SR - AGR-6546 - USER FEE STUDYAGENDA ITEM
Date: December 12, 2017
�CC�INTY GP
ReviewedNerified
City Manager
TO: Honorable Mayor and Finance Direct r
Members of the City Council To Be Presente : Will Kolbow
THRU Rick Otto X Cons Calendar _ City Mgr Rpts
City Manager Council Reports _ Legal Affairs
FROM: William M. Kolbow2/i�V4/ Boards /Crates _ Public Hrgs
Finance Director Admin Reports Plan/Environ
1. SUB
Agreement with Matrix Consulting Group to conduct a User Fee Study.
2. SUMMARY
A Request for Proposal (RFP) was released for updating the City's user fees and the City received
five responses. Based on the evaluation of the proposals, Matrix Consulting Group was the top
ranked consultant.
1 3. RECOMMENDED ACTION
Approve agreement with Matrix Consulting Group in the amount of $48,000 and authorize the
Mayor and City Clerk to execute on behalf of the City.
14. FISCAL IMPACT
Funds are available to cover the cost of the contract as follows:
100.0201.51670.00000 Other Professional & Consulting Services $48,000
5. STRATEGIC PLAN GOAL(S)
2. Be a Fiscally Healthy Community
b. Analyze future fiscal needs and potential revenue opportunities.
d. Effectively manage and develop City assets.
GENERAL PLAN IMPLEMENTATION
N/A
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7. DISCUSSION and BACKGROUND
Introduction
The last comprehensive citywide user fee study performed by a consultant was completed in
December 2007. The City updated the Master Schedule of Fees and Charges in January 2008
based upon the results of the study. These fees were reviewed by staff and portions of the fee
schedule were updated in February 2010. Several individual fees have been revised since then.
The most recent update to an individual fee was in December 2015.
Due to the continued efforts to enhance our efficiency and cost effectiveness, many processes of
providing city services have been changed. In light of the current economic cycle and the need for
departments to review their cost of services and fee revenues charged, the City has determined to
engage a consultant to perform a complete assessment on the user fees.
The study to be conducted by a consultant will include review of the current user fees charged,
total cost analysis, and recommendations on appropriate updated and potential new fees. Fees
such as building related permits, plan check fees, and report fees will be reviewed, among others.
Development impact fees, sewer fees, and water rates are not included in the study. Rental fees
for rooms and equipment as well as penalty fees and late charges will be reviewed by staff
internally. The goal is to have the comprehensive fee study completed and revised fee schedule to
be considered by the City Council in June 2018 so that it may be reviewed alongside the FY 19
budget. Staff will also present initial information during one of our upcoming Budget Study
Sessions for City Council review and feedback.
RFP Process
In October, staff distributed an RFP to solicit proposals from qualified consultants for the study.
Five proposals were received in response and were reviewed by staff. The proposals were rated
on the basis of the following key criteria:
1. Thoroughness and understanding of the tasks to be completed
2. Background and experience in organizational analysis evaluation
3. Consultant's expertise and overall experience with this type of study
4. Time required to accomplish the requested services
5. Responsiveness to requirements of the study
6. Price, considering both the overall cost and the cost relative to the number of hours
proposed
Matrix Consulting Group had the top ranking. From highest to lowest rating, the summary results
are as follows:
1. Matrix Consulting Group
2. MGT Consulting Group
3. Willdan Financial Services
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4. Revenue & Cost Specialists, LLC
5. Michael Baker International
Matrix Consulting Group showed the most thorough understanding of the project scope, had a
timely project schedule, proposed a reasonable fee with a considerable amount of time allocated
to the project, had the most local relevant experience with this type of project, and provided a
sample report that is comprehensive and analytical. Other cities reported that they have had a
positive experience in working with Matrix. The total cost of the Agreement is not -to- exceed
$48,000, and will be funded with appropriated funds in the General Fund.
8. ATTACHMENTS
• Consultant Services Agreement, Exhibit A
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CONSULTANT SERVICES AGREEMENT
THIS CONSULTANT SERVICES AGREEMENT (the "Agreement ") is made at
Orange, California, on this day of , 2017 (herein referred to as the "Effective
Date ") by and between the CITY OF ORANGE, a municipal corporation ( "City "), and MATRIX
CONSULTING GROUP, LTD, a California corporation ( "Consultant "), who agree as follows:
1. Services Subject to the terms and conditions set forth in this Agreement,
Consultant shall provide to the reasonable satisfaction of City the services set forth in Exhibit "A ",
which is attached hereto and incorporated herein by this reference. As a material inducement to
the City to enter into this Agreement, Consultant represents and warrants that it has thoroughly
investigated and considered the scope of services and fully understands the difficulties and
restrictions in performing the work. Consultant represents that it is experienced in performing the
work and will follow the highest professional standards in performance of the work. All services
provided shall conform to all federal, state and local laws, rules and regulations and to the best
professional standards and practices. The terms and conditions set forth in this Agreement shall
control over any terms and conditions in Exhibit "A" to the contrary.
Josephine Chan, Investment /Revenue Officer (herein referred to as the "City's Project
Manager "), shall be the person to whom the Consultant will report for the performance of services
hereunder. It is understood that Consultant's performance hereunder shall be under the direction
and supervision of the City's Project Manager (or his /her designee), that Consultant shall
coordinate its services hereunder with the City's Project Manager to the extent required by the
City's Project Manager, and that all performances required hereunder by Consultant shall be
performed to the satisfaction of the City's Project Manager and the City Manager.
2. Compensation and Fees
a. Consultant's total compensation for all services performed under this
Agreement, shall not exceed FORTY EIGHT THOUSAND and 00 /100 DOLLARS ($48,000.00)
without the prior written authorization of the City.
b. The above fee shall include all costs, including, but not limited to, all
clerical, administrative, overhead, insurance, reproduction, telephone, travel, auto rental,
subsistence and all related expenses.
3. Payment
a. As scheduled services are completed, Consultant shall submit to City an
invoice for the services completed, authorized expenses and authorized extra work actually
performed or incurred.
b. All such invoices shall state the basis for the amount invoiced, including
services completed, the number of hours spent and any extra work performed.
C. City will pay Consultant the amount invoiced within thirty (30) days after
the approval of the invoice.
d. Payment shall constitute payment in full for all services, authorized costs
and authorized extra work covered by that invoice.
4. Change Orders No payment for extra services caused by a change in the scope
or complexity of work, or for any other reason, shall be made unless and until such extra services
and a price therefor have been previously authorized in writing and approved by the City Manager
or his designee as an amendment to this Agreement. The amendment shall set forth the changes
of work, extension of time for preparation and adjustment of the fee to be paid by City to
Consultant.
5. Licenses Consultant represents that it and any subcontractors it may engage,
possess any and all licenses which are required under state or federal law to perform the work
contemplated by this Agreement and that Consultant and its subcontractors shall maintain all
appropriate licenses, including a City of Orange business license, at its cost, during the
performance of this Agreement.
6. Independent Contractor At all times during the term of this Agreement,
Consultant shall be an independent contractor and not an employee of City. City shall have the
right to control Consultant only insofar as the result of Consultant's services rendered pursuant to
this Agreement. City shall not have the right to control the means by which Consultant
accomplishes services rendered pursuant to this Agreement. Consultant shall, at its sole cost and
expense, furnish all facilities, materials and equipment which may be required for furnishing
services pursuant to this Agreement. Consultant shall be solely responsible for, and shall
indemnify, defend and save City harmless from all matters relating to the payment of its
subcontractors, agents and employees, including compliance with social security, withholding and
all other wages, salaries, benefits, taxes, exactions, and regulations of any nature whatsoever.
Consultant acknowledges that Consultant and any subcontractors, agents or employees employed
by Consultant shall not, under any circumstances, be considered employees of the City, and that
they shall not be entitled to any of the benefits or rights afforded employees of the City, including,
but not limited to, sick leave, vacation leave, holiday pay, Public Employees Retirement System
benefits, or health, life, dental, long -term disability or workers' compensation insurance benefits.
7. Consultant Not Agent Except as City may specify in writing, Consultant shall
have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an
agent. Consultant shall have no authority, express or implied, to bind City to any obligation
whatsoever.
8. Designated Persons Except as otherwise authorized by the City's Project
Manager, only those persons designated in Exhibit "A" shall perform work provided for under this
Agreement. It is understood by the parties that clerical and other nonprofessional work may be
performed by persons other than those designated.
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9. Assignment or Subcontracting No assignment or subcontracting by Consultant
of any part of this Agreement or of funds to be received under this Agreement shall be of any force
or effect unless the assignment has had the prior written approval of City. City may terminate this
Agreement rather than accept any proposed assignment or subcontracting. Such assignment or
subcontracting may be approved by the City Manager or his designee.
10. Time of Completion Consultant agrees to commence the work provided for in
this Agreement within ten (10) days of the date herein above stated and to diligently prosecute
completion of the work in accordance with the time period set forth in Exhibit "A" hereto or
otherwise agreed to by and between the representatives of the parties.
11. Time Is of the Essence Time is of the essence in this Agreement. Consultant
shall do all things necessary and incidental to the prosecution of Consultant's work.
12. Reserved
13. Delays and Extensions of Time. Consultant's sole remedy for delays outside its
control, other than those delays that are caused by the City, shall be an extension of time. No
matter what the cause of the delay, Consultant must document any delay and request an extension
of time in writing at the time of the delay to the satisfaction of City. Any extensions granted shall
be limited to the length of the delay outside Consultant's control. If Consultant believes that delays
caused by the City will cause it to incur additional costs, it must specify, in writing, why the delay
has caused additional costs to be incurred and the exact amount of such cost at the time the delay
occurs. No additional costs can be paid that exceed the not to exceed amount absent a written
amendment to this Agreement.
14. Products of Consultant The documents, studies, reports, plans, citations,
materials, manuals and other products produced or provided by Consultant for this Agreement
shall become the property of City upon receipt. Consultant shall deliver all such products to City
prior to payment for same. City may use, reuse or otherwise utilize such products without
restriction.
15. Equal Employment Opportunity During the performance of this Agreement,
Consultant agrees as follows:
a. Consultant shall not discriminate against any employee or applicant for
employment because of race, color, religion, sex, national origin or mental or physical disability.
Consultant shall ensure that applicants are employed and that employees are treated during
employment, without regard to their race, color, religion, sex, national origin, or mental or physical
disability. Such actions shall include, but not be limited to the following: employment, upgrading,
demotion or transfer, recruitment or recruitment advertising, layoff or termination, rates of pay or
other forms of compensation and selection for training, including apprenticeship. Consultant
agrees to post in conspicuous places, available to employees and applicants for employment, a
notice setting forth provisions of this non - discrimination clause.
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b. Consultant shall, in all solicitations and advertisements for employees
placed by, or on behalf of Consultant, state that all qualified applicants will receive consideration
for employment without regard for race, color, religion, sex, national origin, or mental or physical
disability.
C. Consultant shall cause the foregoing paragraphs (a) and (b) to be inserted in
all subcontracts for any work covered by this Agreement, provided that the foregoing provisions
shall not apply to subcontracts for standard commercial supplies or raw materials.
16. Conflicts of Interest Consultant agrees that it shall not make, participate in the
making, or in any way attempt to use its position as a consultant to influence any decision of City
in which Consultant knows or has reason to know that Consultant, its officers, partners, or
employees have a financial interest as defined in Section 87103 of the Government Code.
17. Indemnity
a. To the fullest extent permitted by law, Consultant agrees to indemnify,
defend and hold the City, its City Council and each member thereof, and the officers, employees
and representatives of the City (herein referred to collectively as the "Indemnitees ") entirely
harmless from all liability arising out of:
(1) Any and all claims under worker's compensation acts and other employee
benefit acts with respect to Consultant's employees or Consultant's contractor's
employees arising out of Consultant's work under this Agreement; and
(2) Any claim, loss, injury to or death of persons or damage to property caused
by any act, neglect, default, or omission other than a professional act or omission
of the Consultant, or person, firm or corporation employed by the Consultant, either
directly or by independent contract, including all damages due to loss or theft
sustained by any person, firm or corporation including the Indemnitees, or any of
them, arising out of, or in any way connected with the work or services which are
the subject of this Agreement, including injury or damage either on or off City's
property; but not for any loss, injury, death or damage caused by the active
negligence or willful misconduct of City. The Consultant, at Consultant's own
expense, cost and risk, shall indemnify any and all claims, actions, suits or other
proceedings that may be brought or instituted against the Indemnitees on any such
claim or liability covered by this subparagraph, and shall pay or satisfy any
judgment that may be rendered against the Indemnitees, or any of them, in any
action, suit or other proceedings as a result of coverage under this subparagraph.
b. To the fullest extent permitted by law, Consultant agrees to indemnify and
hold Indemnitees entirely harmless from all liability arising out of any claim, loss, injury to or
death of persons or damage to property caused by the negligent professional act or omission in the
performance of professional services pursuant to this Agreement.
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C. Except for the Indemnitees, the indemnifications provided in this
Agreement shall not be construed to extend any third party indemnification rights of any kind to
any person or entity which is not a signatory to this Agreement.
18. Insurance
a. Consultant shall carry workers compensation insurance as required by law
for the protection of its employees during the progress of the work. Consultant understands that it
is an independent contractor and not entitled to any worker's compensation benefits under any City
program.
b. Consultant shall maintain during the life of this Agreement, comprehensive
general liability insurance or commercial general liability insurance written on an occurrence basis
providing for a combined single limit of $1 million for bodily injury, death and property damage.
C. Consultant shall maintain during the life of this Agreement, automotive
liability insurance on a comprehensive form written on an occurrence basis covering all owned,
non -owned and hired automobiles providing for a combined single limit of $1 million for bodily
injury, death and property damage.
d. Each policy of general liability and automotive liability shall provide that
City, its officers, agents, and employees are declared to be additional insureds under the terms of
the policy, but only with respect to the work performed by Consultant under this Agreement. A
policy endorsement to that effect shall be provided to the City along with the certificate of
insurance, which endorsement shall be on Insurance Services Office, Inc. Form CG 20 10 10 01.
In lieu of an endorsement, the City will accept a copy of the policy(ies) which evidences that the
City is an additional insured as a contracting party.
e. Consultant shall maintain during the life of this Agreement professional
liability insurance covering errors and omissions arising out of the performance of this Agreement
with a combined single limit of $1,000,000. Consultant agrees to keep such policy in force and
effect for at least five years from the date of completion of this Agreement.
f. The insurance policies maintained by Consultant shall be primary insurance
and no insurance held or owned by City shall be called upon to cover any loss under the policy.
Consultant will determine its own needs in procurement of insurance to cover liabilities other than
as stated above.
g. Before Consultant performs any work or prepares or delivers any materials,
Consultant shall furnish certificates of insurance and endorsements, as required by City,
evidencing the aforementioned general liability, automotive and professional liability insurance
coverages on forms acceptable to City, which shall provide that the insurance in force will not be
canceled or allowed to lapse without at least ten (10) days prior written notice to City.
h. Except for professional liability insurance coverage that may be required by
this Agreement, all insurance maintained by Consultant shall be issued by companies admitted to
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conduct the pertinent line of insurance business in the State of California and having a rating of
Grade A or better and Class VII or better by the latest edition of Best's Key Rating Guide. In the
case of professional liability insurance coverage, such coverage shall be issued by companies
either licensed or admitted to conduct business in the State of California so long as such insurer
possesses the aforementioned Best's rating.
L Consultant shall immediately notify the City if any required insurance
lapses or is otherwise modified and cease performance of this Agreement unless otherwise directed
by the City. In such a case, the City may procure insurance or self insure the risk and charge
Consultant for such costs and any and all damages resulting therefrom, by way of set -off from any
sums owed Consultant.
j. Consultant agrees that in the event of loss due to any of the perils for which
it has agreed to provide insurance, Consultant shall look solely to its insurance for recovery.
Consultant hereby grants to the City, on behalf of any insurer providing insurance to either the
Consultant or to the City with respect to the services of Consultant herein, a waiver of any right to
subrogation which any such insurer of said Consultant may acquire against the City by virtue of
the payment of any loss under such insurance.
k. Consultant shall include all subcontractors, if any, as insureds under its
policies or shall furnish separate certificates and endorsements for each subcontractor to the City
for review and approval. All coverages for subcontractors shall be subject to all of the
requirements stated herein.
19. Termination The City may for any reason terminate this Agreement by giving
the Consultant not less than five (5) days written notice of intent to terminate. Upon receipt of
such notice, the Consultant shall immediately cease work, unless the notice from the City provides
otherwise. Upon the termination of this Agreement, the City shall pay Consultant for services
satisfactorily provided and all allowable reimbursements incurred to the date of termination in
compliance with this Agreement, unless termination by the City shall be for cause, in which event
the City may withhold any disputed compensation. The City shall not be liable for any claim of
lost profits.
20. Maintenance and Inspection of Records In accordance with generally accepted
accounting principles, Consultant and its subcontractors shall maintain reasonably full and
complete books, documents, papers, accounting records, and other information (collectively, the
"records ") pertaining to the costs of and completion of services performed under this Agreement.
The City and any of their authorized representatives shall have access to and the right to audit and
reproduce any of Consultant's records regarding the services provided under this Agreement.
Consultant shall maintain all such records for a period of at least three (3) years after termination
or completion of this Agreement. Consultant agrees to make available all such records for
inspection or audit at its offices during normal business hours and upon three (3) days notice from
the City, and copies thereof shall be furnished if requested.
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21. Compliance with all Laws/Immigration Laws
a. Consultant shall be knowledgeable of and comply with all local, state and
federal laws which may apply to the performance of this Agreement.
b. Consultant represents and warrants that Consultant:
(1) Has complied and shall at all times during the term of this Agreement
comply, in all respects, with all immigration laws, regulations, statutes, rules,
codes, and orders, including, without limitation, the Immigration Reform and
Control Act of 1986 (IRCA); and
(2) Has not and will not knowingly employ any individual to perform services
under this Agreement who is ineligible to work in the United States or under the
terms of this Agreement; and
(3) Has properly maintained, and shall at all times during the term of this
Agreement properly maintain, all related employment documentation records
including, without limitation, the completion and maintenance of the Form I -9 for
each of Contractor's employees; and
(4) Has responded, and shall at all times during the term of this Agreement
respond, in a timely fashion to any government inspection requests relating to
immigration law compliance and /or Form I -9 compliance and /or worksite
enforcement by the Department of Homeland Security, the Department of Labor,
or the Social Security Administration.
C. Consultant shall require all subcontractors or sub - consultants to make the
same representations and warranties as set forth in Section b.
d. Consultant shall, upon request of the City, provide a list of all employees
working under this Agreement and shall provide, to the reasonable satisfaction of the City,
verification that all such employees are eligible to work in the United States. All costs associated
with such verification shall be borne by the Consultant. Once such request has been made,
Consultant may not change employees working under this Agreement without written notice to
the City, accompanied by the verification required herein for such employees.
e. Consultant shall require all subcontractors or sub - consultants to make the
same verification as set forth in Section d.
E Any Consultant, subcontractor or sub - consultant who knowingly employs
an employee providing work under this Agreement who is not authorized to work in the United
States, and /or fails to follow federal laws to determine the status of such employee shall constitute
a material breach of this Agreement and may be cause for immediate termination of this Agreement
by the City.
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g. The Consultant agrees to indemnify and hold the City, its officials, and
employees harmless for, of and from any loss, including but not limited to fines, penalties and
corrective measures, the City may sustain by reason of the Consultant's failure to comply with said
laws, rules and regulations in connection with the performance of this Agreement.
22. Attorneys' Fees If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys'
fees, costs, and necessary disbursements, in addition to any other relief to which it may be entitled.
If the City is the prevailing party and uses in -house counsel in the litigation, it shall be entitled to
recover attorneys' fees at the hourly rate that Consultant is being charged by its attorney or at the
in -house counsel's fully burdened rate, whichever is higher.
23. Governing Law This Agreement shall be construed in accordance with and
governed by the laws of the State of California and Consultant agrees to submit to the jurisdiction
of California courts.
24. Integration This Agreement constitutes the entire agreement of the parties. No
other agreement, oral or written, pertaining to the work to be performed under this Agreement shall
be of any force or effect unless it is in writing and signed by both parties. Any work performed
which is inconsistent with or in violation of the provisions of this Agreement shall not be
compensated.
25. Notice Except as otherwise provided herein, all notices required under this
Agreement shall be in writing and delivered personally or by first class mail, postage prepaid, to
each party at the address listed below. Either party may change the notice address by notifying
the other party in writing. Notices may be sent by either e -mail or U.S. Mail. Notices shall be
deemed received upon receipt of same or within 3 days of deposit in the U.S. Mail, whichever is
earlier. Notices sent by e -mail shall be deemed received on the date of the e -mail transmission.
"CONSULTANT"
Matrix Consulting Group, LTD
201 San Antonio Circle, Suite 148
Mountain View, CA 94040
Attn.: Richard Brady
"CITY"
City of Orange
300 E. Chapman Avenue
Orange, CA 92866 -1591
Attn.: Josephine Chan
Telephone No.: 650- 858 -0507
E -Mail Address: rbrady @matrixcg.net
Telephone No.: 714- 744 -2236
E -Mail Address: jchan @cityoforange.org
IN WITNESS of this Agreement, the parties have entered into this Agreement as of the
year and day first above written.
"CONSULTANT" "CITY"
MATRIX CONSULTING GROUP, LTD, CITY OF ORANGE, a municipal corporation
a California corporation
*By:
Printed Name:
Title:
By:
Printed Name:
Title:
Teresa E. Smith, Mayor
ATTEST:
Mary E. Murphy, City Clerk
APPROVED AS TO FORM:
Wayne W. Winthers, City Attorney
* NOTE : The City requires the following signature(s) on behalf of the Consultant:
-- (1) the Chairman of the Board, the President or a Vice - President, AND (2) the
Secretary, the Chief Financial Officer, the Treasurer, an Assistant Secretary or
an Assistant Treasurer. If only one corporate officer exists or one corporate
officer holds more than one corporate office, please so indicate. OR
-- The corporate officer named in a corporate resolution as authorized to enter into
this Agreement. A copy of the corporate resolution, certified by the Secretary
close in time to the execution of the Agreement, must be provided to the City.
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EXHIBIT "A"
SCOPE OF SERVICES
[Beneath this sheet.]
Proposal to Conduct a User Fee Study O CALIF
7 Work Plan
The following subsections provide our approach to managing projects, a detailed work
plan, and proposed project schedule.
1 Summary and Approach
The Matrix Consulting Group works with a wide variety of clients ranging from small
towns to major metropolitan cities in over 40 states across the U.S. Every project is
unique, and is managed according to the following essential project approaches:
• Reputation for effective project management: Our clients value the personal
attention, enthusiasm, responsiveness, timely delivery, and expertise provided on
their projects. This attention to project management is demonstrated in our work
approach, as shown in the detailed work plans provided for each project.
• Cross - trained project team: Our project team's background in both financial
and management analysis provides them with a unique understanding of the
work processes and service level assumptions behind cost and fees for service.
• Communication with the City: At the onset of the project, a detailed schedule
will be developed outlining key deadlines and deliverables, and regular progress
reports will be provided to the City's Project Manager. We are known for being
available to clients and for providing prompt responses to questions or issues.
• City staff support: The Matrix Consulting Group is mindful of the City's current
workload and our approach is to work with our clients' staff to minimize project
impacts through strong project management, clear expectations of our roles
versus staff roles, and careful as well as realistic scheduling.
• Workshop data gathering approach: The facilitation of data gathering
workshops allows the project team to obtain more accurate time and service level
data. It also provides staff with the knowledge needed to explain how results
were derived and the assumptions behind the analysis.
• Excel -based analytical models: Our technical cost plan and user fee models
are based in Microsoft Excel, which provides our clients with the ability to adapt
and update them from year to year as their organization changes. Using Excel as
the platform for our models eliminates costs and additional training associated
with software products and licensing.
These approaches have led to high rates of implementation for all of our project results.
Matrix Consulting Group Page 12
Proposal to Conduct a User Fee Study ORANGE, CALIFORNIA
2 Work Plan
Updating the City's current User Fee schedules will provide clear documentation of
direct and indirect costs associated with fee -based services, as well as outline current
cost subsidies or over - recoveries. The following tasks include a narrative, associated
activities, and projected staff time requirements.
Task 1 Determine and Review Initial Documentation
The project team will provide the City with a written "Data Collection List" outlining
documents and information needed prior to our first onsite visit. This data request
typically includes the following items:
• Current Fiscal Year adopted Budget for Building, Planning, and Engineering.
• Most recent completed Fiscal Year revenue reports for all Departments.
• List of all budgeted personnel by Department / Division.
• List of all current fees being charged by the City to be included in the analysis.
Before our first on -site visit, we will review this information to familiarize ourselves with
strengths, weaknesses and opportunities for improvement related to the City's existing
fee structure. In addition, we will familiarize ourselves with the budgetary and staffing
structures relevant to fees for service.
Project Deliverable — MCG City Services Required
• List of basic data requirements for the Study Basic data requirements for the Study as
listed by the Matrix Consulting Group (staffing,
salary, budget, etc.)
Estimated Hours: 1 - 2 hours for Finance
Task 2 Project Initiation — Establish the City's Goals and Objectives for
the Study, and Identify Trends and Plans Which Impact Cost
Recovery Analysis and Policy
To effectively analyze and present the full cost of providing City services, it is important
that the project team develops an understanding of key issues which impact and shape
the City's service delivery and cost recovery policies. To develop this perspective and
customize the structure of the project, we plan to do the following:
Matrix Consulting Group Page 13
Proposal to Conduct a User Fee Study ORANGE, CALIFORNIA
• Conduct an initial meeting with the City's management staff to solidify the exact
parameters of the Study.
• Develop a detailed project management plan, including timelines and associated
deliverables.
• Conduct discussions regarding the City's current fee structure and any potential
changes.
• Identify current cost recovery policies or established subsidies.
As a "user fee" study, the Matrix Consulting Group does not propose to evaluate any
fines, taxes, utility rates, or impact fees. Services and activities included in the study are
those that are defined specifically by an estimate of staff time.
Project Deliverable — MCG City Services Required
• On -site meeting with City management Designated project management
involved in or impacted by the Study representative
• Project Management Plan Approval of work plan as provided by the
Matrix Consulting Group
Estimated Hours: 0.5 hours per executive staff member attending the meeting
Task 3 Develop a Schedule of Current and Potential Fees for Service
The scope of this effort will be the fees charged by the City for services. Current, as well
as potential fees and charges will be identified and documented. Meetings with each
department will identify the areas of greatest potential cost recovery, and structure and
expand existing fee schedules for both optimum cost recovery and fairness and
equitability to the applicant for services.
At this time, the project team will request volume statistics to be used for staff utilization
and cost/revenue comparisons later in the analysis.
Project Deliverable — MCG City Services Required
• On -site meeting to discuss and revise fee Participation in discussion of existing and
structures for each department proposed fee items for the analysis
• Thorough review of existing documentation Review, comment, and approval of fee
and analyses that support the Department's structure report prepared by the Matrix
current fee structure and operations Consulting Group
Estimated Hours: 3 hours per department
Matrix Consulting Group Page 14
Proposal to Conduct a User Fee St ORANGE, CALIFORNIA
Task 4 Conduct Time and Activity Data Gathering Workshops
The project team will conduct workshops to gather time and activity estimates for each
service included in the study, interviewing key personnel from each department and
analyzing the various activities being performed within it that are both revenue and non -
revenue generating. The flowchart below shows an example of the steps involved in
processing a permit and the staff and time associated with each step.
Intake and
Permit Processing
• Permft Tech
• 10 min
Initial Review
• Engineer
• 1 hr
Final Review 4
•Engineer
• 30 min
Issue Permit ' Iq
=15min
As the flowchart above shows, basic process steps in application / permit processing
will be documented and provided in the Departmental detail for each department
represented in the study.
Project Deliverable — MCG City Services Required
Facilitation of two -days of meetings related to Attendance at workshop meetings
available net hour calculations, documentation • Provision of follow up data or discussion as
of service levels needed
1 - 2 iterations of review to achieve a
defensible and reasonable allocation of staff
time to fee and non -f activities
Estimated Hours: 3 - 7 hours per department
Task 5 Perform a Total Cost Analysis
The Matrix Consulting Group's costing model is built based on the City's operations,
budget detail and intended uses for the results. This method is a customized approach,
specific to each jurisdiction, for cost analysis of user fee services. This costing method
uses time and annual activity level data to establish the cost of providing services on
both a unit and annual level. Once the time spent for a fee activity is determined for
each individual or position, the team uses its fee and rate software to apply applicable
City costs to the calculation of the full cost of providing each service. The chart on the
following page describes the typical costs considered as applicable to fees.
Matrix Consulting Group Page 15
Proposal to Conduct a User Fee Study ORAN CA LIFORNIA
(Dept. Admin /
Resulting costs are presented on a unit and annual level, and are compared to the
existing fee schedule and revenue reports. The City will obtain information about cost
recovery surpluses and deficits on both a detailed (per unit) and global (annualized)
level, as well as an understanding of cost components for each service.
Project Deliverable — MCG City Services Required
• Detailed documentation of current charges Provision of follow up data or discussion as
versus the actual cost of providing services needed
from both a cost per unit and annual cost
perspective
Estimated Hours: 1 - 3 hours per department
Task 6 1 Analysis of Recoverable Revenue
Utilizing each department's billing statistics, receivables, and workload data, the project
team will analyze potential and actual recoverable revenue. This will help the City
understand how workload volume impacts revenue and cost subsidies. While potential
revenue can be identified, recoverable revenue is dependent upon the following factors:
Current policies and legal restrictions, which limit the City's ability to increase
fees and thereby revenue recovery.
• Economic and revenue impacts of proposed and recommended fee levels and
methodologies, including compliance with policies and fee affordability for small
projects and applications.
These factors influence the actual recoverable revenue of a department and directly
influence the self -sustainability of a department / division. City staff can use this
information to shape or alter current or future City policies on cost recovery.
Matrix Consulting Group Page 16
Proposal to Conduct a User Fee Study ORANGE, CALIFORNIA
Project Deliverable — MCG City Services Required
• Discussion of internal and external policies Provide documentation regarding current City
limiting fee increases policies
• Analysis of potential and actual recoverable Attendance at meetings related to discussion
revenue of revenue results
Estimated Hours: 2 - 4 hours per department
Task 7 Conduct a Market Rate Survey to Similar Jurisdictions
The project team will work with the Department to identify cities in Orange County
targeted for the fee comparison survey. We will also develop the survey tools and select
the most appropriate fee items for benchmarks. Then, we will administer the survey,
collect comparative data, conduct the comparison, and document the results. The
following graph provides an example of how comparative survey results for Building
Fees would be presented:
$8,000
$7,000
v, $6,000
LL $5,000
$4,000
E $3,000
a $2,000
$1,000
Single Family Home - New
Permit and Plan Check Fees
• Plan Check
• Permit
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Market surveys do not provide adequate or objective information about the relationship
of a jurisdiction's costs to its fees, therefore, it is recommended that information
contained in the market comparison of fees be used as a secondary decision - making
tool, rather than as a tool for establishing price points for services.
Project Deliverable — MCG City Services Required
• Survey of fees in similar jurisdictions Review of proposed jurisdictions and list of
• Written comparative summary of the results comparable fees to be included in the survey
Estimated Hours: 1 hour per division or program
Matrix Consulting Group Page 17
Proposal to Conduct a User Fee Study ORANGE, CALIFORNIA
Task 8 Review / Revise the Fee Study Results with Departments and
City Management
Because the analysis of fees for service is based on estimates and information provided
by City staff, it is extremely important that all participants are comfortable with our
methodology and with the data they have provided. Once the departments agree that
the analysis reflects the reasonable costs of providing services, City management will
have an opportunity to review the results.
The project team will address implementation strategies that consider both policy issues
and goals for optimum cost recovery. While it is generally desirable to eliminate any
subsidies, discussions regarding the feasibility of raising fees based on political climate,
legal restrictions, and social and economic consequences must occur.
Project Deliverable — MCG City Services Required
• Approval of analytical results at the Review of final analytical model
Department and City management levels documentation
• Formulation of cost recovery Attendance at meetings related to discussion
recommendations and associated revenue of results and economic policy implications
impacts Follow up data or discussion as needed
Estimated Hours: 1 - 3 hours per department
Task 9 Prepare a Final User Fee Study
Upon conclusion of the fee study, we will. prepare a detailed report that summarizes the
results of each of the previous work tasks described above. This report will include the
following:
• A succinct executive summary discussing the study, the methodology, and the
results.
• A narrative describing the services included in the study, as well as any revenue
enhancement and operational recommendations specific to your organization
and based on our extensive experience with hundreds of jurisdictions, as well as
key decision - making points to be considered.
• Appendices that compare existing and potential cost recovery on a unit and
annual basis by department.
The report will be reviewed, revised and finalized with Department and City
management.
Matrix Consulting Group Page 18
Proposal to Conduct a User Fee Study ORANGE, CALIFORNIA
Project Deliverab - MCG City Services Required
• Preparation and approval of the Final City- Review and approval of Final Report drafts
wide User Fee Study report
• 5 bound copies, 1 unbound, and 1 electronic
version of the final report
• Detailed back -up documentation for each
department included in the study
Estimated Hours: 1 hour per reviewer
Task 10 Present the Final Report to Key Stakeholders
The presentation of results to City officials and /or stakeholders is critical to the success
of the overall engagement. Because the product from the study is often controversial,
the objective of this final step is to present a succinct summary that provides decision
makers with key information. The Matrix Consulting Group will attend and present the
Study to the City Council. Additional meetings can be arranged at cost.
Project Deliverable — MCG City Services Required
• Presentation of Study results at a City Council Preparation of City Staff Report
meetino
Estimated Hours: 4 hours per Finance Department or Management staff
Task 111 Provide Analytical Summary Table, Model, and Staff Training
The City wishes to have the ability to update the final version of the User Fee Study,
including the ability to add, revise or remove direct and indirect costs so that fees and
rates can be easily updated annually.
Our technical fee models, produced in Microsoft Excel, provide the ability for the City to
adapt and continuously update the model from year to year as the organization changes.
While the model is structured in Excel, the technical model is proprietary and for internal
use by City staff only. By having our model based in Excel, the requirements for
software training, cost of new software products, updates, licensing or other additional
support, would be minimized.
After the final draft of the User Fee Study is approved, at the discretion of City staff, the
project team will meet with and train designated City employees on use of the Excel
model. Staff will be provided with initial training that includes: a step -by -step PowerPoint
presentation; a User's Manual which explains key concepts and defines basic terms;
Matrix Consulting Group Page 19
Proposal to Conduct a User Fee Study ORANGE, CALIFORNIA
and a customized updated checklist of data and information that needs to be entered.
While staff training typically takes about four hours, the Matrix Consulting Group is
committed to supporting City staff well after project completion, including answering
questions and providing model support, at no additional costs.
Project Deliverable — MCG City Services Required
• Computer based summary table of the final Attend training session with Matrix
version of the User Fee study and Technical Consulting Group
Model
• Four (4) hours of on -site training for appropriate
Finance Department staff
Estimated Hours: Traininq attendance — 4 hours
3 Proposed Schedule
Studies of this nature typically take a minimum of 12 weeks to complete. The following
table outlines our proposed project schedule on a task -by -task basis for completing a
User Fee Study.
Initial Documentation
Project Kick -off
Current & Potential Fees
Data Workshops
Total Cost Analysis
Analysis of Recoverable Revenue
Rate Comparison
Review / Revise Results
Prepare Final Report
2 3 4 5 6 7 8 9 10
All timelines can be adjusted based upon the City's schedule and other commitments in
agreement with City staff. Presentation of results and adoption by City Council would
occur after delivery and approval of the final report, at the discretion of the City. Delivery
of analytical summaries and worksheets, automatic update mechanisms and training
would occur either before or after the Council meetings, per the City's preference.
Matrix Consulting Group Page 20
AGENDA ITEM
Date: December 12, 2017
C ot/ r CP
ReviewedNerified i •
City Manager
TO: Honorable Mayor and Finance Direct r �i(rYi
Members of the City Council To Be Presentee : Will Kolbow
THRU: Rick Otto X Cons Calendar City Mgr Rpts
_
City Manager Council Reports Legal Affairs
FROM: William M. Kolbow /p , / aj Boards /Cmtes _ Public Hrgs
Finance Director Admin Reports Plan /Environ
1. SUBJECT
Agreement with Matrix Consulting Group to conduct a User Fee Study.
2. SUMMARY
A Request for Proposal (RFP) was released for updating the City's user fees and the City received
five responses. Based on the evaluation of the proposals, Matrix Consulting Group was the top
ranked consultant.
3. RECOMMENDED ACTION
Approve agreement with Matrix Consulting Group in the amount of $48,000 and authorize the
Mayor and City Clerk to execute on behalf of the City.
4. FISCAL IMPACT
Funds are available to cover the cost of the contract as follows:
100.0201.51670.00000 Other Professional & Consulting Services $48,000
5. STRATEGIC PLAN GOAL(S)
2. Be a Fiscally Healthy Community
b. Analyze future fiscal needs and potential revenue opportunities.
d. Effectively manage and develop City assets.
6. GENERAL PLAN IMPLEMENTATION
N/A
ITEM 3.10 �s 12/12/17
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7. DISCUSSION and BACKGROUND
Introduction
The last comprehensive citywide user fee study performed by a consultant was completed in
December 2007. The City updated the Master Schedule of Fees and Charges in January 2008
based upon the results of the study. These fees were reviewed by staff and portions of the fee
schedule were updated in February 2010. Several individual fees have been revised since then.
The most recent update to an individual fee was in December 2015.
Due to the continued efforts to enhance our efficiency and cost effectiveness, many processes of
providing city services have been changed. In light of the current economic cycle and the need for
departments to review their cost of services and fee revenues charged, the City has determined to
engage a consultant to perform a complete assessment on the user fees.
The study to be conducted by a consultant will include review of the current user fees charged,
total cost analysis, and recommendations on appropriate updated and potential new fees. Fees
such as building related permits, plan check fees, and report fees will be reviewed, among others.
Development impact fees, sewer fees, and water rates are not included in the study. Rental fees
for rooms and equipment as well as penalty fees and late charges will be reviewed by staff
internally. The goal is to have the comprehensive fee study completed and revised fee schedule to
be considered by the City Council in June 2018 so that it may be reviewed alongside the FY 19
budget. Staff will also present initial information during one of our upcoming Budget Study
Sessions for City Council review and feedback.
RFP Process
In October, staff distributed an RFP to solicit proposals from qualified consultants for the study.
Five proposals were received in response and were reviewed by staff. The proposals were rated
on the basis of the following key criteria:
1. Thoroughness and understanding of the tasks to be completed
2. Background and experience in organizational analysis evaluation
3. Consultant's expertise and overall experience with this type of study
4. Time required to accomplish the requested services
5. Responsiveness to requirements of the study
6. Price, considering both the overall cost and the cost relative to the number of hours
proposed
Matrix Consulting Group had the top ranking. From highest to lowest rating, the summary results
are as follows:
1. Matrix Consulting Group
2. MGT Consulting Group
3. Willdan Financial Services
ITEM 12/12/17
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4. Revenue & Cost Specialists, LLC
5. Michael Baker International
Matrix Consulting Group showed the most thorough understanding of the project scope, had a
timely project schedule, proposed a reasonable fee with a considerable amount of time allocated
to the project, had the most local relevant experience with this type of project, and provided a
sample report that is comprehensive and analytical. Other cities reported that they have had a
positive experience in working with Matrix. The total cost of the Agreement is not -to- exceed
$48,000, and will be funded with appropriated funds in the General Fund.
8. ATTACHMENTS
• Consultant Services Agreement, Exhibit A
ITEM 12/12/17
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