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CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
Date: May 2, 2011
Subject: Resolution of the City of San
Bernardino authorizing the City Manager to
execute a Master Services Memorandum of
Understanding with the Water Department
for provision of City services for Fiscal Year
2010.11.
From: Charles McNeely, City Manager
Dept: City Manager's Office
MIce Meeting Date: June 6, 2011
Synopsis of Previous Council Action:
1997 through 2009 - Resolutions are adopted annually authorizing Master Services
Memorandums of Understanding with the Water Department for the provision of City Services.
Recommended Motion:
Adopt resolution.
Contact person: James Graham, Assistant to City Mgr. Phone: 5122
Supporting data attached: SR Resolution & MOlT Ward:
City Wide
FUNDING REQUIREMENTS:
Amount: No Cost to the City
Source:
Finance:
Council Notes:
Agenda Item No.
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CITY OF SAN BERNARDINO - REOUEST FOR COUNCIL ACTION
Staff Report
SUBJECT:
Resolution of the City of San Bernardino authorizing the City Manager to execute a
Master Services Memorandum of Understanding with the Water Department for
provision of City services for FY 20 I 0-11.
BACKGROUND:
Each year, the Water Department and City enter into a contract, a Master Services
Memorandum of Understanding (MOU), for the City to provide various support services
needed for the water and wastewater treatment operations. On April 19, 2011 the Water
Department approved the proposed Master Services MOU for Fiscal Year 2010-11. On
May 16,2011 the proposed agreement was presented to the Mayor and Common Council
for consideration and was continued for further discussion. The following provides
additional information on the background and financial impact of this proposed
agreement.
Unlike most other City departments, a Master Services MOU is necessary with the Water
Department for the provision of support services for two reasons: first, the City
establishes the Water Department as a financially separate entity governed by an
appointed board of directors; and secondly, State law provides that the funds overseen by
Water Department are classified as enterprise funds and are restricted to paying only for
water and wastewater treatment service related costs. The Master Services MOU
identifies the costs of the documented support services provided by the City to the Water
Department.
City Services Provided to the Water Departmentfor FY 2010-11
The following are the support services the Water Department contracted for the City to
provide for FY 2010-11 related to the Water Department's water and wastewater
treatment operations. The list identifies the fund the City has used to pay for the services
provided to the Water Department, and the total cost of such services for FY 2010-11 :
Services Fund Amount
1. Employee Assistance Program Workers Compensation $10,000
2. Rideshare Coordinator Transportation Fund 5,200
3. Workers' Comp Claims/Adm. Workers Compensation 412,000
4. Information Technology IT Fund 522,267
5. Telephone Services Telephone Fund 126,400
6. Police and Fire Departments General Fund 500,000
7. Equal Opportunity Officer General Fund 57,200
8. City Attorney General Fund 200,435
9. Civil Service
10. Human Resources, Finance
City Treasurer
General Fund
87,780
General Fund
192.200
TOTAL
$2,113,482
Additionally, on June 30, 2010, the Mayor and Common Council approved the
preparation of a cost allocation plan for all services that the City provides to support
various enterprise functions and operations such as water, sewer, and refuse. Over the
past number of years, cities throughout the state have prepared and adopted similar
modem cost allocation plans to provide an accurate accounting of the full cost for various
services and operations. These cost allocation plans further provides the documentation
necessary to comply with the provisions of Proposition 218. Under Proposition 218, for
property-related services such as water, sewer, and refuse, only costs related to the
provision of such services may be included in the rates charged for the services.
Therefore, cost allocation plans help ensure that cities remain compliant with the state
constitutional requirements of Proposition 218.
The City contracted with Matrix to perform the analysis and prepare the cost allocation
plan. It is anticipated that this plan will be presented to the Mayor and Common Council
for consideration at the June 20, 2011 meeting.
FINANCIAL IMPACT:
The anticipated reimbursement amounts from the Water Department Master Services
Memorandum of Understanding were included in the FY 2010-11 adopted budget, as
follows:
Budl!et bv Fund FY 10111
General Fund (001): $1,037,615
IT Fund (679): 522,267
AB 2766 Fund (111): 5,200
Teleohone Suoport Fund (630): 126,400
Worker's Comp Fund (678): 422,000
Total $2,113,482
If these documented costs that the City has already incurred by providing services to the
Water Department are not reimbursed, the City's budget will experience an immediate
and unforeseen shortfall in anticipated revenue. As a result, an examination of options to
address the revenue shortfall would occur, including reductions in City Services and
personnel.
RECOMMENDATION:
Adopt the resolution.
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: Charles McNeely, City Manager
Subject: Resolution of the City of San
Bernardino authorizing the City Manager of
the City of San Bernardino to execute a
Master Services Memorandum of
Understanding with the Water Department
for provision of City services for Fiscal Year
2010/2011.
Dept: City Manager's Office
Date: May 2, 2011
MICC Meeting Date: May 16,2011
Synopsis of Previous Council Action:
1997 through 2009 - Resolutions are adopted annually authorizing Master Services
Memorandums of Understanding with the Water Department for the provision of City Services.
Recommended Motion:
Adopt resolution.
{!~,~
Signature
Contact person: James Graham, Assistant to City Mgr. Phone: 5122
Supporting data attached: SR Resolution & MOll Ward:
City Wide
FUNDING REQUIREMENTS:
Amount: No Cost to the City
Source:
Finance:
Council Notes:
Agenda Item No. q
05~/&-8lJ(1
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
Subiect:
Resolution of the City of San Bernardino authorizing the City Manager of the City of San
Bernardino to execute a Master Services Memorandum of Understanding with the Water
Department for provision of City services for Fiscal Year 2010/2011.
Staff Report
Backl!:round:
The Water Department contracts with the City for various services. Below is a summary of the
services provided by the City to the Water Department which shall be reimbursed pursuant to the
attached Master Services Memorandum Of Understanding ("MOU"), which are based on the
City's cost of providing these services to the Water Department:
MOU Section FY 10/11 FY 09/10 Notes
Section 1. Equal Employment Officer: $57,200 $42,400 Flat rate to the General Fund
Section 2. City Attorney: $200,435 $190,890 Flat rate to the General Fund
Section 3. Civil Service: $87,780 $69,200 Flat rate to the General Fund
Section 4. Human Resources, Finance,
and City Treasurer: $192,200 $56,200 Flat rate to the General Fund
Total to the Workers'
Compensation Fund) $650 per
month, plus $2,200 for
Section 5. Employee Assistance proportionate share of
program: $10,000 $10,000 administrative costs
Section 6. Rideshare Coordinator: $5,200 $5,200 Flat rate to the AB 2766 Fund
Reimbursement for actual costs,
plus proportionate share of fixed
Section 7. Telephone services: $126,400 $126,400 costs.
Reimbursement for actual costs of
claims, plus proportionate share of
administrative costs (estimates
Section 8. Workers' Compensation: $412,000 $412,000 based on previous years).
Flat rate to IT Fund for IT
Section 9. Information Technology: $522,267 $539,600 Contract Services
Section 10. Police and Fire Depts.: $500,000 $500,000 Flat rate to General Fund
The City receives 10% of net
revenue from each land sale
Section II. Water Dept. Land Sales $- $ -
Total $2,113,482 $1,951,890
It should be noted that on April 19, 2011 the Board of Water Commissioners of the City of San
Bernardino adopted the attached Master Services Memorandum of Understanding for FY 20 I O-
II reflecting the reimbursement amounts. (attachment)
I
On February 7, 2011 the Water Department, Mayor and Common Council approved funding for
a Customer Service Representative I in the amount of $28,300 for FY20 10/11. In addition, the
Water Department and Mayor and Common Council approved the funding strategy for the SB
Direct Phone Switch in the amount of $400,000 on January 24, 20 II. These figures are not
included in the chart.
Chane:es From Prior Year:
The cost for services related to the City Attorney, Civil Service, Human Resources, Finance and
City Treasurer have increased by approximately $178,500. The majority of the increase is
related to reimbursement for payroll charges, such as broker and administrative fees related to
Mercer, the City's benefits/healthcare administrator, and staff time ($105,000). For the current
year, reimbursement for treasury, investment, and banking services provided by the City
Treasurer were added ($40,500). Other costs increases are related to the increase of Civil
Service's percentage of time spent providing services to the Water Department ($18,600) and
increases for personnel costs in Human Resources and the City Attorneys Office ($14,400).
The cost for Information Technology Services has decreased from $539,600 to $522,267. The
reductions are related to decrease in staff time and services available to be provided to the Water
Department pursuant to the City's 10% employee concessions. As such, the reduction of $17,333
will not have an impact on the General Fund or IT Fund.
Financial Impact:
Anticipated reimbursement amounts from the Water Department Master Services Memorandum
of Understanding were included in the FY 2010-11 preliminary and adopted budgets, as follows:
Budget by Fund FY to/11
General Fund (001): $1,037,615
IT Fund (679): $522,267
AB 2766 Fund (III): $5,200
Telephone Support Fund (630): $126,400
Worker's Comp Fund (678): $422,000
Total $2,113,482
Recommendation:
Adopt attached resolution.
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