The document emphasizes the importance of structuring cost codes to accurately identify non-assessable costs in construction for effective property tax reporting. It outlines the necessity of tracking specific costs separately, such as subsistence and freight, to avoid estimates and defend assessments. Additionally, it highlights the need for inclusion of information requirements in contracts to facilitate efficient processing of property tax-related data.

1. Construction Cost Reporting
Contracts & Cost Breakdown Structure
P R O P E R T Y T A X C O N S U LT I N G
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Identifying the actual amount of
non-assessable cost is a much simpler
exercise if the cost codes are structured so as
to correspond with the CCRG’s
non-assessable categories. For example,
subsistence cost is often buried in labor tickets
and needs to be estimated. By setting up a
‘subsistence’ cost code, and mandating that
contractors and subcontractors track this
expense separately, the actual subsistence
cost can be accurately identified, and no
estimate will need to be made (and therefore
defended to the assessor).
Other examples of costs centers to track separately:
Freight
Nonproductive labor
The premium portion of overtime paid
Spare parts
Rework and Interference
Retention bonuses, incentives (isolation pay)
Travel and camp expenses
With respect to contract setup (especially in a lump sum / unit rate contract), the most important thing to
include in the contract is a clause that ensures the contractor must provide any information required for
property tax reporting. Efficient information flow and availability of complete, accurate, information are critical
factors when looking to add value through the cost reporting process.
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