measured as      |
|                | qualitative benefits under the State\'s             |
|                | Cost/Benefit Measurement Plan.)                     |
+----------------+-----------------------------------------------------+

+-------------------------------+------------------+-------------------+
| **Average Weekly Distribution |                  |                   |
| of Administrative Duties**    |                  |                   |
|                               |                  |                   |
| **in Hours by Caseworker**    |                  |                   |
+-------------------------------+------------------+-------------------+
| **Description**               | **Current**      | **Proposed**      |
+-------------------------------+------------------+-------------------+
| Maintaining Tickler Files     | 1                | 0                 |
+-------------------------------+------------------+-------------------+
| Work Scheduling               | 2                | 1                 |
+-------------------------------+------------------+-------------------+
| Manual Tracking               | 2                | 1                 |
+-------------------------------+------------------+-------------------+
| Internal Reporting            | 3                | 2                 |
+-------------------------------+------------------+-------------------+
| TOTAL                         | 8                | 4                 |
+-------------------------------+------------------+-------------------+

+----------------+-----------------------------------------------------+
|                | Projected overtime is based on the State\'s most    |
|                | recent five-year budget (1994 - 1999), except that  |
|                | figures are expressed here in constant dollars.     |
|                | Copies of budgetary materials remain archived in    |
|                | the State.                                          |
+----------------+-----------------------------------------------------+
| **             | No major changes will take place in the duties      |
| Assumptions:** | assigned to caseworkers over the systems life.      |
|                |                                                     |
|                | \[This assumption is supported by a prior           |
|                | assessment of caseworkers\' duties, conducted in    |
|                | 1987 as part of a personnel audit. The study,       |
|                | *Performance Audit of Caseworkers,* is attached to  |
|                | the time and motion study and will be retained in   |
|                | State files.\]                                      |
|                |                                                     |
|                | Workload growth will remain within the projections  |
|                | stated in Benefit 3 and there will be no new        |
|                | program mandates requiring overtime.                |
+----------------+-----------------------------------------------------+
| **Initial      | The current average caseworkers\' salary of         |
| Calculations** | \$42,000, divided by 2080 hours (working hours in   |
|                | year), yields an average salary rate per hour of    |
| **of           | \$20.19. With the addition of the State\'s average  |
| Benefit\'s     | fringe rate of 25.5%, the average loaded pay rate   |
| Values:**      | per hour of caseworkers\' time is \$25.34.          |
|                |                                                     |
|                | Given an average of 46 weeks worked per year, times |
|                | 4 hours saved per week, each worker can be          |
|                | projected to have 184 hours freed from routine      |
|                | administrative duties. Multiplying 184 hours times  |
|                | 120 caseworkers yields 22,080 hours times the       |
|                | loaded hourly rate of \$25.34 equals annual savings |
|                | of \$559,507, more than enough to eliminate         |
|                | budgeted overtime expenditures of \$150,000. No     |
|                | claim is made for the additional \"savings\" since  |
|                | current staff will not be reassigned or laid off.   |
|                | Instead, the effect of productivity improvement on  |
|                | future staffing is set forth in Benefit 3.          |
|                |                                                     |
|                | \[Data on average salary, current fringe rate, and  |
|                | average weeks worked were provided by the State\'s  |
|                | personnel office.\]                                 |
|                |                                                     |
|                | This benefit has an annual program cost savings     |
|                | value of \$150,000. There are no benefit values for |
|                | the status quo.                                     |
+----------------+-----------------------------------------------------+

  ----------------- -------- --------- --------- --------- --------- -----------
  **SYSTEM LIFE                                                      
  BENEFIT PROFILE:                                                   
  ALTERNATIVES**                                                     

  **Description**   **Year   **Year    **Year    **Year    **Year    **Total**
                    1**      2**       3**       4**       5**       

  Benefit 2         0        150,000   150,000   150,000   150,000   600,000
  ----------------- -------- --------- --------- --------- --------- -----------

+----------------+-----------------------------------------------------+
| **Measurement  | The State is preparing to adopt a new procedure for |
| Plan:**        | approving overtime work which will track overtime   |
|                | against a set of standard work categories. Under    |
|                | the new procedure, overtime requests which specify  |
|                | the purpose of \"caseload processing\" will require |
|                | explanation and special management approvals. Since |
|                | the new system is intended to reduce overtime       |
|                | caseload processing, management controls can ensure |
|                | that other measures, such as reallocating workload, |
|                | are taken before overtime is approved. Records will |
|                | be kept and evaluated annually to determine whether |
|                | this benefit has been achieved.                     |
|                |                                                     |
|                | Productivity improvements will be measured as       |
|                | qualitative benefits under the Cost/Benefit         |
|                | Measurement Plan. Once the new system is            |
|                | operational, the caseworkers\' workload             |
|                | distribution will be reassessed annually, using the |
|                | same measuring tools and methodology used for       |
|                | projecting these benefits.                          |
+----------------+-----------------------------------------------------+

**Quantified Benefits Worksheet: Systems Life**

<table>
<colgroup>
<col style="width: 9%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 10%" />
<col style="width: 1%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10"><strong>BENEFIT CATEGORY / DESCRIPTION</strong></td>
</tr>
<tr class="even">
<td colspan="10"><p><strong>Benefit Number:</strong> 2</p>
<p><strong>Description:</strong> Reduction in Caseworker's Overtime
Pay</p></td>
</tr>
<tr class="odd">
<td colspan="10"><strong>STATUS QUO BENEFIT VALUE</strong></td>
</tr>
<tr class="even">
<td colspan="10"><strong>Assumptions:</strong> None. No benefit is
claimed for the status quo. Figures below on current performance were
used to determine cost savings for the alternative</td>
</tr>
<tr class="odd">
<td colspan="3"><strong>Numbers</strong></td>
<td colspan="3"><strong>Basis</strong></td>
<td colspan="4"><strong>Source</strong></td>
</tr>
<tr class="even">
<td colspan="3"><p>Current Measure/Volume:</p>
<p>$150,000 annually</p></td>
<td colspan="3">State Budget (1994-1999)</td>
<td colspan="4">Budget office</td>
</tr>
<tr class="odd">
<td colspan="3">Projected Increase/Decrease Over Time: Stable</td>
<td colspan="3">State Budget (1994-1999)</td>
<td colspan="4">Budget office</td>
</tr>
<tr class="even">
<td colspan="3">Current Value: $150,000 annually</td>
<td colspan="3">State Budget (1994-1999)</td>
<td colspan="4">Budget office</td>
</tr>
<tr class="odd">
<td colspan="10"><strong>System Life Benefits Profile: Status
Quo</strong></td>
</tr>
<tr class="even">
<td>Year 1</td>
<td>Year 2</td>
<td>Year 3</td>
<td>Year 4</td>
<td>Year 5</td>
<td>Year 6</td>
<td>Year 7</td>
<td colspan="2">Year 8</td>
<td>Total</td>
</tr>
<tr class="odd">
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td colspan="2">0</td>
<td>0</td>
</tr>
<tr class="even">
<td colspan="10"><strong>ALTERNATIVE 1 BENEFIT VALUE</strong></td>
</tr>
<tr class="odd">
<td colspan="10"><strong>Assumptions</strong>: Workload growth will
remain within the projections stated in Benefit 3 and there will be no
new program mandates requiring overtime</td>
</tr>
<tr class="even">
<td colspan="3"><strong>Numbers</strong></td>
<td colspan="3"><strong>Basis</strong></td>
<td colspan="4"><strong>Source</strong></td>
</tr>
<tr class="odd">
<td colspan="3">Measure/Volume at implementation: $150,000</td>
<td colspan="3">State Budget (1994-1999)</td>
<td colspan="4">Budget office</td>
</tr>
<tr class="even">
<td colspan="3">Projected Increase/Decrease Over Time: Stable</td>
<td colspan="3">State Budget (1994-1999)</td>
<td colspan="4">Budget office</td>
</tr>
<tr class="odd">
<td colspan="3">Initial Value at Implementation: $150,000</td>
<td colspan="3">State Budget (1994-1999)</td>
<td colspan="4">Budget office</td>
</tr>
<tr class="even">
<td colspan="10"><strong>System Life Benefits Profile: Alternative
1</strong></td>
</tr>
<tr class="odd">
<td>Year 1</td>
<td>Year 2</td>
<td>Year 3</td>
<td>Year 4</td>
<td>Year 5</td>
<td>Year 6</td>
<td>Year 7</td>
<td>Year 8</td>
<td colspan="2">Total</td>
</tr>
<tr class="even">
<td>-</td>
<td>150,0000</td>
<td>150,0000</td>
<td>150,0000</td>
<td>150,0000</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td colspan="2">600,000</td>
</tr>
</tbody>
</table>

**Benefit 3:**

**Controlled Staff Expenditures in Meeting Caseload Growth**

**\[Effect of New System on Future Staff Requirements\]**

+----------------+-----------------------------------------------------+
| **Scenario**   | Under the current system, caseload processing is    |
|                | only marginally within system capabilities. The     |
|                | workload is achieved at the expense of significant  |
|                | delays for clients, support from outside processing |
|                | services to meet system overloads, and caseworker   |
|                | overtime. (The latter was described in Benefit 2.)  |
|                |                                                     |
|                | Unfortunately, the current workload is not expected |
|                | to remain level. It will increase, from 55,200 to   |
|                | an estimated 80,800 cases annually. See the graph   |
|                | below.                                              |
+----------------+-----------------------------------------------------+
|                | ![](media/image5.wmf)                               |
+----------------+-----------------------------------------------------+
|                | If management were to take no action, the           |
|                | caseworker burden would increase approximately 10%  |
|                | annually, from 460 to 673 cases per year. See the   |
|                | chart on the following page for the annual          |
|                | projected burden by caseworker, if no action is     |
|                | taken.                                              |
+----------------+-----------------------------------------------------+

+---------------+------------------------------------------------------+
|               | This situation is considered untenable by State      |
|               | management. The problem was analyzed and addressed   |
|               | in an internal State staffing plan. This plan        |
|               | addresses the number and timing of additional        |
|               | required staff and the manner in which they would be |
|               | recruited and trained.                               |
+---------------+------------------------------------------------------+
|               | ![](media/image6.wmf)                                |
+---------------+------------------------------------------------------+
|               | The results of this plan, showing the projected      |
|               | staff increase for the status quo, is depicted in    |
|               | the top chart on the next page. In order to maintain |
|               | a ratio of about 460 cases annually per caseworker,  |
|               | staffing would increase from 120 caseworkers to 176  |
|               | over five years.                                     |
|               |                                                      |
|               | However, with the new system, reductions in          |
|               | administrative duties (described in Benefit 2) would |
|               | enable staff to handle more cases per year --- from  |
|               | 460 cases annually per year to 560 cases per year.   |
|               | This would reduce the overall staff requirements     |
|               | projected as necessary --- down from 176 in the      |
|               | fifth year to 144 --- and delay recruitment of       |
|               | additional personnel until the fourth year of the    |
|               | system life. See the bottom chart on the following   |
|               | page for a comparison of projected staffing between  |
|               | the status quo and the alternatives. \[Both          |
|               | alternatives would support the same staffing         |
|               | pattern.\]                                           |
+---------------+------------------------------------------------------+

![](media/image7.wmf)

![](media/image8.wmf)

+----------------+-----------------------------------------------------+
| **Basis for    | Projected caseloads are documented in a study       |
| Numbers:**     | conducted this year with contractor assistance,     |
|                | *Historical and Demographical Trends in Casework:   |
|                | Effect on the Future.* Next the State examined the  |
|                | effect of the projected caseload increase on        |
|                | current staff and devised a strategic staffing      |
|                | plan. The *State Caseworker Staffing Master Plan*   |
|                | was developed by a team represented by State        |
|                | management, personnel specialists, caseworker       |
|                | professional organization representatives, and      |
|                | contractor specialists. These studies will remain   |
|                | on file in the State throughout the development,    |
|                | implementation, and operation of this project.      |
|                |                                                     |
|                | Average case processing time is currently just over |
|                | three hours, based on program management records on |
|                | file in the State. Under the current system,        |
|                | caseworkers working 46 weeks per year at 32 hours   |
|                | per week on casework would have 1,472 hours,        |
|                | allowing them to process about 460 cases. Given the |
|                | weekly gain of four hours for case processing that  |
|                | will accrue from the elimination of administrative  |
|                | duties (see Benefit 2), current staff working 46    |
|                | weeks per year, 36 hours per week, with an average  |
|                | case processing time of under 3 hours, will be able |
|                | to process management\'s projected goal of 560      |
|                | cases per year. These figures are considered        |
|                | conservative based on the fact that other system    |
|                | improvements have not been factored in --- and      |
|                | based on other States\' records of processing       |
|                | similar cases in 2.5 hours, once modern technology  |
|                | was employed.                                       |
+----------------+-----------------------------------------------------+
| **             | No major changes will take place in the duties      |
| Assumptions:** | assigned to caseworkers over the systems life.      |
|                | Workload growth will remain within the projections  |
|                | cited herein. There will be no new program          |
|                | mandates.                                           |
+----------------+-----------------------------------------------------+
| **Initial      | If no action is taken, the State\'s caseworker      |
| Calculations   | staff will increase from 120 to 176 over five       |
| of Benefit\'s  | years. The average annual salary for the current    |
| Values**       | staff is \$42,000. According to the State\'s        |
|                | staffing plan, new caseworkers would be hired under |
|                | the State\'s three-year training program with       |
|                | annual salaries of \$32,000, \$34,000, and          |
|                | \$36,000, for the first, second, and third years    |
|                | respectively. All dollars are constant dollars. No  |
|                | cost-of-living adjustments or other salary          |
|                | increases are currently approved and, therefore,    |
+----------------+-----------------------------------------------------+

+----------------+-----------------------------------------------------+
|                | have not been factored into these calculations. See |
|                | the top table on page 3-22.                         |
+----------------+-----------------------------------------------------+
|                | If the new system is adopted, the State\'s          |
|                | caseworker staff will remain stable for three       |
|                | years, then increase by 11 in year 4 and 13 in year |
|                | 5 to a total of 144 caseworkers. See the bottom     |
|                | table on the following page.                        |
|                |                                                     |
|                | The difference between the total loaded salary      |
|                | projections establishes the estimated program cost  |
|                | avoidance reported as a benefit for the             |
|                | alternatives. See below. There is no corresponding  |
|                | benefit for the status quo.                         |
+----------------+-----------------------------------------------------+

  ----------------- ----------- ----------- ----------- ----------- ----------- ------------
  **SYSTEM LIFE                                                                 
  BENEFITS PROFILE:                                                             
  ALTERNATIVES**                                                                

  **Description**   **Year 1**  **Year 2**  **Year 3**  **Year 4**  **Year 5**  **Total**

  Status Quo        6,325,200   6,807,120   7,359,320   8,024,470   8,737,310   37,253,420
  Salaries                                                                      

  Alternatives\'    6,325,200   6,325,200   6,325,200   6,766,960   7,316,650   33,059,210
  Salaries                                                                      

  Benefit 3         0           481,920     1,034,120   1,257,510   1,420,660   4,194,210
  ----------------- ----------- ----------- ----------- ----------- ----------- ------------

  ---------------- ------------------------------------------------------
                   \[Note that caseworker costs are not included on the
                   cost side of the cost/benefit analysis, since those
                   costs do not directly support the systems project. The
                   program cost differential effected by the systems
                   project is claimed as a cost avoidance of the
                   alternatives.\]

  **Measurement    The State will measure actual staffing salaries at the
  Plan:**          loaded rate and deduct the actuals from the projected
                   status quo salaries, to determine whether the
                   projected cost avoidance benefit has been achieved.
  ---------------- ------------------------------------------------------

  ------------- ----------- ------------ ----------- ----------- --------- ---------- -----------
  **Projected                                                                         
  Caseworker                                                                          
  Expenses:                                                                           
  Status Quo**                                                                        

  **Year**      **Staff**   **Salary**   **Total**   **Annual    **Total   **Fringe   **Loaded
                                                     Salary**    Staff**   Rate**     Salary**

  1             120         42,000       5,040,000   5,040,000   120       0.255      6,325,200

  2             120         42,000       5,040,000   5,424,000   132       0.255      6,807,120

                12          32,000       384,000                                      

  3             120         42,000       5,040,000   5,864,000   145       0.255      7,359,320

                12          34,000       408,000                                      

                13          32,000       416,000                                      

  4             120         42,000       5,040,000   6,394,000   160       0.255      8,024,470

                12          36,000       432,000                                      

                13          34,000       442,000                                      

                15          32,000       480,000                                      

  5             120         42,000       5,040,000   6,962,000   176       0.255      8,737,310

                25          36,000       900,000                                      

                15          34,000       510,000                                      

                16          32,000       512,000                                      
  ------------- ----------- ------------ ----------- ----------- --------- ---------- -----------

  ---------------- ----------- ------------ ----------- ----------- --------- ---------- -----------
  **Projected                                                                            
  Caseworker                                                                             
  Expenses:                                                                              
  Alternatives**                                                                         

  **Year**         **Staff**   **Salary**   **Total**   **Annual    **Total   **Fringe   **Loaded
                                                        Salary**    Staff**   Rate**     Salary**

  1                120         42,000       5,040,000   5,040,000   120       0.255      6,325,200

  2                120         42,000       5,040,000   5,040,000   120       0.255      6,325,200

  3                120         42,000       5,040,000   5,040,000   120       0.255      6,325,200

  4                120         42,000       5,040,000   5,392,000   131       0.255      6,766,960

                   11          32,000       352,000                                      

  5                120         42,000       5,040,000   5,830,000   144       0.255      7,316,650

                   11          34,000       374,000                                      

                   13          32,000       416,000                                      
  ---------------- ----------- ------------ ----------- ----------- --------- ---------- -----------

**Quantified Benefits Worksheet: Systems Life**

<table>
<colgroup>
<col style="width: 9%" />
<col style="width: 1%" />
<col style="width: 0%" />
<col style="width: 9%" />
<col style="width: 1%" />
<col style="width: 1%" />
<col style="width: 9%" />
<col style="width: 0%" />
<col style="width: 1%" />
<col style="width: 8%" />
<col style="width: 0%" />
<col style="width: 2%" />
<col style="width: 8%" />
<col style="width: 0%" />
<col style="width: 3%" />
<col style="width: 7%" />
<col style="width: 0%" />
<col style="width: 10%" />
<col style="width: 0%" />
<col style="width: 1%" />
<col style="width: 8%" />
<col style="width: 12%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="22"><strong>BENEFIT CATEGORY / DESCRIPTION</strong></td>
</tr>
<tr class="even">
<td colspan="22"><p><strong>Benefit Number:</strong> 3</p>
<p><strong>Description:</strong> Controlled Staff Expenditures in
Meeting Caseload Growth (see narrative for further detail on
calculation)</p></td>
</tr>
<tr class="odd">
<td colspan="22"><strong>STATUS QUO BENEFIT VALUE</strong></td>
</tr>
<tr class="even">
<td colspan="22"><strong>Assumptions:</strong> None. No benefit is
claimed for the status quo. Figures below on projected staffing costs
for the status quo were used to determine cost avoidance for the
alternatives.</td>
</tr>
<tr class="odd">
<td colspan="7"><strong>Numbers</strong></td>
<td colspan="10"><strong>Basis</strong></td>
<td colspan="5"><strong>Source</strong></td>
</tr>
<tr class="even">
<td colspan="7"><p>Current Measure/Volume:</p>
<p>120 caseworkers</p></td>
<td colspan="10">State Staffing Plan</td>
<td colspan="5">State Caseworker Staffing Master Plan</td>
</tr>
<tr class="odd">
<td colspan="7">Projected Increase/Decrease Over Time: 10% to 176</td>
<td colspan="10">State Staffing Plan</td>
<td colspan="5">State Caseworker Staffing Master Plan</td>
</tr>
<tr class="even">
<td colspan="7">Current Value: $6,325,200 with variable cost
increase</td>
<td colspan="10">State Staffing Plan</td>
<td colspan="5">State Caseworker Staffing Master Plan</td>
</tr>
<tr class="odd">
<td colspan="22"><strong>System Life Caseworker Costs: Status
Quo</strong></td>
</tr>
<tr class="even">
<td colspan="3">Year 1</td>
<td colspan="3">Year 2</td>
<td colspan="3">Year 3</td>
<td colspan="3">Year 4</td>
<td colspan="3">Year 5</td>
<td colspan="2">Year 6</td>
<td colspan="3">Year 7</td>
<td>Year 8</td>
<td>Total</td>
</tr>
<tr class="odd">
<td colspan="3">6,325,200</td>
<td colspan="3">6,807,120</td>
<td colspan="3">7,359,320</td>
<td colspan="3">8,024,470</td>
<td colspan="3">8,737,310</td>
<td colspan="2">-</td>
<td colspan="3">-</td>
<td>-</td>
<td>37,253,420</td>
</tr>
<tr class="even">
<td colspan="22"><strong>ALTERNATIVE 1 BENEFIT VALUE</strong></td>
</tr>
<tr class="odd">
<td colspan="22"><strong>Assumptions</strong>: Workload growth will
remain within the projections stated in Benefit 3 and there will be no
new program mandates requiring overtime</td>
</tr>
<tr class="even">
<td colspan="7"><strong>Numbers</strong></td>
<td colspan="10"><strong>Basis</strong></td>
<td colspan="5"><strong>Source</strong></td>
</tr>
<tr class="odd">
<td colspan="7">Measure/Volume at implementation: 120</td>
<td colspan="10">State Staffing Plan</td>
<td colspan="5">State Caseworker Staffing Master Plan</td>
</tr>
<tr class="even">
<td colspan="7">Projected Increase/Decrease Over Time: Stable til year
4</td>
<td colspan="10">State Staffing Plan</td>
<td colspan="5">State Caseworker Staffing Master Plan</td>
</tr>
<tr class="odd">
<td colspan="7">Initial Value at Implementation: $6,325,200</td>
<td colspan="10">State Staffing Plan</td>
<td colspan="5">State Caseworker Staffing Master Plan</td>
</tr>
<tr class="even">
<td colspan="22"><strong>System Life Projected Caseworker Costs:
Alternatives</strong></td>
</tr>
<tr class="odd">
<td colspan="2">Year 1</td>
<td colspan="3">Year 2</td>
<td colspan="3">Year 3</td>
<td colspan="3">Year 4</td>
<td colspan="2">Year 5</td>
<td colspan="3">Year 6</td>
<td colspan="3">Year 7</td>
<td colspan="2">Year 8</td>
<td>Total</td>
</tr>
<tr class="even">
<td colspan="2">6,325,200</td>
<td colspan="3">6,325,200</td>
<td colspan="3">6,325,200</td>
<td colspan="3">6,766,960</td>
<td colspan="2">7,316,650</td>
<td colspan="3">-</td>
<td colspan="3">-</td>
<td colspan="2">-</td>
<td>33,059,210</td>
</tr>
<tr class="odd">
<td colspan="22"><strong>System Life Benefits Profile: Alternative
1</strong></td>
</tr>
<tr class="even">
<td>Year 1</td>
<td colspan="3">Year 2</td>
<td colspan="3">Year 3</td>
<td colspan="3">Year 4</td>
<td colspan="4">Year 5</td>
<td colspan="2">Year 6</td>
<td colspan="2">Year 7</td>
<td colspan="3">Year 8</td>
<td>Total</td>
</tr>
<tr class="odd">
<td>0</td>
<td colspan="3">481,920</td>
<td colspan="3">1,034,120</td>
<td colspan="3">1,257,510</td>
<td colspan="4">1,420,660</td>
<td colspan="2">-</td>
<td colspan="2">-</td>
<td colspan="3">-</td>
<td>4,194,210</td>
</tr>
</tbody>
</table>

**Benefit 4:**

**Reduction in Service Bureau\'s Processing Costs**

  ---------------- ------------------------------------------------------
  **Scenario:**    Under the current system, backlogs in caseload
                   processing are transferred to an outside service
                   bureau. This is required since current processing
                   resources are unable to handle peak processing loads
                   at certain times of the year. See the chart below.

                   ![](media/image9.wmf)

                   The new system will have sufficient capacity and
                   capability to process all workload.

  **Basis for      The information in the chart was provided by the
  Numbers:**       State\'s procurement office, based on the State\'s
                   current five-year service bureau contract. (This
                   contract is used for other purposes, so eliminating
                   service for caseload processing will not result in
                   contract termination charges.) Between program
                   workload and service bureau fixed-fee contract rates,
                   the fixed
  ---------------- ------------------------------------------------------

+----------------+-----------------------------------------------------+
|                | price costs for service bureau processing will      |
|                | increase at about 15% per year. The contracts are   |
|                | maintained in the State\'s procurement office.      |
+----------------+-----------------------------------------------------+
| **             | No major changes will take place in the duties      |
| Assumptions:** | assigned to caseworkers over the systems life.      |
|                | Workload growth will remain within the projections  |
|                | cited in Benefit 3. There will be no new program    |
|                | mandates.                                           |
+----------------+-----------------------------------------------------+
| **Initial      | Figures are from the State\'s five-year,            |
| Calculation    | fixed-price contract, and are in the State\'s       |
| of**           | current budget. (Dollars stated reflect fixed price |
|                | contract rates and have not been adjusted by the    |
| **Benefit\'s   | State for inflation.) Since these figures are       |
| Value:**       | budgeted and approved systems-related costs, they   |
|                | are shown as costs for the status quo and first     |
|                | year of the alternatives and as system cost savings |
|                | benefits for years 2 - 5 of the alternatives.       |
+----------------+-----------------------------------------------------+

  ----------------- --------- --------- --------- --------- --------- -----------
  **SYSTEM LIFE                                                       
  COST PROFILE:                                                       
  STATUS QUO**                                                        

  **Description**   **Year    **Year    **Year    **Year    **Year    **Total**
                    1**       2**       3**       4**       5**       

  Support Services: 531,300   610,995   702,644   808,041   929,247   3,582,227
  Service Bureau                                                      
  Fees                                                                
  ----------------- --------- --------- --------- --------- --------- -----------

+--------------+--------+--------+--------+--------+--------+----------+
| **SYSTEM     |        |        |        |        |        |          |
| LIFE COST    |        |        |        |        |        |          |
| PROFILE:     |        |        |        |        |        |          |
| AL           |        |        |        |        |        |          |
| TERNATIVES** |        |        |        |        |        |          |
+--------------+--------+--------+--------+--------+--------+----------+
| **D          | **Year | **Year | **Year | **Year | **Year | *        |
| escription** | 1**    | 2**    | 3**    | 4**    | 5**    | *Total** |
+--------------+--------+--------+--------+--------+--------+----------+
| Support      | 5      | 0      | 0      | 0      | 0      | 531,300  |
| Services:    | 31,300 |        |        |        |        |          |
|              |        |        |        |        |        |          |
| Service      |        |        |        |        |        |          |
| Bureau Fees  |        |        |        |        |        |          |
+--------------+--------+--------+--------+--------+--------+----------+

  ----------------- -------- --------- --------- --------- --------- -----------
  **SYSTEM LIFE                                                      
  BENEFIT PROFILE:                                                   
  ALTERNATIVES**                                                     

  **Description**   **Year   **Year    **Year    **Year    **Year    **Total**
                    1**      2**       3**       4**       5**       

  Benefit 4         0        610,995   702,644   808,041   929,247   3,050,927
  ----------------- -------- --------- --------- --------- --------- -----------

  ---------------- ------------------------------------------------------
  **Measurement    Service bureau charges in support of program
  Plan:**          operations are projected to be eliminated by the
                   second year. The finance department maintains records
                   by expenditure category and program office and will be
                   able to confirm elimination of these costs.

  ---------------- ------------------------------------------------------

**Quantified Benefits Worksheet: Systems Life**

<table>
<colgroup>
<col style="width: 9%" />
<col style="width: 1%" />
<col style="width: 0%" />
<col style="width: 9%" />
<col style="width: 1%" />
<col style="width: 10%" />
<col style="width: 0%" />
<col style="width: 10%" />
<col style="width: 0%" />
<col style="width: 11%" />
<col style="width: 0%" />
<col style="width: 10%" />
<col style="width: 0%" />
<col style="width: 10%" />
<col style="width: 1%" />
<col style="width: 9%" />
<col style="width: 0%" />
<col style="width: 10%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="18"><strong>BENEFIT CATEGORY / DESCRIPTION</strong></td>
</tr>
<tr class="even">
<td colspan="18"><p><strong>Benefit Number:</strong> 4</p>
<p><strong>Description:</strong> Reduction in Service Bureau's
Processing Costs</p></td>
</tr>
<tr class="odd">
<td colspan="18"><strong>STATUS QUO BENEFIT VALUE</strong></td>
</tr>
<tr class="even">
<td colspan="18"><strong>Assumptions:</strong> None. No benefit is
claimed for the status quo. Figures below on current and future service
bureau processing fees were used to determine cost savings for the
alternatives.</td>
</tr>
<tr class="odd">
<td colspan="6"><strong>Numbers</strong></td>
<td colspan="7"><strong>Basis</strong></td>
<td colspan="5"><strong>Source</strong></td>
</tr>
<tr class="even">
<td colspan="6"><p>Current Measure/Volume:</p>
<p>$531,000 annually</p></td>
<td colspan="7">State Budget (1994-1999) &amp; Service Contract</td>
<td colspan="5">Budget and Procurement offices</td>
</tr>
<tr class="odd">
<td colspan="6">Projected Increase/Decrease Over Time: 15% annually to
$929,247</td>
<td colspan="7">State Budget (1994-1999) &amp; Service Contract</td>
<td colspan="5">Budget and Procurement offices</td>
</tr>
<tr class="even">
<td colspan="6">Current Value: $531,000 annually</td>
<td colspan="7">State Budget (1994-1999) &amp; Service Contract</td>
<td colspan="5">Budget and Procurement offices</td>
</tr>
<tr class="odd">
<td colspan="18"><strong>System Life Cost Profile: Status
Quo</strong></td>
</tr>
<tr class="even">
<td colspan="3">Year 1</td>
<td>Year 2</td>
<td colspan="2">Year 3</td>
<td colspan="2">Year 4</td>
<td colspan="3">Year 5</td>
<td colspan="2">Year 6</td>
<td colspan="2">Year 7</td>
<td colspan="2">Year 8</td>
<td>Total</td>
</tr>
<tr class="odd">
<td colspan="3">531,000</td>
<td>610,995</td>
<td colspan="2">702,644</td>
<td colspan="2">808,041</td>
<td colspan="3">929,247</td>
<td colspan="2">-</td>
<td colspan="2">-</td>
<td colspan="2">-</td>
<td>3,581,927</td>
</tr>
<tr class="even">
<td colspan="18"><strong>ALTERNATIVE 1 BENEFIT VALUE</strong></td>
</tr>
<tr class="odd">
<td colspan="18"><strong>Assumptions:</strong> No major changes will
take place in caseworker's duties. Workload growth will remain within
the projections stated in Benefit 3. No new program mandates.</td>
</tr>
<tr class="even">
<td colspan="6"><strong>Numbers</strong></td>
<td colspan="7"><strong>Basis</strong></td>
<td colspan="5"><strong>Source</strong></td>
</tr>
<tr class="odd">
<td colspan="6">Measure/Volume at implementation: $531,300</td>
<td colspan="7">State Budget (1994-1999) &amp; Service Contract</td>
<td colspan="5">Budget and Procurement offices</td>
</tr>
<tr class="even">
<td colspan="6">Projected Increase/Decrease Over Time: Eliminated in
second year</td>
<td colspan="7">State Budget (1994-1999) &amp; Service Contract</td>
<td colspan="5">Budget and Procurement offices</td>
</tr>
<tr class="odd">
<td colspan="6">Initial Value at Implementation: -$531,000</td>
<td colspan="7">State Budget (1994-1999) &amp; Service Contract</td>
<td colspan="5">Budget and Procurement offices</td>
</tr>
<tr class="even">
<td colspan="18"><strong>System Life Cost Profile:
Alternatives</strong></td>
</tr>
<tr class="odd">
<td colspan="2">Year 1</td>
<td colspan="3">Year 2</td>
<td colspan="2">Year 3</td>
<td colspan="2">Year 4</td>
<td>Year 5</td>
<td colspan="2">Year 6</td>
<td colspan="2">Year 7</td>
<td colspan="2">Year 8</td>
<td colspan="2">Total</td>
</tr>
<tr class="even">
<td colspan="2">531,500</td>
<td colspan="3">-</td>
<td colspan="2">-</td>
<td colspan="2">-</td>
<td>-</td>
<td colspan="2">-</td>
<td colspan="2">-</td>
<td colspan="2">-</td>
<td colspan="2">531,500</td>
</tr>
<tr class="odd">
<td colspan="18"><strong>System Life Benefits Profile: Alternative
1</strong></td>
</tr>
<tr class="even">
<td>Year 1</td>
<td colspan="3">Year 2</td>
<td colspan="2">Year 3</td>
<td colspan="2">Year 4</td>
<td colspan="3">Year 5</td>
<td colspan="2">Year 6</td>
<td colspan="2">Year 7</td>
<td colspan="2">Year 8</td>
<td>Total</td>
</tr>
<tr class="odd">
<td>0</td>
<td colspan="3">610,995</td>
<td colspan="2">702,644</td>
<td colspan="2">808,041</td>
<td colspan="3">929,247</td>
<td colspan="2">-</td>
<td colspan="2">-</td>
<td colspan="2">-</td>
<td>3,050,927</td>
</tr>
</tbody>
</table>

**Benefit 5:**

**Reduction in Courier Service Costs**

  ---------------- ------------------------------------------------------
  **Scenario:**    Since the current system lacks statewide
                   telecommunications support, the program relied on
                   courier services last year to deliver time-sensitive
                   material to meet new mandates for information
                   timeliness. Since these costs were not anticipated nor
                   budgeted, the expenses could only be met by
                   reprogramming funds from a State emergency operating
                   expense account.

                   To meet this expense in current or future years, funds
                   would have to be reprogrammed from the program
                   accounts. However, with the new system, electronic
                   transmission will be used, eliminating the need to
                   budget for this expense --- resulting in a system cost
                   avoidance.

                   ![](media/image10.wmf)
  ---------------- ------------------------------------------------------

+----------------+-----------------------------------------------------+
| **Basis for    | Projected courier service costs are based on the    |
| Numbers:**     | State\'s most recent expenditures. Figures are      |
|                | expressed in constant dollars. Spending records are |
|                | archived in the State. (A management study          |
|                | conducted at the time that courier services were    |
|                | adopted indicated that there were no more           |
|                | economical alternatives to meet this requirement,   |
|                | given the State\'s current technological            |
|                | limitations.)                                       |
+----------------+-----------------------------------------------------+
| **             | Commercial network services will be installed by    |
| Assumptions:** | mid-year in the first year, cutting courier service |
|                | costs in half.                                      |
+----------------+-----------------------------------------------------+
| **Initial      | The benefit has an average yearly value of          |
| Calculations** | \$130,000, based on past expenditures. There are no |
|                | benefit values for the status quo; however, costs   |
| **of           | are reflected since they are direct systems         |
| Benefit\'s**   | operational costs requiring funding. See the        |
| **Value:**     | following excerpts.                                 |
+----------------+-----------------------------------------------------+

  ----------------- --------- --------- --------- --------- --------- -----------
  **SYSTEM LIFE                                                       
  COST PROFILE:                                                       
  STATUS QUO**                                                        

  **Description**   **Year    **Year    **Year    **Year    **Year    **Total**
                    1**       2**       3**       4**       5**       

  Courier Service   130,000   130,000   130,000   130,000   130,000   650,000
  Fees                                                                
  ----------------- --------- --------- --------- --------- --------- -----------

  ----------------- -------- -------- -------- -------- -------- -----------
  **SYSTEM LIFE                                                  
  COST PROFILE:                                                  
  ALTERNATIVES**                                                 

  **Description**   **Year   **Year   **Year   **Year   **Year   **Total**
                    1**      2**      3**      4**      5**      

  Courier Service   65,000   0        0        0        0        65,000
  Fees                                                           
  ----------------- -------- -------- -------- -------- -------- -----------

  ----------------- -------- --------- --------- --------- --------- -----------
  **SYSTEM LIFE                                                      
  BENEFIT PROFILE:                                                   
  ALTERNATIVES**                                                     

  **Description**   **Year   **Year    **Year    **Year    **Year    **Total**
                    1**      2**       3**       4**       5**       

  Benefit 5         65,000   130,000   130,000   130,000   130,000   585,000
  ----------------- -------- --------- --------- --------- --------- -----------

  ---------------- ------------------------------------------------------
  **Measurement    Courier service charges in support of program
  Plan:**          operations are projected to be eliminated by mid-year
                   in the first year. The finance department maintains
                   records by expenditure category and program office and
                   will be able to confirm elimination of these costs.

  ---------------- ------------------------------------------------------

**Quantified Benefits Worksheet: Systems Life**

<table style="width:100%;">
<colgroup>
<col style="width: 9%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 10%" />
<col style="width: 1%" />
<col style="width: 8%" />
<col style="width: 3%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="11"><strong>BENEFIT CATEGORY / DESCRIPTION</strong></td>
</tr>
<tr class="even">
<td colspan="11"><p><strong>Benefit Number:</strong> 5</p>
<p><strong>Description:</strong> Reduction in Courier Service
Costs</p></td>
</tr>
<tr class="odd">
<td colspan="11"><strong>STATUS QUO BENEFIT VALUE</strong></td>
</tr>
<tr class="even">
<td colspan="11"><strong>Assumptions:</strong> None. No benefit is
claimed for the status quo. Figures below on current and future courier
service fees were used to determine cost savings for the
alternative</td>
</tr>
<tr class="odd">
<td colspan="3"><strong>Numbers</strong></td>
<td colspan="3"><strong>Basis</strong></td>
<td colspan="5"><strong>Source</strong></td>
</tr>
<tr class="even">
<td colspan="3"><p>Current Measure/Volume:</p>
<p>$130,000</p></td>
<td colspan="3">State Budget (1994-1999)</td>
<td colspan="5">Budget office</td>
</tr>
<tr class="odd">
<td colspan="3">Projected Increase/Decrease Over Time: Stable</td>
<td colspan="3">State Budget (1994-1999)</td>
<td colspan="5">Budget office</td>
</tr>
<tr class="even">
<td colspan="3">Current Value: $130,000 annually</td>
<td colspan="3">State Budget (1994-1999)</td>
<td colspan="5">Budget office</td>
</tr>
<tr class="odd">
<td colspan="11"><strong>System Life Benefits Profile: Status
Quo</strong></td>
</tr>
<tr class="even">
<td>Year 1</td>
<td>Year 2</td>
<td>Year 3</td>
<td>Year 4</td>
<td>Year 5</td>
<td>Year 6</td>
<td colspan="2">Year 7</td>
<td colspan="2">Year 8</td>
<td>Total</td>
</tr>
<tr class="odd">
<td>130,000</td>
<td>130,000</td>
<td>130,000</td>
<td>130,000</td>
<td>130,000</td>
<td>-</td>
<td colspan="2">-</td>
<td colspan="2">-</td>
<td>650,000</td>
</tr>
<tr class="even">
<td colspan="11"><strong>ALTERNATIVE 1 BENEFIT VALUE</strong></td>
</tr>
<tr class="odd">
<td colspan="11"><strong>Assumptions</strong>: Commercial network
services will be installed by mid-year in the first year, cutting
courier service costs in half.</td>
</tr>
<tr class="even">
<td colspan="3"><strong>Numbers</strong></td>
<td colspan="3"><strong>Basis</strong></td>
<td colspan="5"><strong>Source</strong></td>
</tr>
<tr class="odd">
<td colspan="3">Measure/Volume at implementation: $150,000</td>
<td colspan="3">State Budget (1994-1999)</td>
<td colspan="5">Budget office</td>
</tr>
<tr class="even">
<td colspan="3">Projected Increase/Decrease Over Time: Stable</td>
<td colspan="3">State Budget (1994-1999)</td>
<td colspan="5">Budget office</td>
</tr>
<tr class="odd">
<td colspan="3">Initial Value at Implementation: $150,000</td>
<td colspan="3">State Budget (1994-1999)</td>
<td colspan="5">Budget office</td>
</tr>
<tr class="even">
<td colspan="11"><strong>System Life Benefits Profile: Alternative
1</strong></td>
</tr>
<tr class="odd">
<td>Year 1</td>
<td>Year 2</td>
<td>Year 3</td>
<td>Year 4</td>
<td>Year 5</td>
<td>Year 6</td>
<td>Year 7</td>
<td colspan="2">Year 8</td>
<td colspan="2">Total</td>
</tr>
<tr class="even">
<td>65,000</td>
<td>130,0000</td>
<td>130,0000</td>
<td>130,0000</td>
<td>130,0000</td>
<td>-</td>
<td>-</td>
<td colspan="2">-</td>
<td colspan="2">5,265,000</td>
</tr>
</tbody>
</table>

**Benefit 6:**

**System Engineering Upgrade Cost Savings**

+----------------+-----------------------------------------------------+
| **Scenario:**  | Under the current systems plans and budgets, the    |
|                | status quo computer system is scheduled for a       |
|                | hardware and software engineering upgrade in the    |
|                | third year. This upgrade is required by the         |
|                | manufacturer, in order to continue hardware and     |
|                | software maintenance services beyond year 3. This   |
|                | upgrade does not affect the capacity or capability  |
|                | of the system\'s processing power. It simply makes  |
|                | the equipment eligible for continued maintenance    |
|                | support.                                            |
|                |                                                     |
|                | The upgrade is budgeted at \$655,000, with          |
|                | expenditures for equipment and software purchase    |
|                | and fees, installation, system testing, studies,    |
|                | and procurement. See the graph below.               |
|                |                                                     |
|                | ![](media/image11.wmf)                              |
+----------------+-----------------------------------------------------+
|                | By implementing the alternative, the upgrade will   |
|                | not be made --- resulting in a system cost savings. |
+----------------+-----------------------------------------------------+

+----------------+-----------------------------------------------------+
| **Basis for    | The figures were taken from the latest approved     |
| Numbers:**     | State budget. A copy will be maintained in the      |
|                | State.                                              |
+----------------+-----------------------------------------------------+
| **             | None.                                               |
| Assumptions:** |                                                     |
+----------------+-----------------------------------------------------+
| **Initial      | The benefit has a value of \$655,000, as a system   |
| Calculation    | cost savings from the status quo.                   |
| of**           |                                                     |
|                |                                                     |
| **Benefit\'s   |                                                     |
| Value:**       |                                                     |
+----------------+-----------------------------------------------------+

  ----------------- -------- -------- --------- -------- -------- -----------
  **SYSTEM LIFE                                                   
  COST PROFILE:                                                   
  STATUS QUO**                                                    

  **Description**   **Year   **Year   **Year    **Year   **Year   **Total**
                    1**      2**      3**       4**      5**      

  System upgrade    0        0        655,000   0        0        655,000
  ----------------- -------- -------- --------- -------- -------- -----------

  ----------------- -------- -------- --------- -------- -------- -----------
  **SYSTEM LIFE                                                   
  BENEFIT PROFILE:                                                
  ALTERNATIVES**                                                  

  **Description**   **Year   **Year   **Year    **Year   **Year   **Total**
                    1**      2**      3**       4**      5**      

  Benefit 6         0        0        655,000   0        0        655,000
  ----------------- -------- -------- --------- -------- -------- -----------

  ---------------- ------------------------------------------------------
  **Measurement    None required. Budgeted funds will be de-allocated and
  Plan:**          cost savings claimed in the third year.

  ---------------- ------------------------------------------------------

**Quantified Benefits Worksheet: Systems Life**

<table>
<colgroup>
<col style="width: 9%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 10%" />
<col style="width: 0%" />
<col style="width: 10%" />
<col style="width: 1%" />
<col style="width: 9%" />
<col style="width: 1%" />
<col style="width: 8%" />
<col style="width: 2%" />
<col style="width: 8%" />
<col style="width: 1%" />
<col style="width: 10%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="14"><strong>BENEFIT CATEGORY / DESCRIPTION</strong></td>
</tr>
<tr class="even">
<td colspan="14"><p><strong>Benefit Number:</strong> 6</p>
<p><strong>Description:</strong> System Upgrade Cost Savings</p></td>
</tr>
<tr class="odd">
<td colspan="14"><strong>STATUS QUO BENEFIT VALUE</strong></td>
</tr>
<tr class="even">
<td colspan="14"><strong>Assumptions:</strong> No benefit is claimed for
the status quo. Figures below reflect costs budgeted for the status quo
and used to determine cost savings for the alternative</td>
</tr>
<tr class="odd">
<td colspan="3"><strong>Numbers</strong></td>
<td colspan="6"><strong>Basis</strong></td>
<td colspan="5"><strong>Source</strong></td>
</tr>
<tr class="even">
<td colspan="3"><p>Current Measure/Volume:</p>
<p>$655,000 (third year)</p></td>
<td colspan="6">State Budget (1994-1999)</td>
<td colspan="5">Budget office</td>
</tr>
<tr class="odd">
<td colspan="3">Projected Increase/Decrease Over Time:
Non-recurring</td>
<td colspan="6">State Budget (1994-1999)</td>
<td colspan="5">Budget office</td>
</tr>
<tr class="even">
<td colspan="3">Current Value: $655,000 annually</td>
<td colspan="6">State Budget (1994-1999)</td>
<td colspan="5">Budget office</td>
</tr>
<tr class="odd">
<td colspan="14"><strong>System Life Benefits Profile: Status
Quo</strong></td>
</tr>
<tr class="even">
<td>Year 1</td>
<td>Year 2</td>
<td>Year 3</td>
<td>Year 4</td>
<td colspan="2">Year 5</td>
<td colspan="2">Year 6</td>
<td colspan="2">Year 7</td>
<td colspan="2">Year 8</td>
<td colspan="2">Total</td>
</tr>
<tr class="odd">
<td>0</td>
<td>0</td>
<td>655,000</td>
<td>0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">0</td>
<td colspan="2">655,000</td>
</tr>
<tr class="even">
<td colspan="14"><strong>ALTERNATIVE 1 BENEFIT VALUE</strong></td>
</tr>
<tr class="odd">
<td colspan="14"><strong>Assumptions</strong>: None</td>
</tr>
<tr class="even">
<td colspan="3"><strong>Numbers</strong></td>
<td colspan="6"><strong>Basis</strong></td>
<td colspan="5"><strong>Source</strong></td>
</tr>
<tr class="odd">
<td colspan="3">Measure/Volume at implementation: None</td>
<td colspan="6">State Budget (1994-1999)</td>
<td colspan="5">Budget office</td>
</tr>
<tr class="even">
<td colspan="3">Projected Increase/Decrease Over Time: Non-recurring
(third year)</td>
<td colspan="6">State Budget (1994-1999)</td>
<td colspan="5">Budget office</td>
</tr>
<tr class="odd">
<td colspan="3">Initial Value at Implementation: None - $655,000 (third
year)</td>
<td colspan="6">State Budget (1994-1999)</td>
<td colspan="5">Budget office</td>
</tr>
<tr class="even">
<td colspan="14"><strong>System Life Benefits Profile: Alternative
1</strong></td>
</tr>
<tr class="odd">
<td>Year 1</td>
<td>Year 2</td>
<td>Year 3</td>
<td colspan="2">Year 4</td>
<td colspan="2">Year 5</td>
<td colspan="2">Year 6</td>
<td colspan="2">Year 7</td>
<td colspan="2">Year 8</td>
<td>Total</td>
</tr>
<tr class="even">
<td>-</td>
<td></td>
<td>655,0000</td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2">-</td>
<td colspan="2">-</td>
<td colspan="2">-</td>
<td>655,000</td>
</tr>
</tbody>
</table>

**Cost / Benefit Profile**

Alternative 1 Constant Dollars

  ------------------- ----------- ----------- ----------- ----------- ------------ ------------
  **SYSTEM LIFE COST                                                               
  PROFILE**                                                                        

  Description         Year 1      Year 2      Year 3      Year 4      Year 5       Total

  Non-Recurring Costs 3,700,000   0           0           0           0            3,700,000

  Recurring Costs     1,621,868   1,621,868   796,145     796,145     796,145      5,632,171

  Total Projected     5,321,868   1,621,868   796,145     796,145     796,145      9,332,171
  Costs                                                                            

  Total Present Value 5,144,650   1,465,358   672,265     628,238     587,157      8,497,668
  Costs                                                                            

  **SYSTEM LIFE                                                                    
  BENEFITS PROFILE**                                                               

  Description         Year 1      Year 2      Year 3      Year 4      Year 5       Total

  Total Projected     65,000      1,782,422   3,081,271   2,755,058   3,039,414    10,723,165
  Benefits                                                                         

  Total Present Value 62,836      1,610,418   2,601,825   2,174,016   2,241,568    8,690,663
  Benefits                                                                         

  **CUMULATIVE                                                                     
  BENEFIT / COST                                                                   
  PROFILE**                                                                        

  Description         Year 1      Year 2      Year 3      Year 4      Year 5       Total

  Cumulative Total    65,000      1,847,422   4,928,693   7,683,751   10,723,165   N/A
  Projected Benefits                                                               

  Cumulative Total    5,321,868   6,943,736   7,739,881   8,536,026   9,332,171    N/A
  Projected Costs                                                                  
  ------------------- ----------- ----------- ----------- ----------- ------------ ------------

+--------------+---------------+---------+---------+---------+---------+
| *            |               |         |         |         |         |
| *QUALITATIVE |               |         |         |         |         |
| BENEFITS**   |               |         |         |         |         |
+--------------+---------------+---------+---------+---------+---------+
| Benefits     | Related       | **      |         |         |         |
|              | System        | Measure |         |         |         |
|              | Objectives    | of      |         |         |         |
|              |               | E       |         |         |         |
|              |               | ffectiv |         |         |         |
|              |               | eness** |         |         |         |
+--------------+---------------+---------+---------+---------+---------+
|              |               | Very    | Ef      | Mi      | Not     |
|              |               | Ef      | fective | nimally | Ef      |
|              |               | fective |         | Ef      | fective |
|              |               |         |         | fective |         |
+--------------+---------------+---------+---------+---------+---------+
| Enhanced use | Eliminate     |         |         |         |         |
| of           | processing    |         |         |         |         |
| technology   | delays        |         |         |         |         |
| to speed up  |               |         |         |         |         |
| input,       | Provide more  |         |         |         |         |
| processing,  | timely        |         |         |         |         |
| and          | services      |         |         |         |         |
| transmission |               |         |         |         |         |
+--------------+---------------+---------+---------+---------+---------+
| Support      |               |         |         |         |         |
| program      |               |         |         |         |         |
| goals and    |               |         |         |         |         |
| long range   |               |         |         |         |         |
| strategies   |               |         |         |         |         |
+--------------+---------------+---------+---------+---------+---------+
| Ensure       |               |         |         |         |         |
| flexibility  |               |         |         |         |         |
| and proven   |               |         |         |         |         |
| technology   |               |         |         |         |         |
+--------------+---------------+---------+---------+---------+---------+

**COMPARISON OF ALTERNATIVES**

Constant Dollars

  ----------------------------- ------------- --------------- ---------------
  **QUANTITATIVE FACTORS**                                    

  **Description**               **Status      **Alternative   **Alternative
                                Quo**         1**             2**

  Total Present Value Benefits  0             8,690,663       8,690,663

  Less Total Present Value      7,658,159     8,497,668       10,652,110
  Costs                                                       

  Net Benefit (Cost)            ‑7,658,159    192,995         ‑1,961,447

  Benefit/Cost Ratio            0.00          1.02            0.82

  Breakeven (Months)            N/A           52              N/A
  ----------------------------- ------------- --------------- ---------------

+-----------------------------+------------+------------+------------+
| **QUALITATIVE FACTORS**     |            |            |            |
+-----------------------------+------------+------------+------------+
| Description:                | N/A        | Highly     | Highly     |
|                             |            | Effective  | Effective  |
| Enhanced use of technology  |            |            |            |
| to speed up input,          |            |            |            |
| processing, and             |            |            |            |
| transmission in order to:   |            |            |            |
|                             |            |            |            |
| • Eliminate processing      |            |            |            |
| delays, and                 |            |            |            |
|                             |            |            |            |
| • Provide more timely       |            |            |            |
| services.                   |            |            |            |
+-----------------------------+------------+------------+------------+
| Support program goals and   |            | Highly     | Highly     |
| long range strategies       |            | Effective  | Effective  |
+-----------------------------+------------+------------+------------+
| Ensure flexibility and      |            | Highly     | Highly     |
| proven technology           |            | Effective  | Effective  |
+-----------------------------+------------+------------+------------+

**Cost Measurement Baseline**

  --------------- ----------- ----------- ----------- ----------- ----------- ------------
  **SYSTEM LIFE                                                               
  COST BASELINE**                                                             

  Description     Year 1      Year 2      Year 3      Year 4      Year 5      Total

  Non-Recurring   3,700,000   0           0           0           0           3,700,000
  Costs                                                                       

  Recurring Costs 1,621,868   1,621,868   796,145     796,145     796,145     5,632,171

  Total Projected 5,321,868   1,621,868   796,145     796,145     796,145     9,332,171
  Costs                                                                       

  **SYSTEM LIFE                                                               
  BENEFITS                                                                    
  BASELINE**                                                                  

  Description     Year 1      Year 2      Year 3      Year 4      Year 5      Total

  Total Projected 65,000      1,782,422   3,081,271   2,755,058   3,039,414   10,723,165
  Benefits                                                                    

  **CUMULATIVE                                                                
  BENEFIT / COST                                                              
  BASELINE**                                                                  

  Description     Year 1      Year 2      Year 3      Year 4      Year 5      Total

  Cumulative      1           3           6           10          15          N/A
  Total Projected                                                             
  Benefits                                                                    

  Cumulative      3,700,000   3,700,000   3,700,000   3,700,000   3,700,000   N/A
  Total Projected                                                             
  Costs                                                                       
  --------------- ----------- ----------- ----------- ----------- ----------- ------------