HomeMy WebLinkAbout25-057 - Contract - FCS Group - 2025 Citywide Cost Allocation PlanCity of Tukwila Contract Number: 25-057
Council Approval N/A
• 6200 Southcenter Boulevard, Tukwila WA 98188
PROFESSIONAL SERVICES AGREEMENT
(Includes consultants, architects, engineers, accountants, and other professional services)
THIS AGREEMENT is entered into between the City of Tukwila, Washington, hereinafter
referred to as "the City", and _FCS Group, hereinafter referred to as "the Consultant", in consideration
of the mutual benefits, terms, and conditions hereinafter specified.
1. Project Designation. The Consultant is retained by the City to perform professional services
in connection with the project titled 2025 Citywide Indirect cost Allocation Plan.
2. Scope of Services. The Consultant agrees to perform the services, identified on Exhibit "A"
attached hereto, including the provision of all labor, materials, equipment and supplies.
3. Duration of Agreement; Time for Performance. This Agreement shall be in full force and
effect for a period commencing upon execution and ending October 31, 2025, unless sooner
terminated under the provisions hereinafter specified. Work under this Agreement shall
commence upon written notice by the City to the Consultant to proceed. The Consultant shall
perform all services and provide all work product required pursuant to this Agreement no later
than October 31, 2025, unless an extension of such time is granted in writing by the City.
4. Payment. The Consultant shall be paid by the City for completed work and for services
rendered under this Agreement as follows:
A. Payment for the work provided by the Consultant shall be made as provided on Exhibit
"B" attached hereto, provided that the total amount of payment to the Consultant shall not
exceed $59,000 without express written modification of the Agreement signed by the City.
B. The Consultant may submit vouchers to the City once per month during the progress of
the work for partial payment for that portion of the project completed to date. Such
vouchers will be checked by the City and, upon approval thereof, payment shall be made
to the Consultant in the amount approved.
C. Final payment of any balance due the Consultant of the total contract price earned will be
made promptly upon its ascertainment and verification by the City after the completion of
the work under this Agreement and its acceptance by the City.
D. Payment as provided in this section shall be full compensation for work performed,
services rendered, and for all materials, supplies, equipment and incidentals necessary to
complete the work.
E. The Consultant's records and accounts pertaining to this Agreement are to be kept
available for inspection by representatives of the City and the state of Washington for a
period of three (3) years after final payments. Copies shall be made available upon
request.
5. Ownership and Use of Documents. All documents, drawings, specifications and other
materials produced by the Consultant in connection with the services rendered under this
Agreement shall be the property of the City whether the project for which they are made is
executed or not. The Consultant shall be permitted to retain copies, including reproducible
copies, of drawings and specifications for information, reference and use in connection with
the Consultant's endeavors. The Consultant shall not be responsible for any use of the said
documents, drawings, specifications or other materials by the City on any project other than
the project specified in this Agreement.
6. Compliance with Laws. The Consultant shall, in performing the services contemplated by
this Agreement, faithfully observe and comply with all federal, state, and local laws, ordinances
and regulations, applicable to the services rendered under this Agreement.
7. Indemnification. The Consultant shall defend, indemnify and hold the City, its officers,
officials, employees and volunteers harmless from any and all claims, injuries, damages,
losses or suits including attorney fees, arising out of or resulting from the acts, errors or
omissions of the Consultant in performance of this Agreement, except for injuries and damages
caused by the sole negligence of the City.
Should a court of competent jurisdiction determine that this Agreement is subject to RCW
4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or
damages to property caused by or resulting from the concurrent negligence of the Consultant
and the City, its officers, officials, employees, and volunteers, the Consultant's liability
hereunder shall be only to the extent of the Consultant's negligence. It is further specifically
and expressly understood that the indemnification provided herein constitutes the Consultant's
waiver of immunity under Industrial Insurance, Title 51 RCW, solely for the purposes of this
indemnification. This waiver has been mutually negotiated by the parties. The provisions of
this section shall survive the expiration or termination of this Agreement.
8. Insurance. The Consultant shall procure and maintain for the duration of the Agreement,
insurance against claims for injuries to persons or damage to property which may arise from
or in connection with the performance of the work hereunder by the Consultant, its agents,
representatives, or employees. Consultant's maintenance of insurance as required by the
agreement shall not be construed to limit the liability of the Consultant to the coverage provided
by such insurance, or otherwise limit the City's recourse to any remedy available at law or in
equity.
A. Minimum Amounts and Scope of Insurance. Consultant shall obtain insurance of the
types and with the limits described below:
Automobile Liability insurance with a minimum combined single limit for bodily injury
and property damage of $1,000,000 per accident. Automobile Liability insurance
shall cover all owned, non -owned, hired and leased vehicles. Coverage shall be
written on Insurance Services Office (ISO) form CA 00 01 or a substitute form
providing equivalent liability coverage. If necessary, the policy shall be endorsed to
provide contractual liability coverage.
2. Commercial General Liability insurance with limits no less than $2,000,000 each
occurrence, $2,000,000 general aggregate. Commercial General Liability
insurance shall be at least as broad as ISO occurrence form CG 00 01 and shall
cover liability arising from premises, operations, stop -gap independent contractors
and personal injury and advertising injury. The City shall be named as an
additional insured under the Consultant's Commercial General Liability insurance
policy with respect to the work performed for the City using an additional insured
endorsement at least as broad as ISO endorsement form CG 20 26.
3. Workers' Compensation coverage as required by the Industrial Insurance laws of
the State of Washington.
CA revised May 2020 Page 2
4. Professional Liability with limits no less than $2,000,000 per claim and $2,000,000
policy aggregate limit. Professional Liability insurance shall be appropriate to the
Consultant's profession.
B. Public Entity Full Availability of Contractor Limits. If the Contractor maintains higher
insurance limits than the minimums shown above, the Public Entity shall be insured for the
full available limits of Commercial General and Excess or Umbrella liability maintained by
the Contractor, irrespective of whether such limits maintained by the Contractor are greater
than those required by this Contract or whether any certificate of insurance furnished to
the Public Entity evidences limits of liability lower than those maintained by the Contractor.
C. Other Insurance Provision. The Consultant's Automobile Liability and Commercial
General Liability insurance policies are to contain, or be endorsed to contain that they shall
be primary insurance with respect to the City. Any Insurance, self-insurance, or insurance
pool coverage maintained by the City shall be excess of the Consultant's insurance and
shall not be contributed or combined with it.
D. Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M.
Best rating of not less than A:VII.
E. Verification of Coverage. Consultant shall furnish the City with original certificates and a
copy of the amendatory endorsements, including but not necessarily limited to the
additional insured endorsement, evidencing the insurance requirements of the Contractor
before commencement of the work. Upon request by the City, the Consultant shall furnish
certified copies of all required insurance policies, including endorsements, required in this
Agreement and evidence of all subcontractors' coverage.
F. Notice of Cancellation. The Consultant shall provide the City with written notice of any
policy cancellation, within two business days of their receipt of such notice.
G. Failure to Maintain Insurance. Failure on the part of the Consultant to maintain the
insurance as required shall constitute a material breach of contract, upon which the City
may, after giving five business days notice to the Consultant to correct the breach,
immediately terminate the contract or, at its discretion, procure or renew such insurance
and pay any and all premiums in connection therewith, with any sums so expended to be
repaid to the City on demand, or at the sole discretion of the City, offset against funds due
the Consultant from the City.
9. Independent Contractor. The Consultant and the City agree that the Consultant is an
independent contractor with respect to the services provided pursuant to this Agreement.
Nothing in this Agreement shall be considered to create the relationship of employer and
employee between the parties hereto. Neither the Consultant nor any employee of the
Consultant shall be entitled to any benefits accorded City employees by virtue of the services
provided under this Agreement. The City shall not be responsible for withholding or otherwise
deducting federal income tax or social security or for contributing to the state industrial
insurance program, otherwise assuming the duties of an employer with respect to the
Consultant, or any employee of the Consultant.
10. Covenant Against Contingent Fees. The Consultant warrants that he has not employed or
retained any company or person, other than a bonafide employee working solely for the
Consultant, to solicit or secure this contract, and that he has not paid or agreed to pay any
company or person, other than a bonafide employee working solely for the Consultant, any
fee, commission, percentage, brokerage fee, gifts, or any other consideration contingent upon
or resulting from the award or making of this contract. For breach or violation of this warrant,
the City shall have the right to annul this contract without liability, or in its discretion to deduct
from the contract price or consideration, or otherwise recover, the full amount of such fee,
commission, percentage, brokerage fee, gift, or contingent fee.
CA revised May 2020 Page 3
11. Discrimination Prohibited. Contractor, with regard to the work performed by it under this
Agreement, will not discriminate on the grounds of race, religion, creed, color, national origin,
age, veteran status, sex, sexual orientation, gender identity, marital status, political affiliation,
the presence of any disability, or any other protected class status under state or federal law,
in the selection and retention of employees or procurement of materials or supplies.
12. Assignment. The Consultant shall not sublet or assign any of the services covered by this
Agreement without the express written consent of the City.
13. Non -Waiver. Waiver by the City of any provision of this Agreement or any time limitation
provided for in this Agreement shall not constitute a waiver of any other provision.
14. Termination.
A. The City reserves the right to terminate this Agreement at any time by giving ten (10) days
written notice to the Consultant.
B. In the event of the death of a member, partner or officer of the Consultant, or any of its
supervisory personnel assigned to the project, the surviving members of the Consultant
hereby agree to complete the work under the terms of this Agreement, if requested to do
so by the City. This section shall not be a bar to renegotiations of this Agreement between
surviving members of the Consultant and the City, if the City so chooses.
15. Applicable Law; Venue; Attorney's Fees. This Agreement shall be subject to, and the
Consultant shall at all times comply with, all applicable federal, state and local laws,
regulations, and rules, including the provisions of the City of Tukwila Municipal Code and
ordinances of the City of Tukwila. In the event any suit, arbitration, or other proceeding is
instituted to enforce any term of this Agreement, the parties specifically understand and agree
that venue shall be properly laid in King County, Washington. The prevailing party in any such
action shall be entitled to its attorney's fees and costs of suit. Venue for any action arising
from or related to this Agreement shall be exclusively in King County Superior Court.
16. Severability and Survival. If any term, condition or provision of this Agreement is declared
void or unenforceable or limited in its application or effect, such event shall not affect any other
provisions hereof and all other provisions shall remain fully enforceable. The provisions of this
Agreement, which by their sense and context are reasonably intended to survive the
completion, expiration or cancellation of this Agreement, shall survive termination of this
Agreement.
17. Notices. Notices to the City of Tukwila shall be sent to the following address:
City Clerk
City of Tukwila
6200 Southcenter Boulevard
Tukwila, WA 98188
Notices to Consultant shall be sent to the following address:
7525166 th Ave NE, Ste D-215
Redmond, WA 98052
18. Entire Agreement; Modification. This Agreement, together with attachments or addenda,
represents the entire and integrated Agreement between the City and the Consultant and
supersedes all prior negotiations, representations, or agreements written or oral. No
amendment or modification of this Agreement shall be of any force or effect unless it is in
writing and signed by the parties.
CA revised May 2020 Page 4
DATED this 19th day of February, 2025.
CITY OF TUKWILA
`-Signed by:
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Thomas McLeod, Mayor
ATTEST/AUTH ENTI CATED:
Signed by:
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FEBFFSA84 ...
Andy Youn-Barnett, City Clerk
APPROVED AS TO FORM:
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igned by:
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Office of the City Attorney
CONSULTANT:
By: �.
Printed Name. Angie Sanchez Virnoche
Title: Principal
CA revised May 2020 Page 5
***4FCS
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February 19th, 2025
Tony Cullerton
City of Tukwila
6200 Southcenter Boulevard
Tukwila, WA 98188
Re: 2025 Indirect Cost Allocation Plan
Dear Mr. Tony Cullerton
Thank you for reaching out to FCS and inquiring about our firm's availability to prepare the 2025 citywide
indirect cost allocation plan for the City of Tukwila, WA. We are pleased to present for your review the
attached proposed scope of work and revised budget for your consideration.
Our experience in developing indirect cost allocation plans positions us to develop a comprehensive and
defensible methodology for allocating overhead costs that is rooted in industry with the best practices
and complies with all requirements of the OMB 2 CFR 200. We are equipped in helping the City
enhance its fiscal sustainability and resilience by setting rates and charges that are based on the fully
loaded cost of providing public services.
From setting up the conceptual framework to constructing formulas, analytical modeling is part of our
everyday lives. Our models incorporate a clear and logical flow of information, summarizing results in a
way that supports executive -level leadership presentations. We empower clients who are interested in
using our models internally with the training and knowledge that they need to succeed.
Our team will include Angie Sanchez Virnoche as Principal -in -Charge, with Chase Bozett serving as
Technical Advisor, supported by Eli as Analyst. I will serve as your project manager and primary point of
contact.
We look forward to the City's review, and please do not hesitate to contact us with any questions.
Sincerely,
Shivani Lal
7525 166th Ave NE, Ste D-215, Redmond, WA 98052
P: 425.867.1802
1 I City of Tukwila Indirect Cost Allocation Plan fcsgroup.com I bow an.co
***4FCS
a Bowman cdampa!ny
The City of Tukwila (City) seeks to optimize its financial planning through a comprehensive Indirect Cost
Allocation Plan (ICAP) update. This project will accurately allocate indirect costs across departments,
ensuring compliance with funding requirements and enhancing cost recovery
Our approach includes a thorough review of existing practices, refining methodologies, and aligning with
best practices to support budgeting and audit readiness. The updated CAP will strengthen fiscal
stewardship, improve decision-making, and ensure efficient resource management for the City's long-
term financial health.
The City of Tukwila, located in King County, Washington, has an estimated population of 21,000,
according to the latest Census data. Committed to financial stewardship and operational efficiency, the
City strives to distribute service costs equitably across departments and programs. The Indirect Cost
Allocation Plan (ICAP) plays a vital role in this effort by serving as a key financial management tool that
ensures compliance with regulations while enhancing transparency and accountability.
The 2023-2024 budget reflects Tukwila's commitment to responsible investments that address the needs
of a growing community, guided by City Council goals, community priorities, and fiscal responsibility. The
City is served by over an estimated 294 Full -Time Equivalent employees across 7 departments (Parks,
Public Works, Police, Fire, Community Development, Finance and Administrative Services) with an adopted
budget totaling $396 million. City services to the community are provided through a combination of
direct services provided by City staff and contracted services provided by neighboring jurisdictions or
private sector professionals.
The FCS study approach follows industry's best practices and uses a two-step process that allocates the
costs of indirect or overhead services to all direct service functions.
Exhibit 1: Illustration of two-step indirect cost allocation process
The results of this plan can be used to budget indirect cost line items in department budgets, establish an
indirect component for city rates and fees, and provide a city-wide overhead component for hourly rates
(e.g. rates used to charge capital projects for Public Works' staff time). Based on discussions with City staff,
7525 166th Ave NE, Ste D-215, Redmond, WA 98052
P: 425.867.1802
1 City of Tukwila Indirect Cost Allocation Plan fcsgroup.com I bow an.co
casts DIRECT SERVICE
PROGRAMS
Allocable Costs of
INE?ERECT SERVICE
PROGRAMS
casts
s@ are a in irect
INDIRECT SERVICE
casts
PROGRAMS
!lid
The results of this plan can be used to budget indirect cost line items in department budgets, establish an
indirect component for city rates and fees, and provide a city-wide overhead component for hourly rates
(e.g. rates used to charge capital projects for Public Works' staff time). Based on discussions with City staff,
7525 166th Ave NE, Ste D-215, Redmond, WA 98052
P: 425.867.1802
1 City of Tukwila Indirect Cost Allocation Plan fcsgroup.com I bow an.co
***4FCS
Bowman compa!ny
this analysis will focus on determining indirect cost allocations for full -cost budgeting, with an optional
calculation of 2 CFR 200 -compliant indirect overhead rates to meet federal requirements.
Task 1 1 Project Kickoff Meeting (remote) and Background Review
FCS will work collaboratively with the City project team on a comprehensive set of principles that will
guide the update of the City's current indirect cost allocation plan and identify any specific policy
objectives the City wishes to address as a part of this update.
Deliverables: Establish study guiding principles and confirm study objectives. One remote meeting
to review/discuss/revise guiding principles.
Task 2 1 Data Collection & Validation
Following confirmation of study objectives, FCS staff will prepare and transmit the comprehensive data
request form for initial data including expenditures, City staff budgeted salary and benefit details, updated
organizational charts, and any other reports required for updating the existing indirect cost allocation
plan. We will utilize the information provided, validate its nexus to the costs being allocated, and ensure
consistency with the guiding principles established in the previous task. This task is highly dependent on
the City's efforts on data collection and transmittal to FCS and can impact the project timeline if there are
delays.
Deliverables: Develop and transmit initial data request form to the City.
Task 3 1 Identify Overhead Cost Pools
Utilizing the City financial records and other information provided by the City, FCS will identify the
functions of overhead services, their respective costs and cost pools, as illustrated in Exhibit 2. For
example, Administrative Services is an indirect (overhead) service which provides City Clerk,
Administration, Public Information, and IT services. Each of these workgroups are individual cost pools
within this larger department—these functions may be further subdivided into specific functional cost
pools such as Website Support, Council Support, and Device Support.
Exhibit 2
Description of "Cost Pool" Methodology
Indirect. Service Cost Poon 1
Department A Cost. PooV 2
Indirect. Service Cost Poob 3
Department 8 Cost Pool 4
7525 166th Ave NE, Ste D-215, Redmond, WA 98052
P: 425.867.1802
1 City of Tukwila Indirect Cost Allocation Plan fcsgroup.com I bow an.co
***4FCS
a Bowman company
Task 4 1 Prepare the Indirect Cost Allocation Model with the optional Uniform Guidance 2 CFR 200
Once the pools are identified, FCS will prepare a full -cost indirect cost allocation model. Indirect cost
centers will be allocated based on fully loaded costs and cost allocation factors that will be determined in
collaboration with the City's project team. For example, Finance -Accounting may be allocated based on
the relative size of annual budgets for each department while the Clerk -Council Support function may be
allocated based on the number of City Council agenda items.
A two-step cost allocation methodology will be used to determine the fully loaded costs for each indirect
cost center. The fully loaded costs will then be allocated to benefiting direct service departments and
services based on workload allocation factors. This two-step method is commonly referred to as a Primary
and Secondary cost allocation process, as illustrated in Exhibit 3.
Exhibit 3
Example of Primary and Secondary Allocation Processes
i
/ir UI fC'I SERVICE
/ costs PROGRAMS
Allocable Costs of
INDIRECT' SERVICE
PROGRAM'S casts share of ire ire.
INDIRECT SERVICE costs
PROGRAMS
Deliverables: Prepare an indirect cost allocation with the optional OMB Title 2 CFR 200 (if selected)
compliant model for review with City staff.
Task 5 1 Review Preliminary Results with City Staff and final presentation (remote meetings)
FCS will facilitate up to two (2) remote meetings to review study assumptions, data and findings. During
these meetings we will review and discuss key changes in allocations and revised overhead rates. We will
collect staff feedback and any updated input data for integration into a final model deliverable.
Deliverables: Faciliate upto two (2) remote meetings to review study preliminary results with City
staff and a final presentation
Task 6 1 Finalize Cost Allocation Plan and Deliver the comprehensive customized City's ICAP Model
Based on feedback from City staff, FCS will incorporate any changes, finalize the cost allocation results
Additionally, FCS will prepare and finalize the City's comprehensive customized ICAP model for delivery.
Deliverables: Modify and finalize the cost allocation plan as needed, based upon feedback and
direction from the City. And City's comprehensive customized ICRP model.
7525 166th Ave NE, Ste D-215, Redmond, WA 98052
P: 425.867.1802
1 City of Tukwila Indirect Cost Allocation Plan fcsgroup.com I bow an.co
***4FCS
a Bowman company
Task 7 1 Documentation, Model Training and User Guide
FCS will prepare a draft report describing study methodology, approach, and study results for City review
and comment. Incorporate City comments (if any) and transmit final report in PDF format and the cost
allocation plan in MS -Excel format. In addition, FCS will provide a one-hour model training and
supplemental user guide for staff to reference when updating the model.
Deliverables: Prepare and transmit draft report to the City's project team for review. Collate
comments and edits and finalize / transmit report. Provide model training and user guide.
Task 8 1 Administration and Check-in Meetings
This task includes general project accounting, contract management, and monthly invoicing. FCS will
facilitate a monthly Teams virtual up to thirty minutes project check-in with the City's project team to
discuss study progress, upcoming meetings and deliverables and discuss/resolve any questions or
concerns. This task is expected to recur over the duration of the study.
Project Contingency
A project contingency of $4,000 is recommended to cover additional resources if the City opts to include
up to two scenario models, The 2 CFR 200 federal requirement or additional resources is needed for data
collection and validation. This contingency will only be utilized upon receipt of written authorization from
the City.
We have detailed each task to offer the City flexibility to select a combination of tasks to meet any budget
constraints and are willing to work with the City on prioritizing the various tasks based on its current goals
/ objectives. The following table summarizes our estimated cost to perform the task plan based on 2025
labor rates. The cost of completing the project tasks below is proposed as a lump sum agreement in an
amount not to exceed $59,000 including the project contingency of $4,000 as described in the project
task plan.
Study Task
Mtg.
Principal
Sanchez-
Virnache
PM Lal
Sr Analyst
l hn
Analyst
Jainreson
Admin.
Total
Hours
Proposed
Budget
1: Project Kickoff Meeting (remote) and Background Reuew
1
1
8
4
3
0
16
$3,400
2: Data collection and validation
0
16
16
30
0
62
$11.740
3: Identity Oxerhead Cost Pools
0
4
4
6
0
14
$2.680
4: Develop the Indirect Cost Allocation Model with optional 2CFR200
0
16
16
24
0
56
$10.720
5: Renew Preliminary Results with City Team & Final Presentation (remote)
2
1
8
6
4
0
19
$3.940
6: Finalize Cost Allocation Plan and deliver the Comprehensive Customized City's CAP Model
4
16
8
12
0
40
$8,440
7: Documentation. Model Training (remote) and City's ICAP Model User Guide
1
2
12
3 1
12
0
34
$6.900
8: Project administration and Check-in Meetings (Iti-weekly 30minutes)
10
0
16
8
8
6
38
$7,180
Project Contingency
I
1
$4.000
Total
14
8
1 96
70 1
99
6
279
$59,000
FF!'! !' 1
This study is estimated to take five to six months depending on the City's efforts on gathering and
compiling the comprehensive data needed for full cost and optional OMB Title 2 CFR Part 200 compliant
7525 166th Ave NE, Ste D-215, Redmond, WA 98052
P: 425.867.1802
5 1 City of Tukwila Indirect Cost Allocation Plan fcsgroup.com I bow an.co
***4FCS
a Bowman compa!ny
indirect cost allocation plan. In the event the City has limited data set and has time constraints, a
secondary alternative may be explored.
1 Project Kickoff Meeting (remote) and Background Review 1
2 Data collection and validation t *-
3 Identify Overhead Cost Pools mow
4 Develop the Indirect Cost Allocation Model with optional 2CFR200 MOW`,
5 Review Preliminary Results with City Team & Final Presentation (remote) 2
6 Finalize Cost Allocation Plan and deliver the Comprehensive Customized City's ICA'..
7 Documentation, Model Training (remote) and City's ICAP Model User Guide 1
8 Project administration and Check-in Meetings (hi -weekly 30minutes)
We look forward to the opportunity to work with the City on this project. Please reach out if you have any
questions about this proposal.
Respectfully,
Shivani Lal
Project Manager
7525 166th Ave NE, Ste D-215, Redmond, WA 98052
P: 425.867.1802
1 City of Tukwila Indirect Cost Allocation Plan ksgroup.com I bow an.co