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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />MAY 1, 2018 <br />TITLE: <br />APPROVE AN AGREEMENT WITH MGT OF <br />AMERICA, INC., FOR FEDERALLY <br />COMPLIANT COST ALLOCATION PLAN <br />PREPARATION AND INTERNAL SERVICE <br />FUND ALLOCATION STUDY <br />(STRATEGIC PLAN NO. 6, 1G) <br />CI MANAGER <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />❑ As Recommended <br />❑ As Amended <br />❑ Ordinance on 151 Reading <br />❑ Ordinance on 2nd Reading <br />❑ Implementing Resolution <br />❑ Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />Authorize the City Manager and Clerk of the Council to execute an agreement with MGT of <br />America, Inc., for the three-year term beginning May 1, 2018, and expiring on April 30, 2021, with <br />provision for two one-year extensions exercisable by the City Manager and City Attorney, to <br />prepare annual Code of Federal Regulations (CFR) Part 200 compliant Cost Allocation Plans <br />necessary for state and federal grant reimbursement, and an Internal Service Fund Allocation <br />Study, in the amount of $151,825 for the term of the agreement, including any approved <br />extensions, plus a 10 percent contingency of $15,183, for a total amount not to exceed $167,008, <br />subject to nonsubstantive changes approved by the City Manager and City Attorney. <br />DISCUSSION <br />A majority of the grants awarded to the Public Works Agency from the California Department of <br />Transportation (Caltrans) and the Orange County Transportation Authority (OCTA) <br />Comprehensive Transportation Funding Program for the City's Capital Improvement Program <br />projects are distributed on a reimbursement claim basis. To receive the grant funds, Public <br />Works Agency staff must submit detailed reimbursement documentation, as required by the <br />respective funding agencies. However, because state and federal grant reimbursement requests <br />include both direct and indirect City employee labor costs, a federally compliant Cost Allocation <br />Plan is required that calculates the appropriate Indirect Cost Rate percentage applicable for <br />reimbursement claims. OCTA requires a third -party review of the annual Indirect Cost Rate <br />Proposal calculations, and will not process reimbursement for projects unless a 2 CFR Part 200 <br />compliant Cost Allocation Plan is prepared and accepted by Caltrans within the appropriate fiscal <br />year. <br />A similar Fund Allocation Study is needed for the Public Works Agency Administrative Services <br />Division (Division). The Division budget is characterized as an Internal Service Fund and is <br />funded by cross charges to internal Public Works departments. The cross charges have been <br />25A-1 <br />