HomeMy WebLinkAboutC-2321 - Preparation of a Cost/Revenue Impact Analyst ReportCITY OF NEWPORT BEACH
OFFICE OF THE CITY CLERK
(714) 640-2251
DATE; February 25, 1982
V. 41
TO: FINANCE DIRECTOR
FROM: City Clerk
SUBJECT: Contract No. C-2321
Description of Contract Professional Services Agree-
ment for preparing Cost/Revenue Impact Report
Effective date of Contract February 25, 1982
Authorized by Resolution No. 82-26 , adopted on Feb. 22, 1982
Contract with Ralph Andersen & Associates
Address 1446 Ethan Way, Suite 101
Sacramento, CA 95825
Amount of Contract See Agreement
Wanda E. Andersen
City Clerk
WEA: jr
City Hall • 3300 Newport Boulevard, Newport Beach, California 92663
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• ORIGINAL
PROFESSIONAL SERVICES AGREEMENT
THIS AGREEMENT made this ! day of , 1982, by
and between the CITY OF NEWPORT BEACH, a Municipal rporation,
hereinafter CITY, and RALPH ANDERSEN AND ASSOCIATES, hereinafter
referred to as CONSULTANT, is made with reference to the follow-
ing facts, the materiality and existence of which is stipulated
and agreed by the parties:
A. CITY is in need of a specific system for de-
termining the fiscal impact of new development occurring within
CITY so as to facilitate informed decision - making by the Planning
Commission and City Council with respect to the fiscal impact of
planning and development proposals; and
B. CONSULTANT has extensive experience in the
preparation of revenue and expenditure forecasting systems as
well as the preparation of fiscal impact analysis of development
and annexation proposals; and
C. CITY is desirous of retaining CONSULTANT to
prepare, inter alia, a cost revenue impact analysis system such
that CITY staff, the Planning Commission and City Council will be
able to intelligently evaluate fiscal impacts of various develop-
ment proposals.
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NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. DUTIES OF CONSULTANT
CONSULTANT agrees to do the following:
(a) To review current and planned land uses
within the City of Newport Beach, as well as projected annexat-
ions, and to meet and consult with City pesonnel with respect to
the manner in which a comprehensive cost /revenue impact analysis
system should be developed, with such consultation to consider
the objectives of such a system, the approach that should be
taken with respect to the development of the system, the nature
of the system and the time within which the system should be
developed. This review is to result in a clear understanding on
the part of CONSULTANT of the needs of CITY, with respect to the
cost revenue impact analysis system, and allow CONSULTANT to
prepare a specific time table for the completion of the tasks
which are to result in the preparation of the system.
(b) To prepare a profile or inventory of
local service and public facility requirements for various areas
within CITY and various land uses within CITY; the profile or
inventory will take into consideration both the incremental or
marginal service requirements associated with development, as
well as the overall relationship of development to CITY services
and intrastructure;
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(c) To prepare a comprehensive inventory of
all recurring and non - recurring costs associated with providing
CITY services and facilities to development. Included within
this inventory there will be an identification of the nature,
magnitutde of and responsibilities for such costs, as well as
specific methodologies and criteria for distributing costs
applicable to various types of land uses;
(d) To prepare a complete and definitive
listing of CITY revenue sources that will be available from deve-
lopment, together with the rationale and appropriate methodology
and criteria for the CITY to identify amounts of revenue to be
derived from specific types of development;
(e) To prepare a comprehensive system for
analyzing the cost and revenue impacts of development, utilizing
the results of the profiles and /or inventories referred to in
subparagraphs a through d, above. The system shall reflect actu-
al cost, service levels and other conditions unique to the City
of Newport Beach and the system for determining costs and revenu-
es applicable to various land uses will be practical, rational
and capable of being implemented and maintained by CITY personnel
on an on -going basis. The system will cover development within
CITY and identify specific considerations and /or modifications of
approach necessary to apply the system to projected
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annexations, The system will allow CITY to analyze cost /revenue
impacts on the basis of: (1) the "average cost" approach; (2)
the "marginal cost" approach; (3) and other appropriate analysis
techniques;
(f) To forecast current City revenues and
expenditures for an appropriate period in order to clarify
current trends relative to the financial condition of the City;
(g) To generally review and assess revenue
generation and costs by principal, geographic areas of the City;
(h) To prepare and present a draft final
report for review by the Planning Director, the report to contain
all of the information specified in pages 16 through 18 of the
document entitled "Scope for Services" which is attached hereto
as Exhibit "A ";
(i) To prepare and present to the Planning
Commission and City Council a comprehensive final report consist-
ing of the draft report together with any comments or suggestions
from those who have reviewed the draft which are deemed appro-
priate by CONSULTANT;
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(j) Conduct a one -day seminar for CITY staff
on the use and maintenance of the cost revenue system.
2. DUTIES OF CITY
CITY, in consideration of the services to be per-
formed by CONSULTANT pursuant to this contract agrees to pay
CONSULTANT the sum of $16,000.00, with payment for professional
services to be paid to CONSULTANT upon completion of all of the
work set forth in paragraph 1. CITY further agrees to reimburse
CONSULTANT for expenses incurred in the performance of the work
contemplated by this contract on the basis of actual cost to
CONSULTANT, but in no event shall CITY reimburse CONSULTANT for
any expenses incurred in excess of the sum of $2,740.00 without
the approval of the City Council of the City of Newport Beach.
The limit on reimbursement for expenses is based upon estimates
provided by CONSULTANT, and CONSULTANT does not anticipate that
expenses will exceed the sum of $2,740.00. CONSULTANT shall
maintain all records of expenses and professional services
rendered, and shall make such records available for CITY to re-
view during normal business hours.
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3. COMPLETION OF PROJECT
i
The duties of CONSULTANT under this agreement are
to be completed in accordance with the project schedule, set
forth on page 22 of the "Scope of Services" document.
4. TERMINATION
CITY reserves the right to terminate this agree-
, ment, without cause, upon seven (7) days' written notice to
CONSULTANT. In the event of a termination of this agreement
pursuant to this paragraph, CITY shall pay to CONSULTANT for all
tasks performed to the date of termination in accordance with the
itemization of professional services and expenses therefor, con-
tained on pages 20 and 21 of the document. In the event of early
termination pursuant to this paragraph, CITY shall pay for all
expenses incurred by CONSULTANT to the date of termination, but
in no event shall CITY pay in excess of the sum of $2,740.00
without authorization by the City Council
5. MODIFICATION OF SCOPE OF SERVICES
CITY reserves the right to order, in writing,
changes in the scope of services to be performed by CONSULTANT
hereunder. In the event that CITY, by way of modification, re-
quires CONSULTANT to perform services in addition to those spec-
ified herein, CITY agrees to pay CONSULTANT the hourly rates as
specified on page 21 of the scope of services, attached hereto as
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Andersen
Exhibit "A ". CITY further agrees to reimburse CONSULTANT for all
expenses reasonably incurred in the performance of the additional
services required by the modification.
6. LITIGATION SERVICES
CONSULTANT agrees in the event of any legal chal-
lenge to any action involving the CITY wherein the validity of
the comprehensive cost /revenue impact analysis system is an
issue, CONSULTANT agrees to reasonably cooperate with the CITY
and its attorneys in the defense of said litigation, and agrees
to give such testimony as may be reasonably required by CITY to
establish the validity of said system. CITY agrees to compensate
CONSULTANT for the performance of such services at a rate equal
to the then current billing rate and to reimburse CONSULTANT for
all expenses reasonably incurred during the course of the perfor-
mance of those services.
7. ARBITRATION
If, at any time, any controversy shall arise be-
tween CITY and CONSULTANT with respect to any matters arising out
of or relating to this agreement or the breach thereof, which the
parties do not promptly resolve, said controversy shall be decid-
ed by arbitration administered by and in accordance with the
rules of the American Arbitration Association then obtaining,
unless the parties mutually agree otherwise. This agreement to
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Andersen
arbitrate shall be specifically enforceable under the prevailing
arbitration law. The award rendered by the arbitrator shall be
final and judgment may be entered upon it in any court having
jurisdiction thereof.
8. ASSIGNMENT
CONSULTANT has been selected to perform the work
herein on the basis of his expertise and CONSULTANT is not able
to delegate the duties and responsibilities hereunder without
first having obtained the prior written consent of CITY.
9. NOTICES
Any notice required to be given pursuant to the
terms and conditions of this agreement, shall be deemed to have
been given when deposited in the U.S. mail, first - class, postage
pre -paid, and addressed as follows:
City of Newport Beach Ralph Andersen and Associates
3300 Newport Blvd., 1446 Ethan Way Suite 101
Newport Beach, Ca. 92663 Sacramento, California 95825
10. ENTIRE AGREEMENT
This agreement constitutes the entire agreement of
the parties hereto and no other agreement, statement or promise
relating to the subject matter of this agreement which is not
contained herein shall be valid or binding.
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This agreement is effective as of the day and year first
above written.
APPROVED AS TO FORM
7�a
City Attorney
CITY OF NEWPORT BEACH
L.`
RALPH ANDERSEN'AND ASSOCIATES
By: _
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TO:
!�;iil5>A
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City Council
City Counci Oeetin9
Agenda Item No.
CITY OF NEWPORT BEACH
Planning Department
SUBJECT: Cost /Revenue System Update
Suggested Action
February 22. 1982
Fa
If desired, authorize the Mayor and City Clerk to enter into an
agreement with Ralph Andersen and Associates to prepare an updated
Cost /Revenue System for the City of Newport Beach.
Background
At the City Council meeting of October 13, 1981, staff was directed
to update the City Cost /Revenue System originally prepared by
Ashley Economic Services, Inc, in 1976. Staff has interviewed
several qualified consultants and recommends the selection of Ralph
Andersen and Associates.
Discussion
A Request for Proposals (RFP) was distributed on November 12, 1981
to the following firms:
1) Ralph Andersen and Associates
2) The Newport Economics Group
3) Williams - Kuebelbeck and Associates, Inc.
4) Coopers and Lybrand
5) Arthur Young and Company
6) Economic Research Associates
7) The Planning Center
8) Larry Seeman Associates, Inc.
Proposals were submitted by Ralph Andersen, Newport Economics Group,
and Williams - Keubelbeck; the other firms declined to submit.
Staff has interviewed the three proposing firms, and recommends the
selection of Ralph Andersen and Associates for the project. Ralph
Andersen, President and Managing Partner of the firm, will serve
as "Project Director." The "Lead Consultant" will be Jim Harrington,
a Partner and Principal Consultant in the firm, Mr. Harrington is
the former Director of Administrative Services /Director of Finance
for the City of Irvine, and was instrumental in the development of
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TO: City Council - 2.
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Irvine's computerized economic model. In addition to the pre-
paration of individual cost /revenue systems for other cities
in the State, Ralph Andersen and Associates has recently pre-
pared a "Revenue and Expenditure Forecasting Guidebook" for
the League of California Cities.
The proposed Cost /Revenue Update is scheduled to be completed
in three months for a total cost of $18,740, The City Attorney
has prepared a contract setting forth the work to be completed,
including the additional tasks as outlined in the January 27,
1982, letter from Ralph Andersen and Associates. The contract
also places a firm amount on expenses and is attached to this
report.
Respectfully submitted,
PLANNING DEPARTMENT
JAMES D. HEWICKER, Director
WIVOWN
I 11 I. 1 VLV LLL
Senior 4 anner
CTB /kk /pw
Attachments for City Council Only
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SCOPE OF SERVICES
FOR
COST /REVENUE SYSTEM
EXHIBIT "A"
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RALPH ANDERSEN AND ASSOCIATES
December 2, 1981
Mr. James Hewicker
Planning Director
City of Newport Beach
3300 Newport Boulevard
P.O. Box 1768
Newport Beach, California 92663
Dear Mr. Hewicker:
Thank you for the opportunity to submit this proposal to develop an updated
cost /revenue impact analysis system for the City of Newport Beach. We par-
ticularly appreciate your extending the deadline for submitting the proposal
in recognition that we received your Request For Proposals only shortly before
the deadline.
Our firm is well qualified to prepare the cost /revenue system for the City.
We have successfully completed similar assignments for both public and private
sector clients which involved development of overall systems for projecting
revenues and expenditures, as well as assessments of the financial impact of
development on a city -wide basis and for particular development projects.
Examples of similar recently completed projects include:
. !a, ue of California Cities - Preparation of a Revenue and Expen-
iture precasting GuidebooK that will soon be distributed to all
cities in the State.
City of Beverly Hills - Development of a revenue and expenditure
forecasting system for use by city staff.
. City of Rancho Palos Verdes - Development of a long term (10 year)
financial plan, including revenue and expenditure forecasts and
training for city staff on how to continually update and maintain
the plan.
.
Cit x of Redondo Beach - Preparation of a financial forecast of
city revenues and expenditures.
. City of Monterey - Fiscal impact analysis of the proposed "Monterey
ii" development and annexation which included commercial, Indus -
trial and residential development with a projected population of
over 14,000.
These and numerous other successful projects (which are listed in the enclosed
proposal) have helped establish our firm as a well recognized consulting prac-
tice providing public finance and economics services to local governments
throughout the Western United States. We are prepared to begin immediately on
1446 ETHAN WAY • SUITE 101 • SACRAMENTO. CALIFORNIA 95825 • (916) 929 -5575
Mr. James Hewicker
December 2, 1981
Page 2
this assignment, and the most senior staff of our Economics /Public Finance
Division would be assigned to this project. The project staff have been care -
fully selected because of their direct experience in completing similar assign-
ments, their practical experience in city finance administration, and their
particular knowledge of your City and the surrounding area. To assist you in
reviewing our proposal, the contents have been organized into the following
sections:
• Section I - Our Understanding Of The Assignment
• Section II - Our Approach To The Assignment
• Section III - Corporate And Staff Qualifications
• Section IV - Project Tiing and Cost
• Appendices - A - Project Schedule Timeline
B'- Partial List of Clients
Again, we appreciate the opportunity to submit a proposal to the City of New-
port Beach on this important assignment. Should you have any questions or
desire additional information, please contact Jim Harrington in our Sacramento
headquarters office at (916) 929 -5575.
Sincerely
Ralph Andersen & Associates
CM
January 27, 1982
Mr. James Hewicker
Planning Director
City of Newport Beach
3300 Newport Boulevard
P. 0. Box 1768
Newport Beach, California 92663 -3884
Dear Mr. Hewicker:
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ASSOCIATE
As a follow -up to my telephone conversation with Craig Bluell of this date, and
as a supplement to our proposal dated December 2, 1981, this is to confirm our
interest in assisting you and the City of Newport Beach in the development of
a system for determining fiscal impact.
Our proposal contemplates the development of a specific system for determining
the fiscal impact of new development, taking into account recent changes in law
that significantly affect local government finance. The principal purpose of
the system will be to facilitate informed decision- naking by providing factual
information regarding the impact of planning and development proposals. Sub-
ject to a final review of details at our initial project meeting, we are also
prepared to forecast current City revenues and expenditures for an appropriate
period in order to clarify current trends relative to the financial condition
of the City, and to generally review and assess revenue generation and costs
by principal geographic areas of the City. Overall, this should assist in
evaluating the current and longer -term advantages and disadvantages of alter-
nate development scenarios.
Fie are pleased to clarify our proposal, and to confirm that the services as
referenced above can be provided for $16,000 plus reimbursement for out -of-
pocket expenses. We look forward to assisting you and the City on this impor-
tant assignment, and hope you will feel free to call if there is any further
information vie can provide.
Best regards.
Sincerely,
Ralph Andersen
1446 ETHAN WAY . SUITE 101 • SACRAMENTO. CALIFORNIA 95825 • (916) 929 -5575 6
SECTION I •
OUR UNDERSTANDING OF THE ASSIGNMENT
For a number of years the City of Newport Beach has assessed the fiscal impact
of development and planning alternatives, using several methods or systems.
The City's staff initially utilized an internally developed system for fiscal
impact analyses until a Fiscal Impact Analysis System was prepared for the City
by a consultant in July, 1976. For several years, City staff have used the
marginal cost and average cost methodologies of that system to review the fis-
cal impact of development. However, since that Fiscal Impact Analysis System
was prepared, a number of changes have occurred which have significantly alter-
ed the nature of local government finance in general, and the applicability of
the City's Fiscal Impact Analysis System in particular. Some of the more
significant events that have affected local government finance include:
Proposition 13 - Approved by the voters in 1978 (now Article XIII
A of the State Constitution) totally changed the nature and method
for determining property tax revenues.
Proposition 4 - Approved by the voters in 1979 (now Article XIII B
of the State Constitution), among other things, placed limits on
local government appropriations of proceeds of taxes.
SB 102 - Adopted by the State Legislature in 1981 and eliminated
three State revenue subventions that were historically received by
local government, and also reduced the Motor Vehicle In -Lieu Fee
subvention for one year.
SB 215 - ApproveOby the State Legislature in 190, and among other
things, established a new revenue source for local government
transportation through 1985 -86.
Because of these and other changes, the previously developed Fiscal Impact
Analysis System is no longer applicable, and the City is currently reviewing
cost /revenue impact through the Environmental Impact Review (EIR) process on a
project -by- project basis. The City is in need of a current system which will
enable City staff to accurately assess the revenue vs. cost impact of develop-
ment within the City as well as development added to the City through projected
annexations. Therefore, the City of Newport Beach is seeking professional con-
sulting assistance to prepare an updated Cost /Revenue Impact Analysis System.
In particular, the updated system should include, among other things:
. Development of an "average cost" and "marginal cost" analysis and
methodology for the City's Cost /Revenue System. The analysis
should encompass all effected revenues and expenditures and include
a thorough discussion of the advantages and disadvantages of these
and alternative approaches to fiscal impact analysis.
. An identification of the effects of Proposition 13 and other recent
changes in local government finance, particularly property tax
revenue.
An analysis of the fiscal relationships" and effects of various
land use developments on City expenditures and revenues, with par-
ticular consideration of the property tax revenue implications of
shifts or changes in assessed value resulting from different rates
of turnover for commercial and residential properties.
An analysis and explanation of the effects of Proposition 4 revenue
appropriation limits and other revenue limitations (such as recent
legislation specifying procedures for establishing or changing
service charges and fees).
Assumptions and methodologies for revenue and cost distributions
which are clearly explained and documented, particularly including
the approach used for identifying and distributing sales tax re-
venues.
Identification of all assumptions upon which the system is based,
with clear definitions and documentation.
A total design for the cost /revenue system that permits simple,
manual updating by City staff.
As can be seen in Section III of this proposal, Ralph Andersen & Associates
possesses the corporate and staff qualifications to successfully accomplish
the objectives for this project as summarized above. The next section of this
proposal sets forth a_ workplan specifically designed to accomplish the objec-
tives of the City for this assignment.
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• SECTION II •
OUR APPROACH TO THE ASSIGNMENT
In order to fully and accurately meet the needs of the City and achieve the
objectives outlined in the preceding section of this proposal, we have care-
fully developed a workplan that is designed specifically for this project.
The workplan includes a series of tasks which are outlined as follows:
TASK 1 - MEET WITH PLANNING DIRECTOR AND OTHERS AS APPROPRIATE, TO
CONFIRM OBJECTIVES, APPROACH AND TIMING
It is important that the assignment be initiated with a
clear understanding of project objectives, approach, timing, end -
products, and related concerns. Accordingly, project staff will meet
with the Planning Director and other City personnel as appropriate
to review the proposed project workplan and timetable.
PRODUCT OF TASK I
This task will assure a mutual understanding of project objectives
' and approach, as well as result in a refined agenda of tasks and a
specific timetable for their completion.
TASK 2 - REVIEW THE CITY'S CURRENT AND PLANNED LAND USES, AND PRO-
JECTED ANNEXATIONS
In order to develop a cost /revenue impact analysis system
that best meets the needs of the City, it is 'important to understand
and document the particular nature of current and planned development
within the City as well as development that will become a part of
the City as a result of projected annexations. Project staff will
build upon their current knowledge of Newport Beach by initially
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reviewing existing documents and reports on current and planned de-
velopment. Staff will also meet with City planning staff and others
as appropriate to review and document the nature, scope, and timing
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of development, projected annexations, and existing land uses. Pro-
ject staff will identify and document relevant data and assumptions
regarding:
. Existing demographic and economic data.
Existing land uses by type, location and area of the total City.
Nature, scope and timing of planned development.
. Nature, scope and timing of projected annexations.
Other land use data and considerations affecting City costs and
revenues.
PRODUCT OF TASK 2
This task will result in a documented profile of current and planned
land uses within the City and for projected annexations. This data
and information will provide the basis for developing appropriate
methods for identifying and distributing costs and revenues.
TASK 3 - IDENTIFY SERVICE AND INFRASTRUCTURE REQUIREMENTS ASSOCIATED
WITH DEVELOPMENT OF VARIOUS TYPES OF LAND USES
Once data and assumptions have been developed regarding
current and planned development, project staff will prepare a profile
of local service and public facility requirements for various areas
and land uses within the City. The profile will take into considera-
tion both the incremental or marginal service requirements associated
with development, as well as the overall relationship of development
to City services and infrastructure. The profile will identify and
document the data and assumptions regarding service and public
facility infrastructure' requirements for all City areas, including
such City expenditure categories as:
General Operating
- City Council
- City Clerk
- City Manager
- Personnel
- City Attorney
- Finance
- Police
- Fire
- Planning
- Marine
- Building
- Public Works
- General Services
- Libraries
- Park and Recreation
- Nondepartmental
- Retirement
Utility Operating Budgets
- Electrical
- Sewers
- Water
- 'dater Bond Debt Service
- Marina Park
1 Capital ImpT6vements
- Harbor and Tidelands
- Drainage
- Sewer
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- Street
- Park and Recreation Fund
- Water Fund
- Gas Tax Funds
- Building Excise Tax Fund
- Federal Revenue Sharing Fund
The .service and infrastructure profile will be based upon meetings
with appropriate- City departmental staff, our knowledge of local
agency practices, and review of appropriate City documents and re-
ports.
PRODUCT OF TASK 3
An inventory of service provided to development within the various
land uses, including an identification of service levels and other
criteria for City services and infrastructure.
TASK 4 - IDENTIFY RECURRING AND NON- RECURRING COSTS ON THE BASIS OF
AVERAGE, MARGINAL AND OTHER COST MEASURES AS APPROPRIATE
Provision of City services and facilities to development
will require certain one -time and continuing costs. These will be
identified as specific incremental (marginal) costs attributable
directly to development, and as a general application of cost (aver-
age cost) for city -wide services and infrastructure from which de-
velopment benefits. Many of these costs will be assumed by the
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developer as a condition of approval for development, while others
become a direct obligation of the City. This task will identify the
nature and magnitude of such costs, clarify who is responsible for
such costs, and develop specific criteria and assumptions for ap-
plying appropriate costs to development.
PRODUCT OF TASK 4
A comprehensive inventory of all recurring and non - recurring costs
associated with providing City services and facilities to develop-
ment. The nature, magnitude and responsibilities for such costs
will be identified and specific methodologies and criteria for dis-
tributing costs applicable to the various types of land uses will be
developed, including marginal cost, average cost, or other appro-
priate cost allocation techniques.
TASK 5 - IDENTIFY RECURRING AND NON- RECURRING REVENUES DERIVED FROM
DEVELOPMENT
As with costs, development will generate additional one -time
and continuing revenue that can be utilized to finance City services
and capital improvements. All sources -of additional revenue will be
identified, including such sources as:
• Property Taxes
• Transient Occupancy Tax
• Sales and Use Tax
• Property Transfer Tax
• Licenses and Permits
• State Subventions
y - Cigare'Cte Tax •
I - Motor Vehicle In -Lieu Fees
- Gasoline Taxes
. Charges and Fees For Services
. Building Excise Tax
. Other Miscellaneous Sources
Project staff will carefully review City budget documents and various
ordinances, resolutions and adopted policies relating to City re-
venues, as well as meet with appropriate City finance personnel to
review the basis, nature and administration of City revenues. Pro-
; jest staff will also specifically take into consideration the effects
of Proposition .1-3, Proposition 4, and other more recent legislation
affecting City revenue sources.
PRODUCT OF TASK 5
A complete and definitive listing of all City revenue sources that
will be available from development, and a rational and appropriate
methodology and criteria for the City to identify amounts of revenue
with the specific types of development from which each revenue source
is derived.
TASK 6 - DEVELOP A COMPREHENSIVE REVENUE AND COST IMPACT ANALYSIS
SYSTEM
Utilizing the analyses and products of the preceding tasks,
project staff will prepare a comprehensive system for analyzing the
revenue and cost impacts of development. The system will be speci-
fically developed for the City of Newport Beach to take into consi-
deration actual costs, service levels and other conditions unique to
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the City. The system for determining costs and revenues applicable
to the various land uses will be practical, rational and capable of
being implemented and maintained by City personnel on an ongoing
basis. The system will cover development within the City and iden-
tify specific considerations and /or modifications of approach. ne-
cessary to apply the system to projected annexations. Finally, the
system will permit the City to analyze cost /revenue impacts on the
basis of:
• "average cost" approach
• "marginal cost" approach
• other appropriate analysis techniques
PRODUCT OF TASK 6
A comprehensive system for the City to utilize to identify and an-
alyze the cost and revenue impact of various types of development,
including projected annexations.
TASK 7 - PREPARE AND PRESENT A DRAFT FINAL REPORT
The updated system for analysis of cost /revenue impact will
be documented and explained in a concise but comprehensive draft
final report for review by the Planning Director and others as ap-
propriate. The draft report will be complete and will clearly docu-
ment and explain the methodologies and assumptions upon which the
system is based. As a minimum, the draft final report will:
Provide a comprehensive method for specifically identify-
ing recurring and non - recurring costs to the City re-
sulting from various types of development.
Permit analysis of the costs of development on the basis
of:
- average cost approach
- marginal cost approach
- other appropriate analysis techniques
Each approach will be discussed and explained, including
advantages and disadvantages of each.
. Provide a comprehensive method for identifying the amount
of each principal source of recurring and non- recurring
revenue associated with each of the development land
uses.
Provide a summary of the fiscal relationships and effects
of development in each of the principal land use cate-
gories.
Identify specific considerations and approaches for ap-
plying the cost /revenue analysis system to projected
annexations.
Contain an analysis and explanation of the effects Pro-
position 13, Proposition 4 and recent statutory measures
impacting the costs and revenues that are generated by
development.
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A clear identification of and explanation for all as-
sumptions and methodologies used in the cost /revenue
impact analysis system.
Provide an overall approach to the cost /revenue analysis
system that is clear, rational and can be easily adminis-
tered and updated by City staff.
PRODUCT OF TASK 7
A clear and comprehensive draft final report for review by the Plan-
ning Director and others as appropriate. Project staff will present
the report and note any comments or suggestions from those reviewing
it
TASK 8 - PREPARE AND PRESENT A COMPREHENSIVE FINAL REPORT
Project staff will take into consideration any comments or
suggestions from those who have reviewed the draft, make revisions
as appropriate, and prepare a final comprehensive report. Project
staff will be prepared to make a presentation to the Planning Com-
mission and City Council.
PRODUCT OF TASK 8
A comprehensive report presenting the updated cost /revenue impact
analysis system.
TASK 9 - CONDUCT A ONE -DAY SEMINAR FOR CITY STAFF ON USE AND MAINTE-
NANCE OF THE COST /REVENUE SYSTEM
The final report will clearly document and explain the up-
dated cost /revenue system. For the system to be a continually viable
to
tool for City anaysis and decision- making, it should be reviewed
and updated periodically to reflect changes in law, local policies,
and economic conditions. The system will be developed so as to per-
mit use and updating by City staff on an ongoing basis. To facili-
tate City staff's understanding and use of the system, project staff
will conduct a one -day seminar on how to use, maintain or update the
system.
PRODUCT OF TASK 9
Training for City staff to facilitate their ongoing use, maintenance
and revision of the system as needed.
The following section demonstrates the ability of Ralph Andersen and Associates
to accomplish these tasks by presenting the expeience and qualifications of the
corporation and the staff that would be assigned to this project.
f/I?
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SECTION IV
PROJECT TIMING AND COST
We are prepared to proceed with the assignment immediately and anticipate com-
pleting all tasks of the project within 12 weeks (see Appendix A: Project
Schedule Timeline). Throughout the project, Ralph Andersen & Associates will
establish and maintain all records and files necessary to demonstrate that the
terms and conditions of the contract have been complied with. These records
will be maintained for at least three years and be available for review or
audit.
As requested, the project cost has been itemized for each task of the proposed
workplan. The total cost for all professional services would be $16,000.
Out -of- pocket expenses such as travel, printing, and long distance telephone
would be reimbursed on an actual -cost basis, not to exceed $2,740 without the
prior authorization of the City. The two additional tasks discussed in the
letter dated January 27, 1982, will result primarily from work involved in the
completion of the nine tasks outlined in the scope of services. Therefore,
adJustments in the cost of Drofessional services and expenses is not necessarv.
Professional
Workplan Task Services Expenses
1. Review and Confirm Project Objectives, Approach (Combined
and Timing with #2)
2. Review Current and Planned Land Uses, and Pro-
jected Annexations $ 1,575 $ 350
3.
Identify Service and Infrastructure Requirements
for Development /Land Uses
2,625
480
4.
Identify Recurring and Non - Recurring Costs for
Land Uses /Development
2,625
120
5.
Identify Recurring and Non - Recurring Revenues for
Land Uses /Development
2,100
330
*6.
Develop Comprehensive Cost /Revenue Impact Analysis
System
2,100
100
*
Note: Several elements of Task 6 will be accomplished
in Tasks
3, 4 and 5 �O
0
Irofessional
Workplan Task
Services
Expenses
7. Prepare and Present Draft Final
Report (assumes
one presentation, and printing
15 copies of the
report)
2,100
420
8. Prepare and Present Final Report (assumes two
presentations and 25 copies of
the report)
2,100
650
9. Conduct Seminar for City Staff
on Use and Updating
of System
775
290
TOTAL COSTS
$16,000
$2,740
As noted above, certain assumptions were necessary regarding costs associated
with the number of meetings and reports printed. We also understand and appre-
ciate that the City may wish to expand or reduce the scope relative to their
budget constraints or other requirements. We would be pleased to discuss such
matters further prior to entering into a contract for services. Should the
City wish to have additional printing or have our staff make additional pre-
sentations, the costs for such items would be based upon applicable hourly
billing rates and reimbursement for actual out -of- pocket expenses. As re-
quested, current hourly billing rates are as follows:
Classification Hourly Rate
Managing Partner $76
Partner /Principal Consultant 65
Senior Consultant 53
Consultant 45
Analyst 38
We look forward to the opportunity to assist you on this important assignment.
If you have any questions or need additional information, please contact Jim
1
1
Harrington in our Sacramento headquarters office at 929 -5575.
C.:z/
CITY OF NEWPORT BEACH
COST /REVENUE IMPACT ANALYSIS SYSTEM
Project Schedule Timeline
WORKPLAN TASKS WEEKS
1 2 3 4 5 6 7 8 9 10 11 12
1. Review and Confirm
Project Workplan/
Timing —
2. Review Current and
Planned Land Uses,
And Projected Annex-
ations
3. Identify Service And
Infrastructure Re-
lated To Develop-
ment /Land Uses
4. Identify Recurring
And Non - Recurring
Costs
5. Identify Recurring
And Non - Recurring
Revenues
6. Develop Comprehen-
sive Cost /Revenue
Impact Analysis
System
7. Prepare And Present
Draft Final Report
8. Prepare and Present
Final Report
9. Conduct Seminar For
City Staff
I
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RESOLUTION NO. 8 2 -2
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH AUTHORIZING THE MAYOR AND
CITY CLERK TO APPROVE AND EXECUTE AN AGREEMENT
BETWEEN THE CITY OF NEWPORT BEACH AND RALPH
ANDERSEN & ASSOCIATES FOR THE PREPARATION OF A
COST /REVENUE IMPACT ANALYSIS REPORT PERTAINING
TO THE CITY OF NEWPORT BEACH
WHEREAS, there has been presented to the City Council
of the City of Newport Beach a certain Cost /Revenue and Impact
Analysis Report between the CITY OF NEWPORT BEACH and RALPH
ANDERSON & ASSOCIATES in connection with the scope of services to
be performed for CITY regarding cost /revenue impacts for an
overall system of projecting revenues and expenditures, as well
as assessments of financial impacts of development on particular
development projects, a copy of the Cost /Revenue and Impact
Analysis Report is attached hereto, marked Exhibit "A" and
incorporated herein by reference; and
WHEREAS, the City Council has reviewed the terms and
conditions of said Agreement and finds them to be fair and
equitable and that it would be in the best interests of the City
to execute said Agreement.
NOW, THEREFORE, BE IT RESOLVED by the City Council of
the City of Newport Beach that the Cost /Revenue Impact Analysis
System Report, above - described, is approved and the Mayor and
City Clerk are hereby authorized and directed to execute same on
behalf of the City of Newport Beach.
ADOPTED this — day of FEB 2 2 "1982.
ATTEST:
City Cler
022282
PR
Mayor
PROFESSIONAL SERVICES AGREEMENT
THIS AGREEMENT made this day of , 1982, by
and between the CITY OF NEWPORT BEACH, a Municipal Corporation,
hereinafter CITY, and RALPH ANDERSEN AND ASSOCIATES, hereinafter
referred to as CONSULTANT, is made with reference to the follow-
ing facts, the materiality and existence of which is stipulated
and agreed by the parties:
A. CITY is in need of a specific system for de-
termining the fiscal impact of new development occurring within
CITY so as to facilitate informed decision - making by the Planning
Commission and City Council with respect to the fiscal impact of
planning and development proposals; and
B. CONSULTANT has extensive experience in the
preparation of revenue and expenditure forecasting systems as
well as the preparation of fiscal impact analysis of development
and annexation proposals; and
C. CITY is desirous of retaining CONSULTANT to
prepare, inter alia, a cost revenue impact analysis system such
that CITY staff, the Planning Commission and City Council will be
able to intelligently evaluate fiscal impacts of various develop-
ment proposals.
EXHIBIT A
A- 7H- 021682 •
Andersen
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NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. DUTIES OF CONSULTANT
CONSULTANT agrees to do the following:
(a) To review current and planned land uses
within the City of Newport Beach, as well as projected annexat-
ions, and to meet and consult with City pesonnel with respect to
the manner in which a comprehensive cost /revenue impact analysis
system should be developed, with such consultation to consider
the objectives of such a system, the approach that should be
taken with respect to the development of the system, the nature
of the system and the time, within which the system should be
developed. This review is to result in a clear understanding on
the part of CONSULTANT of the needs of CITY, with respect to the
cost revenue impact analysis system, and allow CONSULTANT to
prepare a specific time table for the completion of the tasks
which are.to result in the preparation of the system.
(b).. To prepare a profile or inventory of
local service and public facility requirements for various areas
within CITY and various land uses within CITY; the profile or
inventory will take into consideration both the incremental or
marginal service requirements associated with development, as
well as the overall relationship of.development to CITY services
and intrastructure;
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X -7x- 021682 • •
Andersen
(c) To prepare a comprehensive inventory of
all recurring and non - recurring costs associated with providing
CITY services and facilities to development. Included within
this inventory there will be an identification of the nature,
magnitutde of and responsibilities for such costs, as well as
specific methodologies and criteria for distributing costs
applicable to various types of land uses;
(d) To prepare a complete and definitive
listing of CITY revenue sources that will be available from deve-
lopment, together with the rationale and appropriate methodology
and criteria for the CITY to identify amounts of revenue to be
derived from specific types of development;
(e) To prepare a comprehensive system for
analyzing the cost and revenue impacts of development, utilizing
the results of the profiles and /or inventories referred to in
subparagraphs a through d, above. The system shall reflect-actu-
al cost, service levels and other conditions unique to the City
of Newport Beach and the system for determining costs and revenu-
es applicable to various land uses will be practical, rational
and capable of being implemented and maintained by CITY personnel
on an on -going basis. The system will cover development within
CITY and identify specific considerations and /or modifications of
approach necessary to apply the system to projected
3
A -7H- 021682 • •
Andersen
annexations. The system will allow CITY to analyze cost /revenue
impacts on the basis of: (1) the "average cost" approach; (2)
the "marginal cost" approach; (3) and other appropriate analysis
techniques;
(f) To forecast current City revenues and
expenditures for an appropriate period in order to clarify
current trends relative to the financial condition of the City;
(g) To generally review and assess revenue
generation and costs by principal, geographic areas of the City;
(h) To prepare and present a draft final
report for review by the Planning Director, the report to contain
all of the information specified in pages 16 through 18 of the
document entitled "Scope for Services" which is attached hereto
as Exhibit "A ";
(i) To prepare and present to the Planning
Commission and City Council a comprehensive final report consist-
ing of the draft report together with any comments or suggestions
from those who have reviewed the draft which are deemed appro-
priate by CONSULTANT;
2
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A -7H- 021682 , •
Andersen
(j) Conduct a one -day seminar for CITY staff
on the use and maintenance of the cost revenue system.
2. DUTIES OF CITY
CITY, in consideration of the services to be per -
formed by CONSULTANT pursuant to this contract agrees to pay
CONSULTANT the sum of $16,000.00, with payment for professional
services to be paid to CONSULTANT upon completion of all of the
work set forth in paragraph 1. CITY further agrees to reimburse
CONSULTANT for expenses incurred in the performance of the work
contemplated by this contract on the basis of actual cost to.
CONSULTANT, but in no event shall CITY reimburse CONSULTANT for
any expenses incurred in excess of the sum of $2,740.00 without
the approval of the City Council of the City of Newport Beach.
The limit on reimbursement for expenses is based upon estimates
provided by CONSULTANT, and CONSULTANT does not anticipate that
expenses will exceed the sum of $2,740.00. CONSULTANT shall
maintain all records of expenses and professional services
rendered, and shall make such records available for CITY to re-
view during normal business hours.
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A -7H- 021682
Andersen
3. COMPLETION OF.PROJECT
The duties of CONSULTANT under this agreement are
to be completed in accordance with the project schedule, set
forth on page 22 of the "Scope of Services" document.
4. TERMINATION
CITY reserves the right to terminate this agree- .
.ment, without cause, upon seven (7) days' written notice to
CONSULTANT. In the event of a termination of this agreement
pursuant to this paragraph, CITY shall pay to CONSULTANT for all
tasks performed to the date of termination in accordance with the
itemization of professional services and expenses therefor, con-
tained on pages 20 and 21 of the document. In the event of early
termination pursuant to this paragraph, CITY shall pay for all
expenses incurred by CONSULTANT to the date of termination, but
in no event shall CITY pay in excess of the sum of $2,740.00
without authorization by the City Council
5. MODIFICATION OF SCOPE OF SERVICES
CITY reserves the right to order, in writing,
changes in the scope of services to be performed by CONSULTANT
hereunder. In the event that CITY, by way of modification, re-
quires CONSULTANT to perform services in addition to those spec-
ified herein, CITY agrees to pay CONSULTANT the hourly rates as
specified on page 21 of the scope of services, attached hereto as
0
A -7H- 021682
Andersen
Exhibit "A ". CITY further agrees to reimburse CONSULTANT for all
expenses reasonably incurred in the performance of the additional
services required by the modification.
6. LITIGATION SERVICES
CONSULTANT agrees in the event of any legal chal-
lenge to any action involving the CITY wherein the validity of
the comprehensive cost /revenue impact analysis system is an
issue, CONSULTANT agrees to reasonably cooperate with the CITY
and its attorneys in the defense of said litigation, and agrees
to give such testimony as may be reasonably required by CITY to
establish the validity of said system. CITY agrees to compensate
CONSULTANT for the performance of such services at a rate equal
to the then current billing rate and to reimburse CONSULTANT for
all expenses reasonably incurred during the course of the perfor-
mance of those services.
7. ARBITRATION
If, at any time., any controversy shall arise be-
tween CITY and CONSULTANT with respect to any matters arising out
of or relating to this agreement or the breach thereof, which the
parties do not promptly resolve, said controversy shall be decid-
ed by arbitration administered by and in accordance with the
rules of the American Arbitration Association then obtaining,
unless the parties mutually agree otherwise. This agreement to
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A -7H- 021682 •
Andersen
arbitrate shall be specifically enforceable under the prevailing
arbitration law. The award rendered by the arbitrator shall be
final and judgment may be entered upon it in any court having
jurisdiction thereof.
8. ASSIGNMENT
CONSULTANT has been selected to perform the work
herein on the basis of his expertise and CONSULTANT is not able
to delegate the duties and responsibilities hereunder without
first having obtained the prior written consent of CITY.
9. NOTICES
Any notice required to be given pursuant to the
terms and conditions of this agreement, shall be deemed to have
been given when deposited in the U.S, mail, first - class, postage
pre -paid, and addressed as follows:
City of Newport Beach
3300 Newport Blvd.,
Newport Beach, Ca. 92663
Ralph Andersen and Associates
1446 Ethan Way Suite 101
Sacramento, California 95825
10. ENTIRE AGREEMENT
This agreement constitutes the entire agreement of
the parties hereto and no other agreement, statement or promise
relating to the subject matter of this agreement which is not
contained herein shall be valid or binding.
W
A- 7H- 021682 •
Andersen
0
This agreement is effective as of the day and year first
above written.
CITY OF NEWPORT BEACH
By:
RALPH ANDERSEN AND ASSOCIATES
By:
APPROVED AS TO FORM
-t� 44 // M
City Attorney
0