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HomeMy WebLinkAboutResolution #3320RESOLIITION N0. 3320 A RESOLIITION APPROVING AN AGREEMENT BETWEEN THE CITY OF CANTON AND VALIIATION RESOIIRCE MANAGEMENT, INC. WHEREAS, Legal and Ordinance Committee has determined that it is necessary and in the best interest of the City of Canton that the attached Proposal of Fixed Asset Appraisal Services for the City of Canton be approved; WHEREAS, the Canton City Council has made a similar determination. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COIINCIL OF THE CITY OF CANTON, Fulton County, Illinois as follows: 1. That the Canton City Council hereby finds the foregoing recitals to be fact. 2. That the Proposal of Fixed Asset Appraisal Services, a copy of which is attached as Exhibit A, is hereby approved by the Canton City Council and the Mayor is hereby directed to execute and deliver the same on behalf of the City of Canton. 3. That this Resolution shall be in full force and effect immediately upon its passage by the City Council of the City of Canton, Fulton County, Illinois, and approval by the Mayor thereof. PASSED by the City Council of the City of Canton, Fulton County, Illinois at a regular meeting this 16th,- day of April, 1996, upon a roll call vote as follows: AYgS; Aldermen May, Shores, Meade, Nidiffer, Phillips, Sarff, Hartford, Molleck. NAYS: None. ABS~:None. APPROVED: ~~ %~ ~ c ~~ , Donald E'. dwar s, Mayor ATTEST: a y it s, City Clerk. PROPOSAL OF FIXED ASSET APPRAISAL SERVICES FOR THE CITY OF CANTON CANTON, ILLINOIS " MARCH 1,1996 R V M THE V RM DIFFERENCE * Our commitment to governmental clients and the public sector (over 850 entities served in last few years alone) * VRM's role as the industry's innovative leader * Largest professional staff in the industry, exclusively . dedicated to serving public sector clients * Full-time, qualified individuals with ASA designations and affiliations; NO subcontractors * Unparalleled, recent e~xnerience * Turnkey solutions -can manage X11 phases of a sizable engagement w * Automation -utilizing state-of-the-art fixed asset software, bar code applications and hardware for inventories and perpetuation; computerized data collection * Proven ability to meet or beat project deadlines * Full compliance with stringent Uniform Standards of Professional Appraisal Practice (USPAP) for appraisal reports R V M TABLE OF CONTENTS I. Purpose of the Appraisal 1 II. Qualifications/Background 2 III. Scope 3 IV. Methodology 4 V. Inventory Procedures 5 VI. Valuation Procedures 8 VII. Data Base 9 VIII. Reports 10 IX. Timing 11 X. Training & Property Control Manual 11 XI. Optional Perpetuation Services 12 XII. General Information 16 XIII. Investment & Payment Schedule 17 XIV. Conclusion 18 XV. Authorization 19 ADDENDA Addendum A Property Locations Addendum B Professional Qualifications Addendum C References t~o+ R V M PROPOSAL OF FIXED ASSET APPRAISAL SERVICES FOR THE CITY OF CANTON :.s Valuation Resource Management, Inc., hereby proposes to provide professional valuation consulting services to the City of Canton. The purpose, scope, procedures, output, and 3 timing for this engagement are set forth as follows: ,, L P T PO F. OF TAF. APPItA_T AL. The purpose of the proposed appraisal service is to provide the City of Canton with a r comprehensive fixed asset appraisal and management system to meet the following ~ objectives: FINANCIAL REPORTING: Fulfill current fiscal reporting requirements for Materiality Disclosure, establish audit compliance to Generally Accepted Accounting Principles (GAAP) and Governmental Accounting, Auditing, and Financial Reporting (GAAFR), and assist the City in obtaining the GFOA's Certificate of Achievement for Excellence in Financial Reporting. INSURANCE: Provide the City of Canton with current insurable values of all appraised assets for insurance placement and documentation, co-insurance compliance, proper rating, proof of loss substantiation, and a system for perpetuation of the conclusions. ^~ PROPERTY MANAGEMENT Develop accurate building and content descriptions, ~, AND CONTROL: and meet current requirements for accountability and i custodianship. Will enhance operational efficiency `" through identification, control, reinventory and maintenance of fixed assets. ~~ CAPITAL EXPENDITURE • ~• PLANNING: ..~ Establish a basis for projecting capital asset improvements and replacements to assist in the planning and budgeting processes. COST ACCOUNTING: Assist in determining the cost of programs and services provided, and rate setting for internal service and enterprise funds, as well as provide current and accumulated depreciation on all assets. r R V M City of Canton Canton, Illinois Page 2 An accurate inventory and appraisal combined with the implementation of effective _ perpetuation procedures will ensure that the City maintains compliance with financial reporting requirements, and is also prepared to support and defend their insurance record, in the event of a loss. With an automated (bar code) approach, retirement and transfer _ activity which previously went unrecorded can be accurately captured, thus extending the "life" of your fixed asset records (and extending the period between appraisals). IL QUAL.IFI ATION /BA K SRO Valuation Resource Management, Inc. (VRM) has assembled the finest public sector appraisers in our industry. It is VRM's commitment to serving only public entity clients that has enabled us to develop our unique and extensive experience in this market. We are the only national appraisal company which is wholly dedicated to working exclusively with clients such as the City of Canton. VRM's experience in providing governmental clients ,_. with fixed asset management services is unparalleled. Many of our clients have used our appraisal results to prepare financial statements which have been awarded the GFOA's Certificate of Achievement for Excellence in Financial Reporting. It is our policy to employ only full-time, professional appraisers. VRM will not utilize subcontractors for any phase of your appraisal engagement. It is our strong conviction that this tactic, frequently employed by other firms, seriously jeopardizes quality, consistency and general service standards. The company is managed by Mr. William N. Jaeger, President. Mr. Saeger has more than fourteen years experience in inventory and valuation procedures for property records of municipalities, counties, school districts, colleges and universities, and states. He has managed hundreds of public sector engagements, and is a nationally recognized speaker on fixed asset and insurance issues. Included among the national organizations Mr. Jaeger has addressed and performed workshops for, are the Government Finance Officers Association and the Association of School Business Officials. VRM full-time staff offers our clients years of specialized experience. Several Valuation Resource Management, Inc. appraisers have obtained their Senior Designation from the American Society of Appraisers and all are affiliated with that prestigious organization. Additionally, VRM is one of a select few companies which produces final appraisal reports in full compliance with the stringent Uniform Standards of Professional Appraisal Practice (USPAP). R _~ V M City of Canton Canton, Dlinois •'° Page 3 ''''~ Our staffmembers have managed sizable projects for various public sector clients including the Chicago Park District, the Milwaukee Metropolitan Sewerage District, the cities of San Diego and Houston, the Australian Government, and the States of Alabama, ~" Ohio, Montana, Vermont, and Arizona, to name a few. The enclosed list of references - (Addendum C) will provide a list of entities served on similar engagements. III. SCOPE ,.,~ PROJECT PLANNING ' ' We feel an important element in conducting a comprehensive inventory and appraisal of ~"' the City's fixed assets is the time invested in planning and organizing the engagement. ,~ Accordingly, we will hold a planning meeting with City representatives prior to the start of ~~ the field work. It is advisable that members of the administrative staff, including department heads and others directly involved with the ongoing maintenance of the fixed asset records, attend this meeting. In addition, we invite the City's auditors and insurance consultants to participate in the meeting. 'r" The project planning meeting will begin with a review of the City's objectives and the tasks ,,.;t to be completed by our appraisal team. In addition to confirming our specifications for the project time schedule, properties to be appraised, property to be included and excluded, s ° inventory procedures, methodology, vah~ation procedures, and report timing and format, we will address other pertinent schedule, accessibility to properties, contact person at each location, potential use of pwchase information contained within your files and documentation of master file information such as property/location, building, department, fund and account codes. ,. During this meeting, VRM will review the City's existing fixed asset records to determine `~ the extent to which they will be utilized by our staff. We ask that the City make these records available to us at this time so that our staff can coordinate their use. ~~ This meeting will also lay the foundation for the methods and procedures to be used in . maintaining the fixed asset system upon completion of the inventory and delivery of the fixed asset reports. ..~ PROPERTY TO BE INCLUDED ,1 The appraisal will include land, land improvements, other property in the open, buildings/structures, machinery and equipment (contents), infrastructure consisting of underground water and sewer lines, and vehicles owned by the City at the locations specified in Addendum A. R 4, V M City of Canton Canton, Illinois Page 4 Although we intend to perform a detailed inventory and reseazch at the locations stated in Addendum A, we request that you provide any current lists and/or cost information pertaining to land, licensed vehicles, weapons, radios and similar mobile _ equipment to us to ensure that we have located and accounted or all assets. The information to be made available should include such information as asset "- description, manufacturer, model, serial number, original cost and acquisition date. _ Should the City elect to include this information in VRM's appraisal, all forms and data must be provided to our staff within 21 days of our field investigation. Our '` Project Manager will assist the City in coordinating this effort while on-site. ,. PROPERTY TO BE EXCLUDED Property to be excluded from our appraisal consist of general fund infrastructure; all assets of an intangible nature; records and drawings; consumable supplies and spaze parts; works , ~ of arts or antiques; inventory items; and personal property of City employees. ~' IV. METHODOLOGY VRM will employ generally accepted appraisal practices to perform our services for the City. Where possible, we will use the Direct Costing method, using the actual original cost and acquisition date for the property inventoried. VRM will utilize existing City records to establish our original cost conclusions. When invoices or accurate records are not readily available, we will use the Standazd Costing or Normal Costing Methods, which aze defined as follows: F STANDARD COSTING is used when inventoried property units/groups not reconciled to a historical record . receive an estimated cost, where possible, based upon a standazd cost (a known average installed cost for a like unit) at the estimated acquisition date. The unit's age is estimated based upon observed condition, manufacturer's name, model, serial number, age of the facility, and other factors. NORMAL COSTING is used where the preceding ~. techniques cannot be employed to apply historical cost, cost is estimated based upon the present cost of reproduction new, indexed by a reciprocal factor for the price increase . _ from the estimated date of acquisition, to the appraisal date. a. R V M City of Canton Canton, Illinois Page 5 Donated assets will be recorded at fair market value at the time of donation. For assets that have been donated in new or unused condition, the replacement value at the time of donation will be used. This information is available from vendors, manufacturers' price lists or telephone quotes. Assets donated used will be recorded at their estimated fair market value, at the time of the donation. During the costing procedures, aU items will be assigned a useful life of an item will determine its approximate replacement year and be used in calculating depreciation. V. INVENTORY PROCEi~ TRF.S VRM shall coordinate all activities and field inventory work with the City's designated liaison. It is advisable that the City identify one individual to act in this capacity. Our project manager will interact with this individual on a "day-to-day" basis as we progress , with ow work, especially during the inventory phase of our project. All included fixed assets will be inventoried by major category as follows: A. I.A» Land will be included within our database of information and reports based on a cooperative effort with City personnel. Our staff will work with existing records as provided by the City. The information supplied should include, but not necessarily be limited to location, description, acquisition date and cost, and source of funds. B. B[7II,DIND/STR T['Ti TRF.~ The buildings/structures subject to our survey will be carefully inspected and measured. Segregated construction components and building features will be identified and valued. Building plans and photographs will be prepared for each structure to become part of our proof-of-loss documentation, in addition to assisting with the valuation efforts. ~- :: .,. R V M i _. City of Canton Canton, Illinois °- Page 6 A description of each building will be developed and __ recorded, showing construction type, story heights(s) occupancy, materials used, square foot area, date(s) of construction, service systems, fire and safety systems, security/apparatus systems, and additional features. Building improvements (i.e. additions, renovations) will be individually recorded, with the appropriate dates and ,, costs, to satisfy GAAP requirements. During the office valuation portion of the engagement, property exclusions (those items not typically covered by an insurance policy) will be segregated to properly report the site preparation and excavation, footings and foundations, and a portion of plumbing costs (underground). In our Insurance Summary Reports, these items will be properly segregated to assist the City and your insurer. C. INIPROVEMRNT OTHER AN B TTi i~TN('TC ' Improvements outside of a building and particular to a parcel of land will be inventoried and recorded by _ location. Included are assets such as parking lots, ' fencing, and outside lighting. D. MACHINERY t~ND EO~TT_PMENT (CONTENTSI A detailed inspection and field inventory will be "~ conducted at those sites listed under Properties to be Appraised. All included fixed assets will be inventoried by major category as follows: 1. Unit Control -Machinery and equipment items with an original unit cost of $500 or more, and having an estimated useful life of more than one - year will be inventoried and identified ;~ individually. R V M City of Canton Canton, Illinois Page 7 2. Group Control -Items which have an original unit cost of less than the selected cutoff will be grouped by like asset kind (i.e. chair, desk, file) within each building (by department). These assets will be included and valued for insurance purposes, and will tll~ appear in the accounting reports. They will .however be contained in the same general data base and coded as "Non- . Capitalized". TAGGING Our appraisers will apply new bar code tags to all unit control items and enter the tag numbers into the data base. Tags will be applied in a consistent location on like items, enabling ease of future reinventory. Formal tagging procedures will be provided to the City for acceptance, and will also become part of your Property Control Manual (optional). Valuation Resource Management, Inc. will provide the type and quantity of bar code tags needed for this assignment as well as for perpetuation of the tagging system. The cost of ' ~ the tags will be billed directly to the City. We estimate the cost of these tags to be $200. VRM anticipates providing 2,000 polyester bar coded tags which will accommodate the initial inventory and leave an ample supply for future years' additions. The following is a sample of the type of tag we would use: ~' CITY OF ~.; CANTON, ILLINOISS ~Z IIIIIIIIIIIIIIIIIIIIIIIIIIIII IIII IIII ~ 000005 E. VEHICLES Licensed vehicles and rolling stock will be included within the appraisal report. The City will be responsible for providing a list of all vehicles. Included in this information should be make, model, description, VIN, acquisition date and cost, and responsible department. ~~- s :: R ` V M City of Canton Canton, Illinois Page 8 - F. Il~ERASTRUCTIJRE - VRM will perform a detailed inventory and appraisal of water distribution and wastewater collection lines. The City will be responsible for providing our staff with the most current mappings, records, and/or engineering studies available. VRM will perform the necessary "take-offs" and/or records research. r^ The data will be recorded with sufficient detail to promote ease ~' of future perpetuation. PROGRESS REPORTS Our staff will keep the City informed as to the status of our engagement with periodic progress reports. These will take the form of both meetings and written communication, and an agreeable schedule for these updates will be determined during our project planning meeting. VI. VALUATION PROCEDURES During the course of the inventory and the subsequent valuation research, our appraisers will examine all assets to determine: a) date of acquisition b) original cost c) cost of reproduction new d) cost of reproduction new less depreciation, defined as follows: ~ ORIGINAL COST is the amount originally paid to acquire the asset, including such cost as set-up chazges; transportation; taxes; engineering and azchitectural fees; and title insurance. If an asset was donated or bought for a nominal sum, GAAP requires that the asset be accounted for at mazket value as of the date of acquisition. When possible, original costs and acquisition dates will be determined via the direct costing method as described in section III -Methodology. Where purchase information is not readily available, costs and dates will be determined by the standazd and normal costing methods as described in the Methodology section. COST OF REPRODUCTION NEW is the amount required to reproduce property in like kind and materials, in accordance with current mazket prices for materials, labor and manufactured equipment, contractor's overhead, profit, ~ and fees, but without provision for material or equipment, :~ based upon reproducing the entire property at one time. R V M i:. City of Canton Canton, Illinois Page 9 COST OF REPRODUCTION NEW LESS DEPRECIATION for insurance coverage, is based upon the cost of reproduction new, as defined, less an allowance for accrued depreciation as evidenced by observed condition is comparison with new units of like kind, with consideration of physical deterioration and functional and economic factors deemed relevant for insurance purposes. t ,, ~~ Our investigation includes the use of various research sources to develop the cost conclusions for each asset of group of assets. These sources include catalogs, phone quotes, price lists, trade journals, magazines, industry publications, technical and pricing subscription services, engineering manuals such as Means, Marshall Swift, Handy Whitman and E.H. Boeckh. VII, pATA BASE The information to be contained in the computerized data base inventory will include at a minimum following elements for each asset or group of assets: a. Properiy/Location b. Building c. Department ' d Fund e. Account f. Asset Classification Code g. Asset Number h. Quantity i. Description j. Manufacturer ** k. Model 1. Serial Number ** m. Date of Acquisition (Actual or Estimated) n. Percent Depreciation (Physical) o. Accumulated Depreciation p. Annual Depreciation q. Useful Life r. Original Cost (Actual or Estimated) R V M City of Canton Canton, Illinois Page 10 s. Cost of Reproduction t. Cost of Reproduction New Less Depreciation * Department, fund, and account numbers will be included with assistance of City personnel. * * To be recorded when available on the individual asset. VIII. REPORTS Your reports are presented in an easy to read format. Two copies of each final report will be provided (additional copies upon request). Detail as well as summary reports are included in the final product. Your reports will be preceded by a narrative section which will: a. Identify the property appraised b. State the purpose of the appraisal c. Specify the appraisal date d. Define the level of value sought and the premise of value employed e. Describe the nature of the property included in and excluded from the appraisal f. Discuss the appraisal investigation ' g. Indicate the factual data considered h. Present the conclusions of value i. Outline the qualifying and limiting conditions j. Include the signature of an authorized officer of the company Your reports will include: • Accounting Summary Report (Total Original Cost, by Fund, Asset Type/Class) • Depreciation Summary Report (for Proprietary Fund Assets) • Accounting Detail Report (Sorted by Fund, Location, and Department) • Depreciation Detail Report (for Proprietary Fund Assets) R V M City of Canton Canton, Illinois Page 11 • Insurance Summary Reports (Both Reproduction New Cost & Reproduction New Less Depreciation Cost) • An Insurance Detail Report (By Location) • Appropriate Legends The above reports are designed (based on our experience with similar clients) to satisfy all ~. '~ of the City's reporting requirements, including audit compliance under AICPA and GFOA guidelines. Additionally, those generated for insurance purposes shall provide sufficient detail for proof of loss, as-well as a standard format for summary reporting of property (building and contents style). IX. ~ VRM's level of automation, depth of experienced staff, and commitment to governmental clients are all factors in enabling us to meet the most aggressive delivery schedule. Upon receipt of yow authorization, we will contact you to determine a mutually agreeable schedule for the project planning meeting and our field investigation. Delivery of the final reports will be within 60 - 90 days from project commencement, assuming we receive any required information from the City of Canton in a timely manner. '~' X. TRAiNiNr AND PROPERTY ONTROi. ANiTAT, - OPTIONAi. Should the City so choose, VRM will instruct the appropriate City personnel in the maintenance and upkeep of the City's Fixed Asset Management System. VRM will tailor our training and subsequent manual to fit the method of updating selected by the City ("in- house" updating). To understand the City's policies and procedures regarding fixed asset accounting, our project manager will meet with department personnel responsible for acquiring or disposing of assets and those individuals responsible for the eventual use and upkeep of the fixed asset records. Upon completion of the interviews, we will prepare a manual with descriptive information on topics including, but not limited to, property control responsibilities, methods for asset tracking, tagging procedures and coding. The manual f~' will also contain sample forms for perpetuation and a section which defines standard ~:; language and fixed asset terminology. e ~, r R V M ,w City of Canton Canton, Illinois ~"^ Page 12 The completed manual will provide the City with documented procedures for maintaining `~ the fixed asset records as well as guidelines for handling more unique or complex asset transactions, (donations, partial retirements, building renovations, etc.). ~.- "" The benefits of this service include the following: Assemble in one manual of reference, all policies, procedures and instructions which are to be used in the on going maintenance of the fixed asset records * Ident~ the responsibilities of the various departments involved in maintaining the information * Provide examples and individually tailored forms to assist in the ~` perpetuation process XI. OPTiONAj. PF. P .Ti ATiON F.RVI E PERPETUATION -GENERAL NOTES VRM irides itself on our ability to offer our clients the appropriate solutions for their fixed asset needs. By providing several options for perpetuation of the resulting fixed asset records, we can ensure that the City will have available the proper tools to maintain their system. The software outlined in Option II is designed to maximize the benefits of maintaining in- house records and utilizing the appraisal database as a "true" fixed asset management system. Additionally, Option IlI presents the barcode hardware which is completely compatible with Option II. Option IV offers variations on Annual Updating programs which are designed to be more "hands-off' for the City. FIXED ASSET SOFTWARE (OPTION II) VRM is pleased to offer the industry's most flexible, state-of-the-art fixed asset management software, designed specifically for public sector and not-for-profit users. FACTS/plus is aWindows-based, event-driven program which incorporates all the ~~ R V M City of Canton Canton, Illinois Page 13 necessary fixed asset management tools in an easy to use package. The following are a few of its many features: • Quick data entry screen • Graphical User Interface using Windows • Query and sorting capabilities on aU key fields of data • Stand-alone or network operations • Windows 95 ready Custom report writer interface (optional) • Ability to interface with other systems for import (i.e. payables) or export functions • Direct link with bar code scanning hardware for automated reinventories • Multiple access levels for enhanced security FACTS/plus is designed to operate under the following system requirements: {-~~' • IBM compatible 486-33 or better with Windows and a mouse • Minimum 12MB RAM • 25MB hard disk space for FACTS/plus, and additional 20MB per 10,000 asset records in your data files • VGA color monitor FACTS/plus is fully documented with aneasy-reference user's manual outlining all aspects of the system's operation. Also, each system includes up to 90 minutes of (toll-free) telephone support, available for the first six months. Beyond the initial purchase of FACTS/plus, VRM offers our Annual Service Plan (ASP). This two-fold maintenance begins six months after the initial installation, and is renewable annually. First, ASP includes all system enhancements and upgrades made to either version, along with an additional 90 minutes of 800# phone support. Also, ASP includes VRM's customized value trending factors to be applied to your data's replacement cost figures. Each year (on or near the anniversary of your appraisal) VRM will send a diskette cornaining the current trend factors for each major class of assets. This automated process ensures that your insurable values will be updated in an accurate, efficiern manner, helping extend the "life" of your appraisal records. 4i ;- R . V M u City of Canton Canton, Illinois - Page 14 . _ Finally, VRM provides optional on-site system installation and training services. The standard service includes a full day of instruction by VRM's in-house systems consultant, ~~ and this service can be tailored to fit multiple user needs. BAR CODE SCANNING HARDWARE (OPTION III) Y^ With the purchase and use of an integrated bar code scanning, hand-held computer, the ~" City could perform an annual reinventory of its equipment items in a fraction of the time ,,.. necessary using conventional methods. The City personnel would use the reader to scan and record the bar code tag number for each tagged unit control item, during the ~. reinventory. Next, the collection unit's data would be up-loaded into the City's personal computer which had been designed to run VRM's FACTS/plus Software Program. The scanned inventory data would then by compared to the original inventory and reconciled. Discrepancies between the base inventory, processed changes and the reinventory could be investigated by use of the following exception reports: The assets that are located within a particular building, department or room that were not previously shown on the " base inventory (unrecorded additions). A listing of the assets that were supposed to have been located within a particular building, department or room and ~" their present locations (unrecorded transfer). i ~` Assets that were not scanned due to being missed in the scanning process, having a defaced or missing tag, or being improperly retired or stolen from the scanned area ~ (unrecorded retirements or missing asset). ~- The City could generate its own revised standard reports and activity reports ,~, reflecting additions, transfers, and retirements, annually. Annual reinventories can be conducted in a very short period of time, and this system will automatically identify transfers and retirements. ~_ R V M ,,, City of Canton Canton, Illinois Page 15 ~. ; ANNUAL VALUATION SERVICE OPTION - (OPTION IV) Annual Valuation Service IVa. As an option we offer an annual appraisal updating service. The service requires - that the City provide VRM with a complete list of all additions, retirements, and transfers having occurred in the previous year. VRM will provide the necessary ±t reporting forms and training to ensure proper maintenance of the system, while maintaining the completed appraisal database. 0 -~ VRM will record the additions and changes in the existing database, apply inflationary factors to the existing assets' replacement costs, and annually reissue a full set of revised reports. In addition to the standard reports issued, as stated under the Reports sections of this proposal, we will provide you with additions, retirements, and transfer reports. Our Annual Valuation Service fee will be invoiced at the time the final report is delivered. This fee will cover servicing your appraisal database with customized trend (inflation) factors on a periodic basis throughout the year, providing the City with revised appraisal reports on the first anniversary of your appraisal, reflecting updated insurable values, and, as necessary, providing the City with special reports to substantiate a loss. This service offers an effective tool for maintaining fixed asset records with a minimfi.l amount of administrative time and effort. Also, reports are consistently produced and delivered on a regular schedule, making year end reporting more standardized. On-Site Annual Valuation Service - IVb. This final perpetuation Option is available, and can be exercised at any time, for a period of four years from the date of this proposal. Also it can be applied under our software scenario (FACTS/plus). VRM's staff would perform a complete reinventory of the major (tagged) equipment assets using our own Tebcon scanning equipment. The scanned inventory would be compared to your existing data base Qn_sitg and then reconciled, accounting for and identifying transfer and disposal activity which might otherwise have gone unrealized. R V M City of Canton Canton, Illinois .~ Page 16 The many benefits of this service are summarized as follows: • Annual (or future) verification of frzed assets by independent third party provides continued integrity of your records; ~- • Greatly extends the period between major reappraisals; ~L ~,. • VRM can provide assistance with recording future major acquisitions ~~ or construction projects, combined with this service, at significantly lower rates. • Saves the City the initial hardware (Telxon) investment. XII. ENF.RAL.INFO MATION The following conditions are considered standard practice in the performance of our appraisal services and, if applicable, are made a part of this proposal. All available data an records deemed necessary in the search for costs and historical background should be provided to our appraisal staff. The City should identify all equipment not owned by the City in advance of the field irfventory. A list of all assets on loan or off site for repair should be furnished to the appraisal staff. We will maintain copies of the final reports, together with all field notes and working papers in our files for a period of five years from the date of the appraisal. Should the need arise, these documents will be made available to the City of Canton. Valuation Resource Management, Inc. will render advisory service at no charge to the City of Canton, its auditors and insurance representatives regarding the procedures and methods used in the appraisal process and the resulting values of the assets appraised. ~`.1 R V M ;~ i~ City of Canton Canton, Illinois Page 17 VRM will act as an independent contractor for this engagement and agees that it presently has no interest and shall not acquire any interest, direct or indirect, which would conflict in any manner or degee with the performance of its service to the City. Additionally, in the execution of this contact VRM shall not employ any individual(s) having such known interest. In the event of property loss involving assets appraised, Valuation Resource Management, Inc. will provide to the City at no cost, current insurable values of the affected areas. This service is available for one year after completion and delivery of the final reports. This service will remain in effect on a year to year basis as long as the City uses the updating services described within this proposal. XIIL INVESTMENT PAYMENT HF.D Ti,F Based on our understanding of yow requirements and the level of professional skills necessary to complete this project, the City's not to exceed investments is as follows: Comprehensive Fixed Asset Appraisal Service $10,800 Includes inventory and appraisal of all specified fixed assets, tagging unit control equipment with bar coded labels, and preparation of final reports (excludes cost of tags est. $200) A. Base Appraisal $ 8,500 B. Infrastructure Portion $ 2,300 ,. Option I -Property Control Manual - -PERPETUATION OPTIONS - - Option II -FACTS/plus Software * Network Version * Stand-alone Version * Installation/Training -Either Version * Annual Service Progam/Trends (stand-alone) * Annual Service Progam/Trends (network) Option III - Telxon PTC-912 Bar Code Scanning Unit $ 600 $ 2,995 $ 1,995 $ '900 $ 450 $ 550 $ 2,400 R irr V M City of Canton Canton, Illinois Page 18 OR Option IVa -Annual Valuation Service $ 800/year Option IVb - On-Site Annual (or Future)Valuation Service $ 5,900 C The above fees include any and all expenses incurred by Valuation Resource Management, Inc. in preparation and completion of the inventory, appraisal and reports. Our fees are guaranteed for a period of ninety (90) days from the date of this proposal. Progress invoices, up to 90 percent of the total fee, will be issued during the course of our engagement, with payment expected prior to delivery of the reports. The final 10% will be invoiced upon completion and delivery of the reports and is due and payable upon receipt. We have relied upon certain property and building data provided by the City of Canton in developing these fees. Additional locations, buildings or structures encountered, or corrections to the listing of properties provided to valuation Resource Management, Inc. necessitating a significant increase in professional time, will be charged at our standazd per diem rates, plus expenses, and billed in addition to the agreed upon fee. Fee quotations for inclusion of additional properties or buildings will be provided upon request. XIV. CONCLUSION Should this proposal meet with yow understanding of the services required, and you agee with the methods and procedures as outlined above, please signify your acceptance by executing the signature block on the enclosed duplicate copy of this document and return it for our files. To avoid delays, the authorization sheet can be sent via facsimile to (414)224-1341. We look forwazd to working with the City of Canton on this important project and asswe you our service will be as desired and expected. Should you have any questions regarding this proposal, please call me at (800)876-0350. R V ~_ M~' \'. City of Canton Canton, Illinois Page 19 AUTHORIZATION Please note the services you desire by placing a check mark in the space provided. Our fees are as follows: Comprehensive Fixed Asset Appraisal Service $10,800 Includes inventory and appraisal of all specified fixed assets, tagging unit control equipment with bar coded labels, and preparation of final reports (excludes cost of tags est. $200) . A. Base Appraisal $ 8,500 _ B. Infrastructure Portion $ 2,300 Option I -Property Control Manual $ 600 - -PERPETUATION OPTIONS - - Option II -FACTS/plus Software * Network Version- $ 2,995 _ * Stand-alone Version $ 1,995 _ * Installation/Training -Either Version $ 900 _ * Annual Service Program/Trends (stand-alone) $ 450 * Annuai Service Program/Trends (network) $ 550 ' Option III - Telxon PTC-912 Bar Code Scanning Unit $ 2,400 _ • OR Option IVa -Annual Valuation Service $ 800 _ /year Option IVb - On-Site Annual (or Future)Valuation Service $ 5,900 _ ACCEPTED: CITY OF CANTON Name: Title: Date: OFFERED BY: VALUATION RESOURCE MANAGEMENT, INC. ~~ ~~~ Mark T. Hessel, Vice President March 1, 1996 ~R ' ~V M , i ~ ~ City of Canton Canton, Illinois Page 19 AUTHORIZATION Please note the services you desire by placing a check mark in the space provided. Our fees are as follows: Comprehensive Fixed Asset Appraisal Service $10,800 _ Includes inventory and appraisal of all specified ~., fixed assets, tagging unit control equipment with bar coded labels, and preparation of final reports (excludes cost of tags est. $200) A. Base Appraisal $ 8,500 - B. Infrastructure Portion $ 2,300 _ Option I -Property Control Manual $ 600 - -PERPETUATION OPTIONS - - Option II -FACTS/plus Software * Network Version $ 2,995 _ * Stand-alone Version $ 1,995 _ * Installation/Training -Either Version $ 900 _ * Annual Service Program/Trends (stand-alone) $ 450 _ * Annual Service Program/Trends (network) $ 550 'Option III - Telxon PTC-912 Bar Code Scanning Unit $ 2,400 OR Option IVa -Annual Valuation Service $ 800 _ /year Option IVb - On-Site Annual (or Future)Valuation Service $ 5,900 ACCEPTED: CITY OF CANTON Name: Title: Date: OFFERED BY: VALUATION RESOURCE MANAGEMENT, INC. Mark T. Hessel, Vice President March 1, 1996 R V M ADDENDUM A PROPERTY LOCATIONS R V M City of Canton . Properties To Be Appraised City Hall City Garages (3} Public Safety (Police/Fire) WWTP ~- 2.4 Average MGD Water Plant 3.0 MGD (Maximum) Enterprise Fund Infrastructure (Water, Sewer Lines) r~ r R V M ADDENDUM B PROFESSIONAL QUALIFICATIONS R V M R ,. ~ ~ ~: :. _ ~; Valuation Resource Management, Inc. PROFESSIONAL PROFILE r S WILLIAM N. JAEGER, ASA r= PRESIDENT & EXECUTIVE IN CHARGE William N. Jaeger is President and Executive-In-Chazge of Valuation Resource --~ Management, Inc. (VRM). Mr. Jaeger founded the Company on the belief that the Public Sector deserves the highest quality appraisal service possible. ~' Mr. Jaeger is considered by his peers as a leader in the appraisal community. For over 15 ~, yeazs Bill has specialized in the valuation of real estate, machinery & equipment and building service systems, unique and monumental building structures, land improvements, water and wastewater treatment facilities, electrical power generating facilities and infrastructure type assets. He has been directly involved in over 500 projects for various corporations, states, cities, counties, risk pools, pazk districts, universities and colleges, school districts, private schools, water and wastewater treatment facilities and various municipal authorities. These assignments were completed for the purposes of establishing fixed asset records, as well as for establishing insurable values, planning and lifing studies and fair rental value. Mr. Jaeger has been called upon as an expert witness, giving testimony before the State of Colorado. His testimony was used to define fair rental value conclusions, construction cost estimating, and depreciation, that helped establish guidelines and procedures in the appraisal of nursing homes for the State of Colorado. With his proven expertise in the valuation of water and wastewater treatment facilities, Mr. Jaeger was retained by the Australian Government to provide a quality audit and fixed asset study for the Engineering, Sewer and Water Supply Division. The study involved water and wastewater property, infrastructure, property control, and estimated useful life of water and wastewater treatment equipment. Mr. Jaeger served as engagement manager for a comprehensive fixed asset management system for the City of Houston, Texas. This multi-phased joint venture, allowed Valuation Resource Management, Inc. to performed a complete inventory and appraisal for fixed asset accounting and insurance purposes of General Fund, Civic Center, and Sports Authority fund assets. Included in the appraisal were land, land improvements, buildings, and machinery and equipment. All controllable moveable machinery and equipment were baz code tagged and all rooms were tagged with a bar code identifier. Mr. Jaeger provided consultation to the City on creating financial and operating policies ~` and procedures, appropriate applications softwaze, financial and management reporting, ~.. and appropriate training of City staff. 4 .tY 4V i PUBLICATIONS: Establishing a Fixed Asset Management System Government Finance Review Establishing Insurable Values Utilizing A Model Approach American City a_nd County magazine Authored four chapters on fixed assets for the Governmental ' ~ Finance Officers Association publication of fixed assets dealing with inventorying, lifing, coding and depreciation. ~_ Seminars on various appraisal topics such as fixed asset ~-- management and insurable values for the National Association of College and University Business Officers, the Society of Property Administrators, the Governmental Finance Officers Association and ~' the Association of School Business Officials Speaker at 1995 Southeastern ASBO Regional Convertion t EDUCATION: Waukesha County Technical Institute, Waukesha, WI A.A. -Real Estate PROF'~SSIONAL AFFILIATIONS/DESIGNATIONS: American Society of Appraisers Accredited Senior Member (ASA) Risk Insurance Management Society (RIMS) Governmental Finance Officers Association (GFOA) Association of School Business Officials (ASBO) American Water Works Association (AWWA) Canadian Risk Managers Association WII.,LIAM N. JAEGER, ASA PRESIDENT & EXECUTIVE-IN-CHARGE ~. • R V M il'm. R -.. ~ ,,M Valuation Resource Management, Inc. PROFESSIONAL PROFILE ;~ "' MARK T. HESSEL -~ VICE PRESIDENT ~_ '~ EXPERIENCE: As Vice President of Valuation Resource Management, Inc. (VRM), Mark T. Hessel is t- responsible for business development and contract management in the Central Region. Mr. Hessel has nine years experience in assisting various public sector and not-for-profit ~e ' entities with their fixed asset appraisal needs. He has been instrumental in standardizing ''`' procedures for valuing land improvements, buildings and building services, machinery and equipment, infrastructure, and water and sewer district assets. He is well versed in various public sector audit requirements. His appraisal experience as a Senior Appraiser and his knowledge of the business have been very useful to identify the specific needs of his clients. Because of his extensive project management experience as an appraiser, he is able to anticipate client questions, offer appropriate solutions, and effectively interface with brokers, auditors, and systems consultants. Mr. Hessel's experience in the industry, and input into the establishment of Valuation Resource Management, Inc. have enhanced new technical procedures, customized reports, and timely project completion rates. Throughout his career Mr. Hessel has managed or been involved with hundreds of engagements. A few of his more recent and sizable projects include: '~ * Metropolitan Council -Wastewater Services, Minnesota * Green Bay Metropolitan Sewerage District, Wisconsin * Macon-Bibb County Water/Sewer Authority, Georgia * City of San Diego, California * City of Tallahassee, Florida * Moraine Park Technical College, Fond du Lac, Wisconsin * St. Francis Hospital, Milwaukee, Wisconsin * * Waukesha County Technical College, Wisconsin Cincinnati Technical College, Ohio * Lakeshore Technical College, Cleveland, Wisconsin * Davenport Schools, Iowa * Canton School District, Ohio * West Allis-West NTilwaukee School District, Wisconsin ,_. Y EDUCATION: University of Wisconsin -1Vfilwaukee B.B.A. -Finance PROFESSIONAL AFFILIATIONS: 4r Tri-State (NE, IA, SD) PRIMA ~ Central Association of College and University Business Officers , American Water Works Association ~~~ Illinois Government Finance Officers Association Illinois Association of School Business Officials Illinois Association of School Boards ~` Michigan Municipal Finance Officers Association Michigan Association of School Business Officials Government Finance Officers Association of Missouri Kentucky Association of School Business Officials, Inc. Ohio Government Finance Officers Association Ohio Association of School Business Officials Minnesota School Boards Association Minnesota Association of School Business Officials Minnesota Government Finance Officers Association Wisconsin Association of School Business Officials SPEECHES/ARTICLES Various articles including "Automating Fixed Assets" - Minnesota ASBO October 1995 Newsletter Various speeches including fixed asset appraisal seminars to the following: September 1995 Ohio GFOA Conference September 1995 Missouri MFOTA Meeting - St. Louis Chapter November 1995 Minnesota ASBO October 1993 Nebraska, South Dakota, Iowa Tri-State PRIMA meeting MARK T. HESSEL VICE PRESIDENT R ~r V M R V M, ti:,. Valuation Resource Management, Inc. PROFESSIONAL PROFILE C'' ~- GENE K. ARENSON VICE PRESIDENT EXPERIENCE: As Vice President of Valuation Resource Management, Inc. (VRM), Gene K. Arenson is responsible for project management, production, review, training and development of new staff, property accounting manual guidelines, and quality assurance of valuation '' services provided to clients. He oversee all professional staff operations in the Midwest ~- Region for VRM. ..- . Mr. Arenson has specialized in public sector appraisal studies since 1988. His technical W- expertise encompasses the valuation of buildings, building service systems, land improvements, and machinery and equipment. He is versed in Generally Accepted Accounting Principles (GAAP) rules as they apply to governmental and educational entities. Mr. Arenson's extensive experience includes project management and appraisal services to over 100 public sector clients. His valuation studies have resulted in efficient property utilization and control, customized inventory procedures for software linkage with existing client software, applied bar code technology, and reconciliation of assets to their documented acquisition costs and dates for educational, municipal, and utility clients. Several of his most notable clients served include: • * City of Houston, TX * Metropolitan Council -Wastewater Services, MN * State of Ohio * Ottawa County, MI * Lewis County, WA * Fond du Lac County, WI * City of Beloit, WI * Waukesha County Technical College, WI * San Bernardino Community College District, CA ED UCATION: University of Wisconsin - Milwaukee B.A. -Economics PROFESSIONAL AFFILIATIONS/DESIGNATIONS American Society of Appraiser (ASA) -Candidate Member American Water Works Association -Member z R,~ ,~ . V' %,M%> ~'~ ~ Valuation Resource Management, Inc. PROFESSIONAL PROFILE KURT J. HANTSCHE STAFF APPRAISER EXPERIENCE: Kurt Hantsche is a staff appraiser with Valuation Resource Management, Inc. (VRM), located in the Milwaukee, Wisconsin Office. He joined Valuation resource Management, Inc. on January 3, 1995. Mr. Hantsche serves as both an appraiser and project manager/consultant for various appraisal assignments. As an appraiser, Mr. Hantsche has had previous experience with AccuVal Associates, Incorporated and with American Appraisal Associates, Incorporated. In his position with - AccuVal Associates, Incorporated, he assisted in developing liquidation and auction -~ values for the auctioneering process. His specialty with AccuVal Associates, Incorporated was in the area of contractors/heavy construction equipment. While employed with ~, American Appraisal Associates, Incorporated, Mr. Hantsche specialized in the appraisal of ~- Public Sector entities using Cost of Replacement new, Cost of Replacement New Less Depreciation, and Original/Historical Cost for insurance and accounting valuation conclusions. As an appraiser, Mr. Hantsche has 4 years of specific experience in the appraisal of county governmental entities, city/town/village governmental entities, wastewater and water treatment facilities, college/university campuses, school districts, and various private sector companies. As a project manager, Mr. Hantsche is responsible for the successful completion of ~ appraisal assignments, coordinates and delegates assignments for appraisal team(s), reviews reports before shipment to client(s), and performs follow-up clients satisfaction studies. Recent engagements in which he has been a appraisal specialist include: ., • City of Liberty, MO • Lapeer County, MI • City of Savage, MN • City of Hastings, MN Waukesha County Technical College, WI EDUCATION: University ofWisconsin-Milwaukee Bachelor of Science: Marketing Degree (with emphasis in Marketing Management) Real Estate/LTrban Development Degree (with emphasis in Real Estate Appraisal) R ~. V M KREG A. GURAN STAFF APPRAISER EXPERIENCE: PROFESSIONAL PROFILE °; Kreg A. Guran is a staffappraiser with Valuation Resource Management, Inc. (VRM). ,~ Mr. Guran is responsible for managing projects involving the inventory of assets, costing, review, and quality assurance of valuation services provided to clients by VRM. ,.~ ;~ Mr. Guran is well versed in the appraisal of land improvements, infrastructure, buildings and services, and machinery and equipment, to provide clients with insurable values, proof of loss substantiation, and development of property record systems. His clients use the ;~- results of the appraisal investigation to achieve audit compliance to Generally Accepted Accounting Principles (GAAP) and Governmental Accounting, Auditing and Financial Reporting (GAAFR), as a basis for projecting capital asset improvements and replacement, assisting in the planning and budgeting process, and for the placement of property insurance and proof of loss documentation. In his capacity as staff appraiser, Mr. Guran has participated in or managed the appraisal of various governmental entities and educational properties. Recent engagements in which he has been a project manager or staff specialist include: ~ • City of Houston, TX • Leon County, Tallahassee, FL ' • Atlanta Public Schools • City of Liberty, MO • • Rolling Meadows Park District, II. Sacred Heart School of Theology Hales Corners WI , , • Moraine Park Technical College, WI • Davenport School District, IA • School District of Kettle Moraine, WI • Hartland/Lakeside Elementary Schools, WI EDUCATION: Whitewater University - Whitewater, Wisconsin B.B.A. -Speech Communication PROFESSIONAL AFFILIATIONS/DESIGNATIONS American Society of Appraisers (ASA) -Candidate Member .y Valuation Resource Management, Inc. t R V M ~~~ Valuation Resource Management, Inc. PROFESSIONAL PROFILE DEAN RONDORF ~- STAFF APPRAISER EXPERIENCE: ..- ,_ ,_ Dean Rondorf is a staff appraiser with Valuation Resource Management (VRM). Mr. Rondorf is responsible for inventory of assets, costing, review, and quality assurance of valuation services provided to clients by VRM. Mr. Rondorf is well versed in the procedures used to value building construction and 4 services, land improvements, and machinery and equipment for municipalities and school ;~ districts. His clients use the results of the appraisal investigation to achieve audit '~ compliance to Generally Accepted Accounting Principles (GAAP) and Governmental Accounting, Auditing and Financial Reporting (GAAFR), as a basis for projecting capital asset improvements and replacement, assisting in the planning and budgeting process, and for the placement of property insurance and proof of loss documentation. ]n his capacity as a staff appraiser, he has participated in the appraisal of educational entities and municipal properties. Recent engagements in which Mr. Rondorf has been a project manager or an appraisal staff specialist include: • Eastern Michigan University • Atlanta Public Schools City of Houston, TX • City of Ripon, WI • Village of Oak Park, II, • Village of McFarland, WI • Village of Northbrook, IL • Shelby County Schools, TN EDUCATION: University of Wisconsin-Green Bay, WI B.S. -Business Administration PROFESSIONAL AFFILIATIONS/DESIGNATIONS American Society of Appraisers (ASA) -Candidate Member ~.. ADDENDUM C REFERENCES R V M STATE OF ILLINOIS REFERENCES Hoffrnan Estates Park District Hoffman Estates, IL, Ms. Pat Jacobs Business Manager (708)885-7500 ~~ ;,~ City of St. Charles St. Charles, II, "'" Mr. Larry Maholland Finance Director (708)377-4425 Village Of Flossmoor Flossmoor, IL Mr. Brian Barnes Finance Manager (708)798-2300 Rolling Meadows Park District Rolling Meadows, IL Mr. Rudy Nelson Execufive Director (708}818-3200 -' Glenview Park District Glenview, IL Mr. Steve Rauwolf Business Manager (708)724-5670 Onwentsia Club Lake Forest, IL Mr. James Muldowney General Manager (708)234-0120 i" d * Fixed Asset Inventory & Appraisal * Asset Tagging * Insurable Values * Annual Valuation Service * Fixed Asset Inventory & Appraisal * Asset Tagging * Insurable Values * Infrastructure Valuation * Property Control Manual * Fixed Asset Software * Fixed Asset Inventory & Appraisal * Reconciliation of Cost * Asset Tagging * Fixed Asset Software * Fixed Asset Inventory & Appraisal * Asset Tagging * Insurable Values * Annual Valuation Service * Fixed Asset Inventory & Appraisal * Insurable Values * Annual Valuation Service * Fixed Asset Software * Insurance Inventory and Appraisal * Annual Valuation Service 4` R V M State of Illinois, References Page 2 ~~ Village of Oak Park Oak Park, IL • • Mr. Peter Strutynski Risk Manager (708)383-6400 `" Village of Northbrook ~ . Northbrook, IL Ms. Betsy Garibaldi r. Assistant Finance Director fi (708)272-5050 City of Wood Dale Wood Dale, IL Mr. Pete Stefan Finance Director (708)766-4900 Thorn Creek Basin Sanitary District Chicago Heights, IL Ms. Janet Stevens Manager -Finance Accounting (708)754-0525 c t City of Springfield Springfield, IL Ms. Julie Zohlgadr Operations Coordinator- Office of Budget & Management (217)789-2191 City of Macomb Macomb, II, Mr. Robert Moms City Administrator (309)837-0501 * Fixed Asset Inventory & Appraisal * Asset Tagging * Insurable Values * Infrastructure Valuation * Property Control Manual * Fixed Asset Inventory & Appraisal * Reconciliation of Cost * Asset Tagging * Infrastructure Valuation * Fixed Asset Software * Fixed Asset Inventory & Appraisal * Asset Tagging * Insurable Values * Infrastructure Valuation * Fixed Asset Inventory &. Appraisal * Allocation of Cost * Insurable Values * Fixed Asset Software * Fixed Asset Inventory & Appraisal * Reconciliation of Cost * Asset Tagging * Conversion of Final Data To Tape * Fixed Asset Inventory & Appraisal * Infrastructure Valuation * Asset Tagging * Insurable Values R ~, V M State of Illinois, References Page 3 City of Lemont * Fixed Asset Inventory & Appraisal Lemont, IL. * Insurable Values Ms. Jean Nona * Asset Tagging Village Treasurer * Annual Valuation Service (708)257-3788 City of Champaign * Fixed Asset Inventory & Appraisal Champaign, IL * Insurable Values Ms. Leslie Lundy * Asset Tagging City Accountant * Fixed Asset Software (217)351-4415 * Property Control Manual City of Bloomington * Insurance Inventory & Appraisal Bloomington, IL * Annual Valuation Services Mr. James Kaiser Purchasing Agent (309)823-4233 City of Clinton * Fixed asset Inventory & Appraisal Clintofi, IL * Insurable Values Mr. Richard Helton * Asset Tagging City Administrator * Annual Valuation Services (217)935-6552 County of DeWitt * Insurance Inventory & Appraisal Clinton, II, * Annual Valuation Services Ms. Joye Floyd County Clerk (217)93 5-2119 R V M C."4 G SAMPLE GOVERNMENTAL REFERENCES (EACH IIWOLVING UTILITY PROPERTIES) City of Lima, OH Mr. Michael T. Barnhardt Administrative Technician -Utilities Dept. 419-221-5294 City of Rosemount, MN Mr. Jeff May -Finance Director 612-423-4411 City of Beloit, WI Ms. Laureen Presney -Director of Purchasing & Accounting 608-364-6686 City of Macomb, IL Mr. Robert Morris -City Administrator 309-837-0501 Village of Grafton, WI Ms. Shirley Ritger -Finance Director 414-375-5300 Green Bay Metro Sewerage District, WI Mr. Tim Woodworth, CPA -Director of Accounting 414-432-4893 R