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HomeMy WebLinkAbout02-152 Resolution No. 02-152 RESOLUTION AUTHORIZING EXECUTION OF AN AGREEMENT WITH MAXIMUS, INC. FOR A COST OF SERVICES ANALYSIS BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Olufemi Folarin, Interim City Manager, and Dolonna Mecum, City Clerk, be and are hereby authorized and directed to execute an agreement on behalf of the City of Elgin with Maximus, Inc . for a cost of services analysis, a copy of which is attached hereto and made a part hereof by reference . s/ Ed Schock Ed Schock, Mayor Presented: April 24 , 2002 Adopted: April 24 , 2002 Omnibus Vote : Yeas : 7 Nays : 0 Attest : s/ Dolonna Mecum Dolonna Mecum, City Clerk AGREEMENT THIS AGREEMENT, made and entered into this .day of 4/9/1$14., 2002, by and between the CITY OF ELGIN, an Illinois municipal corporation (hereinafter referred to as "CITY") and MAXIMUS, INC., a Virginia corporation(hereinafter referred to as the"CONSULTANT"). WHEREAS, the CITY desires to engage the CONSULTANT to furnish certain services in connection with an analysis of the CITY's costs of providing municipal services and the establishment of new and revised user fees and cost allocations pursuant to said services (hereinafter referred to as the PROJECT). NOW, THEREFORE, for and in consideration of the mutual undertakings contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is hereby agreed by and between the CITY and the CONSULTANT that the CITY does hereby retain the CONSULTANT for the matters relating to the PROJECT as set forth herein, subject to the following terms and conditions: 1. SCOPE OF SERVICES CONSULTANT shall perform and direct the necessary qualified personnel to perform the services for the PROJECT as set forth in Pages 2-1 through 2-10 of CONSULTANT's proposal attached hereto and made a part hereof as Exhibit 1 and is further detailed in the CITY's Request for Proposals dated March 1, 2002. All work hereunder shall be performed under the direction of the City Manager and the Assistant City Manager of the CITY. 2. TIME SCHEDULE AND TERM A. CONSULTANT shall perform and complete the various services and tasks in Exhibit 1 hereto according to the schedule contained therein. Changes in the scope of work as directed by the CITY, timing of decisions by the CITY, timing of approvals by authorities having jurisdiction over the PROJECT and other events outside the control of the CONSULTANT may, however, effect the time line. Other alterations to the time line may be made by mutual written agreement of the parties. The term of this agreement shall commence upon execution hereof and shall continue until January 1, 2003, and CONSULTANT shall have performed and completed all of the services to be provided pursuant to this agreement within such period. The CITY agrees to make staff available for interviews and to provide comments on drafts promptly to keep the PROJECT on schedule. Notwithstanding the foregoing, the CONSULTANT shall not be liable for delays in performance that are caused in whole or in part by the CITY, third parties over which the CONSULTANT does not have the legal right to control or forces de majeure. The period of performance shall be extended by the period of delay contemplated herein. B. It is further expressly agreed and understood that the CONSULTANT shall deliver to the CITY initial or draft recommendations on or before August 26, 2002, that the CONSULTANT shall deliver to the CITY final recommendations to the CITY on or before September 16, 2002, and that the CONSULTANT shall deliver to the CITY a final report and the PROJECT shall be completed on or before January 1, 2003. Time is of the essence of this agreement. CONSULTANT acknowledges and agrees that in the event CONSULTANT fails to complete the PROJECT by the dates specified in this agreement and to provide the initial or draft recommendations, the final recommendations and the final report to the CITY on or before the dates provided in this paragraph, that the CITY will incur damages,which by their nature are difficult to ascertain. CONSULTANT has reviewed all of the surrounding circumstances and information available at the time of this agreement, and it agrees that liquidated damages to the CITY in the amount of$100 per day are and shall be construed as a reasonable estimate of the damages which would actually be incurred by the CITY in the event of CONSULTANT's failure to complete its performance of the terms of the agreement as described above by the dates specified in this agreement. CONSULTANT shall therefore pay to the CITY the sum of$100 per day as and for liquidated damages in the event the CONSULTANT fails to deliver to the CITY initial or draft recommendations on or before August 26, 2002, fails to deliver to the CITY final recommendations to the CITY on or before September 16, 2002, and/or fails to deliver to the CITY a final report and complete the PROJECT on or before January 1, 2003. CONSULTANT further agrees and acknowledges that the imposition of the aforementioned liquidated damage provision is intended by the CITY as a good faith attempt to ascertain actual damages for such late performance, and not as a penalty or as a means by which to secure CONSULTANT's timely performance. Notwithstanding the foregoing, the foregoing provisions of this Paragraph 2B are subject to the condition that data that is requested by the CONSULTANT from the CITY must be provided by the CITY within one (1) week of such request. The CONSULTANT shall not be liable for the foregoing liquidated damages where delays are caused in whole or in part by inadequate, incomplete or untimely data provision on the part of the CITY or any party acting on behalf of the CITY, or forces de majeure. 3. WORK PRODUCTS All work products prepared by the CONSULTANT pursuant hereto including, but not limited too, reports, designs, calculations, work drawings, studies, photographs, models and recommendations shall be the property of the CITY and shall be delivered to the CITY upon request of the CITY provided, however, that the CONSULTANT may retain copies of such work products for its records. Notwithstanding the foregoing, an except as further provided in this agreement, the foregoing is not intended to transfer or assign to CITY ownership of CONSULTANT's proprietary software. 4. COMPENSATION The total compensation to be paid by the CITY to the CONSULTANT for services provided by the CONSULTANT shall be the total amount of $40,850, inclusive of all professional services, fees and expenses, regardless of actual time expended or actual costs incurred by the CONSULTANT unless material modifications to the PROJECT are authorized in writing by the CITY and approved by the City Council. 5. INVOICES A The CONSULTANT shall submit invoices in a format approved by the CITY. Progress reports will be included with all payment requests. B. The CONSULTANT shall maintain records showing actual time devoted and costs incurred. The CONSULTANT shall permit an authorized representative of the CITY to inspect and audit all data and records of the CONSULTANT for work done under this Agreement. The CONSULTANT shall make these records available at reasonable times during the Agreement period, and for three years after expiration or termination of this Agreement. 6. TERMINATION OF AGREEMENT Notwithstanding any other provision hereof, the CITY may terminate this Agreement at any time upon fifteen (15) days prior written notice to the CONSULTANT. In the event that this Agreement is so terminated, the CONSULTANT shall be paid for services actually performed and reimbursable expenses actually incurred prior to termination, except that reimbursement shall not exceed the task amounts set forth under Paragraph 4 above. 7. TERM This Agreement shall become effective as of the date the CONSULTANT is given a notice to proceed and, unless terminated for cause or pursuant to Paragraph 5, shall be deemed concluded on the date the CITY determines that all of the CONSULTANT's work under this agreement is completed. A determination of completion shall not constitute a waiver of any rights or claims, which the CITY may have or thereafter acquire with respect to any term or provision of the Agreement. 8. NOTICE OF CLAIM If the CONSULTANT wishes to make a claim for additional compensation as a result of action taken by the CITY, the CONSULTANT shall give written notice of his claim within 15 days after occurrence of such action. No claim for additional compensation shall be valid unless so made. Any changes in the CONSULTANT's fee shall be valid only to the extent that such changes are included in writing signed by the CITY and the CONSULTANT. Regardless of the decision of the CITY relative to a claim submitted by the CONSULTANT, all work required under this Agreement as determined by the CITY shall proceed without interruption. 9. BREACH OF CONTRACT If either party violates or breaches any material term of this Agreement, such violation or breach shall be deemed to constitute a default, and the other party has the right to seek such administrative, contractual or legal remedies as may be suitable to the violation or breach; and, in addition, if either party, by reason of any default, fails within fifteen (15) days after notice thereof by the other party to comply with the conditions of the Agreement, the other party may terminate this Agreement. 10. INDEMNIFICATION To the fullest extent permitted by law, CONSULTANT agrees to and shall indemnify, defend and hold harmless the CITY, its officers, employees, agents,boards and commissions from and against any and all claims, suits, judgments, costs, reasonable attorneys fees, damages or other relief, including but not limited to workers compensation claims, in any way resulting from or arising out of negligent actions or omissions of the CONSULTANT in connection herewith, including negligence or omissions of employees or agents of the CONSULTANT arising out of the performance of this Agreement. In the event of any action against the CITY, its officers, employees, agents, boards or commissions, covered by the foregoing duty to indemnify, defend and hold harmless such action shall be defended by legal counsel of the CONSULTANT's choosing subject to the CITY's approval which shall not be unreasonably withheld. 11. NO PERSONAL LIABILITY No official, director, officer, agent or employee of the CITY shall be charged personally or held contractually liable under any term or provision of this Agreement or because of their execution, approval or attempted execution of this Agreement. 12. INSURANCE A. Comprehensive Liability. The CONSULTANT shall provide, pay for and maintain in effect, during the term of this Agreement, a policy of comprehensive general liability insurance written in occurrence form with limits of at least $1,000,000 aggregate for bodily injury and $1,000,000 aggregate for property damage. The CONSULTANT shall deliver to the CITY a Certification of Insurance naming the CITY as additional insured. The policy shall not be reduced in coverage or limits or terminated without thirty(30)days prior written notice to the CITY. This insurance shall apply as primary insurance with respect to any other insurance or self-insurance programs afforded to the CITY. There shall be no endorsement or modification of this insurance to make it excess over other available insurance, alternatively, if the insurance states that it is excess or prorate, it shall be endorsed to be primary with respect to the CITY. B. Comprehensive Automobile Liability. Comprehensive Automobile Liability Insurance written in occurrence form covering all owned, non-owned and hired motor vehicles with limits of not less than$500,000 per occurrence for damage to property. C. Combined Single Limit Policy. The requirements for insurance coverage for the general liability and auto exposures may be met with a combined single limit of $1,000,000 per occurrence subject to a$1,000,000 aggregate. 13. NONDISCRIMINATION In all hiring or employment made possible or resulting from this Agreement, there shall be no discrimination against any employee or applicant for employment because of sex, age, race, color, creed, national origin, marital status, of the presence of any sensory, mental or physical handicap, unless based upon a bona fide occupational qualification, and this requirement shall apply to, but not be limited to, the following: employment advertising, layoff or termination, rates of pay or other forms of compensation and selection for training, including apprenticeship. No person shall be denied or subjected to discrimination in receipt of the benefit of any services or activities made possible by or resulting from this Agreement on the grounds of sex, race, color, creed, national origin, age except minimum age and retirement provisions, marital status or the presence of any sensory, mental or physical handicap. Any violation of this provision shall be considered a violation of a material provision of this Agreement and shall be grounds for cancellation, termination or suspension, in whole or in part, of the Agreement by the CITY. 14. ASSIGNMENT AND SUCCESSORS This Agreement and each and every portion thereof shall be binding upon the successors and the assigns of the parties hereto; provided, however, that no assignment shall be made without the prior written consent of the CITY. 15. DELEGATIONS AND SUBCONTRACTORS Any assignment, delegation or subcontracting shall be subject to all the terms, conditions and other provisions of this Agreement and the CONSULTANT shall remain liable to the CITY with respect to each and every item, condition and other provision hereof to the same extent that the CONSULTANT would have been obligated if it had done the work itself and no assignment, delegation or subcontract had been made. Any proposed subcontractor shall require the CITY's advanced written approval. 16. NO CO-PARTNERSHIP OR AGENCY This agreement shall not be construed so as to create a partnership, joint venture, employment or other agency relationship between the parties hereto. 17. SEVERABILITY The parties intend and agreed that, if any paragraph, sub- paragraph, phrase, clause or other provision of this Agreement, or any portion thereof, shall be held to be void or otherwise unenforceable,all other portions of this Agreement shall remain in full force and effect. 18. HEADINGS The headings of the several paragraphs of this Agreement are inserted only as a matter of convenience and for reference and in no way are they intended to define, limit or describe the scope of intent of any provision of this Agreement, nor shall they be construed to affect in any manner the terms and provisions hereof or the interpretation or construction thereof. 19. MODIFICATION OR AMENDMENT This Agreement and its attachments constitutes the entire Agreement of the parties on the subject matter hereof and may not be changed, modified, discharged or extended except by written amendment duly executed by the parties. Each party agrees that no representations or warranties shall be binding upon the other party unless expressed in writing herein or in a duly executed amendment hereof,or change order as herein provided. 20. APPLICABLE LAW This Agreement shall be deemed to have been made in, and shall be construed in accordance with the laws of the State of Illinois. Venue for the resolution of any disputes or the enforcement of any rights pursuant to this agreement shall be in courts having jurisdiction over Kane County, Illinois. 21. NEWS RELEASES The CONSULTANT may not issue any news releases without prior approval from the CITY, nor will the CONSULTANT make public proposals developed under this Agreement without prior written approval from the CITY prior to said documentation becoming matters of public record. 22. COOPERATION WITH OTHER CONSULTANTS The CONSULTANT shall cooperate with any other consultants in the CITY's employ or any work associated with the PROJECT. 23. INTERFERENCE WITH PUBLIC CONTRACTING The CONSULTANT certifies hereby that it is not barred from bidding on this contract as a result of a violation of 720 ILCS 5/33E et seq. Or any similar state or federal statute regarding bid rigging. 24. SEXUAL HARASSMENT As a condition of this contract, the CONSULTANT shall have written sexual harassment policies that include, at a minimum, the following information: A. the illegality of sexual harassment; B. the definition of sexual harassment under state law; C. a description of sexual harassment,utilizing examples; D. the vendor's internal complaint process including penalties; E. the legal recourse, investigative and complaint process available through the Illinois Department of Human Rights, and the Illinois Human Rights Commission; F. directions on how to contact the department and commission; G. protection against retaliation as provided by Section 6-101 of the Human Rights Act. A copy of the policies must be provided to the Department of Human Rights upon request 775 ILCS 5/2-105. 25. WRITTEN COMMUNICATIONS All recommendations and other communications by the CONSULTANT to the CITY and to other participants which may affect cost or time of completion, shall be made or confirmed in writing. The CITY may also require other recommendations and communications by the CONSULTANT be made or confirmed in writing. 26. NOTICES All notices, reports and documents required under this Agreement shall be in writing and shall be mailed by First Class Mail,postage prepaid, addressed as follows: A. As to CITY: SEAN STEGALL Assistant City Manager City of Elgin 150 Dexter Court Elgin, IL 60120-5555 B. As to CONSULTANT: MR. BRUCE COWANS Vice President Maximus, Inc. 60 Revere Drive Suite 200 Northbrook, IL 60062 Notices shall be deemed delivered three (3) days after deposit in the U.S. mail. 27. ADDITIONAL PROVISIONS This agreement includes those additional provisions contained in Exhibits 2, 3 and 4 relating to CONSULTANT's tax/collusion/debarment affidavit, bidder's employee utilization form and sexual harassment policy. 28. LICENSE FOR SOFTWARE CONSULTANT will complete the fee component of the PROJECT using Microsoft Excel and provide the fully developed model to the CITY at no additional charge. No license or license fee for that model will be required. CONSULTANT shall complete the indirect cost allocation plan using CONSULTANT's proprietary NGCS2 program. The CONSULTANT agrees to provide the CITY a license authorizing the CITY's use of same and that the CITY may use the existing DOS-based software for an annual license fee of$1,000. Such system operates in a DOS environment on a stand-alone PC. The system described in this paragraph will include all of the calculations that form the basis of the fee recommendations and cost allocations and such systems can be automatically updated by the CITY on an annual basis. 29. THIRD PARTIES The CITY and the CONSULTANT are the only parties to this agreement and are the only parties entitled to enforce its terms. Nothing in this agreement gives, is intended to give, or shall be construed to give or provide, any right or benefit, either directly or indirectly or otherwise,to third persons. 30. SERVICES AND MATERIALS TO BE FURNISHED BY THE CITY The CONSULTANT shall provide guidance to the CITY in determining the data required for purposes of the contemplated services. The CITY further agrees to provide all data specifically requested, including documentation and information to the CONSULTANT in a timely manner. The CONSULTANT shall assume without incurring liability therefor, that all data so provided by the CITY is correct and complete. 31. CONSULTANT LIABILITY IF AUDITED The CONSULTANT will assume all financial and statistical information provided by the CITY is correct and complete. Any subsequent disallowance of funds paid to the CITY under the cost plan by any federal, state or local governmental entity or agency shall be the sole responsibility of the CITY, except to the extent caused by the negligent actions or omissions of the CONSULTANT in connection with the performance of this agreement. IN WITNESS WHEREOF, the undersigned have placed their hands and seals upon and executed this Agreement in triplicate as though each copy hereof was an original and that there are no other oral agreements that have not been reduced to writing in this agreement. For the CITY: For the CONSULTANT: CITY OF ELGIN MAXIMU INC. By ,��. _ By City anager Its 1/t Le f e S a 4tvti" Attest: Attest: Q‘a41".."--452 City Clerk F:\Legal Dept\Agreement\Maximus-Cost of Services-User Fee Study-SS.wpd • LIST OF EXHIBITS Exhibit 1 Scope of Services Exhibit 2 Tax/Collusion/Debarment Affidavit Exhibit 3 Bidder's Employee Utilization Form Exhibit 4 Sexual Harassment Policy . APR-03-02 WED 12: 12 PM CITY OF ELGIN/CITY MGR. FAX NO. 18479315610 P. 11 City of Elgin Proposal for a Cost of Service Study Part 2—Scope of Service Part 2—Scope of Service This section of our proposal includes the following descriptive information: ➢ Method and approach / Proposed services; • Project schedule; and, > Project staffing and management Method and Approach/Proposed Services The City of Elgin is interested in studies that will help it evaluate the sufficiency of fees and charges to customers. The elements of work include: • Core services that must be analyzed • Optional services that the City may choose td add to the scope of work • A survey of fee services and fee prices charged by comparable communities Costs should include indirect costs, to be determined by the consultant, The City seeks a software license to permit it to update the analyses itself in future years, The consultant will be expected to attend regular progress meetings and a designated number of Council meetings to review the work. The consultant will be expected to make recommendations for price levels. MAXIMUS Work Plan We would perform the work as a series of tasks: • Task 1 Conduct Fee Survey • Task 2 Prepare Cost Allocation Plan • Task 3 Identify Costs of Service in Departments with Direct Public Contact • Task 4 Critique Fee Structure • Task 5 Document findings, write report and review a draft report with the City Task 6 Develop and Present Final Report • Task 7 Train City Staff to Update Fees We explain these tasks in more detail below. • Exhibit 1 Page 2 - 1 APR:03-02 WED 12: 13 PM CITY OF ELGIN/CITY MGR, FAX NO, 18479315610 P. 12 City of Elgin Proposal for a Cost of Service Study Part 2— Sco se of Service Task 1: Conduct a Fee Survey The City indicated an interest in what other communities charge for their fee services. The local survey will cover the communities identified in the RFP. As many of them are clients, we anticipate cooperation. Fee prices are a matter of public record. If we encounter problems with cooperation, we may ask the City to call the peer city in question and request its assistance. Ultimately, there is no way to compel cooperation. We caution you that most communities set fee levels arbitrarily, not by analysis. The amounts they charge may bear no relation to the actual cost of those services. At the conclusion of the fee survey, the City should provide a final list of the service areas for study. For purposes of this proposal, investigation and analysis of fee services identified in the RFP as "Optional Areas of Analysis" occur concurrently with . the "Core Components". Optional areas would be subject to the same rigorous level of analysis as core components. We propose concurrent analysis to make the most effective use of consultant and City staff time during data development. / Task 2: Prepare a Cost Allocation Plan The cost of serving the public extends beyond the department with direct public contact.. Failing to recognize these costs will cause the study to ignore a significant element of the cost of fee services. Many City departments and funds incur costs indirectly in support of fee services. These are "central service" departments, which exist, at least in part, to support • departments providing fee services directly to the public. The City's budget identifies the cost of organization units, not the cost of individual services provided by organization units. We have to develop the latter type of information.. We conduct interviews to identify which, costs should be treated as direct and which as indirect. • Direct labor support is usually evidenced by staff exclusively dedicated to a function or keep time records that support allocation of labor cost (i.e., an activity-based time sheet). Direct equipment or materials are evidenced by contract or equipment costs exclusively dedicated to a function, or usage logs that support a claim that- an expense is incurred for a stated purpose. • In other places, the cost of support is indirect and not immediately identifiable. These indirect costs must be allocated. Examples include central payroll and Page 2- 2 APR-03-02 WED 12:14 PNCITY OF ELGIN/CITY MGR. FAX NO. 18479315610 P. 13 City of Elgin Proposal for a Cost of Service Study Part 2— Scope of Service accounting costs, purchasing, data processing, and legal counsel, which benefit all departments. We use the results of our interviews and data collection to summarize cost relationships in a "Central Services Cost Allocation Plan." Our firm uses proprietary software for this purpose. The software has been used to prepare thousands of similar studies and its reports have been audited and validated extensively by Federal and State audit agencies and independent accounting firms. Our method is derived from a Federal government cost accounting regulation, OMB Circular A-87, titled "Cost Principles for State and Local Governments and Indian Tribal Units." Illinois law regarding user fees for Sheriffs, County Clerks and Recorders mentions this regulation explicitly as a guide to the conduct of a fee study. Compliance with a widely recognized standard of governmental cost accounting will enhance the public's acceptance of the study. The following characteristics relate to the overall plan structure and represent opportunities to refine cost allocations, simplify computations, and recover at current cost levels. A. Step-Down Central Service Costs Frequently, central service costs are directly allocated to benefiting funds or agencies. A single step-down of costs provides for shifting costs among central services prior to allocation to beneficiaries, but,does not identify the correct costs of central service departments and may be substantially inaccurate. A reciprocal allocation process using at feast two iterations remedies the deficiencies and heightens both accuracy and usefulness. B. Double Iteration Allocation Process Many cost allocation plans, are compiled using a single step-down or "waterfall" methodology in which the costs of central, service departments are allocated in series with emphasis placed on ordering non-departmental and departmental cost groupings to maximize the flow of costs to recoverable program areas. Although this is an acceptable method resulting in substantially accurate program allocations, it provides only partial information. • MAXIMUS has developed a more, sophisticated double iteration cost process within which central service costs are cross-allocated to reflect the impact of all central services on each other. This enhances the accuracy of costs distributed to line departments and program areas. Page 2- 3 •;. . APR-03-02 WED 12: 14 PM CITY OF ELGIN/CITY MGR, FAX NO. 18479315610 P. 14 City of Elgin Proposal for a Cost of Service Study Part 2— Scope of Service A simultaneous equation cost allocation, using matrix algebra to quantify reciprocal service relationships, is the most sophisticated method of cast allocation. However, this procedure suffers two drawbacks: it is difficult to audit and explain and the cost of the method usually exceeds the benefit. Academic review of the methods suggests that a double iteration cost process is nearly as accurate, easier to explain and less costly to produce. Based on that research, we developed proprietary cost allocation software that employs a double iteration process. In the MAXIMUS approach, costs of central service departments are broken down into functional cost groupings, line item by line item. .Costs cross-allocated between central service departments can be distributed further within component functions of receiving departments on a variety of appropriate bases or any one cost can be singled out and targeted, in whole or part, toany specific function. We are clearly unique in this aspect of our system approach to cost distribution. • Line departments to which indirect costs are allocated can also be presented in enhanced detail. For example, it is possible, provided accounting and other statistical data available, to present indirect costs allocable to subdivisions within departments and programs to the extent deemed desirable by State representatives. The end result is a cost accounting system, which provides precise information for use in analysis and allocation. It follows these steps: 1. Determine available financial information. This task involves identifying the sources of financialinformation to be used. At a minimum, the financial report for the, previous fiscal year and a City organization chart are required. Additional financial • reports issued by the City may be used if available. 2. Survey all City departments, bureaus, etc. This involves surveying all departments to determine what funds are being received, for which programs and purposes, and the extent of recovery of administrative costs. This information is used as an aid in identifying the areas of greatest potential for cost recovery. 3. Determine administrative departments, This task focuses on identifying those departments with responsibility for providing services .to other City departments. These are typically such services as data processing, accounting, auditing, personnel, and purchasing. • 4. Determine allocation bases for allocating services to benefiting departments. This task is critical to insure that administrative costs are allocated fairly and accurately. Numerous allocation bases can be developed but they must be defensible. The services provided each user department must be measurable in specific units of service. For example, a payroll section provides payroll services to all other Page 2 - 4 APR:03-02 WED 12: 15 PM CITY OF ELGIN/CI TY MGR. FAX NO. 18479315610 P. 15 . P . City of Elgin Proposal for a Cost of Service Study Part 2— Scope of Service departments, which have employees to be paid. Therefore, payroll services are measured by the number of personnel each department has on its payroll, and data must be collected on the percentage of payroll checks issued to each department. 5. Prepare cost allocation worksheet. For each administrative department, a worksheet showing the expenditures of the department during the prior fiscal year is prepared. The resulting amount is allocable to benefiting departments. Based upon • units of service identified in prior tasks, the portion of allowable costs to each department is calculated. • 6. Summarize costs by benefiting department. Costs are summarized in the cost allocation plan for each department that receives services from other departments. This final plan, including the cost allocation worksheets, is documented in report . format. • • The full cost plan may be used to: • • Determine charges to user departments for overhead services provided. • Bill to departments their share of all unallocated costs. • Reconcile the 'full cost of services now beingdirectly billed with current charges. Adjust future rates for over and under billings. • Convert more central service departments to direct billing on a periodic basis, • Train and assist financiaF and departmental personnel in using cost information from central service departments and non-departmental overhead cost centers, This can be used for costing programs, projects, services, and fees. The City will review the cost allocation plan in draft. The final document for this task will be a technical report documenting the allocated cost of service to benefiting funds and departments. We will use it as input to the determination of total fee service costs. Task 3: Identify Costs of Fee Services in Departments with Direct Public Contact . . . Our efforts in this task are driven by the number of City departments / agencies requiring detailed review. The following table identifies the departments we believe will require this review under both the "core"and "optional" levels of analysis: . . ..; Page 2- 5 18479315610 P. 16 APR-.03-02 WED 12: 16 PM CITY OF ELGIN/CITY MGR, FAX NO. • - City of Elgin Proposal for a Cost of Service Study Part 2— Scope of Service Fee Study Indirect Cost Plan Study Neither Stud Finance Finance Economic Development and Business Services Purchasing Purchasing Planning &Neighborhood • Services Clerk City Manager Water Code Admin &Development Management Info Services Services Parks and Recreation Building Maintenance Public Works Human Resources Fire - Police Should the City identify that additional departments should be involved, we would negotiate an alternative price proposal. • There are a few discrete elements to this task. • Establish annual demand for each service. The City will be asked to supply, either by actual count, statistical sampling, or educated estimate, the number of times per year each service is provided. We use this data to establish unit costs (i.e., how much to charge a customer for a single transaction). • Identify labor effort by .service. We conduct interviews with department heads or other supervisors in relevant departments for this, purpose. If necessary, we distinguish individual employee activity, but more commonly report detail at the level of position title. Based on interviews with each of the department heads (or other appropriate supervisors), we develop a model to account for all of the time of . employees in each job title across the range of services provided by that department. The model includes two activities other than the fee services being studied. The first is "General and Administrative," In that category, we allocate labor effort of senior management and clerical staff that benefit all services of the department, but are not directly attributable to individual services. That cost is prorated to each other service based on prorated labor effort of the rest of the department's staff. The second category is "All other." . That is for recording of time related to non-fee services and fee services outside the scope of the study. For some departments, this may be the single most expensive service. • Identify other budgeted expenses by service._ Labor is not the only cost of service. In this element of the review, we investigate other budgeted expenses. Our default Page 2 - 6 APR-03-02 WED 12: 16 PM CITY OF ELGIN/CITY MGR, FAX NO, 18479315610 P. 17 i . i; r City of Elgin Proposal for a Cost of Service Study Part 2— Scope of Service assumption is that these expenses are incurred in proportion to labor costs by service, Via interviews with department heads, we explore exceptions to that rule. • Include central service costs by service. If the City opts to have us prepare a Central Services Cost Allocation Plan, this is where the overhead costs of the City would be recognized. Our default assumption is that these expenses are incurred in proportion to labor costs by service. Task 4:Critique Fee Structure In particular, some of the current price distinctions between project sizes (e.g., liquor licenses and inspection of structures) may not reflect the true cost differences of serving' projects of those sizes. The City would like fees to remain easy to understand and explain and easy to update. While it is too early to say, we wish to acknowledge the possibilities that: • Peer community prices may be a poor guide, especially if they were set arbitrarily or do not reflect cost. • The current fee structure may bear only a limited relationship to cost. For example, larger projects are not always materially more expensive to inspect. Cost-based fees may not mirror the current sliding price scales for,projects of different sizes. In our experience with hundreds of fee studies,.we find that careful analysis usually overcomes the public resistance to fee increases that clients fear before projects are undertaken. Our work has been scrutinized and audited and has consistently supported. policy decisions for our clients. We have also learned that fee increases do not distort consumer demand to the extent typically feared by our clients. First, the fee increases are a very small percentage of total project cost. Developers and buyers tend not to walk away from a project because fees increase its total cost by a fraction of a percent, nor are they attracted to• a community because fees are low, Second, we have seen consistently that fee increases in one community are often matched by the neighbors_ This diminishes the chance that a development will be taken to a neighboring community to avoid paying higher fees. Those threats are often bluffs made by skilled negotiators. Task 5: Document Findings, Write Report and Review a Draft Report with the City 1 t. L We ask the departments to confirm all of the information and assumptions in our work. i , We will rely on this review as verification of the accuracy of the report. We prepare . detailed documentation that is audit-ready. This reduces the chances that a third party Page 2- 7 APRFAX NO, 18479315610 P. 1803-02 WED 1217 PM CITY OF ELGIN/CITY MGR. City of Elgin Proposal for a Cost of Service Study Part 2— Scope of Service would challenge our findings. We include in this task time for a meeting to present and explain our draft report. Task 6: Develop and Present Final Report We allow time in this task for editing, further research, meetings, and services of any kind related to this project. For the sake of keeping the total cost of the project reasonable, we will limit our time in this task to not more than 150% of the hours estimated for this task. Should our involvement be requested beyond that level; we would invoice our additional services at our standard hourly rates, plus expenses, • Task 7: Train City Staff to Update Fees Most local governments are diligent to update tax assessments and tax rates: Fee prices tend to remain fixed over long periods of time, even though the costs they are intended to reimburse rise with each new budget year. In this task, we will deliver and explain how to update the central service cost allocation plan model and the user fee models. • Page 2 - 8 APR-03-02 WED 12: 17 PM CITY OF ELGIN/CITY MGR. FAX NO. 18479315610 P. 19 City of Elgin Proposal for a Cost of Service Study Part 2— Scope of Service Project Schedule We are able to commence work within two weeks of receiving a signed contract. On the following page, we detail our week-by-week estimated schedule for this project. This schedule assumes cooperation from the City in scheduling interviews and prompt review of our draft deliverables. Should key City staff be absent (vacation or illness) during the project, we may be unable to adhere strictly to this schedule. Nonetheless, based on our experience in projects of this type, we can complete all elements of the project by the stated deadlines in the RFP. We anticipate completing work ahead Of the schedule in the RFP. This assumes that we make requests for data in writing and that the City provides the data within one week of the request. Our schedule also assumes that the City reviews our drafts according to the schedule as presented on the following page. • • Page 2 -9 APR-03-02 WED 12: 16 PM CITY OF ELGIN/CITY MGR. FAX NO. 18479315610 P. 20 t - City of Elgin Proposal for a Cost of Service Study Part 2- Scope of Service Project Schedule Week Task 1 2 3 4 5 6 7 8 9 10 11 1213 14. 15 16 17 18 19 201211 I 1 ill co 2 iy,Igio __________ .. .„. _ _,....._ --g 1 Foe Survey --.,i 1-1 Assess current Elgin services for foe „At,.r I 1 1 potential 1-2 Legal review by City .4,...4 i3 Conduct local area fee surveyl'orat)i•T4i 1 1-4 Document findings ttif,1 . 1 -1. , I I 1 .. 1-5 Meetings l 'ilt 4'lll 1 I I 2 Cost Allocation Plan(Overhead ' - I I I Study) 1 I 1 - . . . . . 2-1 Delerrnine overhead departments ,',4;4. and functions tillt; I I 1 2-2 Accumulate relevant costs by *qi.+41A-K . i i 11 deem trnent and function .fi.?.. ,leK _,. I I i 2-3 Develop cost allocation bases .:/-..i...i .. 1 f., - 2-4 Gather/enter data Into model 2-5 Prepare draft report section - . ,,4,•:•,. ,4 ,:ii.., 4 I 2-6 Review draft report section '-1.i:,:. • . 2.7 One revision of draft report into finai 1::;t t _.- . 1 j. 1 2-8 Meetings . it!l0 ..,, lt!'iil ":„ili - L_J 3 Identify Costs of Fee Service In I I Departments with Direct Public 1 I Contact I I 3-1 Identify services to be utudled \,- :a,, z`;il. _ .1i0 1 I 3-2 Enter staffing 8 payroll dota•Into 7.17t,-;i:-..,, •,,.. 1 1 departmental modals TOI gli ;1•Iii," - I , I-----I---1 3-3 Enter annual transaction totals by -:,..v i..:; .i.:. . .. w;l4.2; !.;...i. service into models 3-4 Determine/enter transaction time by n1;ii,;.• iitii; • Joblille for each service -i,,,7-:7. . r I 3.5 Revise/balance labor cost models ,i;i:i.-'i:;:',;" 1 _ i'''' ''!;'; _I _ 3-6 Review non-labor trudge(Items by - ',tie department for relevance to services 4:!;I:i.el..! I 3-7 Enter City overhead costs Into model 3-8 Import/Export costs between • ;49., I departments working cooperatively . 3-9 Prepare draft report section 1 , „••••• . . . 1 3.10 Review draft report section 1- 3-11 One revleion of draft report Into final 3.12 Meetings ,.,17t1 ,ii,.,i, ;:f*;1 , iiii?':i 4 Critique Fee Structure , t 1 1 . I I 4-1 Research and analysis ' 4-2 Prepare draft recommendations ?:27•1 L.j _j 4-3 Review draft recommendations 1 1 - , . '4-4 Meetings ,.!_ T r 1 5 Document Findings,Write Report 1 1 and Review Draft with CityI I 5-1 Compile/review draft sections . , I I -I 5-2 Prepare draft report 5-3 Present draft report to CSC - r , i 1 ,...-4 Meetings 1- 1 1 :i 6 Develop and Present final ReportI i ; f 1 6-1 Make requested changes 4 6.2 Present final report to CSC 6-3 Present final report to City Council i Fa'll G-4 Submit final report to City staff 1-7-11n4 '7 Train City Staff to Update Foes I I I •lti•:.,it.„, :„...,_ ,._ , i •" , T i 1 — 1 . — / . . Page 2- 10 . APR-O3-02 WED 12 19 PM CITY OF ELGIN/CITY MGR, FAX NO, 18479315610 P. 21 MAR-08-2002 FRI 01 :13 PM CITY OF ELGIN FAX NO, 1 847 931 6075 P. 03 TAX/COLLUSION/DEBARMENT AFFIDAVIT State of Illinois ss. • County of Cook Bruce Cowans ,being first duly sworn, deposes and says: • That he is vice President: -. . of the firm of.the party FrlakilFi�ing 1`gr�9pit19 f'i� .1V10.4#��E the bid_er s Flat barred torfl carltraet1Rg With AN t It or local government as a result of a violation of 720 Illinois Compiled Statutes; Section 5133E-3 or 5/33E-4,as amended; and,no collusion or agreement among other bidders Cr prospective bidders to bid a fixed price or otherwise restrain freedom of competition by agreement has taken place; and.bidder is not delinquent in the payment of any tax administered by the Illinois Department of Revenue unless there is a pending proceeding contesting the tax. • Signature of Bidder,if an individual; • • Signature of Bidder, if a partnership: Subscribed and sworn to belgr,�m � day of Ili ISi•nature-bf Bidder, if a car oration: My commission expires: 6:3-/ -tfi/OS - "• Vi�cerr President '� ! * - - ,fir �/^. Y• :� ,v �` `^ Asszstan oecre ry ,r_ ,A • • • • • • • Exhibit 2 APR-03-02 WED 12: 19 PM CITY OF ELGIN/CITY MGR. FAX NO. 18479315610 P. 22 �w 703 82? 0550 P.02 n+ . 11. (UUL ):V[(14' YIR/IlIYILJJ r;122'' -rvuc F.fel: u1, 13 PM vl i i ;l7 ELGIN FAX NO, 1 847 931 6 20a P 2P, 04 • BIDDER'S EMPLOYEE UTILIZATION FORM (his report.L mysz d by the City of Elgin and must be submitted befor the contract can be tward ed. ;hapter 3.12.1000 .Affirmative Action- City Contracts t, Name aati Address of Bidder NIAXIMCIS. INC. pesptonrojct� ServicesAnalysis - .60 Revere Dr.iveL Suite 2Q0 Northbrook, Illinois 60062 TO CATEGORIES Total Whites Blades krii Este'rs Asians or A crica-t 14li.nority Ferrule Employees Pacific Indians (24&F) (AU Islanders Caecgeries) M / F MIF M / F MIF M / F - ` 96 Cpl=!•+(sragm IS 3 S 3 2 4 1 55.146 4¢t% tttr^-41C2S . i945- `i°6 3y3 q;- 17 29 4d • A t ,;1 exv, • 5a �•tcssie ,.<<� ' 30 88, if-63 ?53 .1x'7 Flrs 1qg X98 9`t (33 3 q t0-3g 7,2% q 'r of ;,.0.o 4 a. LF ft 8 r 36% -4% 'Sa/c5 1i.4,e k_!'e.t s 1 & I 3 e- ( 'e- es>-' �" ‘9,' 8 0% be Merl t • (vQ 3 • / '1 -'/ If(' 6 Si /0 A( A e 58% OS� d*„ ' a- .4s)- '- ' e. .9- Servic.e. VJo 4.4rs S ( e er I I 2. 4fr• a SD 6e Y. • • _ _ + TOTALS '$'M3 133 i2 a1q�1((3 10 5q1 ty1 1c? 5 ii 53X 67% ipaaarc.of Company°facial Title Telephone Ntarabzr Date Si=ccl Page " -.�- 10'3 35( 3350 03ibr,--- , of ��=-'rte►-moi N46e� R+s..wacmal 2. Have you ever been awarded a b'd by the City of Agin? • 3.• If the answer to question#2 is Yes,please submit a copy of tlse Employee Utilization Form that was submitted with your last alimmell bid along with a hilly completed copy of this form_ 4- If tha statistical data provided above shows under-utilization of minorities and/or females,please submit, according to the guideline pravidcd in the attached document, a written Comm tment to provide equal empIoyment opportunity. NOTE' . .In the event that a contractor or vendor, etc„fails to comply wish tee employment and afFirrnat re action provisions of the City ofElgin,the Cry amongst _ othir acdoas may cancel, terminate,or suspend the contract in whole az in pan, R-08-2002 16.:el +11A47CReq1 ma, TATnf N A^1 , APR-.03-02 WED 12:20 PM CITY OF ELGIN/CITY MGR, FAX NO, 18479315610 P. 23 MAR-06-2t02 ERI 01 : 12 PM CITY OF ELGIN FAX NO, 1 847 931 6075 p, 02 . r. <4 OF Ex.v. It ...z, rk Z .14?• • i 0 77 City of ElcrinI Illinois 0 Ale. -..?, Z • . ....1 , ..".. .- Sexual Harassment -- Policies and Programs ..„ _ -4:g rcp i.uw•- 1 • Effective July 1, 1993, every,party to any contract with the.City of Elgin and every eligible bidder is , - required to have written sexual'harassment policies that include,at a mirtimi4n,'the following , . -. . information: . . • . . • . (I) the illegality of sexual harassment (Li) the definition of sexual harassment under sate law (iii) a descriptirn of sexual harassment,utilizing examples' • • . . (iv) the vendor's Internal complaint process including penalties (v) the legal recourse, investigative and complaint process available through the Illinois Department of Human Rights, and the Illinois Human Rights Commission. . (vi) _ directions on how to contact the department and commission . . (vii) protection against retaliation.as provided by Section 6-101 of the Human Rights Act •• . I hereby affirm that;the organization which I represent has in place sexual harassment policies which include the required information set forth - .9 - arid I hereby agree to furnish the City of Elgin i Human Resources Department with a co• of cse policies if chsv_40 peiest.; MAXIMUS_', gicies are consistent with the 'foregoing r-• - fsocccipt -• .spectiac references to Illinoi .atutes and the Illinois _ Signaturerritle ..A1....L......1 —' • Vre'e Rrs.114;4/- ' partment of Human Rights. I 's'information is posted Company ,...._ , . G . , . 1 the MAXEMLTS offices.. Date - /grAf.7 . . Dcated in Illinois. • . • • , Sexual harassment is defined as follows: • . -"Sexual harassment'means any unwelcome:sexual advances Orrequests for sexual • • • favors or any conduct of a sexual nature when(1).submission to such conduct is made either explicitly or'iznplicitly a term or condition of an indivicluars employment, (2) submissiOn to or rejection.of such conduct by an individual is used as-a basis for employment decisions affecting such individual,or(3) such conduct has the purpose or effect:of substantially interfering with art individuals work performance or creating art intimidating.hostile, or offensive working envirorunent. . , . Arty questions by contracting parries or eligible bidders concerning compliance with these requirements should be directed to the City of Elgin- Human Resources Dcpartrrtent at . (847) 931-5618. . • . I hereby agree to fully indemnify and hold the City of Elgin harmless from arty and all lisbility, loss or damage including costs'-of defense or claim, demands, costs of judgment against it arising from any sexual harassment complaint resultin ro the act of any member of my organization , in the performance of this contract. .. . . . ' , . ' Signature/Title ihce Peas/ C/444t. . cothp..y ,r, ^ AA A - Date • . . • ... .--------- 0 F It; City of Elgin Agenda Item No.rihtu - - 041 • _ E t'st L April 5, 2002 G Tm .111 A no 4L= OPI ' TO: Mayor and Members of the City Council N Cir II I Mr' , • FROM: Olufemi Folarin, Interim City Manager FINANCIALLY STABLE CITY GOVERNMENT EFFICIENT SERVICES. AND QUALITY INFRASTRUCTURE SUBJECT: Cost of Services Analysis PURPOSE The purpose of this memorandum is to provide the Mayor and members of the City Council with information to award a contract for professional services to MAXIMUS Inc . in order to perform a Cost of Services Analysis (COSA) . BACKGROUND An allocation has been provided in the 2002 Riverboat Fund in order to secure the services of a consultant to perform a COSA. A COSA is a methodology based upon accounting and finance principles in order to capture the "real" costs of providing certain municipal services and to establish appropriate user fees to capture the costs of providing the services . Such an analysis is undertaken in two distinct phases and reviews charges to internal and external customers . The initial phase of the analysis will be to capture the City' s indirect or overhead costs associated with the various departments and to outside customers . As an example, the General Fund charges the Water Fund on an annual basis for the costs of providing administrative services (billing, accounting, legal , etc . ) The formula for determining this charge will now be based upon a well- supported methodology. Upon the establishment of the indirect costs, City services and fees will be reviewed to ensure there is adequate recovery of the costs to provide those services . This statement is inherent in the Phase 1 scope of services . The second phase of the analysis will identify areas where current fees should be adjusted so they adequately cover the actual costs of the service rather than subsidizing those services from other General Fund revenues . An additional objective of the study is to identify areas where the City can reasonably recover costs through user fees, where the City does not currently charge a fee. In order to support this component of the analysis, a fee survey will be undertaken to ascertain the reasonableness of chargeable fees, . . Cost of Services Analysis en. April 5, 2002 Page 2 current or newly recommended, and how they compare to the municipal market within which the City operates . It must be noted that any recommendation establishing a fee that fully recovers the costs of providing the service will be reviewed on its effect on the City' s competitive position. Furthermore, it is expected that the additional revenue will be borne as a result of this study to the General Fund on an annual basis, depending on final City Council action on the City' s various fees and inter-fund charges . Based on the prior experience of Assistant City Manager Stegall , the cost of the analysis should pay for itself within two fiscal years . A request for Proposal was sent to three firms who possess the expertise to employ the unique methodology to perform the analysis . Those firms were : Arroyo Associates, Deloitte & Touche, and MAXIMUS, Inc . The results were as follows : Arroyo Associates Declined to respond to scheduling conflicts Deloitte & Touche $271 , 200 rft. MAXIMUS, Inc. $40 , 850 Although there is a large discrepancy between the price proposals, the scope and approach by each firm is similar. Furthermore, there is no concern about MAXIMUS' s ability to perform the work for the stated price. They are the industry leaders in this area and do have economies of scale working in their favor. It should be noted that, Assistant City Manager Sean Stegall was formerly employed by a firm that merged with MAXIMUS and is keenly aware of their capabilities and ability to accomplish the work for the given price . MAXIMUS has provided similar services to over 1 , 200 municipalities each year. Some local municipalities include : • City of West Chicago, IL • City of Evanston, IL • City of Naperville, IL • City of St . Charles, IL In order to have this information available for consideration as part of the 2003 Budget , a tentative schedule is set forth below: Cost of Services Analysis April 5, 2002 Page 3 Tentative Performance Schedule April 22 , 2002 "Kick-Off" Meeting between the consultant and the Cost Allocation Committee August 26, 2002 Initial or draft recommendations presented to the Cost Allocation Committee September, 2002 Final recommendations are presented to the Cost Allocation Committee October, 2002 Initial consideration by the City Council November, 2002 Possible adoption by the City Council in conjunction with the 2003 Budget January 1, 2003 The Project is completed and the Final Report is submitted to Sean R. Stegall and newly- established and revised fees, if any, go into effect . GROUPS/INTERESTED PERSONS CONTACTED None. 1179 rv( FINANCIAL IMPACT (Ujt There are sufficient funds available ($50, 000) in account number 275-0000-791 . 30-99, Miscellaneous Professional Services, to award the contract in the amount of $40, 850 . GAL IMPACT 0 None. ALTERNATIVES 1 . To alter the scope of services with MAXIMUS, Inc . 2 . To not award the contract . . . . rft. Cost of Service Analysis April 5, 2002 Page 2 RECOMMENDATIONS It is recommended that the City Council approve a contract for professional services to MAXIMUS, Inc. in the amount of $40, 850 . Respectfully submitted, . ` Olufem' F. .rin Interi y ager SRS Attachment eft.