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Res 1869 11/4/1976RESOLUTION NO. 1869 RESOLUTION APPROVING AGREEMENT WITH MANAGEMENT ANALYSIS CENTER, INC. FOR CONSULTING SERVICES TO IMPLEMENT ZERO BASE BUDGETING. BE IT RESOLVED BY THE BOARD OF ALDERMEN OF THE CITY OF WICHITA FALLS , TEXAS, THAT: That certain agreement, a copy of which is attached hereto, between the City of Wichita Falls and Management Analysis Center, Inc. , providing for consulting services necessary to implement zero base budgeting, is hereby approved, and the City Manager is authorized to execute the same for the City of Wichita Falls. PASSED AND APPROVED this the 4th day of November, 1976. A Y O R ATTEST: City Clerk STATE OF TEXAS X KNOW ALL MEN BY THESE PRESENTS : COUNTY OF WICHITA X This agreement made and entered into this the day of 1976, by and between the City of Wichita Falls, Texas, a municipal corporation, herein- after called City, and Management Analysis Center, Inc. , hereinafter referred to as MAC, WITNESSETH: FOR AND IN CONSIDERATION of the mutual covenants herein contained, -City and MAC agree as follows: I . MAC shall perform the services as specified in Exhibit A, the 'Formal Work Statement of Design and Assistance in Implementation of a Zero-Base Budgeting Process for the City of Wichita Falls, which is incor- porated herein. MAC shall serve as consultant to City for the purpose of analyzing and evaluating the current management systems and budgeting procedures of the various departments of City in a budget management audit phase which will be referred to as "Phase I" ; pre- paration for City of draft budget instruction incorpor- ating a detailed design for the implementation of Zero- Base Budgeting for City, hereinafter referred to as Phase II" ; and, furnishing a training program for all City personnel to be involved in Zero-Base Budgeting, pro- viding direct assistance to each decision unit manager in analyzing his program, defining and outlining meaning- ful levels of service, identifying measures of service quality and quantity appropriate for Zero-Base Budgeting, and, as necessary, consulting with analysts from the City Manager's Office to aid in insuring timely and accurate submission of forms documenting the results of the planning process, hereinafter called "Phase III . " II . MAC shall begin implementation of "Phase I" of this agreement upon the date of execution of this agreement and shall complete "Phase III" of this agreement by not later than September 30, 1977 . III. The Director of Budget and Research of City will be the liasion to whom MAC will direct reports and by whom approval shall be given. Further, the Director of Budget and Research and/or his staff shall assist in identifying relevant documents for review and in setting up interviews between MAC and City personnel. IV. Upon satisfactory completion of "Phase I" under this agreement, MAC shall be paid for hours billed and actually worked, which in no case shall exceed the maximum amount of ten thousand two hundred dollars ($10, 200. 00) . Upon satisfactory completion of "Phase II" MAC shall submit bills to City and shall be paid for hours actually worked but in no case shall the total cost to City of"Phase II" exceed the maximum amount of eight thousand five hundred dollars ($8 ,500. 00) . Upon satisfactory completion of Phase III" , MAC shall bill City for hours actually worked in completing said phase and City shall pay this amount but in no case shall the total cost of completion of Phase III" exceed the maximum amount of sixteen thousand dollars ($16, 000. 00) . The total amount to be paid by City to MAC for satisfactory completion of "Phases I , II and III" shall not exceed the total contract figure of thirty-four thousand seven hundred dollars ($34,700 .00) . 2 - i V. All projects, documents, data,P J plans, programs and other work products resulting from the implementation of MAC 's Zero-Base budgeting procedures for City under this agreement shall become the exclusive property of City upon payment therefor to MAC by City. MAC shall have no right to such projects, plans, data, programs, or work products which are the output of City personnel. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be signed and dated the day and year first above stated. City of Wichita Falls, Texas BY: Gerald G. Fox, City Manager ATTEST: City Clerk Management Analysis Center, Inc. BY: 3 - EXHIBIT "A" Formal Work Statement Design and Assistance in Implementation of a Zero-Base Budget Process for Wichita Falls Design Specifications - Budget Management Audit 1. MAC will survey existing budget and management systems which include but are not necessarily limited to: o Management accounts structure o The current budget process o Operations analysis review o Monthly progress reporting o Financial reporting system o Definition of goals and objectives being developed a. This will involve identification and intensive review of documents describing the budget/management systems or productes generated by them. b. Selected interviews will be conducted of personnel responsible for various aspects of design, coordination, operation or use of systems. These may include personnel in the City Manager's office, department heads and/or their staff. 2. MAC will evil_uate the existing management systems: a. Evaluation criteria will be developed in agreement with the Director of Budget and Research. b. Evaluation and in-depth analysis will be under taken of the budget/manage- ment systems. c. MAC will prepare a brief written report summarizing findings from investigations, evaluating systems, and recommending how to best mesh them with ZBB efforts. 2- 3. MAC will prepare a brief written report recommending the approach to zero-base budgeting including: o Detailed project plan and schedule for the rest of the ZBB process. o Information to be collected in budget submissions. o General responsibilities of MAC and Wichita Falls personnel. o Approach to defining budget units. 4. An oral briefing will be made to management to summarize the evaluation and analysis of budget management systems and the recommended approach to ZBB. The outcome of this meeting and suggested modifications should be approved by Wichita Falls to proceed to detailed design. II. Detailed Design 1. MAC will interview each department head and/or designee to review the organization and program of each department, review his existing budget process'and individual management systems, and to guage the capacity of managers to describe and analyze their operations. 2. As necessary, follow-up interviews or discussions will be conducted with the City Manager's staff. 3. MAC will prepare and submit to Wichita Falls draft budget instructions which will include: o Identification of decision units and decision unit managers o Forms to be used o General procedures for analysis o Specific ZBB timetables o Specific roles and responsibilities 4. Following detailed discussion of the draft, agreed modifications will be incorporated into a final draft to be submitted to the City of Wichita Falls. Final preparation of the document and the production of the camera ready copies for printing and dissemination will be provided by the City of Wichita Falls. i . 3- III. Training and Technical Assistance 1. MAC will prepare and conduct a training program for all City personnel to be involved in zero-base analysis, planning, and ranking. We assume that I two sessions will have to be held so that no more than 30 individuals will be involved in each. f 2. MAC will directly assist each decision unit manager to analyze his program, to define and outline meaningful levels of service, and to identify measures of service quality and quantity appropriate to zero-base budgeting. 3. As necessary, MAC will consult with the Director of Budget & Research who will take responsibility for insuring timely and accurate submission of forms documenting the results of the planning process. 4. MAC will develop checklists for review of submissions, and recommend alternate approaches to ranking (or the review of ranking) by the Manager and Board of Aldermen. IV. Other Considerations 1.' MAC assumes that the Director of Research and Budget will be the City' Official to whom reports will be directed and approvals given and that he and/or his staff will assist in identifying relevant documents for review and in gaining access to City Officials for interviews. 2. MAC's work predicated on the desire of Wichita Falls to build the internal capacity to operate and modify ZBB in the future. Accordingly we assume that at least 3 individuals will be working with MAC staff during the early stages of implementation up to one-half time. They will be responsible for coordinating completion of implementation, e.g. insuring the correctness and timeliness of budget submissions and for their technical review and program policy analysis after submission. SCHEDULE AND COST Design Specifications - $udget Management Audit Commence: Approximately November 15, 1976 Complete: About January 21, 1977 Cost: $10,200 U. Detailed Design Commence: Date to be determined in Phase I but not before,completion of that Phase. Complete: Four to eight weeks following commencement Cost: $8,500 III. Training and Technical Assistance Commence: Date to be determined in Phase I but not before completion of Phase II. Complete: o Direct technical assistance six to eight weeks after commencement. o Consultation with City analysts four to six weeks later. o Checklists and alternate approaches to ranking and review two weeks later. Cost: $16,000 As is MAC's standard practice the cost figures are upper limits and the City will be billed only for hours actually worked.