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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 0 D • 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. A -7H- 021682 • • Andersen 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; 2 A -7H- 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; 9 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. E 1 A -7H- 021682 • • Andersen 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 L" 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 7 • • 1 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 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. E3 i A- 7H- 0216$2 • Andersen 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: _ 91 TO: !�;iil5>A u 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 E TO: City Council - 2. • 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 0 SCOPE OF SERVICES FOR COST /REVENUE SYSTEM EXHIBIT "A" 3 '4 i` i L] 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: 9 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. 9 • 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 I 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 i 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 i - 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 I 13 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 I /S- 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. /7 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? 0 • 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 0 0 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 0 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; ►q 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 1 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. 5 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 7 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