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HomeMy WebLinkAbout11077 ORD - 09/13/1972JRR:HG:jLh; 7- 19 -72;'L t • AN ORDINP.NCE AUTHORIZING THE CITY 1,10AGER TO EXECUTE A CONTRACT WITU TOMTE ROSS & CO., FOR THE PREPARATION OF COST ALLOCATION AND INDIRECT COST PROPOSAL IN ACCORDANCE WITH THE U. S. OFFICE OF NANAC `TENT AND EUDCET CIRCULAR A -87, AND AS MORE FULLY SET FORTH IN THE CONTRACT, A COPY OF MICH IS ATTACHED HT:RETO MD MIRKED EXHIBIT "A "; AP- PROPRIATING OUT OF NO. 102 GENERAL FUND FOR TRANSFER TO 154 COMMUNITY RENEWAL GRANT FUND THE SUM OF $4000, SAID SUM TO SUPPLELENT $10,000 PREVIOUSLY APPROPRIATED FOR THE AFORESAID CONTRACT TO DE PERFORMED BY .TOUCHE ROSS & CO.; AND DECLARING AN EMERGENCY. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. The City Manager be, and he is hereby, authorized to execute a. contract- with Touche Ross & Co., for the preparation of cost allocation and indirect cast proposal in accordance with the U. S. Office of Management and Budget Circular A -87, and as more fully set forth in the contract, a copy of which is attached hereto and marked Exhibit "A ". SECTION 2. There is hereby appropriated out of No. 102 General Find for transfer to 154 Community Renewal Grant Fund the sum of $4000, said sum to supplement the sum of $10,000 previously appropriated for the afore- said contract to be performed by Touche Ross & Co. SECTION 2. The necessity to enter into the aforesaid contract and to appropriate the necessary sums in order that the Cost Allocation Plan and Indirect Cost Proposal may be prepared without delay creates a public emergency and an imperative public necessity requiring the suspension of the Charter rule that no ordinance or resolution shall be passed finally on the date of its introduction but that such ordinance or resolution shall be read.at three several meetings of the City Council, and the Mayor having declared such emergency and necessity to exist, having requested the suspension of the Charter rule and that this ordinance be passed finally on the date of its introduction and take effect and be in full force and effect from and after its passage, IT IS ACCORDINGLY SO ORDAINED, this the 4day of , 1972. b a rrAYnR THE CITY OF CO S IRISTI, TEXAS 2: J ®77 THE STATE OF TEXAS X COUNTY OF NUECES X WHEREAS, indirect cost identification and recovery is increasingly significant to the City of Corpus Christi in the Federal Grant Programs; and WHEREAS, the administrative procedures required to qualify for the recovery of these indirect costs is new, complex and demanding of local resources; and WHEREAS, Touche Ross and Co, is a well qualified professional firm able to prepare the required Cost Allocation Plan and Indirect Cost Proposals and has submitted a proposal for such project dated May 10, 1972: NOW, THEREFORE, the City of Corpus Christi, a municipal corporation and body politic under the laws of the State of Texas, hereinafter called City, and Touche Ross & Co., hereinafter called Contractor, do hereby agree, covenant and contract as follows: I Contractor agrees to prepare for the City a Cost Allocation Plan and Indirect Cost Proposal in accordance with the attached proposal dated May 10, 1972, which is marked Exhibit "A" and made a part hereof, the same as if written herein. Said project will identify and conform to the condi- tions prescribed in the Office of Management and Budget Circular A -87 to the end that the City may claim indirect cost items as allowable costa for the Federal grant prbgrams it operates. Contractor agrees to bill the City at the following costs per hour: partners, $55.00 per hour; senior consultant, $35.00 per hour; associate consultant, $25.00 per hour, plus necessary out -of- pocket expenses, not to exceed Fourteen Thousand Dollars ($14,000). Contractor agrees to submit its invoice for services rendered at the comple- tion of the project. II City agrees to purchase the services described herein and to pay the billed amount not to exceed Fourteen Thousand Dollars ($14,000). Said payment to be made upon proper invoice and acceptance of the project by the City. City agrees to make available an employee of the Department of Finance to work with the Project Team on a part -time basis throughout the engagement. • III Both parties mutually agree that the City will monitor and evaluate the ongoing project. The parties hereto mutually agree that said project upon completion becomes the exclusive property of City for its sole use and benefit. Wherefore, witness our hands binding the respective parties this the day of , 1972. TOUCHE ROSS & CO. ATTEST: ATTEST: City Secretary APPR OED: DAY OF , 1972: C Atto 5 . By (Title) CITY OF CORPUS CHRISTI By. R. Marvin Townsend City Manager • I] • TOUCHE ROSS & CO. SUITE 408 GUARANTY BANK PLAZA CORPUS CHRISTI.TE %AS 75401 May 10, 1972 Mr. Harold F. Zick Director of Finance City of Corpus Christi, Texas Corpus Christi, Texas Dear Mr. Zick: Indirect cost identification and recovery has become an issue of in- creasing significance to local governments participating in Federal grant programs. The administrative procedures required to qualify for recovery of these costs is new, rather complex and somewhat demanding of local resources. Many municipalities have therefore sought the assistance of professional firms such as Touche Ross & Co. in this important area. This proposal is submitted in response to your request, and reflects our under- standing of the subject and our approach to assisting the City of Corpus Christi, Texas in the preparation of the required Cost Allocation Plan and Indirect Cost Proposals, COST ALLOCATION PLANS AND INDIRECT COST PROPOSALS Office of Management and Budget (formerly Bureau of the Budget) Circular A -87 prescribes the conditions under which the City of Corpus Christi may claim indirect cost items as allowable costs for the Federal grant programs it operates. Such indirect costs consist generally of two components: - Grantee departmental indirect costs - Costs incurred by agencies other than the grantee (staff departments) CENTRAL SERVICE COSTS The latter category of costs is allocable to departments receiving the benefit of services performed. This allocation is accomplished by preparing a City Government -Wide Cost Allocation Plan. This plan, to be developed annually, describes the central services, their costs, methods of allocation to departments, the amounts allocated, and other information supporting the allocation of indirect staff department costs. • TOUCHE ROSS & CO. Mr. Harold F. Zick -2- May 10, 1972 DEPARTMENTAL INDIRECT COSTS Indirect costs of grantee departments include the costs of those general services provided by the department which are of benefit to Federal grant pro- grams operated by it, but have not been charged directly to those grant ac- tivities. These costs, when combined with the central service costs allocated to the department through the Cost Allocation Plan, are chargeable to specific Federal grants to the extent permitted by legislation authorizing specific grants. The charges are made by way of absorption rates established annually in departmental Indirect Cost Proposals. Indirect Cost Proposals are developed by accumulating financial and statistical data and computing one or more rates for each department which, when applied to a direct cost base, will result in a reasonable and acceptable approximation of actual indirect costs of each department or grant activity. REQUIREMENTS FOR SUBMISSION A currect Cost Allocation Plan must be kept on file by the City of Corpus Christi for fiscal periods in which indirect costs of staff departments are claimed as allowable grant costs. No prior approval of the cognizant Federal agency is required to use the plan unless specifically requested. Indirect Cost Proposals for City departments operating Federal grant programs may re- quire direct approval of grantor agencies. Such approval and /or negotiation should become a feature of the grant application process, where appropriate. A graphic illustration of the role of the Cost Allocation Plan and Indirect Cost Proposals in distributing indirect costs to cost objectives is enclosed as Exhibit 1. POTENTIAL BENEFITS Development of a Cost Allocation Plan and Indirect Costs Proposals will provide the City of Corpus Christi with a means of recognizing as allowable costs those amounts now being expended, but not reimbursed, for the benefit of grant programs. The resultant increase in recognized allowable cost will be a basis for claiming additional grantee contribution, or 'local share ". Documentation of "local share" contributions will be greatly simplified at the individual grant level. Additional Federal funds may also be forthcoming, depending upon available amounts at the Federal level and grant budget ap- provals. In addition, through the development of the Cost Allocation Plan and Indirect Cost Proposals, the City will acquire an improved facility for measuring and evaluating the financial and organizational performance of City agencies. SCOPE OF THE WORK PROPOSED We believe that the basic tasks listed below will be required in the thorough and responsible preparation of the required Cost Allocation Plan and Indirect Cost Proposals: - Identification of central services (staff) department costs to be allocated. • TOUCHE ROSS & CO. • Mr. Harold F. Zick -3- May 10, 1972 - Determination of method for allocating each type of staff department cost to all departments receiving service. - Accumulation of inter - departmental billings and mathematical allocation of staff department cost to departments receiving services. - Compilation of cost allocation plan and possible negotiation with cognizant Federal agency (the U. S. Environmental Protection Agency). - Determination of direct and indirect costs in departments operating significant Federal grant programs, including grant costs. - Computation of indirect cost rates and compilation of indirect cost proposals. - Presentation of implementation seminar for affected City departments and agencies. Final review. We have prepared a detailed work plan to accomplish these tasks. The scope of this plan will probably oe reduced in subsequent periods with the establishment of routine data- gathering procedures and effective rapport with Federal agencies involved. PROJECT ADMINISTRATION We have organized a Project Team of experienced professionals to serve the City of Corpus Christi in the preparation of its Cost Allocation Plan and Indirect Cost Proposals. Mr. Patrick H. Canary, Partner in Charge of Management Services in our Houston office will have overall responsibility for the engagement, Mr. Douglas H. Wilton, Senior Consultant in our St. Louis office, will serve as Project Manager, and will be responsible for the day - to-day management of the engagement. Additional consultants from our Houston, St. Louis and Corpus Christi offices will be assigned to the project as re- quired. Mr. William E. Ponder, Partner in Charge, and Mr. Willie J. Kosarek, Manager, of our Corpus Christi office, will serve as Technical Advisors to the Project Team. We anticipate the availability of an employee of the Department of Finance to work with the Project Team on a part -time basis throughout the engagement. Our fees are based upon the actual time spent by our consultants at standard hourly rates, plus necessary out -of- pocket expenses. As is our normal practice in engagements with the City of Corpus Christi, we are pre- pared to agree to a maximum fee contract based upon the proposed work plan and scope of services. We estimate that this engagement can be performed for a fee not to exceed fourteen thousand dollars ($14,000). The extent to which the actual fee will be less than the maximum proposed will largely be determined by the degree of involvement in the project by City of Corpus Christi personneL. TOUCHE ROSS & CO. • Mr. Harold F. Zick -4- May 10, 1972 We believe that the Cost Allocation Plan and required Indirect Cost Proposals can be prepared within two months of the start of the project (See Exhibit 2). To the extent that the preparation of these documents will facilitate actual recovery of costs from the Federal Government, it is desirable for the City to commence work on the project at the earliest possible date. FIRM QUALIFICATIONS The extensive experience in governmental consulting which Touche Ross & Co. has acquired, together with the Firm's knowledge of the structure and operation of the City of Corpus Christi, uniquely qualify Touche Ross to advise and assist the City in this project. The specific qualifications of the project staff are par- ticularly relevant to the proposed endeavor. Mr. Patrick H. Canary, who will exercise partner responsibility for this engagement, has functioned in a similar role in several prior consulting projects with municipalities, including the City of Corpus Christi. Mr. Canary's broad experience in cost accounting, analysis and distribution, governmental accounting and grants management will provide a solid basis for engagement coordination and communication. Mr. Douglas H. Wilton has been responsible for projects directly involved in Federal grants administration for several state and local government agencies. He recently supervised the preparation of the Cost Allocation Plan and Indirect Cost Proposals for a major mid- western city. A certified public accountant with in -depth experience in the many aspects of cost allocation and grants management, Mr. Wilton's background will be of significant benefit to the project. Mr. William E. Ponder and Mr. Willie J. Kosarek have gained valuable know- ledge and experience through the Firm's audit relationship with the City of Corpus Christi. Both Mr. Ponder and Mr. Kosarek are certified public accountants versed in the complex field of municipal finance and administration. Their con- tribution to the success of the proposed engagement will be significant. All of the consultants whom we would propose to assign to this project will have current relevant experience. Their backgrounds include extensive consulting in the fields of local government, grants administration, cost allocation, systems and procedures and related disciplines. The experience and knowledge of our National Staff are available to meet specialized technical challenges and to pro- vide additional perspective in successfully completing the engagement. We will be pleased to provide additional information regarding our experience and professional qualifications upon your request. We are grateful for the opportunity to submit this proposal. Should you wish to have further information or clarification, please contact Mr. Ponder or Mr. Kosarek at our Corpus Christi office (telephone 882 - 4311). Yours very truly, • LLOCATION OF INDIRECT COSTS TO FuDERAL GRANT PROGUMS IN LOCAL GOVERNMENT AGENCIES General - Mayor Central - Comptroller Wvernme -t - Alder- Service - Personnel Agencies men Departments - Supply - Data Processing - Other D eri ct Coate - /Indirect Coaea Only Charged Directly Costs Coats not Capitol allowable Allowable Expenditure under OMB Indirect CIR A -87 Coate - special - Health G Hospitals Allocation Allocation service - Police Be... Plan Departments - Fire - Courts - other _ - Allowable - Coate Coate Indirect Capital Chargod Ho[ Coate Expenditures Directly Allowable - General Depart - menta e Allocation rile Spec iPie - Other Budgets _ - - ' -- Haves Police Grants and - Federal ealth Contracts - Local Share __ -- -- Indirect. - Actual Coats Cost _ - Proposals ix{ _ -— - • t67-! H I GENERAL 'PURPOSE GANTT r ORGANIZATION City of Corpus Christi, Texas - - •! a 1 CHART' DATE r WORK LEVEL Cost ,Allocation Plan /Indirect Cost Proposals PAGE 1 eF 1 Weeks After Commencement of Project Task 1 2 3 5 ( 7 8 9 I. Identify Central _ Service Costs II. Determine Allocation . Method III. Accumulate Billings & Allocate Costs IV. Compile Cost Allocati n - - -_ Plan &.N gotiate V. Determine Department Indirect Costs VI. Compute Rates & Compi e , Indirect Cost Pro-oastis VII. Prepare & Present _ II. Final Review rRCrARCV nr APPROVED BY 11 COPYRIOUT 1008 10-03 TOUCME, ROSS TOUCHE ROSS & CO. _ Resume of PATRICK H. CANARY Present Director of Management Services, Houston position Touche Ross & Co. Firm experience includes: - Management study and operations review; project manager on project to determine management and operating recommenda- tions for large Texas state agency and a local health agency. - Management and organization study; project manager on pro- ject to determine management and organizational recommenda- tions for an agency of the Federal government. - Systems planning study; engagement partner on a systems plan- ning project to study the feasibility of a joint computer installa- tion shared by a city, county, and school district in Texas. - Organization planning; documented corporate plans of national transportation company and developed required organizational planning and management development. - Work measurement; developed and implemented broad work mea- surement program for large department store. - Data processing evaluation; participated in comprehensive evaluation of electronic data processing function of large oil company. - Materiel control system; designed material control system for gift wrap manufacturer. - Production scheduling system; managed project to design and implement production control system in manufacturing company. Previous International Business Machines experience - Sales Representative; responsible for sales and implementation of electronic accounting machines, including systems design. Aluminum Company of America - Assistant Supervisor, Foil Rolling and Finishing; assisted in line supervision of two large production departments. - Industrial Engineer; developed improved production methods, especially production standards, and performed cost analyses. U. S. Army - Lieutenant; training officer assigned to Basic Officers' School ON. Educaiion University of Kansas, B.S. in Industrial Management Harvard Business School, M.B.A. Professional Certificate in Data Processing A;aerican Institute of Industrial Engineers Certified Public Accountant, Texas Institute of Management Consultants TOUCHE ROSS & CO. � Resume of DOUGLAS H. WILTON Present Senior Consultant, Management Services Position Touche Ross & Co., St. Louis Firm experience includes: - Grants administration; responsible for development of comprehensive systems of fiscal and administrative con- trol for grantor and grantee agencies in federal programs, including specification of organizational, fiscal and contractual relationships and procedures. - Cost Allocation; responsible for development of Cost Al- location Plan and Indirect Cost Proposals, under provisions of OMB Circular A -87, for the government of a major urban city; developed implementation plan and supervised negotiation of indirect cost rates with Federal agencies. - Medicare; conduct of cost studies and preparation of Medicare cost reports for hospitals, extended care facilities and home health agencies; counsel and representation of clients in resolution of Medicare audit reports; also supervision of Medicare audits at several hospitals. - Operations review; responsible for management review of operations in the trust department of a major bank, including organization of functions, functional procedures, management controls and detail work plans. - Information systems; analysis, design and implementation of comprehensive information systems for a charter airline, a restaurant franchise organization, government agencies, manu- facturers, and health care organizations. - Financial projections; preparation of detail forecasts of earnings, cash flow and financial position for existing companies and proposed new enterprises. - Electronic data processing; systems planning and economic feasibility study for an automotive parts distributor and health care organizations. - Government management survey; development of comprehensive recommendations for management of an agency of the federal government. Previous General Motors Corporation experience - Central Office Financial Staff; internship in data processing. U. S. Army - Captain, Commanding Officer of a missile battery. CORPUS CHRISTI, TEXAS DAY OF i' 19 27✓ TO THE MEMBERS OF THE CITY COUNCIL CORPUS CHRISTI, TEXAS FOR THE REASONS SET FORTH IN THE EMERGENCY CLAUSE OF THE FOREGOING ORDINANCE, A PUBLIC EMERGENCY AND IMPERATIVE NECESSITY EXIST FOR THE SUSPEN- SION OF THE CHARTER RULE OR REQUIREMENT THAT NO ORDINANCE OR RESOLUTION SHALL BE PASSED FINALLY ON THE DATE IT IS INTRODUCED, AND THAT SUCH ORDINANCE OR RESOLUTION SHALL BE READ AT THREE MEETINGS OF THE CITY COUNCIL; 1, THEREFORE, REQUEST THAT YOU SUSPEND SAID CHARTER RULE OR REQUIREMENT AND PASS THIS ORDI- NANCE FINALLY ON THE DATE IT IS INTRODUCED, OR AT THE PRESENT MEETING OF THE CITY COUNCIL. - PECT LLY, YOR THE CITY OF CO U CHRISTI,, TEXAS THE CHARTER RULE WAS SUSPENDED BY THE FOLLOWING -VOTE: RONNIE SIZEMORE - - CHARLES A. BONNIWELL RoBERTo BosQu£z, M.D. REV. HAROLD T. BRANCH �/�•-,���_ - - ,.. THOMAS V. GONZALES J. HOWARD STARK THE ABOVE ORDINANCE WAS PASSED BY THE FOLLOWING VOTE: . BONNIE $12EMORE CHARLES A. BONNIWELL ROBERTO BOSQU£2, M.D. 'REV. HAROLD T. BRANCH THOMAS V. GONZALES GABE LOZANO, SR. J. HOWARD STARK