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HomeMy WebLinkAboutClearsource Financial Consulting - 2018-10-08PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND CLEARSOURCE FINANCIAL CONSULTING FOR COST ALLOCATION AND FEE STUDY 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 a cost allocation and user fee study; 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: I. 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/professionalsvcs to $49 10115 18-6953/190355 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 Ot. ObeC g , 20 18 (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 three (3) years 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 Fifty Four Thousand Six Hundred Dollars ($54,600). 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." agree/surfnet/profession al Svcs to $49 10115 18-6777/186254 2 of II 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 10/15 18-6953/190355 3 of 11 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. agree/surfnet/professional svcs to $49 10/15 18-6953/190355 4 Of I 1 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 svcs to $49 10/15 18-6953/190355 5 of 11 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 performed 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 18-6953/190355 6 of II 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: City of Huntington Beach ATTN: Gilbert Garcia 2000 Main Street Huntington Beach, CA 92648 17. CONSENT TO CONSULTANT: C1earSource Financial Consulting ATTN: Terry Madsen 7960 B Soquel Drive, Suite #363 Aptos, CA 95003. 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 18-6953/190355 7 of 1 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/surfnet/professional svcs to $49 10115 18-6953/190355 8 of 11 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 sves to $49 10115 18-6953/190355 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. agree/surfnet/professional sves to $49 10/15 18-6953/190355 10 of I 1 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. CONSULTANT, CLEARSOURCE FINANCIAL CONSULTING, a California Corporation By:_ — V �—, CITY OF I IUNTINGTON BEACH, a municipal corporation of the State of ca11101'llla Director/Chief (Pursuant 7o I/BYVIC§3.03.l00) Terry Madsen print name APPROVED AS TO FORM: ITS: (circle one) Chairma siden ice President AND By: Bethany Madsen print name ITS: (circle one) Secretary/ hief Financial Officer/Asst. _— secretary — Treasurer City Attorney µv Date RECEIVE AND FILE: City Clerk Date COUNTERPART agree/surfnct/professional svcs to $49 10115 18-6953/190355 11 01. 1 l IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. CONSULTANT, CLEARSOURCE FINANCIAL CONSULTING, a California Corporation CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Director/Chief (Pursuant To HBMC §3.03.100) Terry Madsen print name APPROVED AS TO FORM: ITS: (circle one) Chairman/President/Vice President I: AND V, 11, j'T Cit Attorney µA/ Bethany Madsen print name ITS: (circle one) Secretary/Chief Financial Officer/Asst. Secretary — Treasurer agree/surfnet/professionalsvcs to $49 10115 18-6953/190355 11 of 11 Date RECEIVE AND FILE: City Clerk Date (b -Cp- r— EXHIBIT PROJECT UNDERSTANDING Objectives The City of Huntington Beach is considering a Cost Allocation Plan and User Fee Study. This type of project is focused on the ethic of "the costs to serve" from two different, yet intertwined perspectives: What are the costs of central services within the municipal organization, and how do those costs relate to the array of direct services provided to the community? What are the cost recovery opportunities for these administrative, management, and support services of the agency? Z What are the costs of the comprehensive line-up of direct services provided to the community, which currently have or may be eligible for a user or regulatory fee? What are the cost recovery targets or policies of the City as to the amounts that should be paid for those who request or cause these services? What is the impact to the source funds —typically the General Fund — of changes to user/regulatory fees? The City may alternatively initiate a condensed Fee Schedule Update for the 2019-2020 Fiscal Year. This effort is intended to adjust prevailing user and regulatory fees Citywide for cost inflation and minor changes. Services for Review It is expected that direct, fee -related services under review in this project — in either a comprehensive fee study or a fee schedule update — will focus on services eligible for user fee methodology, as well as identification during this study of any relevant additions for services performed without a fee or for under - quantified or ineffectively structured fees. All direct services throughout the City organization for which a user or regulatory fee is or can be imposed will be included. This can encompass activities such as: Regulatory activities, such as review and inspection of land development, construction/building, and improvements to infrastructure, and other areas of code review, compliance, and enforcement Permitting, such as special events and use of public facilities, infrastructure, and services Facility rentals and use of public spaces, such as community centers, recreational sites, parks, and athletic field use Program participation Operations and services of individual benefit/request Operations and response to individual action Licensing, billing, records management, and administrative service Hourly rates for direct -billing City staff time From the City's published fee schedules, our initial identification of fees eligible for review under this user/regulatory fee methodology include those managed by the following program areas: Z City Clerk Community Development Community Services :Z Finance :� Fire :Z Information Services CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 11 Library recovery for the "indirect" services of the Office of Business Development municipal organization. Indirect services Z Police represent City budget units commonly found in Public Works the General Fund that might include: Revenue streams generally excluded from this type of methodology due to differing authority, implementation and analytical methodologies, and approval procedures would include: utility rates and other property -related fees subject to Proposition 218 proceedings, assessments, development impact fees, in -lieu fees, fees intended and codified more as "taxes," punitive fines/penalties, and general taxes. While cost recovery for the above listed direct services are the focus of Fee Study, the Cost Allocation Plan focuses on potential cost METHODS Statutory Parameters Industry best practice and California statute are in harmony: User fees should be set according to the estimated reasonable cost of service and should bear a fair and reasonable relationship to the payer's burdens on or benefits received from the activities and/or services provided by the City. Longstanding financial and accounting practices have accomplished this with well - established methods that satisfy Article 13C of the California Constitution and in most cases for user fees, sustains local legislative control over the imposition and modification of those fees. Legislative and general governmental activities Organization -wide management and administration Central services outside of internal service funds Our standard practice — and built into our expected work plan — is an open mind for additions or deletions of direct services for which a fee is established or indirect services for which an overhead charge is applicable. recovery venue: a "full cost plan" .for application in locally -controlled revenues versus a more constrained "federal" plan (OMB 2 CFR Part 225). Under both iterations, the indirect cost allocation plan includes components to ensure meaningful outcomes of use to the City in budgetary, reimbursement, and fee -setting environments: Clearly distinguishes support service and direct service departments. Applies a two-step allocation of support services costs that effectively transfers all support services costs to only the direct service functions of the City. Allows for the addition, removal, and adjustment of costs. Cost Allocation Technique Identifies revenue impacts and overhead ClearSource generates a uniform methodology costs attributable to each of the City's for each client, with the dynamism to change General Fund departments and each City the eligibility of indirect cost depending on cost Non -General Fund. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 12 Clearly identifies the statistical bases and inputs used to derive the allocation of costs (e.g. departmental expenditures, number of employees, annual time tracking information). Defining the Costs of Service Figure 3 illustrates the build-up of a cost -of - service methodology applied to user and regulatory fees in the municipal setting. FIGURE 3 J USER FEE ANALYTICAL MODULES Most of the services under review in this project are driven in scale and relativity based on the amount of labor involved in completing the activity. For this reason, the justification for most of the examined fees will start with a set of fully -burdened hourly rates for personnel involved in the process. Fully burdened hourly rates are an expression of cost for a unit of time. These rates include direct labor expense; indirect labor for activities that support direct activities; materials, services, and supplies; administration and management; and central services of the overall governmental agency. Once time is valued, the cost of service for individual services can be examined. This is derived by understanding the time required to perform service, and how that time varies when project characteristics vary. Not only does this inform cost for an average service, it also 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 service to determine proposed fee amounts imposed on individuals requesting or causing the service. Cost of Service and Cost Recovery Nearly every service for which a fee is imposed can be illustrated as shown in Figure 4, contrasting the components of the full cost of service, which is the maximum fee amount justified, against the local agency's goals for cost recovery. We believe most fee paying stakeholders and City Council members accept high cost recovery targets as long as: The elements of the cost of service and assumptions are clearly communicated. The service level provided by staff is attentive, responsive, and collaborative. The City clearly communicates that only eligible costs are included in fees. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 13 THE COSTS OF SERVICE Central Services/Governmental Administration/Management Materials/Services/Supplies indirect Service Labor Direet Service Labor FEE -BASED COST RECOVERY 100%= "Full Cost Recovery" Cost Recovery Target by Service: Public/Private Benefit Policies Market Sensitivity Compliance/Behavior Modification Fiscal Constraints/Considerations in the Organization 0%= Other Fund Subsidy FIGURE 4 / COMPARING THE COST OF SERVICE TO COST RECOVERY OBJECTIVES Fee Structure The fiscal environment in California has pushed most agencies to a default policy of full cost recovery in their user fees, with exceptions found for targeted services of specific resonance with the local community or where market sensitivities are particularly prevalent. Therefore, ClearSource finds much of our effort in recent years has been first, to ensure that full cost is thoroughly documented, while secondly, exploring modernization of fee schedules for both agency and customer satisfaction. As the nature of City service changes, particularly with technological advancement or necessary efficiency improvements, it is important for fee structures to fall in line with the way in which service is performed, rather than simply adjusted perennially as a revenue measure. We will work closely with departmental management and direct service providers to weigh the findings and implications of the costs of service with prevailing fee structures. As an example, we recommend flat fees for the majority of City services. This allows for: Improved ability for users to forecast fees Consistency in the application of the fee structure. Less variability in staff monitoring their service hours. The ability for the City to achieve its program cost recovery goals in aggregate. Conversely, there are instances where more variable fees, if not deposit -based fees, are warranted, despite the increased complexity or administration: Highly variable, time -intensive projects. Agencies with technology systems that can accommodate deposit -monitoring, staff buy -in regarding the importance of tracking time, and appropriate staffing levels to manage the deposit life -cycle. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 14 When it comes to fee structure, :) Implementation of a project management fundamentally, we believe many methods can work, and we are committed to the heavy - lifting required to achieve results of lasting significance for our clients. We try diligently to defer to the preferences of direct service providers and their fee -paying constituents, rather than imposing a consultant -driven solution. That said, we require that any structural method chosen have a direct correlation to the service provided. As a common example in other agencies, after working with building or engineering staff, we may decide that the number of grading plan sheets being reviewed may have a much closer nexus to the cost of plan review than cubic yards of the grading project. Project Management for Quality Control/Quality Assurance During the performance of this contract, ClearSource will implement the following elements of review we find essential to assuring accurate deliverable work products and outcomes ready for implementation: Assignment of two senior -level team members with over three decades of combined experience in the subject matter, cross -trained, and mutually cooperative in the development of supporting data and outcomes, both quantitative and qualitative. Demonstrated reconciliation of financial inputs to source data. Demonstrated reconciliation of cost, time, and volumetric data inputs and assumptions, where feasible. Designated points of review of critical cross- references embedded in elements of the analysis. "dashboard" to follow progress toward and completion of significant project elements that impact quality of analysis and thoroughness of the overall project. This is a spreadsheet used for regularly scheduled project manager check -in points between ClearSource and the City's primary point of contact. At each check -in, the status of each element of the project — critical inputs, analysis, onsite events, and deliverables — is updated and comments are noted. Progression points change at each check -in point to ensure continued movement of the project and resolution of diversions. Responsibilities of study participants, both consultants and agency contacts and/or departments are tracked separately to pin- point potential focal areas for continued schedule management. Flexibility in Reporting and Approval Procedures ClearSource rests a great deal of our professional standing on the successful implementation (approval) of the outcomes we report in these types of studies. We have found this push for approval requires a great deal of flexibility and creativity to respond to conditions on the ground as the project approaches stakeholder, public, and/or legislative review. The ability to generate new reporting and refine messages as we go is essential. It is a normal part of our process, unique to each client, and embedded in every project we have performed. Our references, who are listed at the end of this proposal, can attest to our reporting and presentation styles and the flexibility of approach that ClearSource brings to these studies. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 15 WORK PLAN of a new Excel -based model in alignment with current needs but may include modification of COST ALLOCATION PLAN existing tools if City personnel prefer to sustain existing tools. ClearSource will remain flexible. ClearSource presents the following step-by-step work plan to complete the Cost Allocation Plan envisioned by the City of Huntington Beach. Task 1 1 Study Orientation The purpose of this task is to generate common understanding of objectives, known issues that must be addressed by study end, participant roles, expected procedural requirements, schedule and pre -established dates, and data collection and development procedures. TASK 1.1 1 ONSITE PROJECT KICK-OFF Consultants will prepare for, attend, and facilitate one onsite event with City personnel to initiate the project. (This event will be held concurrently with events scheduled for the User Fee Study.) TASK 1.2 1 ASSESSMENT OF PREVAILING METHODS ClearSource will evaluate prevailing cost allocation models, methods, and applications. Particular attention will be paid to annual procedures, internal opinions and impacts, and balance of workload with the requirements of the City's uses for overhead, including internal transfers/reimbursements and external agency reimbursement. ClearSource will also review readily available budgetary documents to gain a working knowledge of City structure and accounting practices. TASK 1.3 1 PLAN FOR NEW MODEL After project kick-off, ClearSource will determine a plan for generating current indirect cost allocations for the host of uses identified by the City. This will likely include development Task 2 1 Development of Critical Inputs The purpose of this task is to develop the necessary foundation for subsequent quantitative analysis. Particular focus will be generating necessary data and documentation of inputs and assumptions as required by the application of plan outcomes. (For example, an OMB 2 CFR Part 225 compliant plan requires a specific inventory of information that may not be as essential if applications are entirely internal to the City.) TASK 2.1 1 GATHER, ANALYZE, AND DEVELOP FINANCIAL INPUTS Consultants will mine the City's financial reporting to access organizational and line -item detail to support costs, allocation factors, workload metrics, and accounting structure in the cost allocation model. TASK 2.2 1 DEVELOP ALLOCATION FACTORS Consultants will pull published statistics that may be useful as bases for distributing costs and where necessary, develop and document alternate data sets to serve as distribution methods. Targeted meetings with representatives from support services departments may be useful to influence data accessibility and relevance in the cost allocation plan, such as work order records, inventories, and other volumetric or organizational tools. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 16 Task 3 1 Cost Allocation Model The purpose of this task is to generate the quantitative model to allocate indirect costs Citywide. Structure and detail of the final model will be dependent upon the ultimate application of its results, as a plan submitted for cognizant agency approval in compliance with OMB 2 CFR Part 225 and/or the State Controller's Office for Cost Claiming will require aspects unnecessary in applications where cost recovery is expected to be entirely internal to the agency. TASK 3.1 1 MODEL DEVELOPMENT ClearSource will develop an Excel -based model to distribute indirect service costs Citywide. The model is expected to identify: Citywide fund and accounting structure and fiscal year data for allocation outcomes Allocable indirect service centers Allocation bases and related distribution factors for indirect service centers Direct service centers Primary and secondary allocations Resulting annual cost allocations Resulting indirect service rates �Z Resulting interfund transfers The model will establish a specific methodology for deriving overhead costs that will properly reimburse the General Fund. The model will be developed to accommodate iterations, should an internal "full cost" method be desirable in certain applications, while maintaining an iteration with decisions necessary for state/federal compliance in indirect cost reimbursement. The model will be built to accommodate change in the organization: the ability to add or remove direct and indirect costs and to adapt to a range of activities, from simple to complex. Furthermore, the model will be built to enable continuous updates, as the City elects to maintain and update its cost allocation practices in-house in future years. TASK 3.2 1 COMPARISON OF OUTCOMES ClearSource will generate a comparison of outcomes under the updated Cost Allocation Plan to prior year outcomes, including explanation for substantive differences. Task 4 1 Reporting and Deliverable Tools The purpose of this task is to provide the formal documentation encompassing the work and outcomes of the study, as well as deliver the tools developed throughout the study for the City's ownership and future use. TASK 4.11 DRAFT REPORT ClearSource will prepare a narrative description of the study, describing key data and assumptions, and impacts. The report will include tables and charts to explain findings, and it will include the complete quantitative analysis as the justification for updated indirect cost allocations and associated rates and transfers. Reports will be issued in portable document format (PDF) for digital distribution and any necessary printing by the City. For a cost allocation plan in compliance with OMB 2 CFR Part 225, the report/quantitative analysis will include: Description of each allocated central service Identification of the units rendering services and the units receiving services CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 17 Items of expense included in the allocated cost of service Method used to distribute the cost of service to benefitted units Schedule showing the allocation of each service to the specific benefitted units Organizational chart TASK 4.2 1 FINAL REPORT Upon review and feedback from the City staff, consultants will revise the draft report and accompanying outcomes to incorporate direction received. The final report will be issued for the City's implementation and as a data source for incorporation in the User Fee Study. Reports will be issued in PDF for digital distribution and any necessary printing by the City beyond the requested bound and unbound copies delivered by consultants. TASK 4.3 1 MODEL/WORK PAPER DELIVERY Upon issuance of the final report, ClearSource will deliver editable versions of all models, documentation, and associated work papers to the City for future use. Models will be delivered in Microsoft Excel and PDF. Documentation will be delivered in Microsoft Word and PowerPoint and in PDF. Additional work papers developed will be delivered in the format in which they were created and in PDF. Task 5 1 Engagement The purpose of this task is to facilitate a meaningful level of interaction between consultants, City personnel, and City Councilmembers. TASK 5.1 1 CITY STAFF INTERACTION In addition to the project kick-off event described in Task 1, ClearSource anticipates at least two additional site visits to engage with designated City personnel managing cost allocation practices, held in conjunction with events for the Comprehensive User Fee Study: An interim review session upon initial completion of the cost allocation model A second interim review session to review the draft report The City specifically identifies a "management group" as a potential body for these types of reviews, in addition to the Finance Department as the primary TASK 5.2 1 CITY COUNCIL INTERACTION At City management discretion, ClearSource anticipates one event with the City Council to present the draft report and receive feedback and direction on cost allocation proposals that would impact the City's budgetary and financial practices. If desired, this event may occur during the same agenda as the first session for the Fee Study. Consultants will prepare materials for this session, present the plan (or elements relevant for City Council input), and respond to City Council inquires. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 18 WORK PLAN TASK 1.3 1 INITIAL FEE STRUCTURE REMODELING USER FEE STUDY ClearSource presents the following step-by-step work plan to complete the User Fee Study envisioned by the City of Huntington Beach. Task 11 Study Orientation The purpose of this task is to generate common understanding of objectives, known issues that must be addressed by study end, participant roles, expected procedural requirements, schedule and pre -established dates, and data collection and development procedures. Most significantly, this task includes a major upfront effort to examine prevailing fees for known issues and to discuss initial and potential modifications to structures and practices. TASK 1.1 1 ONSITE PROJECT KICK-OFF Consultants will prepare for, attend, and facilitate one onsite event with City personnel to initiate the project. Events may be combined or separated into a series of meetings with involved internal stakeholders. TASK 1.2 1 ASSESSMENT OF PREVAILING FEES Prior to project kick-off, ClearSource will evaluate prevailing schedules of fees under review. Assessment will include subjective effectiveness of current structures, in such terms as perceived cost recovery, perceived equity among different applicants/projects, alignment of fee categories with the manner in which work is performed currently, perceived or known competitiveness in the region, feasibility and accuracy of billing within current technology or practices, and other considerations. After project kick-off, ClearSource will draft an initial fee schedule, with categories and proposed charge bases only, stemming from initial conversations, proposed solutions based on industry standards or regional influences, or initial concepts suggested by ClearSource. This initial fee schedule will be used as the basis for developing critical data inputs in Task 2; however, it does not have to represent the final structure of fees, as quantitative analysis in Tasks 2 and 3 will also inform recommended fee structures. It is important for us to state that discussion of fee remodeling is intended to indicate our willingness to enact substantive change, should the City desire it. Unless our cost of service results indicate an absolute requirement that structures be altered, we are also amenable to continuance of prevailing practices, modified to current costs of service and other influences. In short, we are flexible to conditions on the ground once we arrive. Task 2 1 Development of Critical Inputs The purpose of this task is to develop the necessary foundation for subsequent quantitative analysis. We will focus much of our initial work to develop the body of data that will inform every downstream element of the project. TASK 2.11 GATHER, ANALYZE, AND DEVELOP FINANCIAL DATA Consultants will access detailed budget data from City staff and publicly available resources to describe: CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 19 Revenues: Our preference is to examine a three- to five-year history of fee -related revenues at the lowest level of detail possible. To the extent applicable, fund/reserve performance will be included. Personnel Costs and Organization: This includes listing of full-time equivalent employees, salary and benefit costs, roles and lines of reporting, part-time personnel, and contracted personnel. Operating Costs: Line -item expenditures will be examined from the currently adopted budget. Additional examination of periodic expenses or capital investments will be researched. Fee schedules for any contacted personnel will be acquired and interpreted. And, internal charges or estimation for central services and/or general governmental overhead will be included. TASK 2.2 1 GATHER, ANALYZE, AND DEVELOP ANNUAL LABOR TIME Consultants will determine availability of any existing labor time -tracking information within the Department. With or without tracked data, ClearSource will conduct onsite individual or group interviews using a questionnaire structure developed for this study to enable individual contributors to estimate a distribution of their annual time across core functions of service. Upon implementing time estimates developed through this process, ClearSource will follow-up remotely with any individuals where further information is warranted. Annual labor time profiles will be circulated to project leads and/or management within the department to enable review and eventual concurrence. TASK 2.3 1 GATHER, ANALYZE, AND DEVELOP SERVICE TIMES Consultants will determine availability of any existing labor time -tracking information for different fee -related service categories. With or without tracked data, ClearSource will circulate a questionnaire to appropriate personnel, linked to the remodeled fee structure developed in Task 1, to estimate average or a range of service times for fee -related services. Where information is under -developed with staff input, ClearSource will apply our industry experience to populate the analysis. Service time estimates will be circulated to project leads and/or management within the department to enable review and eventual concurrence. TASK 2.4 1 ACQUIRE AND ANALYZE VOLUMETRIC STATISTICS FOR SERVICES Consultants will gather from departmental personnel any existing data sets that will inform workload/activity levels for the fee -related services under review. This includes data such as numbers of applications and/or permits opened, in process, and closed over a pre- determined time period. Project attributes, such as valuations or other sizing may be necessary. Acquisition of statistical information from City databases will likely be requested throughout the study as issues for further analysis arise. TASK 2.5 1 RECONCILE ESTIMATES AND KNOWN DATA To the degree possible, ClearSource will attempt to reconcile the body of information used: annual time, service time estimates, and service volumes, to ensure a reasonable portrayal of workload and related costs for these services. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 20 Task 3 1 Cost of Service Analysis The purpose of this task is to generate the quantitative analyses that comprise the "cost of service" basis required by California law for cities to impose these fees as a matter of City Council discretion. The result of this series of analysis is the maximum fee amount that may be imposed as a fee for service. TASK 3.1 1 FULLY BURDENED HOURLY RATE MODEL ClearSource will develop a model to compute fully burdened hourly rates for work performed in each division and/or department contributing to the fee -related services under review. (It is possible that direct service providers exist outside the responsible department for a particular fee category. To portray an accurate "full cost of service," time for each contributor should be considered, unless a separate revenue stream is in place for those other divisions/departments.) Fully burdened hourly rates will be developed three ways: as a composite rate for the participating division, composite rates for classes (subsets) of contributors within each participating division, and individual rates for each contributor. Rates will also be expressed in multiple ways: per available hour, per productive hour, and per direct service hour to enable flexibility in how the City prefers to value increments of time. The ClearSource model will be built to illustrate the "full cost of service," encompassing labor costs, non -labor operating costs, departmental administration, central services/general governmental administration, periodic investments, and a reserve funding requirement, if applicable. These costs will also be expressed by function of service within each division. The ClearSource model will enable the City to include or exclude these cost layers in its final outcome, should current or eventual policy direct away from full cost recovery. Finally, the ClearSource model will be able to compare total annual cost of service for each division against annual revenues available to provide a global view of cost recovery for programs. This can inform any overall revenue impacts that may be warranted. TASK 3.2 1 ACTIVITY COST OF SERVICE MODEL ClearSource will develop a model to compute the cost of service at the activity level for fee - related services. This will involve applying fully burdened hourly rates to service time estimates and incorporating project -specific direct expenses applicable. The analysis will be structured to follow any proposed remodeled fee structure, as well as any additional services for which new fees will be considered. The cost of service model will enable comparison to existing fee levels to determine prevailing cost recovery levels. From that point, internal discussions may ensue as to appropriate or desired changes to fees and fee levels to enhance cost recovery, if in line with City policies, goals, or values. The cost of service model will also be structured to enable calculation of revenue impacts, if adequate data is available. Task 4 1 Fee Development and Impact Analysis The purpose of this task is to develop the updated schedule of fees for Citywide direct services. This task will be influenced by the cost of service results developed in Task 3, regional competiveness, and local values and/or City policy. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 21 TASK 4.1 1 REGIONAL FEE COMPARISON ClearSource will prepare a limited -scope comparison of fees to up to ten municipalities selected by the City, neighboring or elsewhere in California. Comparison will be limited to fee categories of particular interest and will be best accommodated in areas, such as development review, by creating profiles for an array of "typical" projects in the community. Rather than comparing fee to fee, in many cases, identifying attributes for a sample project subject to multiple fees is a more meaningful comparison. TASK 4.2 1 COST RECOVERY POLICY Consultants will work with departmental management to develop targeted cost recovery at the activity level for eventual proposal to the City Council. Cost recovery targets will be applied to activity costs of service to inform a proposed fee amount. Subsidy amounts will be identified. TASK 4.3 1 FEE SCHEDULE Consultants will develop a master fee schedule for the City, useful in presenting proposals, as well as communicating fee descriptions, fee amounts, and charge bases to other City departments, who may have responsibility for maintaining Citywide schedules of fees. If desired, the master fee schedule developed can also include a tool for subsequent annual inflationary adjustments to the established fee structures. TASK 4.4 1 COMPARATIVE FEE IMPACTS Where fee structures are remodeled extensively, ClearSource will prepare targeted schedules comparing changes to fees, individually and for a selection of sample projects. This comparison assists in presenting and communicating changes to fee structure, and also, it enables further testing of the reasonableness and accuracy of substantial changes to fee approach. TASK 4.5 1 REVENUE IMPACTS Upon finalizing fee proposals, ClearSource will attempt to quantify revenue impacts of proposals, depending on data availability and reliability on past workload at the activity level. Subsidies by other funds will be identified. If applicable, fund/reserve performance will be projected, as feasible from available data. Task 5 1 Reporting and Deliverable Tools The purpose of this task is to provide the formal documentation encompassing the work and outcomes of the study, as well as deliver the tools developed throughout the study for the City's ownership and future use. TASK 5.11 DRAFT REPORT ClearSource will prepare a narrative description of the study, describing key data and assumptions, cost of service outcomes, fee proposals, and impacts. The report will include tables and charts to explain findings, and it will include the complete quantitative analysis as the justification for proposed fees. Reports will be issued in portable document format (PDF) for digital distribution and any necessary printing by the City. It is expected that City personnel will review an initial iteration of the draft report, and ClearSource will modify it before it becomes a document delivered to the City Council and available to the public. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 22 TASK 5.2 1 PRESENTATION/SUMMARY Task 6 1 Engagement MATERIALS ClearSource will develop a presentation or summary packet for use in communicating proposals to the City Council and any stakeholders. TASK 5.3 1 STAFF REPORT AND NOTICING ASSISTANCE ClearSource will assist City staff in the preparation of the staff report delivered to the City Council as part of the normal agenda process. Consultant will also assist in the drafting of a notice of the public hearing at which fee proposals will be considered for approval. TASK 5.4 1 FINAL REPORT Upon review and feedback from the City Council, consultants will revise the draft report and accompanying fee proposals to incorporate direction received from Councilmembers. The final report will be issued for the City's public hearing process for implementation of fee proposals. Reports will be issued in PDF for digital distribution and any necessary printing by the City beyond the requested bound and unbound copies delivered by consultants. TASK 5.5 1 MODEL/WORK PAPER DELIVERY Upon issuance of the final report, ClearSource will deliver editable versions of all models, documentation, and associated work papers to the City for future use. Models will be delivered in Microsoft Excel and PDF. Documentation will be delivered in Microsoft Word and PowerPoint and in PDF. Additional work papers developed will be delivered in the format in which they were created and in PDF. The purpose of this task is to facilitate a meaningful level of interaction between consultants, City personnel, and City Councilmembers with the goal of successful approval, implementation, and ongoing maintenance of study proposals. TASK 6.1 1 DEPARTMENTAL INTERACTION In addition to the project kick-off event described in Task 1, ClearSource anticipates additional site visits to engage with departmental personnel, such as: Events to develop data, particularly annual time from individual contributors. An interim review session upon initial completion of the cost of service analysis. A second interim review session to review the initial iteration of the draft report. TASK 6.2 1 CITY COUNCIL INTERACTION ClearSource anticipates two events with the City Council: One meeting to present the draft report and receive feedback and direction on proposals. A public hearing to adopt the proposed fees contained in the final report. Consultants will prepare materials for these sessions, present the study, and respond to City Council inquiries and/or enable Councilmember dialogue with supplemental information. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 23 WORK PLAN TASK 2.11 DEVELOP UNIFORM INFLATIONARY FEE SCHEDULE UPDATES (IN SUBSEQUENT YEARS) ClearSource presents the following step-by-step work plan to complete the Fee Schedule Updates in subsequent fiscal years envisioned by the City of Huntington Beach. Task 1 I Study Orientation The purpose of this task is to generate common understanding of objectives, known issues that must be addressed by study end, participant roles, expected procedural requirements, schedule and pre -established dates, and data collection and development procedures. TASK 1.11 ONSITE PROJECT KICK-OFF Consultants will prepare for, attend, and facilitate one onsite event with City personnel to initiate the project. Events may be combined or separated into a series of meetings with involved internal stakeholders. TASK 1.2 1 FEE SCHEDULE ASSESSMENT After project kick-off, ClearSource will draft an initial fee schedule, following the City's existing formats and content, and flagging fees eligible for inflationary or other adjustments identified through project commencement meetings. Task 2 I Development of Critical Inputs The purpose of this task is to develop the necessary foundation for preparing a condensed update to Citywide user and regulatory fee schedules for the 2018-2019 Fiscal Year. Consistent with prevailing City code and/or industry best practices, consultants will generate the uniform inflationary factor that will be applied to eligible fees across the Citywide fee schedules. TASK 2.2 1 DEVELOP ALTERNATIVE INFLATIONARY FACTOR FOR EXCEPTED FEE CATEGORIES For any areas requiring or deemed eligible, ClearSource will develop alternative inflationary factors in targeted program areas and/or fee sections. Task 3 I Minor Cost of Service Analysis 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 categories. Task 4 I Fee Schedule Update The purpose of this task is to develop the updated schedule of fees for Citywide direct services. Existing formats of the fee schedule will be retained, and it is expected that prior cost recovery policy will be targeted, with select exceptions were identified and justified. Task 5 I Reporting and Deliverable Tools The purpose of this task is to provide the formal documentation encompassing the work and outcomes of the effort. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 24 TASK 5.11 DRAFT MEMORANDUM OF FEE issued in PDF for digital distribution and any PROPOSALS necessary printing by the City. ClearSource will prepare a narrative description of the effort, describing key data and assumptions and fee proposals. The report will be issued in memorandum format and will be issued in portable document format (PDF) for digital distribution and any necessary printing by the City. It is expected that City personnel will review an initial iteration of the draft memorandum, and ClearSource will modify it before it becomes a document delivered to the City Council and available to the public. TASK 5.2 1 PRESENTATION/SUMMARY MATERIALS ClearSource will develop a presentation or summary packet for use in communicating proposals to the City Council and any stakeholders. TASK 5.3 1 STAFF REPORT AND NOTICING ASSISTANCE ClearSource will assist City staff in the preparation of the staff report delivered to the City Council as part of the normal agenda process. Consultant will also assist in the drafting of a notice of the public hearing at which fee proposals will be considered for approval. TASK 5.4 1 FINAL MEMORANDUM OF FEE CHANGES Upon review and feedback from the City Council, consultants will revise the draft memorandum and accompanying fee proposals to incorporate direction received from Councilmembers. The final memorandum will be issued for the City's public hearing process for implementation of fee proposals. It will be TASK 5.5 1 MODEL/WORK PAPER DELIVERY ClearSource will deliver editable versions of all models, documentation, and associated work papers to the City for future use. Models will be delivered in Microsoft Excel and PDF. Documentation will be delivered in Microsoft Word and PowerPoint and in PDF. Task 6 1 Engagement The purpose of this task is to facilitate a meaningful level of interaction between consultants, City personnel, and City Councilmembers with the goal of successful approval, implementation, and ongoing maintenance of study proposals. TASK 6.11 DEPARTMENTAL INTERACTION In addition to the project kick-off event described in Task 1, ClearSource anticipates one additional site visits to engage with departmental personnel to review the initial iteration of the memorandum of fee proposals. TASK 6.2 1 CITY COUNCIL INTERACTION ClearSource anticipates two events with the City Council: One meeting to present the draft memorandum of fee proposals and receive feedback and direction. A public hearing to adopt the proposed fees contained in the final memorandum. Consultants will prepare materials for these sessions, present the fee update effort, and respond to City Council inquiries and/or enable Councilmember dialogue with supplemental information. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 25 SCHEDULE For the comprehensive Cost Allocation Plan and User Fee Study, ClearSource forecasts to deliver reporting from this study 120 days from project commencement. These reporting documents will enable final presentation, final edits based on City Council review and input, and public procedure thereafter along the City's timeline and legislative priorities. For the Fee Schedule Updates in the two subsequent fiscal years, ClearSource forecasts to deliver reporting 45 days from project commencement, enabling final presentation, final edits based on City Council review and input, and public procedure thereafter along the City's timeline and legislative priorities. Figure 5 illustrates the estimated time for completion of our previously described work plan tasks, timing of deliverables, and a sample timeline for implementation procedures. It is important to note that California law requires a 60-day period after City Council approval (public hearing) before modified and/or new development review fees may go into effect. (This section continues on the following page.) CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH PIT:, Work Plan Task 0-30 Days 31-60 Days 61-90 Days 91-120 Days Approval Process. at City's Timing Cost Allocation Plan 1 Study Orientation - 2 Development of Critical Inputs 3 Cost Al I ocation Model 4 Reporting and Deliverable Tools 5 Engagement with City Personnel with City Council Comprehensive User Fee Study 1 Study Orientation - 2 Development of Critical Inputs 3 Cost of Service Analysis 4 Fee Development and Impact Analysis 5 Reporting and Deliverable Tools 6 Formal Engagement: with City Personnel with City Counci I Fee Schedule Update (Subsequent Year) 1 Study Orientation 2 Development of Critical Inputs 3 Minor Cost of Service Analysis 4 Fee Schedule Update 5 Reporting and Deliverable Tools _ 6 Formal Engagement: with City Personnel with City Council'' Onsite engagement event, tentative timing shown (actual timing to be determined at project commencement) * Delivery of draft report, readyfor legislative approval procedures and public review Approval Process I It is anticipated that engagement with the Cry Council, including public hearing, will occur after delivery of me Draft Report, following statutory obligations and City legislative priorities. The Draft Report, already reviewed by City personnel, will be delivered no later than 120 days from project commencement (45 days for the Fee Schedule Update in each subsequent year). FIGURE 5 J ESTIMATED PROJECT TIMELINE CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 0A CONSULTING FEE Total Project Budget ClearSource proposes the following consulting fee, depending on study scope chosen: COST ALLOCATION PLAN AND USER FEE STUDY A total project budget of $42,600, including both the Cost Allocation Plan and User Fee Study portions of the project. Subtotals by project element are as follows: — $9,000 for the Cost Allocation Plan (Single Iteration, expected to be a Full Cost approach) — $33,600 for the User Fee Study A total of 284 hours of consultant time dedicated to the City for both elements of the project, as follows: — 60 hours for the Cost Allocation Plan — 224 hours for the User Fee Study FEE SCHEDULE UPDATES IN SUBSEQUENT FISCAL YEARS A total project budget of $6,000 for each fiscal year's effort after the initial comprehensive study. A total of 40 hours of consultant time dedicated to the City for each yearly effort ClearSource also proposes: A commitment to live within this proposal: no change orders to complete the scope of work. A "not -to -exceed" fixed fee that includes all associated costs incurred by ClearSource to complete our work, such as travel and document production. Figure 6 on the following page illustrates the basis for the proposed budget following major tasks described in the Work Plan. Deliverable Tools and Support As stated in our Work Plan for each study element, ClearSource delivers all work products developed through these studies, including the analysis and supporting schedules in editable Microsoft Excel, Word, and PowerPoint formats, for the City's future use. As part of this service and at no added fee, ClearSource is available to train staff upon delivery of the tools and be available for questions and support as the City utilizes the work products in-house. Professional Hourly Rates ClearSource maintains a single hourly rate for professional services performed, regardless of individual contributor: $150 per hour. This rate is all-inclusive of labor and non -labor costs. We anticipate no additional direct expenses within our project budget. Payment Schedule ClearSource will submit monthly progress reports and invoicing to the City, based on hours recorded to the project, with final invoice not submitted until work is completed. Total invoices will not exceed the total fee described above. CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 28 Work Plan Task Consultant Hourly Total Hours Rate I Consulting Fee Cost Allocation Plan 1 Study Orientation 4 $150 $ 600.00 2 Development of Critical Inputs 12 $150 1,800.00 3 Cost Allocation Model 32 $150 4,800.00 4 Reporting and Deliverable Tools and Training 8 $150 1,200.00 5 Engagement 4 $150 600.00 Comprehensive User Fee Stud 1 Study Orientation 12 $150 $ 1,800.00 2 Development of Critical Inputs 24 $150 3,600.00 3 Cost of Service Analysis 80 $150 12,000.00 4 Fee Development and Impact Analysis 60 $150 9,000.00 5 Reporting and Deliverable Tools and Training 28 $150 4,200.00 6 Engagement 20 $150 3,000.00 Comprehensiwe User Fee Study 224 33,600-00 Fee Schedule Update (Year Two) 1 Study Orientation 4 $150 $ 600.00 2 Development of Critical Inputs 4 $150 600.00 3 Minor Cost of Service Analysis 4 $150 600.00 4 Fee Schedule Update 12 $150 1,800.00 5 Reporting and Deliverable Tools and Training 8 $150 1,200.00 6 Formal Engagement 8 $150 1,200.00 UpdateFee Schedule 0i Fee Schedule Update (Year Three) 1 Study Orientation 4 $150 $ 600.00 2 Development of Critical Inputs 4 $150 600.00 3 Minor Cost of Service Analysis 4 $150 600.00 4 Fee Schedule Update 12 $150 1,800-00 5 Reporting and Deliverable Tools and Training 8 $150 1,200.00 6 Formal Engagement 8 $150 1,200.00 FIGURE 6 / PROJECT BUDGET DETAIL CLEARSOURCE PROPOSAL TO THE CITY OF HUNTINGTON BEACH 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND CLEARSOURCE FINANCIAL CONSULTING FOR COST ALLOCATION AND FEE STUDY Table of Contents Scope of Services CityStaff Assistance........................................................................................................... 2 Term; Time of Performance................................................................................................ 2 Compensation...................................................................................................................... 2 ExtraWork.......................................................................................................................... 2 Methodof Payment............................................................................................................. 3 Disposition of Plans, Estimates and Other Documents....................................................... 3 HoldHarmless..................................................................................................................... 3 Professional Liability Insurance..............................................................................4 Certificateof Insurance....................................................................................................... 5 IndependentContractor....................................................................................................... 6 Terminationof Agreement.................................................................................................. 6 Assignmentand Delegation.................................................................................................. 6 Copyrights/Patents............................................................................................................... 7 City Employees and Officials.............................................................................................. 7 Notices....................................................................................................................7 Consent................................................................................................................................ 8 Modification........................................................................................................................ 8 SectionHeadings................................................................................................................. 8 Interpretation of this Agreement.......................................................................................... 8 DuplicateOriginal...............................................................................................................9 Immigration.......................................................................................................................... 9 Legal Services Subcontracting Prohibited............................................................................ 9 Attorney's Fees..................................................................................................................... 10 Survival................................................................................................................................ 10 GoverningLaw..................................................................................................................... 10 Signatories............................................................................................................................ 10 Entirety................................................................................................................................. 10 EffectiveDate................................................................................. I I It ��NT NG vCF��UNSV GP�\FO CITY OF HUNTINGTON BEACH RECEIVED Professional Service Approval Form OCT 08 X)60 PART I Date: 10/8/2018 Project Manager Name: Dahle Bulosan Requested by Name if different from Project Manager: Department: Finance PARTS I OF THE PROFESSIONAL SERVICES CONTRACTS APPROVAL FORM MU fln)shce De a4tnwM OCT 11 2018 iEeadMk Etger BY THE REQUESTING DEPARTMENT AND SIGNED BY THE CITY MANAGER, FOR APPROVAL, BEFORE PROCEEDING WITH THE SOLICITATION OR CONTRACT PROCESS. PART / 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: $ 54,600 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 Services Manager Signature (Purchasing Approval) 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): Dat Account number Contractual Dollar Amount Business unit. object # Fiscal Year FY 18/19 Fiscal Year FY 19/20 Fiscal Year FY20/21 Fiscal Year 10040101.69365 $42,600 $6000 $6000 $ ��,l t Mt, iN/ Budget Approval X F`amnt Head Si ture(s) aAChie nancial O icer Sign�ure l Assistant City Manager's Signature APPROVED ❑ DENIED ❑ %C Dat Cv-) &-,W Date Date �0/1 k/c f at professional service approval form - part i clearsource.doc REV: February 2015 CITY . • BEACH UProfessionalApproval Form ���dUNT`tGP�� PART AR ir� ,, .11 City Managkr's Signature Date professional service approval form - part i clearsource.doc REV: February 2015 ��V",STINgTw CITY OF p< t e re•.. 9 v Professional 2CF�UUNTY �P���`0 Date: 10/8/2018 Project Manager: Dahle Bulosan 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 & 11 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: $54,600 Account number Contractual Dollar Amount Business unit. object # Fiscal Year FY 18/19 Fiscal Year FY19/20 Fiscal Year FY20/21 Fiscal Year 10040101.69365 $42,600 $6,000 $6,000 $ 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. Department Head C44�� _��OIA69 M Fiscal S rvices Manager (Purchasing) 10 Add' AV1 WA 16`,A/D7--W Budget anager Approval Signature "NV tk- Chief Financial Officer (or designee) Signature o Date( 1IN11 Date f� t v /d 0 ate professional service approval form - part ii clearsource.doc