HomeMy WebLinkAbout06/19/2006 B A K E R S F I E L D
Mike Maggard, Chair
Irma Carson
Harold Hanson
Staff: John W. Stinson
MEETING NOTICE
BUDGET AND FINANCE COMMITTEE
of the City Council - City of Bakersfield
Monday, June 19, 2006 - 10:00 a.m.
City Manager's Conference Room, Suite 201
Second Floor - City Hall, 1501 Truxtun Avenue, Bakersfield, CA
AGENDA
1. ROLL CALL
2.. ADOPT MAY 9, 2006 AGENDA SUMMARY REPORT
3. PUBLIC STATEMENTS
4. NEW BUSINESS
A. Discussion and Committee recommendation regarding WiFi (wireless Internet
service) - Christensen
B. Discussion and Committee recommendation regarding California State
Department of Transportation Audit Report of City of Bakersfield, Department
of Public Works, Indirect Cost Rate Proposals (ICRP) for Fiscal Years Ending
June 30, 2003 and June 30, 2004 - Smith
C. Discussion and Committee recommendation regarding California State
Controller's Office Audit Report of the City of Bakersfleld's Gas Tax Fund for
Fiscal Year Ending June 30, 2005 - Smith
5. COMMITTEE COMMENTS
6. ADJOURNMENT
B A K E R S F I E L D
~' ¢ ~'-~"" Mike Maggard, Chair
John Stinson, Assistant City Manager Irma Carson
For: Alan Tandy, City Manager Harold Hanson
AGENDA SUMMARY REPORT
BUDGET AND FINANCE COMMITTEE MEETING
Tuesday, May 9, 2006 - 10:00 a.m.*
City Manager's Conference *Room - Suite 201
City Hall, 1501 Truxtun Avenue, Bakersfield, CA
1. ROLL CALL
The meeting was Called to Order at 10:05 a.m.
Present: Councilmembers Mike Maggard, Chair, Irma Carson; and Harold Hanson
2. ADOPT MARCH_8, 2006 AGENDA SUMMARY REPORT
Adopted as submitted.
3. PUBLIC STATEMENTS
4. DEFERRED BUSINESS
A. Update Report and Committee recommendation regarding Refuse Hauling
Contract extension negotiations
Public Works Director Raul Rojas reported staff met with the haulers in
February. It was a positiVe meeting, but there were unresolved issues. A letter
was sent on February 23rd to Kern Refuse Disposal (haulers) outlining rate and
contract related issues to be negotiated in relationship to the haulers' request to
extend the expiration date of their contract. The main issues remaining were
the City's request to limit customer rate increases to the Consumer Price Index
and allowing customers to trade in the extra tan cart for the blue recyCling cart.
Staff is waiting for a response to the letter sent to the haulers.
Committee Chair Mike Maggard stated at the last Council meeting, two weeks
ago, staff was requested to negotiate with the haulers and bring the contract
extension back to the Committee today and asked staff to explain the issues
that are holding up the negotiations.
AGENDA SUMMARY REPORT Page 2
BUDGET AND FINANCE COMMITTEE MEETING
Tuesday, May 9, 2006
Solid Waste Superintendent Sal Moretti explained after the City/County Joint
meeting at which the Council and the Board of Supervisors brought up
mandatory 'curbside recycling, City Solid Waste staff and County staff met with
the haulers twice regarding curbside recycling. The haulers' contract extension
was not part of the discussions, but it became apparent the mandatory curbside
recycling issue has impacted the progress of the negotiations.
'Mr. Larry Moxley, Kern Refuse Disposal, Inc., explained they have not
responded directly to the Public Works Director's letter due to concerns
regarding the possibility the City and County may decide to go to mandatory
curbside recycling. The haulers would need to spend roughly $5.5 million for
blue carts and trucks and if the haulers are required to do' processing, a
processing plant would cost another $5 to $8 million to build.
After discussion, Committee Chair Mike Maggard recommended since the City
Council has not adopted a policy on mandatory curbside recycling, that it not be
considered in the contract extension negotiations at this time. In .the future, if
the City. Council and the Board of Supervisors decide to make curbside
recycling mandatory, it could be negotiated as a separate issue. The
Committee unanimously agreed.
Mr. Moxley spoke regarding the contract extension negotiations. The haulers
are not in agreement with the City on using only the Consumer Price Index
(CPI) for yearly rate increases. CPI increases are always a year behind. The
haulers have requested rate increases in addition to the CPI to cover fuel and
'workers' compensation expenses due to the extraordinary higher costs.
'Public Works Director Raul Rojas explained fuel and workers' compensation
costs are included in the CPI, which is used each year in January when the.
:haulers' rates charged to customers are adjusted.
:City Manager Alan Tandy stated the City's goal is to clear'up the language in
the contract to avoid open ended disputes every year. The contract needs to
be clear as to whether there are going to be exceptions, or if everything is
included in the Consumer Price Index. Specific unforeseen exceptions could
be included in the contract, for example, new State legislation that impacts the
costs associated with providing refuse services.
Public Works DireCtor Raul Rojas stated there is another unresolved issue with
the contract regarding exchange of the extra tan cart for a blue recycling cart.
The haulers are not in disagreement, but due to the cost differential between
the two carts, the haulers would charge the City the actual monthly cost to
service the blue recycling carts, which the City wOuld have to subsidize.
AGENDA SUMMARY REPORT Page 3
BUDGET AND FINANCE COMMITTEE MEETING
Tuesday, May 9, 2006
Several years ago when the City was changing over to automation and the use
of refuse carts, some families complained the one tan refuse cart was not
enough. The City Council decided to provide a second tan cart for a nominal
charge of just over $4.00 per month,, which is subsidized by the City from the
refuse fund. The charge for the first tan cart is $6.25 per month. Approximately
2.5 percent of the households have the extra tan cart at an approximate
subsidy of $85,000 per year. Due to traveling distances, the blue recycling cart.
is charged at the actual cost, which is $6.67 per month, so. the subsidy would
increase if the second tan carts were traded for blue recycling carts.
Chuck .Waide, CCAPE, spoke regarding the higher charge for the blue recycling
carts and expressed in order to promote recycling, the City should not be
subsidizing the tan carts. The charge should be the same for the second tan.
.cart as the blue recycling cart or more, since the tan carts add to the waste
stream.
Committee Chair Mike Maggard suggested since this is holding up-the
negotiations, subsidizing the extra tan refuse carts or increasing the cost to the
same as the blue carts to promote recycling should be part of a much larger
discussion. He would charge the same, but would like to have input from the
other Councilmembers on this policy issue. The Committee agreed and
requested staff to complete the negotiations on the haulers' contract extension
without the blue recycling cart issues and bring the contract extension back to
the Committee at the next meeting.
5. NEW BUSINESS
A.Discussion and Committee recommendation regarding sewer connection fee
increase
Finance Director Nelson Smith explained the City has been developing a
financing plan for the expansion of Wastewater Treatment Plant No. 3. At the
March 8th Budget and Finance Committee meeting, the City's bond consultant
:gave a presentation on a fee survey of other cities and proposed bond.
financing information, which was included in the Committee packet.
The City has historically attempted to cover the annual debt service
requirements with connection fee revenues to match the cost of the plant
.expansion associated with new development growth, which is driving the need
for the plant expansion. The current connection fee for a single family
residence is $2,500. The proposed fee schedule is a "phased-in" approach to
raise the fee $300 per year for the next five years, with the single-family
.residence connection fee reaching $4,000 in JulY 2010. This is a one-time
connection fee paid at the time of the building permit application.
AGENDA SUMMARY REPORT Page 4
BUDGET AND FINANCE COMMITTEE MEETING
Tuesday, May 9, 2006
The Committee reviewed the fee schedule for multiple family dwellings,
dwellings with 14 or less fixture units, and commercial/industrial per fixture fee.
Committee Member Harold Hanson asked about homes still on septic tanks
that have not hooked up to the sewer. Staff responded that there would be
time before the fee increase goes into effect for those who want to avoid the
first year's increase of $300.
Committee Chair Mike Maggard raised questions regarding in-fill development
in the downtown. Staff explained if there has ever been a home or business on
the property, credit is given toward the connection fee.
Finance Director Nelson Smith explained' staff is requesting approval to
. proceed with the public notice and to put the resolution with the proposed new
sewer connection fee schedule on the June 7th Council meeting agenda. If the
resolution is adopted by the Council, the fee increases are subject to a 60-day
waiting period before the fees go into effect.
Committee Member Irma Carson made a motion the Committee approve staff's
moving forward with the public hearing and placing the resolution and fee
schedule on the June 7, 2006 Council meeting agenda. The Committee
unanimouSly approved the motion.
B. Discussion and Committee recommendation regarding dispensing with bidding
procedures
City Attorney Ginny Gennaro gave an overview of the memorandum in the
COmmittee packet, which outlined the bidding procedures in the City Charter
and ordinances.
This referral arose from the City Council meeting at which the Council approved
payment for an emergency sewer line failure. Due to the emergency situation,
the contractor provided the cost based on time and materials and was not
required to go through design and bidding procedures, so the City was actually
able to save money.
The City Attorney eXplained there are three exceptions: urgent necessity; sole
source exception; and open market where the City does not receive responsive
or any bids. Other than the exceptions, the City Charter requires some type of
bidding procedures. The Charter can only be changed by the voters as
ordinances cannot override the Charter.
D AFT
AGENDA SUMMARY REPORT Page 5
BUDGET AND FINANCE COMMITTEE MEETING
Tuesday, May 9, 2006
Staff explained some items can be purchased in advance to save money, and
the City. is allowed to piggyback on State or Federal contracts, as the contracts
.have already gone out to bid.
The Committee took no further action.
6. COMMITTEE COMMENTS
Committee Member Irma Carson asked when new developments are charged
fees, why do they not remain in the area where they are collected?
City Manager Alan Tandy responded. Transportation Development Fees are
collected for the impacts development has on regional transportation, so the fees
collected are applied to projectS on the adopted Transportation Impact Fee
Schedule. Park Development Fees are regional but collected for three' districts in
the City.
Committee Chair Mike Maggard thanked everyone for working through the issues
on the haulers' contract, so it can again move forward towards getting resolved.
7. ADJOURNMENT
The meeting adjourned at 11:30 p.m.
Attendance: Staff: City Manager Alan Tandy; City Attorney Ginny Gennaro; Assistant City
Manager John W. Stinson; Finance Director Nelson Smith; Public Works Director Raul Rojas;
City Clerk Pam McCarthy; Assistant Finance Director Sandra Jimenez; Solid Waste Director
Kevin Barnes; Assistant to the Public Works Director Georgina Lorenzi; Solid Waste
Superintendent Sal Moretti; Purchasing Officer Diane Wagner; and Wastewater Engineer Art
Chianello
Others: David Burger, Reporter, The Bakersfield Californian; Bruce Keown, Superior Sanitation;
Larry Moxley, Kern Refuse Disposal, Inc.; Chuck Waide and Pete Roddquez, CCAPE
cc: Honorable Mayor and City Council
S:UOHN\Council Committees\06Budget&Finance~bf06 may 09summary.doc
B A K E R S F I E L D
CITY MANAGERS OFFICE
MEMORANDUM
June 15, 2006
TO: Budget & Finance Committee'
FROM: Alan Christensen, Assistant City Manager ~
SUBJECT: Company Inquiry to Provide Wireless Internet Access
City staff received a proposal from a company named MetroFi that is requesting to lease City light
poles in order to provide wireless intemet service throughout Bakersfield. They are requesting
something very similar to the franchise agreements that the City has with phone, gas, electric, and
cable companies. MetroFi estimates that abOut 200 light poles are needed to' mount radio
transmission equipment to provide the service city wide.
MetroFi proposes wireless intemet service or "WiFi" at no cost to local customers. The cost of the
service is. paid for with local advertising on content pages. They also offer an option for service
without advertising for about $20 per month. Speeds are similar but not quite as fast as cable
modem or DSL. This product is ideal for City residents that cannot afford intemet service.
MetroFI already operates in several California cities: Santa Clara, Cupertino, Foster City,
Sunnyvale, Mountain View and San Francisco. They have agreements signed with Portland, Oregon,
and Aurora, Illinois. Other communities across the country use the same technology.
There is no cost to the City. Rather, the company offers to pay the City'lease payments of $36 per ·
light pole. The lease revenue is estimated to be between $180,000 and $200,000 if enough poles
were used to offer the service city wide. MetroFi has also offered to PrOvide their wireless network
for free to the City where now we currently pay for T-1 phone lines to remote sites such as Fire
Stations. Their network could alSo be used for surveillance in graffiti and code enforcement.
Attached are two pictures of MetroFI radio antennas mounted on light poles in other communities.
Also attached are professional articles describing how local governments are allowing private
companies to offer WiFi service in their communities at little or no cost and the savings generated by
the technology.
Staff believes the WiFi program proposed by MetroFi is a good one and worthy of study and
consideration by the City of Bakersfield.
January 24, 2006
Citywide Wireless Broadband
MetroFi Overview/Proposal
MetroFi is pleased to provide an overview to the City of Bakersfield. Our company has
three years of experience designing, building and operating community Wi-Fi networks
in the San Francisco Bay Area. MetroFi is unique in that we have an operational
network covedng cities in the Bay area at this time.
We have negotiated agreements with the local power company (PG&E) for un-metered
power and with other San Francisco Bay Area Cities for Pole Attachment, developed best
practices for deployment and network management tools for citywide Wi-Fi service and
have 1000's of wireless broadband customers.
We have validated performance in the "real world" of large scale deployment. The
result is a quality, state-of-the-art solution which is high-speed, Iow-cost and highly
reliable and what we bring to the City of Bakersfield is a proven track record.
Overview
MetroFi's proposal delivers a visionary approach. We will build the network at no cost to
the City of Bakersfield and wireless broadband will be available at no cost to residents
and visitors. Our experience is our foundation and we have demonstrated the ability to
work with various cities by deploying five San Francisco Bay Area networks.
The MetroFi solution can stimulate the local economy by making affordable and portable
broadband available to every citizen and visitor to the City. The City of Bakersfield,
residents and visitors will benefit from choice and competition in the broadband
marketplace.
Low-income households and non-profit agencies can access the Internet at no cost.
This removes the #1 barrier to broadband penetration in the US - Affordability.
Families without credit cards can access the service as we will require no credit reports,
and no credit cards. The service will be easy to use - just access the MetroFi - FREE
SSID with a standard Wi-Fi device and you enjoy 1Mbps high speed Internet. Local
non-profit agencies can marry MetroFi Wi-Fi access to training programs and affordable
computers. No child or adult needs to be without high speed access to the information
and opportunities afforded through the Tnternet.
The City can also save on its existing telecommunications bills by leveraging the pre-
WiMAX services created by the MetroFi service. Better government will be enabled by
making city workers as productive outside the office as they are when connected to
broadband at their desks.
Our proposed solution is a replica of our existing architecture and design. Our PROVEN
deployment model and end-to-end solution will ensure a fast and successful deployment
for the City of Bakersfield. We are well funded with top-tier Silicon Valley Venture
backing from August Capital and Sevin Rosen Funds.
We believe no other company has our track record in deploying a City-wide Community
Wireless Broadband Network. Designing, Building and Operating this network requires
Copyright MetroFi, Inc. 2
MetroFi Overview/Proposal
real world experience in managing RF coverage, interference, end-to-end architecture,
and customer service. Experience matters and MetroFi offers a Iow-risk solution in
achieving the City of Bakersfield's goals and objectives. By working with MetroFi, the
City of Bakersfield leverages this financial and operational knowledge.
The key aspects of partnering with MetroFi are outlined below:
Affordable/Free MetroFi will offer FREE advertiser' supported Internet throughout
the city. Most of Bakersfield will 'be within lO0's of feet of Free Wi-F! Tnternet access.
This will be a great benefit to visitors to the City and an economic driver for the
residents.
MetroFi proposes a full speed, 1Mbps service, not a slow-speed almost broadband.
Residents may subscribe to the MetroFi $19.95 service or one of our wholesale Service
Provider services if they want ad-free, unlimited service.
Experience MetroFi is.staffed by communications industry veterans who know what it
takes to deliver carrier class networks capable of scaling to 100,000's of customers.
MetroFi is the leader in designing, building and operating municipal Wi-Fi networks.
State-of-the-Art MetroFi's network delivers high performance and scalability using
high-powered 2nd Generation Mesh radio architecture.
Multi-U~e A single network can serve government, business and consumer customers
for voice, data and video. Government and emergency services can be prioritized.
Business services will be provisioned over a state-of-the-art pre-WiMAX mesh layer,
delivering industry leading price/performance over existing options. Consumer Internet
will be fast, reliable and portable.
Ubiquitous .MetroFi will blanket the city with 1Mbps wireless broadband service for
consumer, business and government use.
Open Access MetroFi is founded on the principle of an open access model. The
MetroFi network Can support !SP's who may wish to offer services to the City of
Bakersfield.
~efure MetroFi encourages all residential, government and business customers to use
industry standard WPN802.1x security. MetroFi is the first company implementing
security in a production municipal network.
Reliable The MetroFi network operates with high reliability, with 99.5-99.9%
availability.
Scope of Work MetroFi will provide wireless broadband where possible throughout
Bakersfield. We will complete the entire city within 12 months of signing contracts with
the city
Copyright MetroFi, Inc. 3
MetroFi Overview/Proposal
Network _Our state-of-the-art network architecture is comprised of two tiers, a pre-
WiMAX mesh backbone and a second, dedicated 802.1:Lb/g Wi-Fi access radio. Tt
consists of 802.11 b/g access network in the 2.4 GHz spectrum to enable customers to
connect to the network and 802.11a backhaul mesh in the 5.8 GHz spectrum 'to
aggregate all the traffic in the neighborhood network area which is then backhauled to a
central POP via point to point wireless backhaul in the 18 GHz licensed spectrum links.
This architecture reduces the cost of backhaul significantly while offering high reliability.
MetroFi will deliver a state of the art network with density of 20-30 nodes per square
mile. This network in densely populated areas will deliver 95% in-street (outdoor)
coverage with no additional hardware than a standard 802.11b/g card within a wireless
laptop or other wireless enabled devices. Client distance is minimized to no more than
approximately 600 ft from any node as a result of our dense "pico-cell" architecture.
The Network design will support in-building coverage as measured by a single, first or
second floor room (e.g. adjacent to an exterior wall in the residence or business) and
access to the wireless network is at 1Mbps best-effort speed levels. Subscribers who
are less than 300 feet can typically achieve a good performance with their Iow-power RF
device such as a laptop. Customer between 300-450 feet may require a higher power
device'. Customers who are farther than 450 feet will typically require an outdoor
antenna that needs to be mounted with some line of sight to the nearest 802.11b/g
access point. MetroFi will offer a high power device with integrated security to
customers for improved performance and enhanced customer experience.
802.11a
Dual-band 802.11a & big radio
Wireless modem w/auto-
setup & built-in security
MetroFi intends to offer access to virtually the entire city on both Wi-Fi and WiMAX Tiers
of the network. Lack of mounting assets, building restrictions, very Iow household
Copyright MetroFi, Inc. 4
¢ MetroFi Overview/Proposal
density, obstructions and other physical limitations can prevent us from 100% ubiquitous
coverage.
Security MetroFi supports multiple security options. Our network supports standard
capture portal for Free users. All $19.95 customers and Free customers wanting security
will use an 802. lli/WPA/802, ix standard implementation.
Ad support Our vision is that this system is a community extension to the Internet.
Tying in local government and small business is an integral part of creating this
community. Small businesses have limited local advertising vehicles. MetroFi will offer a
unique way for these Bakersfield based businesses to build brand awareness of their
products and services, sell products, services or content directly online, generate local
leads and traffic to their website and provide information and education to the residents
and visitors of Bakersfield. Our advertising rates will be below traditional print, mail and
outdoor prices.
Regulations MetroFi'will comply with all City, County, State and Federal regulations.
MetroFi does expect the City of Bakersfield and municipal offices such as Planning,
Electrical and Building departments to streamline the permitting application and issuance
processes. A Iow cost, high quality Wireless broadband community area network can
only be built if the vision of mutual cooperation and interdependency of the government
and private sector is fulfilled. Safety and compliance are top priorities at MetroFi.
Co~.s to the City of Bakersfield There are no direct costs to the City of
Bakersfield in the MetroFi Proposal. The .only indirect costs are in streamlining the
permitting process for traffic/streetlight poles and city owned rooftops and MetroFi will
also pay for all electric usage. MetroFi will provide 100% of the financing for system
design, capital build-out, ongoing operation, maintenance and repair of the wireless
broadband system.
Examples of other Similar ProJects Currently Ongoing
Santa Clara, CA 102,000 population, 11 square miles, > 200 nodes
Cupertino, CA 50,546 population, 7 square miles, 100 nodes
Sunnyvale, CA 132,000 population, 4 sq. miles, >100 nodes
· Mountain View, CA Facilities Use/Pole Attachment Agreement
San Francisco Hot Zones 3 public plazas
Copyright MetroFi, Inc. 5
MetroFi Overview/Proposal
X
Santa Clara, Cupertino and Sunnyvale networks - ~21 square miles and over 400 Mesh Radios
I~letroFJ, Inc.
516 Clyde Avenue
Mountain View, CA 94043
Ben Zifrony
VP Sales and Business Development
bzifrony@metrofi.com
(650) 810-8029
Copyright MetroFi, Inc. 6
Strategies for building m. unicipal
wireless networks ar.e evolving fast. But
are they prudent the long run?
BY CHRISTOPHER SWOPE
k at San Frandsco's plan for gesring creative ways to provide free dry- 2oo dries across the country are now clam-
L blankering the dty with. wire- wide WiFi at no cost to taxpayers. The idea oring for free WiFioftheir own, with many
less Internet access, and you that got the most attention was put together of them demanding similar sweetheart
maywonder if you're reading a by Google and EarthLink, which teamed up deals. Nearly allofthe ciries share the same
memo to Santa Claus. San onaplantopayforfreeWiFibytargetingad- admirable goals: They want WiFi for eco-
Francisco wants anyone with a vertising at Intemet users. But there were nomic development, to bridge the digital di-
laptop or handheld computer to be able to other free models proposed, too. One local vide andto make their own mobile workers
get online from just about anywhere in nonprofit, forexarnple, partneredwithIBM more efflcient in the fleld. But can they re-
town. Not only is the city unwilling to pay a andCiscotosuggestpayingforanetworkby alistically expect to get all of that free?
dime to get a citywide "WiFi" system built selling corporate sponsorships and seeking That's onlyone question dries should be
but it also wants public access to be free. donations from local philanthropists, asking as they hop on the WiFi bandwagon.
You might expect that technology com- San Frandsco ultimately went with the Nowadays, getting wired for the 21st cen-
parties would laugh at such an audadous scheme proposed by Google and Earth- tury seems so 2oth century. Getting un-
wish list and walk away. They didn't. In fact, Link. It will be many months before that u;/red is the next big thing, and cities are
the dry received a half-dozen proposals, sug- system goes live; Nevertheless, more than moving forward at a frantic pace. After all,
54 MAY2OO6'GOVERNING
it was only'a couple of years ago that cities fighting cameras and give cops better data established rules or business models to roi-
began setting up small WiFi "hotspots" in capabilities while on patrol. Customers Iow. So cities are making up the rules as
airports, parks and libraries. Now, they're could also take advantage at home--if their they go along. A few jurisdictions arelook-
talking about entire cities as hotspots, computer is near a window--or with the aid ingatWiFiasamunicipalutilitylikewater
They're even considering how to connect ora signal booster if it is not, andseWers. They believe that the public sec.
cities to form regional wireless networks. The reason cities are getting involved in .tor should own the networks--even if they
The idea is pretty Simple: to create one WiFi, rather than leaving it entirely to the outsource the customer service. Most, how.
contiguous cloud of outdoor Intemet ac- private sector, is because they want to en- ever, arelookingat partnering with vendors
cess. That wouldn't just indulge road war. sure that poor neighborhoods are covered that will build and own the networks at
riors with their laptop computers and just as well as rich ones. In addition, cities their own eXPense and make money either
PDAs. It would also enable new technolo- own a vital piece of infrastructure--the bycharging subscription fees or selling on-
z gies, such as handheld Internet phones, to streetlightswto which WiFi routers can be line advertising.
o°o, flourish, cities themselves would be big mounted and used for electricity. Either way~ strategies around municipal
_~ customers, .using WiFi to liberate building Conceiving of WiFi on this giant scale, wireless are evolving fast. Philadelphia, for
fi- inspectors from their desks, enable crime, however, is so new that there aren't many example, famously announcedthefirstbig-
GOVERNING MAY 2006
citywireless projealess than two years ago. to administer the arrangement, thinks the WiFi access for free. Likewise, Grand
Back then, officials envisioned building a trade-offs of private ownership are worthit. Rapids, Michigan, stated upfront that the
publicly owned network at taxpayer ex- 'They're building the network on their own city wouldn't use any taxpayer funds to pay
pense. But that plan ran into opposition, dime--we're not spending any money at for its WiFi network. "City resources are
The incumbent cable and telephone com- all,' he says. "Welose some level of consol, stretched pretty thin," says Sally Wesorick,
parties objected to the idea of the public sec- But we got many of the things we'd want the wireless project manager there.
tor competing with their own broadband of- from our own municipal network--without Settles believes that dries are drunk on
ferings. Many. citizens, too, scoffed at the es- having to figure out how to nm it;' the idea of getting something for nothing,
timated $1o million price tag. and should be more cautious in their ap-
Then, last year, EarthLink made proach. Philadelphia, he says, isn't really
Philadelphia an offer it couldn't refuse: to NOCash Down' getting a free network. It's getting a "no-
build and operate a WiFi network at the Cities responded enthusi~astically to the cash.down' network, paid for later by sub-
company's own expense. What's more, news out of Philadelphia and San Fran- scribers. If cities demand too much for
EarthLink offered Philadelphia 3,000 free dsco. Perhaps a bit too enthusiastically, in free, they risk getting shoddy hardware or
or discountedlwireless accounts for its fleld ' the view of some observers. "The feeding badserviceorinthecaseofupstartvendors,
workers; a slice of its revenues, in order to frenzy has started,' says Craig Settles, the pushing them to promiSe.more than they
buy computers for low-income families; author of a recent book on munidpal wire- can deliver, Settles says. "Judging by the
and discounted service to help get those less proiects. UEveryone's saying,'I want my haste with which dries are going frompress
families online ($9.95 a month versus a free network, too.'" release to RFP to finding a vendor, I don't
likely retail rate of about Szo a month). In Not a day goes'by lately without a mayor sense that much analysis or due diligence is
exchange, Philadelphia would have to give announcinganewwirelessinitiativeoradty being done;'
upusagerightsto4,ooodty-ownedstreet- issuing a new request for proposals. The Nevertheless, the Philadelphia model
lights. Importantly, EarthLinkmnot the plans look a little different in each dry. But is emerging as something of a blueprint, at
dtymwould own the network the idea that WiFi should come at no cost-- least for many big dries. Rather than build-
Philadelphia took EarthLink up on its either to consumers, to dty coffers or both-- ing out WiFi themselves, they're turning
offer, although the deal still awaits dry pervades much of the discussion. Wash- the up-front cost and customer-service has-
council approval. Derek Pew, interim CEO ington, D.C., for example, plans to stipulate sle over to private companies and then reg-
of.W.~kelessPhiladelphia, anonprofltsetup in its RFP that Iow-income residents get ulatingit. Insomeways, this resembles the .
emergence of cable television 3 o years ago,
when dries signed the first franchise agree-
ments with cable companies. A major dif-
ference is that rather than granting local
monopolies, as dries initially did with cable,
they are pursuing an open-access model
with WiFi. In Philadelphia, for example,
EarthLink must let other Intemet service
providers sell services over its network.
Some see other advantages to this
model. The big one is a matter of rnitigat-
ing the risk that another wireless technol-
ogy might overtake WiFi and make it obso-
lete. That's one reason why Portland de-
tided to follow the Philadelphia model, ac.
cording to Rashid Ahmed, senior project
coordinator for the Portland D~velopment
Commission. In April, Portland chose
MetroFi to build a free, ad-supported net-
work. "One of the major concerns is how do
you know you're not buying an 8-track tape.
You don't--so we're not buying any of it,"
Ahmed says. "The city's role in this is we
iust want to be a customer of a privately op-
erated system, so the risk is fh'mly on the
shoulders where it belongs, the private sec-
tor, to choose the right technologies and
make it happen."
Portland is offering itself as an "anchor
56 MAY2006 GOVERNING
Portland is
already dotted
with w reless
Internet
hotspots.
Soon WiFi will
go citywide.
utilities, intended to automate the reading
of gas and water meters. It turned out
that the meters needed to upload data only
twice a day, using just a fraction of the net-.
work's bandwidth. About that time, the
national buzz around cityWide wireless
picked up, and Corpus Christi realized
that it already had the building blocks of a
network in place~ "What we'd stumbled
upon is the newest infrastructure, for city
governments," says Leonard Scott, busi-
ness unit manager for the city's manage-
ment 'information systems department. ·
tenant" for the WiFinetwork, meaning that mental decision that policy makers need to "We haven't had one of these come along
the city will be one of the biggest wireless make is not a nuts-an&bolts technology de- in about xSo years."
customers. WiFi will substantially cut the cisionbut this question of ownership."- Now, Corpus Christiis in the process of
cost of the city's "smart" parking meters, building out WiFiacross the city's entire ~47
which require an Internet connection to up- square miles. The project will cost $7 million
load credit card data. Policeexpecttousethe A Newlnfrastructure andisslatedforcompletionbyAugust. The
system to download mug shots and other For now, h_owever, public ownership is an dty doesn't plan to dealwith customers di-
data to their squad cars. And the local tran- idea that is gaining traction only among rectly. Rather, it expects to sell access at
sit agencyis looking at using WiFi to create smaller dories. St. Cloud, Florida, is one of wholesale rates to local Internet service
a system that would tell bus passengers them. St. Cloud got started in WiFi three providers. They, in turn, would sell wireless
how long they'll have to wait until the nex~ \ years ago when it built a hotspot in a busi- Internet service to consumers. The city es-
bus arrives, ness park. The idea thenwas to use wireless timates that its capital investment will be
Critics of:these arrangements, however, as a hook to attract businesses. Later, city of- paid off in four years.
argue that dories like Portland aren't really fidoals came around to the idea of WiFias a As Scott sees it, smaller cities may have
sidestepping risk. In fact, by agreeing to act 'hook for resident% too. to take a more active role in making wireless
as anchor tenants, theymaybe exacerbating St. Cloud estimated thatits dotizens were Internet come to fruition because they
the downside if these unproven business collectively spending $4 million a year on won't attract the same amount of interest
models don't pan out. BeccaVargo DaggeR, Internet access. For $2.6 million, the city from vendors as cities such as Philadel-
a researcher with the Minneapolis-based In- was able to build a WiFi network across the phia and San Francisco. "If second- and
stitute for Local Self-Reliance, believes that entire city and offer the service to residents third-tier cities don't start working to build
dories should be more willing to consider gratis. St. Cloudhired Hewlett-Packard to their own systems, it'll be a long time com-
i wireless models in which the public owns build the network and run customer serv- ing," he says.
the network. "If they're going to be relying ice, but the city owns it. The system went "We look at it the same as we do water,
on this for their intemal communicarions, live in early March. In its £~rst three weeks, sewers, gas and the road. system," Scott
there's substantial risk in that," Daggett about one-quarter of the homes in St. adds."It'sthereforthegeneralpublic'suse.
says."Andit~sarisktheydon'tcontrolinthe Cloud had signed up. We think it's very important that the dry
' m"
same way as if they owned it:' Corpus Christi, Texas, is taking a sim- have ownership and controlof the syste .
"A lot of dories think tho/re getting a free ilar approach to WiFi, although the dry hit
networkand,tho/aren't," Daggettcontinues. upon it by accident. A few years ago, the Chrlstovher Swore can he r~acned at
"Ownership affects everything. The funda- city set up a pilot wireless project for its cswove®qoveminq.com
58 MAY2006 GOVERNING
~ ~ile local govern- Philadelphia expects to pay $20 per manuals, floor plans and other informa-
~ ~ ments are devel- month for each of its 2,000 mobile work- tion so those using WiFi-enabled laptops
~ ~ ~ ~ oping high-speed ers using WiFi, plus eliminate T1 lines in can assess the appropriate response to
/~ ~ ~] wireless (WiFi) 300 remote buildings, including fire and a fire. Using wireless medical devices,
*: networks to police stations. "We can save as much as emergency medical responders transmit
i -~' lowinco~me $2 million annually starting in the third patient readingstomobileunitsusing
~3' ~ ~e~xpents~;~ yeari" Neff says. wireless modems that send the data to
hospitals before patients arrive. Para-
Internet access, and to encourage eco- WiFi is spreading medics also can transmit their reports
nomic development, they also are using Cities and counties already are using from the scene.
them to improve the efficiency of public citywide WiFi networks to support their Medford, Ore., spent $700,000
safety operations. A WiFi network is less mobile workers, including those in law ($500,000 of which came from federal
expensive than cellular competitors, a enforcement, firefighting and emergency grants) to deploy its network over the
critical factor in Philadelphia's decision medical service. Law enforcement ofli- city's 24-square-mile area for police, fire
to build one. "Right now we pay for data cials use WiFi to scan local and national and city employee use. Ripon, Calif.,
wireless for a number of field workers, databases as well as complete paperwork, built a $500,000 network covering eight
such as those in public safety," says Phil- capture officers' interaction with motor- square miles, and Fresno, Calif., spent
adelphia's CIO Dianah Neff. "This is $70 ists or to watch public areas, and scan car $?50,000 for tl~e first phase of building
per employee per month, so we limit the tags'for vehicle or owner registration, its network to address all areas of public
number of people who have access." Fire departments typically digitize safety, according to the "Second Anni-
44 May 2006 www.americancityandcounty.corn
Morrow County, Ore., the location b.oses, valves and sprinklers to fight'haz-
of the Umatilla Chemical Depot, hosts ardous materials fires on or near shores."
about one-third of the nation's stockpile Tl~e cen'Cer~s main phone lines use
of warfare materials, is home to the Han- voice over Internet protocol (VolP)
ford Nuclear Reservation and also oper- phones so staff can use the Internet to
ates a nuclear power station. The county call when regular phone lines or cellu-
also includes natural gas and energy pro- lar networks fail. Emergency response
duction and distribution facilities, vehicles are equipped with mobile WiFi
Because a major natural or manmade access so they can stay connected to the
disaster striking any of those facilities network while en route to hospitals. The
can have devastating consequences, the network complies with the Health Insur-
Morrow County Emergency Manage- ance Portability and Accountability Act
ment Center's (MCEMC) team of first so patient data can be wirelessly trans-
...... . responders completed a $2 million, 1;000- mitted and with the Federal Information
· square-mile WiFi network last month to Protection Standard.
give its public safety entities monitoring In one well-planned and coordinated
~.:::,.:: and emergencyresponsecapabilities, effort, Morrow County addressed the
.... '~::~: Cameras on the network stream real- needs of its various public safety enti-
time color video to the center to moni- ties, while creating a multi-agency acces-
tor its higher risk facilities. The same sine communications and operations
cameras also monitor the highways so management network. "Nothing could
the staff can respond in 10 minutes or match WiFi for moving large volumes of
less when a chemical disaster occurs. To data," Beard says.
quickly evacuate residents, MCEMC will
use the cameras and the network to re- More to come
direct traffic by controlling traffic lights, As cities and counties become more
drop arm barriers and message signs, comfortable with basic communica-
"The captain of a tug moving barges tion over WiFi, other technblogies will
needs to know about any major emer- be brought to bear. After 18 months of
gencies on land, so we deployed WiFi development, Oklahoma City is testing
access points mounted on buoys on- the its network this month. The system origi-
rivers and waterways to provide warn- nally was planned to allow police.to com-
ings to watercraft," says MCEMC Direc- plete reports in the field and access mug
tor Casey Beard. "These also back up shots and centralized records. However,
the land-based access points. We can officials now are considering expanding
remotely operate un-manned fire boats' its use to geographic information systems
versary Report" from MuniWireless,
a website featuring municipa! wireless
broadband projects.
In 2004, New Orleans used video sur-
veillance over a WiFi network to help
address increasing crime. "[Our] pilot
projects saw an immediate 58 percent ~
reduction in the murder rate in those
areas, and similar reductions in other
violent crime," says the city's CIO Greg
Meffert.
New Orleans planned to roll out data
applications for its police as soon as the · -
network was fully deployed. But With the °
city crippled by Katrina, the network is
used for other applications. "We were a
third of the way done when Katrina hit,"
Meffert says. At that point, $3 million
had been spent --'money secured from
the city and the federal government.
May 2006 45
to automatically ~,ute fire trucks arov:?d eras around the city and a VolP system issued requests for proposals to have
hazards, such as un~x~ bridges, or direr with universal phone numbers and roes- them built or created steering commit-
firefighters to hydrant~ with the high- sage routing for police officers to improve tees to pursue the initiatives. The net-
est water pressure. The next stage may communication with residents, works hold the potential to significantly
include the ability for mobile personnel More than 300 U.S. cities have improve public safety.
to see images captured from video cam- deployed citywide wireless networks, Speaking at this year's Wireless Inter-
net Institute's Digital Cities conference, i.'
'~'-' ':':;~': ..... ~: Oklahoma City CIO Mark Meier sug-
gested that cities considering WiFi should
ensure they have a high quality of service
to give public safety officials the nares-
.: sary bandwidth in an emergency, espe-
.:: .:. ......... cially if the general public also is using
the network. He also suggested that they
test their network radios to determine if
they can travel throughout the coverage
area without losing the signal or data;
watch costs and maintain the network
using as few people as possible.
Meffert also advises communities
considering building a WiFi network to
plan one that handles communications
with public safety personnel and video . i
surveillance. "We were able to wall off
the public safety part of the network,
and you'll have a much more connected,
complete network," he says. ~
Craig Settles is the Oakland, Calif.-
based author of "Fighting the Good Fight
for Municipal Wireless."
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46 May 2006 www.americancityandcounty, com
From: <j'pete1955@aol.com>
To: <achriste@ci.bakersfield.ca.us>
Date: §/26/2006 8:34:13 AM
Subject: Free Wireless in Bakersfield Area
I am presently in Spokane, WA on business and they have this feature for their citizens. I would like to
see us go forward with this as well. I support the initiative. Jeff Peterson
From: "Jim Milledge" <jmilledge@bak.rr. com>
To: <achriste@bakersfieldcit~. us>
Date: 5/25/2006 10:02:45 AM
Subject: Wireless Internet
Outstanding job for the people of Bakersfield. Wireless Internet free would be a great thing for those of us
on Social Security. Hope it comes to pass and before a year as the paper stated. Again, Thank you. Jim
Milledge-Bakersfield
MEMORANDUM
TO: JOHN STINSON, ASSISTANT CITY MANAGER
FROM: SANDRA JIMENEZ, ASSISTANT FINANCE DIRECTOR
DATE: MAY 17, 2006
SUBJECT: CAL TRANS AUDIT
Please fred three (3) attached copies of the City of Bakersfield's Audit report fi:om the California
Department of Transportation. Please place the above report on the Budget and FinanCe
Committee's agenda for the next meeting. Let me know if you have any questions.
S:~AdminWlemos\Oas tax audit - budget and finance. DOC
05/16/2006 15:30 FAX 916 323 7155 CALTRANS-A & I ~002
D~P~T~NT O~ ~NS~ORTATION
A~S ~ ~S~GA~ONS
13~ O ST~, Sui~
P, O, BOX 9~2874
SAC~TO, ~ 94274-0001 ~e e~e~c~nt!
PHONE (916) 32~-7111
F~ (916) 323-7123
~: (9163 654~0~
May 16, 2006
Nelson K, Smith
Finance Director
City of Bakersfield
1501 Truxtun Avenue
Bakersfield, CA 93301
Re: Examination of FY 2002/03 and FY 2003/04 Indirect Cost Rate Proposals (ICRPs)
for the Depariment of Public Works, City of Bakersfield
File No: P1190-0512
Dear Mr. Smith:
We have examined thc City of Bakersfield, Department of Publio Works' (City) assertion.
that thc accompanying Indirect Cost Rate Proposals (ICRP) for ~c fiscal years ended
June 30, 2003 and June 30, 2004 arc presented in accordance with Office of Management
and Budget (OMB) Circular A-87 and thc Depai'ii~ient of Transportation s (Department's)
Local Programs Procedures (LPP) 04-10. The City proposed indirect cost rates to be
applied to total direct salaries and fringe bc~le.~ts as follows:
P~roposed Indirect Rates
FY 02/03 115%
FY 03/04 96%
City management is responsible for the assertion. Our responsibility is to express an
opinion on the assertion based on our examination.
The scope of the examination was limited to select financial and compliance activities.
The .examination consisted of a review of the ICRPs and tests of individual accounts to
the gcnexal ledger and supporting documentation based on a risk assessment.
Our.examination was conducted in accordance with thc Attestation Standards set forth in
the Oeneml Accounting Office's Generally Accepted Government Auditing Standards
and, accordingly, included examiniug, on a test basis, evidence supporting management's
05/~6/2006 15:30 FAX 9~6 32~ ?~$ CALTRANS-A & I [~003
Nelson Smith
- ~M~y 16, 2005
Page 2 of 3
assertions and performing such other procedures as we considered necessary in the
circumstances. We believe that our examination provides a reasonable basis for our
opinion.
In our opinion, the City's assertion referred to above is fairly stated, in all material
respects, based on OMB Circular A-87 and LPP 04-10 except for the finding noted
below. The approved indirect cost rates are as follows:
Approved Indirect Rates
FY 02/03 115%
FY 03/04 96%
The approval is based on the understanding that the rates will be applied to total direct
salaries and wages, excludi.g benefits, and that a carryforward provision does not apply.
Therefore, no adjustments will be made to previously approved rates.
Finding 1
~hc City's Department of Public Works (DPW) ,has the capability to track direct labor
time by coding to direct project numbers but the DPW does not have thc same capability
for tracking indirect labor time. As a result, if employees who work on direct projects
erroneously omit the direct labor identifier then by default the direct labor is treated as
indirect, thereby overstating total indirect labor costs aud understating total direct labor
costs.
Per 49 Code of Federal Regulations Paxt 1 $.20(b)(3):
Internal Control. Effective control and accountability must be maintained for all grant
and subgrant cash, real and personal property, and other assets. Grantees and
subgrantees must adequately safeguard all such property and must assure that it is used
solely for authorizedpurposes. Aud
OMB Circular A-87, Attachment A, (C) (1):
Factors affecting allowability of costs. To be allowable under Federal awards, costs
must meet the following general criteria:
0') Be adequately documented.
Recommendation
D~W should establish procedu~s for coding of indirect labor time 'that would require
such labor to be coded to an overhead identifier.
.The examination resuRs were communicated to Randy McKeegan, Department of
Finance, City of Bakersfield, on May 11, 2006. This report is intended solely for the
information of Depaxi~:,ent Management, City Managvunemt, the Federal Highway
05/16/2006 15:31 FAX 916 323 7135 CALTRANS-A & I ~004
Nelson Smith.
- --Ma'y 16, 2005
Page 3 of 3
Administration (FHWA) and the California Transportation Commission. However, this
report is a matter of public, record and its dis~bution is not limited.
Please retain the approved ICRPs for your files. Copies were sent to the Department's
District 6, the Department's Division of ~eoun~ing and the FHWA. If you have any
questions, please contact Luisa Ruv~eaba, Auditor, at (916) 323-7888 or Zilan Chen,
Audit Supervisor, at (916) 323-7915.
LUISA RUVALCABA
Auditor
Approved:
Chief, External Audits
C: Gary Yarber, FHWA
Gaxy Buekhammer, Division of Accounting
DLAE, District 6
05/16/2006 15:31 FAX 916 323 7135 CALTRANS-A & I ~005
City of Bakersfield
Indirect Cost Plan
The indirect cost rate contained herein is for use on grants, contracts and other agreements with'
the Federal Government and California Department of Transportation (Caltrans), subject to the
conditions in Section II. This plan was prepared by the City of Bakersfield and approved by
Caltrans.
SECTION I: Rates
Rate Type Effective Period Rate* Applicable To
Fixed based on actual costs 7/1/03 to 6/30/04 96% Public Works Engineering
*Base: Total Direct Salaries
SECTION H: General Provisions
A. Limitations:
The rates in this Agreement are subject to any statutory or administrative hmitations and apply
a given grant, contract, or other agreement only to the extent that funds are available. Acceptance
of the rates is subject to the following conditions: (1) Only costs incurred by the organization
were included in its indirect cost pool as finally accepted: such costs are legal obligations of the
organization and are allowable under the governing cost principles; (2) The same costs that have
been treated as indirect costs are not claimed as direct costs; (3) Similar types of costs have been
accorded consistent aceountirig treatment; and (4) The information provided by the organization
which was used to establish the rates is not later fottud to be materially incomplete or inaccurate
by the Federal Oovemment or Caltrans. In such situations the rate(s) would be subject to
renegotiation at fine discretion of the Federal Government or Calirans; (5) Prior actual costs used
in the calculation of the approved rate are contained in the grantee's Single Audit which was
prepared in accordance with OMB Circular A-133. If a Single Audit is not required to be
performed, then audited financial statements should be used to support the prior actual costs;
and, (6) the rate is based on the actual costs incurred during the period.
B. Accounting Changes:
This Agreement is based on the accounting system purported by the organization to be in effect
during the Agreement period. Changes to the method of accounting for costs which affect the
mount of reimbursement resulting from the use of this Agreement require prior approval of the
authorized representative of the cognizant agency. Such changes include, but are not limited to,
changes in the charging of a particular type of cost from indirect to direct. Failure to
approval may result in cost disallowances.
C. Fixed Rate with Carry Forward:
The fixed rate used in this Agreement is based on actual cost for thc period covered by the rate;
thereibre, a carry forward provision does not apply.
C:~,DOCLrlviE_l\u~er~LOCALS_l¥1'emp\not~s6030CS\indiroct [CAP cert-Dire~t Co~'ts 2004amnd. doo
05/16/2006 15:31 FAX 916 $25 7135 CALTRA.NS-A & I ~006
D. Audit Adjustments:
Immaterial adjustments resulting from the audit of information contained in this plan shall:be
compensated for in the subsequent indirect cob plan approved after the date of ~e audit
adjustment. Material audk adjustments wiU require reimbursement from the grantee.
E. Use by Other Federal Agencies:
Authority to approve this agreemem by Caltrans has been delegated by the Federal Highway
Administration, California Division. The purpose of this approval is to permit subject local
government to bill indirect costs to Title 23 funded projects administered by the Federal
Departrneat of Transportation (DOT). This approval does not apply to any gra~ts, contractso
projects, or programs for which DOT is no! the cognizant Federal agency.
The approval will also be used by Caltram ~u State-only funded projects.
F., Other:
If any Federal contract, grant, or other agreement is reimbursing indirect costs by a means other
than the approved rate(s) in this Agre. craent, ~e organization should (1) cre.3it such costs to the
affected programs, and (2) apply the approved rate(s) to the appropriate base to identify thc'
proper amount of indirect costs allocable to these programs.
G~ Rate Calculation
FY 2004 Actual Direct Salaries and Wages $ 2,397,338
FY 2004 Actual Indirect Costs $ 2,294,143
FY 2004 Indirect Cost Rate -
Public Works Engineering 96%
CERTIFICATION OF INDIRECT COSTS
Tkis is to certify that I have reviewed the indirect cost rate proposal' submitted herewith and To
the best of my knowledge and belief:
(1) All costs included irt this proposal to establish billing or final indirect costs rat~s for fiscal
year 2004 (July 1, 2003 to June 30, 2004) are allowable in accordance witZ the requirements of
the Federal and State award(s) to which they apply and OMB Ciroalar A-87, "Cost Principles for
State, Local, and Indian. Tribal Governments." Unallowable costs have been adjusted for in
allocating costs as indicated in the cost allocation plan.
(2) Al1 costs included in this proposal are properly allocable to Federal and State awards on the
basis of a beneficial or causal relationship between the' expenses incurred and the agreements to
which they are allocated in accordance wi& applicable requirements. Further, the same costs that
have been treated as indirect costs have ~ot been claimed as direct costs. Similar types of costs
haVe been accounted for consistently and the Federal Government and Caltrans will be notified
of any accounting changes that would affect the fixed rate.
C:~DOCUME-I~r, efiLOGA/...q-I \Tcmp~not~6030GS~indirect IC.A~ ~ert. Dircct Co~t~ 2004alllrtd..cloC
05/15/2006 1~:32 FAX 916 323 7135 CALTRANS-A & I ~007
I declare that the foregoing is true and correct.
Govemmen~l Unit: City of Bakersfield
Signature: ~ Signature:
Reviewed, Approved and Submitted by: Prepared by:
Name of Official: Nelson K. Smith Name of Official: Sandra ~imenez
Title: Finance Director Title: Assistant Finance Director
Date of Execution: I~a~ I~,~oa~, Phone: (661) 326-3740
INDIRECT COST RATE APPROVAL
The State DOT has reviewed this indirect cost plan and hereby approves the plan.
Reviewed'~d Approved by: ~ ~:.'~,,~.~Reviewed and Approved by:
(Name of Audit Manager) . M _ ~ (Name of auditor)
S:'d:[,ANDY"~Co~ Plun'~indir~ct ICAP ccrt-Di~t Costs 2004m'r,Jld.do¢
05/16/2006 15:32 FAX 916 323 7135 CALI~A~S-A & I ~008
INDIRECT COST RATE PROPOSAL
Claimant Name: City of Bakersfield, Ca.
Department: Public Works - Engineering 403t
Fiscal Year:. 200312004
Allowable AIIo~ab|e
Description of Costs Total Unallowable Indirect Diregt
Co_~s C_-~_ts Costs Costs
I Salaries&Wages $3,033,218 $0 $635,650 $2,397,338
Line mm Cmts (Sewlces, Supplies & Other):
s C~tract L~or $0 $0 $0
'4 Administatlve AIlO~alion $0 $0 $0 $0
, $0 $0 $0 $0
s Dim~ AIIocMIon
s Audit $0 $0 $0 $0
I Other Professi~al ~wlce~ S178,418 $0 " $50,000 S128,418
a Internal Vehicles $110,478 $0 $110,479
s intern;d Corem E~uip $1 t ,,(31 $0 $11,43'1 $0
~o IntemalTetopl~0ne Equ~ S27,986 $0 S27,986 $0
~1 lrAemal computer Equip $98,033 $0 $g8,033 $0
~ Internal Other Equip $0 $0 S0 $0
~3 Repair & :Maintena~;e $937 $0 S937 S0
t& Liabl~tY Instz'ance AIIocati~ $48.899 $0 $48,699
~s Pr'operly InsuarteeAllocation $4,162 $0 $4.162 $0
,16 Telephone LD S35,797 $0 S35,797 $0
t;' Printing & i~inding $3,834 $0 $3,834 S0
~e internal Duplication $8,558 $0 $8,558 $0
~s Reimbursal~le ;xpens S7,-~94 . $0 $0 $7,394
20 Other Outside se~vlces $27,092 $0 S0 $27,092
2~ Uhif~s & Accessories(office supl~l[ss) S1~,45'1 · $0 $12,4.51
22 Street/Sever Supplies $0 S0 $0 S0
23 Utal~ ~0 $o So S0
S4,320 $0 $4,320 $o
34 compute~ Suppaes So
2s Oliver Materials & Supplies $4,211 S0 $4,211
~6 FUnKure & Equipment (Minor) S824 . $0 $824 $0
~ $,lgnal & Corem Eq (Minor) $0 SO $0 -... *'
ia Other Equipment $10,887 ' $0 St0,887 **" $0
3a Conlpuler Software & Hardware $8,4~3 S0 $8,435 $0
~o Oeperlmen~l Support $102.464 S0 $I0~,484 $0
$0 $0 · $0 $0
st 9ad Debt Expense S0 S0 $0
~2 TaXes $0 S0 $0 $0
33 I~epmclatlen S0 $0 $0 $1)
aa Mainlenance S0 $0~ $0 S0
aTOTAL: $706 609 $0 $543,70S
['- TOTAl. eXPENDITUreS: ~ --
ICost AdJu,stmarrts and/or C~st Plan ¢~:
ss Cost Allocation $932,27~ $9~2,273
37
SUBTOTAL.:
TOTAL COSTS: $5,S41,619 $0 $2,294.t43 $3,247,476
$2,294,t43 [] Tq4al ;allowable indirect co.ts
CALCULATED IHDIRECT COST RATE -- 1[ 95.~'A ~ $2 397,338
Rate Is based on: Salaries = Total direst salaries
8:~ad~lDY~Oost Plmt~4pl~WOd;sheemo,3-O4arm d~l a
05/16/2006 15:32 FAX 916 323 7135 CALTRANS-A & I ~009
City of Bakersfield
Indirect Cost Plan
The indirect cost rate co~tained herein is for use on grants, contracts and other agreements with
the Federal Government and California Department of Transportation (Caltrans), subject to the
conditions in Section II. This plan was prepared by tho City of Bakersfield and approved by
Callxans.
SECTION I: Rates
Rate Type Effective Period Rate* Applicable To
Fixed based on actual costs ' 7/1/02 to 6/30/03 115% Public Works Engineering
*Base: Total Direct Salaries
SECTION II: General Provisions
A. Limitations:
The rates in this Agreement ar= subject to any statutory or administrative limitations and apply to
a given grant, contracL, or other agreement only to the extent that funds are available. Acc=prance
of the rates is subject to the following conditions: (1) Only costs incmxed by the organization
were included in its indirect cost pool as finally accepted: such costs are legal obligations of the
organization and arc allowable under the governing cost principle; (2) The same costs that have
been treated as redirect costs are not claimed as dixec~ costs; (3) Similar typ~s of costs have been
accorded consistent accounting tmalxnent; and (4) The information provided by the organization
which was used to establish the rates is not later found to be materially incomplete or inaccxu~te
by the Federal Oovcmment or Caltrans. In such ~situations the rate(s) would b~ subject to
renegotiation at the discretion of thc Federal Government or Caltran~; (5) Prior actual costs used
in: the calculation of the approved rate are contained in the grantee's Single Audit which was
prepared in accordance with OMB Circular A-133. If a Single Audit is not required to be
performed, then audited financial statcrhents should be used to support the prior actual costs;
and, (6) the rate is based on the actual costs incurred during the period.
B. Accounting Changes;
This Agr¢¢m~t is based on the accounting system purported by the organization to be in effect
during the Agreement period. Changes to thc method of accounting for costs which affect the
amount of reimbursement resulting from the us~ of this Agreexflent require prior approval of the
authorized representative of the cognizant agency. Such changes include, but arc not limited to,
char~ges in the charging of a particular type of cost from indixect to direct. Failure to obtain
approval may result in cost disallowances.
C. Fixed Rate with Carry Forward: ~
The fixed rate used in this Agreement is based on actxml cost for the period covered by thc ram;
therefore, a carry forward provision does not apply.
C:'~DOCU ME~ 1 ~usefil'.,OCALS- 1 \T~mp~mt~s60:] 0C~"441M34'd°c
0§/15/2006 18:33 FAX 916 323 7135 CALTRANS-A & I ~010
D. Audit Adjustments:
Immaterial adiustmeats resulting from the audit of information contained in this plan shall bc
· compensated '~or in the subsequent indirect cost plan, approved after thc dat~ of thc audit
adjustment. Material audit adjustments will require reimbursement ~om thc grantee.
E. Use by Other Federal Agencies:
Authority to appwve this 'agreement by Caitrans has been delegated by the Federal Highway
Administration, California Division. The purpose of this approval is to permit subjec~ local
government to bill indirect costs to Title 23 funded projects administered by the Federal
Department of Transportation (DOT). This approval does not apply to any grants, contracts,
projects, or programs for which DOT is not the cognizant Federal agency.
Thc approval will also be used by Caltraus in State-only funded projects.
F. Other:
If any FederaJ contract, grant, or other agreement is reimbursing indirect costs by ame. apS other
than the approved rate(s) in this Agreement, the organization should (1) credit such costs to thc
affected programs, and (2) apply the approved rate(s) to the appropriate base to identify thc
proper amount of indirect costs allocable to these programs.
G. Rate Calculation
FY 2003 Actual Direct Salaries and Wages $ 2,239,199
FY 2003 Actual Indirect Costs $ 2,567,688
FY 2003 Indirect Cost Rate -
Public Works Engineering 115%
CERTIFICATION OF INDIRECT COSTS
This is to certify that I have reviewed the indirect cOst rate proposal submitted herewith and ~o
the best of my knowledge and belief:.
(1) All costs included in this proposal to establish billing or final indirect costs rates for fiscal
year 2003 (July l, 2002 to 1tree 30, 2003) are allowable in aCCordance with the requirements of
the Federal and State award(s) to which they apply and OMB Circular A-87, "Cost Principles for
State, Local, and Indian Tribal ,Governments." Unallowable costs have bccn adjusted for in
allocating costs as indicated in thc cost allocation plan.
(2) All costs included in this proposal arc properly allocable to Federal and State awards on the
basis of a beneficial or causal relationship between the expenses incurred and the agreements to
which they axe allocated in accordance with applicable rcquirememts. F-arthcr, the same costs that
have been treated as indirect costs have not been clahned as direct costs. Similar types of costs
have been accounted for consistently and the Federal Government and Caltrans will be notified
of any accounting changes that would affect the fixed rotc.
· C:~d3OCUM~- F,,uscfiLOCALS-'I ~Temp~nof=s6030Cffv'4413434-d°°
05/16/2006 15:33 FAX 916 323 7135 CALTRANS-A & I ~011
I declare that the foregoing is true md correct,
Governmental Unit: City of Bakersfield
Signature: _~~~~-~ signature: j
Reviewed, Approved and Submitted by: Prepared by:
Name of Official: Nelson K. Smith Name of Official: Sanctta Jimenez
Title: Finance Director Title: Assistant Finance Director
Date of Execution: l'r~ i~:~o0,~ Phone: (661) 326~3740
INDIRECT COST RATE APPROVAL
The State DOT ha~ reviewed this indirect cost plan and hereby approves the plan.
Reviewed ~ Approved b~y'.r~,~..~.~i"~ Reviewed and Approved by:
(Name of Audit Manager) ( X(Nam¢ of auditor)
Title: C. aa~'~, ~--_~~ ~ Title:
Date: ~ tt~ .;~x~ Date: ~¥
Phone NUmber: C~t,~.'~ ~='~ .- '; ,=a' Phone Number:
S;~A, NDY~Cost Phm~indire~ ICAP ==~.-Dit¢¢t Cost~ 2003atm*~d,doc
08/16/2006 15:33 FAX 916 323 7135 CALTRAN$-A & I [~012 '
iNDIRECT COST RATE PROPOSAL
Claimant Name: city of Bakemfleld, Ca.
Department; Public Works - Engineering 4031
Fiscal Year: 2002/2003
Allowable
Description of Costs Total Unallowable Indirect Direct
Costs Costs Costs Co~
per~oflnel Servlcs~:
t ~alarle9 & Wages $3,099,935 $0 $860.737 S2,239,199
2 Benefits 21,40/, $662~745
SUOTOTAL: $3~ $0
~ Item ¢ost~ (Sewlce$, Supplie~ & Olher):
a Contract Labor $22,716 $0 $0 $22,716
4 Admin~s~lJ~ A]loca-tJofl $0 $0 $0 $0
s Oireot Al~_.,a~on $0 SO SD SO
s Audit $0 60 $0 $0
? Ome~ Prc~esGlan;~ Serdces $90,418 $0 $0 $90,418
8 Inter. Gal Ve~ic~es $t03.442 60 $'J03,442
a Int. em;d Camm Equip $11,938 $0 $11.938 SO
so IntemaJ Tdepho~e Equip $29,940 60 62e,G40 60
· 1'1Int~'nal computer Equip $102,208 $0 $'102,208
~z Inmm~ O~er Equip $;31)1) $0 $399
t3 P'el~Jr & :Mainte~e~ce $1,701 $0 $1,701 $0
14 Liab~ty Insurance AIk)oation $443.800 $0 S443,800 S0
1~ P~operty I~Suance AIIoc~lm $10,391 $43 $10,39t
,IG Teleph=ne LD 622,355 S0 622,355 ~ $0
~? P~intlng & Blnding 610,430 $0 $10,436 $0
t~ Irffemal Duplir, at~en $1o,013 $0 61~,~13 $0
is Reimbura;lole Expels 617.050 $0 $0
$90,811 $0 $o $90,811
20 Other Outside ~ervices ,
~ Uniforms & Accessories(office so;plie~) $24.218 $0 .$24.216 $0
2= St~e~/~ewer E,u;~ias SO $0 $0
$0 sa $o
2~ utilities ~2,18g $0 $2.189 SO
24 Com~;IUt~I~' ~u~lJe~
2~ Ot~er M~tesi;ds & SupplJe~ $4,882 $0 $4,862 $0
2~ Funlture & Equipment (M~nor) $~.147 ~ $5,147 $0
z~ Sign;; & Corem Eq (MinOr) S~ $9 $0 $0
28 O~gr ;:qu~pme~t 61,124 ::: $0 $1,124
2~ Computer;~e&Hm~w~m $48,134 ~ $0 $45,1S4 . $0
~'' $0
30 Depmtmental Support $86~13 $0 $86~t3
3t Bed Debt Expense $0 60 $0 $0
~2 Taxes SO $0 60 60
33 D~'ec~on 60 $0 $0
34 Malnt~a~r,e S0 $0 $0
3s C,h~ ~..;.;~ S0 , $0 $0 S0
~_L-iOTAL: $t .t39,505- $0 $9t8.51 O
I' TOTAL EXPENDITURES: $4.902,186 I
37cost Ad]ustnlents a,/~d/or Cos~ Pl~n
36 Cost AItOCatlon $$04,4~1
5lJU ~ OTAL: ' $604. Ta.~_1 $0
I TOTAL CO~TS: $;,606,607 $0 $2,567,688
I CALCUI_ATED INDIRECT COST RATE = I~ 1t4.7% IJ $2,$87,688 =To=lallowablelndlmctcosts
L~_~s based on: salaries - $2,27_~.199 ~. Total dl~Ct ~alarl.__~_~
2:41) PM - 5/11/2006
05/16/2006 15:30 FAX 916 323 7135 CALTRANS-A & I ~001
To: Randy MCKeegan
Phone: 66t-326-3030
Fax: 661-852-2040
From: Luisa Ruvalcaba
Audits and Investigations
Department of Transportation
Phone: (916) 323-7888
Fax: (9t6) 323-7135
Date: 5116106
Pages: / ~_ , (including cover sheet)
Approved tCRPs - origi~al~ will be
mailed.
From the desk of:
Luisa Ruvaicaba
Audits and Investigations
California Department of
Transportation
t304 "O" Street, Suite 200
Mail: P. O. Box 942874
Sacramento, CA 94274-0001
General Numbem:
916 - 323-7111
fax: 9t6 - 323-7135
TO: JOHN STINSON, ASSISTANT CITY MANAGER
FROM:
JIMENEZ, ASSISTANT FINANCE DIRECTOR
SANDRA
DATE: MAY 17, 2006
SUBJECT: GAS TAX AUDIT
Please find three (3) attached copies of the City of Bakersfield's Audit report for the City's Gas
Tax Fund that was prepared by the California State Controller. Please place the above report on
the Budget and Finance Committee's agenda for the next meeting. Let me know if you have any
questions.
SAAdminhMemos\Oas tax audit -budget and finance. DOC
CITY OF BAKERSFIELD
Audit Report
GAS TAX FUND.
July 1, 2004, through June 30, 2005
STEVE WESTLY
California State Controller
April 2006
April 28, 2006
Nelson K. Smith
Finance Director
City of Bakersfield
1501 Truxtun Avenue
Bakersfield, CA 93301
Dear Mr. Smith:
The State Controller's Office audited the City of Bakersfield's Gas Tax Fund for the period of
July 1, 2004, through June 30, 2005.
The city accounted for and expended its Gas Tax Fund in compliance with Article XIX of the
California Constitution and the Streets and Highways Code.
If you have any questions, please contact Paul R. Criss, Chief, Financial-Related Audits Bureau,
at (916) 322-4941.
JEFFREY V. BROWNFIELD
Chief, Division of Audits
JVB/vb
cc: Grace Kong, Chief
Local Progran~ Accounting
Department of Transportation
City of Bakersfield Gas Tax Fun~!
Contents
Audit Report
Summary .................................................................................................................................. 1
Background ................. , .................................... i ....................................................................... 1
Objective, Scope, and Methodology ...................................................................................... 1
Conclusion ................................................................................................................................ 2
Follow-Up on Prior Audit Findings ...................................................................................... 2
Views of Responsible Official ................................................................................................. 2
Restricted Use .......................................................................................................................... 2
Schedule 1--Reconciliation of Fund Balance ........................................................................... 3
~teve }Festly · California State Controller
City of Bakersfield Gas Tax Fund
Audit Report
Summary The State Controller's Office (SCO) audited the City of Bakersfield's
Gas Tax Fund for the period of July 1, 2004, through June 30, 2005. We
also audited the Traffic Congestion Relief Fund (TCRF) for the period of
July 1, 2001, through June 30, 2003. The last day of fieldwork was
January 12, 2006.
The city accounted for and expended its Gas Tax Fund in compliance
with Article XIX of the California Constitution and the Streets and
Highways Code.
Background The State apportions funds monthly from the highway ,users tax account
in the transportation tax fund to cities and counties for the construction,
maintenance, and operation of local streets and roads. The highway users
taxes are derived from state taxes on the sale of motor vehicle fuels. In
accordance with Streets and Highways Code Section 2101 and
Artiele XIX of the California Constitution, a city must deposit all
apportionments of highway users taxes in its Gas Tax Fund (also known
as the Special Gas Tax Street Improvement Fund). A city must expend
gas tax funds only for street-related purposes. We conducted our audit of
the city's Gas Tax Fund under the authority of Government Code Section
12410.
Chapter91, Statutes of 2000 (Assembly Bill 2928), as amended by
Chapter.656, Statutes of 2000 (Senate Bill 1662), established a Traffic
Congestion Relief Fund in the State Treasury for allocating funds
quarterly to. cities and counties for street or road maintenance,
reconstruction, and storm damage repair. Cities must deposit funds
received into the city account designated for the receipt of state funds
allocated for transportation purposes. The city recorded the TCRF in the
Gas Tax Fund. We conducted our audit of the city's TCRF under the
authority of Streets and Highways Code Sections 2182 and 2182.1.
Objective, Our audit objective was to determine whether the city accounted for and
Scope, and expended the Gas Tax Fund in compliance with Article XIX of the
California Constitution and the Streets and Highways Code. To meet the
Methodology audit objective, we determined whether the city:
· · Properly deposited highway users tax apportionments and other
appropriate revenues in the Gas Tax Fund;
· Expended funds exclusively for authorized street-related purposes;
and
.. · Made available unexpended funds for future expenditures.
Steve ff/estly · California State Controller
City of Bakersfield Gas Tax Fund
We conducted our audit according to Government/tuditingStandards,
issued by the Comptroller General of the United States. We did not audit
the city's financial statements. We. limited our audit scope to planning
and performing the audit procedures necessary to obtain reasonable
assurance that the city accounted for and expended the Gas Tax Fund in
accordance with the requirements of the Streets and Highways Code.
Accordingly, we examined transactions, on a test basis, to determine
whether the city expended funds for street purposes. We considered the
city's internal controls only to the extent necessary to plan the audit.
Conclusion Our audit disclosed that the city accounted for and expended its Gas Tax
Fund in compliance with Article XIX of the California Constitution and
the Streets and Highways Code for the period of July 1, 2004, through
June 30, 2005.
Follow,Up on Prior Our prior audit report, issued on July 1997, disclosed no findings.
Audit Findings
Views .of We discussed the audit results with city representatives during an exit
Responsible conference on January 12, 2006. Sandra Jimenez, Assistant Finance
Director, agreed with the audit results. Ms. Jimenez further agreed that a
Official dra~ audit report was not necessary and that the audit report could be
issued as final.
Restricted Use This report is i~tended for the information and use of city management
and the SCO; it is not intended to be and should not be used by anyone
other than these specified parties. This restriction is not-intended to limit
distribution of this report, which is a matter of public record.
JEFFREY V. BROWNFIELD
Chief, Division of Audits
Steve Westly · California State Controller
City of Bakersfield Gas Tax Fund
Schedule 1-
Reconciliation of Fund Balance
July 1, 2004, through June 30, 2005
Gas Tax Fund ~
Beginning fund balance per city $ 3,977,535
Revenues 19,681,668
Total funds available 23,659,203
Expenditures (20,227,242)
Ending fund balance per city 3,431,961
SCO adjustment _
Ending fund balance per audit $ 3,431,961
The city receives apportionments from the state highway users tax account, pursuant to Streets and Highways
Code Sections 2105, 2106, 2107, and 2107.5. The basis of the apportionments for Sections 2105, 2106, and 2107
varies, but the money may be used for any street purpose. Streets and Highways Code Section 2107.5
apportiq.nments are restricted to administration and engineering expenditures, except for cities with populations of
fewer than 10,000 inhabitants. Those cities may use the funds for fights-of-way and for the construction of street
systems.
Steve ~'est!y · California State Controller
State Controller's Office
Division of Audits
Post Office Box 942850
Sacramento, CA 94250-5874
http://www.sco.ca.gov
C06-GTA-012