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HomeMy WebLinkAboutClearsource Financial Consulting - 2018-08-27 PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND CLEARSOURCE FINANCIAL CONSULTING FOR USER FEE SCHEDULE UPDATE THIS AGREEMENT ("Agreement") is made and entered into by and between the City of Huntington Beach, a municipal corporation of the State of California, hereinafter referred to as "CITY," and CLEARSOURCE FINANCIAL CONSULTING, a California corporation, hereinafter referred to as "CONSULTANT." WHEREAS, CITY desires to engage the services of a consultant to perform user fee study and update; and Pursuant to documentation on file in the office of the City Clerk, the provisions of the Huntington Beach Municipal Code, Chapter 3.03, relating to procurement of professional service contracts have been complied with; and CONSULTANT has been selected to perform these services, NOW, THEREFORE, it is agreed by CITY and CONSULTANT as follows: 1. SCOPE OF SERVICES CONSULTANT shall provide all services as described in Exhibit "A," which is attached hereto and incorporated into this Agreement by this reference. These services shall sometimes hereinafter be referred to as the "PROJECT." CONSULTANT hereby designates Terry Madsen, who shall represent it and be its sole contact and agent in all consultations with CITY during the performance of this Agreement. 2. CITY STAFF ASSISTANCE CITY shall assign a staff coordinator to work directly with CONSULTANT in the performance of this Agreement. agree/surfnet/professional Svcs to$49 10115 18-6777/1 s6254 1 of I I 3. TERM; TIME OF PERFORMANCE Time is of the essence of this Agreement. The services of CONSULTANT are to commence on tT 1 , 20 (the "Commencement Date"). This Agreement shall automatically terminate three (3) years from the Commencement Date, unless extended or sooner terminated as provided herein. All tasks specified in Exhibit "A" shall be completed no later than one (1) year from the Commencement Date. The time for performance of the tasks identified in Exhibit "A" are generally to be shown in Exhibit "A." This schedule may be amended to benefit the PROJECT if mutually agreed to in writing by CITY and CONSULTANT. In the event the Commencement Date precedes the Effective Date,CONSULTANT shall be bound by all terms and conditions as provided herein. 4. COMPENSATION In consideration of the performance of the services described herein, CITY agrees to pay CONSULTANT on a time and materials basis at the rates specified in Exhibit "B," which is attached hereto and incorporated by reference into this Agreement, a fee, including all costs and expenses, not to exceed Eighteen Thousand Six Hundred Dollars ($18,600.00). 5. EXTRA WORK In the event CITY requires additional services not included in Exhibit "A" or changes in the scope of services described in Exhibit "A," CONSULTANT will undertake such work only after receiving written authorization from CITY. Additional compensation for such extra work shall be allowed only if the prior written approval of CITY is.obtained. 6. METHOD OF PAYMENT CONSULTANT shall be paid pursuant to the terms of Exhibit "B." aeree/surfnet/professional svcs to$49 10115 18-6777/186254 2 of 11 7. DISPOSITION OF PLANS, ESTIMATES AND OTHER DOCUMENTS CONSULTANT agrees that title to all materials prepared hereunder, including, without limitation, all original drawings, designs, reports, both field and office notices, calculations, computer code, language, data or programs, maps, memoranda, letters and other documents, shall belong to CITY, and CONSULTANT shall turn these materials over to CITY upon expiration or termination of this Agreement or upon PROJECT completion, whichever shall occur first. These materials may be used by CITY as it sees fit. 8. HOLD HARMLESS CONSULTANT hereby agrees to protect, defend, indemnify and hold harmless CITY, its officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with CONSULTANT's (or CONSULTANT's subcontractors, if any)negligent(or alleged negligent)performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement by CONSULTANT, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of CITY. CONSULTANT will conduct all defense at its sole cost and expense and CITY shall approve selection of CONSULTANT's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by CONSULTANT. 9. PROFESSIONAL LIABILITY INSURANCE CONSULTANT shall obtain and furnish to CITY a professional liability insurance policy covering the work performed by it hereunder. This policy shall provide coverage for agree/surfnet/professional svcs to$49 10115 18-6777/186254 of I I CONSULTANT's professional liability in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and in the aggregate. The above-mentioned insurance shall not contain a self-insured retention without the express written consent of CITY; however an insurance policy "deductible" of Ten Thousand Dollars ($10,000.00) or less is permitted. A claims-made policy shall be acceptable if the policy further provides that: A. The policy retroactive date coincides with or precedes the initiation of the scope of work (including subsequent policies purchased as renewals or replacements). B. CONSULTANT shall notify CITY of circumstances or incidents that might give rise to future claims. CONSULTANT will make every effort to maintain similar insurance during the required extended period of coverage following PROJECT completion. If insurance is terminated for any reason, CONSULTANT agrees to purchase an extended reporting provision of at least two (2) years to report claims arising from work performed in connection with this Agreement. If CONSULTANT fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the CITY with required proof that insurance has been procured and is in force and paid for, the CITY shall have the right, at the CITY's election, to forthwith terminate this Agreement. Such termination shall not affect Consultant's right to be paid for its time and materials expended prior to notification of termination. CONSULTANT waives the right to receive compensation and agrees to indemnify the CITY for any work performed prior to approval of insurance by the CITY. a_ree/surfnet/professional Svcs to$49 10115 18-6777/186254 4 of II 10. CERTIFICATE OF INSURANCE Prior to commencing performance of the work hereunder, CONSULTANT shall furnish to CITY a certificate of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverage as required by this Agreement; the certificate shall: A. provide the name and policy number of each carrier and policy; B. state that the policy is currently in force; and C. shall promise that such policy shall not be suspended, voided or canceled by either party,reduced in coverage or in limits except after thirty(30)days' prior written notice;however,ten(10)days'prior written notice in the event of cancellation for nonpayment of premium. CONSULTANT shall maintain the foregoing insurance coverage in force until the work under this Agreement is fully completed and accepted by CITY. The requirement for carrying the foregoing insurance coverage shall not derogate from CONSULTANT's defense, hold harmless and indemnification obligations as set forth in this Agreement. CITY or its representative shall at all times have the right to demand the original or a copy of the policy of insurance. CONSULTANT shall pay, in a prompt and timely manner, the premiums on the insurance hereinabove required. 11. INDEPENDENT CONTRACTOR CONSULTANT is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of CITY. CONSULTANT shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other agree/surfnet/professional sves to$49 10115 18-6777/186254 5 of I I payroll deductions for CONSULTANT and its officers, agents and employees and all business licenses, if any, in connection with the PROJECT and/or the services to be performed hereunder. 12. TERMINATION OF AGREEMENT All work required hereunder shall be perfonned in a good and workmanlike manner. CITY may terminate CONSULTANT's services hereunder at any time with or without cause, and whether or not the PROJECT is fully complete. Any termination of this Agreement by CITY shall be made in writing, notice of which shall be delivered to CONSULTANT as provided herein. In the event of termination, all finished and unfinished documents, exhibits, report, and evidence shall, at the option of CITY,become its property and shall be promptly delivered to it by CONSULTANT. 13. ASSIGNMENT AND DELEGATION This Agreement is a personal service contract and the work hereunder shall not be assigned, delegated or subcontracted by CONSULTANT to any other person or entity without the prior express written consent of CITY. If an assignment, delegation or subcontract is approved, all approved assignees, delegates and subconsultants must satisfy the insurance requirements as set forth in Sections 9 and 10 hereinabove. 14. COPYRIGHTS/PATENTS CITY shall own all rights to any patent or copyright on any work, item or material produced as a result of this Agreement. 15. CITY EMPLOYEES AND OFFICIALS CONSULTANT shall employ no CITY official nor any regular CITY employee in the work performed pursuant to this Agreement. No officer or employee of CITY shall have any agree/surfnet/professional Svcs to$49 10/15 18-6777/186254 6 of 11 financial interest in this Agreement in violation of the applicable provisions of the California Government Code. 16. NOTICES Any notices, certificates, or other communications hereunder shall be given either by personal delivery to CONSULTANT's agent (as designated in Section 1 hereinabove) or to CITY as the situation shall warrant, or by enclosing the same in a sealed envelope,postage prepaid, and depositing the same in the United States Postal Service, to the addresses specified below. CITY and CONSULTANT may designate different addresses to which subsequent notices, certificates or other communications will be sent by notifying the other party via personal delivery, a reputable overnight carrier or U. S. certified mail-return receipt requested: TO CITY: TO CONSULTANT: City of Huntington Beach ClearSource Financial Consulting ATTN: Gilbert Garcia ATTN: Terry Madsen 2000 Main Street 7960 B Soquel Drive, Suite #363 Huntington Beach, CA 92648 Aptos, CA 95003. 17. CONSENT When CITY's consent/approval is required under this Agreement, its consent/approval for one transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence of the same or any other transaction or event. 18. MODIFICATION No waiver or modification of any language-in this Agreement shall be valid unless in writing and duly executed by both parties. agree/surfnet/professional Svcs to$49 10/15 18-6777/186254 7 of I I 19. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this Agreement are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded from such provisions, and do not interpret, define, limit or describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Agreement. 20. INTERPRETATION OF THIS AGREEMENT The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. If any provision of this Agreement is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Agreement. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Agreement, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision contained herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this Agreement which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. 21. DUPLICATE ORIGINAL The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of agree/surfneUprofessional svcs to$49 10115 18-6777/186254 8 of I I the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who has signed it. 22. IMMIGRATION CONSULTANT shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the United States Code regarding employment verification. 23. LEGAL SERVICES SUBCONTRACTING PROHIBITED CONSULTANT and CITY agree that CITY is not liable for payment of any subcontractor work involving legal services, and that such legal services are expressly outside the scope of services contemplated hereunder. CONSULTANT understands that pursuant to Huntington Beach City Charter Section 309, the City Attorney is the exclusive legal counsel for CITY; and CITY shall not be liable for payment of any legal services expenses incurred by CONSULTANT. 24. ATTORNEY'S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Agreement or to secure the performance hereof, each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the nonprevailing party. 25. SURVIVAL Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement, shall so survive. agree/surfnet/professional Svcs to$49 1 oil 5 18-6777/186254 9 of 11 26. GOVERNING LAW This Agreement shall be governed and construed in accordance with the laws of the State of California. 27. SIGNATORIES Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any injuries or damages to CITY in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. 28. ENTIRETY The parties acknowledge and agree that they are entering into this Agreement freely and voluntarily following extensive arm's length negotiation,and that each has had the opportunity to consult with legal counsel prior to executing this Agreement. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party or anyone acting on that party's behalf, which are not embodied in this Agreement, and that that party has not executed this Agreement in reliance on any representation, inducement, promise, agreement, warranty, fact or circumstance not expressly set forth in this Agreement. This Agreement, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Agreement, and supersede all prior understandings and agreements whether oral or in writing between the parties respecting the subject matter hereof 29. EFFECTIVE DATE This Agreement shall be effective on the date of its approval by the City Attorney. This Agreement shall expire when terminated as provided herein. a_ree/surfnet/professional svcs to$49 10/15 18-6777/186254 10 of 11 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. CONSULTANT, CITY OF HUNTINGTON BEACH, a municipal corporation of the State of CLEARSOURCE FINANCIAL California CONSULTING, a California Corporation By: � ��� Director/Chief (Pursuant To HBMC§3.03.100) Terry Madsen print name APPROVED AS TO FORM: ITS: (circle one)Chairm residen ice President AND B y: `� �' ��; .:�- City Attorney J Bethany Madsen ate print name ITS: (circle one) ecreta hiefFinancial Officer/Asst. RECEIVE AND FILE: Secretary—Treasurer 4q4otl �&�"djlt4d Ln City Clerk Date gla�li S UZ ,v LA-1 N agree/surfnet/professional Svcs to S49 10/15 18-6777/1 s6254 11 of I I EXHIBIT A SCOPE OF SERVICES PROJECT UNDERSTANDING Regulatory activities,such as review and inspection of land development, Objectives construction/building, and improvements to infrastructure,and other areas of code The City of Huntington Beach is considering a review, compliance, and enforcement User Fee Schedule Update.This type of project is focused on the ethic of"the costs to serve" Permitting,such as special events and use and appropriate, if not effective,cost recovery: of public facilities, infrastructure,and services What are the costs of the comprehensive line-up of direct services provided to the Facility rentals and use of public spaces, community,which currently have or may such as community centers, recreational be eligible for a user or regulatory fee? sites, parks, and athletic field use What are the cost recovery targets or Program participation policies of the City as to the amounts that should be paid for those who request or Operations and services of individual cause these services?What is the impact to benefit/request the source funds—typically the General Operations and response to individual Fund—of changes to user/regulatory fees? action As an update,this effort is somewhat Licensing, billing, records management,and abbreviated from the otherwise periodic and administrative service comprehensive cost of service analysis of user and regulatory fees the City has undertaken in Hourly rates for direct-billing City staff time recent years. It is intended to adjust prevailing From the City's published fee schedules,our user and regulatory fees Citywide for cost initial identification of fees eligible for review inflation and minor cost of service-based under this user/regulatory fee methodology changes where necessary. include those managed by the following Services for Review program areas: —) City Clerk It is expected that direct,fee-related services -) Community Development under review in this will focus on services � Community Services eligible for user fee methodology, as well as Finance identification during this study of any relevant Fire additions for services performed without a fee � Information Services or for under-quantified or ineffectively structured fees. Library :D Office of Business Development All direct services throughout the City Police organization for which a user or regulatory fee Public Works is or can be imposed will be included.This can encompass activities such as: Revenue streams generally excluded from this type of methodology due to differing authority, CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 9 SCOPE OF SERVICES implementation and analytical methodologies, development impact fees, in-lieu fees,fees and approval procedures would include: utility intended and codified more as "taxes," punitive rates and other property-related fees subject to fines/penalties, and general taxes. Proposition 218 proceedings, assessments, METHODS Most of the services under review in this project are driven in scale and relativity based on the Statutory Parameters amount of labor involved in completing the activity. For this reason,the justification for Industry best practice and California statute are most of the examined fees will start with a set in harmony: User fees should be set according of fully-burdened hourly rates for personnel to the estimated reasonable cost of service and involved in the process. should bear a fair and reasonable relationship Fully burdened hourly rates are an expression to the payer's burdens on or benefits received from the activities and/or services provided by of cost for a unit of time.These rates include the City. Longstanding financial and accounting direct labor expense; indirect labor for activities that support direct activities; materials, practices have accomplished this with well services, and supplies; administration and established methods that satisfy Article 13C of management; and central services of the overall the California Constitution and in most cases for user fees, sustains local legislative control governmental agency. over the imposition and modification of those Once time is valued, the cost of service for fees. individual services can be examined.This is derived by understanding the time required to Defining the Costs or Service perform service, and how that time varies when Figure 3 illustrates the build-up of a cost-of- project characteristics vary. Not only does this service methodology applied to user and inform cost for an average service, it also regulatory fees in the municipal setting, informs how a downstream fee might best be structured to capture relative costs between different users. In other words, do entirely flat fees suffice, or on the opposite end of that spectrum, does an entirely variable fee,such as a time-and-materials basis, need to be imposed?More likely, how might the service attributes be best portrayed to establish predictable, administratively feasible fees somewhere in the middle of that range? Finally, cost recovery goals for the agency are applied to the expression of the full unit cost of FIGURE 3/USER FEE ANALyncAL MODULES service to determine proposed fee amounts CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 10 EXHIBIT A SCOPE OF SERVICES imposed on individuals requesting or causing justified, against the local agency's goals for the service. cost recovery. As an update only, the above-described We believe most fee paying stakeholders and methodology will be implemented in specifically City Council members accept high cost recovery targeted areas where cost of service analysis targets as long as: will be necessary for minor adjustments or The elements of the cost of service and newly-identified services. assumptions are clearly communicated. Cost of Service and Cost Recovery The service level provided by staff is Nearly every service for which a fee is imposed attentive, responsive, and collaborative. can be illustrated as shown in Figure 4, The City clearly communicates that only contrasting the components of the full cost of eligible costs are included in fees. service, which is the maximum fee amount THE COSTS OF SERVICE FEE-BASED COST RECOVERY Central Services/Governmental 100%="Full Cost Recovery' Administration/Management Cost Recovery Target by Service: j Materials/Services/Supplies Public/Private Benefit Policies Indirect Service Labor Market Sensitivity Compliance/Behavior Direct Service Labor Modification _ fiscal per Constrain ts/Considerotions per 'ur in the Organization Serviceper Unit of V 0%=Other Fund Subsidy FIGURE 4 1 COMPARING THE COST OF SERVICE TO COST RECOVERY OBJECTIVES Fee Structure full cost is thoroughly documented,while secondly,exploring modernization of fee The fiscal environment in California has pushed schedules for both agency and customer most agencies to a default policy of full cost satisfaction. As the nature of City service recovery in their user fees,with exceptions changes, particularly with technological found for targeted services of specific advancement or necessary efficiency resonance with the local community or where improvements, it is important for fee structures market sensitivities are particularly prevalent. to fall in line with the way in which service is Therefore, ClearSource finds much of our effort performed, rather than simply adjusted in recent years has been first,to ensure that perennially as a revenue measure. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 11 SCOPE OF SERVICES We will work closely with departmental nexus to the cost of plan review than cubic management and direct service providers to yards of the grading project. weigh the findings and implications of the costs of service with prevailing fee structures.As an As on update only, the above-described example,we recommend flat fees for the methodology will be implemented in specifically targeted areas where fee design analysis will be majority of City services. This allows for: necessary for minor adjustments or newly- Improved ability for users to forecast fees. identified services. Consistency in the application of the fee Project Management for Quality structure. Control(Qualit ` ,assurance Less variability in staff monitoring their During the performance of this contract, service hours. ClearSource will implement the following The ability for the City to achieve its elements of review we find essential to assuring program cost recovery goals in aggregate. accurate deliverable work products and Conversely, there are instances where more outcomes ready for implementation: � variable fees, if not deposit-based fees, are Assignment of two senior-level team warranted, despite the increased complexity or members with over three decades of administration: combined experience in the subject matter, cross-trained, and mutually cooperative in Flighty variable,time-intensive projects. I the development of supporting data and Agencies with technology systems that can outcomes, both quantitative and accommodate deposit-monitoring,staff qualitative. buy-in regarding the importance of tracking Demonstrated reconciliation of financial time, and appropriate staffing levels to inputs to source data. manage the deposit life-cycle. Demonstrated reconciliation of cost,time, When it comes to fee structure, and volumetric data inputs and fundamentally,we believe many methods can assumptions, where feasible. work,and we are committed to the heavy- lifting required to achieve results of lasting Designated points of review of critical cross- significance for our clients.We try diligently to references embedded in elements of the defer to the preferences of direct service analysis. providers and their fee-paying constituents, Implementation of a project management rather than imposing a consultant-driven "dashboard"to follow progress toward and solution.That said,we require that any completion of significant project elements structural method chosen have a direct that impact quality of analysis and correlation to the service provided.As a thoroughness of the overall project.This is common example in other agencies, after a spreadsheet used for regularly scheduled working with building or engineering staff,we project manager check-in points between may decide that the number of grading plan ClearSource and the City's primary point of sheets being reviewed may have a much closer contact. At each check-in,the status of each CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 12 EXHIBIT A SCOPE OF SERVICES element of the project—critical inputs, implementation (approval)of the outcomes we analysis,onsite events, and deliverables—is report in these types of studies. We have found updated and comments are noted. this push for approval requires a great deal of Progression points change at each check-in flexibility and creativity to respond to point to ensure continued movement of the conditions on the ground as the project project and resolution of diversions. approaches stakeholder, public, and/or Responsibilities of study participants, both legislative review.The ability to generate new consultants and agency contacts and/or reporting and refine messages as we go is departments are tracked separately to pin- essential. It is a normal part of our process, point potential focal areas for continued unique to each client, and embedded in every schedule management. project we have performed. Our references, who are listed at the end of this proposal,can Flexibility in Reporting and Approval attest to our reporting and presentation styles Procedures and the flexibility of approach that ClearSource brings to these studies. ClearSource rests a great deal of our professional standing on the successful WORK PLAN TASK 1.2 1 FEE SCHEDULE ASSESSMENT FEE SCHEDULE UPDATE After project kick-off,ClearSource will draft an initial fee schedule,following the City's existing ClearSource presents the following step-by-step formats and content, and flagging fees eligible work plan to complete the Fee Schedule Update for inflationary or other adjustments identified envisioned by the City of Huntington Beach. through project commencement meetings.At this point, identification of fee categories that hask 1 I Study Orientation will merit additional cost of service analysis The purpose of this task is to generate common within this update will occur. understanding of objectives, known issues that Task 2 1 Development of Critical must be addressed by study end, participant Inputs roles, expected procedural requirements, schedule and pre-established dates, and data The purpose of this task is to develop the collection and development procedures, necessary foundation for preparing a TASK 1.1 1 ONSITE PROJECT KICK-OFF condensed update to Citywide user and regulatory fee schedules for the 2018-2019 Consultants will prepare for, attend, and Fiscal Year.Types of information developed will facilitate one onsite event with City personnel depend on the level of additional analysis to initiate the project. Events may be combined needed in targeted fee categories, but may or separated into a series of meetings with include: involved internal stakeholders. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 13 SCOPE Financial data, including revenues, categories. It is expected that the majority of personnel costs and organization, operating fees will be updated based on an overall costs, and overhead or administrative alignment with cost inflation; however, it is also expenses. expected that every participating department will identify specific services where targeted Annual labor time to yield a distribution of cost of service analysis is necessary. activity across core functions of service This analysis may include any of the following within a department or division. elements: Service times to understand the quantity Calculation of fully burdened hourly rates and nature of time spent providing direct for personnel involved in the direct services for which a fee is or may be provision of services eligible for a imposed. user/regulatory fee. Volumetric statistics that might inform Calculation of activity-based costs of service workload or activity levels for fee-related to generate the unit cost of service services under targeted review. associated with time and fully loaded labor cost attributable to the service or activity. TASK 2.11 DEVELOP UNIFORM INFLATIONARY Development or application of cost FACTOR recovery targets or policy for services. Consistent with prevailing City code and/or Comparison of specific fees to other industry best practices,consultants will agencies in the region. generate the uniform inflationary factor that will be applied to eligible fees across the Comparison of impacts to users before and Citywide fee schedules. after newly developed or redesigned fees. TASK 2.2 1 DEVELOP ALTERNATIVE Estimation,where feasible,of revenue INFLATIONARY FACTOR FOR EXCEPTED FEE impacts of newly developed or redesigned CATEGORIES fees. For any areas requiring or deemed eligible, Task 4 1 Fee Schedule Update ClearSource will develop alternative inflationary factors in targeted program areas and/or fee The purpose of this task is to develop the sections. updated schedule of fees for Citywide direct services. Existing formats of the fee schedule Task 3 1 Minor Cost of Service will be retained, and it is expected that prior Analysis cost recovery policy will be targeted,with select exceptions were identified and justified. For minor changes necessitated by the City in select fee categories, ClearSource will develop abbreviated quantitative analysis to support small changes in accordance with previously established cost of service methods for those CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 14 EXHIBIT A SCOPE OF SERVICES Task 5 Reporting and Deliverable TASK 5.4 FINAL MEMORANDUM OF FEE Tools CHANGES The purpose of this task is to provide the formal Upon review and feedback from the City documentation encompassing the work and Council,consultants will revise the draft outcomes of the effort. memorandum and accompanying fee proposals to incorporate direction received from TASK 5.1 l DRAFT MEMORANDUM OF FEE Councilmembers.The final memorandum will PROPOSALS be issued for the City's public hearing process for implementation of fee proposals. It will be ClearSource will prepare a narrative description issued in PDF for digital distribution and any of the effort, describing key data and necessary printing by the City. assumptions and fee proposals.The report will be issued in memorandum format and will be TASK 5.5 1 MODEL/WORK PAPER DELIVERY issued in portable document format(PDF)for ClearSource will deliver editable versions of all digital distribution and any necessary printing models, documentation, and associated work by the City. papers to the City for future use. Models will be It is expected that City personnel will review an delivered in Microsoft Excel and PDF. initial iteration of the draft memorandum,and Documentation will be delivered in Microsoft ClearSource will modify it before it becomes a Word and PowerPoint and in PDF. document delivered to the City Council and available to the public. Task 6 Engagement TASK 5.2 l PRESENTATION/SUMMARY The purpose of this task is to facilitate a MATERIALS meaningful level of interaction between consultants, City personnel,and City ClearSource will develop a presentation or Councilmembers with the goal of successful summary packet for use in communicating approval, implementation, and ongoing proposals to the City Council and any maintenance of study proposals. stakeholders. TASK 6.11 DEPARTMENTAL INTERACTION TASK 5.3 l STAFF REPORT AND NOTICING ASSISTANCE In addition to the project kick-off event described in Task 1, ClearSource anticipates one ClearSource will assist City staff in the additional site visits to engage with preparation of the staff report delivered to the departmental personnel to review the initial City Council as part of the normal agenda iteration of the memorandum of fee proposals. process. Consultant will also assist in the drafting of a notice of the public hearing at which fee proposals will be considered for approval. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 15 EX BIT SCOPE OF SERVICES VAS:"6.2 ; CIFY COUNCIL INTLRACTION .- A public hearing to adopt the proposed fees ClearSource anticipates two events with the contained in the final memorandum. City Council: Consultants will prepare materials for these One meeting to present the draft sessions, present the fee update effort, and memorandum of fee proposals and receive respond to City Council inquiries and/or enable Councilmember dialogue with supplemental feedback and direction. information. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 16 EXHIBIT A PROJECTSCHEDULE SCHEDULE Figure 5 illustrates the estimated time for completion of our previously described work For the User Fee Schedule Update, ClearSource plan tasks,timing of deliverables,and a sample forecasts to deliver reporting from this study timeline for implementation procedures. 120 days from project commencement.These It is important to note that California law reporting documents will enable final requires a 60-day period after City Council presentation,final edits based on City Council q approval(public hearing) before modified review and input, and public procedure and/or new development review fees may go thereafter along the City's timeline and into effect. legislative priorities. WorkPlarrTask Approval Places-, AOL at City's Timing Alternative:Fee Schedule Update 1 Study Orientation 2 Development of Critical Inputs ■ Minor Cost of Service Analysis 4 Fee Schedule Update 5 Reporting and Deliverable Tools 6 Formal Engagement: with City Personne� with City Council Onsite engagement event,tentative timing shown(actual timing to be determined at project commencement) Delivery of draft report,ready for legislative approval procedures and public review Approval Process I It is anticipated that engagement with the City Counrii,including public hearing,wiri ocrur after delivery of the Draft Report. following statutory obligations and City legislative priorities The Draft Repot,already reviewed by City personnel,will be delivered no toter than 120 days from project commencement. FIGURE 5/ESTIMATED PROJECT TIMELINE CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 17 EXHIBIT `B" Payment Schedule (Hourly Payment) A. Hourly Rate CONSULTANT'S fees for such services shall be based upon the following hourly rate and cost schedule: B. Travel Charges for time during travel are not reimbursable. C. Billing I. All billing shall be done monthly in fifteen (15) minute increments and matched to an appropriate breakdown of the time that was taken to perform that work and who performed it. 2. Each month's bill should include a total to date. That total should provide, at a glance, the total fees and costs incurred to date for the project. 3. A copy of memoranda, letters, reports, calculations and other documentation prepared by CONSULTANT may be required to be submitted to CITY to demonstrate progress toward completion of tasks. In the event CITY rejects or has comments on any such product, CITY shall identify specific requirements for satisfactory completion. 4. CONSULTANT shall submit to CITY an invoice for each monthly payment due. Such invoice shall: A) Reference this Agreement; B) Describe the services performed; C) Show the total amount of the payment due; D) Include a certification by a principal member of CONSULTANT's firm that the work has been performed in accordance with the provisions of this Agreement; and E) For all payments include an estimate of the percentage of work completed. Upon submission of any such invoice, if CITY is satisfied that CONSULTANT is making satisfactory progress toward completion of tasks in accordance with this Agreement, CITY shall approve the invoice, in which event payment shall be made within thirty (30) days of receipt of the invoice by CITY. Such approval shall not be unreasonably withheld. If CITY does not approve an invoice, CITY shall notify CONSULTANT in writing of the reasons for non-approval and the schedule of performance set forth in Exhibit "A" may at the option of CITY be suspended until the parties agree that past performance by CONSULTANT is in, or has been brought 1 Exhibit B into compliance, or until this Agreement has expired or is terminated as provided herein. 5. Any billings for extra work or additional services authorized in advance and in writing by CITY shall be invoiced separately to CITY. Such invoice shall contain all of the information required above, and in addition shall list the hours expended and hourly rate charged for such time. Such invoices shall be approved by CITY if the work performed is in accordance with the extra work or additional services requested, and if CITY is satisfied that the statement of hours worked and costs incurred is accurate. Such approval shall not be unreasonably withheld. Any dispute between the parties concerning payment of such an invoice shall be treated as separate and apart from the ongoing performance of the remainder of this Agreement. 2 Exhibit B EXHIBIT "B" Payment Schedule (Fixed Fee Payment) 1. CONSULTANT shall be entitled to monthly progress payments toward the fixed fee set forth herein in accordance with the following progress and payment schedules. 2. Delivery of work product: A copy of every memorandum, letter, report, calculation and other documentation prepared by CONSULTANT shall be submitted to CITY to demonstrate progress toward completion of tasks. In the event CITY rejects or has comments on any such product, CITY shall identify specific requirements for satisfactory completion. 3. CONSULTANT shall submit to CITY an invoice for each monthly progress payment due. Such invoice shall: A) Reference this Agreement; B) Describe the services performed; C) Show the total amount of the payment due; D) Include a certification by a principal member of CONSULTANT's firm that the work has been performed in accordance with the provisions of this Agreement; and E) For all payments include an estimate of the percentage of work completed. Upon submission of any such invoice, if CITY is satisfied that CONSULTANT is making satisfactory progress toward completion of tasks in accordance with this Agreement, CITY shall approve the invoice, in which event payment shall be made within thirty (30) days of receipt of the invoice by CITY. Such approval shall not be unreasonably withheld. If CITY does not approve an invoice, CITY shall notify CONSULTANT in writing of the reasons for non-approval and the schedule of performance set forth in Exhibit "A" may at the option of CITY be suspended until the parties agree that past performance by CONSULTANT is in, or has been brought into compliance, or until this Agreement has expired or is terminated as provided herein. 4. Any billings for extra work or additional services authorized in advance and in writing by CITY shall be invoiced separately to CITY. Such invoice shall contain all of the information required above, and in addition shall list the hours expended and hourly rate charged for such time. Such invoices shall be approved by CITY if the work performed is in accordance with the extra work or additional services requested, and if CITY is satisfied that the statement of hours worked and costs incurred is accurate. Such approval shall not be unreasonably withheld. Any dispute between the parties concerning payment of such an invoice shall be treated as separate and apart from the ongoing performance of the remainder of this Agreement. Exhibit B CONSULTING FEES 'r ~ CONSULTING FEE Professional Hourly Rates otal Project Budget ClearSource maintains a single hourly rate for professional services performed, regardless of ClearSource proposes the following consulting individual contributor: $150 per hour. This rate fee, for the User Fee Schedule Update: is all-inclusive of labor and non-labor costs. We anticipate no additional direct expenses within A total project budget of$18,600. our protect budget. A total of 124 hours of consultant time Payment Schedule dedicated to the City A commitment to live within this proposal: ClearSource will submit monthly progress no change orders to complete the scope of reports and invoicing to the City, based on work. hours recorded to the project,with final invoice not submitted until work is completed. Total A "not-to-exceed" fixed fee that includes all invoices will not exceed the total fee described associated costs incurred by ClearSource to above complete our work, such as travel and document production. Figure 6 illustrates the basis for the proposed budget following major tasks described in the Work Plan. 1 Study Or,entation 8 515C 5 1.200 2 Development of Critical Inputs 12 $ISO 5 1.800 3 Minor Cost of Service Analysis 48 5150 5 7.200 4 fee Schedule Update 24 $ISO S 3.6D0 5 Reportlns and Del werable Tools 16 SISO S 2,400 6 forma l Engagement 16 S150 S 2.400 Total"Nat to Exceed"for the Project 124 I FIGURE 6 t PROJECT BUDGET DETAIL CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 18 PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND FOR Table of Contents 1 Scope of Services................................................................................................................ 1 2 City Staff Assistance...........................................................................................................2 3 Term; Time of Performance................................................................................................2 4 Compensation......................................................................................................................2 5 Extra Work..........................................................................................................................2 6 Method of Payment.............................................................................................................3 7 Disposition of Plans,Estimates and Other Documents.......................................................3 8 Hold Harmless.....................................................................................................................3 9 Professional Liability Insurance ..............................................................................4 10 Certificate of Insurance....................................................................................................... 5 11 Independent Contractor.......................................................................................................6 12 Termination of Agreement..................................................................................................6 13 Assignment and Delegation..................................................................................................6 14 Copyrights/Patents .............................................................................................................. 7 15 City Employees and Officials..............................................................................................7 16 Notices... .................................................................................................................7 17 Consent................................................................................................................................ 8 18 Modification........................................................................................................................ 8 19 Section Headings................................................................................................................. 8 20 Interpretation of this Agreement......................................................................................... 8 21 Duplicate Original...............................................................................................................9 22 Immigration..........................................................................................................................9 23 Legal Services Subcontracting Prohibited ...........................................................................9 24 Attorney's Fees..................................................................................................................... 10 25 Survival................................................................................................................................ 10 26 Governing Law..................................................................................................................... 10 27 Signatories............................................................................................................................ 10 28 Entirety................................................................................................................................. 10 29 Effective Date.................................................................................I I DATE(MM/DD/YYYY) ACGJ R" CERTIFICATE OF LIABILITY INSURANCE 08/07/18 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER.THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED,the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER N FRANK VITALE INSURANCE AGENCY ACT PHONE ME FAX ac No EXt (831) 462-9222 Ac,No.(831)462-9299 4067 Cory St ADDRESS Fvitale99@gmail.com Soquel, CA 95073 INSURER(S) AFFORDING COVERAGE NAIC# INSURER PHILADELPHIA INDEMNITY INS CO 18058 INSURED CLEARSOURCE FINANCIAL CONSULTING INSURER B TRAVELERS PROPERTY & CASUALTY 25674 7960 B SOQUEL DR, STE 363 INSURER APTOS, CA 95003 INSURER D 831-288-0608 INSURER E' INSURER F COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS INSR ADDL SUER POLICY EFF POLICY EXP TYPE OF INSURANCE LTR INSD WVD POLICY NUMBER MM/DD/YYYY MM/DD/YYYY LIMITS X COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE $ 1,000,000 DAMAGE TO CLAIMS-MADE CI OCCUR PREMISES Ea occurrence $ 50 r 000 PHSD1302245 12/9/2017 12/9/2018 MED EXP(Any one person) $ 5,000 A Y Y PERSONAL&ADV INJURY $ 1,000,000 GEN'L AGGREGATE LIMIT APPLIES PER GENERAL AGGREGATE $ 3,000,000 X POLICY CI PRO JECT CI LOC PRODUCTS-COMP/OP AGG $ 1,000 ,000 OTHER COMINE AUTOMOBILE LIABILITY Ea accident SINGLE LIMIT $ 1,000 ,000 ANYAUTO 12/9/2017 12/9/2018 BODILY INJURY(Per person) $ OWNED SCHEDULED PHSD1302245 BODILY INJURY(Per accident) $ A AUTOS ONLY AUTOS HIRED NON-OWNED PROPERTY DAMAGE $ X AUTOS ONLY X AUTOS ONLY Per accident UMBRELLA LAB OCCUR EACH OCCURRENCE $ EXCESS LIAB CLAIMS-MADE AGGREGATE $ DED I RETENTION$ F$ 1,000,000 WORKERS COMPENSATION X P AND EMPLOYERS'LIABILITY STATUTE YINUB—BJ345908-18-42—G 1/1/2018 1/1/2019ANY PROPRIETOR/PARTNER/EXECUTIVEC N A YE L EACH ACCIDENTO,OOO B OFFICER/MEMBER EXCLUDED'(Mandatory in NH( E L DISEASE-EA EMPL If yes,describe underDESCRIPTION OF OPERATIONS below E.L DISEASE-POLICY L ,AGGREGATE ,000 A PROFESSIONAL LIABILITY PHSD1302245 12/9/2017 12/9/2018 OCCURANCE ,000 DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES (ACORD 101,Additional Remarks Schedule,may be attached If more space Is required) PER CO "A" BLANKET ADDITIONAL INSURED WITH PRIMARY & NON CONTRIBUTORY & WAIVER OF SUBROGATION ELITE-ENHANCEMENT FORM PI-BP-001, THE CERTIFICATE HOLDER THE CITY OF HUNTINGTON BEACH IS NAMED AS ADDITIONAL INSURED WITH REGARDS TO THE INSUREDS JOB OPERATIONS: FEE STUDY. JOB DURATION: 08/15/2018 TO 06/30/2019. APPR VEDA�M — *10 DAY NOTICE FOR NON PAYMENT OF PREMIUM APPLIES* By. CERTIFICATE HOLDER CANCELLATION e' CITY ATTORNEY CITY OF HUNTINGTON BEACH CITY OF HUNTINGTON BEACH ATTN: GILBERT GARCIA SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN 2000 MAIN STREET ACCORDANCE WITH THE POLICY PROVISIONS HUNTINGTON BEACH, CA 92648 AUTHORIZED REPRESENTATIVE ©1988-2015 ACORD CORPORATION. All rights reserved. ACORD25(2016/03) The ACORD name and logo are registered marks of ACORD ` RAVEL J WORKERS COMPENSATION AND ONE TOWER SQUARE EMPLOYERS LIABILITY POLICY HARTFORD CT 06183 ENDORSEMENT WC 04 03 06 (01) — 002 POLICYNUMBER: UB-8J34 5908-18-42-G WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS ENDORSEMENT-CALIFORNIA We have the right to recover our payments from anyone liable for an injury covered by this policy. We will not enforce our right against the person or organization named in the Schedule. (This agreement applies only to the extent that you perform work under a written contract that requires you to obtain this agreement from us.) You must maintain payroll records accurately segregating the remuneration of your employees while engaged in the work described in the Schedule. THE ADDITIONAL PREMIUM FOR THIS ENDORSEMENT SHALL BE 5.00% Of- I HE CALIFORNIA WORKERS, COMPENSATION PREMIUM OTHERWISE DUE ON SUCH REMUNERATION. SCHEDULE i• PERSON OR ORGANIZATION JOB DESCRIPTION CITY OF HUNTINGTON BEACH FINANCIAL CONSULTING s r Ali I; Y V f i t DATE OF ISSUE: 07-31-18 ST ASSIGN: Page 1 of 1 PI-BP-001 (9105) THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. BUSINESSOWNERS POLICY-ELITE ENHANCEMENT This endorsement modifies insurance provided under the following: BUSINESSOWNERS LIABILITY COVERAGE FORM BUSINESSOWNERS SPECIAL PROPERTY COVERAGE FORM It is understood and agreed that the following extensions only apply in the event that no other specific coverage for the indicated loss exposures are provided under this policy. If such specific coverage applies, the terms, conditions and limits of that coverage are the sole and exclusive coverage applicable under this policy. Throughout this endorsement the words"you"and"your"refer to the Named Insured shown in the Declarations. The words"we", "us"and"our"refer to the Company providing this insurance. Part 1: Property Coverage Enhancements: The following amendments are a part of the BUSINESSOWNERS SPECIAL PROPERTY COVERAGE FORM: 1. Increased Glass Limits Section A. Coverage, item 4.b. is replaced by: b. With respect to glass(other than glass building blocks)that is part of the interior of a building or structure, or part of an outdoor sign,we will not pay more than$3,000 for the total of all loss or damage in any one occurrence. This Limitation does not apply to loss or damage by the"specified causes of loss", except vandalism. 2. Increased Fire Department Service Charge Section A. Coverage, item 5.c. is replaced by: c. Fire Department Service Charge When the fire department is called to save or protect Covered Property from a Covered Cause of Loss,we will pay up to$3,000 for your liability for fire department service charges: (1)Assumed by contract or agreement prior to loss;or (2)Required by local ordinance. 3. Reduced Waiting Period and Longer Duration for Civil Authority Coverage Section A. Coverage, item 5.i. is replaced.by: i. Civil Authority We will pay for the actual loss of Business Income you sustain and necessary Extra Expense caused by action of civil authority that prohibits access to the described premises due to direct physical loss of or damage to property,other than at the described premises,caused by or resulting from any Covered Cause of Loss. The coverage for Business Income will begin 48 hours after the time of that action and will apply for a period of up to three consecutive weeks after coverage begins. Page 1 of 5 Includes copyright material of the Insurance Services Office,Inc.used with Its permission. PI-BP-001 (9/05) The coverage for necessary Extra Expense will begin immediately after the time of that action and ends: (1) 5 consecutive weeks after the time of that action;or (2) When your Business Income coverage ends;whichever is later. The definitions of Business Income and Extra Expense contained in the Business Income and Extra Expense Additional Coverages also apply to this Civil Authority Additional Coverage, The Civil Authority Additional Coverage is not subject to the Limits of Insurance. 4. Broadened Personal Property Coverage Section A. Coverage, item 1.b.,the first paragraph is replaced by: b. Personal Property located in or on the buildings at the described premises or in the open (or in a vehicle)within 1,250 feet of the described premises, including: 5. Increased limits for Personal Property Off Premises Section A. Coverage, item 6.b. is replaced by: b. Personal Property Off Premises You may extend the insurance that applies to Business Personal Property to apply to covered Business Personal Property, other than "money" and "securities", "valuable papers and records"or accounts receivable,while it is in the course of transit or temporarily at a premises you do not own, lease or operate. The most we will pay for loss or damage under this Extension is$10,000. 6. Increased limits for Outdoor Property Section A. Coverage, item 6.c. is replaced by: c. Outdoor Property You may extend the insurance provided by this policy to apply to your outdoor fences, radio and television antennas(including satellite dishes), signs(other than signs attached to buildings),trees, shrubs and plants, including debris removal expense, caused by or resulting from any of the following causes of loss: (1) Fire; (2) Lightning; (3) Explosion; (4) Riot or Civil Commotion;or (5) Aircraft. The most we will pay for loss or damage under this Extension is$5,000, but not more than $1,000 for any one tree, shrub or plant. 7. F;re Extinguisher Recharge Section A. Coverage, item 6. Coverage Extensions-will also include: You may extend the insurance provided by this coverage form to cover expenses you incur to recharge portable fire extinguishers, dry chemical, carbon dioxide, or liquid automatic fire extinguishing systems and the cost of resetting automatic fuel shut-off connections, if any of the above are discharged to fight a fire or are discharged due to a mechanical malfunction. The most we will pay for loss or damage under this extension is$3,000, Page 2 of 5 Includes copyright material of the Insurance Services Office,Inc.used with its permission. PI-BP-001 (9/05) item c.will not apply to(1)any occurrence which takes place after the equipment lease expires; nr(2)"Bodily Injury"or"Property Damage"arising out of the negligence of the lessor or contractor engaged to operate the leased equipment; and d. any owner, mortgagor, lessor,landlord, condominium association or manager of a premises leased by you, but only for"occurrences"that take place while you occupy the premises, provided however that this item d.will not apply to structural alterations, new construction, or demolition operations; and With regard to parties applicable under items a. through d. above,the Insurer and the Named Insured agree to waive rights of recovery, as provided within the policy. Nothing contained in this section C. shall serve to nullify matters excluded under section B.of the policy. 4. Bodily Injury-Mental Anguish The definition of"bodily injury" is changed to read: "Bodily Injury": a. Means bodily injury, sickness or disease sustained by a person, and includes mental anguish resulting from any of these; and b. Except for mental anguish, includes death resulting from the foregoing(item a. above)at any time. 5. Liberalization If we revise this endorsement to provide more coverage without additional premium charge,we will automatically provide the additional coverage to all endorsement holders as of the day the revision is effective in your state. 6. Employee Indemnification Defense Coverage Under SUPPLEMENTARY PAYMENTS—COVERAGES AAA.,the following is added: (8)We will pay on your behalf defense costs incurred by an"employee"in a criminal proceeding, provided, however that you must have a prior written agreement with such"employee" whereby you agree to indemnify the"employee"for such defense costs, and the agreement includes a provision for repayment of defense costs in the event of an adverse judgment.The most we will pay for any"employee"who is alleged to be directly involved in a criminal = proceeding is$2,500 regardless of the number of employees,claims or"suits"brought or persons or organizations making claims or bringing"suits." 7. Amendment of Aggregate Limit SECTION DA.—Aggregate Limits, item B is replaced by: b. All other injury or damage, including medical expenses,arising from all"occurrences"during the policy period-is three times the Liability and Medical Expenses limit.This limitation does not apply to"property damage"to premises while rented to you or temporarily occupied by you with permission of the owner, arising out of fire or explosion. 8. Amendment to Watercraft Exclusion Part B-Exclusions, item g.(2)(a)is amended by the following: The phrase"less than 26 feet"is replaced by"less than 51 feet." Page 4 of 5 Includes copyright material of the Insurance Services Office,Inc.used with its permission. PI-BP-001 (9/05) Part 3: Amendment of Conditions: 1. Other provisions of the policy notwithstanding, this policy will be primary for all losses covered herein, and the existence of other insurance will not serve to reduce our obligation. 2. You will have the right to waive our rights of recovery prior to a loss with respect to any party. This must be done in writing to affect our rights. Page 5 of 5 Includes copyright material of the Insurance Services Office,Inc.used with its permission. - CITY OF HUNTINGTON BEACH RECEIVED Professional Service Approval Form AUG 23 y->0 PART I Finance Depaftent Date: 7/24/2018 Project Manager Name: Gilbert Garcia Requested by Name if different from Project Manager: Department: Finance PARTS I OF THE PROFESSIONAL SERVICES CONTRACTS APPROVAL FORM MUST BE COMPLETED BY THE REQUESTING DEPARTMENT AND SIGNED BY THE CITY MANAGER, FOR APPROVAL, BEFORE PROCEEDING WITH THE SOLICITATION OR CONTRACT PROCESS. PART I MUST BE FILED WITH ALL APPROVED CONTRACTS. 1) Briefly provide the purpose for the agreement: Consulting services for the analysis on a comprehensive fee schedule update and cost of service for specific fees such as, all fees will be updated to account for inflationary charges, all departments will have an opportunity to make non-inflationary changes based cost of service analysis: i.e. add new fees; modify existing fee categories; remove antiquated fees, etc. and fee schedule will be built to allow for future inflationary adjustments. 2) Estimated cost of the services being sought: $ 18,600 3) Are sufficient funds available to fund this contract? ® Yes ❑ No If no, please explain: 4) Check below how the services will be obtained: ❑ A Bid solicitation process in accordance to the MC 3.03.060 procedures will be conducted. ❑ MC 3.03.08(b)—Other Interagency Agreement procedure will be utilized. ® MC 3.03.08—Contract Limits of$30,000 or less exempt procedure will be utilized. 5) Is this contract generally described on the list of professional service contracts approved by the City Council? If the answer to this question is "No," the contract will require approval from the City Council.) ® Yes ❑ No Fiscal Services Manager Signature (Purchasing Approval) Date 6) Amount, Business Unit(8 digits) and Object Code (5 digits) where funds are budgeted (Please note that a budget check will occur at the object code level): Account number Contractual Dollar Amount Business unit. object# Fiscal Year Fiscal Year Fiscal Year Fiscal Year FY 18119 10040101.69365 $18,600 $ $ $ $ $ $ $ y&3ht Budget Approval Date �)I* r$ epartment Head Signature(s) Date � IIff) Chief i ancial Officer ignature � '� Date v l� � Assistant City Manager's Signature Date APPROVED ❑ DENIED ❑ professional service approval form-part i clearsource.doc REV: February 2015 CITY OF HUNTINGTON BEACH Professional Service Approval Form PART I City Manager's Signature Date professional service approval form - part i clearsource.doc REV: February 2015 CITY OF HUNTINGTON BEACH Professional Service Approval Form PART 1 1 City ManAggerCSignature Date professional service approval form-part i clearsource.doc REV:February 2015 CITY OF HUNTINGTON BEACH IVED Professional Service Approval Form AUG 3 2 3 96AO " PART II Fir►snee- DepWillTlWt Date: 7/24/2018 Project Manager: Gilbert Garcia Requested by Name if different from Project Manager: Department: Finance PARTS I & II OF THE PROFESSIONAL SERVICES CONTRACTS APPROVAL FORM MUST BE COMPLETED BY THE REQUESTING DEPARTMENT AND SIGNED FOR APPROVAL. PART I & II MUST BE FILED WITH ALL APPROVED CONTRACTS. 1) Name of consultant: ClearSource 2) Contract Number: FIN (Contract numbers are obtained through Finance Administration x 5630) 3) Amount of this contract: $18,600 Account number Contractual Dollar Amount Business unit. object# Fiscal Year Fiscal Year Fiscal Year Fiscal Year FY 18/19 10040101.69365 $18,600 $ $ $ 4) Is this contract less than $50,000? ® Yes ❑ No 5) Does this contract fall within $50,000 and $100,000? ❑ Yes ® No 6) Is this contract over$100,000? ❑ Yes ® No (Note: Contracts requiring City Council Approval need to be signed by the Mayor and City Clerk. Make sure the appropriate signature page is attached to the contract.) 7) Were formal written proposals requested from at least three available qualified consultants? ❑ Yes ® No 8) Attach a list of consultants from whom proposals were requested (including a contact telephone number.) 9). Attach Exhibit A, which describes the proposed scope of work. 10) Attach Exhibit B, which describes the payment terms of the contract. J". 4—,-- *-3116 Dep rtmen Head Date ( 'O,w Fiscal Services Manager(Purchasing) Date &"C�� y Id 5 ,,S Budget Manag r Approval Signature Date Chief Fina ci fficer(or designee) Signature Date professional service approval form-part ii clearsource.doe CITY OF HUNTINGTON BEACH PROPOSAL O. User Fee Schedule Update TERRY MADSEN � PRINCIPAL CONSULTANT " tmadsen@clearsourcefinancial.com � 831.288.0608 7960 B Soquel Drive,Suite 363 � Aptos,California 95003 www.clea rsourcefina ncial.com CONTENTS PROPOSAL TOPICS 1 Letter of Interest 2 Firm Qualifications and Experience 6 Project Team Qualifications and Experience 9 Scope of Services 17 Project Schedule 18 Consulting Fees 19 References CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 79608 SOQUEL DRIVE,SUITE 363 1 APT05,CAUFORNIA95003 ClearSource Financial Consulting 831.288.0608 1 WWW.CLEARSOURCEFINANCIALCOM July 16,2018 CITY OF HUNTINGTON BEACH Gilbert Garcia, Finance Director 2000 Main Street Huntington Beach,California 92648 Via email:gilbert.garcia@surfcity-hb.org Proposal for a User Fee Schedule Update Dear Gil: Thank you for the opportunity to provide this proposal for cost of service and fee analysis consulting for the City of Huntington Beach. ClearSource is well-qualified,available,and equipped to complete the scope of work envisioned by the City.We bring an open mind for change and exhibit the energy to do the heavy lifting it takes for a fresh look on fees and related financial performance. We commit to the City of Huntington Beach to provide premier service,on time,and within budget: PREMIER SERVICE ON TIME WITHIN BUDGET We routinely demonstrate care Study outcomes and reporting will We will finish the scope of services about the details and the rightful ' be ready for the Cit 's public I without change orders,which is influence of local conditions.We approval processes 120 days from our standard practice.We do not do the hard work to achieve project commencement.An ask our clients to bear the risk in modern and meaningful outcomes August 1 start date,yields a Draft estimating what it takes to do this that reflect the way our clients Report by the end of November work thoroughly and with serve their communities today. 2018. successful enactment of results. i I am the President of ClearSource Financial Consulting,authorized to negotiate and bind ClearSource contractually. I have read and will comply with all terms and conditions of the RFP without exception. My signature obligates ClearSource to the terms of this proposal and confirms that this proposal shall remain valid for a period of 90 calendar days from the date of this submittal. Sincerely, TERRY MADSEN, PRESIDENT I CLEARSOURCE FINANCIAL CONSULTING COMPANY NAME: ClearSource Financial Consulting CONTACT NAME: Terry Madsen, President and Principal Consultant PHONE NUMBER: 831.288.0608 MAILING ADDRESS: 7960 B Soquel Drive,Suite 363,Aptos, CA 95003 EMAIL ADDRESS: tmadsen@clearsourceflnancial.com WEB: www.clearsourcefinancial.com FIRM QUALIFICATIONS WHO IS CLEARSOURCE? California firm,Terry has worked in this field of consulting since 2001. His depth of knowledge ClearSource Financial Consulting is a California- includes user and regulatory fee studies, based boutique consulting firm intentionally indirect cost allocation plans,cost sharing sized and structured to focus on a highly negotiations,internal service fund rate studies, tailored,high quality study experience for our water and wastewater rate studies,and special clients. ClearSource is staffed by a four-person financing district administration. During his team of seasoned individuals with decades of career he has served a diverse selection of combined experience in local government California public agencies,such as: financial analysis.We are particularly focused 0 Atherton on equitable forms of cost allocation and cost Z Bell 'The New Bell" recovery within the challenges and constraints :) Chula Vista of the ever-evolving California statutory and Z East Palo Alto legal environment,informed respectfully and :D Escalon strategically by the voter driven principles :D Gustine embedded in Propositions 218 and 26. :D Hesperia Z La Habra Heights This project will be led Z Laguna Woods from start-to-finish by :) La Quinta ClearSource founder :> Larkspur and President,Terry Z Long Beach Madsen. For 16 years, Z Los Angeles l Terry has provided Malibu financial consulting Z Napa services exclusively to :D Oakdale local government Z Ojai :D Palos Verdes Estates agencies. In October Z Roseville 2011, he founded ClearSource,a firm dedicated �D Sacramento to providing local government agencies with Z Sacramento Regional Transit District premier financial consulting services: Z San Carlos • Energy and enthusiasm to dive deep into San Diego Metropolitan Transit System the details San Leandro 0 Shafter • Willingness to do the heavy lifting necessary Z Sierra Madre to implement modernization and lasting Z Taft change Z Torrance • Commitment to on-time delivery and not- :D Union Sanitary District Z Ventura to-exceed fees West Sacramento As the current leader of ClearSource and previously as a key contributor at a competing CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 2 FIRM QUALIFICATIONS 1. CLEARSOURCE FOCUS governmental services and funds. Our primary focus is in revenue streams linked to cost of Services service principles,equity,and local-government control. Throughout these areas of expertise, ClearSource provides services to California we often work in harmony with internal and municipal agencies, consulting on topics external stakeholders to achieve successful focused on revenue management through cost implementation of the necessary solutions. of service-based resources, including the common areas of study and consulting listed in Figure 1 for a wide cross-section of ----------------------------------------------------------------- --- ------------- 0 USER AND REGULATORY FEE STUDIES i COST ALLOCATION PLANS i MASTER FEE SCHEDULE UPDATES ; INTERNAL SERVICE FUND RATE STUDIES COMPARATIVE/MARKET FEE ANALYSES COST SHARING CONSULTING I I , Effective and Equitable Revenue Management iand the Costs of Servicei , WATER AND SEWER RATE STUDIES SPECIAL FINANCING DISTRICT I CAPITAL FACILITIES CHARGE STUDIES I CONSULTING ------------------------------------------------------------------------------------- FIGURE 1 i CLEARSOURCE CONSULTING SERVICES Pattern of Repeat Engagements Communities desiring extensive fee structure remodeling, such as the City of ClearSource prides ourselves in the repeat Laguna Woods,where we have completed engagements we earn from our clients,which ten projects,with more in progress. are a testament to our style of service.We find ourselves providing fee study services to: As with every study of this type,the successful completion of this project at the City of Z Communities projecting premier customer Huntington Beach will require positive, services,such as the City of La Quinta, professional relationships with City staff, where we have completed nine projects, contract service providers,stakeholders,and with more in progress. the City Council. ClearSource clientele can Z Communities targeting full cost recovery, attest to our ability to successfully navigate such as the City of Ventura,where we have timing, competing values,and other challenges completed thirteen projects,with more in that arise when completing large scale projects. progress. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 3 FIRM QUALIFICATIONS During his career,Terry Madsen has been they face and the results they require in order awarded for his integrity,client service, to successfully accomplish their goals and dedication,and perseverance. His treatment objectives, results in working relationships that of internal staff,and respect for the challenges span multiple years and projects. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - COMPARATIVE PROJECTS City of Torrance, California USER&REGULATORY FEE STUDY 2017/2018 ClearSource presents the following descriptions AND COST ALLOCATION PLAN ANALYSIS of several of our recent assignments with comparable scopes of service for a cross-section The study examined all user and regulatory fees of California communities: collected by this full service southern California coastal City and included development of fee City of Long Beach, California schedules that can be used for annual fee LAND DEVELOPMENT FEE STUDY—2017/2018 updating with minimal effort. The City recently created a division focused on SERVICES STUDIED:City Clerk, Building& serving private development needs within the Safety, Engineering, Planning, Engineering Bureau of the Public Works Environmental Design &Protection,Library, Department. The study involved reviewing all Parks& Recreation, Parks Services, Finance, existing fees for services and recommending Fire Prevention&Hazardous Materials, fees for services currently provided by the Airport,Cultural Arts Center, Police,Animal division without existing fee recovery. Control,Water(Non-Rate), SERVICES STUDIED: Private Land City of Palos Verdes Estates, Calif. Development COMPREHENSIVE USER FEE STUDY— City of Azusa, California 2017/2018 COMPREHENSIVE FEE STUDY—2015/2016 In 2017 the City conducted its first comprehensive user and regulatory fee study. The City had gone many years without a fee The study involved extensive public education study and the findings of the prior fee study had efforts, including multiple presentations before not been implemented. Completing a fee study the City Council and a designated fee study with findings that were implementable by the review ad-hoc committee. Ultimately,fees City was critical. Additionally,the City required were unanimously adopted by the Council. the consultant to commit to a fixed project timeline. SERVICES STUDIED: Building, Planning, Engineering, Police, Public Works,Community Z SERVICES STUDIED: Building and Safety, and Event Permitting,Administration Planning, Engineering,Utilities, Fire, Police, Business Licensing, Recreation, Transportation, Library,Administration CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 4 FIRM QUALIFICATIONS City of San Leandro, California BUILDING AND PLANNING FEE STUDY— 2016/2017(Most Recent Update) The City has an intensive development review process and desired a schedule of fees that corresponded to the services provided while minimizing complexity. ClearSource specifically considered the unique needs of the City during the fee study instead of trying to mold the City into an existing template of fees. Specifically, the City desired fees that could easily be used as part of an initiative to enact more online components into the permitting process. d SERVICES STUDIED: Building and Safety CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 5 TEAM QUALIFICATIONS CLEARSOURCE TEAM Terry Madsen PROJECT MANAGER/PRINCIPAL CONSULTANT Project Team Organization Expected Project Participation:6596 This project will be led from start-to-finish by Terry Madsen is the President and Principal Terry Madsen. He will conduct all meetings, Consultant of ClearSource Financial Consulting. present all reports,and oversee development of For 16 years, he has provided financial all analysis and outcomes. Analytical and consulting services to local government strategic support will be provided by Jeanette agencies. Hahn and Karyn Johnson. Their experience includes more than 60 years of direct support to In October sul Terry founded ClearSource Financial local government agencies. Fnancial Consulting(ClearSource),a firm dedicated to providing local government agencies with premier financial consulting TERRY MADSEN services. From October 2001 to October 2011 Project Manager I Principal Consultant Terry was employed by a competing California firm, NBS. Terry's depth of knowledge includes numerous service areas including user fee studies, indirect cost allocation studies, internal Senior C ior Consultant service fund rate studies,water and wastewater rate studies, and special financing district FIGURE21 CONSULTANT TEAM ORGANIZATION administration. A description of consultant project roles is as During his career,Terry has served the follows: following agencies,among others: • Project Manager I Primary contact for the Atherton City, direction of analysis,onsite interaction Bell 'The New Bell" with City staff and leadership,and face for 0 Chula Vista public procedures. Z) East Palo Alto :) Escalon • Principal Consultant I Implementation of Gustine analytical direction,targeted analysis, 0 Hesperia troubleshooting,and quality assurance. La Habra Heights Laguna Woods • Senior Consultant I Foundational financial Z La Quinta analysis,data analysis,strategic sounding :) Larkspur board,and quality control interaction. 0 Long Beach Additionally,data input,data structuring, :) Los Angeles and research. Z Malibu :D Napa Z Oakdale :) Ojai Z Palos Verdes Estates CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 6 TEAM QUALIFICATIONS Roseville services,parks, recreation,administration, :D Sacramento general governmental,public infrastructure, :) Sacramento Regional Transit District utilities,and others. Z San Carlos San Diego Metropolitan Transit System Terry is a member of the California Society of San Leandro Municipal Finance Officers. He received his Z Shafter undergraduate degree(Cum Laude)from Cal Sierra Madre Poly,San Luis Obispo. He was awarded a Taft Bachelor of Science in Business Administration Z) Torrance with a Finance Concentration and an Economics Z Union Sanitary District Minor. He received his graduate degree from :) Ventura California State University,San Bernardino. He Z West Sacramento was awarded a Master of Business Within the past year, Mr. Madsen has Administration with an Entrepreneurship supported cost allocation and user fee studies Concentration. for California cities, including but not limited to, Jeanette Hahn Azusa, Escalon,Gustine, Laguna Woods, La Quinta, Larkspur, Palos Verdes Estates, Rancho SENIOR CONSULTANT Mirage,San Leandro,Torrance,and Ventura. Expected Project Participation;2S% Terry has worked closely with every level of the Jeanette Hahn is a Senior Consultant for public body including property owners, ClearSource Financial Consulting.She has over community organizations,council members, 18 years of experience advising municipal special commissions,agency managers,all agencies on equitable and effective costs of members of the agency finance team,directors service,cost recovery,and strategic financial of every agency department, management planning. analysts,and the direct service staff that are the Jeanette has analytical and policy expertise in primary contact points for members of the the following subject matter: community,such as inspectors, plan reviewers, operators, maintenance personnel, and records Z Cost of service analysis and cost allocation staff. for cost recovery opportunities, including user fees, regulatory fees,and Terry's experience in performing fee studies contracts/partnerships includes all phases of the work,from project initiation to completion and presentation of Z Water,wastewater, reclaimed water, and final findings. His efforts include data storm water/drainage utility rates and fees gathering,conducting interviews with agency Development impact fees and capacity staff, model development,report preparation, charge nexus analysis/justification and presentation and delivery of study narratives. He has analyzed fees for a Economic feasibility/decision analysis comprehensive array of municipal services,such Z Long-range financial planning as planning, land development, building,fire protection,code enforcement,community Z Benchmarking CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 7 TEAM QUALIFICATIONS Prior to becoming part of the ClearSource team Jeanette holds a Bachelor of Arts in Economics in 2017,Jeanette succeeded at competing with a Public Finance concentration from the consulting firms.She was Director of Financial University of Washington,Seattle. Consulting for California-based NBS from 2007 to 2011 and served progressive roles at FCS Karyn Johnson GROUP from 1997 to 2007, including California SENIOR CONSULTANT Regional Manager from 2004 to 2007.Jeanette Expected Project Participation:10% stepped down from these executive roles in Karyn Johnson is a Senior Consultant for 2011 to focus on motherhood. ClearSource Financial Consulting.She has over Jeanette has performed nearly 200 separate 32 years of experience as a financial consultant engagements for public agencies of diverse size to cities,counties, and special districts leading and situation throughout the Western United and developing analysis to support cost of States, including in California,Washington, service based revenue streams. Oregon, Idaho, Nevada, Utah, Montana,and Alaska.She is articulate and agile when working Karyn's project work for municipal agencies within the legal framework of rate and fee- includes: setting across these states,with particular Z Multi-year financial planning emphasis on California's Proposition 218 and the state's Mitigation Fee Act.As an Z Policy development accomplished and highly regarded speaker, Cost-of-service studies Jeanette has earned a reputation for crafting effective and persuasive messages for attaining Rate/fee design and restructuring legislative and public approval of financial plans Z Capital and infrastructure planning and accompanying rates and fees. Her skills have been deployed frequently in municipal Z Funding alternatives work to defuse contentious or actively contested matters. Furthermore,she has been Cost-benefit analyses repeatedly invited to present in educational and Z Reserve analysis industry forums,such as the California Society of Municipal Finance Officers, League of Community education and involvement California Cities,Association of California Water Karyn's subject matter expertise focuses in Agencies,and California Special Districts public works,water,wastewater,and storm Association,among many others. water utilities and programs.She has served as Within the past year,Jeanette has supported principal consultant for the practices of Black& user fee studies for California cities, including Veatch and FCS Group. but not limited to, Escalon, Palos Verdes Karyn earned a Bachelor of Science in Business Estates, Long Beach, Rancho Mirage, Roseville, Management/Finance from Franklin University San Leandro,Shafter,and Torrance. and a Master of Business Administration from Pepperdine University. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 8 SCOPE ' VICES PROJECT UNDERSTANDING Z Regulatory activities,such as review and inspection of land development, Objectives construction/building, and improvements to infrastructure,and other areas of code The City of Huntington Beach is considering a review,compliance,and enforcement User Fee Schedule Update.This type of project is focused on the ethic of"the costs to serve" Permitting,such as special events and use and appropriate, if not effective, cost recovery: of public facilities, infrastructure,and services What are the costs of the comprehensive Facility rentals and use of public spaces, line-up of direct services provided to the such as community centers, recreational community,which currently have or may be eligible for a user or regulatory fee? sites, parks,and athletic field use What are the cost recovery targets or Z Program participation policies of the City as to the amounts that should be paid for those who request or Z Operations and services of individual cause these services?What is the impact to benefit/request the source funds—typically the General Z Operations and response to individual Fund—of changes to user/regulatory fees? action As an update,this effort is somewhat :D Licensing, billing,records management,and abbreviated from the otherwise periodic and administrative service comprehensive cost of service analysis of user and regulatory fees the City has undertaken in :D Hourly rates for direct-billing City staff time recent years. It is intended to adjust prevailing From the City's published fee schedules,our user and regulatory fees Citywide for cost initial identification of fees eligible for review inflation and minor cost of service-based under this user/regulatory fee methodology changes where necessary. include those managed by the following Services for Review program areas: City Clerk It is expected that direct,fee-related services :) Community Development under review in this will focus on services � Community Services eligible for user fee methodology, as well as identification during this study of any relevant Finance Z Fire additions for services performed without a fee or for under-quantified or ineffectively Information Services structured fees. Library :D Office of Business Development All direct services throughout the City Z police organization for which a user or regulatory fee Z) public Works is or can be imposed will be included.This can encompass activities such as: Revenue streams generally excluded from this type of methodology due to differing authority, CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 9 SCOPE ' implementation and analytical methodologies, development impact fees, in-lieu fees,fees and approval procedures would include: utility intended and codified more as"taxes," punitive rates and other property-related fees subject to fines/penalties,and general taxes. Proposition 218 proceedings,assessments, - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - METHODS Most of the services under review in this project are driven in scale and relativity based on the Statutory Parameters amount of labor involved in completing the activity. For this reason,the justification for Industry best practice and California statute are most of the examined fees will start with a set in harmony: User fees should be set according of fully-burdened hourly rates for personnel to the estimated reasonable cost of service and involved in the process. should bear a fair and reasonable relationship to the payer's burdens on or benefits received of cost for a unit of time.These rates Fully burdened hourly rates are rates include an expression from the activities and/or services provided by the City. Longstanding financial and accounting tires labor expense; indirect labor for activities practices have accomplished this with well- that support direr activities; materials, established methods that satisfy Article 13C of services,and supplies; administration and the California Constitution and in most cases management; and central services of the overall for user fees,sustains local legislative control governmental agency. over the imposition and modification of those Once time is valued,the cost of service for fees. individual services can be examined.This is derived by understanding the time required to Defining the Costs of Service perform service, and how that time varies when Figure 3 illustrates the build-up of a cost-of- project characteristics vary. Not only does this service methodology applied to user and inform cost for an average service, it also regulatory fees in the municipal setting. informs how a downstream fee might best be structured to capture relative costs between different users. In other words,do entirely flat fees suffice,or on the opposite end of that spectrum,does an entirely variable fee,such as a time-and-materials basis, need to be imposed?More likely, how might the service attributes be best portrayed to establish predictable, administratively feasible fees somewhere in the middle of that range? Finally, cost recovery goals for the agency are applied to the expression of the full unit cost of FIGURE 31 USER FEE ANALYTICAL MODULES service to determine proposed fee amounts CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 10 SCOPE OF SERVICES imposed on individuals requesting or causing justified,against the local agency's goals for the service. cost recovery. As an update only, the above-described We believe most fee paying stakeholders and methodology will be implemented in specifically City Council members accept high cost recovery targeted areas where cost of service analysis targets as long as: will be necessary for minor adjustments or newly-identified services. The elements of the cost of service and assumptions are clearly communicated. Cost Of Service and Cost Recovery Z The service level provided by staff is Nearly every service for which a fee is imposed attentive, responsive, and collaborative. can be illustrated as shown in Figure 4, Z The City clearly communicates that only contrasting the components of the full cost of eligible costs are included in fees. service,which is the maximum fee amount THE COSTS OF SERVICE FEE4MSED COW RECOVERY Central Services/Governmental 100%="Full Cost Recovery" Administration/Management Cost Recovery Target by Service: rMateriels/Services/supplies Public/Private Benefit Policies Indirect Service Labor _C Market Sensitivity Compliance/Behavior Direct Service Labor Modification I Fiscal Constraints/Considerations in the Organization i 0%=Other Fund Subsidy FIGURE 4 1 COMPARING THE COST OF SERVICE TO COST RECOVERY OBJECTIVES Fee Structure full cost is thoroughly documented,while secondly,exploring modernization of fee The fiscal environment in California has pushed schedules for both agency and customer most agencies to a default policy of full cost satisfaction. As the nature of City service recovery in their user fees,with exceptions changes, particularly with technological found for targeted services of specific advancement or necessary efficiency resonance with the local community or where improvements, it is important for fee structures market sensitivities are particularly prevalent. to fall in line with the way in which service is Therefore,ClearSource finds much of our effort performed, rather than simply adjusted in recent years has been first,to ensure that perennially as a revenue measure. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 11 SCOPE ' VICES We will work closely with departmental nexus to the cost of plan review than cubic management and direct service providers to yards of the grading project. weigh the findings and implications of the costs As anof service with prevailing fee structures.As an methodology update only, the above-described example,we recommend flat fees for the modology will be implemented in specifically majority of City services.This allows for: targeted areas where fee design analysis will be necessary for minor adjustments or newly- Improved ability for users to forecast fees. identified services. Z Consistency in the application of the fee Project Management for Quality structure. Control/Quality Assurance Less variability in staff monitoring their service hours. During the performance of this contract, ClearSource will implement the following Z The ability for the City to achieve its elements of review we find essential to assuring program cost recovery goals in aggregate. accurate deliverable work products and Conversely,there are instances where more outcomes ready for implementation: variable fees, if not deposit-based fees,are Assignment of two senior-level team warranted, despite the increased complexity or members with over three decades of administration: combined experience in the subject matter, Z Highly variable,time-intensive projects. cross-trained,and mutually cooperative in the development of supporting data and Agencies with technology systems that can outcomes, both quantitative and accommodate deposit-monitoring,staff qualitative. buy-in regarding the importance of tracking Demonstrated reconciliation of financial time,and appropriate staffing levels to inputs to source data. manage the deposit life-cycle. Z Demonstrated reconciliation of cost,time, When it comes to fee structure, and volumetric data inputs and fundamentally,we believe many methods can assumptions,where feasible. work,and we are committed to the heavy- lifting required to achieve results of lasting Designated points of review of critical cross- significance for our clients.We try diligently to references embedded in elements of the defer to the preferences of direct service analysis. providers and their fee-paying constituents, Implementation of a project management rather than imposing a consultant-driven "dashboard"to follow progress toward and solution.That said,we require that any completion of significant project elements structural method chosen have a direct that impact quality of analysis and correlation to the service provided.As a thoroughness of the overall project.This is common example in other agencies,after a spreadsheet used for regularly scheduled working with building or engineering staff,we project manager check-in points between may decide that the number of grading plan ClearSource and the City s primary point of sheets being reviewed may have a much closer contact.At each check-in,the status of each CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 12 SCOPE ' VICES element of the project—critical inputs, implementation(approval)of the outcomes we analysis,onsite events,and deliverables—is report in these types of studies.We have found updated and comments are noted. this push for approval requires a great deal of Progression points change at each check-in flexibility and creativity to respond to point to ensure continued movement of the conditions on the ground as the project project and resolution of diversions. approaches stakeholder, public,and/or Responsibilities of study participants, both legislative review.The ability to generate new consultants and agency contacts and/or reporting and refine messages as we go is departments are tracked separately to pin- essential. It is a normal part of our process, point potential focal areas for continued unique to each client, and embedded in every schedule management. project we have performed.Our references, who are listed at the end of this proposal,can Flexibility in Reporting and Approval attest to our reporting and presentation styles Procedures and the flexibility of approach that ClearSource ClearSource rests a great deal of our brings to these studies. professional standing on the successful - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - WORK PLAN TASK 1.2 l FEE SCHEDULE ASSESSMENT FEE SCHEDULE UPDATE After project kick-off,ClearSource will draft an initial fee schedule,following the City s existing ClearSource presents the following step-by-step formats and content,and flagging fees eligible work plan to complete the Fee Schedule Update for inflationary or other adjustments identified envisioned by the City of Huntington Beach. through project commencement meetings.At this point, identification of fee categories that Task 1 I Study Orientation will merit additional cost of service analysis The purpose of this task is to generate common within this update will occur. understanding of objectives, known issues that Task 2 1 Development of Critical must be addressed by study end, participant inputs roles,expected procedural requirements, schedule and pre-established dates,and data The purpose of this task is to develop the collection and development procedures. necessary foundation for preparing a TASK 2.11 ONSITE PROJECT KICK-OFF condensed update to Citywide user and regulatory fee schedules for the 2018-2019 Consultants will prepare for,attend,and Fiscal Year.Types of information developed will facilitate one onsite event with City personnel depend on the level of additional analysis to initiate the project. Events may be combined needed in targeted fee categories, but may or separated into a series of meetings with include: involved internal stakeholders. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 13 SCOPE ' • Financial data, including revenues, categories. It is expected that the majority of personnel costs and organization,operating fees will be updated based on an overall costs, and overhead or administrative alignment with cost inflation; however, it is also expenses. expected that every participating department will identify specific services where targeted • Annual labor time to yield a distribution of cost of service analysis is necessary. activity across core functions of service This analysis may include any of the following within a department or division. elements: • Service times to understand the quantity Calculation of fully burdened hourly rates and nature of time spent providing direct for personnel involved in the direct services for which a fee is or may be provision of services eligible for a imposed. user/regulatory fee. Volumetric statistics that might inform Z Calculation of activity-based costs of service workload or activity levels for fee-related to generate the unit cost of service services under targeted review. associated with time and fully loaded labor cost attributable to the service or activity. TASK 2.11 DEVELOP UNIFORM INFLATIONARY FACTOR � Development or application of cost recovery targets or policy for services. Consistent with prevailing City code and/or industry best practices,consultants will Comparison of specific fees to other generate the uniform inflationary factor that agencies in the region. will be applied to eligible fees across the Z Comparison of impacts to users before and Citywide fee schedules. after newly developed or redesigned fees. TASK 2.2 1 DEVELOP ALTERNATIVE Estimation,where feasible,of revenue INFLATIONARY FACTOR FOR EXCEPTED FEE impacts of newly developed or redesigned CATEGORIES fees. For any areas requiring or deemed eligible, Task 4 1 Fee Schedule Update ClearSource will develop alternative inflationary factors in targeted program areas and/or fee The purpose of this task is to develop the sections. updated schedule of fees for Citywide direct services. Existing formats of the fee schedule Task 3 1 Minor Cost of Service will be retained,and it is expected that prior Analysis cost recovery policy will be targeted,with select exceptions were identified and justified. For minor changes necessitated by the City in select fee categories, ClearSource will develop abbreviated quantitative analysis to support small changes in accordance with previously established cost of service methods for those CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 14 SCOPE ' VICES Task 5 1 Reporting and Deliverable TASK 5.4 I FINAL MEMORANDUM OF FEE Tools CHANGES Upon review and feedback from the City The purpose of this task is to provide the formal Council,consultants will revise the draft documentation encompassing the work and memorandum and accompanying fee proposals outcomes of the effort. to incorporate direction received from TASK 5.11 DRAFT MEMORANDUM OF FEE Councilmembers.The final memorandum will PROPOSALS be issued for the City's public hearing process for implementation of fee proposals. It will be ClearSource will prepare a narrative description issued in PDF for digital distribution and any of the effort,describing key data and necessary printing by the City. assumptions and fee proposals.The report will be issued in memorandum format and will be TASK S.S I MODEL/WORK PAPER DELIVERY issued in portable document format(PDF)for ClearSource will deliver editable versions of all digital distribution and any necessary printing models, documentation,and associated work by the City. papers to the City for future use. Models will be It is expected that City personnel will review an delivered in Microsoft Excel and PDF. initial iteration of the draft memorandum,and Documentation will be delivered in Microsoft ClearSource will modify it before it becomes a Word and PowerPoint and in PDF. document delivered to the City Council and available to the public. Task 1 Engagement TASK 5.2 I PRESENTATION/SUMMARY The purpose of this task is to facilitate a MATERIALS meaningful level of interaction between consultants,City personnel,and City ClearSource will develop a presentation or Councilmembers with the goal of successful summary packet for use in communicating approval,implementation,and ongoing proposals to the City Council and any maintenance of study proposals. stakeholders. TASK 6.11 DEPARTMENTAL INTERACTION TASK 5.3 I STAFF REPORT AND NOTICING ASSISTANCE In addition to the project kick-off event described in Task 1,ClearSource anticipates one ClearSource will assist City staff in the additional site visits to engage with preparation of the staff report delivered to the departmental personnel to review the initial City Council as part of the normal agenda iteration of the memorandum of fee proposals. process.Consultant will also assist in the drafting of a notice of the public hearing at which fee proposals will be considered for approval. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 15 SCOPE ' VICES TASK 6.2 CITY COUNCIL INTERACTION A public hearing to adopt the proposed fees contained in the final memorandum. ClearSource anticipates two events with the City Council: Consultants will prepare materials for these One meeting to present the draft sessions, present the fee update effort, and respond to City Council inquiries and/or enable memorandum fee proposals and receive Councilmember dialogue with supplemental feedback and direction. information. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 16 PROJECT SCHEDULE Figure 5 illustrates the estimated time for completion of our previously described work For the User Fee Schedule Update, ClearSource plan tasks,timing of deliverables, and a sample forecasts to deliver reporting from this study timeline for implementation procedures. 120 days from project commencement.These It is important to note that California law reporting documents will enable final requires a re 60-clay presentation,final edits based on City Council q Y period after City Council approval (public hearing) before modified review and input, and public procedure thereafter along the City's timeline and and/or new development review fees may go into effect. legislative priorities. Work Plan Task Alternative:Fee Schedule Update 1 Study Orientation - 2 Development of Critical Inputs S Minor Cost of Service Analysis 4 Fee Schedule Update 5 Reporting and Deliverable Tools - 6 Formal Engagement: with City Personnel with City Council k` Onsite engagement event,tentative timing shown(actual timing to be determined at project commencement) * Delivery of draft report,ready for legislative approval procedures and publ is review Approval Process I R is anticipated that engagement with the Cry Council,including public heating,will occur alter delivery of the Draft Report, following statutory obligations and Cry legislative priorities.The Draft Report already reviewed by Dry personnel,will be delivered m later than 120 days from pmlect commencement FIGURE 5 J ESTIMATED PROJECT TIMELINE CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 17 1 CONSULTING FEES CONSULTING FEE Professional Hourly Rates Total Project Budget ClearSource maintains a single hourly rate for professional services performed, regardless of ClearSource proposes the following consulting individual contributor: $150 per hour.This rate fee,for the User Fee Schedule Update: is all-inclusive of labor and non-labor costs. We anticipate no additional direct expenses within • A total project budget of$18,600. our project budget. • A total of 124 hours of consultant time Payment Schedule dedicated to the City A commitment to live within this proposal: ClearSource will submit monthly progress no change orders to complete the scope of reports and invoicing to the City, based on work. hours recorded to the project,with final invoice not submitted until work is completed. Total A"not-to-exceed" fixed fee that includes all invoices will not exceed the total fee described associated costs incurred by ClearSource to above. complete our work, such as travel and document production. Figure 6 illustrates the basis for the proposed budget following major tasks described in the Work Plan. Work Plan Task User Fee Schedule Update 1 Study Orientation 8 $150 $ 1,200 2 Development of Critical Inputs 12 $150 $ 1,800 3 Minor Cost of Service Analysis 48 $150 5 7.200 4 Fee Schedule Update 24 $150 $ 3,600 S Reporting and Deliverable Tools 16 $150 $ 2,400 6 Forma l Engagement 16 $150 $ 2,400 Total"Not to Exceed"for the Project 124 18,600 FIGURE 6 f PROJECT BUDGET DETAIL CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 18 REFERENCES CLIENT REFERENCES City of Torrance, California Sheila Poisson Please contact our references to discuss their Assistant Finance Director experience with projects completed by ClearSource.Summary descriptions of these 310.6 8.5854ranceca.gov projects were included earlier in this proposal. 310.618.5854 City of Long Beach, California City of Azusa, California Joshua Hickman Richard Lam Program Manager Budget Analyst joshua.hickman@longbeach.gov rlam@ci.azusa.ca.us 562.570.5714 626.812.5200 City of San Leandro, California City of Palos Verdes Estates, Calif. Thomas Liao Anton "Tony" Dahlerbruch Acting Development Services Director City Manager tliao@sanleandro.org adahlerbruch@pvestates.org 510.577.3352 310.378.0383 ClearSource will readily provide additional client references upon request. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 19 PROFESSIONAL SERVICES FISCAL YEAR 2018/19 NON-DEPARTMENTAL Department Description Amount Professional services including claims, litigation, auditing, recruitment services, Non-Departmental appraisal, economic analysis, legal, housing compliance and other consulting and professional services. $471,948.00 Date Vendor Amount Contract Value Notes FY 19/20 FY20/21 FY21/22 8/8/2017 ARC $ 4,500 $ 13,500 Arbitrage Rebate Compliance Services $ 4,500 2/22/2018 KNN $ 20,000.00 $ 60,000.00 as needed services $ 20,000 4/30/2018 Willdan Financial Services $ 20,000.00 $ 63,750.00 CFD $ 21,500 $ 22,250 8/1/2018 Housing Compliance Monitoring (LMIHAF) $ 10,000.00 $ 90,000.00 RFP to be issued/See ADM for$20K $10,000.00 $10,000.00 8/23/2018 ClearSource $ 18,600.00 $ 18,600.00 Comprehensive Fee Schedule Update Total Value $ 73,100.00