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HomeMy WebLinkAbout2004 CON Maximus - User Fee AnalysisAGREEMENT BY AND BETWEEN THE CITY OF NATIONAL CITY AND MAXIMUS THIS AGREEMENT is entered into this 6th day of January, 2004, by and between the CITY OF NATIONAL CITY, a municipal corporation (the "CITY"), and MAXIMUS (the "CONTRACTOR"). RECITALS WHEREAS, the CITY desires to employ a CONTRACTOR to provide a cost of services/user fee analysis. WHEREAS, the CITY has determined that the CONTRACTOR is a corporation and is qualified by experience and ability to perform the services desired by the CITY, and the CONTRACTOR is willing to perform such services. NOW, THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS FOLLOWS: 1. ENGAGEMENT OF CONTRACTOR. The CITY hereby agrees to engage the CONTRACTOR and the CONTRACTOR hereby agrees to perform the services hereinafter set forth in accordance with all terms and conditions contained herein. The CONTRACTOR represents that all services required hereunder will be performed directly by the CONTRACTOR or under direct supervision of the CONTRACTOR. 2. SCOPE OF SERVICES. The CONTRACTOR will perform services as set forth in the attached Exhibit 1 Section A - F. The CONTRACTOR shall be responsible for all research and reviews related to the work and shall not rely on personnel of the CITY for such services, except as authorized in advance by the CITY. The CONTRACTOR shall appear at meetings cited in Exhibit 1 to keep staff and City Council advised of the progress on the project. The CITY may unilaterally, or upon request from the CONTRACTOR, from time to time reduce or increase the Scope of Services to be performed by the CONTRACTOR under this Agreement. Upon doing so, the CITY and the CONTRACTOR agree to meet in good faith and confer for the purpose of negotiating a corresponding reduction or increase in the compensation associated with said change in services, not to exceed a factor of 15% from the base amount. Revised August 2003 3. PROJECT COORDINATION AND SUPERVISION. Kathleen Trees hereby is designated as the Project Coordinator for the CITY and will monitor the progress and execution of this Agreement. The CONTRACTOR shall assign a single Project Director to provide supervision and have overall responsibility for the progress and execution of this Agreement for the CONTRACTOR. Richard Pearl thereby is designated as the Project Director for the CONTRACTOR. 4. COMPENSATION AND PAYMENT. The compensation for the CONTRACTOR shall be based on monthly billings covering actual work performed. Billings shall include labor classifications, respective rates, hours worked and also materials, if any. The total cost for all work described in Exhibit 1 shall not exceed the schedule given in Exhibit 1 Section G (the Base amount) without prior written authorization from the Project Coordinator. Monthly invoices will be processed for payment and remitted within thirty (30) days from receipt of invoice, provided that work is accomplished consistent with Exhibit 1 as determined by the CITY. The CONTRACTOR shall maintain all books, documents, papers, employee time sheets, accounting records, and other evidence pertaining to costs incurred and in -kind services provided and shall make such materials available at its office at all reasonable times during the term of this Agreement and for three (3) years from the date of final payment under this Agreement, for inspection by the CITY and for furnishing of copies to the CITY, if requested. 5. LENGTH OF AGREEMENT. Completion dates or time durations for specific portions of the Project are set forth in Exhibit 1 Section H. 6. DISPOSITION AND OWNERSHIP OF DOCUMENTS. The Memoranda, Reports, Maps, Drawings, Plans, Specifications and other documents prepared by the CONTRACTOR for this Project, whether paper or electronic, shall become the property of the CITY for use with respect to this Project, and shall be turned over to the CITY upon completion of the Project, or any phase thereof, as contemplated by this Agreement. Contemporaneously with the transfer of documents, the CONTRACTOR hereby assigns to the CITY and CONTRACTOR thereby expressly waives and disclaims, any copyright in, and the right to reproduce, all written material, drawings, plans, specifications or other work prepared under this agreement, except upon the CITY's prior authorization regarding reproduction, which authorization shall not be unreasonably withheld. The CONTRACTOR shall, upon request of the CITY, execute any further document(s) necessary to further effectuate this waiver and disclaimer. The CONTRACTOR agrees that the CITY may use, reuse, alter, reproduce, modify, assign, transfer, or in any other way, medium or method utilize the CONTRACTOR's written work product for the CITY's purposes, and the CONTRACTOR expressly waives and disclaims any residual rights granted to it by Civil Code Sections 980 through 989 relating to intellectual property and artistic works. 2 Revised August 2003 Any modification or reuse by the CITY of documents, drawings or specifications prepared by the CONTRACTOR shall relieve the CONTRACTOR from liability under Section 14 but only with respect to the effect of the modification or reuse by the CITY, or for any liability to the CITY should the documents be used by the CITY for some project other than what was expressly agreed upon within the Scope of this project, unless otherwise mutually agreed. 7. INDEPENDENT CONTRACTOR. Both parties hereto in the performance of this Agreement will be acting in an independent capacity and not as agents, employees, partners or joint venturers with one another. Neither the CONTRACTOR nor the CONTRACTOR'S employees are employee of the CITY and are not entitled to any of the rights, benefits, or privileges of the CITY's employees, including but not limited to retirement, medical, unemployment, or workers' compensation insurance. This Agreement contemplates the personal services of the CONTRACTOR and the CONTRACTOR's employees, and it is recognized by the parties that a substantial inducement to the CITY for entering into this Agreement was, and is, the professional reputation and competence of the CONTRACTOR and its employees. Neither this Agreement nor any interest herein may be assigned by the CONTRACTOR without the prior written consent of the CITY. Nothing herein contained is intended to prevent the CONTRACTOR from employing or hiring as many employees, or subcontractors, as the CONTRACTOR may deem necessary for the proper and efficient performance of this Agreement. All agreements by CONTRACTOR with its subcontractor(s) shall require the subcontractor to adhere to the applicable terms of this Agreement. 8. CONTROL. Neither the CITY nor its officers, agents or employees shall have any control over the conduct of the CONTRACTOR or any of the CONTRACTOR's employees except as herein set forth, and the CONTRACTOR expressly agrees not to represent that the CONTRACTOR or the CONTRACTOR's agents, servants, or employees are in any manner agents, servants or employees of the CITY, it being understood that the CONTRACTOR, its agents, servants, and employees are as to the CITY wholly independent contractors and that the CONTRAC- TOR's obligations to the CITY are solely such as are prescribed by this Agreement. 9. COMPLIANCE WITH APPLICABLE LAW. The CONTRACTOR, in the performance of the services to be provided herein, shall comply with all applicable State and Federal statutes and regulations, and all applicable ordinances, rules and regulations of the City of National City, whether now in force or subsequently enacted. The CONTRACTOR, and each of its subcontractors, shall obtain and maintain a current City of National City business license prior to and during performance of any work pursuant to this Agreement. 10. LICENSES, PERMITS, ETC. The CONTRACTOR represents and covenants that it has all licenses, permits, qualifications, and approvals of whatever nature that are legally required to practice its profession. The CONTRACTOR 3 Revised August 2003 represents and covenants that the CONTRACTOR shall, at its sole cost and expense, keep in effect at all times during the term of this Agreement, any license, permit, or approval which is legally required for the CONTRACTOR to practice its profession. 11. STANDARD OF CARE. A. The CONTRACTOR, in performing any services under this Agreement, shall perform in a manner consistent with that level of care and skill ordinarily exercised by members of the CONTRACTOR'S trade or profession currently practicing under similar conditions and in similar locations. The CONTRACTOR shall take all special precautions necessary to protect the CONTRACTOR's employees and members of the public from risk of harm arising out of the nature of the work and/or the conditions of the work site. B. Unless disclosed in writing prior to the date of this agreement, the CONTRACTOR warrants to the CITY that it is not now, nor has it for the five (5) years preceding, been debarred by a governmental agency or involved in debarment, arbitration or litigation proceedings concerning the CONTRACTOR's professional performance or the furnishing of materials or services relating thereto. C. The CONTRACTOR is responsible for identifying any unique products, treatments, processes or materials whose availability is critical to the success of the project the CONTRACTOR has been retained to perform, within the time requirements of the CITY, or, when no time is specified, then within a commercially reasonable time. Accordingly, unless the CONTRACTOR has notified the CITY otherwise, the CONTRACTOR warrants that all products, materials, processes or treatments identified in the project documents prepared for the CITY are reasonably commercially available. Any failure by the CONTRACTOR to use due diligence under this sub -paragraph will render the CONTRACTOR liable to the CITY for any increased costs that result from the CITY's later inability to obtain the specified items or any reasonable substitute within a price range that allows for project completion in the time frame specified or, when not specified, then within a commercially reasonable time. 12. NON-DISCRIMINATION PROVISIONS. The CONTRACTOR shall not discriminate against any employee or applicant for employment because of age, race, color, ancestry, religion, sex, sexual orientation, marital status, national origin, physical handicap, or medical condition. The CONTRACTOR will take positive action to insure that applicants are employed without regard to their age, race, color, ancestry, religion, sex, sexual orientation, marital status, national origin, physical handicap, or medical condition. Such action shall include but not be limited to the following: employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. The CONTRACTOR agrees to post in conspicuous places available to employees and applicants for employment any notices provided by the CITY setting forth the provisions of this non-discrimination clause. 13. CONFIDENTIAL INFORMATION. The CITY may from time to time communicate to the CONTRACTOR certain confidential information to enable the CONTRACTOR to effectively perform the services to be provided herein. The CONTRACTOR shall treat all such information as confidential and shall not disclose 4 Revised August 2003 any part thereof without the prior written consent of the CITY. The CONTRACTOR shall limit the use and circulation of such information, even within its own organization, to the extent necessary to perform the services to be provided herein. The foregoing obligation of this Section 13, however, shall not apply to any part of the information that (i) has been disclosed in publicly available sources of information; (ii) is, through no fault of the CONTRACTOR, hereafter disclosed in publicly available sources of information; (iii) is already in the possession of the CONTRACTOR without any obligation of confidentiality; or (iv) has been or is hereafter rightfully disclosed to the CONTRACTOR by a third party, but only to the extent that the use or disclosure thereof has been or is rightfully authorized by that third party. The CONTRACTOR shall not disclose any reports, recommendations, conclusions or other results of the services or the existence of the subject matter of this Agreement without the prior written consent of the CITY. In its performance hereunder, the CONTRACTOR shall comply with all legal obligations it may now or hereafter have respecting the information or other property of any other person, firm or corporation. CONTRACTOR shall be liable to CITY for any damages caused by breach of this condition, pursuant to the provisions of Section 14. 14. INDEMNIFICATION AND HOLD HARMLESS. The CONTRACTOR shall defend, indemnify, and hold harmless the City of National City, its officers and employees, against and from any damages and liability directly caused by the negligent actions or willful misconduct of the CONTRACTOR, its employees or agents. The CONTRACTOR shall not be responsible for any damages or liability resulting, in whole or part, from the negligence or willful misconduct of the CITY or any third party. 15. WORKERS' COMPENSATION. The CONTRACTOR shall comply with all of the provisions of the Workers' Compensation Insurance and Safety Acts of the State of California, the applicable provisions of Division 4 and 5 of the California Government Code and all amendments thereto; and all similar state or Federal acts or laws applicable; and shall indemnify, and hold harmless the CITY and its officers, and employees from and against all claims, demands, payments, suits, actions, proceedings and judgments of every nature and description, including reasonable attorney's fees and defense costs presented, brought or recovered against the CITY or its officers, employees, or volunteers, for or on account of any liability under any of said acts which may be incurred by reason of any work to be performed by the CONTRACTOR under this Agreement. 16. INSURANCE. The CONTRACTOR, at its sole cost and expense, shall purchase and maintain, and shall require its subcontractors, when applicable, to purchase and maintain throughout the term of this agreement, the following insurance policies: ❑ A. If checked, Professional Liability Insurance (errors and omissions) with minimum limits of $1,000,000 per occurrence. B. Automobile insurance covering all bodily injury and property damage incurred during the performance of this Agreement, with a minimum coverage 5 Revised August 2003 of $1,000,000 combined single limit per accident. Such automobile insurance shall include non -owned vehicles. C. Comprehensive general liability insurance, with minimum limits of $1,000,000 combined single limit per occurrence, covering all bodily injury and property damage arising out of its operation under this Agreement. D. Workers' compensation insurance covering all of CONSULTANT's employees. E. The aforesaid policies shall constitute primary insurance as to the CITY, its officers, employees, and volunteers, so that any other policies held by the CITY shall not contribute to any loss under said insurance. Said policies shall provide for thirty (30) days prior written notice to the CITY of cancellation or material change. F. Said policies, except for the professional liability and worker's compensation policies, shall name the CITY and its officers, agents and employees as additional insureds. G. If required insurance coverage is provided on a "claims made" rather than "occurrence" form, the CONTRACTOR shall maintain such insurance coverage for three years after expiration of the term (and any extensions) of this Agree- ment. H. Any aggregate insurance limits must apply solely to this Agree- ment. I. Insurance shall be written with only California admitted companies which hold a current policy holder's alphabetic and financial size category rating of not less than A•VII according to the current Best's Key Rating Guide, or a company equal financial stability that is approved by the City's Risk Manager. J. This Agreement shall not take effect until certificate(s) or other sufficient proof that these insurance provisions have been complied with, are filed with and approved by the CITY's Risk Manager. If the CONTRACTOR does not keep all of such insurance policies in full force and effect at all times during the terms of this Agreement, the CITY may elect to treat the failure to maintain the requisite insurance as a breach of this Agreement and terminate the Agreement as provided herein. 17. LEGAL FEES. If any party brings a suit or action against the other party arising from any breach of any of the covenants or agreements or any inaccuracies in any of the representations and warranties on the part of the other party arising out of this Agreement, then in that event, the prevailing party in such action or dispute, whether by final judgment or out -of -court settlement, shall be entitled to have and recover of and from the other party all costs and expenses of suit, including attorneys' fees. For purposes of determining who is to be considered the prevailing party, it is stipulated that attorney's fees incurred in the prosecution or defense of the action or suit shall not be considered in determining the amount of the judgment or award. Attorney's fees to the prevailing party if other than the CITY shall, in addition, be limited to the amount of attorney's fees incurred by the CITY in its prosecution or defense of the action, irrespective of the actual amount of attorney's fees incurred by the prevailing party. 6 Revised August 2003 18. MEDIATION/ARBITRATION. If a dispute arises out of or relates to this Agreement, or the breach thereof, the parties agree first to try, in good faith, to settle the dispute by mediation in San Diego, California, in accordance with the Commercial Mediation Rules of the American Arbitration Association (the "AAA") before resorting to arbitration. The costs of mediation shall be borne equally by the parties. Any controversy or claim arising out of, or relating to, this Agreement, or breach thereof, which is not resolved by mediation shall be settled by arbitration in San Diego, California, in accordance with the Commercial Arbitration Rules of the AAA then existing. Any award rendered shall be final and conclusive upon the parties, and a judgment thereon may be entered in any court having jurisdiction over the subject matter of the controversy. The expenses of the arbitration shall be borne equally by the parties to the arbitration, provided that each party shall pay for and bear the costs of its own experts, evidence and attorneys' fees, except that the arbitrator may assess such expenses or any part thereof against a specified party as part of the arbitration award. 19. TERMINATION. A. This Agreement may be terminated with or without cause by the CITY. Termination without cause shall be effective only upon 60- day's written notice to the CONTRACTOR. During said 60-day period the CONTRACTOR shall perform all services in accordance with this Agreement. B. This Agreement may also be terminated immediately by the CITY for cause in the event of a material breach of this Agreement, misrepresentation by the CONTRACTOR in connection with the formation of this Agreement or the performance of services, or the failure to perform services as directed by the CITY. C. Termination with or without cause shall be effected by delivery of written Notice of Termination to the CONTRACTOR as provided for herein. D. In the event of termination, all finished or unfinished Memoranda Reports, Maps, Drawings, Plans, Specifications and other documents prepared by the CONTRACTOR, whether paper or electronic, shall immediately become the property of and be delivered to the CITY, and the CONTRACTOR shall be entitled to receive just and equitable compensation for any work satisfactorily completed on such documents and other materials up to the effective date of the Notice of Termination, not to exceed the amounts payable hereunder, and less any damages caused the CITY by the CONTRACTOR's breach, if any. Thereafter, ownership of said written material shall vest in the CITY all rights set forth in Section 6. E. The CITY further reserves the right to immediately terminate this Agreement upon: (1) the filing of a petition in bankruptcy affecting the CONTRACTOR; (2) a reorganization of the CONTRACTOR for the benefit of creditors; or (3) a business reorganization, change in business name or change in business status of the CONTRACTOR. 20. NOTICES. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered; or sent by overnight mail (Federal Express or the like); or sent by registered or certified mail, postage prepaid, return receipt requested; or sent by ordinary mail, postage prepaid; or telegraphed or cabled; or delivered or sent by telex, telecopy, facsimile or fax; and shall be deemed received upon the earlier of (i) if personally delivered, the date of delivery to the address of the person to receive such notice, (ii) if sent by overnight mail, the 7 Revised August 2003 business day following its deposit in such overnight mail facility, (iii) if mailed by registered, certified or ordinary mail, five (5) days (ten (10) days if the address is outside the State of California) after the date of deposit in a post office, mailbox, mail chute, or other like facility regularly maintained by the United States Postal Service, (iv) if given by telegraph or cable, when delivered to the telegraph company with charges prepaid, or (v) if given by telex, telecopy, facsimile or fax, when sent. Any notice, request, demand, direction or other communication delivered or sent as specified above shall be directed to the following persons: To the CITY: Kathleen Trees, Director Building & Safety Department City of National City 1243 National City Boulevard National City, CA 91950-4301 To the CONTRACTOR: Richard Pearl, Vice President MAXIMUS 4320 Auburn Boulevard, Suite 2000 Sacramento, CA 95831 Notice of change of address shall be given by written notice in the manner specified in this Section. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to constitute receipt of the notice, demand, request or communication sent. Any notice, request, demand, direction or other communication sent by cable, telex, telecopy, facsimile or fax must be confirmed within forty-eight (48) hours by letter mailed or delivered as specified in this Section. 21. CONFLICT OF INTEREST AND POLITICAL REFORM ACT OBLIGATIONS. During the term of this Agreement, the CONTRACTOR shall not perform services of any kind for any person or entity whose interests conflict in any way with those of the City of National City. The CONTRACTOR also agrees not to specify any product, treatment, process or material for the project in which the CONTRACTOR has a material financial interest, either direct or indirect, without first notifying the CITY of that fact. The CONTRACTOR shall at all times comply with the terms of the Political Reform Act and the National City Conflict of Interest Code. The CONTRACTOR shall immediately disqualify itself and shall not use its official position to influence in any way any matter coming before the CITY in which the CONTRACTOR has a financial interest as defined in Government Code Section 87103. The CONTRACTOR represents that it has no knowledge of any financial interests that would require it to disqualify itself from any matter on which it might perform services for the CITY. ❑ If checked, the CONTRACTOR shall comply with all of the reporting requirements of the Political Reform Act and the National City Conflict of Interest Code. Specifically, the CONTRACTOR shall file a Statement of Economic Interests with the City Clerk of the City of National City in a timely manner on forms which the CONTRACTOR shall obtain from the City Clerk. 8 Revised August 2003 The CONTRACTOR shall be strictly liable to the CITY for all damages, costs or expenses the CITY may suffer by virtue of any violation of this Paragraph 21 by the CONTRACTOR. 22. MISCELLANEOUS PROVISIONS. A. Computation of Time Periods. If any date or time period provided for in this Agreement is or ends on a Saturday, Sunday or federal, state or legal holiday, then such date shall automatically be extended until 5:00 p.m. Pacific Time of the next day which is not a Saturday, Sunday or federal, state or legal holiday. B. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute but one and the same instrument. C. Captions. Any captions to, or headings of, the sections or subsections of this Agreement are solely for the convenience of the parties hereto, are not a part of this Agreement, and shall not be used for the interpretation or determination of the validity of this Agreement or any provision hereof. D. No Obligations to Third Parties. Except as otherwise expressly provided herein, the execution and delivery of this Agreement shall not be deemed to confer any rights upon, or obligate any of the parties hereto, to any person or entity other than the parties hereto. E. Exhibits and Schedules. The Exhibits and Schedules attached hereto are hereby incorporated herein by this reference for all purposes. F. Amendment to this Agreement. The terms of this Agreement may not be modified or amended except by an instrument in writing executed by each of the parties hereto. G. Waiver. The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof. H. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. I. Entire Agreement. This Agreement supersedes any prior agree- ments, negotiations and communications, oral or written, and contains the entire agreement between the parties as to the subject matter hereof. No subsequent agreement, representation, or promise made by either party hereto, or by or to an employee, officer, agent or representative of any party hereto shall be of any effect unless it is in writing and executed by the party to be bound thereby. J. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the parties hereto. K. Construction. The parties acknowledge and agree that (i) each party is of equal bargaining strength, (ii) each party has actively participated in the drafting, preparation and negotiation of this Agreement, (iii) each such party has consulted with or has had the opportunity to consult with its own, independent counsel and such other professional advisors as such party has deemed appropriate, relative to any and all matters contemplated under this Agreement, (iv) each party and such party's counsel and advisors have reviewed this Agreement, (v) each party has agreed to enter into this Agreement following such review and the rendering of such advice, 9 Revised August 2003 and (vi) any rule or construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Agreement, or any portions hereof, or any amendments hereto. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first above written. CITY OF NATIONAL CITY By: Nick Inzu APPROVED AS TO FORM: George H. Eiser, III City Attorney (Two signatures required for a corporation) By: (Name) (Title) Y. --_ (Name) \1J e (Title) 10 Revised August 2003 Ms. Kathleen Trees Building Official City of National City 1243 National City Blvd National City, CA 91950 Dear Ms. Trees: MAXIMUS HELPING GOVERNMENT SERVE THE PEOPLE` December 12, 2003 I am pleased to present this proposal for a cost of services/user fee analysis to the city of National City. In the current fiscal climate it is very important that local governments have a complete understanding of their cost to provide services to their citizens. This knowledge will allow the city council to knowledgeably set user fee cost recovery levels. This proposal includes a complete cost allocation plan and user fee analysis. The cost plan is important as it establishes the overhead component for the fee structure. It also provides for cost recapture against state and federal grant programs: SB 90, CDBG, etc. The user fee component includes our NEXUS building fee methodology, a structure re- cently adopted by the city of San Diego. MAXIMUS fees studies provide our clients with user fee information that speaks to both current fees, and potential new fees. Perhaps most importantly, with our decades of ex- perience, we have been extremely successful in helping our clients implement the studies, a true test of a consulting engagement. A distinct advantage in engaging our firm to provide the proposed cost of service studies is our ability to couple local expertise with national resources. Our California team has been on the cutting edge in delivering new and effective management tools to local gov- ernment: performance -based management analysis, revenue alternative strategies, and most recently a legally defensible building and safety fee structure. The city is a current client of our firm, and we appreciate the valued relationship over the past years. We are available to meet with you and the city manager at your convenience to modify the following proposal to meet any specific needs of the city. I will send under separate cover a hard copy of this proposal, and an example of a cost plan -fee study. Very truly yours, Richard Pearl Senior Vice President 4320 AUBURN BLVD., SUITE 2000 SACRAMENTO, CA 95841 1916.485.8102 1916.485.0111 FAX I WWW.MAXIMUS.COM Cost of Service Proposal City of National City SECTION I EXECUTIVE SUMMARY MAXIMUS is pleased to present this proposal to the city of National City. MAXIMUS is the nation's, and California's leading provider of cost and revenue services to local gov- ernment. We have gained our position of leadership through "Delivery of a Superior Product at a Fair Price, for Today's Project...and Tomorrow's Service." We understand the importance of this project to the city, and will do everything in our power to provide a sound document, one that will be accepted by the organization and the community as bal- anced, realistic, and valuable. Fee Study Benefits: 1. Ensure fairness & equity 2. Legal support 3. Knowledge for management decisions Based on our years of user fee services to local governments, we have come to recognize and understand the myriad motivations for cities to engage in a study of their costs, both indirect and service -related (fees). Among the many reasons are the desire to maximize revenues, ensure fairness and equity, protect the city from litigation, and a general goal of understanding the true cost of services to make quality management decisions. By virtue of this study, the city of National City is being pro- active in its review and analysis of existing and potential fees. The results of this study will allow the city to better understand the true cost of providing city services, so it can ensure appropriate fee levels and desired cost recovery. We understand that the city's existing fee structure has not been modified for some time. This situation normally results in several important circumstances related to revenue col- lection and maximization: • The increased cost of providing services over time, without a corresponding increase in fees, typically causes under -recovery of costs. Over a significant period of time, fee -related services tend to exceed the growth of the general CPI and other common inflationary factors (although these factors may be applicable over the short-term). • As time passes, the processes involved with city service delivery change, which re- sults in outdated cost distribution to the fee -related services. • Contributions to service delivery by other departments, offices, and programs, tend to change, and the cost associated with those contributions becomes unknown or is omit- ted in the fee determinations. • Finally, outdated methodologies or assumptions may also cause the city to inadver- tently overcharge for certain types of services (building and safety fees are most common). This situation contravenes the traditional government concept of charging only up to the full cost of the service provided. State law and official opinions are quite clear that a governmental jurisdiction cannot charge more than the reasonable cost of providing the service. 2 Cost of Service Proposal City of National City The factors described above will cause a fee schedule to become obsolete and prevent a jurisdiction from realizing its true revenue potential. MAXIMUS has been providing local governments with cost of service analysis for over 25 years. We have worked with all 58 California counties and over 200 California cities and special districts. Since 1983, we have performed over 100 user fee studies. We are excited for the potential opportunity to serve the city of National City. The detailed cost information resulting from the study can help management make more informed and beneficial decisions regarding specific programs and services. Furthermore, refined fees based on the actual cost of providing the services can help citizens better understand and appreciate the fees they pay to their government. Benefits Of The Study Local governments are funded from a variety of sources, the primary sources being taxes, subventions, fees, special charges, fines, and grants. As the traditional provider of basic services, cities are constantly struggling with securing sufficient funding to pay for the services expected/demanded/sought after by the citizenry. Many local government ser- vices are "global" in nature (e.g., police and fire protection, open space, etc.). Other ser- vices benefit a particular segment of the population, most often providing a direct mone- tary benefit to the recipient. It is in this latter group that subsidy and recovery issues are brought to the fore. Given the "sum -sufficient" nature of government financing, un- recovered monies must be offset by a decrease in available funding for other public good activities. Users of services - where they get a specific advantage - should pay for the cost of that service It is generally accepted that recovery of costs should be in direct proportion to the individual/specific gain for services. This means that if a developer wants to rezone farm land for a housing development, the city may not want to charge that business a fee less than full cost, since to do otherwise would require a subsidy for other services that must be made up by the general citizenry who doesn't share in the particular benefit. Where new development causes an increase in infrastructure requirements, that increase should logi- cally be shared pro rata with the existing area proportionate to the degree that the new de- velopment benefits from the infrastructure. Conversely, a recreation program could logi- cally be heavily subsidized from the general tax base in order to promote the overall well being of the general public, or to achieve specific socio-economic objectives. The goal of the cost of service study is to create an empirical basis to fairly and equitably allocate costs to the users of specific services. Once this is accomplished, the next step is to determine the rate of recov- ery/subsidy, which is a decision reserved for the legislative body — in this To subsidize, or not to subsidize: that is the question... or is it bet- ter to suffer the slings & arrows of outra- geous revenue short- falls 3 Cost of Service Proposal City of National City case the city council. It is they who have to balance fiscal resources and service delivery. An experienced consulting firm can provide not only the numerical data, but can add per- spective and offer experience with other jurisdictions to the deliberations. In addition to the equity issues noted above, a cost of service study will assure the city that it is in compliance with state law. Legally (state constitution, various statutes, the at- torney general), a governmental jurisdiction cannot charge more for a service than it costs to provide that service. By determining the full cost of each fee, the city council can be comfortable in the fact that if it wishes not to subsidize an activity, the full cost fee it sets will be in compliance with the provisions of the law. Finally, a cost of service analysis invariably has the effect of increasing revenue to the general fund. As experts in cost determination, a goal of the study is to maximize poten- tial revenue...within the bounds of proper and defensible accounting treatments A. GENERAL QUALIFICATIONS The Cost Services Division of MAXIMUS originally known as David M. Griffith and Associates, Ltd., (DMG) was founded in 1976. In May 1998, DMG merged with MAXIMUS, Inc. and the combined firm is now recognized as the nation's leading consulting organization pro- viding a broad range of management, financial, operational, and human resource consulting services to local and state governments. Our clients include over 2,000 governments, universities, and other public sector and not -for -profit organizations. Consultants of MAXIMUS have been called upon to examine virtually every facet of local government operations. Major public sector services offered by our firm include: • Cost allocation and indirect overhead rates • Cost of Service analysis (activity -based costing, fee for service, user fee, etc.) • GASB 34 Implementation • Revenue enhancement (impact fee analysis, TOT audits, revenue maximization) • Operations improvement and performance measurement • Fleet management consulting • Franchise fee/transient occupancy tax audits • State Controller's Report preparation • State mandated cost recovery. The Cost Services Division's Western Region is headquartered in Sacramento, California, with additional offices in Oakland, Irvine, Seattle, and Denver. There are forty-five pro- fessionals in the Region. Our goal is to provide the best possible service in order to meet the city's needs while maintaining the professional integrity of the product. We built our cost of service practice on the foundation that we continue to be the most knowledgeable and technically advanced company that provides these services. We not only have exten- 4 Cost of Service Proposal City of National City sive experience in cost plan, user fee, and development impact fee studies, but also have been leaders in the development of software specific to these applications. We believe that we set the standard in activity based cost analysis for local agencies. MAXIMUS is unquestionably a large firm. The size and breadth of our firm is advanta- geous to our clients because of our capability to provide virtually seamless consulting ser- vice covering many disciplines. The firm, however, has never forgotten its roots or the reasons for its continued growth, which is based on individualized service, quickly and professionally provided. B. STAFFING With the highly experienced team MAXIMUS brings to this project, city staff require- ments are held to a minimum. Obviously, however, there is information only city staff can provide. Another necessary commitment is the review and critique of data, assump- tions, and recommendations. While we cannot project a certain number of hour's com- mitment, we can assure the city it will not be burdensome. The city should anticipate 3-5 hours for any one person associated with the data collections. Senior staff will most likely require more hours due to project and data review. C. DELIVERABLE PRODUCTS MAXIMUS will provide the city of National City with the following: ➢ User Fee Study — a study documenting all current and potential fee activities for the following city cost centers: Building, Engineering, Planning, Code Enforce- ment, police, fire, and recreation. ➢ Fee Schedule — a consolidated schedule of all fees derived from the fee study, with our recommendations for fee adjustments. ➢ Comparison — A comparison of the city of National City's fees to other surround- ing jurisdictions. Please note that the comparison will be general in nature since it is very difficult to "line-up" direct "apples -to -apples" fee comparisons (cities call the same service by different names, or group fees, etc. We will, however, be able to provide a range for comparison analysis. 5 Cost of Service Proposal City of National City SECTION II USER FEE STUDY PROPOSAL A. USER FEE ANALYSIS - SCOPE MAXIMUS will identify and calculate the full cost of all fees, both current and potential, in the planning, building & safety, engineering, police, and fire operations. At the con- clusion of the above analysis we will then prepare a report of our findings and present fee recovery recommendations. The report will include current fees and recovery levels as a percentage of full costs, full costs, recommended fees, and remaining subsidy. Finally, we will assist the city with a fee implementation strategy. We will create a central services cost allocation plan to determine overhead costs to cre- ate full cost values within each operation, as well as to charge any appropriate state or federal grants. User Fee Analysis User fee studies: current & potential fee recovery areas; ad- dresses equity issues The purpose of a user fee study is to determine the full cost of services offered by the agency for which user fees are currently being charged or could be charged. The full cost is then compared to current revenues to determine the amount of subsidy (or occasionally, overcharge). With this knowledge decisions can be made concerning appropriate fee ad- justments. MAXIMUS can assist in understanding economic issues such as elasticity of demand and will provide information on what others are charging. However, in the final analysis, the actual decision to increase or decrease fees is a local decision. The underlying rational to charge full cost for user fees is simply this: the city is provid- ing a distinct service or product to a business or individual who is gaining a monetary, emotional, or recreational benefit. Equity says that others who do not participate in that benefit should not subsidize individuals or businesses. For example, why should a long- term resident living downtown contribute towards a subsidy to a developer opening up a new subdivision on the edge of town? Historically, subsidy issues were not stressed since there were alternative tax avenues available to fund government services. This is no longer the case. We recognize, however, that there are circumstances and programs, which probably justify a subsidy, i.e. youth, senior, and disadvantaged recreation programs, certain classifications of code enforcement, library services, etc. With this in mind, MAXIMUS has developed a 6 Cost of Service Proposal City of National City service/benefiting agent matrix to help place the subsidy issue in proper context. The matrix with typical fee issues is first shown in conceptual form then in detail for selected fees. Please note that the table includes only fee -oriented activities. MAXIMUS believes that construction of the matrix is important in generating acceptance of fee for service cost recovery levels by the city council and community/business groups. Through this visual perspective the rationale for cost recovery becomes clear and defensible. Following the matrix generic presentation is a display of how a jurisdiction's specific fees could be placed into the general matrix. (TABLE FOLLOWS) 7 Cost of Service Proposal City of National City PUBLIC POLICYMATRIX Primarily the comm. w/ some indiv . benefit TYPE OF SVC. Primarily the indiv. w/ some comm. benefit Public TAX V. FEES i Public/Private Individual Benefit Private/Public Private 8 100% Taxes Mostly taxes & some fees Mostly fees & some taxes 100% Fees Cost of Service Proposal City of National City DEPARTMENT/FEE PUBLIC POLICY FEE MATRIX: FEE: Priv/Individua Mostly Private/ Mostly Public/ Public 1 Oriented: Some Public: Some Private: Oriented: CURR. FULL RECM "/" RECM %n RECM %o RECM FEE COST FEE Subs. FEE Subs. FEE Subs. FEE Subs. PLANNING Conditional Use Permit 1,500 2,500 2,500 0% Lot Line Adjustment 850 1,250 1,250 0% Tentative Map 2,500 4,000 4,000 0% Design Review 500 1,000 800 20% Environ. Impact Review 3,000 6,000 6,000 0% Appeal 25 800 100 90% General Plan Update 0 125,000 0 100% CODE ENFORCEMENT Apartments (>4) 0 1,500 1,500 0% Private Residences 0 300 200 33% Restaurants 750 1,000 1,000 0% ENGINEERING Street Cut 35 90 90 0% Tentative Map 850 1,225 1,225 0% Public Right of Way 0 600 300 50% Plan Check 1,000 1,400 1,400 0% RECREATION Adult Sports Tennis 2 5 4 20% Dance Classes 30 40 35 13% Trips 30 60 40 33% Youth/Seniors Tennis 2 5 3 40% Trips 20 40 25 37% Golf 10 30 25 17% 9 Cost of Service Proposal City of National City Our fee analysis for the planning, engineering, and code enforcement operations is based on a standard -cost methodology, including all direct and indirect costs. The fees are de- termined based on a build-up of hours and resultant cost derived from each appropriate worker's input into the service area. Specifically, each staff member is asked how much time he/she spends on each service area. Costs per hour for salary costs are developed and augmented by all appropriate support costs. This format has been used in nearly 100 user fee studies and is totally accepted by city staffs and community groups. Building & Safety Fees Our approach for building and safety fees are somewhat different, due to both historical precedent and current legal actions. Prior to 2000, all of our firm's user fee analysis of building departments were constructed on a cost - revenue match -up basis, i.e. the calculation would be at the gross service level (industrial, commercial, residential, alterations plan checking and/or inspection services). We then would recommend that the UBC and trades tables be adjusted based on the revenue/cost percentage variance. This method was used in the absence of a more definitive model acceptable to the building industry. For the past several years, many California jurisdictions have been facing a controversy in building and safety fee setting. In the early 1990's, a special interest group began com- bating local governments over what was termed "excessive fees." The challengers/critics of local government fees have asserted that the traditional UBC and valuation rate tables traditionally used by building and safety departments to set fees could not be statistically supported, which results in fees unrelated to actual cost. NEXUS: legally defensible, cost based In response to the needs of local government and to help them protect themselves from successful fee challenges, MAXIMUS developed a new fee analysis model for building and safety fees. This new model, NEXUS, has similarities to our standard fee analysis model, but we tailored it to address the particular nature of this operation. Essentially, we create a cost per square foot of occupancy -type, based on time spent per activity. We address miscellaneous fees in the same fashion. We believe this meets the standard called for in the Attorney General's opinion 92-506, which stated that full cost recovery is appropriate as long as there is a "nexus" or linkage between the services provided and the fees charged. The resulting schedule is easy to understand by the community and easy to administer by the building department. All of our new clients are accepting the NEXUS methodology for their fee studies. More recently, we have added a revenue and staffing forecasting module to the program which, when estimated activity unit volume can be projected generates future staffing levels and revenue. This can be important in budget preparation. The NEXUS model has been implemented in: San Diego (city), Chico, Vallejo, Belmont, Malibu, and is in the process of being adopted or developed for: Orange County, Napa 10 Cost of Service Proposal City of National City County, Butte County, and the cities of Lancaster, Livermore, Banning, Benica, Santa Maria, Woodland, Hercules, and Ventura. B. OVERVIEW OF OUR APPROACH There are five aspects of our approach, which we believe are most significant. 1. Interactive Work Program- The MAXIMUS approach is to work closely with man- agement and staff to produce an analysis of cost of services and revenues that is thor- oughly understood and verified by city staff. To this end, we repeatedly review our analysis and findings with staff, elicit their input, and draw upon their intimate knowledge of city operations. This is not to say that there may not be a divergence of opinion at the recommendation stage. Our goal, however, is to provide the client with the best information and statistics possible. Final implementation decisions, of course, remain with management and city council. 2. Experienced Team - MAXIMUS has been in existence nationally since 1975 and in California since 1979. Its Western Region management team has decades of California experience. Most all MAXIMUS consultants have more than five years of experience in achieving the goals the City wishes to accomplish with this project. 3. Proven Methodology - MAXIMUS has produced thousands of cost plans for all sizes of cities and counties. We are the recognized experts in this field, both locally and nationally. We have produced nearly 100 user fee studies in California, and an equal number in other states. Our systems have been time -tested. Of critical importance, however, is that our consultants are proven in their particular fields of experience. We get the job done, to our client's complete satisfaction. 4. Computerized Support - MAXIMUS will utilize its user fee model (MAXFEE), which has been developed specifically to determine the full costs of governmental services. 5. Realistic Pricing - MAXIMUS's strategy has always been to provide exceptional service at a fair price. We are in the California marketplace for the long-term. A client well served will return for future engagements. 11 Cost of Service Proposal City of National City C. WORK PLAN MAXIMUS will initially calculate a cost allocation plan for overhead cost determination. We will then separate all costs and revenues within the various fee -related departments, and other appropriate functions into tax -based and fee -based groupings. Within the latter, we will then identify and calculate the full cost of all existing fees within the departments under study. Additionally, we will calculate the full cost of potential fees for these de- partments based on experience gained from previous engagements. At the conclusion of the above analysis we will prepare a report of our findings and pre- sent fee recovery recommendations. The report will include current fees, recovery levels as a percentage of full costs, full costs, recommended fees, and remaining subsidy. We can provide a fee schedule and plan, as well as assist the city with an implementation strategy. The following section describes the specific tasks that will be performed in order to ac- complish the goals of this study. Specific Tasks to Be Performed Task 1: Project Initiation In our first task we will carry out those activities required to begin the engagement in a manner that will ensure timely and successful project completion. The specific activities include the following: Meet with the Finance Director and other appropriate city representatives to discuss the goals, objectives, and overall scope of the engagement. Our designated Project Manager will represent MAXIMUS in this initial meeting. It is important that individuals who will be most directly concerned with the ultimate engagement results represent the city. Based upon this meeting, we will finalize the scope of the engagement. Any significant variations will be documented in writing and provided to the city. Task 2: Develop Schedule of Service Areas to Be Analyzed MAXIMUS will develop a schedule of current and potential fee -for -service activities. Our experience in working with many other cities will aid in identifying potential fee ser- vices. Task 3: Develop Direct Service Costs 12 Cost of Service Proposal City of National City For each fee -for -service activity (or a non -revenue producing service for which a fee could be imposed), MAXIMUS will develop the direct costs of providing the service. Direct costs generally include the salaries and benefits of those individuals actually per- forming the service and any services and supplies that can be directly attributable to the service. To the extent possible, we identify as many costs as possible as direct and treat the appropriate remaining costs as indirect. Based upon our extensive experience, we know that most supervisory and service and supply costs will be treated as indirect costs. In any case, a hallmark of our approach is a fully substantiated cost analysis. For building -related fees, we will identify service costs based on the NEXUS model. In this instance, we would identify productive hourly costs on an occupancy basis (residen- tial dwelling, restaurant, retail store, commercial high rise, etc.) and calculate the total cost on a square footage basis. This methodology would replace the UBC rate tables as a charging mechanism. We believe this methodology produces a stronger nexus between permit/plan check fees and costs. While NEXUS is not a required format, i.e. a revenue/cost match up approach could be taken, it is less defensible and would need to be updated more frequently to adhere to the Attorney General's Opinion 92-506. All of our recent user fee study clients have opted for NEXUS. If the city wishes to use the revenue -cost match up, we will, of course, use that approach. Task 4: Distribute Department/Program Overhead Costs MAXIMUS will distribute indirect costs to each service or activity. In general, these costs reflect supervision occurring at the department/division/program level and associated ser- vices and supplies. Our approach to this distribution depends on the complexity of the governmental unit being analyzed. Task 5: Match Service Revenue with Service Costs We will match the total cost of each service with the fee revenue received from each ser- vice. In its basic form, the resulting table illustrates the total tax subsidy or the revenue surplus generated by each service. This table provides a departure point for use in fee discussions. Task 6: Review Cost, Revenue, And Subsidies With Departments The cost, revenue, and subsidy analyses developed by MAXIMUS are based on informa- tion supplied by city departments. In Task 6, we return to each department to review the preliminary results. We believe this to be an extremely important step, as it is the de- partments that must ultimately be comfortable with our cost analysis and methods. Based upon the departmental reviews, we make appropriate changes. 13 Cost of Service Proposal City of Na anal City Task 7: Review Cost And Revenue Relationship With City Management Once we reach consensus with departments that the analysis portrays reality, we will re- view results with management. Cities usually find it desirable to eliminate subsidies, but there are issues to consider before making fee adjustments: ■ It may not be politically feasible to raise a particular fee. ■ It may not be legal to raise a particular fee. • An undesirable social consequence may result from raising a particular fee (e.g., a group may be excluded from a desired service). • An undesirable economic consequence may result (e.g., a fee increase may result in less revenue due to decreasing demand). Based upon these discussions and our experience, we will formulate appropriate recom- mendations. Task 8: Revise Analysis/Recommendations Based on our discussions with senior management, we will make appropriate revisions to the study and/or analysis. Task 9: Develop Implementation Strategy A principal objective of the firm's approach to all of our engagements is to facilitate posi- tive change. We will work with senior staff to develop an appropriate and effective im- plementation strategy that will reflect the city of National City's needs. We will also work with the city to address on -going maintenance of the study results. Task 10: Prepare and Provide Draft Report The project report will be presented to department heads in draft form. This step offers an opportunity to discuss individual recommendations in detail. Based upon these dis- cussions, we will modify the draft report as required and submit it in final form. Task 11: Present Final Report The product from the proposed engagement is often controversial. We believe it is ex- tremely important that all parties fully understand the basis for and rationale behind the project findings and recommendations. To this end, we are committed to providing all in- terested parties with an understanding of our approach and results. This typically re- quires: 14 Cost of Service Proposal City of National City • A presentation to management with less emphasis on detailed methodology, and greater emphasis on the impact of recommendations and implementation strategies. • Engagement presentations to the city council to provide an overview of the project and its findings and to answer any questions concerning the project. Task 12: Project Close Out At the end of the project, we will perform those activities necessary to ensure successful project completion, including: ■ Answer remaining questions and explain outstanding issues, and ■ Discuss update requirements and strategies. Work plan Flexibility Tasks 1-12 discussed above summarize the activities necessary to accomplish most cost plan and fee study projects. However, we remain flexible throughout the engagement, which allows us to modify this approach to meet the unique circumstances experienced by each client. Consequently, if this work plan does not specifically meet your needs, we will work with you to revise our approach to fully accomplish the goals of this project. 15 Cost of Service Proposal City of National City D. PREVIOUS COST PLAN/USER FEE EXPERIENCE Following is a list of our California cost plan and user fee studies: Cost and Fee Studies - Cities Alameda Hercules Anaheim Hermosa Beach Beverly Hills Lancaster Brisbane La Quinta Burbank Livermore Camarillo Lompoc Campbell Long Beach Carlsbad Menlo Park Culver City Millbrae Cupertino Mountain View Dana Point Oakland Emeryville Oceanside Fairfield Ontario Fresno Palm Springs Hayward Palmdale Mission Viejo San Jacinto Escondido Irvine Blythe Indian Wells Butte Napa Orange Pasadena Petaluma Port Hueneme R. Cucamonga Redding Redlands Redondo Beach Redwood City Rialto Ridgecrest Riverside Sacramento San Fernando San Francisco San Jose Vista San Mateo San Carlos User Fee Studies - Counties Lassen Santa Cruz Nevada Tuolumne Santa Barbara Santa Clara Santa Monica Santa Paula South Gate So. San Fran. Stockton Suisun City National City Union City Vacaville Ventura Watsonville Visalia Woodland Whittier Temecula Thousand Oaks Shasta Yuba E. REFERENCES Our firm currently has more cities and counties under contract in the United States to pro- vide cost plan services than all other firms combined. We believe we have achieved this position of leadership through: • Comprehensive responsibility for establishing an indirect cost recovery system • Guaranteed approval of our plans by federal and state representatives • Thorough knowledge of regulations pertaining to cost recovery and working relationships developed in government at all levels. 16 Cost of Service Proposal City of National City Any of our clients in California or elsewhere may be contacted concerning our services. Specific governmental references are listed below: City of Chico: Mr. Tony Baptiste Community Dev. Dir. (530) 895-4872 City of San Diego Mr. Dan Culp Sr. Management Analyst 1222 First Avenue, MS401 San Diego, CA 92101 (619) 446-5261 City of Fresno Ms. Ruth Quinto Controller (559) 498-4757 City of Vallejo Mr. Wm. Miller Asst. Finance Director 555 Santa Clara Ave. Vallejo, CA 94590 (707) 648-4343 Concerning our knowledge of building fee structure and current litigation, please contact Mr. Jeff Dunn, partner, Best, Best & Krieger, LLC. (949) 260-0962. F. STAFFING The preparation of central service cost allocation plans and comprehensive user fee studies is a primary MAXIMUS service to local government. MAXIMUS is able to assign a team of knowledgeable, experienced consultants to the engagement. Specific areas of expertise of our proposed project team include: ■ Governmental cost accounting • Knowledge of governmental service delivery within each of the departments to be analyzed • User fee service structure and service type in other California city governments • Development of presentations for City Councils and the general public. Our project organization and project team members are described below. Richard Pearl — Sr. Vice President, Western Region Mr. Pearl will be the Project Director for the engagement, responsible for overall project management and official presentations. Mr. Pearl has been with the firm for 27 years and has participated in scores of user fee studies and hundreds of cost allocation plan analysis over the years. He is an expert on cost of service and revenue enhancement opportunities. 17 Cost of Service Proposal City of National City PROJECT MANAGER - The project manager is responsible for the day-to-day supervision of the engagement. The project manager will participate directly in departmental interviews, fee identification, cost development and report preparation. The project manager will be responsible for apprising the City of progress on an on -going basis. Our Project Manager is Mr. Chad Wohlford. Mr. Wohlford has over 12 years of professional analytical, management, and consulting experience in state, local, and federal government finance and operations. As a MAXIMUS consultant, Mr. Wohlford has managed various revenue projects, gov- ernment cost allocation plans, government process improvement projects, and govern- ment performance measurement projects. He has developed and analyzed costs for spe- cific government programs, gathered and analyzed utilization data, studied operations, and developed methodologies to appropriately allocate costs among programs. Examples of his past and current California clients include the counties of Napa, Butte, Sacramento, Merced, Orange, San Mateo County, and San Diego; the cities of San Diego, Chico, Plea- santon, Santa Rosa, Hawthorne, Pasadena, La Palma, El Segundo, Santa Clara, San Lean- dro, and Clovis; the State of California, Port of San Francisco, Irvine, South Bay Re- gional Communications Authority, and Rincon Valley Fire Protection District. As Senior Administrative Analyst for the Sacramento County Department of Heath and Human Services, Mr. Wohlford served as the principal budget and contracts administrator and administrative analyst. Analytical Staff - MAXIMUS will utilize additional consultant and senior consultant staff in data gathering and information processing. Potential staff include: Mike Adams, Dawn Steele, and Nicole Kissam). G. PROJECT COST AND SCHEDULE 1. Proposed Cost MAXIMUS will complete the proposed tasks and deliverable products (cost plan and user fee study for the planning, building, engineering, police, fire, and recreation depart- ments) for a fixed fee of $45,000 plus a maximum of $2,000 in expenses. MAXIMUS always conducts user fee studies under a "fixed fee" arrangement. In this manner, our clients know the entire cost of the project prior to the commencement of the engagement. Furthermore, this approach eliminates the perception or potential perception that our determination of costs and fees was influenced by possible increases to our own bottom line (as could be the case of a contingency fee basis). This approach enhances the credibility of the study outcomes (new fees) with the city departments, your customers/fee payers, and the general citizenry. 18 Cost of Service Proposal City of National City All of the services we propose to the city of National City are included in our proposed price, including consultant labor, expenses, travel, and associated project costs. Unless the city requests additional services or materially changes the scope of the project, our price will not change. If the city requests additional services, we will mutually agree upon the associated project cost before beginning work on the additional tasks. In short, we will not perform additional work or charge additional fees without the city's permis- sion. H. COST NOTES With the current economic constraints placed on our clients, we have taken special efforts to present the most cost/effective pricing plan possible. Our proposal price assumes that the study will not require more than two revisions to any component analysis, i.e. an original run and two subsequent re -runs to fine tune the analysis. It also assumes that we will not we devote more than 32 hours of professional time to this project after delivery of our final draft report for further editing, research, meetings or work of any kind related to this project. Should we need to devote time in excess of 32 hours after delivery of the draft, we would charge our additional services at the rates noted below. It is very rare for us to charge a client for additional services. This provision is an incen- tive to the city to bring the project to the implementation phase and a protection for our firm's promise to live within a fixed fee. Actual time spent after delivery of the draft is unlikely to exceed 24 hours. MAXIMUS current professional service rates are: vice president - $220/hour; Director - $175/hour; manager - $125/hour; senior consultant - $105/hour; consultant - $85/hour 1. Project Payment Schedule The city would be invoiced based on the following deliverable completion: Milestone % of Total Cost Draft cost of service analysis (data) 60% Draft fee report 20% Final fee/operations analysis 10% Completion of all services 10% TOTAL 100% 2. Project Schedule 19 Cost of Service Proposal City of National City The city of National City proposed cost of services study constitutes a complex set of op- erations. A MAXIMUS cost of services study typically entails several iterations (reviews) by staff until both staff and MAXIMUS professionals are confident that the numbers pre- sented represent the actual cost of providing the services. In our experience, and with good city cooperation, the process will take approximately two and one half to three months to complete the factual data process, (i.e. delivery of the "full cost" numbers). The next phase, acceptance of the draft and final report, and presentation to the city coun- cil, can take another one to three months, depending on local timing. CONCLUSION We are excited for the potential opportunity to serve the city of National City. Our com- pany motto is "Helping Government Serve the People." Based on our experience with other cities and counties throughout the West, we believe that the city and its citizens would reap many benefits from this study. The detailed cost information resulting from the study can help management make more informed and beneficial decisions regarding specific programs and services. Furthermore, refined fees based on the actual cost of providing the services can help citizens better understand and appreciate the fees they pay to their government. 20 City of National City, California COUNCIL AGENDA STATEMENT MEETING DATE January 6, 2004 AGENDA ITEM NO. 3 ITEM TITLE A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT WITH MAXIMUS TO PROVIDE THE CITY WITH COST OF SERVICES/USER FEE ANALYSIS Kathleen Trees 4213 PREPARED BY ZZ��o. _ ���/,,,,_ DEPARTMENT EXPLANATION '�-GP� ���� Building & Safety To avoid large user fee increases, the City Council has previously recommended more frequent, modest user fee increases to keep pace with inflation. The last City user fee review was conducted in 2001. Due to increases in labor, materials and supplies, some of the current user fees are not sufficient to cover the cost of City services. In addition, new services have been added in which the fees have not been established. In the past, the City staff in each department has calculated their cost of services. In recent years, however, cities have been challenged in the courts on their development fees. With this in mind, staff decided to contract with a consultant that is an expert in calculating fees that can be defended in the courts. Several proposals were received and MAXIMUS was chosen based on their experience and superior method of calculating building department fees. See attached Executive Summary and proposal prepared by MAXIMUS for more information. Environmental Review ✓ N/A Financial Statement $47,000 to be paid out of Unreserved Fund Balance. Account No. 001' 'A05 i2`19-G,0 STAFF RECOMMENDATION Adopt the Resolution. BOARD / COMMISSION RECOMMENDATION N/A ATTACHMENTS ( Listed Below) Resolution No. 2004-1 Resolution Contract Executive Summary A-200 (9/80) RESOLUTION NO. 2004 —1 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT WITH MAXIMUS TO PROVIDE THE CITY WITH COST OF SERVICES FEE ANALYSIS WHEREAS, the City desires to employ a consultant to provide a cost of services/user fee analysis; and WHEREAS, the City has determined that Maximus is a program management and operations consultant and is qualified by experience and ability to perform the services desired by the City, and Maximus is willing to perform such services. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby authorizes the Mayor to execute on behalf of the City an Agreement with Maximus to provide a cost of services/user fee analysis. Said Agreement is on file in the office of the City Clerk. PASSED and ADOPTED this 6th day of January, 2004. ATTEST: Mich el Dalla, Ci Clerk APPROVED AS TO FORM: George H. Eiser, III City Attorney Passed and adopted by the Council of the City of National City, California, on January 6, 2004, by the following vote, to -wit: Ayes: Councilmembers Inzunza, Morrison, Natividad, Parra, Ungab. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: NICK INZUNZA Mayor of the City of National City, California lerk of the City National City, California By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2004-1 of the City of National City, California, passed and adopted by the Council of said City on January 6, 2004. City Clerk of the City of National City, California By: Deputy