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Finance and Administration Agreement between city of Vancouver and Clark County

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City of Vancouver, WA
Finance and Administration Agreement

THIS AGREEMENT is entered into between the City of Vancouver, a municipal corporation and charter city of the first class of the State of Washington, (the "City"), and Clark County, Washington, a political subdivision of the State of Washington (the "County").

WHEREAS, the City and County agreed in April, 1996 to negotiate in good faith to develop a long term financial agreement by November 1, 1996; and

WHEREAS, the City and County have agreed to work together to seek opportunities for joint efforts or the combining of operations to achieve greater efficiency and effectiveness in the provision of community services; and

WHEREAS, the financial agreement was to include a method for determining fair costs for contracting services between either jurisdiction and for the cost sharing of consolidated services, regardless of which jurisdiction manages the service; and

WHEREAS, the City and County have agreed upon a proposed Memorandum of Understanding for Interagency Personnel Transfers which provides for the payment of certain potential financial obligations for employees transferring between the City and County;

NOW, THEREFORE,

THE CITY OF VANCOUVER AND CLARK COUNTY agree as follows:

SECTION 1. PURPOSE. The purpose of this agreement is to set forth the financial and administrative procedures the City and the County will incorporate into subsequent service agreements associated with the City’s annexation of unincorporated areas of Clark County, as authorized under the authority of the Interlocal Cooperation Act, Chapter 39.34 RCW.

SECTION 2. DEFINITIONS.

2.1 Government. Jurisdiction that solicits and pays for the service(s).

2.2 Contractor. Jurisdiction that contracts to provide the service(s).

2.3 Jurisdiction. Either the City or the County.

2.4 Cost centers. The sum total of all direct costs, departmental overhead costs and organizational indirect costs required to provide a specific service.

2.5 Allocation. That portion of the Contractor’s cost center that is directly attributable to the provision of services.

2.6 Direct costs. Those costs that can be identified specifically with a particular final cost objective.

SECTION 3. COST OF SERVICES

3.1 Cost center calculation. Costs for services shall be calculated using the Contractor’s current year adopted budget; e.g. 1997 service costs to the Government will be based on the Contractor’s 1997 adopted budget. The cost center shall be the sum total of all direct costs, departmental overhead costs and interdepartmental indirect costs.

3.2 Direct cost calculation. Direct costs shall include all personnel salaries, benefits, supplies and services of those programs which are directly involved in the provision of services.

    3.2.1 Capital costs. Capital budget appropriations for equipment that costs $1,000 or less shall be included in the current year cost center, PROVIDED, that if the Contractor’s current capital policy is for an amount higher than $1,000 the higher amount shall be the applicable policy. Equipment that costs $1,000 (or the Contractor’s applicable policy amount) or more shall be depreciated over the service life of said equipment and only the current year depreciation shall be included in the cost center.

    3.2.2 Equipment Rental and Revolving (ER&R) costs. ER&R costs shall be included in the Contractor’s cost center at full value; e.g. no credit shall be given for the replacement component of the ER&R rate. Consequently, the jurisdiction receiving services (the Government) shall not be required to pay the Contractor for any portion of the original capital acquisition costs of vehicles or equipment included in the ER&R charges.

    3.2.3 Grants. If the Contractor receives grant revenues which offset direct costs, the full value of said grant revenues shall be deducted from the direct costs prior to the allocation of costs to the Government.

3.3 Departmental overhead costs. Department overhead shall include all administrative and support costs related to service operations and shall be proportionate to the direct cost of services.

3.4 Interdepartmental indirect costs. In 1996, County staff reviewed the City’s 1994 indirect cost plan and City staff reviewed the County’s 1994 indirect cost plan. The parties agree that the City may use its plan when costing City services and the County may use its plan when costing County services. Should either party significantly change their plan, the other party must review and approve of the changes before the altered plan can be used under the terms of this agreement.

    3.4.1 Self Insurance. The City or the County may recover the annual costs of their self insurance program by either including the program as an element of their indirect cost plans or by charging programs directly. The program shall be subject to actuarial review at least every five years and the annual internal charge shall represent an amount which maintains the program.

3.5 Excluded costs. Cost centers shall exclude costs for debt, interfund loans and one-time expenditures, except where one-time expenditures are a requirement of providing the service. A mutually agreed upon market rate may be used to compute the cost of office or other work space allocated to a cost center, where the cost center is located in a facility owned by the Contractor.

3.6 Allocation of costs. The allocation of service costs must be based on one or more measurable factors, including but not limited to:

  1. The geographic size of the area to be serviced;

  2. The population of the area to be serviced;

  3. The assessed valuation of the area to be serviced;

  4. The level of service to be delivered;

  5. Workload statistics or other relevant data bases.

3.7 Reconciliation of contracted (budgeted) costs with actual costs. For those service contracts wherein the cost of services to the Government is based on a percentage allocation of the Contractor’s total current year budget, there shall be a year-end reconciliation of the Contractor’s budgeted appropriations for the service cost center with the Contractor’s actual costs for the service cost center; said reconciliation to be made following the thirteenth month accounting period. In those circumstances where the Contractor’s year-end actual costs are less than the amount that was appropriated in the Contractor’s budget, the Government shall receive a monetary rebate for the cost of services within 30 days subsequent to the reconciliation date, or at the Government’s option, a credit for the cost of the subsequent year services.

    3.7.1 Calculation of the rebate/credit. The amount of the rebate or credit shall be based on the Government’s allocated share of the costs; e.g. if the Government’s allocated share of the Contractor’s cost center is twenty-five (25) percent, the Government shall be entitled to a rebate or credit equaling twenty-five percent of the difference between the Contractor’s budgeted appropriations for the cost center and the Contractor’s actual costs.

3.8 Reconciliation of adopted budget with thirteenth month budget. There shall be a year-end reconciliation of the Contractor’s original adopted budget with Contractor’s budget as it exists following mid-year supplemental appropriations or other budget adjustments. Mid-year legislative resolutions which adjust the Contractor’s budgeted cost center shall also adjust the Government’s service costs in accordance with the percentage allocation that was contractually agreed to; PROVIDED that the Government shall have the right to question the validity of those supplemental appropriations not directly related to the provision of Government services pursuant to Sections 3.1 through 3.4 of this agreement.

    3.8.1 Validity of supplemental appropriations. The Contractor shall provide the Government with a copy of all mid-year budget resolutions and associated staff reports. If the Government wishes to question the validity of all or of some part of a supplemental appropriation, the City finance director and the County finance director shall attempt to resolve the matter. If the County finance director and the City finance director are unable to resolve the matter, the provisions for dispute resolution set forth in Section 4.1.2 of this agreement shall apply.

SECTION 4. CHANGE IN SCOPE OF SERVICES.

4.1 Mid-year adjustments to service delivery. The Government may order changes in the delivery of services consisting of additions, deletions, or other revisions within the general scope of the contract. No claims may be made by the Contractor that the scope of the Contractor’s services have been changed, requiring changes to the amount of compensation to the Contractor or other adjustments to the contract, unless such changes or adjustments have been made by written amendment to the contract signed by the Government and the Contractor.

    4.1.1 Additional compensation. If the Contractor believes that any particular work is not within the scope of the contract, is a material change, or will otherwise require more compensation to the Contractor, the Contractor must immediately notify the Government ‘s Finance Director in writing of this belief. If the Government ’s Finance Director believes that the particular work is within the scope of the contract as written, the parties will resolve their dispute in accordance with Section 4.1.2

    4.1.2 Dispute resolution. In the event of a dispute between the City and County regarding additional compensation for the delivery of services, the Vancouver City Manager and the County Administrator or their designated representatives shall review the dispute and options for resolution. The decision of the City Manager and the County Administrator regarding the dispute shall be final as between the parties. If any claim for additional compensation cannot be resolved by the City Manager and County Administrator it may be submitted to mediation and if still not resolved, shall be submitted to binding arbitration in accordance with the rules and procedures set forth in Chapter 7.04 RCW, and the judgment or award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

4.2 Annual adjustments to service delivery. Beginning in 1997, by September 5, or the first working day thereafter, the Contractor shall provide the Government with an estimate of the subsequent year’s service costs and service data and an estimate of the Government’s contract amount for the same level of service for the subsequent year. By September 20 or the first working day thereafter, the Government shall notify the Contractor of any changes in service or service level for the subsequent year. By October 10 or the first working day thereafter, the Contractor shall provide the Government with the estimated contract amount for the subsequent year based on the changes in service requested by the Government.

    4.2.1 Reconciling final adopted budget with contract. The Contractor shall adjust the contractual cost of services to reflect the final adopted budget and shall notify the Government in writing of any adjustments made to the contract amount, on or before December 31.

SECTION 5. FINANCIAL REPORTING and PAYMENT REQUIREMENTS.

5.1 Monthly reports. The Contractor shall provide the Government with monthly revenue and expenditure reports. The reports shall be tailored to report only those revenues and expenditures that are associated with the service agreement.

5.2 Ending reports. The Contractor shall provide the Government with reports showing total ending revenues and expenditures associated with the service agreement either at the termination of the agreement or at the end of the calendar year, whichever occurs earlier.

5.3 Billing procedure. It is contemplated that service costs to the Government may be based either upon the Contractor’s actual monthly costs of service, or upon the Contractor’s budget, pursuant to Section 3 of this agreement. If service costs are based on the Contractor’s actual monthly costs, payments shall be made within 30 days after receipt of the Contractor’s bill. If service costs are based on the Contractor’s budget, the Government shall make twelve equal payments. The Contractor shall issue the bill by the fifteenth (15th) day of the month and payments by the Government shall be due within thirty (30) days after issuance of the bill. Payments that are not paid within the allotted time periods shall be considered delinquent. Delinquent charges shall accrue interest on the unpaid balance, from the date of delinquency until paid, at an interest rate of one percent (1%) per month.

SECTION 6. TRANSFER AND DISPOSITION OF CAPITAL ASSETS.

6.1 Transfer of real property upon annexation. Upon annexation of unincorporated areas by the City, public Infrastructure land and buildings, such as roads and parks, and such others as mutually agreed upon, shall be transferred without compensation from the County to the City. Non-infrastructure property, such as land and buildings shall be transferred at fair market value as determined by an appraisal from disinterested persons of suitable qualifications; PROVIDED, the County shall have discretion to sell such assets and the City shall have discretion to buy.

    6.1.1 Fixtures. Personal property which has been annexed to the realty being transferred, such that it is regarded as part of the real property, shall be transferred from the County to the City without compensation.

    6.1.2 Vehicles and Equipment. Upon annexation, vehicles and equipment shall be transferred at fair market value; PROVIDED, the County shall have discretion to sell such capital assets and the City shall have discretion to buy. Fair market value shall be the mutually agreed upon price at which bone fide sales have been consummated for assets of like type, quality, and quantity in the Portland metro market at the time of acquisition. The County shall retain any monetary reserves set aside for maintenance or replacement of the vehicle or equipment to be transferred.

      6.2.2.1 Definition of equipment. Equipment shall be defined as any capital asset having a value of $1,000 or more; PROVIDED, that if the Contractor’s current capital policy is for an amount higher than $1,000 the higher amount shall be the applicable policy.

      6.2.2.2 Definition of a computer as equipment. A computer, for the purpose of transfer as "equipment," shall be comprised of the Central Processing Unit (CPU) plus a monitor, plus a keyboard, plus any associated peripherals.

6.2 Non-annexation transfer of capital assets between jurisdictions. Capital assets which are not directly associated with annexation may be transferred between the jurisdictions; provided such transfers shall be made at fair market value pursuant to Sections 6.1 of this agreement.

SECTION 7. LIAISONS. The County shall designate one manager from each service area to act in the capacity of liaison to designated manager(s) from the City. The law enforcement liaison shall be selected by the County Sheriff. All other liaisons shall be selected by the County Administrator. In those cases where the City is providing services to the County, the City shall appoint a liaison to the County. City and County liaisons shall have similar responsibilities.

7.1 The liaisons shall coordinate operational activities within the annexed areas, including hours of operation and service protocols and procedures.

7.2 The liaisons will handle day-to-day operational concerns identified by city or county officials and residents.

7.3 The liaisons shall periodically attend meetings of the City Council, the Board of Commissioners and community groups to facilitate the provision of services and to keep open the lines of communication between the City and the County and their respective residents.

7.4 The liaisons shall monitor program performance indicators as agreed to in individual service contracts to ensure that services are being provided at the highest level possible and that any problems are reported and corrected before issues of contractual noncompliance arise.

SECTION 8. VANCOUVER MALL REVENUE SHARING AGREEMENT. In October, 1992, the City and County agreed that in lieu of the City imposing a three tenths of one percent (3/10%) sales tax, thereby allowing said sales tax revenues to flow to the County, the County would not charge the City for jail and custody services for City prisoners, probation costs for City offenders, District Court costs, or emergency dispatching for City police calls. The 1992 Vancouver Mall agreement was drafted in accordance with interlocal agreements existing at that time and remains in effect through 1997. The parties intend to negotiate a new agreement(s) to be enacted January 1, 1998 that will incorporate Senate Bill 6211 legislation on misdemeanant costs and other service issues currently addressed by the Vancouver Mall agreement.

8.1 Vancouver Mall indexing agreement. Section 8 of the Vancouver Mall Revenue Sharing Agreement contains an "index" provision whereby the ratio of County law enforcement personnel to unincorporated population is ensured via revenue transfers from the City to the County or by joint service agreements between the City and the County. For the purpose of calculating the index analysis, those County law enforcement personnel who are providing City services in accordance with an interlocal agreement between the City and the County shall be excluded from the index analysis.

8.1.1 Calculation of excluded personnel. The number of personnel excluded from the index analysis shall be based on the percentage allocation of law enforcement resources dedicated to the provision of City services, as determined by the interlocal agreement; e.g. if the agreement allocates twenty-five (25) percent of the County Sheriff’s budget to the provision of City services, then twenty-five (25) percent of the personnel assigned to the Sheriff’s direct service programs shall be excluded from the index.

SECTION 9. LEAVE BALANCES. The Memorandum of Understanding, Inter-agency Personnel Transfers ("MOU"), set forth in Exhibit "C" to Master Interlocal Services Agreement, provides that the employment of certain employees may transfer from one agency to the other upon the occurrence of a qualifying event.

9.1 As provided for in the MOU, (Section 8. Leave Balances), a Transferring Employee ("TE") may transfer accumulated vacation, PDO or other "vested" type leave balances in certain amounts to the Receiving Agency ("RA"). The Losing Agency ("LA") shall transfer funds equal to the value of the leave transferred, computed at the leave’s payoff value with the LA.

9.2 The TE shall be compensated by the LA for any cash out upon separation benefit for which they are eligible. As provided, the TE’s accumulated sick leave balance which is not cashed out shall transfer to the RA, without payment from the Losing Agency ("LA").

9.3 The LA shall remit the payoff value of any such leave transferred under this agreement within 30 days of the date the transfer of the employee is effective. At the same time, the LA shall provide a schedule detailing the number of hours transferred for each employee, by type of leave, and the calculation of the value of the leave transferred where required. Such payments and schedules shall be sent to the City Finance Department, Payroll Section.