1. ETS Rate Model Development 2015/17

2. Agenda Brief History of ETS Rates Development Outcomes of Rate Development Processes Benefits of using proposed rate methodology Service Lines Process & Key Planning decisions Timeline Rate Elements Customer Input

3. Rate Development History Assessment 2006 - 2007 Finance Committee 2008 - 2012 FullCost Refining 2013 Rate Usage Lessons Learned Transparency

4. History – Lessons Learned Iterative Methodology Adjustments Defining Services Units Cost Allocations Resulted in continuous rate adjustments Rate Transparency requested

5. Today’s Rates Bringing forward learning from the past True Cost of Delivering a Service Eliminate subsidization

6. Process Compensation HW/SW Maintenance Overhead Forecast Costs Forecast Usage ÷ = Unit Rate Pricelist Customer Budget Estimates by Customer by Service line Trend Analysis Growth Projections Customer Feedback Forecast Usage × =

7. Outcomes & Benefits List of products and services Clearly defined Discrete products Stabilize rates Collaborative planning with customers Refine our usage and cost projections Investment vs. Refund

8. Outcomes & Benefits cont. Publish Rate & Pricelist Eliminate subsidization True cost of service delivery Budget predictability A-87 compliant rates Service Benchmarks Demonstrate value for services provided

9. Questions ?

10. Rate Sheet & Pricelist Example

11. CUB Responsibilities Review and approve methodology Key meetings to review work to date Transparency of rate model includes internal and external scrutiny Final layer of CUB scrutiny Final rate approval

12. ETS Rate Methodology Define services to meet business demand Unit descriptions Forecasted current customer usage & growth New customer projects New customers

13. ETS Rate Methodology cont. Pessimistic and optimistic forecasts Staffing assumptions Forecasted external Forecasted overhead costs

14. Service Rate Development Rate Development ETS Management Review Customer Review CUB Governance Review Pricelist & Rates

15. ETS Rate Model and Project Timeline

16. ETS Services Lines Application Services Application Delivery E-Government Data Network Services Local Area Network State Network Access Data Storage Services Backup Data Storage

17. ETS Services Lines cont. IT Professional Services Managed Computing Services Collocation Hosting Workplace Productivity Services Computer Lab Desktop Services Enterprise Email Phone

18. Example of a Computing Rate

19. ETS Rate Development - Common Terms FullCost ™ Tool Tool used to define services, develop business plan, budget planning and calculate rates Budget Units An aspect of our planning tool that allows the ETS budget to be segregated by services offered Internal Costs Buy and sell services within the organization

20. Common Terms cont. External Costs Expenses paid outside the organization Deliverables A service or product sold to the customer Cost Pools A collection of costs spread across more than one deliverable or allocated to a specific service

21. Key Messages CUB & ETS experience Value Collaborative Planning Thank you!!!