WIC EBT Feasibility Study and Cost‐Benefit Analysis

Virginia Department of Health WIC EBT Feasibility Study and Cost-Benefit Analysis
5. COSTS RELATED TO THE PAPER-BASED SYSTEM
Costs of the paper-based system were acquired through data provided by the State; invoices from
the banking contractor; and time estimates/time studies provided by State and local staff.
Details of the paper based cost analysis are provided in Appendix C.
As seen in Figure 10 displayed below, the annual baseline cost of materials, services and labor
is $1.94 million. The largest portion of these costs ($1.1 million) is State and local labor,
based solely on activities related to the paper based process.
At $1.8 million, annual retailer costs are substantial. Labor costs include the time spent in-lane
(by cashiers and managers), and back-office time spent in preparing deposits, reviewing rejects,
and entering data into RSMS.
BASELINE
ESTIMATED COST FOR OUT‐YEARS, PAPER‐BASED ISSUANCE
Calendar Year 2008 2009 2010 2011 2012 2013 2014 2015
Total Labor Costs $ 1,306,501 $ 1,345,696 $ 1,386,067 $ 1,427,649 $ 1,470,479 $ 1,514,593 $ 1,560,031 $ 1,606,832
State Level Labor $ 171,639 $ 176,788 $ 182,092 $ 187,554 $ 193,181 $ 198,976 $ 204,946 $ 211,094
Operations $ 18,478 $ 19,032 $ 19,603 $ 20,191 $ 20,797 $ 21,421 $ 22,064 $ 22,726
Retailer $ 46,446 $ 47,839 $ 49,274 $ 50,753 $ 52,275 $ 53,843 $ 55,459 $ 57,123
Technical $ 73,059 $ 75,251 $ 77,508 $ 79,833 $ 82,228 $ 84,695 $ 87,236 $ 89,853
Business $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
Nutrition $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
Contractor Support $ 25,239 $ 25,996 $ 26,776 $ 27,579 $ 28,407 $ 29,259 $ 30,137 $ 31,041
Indirect Costs $ 8,417 $ 8,669 $ 8,930 $ 9,197 $ 9,473 $ 9,758 $ 10,050 $ 10,352
Regional & Local Labor $ 1,134,862 $ 1,168,908 $ 1,203,976 $ 1,240,095 $ 1,277,298 $ 1,315,617 $ 1,355,085 $ 1,395,738
Food Instrument Issuance $ 945,456 $ 973,819 $ 1,003,034 $ 1,033,125 $ 1,064,119 $ 1,096,042 $ 1,128,923 $ 1,162,791
Material Management $ 124,160 $ 127,885 $ 131,722 $ 135,673 $ 139,743 $ 143,936 $ 148,254 $ 152,701
Contractor Support $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
Indirect Costs $ 65,247 $ 67,204 $ 69,220 $ 71,297 $ 73,436 $ 75,639 $ 77,908 $ 80,245
Material Costs $ 282,142 $ 290,606 $ 299,324 $ 308,304 $ 317,553 $ 327,080 $ 336,892 $ 346,999
Banking Contractor Costs $ 357,459 $ 357,459 $ 357,459 $ 375,331 $ 412,865 $ 412,865 $ 412,865 $ 412,865
TOTAL COST TO STATE $ 1,946,102 $ 1,993,761 $ 2,042,850 $ 2,111,285 $ 2,200,897 $ 2,254,538 $ 2,309,788 $ 2,366,695
Retailer‐Borne Costs $ 1,826,229 $ 1,869,912 $ 1,914,905 $ 1,961,249 $ 2,008,982 $ 2,058,147 $ 2,108,788 $ 2,160,947
Labor $ 1,456,094 $ 1,499,777 $ 1,544,770 $ 1,591,113 $ 1,638,847 $ 1,688,012 $ 1,738,653 $ 1,790,812
Loss $ 370,135 $ 370,135 $ 370,135 $ 370,135 $ 370,135 $ 370,135 $ 370,135 $ 370,135
TOTAL BASELINE COST
Including Retailer‐Borne Costs $ 3,772,331 $ 3,863,673 $ 3,957,756 $ 4,072,533 $ 4,209,879 $ 4,312,685 $ 4,418,575 $ 4,527,643
FIGURE 10: BASELINE AND OUT-YEAR COSTS
The costs identified in this analysis form the basis of the cost comparison in the e-WIC
Feasibility Study.
63 V 1.2 August 20, 2008 Appendix B: Baseline Analysis