Loading...
HomeMy WebLinkAbout1985-01-22; City Council; 8037; Cash Management Program0 LLJ ~ 0:::: a. a.. < z 0 ~ ..J 0 z :::, 0 0 Cit~· OF CARLSBAD -AGEND~. ~ILL AB# ?o3 7 I.ITI,.E: DEPT.H MTG. 1/22/85 CASH MANAGEMENT PROGRAM CITY A TT lll,-¥L-.J...::; oEP'f._F_I_N __ _ CITY MGR'. ,Jtf.-- RECOMMENDED ACTION: Adopt Resolution No. 7J>? '/ AND SELLS to assist the City Cash Management Program. accepting the proposal of DELOITTE HASKJ:NS in implementing improvements to the City's ITEM EXPLANATION The City of Carlsbad has an operating and capital budget in excess of $32 million for 1984-85. This means that on the average the City receives about $130,000 per day in revenue. How the City manages that revenue and other funds held for investment determines how much interest the City will earn each year. If the City can make even minor improvements in the cash management process, the City can stand to gain thousands of dollars in additional interest revenue. The City Treasurer has reviewed the City's current cash management process and has determined that improvements could be made in various areas. The Treasurer has implemented closer control over investment reporting from the Finance Department to the Treasurer and has beguna systematic move toward diversifying the City's investment portfolio to avoid over concentration in one type of investment or another, thereby reducing the exposure of City funds to changes in the market or the stability of banking institutions. The Treasurer has also determined that further imp,ovements can be made in cash management and has requested proposals from several firms who can assist the treasurer and finance director in improving the procedures for collecting, investing and disbursing funds. Proposals were recei"ed as follows: George Petersen and Company, CPA Deloitte Haskins and Sells Arthur Young Arthur Andersen and Company Price Waterhouse Conrad and Associates Earnst and Whinney $6,800 to $7,600 15,000 15,000 declined declined declined declined A review of the proposals by the Assistant City Manager and Finance Director indicates that George Petersen and Company, CPA has insufficient experience in the area of cash management systems. ,O--the remaining fi.rms, both Arthur Young and Deloitte Haskins & Sells have significant experience and satisfied the clients. The proposal by Deloitte Haskins & Sells was initially priced at $17,000, while Arthur Young's initial fee was and remains $15,000. Deloitte Haskins & Sells subsequently lowered its fee to $15,000 to be competitive with Arthur Young. The review committee recommends the selection of Deloitte Haskins & Sells for this project due to their close familiarity with the City's Finance Department gained during the performance of the City's annual audit. Page 2 of Agenda Bill No._~ In addition, Deloitte Haskins & Sells is a leader in the cash management field with their 11 React 11 cash management program. This program has been implemented in the City of San Diego, and the counties of Ventura, Orange, Los Angeles, San Bernardino, Alameda and California State University at Los Angeles. By implementing the City's collection and control of cash and by implementing a cash flow model that accurately predicts the City's need for funds, the City Treasurer can maximize the use of available cash. Also, Deloitte Haskins & Sells will help the City implement an investment policy which can be followed to minimize any risk to City funds. FISCAL IMPACT The proposed cash management study will cost the City $15,000. This is not currently a budgeted expense and would require a transfer from the Contingency Account. This study guarantees the City at least two times the cost in additional interest revenue to the City through improved cash management techniques. The guaranteed return is conservative and the City should expect to receive substantially more than this on an annual basis. A 0.1% tncrease in the average return on invested funds would give the City a $30,000 return. EXHIBITS 1. Proposed letter agreement. 2. Proposal from DeloitteJlaskins & Sells dated June 8, 1984 and letter dated December 27, 1984. 3. Resolution No.2J::..'/.!d-. accer,ting the proposal of Deloitte Haskins & Sells to assist the City in implementing improvements to the City's cash management proposal, and transferring funds. 1200 ELM AVENUE CARLSBAD, CALIFORNIA 92008-1989 ~~·~;· TELEPHONE: (619) 438-5599 --~ .. °' .. q[itp of <!tarlsbab January 22, 1985 Mr. Gordon M. Johns, Partner DELOITTE HASKINS & SELLS 701 'B' Street, Suite 1900 San Diego, CA 92101-8198 / / / I , Dear Mr. Johns: // The City of Carlsbad does hereby accept the te7ms of your proposal to conduct a cash management study u~~ng the DH&S "React" model. A beginning date for this en9{lgement should be set by meeting with the City Treasurer, ~llliam Esterline, and the Finance Director, James Elliott. / / The City agrees to pay Deloitte Haskins~ Sells $15,000 under the terms specified in your letter dat~a December 27, 1984. The City expects DH&S to conduct the,$tudy including all aspects indicated in the attached p~oposal. / Your work will be directed by thE}/City Treasurer and Finance Director and a fiscal report wi)l be made to the City Council by the DH&S staff upop ~omple~ion of the study. Please indicate your accepta'~·ce of these terms by signing and returning one copy of th~,s/letter. Thank you for your interest in serving the City of 9arlsbad. Sincerely, MARY H. CA~rLER Mayor MHC:mmt Attachment / / TERMS ACCEPTED: DELOITTE HASKINS & SELLS by: -------------- Title: -------------- Date: -------------- 3 ----Deloa,,e Haskins+Sells Mr. Frank Aleshire City Manager Ci t.y of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 Dear Sirs: Suite 1900 7Q1 "B" Street San Di.ego. Cahforn1a 92101-8198 (619) 232-6500 TWX 910-335-1573 June 8, 1984 ____ .. ·-~ ~ We appreciated the opportunity fo~fi-::nk Panaris; to meet with you to discuss the City of Ca~.,.J.~_!t~eds in the increasingly important area of cash management. We understand your desire to ensure that the City's cash management program is sufficient to meet toaay's financial challenges. We have worked with many of our clients to assist them in significantly increasing revenues and cash flow 'through better cash management. This letter summarizes our proposed approach to addressing your cash management program. BENEFITS T~e deregulation of depository institutions. advances in technology, and continuous changes in our financial markets have significantly expanded the opportunities for prudently managed organizations to profit from more effective cash management. A comprehensive, coordinated cash management program is one that is tailored to support its particular environment and serves several interrelated objectives: • Maximize the availability of cash: .. •• Expedite the collection and consolida~ion-of cash into usable form. Control the disbursement of cash based on decision criteria including credit terms, legal and statutory considerations, and available return on investments. £itabliih and maintain bu;iness based r~lations with banks predicated on a full range of beneficial services and competitive cost. Anticipate the availability or shortfall of cash with reliable forecasting precision as to timing and amount. Ensure the short-term investment of all available funds through a continuing and easily manageable investment program. Minimize borrowing costs. Monitor and evaluate performance of the cash management program. Ensure that the cash management system is capable of satisfying future requirements. Our services are designed to produce specific recommendations and guidelines to facilitate development of a coordinated cash management program that will achieve the objectives outlined above. OUR APPROACH Deloitte Haskins & Sells (DH&S) has developed a specialized approach to public sector cash management studies which is embodied in our REACT program. Our shorthand acronym, REACT, describes a Review, Evaluation and Analysis of Cash Mana,ement Techniguks. We will utilize elements of our REAC program to ma ea comprehensive review of your investment process. REACT is a structured and efficient approach to cash management designed to provide recommendations that are practical and results-oriented. REACT focuses on the key areas of your system that can generate the largest monetary benefits for the City of Carlsbad. The Deloitt~ Haskins & Sells REACT program is designed to evaluate all of the critical components of the City's Cash Management System. We will analyze the City's particular environment, organization, and systems, making the required modifications in our program. However, our extensive experience in public sector cash management permits us to commit our time and resources where it counts -reviewing, analyzinf, and identifying opportunities for improvement in the City s system. To enhance the orientation process and assure that all key City employees understand the scope and purpose of this project, we will present a one-day seminar on modern cash management. This seminar will ensure that City employees who interact with the cash management system understand cash management fundamentals and become aware of modern -2- techniques. The seminar provides an open forum for discussion among different departments, resulting in impromptu "brainstorming" sessions that provide excellent observations and suggestions from the participants.regarding cash management. · Our approach to studying the City of Carlsbad's cash management practices includes: Evaluate your entire process of collecting and concentrating cash, including: .. .. .. Methods of receiving payments Processing of cash receipts Billing for services provided (if applicable) Applicability of advanced collection and concentration techniques. Review policies and evaluate procedures relative to the purchasing, accounts payable and disbursement functions Review the process of making investm~nts, including: .. •• .. • • Determination of investable balances Matching of investment maturity and cash requirements Bidding process Consideration of different investment alternatives • Evaluate your existing banking relationship including: .. •• •• •• •• The number and purpose of all accounts and relationships The method :or compensating the banks for the services provided The nature, scope and quality of the current services received The benefit to the City of any additional banking services The banking proposals being considered by-the City Review the City's short-term financing arrangements. Evaluate your present cash flow forecasting system and procedures. -3- ' In order to effectively evaluate the areas discussed above, we will utilize the following methodology in studying the City of Carlsbad's cash management function: • Review and clarify the ideas generated at the Cash Management Seminar. Conduct interviews and data gathering utilizing our REACT questionnaire and other materials to determine how the City's cash management process operates. Observe how key areas of the Cssh Management System currently function. Anlayze cash, information, and paper flows. Evaluate existing practices, procedures and systems (manual and automated). Identify areas for improvement. Develop an implementation plan summarized by key tasks, to permit the City to initiate approved changes. Submit observations and recom:nendations for improvements. Our approach is designed to generate recommendations that are results-oriented. It is our intent that your personnel have a high level of involvement in the review process. Upon completion, the project team will conduct an oral presentation of our observations and recommendations and provide sufficient explanations and descriptive material so that your staff can implement approved recommendations. We have found this approach to be more useful and cost effective than writing long reports that are usually never read or implemented. OUR EXPERIENCE We have substantial experience in assisting public sector clients improve their cash management. This wealth of experience allows us to immediately get at solving your problems, rather than wasting time on start-up or preparatory activities. W~ have the proven methodology that has been successful for many other local cities, counties and ~gencies. Local govetnments and other public entities in Souther~ California which have recently utilized our assistance in improving their cash management techniques include: • City of San Diego • City of L~s Angeles • City of Irvine • City of Orange -4- 1 • San Diego Community College District County of Ventura County of Los Angeles County of Orange County of San Bernardino Los Angeles County Transportation Commission California State University, Los Angeles No other consulting organization can pbovide this type of local, up-to-date, relevant government c~sh management experience to the City of Carlsbad. Additionally, our cash management expertise has resulted in successtul engagements across the country for all types of government and not-for-profit entities. At Deloitte Haskins & Sells, we do not believe that simply providing cash management consulting and accounting services for government entities is sufficient; education and knowledge transfer is critical to public sector cash management. Our Firm has taken considerable initiative, over the past several years, to respond to this critical need. ln 1977 the Firm developed, at the request of the Municipal Finance Officers Association (of the U.S. and Canada),~ manual (book) entitled: ImAlementing Effective Cash Management in Local Government: Practical Guide, - ~ince that time we have worked closely with a number of professional associations in developing our Firm's Seminar on Pt~blic Cash Management. Our public sector cash management capabilities were recently affirmed by the Municipal Finance Officers Association, who designated Deloitte Haskins & Sells as tbqir official provider of cash m~nagement training and supporting material. We believe that Deloitte Haskins & Sells has the most powerful combination of relevant, recent Southern California government cash manQgement experience and a nationally recognized expertise to best meet the needs of the City of Carlsbad. We have included specific references in Appendix B. STAFFING We have assembled a team of experienced consultants with specialized talents that best meet the needs of this project. The members of our consultant team are: • Mr. Frank Panarisi, our Firm's Regional Coordinator for all DH&S governmental services in Southern California, will se~ve as project director for the engagement. He accumulated twenty-seven years of man~~ement experience with county government prior to joining DH&S. His public aervice included fift~en yeari with the County of Los Angeles and twelve years wjth the County of San Diego. Mr. Panarisi provide~ his knowl~dge of local -5- • • government and the important part it plays in the conmunity. He has the direct experience of ccping with the many challenges faced by local governments. So~e of Mr. Panarisi's recent cash management experien~e includes: .. City of San Diego .. San Diego Commuliity College District Mr. Fred Gysi, Manager-in-Charge of our Cash Management Practice in Southern California, will work closely with Mr. Panarisi; Mr. Gysi has been project manager on all of our recent local government cash management engagements. He has reviewed the cash management practices of such local entities as: .. .. .. .. .. .. •• City of San Diego City of Los Angeles City of Orange City of Irvine County of Ventura County of Los Angeles County of Orange County of San Bernardino Los Angeles County Transportation Commission Califorina State University, Los Angeles Mr. Keith .Short, a Manager in our Financial Management group, will provide manager assistance on this project. He has managed cash management engagements including: .. .. City of San Ditgo San Diego Community College District Children't Hospital -San Diego Mr. Robin Jensen, a Senior Financial Consultant with expe~ience in Cash Management and Banking, will serve as the lead consultant. Mr. Jensen's public sector cash management experience includes: .. City of San Deigo •• San Diego Community College District Mr. Joel Poladian, a Financial Consultant with experience in many aspects of financial managem~nt and systems development, will serve as a primary consultant. He has experience in both private and public sector cash management. Some of his recent experience includes: " . • • • • County of Ventura Hotel Riviera, Inc • Transcon Lines, Inc • -6- In addition to our Project Director, Manager and Consultants, we have made two of our senior Firm members available dS consultants to the project team: Mr. Jack Kiley, our Firm's National Coordinator of Covernment Cash Management Services, will serve as a technical advisor for the engagement. Prior to joining DH&S, Mr. Kiley was the Assistant State Treasurer for the State of Washington, and managed the state's investment portfolio. His "hands-on" investment experience for a major government agency will be extremely valuable to the City of Carlsbad. He has worked closely with most of our public se~tor clients in improving cash management techniques. Mr. James Robshaw will serve as a technical advisor and the Administrative Partner for this effort, and will oversee all work done and reports produced by the project team. Mr. Robshaw is a partner in our Los Angeles Management Advisory Services Department and is responsible for our consulting services to the government sector for Southern California. He also has executive respvnsibility for our cash management practice in Southern California. Resumes of the members of this Project team are included in Appendix A. ill.§. Our fees for the cash management review will be $17,000. If our review does not generate recommendations resulting in annual benefits at least equal to two times our fee estimate, we will modify our fee accordingly. We believe that you will find these costs very reasonable when compared to the benefits that can accrue to the City. We hope the foregoing provides the information you require. If you have any questions or comments, please contact Frank Panarisi or myself at (619) 232-6500. We are looking forward to being of service to the City. 7~;;:9-L- Gordon M. Jonns Partner cc: James F. Elliott, Finance Director/ William C. Esterline, City Treasurer -7-Jo APPENDIX A -8-I\ CITY OF CARLSBAD DELOITTE HASKINS & SELLS PRQf9.§ED PROJECT QRGANI ZATION CARLSBAD STEERING ,COMMITTEE I PROJECT DIRECTOR TECHNICAL ADVISORS • Frank Panarisi . --• James Robshaw • Jack Kiley I PROJECT MANAGER . Fred A. Gysi 1 STAFF • Keith Short • Robin Jensen • Joel Poladian -9- ACADEMIC BACKGROUND EXPERIENCE: FRANK PANARISI Bachelor of Arts, Occidental College Master of Public Administration, California State University, Los Angeles Mr. Panarisi joined Deloitte Haskins & Sells in March 1983 after twenty-seven years as a public administrator. His public service included fifteen years with the County of Los Angeles and twelve years with the County of San Diego. Mr. Panarisi has held a unique variety of executive positions which have spanned the full range of government services. He has the direct experience of coping with the many challenges faced by local government. Mr. Panarisi provides his knowledge of local government and the important part it plays in the community. His background includes experience as the Assistant Chief Administrative pfficer, San Diego County, with direct responsibility for all appointed departments including: Health Services, Probation, Defender Services, Social Services, EDP, Public Works, Planning, Purchasing, Animal Controls Parks, Public Administrator, ~evenue and Recovery, Registrar, Coroner, General Services, Library, Housing, and Air ·Pollution Control. Also, he had coordination responsibility for Rll elected departments including: Treasurer -Tax Collector, Assessor, Sheriff, District Attorney, Superior and Municipal Courts, County Clerk and Recorder. Among the many positions he has held are President of Coµnty Health Care Administrator's Association of California, Assistant Chief Probation Officer for Los Angeles County, Assistant Executive Officer of the Board of Supervisors in Loa Angeles County, Chairman of the San Diego County Data Processing Policy Committee, President and Board member of the San Diego Criminal Justice Planning Board and Chairman of the San Diego County Audit Committee. Since joining Deloitte Haskins & Sells, Mr. Panarisi assumed the role of our Firm's Coordinator of Southern California Consulting Services to Public Sector clients. During his tenure with our Firm, he has had the following relevant cash management experience: )3 Frank Panarisi San Diego Community College District - Project Manager on our Cash Management Operations Review. City of San Diego -Technical advisor on our Cash Management Operations Review (3/83 - 5/83). He also served on various National Association of Counties committees, the Policy Committee on Administration of Justice for County Supervisors Association of California, and President of the C9unty Health Administrators Association of California. For two years, he was a facilitator for the National Leadership Institute -"Managing Diminishing. Fiscal Resources in Corrections." Mr. Panarisi is a member of Cal1fornia Municipal Treasurers Association, Municipal Finance Officers Association, San Diego Chamber of Commerce, San Diego Rotary, Board of Directors of United Way and is President of Big Brothers of San Diego. -11- FRED A. GYSI. CPA ACADEMIC Bachelor of Arts 1 Summa Cum Laude. Colorado BACKGROUND: College Master of Business Administration, UCLA EXPERIENCE: Fred Gysi is a Manager in the Los Angeles office of Deloitte Haskins & Sells and is responsible for the Firm's Cash Management services to government in Southern California. Mr. Gysi has substantial-experience in financial planning and cash management with over seven years of experience in consulting and accounting. He has assisted many of our Southern California clients in improving their cash management practices and techniques. He has been involved in a variety of engagements in developing Statements of Investment Policy, evaluating cash management systems, preparing requests for Proposals (RFPs) for banking servicer., and designing cash management systems. Mr. Gysi has been involved with all of our public sector cash management consulting engagements in Southern California. Some of his experience includes: • County of Ventura -Comprehensive Cash Management Operations Review, including Investment Practices. Portfolio Evaluation, Internal Control, Cash Planning Techniques, Cash Receipts and Disbursements, Review of Automated Systems, and Bank Service Evaluation (2/84 -4/48) • County of San Bernardino -Comprehensive Cash Management Operations Review, including Investment Practices, Portfolio Evaluation, Internal Control, Cash Planning Techniques, Cash Receipts and Disbursements, Review of Automated Systems, and Bank Service Evaluation; Statement of Investment Policy; Implementation of Cash Management System (8/82 -1/84) County of Orange -Cash Managemen~ Operations Review of Investment Processes and Policies, Banking Services, and Cash Flow Forecasting (1/83 -3/83) Los Angeles County Transportation Commission -Cash Management operations Review of Fred A. Gysi, CPA Investment Processes and Policies; Banking Services, and Cash Flow Forecasting; Statement of Investment Policy; Renegotiation of Banking Relationship (11/82 -3/83) City of Orange -Cash Management Operations Review (8/83) C_alifornia State University, Los Angeles - Cash Management Operations Review of Investment Processes ~nd Policies, Banking Services, and Cash Flow Forecasting (10/82 11/82) He has worked extensively with our specialized REACT (Review, Evaluation and Analysis of Cash Management Techniques) program for government clients. Mr. Gysi has made numerous presentations on current trends in cash management, particularly regarding "REACT -The DH&S Approach to Cash Management." He was recently interviewed on Financial News Network, a national business television network, on cur.rent trends in cash management. He is a Certified Public Accountant in the State of California. He is a member -of the California Municipal Finance Officers Association, Southern California Cash Managers Association, American Institute of Certified Public Accountants, California Society -of CPAs and the National Association of Accountants. -13- ACADEMIC Bachelot of Science, Lehigh University BACKGROUND: Graduate Studies: University of Washington, Pacific Luthern University EXPERIENCE: Mr. Kiley is a manager in our Seattle office and is our Firm's National Coordinator of Government Cash Management Services. Prior to joining DH&S, Mr. Kiley was the Assistant State Treasurer in Washington State. In this capacity, he was responsible for overseeing an investment portfolio averaging between $500 million and $1 billion and managing the state's multi-billion dollar cash flow. Mr. Kiley's duties included selection of investment instruments based on yield, safety and liquidity, establishing investment policies, implementing modern procedures, and supervising the investment process. Mr. Kiley's efforts in cash management made the state of Washington a model for effectively maximizing interest earnings. Some of the techniques pioneered by the state of Washington under Mr. Kiley's direction include adoption of lockbox collection systems for all major state revenues, extension of investment parameters to include bankers' accept~nces, commercial paper, and negotiable CD's, the adoption of competitive bidding_ in bank selections and bank contracts, initiation of funds' consolidation using depository transfer checks and electronic debit entries, and the implementation of direct deposit systems for retirement payments, intergovernmental payments, and employee salaries. Mr. Kiley has had extensive experienc~ in debt management and the interrelationship of cash and debt management. In this regard he negotiated a ~400 million short-term loan for the state of Washington utilizing a new flexible rate instrument which significantly lowered borrowing costs. Mr. Kiley has spoken to numerous national and state organizations including the National Governors' Association, National Association of State Treasurers, National Association of State Auditors, Comptrollers and Treasurers, and Western Treasurers' Conference. He keynoted the Second Annual Conference on Governmental \M Cash Management. \ _, 1.,._ John F. Kiley Mr. Kiley has also had significant "hands-on" experience in the areas of governmental organization, budgeting, accounting systems, capital project administration, data processing administration, and legislative activities. Mr. Kiley's duties for the state of Washington, involving positions as Senior Fiscal Analyst, Investment Officer, and Assistant State Treasurer, were during the period 1971 to 1982. Some of his additional experience includes: Co~nty of Ventura -Technical Manager on our Comprehensive Cash Management Operations Review, including Investment Practices, Portfolio Evaluation, Internal Control, Cash Planning aud Techniques, Cash Receipts and Disbursements, Review of Automated Systems, and Banking Service Evaluation (2/84 -4/84) County of San Bernardino -Technical Manager on our Comprehensive Cash Management Operations Review, including Investment Practices, Portfolio Evaluation, Internal Control, Cash Planning Techniques, Cash Receipts and Disbursements, Review of Automated Systems, and Bank Service Evaluation; Statement of Investment Policy; Implementation of Cash Management System (67 82 -1/ 84) California State University, Los Angeles - Technical Managtr on our Comprehensive Cash Management Operations Review, including Investment Practices, Portfolio Evaluation, Internal Control, Cash Planning Techniques, Cash Receipts and Disbursements, Review of Automated Systems, and Bank Setvice Evaluation (10/82 -11/82) State of Iowa -Technical Manager on out Comprehensive Cash Management Operations Review, including !nvestment Practices, Portfolio Evaluation, Internal Control, Cash Planning Techniques~ Cash Receipts and Disbursements, Review of Automated Systems, and Bank Service Evaluation (8/83 -10/83) City of San Diego --Technical Manager on our Comprehensive Cash Management Operations -15- John F. Kiley Review, including Investment Practices, Portfolio Evaluation, Internal Control, Cash Planning Techniques, Cash Receipts and Disbursements, Review of Automated Systems, and Bank Service Evaluation (3/83 -5/83) County of Orange -Technical Manager on our Cash Management Operations Review of Investment Processes and Policies, Bank Services, and Cash Flow Forecasting (l/83 - 3/83) Mr. Kiley has been extremely active on the national scene in support of upgrading cash management practices. He has been Chairman of the Treasury Management Committee of MFOA, a Board member of the Washington Finance Officers' Association, and a member of the Northwest Cash Management Association. Mr. Kiley has written extensively on cash manegement. His most recent article, published in the October 1983 edition of Public Investor, deals with the safety of public deposits and investments. He also wrote "A Perspective on Public Cash Management in the '80s" published in the December 1981 edition of Governme\1t Finance. He is a major contributor to a new training manual by DH&S entitled "Seminar on Public Cash Management." JAMES D. ROBSHAW 1 CPA ACADEMIC Bachelor of Science, University of Iowa BACKGROUND: Master of Business Administration, University of Colorado EXPERIENCE: Mr. Robshaw is the partner responsible for our financial management consulting practice in our Los Angeles office and has substantial experience in accounting systems, auditing, and data processing operattons. He has been engaged in the practice of public accounting for over eleven years encompassing broad experience in both accounting and business advisory areas related to integrated financial syst~ms, operations reviews, cash management, and accounting and automated data processing controls for clients in a number of industries including government, banking, transportation, and real estate development. He has extensive experience with automated financial information systems, having served as Project Manager for-the implementation of an integrated financial system for the State of Arizona and for Maricopa County, Arizona. He also has experience in cost accounting systems, having been the project manager on a project for the Interstate Commerce Commission to develop a uniform cost center accounting system for the rail industry. He bas had client managerial responsibility for the complex data processing and communications requirements. He has also assisted these clients in the refinement of accounting sy$tems (including conversion to meet changes l~ regulatory accounting and reporting requirements) assessment, development, and implementation of replacement cost accumulation procedures and the development of industry segment data. Some of Mr. Robshaw's specific experience includes: County of Ventura -Project Partner on our Comprehensive Cash Manag~ment Operations Review, including lnv~stment Practices, Portfolio Evaluation, Internal Control, Cash Planning and Techniques, Cash Receipts and Disbursements, Review of Automated Systems, and Banking Service Evaluation (2/84 -4/84) County of San BernaLdino -Project Partner on our work for the County, including a Cash James D. Robshaw, CPA Management Opetations Review, Statement of Investment Policy, and implementaion of a cash management system (8/82 -1/84) Los Angeles County Ttanspotation Commission -Project Partner on out work for the Commission, including a Cash Management Operations Review, Statement of Investment Policy, and Renegotiation of Banking Relationship (11/82 -3/83) State of Arizona -Project Manager on our implementation of an integrated financial system for the State of Arizona (5/80 9/82) Maricopa County, Arizona -Project Manager on our implementation of an integrated financial system for Maricopa County (8/79 - 9/80) Mr. Robshaw also bas direct industry experience and served as Manager of Accounting Systems and Data Processing for American Crystal Sugar Company. In this -position, he had complete responsibility for the redesign and automation of the Company's accounting and internal control systems, including performance of an extensive computer feasibility study, computer equipment selection, system design, implementation, and administration of the EDP system subsequent to installation. Mr. Robshaw is a Certi-fied Public Accountant and is a member of the Ametica~ Institute of Certified Public Accountants. He has conducted Deloitte Haskins & Sells training sessions on numerous topics relating to,accounting systems, accounting and automated data processing controls, financial reporting, and consttuctive setvice to clients. -18- KEITH SHORT, CPA ACADEMIC Bachelor of Science with high honors,-San Diego BACKGROUND: State University International Program Scholarship sponsored by California State University and Colleges - studied at the Univers1ty of Liverpool, Uni~ed Kingdom EXPERIENCE: Mr. Short is a financial manager with our San Diego Management Advisory Services department. His consulting experience includes many aspects of financial management and systems development. The engagements in which Mr. Short has participated include the following: Children's Hospital and Health Center The, Salk Institute The Hill Companies Eipper Formance Ac~ion Instruments Co., Inc. Pharmavite Bentley Industries The City of San Diego Bumble Bee Seafoods San Diego Community College District Mr. Short is a ,Certified Public Accountant ~nd is a member of Beta Ga~a Sigma, Cash Management Association of San Diego, National Association of Accountants, American Institute of Certified Public Accountants, Microcomputer Users Gro~p (DH&S) (Chairman) and Girl Scouts of San Diego and Imperial Counties Mr. Short also has dir~ct industry experience and served as Chief Financial Officer and Controller for Action Instruments. He also has two years accounting experience with Price Waterhouse & Co. -19- ROBIN JENSEN, CPA ACADEMIC Bachelor of Science, University of Arfzona BACKGROUND: EXPERIENCE: Mr. Jensen is a Senior Consultant with Deloitte Haskins & Sells. He has over four years of experience in consulting, and specializes in the areas of cash management and banking. He also has extensive experience in reviewing and evaluating accounting and financial information systems. Mr. Jensen is becoming one of our primary cash management and banking consultants in Southern California. His experience includes: City of San Diego -Performed a Comprehensive Gash Management Operations Review, including Internal Control, Cash Planning and Techniques, Cash Receipts and Disbursements Processing, Review of Automated Systems, Banki~g Service Evaluation, Analysis of Investment Policies and Practices and Cash Flow Forecasting (3/83 -5/83) San Diego Community College ·District - Performed a Comprehensive Cash Management Operations Review, including Internal Control, Cash Planning and Techniques, Cash Receipts and Disbursements Processing, Review of Automated Systems, Banking Service Evaluation, Analysis of Investment Policies and Practices and Cash Flow Forecasting (In-Progress) First Interstate Bank -Participated in an Earnings Improvement Review in which recommendations for improving bank earnings and efficiency were rendered. He is also a member of our specialized Southern California Bank Consulting Group. Mr. Jensen is involved in a number of professional groups, including the N~tional Corporate Cash Management Association, American Institute of CPAs, and National Association of Accountants. -20- JOEL H. POLADIAN ACADEMIC Bachelor of Science, Loyola Marymount-University BACKGROUND: Graduate Stuaies: Unive~sity of La Verne EXPERIENCE: Mr. Poladian is a Financial Consultant with Deloitte H~skins & Sells. He has over three years of experience in consulting and accounting. Mr. Poladian specializes in the areas of Cash Management, Financial Modelling/Forecasting and the Conceptual Design of Financial Accounting Systems. Mr. Poladian has been a consultant on several of our cash management consulting engagements in the Southwest Region. Some of his recent experience includes: County of Ventura -Reviewed Methods of Billing, Collecting and Depositing Revenues; Analyzed Cash Planning and For~casting Techniques and Evaluated Internal Control Procedures (2/84 -4/84) • Hotel Riviera, Inc. -Performed a Comprehensive Cash Management Operations Review, including Internal Control, Cash Receipts and Disbursements Processing, Review of Automated Systems, Banking Service Evaluation, Analysis of Investment Policies and Practices and Cash Flow Forecasting (12/83 -1/84) • Transc~n Lines, Inc. -Performed a Comprehensive Cash Management Operations Review, including Internal Control, Cash Receipts and Disbursements Processing, Review of Billing Techniques and Automated Systems, Banking Service Evaluation, Analysis of InvestmP.nt Policies and Practices and Cash Flow Forecasting (9/83 - 10/83) He has worked with our specialized REACT (Review, Evaluation and Analysis of Cash Management Techniques) program both on private and public sector clients. Mr. Poladian is an Associate Member of the Institute of Management Consultants. -21- APPENDIX B REI;,ERENCES Our cash management expertis~ has resulted in successful engagements across the country for all types of govarnment entities. We are particularly proud of, and want to emphasize, our experience in serving clients in Southern California. This breadth of experience demonstrates our ability to provide the higheRt quality cash management consulting services on schedule and within estimated cost parameters. We have only included those engagements ,hat we believe are directl_y relevant to this project. We have not included, for reasons of brevity, our extensive government experience in related areas such as financial information systems, data processing, general operational reviews, etc. A partial list of government engagements recently completed or currently in progress includes: City of San Diego, California Performed a comprehensive review, utilizing our REACT program of all a•pects of the cash management process, emphasizing cash planning techniques, cash collection and disbursement techniques, review of automated systems, float management, bank service evaluation, investment policies, portfolio evaluation, internal controls and security procedures. Contact: Libby Anderson Director of Financial Management City nf San Diego 233 "A" Street San Diego, California 92101 (619) 236-6070 County of Ventura Perfotmed a comprehensive review, utilizing our REACT program, of all aspects of the cash management process, emphasizing investment policies and procedures, portfolio evaluation, cash collection and disbursement techniques, bank service evaluation, review of automated systems, internal controls and security procedures. Contact: Mr. Robert V. Pena Foreman Grand Jury County of Ventura Ventura, California 93009 (805) 654-2257 -23- County of Los Angeles Performed a comprehensive. internal control review of the County's cash management office. This progress emphasized review of the County's investment areas, including confirmation of transactions, fund transfers, and settlements. Contact: H.B. Alvord Treasurer and Tax Collector Room 437 500 Wes~ Temple Street Los Angeles, California 90012 (213) 974-2101 County of Orange Performed a general cash m~nagement review, utilizing our REACT program, in th& areas of cash flow forecasting, banking services, and investment processes and procedures. Contact: Robert L. "Bob" Citron County Tax Collector -Treasurer 207 Finance Building 630 North Broadway P. o. Box 4515 Santa Ana~ California 92702 (714) 834-3411 County of San Bernardino, California Performed a comprehensive r~view, utilizing our REACT program, of all elements of the cash management system. Additionally, we provided advice on how planned future financial systems should incorporate cash management activities~ We also assisted the County in developing a statement of investment policy. Finally, we helped the County implement a county-wide deposit consolidations system that significantly accelerated cash collections and increased investment earnings. Contact: Errol Mackzum Auditor -Controller/Recorder County of San Bernardino 670 Gilbert Street San Bernardino, California 92415 (714) 383-2320 -24- County of Alameda, California Performed a review and analysis of the County's diversified banking servfce arrangements, and examined service costs, borrowing costs, and new investment opportunities such as automatic investment mechanisms. Contact: Robert G. Knox TreasuTer Alameda County, California 1221 Oak Street Oakland, California 90 (415) 874-6766 £!.llfornia State University, Los Angeles Petformed a ~omprehensive review of the University's cash management system using our REACT program. Contact: Patricia McCoy Vice President for Administration California ~tate Univ,ersfty, Los Angc·les Administrative Building Room 809 5151 State University Drive Los Angeles, California 90032 (213) 22'4-3375 -25- Del1t~'te Haskins+Sells Mr. William C. Esterline City Treasurer City ·of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 Dear Mr. Esterline: Suite 1900 701 "B" Street Sao Diego, California 92101-8198 (619) 232-6500 TWX 910-335-1573 December 27, 1984 This letter confirms our discussion regarding Deloitte Haskins & Sells performing a cash management study for the City of Carlsbad for a fee not to exceed $15,000. I can assure you that the City will receive an outstanding product for this investment, because of the following factors: 0 We have the most extensive and successful cash management experience for the public sector. o We have the unique expertise of Jack Kiley to review investment practices and develop investment policies. o We have the unique understanding of the city's operations because of our experience as the city's outside auditor. o We have a demonstrated commitment to the City of Carlsbad. We certainly look forward to working with the City on this project. Sincerely yours, Frank Panarisi Manager RESOWrION 00. _ _.1'""'s~94.__ A RESOLUl'ION OF THE CITY COONCIL OF 'mE CIT.£ OF CARISBAD ACCEFl'l~ iliE PRO~ Ofi' DELICT'l'E H.?t..SKW.S AN!:> $EL):.$ 10 PERFOP.M A STUDY AND 'ID MSIST IN IMPLEMOO'I~ IMPIOV~ '10 '!'HE CITY'S CTISH MANAG™8Nr SYSI™. WHEREAS, the City of Carlsbad is responsible for a large investment l 2 0 4 5 6 portfolio which is managed by the City Treasurer and which provides interest 7 earnings for the City; and WHERFAS, the City also receives revenue on a daily basis fron the many 8 9 different sources which should be managed in an efficient manner to maximize the 10 interest return to the City; and WHEREAS, the City disburses funds oo a weekly basis which effect the City's 11 12 available cash balances used to eam interest; and 13 I WllEREl\S, Deloitte Haski.ns and Sells has had an og,ortunity t:hro09h the audit )_ 41 pt:0eess to ~view these aspects of City financial management at the City of 15 Carlsbad; and ~, Deloitte Haskins and Sells can provide expertise based on ?'...St 16 17 reviews of ot.11er city and county cash management systems Mlidl has been proven 18 to inf?rove the interest yield on cash .::.vai-lable for investement; and WHEREAS, funds for this stud~, can be rrade available by transferring $15,000 19 20 fron the Council's contingency Account to the Finance Department's Professional 21 services Account. N:M, '.mEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad 22 2 3 as follc,,,s: 1. '!hat t.he proposal of Deloitte Haskins and Sells is hereby accepted and 24 25 the n-ayor is authorized to execute the attached. agreen-ent between the 26 City and Deloitte Haskins and Sells: 27 /// 28 Ill '' ' 2. '.Ihat the above transfer of $15,000 is hereby ~roved. l 2 PASSED, Ai?POOVED A'N'D AOOPT:ED at a regular ·n~cing of ·01e City councH of •h'1e 3 City of carlsbad, California, held on t.he 22nd day of January 4 the following vote, to wit: , 1985 by 5 AYES: Council M9robers casler, Lewis, Kul.chin, Chick and Pettine 6 NOF.S: None 7 ABSENI': None 8 9 10 11 12 13 ATI'EST: 14~).~ 15 ALF.'I'HA L. RAU'I'ENKRANz,cltycier 16 (SEAL) 17 18 19 20 21 22 23 24 25 26 27 28 ~ d.~ MARY"H.distp.,Meyor . 3'1 January AGREEMENT BETWEEN THE CITY OF CARLSBAD AND DELOITTE HASKINS AND SELLS FOR A STUDY OF THE CITY'S CASH MANAGEMENT PROCEDURES. THIS AGREEMENT, made and entered into as of the ---- , 19~, by and between the CITY OF CARLSBAD, a municipal corporation, hereinafter referred to as "City," and Deloitte Haskins & Sells hereinafter referred to as ~consultant." RECITALS day of City requires the services of Deloitte Haskins and Sells to provide the necessary consulting services for preparation of a cash management system for the City of Carlsbad; and Consultant possesses the necessary skills and qualifications to provide the servlces required by City; NOW, THEREFORE, in consideration of these recitals and the mutua'l covenants contc\ined herein, City and a Consultant agree as follows: ( 1) CONSULT ANT'S OBLIGATIONS The Consultant shall perform a review of the City's pre~ent cash management system using the "REACT" model described in the attached proposal and shall recommend changes and improvements to the -existing system where necessary. The Consultant shall provide the Cl-ty with a final report which details the proposed cash management program and any changes which must be made to the City's present systems. ( 2) CITY OBLIGATIOHS The City agrees to cooperate with the ConsuHa,,t lii aH aspects of the study and to provide information necessary to the completion of the study on a timely basis. (3) PROGRESS AHO COHPLETIO~ The work under this contract .ill begin ~ithin 14 days after receipt of notification to proceed by the City and be completed within 90 days of that date. Extensions of ttme may be granted if requested by the Consultant and agreed to ln writing by the Finance Director. In consideration of such requests, the City Engineer will give allowance for documented and substantiated unforeseeable and unavoidable delays not caused by a lack of foresight on the part of the Consultant, or delays caused by City inaction or other agencies' 1ack of timely action. (4) FEES TO BE PAID TO CONSULTANT The lump sum fee payable according to paragraph (5) shall be $15,000. No other compensation for services will be allow~d except th~se items covered by supplemental agreements per paragraph (7), Changes in Work. (5) PAYMENT OF FEES Payment of fees shall be made within thirty days after approval of the final report. (6) FINAL SUBMISSIONS The Consultant's final report shall include: Specific recommendations for impovement in the City's cash management system. An implementation plan summarized by key task to permit the City to initiate the racommended changes. ( 7) CHANGES IN WORK The Consultant or the City may request a change in contract. Such changes shall be processed by the City in the following manner: A letter outlining the required changes shall be forwarded to the City or Consul.ant to inform them of the proposed changes along with a statement of estimated changes in charges or time schedule. A~ter reaching mutual agreement on the proposal, a supplemental agreement shall be prepared by the City and approved by the City Manager. Such supplemental agreement shall not render ineffective or invalid~te unaffected portions of the agreeme~ti (8) REPRESENTATION OF IHDEPENDAHCE The Consultant warrants that their firm has not employed or retained any company or person, other than a bona fide employee working for the Consultant, to solicit or secure this agreement, and that Consultant has not paid or agreed to pay any company or person, other than a bona fide employee, any fee, commission, percentage, brokerage fee, gift, or any other conslderat1on contingent upon, or resulting from, the award or making this agreement. For breach or violation of this warranty, the City shall have the right to annul this agreement without liability, or, in its discretion, to deduct from the agreement price or consideration, or otherwise recover, the full amount of such fee, commission, percentage, brokerage fee, gift or contlngent fee. (.9) HONOISCRIMINATIOH CLAUSE The Consultant shall comply with the State and Federal Ordinances regarding nondiscrimination. , 1 (10) TERMINATION OF CONTRACT In the event of the Consultant's failure to pr~secute: deliver, or perform the work as provided for in this contract, the City may terminate this contract for nonperformanc~ b~ notifying the Consultant by certified mall of the termination of the cont~act. The Consultant, thereupon, has five working days to deliver said documents owned by the City and all work in progress to the Finance Director. The Finance Director shall make a determination of fact based upon the documents dP.livered to City of the percentage of work which thP, Consultant has performed which is usable and of worth to the City in having the contract completeq. Based upon that finding as reported to the City Council, the Council shall determine the final payment of the contract. (11) DISPUTES If a dispute should arise regarding the performance of work under this agreement, the following procedure shalJ be used to resolve any question of fact or interpretation not other~ise settled by agreement between parties. Such questions, if they become identified as a part of a dispute among persons operating under the provisions of this contract, shall be reduced to writing by the principal of the Consultant or the Finance Director. A copy of such documented dispute shall be forwarded to both parties· involved along with recommended methods of resolution which would b~ of benefit to both parties. The Finance Director or principal receiving the letter shall reply to the letter along with a recommended method of resolution within ten days. If the resolution thus obtained ls unsatisfactory to the aggrieved party, I r a letter outlining the dispute shall be forwarded to the City Councp for their resolution through the office of the Clty Manager. The City Council may then opt to consider the directed solution to the problem. In such cases, the action of the City Council shall be binding upon the parties involved, although nothing in this procedure shall prohibit the parties seeking remedies available to them at law. (12) SUSPENSION OR TERMINATIOH OF SERVICES This agreement may be terminated by either party upon tendering 30 days written notice to the other party. In the event of such suspension or termination, upon request of the City, the Consultant shall assemble the work product and put same in order for proper filing and closing and deliver said product to City. In the event of termination, the Consultant shall be paid for work performed to the termination date; however, the total shall not exceed the guaranteed total maximum. The City shall make the final determination as to the portions of tasks completed and the compensation to be made. Compensation to be made in compliance with the Code of Federal Regulations. (13) STATUS OF THE CONSULTANT The Consultant shall perform the services provided for herein in Consultant's own way as an independent contractor and in pursuit of Consultant's independent calling, and not as an employee of the City. Consultant shall be under control of the City only as to the result to be accomplished and the personnel assigned to the project, but shall consult with the City as provided for in the request for proposal. , ' {14) CONFORMITY TO LEGAL REQUIREMENTS The Consultant ls hired to render professional services of studying the City's cash management system and making recommendations for improvements thereto and any payments made to Consultant are compensation solely for such servlces. The Consultant shall certif> that all recommendations, if Implemented, will not place the City in vlolatlcn of any Federal or State laws which govern the management of City funds. {15) OWNERSHIP OF DOCUMENTS All studies, reports or other documents as herein required are the property of the City, whether the work for which they are made be executed or not. In the event this contract ls terminat~ct, all documents, reports and studies shall be delivered forthwith to the City. Consultant shall have the right to make copies of the plans for his/her records. (16) HOLD HARMLESS AGREEMENT The City, its agents, officers and employees shall not be liable for any claims, liabilities, penalties, fines, or any damage to goods, properties, or effects of any person whatever, nor for personal injuries or death caused by, or resulting from, or claimed to have been caused by, or resulting from, any act or omission of Consultant or Consultant's agents, employees or representai:hes. Consult ant agrees to def end, indemnify and save free and harmless the City and its authorized agents, qfficers, and employees against any of the foregoing liabilities or claims of any kind and any cost and expense that is incurred by the City on account of any of the I' foregoing liabilities, including liabilities or claims by reason of arl-egea aeieat-s H, any plans and zpecificat!ons,; unless the liability or claim is due, or arises out of, solely to the City's negligence. (17) ASSIGNMENT Of CONTRACT The Consu1tant shall not assign this contract or any part thereof or any monies due thereunder without the prior written consent of the City. (18) SUBCONTRACTING If the Consultant shall subcontract any of the work to be performed under this contract b) the Consultant, Consultant shall be fully responsible to the City for the acts and omissions of Consultant's subcon~ractor and of the persons either directly or indirectly employed by the subcontractor, as Consultant ls for the acts and omissions of persons directly employed by Consultant. Nothing contained in this contract shall create any contractual relationship between any subcontractor of Consultant and the City. The Consultant shall bind every subcontractor and every subcontractor of a subcontractor by the terms 6f this contrac~ applicable to Consultant's work unless specifically noted to the contrary in the subcontract in question approved in writing by the City. (19) PROHIBITED INTEREST No official of the City who ls authorized in such capacity ?n behalf of the City to negotiate, make, accept, or approve, or take part in negotiating, making, accepting, or approving of any architectural, engineering inspection, construction or material supply contractor, or any subcontractor in connection with the interested personally in this contract or in any part thereof. Ho officer, employee, or attorney, of or for the City who ls authorized in such capacity and on behalf of the City to exercise any executive, supervisory, or other similar functions in connection with the performance of this contract shall become directly or indirect!~ interested personally in this contract or any part thereof. (20) VERBAL AGREEMENT OR CONVERSATION No verbal agreement or conversation with any officer, agent, or employee of the City, either before, during, or after the execution of this contract, shall affect or modify any of the terms or obligations herein contained nor such verbal agreement or conversation entitle the Consultant to any additional payment whatsoever under the terms of this contract. (21) SUCCESSORS OR ASSIGNS Subject to the provisions of paragraph (16), Hold Harmless Agreement, all terms, conditions, and provisions hereof shall insure to and shall bind each of the parties hereto, and each of their respective heirs, executors, administrators, successors and assigns. (24) EFFECTIVi DATE lh!:~ ~gr.eement .i;.hal.l b.e eff~cthe on and from the day and year first abo~e written. IN WITNESS WHEREOF, we ha~e hereunto set our hands and seals. CITY OF CARLSBAD B Mayor tltle ATTEST: APPROVED AS TO FORM: City Clerk As5istant City Attorney 'I