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B. Vehicle Expense (Forms 2 and 3) The purpose of the vehicle expense forms is to assist the city in budgeting its annual costs associated with operating and maintaining equipment for each of the cit}fs solid waste programs. These costs include parts, supplies, fuel, and all labor involved in the maintenance and repair of the citys solid waste vehicles. There are a number of inethods which the city may use to track and record these costs: 1) the use of an internal services fund; 2) the use of some other financial reporting system within the city; or 3) the use of Forms 2 and 3. The workbook will provide a brief overview of the first two accounting methods and a more detailed description of Forms 2 and 3. If the city has a current vehicle cost reporting system that allows them to budget vehicle expenses, and identify which solid waste program(s) uses the vehicle, the city will not need to use Forms 2 and 3. For those cities that do not have a system in place to track and record vehicle costs by solid waste program, Forms 2 and 3 will help cities to identify these costs. 1) Internal Services Funds Prior to determining the city's vkhicle costs for each solid waste program, the city should first review the process it is currently using to record vehicle costs. Many cities use an internal services fund to track and record the costs associated with purchasing and maintaining its fleet of city vehicles. This equipment is then "leased" to the individual departments within the city. If the city tracks and records all vehicle costs (purchases, repairs, fuel, etc.) through the use of an intemal serv'tces fund, the city will probably not have to use Forms 2 and 3 to determine vehicle costs. Once the internal services fund has determined the annual costs associated with each of the city's solid waste vehicles, the only remaining step is to identify which vehicles, or portions of vehicles are associated with spec'rfic solid waste programs. The city can then determine the vehicle costs associated with each solid waste program. 2) Other Financial Reporting Systems While a city may not have an internal services fund, it may still utilize a financial reporting system that allows the city fo track costs associated with each vehicle. As long as"the system is capable of recording the costs associated with each vehicle and the city can determine which solid waste program(s) uses the vehicle, the city will not have to use Forms 2 and 3. 3) Forms 2 and 3 For a city that has not historically tracked vehicle expenses, by vehicle, Forms 2 and 3 may be used to determine these costs. Form 2 will need to be filled out monthly for each solid waste program. For instance, using Form 2 the city's collection program will list each piece of equipment that is used in the collection of solid waste, including equipment that is partially used (example: 50% collection, 50% recycling). After completing a Form 2 for each of the citys solid waste programs, the city will have the total monthly fuel, repair labor, parts and supplies, outside costs, and lease costs associated with each vehicle in a solid waste program. The annual vehicle cost for each program is calculated by completing Form 2 on a monthly basis for each solid waste program and then recording the monthly costs on Form 3. This will provide the city with what it costs on an annual basis to own and operate its fleet of solid waste vehicles by program. This figure may then be used as a basis to determine the amount of vehicle expenses which will be budgeted for each solid waste program. The budgeted amount may then be entered on Form A, line 2. If the cost associated with the purchase of vehicles is included in the internal services fund or on Forms 2 and 3, make sure these same costs are not included on the Capital Costs Form (Form 4) to avoid "double-counting" the purchase costs of any vehicles. 13 , 000211