Click on a link below for an explanation of SEF terms:
Non rental and Leased assets
HEWCF: SEF manages the Highway Equipment Working Capital Fund, or HEWCF. The HEWCF is used to maintain the fleet and replace fleet vehicles. SEF receives no direct General Fund appropriation; its funding comes from fees paid by other state agencies. There are many different categories of assets that SEF manages and maintains. SEF has a complex coding system designed to allocate fleet costs to the fleet users who incur those costs. SEF's rate system is designed to 'break even,' or allocate all costs to customers. Over/under adjustments are made to all rate programs when an over or under collection occurs.
The billing status of an asset determines what charges an asset gets. Billing status is composed of two parts: the type (Wet, Dry, and Non), and the life.
Wet Assets: A HEWCF vehicle or equipment that SEF is responsible for all of the maintenance of. Wet assets are charged a monthly operating rate,*** which covers the maintenance of the asset. Example: Fish & Game has a pickup that is a wet asset. The monthly operating rate is $100. In one month the truck gets a flat tire, and SEF repairs the flat; the next month the transmission fails requiring expensive repair. The month after the truck does not require service. F&G will pay $100 each month for the maintenance of the asset. Wet assets also pay a monthly replacement rate. Wet assets have a W as the first character of their billing status.
Dry Assets: A HEWCF vehicle or equipment that the user is responsible for maintenance of. SEF can perform maintenance on these assets, in which case the user is charged for the maintenance costs. Typically dry assets are located in remote areas where SEF does not have a mechanic. SEF is required to inspect these assets and their maintenance records every year. Dry assets are charged a monthly replacement rate. Dry assets have a D as the first character of their billing status.
Non-Rental Assets: Vehicles and equipment that are not purchased with HEWCF funds. These include Airport equipment purchased with federal funds, trailers purchased with boats using the general fund, and other funding sources. Maintenance on non-rental assets is the user/owners responsibility; any service performed by SEF is directly charged to the user. Non-rental assets do not pay any replacement or operating rate, but are charged certain replacement fees. Non-rental assets have an N as the first character of their billing status.
The expected life, in years, of an asset. Light duty assets are typically given a life of 7 years, but can be more or less based on a user's needs. Heavy equipment life varies from 10-20 years based on the class of equipment and the users needs.This is the length of time that an asset is depreciated, and also used to calculate a replacement rate.
Z status assets: When an asset reaches the end of its amortization period it enters Z status. A Z status asset should have roughly the proper amount of replacement credits generated to purchase a replacement. when an asset enters Z status its replacement rate is recalculated to collect the difference between what has already been collected and what the estimated replacement cost will be.
X status assets: Vehicles that have been kept after being replaced. An X status asset has reached the end of its originally planned useful life, been replaced but kept by the user as an additional asset. X status assets are charged a rental fee which does not generate any replacement credits. This fee is designed to offset the loss in salvage value from keeping an asset longer than was originally intended. All maintenance on X status assets is directly billed to the user.
WN assets: A special billing status for assets that SEF maintains (wet) that are not being replaced by the HEWCF. These assets are charged an operating rate but not a replacement rate. Example: a loader or grader at a rural airport; SEF maintains these assets but they were purchased by federal airport funding and will not be replaced by the HEWCF.
Operating Rate: SEF ACCOUNT CODE 73423 A constant monthly rate paid for the maintenance costs of an asset. For FY09 and beyond, operating rates are computed individually for each piece of equipment. They are an average of the maintenance costs of that piece of equipment for the last three years. Equipment or vehicles in service less than one year pay an average operating rate based on other vehicles of the same class. Operating rates are similar to the maintenance contract you might have on an office copier. You pay a monthly or annual fee whether the machine needs service or not, but you do not pay a fee each time it is serviced. Operating rates are computed each year using the average costs FAQ's.
Replacement Rate: A monthly rate paid to accumulate funds to replace a vehicle when it is at the end of its life. Replacement rates are calculated individually by vehicle, using the original cost, any capitalized costs, salvage value, and accumulated credits. Replacement rates are designed to generate enough funds to replace the asset with a similar asset without upgrades.
Replacement Fees: SEF collects replacement fees to offset the overhead costs associated with managing the fleet. In prior years this cost was allocated only to users with full-life (not fully amortized) HEWCF units. Through the development of separate fees for the different services we provide, the costs are more fairly distributed. These fees are not additional costs, they are the same cost allocated using a more accurate method. Replacement costs are displayed on the bill as Allowed ACCT CODE 73428 and Unallowed ACCT CODE 73429
Allowed/Unallowed charges: Many state agencies are reimbursed for their costs by the federal government. A strict set of guidelines has been established regarding what vehicle costs are able to be charged to the federal government. All operating or maintenance costs can be charged, but only a portion of the replacement charges are eligible for federal reimbursement. SEF separates for each asset the amount of the replacement rate that is allowed, or eligible for reimbursement, and that which is un-allowed, or not eligible. These amounts are displayed on the monthly bill for each asset. The allowed portion of the replacement rate is also known as the Federal Fixed Fee.
Procurement/Disposal Fee: A monthly fee charged to each asset that SEF procures or disposes of. This fee covers some of the overhead associated with writing bid specs, contracts, purchasing, disposal auctions, etc. It is charged to all assets that SEF has a hand in procuring or disposing of. Previously these costs were included in the replacement overhead percentage. The amount of the fee is based on the overhead costs and allocated to each asset in 2 parts: a flat fee plus a percentage of the asset's original cost.
Asset Management Fee:An annual fee charged to each asset that SEF maintains records for. This fee is designed to cover the overhead costs associated with maintaining records, both computerized and paper, performing a statewide annual inventory of all vehicles and equipment, and licensing and titling costs. Previously these costs were included in the replacement overhead percentage.
Replacement Overhead: A percentage added to the replacement rate of an asset. This percentage is added to account for interest paid on funds borrowed for replacement of vehicles, and any losses incurred from the disposal of assets. All fees collected for X status rentals are used to offset these costs and keep the percentage low. The percentage adjusts the replacement rate and does not generate replacement credits. Example: To generate enough replacement credits to purchase a new vehicle, the monthly rate is $100. If the overhead percentage is 5%; the monthly replacement rate of that asset would be $105.
FUR Rate: FUR is an acronym for Fixed Utilization Rate. This rate is calculated for DOT assets so they can be charged on a per mile or hour basis. the FUR rate consists of the Federal Fixed Fee plus all operating costs plus all fuel costs, divided by the annual usage of an asset. The FUR rates are computed annually for each class and district within DOT.
Daily Rental Pool: SEF maintains a small pool of light duty vehicles to be rented out on a short term basis. These vehicles are charged by the day and the daily rate includes all fuel and maintenance costs. SEF keeps daily pool vehicles in more than 30 locations around the state; any state employee is able to use them for state business.
Maintenance Costs: SEF applies costs according to the amount of time spent servicing an asset and the cost of parts and supplies (commodities). Labor is charged at an hourly rate which varies across the state based on the SEF district performing the work. Parts costs are applied at a marked up cost; the markup percentage also varies based on the SEF district. All maintenance charges include a commodities charge for supplies, environmental disposal fees, etc.
Billable Services: SEF ACCT CODE 73424 SEF Maintenance costs that are directly billable to the user. This would include service on dry assets, non-rental assets, leased assets, X-status assets, and costs to repair damage from negligence or accidents. These costs are not factored in to the calculation of operating rates.
Capitalized Costs: Costs incurred by SEF to make a vehicle or equipment ready for the user's intended purpose. These may include adding a snowplow, installing a prisoner screen, adding a bedliner utility body, adding lights or beacons, etc. These costs are factored into the replacement rate calculation.