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HomeMy WebLinkAbout15 - Citywide Cost Allocation Plan & Cost of Services StudyCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 15 April 13, 2010 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Administrative Services Department Tracy McCraner, Administrative Services Director (949) 644 -3123 or TMcCranerC@NewportBeachCA.gov Administrative Services Department Evelyn Tseng, Acting Revenue Manager (949) 644 -3153 or ETsengCaD-NewportBeachCA.gov SUBJECT: CITYWIDE COST ALLOCATION PLAN AND COST OF SERVICES STUDY ISSUE: Should the City waive the bidding requirements of Council Policy F- 14(C)(1) and enter into a six year agreement with MGT of America, Inc. ( "MGT') to update the cost allocation plan and cost of services study? RECOMMENDATION: Waive Council Policy F- 14(C)(1) and authorize the Mayor to execute the attached Professional Services Agreement with MGT to develop a defensible cost allocation plan and to identify and analyze the cost of providing City services. DISCUSSION: Background In 1996, the City of Newport Beach retained KPMG Peat Marwick LLP (KPMG) to conduct a cost of services study for City services requested and initiated by residents, businesses and others who most benefit from the City services. The KPMG study determined the actual cost of providing each of those services including direct labor costs, administration or 'overhead" costs and the cost of materials and supplies based on actual 1994 -1995 costs. In 1997, City Council adopted Chapter 3.36 (Cost Recovery for User Services) of the Municipal Code. Chapter 3.36 establishes the percentage of cost to be recovered from direct user fees for the services studied. The remaining cost of those services is Citywide Cost Allocation Plan and Cost of Services Study April 13, 2010 Page 2 subsidized by tax revenues derived from the general population. In Chapter 3.36, City Council also found that the cost studies should be conducted at least every five years. Around the same time, the City Council adopted Resolution 97 -15 establishing a Master Fee Schedule for City services. The Master Fee Schedule is intended to be a centralized location for the myriad of fees previously located in individual ordinances, resolutions and Council Policies. From 1997 to 2008, the City Council updated the Master Fee Schedule based on changes in the cost of living and salary adjustments. In addition, the Master Fee Schedule evolved to include additional fees based upon Council Policy, commission findings, new ordinances, resolutions and new services. In 2006, the City Council recommended a new cost -of- services study be conducted to comprehensively update the Master Fee Schedule. Public Resource Management, LLC ( "PRM ") was hired to conduct a cost allocation plan and cost of services study. PRM completed its study in 2007 and its results were incorporated into the Master Fee Schedule in 2008. On March 8, 2010, the Finance Committee recommended that cost -of- services studies be conducted more frequently to reduce the significant increases in the Master Fee Schedule associated with infrequent reviews. MGT of America, Inc. In 2006, when City Council recommended that the new cost -of- services study be conducted, staff prepared and distributed a request for proposal to conduct a cost allocation plan and cost of services study to twenty companies. Four companies submitted proposals with costs ranging from $32,920 to $49,500. A selection committee comprised of City staff interviewed the four companies. The selection committee unanimously recommended PRM based on PRM's experience, excellent proposal terms, professional presentation and competitive pricing. PRM's final in -depth study included a cost allocation plan and model as well as a cost - of- services plan and model. In August 2007, MGT acquired PRM. MGT retained PRM's employees, thus providing a continuity of service. Council Policy F- 14(C)(1) requires that competitive bids be obtained when possible before resorting to negotiated awards. Because a formal bidding process for a cost -of- services and cost allocation study was conducted fairly recently, in 2006, and because PRM, now MGT, already has in -depth knowledge of City services, MGT is in the unique position of providing a continuity of resources and the ability to conduct its study more Citywide Cost Allocation Plan and Cost of Services Study April 13, 2010 Page 3 expeditiously and accurately than a company without such knowledge. Therefore, City staff believes that a formal bidding process, at this point, would not be necessary. MGT Agreement Generally speaking, the MGT Agreement will update the cost allocation plan and model, particularly as the update relates to the City's reorganizational efforts at the time of the study. In addition, MGT will update the cost -of- services study and model and perform its initial comprehensive Harbor Tidelands user fee study. In order to smooth the impact of infrequent cost -of- services studies and the resultant fee increases, MGT will, over the course of six years, study each City department and update the citywide cost allocation plan, on a revolving basis. In the Agreement's first year, MGT will update the cost allocation plan, study the Harbor Tidelands user fees and update the Police user fees. In the second year, MGT will update the user fees studies for Administrative Services, Library, Recreation & Senior Services and Utilities. In the third year, MGT will update Building, Fire and Code Enforcement, Planning and Public Works user fee studies. In the fourth year, MGT will repeat this schedule. In the years that departments are not studied, MGT will update their fees by the change in the Consumer Price Index. This schedule will allow MGT to provide more in -depth study and accuracy for each department than previous studies. Staff will have more time to verify the information both provided to and received from MGT. Fees for each department will be updated at least every three years, instead of every five or ten years. City staff recommends that City waive F- 14(C)(1) and hire MGT. The draft Professional Services Agreement and Exhibits are attached. Environmental Review: This action is not subject to the California Environmental Quality Act ( "CEQK) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Public Notice: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Citywide Cost Allocation Plan and Cost of Services Study April 13, 2010 Page 4 Funding Availability: Sufficient funding for FY 2009 -10 is available in the Revenue Division budget, 0640- 8080, in the amount of $15,000, and in Harbor Resources (Tidelands) budget, 2371- 8080, in the amount of $25,000. Funding for FY 2010 -11 will be included in the City's FY 2010 -11 proposed budget. Prepared by: Submitted by: JY"c Evelyn Tseng v Tracy Mcgrrgner Acting Revenue Manager Administr Y e Services Director Attachments: Professional Services Agreement with MGT of America, Inc. for Cost Allocation Plan and User Fee Services PROFESSIONAL SERVICES AGREEMENT WITH MGT OF AMERICA, INC. FOR COST ALLOCATION PLAN AND USER FEE SERVICES THIS AGREEMENT is made and entered into as of this 14th day of April, 2010, by and between the CITY OF NEWPORT BEACH, a Municipal Corporation ( "City "), and MGT OF AMERICA, INC. a Florida Corporation, regionally based in California, whose address is 2001 P Street, Suite 200 Sacramento, California, 95811 ( "Consultant "), and is made with reference to the following: RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of the City. B. City is planning a six phase (during a period of six years) comprehensive review and update of General Fund departmental user fee calculations, initial comprehensive Harbor Tidelands user fee analysis and update of the citywide cost allocation plan. City also wishes to create a detailed breakout of departmental user fee services which directly links to City revenue codes (collectively, the "Project "). Cataloging the user fee services along with the corresponding City Revenue Code will allow the City to more efficiently update charge levels and create a better linkage between user fee services and general plan revenue accounts. C. Consultant, in 2006, had calculated the City's cost allocation plan. At that time, Consultant was PRM, a company that has since been merged into MGT of America, Inc. Because of Consultant's familiarity with City's organization, and the ensuing cost savings, City desires to engage, Consultant to complete the Project in accordance to the schedule shown in Exhibit "A" and incorporated herein by reference. D. Consultant possesses the skill, experience, ability, background, certification and knowledge to provide the services described in this Agreement. E. The principal members of the Consultant for purposes of the Project, shall be Brad Burgess, Erin Payton and Mike Adams. F. City has solicited and received a proposal from Consultant, has reviewed the previous experience and evaluated the expertise of Consultant, and desires to retain Consultant to render professional services under the terms and conditions set forth in this Agreement. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. TERM The term of this Agreement shall commence on the above written date, and shall terminate on the 13th day of April, 2016, unless terminated earlier as set forth herein. 2. SERVICES TO BE PERFORMED Consultant shall diligently perform all the services described in the Scope of Services attached hereto as Exhibit "A" and incorporated herein by reference. The City may elect to delete certain tasks from the Scope of Services at its sole discretion. 3. TIME OF PERFORMANCE Time is of the essence in the performance of services under this Agreement and the services shall be performed to completion in a diligent and timely manner. The failure by Consultant to perform the services in a diligent and timely manner may result in termination of this Agreement by City. Notwithstanding the foregoing, Consultant shall not be responsible for delays due to causes beyond Consultant's reasonable control. However, in the case of any such delay in the services to be provided for the Project, each party hereby agrees to provide notice to the other party so that all delays can be addressed. 3.1 Consultant shall submit all requests for extensions of time for performance in writing to the Project Administrator, as defined in Section 6, not later than ten (10) calendar days after the start of the condition that purportedly causes a delay. The Project Administrator shall review all such requests and may grant reasonable time extensions for unforeseeable delays that are beyond Consultant's control. 3.2 For all time periods not specifically set forth herein, Consultant shall respond in the most expedient and appropriate manner under the circumstances, by either telephone, fax, hand - delivery or mail. 4. COMPENSATION TO CONSULTANT City shall pay Consultant for the services on a time and expense not -to- exceed basis in accordance with the provisions of this Section and the Schedule of Billing and Rates attached hereto as Exhibit 'B" and incorporated herein by reference. Consultant's compensation for all work performed in accordance with this Agreement, including all reimbursable items, shall not exceed: Forty Thousand Dollars ($40,000) during 2009 -10 (Year 1); Fifteen Thousand Dollars ($15,000) during 2010 -11 Year 2); F Twenty Thousand Dollars ($20,000) during 2011 -12 (Year 3); Twenty -Five Thousand Dollars ($25,000) during 2012 -13 (Year 4); Fifteen Thousand Dollars ($15,000) during 2013 -14 (Year 5); and Twenty Thousand Dollars ($20,000) during 2014 -15 (Year 6) without prior written authorization from City. No billing rate changes shall be made during the term of this Agreement without the prior written approval of City. 4.1 Consultant shall submit monthly invoices to City describing the work performed the preceding month. Consultant's bills shall include the name of the person who performed the work, a brief description of the services performed and /or the specific task in the Scope of Services to which it relates, the date the services were performed, the number of hours spent on all work billed on an hourly basis, and a description of any reimbursable expenditures. City shall pay Consultant no later than thirty (30) days after approval of the monthly invoice by City staff. 4.2 City shall reimburse Consultant only for those costs or expenses specifically approved in this Agreement, or specifically approved in writing in advance by City. Unless otherwise approved, such costs shall be limited and include nothing more than the following costs incurred by Consultant: A. Approved reproduction charges. B. Actual costs and /or other costs and /or payments specifically authorized in advance in writing and incurred by Consultant in the performance of this Agreement. 4.3 Consultant shall not receive any compensation for Extra Work performed without the prior written authorization of Project Administrator. As used herein, "Extra Work" means any work that is determined by City to be necessary for the proper completion of the Project, but which is not included within the Scope of Services and which the parties did not reasonably anticipate would be necessary at the execution of this Agreement. Compensation for any authorized Extra Work shall be paid in accordance with the Schedule of Billing Rates as set forth in Exhibit "B ". 5. PROJECT MANAGER Consultant shall designate a Project Manager, who shall coordinate all phases of the Project. This Project Manager shall be available to City at all reasonable times during the Agreement term. Consultant has designated Erin Payton to be its Project Manager. Consultant shall not remove or reassign the Project Manager or any personnel listed above or assign any new or replacement personnel to the Project without the prior written consent of City. City's approval shall not be unreasonably withheld with respect to the removal or assignment of Project Manager. 3 Consultant, at the sole discretion of City, shall remove from the Project any of its personnel assigned to the performance of services upon written request of City. Consultant warrants that it will continuously furnish the necessary personnel to complete the Project on a timely basis as contemplated by this Agreement. 6. ADMINISTRATION This Agreement will be administered by the Administrative Services Department The Revenue Division Manager shall be the Project Administrator and shall have the authority to act for City under this Agreement. The Project Administrator or her authorized representative shall represent City in all matters pertaining to the services to be rendered pursuant to this Agreement. 7. CITY'S RESPONSIBILITIES In order to assist Consultant in the execution of its responsibilities under this Agreement, City agrees to, where applicable, provide access to, and upon request of Consultant, one copy of all existing relevant information on file at City. City will provide all such materials in a timely manner so as not to cause delays in Consultant's work schedule. 8. STANDARD OF CARE 8.1 All of the services shall be performed by Consultant or under Consultant's supervision. Consultant represents that it possesses the professional and technical personnel required to perform the services required by this Agreement, and that it will perform all services in a manner commensurate with community professional standards. All services shall be performed by qualified and experienced personnel who are not employed by City. By delivery of completed work, Consultant certifies that the work conforms to the requirements of this Agreement and all applicable federal, state and local laws and the professional standard of care. 8.2 Consultant represents and warrants to City that it has, shall obtain, and shall keep in full force in effect during the term hereof, at its sole cost and expense, all licenses, permits, qualifications, insurance and approvals of whatsoever nature that is legally required of Consultant to practice its profession. Consultant shall maintain a City of Newport Beach business license during the term of this Agreement. 8.3 Consultant shall not be responsible for delay, nor shall Consultant be responsible for damages or be in default or deemed to be in default by reason of strikes, lockouts, accidents, or acts of God, or the failure of City to furnish timely information or to approve or disapprove Consultant's work promptly, or delay or faulty performance by City, contractors, or governmental agencies. El 9. HOLD HARMLESS To the fullest extent permitted by law, Consultant shall indemnify, defend and hold harmless City, its City Council, boards and commissions, officers, agents, volunteers, and employees (collectively, the "Indemnified Parties ") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever (individually, a Claim; collectively, "Claims "), which may arise from or in any manner relate (directly or indirectly) to any breach of the terms and conditions of this Agreement, any work performed or services provided under this Agreement including, without limitation, defects in workmanship or materials or Consultant's presence or activities conducted on the Project (including the negligent and /or willful acts, errors and /or omissions of Consultant, its principals, officers, agents, employees, vendors, suppliers, consultants, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable or any or all of them). Notwithstanding the foregoing, nothing herein shall be construed to require Consultant to indemnify the Indemnified Parties from any Claim arising from the sole negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorney's fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the Consultant. 10. INDEPENDENT CONTRACTOR It is understood that City retains Consultant on an independent contractor basis and Consultant is not an agent or employee of City. The manner and means of conducting the work are under the control of Consultant, except to the extent they are limited by statute, rule or regulation and the expressed terms of this Agreement. Nothing in this Agreement shall be deemed to constitute approval for Consultant or any of Consultant's employees or agents, to be the agents or employees of City. Consultant shall have the responsibility for and control over the means of performing the work, provided that Consultant is in compliance with the terms of this Agreement. Anything in this Agreement that may appear to give City the right to direct Consultant as to the details of the performance or to exercise a measure of control over Consultant shall mean only that Consultant shall follow the desires of City with respect to the results of the services. 11. COOPERATION Consultant agrees to work closely and cooperate fully with City's designated Project Administrator and any other agencies that may have jurisdiction or 5 interest in the work to be performed. City agrees to cooperate with the Consultant on the Project. 12. CITY POLICY Consultant shall discuss and review all matters relating to policy and Project direction with City's Project Administrator in advance of all critical decision points in order to ensure the Project proceeds in a manner consistent with City goals and policies. 13. PROGRESS Consultant is responsible for keeping the Project Administrator and /or her duly authorized designee informed on a regular basis regarding the status and progress of the Project, activities performed and planned, and any meetings that have been scheduled or are desired. 14. INSURANCE Without limiting Consultant's indemnification of City, and prior to commencement of work Consultant shall obtain, provide and maintain at its own expense during the term of this Agreement, a policy or policies of liability insurance of the type and amounts described below and in a form satisfactory to City. 14.1 Certificates of Insurance. Consultant shall provide certificates of insurance with original endorsements to City as evidence of the insurance coverage required herein. Insurance certificates must be approved by City's Risk Manager prior to commencement of performance or issuance of any permit. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. 14.2 Signature. A person authorized by the insurer to bind coverage on its behalf shall sign certification of all required policies. 14.3 Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. 14.4 Coverage Requirements. A. Workers' Compensation Coverage. Consultant shall maintain Workers' Compensation Insurance and Employer's Liability Insurance for his or her employees in accordance with the laws of the State of California. In addition, Consultant shall require each subcontractor to similarly maintain Workers' Compensation Insurance and Employer's Liability Insurance in accordance with the laws of the State of California for M all of the subcontractor's employees. Any notice of cancellation or non - renewal of all Workers' Compensation policies must be received by City at least thirty (30) calendar days (10 calendar days written notice of non- payment of premium) prior to such change. The insurer shall agree to waive all rights of subrogation against City, its officers, agents, employees and volunteers for losses arising from work performed by Consultant for City. B. General Liability Coverage. Consultant shall maintain commercial general liability insurance in an amount not less than one million dollars ($1,000,000) per occurrence for bodily injury, personal injury, and property damage, including without limitation, contractual liability. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement, or the general aggregate limit shall be at least twice the required occurrence limit. C. Automobile Liability Coverage. Consultant shall maintain automobile insurance covering bodily injury and property damage for all activities of the Consultant arising out of or in connection with work to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than one million dollars ($1,000,000) combined single limit for each occurrence. D. Professional Errors and Omissions Insurance. Consultant shall maintain professional errors and omissions insurance, which covers the services to be performed in connection with this Agreement in the minimum amount of one million dollars ($1,000,000). 14.5 Endorsements. Each general liability and automobile liability insurance policy shall be endorsed with the following specific language: A. The City, its elected or appointed officers, officials, employees, agents and volunteers are to be covered as additional insureds with respect to liability arising out of work performed by or on behalf of the Consultant. B. This policy shall be considered primary insurance as respects to City, its elected or appointed officers, officials, employees, agents and volunteers as respects to all claims, losses, or liability arising directly or indirectly from the Consultant's operations or services provided to City. Any insurance maintained by City, including any self- insured retention City may have, shall be considered excess insurance only and not contributory with the insurance provided hereunder. C. This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring company. II D. The insurer waives all rights of subrogation against City, its elected or appointed officers, officials, employees, agents and volunteers. E. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its elected or appointed officers, officials, employees, agents or volunteers. F. The insurance provided by this policy shall not be suspended, voided, canceled, or reduced in coverage or in limits, by either party except after thirty (30) calendar days (10 calendar days written notice of non - payment of premium) written notice has been received by City. 14.6 Timely Notice of Claims. Consultant shall give City prompt and timely notice of claim made or suit instituted arising out of or resulting from Consultant's performance under this Agreement. 14.7 Additional Insurance. Consultant shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work. 15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS Except as specifically authorized under this Agreement, the services to be provided under this Agreement shall not be assigned, transferred contracted or subcontracted out without the prior written approval of City. Any of the following shall be construed as an assignment: The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Consultant, or of the interest of any general partner or joint venturer or syndicate member or cotenant if Consultant is a partnership or joint- venture or syndicate or cotenancy, which shall result in changing the control of Consultant. Control means fifty percent (50 %) or more of the voting power, or twenty -five percent (25 %) or more of the assets of the corporation, partnership or joint-venture. 16. SUBCONTRACTING The parties recognize that a substantial inducement to City for entering into this Agreement is the professional reputation, experience and competence of Consultant. Assignments of any or all rights, duties or obligations of the Consultant under this Agreement will be permitted only with the express written consent of City. Consultant shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of City. 17. OWNERSHIP OF DOCUMENTS Each and every report, draft, map, record, plan, document and other writing produced ( "Documents "), prepared or caused to be prepared by Consultant, its officers, employees, agents and subcontractors, in the course of implementing this Agreement, shall become the exclusive property of City, and City shall have 0 the sole right to use such materials in its discretion without further compensation to Consultant or any other party. Consultant shall, at Consultant's expense, provide such Documents to City upon prior written request. Documents, including drawings and specifications, prepared by Consultant pursuant to this Agreement are not intended or represented to be suitable for reuse by City or others on any other project. Any use of completed Documents for other projects and any use of incomplete Documents without specific written authorization from Consultant will be at City's sole risk and without liability to Consultant. Further, any and all liability arising out of changes made to Consultant's deliverables under this Agreement by City or persons other than Consultant is waived against Consultant and City assumes full responsibility for such changes unless City has given Consultant prior notice and has received from Consultant written consent for such changes. 18. CONFIDENTIALITY All Documents, including drafts, preliminary drawings or plans, notes and communications that result from the services in this Agreement, shall be kept confidential unless City authorizes in writing the release of information. 19. INTELLECTUAL PROPERTY INDEMNITY The Consultant shall defend and indemnify City, its agents, officers, representatives and employees against any and all liability, including costs, for infringement of any United States' letters patent, trademark, or copyright infringement, including costs, contained in Consultant's drawings and specifications provided under this Agreement. 20. RECORDS Consultant shall keep records and invoices in connection with the work to be performed under this Agreement. Consultant shall maintain complete and accurate records with respect to the costs incurred under this Agreement and any services, expenditures and disbursements charged to City, for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant under this Agreement. All such records and invoices shall be clearly identifiable. Consultant shall allow a representative of City to examine, audit and make transcripts or copies of such records and invoices during regular business hours. Consultant shall allow inspection of all work, data, Documents, proceedings and activities related to the Agreement for a period of three (3) years from the date of final payment to Consultant under this Agreement. 21. WITHHOLDINGS City may withhold payment to Consultant of any disputed sums until satisfaction of the dispute with respect to such payment. Such withholding shall not be deemed to constitute a failure to pay according to the terms of this Agreement. Consultant shall not discontinue work as a result of such withholding. Consultant 9 shall have an immediate right to appeal to the City Manager or his /her designee with respect to such disputed sums. Consultant shall be entitled to receive interest on any withheld sums at the rate of return that City earned on its investments during the time period, from the date of withholding of any amounts found to have been improperly withheld. 22. ERRORS AND OMISSIONS In the event of errors or omissions that are due to the negligence or professional inexperience of Consultant which result in expense to City greater than what would have resulted if there were not errors or omissions in the work accomplished by Consultant, the additional design, construction and /or restoration expense shall be borne by Consultant. Nothing in this paragraph is intended to limit City's rights under the law or any other sections of this Agreement. 23. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS City reserves the right to employ other Consultants in connection with the Project. 24. CONFLICTS OF INTEREST The Consultant or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act "), which (1) requires such persons to disclose any financial interest that may foreseeably be materially affected by the work performed under this Agreement, and (2) prohibits such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. If subject to the Act, Consultant shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for immediate termination of this Agreement by City. Consultant shall indemnify and hold harmless City for any and all claims for damages resulting from Consultant's violation of this Section. 25. NOTICES All notices, demands, requests or approvals to be given under the terms of this Agreement shall be given in writing, and conclusively shall be deemed served when delivered personally, or on the third business day after the deposit thereof in the United States mail, postage prepaid, first -class mail, addressed as hereinafter provided. All notices, demands, requests or approvals from Consultant to City shall be addressed to City at: Attn: Revenue Division Manager Administrative Services Department City of Newport Beach 3300 Newport Boulevard Newport Beach, CA, 92663 T Phone: 949-644-3144 All notices, demands, requests or approvals from CITY to Consultant shall be addressed to Consultant at: Attention: Brad Burgess 2001 P Street, Suite 200 Sacramento, CA 95811 Phone: 916.595.2646 Fax: 916.914.2372 26. TERMINATION In the event that either party fails or refuses to perform any of the provisions of this Agreement at the time and in the manner required, that party shall be deemed in default in the performance of this Agreement. If such default is not cured within a period of five (5) calendar days, or if more than five (5) calendar days are reasonably required to cure the default and the defaulting party fails to give adequate assurance of due performance within five (5) calendar days after receipt of written notice of default, specifying the nature of such default and the steps necessary to cure such default, and thereafter diligently take steps to cure the default, the non - defaulting party may terminate the Agreement forthwith by giving to the defaulting party written notice thereof. Notwithstanding the above provisions, City shall have the right, at its sole discretion and without cause, of terminating this Agreement at any time by giving ten (10) calendar days prior written notice to Consultant. In the event of termination under this Section, City shall pay Consultant for services satisfactorily performed and costs incurred up to the effective date of termination for which Consultant has not been previously paid. On the effective date of termination, Consultant shall deliver to City all reports, Documents and other information developed or accumulated in the performance of this Agreement, whether in draft or final form. 27. COMPLIANCE WITH ALL LAWS Consultant shall at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. In addition, all work prepared by Consultant shall conform to applicable City, county, state and federal laws, rules, regulations and permit requirements and be subject to approval of the Project Administrator and City. 28. WAIVER A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. 11 29. INTEGRATED CONTRACT This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. 30. CONFLICTS OR INCONSISTENCIES In the event there are any conflicts or inconsistencies between this Agreement and the Scope of Services or any other attachments attached hereto, the terms of this Agreement shall govern. 31. INTERPRETATION The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of the Agreement or any other rule of construction which might otherwise apply. 32. AMENDMENTS This Agreement may be modified or amended only by a written document executed by both Consultant and City and approved as to form by the City Attorney. 33. SEVERABILITY If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. 34. CONTROLLING LAW AND VENUE The laws of the State of California shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange. 35. EQUAL OPPORTUNITY EMPLOYMENT Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. 36. NO ATTORNEYS' FEES In the event of a legal dispute under the terms of this Agreement, the prevailing party shall not be entitled to attorneys' fees. 12 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the day and year first written above. APPROVED AS TO FORM: OFFICE OFT E CITY ATTORNEY: L .on ie Mulvihill sir y /`ho Acting City Attorney ATTEST: By: Leilani Brown, City Clerk CITY OF NEWPORT BEACH, A Municipal Corporation Bv: Keith Curry Mayor CONSULTANT: Title: Print Na (Corporate Officer) (Financial Officer) Print Name: Attachments: Exhibit "A" — Scope of Services Exhibit `B" — Schedule of Billing Rates 13 Exhibit "A" Scope of Services Project Organization The project shall be divided into the following six phases: • Year 1 (FY 2009 -10): Update citywide cost allocation plan Perform initial comprehensive Harbor Tidelands user fee study Update Police user fee study Catalog user fee services for all user fee departments listed in project years 1, 2 and 3 along with developing a linkage from each service name to the corresponding City revenue code. • Year 2 (FY 2010 -11): Update Administrative Services, Library, Recreation & Senior Services and Utilities user fee studies. • Year 3 (FY 2011 -12): Update Building, Fire and Code Enforcement, Planning, Public Works user fee studies. • Year 4 (FY 2012 -13): Update citywide cost allocation plan, Harbor Tidelands and Police user fee studies. • Year 5 (FY 2013 -14): Update Administrative Services, Library, Recreation & Senior Services and Utilities user fee studies. • Year 6 (FY 2014 -15): Update Building, Fire and Code Enforcement, Planning, Public Works user fee studies. Detailed Project Description: User Fee Updates For the fee study departments described above, the areas of update /analysis will include: • The addition of any new fee services. • Review /revise all time estimates included in the previous study and capture new time estimates for new services. Note — the initial Harbor Tidelands study will be conducted with all new time information, which will be gathered on site from City staff. Update annual volume and revenue statistics for all fee services. • Update all staffing and expenditure information. • Update all cross - department support calculations. • Provide revenue forecasting based on recommended fee levels. • Update department overhead rates. • Prepare for Council approval the annual citywide service fee schedule reflecting the results of the year's user fee update and cost allocation plan (if applicable), and the changes to the 14 Consumer Price Index from the previously adopted service fee schedule. The staff report for the Council presentation will be created by City staff. • Following Council adoption of the service fee schedule, for each department - create individual comprehensive user fee service and copy & duplication charges catalogs. The user fee catalog will be created in a manner that creates a better linkage between individual departmental user fee levels and the corresponding departmental general fund revenue by tying service fees and transaction counts to general fund revenue accounts. This catalog will allow enhanced revenue forecasting and budgeting by incorporating staffing changes and volume statistics. • Any department not included in that year's detailed analysis will have their user fees updated by the local CPI (i.e. the Planning fees will be updated by the CPI factor in years 1 and 2; the Police fees will be updated by the CPI factor in years 2 and 3).These updates will be applied and forecasted revenue information will be provided for each department. Detailed Project Description: Cost Allocation Plan For the cost allocation plan, the areas of update /analysis will include: • Review /update of all central service departments (add /remove any divisions) • Update cost plan structure /receiving departments to reflect the current city budget structure • Update all functional areas within allocating departments • Update all staff time analyses within functional areas • Update all allocation basis used to allocate functional costs • Update expenditure data to reflect current budget (or previous year actuals) • Compare allocations to prior cost plan results 15 Exhibit "B" Schedule of Billing and Rates Year 1: Update citywide cost allocation plan - $12,500.00 Update Police user fee study - $2,500.00 Perform initial comprehensive Harbor Tidelands user fee study - $25,000.00 Catalog user fee services for all user fee departments listed in project years 1, 2 and 3 along with developing a linkage from each service name to the corresponding City revenue code — included Total - $40,000.00 Year 1 will be billed as follows: 50% after all initial department meetings /interviews are conducted 30% upon receipt of first draft of cost allocation plan, Police and Harbor Tidelands fee study 20% upon receipt of final cost allocation plan, Police and Harbor Tidelands fee study and departmental fee service catalog Year 2: Update Administrative Services user fee study - $3,500.00 Update Library user fee study - $2,500.00 Update Recreation & Senior Services user fee study - $4,500.00 Update Utilities user fee study - $4,500.00 Total - $15,000.00 Year 2 will be billed as follows: 50% upon receipt of 1St user fee draft for all departments 40% upon receipt of 2nd user fee draft for all departments 10% upon receipt of final report and presentation Year 3: Update of Building user fee study - $4,500.00 Update of Code Enforcement user fee study - $2,000.00 Update of Fire user fee study - $4,500.00 Update of Planning user fee study - $4,500.00 Update of Public Works user fee study - $4,500.00 Total - $20,000.00 Year 3 will be billed as follows: 50% upon receipt of 1" user fee draft for all departments 40% upon receipt of 2nd user fee draft for all departments 10% upon receipt of final report, presentation and departmental fee service catalog 16 Year 4: Update Police user fee study - $2,500.00 Update Harbor Tidelands user fee study - $10,000.00 Update citywide cost allocation plan - $12,500.00 Total - $25,000.00 Year 4 will be billed as follows: 50% after all initial department meetings /interviews are conducted 30% upon receipt of 1St draft of cost allocation plan and Police and Harbor Tidelands fee study 20% upon receipt of final cost allocation plan and Police and Harbor Tidelands fee study Year 5: Update Administrative Services user fee study - $3,500.00 Update Library user fee study - $2,500.00 Update Recreation & Senior Services user fee study - $4,500.00 Update Utilities user fee study - $4,500.00 Total - $15,000.00 Year 5 phase will be billed as follows: 50% upon receipt of 1St user fee draft for all departments 40% upon receipt of 2nd user fee draft for all departments 10% upon receipt of final report, presentation and departmental fee service catalog Year 6: Update of Building user fee study - $4,500.00 Update of Code Enforcement user fee study - $2,000.00 Update of Fire user fee study - $4,500.00 Update of Planning user fee study - $4,500.00 Update of Public Works user fee study - $4,500.00 Total - $20,000.00 Year 6 will be billed as follows: • 50% upon receipt of 1St user fee draft for all departments • 40% upon receipt of 2nd user fee draft for all departments • 10% upon receipt of final report, presentation and departmental fee service catalog 17 Hourly Billing Rates For any services outside or in addition to the Scope of Services ( "Extra Work ") described in Exhibit "A ", City shall pay the Consultant for the services on a time and expense basis in 1 /101h hour increments at the following rate(s).. Senior Partner: $250 Senior Associate: $185 Associate: $165 Senior Consultant: $155 Production Coordinator: $85 Project related expenses (mileage, air travel, car rental, lodging, meals while on site, duplication) shall be billed at cost. in