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Fe" ~ RESOLUTION REGARDING CHINA BILLING By: Diana Lund, Finance Officer Background: Much discussion has been had regarding the billing ofHSP & Associates (Vern Hegg) relating to consulting services and travel services. A brief summary of each service is detailed below: On February 14,2006, the City Council authorized a contract with HSP (Mr. Hegg) for consulting and advisory services to locate a Chinese commercial interest in Ramsey for a not-to-exceed amount of $5,000, with consideration that Mr. Hegg would work with staff regarding the components of an itemized billing, and there would be no international travel billed. Mr. Hegg submitted a billing on March 24,2006 (no itemized billing submitted or prior contact with Staff regarding billing). Per direction, Mr. Hegg was paid $3,825 towards his $5,000 consulting contract on April 13, 2006. A letter was sent to Mr. Hegg on April 18, 2006, stating that Mr. Hegg needed to submit an itemized billing that stated dates of service, hours spent on each service and a description of the services offered. In this memo, Mr. Hegg was reminded of the not-to-exceed amount of$5,000, of which $3,825 had been expensed, and that further authorization was needed from City Council to exceed this amount. On April 11, 2006, the City Council authorized (with the exception of Councilmember Strommen), a not-to-exceed amount of $4,500 for a three-person delegation to Loudi, China for the purpose of a round-table discussion with area business people. Per the City Administrator, the City Credit card number was issued to Mr. Hegg to arrange travel arrangements for the delegation to China. On the City's April credit card statement an amount of $5,200 was issued to Sannerud, Savarese & Associates in Ham Lake. The City was of the understanding that the credit card would be used for the direct purchase of the flight through the travel agency and charged only for the price of the ticket with further costs paid at the time of invoice submittal (food, hotel, etc.). As only $4,500 was originally authorized, $700 was refunded as requested by City staff. As of this date, the City has only received actual invoices for the airfare in the amount of $2,494.94 (for Cook and Norman's airfare) and no actual invoices (as have been requested), only estimates, for food and hotel. Thus, the City has no official verification of the remaining $2005.06 that was paid to HSP & Associates. On June 5, 2006, The City received an invoice from HSP (Vern Hegg) for $16,704.54 (number is net ofthe $8,325 paid previously - total billed would be equal to $25,029.54) relating to both contracts mentioned above. The dates of service ranged from March 27 - May 18, 2006.