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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />AUGUST 20, 2019 <br />CLERK OF COUNCIL USE ONLY: <br />TITLE: APPROVED <br />❑ As Recommended <br />APPROVE AGREEMENT WITH ❑ As <br />Or Amended <br />❑ Ordinance on 1s' Reading <br />CLEARSOURCE FINANCIAL CONSULTING ❑ Ordinance on 2nd Reading <br />TO PREPARE AN INDIRECT COST ❑ Implementing Resolution <br />ALLOCATION PLAN AND INTERNAL ❑ Set Public Hearing For <br />SERVIDE FUNDS COST ALLOCATION <br />METHODOLOGY FOR UP TO FIVE YEARS, <br />FOR A TOTAL AGGREGATE AMOUNT <br />NOT TO EXCEED $170,700 <br />(STRATEGIC PLAN NO. 4, 1) <br />CONTINUED TO <br />FILE NUMBER <br />CITY MANAGER <br />RECOMMENDED ACTION <br />Authorize the City Manager and Clerk of the Council to execute an agreement with Clearsource <br />Financial Consulting to prepare an Indirect Cost Allocation Plan and Internal Service Funds <br />Cost Allocation Methodology, for a three-year period August 20, 2019 through August 19, 2022, <br />with a provision for two additional one-year terms exercisable (beginning August 2022 through <br />August 2024) by the City Manager and the City Attorney, for a total aggregate amount not to <br />exceed $170,700 for the term of the contract, including the optional renewals, subject to non - <br />substantive changes approved by the City Manager and City Attorney. <br />DISCUSSION <br />On a periodic basis, it is incumbent on local government agencies to review and update their <br />inter -agency charges through a formal study commonly referred to as a Cost Allocation Plan. <br />The primary purpose of conducting such a study is to ensure that the costs of providing certain <br />City services are reasonably recovered through fees and charges. The City currently uses <br />internally developed cost allocation methodologies to recover direct and indirect costs from <br />various City departments and programs (Indirect Costs). However, due to increased <br />complexity of federal, state, and local guidelines for cost principles and audit requirements, the <br />Finance and Management Services Agency (FMSA) has determined that a more <br />comprehensive cost allocation plan is necessary to maintain the City's continued compliance <br />with applicable laws and regulations. <br />The proposed work plan includes two primary components; An Indirect Cost Allocation Plan <br />(Indirect Costs) and Internal Service Funds Cost Allocation Methodology. The Indirect Cost <br />Allocation Plan aims to recover the General Fund's overhead costs of providing indirect support <br />services to operating departments and programs. The Internal Service Funds Cost Allocation <br />25C-1 <br />