Item 11 - Proposed Organizational Study/Mngt. Audit Request for Qualifications/Request Solicit Proposals
:.GENDA REPORT ~ -
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CITY OF POW A Y
TO: Honorable Mayor and Members of the City
FROM: James L. Bowersox, City Man~
INITIATED BY: Peggy A. stewart, Director of Administrative Services
Janis Acosta, Management AnalYs~
DATE: March 17, 1992
SUBJECT: Proposed Organizational study/Management Audit Request
for Qualifications and Request to Solicit Proposals for
a Revenue-Cost Analysis and Sales Tax Audit
ABSTRACT
In response to the City Council's pursuit to improve the quality
of services provided by the City, to assess the city's revenues
and expenditures to determine whether fees assessed by the City
cover costs associated with services provided by the City, and to
ensure that the city is receiving an appropriate sales tax
allocation from revenues generated within the City, it is being
recommended that the city Council approve the proposed
Organization Study/Management Audit Request for Qualifications
provided in Attachment A and direct staff to solicit proposals
from the Management Services Institute, Inc to conduct a Revenue-
Cost Analysis and from Hinderliter, de Llamas and Associates to
perform a Sales Tax Audit of the city.
BACKGROUND
On November 21, 1991, the city Council concurred that an
independent audit of the City'S operations would be valuable for
improving upon the quality of service the City provides to the
public. In response to the Council's request for further
management audit information, on January 16, 1992, staff provided
the City Council with information about the various types of
independent management audits available and indicated to the
Council that the scope of work for an audit is entirely dependent
upon the City's specific expectations for the management audit
process. At that time, the City Council agreed that the selected
firm would provide the city assistance in developing the audit's
scope of work and directed staff to begin drafting a Request for
Qualifications.
ACTION:
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Agenda Report
Request for Qualifications
March 17, 1992
Page 2
FINDINGS
Provided in Attachments A is a proposed Request for
Qualifications (RFQ) for an Organization study/Management Audit.
The proposed Organizational study/Management Audit RFQ specifies
that the City of poway maintains a commitment to excellence in
public service and is seeking a management consulting firm in an
effort to improve upon the City's quality of service. The
General Scope of the RFQ explains further that the City is
pursuing a management audit to improve responsiveness and
efficiency through the process of evaluating how the City
provides public services, identifying potential areas of
improvement, and looking at recommended alternatives.
Although government agencies are not often equated with quality,
staff has found through the process of developing the proposed
RFQ that a recent trend in government is an emphasis on quality
service and productivity. Cities are attempting to create more
flexible and citizen-orientated agencies by questioning how to
provide quality service while seeking ways that enable the city
to become more efficient and responsive. Since quality is
difficult to measure, many cities are beginning to conduct annual
citizen surveys. Surveys have become useful in finding out if
citizens are satisfied with city services and whether city
departments are meeting the needs of customers. Through a
commitment to quality, employee quality training sessions, and
exploring new ways of providing customer service, cities are not
only improving efficiency and responsiveness but are beginning to
create customer driven agencies. -
In an effort to emphasis the City's commitment to quality,
section three of the proposed RFQ includes a list of general
issues to be addressed by the selected firm during the audit
process. Specifically, the issues consist of looking at ways of
improving the quality of direct services provided by the City,
evaluating the role of the City's citizen advisory committees,
developing "quality" standards to be incorporated in the City's
General Plan, and assessing ways the City can improve
communication and responsiveness with citizens. The list of
issues also includes reviewing and improving the City's permit
process as well as looking at areas where the city could utilize
private sector principles, contract more services, or pursue
privatization.
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Agenda Report
- Request for Qualifications
March 17, 1992
Page 3
section three of the organizational study/Management Audit RFQ
indicates that the audit process will begin with the selected
firm first meeting and working with the City Council to develop
the study's scope of work. The RFQ specifies that the public,
including the poway Chamber of Commerce, Civic Associations, and
Budget Review Advisory Committee, will be invited to provide
input throughout the audit process. section three also specifies
that after the scope of work has been determined, the total
amount for the contract will be negotiated prior to implementing
the work plan.
Within section four of the RFQ, each firm is required to provide
a detailed proposal including a description of the firm,
references and work samples of similar work performed,
description of approach, and proposed work plan. Firms would
also be required to provide resumes, references, and descriptions
of similar projects as well as a description of responsibilities
for each employee the firm assigns to the project. Furthermore,
the City would require information about the firm's hourly rates
and availability for employees in addition to a time estimate and
..-- cost range for completing the study/audit process.
Since the city may require components from both an organizational
study and management audit, "organizational study" has been added
to the Management Audit's RFQ title. Typically, an organizational
study consists of an analysis of an agency's organizational
structure while a management audit includes the review and
assessment of the organization, management, operations,
effectiveness, workloads, staffing, and morale of the agency.
In terms of a process for selecting a firm, responses for the
Organizational Study/Management Audit RFQ would be evaluated by a
subcommittee comprised of council members, Budget Review Advisory
Committee members, and staff. The subcommittee would select the
most responsive firms for an interview based on proposal
qualifications. The City council would then receive
recommendations from the subcommittee based upon the interview
process and the evaluation of the most qualified proposal.
In addition to conducting an Organizational Study/Management
Audit, a Revenue-Cost Analysis and Sales Tax Audit are being
proposed to address the Council's previous interests expressed
about whether fees assessed by the city cover costs associated
with services provided by the City and if the City is receiving
an appropriate sales tax allocation from revenues generated
,- within the City.
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Agenda Report
Request for Qualifications
March 17, 1992
Page 4
A Revenue-Cost Analysis would provide the City with a detailed
assessment of the City's revenues and expenditures by identifying
and comparing revenues with costs related to providing services,
analyzing available revenues and fee structures, and looking at
the strengths and weaknesses associated with financing City
services. The analysis would also assess alleviatory measures
for financing city services while identifying and recommending
available revenue sources that may be used or more efficiently
utilized. The selected firm would be asked to include salaries,
full fringe benefits, expenses, supplies, building occupancy and
equipment charges, departmental and general city overhead,
indirect costs, fixed asset charges, and miscellaneous costs in
the analysis of the City'S expenditures.
Many cities in California are finding that they are not receiving
their entire sales tax revenue allocation due to point-of-sale
distribution and reporting errors. Due to distribution errors,
municipal sales tax revenue has at times been misallocated to the
state Pool, County Pool, or other jurisdictions. The pursuit of a
Sales Tax Audit would ensure that the City is receiving an
appropriate sales tax allocation from revenues generated within
the city. A Sale Tax Audit would consist of a firm gathering
information about the City's sales tax base, inventorying and
analyzing every business within the City, identifying point-of-
sales distribution and reporting errors, and facilitating
corrective action when point-of-sales errors are identified.
Since both a Revenue-Cost Analysis and Sales Tax Audit are more
technical in nature than a organizational study or management
audit, staff is recommending that the City solicit proposals from
two specific firms that are widely utilized by municipalities.
It is suggested that the City solicit a Revenue-Cost Analysis
proposal from the Management Services Institute, Inc. and a Sales
Tax Audit proposal from Hinderliter, de Llamas and Associates.
Once proposals are received from the two firms, the proposals and
contracts would be brought forward to the city Council for
approval.
Provided in Attachment B is a copy of a Revenue-Cost Analysis
proposal prepared by the Management Services Institute, Inc.
(MSI) for the City of Riverside. City staff have recently met
with Douglas Ayers, Chairman of MSI, Inc. to discuss services
available through MSI-copyrighted Municipal Business System. A
letter dated January 27, 1992 recapping the meeting with Mr.
Ayers is provided in Attachment C. Mr. Ayers indicated to the
City that it would take approximately six to twelve months to
conduct a Revenue-Cost Analysis on MSI's Municipal Business
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Agenda Report
- Request for Qualifications
March 17, 1992
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System and that the costs for conducting the analysis would total
$78,000. The process for conducting the analysis would include
MSI staff meeting with City staff to gather financial data as
well as train staff to use the MSI Municipal Business System.
The total cost of the Revenue-Cost Analysis includes conducting
the analysis, providing the City with the necessary software
programs and data, and travel and on-site subsistence expenses.
A brochure of sales tax management services offered by
Hinderliter, de Llamas and Associates is provided in Attachment
D. Hinderliter, de Llamas and Associates have indicated that the
firm identifies and corrects point-of-sale tax misallocations
through computer analysis, cross directory checks, field
investigations, and ongoing coordination with businesses and the
State Board of Equalization. The firm also focuses on educating
local businesses about business tax when correcting critical
errors rather than enforcement so improve municipalities'
relationships with local businesses.
FISCAL IMPACT
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An Organizational Study/Management Audit costs in the range of
$12,000 to $55,000. The lower range costs would relate to a
smaller scope of work such as departmental analysis and the
higher end of the range would involve a full organizational
analysis. A Revenue-Cost Analysis has been estimated to cost
$78,000. The cost of Sales Tax Audit conducted by Hinderliter,
de Llamas and Associates is unknown at this time, however the
contract with the firm would be structured to produce an economic
return greater than the cost of the tax audit service.
RECOMMENDATION
It is recommended that the city Council approve the proposed
Request for Qualifications for an Organizational study/Management
Audit and direct staff to solicit proposals from the Management
Services Institute, Inc to conduct a Revenue-Cost Analysis and
from Hinderliter, de Llamas and Associates to perform a Sales Tax
Audit of the City.
Attachments:
A. Request for Qualifications - Organizational
Study/Management Audit
B. Sample Revenue-Cost Analysis proposal
C. Letter dated January 27, 1992 from Douglas Ayers,
Chairman of Management Services Institute, Inc.
D. Hinderliter, de Llamas and Associates Brochure
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CITY OF POWAY
Request for Qualifications
ORGANIZATIONAL STUDY / MANAGEMENT AUDIT
I. GENERAL SCOPE:
The City of poway is seeking a management consulting firm to
conduct an organizational study/management audit of the City's
operations. The City of poway has a commitment to excellence in
public service and desires to look at ways in which the City can
improve the quality of its service to the public. Through the
process of an organizational study/management audit, the city is
seeking to improve responsiveness and efficiency by evaluating
how the City currently provides public services, identifying
potential areas of improvement, and looking at recommended
alternatives.
II. BACKGROUND INFORMATION:
The City of poway is a rural residential community encompassing
40 square miles in the County of San Diego and has a population
of approximately 44,500 residents. The city incorporated in
December, 1980 as a full-service general law City and operates
under the Council/Manager form of government. Currently, the City
has 218 full-time employees and provides water, sewage disposal,
fire, paramedic, park and recreation, planning and building,
engineering, street maintenance, and landscape maintenance
services. Law enforcement services are provided by the San Diego
County Sheriff's Department.
Since incorporation, the City of poway has been growing at an
extremely rapid pace. In 1983, the poway Redevelopment Agency
was established with a $400 million financing cap which serves
the 8,200 acre paguay Redevelopment Project area. In the mid-
1980's, the City began actively working toward the development of
the 2,400 acre South poway Planned Community in which the City
has successfully encouraged commercial and industrial development
in south Poway's 1,200 acre South poway Business Park.
Furthermore, within the past ten years, the City has constructed
an 815 seat Performing Arts Center, entered into numerous joint
projects with the poway Unified School District, developed over
141 acres of parkland, constructed an olympic-sized community
pool, and networked over 50 miles of pedestrian/equestrian
trails.
III. ISSUES:
The firm selected to conduct the organizational study will first
begin working with the poway City Council to develop the study's
specific goals, objectives, and scope of work. Since the City
Council would like the pUblic to have an opportunity to
ATTACHMENT A ITEM 11
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participate in the study, the Poway Chamber of Commerce, Civic
- Associations, and Budget Review Advisory Committee will be
invited to provide input throughout the Organizational Study/.
Management Audit process.
Once a scope of work has been determined for the organizational
study/management audit, the total amount for the contract will be
negotiated prior to the commencement of the work plan.
Seven specific issues to be addressed during the study include:
1) looking at areas within the city where direct service is
provided by the City and determining how to enhance the quality
of providing those services; 2) assessing how the City can
improve its communication with the public; 3) exploring ways in
which the City can independently determine how government can be
more responsive (ie., citizen surveys); 4) developing "quality"
standards to be included in the City's General Plan; 5) reviewing
the city's permit process to determine whether there are ways to
improve upon the process and to ensure t~at the City is doing
everything possible to accelerate the permit application process;
6) considering areas where the city might utilize private sector
principles or begin contracting out more services or pursue
privatization; and 7) evaluating the role of the City's various
citizen advisory committees and assessing whether committees
should continue to act in an advisory capacity or become
responsible for operational decisions.
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IV. STATEMENT OF OUALIFICATIONS:
Firms interested' in sUbmitting a statement of qualifications to
the City of poway should provide a detailed proposal which
includes the following information:
A. A description of the firm
B. References and work samples where similar work has
been performed by the firm
c. Description of proposed approach to conducting the
organizational study/management audit and outline of
proposed workplan
D. Resumes, references, and descriptions of similar
projects for each employee that would be assigned to
work on the study
E. Description of responsibilities assigned to each
employee that would be involved in conducting the study
F. Hourly rates and availability of each employee involved
in the analysis
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G. Estimated time required to complete the analysis
H. Cost range for conducting the analysis
V. INTERVIEW PROCESS:
All responses received by the City of poway will be carefully
evaluated by a subcommittee comprised of Council members, Budget
Review Advisory Committee members, and city staff. Based upon
proposal qualifications, the most responsive firms will be
selected for an interview. Following the interview process, the
City Council will receive recommendations from the subcommittee
based upon evaluation of the most qualified proposals. The City
Council will then make a selection and enter into negotiations
with the selected firm.
VI. SUBMITTAL INFORMATION:
All responses to the Request for Qualifications must be received
by the City no later than . Please
submit all responses to the following address:
city Manager's Office
City of poway
P.O. Box 789
Poway, CA 92074
For questions or additional information, contact Peggy stewart,
Director of Administrative Services, at (619) 679-4311-
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PROPOSAL
TO PREPARE AND IMPLEMENT j'.
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MUNICIPAL BUSINESS SYSTEM
FOR THE CITY OF RIVERSIDE
_. 1ft Management
91 Services Institute
9 of 42 ATTACHt.1ENT B MAR 1 7 1992 IT~M 11
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Copyright 1989 by Management Services Institute, Inc.
All righ Is reserved. 'No part of this work covered by the copyright
hereon may be reDroduced or copied in any form or by any means --
graphic, electronic or mechanical, including photocoPyinl:, recording,
taping or information storage and retrieval systems -- wilhout written
permission of Management Services Institute, Inc., 14790 Firestone
Boulevard, La Mirada, California 90638 (714) 670-0800
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Douglas Ayres. President ~ ~ I
Rick Kermer, ~PA, VieePresident III Management ServiCeS Institute
Lee Weber, Vice President INCOIiII'OIlAHD
_James D. Williams, Viee President 14790 FIRESTONE BLVD., SUITE 200, LA MlRADA, CA 90638 714/670.0800
January 20, 1989
Honorable Mayor and City council
VIA:
Mrs. Barbara Steckel, Finance Director
City of Riverside
3900 Main street
Riverside, California 92522
Honorable Mayor and city Council:
This Proposal is presented to the Mayor and City Council as
authorized by the city Council Finance Committee at its January 9,
1989 meeting. The Proposal is based on numerous discussions held
between Finance Director Barbara Steckel, Assistant city Manager
Larry Paulsen, Budget Officer Bob Tremont and me over the past
several months.
The MSI-copyrighted Municipal Business System is based on the legal
requirements and inherent business principles of California
Constitution Article XIIIB, the so-called "Gann Proposition 4
Initiative". At completion of our work the Mayor and City Council
will have data enabling you to make policy decisions based on full-
costing data not previously made available by the City's standard
governmental accounting and supplemental standard cost distribution
system.
In our process we are able to answer two big nagging questions
constantly asked in various forms by those who make payments to
local government:
1. What am I getting for my money?
2. Who is paying for what services?
Our work has been accepted on a sole source basis by every City
for which we have worked because of our copyrighted forms, system,
Report, and IBM/PC-compatible software. We license all to the city
at completion of the work.
Further, our work products are additionally unique in that they I
have numerous baCk-up volumes and the computer program, all of
which document an audit trail. All our numbers can be reproduced,
explained how they were originally derived, and thus verified and
updated or revised by city staff. A very minor portion -- around I
eight percent -- of our overall work is what has commonly been
referred to as "a cost allocation plan". MSI' s work generally
_ follows the principles and requirements of Federal OMB Circular A-
87 (FMC 74-4). Such a federal CAPlan, if needed, can be produced
from our copyrighted CAP templates for little additional work, I
either by us or by City staff, once our overall work is completed. .
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city of Riverside Proposal -- Page 2
An extensive list of city staff and elected official names and
telephone numbers is provided in the Proposal to verify all our
contentions. Please call them -- any and all of them.
I personally do all the presentations, which after delivery of the
Report or Reports typically consist of a staff meeting and four or
more City Council study sessions, followed by a presentation at the
statutorily-required public hearing. Then there are several
department/division head implementation meetings. We also provide
a series of adoption and implementation documents consisting of an
ordinance, a public hearing notice, a resolution, and an executive
order form. This process has been accepted and approved by several
score City Attorneys.
In summary, Management Services Institute, Inc. performs techni-
cally proficient work which is politically sensitively performed
and presented, and adopted, and implemented.
Our Reports have never resulted in an increase in All Funds reve-
nues of less than 10%, without political problems. And all our work
is based on the letter and spirit of Article XIIIB of the
california Constitution, otherwise known as the Gann Prop 4
Initiative.
We look forward to the possibility of working with the Mayor, city
Council, and staff of the City of Riverside to assure the financial
viability of all City services and the City financing base by
seeking ways to serve most economically and to finance most fairly
the City services enjoyed by the residents, business persons, and
organizations in the City.
Should you have any questions I will be pleased to respond to them
personally or in writing.
sincerely,
CV.~
DOUGLAS W. AYRES
President
Proposal Attached
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_ PROPOSAL
Management Services Institute, Incorporated (MSI) is pleased to
submit this Proposal to customize and implement our copyrighted
Municipal Business System for the City of Riverside.
General Backaround of prooosal
MSI herewith agrees to apply our copyrighted computerized Municipal
Business System to making a comprehensive analysis of all fee and,
if selected, tax-financed services of the city. Our MBSystem has
now been adopted by 70 client cities, and we are working on cities
71 through 77.
As we point out later herein in detail, the strength of our
MBSystem system is in the ability of the city Council to utilize
the findings to make informed policy decisions, and in staff being
able to know and to control costs.
You will note from perusal of the Proposal that our approach to
governmental financial management is unique both as to technique
and application. Our System will permit the City to operate itself
in a more 'businesslike manner and, in the process, be free of
fluctuating state and federal revenues and have an organized way
to balance revenues with service demands.
More important, our System assures a considerable measure of
fairness and equity for taxpayers in the payment for City services
by those who most use those services, thus in the process, it
implements not only the letter but also the spirit of Proposition
4 of 1979 (the Gann "Spirit of 13" Initiative), now Article XIIIB
of the California Constitution. And our Plan provides both
financial and political predictability to City finances and
services.
All Components contained in the Proposal encompass the City's
entire operation and all of its agencies.
At the end of our work we provide the City with a perpetual license
to our System, as outlined in the Proposal.
Authorization by the appropriate authorized City official signified
by a letter accepting this Proposal is all we need for our
purposes, or we will execute a formal contract should the City so
desire.
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city of Riverside MBS proposal
Services To Be Provided
Attachment A, following, graphically presents those services which
MSI offers as part of its Municipal Business System Program. You
have expressed a desire for us to prepare for the City those marked
as Components I, II and III. The others could be available to the
City after completion of the outlined Components.
Each is now explained in some detail.
component I -- Revenue/cost Service Center Analysis
As the core of the MSI work, upon which all other Components are
based, Management Services Institute proposes to develop a
business-type costing system for the City such that the full costs
of all fee and tax financed or fee-financable services are known
and quantified. Service centers will be identified for all City-
provided services, specific revenues will be matched to those
specific service centers, and revenue and full costing information
will be provided to City management, the City Council, and
designated service center managers.
Costs will be defined pursuant to the terms and intent of the
authors of Proposition 4 (now California Constitution Article
XIIIB) . All such defined costs will be identified and reported so
that cost control can be improved significantly. Another result
will be specific identification of beneficiaries of services not
received or desired by the entire public so that service fees and
charges can be set equitably, tax subsidies known and limited or
eliminated, if desired, taxes diverted to those who are more needy,
and California Constitutional provisions and rate-limiting
legislation complied with.
This process results in the MSI-copyrighted and computerized
Municipal Business System.
Any process which does not utilize the elements, definitions and
process of Prop 4 is suspect in both acceptance and legality.
What is a MuniciDal Business Svstem CMBS)? The MSI-copyrighted
MBSystem is an analysis of revenues and costs for specific
functions or "service centers." The system applies private business
multi-line corporate costing and management principles and
practices to specific local government services. Revenues and full
business costs for each such center are identified and compared.
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. Attachment A
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MANAGEMENT SERVICES INSTITUTE
FinancIal Systems Components
Capital
Financing
Advisor Strategies
C("'Mp()NENT II I
Accounting Computerization
System Revision Assistanc.
Assistance
T f COMPONENT II
FMC-74-4 General
(A-87) Financing
Cost Allocation Plan Commentary
-- Forms and COMPONENT I Budget Forms
Procedure REVENUE/COST CENTER and
Revisions ANALYSIS System
Long Range Organizational
Financial Analysis
Plan
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Proposition 4 Development
Limit Impact Fee Studies
Computation (AB 1600)
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I Water, Sewer,
Electrical, Refus.
Rate Analysis
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city of Riverside MBS proposal
The basic principle involved is the identification and recognition
of full costs following the Constitutiona;lly intended business
definitions, not just those costs which are budgeted. Costs
include, among others, salaries, full fringe benefits, central
service expenses, supplies, building occupancy and equipment
charges, departmental and general overhead, fixed asset charges,
and miscellaneous costs.
Fee revenues and such costs when identified are then compared to
determine if fees collected cover the cost of providing the
service, or if the general taxpayer is unwittingly and probably
unwillingly subsidizing the service with their City tax monies, by
making up the difference between fees collected and full costs
incurred.
Results of Application of MBS. Attachment B, following, provides
an example of one of several summaries ~ncluded in a Report
completed for another fairly small city four years ago. In this
example some 73 specific fee-financed services were analyzed and
this summary shows the cost for that particular city to deliver
each unit of service and the average revenue received for each
transaction. In broader terms, the total cost to that city to
deliver these 73 services neared $15 million, for which less than
$9 million in offsetting revenue was collected.
The MBSystem also has been applied to cities both smaller and
nearly as large as the City of Riverside, and has proved to be
quite beneficial. See the list of references later in this
Proposal for specific cities.
The MBSystem identifies all cost elements so that City management
personnel can control all costs, and be able to provide City
Council with meaningful policy alternatives due to the availability
of specific cost data relating to the provision of a specific
service.
As important, such comprehensive and detailed data permits the City
Council to make meaningful policy decisions concerning the degree
of tax subsidy, if any, to be provided for each service and to know
where taxes are going so that they might defend such to
constituents as appropriate and necessary. The potential exists
for the City given in the example to significantly enhance the
quality of its services by raising nearly $6 million in annual
revenues outside any tax, revenue, or spending limitations, should
its City Council so desire.
The MSI-copyrighted business-oriented full costing approach
produces similar data for each city analyzed, which data is
customized to the size and variety of services provided by each.
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,-uy VI .Jcl_gll:' "~""~~'~"'-""" L.>
( S""".ry of Reveroues, Costs and ubsidies by Service lkllt
. _ Fiscal Year 198'1-1965 8udg~t_
. SERVICE LNIT SlJ8SIDY
IISI REVEIU COST IPROFITl
. SERVICE CENTER LNIT NJ. PERLNIT PERLNIT PER LNIT
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5-1 BUlldirog Plaro Checklrog Plaro 1,130 '53.10 m.lo 118.00
-- 5-2 Corostructloro Inspectioro Porai t ~,570 193.98 149.H 11-".83)
5-3 ~blle flo.. Pk.Annual Inspection Porait no 12.86 15.87 13. 01
5-~ Bldg. Relocation Review/Routing Poralt 8 1250.00 1210.13 1139.88)
5-5 Revle. of Requested Annexation Appl icat ion ~ 1125.00 sz, 372. 25 12, 2~ 7.25
H Negative Declaration Revi.. Application 166 1150.60 12~.50 1112&.10)
5-7 Envlro....ntal Revi.. Applicatioro 3 1250.00 15, 809. 00 15,559. 00
5-8 Preli.lnary ProJect Revi.. Application 150 SO. 00 1392.59 1392. 59
5-9 Design Revi.. Application 175 S2OO. 00 1355. 90 1155.90
5-10 Land Divisioro RIYi.. Application 12 11~1.67 '346.08 S204. 42
5-11 5ubchvisior, /lap Revi.. /lap 52 '788.46 1303. 19 11485.271
5-12 /lap and I.prov_nt Plan Checking Plan 60 11.166.67 '1,611.35 ~.68
5-13 Public l.prv.t.Enrineerl~ Serv. Parcel ~5 152.67 1605.71 1453. ~
5-1~ Public I.prove_ Inspec ion Peralt 90 1863.33 '1~.17 '507.83
5-15 Zone Variance I Use Revillf Application 12 1150.00 .17 '56.17
5-16 Zone Change Review Application 27 1118.52 1227.70 1109.19
5-17 Condltior..1 Use Revi.. Application 50 12~. 00 1420. 08 1180.08
5-18 5peclfic Plan Revi.. Application ~ 1750. 00 '519.75 11230.251
5-19 SpecifiC Plan Preparation Application See Text Ifl Ifl Ifl
5-20 Spec I flc Plan Aaend..nt Revi.. Application 2 1500. 00 1526.50 126. 50
5-21 Seneral Plan Aaerdllent Revillf Application ~ S5OO.00 s;M.25 IS 159. 75)
5-2Z Zoning Ordinance Revi.. Application 17 SO. 00 14~. 35 14~. 35
5-23 Coapllanee Certification Application 38 110.00 169.18 '59.18
5-2~ Over load/Hou5ellOving Rev./Appv'1 Application 125 18.00 '13.98 .5. 98
5-25 toe llc:cupation Revl.. Application 60 125.00 '99.98 '7~.98
5-26 5tlftt Excavation Inspection Application 100 1150.00 1151.15 11.15
5-27 Subdlv.5tlftt 5ign Installation 5ign Sets 200 S50.00 183.1~ 1J3.1~
5-28 Subdivision Landscape Inspection New Building 955 13.75 113. 59 '9.84
5-29 Vl!Ilicle Code Enfortelll!nt Citation 10,489 112.97 $73. 35 160. 38
5-30 Citt Code Enfore...nt Citation 923 113.00 190.51 .n.51
5-31 Par ing Er,forcewnt Ci tation 1,321 118.17 '10.16 118. Oil
5-32 Downtown Off-5tlftt Parking Space 327 SO. 00 125.42 125.42
5-33 Business Regulation Perai t 1~3 1I0.~9 .16. 69 16.20
5-~ Garage/Yard Sale Regulation Pennt 465 14.00 14.06 SO. 06
5-35 Ani..! Regulation LicellSl! 2,230 '15.25 139. 2~ 123.99
5-36 Bicycle Reristration License IOS 12.86 110. <J.\ 18.09
5-37 Fingerprin ing Service Card 2~7 15.00 13.48 (11.52)
5-38 Records Check I Letter Issuance t.tter 25 SO. 00 '3.4-\ 13.~~
5-~ Police Cri.. Report Sale Report m 13.50 14.35 SO. 84
5-~0 Co""ealed Weapon Plrait Investig. Application 10 13.00 IH.80 111.80
5-~1 Pc.lice False Alara Response False AI.", 2,387 SO.~9 121.75 121.2&
5-~2 Rbarodoned VeIlicll Rl!lICIval Vthicle ~50 SO. 00 '1~.95 'H.95
5-13 IlPfective VeIlicle Inspection Vthlcle I,~ SO. 00 14.71 14.71
5-4-\ Rental of Coaaunlty Center 5pace Hour 1,600 112.00 116.21 14.21
5-45 Retoreation EquipllE'nt Rental Rental 150 16.67 13.50 113. I7l
5-46 Rental of Coaaunlty Garden Plots Plot 35 110.00 1879.03 1869.03
5-~7 s..i.ln~ Pool Orvration I /laint. Ad.ission 35, 000 SO.91 11.42 SO. 51
5-~8 Racquet lllWaI yball Progr.. Hour 21,000 '1.10 '5. 7~ 14.~
5-49 Ball field Reservation Service Hour 450 '1.00 '7.91 16.91
5-50 Coaounity Ballflold FacilitIes Hour 2550 SO. 00 '16.38 '16.38
5-51 Serolor Citizen Progr..s Part IClpant 750 12.00 1160.80 '158.80
5-52 Senior Citizon Transportation Rider 8,000 SO. 50 '3.9ll '3.48
5-53 Recreation Classes Part i ci pant 7,900 '5.89 '12.65 16.76
5-5't SpeCial Aecroation Events Event 12 S833. 33 13, 142.08 sz, 308. 1S
5-55 Youth Sports Programs PartiCIpant 10,000 'I.~ '3.84 '2.4-\
5-56 Adult Sports Progra.os Participant 10,000 '3.00 16.66 '3.66
5-57 "ISCfllar~us Sports Progr..s PartiCipant 1,500 '5.33 '19.89 '14.56
5-58 TI r,y Tot PrograllS PartICIpant 1,500 '18.67 121.53 12.86
5-59 Coreesslons peratlon ~ Ifl Ifl Ifl Ifl
5-60 Sewage Collect Ion I Treat..nt Connection 12, 500 166. 88 '130.99 16~. II
5-61 Sewer 5toppage lnvestiration Request 300 SO. 00 .95. 2~ '95.2~
5-62 IlPhnq.Sewer Olsconnec ./Restor. 01 sconnection 575 121.7~ '72.16 '50.42
5-63 UtilIty Street Use "lies 205.5 12,068.13 11,634.87 11433.2(,1
5-6~ Refuse Street Use Cust...~ 8,695 SO. 00 '13.80 113.80
S-65 !lalnter..r"", of Stlftt Landscaping Parcels 23,000 10.65 '5.75 '5.10
S-6Ci /lalnt"..""e of 5treet Troes Parcels 23, 000 SO. 00 '9. 48 '9.48
5-67 SweepIng of Cltl Streets Parce ls 23, 000 SO. 00 16. II 16.11
_. 5-68 SoeePlng of Sta I HIghways "IllS Sooept 800 SO. 00 '11.20 '11.20
5-69 ",lInte""nce of Alleys "lie 3.9 SO.OO 14,761.~ 14,761.~
S-70 llalntenanee of 5tora Drains Parce ls 23,000 SO. 00 14. 12 14. 12
5-71 T..bl.....d RellOval RNoval 200 SO. 00 148. 18 148.18
5-72 1Ia!r,t",.r",. of Stlftt lighting Parcels 23,000 SO. 00 'I~.W '14.~
5-73 lnst.llatlor, of Street Banre~ Installations I '590.00 10.00 1'590.001
5 MAR 1 7 1992 1""-" " 11
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Constitutional Basis for the Svstem. In 1978, with the passage of
Proposition 13, California taxpayers issued a mandate for lower
taxes. Seventeen months later California citizens passed the "Gann
Initiative", Proposition 4 of the special November 1979 election,
which further addressed taxes by placing a computed "lid" on the
appropriation of taxes. The System, which was already in place in
several cities in which MSI President, Douglas W. Ayres was
involved, was modified in response and has now been applied to more
than 70 Western cities.
. The Management Services Institute cost control methodology has been
developed pursuant to the requirements of that Proposition 4,
relative to determining full "costs reasonably borne" incurred in
providing governmental fee-financed services. In other words, there
is now in California a Constitutional mandate for local government
to be conscious of what it costs to provide specific services, and
to know whether those services are being supported by taxes, fees
or a combination of both.
The value of the MSI Component I Revenue/Cost Center Analysis is
that a business-type methodology is applied consistently to all
City services which permits comparison among City services and also
to similar private sector services.
MSI uses the definitions of "Cost reasonably borne" set out by the
Authors of Proposition 4 in their Constitutional intent documents.
Those authors represented the California Taxpayers Association, the
California Chamber of Commerce, the California Association of
Realtors, the National Tax Limitation Committee, and the "Spirit
of 13, Inc." movement of Paul Gann. Their definitions are those
used by business. Thus the requirement to apply business
principles and practices to government.
Elements of Comoonent I. In this key central Component we perform
the following:
1- Conduct a half day seminar for City executives,
management, supervisory and finance staff regarding the
business philosophy, legal base, and operational aspects
of the MSI costing system, providing a detailed
explanation of the steps to be followed and the role of
City staff.
2. Research and document each current City fee and charge,
for each City fund.
3. Compile a seven year revenue history for each such
source.
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4. Develop a tentative list of City-financed service
centers and circulate the list to City staff to
ascertain that revenue, cost and unit work statistics
can be secured from them if not centrally available.
5. Revise the service center list based on City staff
input.
6. Chart each current revenue source for the seven years,
both for budgeted and actual amounts.
7. Analyze the city's complete revenue/fee structure and
historical trends. This work is compiled using the MSI-
copyrighted "Revenue Data Worksheet for Fees and
Charges" attached in Appendix A.
8. By utilizing existing city records if adequate and
complete, and/or by supervising an internal City process
carried out by City staff, develop appropriate capital
asset expense (depreciation) schedules for distribution
to the several service centers. The MSI-copyrighted
fixed asset "Inventory" and "Fixed Asset Expense
Calculation" worksheets and computer templates are
utilized for this process. A copy of both are included
- in Appendix A.
For each user service center we prepare our MSI-copyrighted "Cost
Data Worksheet." We utilize our "Personnel Cost Allocation Sheet"
and our "Program Cost Allocation Sheet", copies of which are
attached in Appendix A herein. In this process we perform the
following steps to complete Component I:
9. Determine the City organizational unit performing each
service and prepare a "Cost Data Worksheet" and computer
templates for each defined service center.
10. Analyze the relationship between the service, any fee
charged, and the user/service beneficiary.
11. Working with City personnel, determine the unit of
measure for the service provided through the service
center, and the number of units provided the last
fiscal year and projected for the current fiscal year.
12. Determine direct costs of providing the service.
13. Analyze the city's accounting records and budget, and
determine the indirect costs of providing services.
Develop appropriate standard formulas for distributing
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City of Riverside MBS Proposal
each major indirect cost to the several service
centers, which formula may be consistently applied
year-to-year.
14. Redistribute appropriate indirect costs to the service
centers by use of the Cost Data Worksheet and computer
templates.
15. Develop a City general overhead rate.
16. Develop appropriate City departmental overhead rates
which can be used for all city internal, interfund,
utili ty and enterprise, special assessment, and
external billing, and charging or costing processes.
17. Apply general and departmental overhead rates to the
service centers.
18. Alert city staff as to revenue and budget variables.
Such is necessary due to the establishment by
Constitution Article XIIIB of a "base year" for
gpvernment appropriations.
19. Compute costs, revenues, excess revenues or excess
costs, both in gross terms and by number of service
units established by step 11, for each regulatory
license, user fee or service charge source of revenue.
Certain legally permissible groupings, or separations,
may be made or may be necessary to be made in this
process.
Result. The MSI-copyrighted process, outlined above as Component
I, will determine fair, equitable, legally proper and consistent
relationships between City operations and funds. From the service
center data comes the ability to know, control, and manage costs
matched for the most part to revenues received for the specific
services provided by each service center.
The result is a businesslike approach to costs and the. ability of
City management personnel to become cost-effective systematically.
As important, the City council also is aware of any discrepancies
between fees paid and services rendered for any of the service
centers, thereby being able to both make policy as to the use of
tax monies, and to judge cost-effectiveness.
California Constitution Article XIIIB went into effect July 1,
1980. It effectively requires delineation and documentation of the
true and full cost relationships between City functions and
revenues. Government Code Sections 54990 to 54993 also limit
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certain fees and charges to "costs reasonably borne". Our work
will provide the basis for accomplishing these ends.
City staff Involvement, Assistance, and Training
City staff have requested that this Proposal contain provisions
enabling the MSI computer program, work papers, and cost finding
techniques be transferred to City staff as the MSI work progresses.
Further, MSI has found in its larger client cities that the sheer
size of the organization and the numbers of employees involved
require considerable liaison between City management and the MSI
staff for data gathering in order to maintain the work schedule and
integrity of data.
Citv staff Assianed to MSI. To meet City requirements and to
assure adequate city staff involvement and training in all the MSI
costing techniques and technical accounting distributions, the
pricing and scheduling of this Proposal -- as contained on the
following pages -- is predicated on the City assigning one and one-
half full time regular City employees to the MSI project staff.
Those two. persons would participate in the MSI work and provide
entre to and liaison with City management personnel, be trained on
an on-going basis in the MSI techniques, copyrighted computer
programs, and accounting details, and fully participate in the work
alongside MSI staff. The quick start in internal organizational
knowledge which these one and one-half persons would provide also
literally will enable MSI to complete the work in the stipulated
ten calendar months. Without them the time consumption would be
several months longer, and several score dollars more.
MSI Specifications for Citv Staffina. The full time person must
be an experienced, recognized, mid-level or above City staff person
who has acceptance in and recognition by all City management
personnel. Additionally, he/she must be trained and experienced
in IBM/PC microcomputer operation and in Lotus 1-2-3 software,
analytical techniques, and accounting analysis. MSI reserves the
right to reject persons submitted until a suitable City employee
is assigned.
The half-time person can be of lower level, but must possess the
same attributes as listed above.
Involvement of Other Citv staff
Minor amounts of time of other city supervisory staff will be
involved, but spaced such that no significant time demands are made
which will be onerous. Information analysis and provision of data
which MSI cannot secure without close cooperation from City sources
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will primarily account for this City staff involvement. While MSI
will accept full responsibility for the accuracy and completeness
of its work, data must be provided us from city files and by City
personnel such that we can assure ourselves that our work is both
complete and accurate.
Following is a somewhat detailed explanation of City staff
participation in the MSI cost/analysis steps in which any degree
of city staff would be involved.
Citv staff Time Reauirements. MSI accepts full responsibility for
the gathering, compilation, and development of all data required
for completion of the assignment. However, we must secure that
data from City staff. Additionally city staff should relate to the
work which is being accomplished, both in understanding and in end
result. To so accomplish some City staff time in assistance to MSI
is required. That time is outlined herein, following the steps
listed on the prior pages.
Steo 1 requires all supervisory staff attendance for one-half day.
Two or three identical half-day sessions can be scheduled if
desired.
Steo 2 necessitates our being taught the filing system in the City
Clerk's Office such that we can locate documentation for the legal
base for all revenues for completion of the revenue manual which
we prepare.
Steo 4 can only be done through an all-day meeting with all
supervisory personnel so that MSI-prepared preliminary service
center list can be heavily modified to reflect the full needs and
services of the City. Several group meetings will be required.
As the work progresses the list is further modified through
interview with supervisors.
Note: This is the step where special services similar in scope and
nature to those for which a fee is charged, but for which no
current fee is collected, are discovered and added to the service
center list for costing. MSI experience has shown that there
usually is around a one-fourth increase in the number of service
centers for which a fee should be instituted, once costs are known
and an appropriate full cost recovery fee schedule can be set.
Steo 8 usually requires the dedication of one person week for each
department to the inventory and evaluation of fixed assets. Asset
heavy departments, such as Public Works, and utilities, and Parks
and Recreation operations usually require two or so person weeks.
This process is organized and supervised by MSI, but staffed by
City personnel. We have acceptable techniques in which we instruct
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City personnel that assure a minimum of time and a maximum of
accuracy. .
step 11 involves data which is in the possession only of operating
departments and divisions. One day per operation usually suffices.
step 12 will be spread over a four month period, during which each
supervisory person will spend cumulatively perhaps a half day with
MSI staff. The purpose is to allocate 100% of the time of 100% of
all city employees to service centers, generally with three
verifying interviews being conducted for each position.
step 13 will involve perhaps a half day orientation of MSI staff
by City finance personnel such that we understand the City's
accounting and recordkeeping systems.
steps in Tax option are encompassed within the above, if that
Option is accepted.
Presentation usually requires attendance and participation by
department heads, as does adoption and implementation. A series
of three half-day meetings usually suffices for implementation up
to and including first collection of enhanced revenues.
- MSI Staff Work. The MSI staff, listed later herein, performs all
staff work, usually being in residence in Riverside several days
a week for approximately nine months. A highly personalized
approach is taken to staffing the project by MSI staff, such that
the ambience of the City, its staff culture, and a high level of
sensitivity to the City's political climate are secured and
utilized.
No subcontractors are used. MSI employees perform ALL work
personally.
Uniaue Approach and Product. Management Services Institute has been
quite successful and believes it has its costing process perfected,
both analytically as well as from policy making and public
acceptance standpoints.
Our documentation is extensive and all non-computer work products
and work papers are turned over to the City at the end of the
process, as are computer printouts. All computer programs and the
computerized data base upon which the Report is based also are
turned over to the city staff, with licenses and instruction, as
set out later herein.
The software will run on any IBM-compatible PC, or a Hewlett-
Packard Vectra.
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Comoonent IA -- Ootional Tax-Suooorted Service Center Analvsis. MSI
has found that an increasing number of city Councils and their
constituents want to know where ALL City money comes from and goes,
not just those derived from fees and charges. The MSI Revenue/Cost
Analysis process is conducive to the determination of and full
distribution of the costs of ALL services, including those which
of practical necessity must be financed by taxes. Thus MSI offers
this optional Component.
The advantage to selection of this Component IA is to account for
all the city's revenues and costs, and which segment of society
pays for, and which benefits from each service, whether fee or tax-
financed. In this Component IA we accomplish the following steps:
1. Include all tax revenue sources in the seven year
revenue history prepared as a part of Component I.
2. Research and prepare an MSI-copyrighted Revenue sheet
for each tax and non-fee revenue source.
3. Work with City staff to develop a "program" structure
for tax-financed services, such that these programs can
be costed in a manner similar to that used for fee-
financed services.
4. Prepare an MSI-copyrighted "Cost" sheet for each such
tax-financed service center.
5. Distribute all city service costs as between fee-
financed, tax-financed, and mixed service centers, in
the process accounting for all City costs and revenues.
6. Prepare a summary of tax-financed service centers.
7. Write a separate Chapter in the text describing tax
revenues, costs, and the comparison between the two, and
the impact on total City financial status.
8. Illustrate both by text and in tabular form the impact
of costs on taxes and total City finances if full costs
are not recovered or controlled within the fee-financed
service centers.
9. Include all such data in the microcomputerized data base
and program.
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City of Riverside MBS Proposal
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ComDonent II -- General Financina Commentarv. A Report is provided
at the completion of the Component I and IA work, which is based
on our by now intimate knowledge of the City's revenue, accounting,
reporting and management control systems, derived from the work in
Components I and IA. In this Component we will do the following:
1. Prepare a Report appraising the strengths, weaknesses,
and potential alleviatory measurers for financing of the
City's services. The Report provides extensive
financial, accounting, legal, and practical explanation
of the work, the product, the process used in arriving
at it, and the results.
2. Recommend specific steps that could be taken to enhance
financial information to management and city Council,
increase revenues, and decrease or better control costs.
3. Identify and suggest revenue sources which may be unused
or better used, but which are available.
4. Present the Report to City staff and the Mayor and city
Council.
5. Explain the Report, its methodology, its contents, and
its suggestions and recommendations to the City council
at up to six City Council or Council Committee study
sessions or meetings.
6. Prepare and present a Model Fee Ordinance, public
hearing notice, and Model Fee Resolution to the City
Council at a City Council meeting, and explain each at
the statutorily-required public hearing.
7. Make appropriate public appearances and speeches up to
a total of six, at the request of the city.
8. Meet with City staff and assist and advise in
implementation techniques and in developing detailed
rate structures, where needed, up to a total of four
meetings.
9. Attend additional staff, City council, or explanatory
meetings and make added presentations if requested, at
the then-current MSI time and expense rates.
Backaround of Services to be Provided as ComDonent II. Most of
the work done in Component I and optional Component IA, and
reported on in Component II, is now necessary in California to
comply fully with Proposition 4 (Article XIIIB) . But more
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City of Riverside MBS proposal
importantly, these steps and procedures are necessary to develop
and maintain a realistic municipal financial system following
business concepts and procedures. And to assure a reasonable degree
of fairness and equity in the tax system.
The MSI System would orient the city in those businesslike
directions quite strongly. Such are' the underlying dictates of
Proposition 4, and a result of the revenue-cost squeeze forced by
Proposition 13 and the inflation rate of the last decade.
The purview of the MSI work, and of our Revenue/Cost study and
Component II Report would be the revenues, expenses, and costing
systems for all fee-financed or financable City services as well
as tax-financed services if that option is selected. ,Our goal is
to assure the City's present and future financial viability, its
capability to deliver services and to utilize its financial
resources both wisely and in a responsible, fair and economical
way. In other words, to get the most for the revenue dollar and
to best utilize monies now and in the future, wherever possible,
by having the best possible financial and management information.
In addition, we will suggest in this Report revenue sources and
alternative ways with which City services and capital improvement
projects could be financed. Such could be the next step in the
ci ty I s financial planning process with which to adj ust to the
changed revenue mix caused by the Federal and State governments
withdrawing financial sources from cities. Alternatives are
available to the City, provided they are planned for and all costs
are considered.
Component III -- Computerization Assistance
Due to the volume and complexity of data developed and utilized in
the Municipal Business System analysis, MSI utilizes a
microcomputer from the initiation of work, placing all data into
the micro. At the end of Components I, IA, and II, we would turn
over all the City'S data, the software programs, and a perpetual
license for their use. Additionally three days of instruction
would be provided to selected City staff. All periodic program
updates will be provided at no additional cost. The City also
would become a member of the MSI/MBS User Group.
This Component III will enable City staff to maintain a constantly
updated version of our Components I and IA work products, thereby
eliminating the need for an annual maintenance contract, or an
elaborate and expensive cost accounting system, unless otherwise
desired for day-to-day management purposes.
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The software also can run on a Hewlett-Packard Vectra. The
software consists of MSI-copyrighted templates written over Lotus
1-2-3.
Timinq of Services
The following Schedule sheets on the next pages present the
timetable for the services proposed.
The work of Component I would be initiated around February 15,
1989, and continue steadily through submission of the Report for
Component II in mid-December.
Since Components I and IA are key and basic, any decision to
delay project initiation past March 1 would cause our schedule to
slip commensurately and may require a re-examination of the length
of the time frame to ensure that no additional MSI project
obligations have been incurred which might affect project timing
and cost.
The Component III transfer of data and software would be conducted
in January and February of 1990.
Fee for Services
-
The fee for our services for the quoted Components is the
following:
Comoonent Fee
I. Revenue/Cost (MBS) --Fees. . . . . . . . . . . . . . . . . . . $ 2 5 0 , 000
IA. Tax Supported Service Analysis (Optional)...$25,000
II. Financial Commentary Report (included in Component I)
III. Microcomputer Program License (included in Component I)
The above fees cover all costs except any required business
license, and report reproduction, which we will have printed in the
number you determine with our actual costs to be billed to the
City, which costs would be added to the contract price. In this way
the city will control the volume and cost of Report reproduction,
and distribution.
-
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-----..---..- -------. --.......--... ..-..-------- ---........--- _..__._..~
fEB 1989 lIAR 1989 APR 1989 IlAY 1989 JUNE 1989 JULY 191'
------..---- .--------- -.........--...... ...........-........ --..-..----- ............---
7 " 21 28 5 12 19 26 2 91623 7 " 21 28 4 II 1825 I 8 22 2
...............-.......................................................,
SCHEDULE AND SUMMARY OF ACTIONS
COMPONENT I o. REVENUE/COST CENTER ANALYSIS
1. Conduct Seminar . -. . . . . . . . . . . . . . . . . . . 0 . .
2. Research revenues . . ....++++++. . . . . . . . . . . . . . . . 0
3. Compile revenue hi.tory . . . . ..++... . 0 . . . . . . . . . . . . . .
4. Develop service center lilt 0 . 0 . . . . 11111 1111111. . . . . . . . . . 0 . .
5. Revise .ervice center ll.t . . . . . 0 0 . . . 111111111 .. . . . . . . . . . .
6. Chart revenue lources . . . . . . . . . . . . . ++ ++ .. .. . 0 . . . . .
7. Analyze fee structure . . . . . 0 0 . . . 0 . . 0 . .... +++ ++++++.. 0 . . .
8. Develop fixed Isset expenses . . . . 0 0 . . . 0 . 0 0 . . . . . . "11111111111..
9. Determine units perfonmfng seryices . . 0 0 . . . . . . . . . . . . . . . 0 . . 0 ..
10. Analyze relltionships . . . . . . 0 . . . 0 . 0 . . 0 . 0 0 . . 0 0 .
1'. Detennfne units of aeryice 0 . . . . . . . . . . . . . . 0 . . . . . . 0 .
12. Detenm;ne direct costs . . . . 0 . . 0 . 0 . . . . . . . . . . . . . .
13. Determine Indirect co.t. . . . . . . . . . . 0 . . 0 . . . . . 0 . . . .
14. Redi.tribute Indirect coot. . . . . . . . . . . . . . . . . . . . . . . . .
15. Develop IMerll overhead rates . . . . . 0 . 0 . . . . . . . . . . . . . . . .
16. Develop deportmentll overhead rite. . . . . . . . . . . . . . . . . . . . . . . . .
17. Apply overhead rite. . . . . . . . . . . . . . . . . . . . . . . . .
18. Alert I. to vlrllbl.. . . . . . 0 . . . . 0 . . . . . . . 0 . . 0 . .
19. Compute revenues and cOlta . . . . . . 0 . . . . . . 0 . . . . . . . . . .
. . . . . . . . . . . . . . . . . . 0 . . 0 . .
COMPONENT " .. GENERAL fiNANCING COMMENTARY . . . . . . 0 . 0 . . . 0 . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . 0 . .
1. Prepere report . . . . . . . 0 . . . 0 . . . . . . . . . . 0 0
2. Mike lpecific recommendttlono . . . 0 . . 0 . 0 . . . . . 0 . . . . 0 . 0
3. Suggest revenue lources . 0 0 . . . 0 . . . . . . . . . . . . . . .
4. Present report . . . . . . 0 . 0 . . . . 0 . . . . . 0 . 0 . .
5. Draft ordinences/assist in presentltion . . . . . 0 0 . 0 . . . . . . . . . . 0 . . . .
. . . 0 0 . . 0 . 0 . . 0 . . 0 . . 0 . 0 0 . .
COMPONENT III -- COMPUTERIZATION . . . . . . 0 . . . 0 . . . 0 . . . 0 . . . . .
. . . . . 0 . . . 0 . . . 0 . . . . 0 . . . . .
1. Turn over software 0 0 . . . . 0 0 0 . . . 0 0 . 0 . . . 0 . . 0 .
2. Turn over ~t. disks . . . . . . . 0 . . . . . . . 0 . . . . . . . .
3. Instruct City Itaff . . 0 . . . . . 0 . . . . 0 . 0 0 . . . . . . .
it. Assist In update de.lgn . . . . . 0 . . . 0 0 . . . . . . 0 . . . . . .
----.---...-.-----------.-.-.---.--------------
+++++ . lepresents period durfng which work
"ill be accompl hhed end not the tl...
.necessary to do the work.
..... lepresents work completed in phases.
_.. . .epresents presentation of leport
++ ++ .+ Represents work done in phlses
16
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__CITY OF RIVERSIDE -
.
----------.. ---------- ---......-...... ..'-....-----. 'O..-------- ---......_--- ------.......
AUG 1989 SEPT 1989 OCT 1989 IIOV 1989 DEC 1989 JAR ~99O FEI 1990
...---......--.. -----..--..- ---_..........,- .....---.......-- --......-........ .....-----..... .---....-....
7142128 4 II 1825 1 8 15 22 I 8 15 22 1 8 15 22 I 81522 I 8 15 2.
........*............................._...........................................,
SCHEDULE AND SUMMARY OF ACTIONS
COMPONENT I .. REVENUE/COST CERTER ANALYSIS
1. Conduct Seminor . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Research revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Compile revenue history . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Develop .ervice center lflt . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Revi.e ..rvice center ltlt . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. Chlrt revenue sources . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7. Analyze fee structure . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I. Develop fixed uset expenses .... . . . . . . . . . . . . . . . . . . . . . . . . . .
9. DeteMlline ",its perfonni,. leryie" .. .. ... .. . . . . . . . . . . . . . . . . . . . . . . . .
10. Analyze relltionshipo . . . 1111111 II.. . . . . . . . . . . . . . . . . . . . . .
11. Detenoine units of service . 111111111. . . . . . . . . . . . . . . . . . . . . . . .
12. Dete~fne direct COlt. . . 1111111 ".. . . . . . . . . . . . . . . . . . . . . . .
13. Determine indirect costl . . . . --. . . . . . . . . . . . . . . . . . . . .
14. Redistribute indirect costs . . . . . ....... . . . . . . . . . . . . . . . . . . .
15. Develop generll overlleod rotes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16. Develop deport_tll overheod rotH . . . . . . . --. . . . . . . . . . . . . . . . . . .
17. Apply overheod rites . . . . . . . . . -. -. . . . . . . . . . . . . . . .
". Alert I' to variables . . . . . . . . . . . . -. . . . . . . . . . . . . .
19. C""",,te revenun.ond cosu . . . . . . . . . . . . . . -. . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
COMPONENT II .. GENERAL FINANCING COMMENTART . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.-- . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Preper. report . . . . . . . . . . -. . . . . . . . . . . . . . . .
2. Mike specific recommendotlons . . . . . . . . . . . . . -. . . . . . . . . . . . .
3. Sug;es t reveRJe sourCD . . . . . . . . . . . . . . . -. . . . . . . . . . .
4. Present report . . . . . . . . . . . . . . . . . . - . . . . . . . . .
5~ Dr.ft ordinances/lssilt in present.tio. . . . . . . . . . . . . . . . . . . -. . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
COMPONENT III .. COMPUTERIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Turn over software . . . . . . . . . . . . . . . . . . . . -. . . . . .
2. Turn over d.ta diakl . . . . . . . . . . . . . . . . . . . . . . -. . . .
3. Instruct City stiff . . . . . . . . . . . . . . . . . . . . . . . . -- . .
4. Ass 1st In \4lCIIte design . . . . . . . . . . . . . . . . . . . . . . . . . . -.
..........-..........-......................-..
-+ . Represents period o...ring which work
will be leeomplished Ind not the tl.
necessary to do the work.
.+ .+ . Represents work completed in phases.
... . Represents presentation of Report
.+ .. .. Represents work done in phases
17
29 of 42 ,MAR 1 7 1992 r::;...~ 11
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city of Riverside MBS Proposal
We will submit twelve invoices of equal monthly amounts totalling
the amount of the above Components which you select. The first
invoice will be submitted ten days after notice to proceed. Each
invoice would be due within 30 days of submission. Subsequent
invoices would be submitted each month following.
These prices and the Proposal are good until March 20, 1989.
We have found it both desirable and more economical for the City
if it provides us with some sort of reasonably suitable work space
within City Hall, telephone, and minor incidental clerical, typing
and reproduction service. These can be easily absorbed within
existing resources and would be utilized only modestly, not to
exceed a value of $4,000.
While much of our work would be conducted actually at the City,
significant parts of it involving microcomputer data input, "number
crunching", and accounting analysis do not require our presence.
During those times we would, of course, be available by telephone
as and if necessary.
Assurances
We always give assurances that our Component II Report would
provide specific recommendations upon which the Mayor and City
Council could be reasonably expected to take positive action, which
actions would generate sufficient added revenue and/or cost-
effectiveness savings so as to offset our fee ten-fold within'not
more than six months. Based on our rather considerable experience
in more than 71 other cities, we have every reasonable expectation
to provide a more equitable balance between cost and effectiveness
of services provided to certain beneficiary groups and the fees and
charges made for those services to those beneficiaries. Further,
any such additional revenues which might be gained would be
continuing and cumulative, whereas our fee is one-time only.
We would invite you to inquire of our other client cities as to
results and the level of acceptability achieved. They are listed
below.
Project staff
Our professional qualifications are attached hereto as Appendix B.
Douqlas W. Ayres personally will be in charge of the project and
will directly oversee and participate in the work. Mr. Ayres will
make all the presentations.
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city of Riverside MBS Proposal
A.R. "Rick" Kermer. CPA. Vice President, will be the Project
Manager.
Owen O. Olsen. CPA. will assist on the indirect cost distribution
analysis processes.
Heidi Petersen. Senior Analvst. will participate in all phases of
the work as assigned.
Kenneth Hubler. Analvst. will participate in all phases of the work
as assigned.
Susie Wendorff. Analvst. will participate in all phases of the work
as assigned.
Larrv Rieale. Analvst. will participate in all phases of the work
as assigned.
Pamela S. Swift. CMC does revenue research into both history,
sources, ~egal authorization and rate structures.
Other MSI staff also will be assigned as needed so as to maintain
_.. the schedule set out herein, and to assure continuance of the
quality of product which MSI has become noted for.
Oualifications
You will see from perusal of our professional qualifications that
both Mr. Kermer and Mr. Ayres have been City Finance Directors,
City Treasurers, and data processing managers; Kermer in three
cities. Ayres also has been a City Clerk.
The three MSI principals have conducted a total of more than 400
consulting engagements. Weber and Ayres have been city managers of
six cities among them, and Weber the initial interim City Manager
of two additional newly incorporated cities. We also have other
accountants, analysts, planners, engineers, EDP systems analysts
and programmers available to us, as needed. Mr. Kermer co-Authored
the League of California Cities publication "Cost Accounting for
California Cities", the manual which is recommended as the standard
to be followed by California cities.
All three MSI principals also teach or have taught at the graduate
level and provide professional seminars on financial, personnel,
and management subjects through both the University of Southern
California and the California State University and College System.
Mr. Ayres also served on the faculty at the Graduate School of
Management of the University of California, Irvine.
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City of Riverside MBS Proposal
References
We have completed similar projects for the following jurisdictions
and would request you to contact the following for references:
Jurisdiction Reference Title
City of Compton James Goins City Manager
213/537-8000 Tim Brown City Controller
City of Antioch Lee Walton City Manager
415/778-4531 Gene Poertner Finance Director
city of Morgan Hill Fred Mortensen City Manager
408/779-7271 Art College III Finance Director
city of Rancho Mirage Carl Hatfield City Manager
619/324-4511 Steve Birbeck Finance Director
City of Westminster Robert Huntley Interim City Manager
714/898-3311 Murray Warden City Manager
City of Carson William Parrott Finance Director
213/830-7600
City of Los Altos Arne Croce City Manager
415/948-1491 Diane Gershuny Ass't City Manager
City'of Foster City Richard Wykoff City Manager
415/349-1200 Jim Hardy Ass't City Manager
City of Porterville Guy Huffaker City Manager
209/784-1400 Bill Mc Guire Finance Director
City of Folsom William Kime City Manager
916/355-7200 Luther Faler Finance Director
city of Marina vince De Maggio Public Works Director
408/384-3715
City of Taft steve Wright City Manager
805/763-3144 Nellie Bazelle Finance Director
City of Shafter Wade McKinney City Administrator
805/746-6361 Jo Barrick Finance Director
City of Cudahy Gerry Caton City Manager
213/773-5143 George Joseph Finance Director
20
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Jurisdiction Reference Title
City of Salinas Roy Herte City Manager
408/758-7201 John Copeland Finance Director
City of Carpinteria Allan Coates City Manager
805/684-5405 ' Jeff Butzlaff Ass't City Manager
city of Upland Lee Travers City Manager
714/982-1352 Phyliss Proctor Finance Director
city of Bakersfield Dale Hawley city Manager
805/326-3775 John stinson BUdget Director
City of Corona James Wheaton city Manager
714/736-2374 Bill Garrett Deputy City Manager
City of Redlands John Holmes City Manager
714/798-75l0 George Kanael Finance Director
City of Brea Ed Wohlenberg City Manager
714/990-:7770 Denise Ovrom Ass't city Manager
City of Chino Richard Rowe City Manager
-. 714/627-7577 Mary O'Neil Dir. Mgmt. Services
City of Lema Linda Robert Mitchell City Manager
714/796-2531 Larry Ronnow Finance Director
City of Big Bear Robert Van Nort city Manager
Lake Jeff Brunsdon Finance Director
714/866-5831
City of La Palma Paul Bussey City Manager
714/523-7700 Linda Stromberg Admin. Ass't
City of Hermosa Bob Blackwood Ass't City Manager
Beach Kathy Revisky City Clerk
213/376-6984 Gary Bruch City Treasurer
City of Alhambra Kevin Murphy City Manager
818/570-5014 Mike Paulus Ass't City Manager
City of El Segundo Bill Glickman Public Works Director
213/322-4670 Jose Sanchez Finance Director
-
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City of Riverside MBS Proposal
Jurisdiction Reference Title
City of Claremont Betty Rose Ass't City Manager
714/624-4531
city of Oceanside Ron Bradley city Manager
619/439-7258
City of San Dean Porter Finance Director
Clemente Myrna Erway City Clerk
714/361-8311
ci ty of Lake Ron Molendyk City Manager
Elsinore Phyllis Rogers Ass't city Manager
714/674-3124
City of Vista Morris Vance City Manager
619/726-1340 Frank Rowland Finance Director
City of Azusa Geoff Craig Finance Director
818/334-5125 Lloyd Wood Police Chief
city of South Gate Bruce Spragg City Admin. Officer
213/563-9502 Lee Squire Finance Director
city of Rialto Joey Aguilar Finance Director
714/820-25,42 Joe Sampson City Clerk
City of Monrovia Jim Starbird City Manager
818/359-3231 Jeanne Kennedy Ass't City Mgr.
City of San Juan Steve Julian City Manager
Capistrano Bob Boone Finance Director
714/493-1171 Mary Ann Hanover City Clerk
City of Rancho Lauren Wasserman City Manager
Cucamonga Jim Hart Admin. Svcs. Dir.
714/989-1851
city of Grand Tom Schwab City Manager
Terrace
714/824-6621
city of Seal Beach Robert Nelson city Manager
213/431-2527 Denis Thomas Finance Director
City of Merced Duane Milnes City Manager
209/385-6834 Rita Geldert Ass't City Manager
22
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Jurisdiction Reference Title
city of Palm Desert Bruce Altman city Manager
619/346-0611
City of La Mirada Gary Sloan City Manager
213/943-0131 Robert Guiterrez Ass't city Manager
city of Banning Thomas Huebner City Manager
714/922-1200 Bill Olsen Finance Director
city of Bend, ORE Art Johnson City Mgr, Emeritus
503/388-5504 Jim Kerfoot Finance Director
City of Lynwood Charles Gomez City Manager
213/608-0220 Don Fraser Ass't city Manager
A more extensive and specific list can be provided on request.
Please also see listings on individual professional resumes.
Mavor and Council References. The Mayors and city Council members
of the above Cities also can be contacted if desired for
attestation to the policy and political sensitivity and
acceptability of our work when it comes to the Council for
- presentation, consideration, adoption, and ultimate implementation.
For your convenience references are listed below:
MAYOR AND COUNCIL MEMBER REFERENCE LIST
Curtis Wright, Mayor, city of Morgan Hill 408/779-7271
Jeff Bleaman, Mayor, City of Rancho Mirage 619/324-4511
Jack Kipp, Mayor, City of Folsom 916/355-7200
Bob Fitzgerald, Mayor, City of Foster City 415/349-1200
Russ Jeffries, Mayor, City of Salinas 408/758-7201
Frank Carpenter, Councilman, City of Upland 714/982-1352
Gary Miller, Mayor, City of Corona 714/736-2371
Clarice Blamer, Mayor, City of Brea 714/990-7704
John Spivey, Councilman, City of Big Bear Lake 714/585-8444
Nathan Simon, Mayor, City of Fontana 714/350-7601
23
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City of Riverside MBS Proposal
MAYOR AND COUNCIL MEMBER REFERENCE LIST
Ardys Koobs, Councilwoman, city of Lorna Linda 714/825-8678
John Rankin, Mayor, City of Porterville 209/784-1400
Larry Bagley, Mayor, City of Oceanside 619/439-7304
Keith Nelson, Councilman, City of La Palma 714/527-1069
Carole Beswick, Mayor, City of Redlands 714/798-7531
Ben Ashley, Mayor, city of La Mirada 213/943-0131
Gloria McClellan, Mayor, city of vista 619/726-1340
William Meachem, Councilman, city of San
Clemente 714/498-6592
Elmer Digneo, Mayor, City of Loma Linda 714/825-8678
Don Ratty, Councilmember, city of Bakersfield 805/326-3751
James H. Childs, Vice-Mayor, city of Bakersfield 805/326-3751
Bruce Latta, Councilman, City of Azusa 818/334-5125
Al Yankey, Councilman, City of Chino 714/627-7577
Barbara Sheldon, Mayor, City of Banning 714/849-4511
Paul Richards, II, Mayor, City of Lynwood 213/537-8000
Thomas Lewis, Mayor, City of Carpinteria 805/684-5405
Phyllis Maurer, Councilmember, City of Salinas 408/758-7201
Dr. John Robertson, Mayor, city of Cudahy 213/773-5143
Robert Baldwin, Mayor, City of Monrovia 818/359-3231
Wayne Deats, Councilman, City of Taft 805/763-4211
John MCDonald, San Diego County Board of
Supervisors and former Councilman, City
of Oceanside 619/236-555
24
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City of Riverside MBS Proposal
MAYOR AND COUNCIL MEMBER REFERENCE LIST
Jon Mikels, San Bernardino County Board of
Supervisors and former Mayor, City of
Rancho Cucamonga 714/383-5102
Larry Walker, San Bernardino County Board of
Supervisors and former Mayor, City of Chino 714/627-7577
cost-Conscious City Operations
Mr. Ayres and Mr. Kermer have well-deserved reputations for their
long-standing efforts in bringing cost-consciousness to city
operations and the considerable management advantages of such.
Also, the ease with which the Mayor and city Council can relate to
their constituents when programs, services, revenues and true costs
are known and then financial plans and projections are developed
to cope with costs, service demands and expectations.
The Management Services Institute staff looks forward to being of
assistance in bringing the management advantages and the revenue
fairness ~nd equity benefits of our System to the City, the Mayor,
his staff, its City Council, and their constituents, and to City
staff.
25
37 of 42 MAR 1 7 1992 m:l~-: 11
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4 SIManagement Services Institute
INCORPORATED
.t 2521 W. LA PALMA AVENUE. SUITE A, ANAHEIM, CA92801 (714)220-1717 FAX(714)220-9112 .c;:'''-) ;0-..0=.1 -<.~\ ;7':"~ ~ 1 'I '''' -;:;.
,1 ~-;--::~ ;'~:-: ~\... \.~ ~ ',Jt :;- .' J .
.~ ... J1s...;oI ,,,",,,:J :":~'" I, '"</ ~"'ZJ ~
.II
January 27, 1992 JAN 27 1992
Mr. James L. Bowersox, city Manager C'''-'f r -~ .
- City of poway - P.O. Box 789 II', .....),- i'..Ui.(fA Y
Poway, CA 92064 CITY :V1Ai'J!:,GERS OFFICE
Dear Jim:
Thank you and Finance Director stewart for meeting with Dennis
Ross and me on Wednesday, January 22 to hear of the work of MSI,
Inc,' in assisting California local governments to secure adequate
revenues with which to maintain required service levels and infras-
tructure. We look forward to the possibility of assisting you in
your quest for financial stability and equity for the City and its
citizens.
To recap the estimates provided you toward the end of our meet-
ing, MSI would agree to provide detailed and specific Proposals to
provide the following services to the City for the following fees:
Municical Business Svstem 1MBS1. In this work we would conduct
our copyrighted revenue/cost analysis for the City in from six to
twelve months, depending on the staff and time intensity desired by
you. Our fees would be as follows:
Fee Analysis................... $ 50,000
Tax Analysis.........".......... $ 10,000
Program License & Data......... $ 8,000
We also are reimbursed our staff out-of-pocket travel and on-
site subsistence expenses not to exceed $10,000. Additionally, were
the City to realize an added $300,000 per year in revenues in the
first year after the completion of our work and presentation of our
Report then, for each of the following three fiscal years, the City
would pay MSI an additional $15,000 per year.
The 85 cities which we have served as sole source supplier with
the MBS process during the past 12 years each has experienced an
all-funds revenue increase of at least ten per cent, with no sig-
nificant political fallout or difficUlty.
Our work and Programs are copyrighted, thus we qualify as sole
source supplier.
Develocment Impact Fees lDIFs 1 . As stated to you, MSI developed
the concept of Development Impact Fees in California, preparing our
first such analysis in 1980. Since that time we have set the tech-
nical and legal standards for the imposition of such fees in the
State, and are prepared to complete such work for the City for the
following fee:
ATTACHMENT C MAR 1 7 1992 IT~}..~ 1 1
L 38 of 42
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Mr. James Bowersox - poway Page 2
t
, Development Impact Fees (DIF).......... $ 45,000
Program License and Data Transfer...... $ 4,000
Gov. Code Sec. 66006 Project Tracking,
Accounting and Reporting Software.... $ 12,000
We also require reimbursement for out-of-pocket travel and sub-
sistence expenses for this work, not to exceed $10,000.
The Master Facilities Plan sets the unassailable legal base for
the DIFs per the "nexus" requirement of the Nollan U.S. Supreme
Court decision, and California Government Code Secs. 66000 - 66006.
Since you already have completed this work, we would review and
advise on what we felt would be desirable revisions and additions
to your document on a Time and Expense basis at a fee not-to-exceed
$10,000.
The MFP/DIF work takes six to nine months, again depending on
the emphasis put on decision making by City staff as to equipment
and infrastructure projects to be encompassed in the Master Facili-
ties Plan. As related to you, the MFP, in effect, has to be a 30
year Capital Improvement Plan based on build-out of the City'S Com-
prehensive General Plan and all its Elements.
- The MBS and DIF projects can proceed independently or parallel.
The only place the two merge, if desired, is through application of
the General Overhead rate computed by the MBS project to the col-
lection of Development Impact Fees.
Other Follow-On Services
Also as outlined to you somewhat, on completion of the MBS and
DIF work we are in a unique position to review and recap all the
City's "problems" and to develop a solution, expressed in terms of
legally available and politically feasible revenue base, rates, and
schedule. We would perform this follow-on analysis and Report for
$20,000 in not to exceed four months.
We also have a microcomputerized Long Range Financial Plan
which projects major revenues and services for ten years, and is
capable of being utilized in "what if" scenarios relative to pro-
posed new developments and their consequent cost and revenue
impacts. We would produce that from the MBS/DIF data base, after
completion of those services, for an additional $45,000, including
transferring of data and program license.
On request, we will provide formal Proposals, complete with
detailed work plans, explanatory material, numerous references of
satisfied City staff and elected officials for whom we have worked,
and schedules.
39 of 42 MAR 1 7 1992 m:A~ 11
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Mr. James Bowersox - poway Page 3
We look forward to the possibility of working with you and the
poway City Council and staff.
Ayres
MAR 1 7 1992 ITr:A~ 11
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