TIMOTHY H. McKINNIE

President, THM & Associates, Inc.

Mr. McKinnie has over twenty-five years of public management experience, both as an elected city official and in consulting. His responsibilities include project management, client relations, presentations and report preparation. His background includes twenty-two years of consulting experience, three years of state government experience, and fourteen years as an elected official for a North Carolina municipality. In addition to serving as an elected official, he served as Chairman and Vice Chairman of a county-wide utility advisory board where during his tenure, nine water districts and two wastewater districts were created which provided potable water to over 15,000 households throughout the county. Mr. McKinnie has participated in many management reviews, feasibility studies, and impact analyses, and is familiar with many of the techniques of industrial engineering and those used to analyze and improve work production. In addition, Mr. McKinnie is experienced in financial and cost analysis. He has personally specialized in general management consulting, cost analysis and revenue enhancement. He has developed, implemented, and managed long and short range financial plans, programs and budgets. Mr. McKinnie was previously a Vice-President responsible for the Public Sector consulting practice of DMG/MAXIMUS in North and South Carolina.

Since incorporating as THM & Associates, Inc., (THM), Mr. McKinnie has participated in the following major projects:

City of Fort Worth, Texas---Mr. McKinnie developed the operational budget, prepared a departmental cost allocation plan and a cost recovery plan and chargeback system for the Equipment Services Division, a 15 million dollar operation. THM was a sub contractor on this engagement.

Metro Government of Nashville and Davidson County---Mr. McKinnie had a major role in this engagement where five independent maintenance operations were consolidated into one large enterprise fund. Staffing levels were determined, capital and operating budgets were developed and a full cost recovery plan was implemented. This recovery plan included both operating rates and capital replacement rates. THM was a sub contractor on this project.

City of Raleigh, North Carolina---Mr. McKinnie assisted the City in converting the Vehicle Fleet Service into an Internal Service Fund. Full cost rates were developed to recover all costs, including indirect cost through departmental billings. THM was the selected firm on this engagement.

City of Spartanburg, South Carolina---Mr. McKinnie conducted an independent third party review of potential revenues from the implementation of a 2% Hospitality Tax for the City. This review was necessitated by the issuance of a COPS agreement.

CONSULTING EXPERIENCE

Cost Allocation Plans

Mr. McKinnie annually supervised and reviewed over a hundred local government cost allocation plans. Additionally, he prepared ten to fifteen local government cost plans and five or six state agency cost plans. Included in this number is the Statewide Cost Allocation Plan for North Carolina. He personally prepared and negotiated this plan for the State since 1986 with the Department of Health and Human Services, Division of Cost Allocation. Mr. McKinnie also provided technical support for DMG offices in Florida and South Carolina in the area of cost allocation. These plans were utilized to identify and document overhead cost for federal grants and contracts, enterprise funds and jointly-funded operations. State and local governments received over 245 million dollars of additional revenues as a result of the preparation and negotiation of these cost plans. Mr. McKinnie personally prepared cost allocation plans for the following organizations:


State of North Carolina (SWCAP)
Forsyth County, North Carolina
North Carolina Data Processing Center
City of Raleigh, North Carolina
North Carolina Department of Correction
City of Greensboro, North Carolina
North Carolina Department of Justice
City of Durham, North Carolina
Florida Department of Correction
City of Charlotte, North Carolina
Mecklenburg County, North Carolina
Charleston County, South Carolina
City of Winston
Salem, North Carolina
City of Charleston, South Carolina
Wake County, North Carolina
Durham County, North Carolina
City of Rock Hill, South Carolina
City of Greenville, South Carolina
North Carolina Department of Administration
South Florida Water Management District

In addition to being an active practitioner, Mr. McKinnie has been instrumental in the development and interpretation of federal and state rules and regulations regarding OMB Circular A-87 reimbursement issues.

In 1995, Mr. McKinnie assisted with the response to the proposed OMB Circular A-87. As a result of his efforts, interest expense on the debt service for the acquisition of machinery and equipment was determined to be allowable for cost allocation purposes. Retiree’s fringe benefits were also determined to be an allowable cost.

In 1995, Mr. McKinnie negotiated the acceptance of indirect cost and depreciation expense with the U.S. Marshal’s office for inclusion in the calculation of the daily jail rate charged for housing federal prisoners.

In 1997, the State DHHS and HCFA approved the acceptance of the Sheriff’s cost of serving papers related to the Title IV-D, Child Support Program. Previously, these costs were limited to a five dollar fee per paper. This was a joint effort between Mr. McKinnie and the NCACC.

In 1997, Mr. McKinnie assisted the counties of NC in meeting the reduced level of administrative cost of the TANF program by developing the 310 / 311 split of administrative cost, thus shifting what was some administrative cost into direct program cost.

Working with the NCACC, Mr. McKinnie was instrumental in getting the indirect cost and the roll forward calculation approved for the determination of the full cost of providing EMS services. This was a major step in setting transport cost reimbursement closer to actual cost and at market level. This provided the spark to include the transportation cost into the reimbursable rate.

In the previous legislative session, Mr. McKinnie conducted a five county cost study to determine the cost of serving civil papers. NCACC had introduced legislation to increase the fee to $25 per paper. The analysis supported this proposed increase which would have replaced the current fee of five dollars. Unfortunately, the bill got caught up in the controversy over slot machines. It is scheduled to be revisited this session.

Currently, I am assisting NCACC and Tom Lundy”s committee in seeking approval of indirect cost for the Mental Health Program and also defining what are administrative cost and direct patient care cost.

Mr. McKinnie has assisted over 20 counties in developing and negotiating approval of a more advantageous reimbursement schedule for the cost of new or renovated DSS buildings. These schedules enable the counties to maximize their reimbursement of the federal share of the building cost and receive it on a timely basis.

Cost of Service (User Fee) Studies

Mr. McKinnie has managed and/or worked on the following user fee studies,
identifying over $21 million dollar of additional non-tax revenues for local governments. These revenues, in turn, reduced or eliminated general fund subsidies which are more appropriately funded through user charges.


Town of Cary, North Carolina
City of Greenville, North Carolina
City of Winston
Salem, North Carolina
City of Asheville, North Carolina
Durham County, North Carolina
City of Rock Hill, South Carolina
Hertford County, North Carolina
Wayne County, North Carolina
City of Fayetteville, North Carolina
Person County, North Carolina
Ashe County, North Carolina
Charleston County, South Carolina
Haywood County, North Carolina
 

Cost of services studies were conducted to compare the actual cost of providing a service to the current fee charged and to recommend, where appropriate, a revision to the current charge based on actual costs. Types of services analyzed included planning, zoning, environmental, building and engineering permits and inspections, leisure  services, landfill and solid waste collection, and jail rates. Process analysis of each service (fee) area was conducted to determine component costs such as direct labor and fringe benefits, materials, facility occupancy costs, debt service and varying levels of
overhead costs. Each service was further analyzed to determine the feasibility of rate change based on several factors: market conditions, elasticity of demand, political environmnt and other factors where applicable. Costs and revenues were projected for future accounting periods. Recommendations and projections were also made regarding process or organizational changes which would provide a more responsive and cost effective delivery service.

Solid Waste Planning and Financial Analysis

Throughout his career, Mr. McKinnie has participated in solid waste management studies for the following cities and counties. These engagements included costing of several solid waste collection, recycling and disposal alternatives. Several of the studies included a waste stream analysis and most required future projections of solid waste a corresponding costs.

Duplin County, North Carolina
Pitt County, North Carolina
Henderson County, North Carolina
Johnston County, North Carolina
Caswell County, North Carolina
Iredell County, North Carolina
Union County, North Carolina
City of Greensboro, North Carolina
Pasquotank County, North Carolina
City of Hickory, North Carolina
Rockingham County, North Carolina
Brunswick County, North Carolina
Management and Productivity Studies

Management and productivity studies involve analysis of the organizational structure and workload effort to determine the most efficient use of manpower and capital resources. Manpower assignments and work production are analyzed and compared to acceptable standards to determine required staffing levels and productivity ratios. Processes are analyzed to identify bottlenecks, duplication of effort, delays, and other factors which can potentially distort the productivity ratio. These studies result in manpower and real dollar savings to the client. Mr. McKinnie has participated in the following engagements:

Edgecombe County, North Carolina (Countywide Study)
Buncombe County, North Carolina (Countywide Study)

Specialty Rate Studies

Specialty rate studies include analysis and identification of rate components for
billing data processing costs to the user community. Expenditures are analyzed to determine actual rate component costs and rates are restructured to provide a more equitable charge system. Mr. McKinnie annually assisted the State of North Carolina’s Data Processing Center in reconciling their departmental charges and establishing rates for the next year. He has also assisted several local governments in establishing  defensible rates for data processing services.

System Development

Mr. McKinnie has assisted in the development, design, marketing and installation of fully integrated accounting systems for long term care facilities. The systems consisted of general ledger, accounts receivable, payables, payroll, trust accounting, and statistical packages.

Health Care

Revenue Maximization - Studies conducted primarily for local health departments and emergency medical service units to identify methods for increasing revenues. All potential revenue sources were analyzed: Medicare, Medicaid, Third Party Insurance and Private Patient billings. The billing and claims processing efforts were reviewed to determine collection rates, billing follow-ups, and internal control. Recommendations were made in conjunction with programmatic reimbursement regulations to increase revenues and collecting efficiencies.

Management Studies – Primarily for county health departments in North Carolina to assess overall performance of the departments. Managerial performance, accounting and billing efficiencies, staffing, and client services were reviewed. Client services were analyzed to determine if services were provided efficiently, if they addressed the needs of the community and whether or not there was duplication of services. Recommendations included centralized intake automated record retention, improved follow-up procedures and better scheduling.

Cost Report Preparation – Specific cost report preparation experience includes
nursing homes and home health agencies. In addition to report preparation, representation was provided to assist the provider during rate, desk review, and audit procedures with fiscal intermediaries. Some of the cost report services included presentation of management indicators and comparative analysis of prior cost reports for management use.

Disaster Grants Accounting

Mr. McKinnie managed the FEMA disaster grants accounting engagements in Charleston County, South Carolina, and Mecklenburg County, North Carolina as a result of Hurricane Hugo. Total expenditures incurred and documented for reimbursement exceeded $49 million. He prepared documentation to support the claims and reimbursement requests, and represented both localities in appeals and hearings to resolve any questioned costs. Mr. McKinnie assisted eighteen local governments regarding disaster grants accounting as a result of Hurricane Fran.

STATE GOVERNMENT EXPERIENCE

Prior to joining DMG, Mr. McKinnie was employed by the North Carolina Division of Medical Assistance from 1977 to 1980 where he served as a field auditor, Contract administrator and health care rate regulator. His responsibilities included the review of setting of rates for nursing home reimbursement, analysis of all cost reports filed to obtain cost and statistical data utilized in policy making decisions, and reviews and comments on proposed legislation to project programmatic impact. He prepared cost allocation plans for the eight State Mental Health and Mental Retardation centers to determine the appropriate cost to be assigned to the various levels of care. Prior to his departure, Mr. McKinnie helped co-author the 1979 Long Term Care Plan which was a major departure from traditional reimbursement methodologies of that era. Mr. McKinnie developed the current cost report utilized by long term care facilities. This cost report consolidated the Medicare report and the State’s Medicaid Report into one simplified document. Statewide training sessions were conducted for management companies, CPA firms and facilities’ staff. As a State Auditor, he was responsible for conducting financial and compliance audits on long term care facilities.

LOCAL GOVERNMENT EXPERIENCE

Mr. McKinnie served as Mayor/Town Manager for the Town of Coats, North Carolina from 1980 to 1994. Mr. McKinnie supervised and managed the Town’s operations (850K-900K budget) and (14 employees). During Mr. McKinnie’s administration, he implemented the first automated accounting system; he applied for and administered the first and only CDBG of $660,000 for housing rehabilitation; he reduced tax rate from $1.01/per $100 assessed value to $.71; he built undesignated fund balance from $27,000 in 1980 to $147,000 in 1994. Mr. McKinnie served on various utility (water and wastewater) advisory boards in Harnett County at which time nine water and two wastewater districts were formed providing potable water for more than 15,000 households in the county.

EDUCATION

Mr. McKinnie received his Bachelor’s degree in Business Administration from Campbell University with a minor in Economics. He has completed 18 hours toward his
MBA.

Mr. McKinnie has completed the “Calculating Water, Sewer, and Storm water
Development Impact Fees” course offered by the Georgia Tech Department of
Continuing Education.

OTHER ACTIVITIES

Member of local municipality governing body (14 years).
Vice Chairman, Northeast Harnett County Metropolitan Water District Advisory Board.
Vice Chairman, Buies Creek, Town of Coats, North Carolina Wastewater District Advisory Board.
Chairman, Northeast Harnett Regional Sewer Advisory Board.
Chairman, Harnett County Public Utilities Rate Setting Committee.

PRESENTATIONS

2002 - NC City/County Managers Conference, Raleigh-Durham RTP
“User Fees vs. Taxation/Declining Revenues---Preparing and Implementing a Defensible Cost of Services Study”.

1999 - GFOA, Nashville, Tenn. “Splitting the Tab, Preparing a Federally Accepted Cost Allocation Plan”

1999 - NC Local Government Budget Officers Conference, Boone, NC
“ Internal Service Funds”

1994 - South Carolina GFOA, Hilton Head, SC. “Preparing Cost Allocation Plans Under the Revised OMB Circular A-87”

1997 - South Carolina GFOA, Hilton Head, SC. “Conducting Management Audits”