HomeMy WebLinkAboutAgenda - 10-19-2004-9bORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: October 19, 2004
Action Agenda ,
Item No. -_~
SUBJECT: Agreement with Robert Segal, CPA, for School Efficiency Study
DEPARTMENT: County Manager PUBLIC HEARING: (Y/N) No
ATTACHMENT(S): INFORMATION CONTACT:
Proposed Agreement Rod Visser, ext 2300
TELEPHONE NUMBERS:
Hillsborough 732-8181
Chapel Hill 968-4501
Durham 688-7331
Mebane 336-227-2031
PURPOSE: To consider approving an agreement with the firm of Robert Segal, CPA, to carry
out an examination of opportunities for achieving budgetary efficiencies in the operations of
Orange County and the two school systems,
BACKGROUND: In Fall 2003, during the discussions on the "Analysis of Potential Impacts
Resulting from a Possible Merger of the Orange County Schools and the Chapel Hill Carrboro
City Schools", the Board of Commissioners expressed the desire to pursue three separate tiers
of analysis and discussion prior to undertaking any further decisions related to possible school
merger or funding equity, The first of these, school collaboration, has been the subject of an
ongoing series of facilitated meetings since early 2004 involving leaders of the County and both
school systems, The second initiative, an "educational excellence" assessment, is underway
and is being conducted under a contract between the County and the University of North
Carolina's School of Education, The third approach, an examination of possible measures that
bath school systems might pursue to increase operational efficiency, has been the focus of
recent discussion between the County Commissioners and the two Boards of Education,
At the September 27, 2004 joint work session of the three governing boards, there was
discussion and general agreement that it would be beneficial to retain the services of the Robert
Segal CPA firm to examine County and school finance records to determine if additional
savings could be achieved, As was reported at the BOCC's regular meeting on September 21,
2004, the County and both school systems have taken a number of significant steps in recent
years to enhance revenue collection and to reduce expenditures through more advantageous
contracting and spending approaches. The Segal firm was engaged several years ago by all
three governing boards for revenue enhancement/expense reduction analysis, and succeeded
in producing hundreds of thousands of dollars in savings and additional revenue for all three
entities,
It is expected that both school systems will engage the Segal firm to explore additional cost
saving opportunities. The Segal firm will need to execute individual agreements with each of
the governing boards tc authorize examination of each entity's financial records and to provide
for remuneration should the firm succeed in identifying operational efficiencies of interest to the
governing board. The accompanying proposed agreement is similar to the agreement that the
County entered into with Segal several years ago.
FINANCIAL IMPACT: If the Board approves this agreement, the Segal firm would retain 50%
of all savings achieved during the first 24 months after recommendations are accepted by the
Board, and actual savings are achieved and documented. There is no upfront cost to the
contract. Other than any retainer the County might pay for specific efficiency examinations that
do not involve directly measurable savings, the Segal firm is remunerated only if savings are
actually achieved.
RECOMMENDATION(S): The Manager recommends that the Board approve the
accompanying agreement with the Robert Segal CPA firm, subject to final review by staff and
the County Attorney, and authorize the Manager to sign it.
LETTER OF AGREEMENT
Robert S. Segal, CPA, PA (SEGAL) and (CLIENT) hereby enter
into this Letter of Agreement whereby SEGAL shall serve as a consultant to CLIENT to examine and
analyze the following listed expenses/revenues of CLIENT and to make recommendations to achieve
savings, credits, refunds or additional revenues, hereafter referred to as funds, in these areas:
Any and all revenues and expenses
SEGAL will fi~rnish CLIENT with a written report as to recommendations that may be made in the above
areas. CLIENT will then determine which (if any) of these recommendations CLIENT wishes to
implement, SEGAL will then assist in the implementation of these recommendations to achieve the
funds. Future savings and revenues are computed on a per unit basis.
CLIENT agrees to pay SEGAL on each recommendation for funds which is implemented, a fee equal to
fifty (50) cents of every dollar saved, credited, refunded or additional revenues during the 24 month
period immediately following full implementation of the recommendation. This fee will be paid quarterly
following the date of full implementation of the particular recommendation,
CLIENT is also interested in obtaining operational efficiencies which may be more difficult to determine
dollar savings and do not fit a contingent fee arrangement. As SEGAL reviews revenues and expenses,
CLIENT requests that SEGAL bring these efficiencies to its attention with the idea that CLIENT would
compensate SEGAL for helping to implement those efficiencies,
SEGAL AGREES TO MAINTAIN IN STRICT CONFIDENCE ALL INFORMATION RECEIVED FROM
CLIENT CONCERNING ITS EXPENSES AND METHODS OF DOING BUSINESS. FURTHERMORE,
SEGAL ACTS AS A CONSULTANT ONLY AND DOES NOT RECEIVE ANY COMMISSIONS OR
REMUNERATION OF ANY KIND FROM ANY VENDORS OR SERVICE PROVIDERS.
The persons signing below are authorized to do so on behalf of their respective organizations. This
Letter of Agreement shall be binding upon the parties hereto, their heirs, successors and assigns, This
Letter of Agreement is entered into effective as of day of ,
CLIENT:
By:
Title:
Robert S. Segal, CPA PA
By:
Robert S. Segal
Title: President