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REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: FEBRUARY 4, 2014 TITLE: AGREEMENT WITH MGT OF AMERICA, INC., FOR MULTIYEAR FINANCIAL AND COST ANALYSIS SERVICES CITY MAN GER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1� Reading ❑ Ordinance on 2n° Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager and Clerk of the Council to execute an agreement with MGT of America, Inc., subject to nonsubstantive changes approved by the City Manager and City Attorney, to prepare multiyear financial and cost allocation studies required to secure maximum reimbursements from the Orange County Transportation Authority, in an amount not to exceed $30,000. DISCUSSION This recommended action will assist the City in providing cost allocation analysis and studies required by the Orange County Transportation Authority (OCTA) to ensure that the City receives the maximum allowable reimbursements from OCTA on grant- funded capital improvement projects. The financial services needed to complete the studies will help staff to complete and file all reimbursement requests and cost allocation studies by the OCTA March 2014 deadline. Staff recommends utilizing MGT of America, Inc., as the firm possesses the knowledge and expertise to perform the studies within the critically sensitive time period. In May 2012, OCTA informed the City that, effective immediately, staff reimbursement billing rates for capital projects would be restricted to wages and benefits plus a 30 percent overhead. Because budget assumptions were based on full cost recovery, reduction to a 30 percent rate would create a structural deficit of $1 million or more annually. In June 2013, City staff negotiated with OCTA to accept a cost allocation plan and indirect cost rate prepared in accordance with federal circular OMB A -87 guidelines. The City retained MGT of America, Inc., a firm with specialized public sector expertise, to prepare the required cost allocation plan and indirect cost rate for FY 12/13. At the time, the City anticipated that a complete resolution to the structural deficit had been reached. In December 2013, however, OCTA indicated that additional cost allocation studies would be required for FY 06/07 and FY 09/10, since some long -term capital projects have outstanding reimbursements pending. Moreover, OCTA has informed the City that all projects tied to Measure 251 -1