AgdaPkt 2000-10-23 - Laserfiche WebLink

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�•�; N,2 BENEFITS OF FIXED FEE OVER CONTINGENCY FEE here are severa important bene its to a ixe ee approach over the standard contingency fee formula, including: . Money owed to MMC for prior compliance work will be forgiven. Money owed to MMC for prior compliance work or reporting penods a er January 1, 200 will be forgiven in exchange for a two year commitment to the fixed fee program. We estimate that the City owes MMC approximately $136,000 in contingency fees for past corrections over the next two years,even if no further compliance activities are performed. Under the fixed fee program, we will pay � $28,040 for fiscal year 2000/01. Therefore, a significant portion of the program would be self- funded by monies owed under the former contingency fee approach. . Most auditing work included in the fixed fee All auditing work would be included in the fixed fee, with the exception o auditing work that is city-specific (such as CAN and utility franchise reviews). Since MMC will be addressing a number of major compliance issues in the coming months (e.g., wireless airtime, gas and electric tax application issues, major wired telecom tax application and exemption issues), it is likely that some of these activities will produce significant additional revenues for the City, resulting in substantial performance-based fees under the cuRent contingency fee agreement. Under the fixed fee approach, this additional revenue would not generate any additional costs to the City. . Attomey/client relationship befinreen the city and Donald H. Maynor, PLC Although the program will involve the cooperative, joint e orts o MM and onald . Maynor, PLC, the fiixed fee program will have two separate contracts — one with MMC for the auditing work, and one with the law firm of Donald H. Maynor, PLC for the legal and protective services. The advantage of this approach is that the City will have the benefit of an attomey/client relationship for the legal work, ensuring full confidentiality of the City's affairs. Fiscal Impact Funds are budgeted in the 2000-01 budget for these services. Accepting MMC's proposal to convert from performance based compensation to a fixed fee arrangement is expected to save the City at least $50,000 annually. Staff will continue to monitor MMC's audit results to confirm that a� fixed fee arrangement is in the City's best interests. Should circumstances dictate, staff will recommend a different compensation arrangement at the conclusion of the two year contract period. --� ,� � �� , � . Brian Ponty , Edward verett Director of Finance and Financial Planning City Manager