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Proposal

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    Proposal Proposal Document Transcript

    • Proposal Goodhue County, MN Proposal to Provide a Review of Fiscal Policies, Establish a Capital Planning Process and Provide a Management Tool for Financial Planning February 16, 2005
    • Table of Contents 1 OBJECTIVES ....................................................................................1 2 PROCESS ........................................................................................3 3 WORK PRODUCTS ............................................................................7 4 ASSIGNED STAFF .............................................................................8 5 EXPECTATIONS ................................................................................9 6 TIMELINE .......................................................................................10 7 COMPENSATION .............................................................................11 8 ACCEPTANCE ................................................................................12 Springsted provides high quality, independent financial and management advisory services to public and non-profit organizations, and works with them in the long-term process of building their communities on a fiscally sound and well-managed basis.
    • Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101-2887 Tel: 651-223-3000 Fax: 651-223-3002 www.springsted.com LETTER OF TRANSMITTAL February 16, 2005 Mr. David Hamilton Goodhue County Administrator 509 West 5th St. Red Wing, MN 55066 Re: Request for Proposal to Provide a Review of Fiscal Policies, Establish a Capital Planning Process and Provide a Management Tool for Financial Planning Dear Mr. Hamilton, Springsted Incorporated is pleased to submit proposal to provide a review of fiscal policies, establish a capital planning process and provide Goodhue County with a tool to assist with looking forward and the various impacts on the County’s finances. Our firm has assisted numerous jurisdictions here in Minnesota as well as throughout the United States, in addressing these areas and performing specialized management studies. We have created an extensive management consulting services practice that ensures we have the expertise to furnish the service required for this project. These services to counties have become particularly useful as they try to manage all the administrative tasks necessary with reduced resources for staff. The Management Services Division of Springsted specializes in performing financal studies for public entities including numerous components. Our project approach is detailed in the accompanying proposal. The County benefits from the following: The service team has background and experience in public administration Springsted is familiar with a wide scope of county needs and is sensitive to the interrelatedness of administrative decision-making The company is big enough to assemble a broad range of resources, but small enough to investigate special needs We look forward to the opportunity to work with the County and its employees on this important project. Respectfully submitted, Carolyn S. Holmsten, Vice President Client Representative dww Public Sector Advisors
    • Objectives 1 1. Objectives The purpose of this study will be broken into three parts covering financial policies, capital planning and financial planning: Part I – Fiscal Policies Study Review the following County’s fiscal policies and identify actions the County can take to ensure the fiscal accountability of all County operations and enterprise activities: • Debt and Debt Management Policy • Investments and Investment Policy • Fund Balance Goals • Financial Reporting Standards Goodhue County has the responsibility to carefully account for and manage its finances. This requires that it plan for the adequate funding of services and for the maintenance of public facilities. Fiscal policies provide the basic framework for the overall fiscal management of the County. The operate independently of changing circumstances and conditions to assist the Board and administration in the decision making process. Fiscal policies represent long-standing principles and practices that guide the County in maintaining financial stability over time. Part II – Capital Planning Policies Review the County’s capital planning procedures and develop criteria regarding and Procedures amortization and life cycles, and establish a plan to determine the method to be followed for future capital investments including procedures to be used to establish the 2006-2010 Capital Plan. The purpose of capital planning will be to maximize the use of the County’s financial resources in funding capital improvements, to be forward looking by anticipating the timing and the financing of future capital needs for necessary public improvements over a nominal period of time and establish a systems approach to provide a “whole county” context for identifying future capital needs. It is designed to be a flexible, evolving plan that is updated each year as the County’s capital needs and priorities change. The plan should be developed using a collaborative process involving all the major stakeholders in the County. Springsted’s participation will assist the County with establishing a consolidated capital planning process. The process will then: • Lead to decisions based on the strategic priority setting by the County • Provide for objective and consistent review of projects • Allow for comparison of dissimilar projects • Measure relative value of proposed projects to the priorities and planning • Indicate relative financial impact on the County • Provide a vehicle for communicating the capital budget to stakeholders Goodhue County, MN. Proposal to Provide Review Fiscal Policies, Establish a Capital Planning Process and Provide a Management Tool for Financial Planning
    • Objectives 2 Part III – Financial Planning Model We would develop an Integrated Financial Planning Model that will enable Goodhue County to project the growth of revenues, operating expenditures, capital expenditures and to project fund balances based on input assumptions related to the growth in the tax base, effects of that growth on operating costs, the impacts of inflation and various development decisions on the County. The model will identify major capital projects and purchases anticipated during the planning period and possible source or sources of funding. It will enable the County to project the impacts of the plan based on various growth scenarios. The model will be built in Microsoft® Excel and will be capable of running in Windows 2000 Professional and Office 2000, or Office XP. Goodhue County, MN. Proposal to Provide Review Fiscal Policies, Establish a Capital Planning Process and Provide a Management Tool for Financial Planning
    • Process 3 2. Process Springsted works regularly with public entities. As a result, we have developed an efficient and effective process for such things as developing policies and building these models. We continue to work with our clients to ensure we are accomplishing the goals they have established. This process is outlined below. Task I – Initial Project Meeting • Meet on site with the County Administrator who will serve as the County’s representative on this study and as the consultant’s point of contact. The County’s representative will be available to the consultants throughout the study to provide general direction or assistance as needed to ensure that the study corresponds to the objectives stated above and to make modifications to the work plan as necessary or apparent. The initial project meeting will also provide an opportunity to define the desired working relationship between Goodhue County and the consulting team on such things as status updates and ongoing communications on the project. A process for written status reports will be established • Identify a staff person who can schedule meetings, reserve meeting rooms for the consultant’s use, and address other logistical study requirements • Identify other Minnesota counties that could be used for comparison purposes and contacted as part of this study to collect information related to the study objectives Task II – Background Information • Review pertinent information available in Springsted’s files or made available by the County including such things as: • Adopted budgets for the last three years • Comprehensive annual financial reports for the last three years • Capital improvement plans for the last three years • Changes in tax base over the past five years • Outstanding debt and sources of repayment • All fiscal policies adopted by the County • Strategic plan or other goals that identify long-range County objectives • Other County and departmental documents requested during the course of the study • Identify current industry standards and best practices for governmental finance operations by researching data available from the Government Finance Officers Association and other comparable governmental associations. Goodhue County, MN. Proposal to Provide Review Fiscal Policies, Establish a Capital Planning Process and Provide a Management Tool for Financial Planning
    • Process 4 Task III – Conduct Individual Meetings On Site • Conduct individual or group meetings with the appropriate management team members designated by the County Administrator to review background information and study assumptions for the various parts of the project. These include but are not limited to: • Review the County’s current fiscal policies and their application to the budgeting and financial planning process • Review historical trends in fund balances, cash reserves, levels of debt, and financial reporting standards • Review historical practices related to the investment of County funds • Review historical capital improvements and the funding sources used for the improvements • Review and discuss the capital improvement planning process, growth assumptions and needed capital improvements • Review current funding practices, funding sources and other policies for financing capital improvements • Discuss alternatives for financing capital improvements • Review the County’s existing fund structure as it relates both to operations and to capital expenditures and determine the need for any changes as they relate to the financial planning model • Review current budgeting and reporting systems for each fund • Review historical trends in housing • Review historical information related to the growth in the County’s tax base • Discuss input variables to be used in the model • Discuss the schedule for completion of the project Task IV – Collect Other Data • Collect relevant information from comparable organizations or from professional associations where such data are needed to achieve the objectives of this study Task V – Analyze Data and Develop Findings regarding policies and procedures Analyze the information gathered for this study by: • Reviewing all information obtained through interviews, document reviews, consultant observations, and comparative data collection, organizing data by functional area • Assessing the completeness of data collected and gathering additional data as needed • Reviewing data pertaining to the proposed timing and capital costs of current projects • Review alternatives for financing anticipated capital improvements, the proposed timing and capital costs of current projects • Review information relating to financing options available for various projects • Review information related to future growth based on the discussions held and data received Goodhue County, MN. Proposal to Provide Review Fiscal Policies, Establish a Capital Planning Process and Provide a Management Tool for Financial Planning
    • Process 5 Develop preliminary findings identified through the study and prepare: • Polices for Part I keeping in mind: − Improved financial operations − Enhanced fiscal accountability and oversight − Clear lines of policy and administrative responsibility for the County’s general financial operations • Present preliminary policies to the Management Team to obtain feedback and discuss recommended improvements • Capital improvement planning for Part II • Develop and evaluate options for the financing of anticipated capital improvements and each one’s impact on user fees, special assessments, and property tax rates • Evaluate the operating cost impacts of the anticipated capital improvements • Develop recommendations for the financing of the anticipated capital improvements, based on operating costs impacts and the impact on user fees, special assessments, and property taxes • Perform a sensitivity analysis to illustrate the impacts of adverse assumption changes • Make recommendations for changes in existing ordinances, resolutions and policies necessary to finance the anticipated capital improvements • Build the Integrated Financial Planning Model based in Microsoft Excel for Part III. The model will include future years and prior years as determined by the County. We would model all the major funds of the County including, but limited to the following: • General Fund on a major category basis for revenues and all departments • Other operating funds on a major category basis including: − Funds using an income statement format with a cash reconciliation for each year modeled on a major category basis − User charges and fees will be projected based on the projection of the income statement − Capital Projects Funds − All existing Debt Service Funds will be modeled as part of the County’s operating funds (i.e., general debt in the General Fund and debt in the Enterprise Fund, etc.) • Other components to be included: − Property tax base projections (market value and tax capacity) for residential, commercial, agricultural, and other land uses. Residential land uses will include single-family, townhouse and apartments. Commercial/industrial land uses will include retail, office and manufacturing. − Property tax rate projections (both operating and debt service) − Projected real property tax tool that will project the real property taxes paid by a residential property with a user-input assessed valuation − Projection of permit revenues receipted into any of the modeled funds − Population and housing unit projections − Projected changes in personnel in General Fund departments − Projected capital improvements for all funds − Projected new debt to be repaid from any of the modeled funds Goodhue County, MN. Proposal to Provide Review Fiscal Policies, Establish a Capital Planning Process and Provide a Management Tool for Financial Planning
    • Process 6 − Projected special assessments to be receipted into any of the modeled funds − Impact of the projections on the recommended fiscal policies that have quantitative measures (i.e., net debt/capita, etc.) − Integrated graphics to visually show the projected financial impacts Task VI – Prepare and Present Draft Report with Recommendations • Prepare a draft report containing our preliminary findings, recommended fiscal policies, recommended capital improvement planning processes and policies and suggested implementation plans for Parts I and II. • Review the draft report with the administration and/or Committee of the Whole, as appropriate • Modify or change the study incorporating the County’s comments into the final document • Present and Review Preliminary Model (Part III) • Springsted will meet with County staff in a workshop session to present and to review the initial Integrated Financial Planning Model • Following a discussion and review of the model, Springsted will modify or change the model, incorporating the County’s comments into the final model, as requested Task VII – Final Report and Presentation • Prepare a final report for Parts I and II incorporating County feedback as appropriate. • Present the final report to the County Board • Present and Review Final Model (Part III) • Springsted will meet with County staff in a workshop session to present the final model and to provide training in its use. Springsted’s training package will include: 1. On-site training by Springsted personnel for key County staff to become proficient in the operation of the model 2. A written training manual provided by Springsted 3. Toll-free phone inquiry service during normal business hours with response by Springsted staff to the County within two hours of an initial inquiry and repairs or corrections within two business days of initial notification 4. Instruction manual for the operation of the model both printed and inserted into the model Goodhue County, MN. Proposal to Provide Review Fiscal Policies, Establish a Capital Planning Process and Provide a Management Tool for Financial Planning
    • Work Products 7 3. Work Products Fifteen copies of the final report regarding policies and capital planning including recommendations on: • Revising fiscal policies as necessary to enhance fiscal accountability; and • Recommendations to implement the above policies • Recommendations on the status of the County in relationship to required financial reporting standards • Recommendations on a capital planning process including how to establish a threshold on minimum cost and useful life for projects and a process to provide objective and consistent review of projects along with possible funding sources • One Financial Model, custom-built to meet your unique needs as described in this work plan • The model will provide the County with a number of other important features that will allow the Commissioners and staff to take a more proactive approach in planning for the future of the County and managing a wide variety of factors as they impact the County’s budget. We are confident, given our knowledge of the County, that we will meet and exceed the County’s expectations concerning development of your model Goodhue County, MN. Proposal to Provide Review Fiscal Policies, Establish a Capital Planning Process and Provide a Management Tool for Financial Planning
    • Assigned Staff 8 4. Assigned Staff Staff assigned to this project are as follows: Project Manager: Bob Thistle, Executive Vice President Carolyn Holmsten, Vice President Patty Kettles, Assistant Vice President Goodhue County, MN. Proposal to Provide Review Fiscal Policies, Establish a Capital Planning Process and Provide a Management Tool for Financial Planning
    • Expectations 9 5. Expectations To facilitate this engagement, Springsted requests that the County identify an individual who will be responsible for setting up interviews and reserving meeting rooms that can be used by the consultants to conduct interviews or perform other work on this project. Goodhue County, MN. Proposal to Provide Review Fiscal Policies, Establish a Capital Planning Process and Provide a Management Tool for Financial Planning
    • Timeline 10 6. Timeline Springsted is prepared to initiate work on the project within days after acceptance of the work plan with completion of the Policy Analysis and Capital Planning Process in May 2005 and complete the planning model work by July 31,2005. In providing a timetable for this project, it should be noted that there are factors beyond the consultant’s control that can have an impact on our ability to meet the project schedule. The proposed time frame is contingent upon a timely decision by the County to retain Springsted to conduct this study and on the timely receipt of data and feedback throughout the study as outlined in this work plan. Goodhue County, MN. Proposal to Provide Review Fiscal Policies, Establish a Capital Planning Process and Provide a Management Tool for Financial Planning
    • Compensation 11 7. Compensation The lump sum professional fee to conduct the scope of services outlined in the Work Plan is $37,830 exclusive of any out-of-pocket expenses. Out-of-pocket expenses include, but are not limited to, travel and sustenance, overnight or messenger deliveries, conference calling beyond our internal capabilities, photocopying and mailing. The lump sum professional fee includes five on-site meetings. As we proceed with the study and through discussion it is mutually agreed some components be deleted, thus the scope of the study reduced, there will be a related reduction in fees. Should the County request and authorize additional work outside the scope of services described in this work plan, or additional revisions beyond those agreed upon at the discussion and review of the draft report and preliminary model, we would invoice the County at our standard hourly fees. Springsted Incorporated’s hourly rates are shown in the table below. Hourly Fee Schedule Title Rate Principal & Senior Officer $195 Officer & Project Manager $165 Senior Associate $140 Associate $125 Support Staff $ 50 Goodhue County, MN. Proposal to Provide Review Fiscal Policies, Establish a Capital Planning Process and Provide a Management Tool for Financial Planning
    • Acceptance 12 8. Acceptance The scope of services and terms defined by this proposal are acceptable to the parties as signified below: For Goodhue County, Minnesota: For Springsted Incorporated: ______________________________ _________________________ Name and Title Name and Title ______________________________ _________________________ Signature Signature Date__________________________ Date ______________________ Goodhue County, MN. Proposal to Provide Review Fiscal Policies, Establish a Capital Planning Process and Provide a Management Tool for Financial Planning