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1993-114e:\WPD0CS\0RD\A14ERICAN.0 ORDINANCE NO. _93 - AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF DENTON AND AMERICAN APPRAISAL ASSOCIATES, INC. FOR PROFESSIONAL SERVICES TO CONDUCT AN INVENTORY OF CITY ASSETS; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING FOR AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION I. That the City Manager is authorized to execute an Agreement between the City of Denton and American Appraisal Assoc- iates, Inc. for professional services to conduct an inventory of City assets. SECTION II. That the City Manager is authorized to expend funds for the above referenced professional services to the firm of American Appraisal Associates, Inc. in the amount of Seventy Six Thousand Nine Hundred Seventy Five Dollars ($76,975.00). SECTION III. That this ordinance shall become effective immed- iately upon its passage and approval. , 1993. PASSED AND APPROVED this the day of 44*--9 _t BOB CASTLEBERRY, MAY ATTORNEY ATTEST: JENNIFER WALTERS, CITY SECRETARY AGREEMENT BETWEEN THE CITY OF DENTON AND AMERICAN APPRAISAL ASSOCIATES, INC. The City of Denton, Texas situated in DE hereinafter called "City", acting herein by Manager, and American Appraisal Associates, organized under the laws of Delaware, "Consultant", acting herein by and through hereby mutually agree as follows: Anton County, Texas, and through its City Inc., a corporation hereinafter called its vice President, I. SERVICES TO BE PERFORMED: City hereby retains Consultant to perform the hereinafter designated services and Consultant agrees to perform the following services: A. Conduct an appraisal and inventory of City's assets, in accordance with the scope of services set forth in Exhibit "A", a copy of which is attached hereto. Consultant agrees to provide warranties on all computer hardware and software for a period of one year from the date of acceptance by the City. B. Availability of City Resources: City will make available to Consultant the following: Information and explanations requested through the Director of Accounting and Budget Operations, and the City's Internal Audit staff and staff from the various operating departments will be available on a limited basis to assist the Consultant during the physical inventory process. II. SCHEDULE OF SERVICES: A. Completion of Field Inventory July 15, 1993 Completion of Office Pricing August 14, 1993 Completion of office processing and review September 15, 1993 Delivery of Report September 30, 1993 1 2 III. B. Deviation from this schedule is acceptable only if approved by City's Executive Director of Finance, or for reasons beyond the Consultant's control. COMPENSATION TO BE PAID CONSULTANT: City agrees to pay Consultant for the services performed hereunder as follows: A. Amount of payment for services: The sum of Seventy-Six Thousand Nine Hundred Seventy-Five Dollars ($76,975.00) as follows: Fixed assets appraisal including $56,000 tagging SATO model 8450 Label printer, 5,700 including tag stock ASTDX2-50 PC, Sony VGA monitor, 4,000 and Panasonic 2624 printer Bar code readers (2) 6,200 PC based fixed asset system: - Fixed asset system only 1,500 - IDOL IV Ad-hoc report program 800 - 3 days on-site training 21275 First Annual Trend Factors 500 In addition, Consultant agrees to provide a copy of the master file on computer tape at no charge. B. Dates of payment: City will make payment within 30 days of proper completion of services provided for herein and of receipt of invoice, as follows: Fifty percent (50%), or Thirty-Eight Thousand Four Hundred Eighty-Seven Dollars ($38,487.00) upon completion of the inventory sweep. Thirty-three percent (33%), or Twenty-Five Thousand Four Hundred Two Dollars ($25,402.00) upon delivery of the reports Seventeen percent (17%), or Thirteen Thousand Eighty-Six Dollars ($13,086.00) after delivery of the final report. 3 IV. INDEPENDENT CONTRACTOR: It is mutually understood and agreed by and between City and Consultant that Consultant is an independent Consultant and shall not be deemed to be or considered an employee of the City of Denton, Texas, for the purposes of income tax, withholding, social security taxes, vacation or sick leave benefits, worker's compensation, or any other City employee benefit. Consultant shall perform the services hereunder at the direction of and to the satisfaction of the City Manager of the City of Denton or his designee under this Agreement. V. INSURANCE: Consultant shall provide at its own cost and expense Workers' Compensation insurance liability insurance, and all other insurance necessary to protect Consultant in the operation of Consultant's business. VI. INDEMNIFICATION: Consultant shall and does hereby agree to indemnify and hold harmless the City of Denton from any and all damages, loss or liability of any kind whatsoever, by reason of injury to property or third persons arising from any negligent act or omission of Consultant, its officers, agents, employees, invitees, and other persons for whom it is legally liable, in the course of the performance of this Agreement, and Consultant will, at its cost and expense, defend and protect the City of Denton against any and all such claims and demands. VII. CANCELLATION: City and Consultant each reserve the right to cancel this Agreement at any time by giving the other party fourteen (14) days written notice of its intention to cancel this Agreement, provided the City pays Consultant for services performed prior to notice of cancellation. VIII. TERM OF CONTRACT: This Agreement shall commence on the 16th day of June, 1993, and end upon the completion of the project. IX. NOTICES: Any notice given by one party to the other in connection with this Agreement shall be in writing and shall be sent by registered mail, return receipt requested, with postage and registration fees prepaid, as follows: If to City, addressed to: City Manager City of Denton 215 E. McKinney Denton, Texas 76201 ph-, 4 If to Consultant, addressed to: John W. Hughes American Appraisal Associates, Inc. 14651 Dallas Parkway, Suite 405 Dallas, Texas 75240 Notices shall be deemed to have been received on the date of receipgt~ as shown the return receipt. EXECUTED this day of 1993. CITY OF DENTON, TEXAS By: 1 d V. Harrell City Manager ATTEST: Jennifer Walters, City Secretary By: 341w ' l~t/L~-eo~-$a APPROVED AS TO LEGAL FORM: Debra A. Drayovitch, City Attorney By: 42~'e 'c , X AMERICAN APPRAISAL ASSOCIATES, INC. By: _.J,~ Ltl . Ronald M. Goergen Executive Vice President American Appraisal Associates PROPOSAL TO CITY OF DENTON, TEXAS FOR A FIXED ASSETS INVENTORY American Appraisal Associates, Inc. 14651 Dallas Parkway, Suite 405 Dallas, Texas 75240 Mr. John W. "Jack" Hughes District Manager (214) 392-0630 May 3, 1993 American Appraisal Associates TABLE OF CONTENTS SECTION 1 Page I. Introduction 4 II. Engagement objectives 5 III. Field Procedures and Specific Elements to be Collected 7 IV. Inventory Valuation 11 V. Reports Furnished it VI. Project Staffing 12 VII. Bar Code Readers 13 VIII. Fixed Asset Software System 15 IX. Timing and Delivery 16 X. Fees and Payments 16 XI. General Services Conditions 19 SECTION 2 Representative List of Public Sector Clients Served 20 SECTION 3 Representative Client Listing For Texas Municipalities and Universities...... 21 SECTION 4 SECTION 5 SECTION 6 SECTION 7 SECTION 8 Public Sector Group Capabilities Biographical Sketches of Project Team Sample Report TELXON Literature, Municipal Administrative Solutions, and American Appraisal Associates, Inc. Brochures City of Denton, Notice To Vendors RFSP #1494 AA American Appraisal Associates The Princeton 14651 Dallas Parkway Suite 405 Dallas, Texas 75240-7479 Telephone 214/392-0630 Fax 214/239-4649 May 3, 1993 Ms. Kathy DuBose, CPA Controller City of Denton Municipal Building Denton, Texas 76201 RE: Fixed Asset Inventory of the City of Denton, Texas Dear Ms. DuBose: American Appraisal Associates is pleased to respond to your request for a proposal relative to a fixed asset equipment and building appraisal for the City of Denton owned property. Our proposed involvement centers upon a need to develop a property inventory, to provide original and replacement cost data, and to assist in making this information available to management within an appropriate time frame. our experience indicates that property moves frequently, although often referred to as fixed assets. Therefore, the initial inventory must be completed rapidly or accuracy can be hindered. Further, a system for perpetuation must be in place at the conclusion of the field inventory process to preclude rapid obsolescence of the system. THE CONSULTING TEAM We have made every effort to be responsive to your objectives and, where possible, have provided more information than required to help you better understand our approach and our service philosophy. Based upon the benefits to be achieved, you should have the following expectations from the firm engaged to help you in meeting your objectives. As your consultant, we will provide the follow- ing: Me value your business."' American Appraisal Associates Ms. Kathy DuBose 2 May 3, 1993 (1) A project team with significant public sector fixed asset expertise directed by a project manager capable of utilizing national and local resources. (2) A professional team consisting of individuals experienced in Generally Accepted Accounting Principles; Governmental Accounting, Auditing and Financial Reporting; Fixed Asset Records; and valuation expertise. (3) A project team with the necessary resources to complete all field inventory requirements and establish ongoing perpetuation procedures within 120 days of authorization. Further, to completely implement and install the entire fixed-asset management system no later than September 15, 1993. The project team will be headed by Mr. Paul Gruenwald, Product Services Manager, who has over 20 years of public sector experience and by members from a full-time Property Appraisal Services Group that specializes in appraisals for cities, counties, school districts, universities, and colleges. Our staff is committed to performing work of the highest quality and providing on time deliveries. Our support to your City does not end at the time the appraisal reports are delivered but continues on to answer any questions you or your auditors may have concerning our work. LEADERS IN SERVING GOVERNMENT American Appraisal has significant experience serving government entities in the design and implementation of fixed-asset systems. We have served more than 1,200 government clients ranging from small school colleges and municipalities to large school colleges, cities, and states. American Appraisal Associates, Inc. is an international firm, founded in 1896. It is the oldest and largest professional valuation firm in the world. Currently, we have 800 full-time employees located in 27 offices throughout the United States. In any given year, service engagements for approximately 4,500 individual clients are performed by American Appraisal. In addition, more than 2,500 engagements are executed on an annual American Appraisal Associates Ms. Kathy DuBose 3 May 3, 1993 basis through the Continuous Service Division for perpetuation of property records and insurable value requirements. We recognize the importance of selecting the best firm to service the City of Denton - and the importance of people who bring a wealth of expertise in government and fixed-asset systems designed specifically for the project. We are confident American Appraisal Associates, Inc. has the staff and experience to assist you in this important project. CONCLUSION Thank you for this opportunity to provide our recommendations and proposal. Please be assured that we would give this matter our utmost professional attention. Very truly yours, John W. "Jack" Hughes District Manager JWH/jcg Enclosures American Appraisal Associates Ms. Kathy DuBose 4 May 3, 1993 I. INTRODUCTION The City of Denton requires a comprehensive fixed asset inventory and property control system. This system must provide an accurate inventory of all personal and real property for effective analysis and control of its general fixed asset account group. The need for a fixed asset inventory system is clearly established for the City by certain pronouncements of the Governmental Accounting, Auditing and Financial Reporting (GAAFR), Audits of State and Local Government Units (AICPA), and National council on Government Accounting (NCGA) Statement 1. American Appraisal Associates, Inc. (AAA) is prepared to provide the City with a comprehensive fixed asset inventory and property control system for specific assets. Our proposal is carefully designed to meet specific needs of the City for a property informat ion system. The complexities of implementing the fixed asset inventory and property control system being considered by the City, necessitates a well conceived and coordinated plan based on organization, experience and expertise. Our proposal incorporates this kind of service plan. Selection of an appraisal firm to provide such a comprehensive and complex service requires careful consideration of a firm's size, capability, utility, expertise, reputation in the property systems field, financial responsibility and, most importantly, an under- standing of the City's needs. American Appraisal Associates, Inc. believes it meets the test of these considerations. Our firm offers the City of Denton years of experience in providing governmental, institutional, and industrial clients with counsel on property value and property control. The fixed asset inventory and property control project is an extremely challenging one. The establishment and implementation of such a complex system demands a high level of specialized experience and knowledge to ensure proper implementation. American Appraisal Associates, Inc. possesses in house, the unique combina- tion of capabilities and experience particularly suited to this American Appraisal Associates Ms. Kathy DuBose 5 May 3, 1993 sophisticated project. We are confident of our ability, not only to provide the high level of quality services to the City, but to provide these services economically and expeditiously. II. ENGAGEMENT OBJECTIVES The objectives for this engagement are threefold: 1. Development of Property Record System - The City will be provided with a detailed property informa- tion system, offering the following benefits and goals: (a) Proper accountability and steward- ship of owned assets. (b) Compliance with the requirements of Gen- erally Accepted Accounting Principles (GAAP) and Governmental Accounting, Au- diting and Financial Reporting (GAAFR) for both the General Fund and Enterprise Fund assets. (c) Elimination of a major obstacle in the process of obtaining the Certificate of Achievement from the Government Finance Officers Associa- tion (GFOA). (d) Assurance that the City will not be pe- nalized, via high interest rates, by the bond rating companies for lack of ade- quate property records. (e) A basis for projecting the cost of future capital replacement. (f) Improvement in equipment utilization through control identification of property in service and that which may be available for transfer. American Appraisai Associates Ms. Kathy DuBose 6 May 3, 1993 2. Insurance Requirements and Administration - This objective requires the development of accurate contents descriptions along with the development of replacement costs. This activity will also develop a system for perpetuating the above valuation conclusions and assisting the city in ongoing proof-of-loss services in the event of a required claim against the insurance coverage. 3. In House Conversion - At the completion of the assignment, and after the acceptance of our ap- praisal reports by the City, we will provide a personal computer based fixed asset system along with the hardware to run it on. The hardware will include: ASTDX2-50 (IBM compatible) personal computer 8MB RAM 1.2MB 5 1/4 inch floppy diskette drive 1.44MB 3.5 inch diskette drive 200MB hard drive 14 inch Sony VGA color monitor MS DOS 6.0 operating software Panasonic 2624 Printer (wide spool) Assets to be Appraised The fixed assets to be included in this proposed engagement are located in approximately 105 buildings and will include the following: Building and structures Water and Sewer Mains office furniture and equipment American Appraisal Associates Ms. Kathy DuBose 7 May 3, 1993 Computer hardware, personal computer, printers and other related equipment Copy Computer hardware Copy machines and related equipment Reproduction equipment Telecommunication equipment Fleet vehicles and Rolling stock Heavy machinery and equipment Minor machinery and equipment Laboratory and testing equipment Cash registers and related equipment Also incorporated into the record, based on information supplied by the City are land, radios, library books, computer software, records, diskettes, cassettes, films, framed art, and licensed vehicles. Leased equipment, expendable inventories, supplies, and personal property of employees or others will be excluded. We will make no investigation of, nor assume any responsibility for the existence or impact of any hazardous substance, which may or may not be present on the property, in the development of our appraisal conclusion. III. FIELD PROCEDURES AND SPECIFIC DATA ELEMENTS TO BE COLLECTED The field investigation and inventory of the specific locations will be conducted by staff appraisers who are permanently employed by American Appraisal's Property Appraisal Services Group. It is recommended that an initial planning meeting be held with the Directors of Accounting, Data Processing, and Purchasing to firmly establish parameters to be followed during the engagement. This initial meeting will include topics such as: (1) The current policies of the City regarding capitalization, accounting, depreciation, asset management, economic life, department cost centers, and available cost records. (2) Finalizing an exact schedule of our work, and arrangements whereby department heads will extend full cooperation to our appraisal staff to insure accessibility to properties. (3) Selecting as a liaison, an individual employed by the City who is aware of the appraisal objectives and with whom we will interface on a daily basis. (4) Review our intended report formats for the final output of the engagement and confirm the delivery date. American Appraisal Associates Ms. Kathy DuBose 8 May 3, 1993 (5) Receive any available listings of audio visual software, computer software, vehicles, land, li- brary books, and the like. (6) Establish procedures for City personnel to perpetu- ate the property records after the appraisal inven- tory is taken. Please note, it is critical to implement this step at this stage of the engagement in order to protect the sizable investment in the appraisal by taking into account the additions, transfers, and retirements which would begin to occur immediately following our physical inventory. (7) Review the property locations and asset clas- sifications that are to be included, and excluded, as part of the appraisal project. (8) Review the inventory procedures, methodology, and valuation procedures that will be followed. (9) Arrange for work space to be used by the appraisal staff during the field work period. (10) Discuss with the data processing representa- tive the field requirements and hierarchy required for input to LGFS. This detailed inventory and appraisal service will include a physical inspection and inventory of all City owned property previ- ously identified as being included in this engagement. The following specific data elements will capture: 1. Asset Location - A series to identify the physical location of the appraised property (floor, room). 2. Building Identification - Where used, existing numerical identifications will remain; unidentified space will be numbered sequentially following the last assigned number. 3. Department - Existing numbers will be utilized. When not available, AAA will identify those partic- ular areas. Generally, only one unit number will be applied to a particular space. The largest department representation will be utilized. 4. Asset Number - A sequentially assigned asset number placed on controlled property by the Fixed Asset System. This will be the bar coded tag that is of fixed to each controllable asset (greater than $ 00) `V American Appraisal Associates Ms. Kathy DuBose 9 May 3, 1993 5. Asset Account - A major classification of property to identify major grouping of assets, i.e., equip- ment, vehicles, etc. 6. Asset Classification - A sub-division of property to further identify assets, i.e., outdoor equip- ment, business machines, data processing equipment, furniture, audio visual equipment, fire equipment, food service equipment, etc. 7. Quantity - Unit controlled property will be record- ed as one. 8. Asset Description - Manufacturer's name, model, generic nomenclature and serial number will be utilized for unit controlled property. 9. Acquisition Date - When readily available, AAA will use the actual acquisition date of property. In the absence of readily available information, the acquisition date will be estimated based upon our knowledge of the property type and its condition. 10. Estimated Life - An estimate will be made of the useful life of each unit and group controlled asset. The remaining useful life will be deter- mined from the estimated life and date of acquisi- tion and printed on reports. 11. Insurable Value - Cost of Reproduction New (Re- placement Cost) as of the appraisal date will be used as a basis for insurable values for all in- cluded property. 12. original /Historical Cost - Where known, we will use the actual original cost and acquisition date for the property inventoried. When invoices or accu- rate records are not readily available, we will utilize standard costing or normal costing, both of which are defined below. In our position as a third party, professional appraisal firm with substantial expertise in property accounting, these estimates are both accurate and well regarded by those who will be scrutinizing our reports. Direct Costing - Inventoried units/groups will match a historical cost record and will be recorded at that amount, if possible. Standard Costing - Inventoried property American Appraisal Associates Ms. Kathy DuBose 10 May 3, 1993 units/groups not reconciled to a historical record will receive an estimated cost, where possible, based on a Standard Cost; a known average installed cost for a like unit estimating acquisition date. The unit's age is estimated based on observed condition, manufacturer's name, model, serial number, age of the facility, etc. Standard costs for many equipment items are available from our own files and records. Normal Costing - Where neither of the above tech- niques can be employed to apply historical cost, cost is estimated based on a present Cost of Repro- duction New indexed by a reciprocal factor of the price increase from the estimated date acquired to the appraisal date. GAAP states "...it may be impossible or time consuming to reconstruct the actual cost of the property. In this situation, the original cost of the property may be estimat- ed..." (Section 30.07 of HBJ MILLER Governmental GAAP Guide 1993). 13. Accounting Depreciation - Accumulated and annual depreciation will be calculated, and reported, for all capitalized assets, if requested. 14. Fund Source`Fund Code - Where known, the source of funds will be recorded. It is difficult to identi- fy the source of funds during the inventory so many times this information is entered by our clients on a "preliminary" report provided by AAA and we update the files before providing final reports. 15. Status Code - All inventoried assets will be iden- tified as in use, surplus, or needs repair/obso- lete. This code will be printed on the inventory reports. Once the inventory and tagging is complete we enter our costing and pricing phase. Utilizing the results of our inventory, records you furnish, and our own records and computer capabilities, we assign an estimated Original Cost, Cost of Reproduction New, and year of acquisition to each controllable unit. Both our inventory and costing phases follow generally accepted accounting principles (GAAP). The same staff who performs the inventory also does the pricing. Inventory Control/Capitalization Level and Grouping Inventory control will be on a room-by-room basis with organiza- American Appraisal Associates Ms. Kathy DuBose 11 May 3, 1993 tional unit structure being shown. All assets included will be inventoried if their replacement cost is greater than $300. Taaainq AAA will provide a bar code label printer manufactured by SATO (model 8400 or 8450). This printer and associated software works with an IBM compatible personal computer which we will provide for the application. The printer uses an ink ribbon along with a "heat process" to produce the tags. The actual model and type of material for the tags will be determined after discussion with City personnel familiar with the requirements of the project. Bar coded tags will be affixed to all assets with a value of $300 or greater. IV. INVENTORY VALUATION Based upon an analysis, pricing, and processing of these records, we will furnish our opinion of the following for all city owned contents: Cost of Reproduction New (CRN) Cost of Reproduction New is the amount required to reproduce the entire property at one time in like kind and materials in accordance with current market prices for materials, labor and manufactured equipment, con- tractors' overhead and profit, and fees, but without provision for overtime or bonuses for labor and premiums for material or equipment. Cost of Reproduction New is synonymous with the insurance industry term "Replacement Cost". The appraisal will not take into consideration the replacement of the property to conform with building codes, ordinances, and other legal restrictions; nor will it consider the cost of demolition in connection with reconstruction or the removal of destroyed property. V. REPORTS FURNISHED The Consultant will provide a full complement of reports (in dupli- cate) reflecting the results of AAA's investigation, to include: (1) A narrative for use by management and outside auditors to provide assurance that the techniques and conclusions are consistent with GAAP (2) Certificate of Values American Appraisal Associates Ms. Kathy DuBose 12 May 3, 1993 (3) Glossary of Accounts and Descriptive Abbreviations used (4) User Manual for Perpetuation Purposes (5) Following Appraisal Reports: Property Accounting Summary - Displays description of fields being summarized, original cost, accumu- lated depreciation, unrecovered cost, annual depre- ciation and projected provision. Property Accounting Ledger Report - Displays asset tag number, class code, quantity, description, model, manufacturer's name, serial number, depreci- ation begin date, fund code, estimated life, origi- nal cost, accumulated depreciation, annual depreci- ation and projected provision. Only capitalized assets appear on this report. Insurance Summary - Displays description of fields being summarized, reproduction costs, exclusions, reproduction insurable cost, and original cost. Insurance Property Record Report - Displays asset tag number, location, status code, class code, quantity, description, manufacturer's name, model number, serial number, and reproduction cost. Both capitalized and expensed assets appear on this report. Expiration Report - Displays all assets whose normal useful life has expired. Obsolete Asset Report - Displays all assets that are obsolete, are no longer in service or that have exceeded their economic useful life. Class Code Report - A listing of assets by asset type (class code). All reports are laser printed on 8 1/2" x 1111 loose-leaf bond paper for ease of duplication and reinventory use by staff. VI. PROJECT STAFFING Professionals assigned to this project will involve several levels of management: executive review, district manager, project manager, and the appraisal staff. American Appraisal Associates Ms. Kathy DuBose 13 CITY OF DENTON EXECUTIVE REVIEW PROJECT MANAGER APPRAISAL STAFF DISTRICT MANAGER The City of Denton project staff will include: Executive Review: May 3, 1993 Paul Gruenwald Product Services Manager Project Manager: District Manager: Jim Eastman Engagement Manager Jack Hughes District Manager The above professional staff members will have overall responsibil- ity and are key personnel to the successful completion of the assignment. Specific appraisal staff assignments may vary depending upon current availability at the time of the authoriza- tion to proceed with this project. VII. BAR CODE READERS The use of bar code tags is an efficient and economical means of perpetuating an asset inventory. The initial step of applying a tag, whether it be a normal tag or a bar code tag, usually involves additional effort during the inventory. However, if bar code tags are used along with portable scanners to read the tags, inventory verification time can be reduced by as much as 70% over convention- al methods. American Appraisal Associates Ms. Kathy DuBose 14 May 3, 1993 The benefits to you are speed, accuracy, and reduced costs through efficiency. Cost savings are achieved by decreased staffing needs, increased productivity, and decreased overtime. The average payback period is 18 months. American Appraisal Associates, Inc. will provide two (2) handheld portable laser scanners that allow for the input of information such as site/property, building, floor, department, room, status, etc. All assets within a specific location are wanded by the bar code reader. The output of the bar code reader is then down loaded to a personal computer for direct input into a fixed asset system. American Appraisal Associates, Inc. will format the output of the bar code reader to be compatible with your fixed asset system. The following illustrates how the verification process works: LASER BAR On site Verification CODE SCANNER 11 by Inventory Personnel (cable) (Communication Program) IBM COMPATIBLE PC CITY OF DENTON FA SYSTEM (PC) 1. Update fixed asset records with current building, room, floor, department, date, quantity, status code, tag number. 2. Exception reports The use of bar codes provides an economical method of verifying the location and existence of assets. To achieve an even work flow and to gain the maximum usage of the bar code reading equipment, it is recommended that the verification be done on a continuous basis throughout the year. Your entity would be verified only once a year, but the process would occur over the entire year. This eliminates the manpower problem that occurs when all properties are inventoried at the same time. After the information is updated, inventory reports can be run and sent to each department for American Appraisal Associates Ms. Kathy DuBose 15 May 3, 1993 review. Exception reports can be run at this time listing all assets that were not found but appeared on the last inventory report. We have had good experience using the model 960, laser bar code reader manufactured by Telxon Corporation. Telxon Corporation is a worldwide organization and the leader in the field of portable handheld data collection devices. Their equipment is dependable, well designed, and most important field upgradable when new technology is announced. The model 960 is a single unit weighing only 30 ounces. It includes in the single unit the rechargeable Nicad batteries, built in battery charger, fail safe battery backup, and a four line display. Only a single piece of equipment has to be carried to perform the inventory verification. Included with the model 960 laser scanner is the customized program that allows the user to input building, room, floor, department, date, quantity, status, and asset tag number. The location information is automatically duplicated for each asset until one of the fields changes at which time the field is changed and the verification continues. The asset tag number can be either wanded into storage by use of the bar code scanner or by keyboard entry if the tag is not scannable. Some users affix bar coded location tags to door jams of rooms which are read when entering the room. This eliminates all manual (keypad) entry of information. The data is down loaded to an IBM compatible personal computer using a standard RS232C interface and any standard communication software such as PROCOMM. The down loaded file is a standard ASCII file formatted for direct input into the City's fixed asset system. The reformatting is part of our service. American Appraisal Associates, Inc. will supply the data entry program, communication program (PROCOMM), laser scanner, cables, and user manuals that are necessary to operate the scanners and PC's. There will be no development work on your part. The bar code scanner will be programmed to read both Code 39 and Code 128 bar codes. VIII. FIXED ASSET SOFTWARE SYSTEM The PC based fixed asset system American Appraisal will provide is written by Municipal Administrative Solutions, a national software firm specializing in software for the public sector. This firm has rewritten their fixed asset system per the specifications of American Appraisal and includes an interface from the Bar Code Scanner to their system. An ad-hoc report program (IDOL IV) is available with the system that allows non-programmers to produce on-screen inquires or reports. In a matter of minutes it is possible to build and display, or print, queries or reports. You simply step through pick and choose windows to build your requests with no programming, codes, or commands. In fact, you can easily American Appraisal Associates Ms. Kathy DuBose 16 May 3, 1993 build your own data files and these files can be linked to any existing data files. Literature describing the features of the system is included with this proposal. Three days of on-site training is included as part of our proposal and a toll free 800 number is available to answer any questions and assist in the installation process. There is no maximum usage limit on the toll free assistance. IX. TIMING AND DELIVERY Based on our current commitments, we would anticipate delivery of our final reports within 120 days after authorization. The following outlines the possible timing of our effort: Authorization June 15, 1993 Planning Meeting June 22, 1993 Field Inventory July 15, 1993 Office Pricing August 14, 1993 Office Processing and Review September 15, 1993 Report Delivery September 30, 1993 Because of our size, we have the resources and flexibility to adjust our schedule to best suit the requirements of the City. If the above schedule needs to be altered, we will work with you to arrive at a mutually convenient schedule. X. FEES AND PAYMENT We estimate our fees for this engagement to be as follows: Fixed Asset Appraisal including tagging * SATO Model 8450 label printer including tag stock * ASTDX2-50 PC, Sony VGA monitor, and Panasonic 2624 printer * Bar Code Readers (2) PC based Fixed Asset System Fixed Asset System Only IDOL IV Ad-hoc report program 3 Days on-site training Annual Trend Factors (Optional) * Includes One Year Factory Warranty Copy of Master file on computer tape $56,000 $ 5,700 $ 4,000 $ 6,200 $ 1,500 $ 800 $ 2,275 $ 500 No Charge No Charge American Appraisal Associates Ms. Kathy DuBose 17 May 3, 1993 Expenses are included in the above fee estimates. These fees are based on our estimate of professional services to be furnished according to our understanding of your requirements and in no way are contingent upon the outcome of our conclusions. American Appraisal will invoice you for professional services rendered. You will be invoiced for portions of the balance of professional fees on four occasions: (1) 50% will be due upon completion of inventory sweep (2) 33% will be due upon delivery of reports; and (3) 17% will be due 30 days after delivery of the final report. All invoices are payable by the City upon receipt. We reserve the right to withhold delivery of our advance conclu- sions or final report(s) if, when either of these are ready for delivery, any previously issued invoices remain unpaid. In the event invoices are not paid on a timely basis defined as within thirty (30) days of receipt, allowing normal mail delivery, we reserve the right to charge interest calculated on the basis of one and one-half percent (1-1/2%) per month will be due and owing. American Appraisal will re-invoice you on the anniversary date of the 31st day of the original invoice, this re-invoiced amount will reflect the addition of the interest charge. Non-payment of re- invoiced amount will be adequate cause to cease all work effort and to withhold delivery of conclusion( s) and/or reports until such time as the re-invoiced amount is paid. The attached General Service Conditions apply to all professional services provided by American Appraisal Associates, Inc. If this proposal correctly reflects your understanding of our agreement, please confirm such by signing and returning one copy. Please note we will be unable to deliver any conclusions, verbal or written, until we are in receipt of this acknowledgement. To avoid any delays in delivery, you may wish to first Fax the signed acknowledgement to (214) 490-9445. Thereafter, please forward the original to us. American Appraisal Associates Ms. Kathy DuBose Client of Record: ACKNOWLEDGEMENT: INITIAL INITIAL INITIAL INITIAL INITIAL INITIAL Name: Title: Date: 18 City of Denton May 3, 1993 FIXED ASSET APPRAISAL INCLUDING TAGGING SATO 8450 LABEL PRINTER PC BASED FIXED ASSET SYSTEM WITH TRAINING PERSONAL COMPUTER HARDWARE/PRINTER BAR CODE READER ANNUAL TREND FACTORS American Appraisal Associates Ms. Kathy DuBose 19 May 3, 1993 XI. GENERAL SERVICES CONDITIONS The service (s) provided by American Appraisal Associates, Inc., will be performed in accordance with professional appraisal standards. Our compensation is not contingent in any way upon our conclusions of value. We assume, without independent verification, the accuracy of all data provided to us. We will act as an independent contractor and reserve the right to use subcontractors. All files, work papers or documents developed by us during the course of the engagement will be our property. We will retain this data for at least five years. Our report is to be used only for the purpose stated herein; any use or reliance for any other purpose, by you or third parties, is invalid. You may show our report in its entirety to those third parties who need to review the information contained herein. No reference to our name or our report, in whole or in part, in any document you prepare and/or distribute to third parties may be made without written consent. You agree to indemnify and hold us harmless against and from any and all losses, claims, actions, damages, expenses or liabilities, including reasonable attorneys' fees, to which we may become subject in connection with this engagement. You will not be liable for our negligence. Your obligation for indemnification and reimbursement shall extend to any controlling person of American Appraisal Associates, Inc., including any director, officer, employee, subcontractor, affiliate or agent. We reserve the right to include your company/firm name in our client list, but we will maintain the confidentiality of all conversations, documents provided to us, and the contents of our reports, subject to legal or administrative process or proceedings. These conditions can only be modified by written documents executed by both parties. American Appraisal Associates Ms. Kathy DuBose 20 May 3, 1993 REPRESENTATIVE LIST OF PUBLIC SECTOR CLIENTS SERVED City of Redondo Beach City of Calexico City of San Rafeal City of San Leandro City of Atascadero City of Baldwin Park City of Chico Town of Colma City of Lancaster City of Santa Rosa City of Vallejo City of Alhambra City of Azusa City of Cerritos City of Corona City of Duarte City of Imperial Beach City of Manteca City of Sunnyvale City of Tracy City of Yorba Linda Board of Education, City of New York City of New York - Infrastructure State of New York - Buildings State of Ohio - Buildings and Internal Service Funds Alabama Municipal League (60 cities) League of Minnesota Counties (20 counties) City of Medina City of Waukesha County of Waukesha Houston Department of Aviation - Airport City of University Heights Florida League of Cities County of Sonoma County of Cumberland City of Seattle Northwest Water Commission City of Ketchikan City of Golden City of Pittsburgh, PA American Appraisal Associates Ms. Kathy DuBose 21 May 3, 1993 REPRESENTATIVE CLIENT LISTING FOR TEXAS MUNICIPALITIES AND UNIVERSITIES City of Allen Brownsville Independent School District, Brownsville East Texas Baptist University, Marshall Georgetown Independent School District, Georgetown The University of Hardin-Baylor Mary, Belton City of Houston City of Hutchins Jordan School District, Sandy Lancaster Independent School District, Lancaster City of McKinney City of Mexia Pilot Point Independent School District, Pilot Point San Antonio Independent School District, San Antonio Socorro Independent School District, E1 Paso