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Fixed Asset Original Proposal - .. . J8 MAXIMUS@ HELPING GOVERNMENT SERVE THE PEOPLE~ August 29,2002 Mr. Rod Franz Director of Finance City of Salina 300 West Ash Street Salina,KS 67402 Dear Mr. Franz: Thank you for considering our firm for the City of Salina's infrastructure and capital asset valuation project. We are pleased to provide the enclosed proposal for the appraisal of the City's property records in order to assist the City with insurance requirements and in future compliance with GASB Statement 34. MAXIMUS' Asset Management Services Group (formerly Valuation Resource Management) has served more governmental clients in the last ten years than any other appraisal firm - evidence that our unique focus on the public sector is what our clients appreciate and require. Our staff has taken the lead nationally in assisting Phase I and early implementing entities with the development of their beginning balances for capital asset reporting. We possess a proven knowledge of the new reporting requirements and how important capital asset totals are in complying with this new Statement. We also possess an established history of providing accurate valuation conclusions for thousands of similar governmental entities. We feel this unparalleled experience qualifies our firm to be THE solution for any unit of government. Our proposal is based on our discussions to this point, the information you have provided relative to your infrastructure assets and MAXIM US' unparalleled experience in assisting similar clients with their property valuation requirements. This proposal can be executed as an agreement simply by signing the enclosed Authorization page. Should you have any questions or comments regarding our proposed service, please feel free to contact me directly. I can be reached at either 888-778-8250, ext. 20 or adambeckum@maximus.com. Respectfully submitted, MAXIM US ,I () Þ /"" -/:/~. /~.. . . ----- Adam Beckum District Manager 13601 PRESTON ROAD. SUITE 20lE. DALLAS, TX 75240-4915.888.778.8250.972.702.6400. FAX 972.702.6420 . PROPOSAL FOR INFRASTRUCTURE & CAPITAL ASSET VALUATION SERVICES FOR: ,. . ~, ',' , saLina -KANSAS- . August 29, 2002 PREPARED BY: MAXIMUS, Inc. 13601 Preston Road Suite 201E Dallas, TX 75240 (888) 778-8250 Adam Beckum District Manager . MAXIMUS . TABLE OF CONTENTS Page I. Purpose of the Engagement 1 II. Qualifications A. Firm 2 B. Staff 3 III. Scope - Capital Asset Valuation 7 IV. Methodology - Costing & Valuation 8 V. Asset Inventory & Identification Procedures 9 VI. Database & Reports 13 VII. Timing 13 VIII. Perpetuation Options 14 . IX. General Information 17 X. Summary 18 XI. Authorization 20 EXHIBITS Exhibit A - Professional Qualifications . MAXIMUS . . . PROPOSAL FOR INFRASTRUCTURE&. CAPITAL ASSET INVENTORY, COSTING&. VALUATION FOR THE CITY OF SALINA MAXIMUS hereby proposes to provide professional valuation consulting services for the City of Salina (hereafter, the City). The purpose, scope, procedures, output, timing and fees are set forth as follows: I. PURPOSE OF THE ENGAGEMENT We have a clear understanding of the issues facing the City related to infrastructure and capital asset reporting and valuation. The purpose of this turnkey service is to provide the City with a completely updated and comprehensive infrastructure asset appraisal to meet the following primary objectives: INSURANCE: Provide the City with current certified insurable values of all appraised assets for insurance placement and documentation, proper rating, proof of loss substantiation, and a system for perpetuation of the conclusions. FINANCIAL REPORTING: Prepare a property accounting system that will assist the City in fulfilling current fiscal reporting requirements for compliance with Generally Accepted Accounting Principles (GMP) and GASB Statement 34; eliminate any audit concerns related to capital asset reporting; assist the City in obtaining GFOA's certificate of Achievement for Excellence in Financial Reporting; and provide the guidance necessary to comply with the new capital asset reporting changes as pronounced by GASB Statement 34. ASSET MAINTENANCE AND MANAGEMENT: Meet internal requirements for accountability, security custodianship as well as assist in enhanced utilization and maintenance of capital assets. Prepare the infrastructure assets in a logical format to produce multiple uses of that and other capital asset data. - 1 - MAXIMUS . . . II. OUALIFICA TIONS A. firm Qual,fications MAXIMUS is a 26-year old management consulting firm specializing in the provision of services to government clients. Our Dunn & Bradstreet rating is 4A2, we have been profitable for twenty-six straight years, and have been internationally recognized in publications like Forbes (1999 & 2001 issues), and Business Week. MAXIMUS is a public company and is traded on the New York Stock Exchange under the trading symbol, MMS. Our Federal ID is 54-1000588. For more information on the MAXIMUS organization, please visit our website at www.maximus.com. MAXIM US, Inc. is a large, national company. In fact, the investment firm of Donaldson, Lufkin & Jenrette reported recently that we are the largest general management consulting firm serving the non-defense public sector market. It is important that you understand our public sector focus, as exemplified by our motto, "Helping Government Serve the People.TMtt Virtually all of our professional services are delivered to public agencies, which gives us a different understanding of your environment than you would find at a firm with a private sector clientele. For the fourth year in a row, MAXIM US has been named as one of Business Week's Top 100 Hot Growth Companies. We are pleased to be one of only two firms who've made this impressive list four consecutive years. Forbes Magazine selected MAXIMUS as one of the ten Best Small Companies in their November 1999 & 2001 issue. Our firm is composed of many different units, giving us the ability to offer a wide array of professional services on short notice. We are the largest consulting firm to the non-federal governmental market. We employ approximately 5,400 people and enjoyed fiscal year 2001 revenue of approximately $500 million. MAXIMUS operates through 2 principal Strategic Management Units. Further information about our services is available on the Internet at http://www.maxinc.com. MAXIM US' Asset Management Services Group will coordinate this project. MAXIM US has unparalleled experience with the implementation of capital asset management systems for governmental clients. Within the last eleven years, our firm has assisted over 5,000 individual public sector clients with their property inventory and appraisal needs. - 2 - MAXIMUS . B. Staff Oualifications MAXIMUS possess the industry's largest and most talented team of individuals specializing in these unique projects for governmental clients, and were represented by Mr. Pete Rose, CPA on the GASB Task Force during the development of Statement No. 34. MAXIMUS' staff consists largely of full time staff appraisers and technical and financial consultants with extensive experience in the execution of asset management projects for public sector and municipal governments. We do not cut corners by using temporary personnel. This project would be staffed with a sufficient number of project managers and staff appraisers to ensure that any project completion deadlines are met. Our appraisal staff is comprised of consultants possessing backgrounds in architecture, engineering and construction estimating, accounting, real estate, finance and business management. Members of our staff maintain affiliations with various professional associations including the American Society of Appraisers (ASA), the American Institute of Certified Public Accountants (AICPA), the American Board of Forensic Accounting, (ABFA), the National Association of Certified Valuation Analysts (NACVA) and the Society of Depreciation Professionals (SDP). We are associated with the American Society of Appraisers, one of the most widely noted appraisal and valuation societies in North America, and select personnel have obtained the senior designation, ASA, the highest designation within the appraisal discipline. . Depending on the exact project timing, MAXIM US' Principal/Supervisory staff (followed by a sample of recent GASB 34 projects) will be comprised of the following individuals: . 0 Jeff Lank, Regional Manager a Missouri City, TX a EI Cerrito City, CA a Madison County, NY a Henrico County, VA a District of Columbia 0 Adam Beckum, District Sales Manager a City of Franklin, VA a Cook County Forest Preserve District, IL a City of Detroit, MI 0 Suffolk County Community College, NY 0 St. Louis Public Schools, MO 0 Peter M. Teigen, CPA, Vice-President a City of Minneapolis, MN a Henrico County, VA 0 Placer County, CA 0 State of MI - Unemployment Agency 0 Chad Ryles, Senior Appraiser - 3- Project Manager Technical Consultant Technical Consultant Appraiser MAXIM US . 0 Galveston County, TX 0 Dallas Independent School District, TX 0 District of Columbia 0 Georgia Interlocal Risk Management Agency ** Professional profiles of these individuals is included in Addenda. C.REFERENCES City of Akron, OH MAXIM US' Asset Management Services practice (formerly VRM) recently completed a comprehensive inventory and valuation of the City of Akron's general infrastructure assets to assist them in satisfying this portion of the new GASB 34 reporting requirements. The City's process of procurement began with firm interviews to determine who was best qualified to perform these critical services in a timely manner and in conformity with their external auditor's (D& T) specific requirements. "The Project Team, led by Bill Jaeger, met with the Audit and Budget staff to get a feel for what the project would entail and which City employees might be able to provide the information," says John Wheeler, the City's Project Manager. . Infrastructure assets comprise the overwhelming majority of most local governments' capital asset totals. Thus, the impact they have on the entity's new Financial Statements is significant. The MAXIM US team understands the importance of developing records that will be comprehensive enough to pass audit, yet easy enough to update for the client's Accounting and Engineering staffs. This project included the following: v" Roads v" Bridges v" Street Lighting v" Traffic Control Signals v" Storm Sewer Systems Total project time frame was less than 60 days from start to finish, including transfer of their completed database for internal perpetuation. "The VRM Team was cited as being very thorough, competent and easy to work with. The report we received from VRM provided more information than we expected, in an easy to use format and in a timely manner," reports Mr. Wheeler. To sum it aU up, he adds, "All in all, having VRM conduct the infrastructure appraisal was a very good experience and their thoroughness and professionalism are commendable!" . The City has recently extended our firm's contract to assist in developing historic cost information for all R-O-W associated with the infrastructure assets. -4- MAXIMUS . . . Contact Information: Mr. John Wheeler, Director of Audit&. Budget, 330.375.2481 Lancaster County, NE MAXIM US recently completed a comprehensive engagement for Lancaster County to provide valuation and GASB 34 consulting services. This project included: ~ Building Appraisal - Insurance ~ Bar Code Tagging and Valuation of Equipment ~ Insfrastructure ~ Land Research ~ FACT/PLUS Implementation Contact Information: Tim Genuchi, Accounting Manager, 402.441.7470 City of Council Bluffs, IA Our firm has been assisting the City with ongoing capital asset valuation needs for the last four years, beginning with an initial appraisal project in 1998. Since the original work, our staff has assisted with on-site updates, subsequent land research and valuation work, and we are currently proposing a General Infrastructure project to assist with full GASB 34 compliance. Our ongoing work has included: ~ Land Research & Valuation ~ Buildings & Improvements ~ Bar Code Tagging and Valuation of Equipment ~ Inventory & Valuation of all Utility Infrastructure ~ Wastewater Collection Contact Information: Ms. Janet Obrecht, City Auditor, 712.328.4605 City of Arlington, TX MAXIMUS completed a comprehensive engagement for the City of Arlington to provide current insurable values for all of the City's structures. This project included: ~ Building Appraisals ~ Annual updates for new structures ~ Detailed reports with digital photographs for each structure - 5- MAXIMUS . Contact Information: Mr. Allen Cass, Risk Manager, Ph: 817.459.6310 City of St. Charles, IL MAXIM US originally assisted the City with a comprehensive capital asset inventory and valuation project in 1995 to establish accurate capital asset totals. The project included the following: ~ Buildings & Improvements ~ Bar Code Tagging and Valuation of Equipment ~ Inventory & Valuation of all Utility Infrastructure ~ Water Distribution ~ Wastewater Collection ~ Electric Distribution );> Implementation of FACTS/plus software . Since our initial appraisal, our staff has provided ongoing support and supplemental software training to assist in the ongoing capital asset maintenance process. Contact Information: Ms. Pam Colby, Finance Director, 630.377.4478 MAXIM US' unparalleled GASB 34 project experience is summarized with these recently completed or ongoing projects: . City of Missouri City . City of Chattanooga, TN . City of Detroit, MI . City of Galveston, TX . City of Miami, FL . City of Minneapolis, MN . City of Taylor, MI . City of Syracuse, NY . City of Warren, MI . New Mexico County Insurance Authority . Georgia Interlocal Risk Management Agency . State of MI - Unemployment Agency . State of TX - Auditors Office . District of Columbia . - 6 - MAXIMUS . . Anoka County, MN . Galveston County, TX . Cook County, IL . Dade County, FL . Grand Traverse County, MI . Henrico County (Richmond), VA . Oneida County, NY . Orange County, CA . Placer County, CA . Riverside County, CA . Suffolk County, NY . Waupaca County, WI . Anoka-Hennepin Schools, MN . Dallas lSD, TX . Denver Public Schools, CO . Detroit Public Schools . Lansing Public Schools, Ml . St. Louis Public Schools, MO Dozens of other Phase I & Phase II Educational and Governmental Entities... . III. SCOPE - CAPITAL ASSET VALUATION PROPERTY TO BE INCLUDED The asset inventory and appraisal will include the following capital assets owned by the City (based on the options selected by the City): . Buildings and structures . Infrastructure . Licensed Vehicles . Furniture, machinery&. equipment . Land improvements . Land (Easement&. R-O-W research optional) . Insurance Appraisals for all Buildings (optional) PROPERTY TO BE EXCLUDED Property to be excluded from our appraisal will consist of antiques, records and drawings, consumable supplies and spare parts, inventory items and personal property of employees. . EXPECTATIONS OF CITY STAFF MAXIM US prides itself on truly managing our capital asset projects for clients. It is our view that clients retain our services with the expectation that, as a paid consultant, MAXIMUS will perform the necessary tasks to successfully complete our project. We - 7 - MAXIMUS . . . do, of course, view the City as an active participant and will anticipate your assistance with the following: . Pre-Project Planning - consisting of the identification of key department contacts and coordination of our project kickoff meeting. Transfer of Existing Infrastructure and Other Asset Records - MAXIMUS will utilize existing records, as provided by the City, to perform the asset inventory. We request that a copy of the most updated capital asset data be provided to us in advance of the project fieldwork. Additionally, our staff will request copies of last year's audited financials to assist in reviewing asset totals. While our firm is not proposing a line-by- line reconciliation, we will utilize existing records where available and possible to tie back more material and recently acquired assets. Whenever possible our staff will perform a tie back of original cost and acquisition dates for amore material and recently acquired assets, based on information the City provides. Infrastructure - Our staff will work cooperatively with the City to develop an accurate accounting and valuation of these assets, as further described in Section V. - ASSET INVENTORY & INDENTIFICATION PROCEDURES. IV. METHODOLOGY COSTING & VALUATION Our investigation of the property will follow generally accepted appraisal techniques and will include the use of specific techniques necessary to develop valid and acceptable original cost, date of acquisition and insurable value for each asset. We will determine original cost by using the following costing methods: The Direct Costing method will be used where historical data is readily available from City records. The actual purchase cost and acquisition date will be maintained for those assets. While MAXIM US is not proposing a detailed line-by-line reconciliation, our staff will work with records as provided by the City to tie back original cost and dates of acquisition on the more material and recent acquisitions. Standard Costing is used when inventoried property units/groups not reconciled to a historical record receive an estimated cost, where possible, based upon a standard cost (a known average installed cost for a like unit) at the estimated acquisition date. The Normal Costing method will be used where no historical information is readily available. These assets will be valued on a current basis and back-trended to an estimated date of acquisition to estimate the original cost. During the costing and valuation procedures, all items will be assigned a useful life. The useful life of an item will determine its approximate replacement year. - 8 - MAXIMUS . . . During the course of the inventory and the subsequent valuation research, our appraisers will examine all assets to determine: a) date of acquisition b) original cost, and c) cost of reproduction new, defined as follows: ORIGINAL COST is the amount originally paid to acquire the asset, including such cost as set-up charges; transportation; taxes; engineering and architectural fees; and title insurance. If an asset was donated or bought for a nominal sum, GMP requires that the asset be accounted for at market value as of the date of acquisition. COST OF REPRODUCTION NEW (CRN) is the amount required to reproduce property in like kind and materials, in accordance with current market prices for materials, labor and manufactured equipment, contractor's overhead, profit and fees, but with no provisions for overtime or bonuses for labor and premiums for materials. V. A SET INVENTORY &.IDENTIFICATION PROCEDURES PROJECT PLANNING Our project team will hold a comprehensive project-planning meeting with City representatives in conjunction with the start of the fieldwork. It is advisable that members of the administrative staff or other directly involved personnel attend this meeting. We also invite the City's auditors to participate in the meeting. Topics of discussion will include confirmation of project scope and time frames, clarification of assets to be verified, the fieldwork schedule, accessibility to records and contact people for each responsible department, and availability and use of original purchase records. Assignment of database code numbers and associated descriptions for locations and classification codes will also be discussed. This meeting will also lay the foundation for the methods and procedures to be used in perpetuating the records upon completion of the inventory and delivery of the reports. PROCEDURES All assets included in our inventory and appraisal will be recorded and categorized by major account. This segregation of items will assist in reporting asset valuation totals for capital asset reporting formats. The major categories are as follows: A. BUILDING/STRUCTURES The buildings/structures subject to our survey will be carefully inspected and measured. In-house professional appraisers will independently calculate the square footage of each building appraised either through the review of "as-built" blueprints or physically measuring each building. Segregated construction components and building features will be identified and valued. Building plans and photographs will be prepared for each structure to become part of our proof of loss documentation, in addition to assisting with the valuation efforts. -9- MAXIMUS . . . A description of each building will be developed and recorded, showing construction type, and materials used. Building improvements (i.e., additions, renovations) will be individually recorded. The building components listed below will be individually analyzed and valued, as applicable. BASIC CONSTRUCTION Excavation Foundation Frame Height/Number of Floors Roof Covering Exterior Walls Floor Basement BUILDING SERVICES Plumbing Fire Protection Heating, Ventilation & Air Conditioning Electrical & Lighting Burglar System Elevators INTERIOR CONSTRUCTION Floor Covering Ceiling Interior Partitions & Built-in Features Stairways Covered Walkways ATTACHED EXTERIOR CONSTRUCTION Stairways Emergency Lighting Covered Walkways Handicap Ramps In addition to the analysis of individual building components, construction classes will also be recorded. ISO classes 1-6, as defined in the Commercial Fire Rating Schedule (CFRS) are defined in terms of the Marshall and Swift construction classes as follows: ISO Class ISO Description M&S Class 1 Frame/Combustible D 2 Joisted Masonry C 3 Noncombustible S 4 Masonry Noncombustible C 5 Modified Fire Resistive A 6 Fire Resistive B During the office valuation portion of the engagement, property exclusions (those items not typically covered by an insurance policy) will be - 10- MAXIMUS . . . segregated to properly report the site preparation and excavation, footings and foundations, and a portion of plumbing costs (underground). B. IMPROVEMENTS OTHER THAN BUILDINGS Improvements outside of a building and particular to a parcel of land will be inventoried and valued by location. Included are assets such as parking lots, fencing, outside lighting and flagpoles. C. FURNITURE, MACHINERY AND EQUIPMENT A detailed inspection and field inventory will be conducted at all buildings. During the inventory, equipment items will be placed into one of the following categories: Capital Assets - Equipment and furniture items at the threShOld~) chosen by the City, and having an estimated useful life of more than one year will be inventoried and identified individually and capitalized in the resulting reports and data. Minor Equipment - Items that have an original unit cost of less'\ than the selected threshold will be excluded from the scope of thi~ ~j project. D. VEHICLES Licensed vehicles will be verified and updated in our appraisal based upon information provided by the City. Listings provided should include vehicle vehicles assignment, description, V.LN., acquisition date and cost, make, manufacturer and model, where available. MAXIM US will assume all licensed vehicles are scheduled separately for insurance purposes, and will include these assets only in the accounting sections of our reports. E. INFRASTRUCTURE All assets included in our inventory and appraisal will be recorded and categorized by major account. This segregation of items will assist in reporting asset valuation totals for capital asset reporting formats. The major categories are as follows: 1. Roads&. Alleys: Provide a detailed listing of owned roads and alleys in electronic format, when available. The detailed listing will include: . Road type (i.e., Primary access, Local access) . Material (i.e. paved, gravel) . Approximate in-service date - 11 - MAXIMUS . Available information on road characteristics such as divided/undivided, access roads, ramps, and renovation project details, etc. should be made available to MAXIM US staff. 2. Bridges: Provide MAXIMUS staff with a detailed listing of owned structures & culverts in electronic format, when available. The detailed listing should include: . Address/Location . DOT Category Type . Span in Feet . Date of Original Construction Additionally, information such as drawings, dates of construction, renovation project details, etc. should be made available to MAXIMUS staff, as available. 3. Traffic Signals: Provide a detailed listing of owned traffic signals in electronic format, when available. The detailed listing will include: . Signal Typee . Approximate in-service date . 4. Wastewater, Storm Water&. Sewerage Systems: Provide a detailed listing of the underground systems in electronic format, if available. The detailed listing will include: . Type of Pipe . Lineal footage . Size in inches (diameter) . In-service date (or age estimates) F. LAND Land will be recorded in our database of information and reports based on information provided by City personnel. Our staff will utilize existing records as provided by the City. The information supplied should include, but not necessarily be limited to location, description, acquisition date and cost, and source of funds. . Once a beginning inventory has been established, MAXIM US can perform additional land research, as requested (optional service). MAXIMUS will develop accurate estimates of acquisition dates and cost where that information is not readily available in City records. Our work for this portion of the engagement will include the research necessary to document/estimate cost for all deeded parcels of land. R-O-W and easement information will require additional research, in conjunction with our infrastructure inventory and valuation service. Our project team will explore this with you as the project evolves. A quotation for this additional work has been provided. - 12 - MAXIMUS . . . CLASSIFICATION OF ASSETS During the inventory and coding processes, MAXIMUS will classify each asset by distinct type or category. Assets will be assigned to various classifications, each with its own estimated normal life. This classification structure will enable the City to select off data for flexible reporting, as well as provide a benchmark for projecting replacement of capital equipment. Additionally this structure will provide the asset life schedule for calculation of depreciation for current reporting requirements (enterprise fund) and eventual compliance with GASB Statement 34 requirements (depreciation of all capital assets). The City's involvement in the establishment of these guidelines will be essential on the front end of our engagement. VI. DATABASE & REPORTS Database Structure The information to be contained in the computerized data base inventory will include at a minimum the following elements for each asset or group of assets: A. Location & Building B. DepartmentjProgram* C. Fund * D. Account (Asset Type) E. Asset Classification Code F. Asset Number G. Quantity H. Description I. Date of Acquisition (Actual or Estimated)J. Useful Life K. Original Cost (Actual or Estimated) L. Cost of Reproduction New M. Accumulated Depreciation N. Current Year Depreciation * Fund, Program & Department numbers are included with assistance of City personnel. Final Reports&. Deliverables The final reports will be presented in an easy-to-read format. Two copies of each report will be provided (additional copies can be provided, upon request, for a nominal charge). Detail as well as summary reports are included in the final product. A narrative section that will certify our appraisal and document our procedures will precede your reports. Your reports will include: . Accounting Summary Report Sorted by Program, Department . Accounting Detail Reports Sorted By Fund, Fund Type . Accounting Summary Report Sorted by Category (asset type) . Insurance Summary Report . Insurance Detail Report VII. TIMING MAXIM US' automated approaches and depth of experienced staff qualify us to complete all phases of this project within the desired time frame. Upon receipt of your - 13 - MAXIMUS . . . authorization MAXIMUS will arrange a mutually agreeable schedule the project planning meeting and our field investigation. Delivery of the final reports will be completed by within 60-90 days of project commencement, assuming we receive any required information from the County in a timely manner. It is our understanding that time is of the essence given the City's need to implement GASB 34 reporting requirements. We will work with the City to establish a mutually agreeable timetable once we have been given the notice to proceed. VIII. PERPETUATION OPTIONS ASSETMAXX Capital asset management system We are pleased to offer MAXIM US' proprietary capital asset management solution, ASSETMAXX. ASSETMAXX is a web-based program allowing users to securely maintain, collect, and retrieve data over the World Wide Web. In addition to its capital asset tracking capabilities, ASSETMAXX also allows for the tracking and updating of real property assets for insurance reporting and insurance placement purposes. ASSETMAXX is the most comprehensive and flexible asset management tool available in the capital asset and real property tracking industry. Because ASSETMAXX is a web-based solution, it provides users with significant advantages over traditional client-server or stand-alone software: . With ASSETMAXX, users access the application via the Internet. . ASSETMAXX can be accessed via an Internet dial-up account or via an organization's network connection (DSL, T-l, etc.) . Users "rent" the application and access it over the web, eliminating the internal need for costly hardware and time consuming maintenance. . Application and data are housed on MAXIMUS' hardware at the MAXIM US data center in Reston, VA. This ensures that the system is always optimally configured. ASSETMAXX encompasses all areas of capital asset and real property tracking and reporting. A few of its many features include: . Fast, Reliable and Easy Access to Data . Secure Server Location and Administration . Secure Authentication, Data Encryption and User Log for Accountability . Supports Unlimited Number of Users . Multiple Levels of Security and Access Permissions . GASB 34 Compliant Features and Reports . Fast and Easy Asset Entry . Both Standard and Ad Hoc Reporting Features . Supports Multiple Depreciation Methods . Supports Multiple Capitalization Levels . Tracks Maintenance and Repair Histories . Allows for Partial Disposals - 14 - MAXIMUS . . Multiple User Defined Fields (10 ea.) . Digital Photo Interface . Handheld Computer Interface (for inventories) . Data Import and Export Capabilities adding new assets and conducting re- . Easy asset entry, asset maintenance, and overall system navigation are the cornerstones of the ASSETMAXX design. All system features are quickly accessed from the main asset entry menu. ASSETMAXX has a general look and feel that users are accustomed to seeing when using a web site and can be viewed with both Microsoft Internet Explorer and Netscape Navigator. The ASSETMAXX pricing schedule is subscription based. Users pay a fixed monthly fee, which provides them with access to their database. The monthly fee includes: . 24 Hour access to ASSETMAXX; . All License and Maintenance Fees; . Unlimited Help Desk Support . Automated Trending of Insurable Values (Annually) . All System Maintenance (database administration, network maintenance, etc.) . A Pro-Rata Share of Data Center Costs (e.g., application and database servers, telecommunications charges, data center housing and security services, etc.) NOÆ' Subscriptions are available in twelve (12) month contracts. Early termination charges may apply. Rates are subject to a fixed five percent (5%) annual increase. . Privacy And Security ASSETMAXX is a secure web-based system. Although the system is centralized, each organization using the system has a unique database containing only their data. This eliminates any chance of data corruption or access by another customer of ASSETMAXX. All standard security protocols and procedures for web-based applications are used at the MAXIMUS data center. SSL encryption is in place for all password and username transmission. This prevents anyone who is "sniffing" the line from retrieving logon information that can be used to compromise the system. In addition, application security provides multiple layers of access. Users can be given any combination of permissions to access the system. A supervisor may limit one Property Control Officer to only viewing reports while another may only update assets. A third user may only be responsible for property transfers and replacement cost updates. ASSETMAXX provides the flexibility to customize access for each user. Supervisors have complete control over all areas of the application and can grant access as needed to individual users. Built-in email is used to notify system administrators and users of requests for access and changes in permissions. This automates the - 15 - MAXIMUS . . . registration and permissions process so the system administrator can focus on other tasks while maintaining an optimal level of security. The permissions (and any combination thereof) that are available in ASSETMAXX include Supervisor, Transfer (physical and financial), Post, Entry, View, Site, and Department. ASSETMAXX includes customized web page interfaces for each individual user based on their access level and permissions and allows for the customization of user roles and permissions. Help Desk Support Unlimited technical support is available to ASSETMAXX users. The fee for support is included in the fixed monthly subscription fee. MAXIM US' ASSETMAXX Help Desk is manned with experienced support staff, which ensures expedited and consistent responses to end user questions regarding application operation and maintenance. Help Desk support is available to all authorized users and is open from 8:00 AM through 5:00 PM CST, Monday through Friday, excluding state government holidays. The Help Desk is accessible by both telephone and e-mail. Any telephone calls received after posted business hours will be answered by an answering system with our Help Desk responding the next business day. MAXIMUS also has a web-based support system, which will be available to all ASSETMAXX subscribers. The application is called "Perfect Tracker" and it allows users to open tickets with our Help Desk regarding their ASSETMAXX questions or concerns. After a user opens a ticket, they will be able to track the progress of their ticket until it is resolved. All tickets get received by our Help Desk and then assigned to the appropriate Help Desk technician. The Perfect Tracker system also provides ASSETMAXX users with an ASSETMAXX message board and Frequently Asked Questions. Training End user training is available to all ASSETMAXX users. With MAXIM US' ASSETMAXX training, each user will be provided training on the software features that are specific to their job responsibilities. As appropriate, training sessions will cover the basics of system layout, setup, access, and security; data input, on-line review and verification, and editing; and ad hoc query and ad hoc and standard output report generation. Training on use of the handheld computers will also be provided during these sessions, as applicable. MAXIM US will provide all necessary training materials. We will also configure client workstations with associated networking and security information to ensure ASSETMAXX' smooth operation. We will test workstations for connectivity either to the MAXIM US data center for key performance parameters such as response time, using a test database established for this purpose. Our budget for this task assumes that a client IT professional will be available during this time to answer any network issues that may arise. We will work with your capital asset - 16 - MAXIMUS . . . manager to develop a comprehensive training schedule that minimizes disruption to day-to-day work activities. Handheld Computers MAXIM US also offers "Handheld Products Dolphin 7400" handheld computers that allow users to enter newly acquired assets remotely as well as conduct physical re- inventories. The Dolphin 7400 comes pre-programmed to interface directly with ASSETMAXX. Asset additions can be input directly into the Dolphin 7400 and subsequently uploaded into ASSETMAXX remotely. Additionally, users have the capability to download the entire database onto the Dolphin 7400 to conduct physical re-inventories. This allows users the capability of viewing assets in the location they were last found according to the system and subsequently automatically record any transfers. It also alerts the user of any assets that no longer are located in the site/building/room/department. The Dolphin 7400's specifications are as follows: . Windows CE version 3.0 . 240x320 Y4 VGA . Backlight . Touch Display . 206 MHz Intel Strong-Arm Processor . 16 MB RAM . 16MB ROM . 128 MB Compact Flash Card (makes total of 144 MB of flash ROM) . RS232 Port . IRDA Port . 2700 mAh NiMH Battery . LX Imager . 56 Key Full Alpha/Numeric Keyboard . 56 Key CE Overlay . 2 Year Warranty The Dolphin 7400 also comes with a HHP 7400 Homebase Cradle with Power Supply and a RS-232 Cable for downloading. IX. GENERAL INFORMATION The following conditions are considered standard practice in the performance of our appraisal services and, if applicable, are made a part of this proposal and contract. All available data and records deemed necessary in the search for costs and historical background should be provided to our appraisal staff. The City should identify all equipment not owned by the City in advance of the field inventory. A list of all assets on loan or off site for repair should be furnished to the appraisal staff. - 17 - MAXIMUS . . . MAXIMUS shall provide guidance to the City in determining the data required for purposes of executing the tasks of this agreement. The City agrees to provide all data requested, including documentation and information to MAXIM US in a timely manner. MAXIMUS shall assume without incurring liability therefore that all such data, documentation and information provided by the City is accurate and complete. In the event that the City provides additional and/or corrected data, documentation and information at a later date, MAXIM US' efforts with respect to such additional and/or corrected data, documentation and information shall be deemed additional services and compensated in addition to the fees set forth herein based on then applicable hourly professional fees and expenses. We will maintain copies of the final reports, together with all field notes and working papers in our files for a period of five years from the date of the appraisal. Should the need arise, these documents will be made available to City. MAXIMUS will render advisory service at no charge to the City or its auditors regarding the procedures and methods used in the appraisal process and the resulting values of the assets appraised. The attached fee schedule includes any and all expenses incurred by MAXIMUS in preparation and completion of the inventory, appraisal and reports. Our fees are guaranteed for a period of ninety (90) days from the date of this offer, until executed. MAXIMUS will invoice the City for professional services rendered during the progress of our work. Progress invoices, up to 90 % of the total fee, will be issued as our work is completed and the balance, 10%, will be invoiced with delivery of the final report. All invoices are due within 30 days of receipt. We have relied upon certain property data provided by the City in developing our fee estimate. Additional scope or corrections to the listing of properties provided to MAXIMUS necessitating a significant increase in professional time, will be charged at our standard per diem rates, plus expenses, and billed in addition to the agreed upon fee. Fee quotations for inclusion of additional properties or change in scope will be provided upon request. x. SUMMARY The MAXIMUS proposal for infrastructure valuation service is designed to accomplish the following: . Establish an accurate, reliable property record with independent third-party values; . Establish realistic & customized asset lives and classifications for depreciation calculations; - 18 - MAXIMUS . . 8 . Provide celtified reports which will satisfy both insurance and financial repolting requirements for GASB 34; . Perform all necessary tasks in a timely manner so as to implement a comprehensive capital asset management system with the highest level of confidence in its validity. We look forward to working with you and the City of Salina on this important project and assure you our service will be as desired and expected. Should you have any questions regarding this agreement, please contact me at 888-778-8250 ext. 20 or at adambeckum@maximus. - 19 - MAXIMUS . . 8 AUTHORIZATION Please note the services you desire by placing a check mark in the space provided. The City's TOTAL fixed fee investment, including out-of-pocket expenses, is as follows: Base Building Appraisal - Insurance Only $ 16,800 Capital Asset Inventory&. Valuation - Including Buildings (insurance & accounting), Improvements and Equipment. $250 Threshold $ 44,550 t~ \ /' $ 36,450 $ 23,625 $ 20,250 $125 per 1,000 $ 13,800 $ 8,000 ;') . P} t,S-v L , $1,000 Threshold $5,000 Threshold $10,000 Threshold Bar Code Tags Infrastructure Land (With Easement&. R.O.W.) Option Perpetuation Options ASSETMAXX Software (per user) Hand Held Dolphin Unit K Onsite Training $75 per month )/ 2,500 1,900 300 $ $ $ Data Disk (ASCII, Excel, or Access) MAXIMUS will invoice you for professional services rendered during the progress of our work. Progress invoices, up to 90 % of the total fee, will be issued as our work is performed and the balance, 10% will be invoiced with delivery of the final report. All invoices are due within 30 days of receipt. ACCEPTED: CITY OF SALINA Name: Title: Date: OFFERED BY: MAXIM US, Inc. Phone: (888)778-8250 /1L &: Adam Beckum, District Manager August 29,2002 - 20- MAXIMUS . EXHIBIT A PROFESSIONAL PROFILES . . MAXIMUS . . . Professional Profile of Jeff Lank Page 1 of 2 Jeff Lank Regional Manager Professional Qualifications Mr. Lank is a Regional Manager with MAXIMUS, Inc. His tenure at MAXIMUS, Inc. has included the planning, management, and execution of numerous capital asset cost accounting studies and property appraisal projects for municipalities, county governments, and other public sector entities. Mr. Lank possesses significant technical expertise in the procedures and methodologies used to value machinery & equipment, buildings & building services, infrastructure, land improvements, and land parcels. He possesses a practical knowledge and understanding of Generally Accepted Accounting Principles (GAAP); Government Accounting, Auditing, and Financial Reporting (GAAFR); Governmental Accounting Standards Board Statement 34 (GASB 34); and various other audit concerns related to capital asset reporting. Mr. Lank is also experienced in providing insurance placement and proof-of- loss information to our clients to assist in addressing their insurance reporting needs. Mr. Lank has served MAXIMUS, Inc. clients throughout the United States on projects of varying scope and complexity. He possesses the experience and skills necessary to provide the high quality service that our clients expect. Mr. Lank has managed numerous large and complex projects including: Madison County - Madison. NY The scope of this project involved the inventory and valuation of the County's infrastructure, machinery & equipment, monuments & statues and buildings in order to bring the County into compliance with GASB-34 reporting requirements. City of Missouri City - Missouri City. TX The project scope involved the inventory and valuation of the City's infrastructure, machinery & equipment, and buildings in order to bring the City into compliance with GASB-34 reporting requirements. MAXIMUS . . . Professional Profile of Jeff Lank Page 2 of2 Savannah Airport Commission - Savannah. GA The purpose of this project was to provide comprehensive property appraisal services to the Savannah Airport Commission. This involved the appraisal of certain property to determine replacement cost. The value of the contents of each building was provided using the modeling of contents method. Results of the appraisal were used for insurance replacement and proof-of-Ioss substantioation. Project Experience ~ New Hanover County - Wilmington, NC ~ Henrico County - Richmond, V A ~ District of Columbia, Washington D.C. ~ Athens-Clarke County - Athens, GA ~ Walton County Water and Sewer District Authority - Monroe, GA ~ Association of County Commissioners of Georgia (ACCG) ~ Georgia lnterlocal Risk Management Agency (GIRMA) ~ Virginia Municipal League (VML) Educational Background Georgia Southern University Bachelor of Arts - Liberal Arts MAXIMUS . . . Professional Profile of Adam Beckum Page 1 of 2 Adam Beckum District Manager Professional Qualifications Mr. Beckum is a District Manager with MAXIMUS, Inc. and has been serving our clients since 1999. He is responsible for the business development and contract management in the South Central Region. He previously served as the Regional Manager for the Central Region before taking over as the District Sales Manager. Those responsibilities included the training and development of appraisal staff, staff scheduling, project planning, report review, quality control, and the development of technical execution guidelines. His tenure at MAXIMUS, Inc. has included the planning, management, and execution of numerous capital asset cost accounting studies and property appraisal projects for municipalities, county governments, and other public sector entities. Mr. Beckum possesses significant technical expertise in the procedures and methodologies used to value machinery & equipment, buildings & building services, infrastructure, land improvements, and land parcels. He possesses a practical knowledge and understanding of Generally Accepted Accounting Principles (GAAP); Government Accounting, Auditing, and Financial Reporting (GAAFR); Governmental Accounting Standards Board Statement 34 (GASB 34); and various other audit concerns related to capital asset reporting. Mr. Beckum is also experienced in providing insurance placement and proof-of-Ioss infonnation to our clients to assist in addressing their insurance reporting needs. Mr. Beckum has managed numerous large and complex projects including: Georgia Municipal Association - Georgia Interlocal Risk Management Agency (GIRMA) The purpose of this project was to provide comprehensive property appraisal services to the over 200 city members of the Georgia Municipal Association. This involved the appraisal of approximately 5000 buildings to detennine a replacement cost. The value of the contents of each building was provided using the modeling of contents method. Results of the appraisal were used for insurance replacement and proof-of-Ioss substantiation. MAXIMUS . . . Professional Profile of Adam Beckum Page 2 of2 Orange County - Santa Ana. CA The scope of this project involved the inventory and valuation of the County's infrastructure, buildings, and park facilities in order to bring the County into compliance with GASB-34 reporting requirements. City of Franklin - Franklin. V A The project scope included the inventory and valuation of the City's infrastructure, buildings, and park facilities in order to bring the City in to compliance with GASB-34 reporting requirements. The conclusions were used for accounting, insurance replacement cost and proof of loss substantiation. Additional Project Experience Þ- City of Detroit, Detroit, MI Þ- Cook County Forest Preserve District, Chicago, IL Þ- Hamilton County - Chattanooga, TN Þ- Washington D.C. - District of Columbia Þ- Monroe County - Forsyth, GA Þ- Tennessee Municipal League Risk Management Pool Þ- North Carolina Association of County Commissioners (NCACC) Þ- Walton County Water and Sewer District Authority - Monroe, GA Þ- Florida Conference of United Methodist Churches - Tallahassee District Educational Background Georgia Southern University Bachelors of Business Administration - Finance with an emphasis in Real Estate MAXIMUS . . . Professional Profile of Peter Teigen Page 1 of 2 Peter M. Teigen, CPA, DABF A Vice President Professional Qualifications Peter M. Teigen is a Vice President with the Asset Management Services Group, MAXIMUS, Inc. His tenure at MAXIMUS, Inc. has included assisting in the assessment, design, and implementation of a capital asset management software system that is widely used in the public sector. His consulting expertise includes the development and implementation of complex capital asset management solutions for various types of public entities to include cities, counties, utility authorities and colleges/universities. These projects involved developing and maintaining a consulting interface with not only the MAXIMUS, Inc. client, but also internal and independent auditors and other potential users and contributors to capital asset management systems to maximize the clients' return on their consulting investment. Mr. Teigen is frequently invited as an expert to provide presentations at national and regional association conferences on the topics of capital asset reporting in the public sector and the GASB-34135 reporting model. Some of his most recent audiences include the Virginia Governmental Finance Officer's Association, Massachusetts Municipal Auditors and Accountants Association, National Association on College Cost Accounting and the Indiana Association of School Business Officials. Mr. Teigen has published white papers and featured articles dealing with GASB-34/35 implementation and capital asset management for various publications and association newsletters including the accounting web site of www.pro2netcom and the government contractor web site of WWW.govcon.COill. Mr. Teigen possesses over 14 years of financial management experience. Prior to joining MAXIMUS, Inc., he worked in the audit and tax department of a Big Five accounting firm. He has served as chief financial officer controlling operational audits, software evaluation/implementation and human resources administration for a number of privatelyheld companies including a computer hardware manufacturing corporation. He has served as a part-time instructor of accounting courses on the collegiate level and has served on an AICP A-CMA joint venture focus group on Service Excellence through Shared Services. He has recently been appointed to the Valuation and Litigation Services Committee of the Florida Institute of Certified Public Accountants. Project Experience California Institute of Technology Mr. Teigen conducted a review and made recommendations to the California Technical Institute regarding their internal property cost accounting department. Based on Mr. Teigen's proposal, the Institute elected to out-source the management of its property cost MAXIM US . . . Professional Profile of Peter Teigen Page 2 of2 accounting program to the Management Services Division of MAXIMUS, Inc. This project included the development of project management protocol, project staffing, data reconciliation and internal and external audit tests to insure compliance with GASB- 34/35 reporting requirements. North Broward Hospital District The scope of this project included a major reconciliation engagement as well as physical inventory and Y2K evaluation study. Mr. Teigen worked closely with a multifaceted team including the client's Accounting, Facilities, Biomedical Engineering, and IT departments as well as outside auditors (DT) and consultants (IBM). Additional Project Experience City of Miami, University of Arizona, University of South Alabama, New Jersey Institute for Technology, Caradon, North Broward Hospital District (NBHD), Perot Systems, VLSI Technologies, Pharmavite Corporation, Sterling Software, Milwaukee Metro Sewer District, Alabama State University, New Orleans Public Schools, Georgetown University, Georgetown University Medical Center. Educational Background University of Wisconsin Bachelors of Business Administration - Accounting Various professional CPE courses including the AICPA's recent National Governmental Accounting & Auditing Update Conference as well as its new Governmental Reporting Model course. Professional Affiliations I Designations American Institute of Certified Public Accountants Florida Institute of Certified Public Accountants Wisconsin Institute of Certified Public Accountants American Board of Forensic Accountants American Society of Appraisers National Association of Certified Valuation Analysts Society of Depreciation Professionals City of West Bend Housing Authority Finance Committee St. Francis Cabrini Parish Finance Committee MAXIMUS . . . Professional Profile of Chad Ryles Page 1 of 1 Chad Ryles Senior Appraiser Professional Qualifications Chad is a Senior Appraiser with MAXIMUS, Inc. and has been serving our clients since 1999. His tenure at MAXIMUS, Inc. has included the planning, management, and execution of numerous capital asset cost accounting studies and property appraisal projects for municipalities, county governments, and other public sector entities. Chad possesses significant technical expertise in the procedures and methodologies used to value machinery & equipment, buildings & building services, infrastructure, land improvements, and land parcels. He possesses a practical knowledge and understanding of Generally Accepted Accounting Principles (GAAP); Government Accounting, Auditing, and Financial Reporting (GAAFR); Governmental Accounting Standards Board Statement 34 (GASB 34); and various other audit concerns related to capital asset reporting. Chad is also experienced in providing insurance placement and proof-of-Ioss information to our clients to assist in addressing their insurance reporting needs. Prior to his employment at MAXIMUS, Inc., Chad learned first-hand the principles involved in construction in his work as a carpenter. He has participated on projects of varying scope and complexity, and uses his practical work experience to assist him in serving the appraisal needs of our clients. Galveston County - Galveston, TX The scope of this project included the valuation of county infrastructure assets (i.e. roads and sidewalks, right-of-ways and easements, etc.. .). The conclusions were used for will be used for GASB 34 accounting purposes. The project is still in progress. Project Experience ~ Colorado Intergovernmental Risk Sharing Agency (CIRSA) ~ Georgia Interlocal Risk Management Agency (GIRMA) ~ Virginia Municipal League (VML) ~ Smith County - Tyler, TX ~ District of Columbia - Washington, D.C. Educational Background Oklahoma Baptist University Bachelors of Business Administration MAXIMUS