(11)AR 091509 Mathis & Associates

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Mathis Consulting Group Change Order City Council Meeting — September 15, 2009 Page 2 of 4 As City Council is aware, the support provided by Dr. Mathis extended beyond what was originally envisioned when the original and subsequent purchase orders were issued. Dr. Mathis supported a number or workshops and goal setting discussions that went beyond the original contracted amounts. In recent months, it became clear that the actual expenditures for Dr. Mathis had exceeded the council authorized amount of $50,000. As staff continued to research this issue, it became clear that not only had the council authorization limit been exceeded but so too had the actual Purchase Order amounts been exceeded as well. This is shown in the table on the following page. Staff has reviewed the circumstances that brought us to this error and conclude that there exists responsibility on both the part of City staff and the consultant. From the City staff perspective, a number of areas of concern were discovered: 1. Contract amendment issued a new purchase order instead of increasing the old purchase order to an amount NTE $50,000; 2. City staff failed to manage the execution of this contract to contain costs and scope of services. When it became apparent that continued expansion of scope was occurring, city staff should have informed the City Council that such was occurring and put a stop work order on the consultant; From the perspective of the Consultant, it is staff's opinion that they share in the creation of this problem in a number of areas: 1. Did not accurately track purchase orders against the "authorized" contract; 2. Did not accurately track expenses to the purchase order amounts and provide warning to the City that contracted amounts would be exceeded; 3. Continuing to provide services to the City even after being notified by City staff that they had exceeded their purchase order and contract amounts; 4. Invoicing the City for expenses that were not authorized or that were offered as "pro- bono" services to the community, which was not defined in writing. City staff is recommending that the cost overrun be shared both by the City of Colton and the Mathis Consulting Group. Specifically, City staff has identified several invoices that were provided to the City long after Mathis Consulting Group was advised that they had exceeded their contract limits. As a result, the Mathis Consulting Group is reducing the amount owed by the City by $8,000 in order to bring resolution to this matter. This will result in a final contract amount of $71, 173.64. The history of invoices is shown on the following page.