Revenue & Cost Specialists - LQ RFP Fees Update
Proposal for User and Regulatory Master Fee Schedule Update
and Full Cost Allocation Plan Update
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Proposal for the City of La Quinta
USER AND REGULATORY
MASTER FEE SCHEDULE UPDATE
AND FULL COST ALLOCATION PLAN
1519 E Chapman Ave Suite C Fullerton, CA 92831 (714) 992-9020 www.revenuecost.com
Proposal for User and Regulatory Master Fee Schedule Update
and Full Cost Allocation Plan Update
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TABLE OF CONTENTS November 23, 2020
Cover Letter .................................................................................................................................................................... 3
Qualifications and Experience ............................................................................................................................. 5
References .................................................................................................................................................................... 13
Fee Schedule ................................................................................................................................................................ 17
Staffing and Project Organization ................................................................................................................. 18
Form of Contract and Disclosures .................................................................................................................. 23
Sample Reports
− Fee Service Summary Worksheet .............................................................................................. 24
− Fee Service Detail Worksheet ...................................................................................................... 25
− Fully Allocated Hourly Rate Detail Report ............................................................................ 26
− Time Detail Report ........................................................................................................................... 27
C
Proposal for User and Regulatory Master Fee Schedule Update
and Full Cost Allocation Plan Update
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November 23, 2020 City of La Quinta Attention: Monika Radeva, City Clerk 78495 Calle Tampico La Quinta, CA 92253
Proposal for City of La Quinta – User and Regulatory Master Fee Schedule Update and
Full Cost Allocation Plan Update Revenue & Cost Specialists, LLC (RCS) appreciates the opportunity to respond with this proposal to develop a User and Regulatory Master Fee Schedule Update and Full Cost Allocation Plan Update. We have been providing cost allocation plans and other costing services since 1980, making us the first and foremost authority in costing services for California. Only RCS principals will work with the City, and our combined 100 years of experience and knowledge in this industry will ensure a successful project that’s on time and under budget. RCS’ skill set will generate maximum accountability for La Quinta. We have a history of delivering quality reports with defensible data that can be acted on and adopted. Of the more than 1,100 reports that we have produced, over 98% were adopted by the Councils and Boards of over 250 public agencies. Our processes are straightforward, and reports are easy to read and understand. The information provided by RCS will allow staff, City Council and other stakeholders to make rational, informed policy decisions. We strive to ensure that you will be able to confidently stand behind the information and recommendations in the Report. As former city staff ourselves, we understand how La Quinta operates, what you want, and that your time is precious. Based in Fullerton, we can provide timely support to City staff for years to come. Revenue & Cost Specialists is independent of the City and unaware of any potential conflict of interest. The terms of this proposal will be honored for 90 calendar days from the date of submittal. Please contact Eric at (714) 992-9027 or eric@revenuecost.com with any questions. Sincerely, ERIC S. JOHNSON CHU THAI President Vice President
Proposal for User and Regulatory Master Fee Schedule Update
and Full Cost Allocation Plan Update
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RCS Contacts Revenue & Cost Specialists 1519 E Chapman Ave, Ste C Fullerton, CA 92831 www.revenuecost.com
Eric Johnson President 714-992-9027 Eric@revenuecost.com
Chu Thai Vice President 714-992-9024 Chu@revenuecost.com
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and Full Cost Allocation Plan Update
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QUALIFICATIONS AND EXPERIENCE
HISTORY RCS (Taxpayer ID no. 330787781) was founded in 1980 by two former City Managers and a Finance Director. In the wake of the passage of Propositions 13 and 4, our founding partners discovered that user fees were a legal option to recover lost municipal revenues. Forty years later, Revenue & Cost Specialists continues its focus on cost allocation and user fee calculation services. After the passage of AB 1600 in 1988, our company added impact fee calculation services to help municipalities finance public facility expansion. In those early years, RCS principals published articles and presented at conferences on how user fees and impact fees worked. By the mid 1990s, RCS was a company with 25 employees, yet we were not happy with the business model. We strategically downsized, and the remaining four principals focused on service delivery, no longer worrying about revenue growth or competing market shares. Now, RCS principals commit resources to client satisfaction and long-term relationships. To this day, RCS continues to thrive due to repeat business, referrals and references. As a small business, RCS will only take on a handful of new clients each year and dedicates substantial time to them. In 2000, RCS created Government Software Systems, a robust costing software that serves fee calculation needs better than spreadsheets. Our company has provided additional services to municipalities, including long range financial planning, accounting procedures and utility rate studies. In 2020, RCS celebrates its 40th year in business and is planning for another 40 years of partnering with municipalities.
Proposal for User and Regulatory Master Fee Schedule Update
and Full Cost Allocation Plan Update
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QUALIFICATIONS RCS’ four principals make up the Limited Liability Company, and we have been financially stable since the company started. Combined, RCS principals have over 100 years of experience in cost allocation plans and fee studies and served over 250 municipalities. We have provided these services to a wide array of public agencies, from the smallest special district to larger and more complex cities and counties. While based in Orange County, we engage in projects throughout the State of California. RCS principals are municipal cost and revenue consultants specializing in the following:
• User Fee Studies
• Cost Allocation Plans
• Development Impact Fee Studies
• Special studies and reports supporting municipal financing management This specialization allows RCS to focus on every aspect of municipal fees and be the best at what we do. We have suggested new fees that are not common practice throughout the state. We have challenged and removed municipal fees that were not defensible. We have assisted municipalities in streamlining their fee-based processes. Specialization also helps RCS manage our workload capacity. We are confident in our project time estimates and do not respond to RFP’s when our project workload exceeds our capacity. All RCS principals have prior city experience, serving as interns, analysts, managers or directors. We are all knowledgeable in fund accounting, department structures and municipal services. We stay current on pending financial and legal issues that challenge municipalities. All principals are comfortable speaking with city staff at all levels, drafting reports and resolutions, and presenting to the public, stakeholders and Council members. Eric Johnson, President, has streamlined and perfected the process of CAP and User Fee Study engagements. With over 30 years of experience and hundreds of studies completed, Eric has created a superior process that demands little of city staff time and still obtains maximum results. With so many projects under his belt, Eric quickly understands complex city services and calculates fees for them. Eric relates well with elected officials because he responds with candor and brevity. If you speak to any of Eric’s prior or current clients, they will tell you how easy the process was. Scott Thorpe, Senior Vice President, joined RCS in 1985. Prior to RCS, he spent 13 years at the cities of Chula Vista, Covina, Anaheim and Brea, serving in various roles within the city manager’s offices. Scott performed user fee studies for several years and then transitioned to development impact fees when AB 1600 went into effect. Scott has written articles that laid out the fundamentals of impact fees, and his work for cities has generated tens of millions in fee revenues for cities.
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and Full Cost Allocation Plan Update
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Chu Thai, Vice President, joined RCS after 22 years of municipal experience. As budget manager and finance director, Chu successfully coordinated user fee increases, impact fee increases, utility rate increases and tax ballot measures. His experience helps clients avoid the unseen perils that jeopardize municipal projects. After project completion, Chu leaves behind well-documented reports and spreadsheets for City staff. The focus of his career has been to improve cities’ financial stability and implement operational effectiveness and efficiencies in local government. Rick Kermer, Partner, was a founding partner of RCS. Rick used his CPA and audit experience to build cost allocation and user fee spreadsheets and software that passes rigorous analysis and reporting accounting standards. Rick’s work is the foundation of all the fee study work offered today. After 40 years, Rick is semi-retired, taking only a handful of projects each year. The four principals of RCS perform studies in a professional and expedient manner. We do not send out junior staff to perform these vital services to our clients. RCS does not rely on producing Status Memoranda because we will be at City Hall quite often to tell you in person how the project is going. RCS has one office, located at 1519 E. Chapman Avenue, Suite C, Fullerton, CA 92831. Eric Johnson, President, and Chu Thai, Vice-President, will have primary responsibility for managing the comprehensive citywide fees and charges rate study for the City of La Quinta. Please contact Eric Johnson at (714) 992-9027 or Eric@revenuecost.com with any questions.
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and Full Cost Allocation Plan Update
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THE RIGHT SOFTWARE In 2000, RCS developed and began using a Windows-based software that is user-friendly and comprehensive. It includes a logical, easy-to-use interface and produces easy-to-understand reports. This Costing Software, based on an easily downloadable 14mb package, will allow the City to continuously update the Cost Allocation and User Fee Studies, as well as input hypothetical services to calculate the estimated costs of providing new services without the worry of incorrect formulas inherent in Excel-based systems. In addition, we are no longer impacted by Microsoft’s upgrades and security patches, which frequently broke Excel formulas and macros, making it challenging for RCS to support our clients, who are all using different versions of office suite software. The RFP specifies that the study should be in Microsoft Word for the narrative portions and in Excel for the schedules and cost documentation. Although RCS is willing to provide the reports in these formats, we believe that cost allocation plans and user fee calculations require a more complex level of detail than Microsoft Word and Excel can offer. RCS will provide the City of La Quinta with an electronic copy of the final version of the comprehensive study, including related schedules and cost documentation in a format that can be edited and updated by City staff to accommodate changes in costs as specified in the scope of services within the RFP listed in “Project Tasks” Section I. For annual updates, our software allows for the editing of funding sources, staffing, benefits, services, allocation time and allocation factors. RCS’ software also produces easy-to-read reports and the ability to export data to Excel for further analysis. Once the project is completed, RCS will ensure that the system and data files are properly installed at the City with no licensing limitations. RCS will provide training and lifetime support and offers annual fee updates as a service so that City staff can focus on other things.
SAMPLE REPORTS Examples of reports produced within our software are included at the end of this proposal. These reports could not be easily produced if RCS were to remain with spreadsheets and word processing software.
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and Full Cost Allocation Plan Update
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QUALIFICATIONS/EXPERIENCE OF PROJECT TEAM While all RCS principals have independently worked on projects before, both Eric Johnson and Chu Thai would be primarily involved with the City of La Quinta. Prior to the project kick-off, we will designate one principal as the Project Manager and primary contact to the City. The other principal will work behind the scenes, compiling and analyzing the data. RCS assigns two principals for several reasons. Often, both principals will attend the public hearing because two are better than one at convincing the policy makers. Two principals allow us to discuss high level issues for each project. Most important to RCS, we want our principals to build long-term relationships with all our clients. RCS can assign additional specialists to the project, for their expertise, maintenance of the proposed schedule or to maintain to assure continuance of the quality of the product. For continuity, only RCS principals will interact with City staff, as our specialization and expertise in fee studies allow City staff to focus on other City functions. We thoroughly understand and are involved in every phase of the fee study, and will advise City staff when necessary. Resumes for the RCS project team are included in this proposal on the following pages.
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EDUCATION Bachelor of Arts in Political Science - University of Redlands AFFILIATIONS California Society of Municipal Finance Officers Government Finance Officers Association
Eric S. Johnson President Mr. Johnson serves as President of Revenue & Cost Specialists with over 30 years of professional knowledge in cost recovery model and user fee studies. He focuses on providing a positive experience for RCS clients, which minimizes staff interruptions yet still produces a comprehensive, defensible study that is adopted by the governing board.
Municipal Experience City of Redlands – Redevelopment Intern (1987-1989) Relevant Project Experience
City of Carmel-by-the-Sea – Comprehensive Fee Study: RCS completed a Comprehensive Fee Study for the City in 2016 and most recently in 2020. The City Council reviewed and approved fee recommendations.
City of City of La Habra Heights – Cost recovery model and
Comprehensive Fee Study: Mr. Johnson developed a Cost recovery model and Comprehensive Study for the City in 2018. The City Council reviewed and approved fee recommendations.
City of Lancaster – Cost recovery model and
Comprehensive Fee Study: Mr. Johnson developed a Cost recovery model and Comprehensive Fee Study for the City most recently in 2006, 2009 and 2014. He also updated the Cost recovery model in 2010, 2011, 2012, 2016, and 2019.
City of Diamond Bar – Cost recovery model and
Comprehensive Fee Study: Mr. Johnson developed a Cost recovery model and Comprehensive Fee Study in 2017. The City Council is currently reviewing the fee recommendations.
City of San Bernardino Municipal Water – Cost recovery
model and Comprehensive Fee Study: Mr. Johnson developed a Cost recovery model and Comprehensive Fee Study for the Water Agency in 2016 and 2019. Review of the Fee recommendations by the Water Board is upcoming.
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EDUCATION Claremont Graduate University – Completed coursework towards Masters in Public Policy Cal State Northridge – MA Public Administration Cal Poly, Pomona – BS in Urban and Regional Planning AFFILIATIONS California Society of Municipal Finance Officers (CSMFO – Board Member) Government Finance Officers Association (GFOA) International City/County Management Association (ICMA) (Cal-ICMA) Municipal Information Systems Association of California (MISAC)
Chu Thai Vice-President Mr. Thai provides multiple aspects to the implementation of user fees, impact fees and utility rates. His experience as a municipal finance officer helps clients reach their goal of fee adoption. Chu keeps current of all legal policies which impact the noticing, calculation and reporting of fees. Municipal Experience
Impact Fees: Cities of Morgan Hill and Monterey Park
Utility Rates: Cities of Morgan Hill, Beverly Hills, South Pasadena and Monterey Park
User Fees: Cities of Claremont, Morgan Hill, Beverly Hills, South Pasadena and Monterey Park
Director of Management Services, City of Monterey Park,
CA
• Managed department of 15 to provide financial planning and reporting, revenue collections, treasury, information technology, telecommunication and support services
• Improved city's revenues through updated user fees, utility rates, and impact fees
• Conducted long-term financial forecasting and analysis
• Streamlined and enforced purchasing process
Administrative Services Director, City of La Quinta, CA
• Managed department providing general accounting, accounts payable, purchasing, payroll, business tax, treasury, IT and communication services
• Updated the City's Investment Policy and strategy
• Developed long-term revenue strategy
• Performed communications audit and reduced expenses by 75%
Finance Director, City of South Pasadena, CA
• Outsourced utility billing and customer service
• Completed $43.4 Million Water Bond Issuance and $12 Million Refunding
• Coordinated the passage of Utility Users Tax Ballot Measure
• Negotiated lease agreements for city property and cell towers
Proposal for User and Regulatory Master Fee Schedule Update
and Full Cost Allocation Plan Update
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Chu Thai Vice-President Municipal Experience (continued)
Budget and Management Officer, City of Beverly Hills, CA
• Managed $400 million citywide budget for 750 full-time employees
• Developed comprehensive capital improvement program
• Developed quarterly performance report presented to the City Council
• Implemented performance-based budget, including goals and objectives
• Updated the city's user fees and utility rates
Budget Manager, City of Morgan Hill, CA
• Managed utility billing, purchasing, business license and accounts receivable functions
• Coordinated IT overhaul, including finance, utility billing and recreation software conversions, standardization, training, disaster recovery and outsourcing.
• Developed pro-formas for proposed aquatics and community centers
• Updated the city's impact fees, user fees and utility rates
Senior Management Analyst, City of Tustin, CA
• Coordinated the City’s $80 million operating and CIP budget with all departments
• Managed finance software upgrade, focusing on departmental reports
• Deployed online payment system for utility customers
Management Analyst, City of Claremont, CA
• Assisted in the development of effective parks and recreation programs
• Assisted in the construction and programming of the Claremont Youth Activity Center, Claremont Skate Park and Hughes Community Center
• Coordinated budget and evaluated cost recovery for the department
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REFERENCES
REFERENCES – COST ALLOCATION PLAN & USER FEE STUDY We encourage you to contact our references, and would be happy to discuss project costs and project timeline for these projects during our interview. The following are municipal agencies requesting the same components as outlined in the City’s RFP.
Jurisdiction Contact Title
City of El Segundo Joseph Lillio (310) 524-2315 Director of Finance jlillio@elsegundo.org RCS completed a Cost Allocation Plan and Comprehensive Fee Study for the City in 2018. The City Council adopted changes to its fee schedule.
City of Lakewood Jose Gomez (562) 866-9771 Director of Finance & Admin Svcs jgomez@lakewoodcity.org RCS recently provided a draft Cost recovery model and Comprehensive Fee Study for the City.
City of Hermosa Beach Viki Copeland (310) 318-0225 Finance Director vcopeland@hermosabch.org RCS developed a Cost Allocation Plan and Comprehensive Fee Study for the City in 2011 and most recently in 2016. The City Council reviewed and approved fee recommendations.
City of Westminster Sherry Johnson (714) 548-3189 Finance Director sjohnson@westminster.ca.gov RCS completed a Comprehensive Fee Study identifying $1.2 million in annual cost recovery, and the City Council approved the fee recommendations in May 2019. Westminster has been an RCS client since 1987.
City of La Habra Heights Fabiola Huerta (562) 694-6302 City Manager Fhuerta@lhhcity.org RCS provided a Cost recovery model and Comprehensive Fee Study for the City in 2018. The City Council reviewed and approved fee recommendations.
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CLIENTS SERVED
USER FEE STUDY/COST
ALLOCATION PLAN Carpentaria-Summerland Fire District Chino Valley Independent Fire District City of Alhambra City of Antioch City of Arcadia City of Atascadero City of Azusa City of Banning City of Barstow City of Bend, OR City of Beverly Hills City of Big Bear Lake City of Brea City of Buena Park City of Carlsbad City of Carmel-by-the-Sea City of Carpentaria City of Carson City of Ceres City of Chino City of Claremont City of Coachella City of Concord City of Corona City of Cotati City of Cudahy City of Desert Hot Springs City of Diamond Bar City of Dinuba City of Dublin, Ohio City of El Cajon City of El Segundo City of Elk Grove City of Eureka City of Folsom City of Fontana City of Foster City City of Fountain Valley City of Fullerton City of Glendale City of Glendora City of Goodyear, Arizona City of Hemet City of Hermosa Beach City of Hesperia City of Highland City of Huntington Beach City of Kennewick, WA City of La Canada-Flintridge City of La Habra Heights City of La Mirada
USER FEE STUDY/COST
ALLOCATION PLAN (continued) City of La Palma City of La Puente City of Lake Elsinore City of Lake Forest City of Lakewood City of Lancaster City of Lathrop City of Lawndale City of Lemoore City of Lincoln City of Lindsay City of Loma Linda City of Long Beach City of Los Altos City of Lynwood City of Mammoth Lakes City of Manhattan Beach City of Marina City of Menifee City of Merced City of Milpitas City of Monrovia City of Monterey City of Moreno Valley City of Morgan Hill City of Morro Bay City of Needles City of Norwalk City of Oakdale City of Oceanside City of Ontario City of Oroville City of Oxnard City of Palm Desert City of Palm Springs City of Palmdale City of Pasadena City of Peoria, AZ City of Pico Rivera City of Pismo Beach City of Pittsburg City of Pomona City of Port Hueneme City of Porterville City of Rancho Cucamonga City of Rancho Palos Verdes City of Red Bluff City of Redlands City of Redlands City of Rialto City of Richmond City of Ridgecrest City of Riverside
USER FEE STUDY/COST
ALLOCATION PLAN (continued) City of Rocklin City of Salinas City of San Clemente City of San Gabriel City of San Juan Capistrano City of San Marino City of San Rafael City of Sanger City of Santa Clarita City of Santa Monica City of Santa Paula City of Scotts Valley City of Seal Beach City of Seaside City of Selma City of Shafter City of Sierra Madre City of Simi Valley City of Solana Beach City of South Gate City of South Lake Tahoe City of South Pasadena City of Springville, UT City of Stockton City of Suisun City City of Taft City of Thousand Oaks City of Tracy City of Tulare City of Turlock City of Upland City of Villa Park City of Vista City of West Covina City of West Jordan, UT City of Westminster City of Yuba City City or Rancho Mirage Coachella Valley Assoc of Gov’t Contra Costa County County of Cobb, GA County of Contra Costa County of San Bernardino County of Tulare Imperial County Oceanside Harbor District Orange County Fire Authority Orange County Vector Control District Placer County Water Agency Riverside County Transport. Comm. San Bernardino Assoc. Gov’t
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USER FEE STUDY/COST
ALLOCATION PLAN (continued) South Jordan City, UT Town of Apple Valley Town of Los Gatos Town of Mammoth Lakes Town of Truckee Ventura County Fire District
IMPACT FEE STUDY Antelope Valley Fire District Apple Valley Fire District Barstow Fire District Bridgeport Fire District Brigham City Corporation, UT Carpentaria-Summerland Fire District Chalfant Public Services (Fire) Protection District City of Alhambra City of Anaheim City of Atascadero City of Baldwin Park City of Barstow City of Big Bear Lake City of Calimesa City of Chino City of Coachella City of Colton City of Corona City of Desert Hot Springs City of Folsom City of Gilroy City of Glendale City of Gonzales City of Grand Terrace City of Greenfield City of Hemet City of Highland City of Huntington Beach City of Jurupa Valley City of King City City of Laguna Hills City of Lemoore City of Loma Linda City of Menifee City of Monterey Park City of Morgan Hill City of Murrieta City of Needles City of Newport Beach City of North Ogden, UT City of Oceanside City of Ontario City of Orange City of Oroville
IMPACT FEE STUDY (continued) City of Paso Robles City of Petaluma City of Pismo Beach City of Rancho Cordova City of Reedley City of Rialto City of Riverside City of San Bernardino City of Santa Paula City of Scotts Valley City of Sedona, AZ City of Selma City of Sierra Madre City of Thousand Oaks City of Tracy City of Tulare City of Wheatland City of Whittier County of Monterey Sheriff’s Department County of San Bernardino Feather River Recreation and Park District June Lake Fire District Lake Havasu City, AZ Long Valley Fire District North Central Fire District SANBAG South Jordan City, UT South Ogden City, UT Town of Apple Valley Town of Mammoth Lakes Town of Paradise Town of Truckee Washington Terrace City, UT West Jordan City, UT Wheeler Crest Fire District
ACCOUNTING PROCEDURES City of Buena Park City of Compton City of La Habra City of La Palma City of Morgan Hill City of Palmdale Commerce Redevelopment City South Gate Housing Authority
ASSISTANCE TO CITY
ATTORNEYS (confidential) Cohen and Berliner – Litigation Assistance Rutan and Tucker – Litigation Assistance
ASSISTANCE TO CITY
ATTORNEYS (continued) San Diego City – Building & Safety Fee Litigation Assistance San Diego County Counsel – DIF Use Litigation Assistance
CASH MANAGEMENT City of Buena Park City of Commerce City of Compton City of Palmdale La Mirada Civic Theater
DATA PROCESSING City of La Palma City of Palmdale City of San Clemente City of South Gate City of Villa Park Ontario-Montclair School District
LONG RANGE FINANCIAL PLAN City of Chino City of Cudahy City of Hesperia City of Lake Elsinore City of South Gate City of Turlock
MASTER FACILITIES
PLANS/CIPs Apple Valley Fire District Barstow Fire District Bridgeport Fire District Brigham City Corporation, UT Carpentaria-Summerland Fire District Chalfant Public Services (Fire) Protection District City of Anaheim City of Atascadero City of Barstow City of Big Bear Lake City of Calimesa City of Carpentaria City of Chino City of Corona City of Desert Hot Springs City of Folsom City of Gonzales City of Grand Terrace City of Greenfield
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MASTER FACILITIES
PLANS/CIPs (continued) City of Highland City of Huntington Beach City of Jurupa valley City of King City City of Lancaster City of Loma Linda City of Menifee City of Murrieta City of Needles City of Newport Beach City of Norco City of Ontario City of Orange City of Oroville City of Paso Robles City of Rancho Cordova City of Riverside City of San Bernardino City of Santa Paula City of Sedona, AZ City of Selma City of Tracy City of Wheatland City of Whittier June Lake Fire District Lake Havasu City, AZ Long Valley Fire District North Central Fire District North Ogden City, UT South Jordan City, UT South Ogden City, UT Town of Apple Valley Town of Mammoth Lakes Town of Paradise Town of Truckee Wheeler Crest Fire District
ORGANIZATIONAL AND
MANAGEMENT City of La Mirada City of South Gate City of Vista Ontario-Montclair School District
UTILITY RATE STUDY City of Brea City of Chino City of El Segundo
MISCELLANEOUS PROJECTS Brigham City Corporation, UT – Closed Indian School Use Conversion City of Azusa – Plan Check/Inspection Process Review City of Beverly Hills – Rent Stabilization Fee City of Colton – Electric Utilities Collection Procedural Manual City of Corona – Communications Repeater Cost Financing City of Corona – Interstate 15 Area Public Safety Facility Financing City of Fontana – General & Departmental Overhead Plan City of Garden Grove - Internal Service Fund Balance Study City of Hemet – Supplemental DIF, Public Peril Report City of Los Altos – Existing DIF Review
MISCELLANEOUS PROJECTS (continued) City of Milpitas – Business License Ordinance Review City of Needles – Development Agreement Assistance City of Pico Rivera – Business License Ordinance Review City of Port Hueneme – Revenue Search Report City of Redlands – Street Sweeping Rate Study City of San Bernardino – Verdemont Area Financing Analysis City of San Clemente – Business License Review City of Santa Paula – General Plan Element City of Seaside – Hayes Housing Development Service Demands City of South Lake Tahoe – Transfer of Custody Cost Verification City of Westminster – Productivity Measurement Module Lake Havasu City, AZ – Capital Financing Plan Los Angeles Fire/Police Retirement System – Fiscal Review San Bernardino County – Special District Office Finance Review South Jordan City, UT – Business Regulation Costing Town of Windsor – Long Range Capital Financing Plan
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FEE SCHEDULE Revenue & Cost Specialists proposes the following project costs, with a NOT TO EXCEED
AMOUNT OF $29,700
Task Milestones/Deliverables Hours Total Cost
Cost Allocation Plan Kick-Off Meeting Informational Meeting 8 1,320 Build Budget and Positions Schedule of Positions and Budget 12 1,980 Review Central Services/Times List of Central Services 8 1,320 Develop Allocation Factors Index of Allocation Factors 8 1,320 Initial Calculation Review Draft Cost Allocation Plan 12 1,980 Prepare Final Cost Allocation Plan Final Cost Allocation Plan 8 1,320
Total Cost Allocation Plan 56 $9,240
User Fee Study Develop Service List Preliminary Service List 8 1,320 Develop Staff Time Allocations Time Detail Reports 40 6,600 Develop Fully Alloc. Hourly Rates Fully Alloc. Hourly Rate Reports 16 2,640 Prepare Draft Report Draft Fee Study Report 36 5,940 Prepare Final Report Final Report 16 2,640Public Meetings Presentation(s)8 1,320
Total User Fee Study 124 $20,460
TOTAL PROJECT COST 180 $29,700 The above costs are based on a charge of $165 per hour. The billing rate for any additional work not covered by this proposal would be $195 per hour. Our proposal covers all costs except for the following additional costs that the City may incur:
• Insurance coverage beyond our basic general liability and workers compensation requiring an additional premium. RCS standard coverage includes workers compensation pursuant to state law, comprehensive liability Insurance with a combined single limit coverage of $2,000,000 and professional liability insurance with a combined coverage of $2,000,000.
• Report reproduction beyond identified number of copies of the final Reports
• Meeting attendance beyond those identified in this proposal. RCS will submit four equal invoices for the Cost Allocation Plan and User Fee Study, plus any miscellaneous costs from the previous paragraph. The first invoice will be submitted ten days after notice to proceed. Each invoice will be due within 30 days of submission. Insurance coverage documentation shall be provided to the City of La Quinta as required per the RFP within ten (10) calendar days of notification that RCS’ proposal has been selected.
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STAFFING AND PROJECT ORGANIZATION The City wants to identify the full costs of all operational services that are currently charged a fee or could be charged a fee. As part of the full costs of services, the City could use a full-cost Cost Allocation Plan, which would fairly distribute the citywide overhead costs to the end-user services provided to the public. The Cost Allocation Plan would also provide detail on the amounts that the City could recover from enterprise and other funds that receive services from the General Fund. This would allow for fair and defensible transfers from these funds to the General Fund. RCS will efficiently construct user fees that represent how operations are conducted in the City. We will review with staff suggested fee structures that recover costs in the most equitable and efficient way possible. This may involve flat fees, deposits, valuation-based fees, step-increase fees or a combination of these. The eventual fee recommendations included in the final report and master fee resolution will be defensible, easy to understand and supported by City staff. The most important part of our work is performed through a series of focused, on-site meetings with
staff (virtual if necessary). Face-to-face meetings commit staff to the timeline and ensure that our study draws from the most knowledgeable person on the subject matter. We will provide flexibility as we conduct meetings and interviews following local guidelines regarding COVID-19. A series of meetings also gives City staff time to digest and reflect on the information generated. RCS uses only company principals with more than 20-plus years of experience to conduct these meetings, which makes the process quicker and the results more accurate. Our process provides the City with well-documented and defensible service costs that will be used to develop fees that comply with Propositions 4, 218 and 26. We also identify 100% of the staff time on 100% of the services they provide. This gives City staff a complete perspective on their time allocations instead of merely looking at time allocations for individual services in a vacuum. These methods will ensure that City staff feels confident about the data and, therefore, confident in supporting the results in public hearings. The other key result of identifying 100% of City services is that we are identifying not only the cost of fee services, but of community-supported services, such as police, street and park maintenance services. This allows us to have a real discussion with real numbers with the City Council about tax subsidy policy. Since we are identifying the full costs of fee services, we are also identifying the current subsidy of general tax dollars for these services.
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Therefore, we can show the City Council how much fee services are subsidized at the expense of community-supported services. Does the City want to continue to use precious tax dollars to support a zone change on a particular parcel that only benefits a particular property owner, or use those tax dollars on things that can only be supported by tax dollars, like police and maintenance services? They will now have that information to be able to make that conscious choice. The support of staff changing the discussion to tax subsidy policy instead of fee increases and the experience of RCS in successfully presenting the results of similar studies to City Councils ensures that the City will be able to meet its policy objectives.
PROJECT APPROACH The proposed work plan described below is for a Cost Allocation Plan and User Fee Study. The project approach for the various parts of the studies will be done concurrently, as there are overlapping steps, and the results of the Cost Allocation Plan would be used for the overhead component of the Fee Study.
Cost Allocation Plan
Task 1: Kick-off Meeting RCS will conduct a meeting with City staff explaining the operational methodology of the study and the role of City staff. We will review any possible issues that may arise as well as answer any questions about the process. This meeting is crucial to ensuring that everyone understands the various steps in the process and what is expected of them.
Task 2: Prepare City Data RCS will review and prepare necessary files for the project. This includes obtaining and reviewing current CAP reports, line item budget details, salary schedules, MOU’s and fringe benefit details.
Task 3: Review Central Services and Allocate Staff Time RCS will meet with City staff of various departments to identify and review central services for indirect departments and allocate staff time and costs to those central services. City staff time would be approximately 1-2 hours per central service department in this process, with staff meeting with RCS to establish the central service listing, quantify the department staff time involved in those central services and review the results.
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and Full Cost Allocation Plan Update
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Task 4: Review Allocation Factors RCS will meet with City staff to review the factors for allocating each central service identified. These factors will form the basis for determining fully burdened hourly rates and allocating central service costs. This meeting will be concurrent with the time allocation meeting. Though City staff involvement in data gathering is a function of the availability of the required information, RCS will use its experience to develop allocation factors that are easily reproducible from year to year but still fairly allocate central service costs. RCS will calculate allocations to the functional centers and review the results with the managers of the various central service departments. City staff time to review the results of the allocations will be less than 1 hour per department.
Task 5: Prepare and Review Draft with City RCS will prepare a Draft Report with allocations to end user departments using our 20-step allocation model. RCS will review this Draft Report with the City’s management group and make any necessary adjustments.
Task 6: Prepare Final Cost Allocation Plan RCS will then prepare a Final Report with allocations to end user departments. These results will be used for the general overhead component of the Fee Study and can also be used to determine the amounts for transfers to the General Fund for support provided to other funds. RCS will provide three copies and a PDF file of the Final Report.
User Fee Study
Task 1: Review the Service List with Departmental Staff RCS will review the service list through meetings with City staff. We will also work with Departmental staff to determine any changes to the fee calculation methods. The end result, whichever method is used, will be a fee structure that best fits the City going forward. While this list will change during the course of the Study as it is refined, it will be the initial basis from where we start. City staff time for this review will be less than 1 hour per department.
Task 2: Staff Time Allocations RCS will interview personnel providing end-user services to ensure that costs from all functional areas directly involved with a service are included in the cost of that service. This component will form the bulk of the time spent by staff. There will be
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and Full Cost Allocation Plan Update
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two to four meetings with supervisory level staff in each functional area to create and verify the amount of time spent by staff on the services identified in the task above. We do not ask City staff to do our job by filling out forms detailing how they spend their time. This interactive process, and the fact that we allocate 100% of all departmental staff, ensures that the information being generated is valid and reliable. A sample Time Detail Report is included in the following pages.
Task 3: Develop Fully Allocated Hourly Rates RCS will develop a fully allocated hourly rate for each departmental employee, including salaries and benefits, miscellaneous operating services and supply costs, overhead costs from the Cost Allocation Plan or a more general City-wide administrative overhead, debt service and other direct costs as identified, which can be used for all charging and costing processes. A sample Hourly Rate Report is included in the following pages.
Task 4: Prepare Draft Report RCS will prepare a Draft Report that identifies the total costs for each service, along with current fees, and makes fee recommendations for each service presented. RCS will review this report with the departments so that each will have input on the fees presented in the Final Report. City staff time would be approximately 1-2 hours per department for those departments that have fee services. A sample of the Service Summary and Cost Detail Reports that are provided for each service is included in the following pages.
Task 5: Prepare Final Report Based on staff input, RCS will prepare a Final Report, which will have recommendations for new fees and subsidy percentages and projections of new revenues from those fees. The Report will include text and summary tables that will clearly explain the results and the context. All recommended fees will comply with Propositions 4, 218, 26 and any other applicable laws. RCS will provide the requested number of copies and a PDF file of the Final Report.
Task 7: Present Report to the City Council RCS will assist the City Council in the review and adoption of revised service fees and subsidy percentages and assist the staff in the implementation of the revised service fees at up to two meetings.
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and Full Cost Allocation Plan Update
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IMPLEMENTATION SCHEDULE RCS’ references will attest that out timelines are ideal for fee studies. If the project begins in February 2021, then a final report target date of July 2021 would be ample time to provide a detailed defensible report that staff will be able to stand behind. This schedule, of course, will require the cooperative participation of City staff. We will be having meeting with staff every two to three weeks and providing them with updates. RCS will comply with local, county, and state protocols for safely conducting meetings as the COVID-19 pandemic evolves. Department meetings will be 30 minutes to two hours each.
CAP/User Fee Study Feb Mar Apr May Jun
Cost Allocation Plan Kick-Off Meeting Obtain Budget & Personnel Data Review of Central Services/Time Review Allocation Factors Review Draft Cost Allocation Plan Prepare Final Cost Allocation Plan
User Fee Study Review Service List Review Staff Time Allocations Develop Fully Alloc. Hourly Rates Review Draft Report with Staff Prepare Final Report
Present User Fee Study to Council
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FORM OF CONTRACT AND DISCLOSURES We have noticed that the indemnification language of many standard city contracts can be interpreted as placing all of the risk on RCS. While we have no issue being responsible for and defending our actions, we can’t be responsible for unsubstantiated claims. We believe it is best to clarify the burden of litigation with our client cities, and therefore, suggest the following indemnification language: “Consultant shall indemnify the City, its elected officials, officers and employees from any demands, judgements, and all liability including, but not limited to, monetary or property damage, lost profit, personal injury, wrongful death, general liability, infringement of copyright/patent/trademark, professional errors and omissions, investigative expenses, attorney fees, and court costs arising out of an error, a negligent act, or omission of the Consultant, or the willful misconduct of the Consultant in performing the services described in, or normally associated with, this type of contracted work.” Revenue & Cost Specialists and its principals have not been involved in any litigation, legal proceedings or investigations by a regulatory authority within the past five years.
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and Full Cost Allocation Plan Update
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SAMPLE – FEE SERVICE SUMMARY WORKSHEET
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and Full Cost Allocation Plan Update
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SAMPLE – FEE SERVICE DETAIL WORKSHEET
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and Full Cost Allocation Plan Update
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SAMPLE – FULLY ALLOCATED HOURLY RATE DETAIL REPORT
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and Full Cost Allocation Plan Update
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SAMPLE – POSITION TIME DETAIL REPORT
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ATTACHMENT 2
INSURANCE REQUIREMENTS ACKNOWLEDGEMENT
Must be executed by proposer and submitted with the proposal
I, ________________________________________ (name) hereby acknowledge and
confirm that __________________________________ (name of company) has reviewed
the City’s indemnification and minimum insurance requirements as listed in Exhibits E and
F of the City’s Agreement for Contract Services (Attachment 1); and declare that insurance
certificates and endorsements verifying compliance will be provided if an agreement is
awarded.
I am _________________________________ of ______________________________,
(Title) (Company)
Commercial General Liability (at least as broad as ISO CG 0001)
$1,000,000 (per occurrence); $2,000,000 (general aggregate)
Must include the following endorsements:
General Liability Additional Insured
General Liability Primary and Noncontributory
Commercial Auto Liability (at least as broad as ISO CA 0001)
$1,000,000 (per accident)
Personal Auto Declaration Page if applicable
Errors and Omissions Liability $1,000,000 (per claim and aggregate)
Worker’s Compensation (per statutory requirements)
Must include the following endorsements:
Worker’s Compensation Waiver of Subrogation
Worker’s Compensation Declaration of Sole Proprietor if applicable
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ATTACHMENT 3
NON-COLLUSION AFFIDAVIT FORM
Must be executed by proposer and submitted with the proposal
I, ________________________________________ (name) hereby declare as follows:
I am _________________________________ of ______________________________,
(Title) (Company)
the party making the foregoing proposal, that the proposal is not made in the interest of,
or on behalf of, any undisclosed person, partnership, company, association, organization,
or corporation; that the proposal is genuine and not collusive or sham; that the proposer
has not directly or indirectly induced or solicited any other proposer to put in a false or
sham proposal, and has not directly or indirectly colluded, conspired, connived, or agreed
with any proposer or anyone else to put in a sham proposal, or that anyone shall refrain
from proposing; that the proposer has not in any manner, directly or indirectly, sought by
agreement, communication, or conference with anyone to fix the proposal price of the
proposer or any other proposer, or to fix any overhead, profit, or cost element of the
proposal price, or of that of any other proposer, or to secure any advantage against the
public body awarding the agreement of anyone interested in the proposed agreement;
that all statements contained in the proposal are true; and, further, that the proposer has
not, directly or indirectly, submitted his or her proposal price or any breakdown thereof,
or the contents thereof, or divulged information or data relative hereto, or paid, and will
not pay, any fee to any corporation, partnership, company, association, organization,
proposal depository, or to any member or agent thereof to effectuate a collusive or sham
proposal.
I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct.
Proposer Signature: __________________________________________________
Proposer Name: __________________________________________________
Proposer Title: __________________________________________________
Company Name: __________________________________________________
Address: __________________________________________________
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ATTACHMENT 4
ACKNOWLEDGEMENT OF RECEIPT OF ADDENDA
Must be executed by proposer and submitted with the proposal;
If no addenda has been issued, mark “N/A” under Addendum No. indicating
Not Applicable and sign
ADDENDUM NO. SIGNATURE INDICATING RECEIPT