Using GIS for tax asset allocation
Method 5. Allocation based on other entity costs
In many categories of costs, there were no specific TIGER features, nor any breakdown
of the costs in FLAME. For instance, right of way costs were simply maintained as a
single running total. Based on other entity total costs as a percentage within each tax
district, the total cost was allocated to each tax district. Thus, the total cost for right of
ways was allocated based on Transmission Main Costs using the following calculations:
-
Determine the total feet of each Transmission Line in each tax district
- Divide the total feet for each Transmission Line in each tax district resulting
in the % of feet for each Transmission Line in each tax district
- Multiply the % of feet for each transmission line in each tax district times the
cost of the each Transmission Line resulting in the cost of each Transmission
Line in each tax district. This was the result of allocation method 2.
- Sum the Transmission Line costs for each tax district resulting in the total cost
for Transmission Main in each tax district.
- Sum the total costs of each tax district resulting in the Total Transmission
Main cost.
- Divide the Total Transmission Main costs into the total cost for Transmission
Main in each tax district resulting in a ratio.
- Result is the % of Transmission Main costs in each tax district.
Now, multiply the total costs for right of ways by each tax district % of Transmission
Main costs to allocate the right of way costs.
A similar ratio was created for Distribution Main costs for each tax district. These ratios
were used on the following entities:
Surprises
As stated in this paper's background, a number of efficiencies were expected. In
addition, both the FLAME and TIGER systems also saw improvements. Plus the asset
allocation application proved to more than pay for its development.
Table 1. Project Costs in FLAME
| Project Number in FLAME |
Cost |
Station Number in TIGER |
| E10355 | $43,125.54 | 547891 |
| C3476 | $128,635.82 | Missing |
| W12115 | $178,335.23 | Missing |
| W23546 | $45,129.20 | 731298 |
| E2001 | $75,836.63 | 812794 |
| E3006 |
$93,451.77 |
Missing |
Using Allocation Method 1, all Project Costs maintained in FLAME needed to be linked
to a Station Feature in TIGER, on a one-to-one basis. Using Table 1 as an example,
initially FLAME was concerned that some of their project numbers did not have a
corresponding station in TIGER. As Engineering researched the missing stations in
TIGER, it became apparent that over the years, a communication breakdown occurred
when certain projects were retired. Nearly $680,000.00 of projects over the years had
been retired and not communicated to Plant Accounting, some retired as far back as 1968.
Thus FLAME was able to retire these costs in their system and save PSNC Energy
reoccurring tax fees for years to come.
In the preparation of the tax report, a number of tax districts did not appear on the report.
Again, as Engineering researched the issue in TIGER, Engineering realized certain tax
district polygons were missing in TIGER. This was an additional problem because as
costs were allocated using methods 3-5, certain tax districts were appeared to not have
any assets to report, while others were reporting asset values too high. TIGER reviewed
what tax districts were missing and created polygon features for them. Thus, the TIGER
system improved its accuracy due to this application as well.
Since TIGER was now maintaining all the pipe lengths and could determine what existed
in each tax district, Plant Accounting was able to reduce the number of hours they
devoted to the manual process of creating the tax asset report by 900 man-hours. In
addition, the number of hours Engineering was devoting to calculating the new and
retired projects and communicating these figures to Plant Accounting, was reduced by
over 300 man-hours. The increase in the number of hours used to prepare the reports
using the new application offset these savings by 400 man-hours, resulting in a net
reduction of 800 man-hours.
What's Next?
Both the FLAME and TIGER systems agree long term that more accuracy can be realized
as more geographic data is created in TIGER. The following steps are planned:
-
New objects for land, buildings, and right of ways are expected which will eliminate
the need for FLAME to maintain the associated tax district.
-
TIGER has undertaken the process of entering and maintaining services and meters
during the coming 24 months, to eliminate the use of allocation method 5.
-
Because links now exist between TIGER and FLAME, though they are only logical at
this time, Engineering no longer reports to Plant Accounting on the installation and
retirement of projects and pipe lengths. Plant Accounting simply maintains the costs
on the FLAME system.
-
The preparation of the 2001's asset allocation report is expected to use less than 100
total man-hours to prepare. Tax districts are entered and altered throughout the year
in TIGER, costs continue to be maintained in FLAME, and all that needs to be
entered into the MS Access Database are the new Transmission Main Costs,
Distribution Main costs for each size and type of pipe for year 2000, and any new
project costs. Retirements will be deleted from the FLAME system using the Table 1
method above.
Long term, the asset allocation application needs to be written with a Visual Basic front
end, dynamically interfacing both TIGER and FLAME, but that will take place once all
objects are entered and maintained in TIGER, and PSNC Energy decides what
department's budget will pay for it.
