AR-Contract/American Appraisal Assoc., Inc.

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CITY OF COLTON AGENDA REPORT FOR THE COUNCIL MEETING OF, MAY 15, 2001 TO: HONORABLE. MAYOR AND CITY COUNCIL MEMBERS FROM: DILU DE ALWIS, ASSISTANT FINANCE DIRECTOR O" SUBJECT: AWARD A CONTRACT FOR THE VALUATION OF CAPITAL ASSETS AND INFRASTRUCTURE FOR THE CITY TO AMERICAN APPRAISAL ASSOCIATES, INC. IN THE AMOUNT OF $28,700. DATE: JUNE 11, 2001 BACKGROUND: With the issuance of GASB 34 (Governmental Accounting Standards Board) on June 30, 1999, state and local governments are now required to report their capital assets, including infrastructure, at historical cost, net of accumulated depreciation. The City will be required to issue financial statements in compliance with GASB 34 in fiscal year 2002/03. Current City records are inadequate to supply this information, and without the in-house expertise and staff to develop this data, an outside inventory and valuation service was deemed the most cost-efficient manner in which to bring our records into compliance. ANALYSIS/DISCUSSION: Over the past year, the Finance Department had discussions with Muni Financial and DMG- Valuation Resource Management regarding providing services for this project. The prices quoted by these firms were in the range of $45,000 to $100,000. In addition, staff evaluated a recent survey by members of the California Municipal Finance Officers Association and noted an overwhelming approval rating for the services provided by American Appraisal Associates, Inc. Recently, American Appraisal Associates, Inc. successfully completed a similar project for both the Colton Joint Unified School District as well as the County of San Bernardino° Finance has solicited a proposal from American Appraisal Associates, Inc. for a detailed capital asset study. A copy of their proposal is attached for your review. The cost of this service is $28,700. Because American Appraisal Associates, Inc. has recently conducted an insurance valuation for the City, as well as the Water and Wastewater Departments, the cost of their prpposal has been significantly reduced. s E Item #13