2017-538-E Co. Mgr. - Management Partners for expenditure, revenue analysis of County's current budget

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DocuSign Envelope ID:9481C8DE-D232-4BFE-A7DF-F240644DFF63 Exhibit A Scope of Services Orange County is engaging Management Partners to conduct a detailed expenditure and revenue analysis and a long term financial forecasting model to maintain financial sustainability and plan for the future. The County has recently lost the ability to collect impact fees for new school construction. The revenue generated by these fees was used to pay debt service associated with school construction. The loss of this revenue along with the ongoing cost to continue current services will stress the operating budget. The goal of this analysis is to identify operating budget pressures and opportunities, improve near term budget forecasting and modeling, and develop a longer range,five year, plan to inform decision making and financial planning. Expenditures and Revenues Analysis The outcome of this assignment will be an independent management report that describes the near- term financial outlook for Orange County. Management Partners will conduct a financial assessment that will review and validate (or recommend adjustments to)the County's revenue and expenditure projections, evaluate the stability of internal service funds and special funds that have the potential to impact the General Fund, and review key service costs. Management Partners will focus on areas where additional attention should be paid to fully address the County's financial challenges. As described below, Management Partners will engage the County's executive and financial team in the process to ensure that recommendations are based on accurate information and the latest financial data. Activity 1—Start Project Management Partners will begin this project with a kick-off meeting with the County Manager and key finance and budget staff. During this meeting, Management Partners will refine the project schedule, discuss the project objectives, and review the tasks to be undertaken. Management Partners will interview elected and appointed leaders to understand their perspectives on the challenges ahead. Management Partners will also submit a document and data request to the County. Activity 2—Gather Data and Create a Baseline Fiscal Trend Model Management Partners will initiate a careful learning phase to understand the County's current fiscal status and environment.This phase will include reviewing multi-year budget information, including revenue sources and amounts, expenditure allocations, reserves and other funds, budgetary reductions that have been made to date, the local community,the County's labor environment, and other relevant factors. Based on thins information, Management Partners will develop a multi-year fiscal model using the modeling tools the County currently uses for budget forecasting purposes. If these modeling tools do not exist or are inadequate, Management Partners will recommend and implement a modeling tool based on best practices. Management Partners will develop independent strategies grouped in four dimensions which,taken together, comprise a range of alternatives for closing any deficit gap identified by the model and create a stabilized and sustainable budget.They are: 1. New/Increased Revenue Sources.This involves identifying new revenue sources based on best practices, including user fee/cost recovery approaches.