Delbert L. and Margaret J. Baker - Page 18

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          The explanation notes that allocations for ALUs and SCUs are the            
          same except for maintenance, landscaping, administration,                   
          insurance, contracts, utilities, and interest, which were                   
          allocated on the basis of two-thirds of the SNF costs.                      
               The report contains an allocation of costs to the emergency-           
          pull-cord system for ILUs for 1998.5  The cost was determined by            
          developing an average hourly rate for front desk staff monitoring           
          the system, multiplying this by the number of hours in a year               
          (because the system was monitored 24 hours a day), and then                 
          adding an overhead cost factor of 30 percent of the staff cost.             
          On the basis of an average hourly rate of $7.75, the total cost             
          to monitor the emergency-pull-cord system for ILUs was determined           
          to be $88,257.6  Mr. Dalton calculated this allocation.                     
               The report contains revenue totals for 1997 and 1998 for               
          monthly services fees from ILU residents.  For 1997, the total              
          monthly service fees from ILU residents are listed as $7,979,906.           
          For 1998, the report lists total monthly service fee revenue of             


               5The report does not contain a cost allocation to monitor              
          the system for ILUs for 1997.                                               
               6The following represents the calculations contained in the            
          report:                                                                     
          Hours required (365 days x 24 hours)    8,760                               
          Average hourly rate                     7.75                                
          Total staff cost                   $67,890                                  
          Overhead of 30 percent                20,367                                
          Total cost to monitor              $88,257                                  





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