HomeMy WebLinkAboutC-3054 - Costing & Performance Measurement Servicesi
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Council Agenda No.: 22
CITY OF NEWPORT BEACH
• DEPARTMENT OF FINANCE
Interdepartmental Memorandum
June 12, 1995
BY THE CITY COUNCIL
CITY OF NEWPORT BEACH
TO: HONORABLE MAYOR & MEMBERS OF THE CITY COUNCIL
FROM: Dennis Danner, Director of Finance 16.o
SUBJECT: COST RECOVERY ANALYSIS C - 3 0.5-V
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During the January, 1995 Council/Manager workshop the City Council expressed a desire
for information regarding a cost recovery analysis study to be performed by a recognized
consultant in this field. In April, 1995, the City Council authorized the issuance of a
Request for Proposal (RFP) for such a study. The RFP requested a consultant to provide
• an implementable cost recovery program with identification of costs for both user fee and
non user fee activities, a federally approved cost allocation system, and performance
benchmarking of key City activities against both public and private agencies. The RFP
provided for the work to be completed within one hundred and twenty days of the award
of contract.
DISCUSSION:
Five companies responded with proposals to provide cost recovery analysis services. The
five respondents; David M. Griffith & Associates, Management Services Institute, Ernst
& Young, Ralph Anderson & Associates, and KPMG Peat Marwick made presentations
to, and were interviewed by, the Finance Committee on May 30, 1995. The Finance
Committee evaluated respondent's proposals on the following criteria:
• Qualifications of the consultant, knowledge and experience in similar studies in
California
• Responsiveness to the City's requirements
• • Ability to complete the project on a timely basis
• Cost of engagement
• References from other California governmental agencies
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COST RECOVERY ANALYSIS
Page Two
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Following the evaluation of the proposals and the respondent's presentations to the
Finance Committee, the Finance Committee unanimously selected KPMG Peat Marwick
as the respondent they recommend to the City Council to perform the study. A copy of
the proposal provided by KPMG Peat Marwick is available for review in the Finance
Department.
Included in the scope of work to be performed by KPMG Peat Marwick is the following:
• Prepare a cost allocation plan in conformance with OMB Circular A -87.
• Conduct a comprehensive review of service fees and fee structures.
• Prepare a comprehensive fee and cost recovery analysis for presentation to the Mayor,
City Council, and City Management.
• Review and analyze the entire operation of City programs in order to ultimately •
justify a fee and cost recovery structure which can be reproduced and maintained by
City staff in subsequent years.
• Identify costs by activity for all areas of City government and prepare reports of such
costs.
• Develop performance indicators for use in monitoring and benchmarking City
accomplishments.
KPMG Peat Marwick has estimated approximately 700 hours to accomplish the above
tasks and will be able to meet the City's desired completion schedule of 120 days. The
cost to perform the study is $78,500, which is competitive with the other proposals; and
includes the analysis, installation of proprietary software, training of staff, and all
incidental expenses. This cost will be offset by any additional revenues identified by the
cost recovery analysis and the adoption of any recommended fee adjustments.
RECOMMENDATION:
It is respectfully recommended that the City Council award the contract for a Cost •
Recovery Analysis to KPMG Peat Marwick and approve the necessary appropriation
budget adjustment to fund the study.
COSTRFP2.DOC 06/02195 10:48 AM
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CITY OF NEWPORT BEACH
P.O. BOX 1768, NEWPORT BEACH, CA 92658 -8915
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TO: PURCHASING /ADMINISTRATIVE SERVICES DEPARTMENT
FROM: CITY CLERK
DATE: August 3, 1995
SUBJECT: Contract No. C -3054
Description of Contract Costing and Performance
Measurement Services
Effective date of Contract June 20 1995
Authorized by Minute Action, approved on June 12, 1995
Contract with KPMG Peat Marwick
Address 650 Town Center Drive
Costa Mesa, CA 92626
Amount of Contract (See Agreement)
Wanda E. Raggio
City Clerk
WER:pm
Attachment
3300 Newport Boulevard, Newport Beach
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PROFESSIONAL SERVICES AGREEMENT
CITY OF NEWPORT BEACH
and
KPMG PEAT MARWICK LLP
650 Town Center Drive
Costa Mesa, California 92626
for
THE PROVISION FOR CONSULTING SERVICES
COSTING AND PERFORMANCE MEASUREMENT SERVICES
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TABLE OF CONTENTS
Paee
SECTIONI ................................. .......:......................I ......................... 1
Payment and Fee Schedule ................................. ............................... 1
SECTIONII ......................................................... ............................... 1
Responsibilities and Basic Services of the Consultant .. ............................... 1
SECTIONIII ........................................................ ............................... 2
The City's Responsibilities ................................ ............................... 2
SECTIONIV ........................................................ ............................... 3
Mutual Obligations of the City and the Consultant ..... ............................... 3
SECTIONV ......................................................... ............................... 3
Chapter, Laws and Ordinances ................... . .................... ............. I..... 3
SECTIONVI ........................................................ ............................... 3
Termination of Contract .................................... ............................... 3
SECTIONVII ....................................................... ............................... 4
Change Orders and Extensions ............................ ............................... 4
SECTIONVIII ...................................................... ............................... 4
Equal Employment Opportunity ........................... ............................... 4
SECTIONIX ........................................................ ............................... 4
Special Conditions ........................................... ............................... 4
PJ
AGREEMENT
This AGREEMENT, made as of the 20th day of June, 1995, by and between the City of Newport
Beach hereinafter called the CITY, and KPMG PEAT MARWICK LLP, hereinafter called the
CONSULTANT.
WITNESSETH
That WHEREAS, the City intends that Consultant, upon written authorization as hereinafter
specified, shall perform services as hereinafter provided; which are in accordance with the project
scope of any addenda thereto, as set forth in the Proposed Work Plan, which Proposed Work Plan
by this Consultant together with addenda, if any, is hereby made a part of this agreement.
NOW, THEREFORE, the City and the Consultant for the consideration hereinafter set forth agree
as follows:
SECTION I — PAYMENT AND FEE SCHEDULE
It is understood and agreed by and between the parties hereto, that the City shall pay the Consultant
for services furnished, and the Consultant shall accept as full payment for such services, amounts
of money computed as follows:
A. The City agrees to pay, and the Consultant agrees to accept, for the technical and professional
services contained in Section II hereof, including out -of- pocket expenses, a sum not to
exceed $78,500.
B. The Consultant shall maintain hourly records of time worked by its personnel to support any
audits the City may request, and shall bill the City twice monthly for costs accrued during the
proceeding period. Upon submission of such billings to the City, and approval by the City
Project Coordinator, payment shall be issued.
SECTION II — RESPONSIBILITIES AND BASIC SERVICES OF THE CONSULTANT
A. The Consultant agrees to perform professional services in connection with project as
hereinafter stated.
B. The Consultant shall serve as the City's professional consultant for the Phases and Tasks as
defined in the Proposed Work Plan, and shall give related consultation and advice to the City
during the performance of its services.
C. Except as otherwise provided herein, any additional work to be performed by the Consultant
shall be first authorized in writing by the City's designated Project Coordinator. Said
authorization shall set forth all special conditions and requirements not otherwise provided for
in the Agreement.
AGREEMENT BETWEEN CITY OF NEWPORT BEACH
AND KPMG PEAT MARWICK LLP
Page 2
D. Time of Performance: The service to be performed by the Consultant under this Agreement
shall be commenced upon notification of contract award and shall be completed as indicated in
the Proposed Timing section, unless extended by the City.
E. Scope: The following documents, which comprise the scope of the Agreement between the
City and the Consultant, are hereby incorporated into this Agreement by reference.
The KPMG Peat Marwick LLP proposal, dated May 10, 1995, entitled Costing and
Performance Measurement Service, and specifically the Proposed Work Plan for Phases
and Tasks.
F. The Consultant providing services under this Agreement will be required to procure and
maintain, at its own expense and without cost to the City, until final acceptance by the City of
all work covered by the Agreement, the following types of insurance. The policy limits
required are to be considered to be minimum amounts:
COMPREHENSIVE GENERAL LIABILITY INSURANCE policy with minimum limits
of $1,000,000 Combined Single Limit for each occurrence. This policy should have a
Broad Form Endorsement and include the following coverages; Blanket Contractual
Liability, Broad Form Property Damage, Completed Operations and Personal Injury.
2. WORKER COMPENSATION AND EMPLOYER'S LIABILITY INSURANCE shall
cover the obligations of the Consultant in accordance with the provisions of the Workers
Compensation Act, as amended, by the State of California.
3. The Consultant agrees to defend, save and hold the City harmless from any and all claims,
causes of actions, suits and liabilities which arise in connection with the Consultant's
negligent performance hereunder, or for any breach of the convenant to recognized
propitiatory interest, maintain security and privacy, and for discrimination.
SECTION III — THE CITY'S RESPONSIBILITIES
The City shall:
A. Assist the Consultant by placing at its disposal all available information pertinent to the
Project including previous reports and any other data requested by the Consultant which is
within the City's possession and control.
B. Except as otherwise specified herein, give notice to the Consultant within ten (10) days
whenever the City's Project Coordinator observes or otherwise becomes aware of any
defect in the project.
C. Obtain approval of all governmental authorities having jurisdiction over the Project and
such approvals and consents from other individuals or bodies as may be necessary for
completion of the Project.
D. Provide suitable work space including telephone.
AGREEMENT BETWEEN CITY OF NEWPORT BEACH
AND KPMG PEAT MARWICK LLP
Page 3
E. Assign a City Project Coordinator to assist the Consultant in data collection, scheduling
meetings and other duties as specified herein.
SECTION IV — MUTUAL OBLIGATIONS OF THE CITY AND THE CONSULTANT
A. This agreement does not guarantee the Consultant any work except as authorized in
accordance with Section R above, or create an exclusive consulting contract.
B. All of the services contemplated under this Agreement are personal and shall not be
assigned, sublet or transferred without the prior written consent of the City. All persons
specifically identified by Consultant in its Proposal of May 10, 1995, as being assigned
to the performance of tasks to be performed under this agreement shall be so assigned by
the Consultant and shall at all times during the performance of this agreement be
assigned to and responsible for the performance of the tasks specified in the agreement.
C. The Consultant and any and all of its personnel utilized by the City under the terms of this
agreement shall remain the agents and employees of the Consultant and are not, nor shall
be construed to be, agents or employees of the City.
D. All plans and specifications prepared by the Consultant are the product of its training,
experience and professional skill; accordingly, they remain its property, and it shall
maintain them in their bid condition for future reference. The City shall receive a
reproducible copy for use solely in connection with this Project. Any re -use will be only
with Consultant's written permission.
SECTION V — CHAPTER. LAWS AND ORDINANCES
The Consultant, at all times, agrees to observe all Federal and State Laws, Ordinances, and Charter
Provisions of the City and all rules and regulations issued pursuant thereto, which in any manner
affect or govern the planning and construction of work contemplated under the Agreement.
SECTION VI — TERMINATION OF CONTRACT
Termination of Contract for Cause
If through any cause, the Consultant shall fail to fulfill in timely and proper manner its obligations
under this Agreement, or if the Consultant shall violate any of the covenants, agreements, or
stipulations of this Agreement, the City shall thereupon have the right to terminate this Agreement
by giving written notice to the Consultant of such termination and specifying the date thereof, at
least five (5) days before the effective date of termination. In that event, the Consultant shall be
entitled to receive just, equitable compensation for any satisfactory work completed on such
documents and other materials. If the City determines not to accept any of such documents,
Consultant shall not be entitled to any payment.
AGREEMENT BETWEEN CITY OF NEWPORT BEACH
AND KPMG PEAT MARWICK LLP
Page 4
Termination for Convenience
The City may, for reasons of its own convenience, cancel all or a portion of this contract upon
thirty (30) days prior written notice to Consultant. Upon such cancellation, Consultant shall be
entitled to just and equitable compensation for all satisfactory work completed to the effective date
of cancellation and a reasonable sum for costs incurred as a direct result of such cancellation not to
exceed 20% of the pro -rata cost of the unfinished portion of this agreement.
The City may, from time to time, require changes in the scope of the services of the Consultant to
be performed herein; such changes shall first be approved as required by Section II(c).
Such changes, including any increase or decrease in the amount of the Consultant's compensation,
which are mutually agreed upon between the City and the Consultant, shall be incorporated in
written Change Orders or extensions to this agreement.
ECITION VIII — EOUAL EMPLOYMENT OPPOR
A. The Consultant will not discriminate against any employee or applicant for employment
because of race, color, religion, sex or national origin. The Consultant shall adhere to
acceptable affirmative action guidelines in selecting employees and shall ensure that
employees are treated during employment without regard to their race, color, religion, sex or
national origin. Such action shall include, but not be limited, to the following: employment,
upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination,
rate of pay or other forms of compensation, and selection for training, including
apprenticeship.
SECTION IX — SPECIAL CONDITIONS
• ���
The Consultant warrants that all recommendations, plans and specifications provided to the City
are, in its professional opinion, valid, accurate and complete. The City reserves the right to accept,
decline or require modifications to recommendations, plans and specifications if deemed in the
City's best interests.
Project Delays
The Consultant shall not be held liable for Project delays caused by the City's failure to perform its
obligations in a timely manner.
• •
AGREEMENT BETWEEN CITY OF NEWPORT BEACH
AND KPMG PEAT MARWICK LLP
Page 5
Force Majeure Clause
The parties to the Agreement shall be excused from performance hereunder during the time and to
the extent they are prevented from obtaining or performing the service, by reason of an act of God,
fire, or commandeering of material products plant facilities by the government, when satisfactory
vidence is presented to the other party, provided it is reasonably established by the presentation of
facts, that the nonperformance is not due to the fault or neglect of the parry who is not performing.
Any notices required to be given by the terms of this agreement shall be deemed to have been given
when the same is mail by certified mail, return receipt requested, postage pre-paid, addressed to the
respective parties as follows:
AS TO CONSULTANT
KPMG Peat Marwick LLP
650 Town Center Drive
Costa Mesa, California 92626
Attention: Margaret J. McBride
wo•
AS TO CITY
City of Newport Beach
3300 Newport Boulevard
Newport Beach, California 92659
Attention: Richard C. Kurth
Consultant agrees that none of its officers or employees shall use or reveal any research or
statistical information furnished by any person and identifiable to any specific private person for
any purpose other than the purpose for which it was obtained. Copies of such information shall
not, without the consent of the person furnishing such information, be admitted as evidence or
used for any purpose in any action, suit or other judicial or administrative proceedings, unless
ordered by a court of competent jurisdiction. City shall be notified immediately upon receipt of any
such order of court, pertaining to production of such information.
AGREEMENT BETWEEN CITY OF NEWPORT BEACH
AND KPMG PEAT MARWICK LLP
Page 6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
KPMG Peat Marwick LLP
By:
Name: Margagg.J. McBride
Title: Partner
City of Newport Beach
J.
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