COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Controller's Office

DATE:

February 3, 2003

BOARD MEETING DATE:

February 25, 2003

TO:

Honorable Board of Supervisors

FROM:

Tom Huening, Controller

SUBJECT:

Approval of Appropriation Transfer Request of $95,000 from Controller Reserves to Services and Supplies for the Agreement with Maximus, Inc. for A-87 Cost Allocation Plan Consulting Services through June 30, 2006.

Recommendation

Approve the Appropriation Transfer Request (ATR) in the amount of $95,000 transferring Departmental Reserves to Services and Supplies.

Background

The Controller's Office, with the cooperation of all general fund departments, prepares the A-87 Cost Allocation Plan (the Plan) annually. The Plan is used to allocate indirect expenditures to non-general fund departments (e.g., Hospital, Public Works, Human Services Agency, LAFCO, First 5, etc.). These departments then file reimbursement claims with outside parties (e.g., the State) which include Plan expenditures. The third party payers then reimburse the claiming departments for a portion of Plan expenditures. The net effect is to reduce County general fund costs.

Discussion

The Controller's Office is requesting your Board authorize the transfer of Departmental Reserves to Services and Supplies to cover contractor fees for preparation of the County's Plan. Maximus has been used for the preparation of the Plan for over 20 years; they have either input our numbers into their software or provided us with the software for Plan preparation. Maximus, though not the sole provider of Plan preparation services in California, prepares the Plan for 24 of the 58 California counties. Most smaller counties prepare their own cost plan as their claims are very simple. As the County has experienced long term success with Maximus, the transition to Maximus for full Plan preparation should be very efficient and effective. Because Maximus prepares the Plan for so many California counties, San Mateo County will benefit from their experience.

This agreement is expected to increase amounts that can be claimed by non-general fund departments and reduce overall general fund expenditures. As the exact amount cannot be determined until the work is performed, the agreement requires Maximus, Inc. to create and provide written recommendations of areas of improvement and to establish base year metrics to measure the impact of these recommendations. We expect the improvements to, at a minimum, cover the agreement cost. We have had this type of success with Maximus in the preparation of our SB-90 claim and expect similar results. Currently, one-third FTE of a senior accountant's time is used to prepare the Plan. This agreement will allow the Controller's Department to transition the Plan preparation to an outside, expert contractor in anticipation of future retirement activity in the Department.

Since the agreement is under $100,000, it will be submitted to the County Manager's Office for review and approval.

Vision Alignment

This agreement is in alignment with the Shared Vision 2010 goal number 20 of effective government; government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain.

Fiscal Impact

There is no Net County Cost. Departmental Reserves will be moved to Services and Supplies to cover the $95,000 4-year agreement with Maximus, Inc. As discussed above, we expect increased claims in an amount to cover agreement costs.