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h~ ~\~ ~'yh Salem Area Mass Transit District Courthouse Square COST ALLOCATION Purpose: The purpose of the cost allocation analysis is to establish the reasonable basis for the payment of shared costs in the Courthouse Square development and prorata payment of construction related progress payments. Principles: The partnership between Marion County and the Salem Area Mass Transit District for Courthouse Square, as memorialized by the Intergovernmental Agreement, enables the two public agencies to realize savings through the sharing of costs which otherwise would have accrued to an individual agency. This cost allocation model will establish the basis on which those costs will be reasonably shared and, when completed, will deternzine each party's prorata. share of the entire development project. In that manner, all invoices for services to the project can be paid by the paying agent upon receipt of each party's prorata share of the invoice, rather than the untimely and costly necessity of trying to determine the actual share of each invoice. Given the condominium nature of the development and the inter-mixed elements of the project, the latter method of determining costs would be almost impossible, whereas, the former proposed method, established by independent cost-estimators and reaffirmed from the bids, provides a simple, accurate, and cost-effective method of payment and fiscal control. Analysis: For purposes of this analysis, cost sharing has been divided into four categories: 1. Land Related Costs 2. Special Considerations 3. Construction Related Costs 4. Change Orders Land Related Casts: The property acquisition model, previously approved by N'TA and recently updated in accordance with the final design development plans, established that Transit has acquired a 31.29% undivided interest in the downtown block now known as Courthouse Square and upon which the project will be developed. Cost Ch2 Cost Allocation 09/23/98 1