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HomeMy WebLinkAbout25I - AGMT - COST ANALYSIS SRVSREQUEST 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 Agreement with MGT of America, Inc., for Multiyear Financial & Cost Analysis February 4, 2014 Page 2 M1 funding must be closed by March 2014. Failing to meet OCTA requirements jeopardizes approximately $1.1 million in funding reimbursements. The City of Santa Ana is the only city in Orange County delivering capital projects using in -house staff to design and perform construction management with an expectation of full cost recovery. The cost for the City to design projects and manage construction fall within acceptable industry standards. Moreover, the City's Scope of Work also includes conceptual development, outreach, project coordination, and close -out. Our internal audit continues to reveal that it is more cost effective to deliver projects by staff compared to that of a consultant. In addition, staff can more quickly respond to a changing environment and direction. The City will be required to perform and submit annual cost allocation plans for OCTA approval in order to receive full reimbursements. OCTA has confirmed that performing the studies as recommended will complete the close -out of all outstanding projects. MGT of America retains costing experts with over 30 years of experience and specialized knowledge of federal and state cost accounting guidelines. In addition, MGT of America's experience with related studies enables the firm's consultants to perform the studies within the critically sensitive time period. ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. FISCAL IMPACT The proposed contract will have a limit of $30,000. Funds for this project are available in the Traffic Signal Maintenance account (No. 02917620 - 62300). APPROVED AS TO FUNDS AND ACCOUNTS: lC� o xe �dY� Edwin "William" Ga z, P.E. Francisco ncisco Gutierrez P7 Interim Executive Director Executive Director Public Works Agency Finance & Management Services Agency WG Exhibit: 1. Consultant Agreement 251 -2 AGREEMENT FOR PROVISION OF PROFESSIONAL SERVICES THIS AGREEMENT, made and entered into this 4"' day of February, 2014 by and between MGT OF AMERICA, a California corporation (hereinafter "Consultant ") and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California (hereinafter "City "). RECITALS A. The City desires to retain a consultant having special skill and knowledge in the analysis of governmental services to develop OMB A -87 related indirect cost rates and prepare a Public Works agency -wide OMB A -87 cost allocation plan. B. Consultant represents that Consultant is able and willing to provide such services to the City. C. In undertaking the performance of this Agreement, Consultant represents that it is knowledgeable in its field and that any services performed by Consultant under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. SCOPE OF SERVICES Consultant shall provide all labor, materials, tools, equipment, services and incidental customary work required to fully and adequately perform cost analyses to develop the OMB A -87 Public Works Agency Cost Allocation Plans for use in FY 06/07 (based on FY 04/05 actual expenditures), FY 09/10 (based on FY 07/08 actual expenditures), and FY 13/14 (based on FY 11/12 actual expenditures), as set forth in Consultant's quote, attached hereto as Exhibit A and incorporated by this reference. If during the term of this Agreement, the parties agree that additional services are necessary to meet OCTA requirements, Consultant shall provide a separate written estimate for such services. No additional services shall be authorized wiless a separate estimate is given for said work and the estimate is approved by the City Manager in writing before the work is commenced. 2. OWNERSHIP OF MATERIALS This Agreement creates a non- exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ( "Documents & Data "). Consultant shall require all subcontractors to agree in writing that City is granted a non- exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were provided to Consultant by the City. City shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City's sole risk. 251 -3 3. COMPENSATION a. City agrees to pay, and Consultant agrees to accept as total payment for its services for City a fee of $21,000.00, at the rates and charges identified in Exhibit B, attached hereto and incorporated by reference. A contingency shall be available, at the discretion of the City Manager, for services that are currently not anticipated but may be necessary to meet OCTA requirements. The total sum to be expended by City under this Agreement shall not exceed $30,000.00 during the term of this Agreement. b. Consultant shall submit to City a monthly itemized statement which indicates work completed and hours of service rendered by Consultant. Each statement shall describe the tasks completed during the statement period, and the percentage of each Project task completed since the commencement of the Agreement. City shall, within 45 days of receiving such statement, review the statement and pay all approved charges thereon. 4. TERM This Agreement shall commence on the date first written above and terminate on June 30, 2014, unless terminated earlier in accordance with Section 14, below. The term of this Agreement may be extended by a writing executed by the City Manager and the Consultant. 5. INDEPENDENT CONTRACTOR Consultant shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer - employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Consultant performs the services which are the subject matter of this Agreement; however, the services to be provided by Consultant shall be provided in a manner consistent with all applicable standards and regulations governing such services. Consultant shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. 6. INSURANCE Prior to undertaking performance of work under this Agreement, Consultant shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: a. Due to the nature of services provided, commercial general insurance is not required. b. Reserved. c. Worker's Compensation Insurance. In accordance with the provisions of Section 3300 of the Labor Code, Contractor, if Contractor has any employees, is required to be insured against liability for worker's compensation or to undertake self - insurance. Prior to commencing the performance of the work under this Agreement, Contractor agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. d. Professional liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim. e. The following requirements apply to the insurance to be provided by Consultant pursuant to this section: i. Contractor shall maintain all insurance required above in full force and effect for the entire period covered by this Agreement. 251 -4 ii. Certificates of insurance shall be furnished to the City upon execution of this Agreement and shall be approved in form by the City Attorney. iii. Certificates and policies shall state that the policies shall not be cancelled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the City. f. If Contractor fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the City with required proof that insurance has been procured and is in force and paid for, the City shall have the right, at the City's election, to forthwith terminate this Agreement. Such termination shall not affect Contractor's right to be paid for its time and materials expended prior to notification of termination. Contractor waives the right to receive compensation and agrees to indemnify the City for any work performed prior to approval of insurance by the City. INDEMNIFICATION To the fullest extent permitted by law, Consultant shall indemnify, defend and hold harmless City, its officers, agents and employees (collectively, the "indemnified parties ") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever (individually, a claim; collectively, "claims "), which may arise from or in any mariner related (directly or indirectly) to any work performed or services provided under this Agreement (including, without limitation, defects in workmanship and /or materials) or Consultant's presence or activities conducted performing the work (including the negligent and /or willful acts, errors and /or omissions of Consultant, its principals, officers, agents, employees, vendors, suppliers, contractors, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable for any or all of them). Notwithstanding the foregoing, nothing herein shall be construed to require Consultant to indemnify the indemnified parties from any claim arising from the sole negligence or willful misconduct of the indemnified parties. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the Consultant. S. LAWS AND REGULATIONS Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the services and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with services. If the Consultant performs any work knowing it to be contrary to such laws, rules and regulations and without giving written notice to the City, Consultant shall be solely responsible for all costs arising wherefrom. Consultant shall defend, indemnify and hold City, its officials, directors, officers, employees and agents free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations. 9. CONFIDENTIALITY If Consultant receives from the City information which due to the nature of such information is reasonably understood to be confidential and/or proprietary, Consultant agrees that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. "Confidential Information" shall include 251 -5 all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and /or agent of the other party is covered by this Agreement. The foregoing obligations of non -use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Consultant disclosed in a publicly available source; (c) is in rightful possession of the Consultant without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Consultant without reference to information disclosed by the City. 10. CONFLICT OF INTEREST CLAUSE Consultant covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 11. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by telefacsimile or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M -30) P.O. Box 1988 Santa Ana, CA 92702 -1988 Fax 714- 647 -6956 With courtesy copy to: Executive Director of Public Works City of Santa Ana Attn: Design Engineering 20 Civic Center Plaza (M -36) P.O. Box 1988 Santa Ana, California 92702 Fax 714- 647 -5635 To Consultant: J. Bradley Burgess MGT of America, hic. 2001 P Street, Suite 200 Sacramento, CA 95811 Fax 916 - 443 -1766 A party may change its address by giving notice in writing to the other party. Thereafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by telefacsimile, communication shall be effective or deemed to have been given twenty -four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 251 -6 12. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Consultant, and supersedes any and all other agreements, oral or written, between the parties. hi the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the authorized representatives of the parties. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Consultant nor the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 13. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Consultant, Consultant may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other consultants retained by City. 14. TERMINATION This Agreement may be terminated by the City upon thirty (30) days written notice of termination. In such event, Consultant shall be entitled to receive and the City shall pay Consultant compensation for all services performed by Consultant prior to receipt of such notice of termination, subject to the following conditions: a. As a condition of such payment, the Executive Director may require Consultant to deliver to the City all work product completed as of such date, and in such case such work product shall be the property of the City unless prohibited by law, and Consultant consents to the City's use thereof for such purposes as the City deems appropriate. b. Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement. 15. DISCRIMINATION Consultant shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. Consultant affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 16. JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. The parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 17. PROFESSIONAL LICENSES Consultant shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of 251 -7 Santa Ana and all other governmental agencies. Consultant shall notify the City immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 18. MISCELLANEOUS PROVISIONS a. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and steal I indemnify City fully, including reasonable costs and attorney's fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: MARIA D. HUIZAR Clerk of the Council APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney Laura Sheedy Assistant City Attorney RECOMMENDED FOR APPROVAL: EDWIN "WILLIAM" GALVEZ, P.E. Interim Executive Director — PWA CITY OF SANTA ANA DAVID CAVAZOS City Manager MGT OF AMERICA J. BRADLEY BURGESS Vice President 251 -8 EXHIBIT A SCOPE OF SERVICES Santa Ana Public Works Cost Allocation Analysis: Consultant shall prepare an OMB A -87 related indirect cost rate for the City's Public Works Agency — Engineering Services Division (08617611 & 612). This indirect cost rate should include an agency cost allocation plan and all appropriate indirect costs. The rate to be developed will be for use in 2006/2007, 2009/2010, and 2013/2014. Per OMB A -87 guidelines, the rates must be based on 2004/2005, 2007/2008, and 2011/2012 actual costs, respectively. Steps Involved in the Calculation Process: 1. Determine Indirect vs. Direct Costs for the Public Works Agency (PWA) A. Review the PWA actual expenditures and organizational charts. B. Interview PWA staff to review assignments and positions of PWA staff. C. Prepare an Agency wide OMB A -87 cost allocation plan that distributes agency -wide indirect costs. 2. Determine Indirect vs. Direct Costs for the PWA Engineering Services Division A. Review the PWA actual expenditures and organizational charts. B. Interview with PWA staff to review assignments and positions of PWA staff. C. Review reimbursement or charging records showing which staff had been charged to projects directly to ensure costs are not double recovered. 3. Calculate Indirect Cost Rate in accordance with the guidelines and requirements set forth in the Office of Management and Budget, Code of Federal Regulations, Title 2, Subtitle A, Chapter II, part 225 — Cost Principles for State, Local, and Indian Tribal Governments (previously OMB Circular A -87). A. Preparation of an Engineering Services Division (08617611 & 612) Indirect Cost Rate that includes all levels of documented indirect costs. PROJECT SCHEDULE: Gather project data - February 4 — April 4, 2014 Initial on -site meeting - February 4, 2014 On -site meetings - February 4 —March 30, 2014 Draft PW CAP /Div ICRP - March 24, 2014 Final Documents - April 4, 2014 251 -9 EXHIBIT B FEESCHEDULE PROJECT CONSULTING FEE: A) Indirect cost rate for Santa Ana Public Works, Construction and Design Engineering (08617611 & 612) 1) Rate based on actual 2011/12 - $9,000 2) Rate based on actual 2004/2005 - $6,000 (reduced price based on economy of scale) 3) Rate based on actual 2007/08 - $6,000 (reduced price based on economy of scale) 4) Additional years of indirect cost rates for budget unit 08617611 & 612 will be charged at $7,000 per FY analyzed. The total $21,000 fixed fee is based on doing the first three (3) rate analyses. 251 -10