HomeMy WebLinkAboutContracts & Agreements_41-2005_CCv0001.pdf AGREEMENT TO FURNISH CONSULTING SERVICES
This Agreement is made and entered into this 15th day of March, 2005 by and between
the City of Redlands, a municipal corporation (hereinafter, -City") and Public Resource
Management Group, LLC, (hercinafter, "C011SUltant").
In Consideration 017 the Mutual promises contained herein, City and Consultant agree as
follows:
ARTICLE I -_ENGAGEMENT OF CONSULTANT
1.1 City hereby retains Consultant to perform professional Consulting services relating to the
preparation of all Overhead Cost Allocation Plan and Comprehensive User Fee and Rate
Study ("Services").
1.2 The Services shall be performed by COIISI-Iltallt in a professional manner and Consultant
represents that it has the skill anti professional expertise necessary to provide the Services
to City at a level of competency presently maintained by other practicing professional
consultants in the Industry providing like and similar types of services.
ARTICLE 2 - SERVICES OF CONSULTANT
2.1 The Services which Consultant shall perform are more particularly described in
Consultant's Attachment "A", a copy of which is attached hereto and incorporated herein
by this reference.
Consultant shall comply with applicable Federal, State and local laws in connection with
its performance of the Services including, but not limited to, applicable State Labor Code
requirements and the State's Fair Employment and Housing Act.
2.3 To ensure that City IS utilizing comprehensive overhead rates and accurately accounting
for the true cost of providing various services within City operations, Consultant shall:
A. Work with City staff to define the purpose, uses and goals for an overhead cost
allocation plan, ensuring that the development of' the plan will be both accurate
and appropriate for City's needs and in compliance with Generally Accepted
Accounting Principles (GAAP) arid the principles of OMB A-87 of treating costs
in an equitable and fair manner;
B. Consultant shall work with City staff in developing service provisions, cost
categories and allocation criteria for current and future programs;
C. Consultant shall provide a Draft Overhead Cost Allocation Plan and participate in
the presentation of the Plan to select City staff and City Council members.
Consultant will also provide documentation of comments and concerns expressed
by staff and Council in Connection with Consultant's performance of the Services:
and
D. COIISI.Iltant Shall prepare the Final Plan and provide five bound copies and one
unbound copy to City. Further, the Cost Allocation Plan shall be made available
to city In electronic tbrinat.
2.4 To ensure that City is able to adequately determine the true Cost of the Municipal Set-Vices
it provides and to determine the appropriate fees to charge to recover these costs
COIISLI]tant shall:
A. Conduct a comprehensive review of the City's fee and rate structure with the goal
of establishing a fee and rate structure that meets the needs of City and its
citizenry. Review of the documentation Supporting the current fee and rate
structures for all non-enterprise departments and services and the existing cost
allocation plan will be required to calculate the cost of services provided by the
City. A survey comparison of rates and fees with similar cities, for information
only, is required.
B. Provide a Draft Comprehensive User Fee and Rate Study and participate in the
presentation of it to City staff and City Council. Consultant will also provide
documentation of comments and concerns expressed by staff and Council in
connection with Consultant's performance of the Services.
C. Prepare the Final Study and provide five bound copies and one unbound copy to
City. The resulting fee Study shall be made available to City on diskette or in
electronic format for ease Of Updating the information in the future.
ARTICLE 3 - RESPONSIBILITIES OF CITY
3.I City shall make available to COIISLIltant, in a timely manner, complete and accurate
ninformation in City's possession that is relevant to the performance of the Services.
3.2 City will provide Consultant with access to City-owned property as required by
Consultant to perform the Services.
ARTICLE 4 - PERIOD OF SERVICE
4.1 Consultant shall complete the Services, In accordance with the performance schedule
attached hereto as Attachment "B." The parties agree that time is of the essence in
Consultant's performance of the Services.
ARTICLE 5 - PAYMENTS TO CONSULTANT
5.1 The total compensation for Consultant's performance of the Services shall not exceed
Fifty Thousand dollars ($ 50,000). A breakdown of these fees is shown on Attachment
T," entitled "Project Cost," and based upon the 1101.11-1v rates shown in Attachment "D."
entitled "Fee Schedule."
5,2 Consultant shall bill City within ten days following the end of each month by Submitting
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an nvoice Indicating the portion of the Services performed, who performed the Services
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and the COSt of such ServiCCS, including I , backup documentation. Payments by City to
Consultant shall be made within thirty (30) days after receipt and approval of
Consultant's invoice, by warrant payable to Consultant,
5.3 All notices, bills and payments shall be made in writing and may be given by personal
delivery or by mail, Notices, bills and payments sent by mall shall be addressed as
follows:
City
Tina KLIndig, Finance Director
Finance Department
City of Redlands
P.O. Box 3005
Redlands, CA 923713
Consultant
J. Bradley Wilkes, Managing Principal
Public Resource Management
1380 Lead Hill Blvd, Suite 106
Roseville, CA 95661
When so addressed, such notices shall be deemed given upon deposit in the United States
Mal I. Changes may be made in the names and addresses of the person to whom notices
and payments are to be given by giving notice pursuant to this paragraph.
ARTICLE 6 - INSURANCE AND INDEMNIFICATION
6.1 Consultant'-, In-,iming- to be Primary
All Insurance required by this Agreement shall be maintained by Consultant
during the term of this Agreement and shall be primary with respect to City and
non-contributing to any insurance
or Self insurance maintained by City.
Consultant shall not perform any Services unless and until all required insurance
listed below is obtained by Consultant. Consultant shall provide City with
Certificates of Insurance and endorsements evidencing Such insurance prior to
commencement of the Services. All insurance policies shall include a provision
prohibiting cancellation of the policy except upon thirty (30) days prior written
notice to City.
6.2 Workers Compensation and Emplovers Liabilitv
A- Consultant shall secure and maintain Worker's Compensation and
Liability er
Employ 's L
I i i _ insurance throughout the term of this Agreement in
dMOLIMS Which Meet SLItUtOrV I-eqUirefflelItS with all IiIISUrauCC carrier
acceptable to City.
B. City and Consultant expressly waive all 1_11)lItS to against
subrogation, each
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the other, their respective elected officials, officers and employees for
losses arising from the Services performed under this Agreement.
Consultant expressly waives Consultant's immunity for injuries to
Consultant's employees and agrees that the obligation to indernnify and
hold harmless provided flor in this Agreement extends to any claim
brought by or on behalf of any employee Of Consultant. This waiver is
Mutually negotiated by the parties. This waiver shall not apply to any
damage resulting from the sole negligence of City, its agents and
employees. To the extent any of the damages referenced herein were
caused by or resulted from the concurrent negligence of City, its agents or
employees, the obligations provided herein to indemnify, defend and hold
harmless are valid and enforceable only to the extent of the negligence of'
Consultant. Its officers, agents and employees.
63 Comprehensive General Liability Insurance. Consultant shall Secure and maintain
in force throughout the term of this Agreement comprehensive general liability
insurance with carriers acceptable to City. Minimum coverage of one million
dollars ($1,000,000) per occurrence and two million dollars ($2,000,000)
aggregate for public liability, property damage and personal injury is required.
Consultant shall obtain an endorsement that City shall be named as an additional
Insured.
6.4 Business Auto Liability Insurance. Consultant shall have business auto liability
coverage with minimum limits of one million ($1,000,000) per occurrence,
combined single limit for bodily injury liability and property damage liability.
This coverage shall include all Consultant owned vehicles used in connection
with Consultant's performance of the Services, hired and non-owned vehicles, and
employee non-ownership vehicles. Consultant shall obtain an endorsement that
City shall be named as an additional insured.
6.5 Hold Harmless and Indemnification. Consultant shall indemnify and hold
harmless City, its elected officials, officers and employees from and against any
and all actions, claims, demands, lawsuits, losses and liability for damages to
persons or property, including costs and attorneys' fees, that may be asserted or
claimed by any person, firm, entity, corporation, political Subdivision or other
organization arising out of; or in connection with, Consultant's negligent and/or
intentionally wrongful acts or omissions in performing the Services, but excluding
Such actions, claims, demands, lawsuits and liability for damages to persons or
property arising From the sole negIlLiCrIce or intentionally wrongful acts ofCity,
its elected officials, officers and employees or agents.
ARTICLE 7 - GENERAL CONSIDERATIONS
7.1 In the event any action is commenced to enforce or interpret any of the terms or
conditions of this Agreement the prevailing party shall, in addition to any costs
and other relief, be entitled to the recovcry of Its reasonable attorneys' fees.
7.2 All documents, records, drawings, designs, cost estimates, electronic data files,
databases and other documents developed by Consultant pursuant to this
Agreement shall become the property of City and shall be delivered to City upon
completion of the Services, or upon the request of City. Any reuse Of Such
clOCUITICrits and any use of incomplete documents will be at City's sole risk.
7.3 Consultant is for all purposes an independent contractor. Consultant shall Supply
all tools and instrumentalities required to perform the Services. All personnel
employed by Consultant are for its account only, and in no event shall Consultant
or any personnel retained by it be deemed to have been employed by City or
engaged by City for the account Of, or in behalf of, City'
7.4 Unless earlier terminated, as provided for below, this Agreement shall terminate
Upon completion and acceptance of the Services by City.
1.5 This Agreement may be terminated by either party, without cause, by providing
seven (7) days prior written notice to the other party (delivered by certified mail.,
return receipt requested).
/.6 This Agreement shall be governed by and construed in accordance with the laws
of the State of California.
7.7 If this Agreement is terminated by City, an adjustment to Consultant's
compensation shall be made, but no amount shall be allowed for anticipated profit
or unperformed Services, and any payment due Consultant at the time of
termination may be adjusted to the extent of any additional costs to City
occasioned by any adjudged default by Consultant.
7.8 Upon receipt of a termination notice from City, Consultant shall discontinue all
Services and provided City has fulfilled all of its financial obligations Linder this
Agreement except those in dispute, deliver or otherwise make available to City
copies (in both hard copy and electronic form, where applicable) of any data,
design calculations, drawings, specifications, reports, summaries and such other
information and documents that have been prepared or assembled by Consultant
in performing the Services.
7.9 Consultant shall maintain books evidencing, payroll costs and all expenses
associated with the Set-vices. Such books shall be available at all reasonable times
I'Or examination by City at the office 0t'(,'0IISL11tM1t.
7.10 This Agreement, including the exhibits incorporated herein by reference,
represents the entire agreement of the parties as to the matters contained herein,
and any prior negotiations, proposals and agreements relating to the subject matter
hereof are superseded by this Agreement. Any amendment to this Agreement
shall be in writing, approved by the City Council of City and Consultant.
7.11 This Agreement shall be governed by and construed in accordance with the laws
of the State of California.
IN WITNESS WHEREOF, duly authorized representatives of City and
Consultant have signed in confirmation of this Agreement.
CITY OF REDLANDS
Mayot" Susan Peppler
ATTEST:
City Clerk, City p I
e lands
PUBLIC RESOURCE MANAGEMENT
J. Bradley Wilkes, Ma aging Principal
Attachment A
Scope of Services
Step 1: Project Introductory Meeting
To ensure a successful start, PRM recommends holding an introductory meeting with key
staff members that include both general fund departments and non-general fund departments.
Of course, PRM will look to city staff for guidance for the purpose and content of the meeting
and for a list of invitees. PRM considers an initial meeting designed to review the project's
overall goals and objectives vital to a successful outcome. Agenda items for the introductory
rneetinty could include:
An explanation of the cost plan and user fee analysis process
The purpose of a full cost study
How other cities use full costing
• Example summary reports produced by the project
Questions and ansxvers
Etc.
Step 2: Data Review
As soon as possible, lists of basic data requirements will be developed. They include: lists of
selected staff salary levels, benefit cost detail, operational budgets, transaction statistics, etc.
PRM will work with the city to develop and gather needed data in the most efficient way.
Once this basic data is acquired, the cost plan and rate structures will be developed.
Step 3: Cost Allocation Plan Development
a) Central Service Department Interview Preparation: After the central city financial
and operational data is gathered., PRM interview forms will be completed. PRM interview
forms are developed with questions related to staffing lists, actual salary level., staff titles.,
department expenditure report detail., development of pre-interview questions, etc. The
completion of interview forms prior to the City department interviews will facilitate 1) a
professionally conducted streamlined interview, and 2) a thorough and complete
understanding of city processes.
b) Central Service Departmental Interviews: Central service or "allocating
departments" are interviewed to ensure that costs are spread in a manner that reflects: the
work that was done, the departments that benefited, and which allocation bases are proper -
all key principles stated throughout OMB A-87. While PRM staffwill bring a background of
knowledge and ideas to these interviews, it is also important to listen to department staff,,vho
understand more about their particular area of expertise. Examples of departments
interviewed will include building maintenance, accounting, management and budget,
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Purchasing, etc. In addition, any internal services funds (ISF) that charge for services will be
ii-itervic\,ved with emphasis on ensuring indirect costs are allocated accurately so that they can
be included in the full cost analysis when calculating ISF rates.
C) Department Personnel Staff Analysis: Departmental Staffing Analysis (PSA)
worksheets will be completed utilizing information gathered in the initial interviews. The
PSA provides a basis for the distribution of departmental costs into departmental functions,
During Our interviews with central service departments, we will discuss each person's
assignments and duties. Using timesheets, assignments, or interview notes, we will deten-nine
what percentage of each person's time should be divided into departmental functions. This
information will be entered into the PSA worksheets to define departmental functions. Once
staff members and their corresponding salaries are distributed to functions, other department
Costs, Such as materials and supplies, will also be distributed into the same functions or cost
pools. This process takes a departmental budget unit and breaks it into functional cost pools,
which can then be allocated throughout the city using a meaningful allocation base.
d)
) Departmental Cost Distribution: This schedule allocates the departmental costs of
the central service department and any "incoming costs" being allocated from other central
service departments. At this point, the PRM software takes an added step usually not
considered in other cost allocation plan software. No other software has the ability to analyze,
display and allocate the indirect costs of each central service department in such detail. This
detail facilitates review, explanation and audit, leading to reduced errors and re-runs of
reports.
e) Developing Allocation Bases: After the departmental functions are created, and
costs are distributed across functions, a separate meaningful allocation base will be selected
that best reflects the benefit each department in the city receives from the various services.
For example, M accounting, once the payroll functional cost pool is developed, an allocation
base will be selected to distribute the payroll cost to all departments that benefit from the
payroll service, Using OMB A-87 as a guide, the allocation base must reflect a connection
between the service provided and the service received. An example for payroll could be the
number of paychecks issued per department during the Fiscal year— in other words — the more
paychecks the department received, the more payroll cost is allocated.
0 Cost Allocation Management Reports: After each central service department is
interviewed, departmental costs are distributed to functional cost pools, and each cost pool is
given an allocation base, the cost plan is ready to be produced. PRM software is based on off-
the-self Microsoft products. This provides unlimited flexibility in calculating, formatting and
reporting information.
a) User Fee Inventory: Working with city staff, an inventory of all current user fee
charges will be developed. This list will 'Include all general fund services provided to the
public For which fees are charged. The objectives of the inventory are to identify all general
fund user fee charges matched to the departments which supply the services. In some cases,
charges
more than one department will participate on a particular service. Information Such as the
following will be reviewed:
fee history
rate increase history
revenue history
Fee purpose
of units completed each year
departments providing service
b) Departmental Interviews: With information from the fee inventory, each
department supplying user fee services will be interviewed. Using the PRM interview forms,
the following data will be gathered:
Staff members providing service
Amount of time:
Required to complete one unit of the service
Per year spent supplying, the service
Activity statistics such as:
# completed per year
# completed last fiscal year
estimated # of units completed in the coming fiscal year
The key statistics needed from a departmental interview are: individual staff estimates of
time spent providing, each service, and the number of units completed on an annual basis. The
attached PRM interview form provides an example of the data needed. In each department
interview, 100% of each staff member's time is identified to ensure that no service, user fee
related or not, is excluded from the full cost analysis.
(Optional ...- Building Department Nexus Study - this option is shown here for informational
purposes only):
Traditionally, city building departments have depended on the Uniform Building Code (UBC)
rate tables to establish building inspection and plan check fees. A fee study can review the
revenue generation of these tables and recommend general increases and/or adjustments to the
UBC rate factors depending on the total cost of the building department. Several PRM clients
have requested that PRM conduct a more thorough "Nexus" study that develops a new
method and basis for charging fees. This nexus method makes a firm connection between
hours and cost of service that some feel is lacking in the traditional UBC table method. We
are currently conducting this analysis for the cities of Roseville and Whittier. If our very
cursory review of the city's building inspection program is correct, the charges for services
are beim-, based on building code tables. The cite inav want to explore moving to an actual
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cost basis for inspection services. Because this process is more detailed and time consuming.
we offer it on optional basis. If the city of Redlands desires this approach PRM, will be
pleased to develop a process for it.
C) Financial Analysis: Once the basic time and workload transaction data is gathered
from the departmental interviews, salary data, departmental service and Supply cost data is
entered into the PRM user fee software. This departmental data is integrated with the indirect
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cost data developed within the PRM cost allocation plan module. The direct costs and
indirect cost of each fee is calculated and displayed for review,
d) User Fee Management Reports: All the financial, transaction and comparison data
is reported in the final management reports. Each department is provided an opportunity to
review the cost/revenue data at least two separate times. This ensures that the raw data is as
accurate as possible, resulting in a more reliable final report.
Deliverables:
Full Cost Allocation Plan
User Fee Detail and Summary Reports
Attachment B
Project Schedule
Since no firm discussion has been held regarding the City's desired schedule, the following
regarding
schedule is provided for proposal Purposes. The schedule is an illustration of our
step-by-step process that could be tied to the RFP stated goal of a project start date of March
15"' and a completion date of June 30"'. This schedule can be adjusted to meet the city's
needs once the contract is signed and the project starts. Each broad step in the process is
described below. PRM will work with the City to fine-tune the schedule to meet the City's
goals and objectives:
Week One and Two:
1) Meet with City management team and department heads to introduce study.
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2) Obtain budgets, salary levels, staff lists, etc. to begin the cost plan.
3) Begin meetings with departments
Explain the data needs for the study
Hand out the already developed PRM data sheets
4) Begin development of the cost allocation plan by entering, basic data into PRM
softxvare.
Week Three-Four:
1) Obtain any feedback from departments, continue communication, and answer
cluestions.
2) Continue cost plan review and user fee department interviews and data collection
Week Five -'Ten:
1) Continue to meet with departments and obtain draft fee data and begin to enter data
into PRM software.
Week Eleven —Twelve- Fourteen:
1) Project teams will provide a draft of the cost allocation plan and user fee data back
to City staff for review.
21 Project teams will update data as needed.
Week Fourteen - Sixteen:
I) Staff changes and comments will be used to Update cost plan and User fee data.
2) Project teams will update data as needed,
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Week Sixteen:
1) Changes and comments will be addressed and a second draft of the user fee and a
final draft of the cost plan will be developed.
2) Project teams will update data as needed.
Meetinp_s with City Council and Management:
1) Management reports will be developed for each department in the Study. The user
fee and cost plan will be finalized. Meetings, will be held as scheduled by the City
and the PRM.
Updates and Corrections:
1) Any changes as requested during the management meetings will be made and
final reports will be delivered.
PROPOSED PROJECT SCHEDULE OUTLINE:
Project Step: Month 1 Month 2 Month 3 Month 4
Project Week: 1 2 3 4 5 6 7 8 9 10 11 1.2 1.3 14 15 16 17
Initial Mtgs:
Cost Plan Development:
User Fee Interviews:
Draft Cost Plan Completed:
I"Draft of User Fee Data:
Final Cost Plan Delivered:
)nd Draft of User Fee Data: �'VP�ri.htdl',p'fl', 1�gi1N'h�V�1Ph''Ni.?�Iq'' ti�
Final User Fee Reports Delivered:
The schedule above is representative of a summary of the steps required to complete a thorough cost allocation
plan and user fee study. The schedule allows for a number of draft reports which allows Redlands several
opportunities to review the study findings and make changes. The number of draft iterations is limited by the
desired schedule. If the city desires additional chances for review, the schedule can be adjusted to reflect the
City's final goals and objectives.
Attachment C
Project Cost
Our project fees are:
Cost Allocation flan Development: (60 - 70 HOURS) $13,000
General Fund User Fee Study: (200 HOURS) $37,000
The project budget includes just a full cast plan and a simple fee comparison of a small
number of planning fees.
Attachment D
Fee Schedule
Hourly Rates (for informational use:)
Senior Team Members: $175/hr.
Team Members: $150/hr.
Support: $ 1.5 hr.
Payment Schedule:
PRNI requests that payment be made on a monthly basis during the project term.
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