Oracle Six-Year Highway Plan Preconstruction Status System’s “Cost Escalator” October 23, 2007

1. Oracle Six-Year Highway Plan Preconstruction Status System’s “Cost Escalator”October 23, 2007

2. As per SAFETEA-LU Federal Regulations the estimated costs of federally funded projects are to be shown in “Year of Expenditure” dollars.

3. This basically means that the current estimated cost of each project phase in today’s dollars must be increased to cover the cost of inflation from the current date of the estimated cost to the estimated year that the project phase funding will be required.

4. As project activities take place and better detailed information is available, it is the responsibility of each project manager to keep the estimated project phases costs updated in the Oracle Six-Year Highway Plan (SYP) Preconstruction Status System. In order to provide a uniform standard process for updating cost estimates for the Kentucky SYP projects, a “Cost Escalator” process has been developed within the Oracle SYP Preconstruction Status System.

5. The “Cost Escalator” process will use the estimated cost of each project phase in today’s dollars and the estimated year that the project funding will be required to calculate the escalated cost for each corresponding project phase.

6. The calculated escalated project phase cost is based on a 4% inflation factor per year for Planning, Design, Utility, and Construction phases of the project and a 5% inflation factor per year for the Right-of-Way phase of the project.

7. The inflation factors are consistent with inflation factors that are being used in preparing Financial Plans for KYTC Mega projects. As projected inflation values change, the “Cost Escalator” process will provide the KYTC with the means to quickly update the cost in today’s dollars to reflect the escalated project cost in the projected year of funding authorization.

8. The following information is a brief explanation and instructions on how to use the Oracle SYP Preconstruction Status System’s “Cost Escalator” process:

9. 1. To access the SYP Precon Cost Escalator, on the main menu bar under “Function” click on “Milestone Update.”

10. Enter District Number Enter Item Number Note: Item Number + “%” will retrieve all subprojects in the base item number series. (i.e. 115%) After entering district number and item number, click on query button to retrieve projects. 2. On the Milestone Update screen enter the District Number and the Item Number that you want to update, and then click on the “Query” button located at the lower left corner of the update screen.

11. To access the cost escalator process 3. After checking that the correct project was queried, click on the “Cost Escalator” button. The screen will change to the Preconstruction Cost Escalator screen.

12. Note: Check to make sure correct project has been queried. Click on cost escalator button to access cost escalator data input screen. 4a. Again, please check to make sure that the correct specified District and Item Number was queried before proceeding.Click on the “Cost Escalator” button. The screen will change to the Preconstruction Cost Escalator data input screen containing the specified project’s phases information and the data input fields for the “Cost Escalator” updates.

13. 4b. The only data input fields on this screen is the “Current Cost in Today’s Dollars” and “Projected Year of Auth.” For the initial process of starting the cost escalator process, the dollar amounts shown in the current Precon estimated costs were used to populate the “Current Cost in Today’s Dollars” data field.

14. 1. Enter the estimated cost in today’s dollars based upon the current project estimates and the amount should not include inflation costs. 2. The “Year of Current Cost” is an automatic insertion of the current calendar date year when the “Current Cost in Today’s Dollars” or the Projected Year of Auth is changed. 5. The amount shown in the “Current Cost in Today’s Dollars” data field should be updated to reflect the current cost in today’s dollars based upon the current project estimates, and the amount should not include inflation costs. The “Year of Current Cost” is an automatic insertion of the current calendar date year when the “Current Cost in Today’s Dollars” is changed or “Projected Year of Auth” is updated.

15. Insert the projected year of authorization 6. After updating the amount shown in the “Current Cost in Today’s Dollars” data field, insert the estimated projected year that reflects when the funding will be required for the corresponding phase of the project into the “Projected Year of Auth” data field.

16. 7. To preview the calculation for “Year of Expenditure Escalated Cost” click on the “Cal” button on the right side of the screen.

17. Calculated Amount Remember to click “SAVE” 8. The calculated amount is shown in the “Year of Expenditure Escal. Cost” data field. Please note: The current cost in today’s dollars, the projected year of auth, and the calculated value of the escalated cost is not saved until you click on the “Save” button.

18. 9. Continue the data input for the “Current Cost in Today’s Dollars” and the “Projected Year of Auth” for the remaining phases of the project.

19. Click here to preview escalated costs 10. Again, each time you enter data you can preview the escalated cost by clicking on the “Cal” button. Please note: The estimated costs under “Current Precon Figures” have not changed to the “Year of Expenditure Escal. Cost” and will not change until the updated information is saved.

20. Remember to Save 11. After you have entered the “Current Cost in Today’s Dollars” and the “Projected Year of Auth,” make sure that you click the “Save” button to save the current costs and projected year of authorization.

21. These data fields are cleared once you click “Save.” Costs update when you click “Save.” 12. The “Current Precon Figures” estimated cost is automatically updated to correspond with the values of the “Year of Expenditure Escal. Cost” when the updates are saved. However, the “Current Cost in Today’s Dollars” is not changed. The “Current Cost in Today’s Dollars” will be available on project reports, along with the date that the current cost was updated.

22. Fields are automatically populated with the standard statement when you click “Save.” 13. Please note that when you click on the “Save” button, the information in the “Reason for Cost Update” data field will be updated to read “Phase cost updated to reflect current cost in today’s dollars.” During our initial process of utilization of the “Cost Escalator” process we are going to insert this standard statement as a reason for cost updates. However, after the initial process is completed, we will remove the automatic insertion of the standard statement and will again require that the individual user of the cost escalator process provide the reason for updates to the current cost of the project phases.

23. Click here to view Six-Year Highway Plan information. 14. Please note the “SIXYEAR FIGURES” button at the lower left of the input screen. If you need to see the type of funds, estimated cost, and scheduled fiscal year in the Six-Year Highway Plan” click on the “SIXYEAR FIGURES” button. This is just a quick reference to the Six-Year Highway Plan information. Please note: Six-Year Highway Plan figures are not available for “Breakout” projects.

24. Click here to go back to current Precon Data info. 15. Click on the “Authorization” button to return to the view to see current Precon Data information.

25. Click here if you don’t want to save any of your changes. 16. Please note the statement at the bottom of the Cost Escalator screen, “COST ESCALATOR PROCESS NOT APPLICABLE FOR PHASES WITH STAGE EQUAL TO “AUTHORIZED” OR “AWARDED.” 17. If you have not already saved your updates, and if you want to Exit the screen without saving any of your changes, click on the “EXIT W/O SAVING” button.

26. 18. If you have saved your updates and when you are ready to exit the Cost Escalator screen, click on the “EXIT” button. An information box containing “Changes have been saved” will appear on the screen and just click on the OK button, and you will return to the “Milestone Update” screen.

27. Click here to return to the main Oracle SYP menu screen. 19. Upon returning to the “Milestone Update” screen, you can query a different project to make updates or you can click on the exit button to return to the main Oracle SYP menu screen.

28. 20. Oracle SYP Main Menu Screen