Loading...
HomeMy WebLinkAbout1984-01-24; City Council; 7620; Selection of a cost allocation consultantGIT JF CARLSBAD — AGENDA JILL 7.. (d 8t 8 0) OLD m roO to- O-H ,y-p -P &|8 iH 0) iH•rH >-l (0U Clj -P B M -S 8^ 05 COI•*rCNI -J Oz I AB# V^<2£ mm-rf* 1/24/84nt 1 Ulr DEPT. FIN TITLE: SELECTION OF A COST ALLOCATION CONSULTANT \CUc-^'DEPT. HDATp^ CITY ATTYvfe^ CITY MGR. ^^- RECOMMENDED ACTION: Adopt Resolution No.awarding the contract for the preparation of a Cost Allocation Plan for the City of Carlsbad to David M. Griffith and Associates, Ltd. ITEM EXPLANATION; Shortly after the passage of Proposition 13, cities increased efforts to establish cost collection systems that would aid in establishing fees and charges to the users of municipal services. These cost systems typically include a cost allocation plan. This plan is a framework that identifies the users of services both direct and indirect. Direct services are those provided directly to the user such as police, fire, engineering services to developers, or building inspection services. Indirect services are usually called overhead. Examples of overhead services are Finance, Personnel, City Manager, and City Attorney services. Indirect services also include departmental administration or shared services such as the Utilities Director and Parks and Recreation Administration section. A cost allocation plan provides the ability to allocate all costs to the point where services are performed and therefore establish charges or fees based on the cost of service and the demand for that service. This cost allocation plan will be used in Carlsbad to develop inter fund charges to enterprise, grant, redevelopment and capital funds. These funds will pay for the services provided by general fund departments. The City staff will also use this cost allocation plan as the basis for establishing fees for services to the public. The City will be able to verify each fee based upon the cost to provide that service and the number of units of service provided. In 1983-84, the Finance Department requested funds to conduct a cost allocation study. The Finance Department began selection of a Cost Allocation Consultant in November by sending an RFP to five companies. The responses to these RFP's are summarized in the attached memo dated November 10, 1983. This summary of proposals was circulated to all department heads for their comments. Out of the five companies, two were selected based on the comments received from department heads and the Finance Director's evaluation. A review committee consisting of the Utilities Director, the Acting City Engineer and the Finance Director interviewed the top two candidates: David M. Griffith and Arthur Young. PAGE 2 OF AB # The committee recommends that the Council accept the David M. Griffith proposal and award them the contract for the cost allocation study. The committee did not recommend the firm with the lowest price due to their limited experience with cost allocation plans. A summary of the proposals is shown below: Public Affairs Consultants $ 5,250 David M. Griffith and Associates 16,500 Arthur Young 24,000 Management Services Institute 60,000 Cooper & Lybrand no bid The Council may wish to consider accepting the Management Services Institute proposal priced at $60,000 although this proposal goes beyond the scope of the Cost Allocation Plan. This study would also include review of all City fees for services and would recommend revision of fees where necessary. Both Oceanside and Vista have cost recovery plans prepared by this company. In Vista, the Council accepted the report and modified some fees based on the recommendations of the consultant. The fees are up-dated on an annual basis by staff using a cost allocation framework created by MSI. In Oceanside, the MSI study was used to support major revisions in almost all areas. A general overhead rate was developed for the allocation of administrative costs for use in budgeting. In both cases increased fee revenue more than offset the cost of the study. If the Council desires a full cost allocation and fee study, the David M. Griffith proposal should also be considered. This proposal includes an analysis of all City fees and the creation of computer models for the annual re-evaluation of overhead allocations and fees. The full price for the DMG proposal including all services is $36,750. The full DMG study provides basically the same product as the MSI study. The net result of the Griffith proposal is the same as the MSI proposal. The staff is confident that either company could produce a very useable product . FISCAL IMPACT: The proposed study will cost $16,500 which can be funded from the Finance Department Budget. No transfer will be necessary to finance this project. The inter-department charges included in the 1983-84- budget transfer part of these cost to the enterprise funds. EXHIBITS: Resolution No. 7V7^ awarding the contract for a Cost Allocation Plan to David M. Griffith and Associates. Memo: Selection of Cost Allocation Consultant Memo: Proposals on the City's Cost Allocation Plan, November 10, 1983 Agreement between the City and David M. Griffith and Associates. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO.7479 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AWARDING A CONTRACT FOR A COST ALLOCATION CONSULTANT TO DAVID M. GRIFFITH AND ASSOCIATES of Carlsbad requested alloca, these ociates PASSED , APPROV 1984, b the ollowing vote, to wit; desires to employ the services allocation plan for the City and, bsals f rom >?£rious firms plan and, proposals, the City\finds that posal most closely meets available in the Finance Depart- by the Co\ty Council of the City Grif f ith\ and/Associates is \ /authorized to execute the City's cost allocation egular meeting of the City day of , NOES: ABSENT: ATTEST: MARY H. CASLBR, Mayor ALETHA L. RAUTENKRANZ, City Clerk (SEAL)3 December 20, 1983 TO: CITY MANAGER FROM: Finance Director SELECTIOK OF COST ALLOCATIOH CONSULTANT RECOMMENDATION Award the contract for the preparation of a cost allocation plan for the City of Carlbad to David M. Griffith and Associates, Ltd. BACKGROUND The Finance Department began selection of a cost allocation consultant in November by sending an RFP to five companies. The responses to these RFP's are summarized in the attached memo dated November 10, 1983. This summary of proposals was circulated to all department heads for their comments. Out of the five companies, two were selected that most closely met the City's needs. This selection was based on the comments received from department heads and my own evaluation. A selection committee was formed consisting of the Utilities Director, Acting City Engineer and myself. This committee interviewed both candidates and found both to have excellent backgrounds and client references. The committee agreed that either company could produce a quality product for the City. With two companies so highly qualified, the question of ranking becomes most difficult. The primary differences lie in the following areas: 0 Client References David M. Griffith and Associates nation wide has large client base and state wide has a very large City user base. Cities such as Anaheim, Long Beach, Riverside, Woodland, Stockton, Pasadena, Fresno and many others use DMG's services. Arthur Young has a good client base in the County arena. The Counties of Contra Costa, Stanislaus, Marin, Sonoma, Kings and Imperial have used Arthur Young services. Location DMG is located in the Sacramento area and would service our account from that location. Staff would be sent to Carlsbad to perform the necessary work on site. Arthur Young has a San Diego office which would service our account. Local staff would be responsible for the preparation of our report. Cost DMG will charge a flat fee of $16,500 for the entire cost allocation study. This amount includes all costs. This is within the Finance Department's budget for the project. The operating budget includes $20,000 for this study. Arthur Young would prepare the report for a total cost of $24,000 plus $3,200 for the development of a computer model, if desired. This cost is above the amount budgeted and would require a fund transfer. In almost all other areas, the two companies are very close and present basically identical options to the City. This being the case, the committee recommends that the Council accept the David M. Griffith proposal and award them the contract for the cost allocation study. We also feel that the Arthur Young firm has much to offer the City and should be considered on other projects such as the Computer Advisory Consultant, City audit or other management services. A proposed contract is attached for the Attorney's review. NOVEMBER 10, 1983 TO: ALL DEPARTMENT HEADS. FROM: Finance Director PROPOSALS ON THE CITY'S COST ALLOCATION PLAN Attached to this memo is a brief summary of the proposals received from firms interested in preparing a cost allocation plan for the City. As we discussed in the department head meeting on November 4, I am asking for your help in selecting one firm to prepare this plan. Any comments on the project or the proposals will be appreciated. I realize that a summary of proposals may leave many of your questions unanswered. If this is the case, I will be available to meet with you to review the complete proposals. If possible, I would like to have specific feedback from you by November 18 on two issues. 1. Does the cost allocation project as described pose any particular problems for you or your department? And, has the project been defined well enough to meet any needs you may have? 2. Which of the four proposals appears most acceptable to you? I will arrange for the department head group to meet with the top candidate(s) if that is of interest to the group. Thank you for your assistance. CITY OF CARLSBAD Summary of Proposals Cost Allocation Plan DESCRIPTION OF FIRM: Management Services Institute - Douglas W. Ayres, President MSI is a La Mirada based firm that specializes in cost/fee studies for local governments. The principals of the firm have considerable municipal experience as City Managers and Finance Directors as well as significant private sector exposure. DESCRIPTION OF SERVICES: MSI has used a standardized approach to cost/fee studies for the past few years. The primary emphasis of the firm has been to assist cities in establishing cost systems that, in their opinion, comply with the requirements of Prop. 13 and Prop. 4 (Article XIII A and XIII B of the State Constitution). MSI typically follows the process outlined below: Phase I - Conduct seminar for managers on the MSI business philosophy, legal base and operational aspect of the MSI system. - Research and document each current non-tax revenue source and create a six year revenue history. - Create list of fee financed service centers. - Using City records or City staff, create a list of capital assets and depreciation schedules. - Determine which City organization unit performs each service and prepare cost worksheet for fee financed services. - Analyze relationship between service, fee charged, and user. - Determine unit of measure, number of units of service provided in the last fiscal year, and an estimated of number service units for current fiscal year. - Determine direct costs of providing service. - Analyze City's indirect costs of providing services and develop standard allocation formula. - Distribute indirect costs using formula. - Develop City departmental overhead. - Apply general and departmental overhead rates to service centers. - Compute costs, revenues, excess revenues or excess costs. At the end of Phase I, MSI will have determined a fair and consistent relationship between City operations costs and fees. Phase II - Prepare a report appraising the strengths and weaknesses and potential improvements measures for fee financial services and fiscal structure. - Make recommendations to enhance financial information to management and Council, to increase revenues or decrease expenses. 7 - Suggest new revenue sources. - Present report to staff and Council. MSI would also supply a micro computer and software for use in maintaining the cost allocation plan and fees for an additional cost of $10,000. PROJECT TIMING: MSI would be unable to complete the indicated work in less the eight months. Any slippage in the system would push the process to as much as 12 months. EXPERIENCE: MSI has prepared similar reports for: Oceanside Rialto La Palma San Clemente Alhambra South Gate Rancho Cucamunga Monrovia San Juan Capistrano Grand Terrace Vista Seal Beach MSI principles have been included with the League of California Cities "Cost Accounting for California Cities" manual. FEE: The proposed fee for services is as follows: Phase I & II $60,000 Computer System (optional) 10,000 (Report reproduction costs & Business License costs to be added). DESCRIPTION: Arthur Young & Company Arthur Young & Compnay is one of the nations largest CPA firms. Within the scope of services offered by Arthur Young are consulting services such as those needed to prepare a cost allocation plan or fee analysis. Arthur Young is San Diego based and would utilize staff from this office for this study. DESCRIPTION OF SERVICES; Arthur Young & Co. has produced cost allocation plans for several governmental clients. The approach used for Carlsbad will basically follow the system used for past studies, modified to meet any special needs we may have. In general, their process is divided into four tasks which will analyze the operating and cost structure of the City. Interviews or questionaires will be used to gather information from department managers. Arthur Young has identified principally the administrative section of the City for allocation as overhead. Arthur Young would develop procedures for the City to follow for gathering base statistical data, performing the cost allocation developing internal overhead rates and updating the plan. Finally, Arthur Young will review the City's fee structure vs. the cost of services deteremined after the allocation of overhead. A micro computer model will be developed to be used on an HP 125/120. This model will be used to assist in up-dating the study in future years. A summary of the task description is shown below: Task 1 - Analyze the cost structure of each department and program. a. Arthur Young will prepare a detailed work plan and present this to the City for approval. b. Once approved, Arthur Young will commence data gathering to determine the cost structure of each department using surveys and interviews. Inter department charges will be identified. Task 2 - Develop a City wide cost allocation plan. a. Objectives of this step are: - Preparing a conceptual design for the plan. - Direct and monitor studies of statistical cost allocation base. - Present recommendations on most appropriate approach. b. Prepare conceptual design for cost allocation plan and present to City for approval. c. Select allocation base(s) for use in allocation plan and outline procedures for collection of statistical data. Instruct City personnel in the use of the study, procedures, and monitor gathering of data. d. Examine data collected and recommend appropriate allocation base. e. Develop City-wide cost allocation plan and procedures and description of methodology that City intends to follow. Task 3 - Develop a fee setting methodology. a. Identify direct and indirect costs for all departments. b. Identify services departments perform and quantity of each service. c. Determine costs related to each service (both direct and indirect). d. Determine allocation base for charging departmental costs to each service. e. Determine cost per unit of service. f. Present data to City. Task 4 - Develop micro computer model for HP-125. At the end of Task 4 the City will have a detailed work plan and supporting work papers, a written conceptual design for cost allocation with supporting work papers, recommendations on the most appropriate base for allocation of costs, procedures for data collection, a City-wide cost allocation plan, procedures for fee evaluation, a computer model for cost allocation plans and fee studies and a management summary. PROJECT TIMING: Arthur Young feels that the project could be completed between eight to ten weeks after beginning work. Departments should plan to spend from one to two full days assisting the Arthur Young staff. EXPERIENCE: Arthur Young has prepared a similar cost allocation plan for Contra Costa, Stanislaus, Marin, Sanoma and Imperial Counties. The firm also shows considerable experience in review of data processing systems. FEE: The estimated fee for services is as follows: Cost Allocation Plan $24,000 Fee Analysis (Per fee analyzed)* 3,400 Computer Model 3,200 * Since the fee analysis is based on a "per fee analyzed" basis, we cannot determine the total program cost including the fee study. Arthur Young recommends that before any final documents are signed, the City and Arthur Young representatives should negotiate a total cost for all services. DESCRIPTION OF FIRM: David M. Griffith and Associates, Ltd. David M. Griffith has provided services to governmental clients for more than seven years. The firm's California offices are located in the Sacramento area. Nationwide, DMG has served more than 800 governmental clients, and is currently serving more than 600 entities. Studies performed by DMG California staff typically fall into the category of cost allocation plans, rate studies, proposition 4 compliance services, and mandated cost recovery plans. DESCRIPTION OF SERVICES; In performing a revenue/cost analysis for the City of Carlsbad, DMG proposes to review all department and cost centers to determine total operating cost including indirect overhead, and to review all non-property tax revenue sources. DMG has proposed a 14 task approach as outlined below: Task 1 - Project initiation. Meet with City Manager, Finance Director, and other appropriate department heads or managers to set goals, objectives, and define scope of work. Document the proposed engagement in writing. Obtain data such as organization charts, budgets, prior fee analysis data, current cost allocation plan (if any) and municipal code. Establish project liasion requirements. Initiate the formation of a project advisory group. Task 2 - Establish project advisory group. This will be a group of department level managers who will work with David M. Griffith staff to ensure interpretations are correct and to assist in locating records. The project advisory group will have several meetings during the course of the project. Task 3 - Develop revenue history. Develop a 5 year revenue history. Identify areas where fees could be utilized but have not been established. Task 4 - Develop cost objective organization. Identify which revenue sources relate to which components of service. Task 5 - Distribute agency-wide indirect costs. Identify "service" departments (such as Manager, Finance, Personnel, etc.) which exist to serve the agency's departments. Use interviews of providers of central services to determine for whom services are provided. Collect the cost allocation base data. Task 6 - Develop direct service costs. Identify the direct cost of each service related to a "cost objective" or revenue source. Task 7 - Distribute departmental/program overhead. Distribute supervisory and management costs within the department. Task 8 - Develop fixed asset replacement costs. Task 9 - Complete the cost and revenue worksheets. Summarize activities carried out to this point. (Task 1 to 8) Task 10 - Match service revenue with service costs. Total cost for each service is to be matched with the revenue from each service. Task 11 - Review cost and revenue relationships with advisory group and City managment. This step verifies the feasibility of increasing fees including political, social, legal and economic considerations. Task 12 - Prepare draft report for review by project advisory group and City managment. Task 13 - Prepare final report. Present final report to staff, department management and Council. Report to department groups emphasizes methodology. Report to management groups emphasizes methodology and impact of recommendations. Overview report presented to City Council includes project findings and recommendations. Task H - Project close out. Exit review of methodology. Answer final questions. Review plans for project up-date. PROJECT TIMING DMG indicates that all services can be provided within the 90 day limit requested in our RFP. EXPERIENCE; David M. Griffith has extensive experience in working with California cities and counties. Assignments have included cost allocation plans, fee studies, mandated cost reimbursement engagements, Proposition k limitation studies, computerized cost allocation plans as well as other projects. Clients using DMG cost allocation services include: Anaheim Ventura Regional Sanitation District Ventura County Woodland Sacramento County Sheriff's Dept. Long Beach Riverside City Library Other clients include 38 California Counties and 24 California cities and 12 special districts and associations including the County Supervisors Association of California. Studies for these additional clients were similar to the ones detailed above. FEE: The fee for the outlined services would be as follows: Consultant Services $26,000 Travel 3,000 Per Diem 3,000 Computer Services 3,000 Report Production 1,000 Miscellaneous 750 TOTAL $36,750 This total cost of $36,750 represents the cost for a complete cost allocation plan and fee analysis. The City may choose to defer the fee analysis portion and reduce the price to a total of $16,500. /3 DESCRIPTION OF FIRM: Public Affairs Consultants - John McTighe PAC is a San Diego based firm that specializes in serving the needs of local governments. The principal service performed by PAC is in the general area of analysis of the economic impact of development. Although smaller in size the the other companies included in this review, PAC has considerable experience in dealing with local government issues. DESCRIPTION OF SERVICES: PAC proposes a five step process for preparing the cost allocation plan and fee analysis. 1. General research - including budget review, preparing questionaire for departments, sending questionaires to departments and conducting interviews with City Manager, ACM's and Finance Director. 2. Cost allocation model development. - Interview Developmental Services, Maintenance and Utility Departments. - Modify PAC's existing model (used for study of Hunt Property's EIR) to relfect 83-84 budget and tentative allocations. - Prepare narrative description of cost allocations. - Review cost allocations with City staff. - Revise allocations, if necessary. - Prepare final cost allocation plan. 3. City fee analysis. - Prepare inventory of current City fees and basis for each fee. - Review inventory with City staff and Manager. - Recalculate fees for services based on basis of full cost recovery. - Prepare report describing methodology. 4. Documentation and training. - Prepare manual describing update procedures for cost allocation plan and fee analysis. - Hold training sessions with finance staff on update procedures. 5. Present report to staff and Council. PROJECT TIMING: PAC indicates that all work can be completed within the requested 90 day time period. EXPERIENCE: PAC has recently performed a detailed fiscal impact analysis of general plan alternatives for the City of Santee. This report analyzed the cost of additional City services and additional revenues that would be associated with various general plan alternatives. PAC also prepared an Economic Impact Report on the Hunt Property annexation for the City of Carlsbad Planning Department. Other clients include the City of Chula Vista and El Centre. FEE: The proposed fee for this study is as follows: Cost allocation plan including fee study $9,400 Cost allocation plan only 5,250 In addition, the City will be billed for the cost of printing reports and manuals. The City may also experience additional costs of $4,000 (or more) to acquire micro computer hardware and software to be used with the cost allocation plan computer model. AGREEMENT TO PROVIDE PROFESSIONAL CONSULTING SERVICES TO THE CITY OF CARLSBAD THIS AGREEMENT, entered into this day of , 1984, effective immediately by and between David M. Griffith and Associates, Ltd. (hereinafter called "Consultant") and the City of Carlsbad (hereinafter called "City"), WITNESSETH THAT: WHEREAS, the City provides services and programs to outside entities, including the public, for which it charges user fees, WHEREAS, the City provides support services paid from the City's general fund to enterprises operated from restricted funds for which the City's general fund may be reimbursed when service costs are appropriately documented, WHEREAS, the City desires to engage the Consultant to assist in developing plans which will provide support service allocations to the City's restricted funds and to its operating departments. NOW, THEREFORE, the parties hereto mutually agree as follows: (1) Employment of Consultant. The City agrees to engage the Consultant and the Consultant hereby agrees to perform the following services. (2) Scope of Services. The Consultant shall do, perform, and carry out in a good and professional manner the following services: A. Development of a central services cost allocation plan which identifies the various costs incurred by the City for the fiscal year ended Gune 30, 1984 (based on budgeted financial data supplied by the City) to support and administer its enterprise funds and programs. This plan will be prepared in general accordance with the Office of Management and Budget Circular A-87 (OMB A-87) except that the allocations will include certain support functions (such as City Council) that are disallowed solely for federal claiming purposes. The plan will contain a determination of the allowable costs of providing each supporting service such as purchasing, legal counsel, disbursement processing, etc. The plan shall in addition include the administrative functions of up to six non-central service departments. The administrative functions will be allocated to the appropriate divisions within the departments. The selection of six administrative functions will be at the discretion of the City. Services will be performed as specified in the attached proposal and sample cost allocation plan submitted by the Consultant dated October 29, 1983. B. Review of the City's plan with affected departments and funds to ensure accuracy and understanding. C. Train the City staff in the preparation and use of the cost allocation plan. - 2 - (3) Time of Performance. The services to be performed hereunder by the Consultant shall be undertaken and completed in such sequence as to assure their expeditious completion and best carry out the purposes of the agreement. All services required hereunder shall be completed by May 1, 1984. The plan will be available for review by the City within 12 weeks of receiving authorization to proceed. (4) Compensation. The City agrees to pay the Consultant a sum not to exceed ($16,500) sixteen thousand five hundred dollars for all service required herein, which shall include reimbursement for expenses incurred. Consultant agrees to complete the project and all services provided herein for said sum. (5) Method of Payment. The Consultant shall be entitled to payment in accordance with the provisions of this paragraph. The Consultant shall receive 75 percent (75%) of the agreed upon fee upon submission of the draft plan. The remaining 25 percent (25%) is due upon the City's final acceptance of the plan and the completion of all work under this contract by the Consultant to the satisfaction of the City. (6) Changes. The City may, from time to time, require changes in the scope of services of the Consultant to be performed hereunder. Such changes, which are mutually agreed upon by and between the City and the Consultant, shall be incorporated in written amendment to this agreement. (7) Services and Materials to be Furnished by City. The City shall furnish the Consultant with all available necessary information, data, and material pertinent to the execution of this agreement. The City shall cooperate with the Consultant in carrying out the work herein and shall provide adequate staff for liaison with the Consultant and other agencies of City government. (8) Termination of Agreement. If, through any cause, the Consultant shall fail to fulfill in timely and proper manner his obligation under 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 effective date thereof, at least five days before the effective date of such termination. (9) Information and Reports. The Consultant shall, at such time and in form as the City may require, furnish such periodic reports concerning the status of the project, such statements, certificates, approvals, and copies of proposed and executed plans and claims and other information relative to the project as may be requested by the City. The Consultant shall furnish the City, upon request, with copies of all documents and other materials prepared or developed in relation with or as part of the project. Working papers prepared in conjunction with the project will be turned over to the City for safekeeping. (10) Records and Inspections. The Consultant shall maintain full and accurate records with respect to all matters covered under this agreement. The City shall have free access at all proper times to such records, and the right to examine and audit the same and make transcripts therefrom, and to inspect all program data, documents, proceedings, and activities. - 3 - (11) Accomplishment of Project. The Consultant shall commence, carry on, and complete the project with all practical dispatch, in a sound, economical, and efficient manner, in accordance with the provisions thereof and all applicable laws. In accomplishing the project, the Consultant shall take such steps as are appropriate to ensure that the work involved is properly coordinated with related work being carried on in the City. (12) Provisions Concerning Certain Waivers. Subject to applicable law, any right or remedy which the City may have under this contract may be waived in writing by the City by a formal waiver, if, in the judgement of the City, this contract, as so modified, will still conform to the terms and requirements of this contract. (13) Matters to be Disregarded. The titles of the several sections, subsections, and paragraphs set forth in this contract are inserted for convenience only and shall be disregarded in construing or interpreting any of the provisions of this contract. (14) Completeness of Contract. This contract and any additional or supplementary document or documents incorporated herein by specific reference contain all the terms and conditions agreed upon by the parties hereto, and no other agreements, oral or otherwise, regarding the subject matter of this contract or any part thereof shall have any validity or bind any of the parties hereto. (15) City Not Obligated to Third Parties. The City shall not be obligated or liable hereunder to any party other than the Consultant. (16) When Rights and Remedies Not Waived. In no event shall the making by the City of any payment to the Consultant constitute or be construed as a waiver by the City of any breach of covenant, or any default which may then exist, on the part of the Consultant, and the making of any such payment by the City while any such breach or default shall exist in no way impair or prejudice any right or remedy available to the City in respect to such breach or default. (17) Personnel. The Consultant represents that he has, or will secure at his own expense, all personnel required in performing the services under this agreement. All of the services required hereunder will be performed by the Consultant or under his supervision, and all personnel engaged in the work shall be fully qualified to perform such services. (18) Consultant Liability if Audited. The Consultant will assume all financial and statistical information provided to the Consultant by City employees or representatives is accurate and complete. Any subsequent disallowance of funds paid to the City under the plan for whatever reason is the sole responsibility of the City. Consultant will, however, provide assistance to the City should an audit be undertaken of indirect costs. (19) Notices. Any notices, bills, invoices, or report required by this agreement shall be sufficient if sent by the parties in the United States Mail, postage paid, to the address noted below: Finance Director David M. Griffith and Associates, Ltd. City of Carlsbad 5441 Fair Oaks Boulevard, Suite C3 1200 Elm Avenue Carmichael, California 95608 Carlsbad, California 92008 IN WITNESS WHEREOF, the City and the Consultant have executed this agreement as of the date first written above. City of Carlsbad By: (City Official) ATTEST: David M. Griffith and Associates, Ltd. By: Louis E. Chappuie Vice President