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Home My WebLink AboutItem 14 - Award Agreement to SCS Engineers Public Works Agency www.santa-ana.org/public-works Item # 14 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report August 1, 2023 TOPIC: Award Agreement to Conduct Cost of Service Study AGENDA TITLE Approve Agreement with Stearns, Conrad & Schmidt, Consulting Engineers, Inc. to Conduct a Cost of Service Study for the Sanitation Services User Charge, in an Amount Not to Exceed $82,875 (Specification No. 23-029) (Non-General Fund) RECOMMENDED ACTION Authorize the City Manager to execute a consultant agreement with Stearns, Conrad & Schmidt, Consulting Engineers, Inc. to conduct a cost of service study in an amount not to exceed $82,875, including a contingency of $16,575, for a three-year term beginning on August 1, 2023 and expiring July 31, 2026, with provision for one, two-year extension, subject to non-substantive changes approved by the City Manager and City Attorney. DISCUSSION The Public Works Agency maintains 400 miles of public right-of-way and provides maintenance services that include roadway maintenance, tree services, roadway cleaning, and sanitation services. Roadway cleaning and sanitation related services are funded through the Sanitation Services Users Charge (Sanitation Fee) and is collected on a bi-monthly basis along with other charges in the City’s municipal utility services bill. The Sanitation Fee was established in 1991 by Ordinance NS-2129 and provides street cleaning services and environmental sanitation services that include street sweeping, street cleaning, removal of illegal deposits such as trash and bulky items, weed abatement, and inspections in the City’s right-of-way. Over 35,000 public roadway cleaning and sanitation service requests are completed, and over 50,000 miles of streets are swept annually. As a best practice, the City periodically reviews enterprise operations; the last comprehensive evaluation of the Sanitation Fee was performed in 2019. At that time, the Tree Services Program expenses were transferred from the Sanitation Fee program to the General Fund. Correspondingly, the monthly Sanitation Fee was reduced from $6.47 monthly to $5.35 monthly (Resolution 2019-039). Due to increases in cost due to inflation, contractual increases, increasing prevailing wage requirements, and the need to keep pace with the increased demand in public service levels, it is Award Agreement to SCS Engineers August 1, 2023 Page 2 3 6 1 3 necessary to perform a cost-of-service study to ensure the sustainability and improvement of the Sanitation Fee funded programs and long term financial stability. The Public Works Agency issued Request for Proposals (RFP) No. 23-029 on March 1, 2023, inviting qualified consulting firms with relevant experience to submit their proposals to the City. The RFP was advertised on PlanetBids, the City’s online bid and management publication system. A summary of the RFP and proposals received is as follows: 211 Vendors notified 7 Santa Ana Vendors notified 16 Vendors Downloaded RFP Packet 2 Proposals Received 0 Proposals Received from Santa Ana Vendors Two proposals were received by the RFP deadline on March 20, 2023, and both were deemed to be responsive. The selection committee with experience in the financial and related program services evaluated both proposals. The recommended firm will perform a cost of service study for the City, involving an evaluation of Sanitation Fee programs, financial statements, reserve policies, establishing a cost recovery plan, financing, compliance with California Proposition 218 requirements, and developing a rate plan for the next five years. The goal of the study is to provide the City with an affordable and equitable rate that supports quality service delivery objectives, and ensures continued services for years to come. Based on criteria outlined in the RFP, the following summarizes the responding firms and their rankings: Firm City Rank Stearns, Conrad & Schmidt, Consulting Engineers, Inc. Pleasanton, CA 1 MGT Consulting Sacramento, CA 2 Staff recommends awarding an agreement to the highest-ranked firm, Stearns, Conrad & Schmidt, Consulting Engineers, Inc. (SCS Engineers, Inc.), to conduct the cost of service study (Exhibit 1). Their proposal demonstrated the firm has the necessary capacity and expertise to complete the required services as specified in the RFP. Additionally, the firm’s rates are reasonable and within industry standard, the project team qualifications are relevant and appropriate, and the proposal was determined to provide the best overall value for the City. ENVIRONMENTAL IMPACT There is no environmental impact associated with the action. Award Agreement to SCS Engineers August 1, 2023 Page 3 3 6 1 3 FISCAL IMPACT Funding is available in the FY 23-24 budget and funding for subsequent fiscal years and optional renewal term, if exercised, will be included in the proposed budgets for City Council consideration. The following is an estimate of expenditures by fiscal year for the initial three-year term: Fiscal Year Accounting Unit - Account # Fund Description Accounting Unit, Account Description Amount 2023-24 06817641- 62300 Sanitation Fund Public Works-Roadway Cleaning, Contract Services-Professional $53,225 2024-25 06817641- 62300 Sanitation Fund Public Works-Roadway Cleaning, Contract Services-Professional $8,025 2025-26 (August – May) 06817641- 62300 Sanitation Fund Public Works-Roadway Cleaning, Contract Services-Professional $21,625 Total:$82,875 EXHIBIT(S) 1. Agreement with SCS Engineers, Inc. 2. Request for Proposal – Cost of Service Study 3. SCS Engineers, Inc. Proposal Response Submitted By: Nabil Saba, P.E., Executive Director – Public Works Agency Approved By: Kristine Ridge, City Manager 1 CONSULTANT AGREEMENT BETWEEN THE CITY OF SANTA ANA AND STEARNS, CONRAD & SCHMIDT, CONSULTING ENGINEERS, INC. FOR A COST- OF-SERVICE STUDY FOR THE SANITATION SERVICES USERS CHARGE THIS AGREEMENT is made and entered into on this 1st day of August, 2023 by and between Stearns, Conrad & Schmidt, Consulting Engineers, Inc. (“Consultant ”), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California (“City”). RECITALS A.The City desires to retain a Consultant having special skill and knowledge in conducting a cost of service study for the Sanitation Services User Charge (“Sanitation Fee”) B.Co nsultant represents that Consultant is able and willing to provide such services to the City. C.In undertaking the performance of this Agreement, Consultant represents that it is knowledgeable in its field and that any services performed by Consultant under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1.SCOPE OF SERVICES Co nsultant shall perform during the term of this Agreement, the tasks and obligations including all labor, materials, tools, equipment, and incidental customary work required to fully and adequately complete the services described and set forth in Exhibit A, attached hereto and incorporated by reference. 2.COMPENSATION a.City agrees to pay, and Consultant agrees to accept as total payment for its services for City, the rates and charges identified in Exhibit B and incorporated herein by this reference. The total amount to be expended during the term of this Agreement shall not exceed $82,875, which includes a contingency amount of $16, 575. b.Payment by City shall be made within forty-five (45) days following receipt of proper invoice evidencing work performed, subject to City accounting procedures. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by City. EXHIBIT 1 2 3.TERM This Agreement shall commence on the date first written above for a three (3) year term with the option for the City to grant up to one (1) two (2)-year renewal, exercisable by a writing by the City Manager and the City Attorney, unless terminated earlier in accordance with Section 15, below. 4.INDEPENDENT CONTRACTOR Consultant shall, during the entire term of this Agreement, be construed to be an independent Consultant and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer-employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Consultant performs the services which are the subject matter of this Agreement; however, the services to be provided by Consultant shall be provided in a manner consistent with all applicable standards and regulations governing such services. Consultant shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. 5.OWNERSHIP OF MATERIALS All drawings, specifications, reports, notes and data developed pursuant to this Agreement are instruments of service, and as such the original documents and data are and remain the property of Consultant. Consultant grants a non-exclusive, perpetual license to use the deliverables (Documents & Data), identified in Exhibit A, to the City, as well as permission to sublicense the Documents & Data to others solely for the purpose of performing obligations related to this Agreement. Consultant shall require all subcontractors to agree in writing that Documents & Data prepared pursuant to this Agreement in their subcontracting agreements grant a non-exclusive, perpetual license to use its deliverables, as well as sublicense such Documents & Data to the City as well as others, solely for the purpose of performing obligations pertaining to or related to this Agreement. Consultant agrees that it has the legal right to license Documents & Data. Consultant makes no representation that it has any legal right to license nor has any obligation as to the accuracy or content of documents or data provided to Consultant by the City. 6.INSURANCE Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder and the results of that work by the Consultant, his agents, representatives, employees or subcontractors. MINIMUM SCOPE AND LIMIT OF INSURANCE Coverage shall be at least as broad as: •Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including property damage, bodily injury and personal & 3 advertising injury with limits no less than $1,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit. • Automobile Liability: ISO Form Number CA 00 01 covering any auto (Code 1), or if Consultant has no owned autos, hired, (Code 8) and non-owned autos (Code 9), with limit no less than $1,000,000 per accident for bodily injury and property damage. • Workers’ Compensation insurance as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease. • Professional liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim with $2,000,000 in the aggregate. If the Consultant maintains broader coverage and/or higher limits than the minimums shown above, the City requires and shall be entitled to the broader coverage and/or the higher limits maintained by the Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. Self-Insured Retentions Self-insured retentions must be declared to and approved by the City. The City may require the Consultant to provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or City. Other Insurance Provisions The general liability policy is to contain, or be endorsed to contain, the following provisions: 1. The City, its officers, officials, employees, agents, and volunteers are to be covered as additional insureds with respect to liability arising out of work or operations performed by or on behalf of the Contractor including materials, parts or equipment furnished in connection with such work or operations. 2. For any claims related to this contract, the Consultant’s insurance coverage shall be primary insurance coverage at least as broad as ISO CG 20 01 04 13 as respects the City, its officers, officials, employees, agents, and volunteers. 3. The Insurance Company agrees to waive all rights of subrogation against the City, its elected or appointed officers, officials, agents, and employees for losses paid under the terms of any policy which arise fr om work performed by the Consultant for the City. This provision also applies to the Consultant ’s Workers’ Compensation policy. 4. Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the City. Acceptability of Insurers Insurance is to be placed with insurers authorized to conduct business in the state with a current A.M. Best’s rating of no less than A: VII, unless otherwise acceptable to the City. 4 Verification of Coverage Consultant shall furnish the City with original Certificates of Insurance including all required amendatory endorsements (or copies of the applicable policy language effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of the CGL policy listing all policy endorsements to City before work begins. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements affecting the coverage required by these specifications, at any time. Special Events Coverage for Contractors Special events coverage is available for an additional fee to provide the liability insurance required by this agreement. Consultant can obtain additional information and cost from the City. Subcontractors Consultant shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein, and Consultant shall ensure that City is an additional insured on insurance required from subcontractors. Special or Low Risk Activities City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances. The City reserves the right to modify or waive insurance requirements for certain low risk recreational activities. 7. INDEMNIFICATION Consultant agrees to defend, and shall indemnify and hold harmless the City, its officers, agents, employees, contractors, special counsel, and representatives from liability for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including death, and claims for property damage, which may arise from the negligent operations of the Contractor, its subcontractors, agents, employees, or other persons acting on its behalf which relates to the services described in section 1 of this Agreement . This indemnity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judic ial or equitable relief suffered, or alleged to have been suffered, by reason of the events referred to in this Section or by reason of the terms of, or effects, arising from this Agreement. The Consultant further agrees to indemnify, hold harmless, and pay all costs for the defense of the City, including fees and costs for special counsel to be selected by the City, regarding any action by a third party challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement. City may make all reasonable decisions with respect to its representation in any legal proceeding. Notwithstanding the foregoing, to the extent Contractor’s services are subject to Civil Code Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section 2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Contractor. 8. INTELLECTUAL PROPERTY INDEMNIFICATION Consultant shall defend and indemnify the City, its officers, agents, representatives, and employees against any and all liability, including costs, for infringement of any United States' 5 letters patent, trademark, or copyright infringement, including costs, contained in the Documents & Data provided by Consultant to the City pursuant to his Agreement. 9. RECORDS Consultant shall keep records and invoices in connection with the work to be performed under this Agreement. Consultant shall maintain complete and accurate records with respect to the costs incurred under this Agreement and any services, expenditures, and disbursements charged to the City for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant under this Agreement. All such records and invoices shall be clearly identifiable. Consultant shall allow a representative of the City to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement during regular business hours. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to this Agreement for a period of three (3) years from the date of final payment to Consultant under this Agreement. 10. CONFIDENTIALITY Consultant shall not disclose, or permit disclosure of any information designated by the City as confidential, except to its employees and other consultants who need such information in order to properly execute the services of this Agreement. This provision shall not apply to information which: (1) has been published and is in the public domain, (2) has been provided to Consultant by third parties who have the legal right to possess and disclose the information, (3) was in the possession of Consultant prior to the disclosure of such information to Consultant by the City, (4) is required by law or any governmental agency to be disclosed, or (5) would require disclosure to comply with the ethical obligations of Consultant to protect the public. 11. CONFLICT OF INTEREST CLAUSE Consultant covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 12. NON-DISCRIMINATION Provider shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, gender identity, gender expression, gender, medical conditions, genetic information, or military and veteran status, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, teaching, training, utilization, promotion, termination or other employment related activities or any services provided under this Agreement. Provider affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 6 13. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Contractor, and supersedes any and all other agreements, oral or written, between the parties. In the event of a co nflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Contractor. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Consultant or the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which is not embodied herein. 14. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Contractor, Consultant may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City’s ability to have any of the services which are the subject to this Agreement performed by City personnel or by other Contractors retained by City. 15. TERMINATION This Agreement may be terminated by the City upon thirty (30) days written notice of termination. In such event, Consultant shall be entitled to receive and the City shall pay Consultant compensation for all services performed by Consultant prior to receipt of such notice of termination, subject to the following conditions: a. As a condition of such payment, the Executive Director may require Consultant to deliver to the City all work product (s) completed as of such date, and in such case have a perpetual license to use the Documents & Data consistent with Section 5 of this Agreement. b. Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement. 16. WAIVER No waiver of breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this Agreement shall be effective unless it is in writing and signed by the party waiving the breach, failure, right or remedy. No waiver of any breach, failure or right, or remedy shall be deemed a waiver of any other breach, failure, right or remedy, whether or not similar, nor shall any waiver constitute a continuing waiver unless the writing so specifies. 7 17. JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 18. PROFESSIONAL LICENSES Consultant shall, throughout the term of this Agreement, mainta in all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Consultant shall notify the City immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 19. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by fax or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, CA 92702-1988 Fax: 714- 647-6956 With courtesy copies to: Executive Director, Public Works Agency City of Santa Ana 20 Civic Center Plaza (M-xx) P.O. Box 1988 Santa Ana, California 92702 8 To Contractor: Vita Quinn MBA Director of Management Services Stearns, Conrad & Schmidt, Consulting Engineers, Inc. 4683 Chabot Drive, Suite 200 Pleasanton, CA 94588 A party may change its address by giving notice in writing to the other party. Thereafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by fax, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 20. MISCELLANEOUS PROVISIONS a. Each undersigned represents and warrants that its signature herein below has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify City fully, including reasonable costs and attorney’s fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. [Space left intentionally blank] [Signatures on the following page] 9 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: CITY OF SANTA ANA Jennifer L. Hall Kristine Ridge City Clerk City Manager APPROVED AS TO FORM: SONIA R. CARVALHO CONSULTANT: City Attorney By: Jose Montoya Assistant City Attorney (title) Tax ID# RECOMMENDED FOR APPROVAL: Nabil Saba, P.E. Executive Director Public Works Agency Vita Quinn MBA Director of Management Services Carlo LebronSenior Vice President EXHIBIT A CITY OF SANTA ANA COST OF SERVICE STUDY 18 Contractor shall perform services as set forth below. I. SCOPE OF SERVICE: The City of Santa Ana is a full-service city with a population of over 335,000, encompassing 27 square miles. Santa Ana is the second largest city in Orange County, the eleventh largest in the state, and the 57th largest in the nation. Incorporated in 1886, Santa Ana has long been the County's government powerbase and serves as the County seat. With a total budget of $760.2 million, Santa Ana provides public safety, quality-of-life programming, and general & utility services to its residents and business community. The Sanitation Services Users Charge (Santation Fee/Sanitation Enterprise) as defined in the Santa Ana Municipal Code Chapter 18 Article XII is 1% of the total budget providing two services: Environmental Sanitation/Weed Abatement and Roadway Cleaning/Street Sweeping. Sanitation services are provided through a combination of city employees and private contractors. The approved Sanitation Enterprise budget for Fiscal Year 2022-23 is $7.6 million. The City maintains 400 miles of public right-of-way by removing hazardous material, vegetation, industrial emissions, and litter. The Sanitation Enterprise support efforts to help ensure an equitable approach to cleaning debris and pollutants along curbed streets, helping prevent contamination of local waters and damaging aquatic life and marine ecosystems. II. DESCRIPTION OF WORK: Consultant shall prepare a cost of service study and make recommendations for implementing a rate in compliance with California Proposition 218 requirements (anticipated implementation date January 2024). The goals of the study are to: A. Propose sanitation rates in accordance with California Constitution (Prop 218), and all applicable laws, that are fair, objective and fiscally appropriate for Santa Ana, covering a ten (10) year study period, including, but not limited to: 1. Ongoing operations and service enhancements; 2. A prudent reserve program for operating; 3. Capital replacement and emergencies; and 4. Identification ofcustomer life-line programs. B. Evaluate existing department operations and budgets, identify the current level of service, and estimate the future level of service. C. Evaluate existing department operations and budgets with non-prevailing wage contractor (street sweeping contract) requirement(s) and identify minimum service levels that will be feasible given the recent enactment of prevailing wage (street sweeping contract). D. Minimize rate impacts to customers to the greatest extent possible. E. Identify existing and potential funding mechanisms to finance department operations and capital Improvements. EXHIBIT I SCOPE OF SERVICES CITY OF SANTA ANA COST OF SERVICE STUDY 19 Key issues that will impact the overall study are: 1. Continuous increase in cost due to current economic climate. 2. Santa Ana's historic effort to tackle the housing crisis is seeing an influx of redevelopment projects, increasing the City's footprint. III. CONTRACTOR REQUIREMENTS & RESPONSIBILITIES I. TASK 1 - SANITATION PROGRAM EVALUATION A. GENERAL The City sweeps approximately 54,000 curb miles; responds to over 15,000 service requests for roadway cleaning annually, 2,000 environmental sanitation/weed abatement violations, and more than 1,600 reports to obstructions in the public right-of-way. B. CONTENT/TASKS 1. Consultant shall review and become familiar with the operation and all pertinent historical performance and financial data. Consultant shall review the following at minimum: a. Surrounding municipalities to establish service level; b. Current and recent budgets and Annual Comprehensice Financial Report (ACFR); c. Background information for the operation including existing regulatory requirements, and other contractual requirements and operations; d. Historical revenues, operating expenses, reserve policies (i.e., working capital and renewal and replacement), approved rates and charges, customer information and number of units; and e. Review other pertinent data as necessary. 2. Consultant shall prepare an “Existing Cost of Service Summary” technical memorandum or executive summary of the existing financial condition of the sanitation enterprises. This summary shall identify: a. The cost of service gaps or discrepancies between the existing rate structure(s); b. The projected maintenance, operations and capital spending plans; and c. The effects of current financial/economic climate. This summary will also identify the strategy the consultant intends to use to close any cost of service gaps identified. C. DELIVERABLES 1. Existing Cost of Service Summary a. Digital Copy (PDF) b. Printed Copies (5) CITY OF SANTA ANA COST OF SERVICE STUDY 20 II. TASK 2 - COST OF SERVICE RATE MODEL & SCENARIO DEVELOPMENT A. GENERAL As part of the work required in preparing a comprehensive cost of service and rate study report, the Consultant may develop various forecasting models, projections, and rate adjustment scenarios for the City’s consideration. The cost of service rate model and scenario covers, but is not limited to, all expenses related to Sanitation Services, including Environmental Sanitation, Weed Abatement, Roadway Cleaning, Street Sweeping, and any other costs identified during the process. B. CONTENT/TASKS Consultant shall perform the following tasks: 1. Classify functional expenses to cost components: capacity (demand) costs (e.g., Environmental Sanitation, Weed Abatement, Roadway Cleaning, Street Sweeping), commodity costs - related to Sanitation Services, customer costs and other direct costs; 2. Classify operating, administrative, operations and maintenance (O&M) expenses, collection/disposal cost, and reserve fund requirements; 3. For each rate scenario, assess the sensitivity of the projected results to changes in certain key variables, including but not limited to, changes in units changes and changes in the cost of the operation. 4. Propose changes to existing or creation of new sanitation fees and surcharges, as are necessary and/or expedient to achieving the goals of the study. 5. The rate design shall continue to support current service level for all customer classes, provide funding for capital replacement while ensuring the ability of the sanitation enterprises to meet fixed and variable cost obligations. C. DELIVERABLES There are no deliverables for this section. Consultant shall meet and confer with City in regards to the cost of service rate model development and various scenarios prior to preparing report. III. TASK 3 - COST OF SERVICE REPORT A. GENERAL Consultant shall prepare comprehensive cost of service reports which satisfies the City’s stated goals in Section II, “Description of Work” above. At a minimum the reports shall be comprised of the following: 1. Executive Summary 2. Introduction/Background including discussions on a. Purpose of study b. Applicable laws and regulatory framework c. Generally accepted rate setting standards 3. Revenue Requirements CITY OF SANTA ANA COST OF SERVICE STUDY 21 4. Cost allocation methodology 5. Recommendations 6. California Proposition 218 Compliant Notices a. Prepare rate adjustment notices compliant with Proposition 218 requirements. Notices will be prepared in three languages, English, Spanish and Vietnamese. Notices to be delivered electronically as Microsoft Word document. b. Pass-through adjustment formula and means of establishing pass through adjustments shall be explicitly stated. B. CONTENT/TASKS Perform a fully allocated sanitation rate study tailored for Santa Ana, including the following: 1. A rate structure based on cost of service sufficient to meet the revenue requirements of the sanitation enterprise; 2. Classify functional expenses to cost components: capacity (demand) costs (e.g., Environmental Sanitation, Weed Abatement, Roadway Cleaning, Street Sweeping), commodity costs - related to Sanitation Services, customer costs and other direct costs; 3. Classify operating, administrative, operations and maintenance (O&M) expenses, collection/disposal cost, and reserve fund requirements; 4. A rate structure that considers and makes provisions for the following factors: a. Current and future cost of providing sanitation services in accordance with established and anticipated standards and regulations. b. A recommended sanitation rate structure that is in compliance with Proposition 218; 5. Provide a comparison of current sanitation rates to comparable surrounding sanitation program; 6. The type and amount of reserves appropriate to the City’s sanitation operations taking into consideration reserves for cash flow, catastrophes, infrastructure replacement (proprietary assets) and other appropriate purposes; 7. A comparison of customer groups and cost of service with neighboring municipalities of comparable size, type of treatment, and level of service; 8. A review and analysis of current rate and fee structures. Consultant should recommend changes if appropriate; and 9. Consultant shall assess the recommended rate structures and their impacts on the ability to fund sanitation operations as well as their impact on the City’s rate payers; 10. A review of elderly low-income and sanitation rate programs provided by other agencies and propose appropriate elderly low-income sanitation rate for Santa Ana; 11. The benefits of any proposed rate modifications shall be weighed against the financial impacts on the ratepayers. Consultant shall analyze the proposed rates for customer impacts and develop alternative rates modeled to address financial impacts on ratepayers. The analysis shall include: CITY OF SANTA ANA COST OF SERVICE STUDY 22 a. Preparation of typical bill comparisons for each proposed rate structure for representative customer classes using the current rate schedules as a baseline. b. Compare customer class and proposed rate structures with neighboring agencies of comparable service area. C. DELIVERABLES Consultant shall deliver at a minimum the following: 1. Final Cost of Service Reports a. Digital Copy (PDF) b. Printed and Bound Copies (15) of each 2. Proposition 218 Compliant Notice a. Digital Copy (PDF and MS Word) 3. Pass-through adjustment calculator a. Digital Copy (MS Excel or similar) Consultant shall meet with the City to discuss the report’s outcome and explain in detail the full parameters and outcomes discussed in the report. In addition, the Consultant shall meet with the City to review a draft copy of the report before submitting the final report. IV. PUBLIC MEETINGS & PRESENTATIONS Consultant shall participate, as requested by City, at both staff and public meetings. Consultant shall expect to make presentations regarding the results of the cost of service study to City executive staff, Mayor and Council and the general public. For purposes of this RFP, Consultant shall be required to attend a minimum six (6) meetings in the range of two (2) – four (4) hours in length in person. V. KICKOFF MEETING Consultant shall attend one (1) contract kick-off meeting at the City’s Corporate Yard located at 215 S. Center St., Santa Ana, CA 92703 at which City staff will share contact information, safety and security protocols, and familiarize the Consultant with the City’s sites and equipment. VI. PROJECT MANAGEMENT & COORDINATION Consultant shall not proceed with any work without the approval of the City’s designated Project Manager. Consultants shall invoice the City on a monthly basis for all work performed during the period. Each invoice shall be accompanied by a summary of tasks performed, results, and progress on long-term tasks (if any). VII. MIDTERM REVIEW The City intends to implement a five-year rate structure as determined appropriate by the results of the cost of service study. Consultant shall perform a midterm review (either at Year 2 or 3 of implementation) of the adopted rate structure, revenues and expenditures, and make recommendations/findings as to the need for any midterm rate adjustments to meet the City’s stated goals. The Consultant shall deliver an addendum report to the initial study presenting CITY OF SANTA ANA COST OF SERVICE STUDY 23 said recommendations. The Consultant will provide an updated Proposition 218 notice if requested by the City. VIII. VALUE-ADDED RELATED SERVICES Consultant may propose additional related services that the City has not specifically identified in this RFP to accomplish the stated goals of this RFP. Value-added related services will be considered by the City and may or may not be incorporated in theAgreement. IX. FEE SCHEDULE Consultant shall submit a fee schedule in a separate file as described in Section VII.F.3 - RESPONSE TO RFP – PROPOSAL CONTENTS. Fee proposal shall be outlined as follows: 1. Fee for preparing Cost of Service Report (Items I – VI) 2. Fee for performing midterm review (Item VII) 3. Firm’s standard hourly fee schedules 4. Optional: Fee for any proposed value-added services, if any (item VIII) X. TERMINATION The City reserves the right to terminate the contract, without penalty, for cause immediately or without cause. 1. This agreement may be terminated without cause by City upon thirty (30) days written notice delivered to the Contractor either personally or by mail. Upon termination, City shall pay to Contractor that portion of compensation specified in the Agreement that is earned and unpaid prior to the effective date of termination. 2. In addition to, or in lieu of, remedies provided in this Agreement or pursuant to law, City shall have the right to withhold all or a portion of Contractor’s compensation for contract services if, in the judgment of the Projects Manager or designee, falls below appropriate standards and/or Contractor fails to satisfactorily perform contract services. XI. CONTRACTOR OPTION FOR TERMINATION In the event of nonpayment of undisputed sums by the City, Contractor shall give the City a minimum of thirty (30) working days to cure the alleged breach. EXHIBIT B 1 To ensure that the City receives the services it requires at the agreed upon price, we propose to offer our servic es for a fixed fee of $47,700. The fee includes the scope for all services described in this proposal, in response to the Scope of Services requested, and will be billed monthly on a percent complete basis. Additionally, we have provided the cost for the midterm update. In the event that the City requires any services not detailed in this proposal, work can be completed on an hourly basis using the fees on the next page, or we can provide a separate, fixed fee proposal for those additional services. Project Steps Fee Project Initiation 1,925$ Revenue Sufficiency Analysis 8,825$ Cost to Provide Services 8,725$ Rate Structure Analysis 10,050$ Rate Benchmarking 2,475$ Ordinance/Policy Review 6,200$ Presentation of Results 9,500$ Total 47,700$ Midterm Update 18,600$ FEE PROPOSAL Our services are offered for a fixed fee. 2 Hourly Rates SCS ENGINEERS FEE SCHEDULE (Effective January 1, 2023 through December 31, 2023) Labor Category Rate Principal/Business Unit Director........................................................................................ $255 Project Director ................................................................................................................ $240 Senior Project Advisor ...................................................................................................... $225 Senior Project Manager ................................................................................................... $205 Project Manager II ............................................................................................................ $185 Project Manager I ............................................................................................................. $175 Project Advisor .................................................................................................................. $165 Senior Project Professional II............................................................................................ $165 Senior Project Professional I ............................................................................................ $155 Senior Designer ................................................................................................................ $145 Project Professional II ....................................................................................................... $140 Project Professional I ........................................................................................................ $130 Designer .......................................................................................................................... $120 GIS Analyst ....................................................................................................................... $120 Staff Professional II ........................................................................................................... $117 Staff Professional I ............................................................................................................ $110 Senior Superintendent ...................................................................................................... $135 Analyst III .......................................................................................................................... $115 Analyst II ........................................................................................................................... $110 Data Analyst .................................................................................................................... $105 Analyst I ............................................................................................................................ $100 Senior Technician ............................................................................................................. $110 Associate Staff Professional ............................................................................................. $100 Drafter .................................................................................................................................. $95 Technical Associate………….. ……………………………………………………………………$95 Technician .......................................................................................................................... $90 Secretarial/Clerical .............................................................................................................. $90 General Terms: 1. The hourly and reimbursable rates are effective through December 31, 2023. Work performed thereafter is subject to a new Fee Schedule issued for the period beginning January 1, 2024. 2. The above rates include salary, overhead, administration, and profit. Other direct expenses, such as analyses of air, water and soil samples, reproduction, travel, subsistence, subcontractors, computers, and other reimbursable fees, are billed in accordance with the attached reimbursable fee schedule, or at cost plus 15 percent for administration. 3. For special situations, such as expert court testimony, hourly rates for principals of the firm will be on an individually-negotiated basis. EXHIBIT 2 CITY OF SANTA ANA 2 COST OF SERVICE STUDY TABLE OF CONTENTS I. BACKGROUND ........................................................................................................................... 3 II. MANDATORY PRE-PROPOSAL MEETING ................................................................................ 3 III. OVERVIEW OF PROJECT .......................................................................................................... 3 IV. SCOPE OF SERVICES ............................................................................................................... 3 V. TERM OF AGREEMENT ............................................................................................................. 4 VI. MINIMUM QUALIFICATIONS ...................................................................................................... 4 VII. RESPONSE TO RFP .................................................................................................................. 4 VIII. CERTIFICATIONS (ATTACHMENTS) ......................................................................................... 7 IX. REFERENCES ............................................................................................................................ 8 X. MINIMUM SCOPE AND LIMIT OF INSURANCE ......................................................................... 8 XI. SELECTION PROCEDURES & CRITERIA ............................................................................... 11 XII. WITHDRAWALS........................................................................................................................ 11 XIII. GENERAL TERMS AND CONDITIONS .................................................................................... 12 XIV. AWARD OF AGREEMENT ........................................................................................................ 16 XV. IMPLEMENTATION ................................................................................................................... 17 EXHIBITS Exhibits provided herein for Proposers’ reference only. EXHIBIT I – SCOPE OF SERVICES EXHIBIT II – SAMPLE AGREEMENT ATTACHMENTS A REFERENCES B NON-COLLUSION AFFIDAVIT C NON-LOBBYING CERTIFICATION D NON-DISCRIMINATION CERTIFICATION CITY OF SANTA ANA 3 COST OF SERVICE STUDY I. BACKGROUND Incorporated in 1886, Santa Ana, a Charter City, established a Council-Manager form of government in 1952. The City Council is composed of seven members; the Mayor elected at large and six Council members elected by ward, who appoint the City Manager, City Attorney and Clerk of the Council. The City of Santa Ana (City) is a full-service City with a diverse population of approximately 335,000. The City’s eleven agencies provide all the traditional municipal services, as well as water utility, library system, 20-acre Zoo, City Jail, Police Department, and contracts with the Orange County Fire Authority for provision of fire services. The City employs 1,342 authorized full-time positions and has an annual citywide budget is $760.2 million, including the General Fund budget of $403.6 million. The City of Santa Ana is located 10 miles inland from the Pacific Ocean, 33 miles southeast of Los Angeles and 90 miles north of San Diego. The City, which is the county seat of Orange County, encompasses an area of approximately 27 square miles and is the 11th largest by population in California. II. MANDATORY PRE-PROPOSAL MEETING A mandatory virtual pre-proposal meeting will be held on the date and time specified on the cover page of this RFP. Failure to attend this meeting shall result in your firm being disqualified from proposing. Meeting Link: https://meet.goto.com/794712045 The meeting will include a detailed discussion of the project and the services provided by the Sanitation Services Users Charge. All questions shall be required to be submitted in written form. After the pre-proposal meeting, City will respond to pre-proposal attendees by e-mail to written questions or requests for clarifications. III. OVERVIEW OF PROJECT The City of Santa Ana is seeking a Consultant to perform a cost of service study for the City’s Sanitation Services Users Charge (Sanitation Fee/Sanitation Enterprise) in compliance with California Proposition 218 requirements . The City intends to enter into an agreement with a single firm to provide the described services. A detailed Scope of Work is included in EXHIBIT I: SCOPE OF SERVICES. IV. SCOPE OF SERVICES SEE EXHIBIT I – SCOPE OF SERVICES The Contractor shall be an independent contractor capable of providing experienced, knowledgeable and professional staff. The Contractor shall be responsive and maintain excellent working relationships with city residents, businesses, government officials and City staff. The Contractor shall provide adequate staffing levels at all times and adhere to established schedules. The Contractor shall be knowledgeable of and comply with federal, state and local regulations, including but not limited to California Constitution Proposition 218. CITY OF SANTA ANA COST OF SERVICE STUDY 4 Usage is not guaranteed. Execution of an agreement between the City and successful firm(s) and/or individual(s) does not guarantee work throughout the duration of the contract period. Numerous factors will be evaluated by the City in its delivery of project and assignments, including technical expertise required. V. TERM OF AGREEMENT The anticipated term of the agreement is for an initial period of three (3) years. The City may, at its discretion, extend the agreement with the same or more limited scope of required services for one (1), two (2) year renewal, upon mutual agreement contingent upon City Council approval, or City Manager or City Attorney authorization, as appropriate unless the City notifies Contractor in writing at least thirty (30) days before the end of the initial term or any extended term, of its intent to terminate the Agreement at the conclusion of the initial term or any extension. Time is of the essence in the performance of services under this Agreement. The total term of the awarded agreement shall not exceed five (5) years. The contract term is anticipated to commence after City Council award or other required approval of this contract and upon receipt and approval of all required bonds and insurance documents. VI. MINIMUM QUALIFICATIONS Proposer’s (Firm’s) proposed KEY Personnel must have a minimum of five years of experience providing cost of service studies services to similar public agencies. VII. RESPONSE TO RFP A. SUBMITTAL INSTRUCTIONS It is the responsibility of the Proposer to ensure that any proposals submitted have been uploaded to PlanetBids prior to the RFP due date and time. Proposals, including all required sections and forms, shall be submitted electronically via the City’s Bid Management System, PlanetBids. No other form of submittal will be accepted. PlanetBids will not accept late proposals and no exceptions shall be made. Proposers will receive an e-bid confirmation number with a time stamp from PlanetBids indicating that their proposal was submitted successfully. The City will only receive and consider those proposals that were transmitted successfully. Submit proposal online at: http://www.planetbids.com/portal/portal.cfm?CompanyID=20137. Proposer shall be solely responsible for informing itself with respect to the proper utilization of the bid management system, for ensuring the capability of their computer system to upload the required documents, and for the stability of their internet service. Failure of the Proposer to successfully submit an electronic proposal shall be at the Proposer’s sole risk and no relief will be given for late and/or improperly submitted proposals. Proposers experiencing any technical difficulties with the bid submission process may contact PlanetBids at (818) 992- 1771. Questions of an operational nature may be directed to the City’s assigned Buyer. Neither the City, nor PlanetBids, makes any guarantee as to the timely availability of assistance, or assurance that any given problem will be resolved by the bid submission deadline. Proposals shall NOT be sent via telegraphic, electronic, or facsimile means. All notifications, updates and addenda will be posted online on PlanetBids at https://www.planetbids.com/portal/portal.cfm?CompanyID=20137. Proposers shall be CITY OF SANTA ANA COST OF SERVICE STUDY 5 responsible for monitoring the site to obtain information regarding this solicitation. Failure to respond to required updates may result in a determination of a nonresponsive proposal. B. COMMUNICATION / CONTACT WITH CITY STAFF Unless otherwise authorized herein, Proposers who are considering submitting a proposal in response to this RFP, or who submit a proposal in response to this RFP, are only to communicate with the assigned Project Coordinator(s), and no other City staff about this RFP from the date this RFP is issued until a contract is awarded. The City will provide all official communication concerning this RFP in writing via the City’s Bid Management System, PlanetBids. The City will not be responsible for or bound by any oral communication or any other information or contact that occurs outside the official communication process specified herein, unless confirmed in writing by the designated Project Manager(s). C. REQUEST FOR INFORMATION OR CLARIFICATION / QUESTIONS Questions regarding this RFP shall be submitted via PlanetBids. Responses to all questions will be posted on PlanetBids no later than the date and time shown at the schedule of key RFP dates on the cover page of this RFP. All prospective Proposers are advised to visit PlanetBids on a regular basis as responses may be posted earlier than the date above (if applicable). No verbal requests or responses will be accepted. Significant interpretations or clarifications will be addressed via addenda to this RFP. Requests submitted for City’s consideration of proposed terms and conditions, including modifications to the City’s RFP and/or Contract terms and conditions must be submitted by the deadline for questions. Such requests should include an attachment in Word or PDF format on formal company letterhead that shows the requested modifications. Significant interpretations or clarifications and responses to questions received by the deadline will be addressed via addenda to this RFP, which will be released and posted on PlanetBids under the “Addenda/Emails” tab. General process questions may be directed to the following: Eva Pierce, Buyer Email: EPierce@santa-ana.org D. ADDENDA Any changes in RFP from the date of release to date of submittal will result in an addendum or amendment. Notification of such addendum or amendment shall be posted on City’s PlanetBids system, https://www.planetbids.com/portal/portal.cfm?CompanyID=20137. Proposers shall be responsible for monitoring the site to obtain information regarding this solicitation. E. UNDERSTANDING PROPOSAL It is the responsibility of each Proposer to inquire about any criteria, condition, term, provision, or requirement of the RFP that the Proposer does not understand. Responses to inquiries, if they significantly change or clarify the RFP requirements or any aspect of the procurement process, will be forwarded by addenda to all Proposers. The City will not be bound by any oral responses to inquiries. By submitting proposals, Proposers assert that they have fully read the RFP and any addenda issued by the City, the proposed Contract and any other Contract Documents, and affirm that the terms and conditions stated therein are fully CITY OF SANTA ANA COST OF SERVICE STUDY 6 understood and are acceptable to the Proposer. Each Proposer accepts the terms and conditions of the Contract Documents and indicates their ability and willingness to perform the requested services under such terms and conditions. Any exceptions to the terms and conditions set forth in the Contract Document shall be submitted to the City by the deadline to submit requests for information or clarification/questions set forth herein. F. PROPOSAL CONTENTS Proposals are to be prepared in such a way as to provide a straightforward, concise delineation of capabilities to satisfy the requirements of this RFP. Colored displays, promotional materials, photographs etc., are not necessary or desired. Emphasis should be concentrated on conformance to RFP instructions, responsiveness to the RFP requirements, and on completeness and clarity of content. Digital dividers and clear organization of content and material are encouraged. Proposals must include a Table of Contents and be limited to a maximum of 10 pages (excluding section dividers and exhibits). The page limitation includes all appendices, attachments, and supplemental information. All electronic proposal submissions shall be on 8-1/2” x 11” white paper (PDF Format). 1. Narrative Proposal must include the following: i. Cover Letter Proposals shall include a letter signed by a principal or authorized representative who can make legally binding commitments for the entity. Include type of business entity. Cover Letter shall not exceed three (3) pages. Cover letter must stipulate the proposed pricing will be valid for a period of a minimum of 24 months (no price increase will be considered in the first 24 months) subject to annual CPI increases, indicate the address and telephone number of the Contractor’s office nearest to Santa Ana, California, and the office from which the contract will be managed. Cover letter must be addressed to the following City Project Manager: Elizabeth Rubio, Projects Manager City of Santa Ana – Public Works Agency 220 S. Daisy Avenue Santa Ana, CA 92703 ii. Scope of Services Provided and Schedule Proposals shall include a description of proposed services to be provided and how they meet the needs of the City; including details of the work phases to be completed, the tasks to be accomplished and the deliverables to be provided. Provide a schedule based on and incorporating the Scope of Services outlined in EXHIBIT I. Include a written statement which provides proposer’s current workload and how this project will be accommodated. iii. Agreement Statement Proposal shall include a statement outlining your concurrence or concerns with any and all provisions as contained in EXHIBIT II – Sample Agreement of this RFP (if any). iv. Firm and Team Experience CITY OF SANTA ANA COST OF SERVICE STUDY 7 Proposal shall include a profile of the firm’s experience. Include resumes of project team/sub-contractors that outline their technical and design experience. At a minimum, this should include the project manager/principal agent, associates in charge when project manager/principal agent is unavailable, key personnel, firm size, and an organization chart identifying only those who will perform work for the proposed project and the percentage of each individual’s time devoted to this project. The project manager/principal agent shall be the primary contact person to represent your firm. v. Understanding the Need Proposal shall include an outline which demonstrates the firm’s understanding of the scope of work. This outline should include anticipated approach, tasks necessary for successful completion, and suggestions or special concerns that the City should be made aware of. vi. Relevant Project Experience Proposal shall include a list of relevant projects which your firm or personnel have completed within the last five (5) years, including significant work with public agencies. Project information should include project description, year completed, client name, along with a person to contact and their telephone number. vii. References Proposal shall include references for three (3) public entities for which Proposer has performed similar work within the past five (5) years. 2. Fee Proposal Provide a fee schedule/pricing information for the project, which shall include the firm’s standard hourly fee schedule, and/or a project fee schedule required to perform the services as set forth in EXHIBIT I. The fee proposal shall be submitted concurrently with the technical proposal, but uploaded as a separate file and clearly labeled as “Fee Proposal”. The City will primarily evaluate proposals based on qualifications. The City reserves the right to negotiate a contract price with the most qualified/highest-rated firm based on available funding. VIII. CERTIFICATIONS (ATTACHMENTS) In addition to the SOQ, Narrative/Technical Proposal, and Cost Proposal, the following forms, included in this RFP, shall be signed and included as part of the proposal submittal package: • Attachment A: References • Attachment B: Non-Collusion Affidavit • Attachment C: Non-Lobbying Certification • Attachment D: Non-Discrimination Certification The proposal must be completely responsive to the RFP. Incomplete proposals will be deemed as nonresponsive and will be rejected. The City reserves the right to reject any or all proposals submitted and no representation is made hereby that any commitment will be awarded pursuant to this RFP or otherwise. CITY OF SANTA ANA COST OF SERVICE STUDY 8 PLEASE NOTE: City will not be waive notarization requirement when applicable on any of the required attachments. IX. REFERENCES Contractor shall provide three (3) references from other similar public agencies for which services similar to those specified in this RFP have been performed, including contact names and telephone numbers. Use ATTACHMENT A – References. The respondent grants permission for the City to contact any individuals listed as references. City may disqualify a Proposer if: • References fail to substantiate Proposer’s description of services and deliverables provided; or • References fail to support that Proposer has a continuing pattern of providing capable, productive, and skilled personnel, or • City is unable to reach the point of contact with reasonable effort. It is the Proposer’s responsibility to inform the point of contact(s) of normal City working hours. X. MINIMUM SCOPE AND LIMIT OF INSURANCE The selected Proposer shall provide the required evidence of insurance coverage as set forth in the standard agreement within ten (10) business days after receipt of Notice of Intent to Award. Contractor must maintain, for the duration of its contract, insurance coverages as required by the City. Additionally, Contractor shall provide the following insurance coverage: Coverage shall be at least as broad as: • Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $1,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit. • Automobile Liability: ISO Form Number CA 00 01 covering any auto (Code 1), or if Contractor has no owned autos, hired, (Code 8) and non-owned autos (Code 9), with limit no less than $1,000,000 per accident for bodily injury and property damage. • Workers’ Compensation: as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease. • Professional Liability (Errors and Omissions) Insurance appropriates to the Consultant’s profession, with limit no less than $1,000,000 per occurrence or claim, $2,000,000 aggregate. If the Contractor maintains broader coverage and/or higher limits than the minimums shown above, the Entity requires and shall be entitled to the broader coverage and/or the higher limits maintained by the contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the Entity. CITY OF SANTA ANA COST OF SERVICE STUDY 9 Other Insurance Provisions The insurance policies are to contain, or be endorsed to contain, the following provisions: Additional Insured Status The Entity, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Contractor including materials, parts, or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the Contractor’s insurance (at least as broad as ISO Form CG 20 10 11 85 or if not available, through the addition of both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 if a later edition is used). Primary Coverage For any claims related to this contract, the Contractor’s insurance coverage shall be primary coverage at least as broad as ISO CG 20 01 04 13 as respects the Entity, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the Entity, its officers, officials, employees, or volunteers shall be excess of the Contractor’s insurance and shall not contribute with it. Notice of Cancellation Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the Entity. Waiver of Subrogation Contractor hereby grants to Entity a waiver of any right to subrogation which any insurer of said Contractor may acquire against the Entity by virtue of the payment of any loss under such insurance. Contractor agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the Entity has received a waiver of subrogation endorsement from the insurer. Self-Insured Retentions Self-insured retentions must be declared to and approved by the Entity. The Entity may require the Contractor to purchase coverage with a lower retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or Entity. Acceptability of Insurers Insurance is to be placed with insurers authorized to conduct business in the state with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the Entity. Claims Made Policies (note – should be applicable only to professional liability, see below) If any of the required policies provide claims-made coverage: 1. The Retroactive Date must be shown, and must be before the date of the contract or the beginning of contract work. 2. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work. 3. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Contractor CITY OF SANTA ANA COST OF SERVICE STUDY 10 must purchase “extended reporting” coverage for a minimum of five (5) years after completion of work. Verification of Coverage Contractor shall furnish the Entity with original Certificates of Insurance including all required amendatory endorsements (or copies of the applicable policy language effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of the CGL policy listing all policy endorsements to Entity before work begins. However, failure to obtain the required documents prior to the work beginning shall not waive the Contractor’s obligation to provide them. The Entity reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time. Subcontractors Consultant shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein, and Contractor shall ensure that Entity is an additional insured on insurance required from subcontractors. Special Risks or Circumstances Entity reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances. CITY OF SANTA ANA COST OF SERVICE STUDY 11 XI. SELECTION PROCEDURES & CRITERIA A. The City will establish a proposal review committee. The review committee will evaluate proposals based on the response to the RFP, which includes adherence to outlined directions and format, and the City evaluation criteria set forth below. A final score will be calculated for each submitted proposal and used to rank the proposers. B. Proposers will be ranked by the review committee based on the following criteria: The committee may interview the top ranking proposers. The City will recommend award of the agreement to the proposers who will provide the best quality and value to the City. City reserves the right to begin negotiations and enter into an agreement without interview or further discussions. XII. WITHDRAWALS Proposers are responsible for verifying all prices and information before submitting a proposal. Prior to the proposal due date, the Proposer or Proposer’s representative may withdraw the proposal by providing written notice of the proposal withdrawal to the City Contact/Project Manager. Verbal or telephonic withdrawals are not permissible. CATEGORY POINTS Firm/Team Experience • Firm experience (Quantity/Similar Project/Scope of Service) • Technical & design experience • Company’s structure demonstrates sufficient depth, capacity for its present and additional workload 15 Understanding of Need • Outline demonstrating the firm’s understanding of the scope of work • Anticipated approach • Task necessary for scuccessful competition 30 Relevant Project Experience • Relevant projects firm/personnel completed within the last five (5) years 15 Schedule • Detailed Schedule based on the Scope of Service 15 Fee • Cost of Project 20 References • References that are similar in size and project scope to the City. • Customer service approach and reputation with municipal agencies 5 TOTAL POSSIBLE SCORE 100 CITY OF SANTA ANA COST OF SERVICE STUDY 12 XIII. GENERAL TERMS AND CONDITIONS A. AMERICANS WITH DISABILITIES ACT The awarded Contractor hereby certifies that it will comply, as applicable, with the Americans with Disabilities Act of 1990 (“ADA”), 42 USC §§ 12101 et seq., and its implementing regulations, including Subtitle A, Title II of the ADA. Contractor will not discriminate against persons with disabilities nor against persons due to their relationship to or association with a person with a disability. Any contract entered into by the awarded Contractor (or any subcontract thereof), relating to this RFP, shall be subject to the provisions of this paragraph. B. CITY BUSINESS LICENSE The selected proposer shall be required to obtain a City of Santa Ana Business license within thirty (30) days of selection and must provide a copy to the City projects manager or designee prior to commencing any work in Santa Ana. C. CITY RIGHT TO REJECT The City reserves the right to reject any or all proposals submitted and no representation is made hereby that any agreement will be awarded pursuant to this RFP or otherwise. The City reserves the right to accept or reject the combined or separate components of this proposal in part or in its entirety or to waive any minor inconsistency, informality or technical defect in the proposal. D. CONFLICT OF INTEREST Contractor shall exercise reasonable care and diligence to prevent any actions or conditions that could result in a conflict with the best interests of the City. This obligation shall apply to the Contractor; the Contractor’s employees, agents, and Subcontractors associated with accomplishing work and services hereunder. The Contractor’s efforts shall include, but not be limited to, establishing precautions to prevent its employees, agents, and Subcontractors from providing or offering gifts, entertainment, payments, loans or other considerations which could be deemed to influence or appear to influence City staff or elected officers from acting in the best interests of the City. Each Proposer must disclose any existing or potential conflict of interest relative to the performance of the contractual services resulting from this RFP. Any such relationship that might be perceived or represented as a conflict should be disclosed. The City reserves the right to disqualify any Proposer on the grounds of actual or apparent conflict of interest. No person, firm, or subsidiary thereof who has been awarded this Contract may be awarded a Contract for the provision of services, the delivery of supplies, or the provision of any other related action which is required, suggested, or otherwise deemed appropriate as an end product of this Contract. Therefore, Contractor is precluded from contracting for any work recommended as a result of this Contract. E. CONTRACTOR’S EXPENSE Pre-Contractual Expenses: The City is not liable for any costs incurred by Proposers prior to entering into a formal contract. Costs of developing a response to this RFP, are entirely the responsibility of the Proposer, and shall not be reimbursed in any manner by the City. Pre- contractual expenses are not to be included in the cost proposal. Pre-contractual expenses include, but are not limited to, preparation of the proposal, submission of the proposal and additional information, attendance at pre-proposal conference, negotiating any matter related CITY OF SANTA ANA COST OF SERVICE STUDY 13 to this RFP with City, and/or any other expenses incurred by the Proposer prior to the date of award and execution, if any, of the contract. Other Expenses: The Contractor will be responsible for all costs related to photo copying, telephone communications, fax communications, and parking while on City sites during the performance of work and services under this Contract. F. CONTRACTOR’S PROJECT MANAGER/KEY PERSONNEL Except as formally approved by the City, the key personnel identified in Contractor’s proposal shall be the individuals who will actually complete the work. Changes in staffing must be reported in writing and approved by the City. The City shall have the right to require the removal and replacement of the Contractor’s Project Manager and key personnel under the awarded contract. The City shall notify the Contractor in writing of such action. The City is not required to provide any reason, rationale, or additional factual information if it elects to request any specific key personnel be removed from performing services under the awarded contract. The City shall review and approve the appointment of the replacement for the Contractor’s personnel. Said approval shall not be unreasonably withheld. Standards of Conduct: Contractor’s personnel shall be courteous and maintain good working relationships with all stakeholders, state or outside agencies, other team members and staff within the City. G. COST PROPOSAL The awarded Contractor agrees to provide the purchased services at the costs, rates, and fees as set forth in their Fee Schedule in response to this RFP. No other costs, rates or fees shall be payable to the awarded Subcontractor for implementation of their proposal. H. DATA RETENTION Contractor shall be responsible for retaining data, records, and documentation for the preparation of required items. These materials shall be made available to and as requested by City. All materials, documents, data or information obtained from the City Data files or any City medium furnished to Contractor in the performance of an awarded contract will at all times remain the property of the City. Such data or information may not be used or copied for direct or indirect use by Contractor after completion or termination of this Contract without the express written consent of the City. All materials, documents, data or information, including copies, must be returned to the City at the end of the contract. All data, documents and other products used, developed, or produced during response preparation of the RFP will become property of the City. All responses to the RFP shall become property of the City. Proposer information identified as proprietary shall be maintained confidential, to the extent allowed under the California Public Records Act. I. DRUG-FREE WORKPLACE The awarded Contractor certifies compliance with Government Code Section 8355 in matters relating to providing a drug-free workplace. Failure to comply with these requirements may result in suspension of payments under the Contract or termination of the contract or both, and the Contractor may be ineligible for award of any future City contracts. CITY OF SANTA ANA COST OF SERVICE STUDY 14 J. EXAMINATION Proposer represents that it has thoroughly examined and become familiar with the services and responsibilities required this RFP and that it is capable of effectively and efficiently performing quality work to achieve the City’s objectives. Any attachments referenced herein or any interpretations, clarifications or amendments subsequently posted in relation to this RFP are fully incorporated. Any irregularities or lack of clarity in the RFP should be brought to the designated City Contact/Project Manager’s attention as soon as possible so that corrective addenda may be furnished to prospective Proposers. Proposals which appear unrealistic in the terms of technical commitments, lack of technical competence, or are indicative of failure to comprehend the complexity and risk of this contract, may be rejected. K. EXECUTION OF AGREEMENT Upon successful negotiations, the City and the selected Proposer will enter into an Agreement similar to that as shown in EXHIBIT II – Sample Agreement of this RFP. If a Proposer is unwilling or unable to execute an Agreement within thirty (30) days after being notified of selection under this RFP, the City reserves the right to disqualify them without any further obligation L. FISCAL NONFUNDING CLAUSE In the event sufficient budgeted funds are not available for a new fiscal period, the City shall retain the right to notify the provider of such occurrence in writing at least thirty (30) days before the end of the current fiscal period and terminate the contract on the last day of the current fiscal period without penalty or expense to the City. M. INDEPENDENT CONTRACTOR Contractor is considered an independent Contractor and neither Contractor, its employees, nor anyone working under Contractor will be considered an agent or an employee of City. Neither Contractor, its employees, nor anyone working under Contractor, will qualify for workers’ compensation or other fringe benefits of any kind through City. N. JOINT OFFERS/SUBCONSULTANTS Where two or more Proposers desire to submit a single Proposal in response to this RFP, they should do so on a prime sub-consultant basis. The City intends to contract with a single firm and not with multiple firms doing business as a joint venture. Should the use of sub- consultants be offered, the Proposer shall provide the same assurances of competence for the sub-consultant plus the demonstrated ability to manage and supervise the subcontracted work. Sub-consultants shall not be allowed to further subcontract with others for work under the Agreement. The provisions of the Agreement shall apply to all sub-consultants in the same manner as the Proposer. The City reserves the right to reject, replace and approve any and all Subcontractors. All Subcontractor(s) shall be identified in the response to the RFP and the City reserves the right to reject any proposed Subcontractor(s). Subcontractors shall be the responsibility of the prime Contractor and the City shall assume no liability of such Subcontractors. O. LITIGATION STATUS Each Proposer must include in its proposal a complete disclosure of any alleged significant prior or ongoing contract failures, any civil or criminal litigation or investigation pending which involves the Proposer or in which the Proposer has been judged guilty or liable. Failure to CITY OF SANTA ANA COST OF SERVICE STUDY 15 comply with the terms of this provision will disqualify any proposal. The City reserves the right to reject any proposal based upon the Proposer’s prior history with the City or with any other party, which documents, without limitation, unsatisfactory performance, adversarial or contentious demeanor, significant failure(s) to meet contract milestones or other contractual failures. P. NEGOTIATIONS The City reserves the right to negotiate final contract terms with any Proposer selected. The contract between the parties will consist of the RFP together with any modifications thereto, and the awarded Contractor’s proposal, together with any modifications and clarifications thereto that are submitted at the request of the City during the evaluation and negotiation process. In the event of any conflict or contradiction between or among these documents, the documents shall control in the following order of precedence: the final executed contract, the RFP, any modifications and clarifications to the awarded Contractor’s proposal, and the awarded Contractor’s proposal. Specific exceptions to this general rule may be noted in the final executed contract. Negotiations shall be confidential and not subject to disclosure to competing Contractors unless and until an agreement is reached. If contract negotiations cannot be concluded successfully, the City reserves the right to negotiate a contract with another Contractor or withdraw the RFP. Q. NON-PAYMENTS Note that payments will NOT be made for any unsatisfactory work until corrected. In the event of nonpayment of undisputed sums by the City, Contractor shall give the City thirty (30) working days to cure the alleged breach. R. OWNERSHIP OF DOCUMENTS The City has permanent ownership of all directly connected and derivative materials produced under this contract by the Contractor. All documents, reports and other incidental or derivative work or materials furnished hereunder shall become and remains the sole property of the City and may be used by the City as it may require without additional cost to the City. Contractor shall provide the City copies of documents upon its request at any time. None of the documents, reports and other incidental or derivative work or furnished materials shall be used by the Contractor without the express written consent of the City. S. PARKING The City will not provide free parking and/or reimbursement for the cost of parking while providing services and conducting business with the City. T. PROFESSIONAL STANDARDS Contractor staff shall be courteous to the public and City staff utilizing facilities where Contractor is performing work, but shall be responsive only to the requests of the City’s Project Manager or designee. Contractor staff shall direct all inquiries to Project Manager or designee. Contractor acknowledges that City locations consist of public-use facilities and recognizes the obligation to ensure Contractor personnel and agents maintain the highest level of professional standards in attire, decorum, and interaction with the public and City personnel. CITY OF SANTA ANA COST OF SERVICE STUDY 16 U. PROJECT MANAGER The selected Proposer will assume responsibility for all services in its proposal. The selected Proposer shall identify a sole point of contact, Project Manager, with the greatest knowledge in regard to the required service operations and contractual matters, including payment of any and all charges resulting from the Agreement. V. PROPOSAL VALIDITY Services, pricing, and warranties indicated in a Proposer’s Proposal must be valid for a period of 180 days at minimum after the submission of the Proposal. W. PUBLIC AGENCIES Other public agencies, as defined by California Government Code Section 6500, may choose to use the terms of this Contract, subject to Contractor’s acceptance. The City is not liable or responsible for any obligations related to a subsequent contract between Contractor and another public agency. X. PUBLIC RECORDS Proposals will become public record after the award of a contract unless the proposal or specific parts of the proposal can be shown to be exempt by law. Each Proposer may clearly label all or part of a proposal as "CONFIDENTIAL" provided that the Proposer thereby agrees to indemnify and defend the City for honoring such a designation. The failure to so label any information that is released by the City shall constitute a complete waiver of any and all claims for damages caused by any release of the information. Proposer information identified as proprietary shall be maintained confidential, to the extent allowed under the California Public Records Act. Y. SUBCONTRACTORS Proposals in response to this RFP must identify any Subcontractors, and outline the contractual relationship between the Awarded Subcontractor and each Subcontractor. An official of each proposed Subcontractor must sign, and include as part of the proposal submitted by the Prime Contractor, a statement to the effect that the Subcontractor has read and will agree to abide by the awarded Contractor’s obligations. Any Subcontractor proposed after award of contract must be approved by the City before commencement of work. The City will look solely to the awarded Contractor for the performance of all contractual obligations which may result from an award based on this RFP, and the awarded Contractor shall not be relieved for the non-performance of any or all Subcontractors. XIV. AWARD OF AGREEMENT Selected Contractor(s) will be notified in writing. Any award is contingent upon the successful negotiation of final contract terms. A standard agreement is included as EXHIBIT II - Sample Agreement of this RFP. “Proposer” will hereinafter be referred to as “Consultant” or “Contractor” in standard agreement. The term of the agreement will begin after the agreement is fully executed, and all required bonds, insurance documents and contents of the payment information packet have been received and approved. CITY OF SANTA ANA COST OF SERVICE STUDY 17 XV. IMPLEMENTATION A. KICK-OFF MEETINGS A kick-off meeting will be held after award of contract. Consultant and its team will meet with City of Santa Ana staff to conduct introductions, discuss scope of services, and implementation process. B. NOTICE TO PROCEED Following the kick-off meeting, a formal Notice to Proceed (NTP) may be issued after the agreement is fully executed, and all insurance documents and contents of the Payment Information Packet have been received and approved. CITY OF SANTA ANA COST OF SERVICE STUDY 18 Contractor shall perform services as set forth below. I. SCOPE OF SERVICE: The City of Santa Ana is a full-service city with a population of over 335,000, encompassing 27 square miles. Santa Ana is the second largest city in Orange County, the eleventh largest in the state, and the 57th largest in the nation. Incorporated in 1886, Santa Ana has long been the County's government powerbase and serves as the County seat. With a total budget of $760.2 million, Santa Ana provides public safety, quality-of-life programming, and general & utility services to its residents and business community. The Sanitation Services Users Charge (Santation Fee/Sanitation Enterprise) as defined in the Santa Ana Municipal Code Chapter 18 Article XII is 1% of the total budget providing two services: Environmental Sanitation/Weed Abatement and Roadway Cleaning/Street Sweeping. Sanitation services are provided through a combination of city employees and private contractors. The approved Sanitation Enterprise budget for Fiscal Year 2022-23 is $7.6 million. The City maintains 400 miles of public right-of-way by removing hazardous material, vegetation, industrial emissions, and litter. The Sanitation Enterprise support efforts to help ensure an equitable approach to cleaning debris and pollutants along curbed streets, helping prevent contamination of local waters and damaging aquatic life and marine ecosystems. II. DESCRIPTION OF WORK: Consultant shall prepare a cost of service study and make recommendations for implementing a rate in compliance with California Proposition 218 requirements (anticipated implementation date January 2024). The goals of the study are to: A. Propose sanitation rates in accordance with California Constitution (Prop 218), and all applicable laws, that are fair, objective and fiscally appropriate for Santa Ana, covering a ten (10) year study period, including, but not limited to: 1. Ongoing operations and service enhancements; 2. A prudent reserve program for operating; 3. Capital replacement and emergencies; and 4. Identification ofcustomer life-line programs. B. Evaluate existing department operations and budgets, identify the current level of service, and estimate the future level of service. C. Evaluate existing department operations and budgets with non-prevailing wage contractor (street sweeping contract) requirement(s) and identify minimum service levels that will be feasible given the recent enactment of prevailing wage (street sweeping contract). D. Minimize rate impacts to customers to the greatest extent possible. E. Identify existing and potential funding mechanisms to finance department operations and capital Improvements. EXHIBIT I SCOPE OF SERVICES CITY OF SANTA ANA COST OF SERVICE STUDY 19 Key issues that will impact the overall study are: 1. Continuous increase in cost due to current economic climate. 2. Santa Ana's historic effort to tackle the housing crisis is seeing an influx of redevelopment projects, increasing the City's footprint. III. CONTRACTOR REQUIREMENTS & RESPONSIBILITIES I. TASK 1 - SANITATION PROGRAM EVALUATION A. GENERAL The City sweeps approximately 54,000 curb miles; responds to over 15,000 service requests for roadway cleaning annually, 2,000 environmental sanitation/weed abatement violations, and more than 1,600 reports to obstructions in the public right-of -way. B. CONTENT/TASKS 1. Consultant shall review and become familiar with the operation and all pertinent historical performance and financial data. Consultant shall review the following at minimum: a. Surrounding municipalities to establish service level; b. Current and recent budgets and Annual Comprehensice Financial Report (ACFR); c. Background information for the operation including existing regulatory requirements, and other contractual requirements and operations; d. Historical revenues, operating expenses, reserve policies (i.e., working capital and renewal and replacement), approved rates and charges, customer information and number of units; and e. Review other pertinent data as necessary. 2. Consultant shall prepare an “Existing Cost of Service Summary” technical memorandum or executive summary of the existing financial condition of the sanitation enterprises. This summary shall identify: a. The cost of service gaps or discrepancies between the existing rate structure(s); b. The projected maintenance, operations and capital spending plans; and c. The effects of current financial/economic climate. This summary will also identify the strategy the consultant intends to use to close any cost of service gaps identified. C. DELIVERABLES 1. Existing Cost of Service Summary a. Digital Copy (PDF) b. Printed Copies (5) CITY OF SANTA ANA COST OF SERVICE STUDY 20 II. TASK 2 - COST OF SERVICE RATE MODEL & SCENARIO DEVELOPMENT A. GENERAL As part of the work required in preparing a comprehensive cost of service and rate study report, the Consultant may develop various forecasting models, projections, and rate adjustment scenarios for the City’s consideration. B. CONTENT/TASKS Consultant shall perform the following tasks: 1. Classify functional expenses to cost components: capacity (demand) costs, commodity costs, customer costs and other direct costs; 2. Classify operating, administrative, operations and maintenance (O&M) expenses, power costs, distribution systems and reserve fund requirements; 3. For each rate scenario, assess the sensitivity of the projected results to changes in certain key variables, including but not limited to, changes in units changes and changes in the cost of the operation. 4. Propose changes to existing or creation of new sanitation fees and surcharges, as are necessary and/or expedient to achieving the goals of the study. 5. The rate design shall continue to support current service level for all customer classes, provide funding for capital replacement while ensuring the ability of the sanitation enterprises to meet fixed and variable cost obligations. C. DELIVERABLES There are no deliverables for this section. Consultant shall meet and confer with City in regards to the cost of service rate model development and various scenarios prior to preparing report. III. TASK 3 - COST OF SERVICE REPORT A. GENERAL Consultant shall prepare comprehensive cost of service reports which satisfies the City’s stated goals in Section II, “Description of Work” above. At a minimum the reports shall be comprised of the following: 1. Executive Summary 2. Introduction/Background including discussions on a. Purpose of study b. Applicable laws and regulatory framework c. Generally accepted rate setting standards 3. Revenue Requirements 4. Cost allocation methodology 5. Recommendations 6. California Proposition 218 Compliant Notices a. Prepare rate adjustment notices compliant with Proposition 218 requirements. Notices will be prepared in three languages, English, CITY OF SANTA ANA COST OF SERVICE STUDY 21 Spanish and Vietnamese. Notices to be delivered electronically as Microsoft Word document. b. Pass-through adjustment formula and means of establishing pass through adjustments shall be explicitly stated. B. CONTENT/TASKS Perform a fully allocated sanitation rate study tailored for Santa Ana, including the following: 1. A rate structure based on cost of service sufficient to meet the revenue requirements of the sanitation enterprise; 2. Classify functional expenses to cost components: capacity (demand) costs, commodity costs, customer costs and other direct costs; 3. Classify operating, administrative, operations and maintenance (O&M) expenses, power costs and reserve fund requirements; 4. A rate structure that considers and makes provisions for the following factors: a. Current and future cost of providing sanitation services in accordance with established and anticipated standards and regulations. b. A recommended sanitation rate structure that is in compliance with Proposition 218; 5. Provide a comparison of current sanitation rates to comparable surrounding sanitation program; 6. The type and amount of reserves appropriate to the City’s sanitation operations taking into consideration reserves for cash flow, catastrophes, infrastructure replacement (proprietary assets) and other appropriate purposes; 7. A comparison of customer groups and cost of service with neighboring municipalities of comparable size, type of treatment, and level of service; 8. A review and analysis of current block sizes and seasonal rate differentials. Consultant should recommend changes if appropriate; and 9. Consultant shall assess the recommended rate structures and their impacts on the ability to fund sanitation operations as well as their impact on the City’s rate payers; 10. A review of elderly low-income and sanitation rate programs provided by other agencies and propose appropriate elderly low-income sanitation rate for Santa Ana; 11. The benefits of any proposed rate modifications shall be weighed against the financial impacts on the ratepayers. Consultant shall analyze the proposed rates for customer impacts and develop alternative rates modeled to address financial impacts on ratepayers. The analysis shall include: a. Preparation of typical bill comparisons for each proposed rate structure for representative customer classes using the current rate schedules as a baseline. b. Compare customer class and proposed rate structures with neighboring agencies of comparable service area. CITY OF SANTA ANA COST OF SERVICE STUDY 22 C. DELIVERABLES Consultant shall deliver at a minimum the following: 1. Final Cost of Service Reports a. Digital Copy (PDF) b. Printed and Bound Copies (15) of each 2. Proposition 218 Compliant Notice a. Digital Copy (PDF and MS Word) 3. Pass-through adjustment calculator a. Digital Copy (MS Excel or similar) Consultant shall meet with the City to discuss the report’s outcome and explain in detail the full parameters and outcomes discussed in the report. In addition, the Consultant shall meet with the City to review a draft copy of the report before submitting the final report. IV. PUBLIC MEETINGS & PRESENTATIONS Consultant shall participate, as requested by City, at both staff and public meetings. Consultant shall expect to make presentations regarding the results of the cost of service study to City executive staff, Mayor and Council and the general public. For purposes of this RFP, Consultant shall be required to attend a minimum six (6) meetings in the range of two (2) – four (4) hours in length in person. V. KICKOFF MEETING Consultant shall attend one (1) contract kick-off meeting at the City’s Corporate Yard located at 215 S. Center St., Santa Ana, CA 92703 at which City staff will share contact information, safety and security protocols, and familiarize the Consultant with the City’s sites and equipment. VI. PROJECT MANAGEMENT & COORDINATION Consultant shall not proceed with any work without the approval of the City’s designated Project Manager. Consultants shall invoice the City on a monthly basis for all work performed during the period. Each invoice shall be accompanied by a summary of tasks performed, results, and progress on long-term tasks (if any). VII. MIDTERM REVIEW The City intends to implement a five-year rate structure as determined appropriate by the results of the cost of service study. Consultant shall perform a midterm review (either at Year 2 or 3 of implementation) of the adopted rate structure, revenues and expenditures, and make recommendations/findings as to the need for any midterm rate adjustments to meet the City’s stated goals. The Consultant shall deliver an addendum report to the initial study presenting said recommendations. The Consultant will provide an updated Proposition 218 notice if requested by the City. VIII. VALUE-ADDED RELATED SERVICES CITY OF SANTA ANA COST OF SERVICE STUDY 23 Consultant may propose additional related services that the City has not specifically identified in this RFP to accomplish the stated goals of this RFP. Value-added related services will be considered by the City and may or may not be incorporated in theAgreement. IX. FEE SCHEDULE Consultant shall submit a fee schedule in a separate file as described in Section VII.F.3 - RESPONSE TO RFP – PROPOSAL CONTENTS. Fee proposal shall be outlined as follows: 1. Fee for preparing Cost of Service Report (Items I – VI) 2. Fee for performing midterm review (Item VII) 3. Firm’s standard hourly fee schedules 4. Optional: Fee for any proposed value-added services, if any (item VIII) X. TERMINATION The City reserves the right to terminate the contract, without penalty, for cause immediately or without cause. 1. This agreement may be terminated without cause by City upon thirty (30) days written notice delivered to the Contractor either personally or by mail. Upon termination, City shall pay to Contractor that portion of compensation specified in the Agreement that is earned and unpaid prior to the effective date of termination. 2. In addition to, or in lieu of, remedies provided in this Agreement or pursuant to law, City shall have the right to withhold all or a portion of Contractor’s compensation for contract services if, in the judgment of the Projects Manager or designee, falls below appropriate standards and/or Contractor fails to satisfactorily perform contract services. XI. CONTRACTOR OPTION FOR TERMINATION The Contractor may request termination of the contract when conditions during the contract make it impossible to perform or when prevented from proceeding with the contract by act of God, by law or official action of a public authority or in the event on nonpayment by the City. Such request will require sixty (60) days written notice prior to contract termination date requested. In the event of nonpayment of undisputed sums by the City, Contractor shall give the City a minimum of thirty (30) working days to cure the alleged breach. CITY OF SANTA ANA COST OF SERVICE STUDY 24 THIS AGREEMENT is made and entered into on this day of , 2023 by and between ___________________________________________________________, (“Consultant”), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California (“City”). RECITALS A. The City desires to retain a Consultant having special skill and knowledge in the field of: B. Consultant represents that Consultant is able and willing to provide such services to the City. C. In undertaking the performance of this Agreement, Consultant represents that it is knowledgeable in its field and that any services performed by Consultant under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. SCOPE OF SERVICES Consultant shall perform during the term of this Agreement, the tasks and obligations including all labor, materials, tools, equipment, and incidental customary work required to fully and adequately complete the services described and set forth in Scope of Services - Exhibit I, attached hereto and incorporated by reference. 2. COMPENSATION a. City agrees to pay, and Consultant agrees to accept as total payment for its services for City, the rates and charges identified in Compensation - Exhibit II. The total amount to be expended during the term of this Agreement shall not exceed $xxxxxx. b. Payment by City shall be made within forty-five (45) days following receipt of proper invoice invoievidencing work performed, subject to City accounting procedures. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by City. 3. TERM This Agreement shall commence on the date first written above for a written number (3) year term with the option for the City to grant up to two, one (1)-year renewals, exercisable by a writing by the City Manager and the City Attorney, unless terminated earlier in accordance with Section 15, below. 4. INDEPENDENT CONTRACTOR EXHIBIT II SAMPLE AGREEMENT CITY OF SANTA ANA COST OF SERVICE STUDY 25 Consultant shall, during the entire term of this Agreement, be construed to be an independent Consultant and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer-employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Consultant performs the services which are the subject matter of this Agreement; however, the services to be provided by Consultant shall be provided in a manner consistent with all applicable standards and regulations governing such services. Consultant shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. Standards and regulations governing such services. Consultant shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. 5. OWNERSHIP OF MATERIALS This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement (“Documents & Data”). Consultant shall require all subcontractors to agree in writing that City is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were provided to Consultant by the City. City shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City’s sole risk. MINIMUM SCOPE AND LIMIT OF INSURANCE The selected Proposer shall provide the required evidence of insurance coverage as set forth in the standard agreement within ten (10) business days after receipt of Notice of Intent to Award. Contractor must maintain, for the duration of its contract, insurance coverages as required by the City. Additionally, Contractor shall provide the following insurance coverage: Coverage shall be at least as broad as: • Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $1,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit. • Automobile Liability: ISO Form Number CA 00 01 covering any auto (Code 1), or if Contractor has no owned autos, hired, (Code 8) and non-owned autos (Code 9), with limit no less than $1,000,000 per accident for bodily injury and property damage. • Workers’ Compensation: as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease. CITY OF SANTA ANA COST OF SERVICE STUDY 26 If the Contractor maintains broader coverage and/or higher limits than the minimums shown above, the Entity requires and shall be entitled to the broader coverage and/or the higher limits maintained by the contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the Entity. Other Insurance Provisions The insurance policies are to contain, or be endorsed to contain, the following provisions: Additional Insured Status The Entity, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Contractor including materials, parts, or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the Contractor’s insurance (at least as broad as ISO Form CG 20 10 11 85 or if not available, through the addition of both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 if a later edition is used). Primary Coverage For any claims related to this contract, the Contractor’s insurance coverage shall be primary coverage at least as broad as ISO CG 20 01 04 13 as respects the Entity, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the Entity, its officers, officials, employees, or volunteers shall be excess of the Contractor’s insurance and shall not contribute with it. Notice of Cancellation Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the Entity. Waiver of Subrogation Contractor hereby grants to Entity a waiver of any right to subrogation which any insurer of said Contractor may acquire against the Entity by virtue of the payment of any loss under such insurance. Contractor agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the Entity has received a waiver of subrogation endorsement from the insurer. Self-Insured Retentions Self-insured retentions must be declared to and approved by the Entity. The Entity may require the Contractor to purchase coverage with a lower retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or Entity. Acceptability of Insurers Insurance is to be placed with insurers authorized to conduct business in the state with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the Entity. Claims Made Policies (note – should be applicable only to professional liability, see below) If any of the required policies provide claims-made coverage: 4. The Retroactive Date must be shown, and must be before the date of the contract or the beginning of contract work. 5. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work. CITY OF SANTA ANA COST OF SERVICE STUDY 27 6. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Contractor must purchase “extended reporting” coverage for a minimum of five (5) years after completion of work. Verification of Coverage Contractor shall furnish the Entity with original Certificates of Insurance including all required amendatory endorsements (or copies of the applicable policy language effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of the CGL policy listing all policy endorsements to Entity before work begins. However, failure to obtain the required documents prior to the work beginning shall not waive the Contractor’s obligation to provide them. The Entity reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time. Special Risks or Circumstances Entity reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances. INDEMNIFICATION Consultant agrees to defend, and shall indemnify and hold harmless the City, its officers, agents, employees, contractors, special counsel, and representatives from liability: (1) for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including death, and claims for property damage, which may arise from the negligent operations of the Contractor, its subcontractors, agents, employees, or other persons acting on its behalf which relates to the services described in section 1 of this Agreement; and (2) from any claim that personal injury, damages, just compensation, restitution, judicial or equitable relief is due by reason of the terms of or effects arising from this Agreement. This indemnity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered, or alleged to have been suffered, by reason of the events referred to in this Section or by reason of the terms of, or effects, arising from this Agreement. The Consultant further agrees to indemnify, hold harmless, and pay all costs for the defense of the City, including fees and costs for special counsel to be selected by the City, regarding any action by a third party challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement. City may make all reasonable decisions with respect to its representation in any legal proceeding. Notwithstanding the foregoing, to the extent Contractor’s services are subject to Civil Code Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section 2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Contractor. INTELLECTUAL PROPERTY INDEMNIFICATION Contractor shall defend and indemnify the City, its officers, agents, representatives, and employees against any and all liability, including costs, for infringement of any United States’ letters patent, trademark, or copyright infringement, including costs, contained in the work product or documents provided by Consultant to the City pursuant to this Agreement. RECORDS Contractor shall keep records and invoices in connection with the work to be performed under this Agreement. Consultant shall maintain complete and accurate records with respect to the costs incurred under this Agreement and any services, expenditures, and disbursements charged to the City for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant under this Agreement. All such records and invoices shall be clearly identifiable. Consultant shall allow a CITY OF SANTA ANA COST OF SERVICE STUDY 28 representative of the City to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement during regular business hours. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to this Agreement for a period of three (3) years from the date of final payment to Consultant under this Agreement. CONFIDENTIALITY If Contractor receives from the City information which due to the nature of such information is reasonably understood to be confidential and/or proprietary, Consultant agrees that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. “Confidential Information” shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and/or agent of the other party is covered by this Agreement. The foregoing obligations of non-use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Consultant disclosed in a publicly available source; (c) is in rightful possession of the Consultant without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Consultant without reference to information disclosed by the City. CONFLICT OF INTEREST CL AUSE Contractor covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. NON-DISCRIMINATION Contractor shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, gender identity, gender expression, gender, medical conditions, genetic information, or military and veteran status, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, teaching, training, utilization, promotion, termination or other employment related activities or any services provided under this Agreement. Consultant affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Contractor, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Contractor. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Consultant or the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which is not embodied herein. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Contractor, Contractor may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City’s ability to have any CITY OF SANTA ANA COST OF SERVICE STUDY 29 of the services which are the subject to this Agreement performed by City personnel or by other Contractors retained by City. TERMINATION The City reserves the right to terminate the contract, without penalty, for cause immediately or without cause. 1. This agreement may be terminated without cause by City upon thirty (30) days written notice delivered to the Contractor either personally or by mail. Upon termination, City shall pay to Contractor that portion of compensation specified in the Agreement that is earned and unpaid prior to the effective date of termination. 2. In addition to, or in lieu of, remedies provided in this Agreement or pursuant to law, City shall have the right to withhold all or a portion of Contractor’s compensation for contract services if, in the judgment of the Projects Manager or designee, falls below appropriate standards and/or Contractor fails to satisfactorily perform contract services. WAIVER No waiver of breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this Agreement shall be effective unless it is in writing and signed by the party waiving the breach, failure, right or remedy. No waiver of any breach, failure or right, or remedy shall be deemed a waiver of any other breach, failure, right or remedy, whether or not similar, nor shall any waiver constitute a continuing waiver unless the writing so specifies. I. JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. II. PROFESSIONAL LICENSES Consultant shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Consultant shall notify the City immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. III. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this contract shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by fax or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M-30) CITY OF SANTA ANA COST OF SERVICE STUDY 30 P.O. Box 1988 Santa Ana, CA 92702-1988 Fax: 714- 647-6956 With courtesy copies to: To Contractor: A party may change its address by giving notice in writing to the other party. Thereafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by fax, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. IV. MISCELLANEOUS PROVISIONS a. Each undersigned represents and warrants that its signature herein below has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify City fully, including reasonable costs and attorney’s fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. b. The Agreement is the final and complete agreement and any prior or contemporaneous agreements for similar services between the parties is superseded by this Agreement. This shall not apply where the Parties are currently engaged and Consultant is providing services not contemplated by this Agreement. c. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: CITY OF SANTA ANA Kristine Ridge Clerk of the Council City Manager First & Last Name Title Consultant Firm Name Address City, State, Zip Fax: CITY OF SANTA ANA COST OF SERVICE STUDY 31 APPROVED AS TO FORM: CONSULTANT: SONIA R. CARVALHO City Attorney By: Assistant City Attorney Tax ID# RECOMMENDED FOR APPROVAL: SAMPLE ONLY (name) (title) CITY OF SANTA ANA COST OF SERVICE STUDY 32 THIS SHEET MUST BE COMPLETED IN ENTIRETY AND RETURNED WITH OFFEROR'S PROPOSAL List and describe fully the contracts performed by your firm which demonstrate your ability to provide the services included in the scope of the proposal specifications. Attach additional pages if required. The City reserves the right to contact each of the references listed for additional information regarding your firm's qualifications & customer service reputation. Reference No. 1 Customer Name: Contact Individual/Email: Address: Phone Number: Facsimile Number: Project Name: Year: Brief Description of Scope of Work: Reference No. 2 Customer Name: Contact Individual/Email: Address: Phone Number: Facsimile Number: Project Name: Year: Brief Description of Scope of Work: Reference No. 3 Customer Name: Contact Individual/Email: Address: Phone Number: Facsimile Number: Project Name Year: Brief Description of Scope of Work: THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. ATTACHMENT A REFERENCES CITY OF SANTA ANA COST OF SERVICE STUDY 33 (Title 23 United States Code Section 112 and Public Contract Code Section 7106) To the CITY OF SANTA ANA In accordance with Title 23 United States Code Section 112 and Public Contract Code 7106 the proposer declares that the proposal is not made in the interest of, or on behalf of, any undisclosed person, partnership, company, association, organization, or corporation; that the proposal is genuine and not collusive or sham; that the proposer has not directly or indirectly induced or solicited any other proposer to put in a false or sham proposal, and has not directly or indirectly colluded, conspired, connived or agreed with any proposer or anyone else to put in a sham proposal, or that anyone shall refrain from bidding; that the proposer has not in any manner, directly or indirectly, sought by agreement, communication, or conference with anyone to fix the proposal price of the proposer or any proposer, or to fix any overhead, profit, or cost element of the proposal price, or of that of any other proposer, or to secure any advantage against the public body awarding the contract of anyone interested in the proposed contract; that all statements contained in the proposal are true; and, further, that the proposer has not, directly or indirectly, submitted his or her proposal price or any breakdown thereof, or the contents thereof, or divulged information or data relative thereto, or paid, and will not pay, any fee to any corporation, partnership, company association, organization, bid depository, or to any member or agent thereof to effectuate a collusive or sham proposal. Note: The above non-collusion affidavit is part of the proposal. Signing this proposal on the signature portion thereof shall also constitute signature of this non-collusion affidavit. Proposers are cautioned that making a false certification may subject the certifier to criminal prosecution. Signed____________________________________________________________________________ State of ________, County of __________________________________________________________ Subscribed and sworn to (or affirmed) before me on this________ day of_____________, 20____, by ________________________, proved to me on the basis of satisfactory evidence to be the person(s) who appeared before me. ________________________ Notary Public Signature Notary Public Seal THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. ATTACHMENT B NON-COLLUSION AFFIDAVIT CITY OF SANTA ANA COST OF SERVICE STUDY 34 The prospective participant certifies, by signing and submitting this bid or proposal, to the best of his or her knowledge and belief, that: (1) No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. (2) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, "Disclosure of Lobbying Activities," in conformance with its instructions. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. The prospective participant also agrees by submitting his or her bid or proposal that he or she shall require that the language of this certification be included in all lower tier subcontracts, which exceed $100,000 and that all such subrecipients shall certify and disclose accordingly. Signed: Title: Firm: Date: THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. ATTACHMENT C NON-LOBBYING CERTIFICATION CITY OF SANTA ANA COST OF SERVICE STUDY 35 The undersigned consultant or corporate officer, during the performance of this contract, certifies as follows: 1. The Consultant shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. The Consultant shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment without, regard to their race, color, religion, sex, or national origin. Such action 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. The Consultant agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause. 2. The Consultant shall, in all solicitations or advertisements for employees placed by or on behalf of the Consultant, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin. 3. The Consultant shall send to each labor union or representative of workers with which he/she has a collective bargaining agreement or other contract or understanding, a notice to be provided advising the said labor union or workers’ representatives of the Consultant’s commitments under this section, and shall post copies of the notice in conspicuous places available to employees and applicants for employment. 4. The Consultant shall comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor. 5. The Consultant shall furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his/her books, records, and accounts by the administering agency and the Secretary of Labor for purposes of investigation, to ascertain compliance with such rules, regulations, and orders. 1. In the event of the Consultant’s non-compliance with the nondiscrimination clauses of this contract or with any of the said rules, regulations, or orders, the contract may be canceled, terminated, or suspended in whole or in part and the Consultant may be declared ineligible for further Government contracts or federally assisted construction contracts in accordance with procedures authorized in Execution Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965, or by rule, regulations, or order of the Secretary of Labor, or as otherwise provided by law. 2. The Consultant shall include the portion of the sentence immediately preceding paragraph (1) and the provisions of paragraphs (1) through (7) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to Section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontract or purchase order as the administering agency may direct as means of enforcing such provisions, ATTACHMENT D NON-DISCRIMINATION CERTIFICATION CITY OF SANTA ANA COST OF SERVICE STUDY 36 including sanctions for noncompliance; provided, however, that in the event the Consultant becomes involved in, or is threatened with, litigation with a subconsultant or vendor as a result of such direction by the administering agency, the Consultant may request that the United States enter into such litigation to protect the interests of the United States. 8. Pursuant to California Labor Code Section 1735, as added by Chapter 643 Stats. 1939, and as amended, no discrimination shall be made in the employment of persons upon public works because of race, religious creed, color, national origin, ancestry, physical handicaps, mental condition, marital status, or sex of such persons, except as provided in Section 1420, and any consultant of public works violating this Section is subject to all the penalties imposed for a violation of the Chapter. Signed: Title: Firm: Date: THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DO NOT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE. 4683 Chabot Drive, Suite 200, Pleasanton, CA 94588 386.546.7719 | Offices Nationwide |www.scsengineers.com Environmental Consultants and Contractors City of Santa Ana Sanitation Services Users Charge Cost of Service Study March 20, 2023 | RFP No. 23-029 INTEGRATED |UTILITY |SOLUTIONS EXHIBIT 3 Table of Contents PAGE # 1 Cover Letter 2 Firm & Team Experience 5 Understanding the Need 10 Relevant Project Experience Attachments – A-D (separate document) Fee Proposal (separate document) SCS Management Services TABLE OF CONTENTS Cover Letter 4683 Chabot Drive, Suite 200, Pleasanton, CA 94588 | 925-426-0080 March 20, 2023 Elizabeth Rubio, Projects Manager City of Santa Ana – Public Works Agency 220 S. Daisy Avenue Santa Ana, CA 92703 Subject: RFP No. 23-029 | Sanitation Services Users Charge Cost of Service Study Dear Ms. Rubio: The City of Santa Ana has requested a proposal for a Sanitation Cost of Service Study. The goal of your study is to develop a long-term financial plan for the City’s Sanitation Services Users Charge that will generate sufficient revenues to support operations, capital and fleet replacements, and other financial requirements while minimizing the impact to your customers. Additionally, the study will review your cost to provide services and develop rate structures that are equitable, easy to understand and bill, and are consistent with best practices. You need the services of experts to perform your financial analyses and provide you with the financial solution you require for long-term financial sustainability, while meeting your operational goals. I (Vita Quinn) am your Project Manager. I am on the Board of Directors for the Solid Waste Association of North America (SWANA), am SCS’ National Expert on Rate Studies, and lead our Management Services practice. I will lead all of the work on this project and remain committed as Project Manager throughout the project duration. Tim Flanagan and Stacey Demers will lead the analysis of user characteristics, operations, and capital needs. Tim has extensive experience in solid waste operations in southern California and is the current SWANA President. Stacey performs research and operational planning, program analysis, and rate benchmarking studies for cities across the country. We will receive support from the other team members listed in this proposal and, to the extent required, can leverage hundreds of other consultants available for this work. Our goal is to combine our models and communication processes in a way that keeps you involved and informed, is efficient and cost-effective, and gets the results you require. Vita Quinn and Tim Flanagan are authorized to enter into and negotiate contracts with the City as required. The contract will be managed from our Pleasanton office and the office address and phone number are located below. As a corporation, SCS Engineers is in concurrence with the provisions contained in EXHIBIT II – Sample Agreement of this RFP. The pricing will be valid for 24 months. If you have questions concerning any aspect of this proposal, please contact me at 386-546-7719 or VQuinn@scsengineers.com. Sincerely, Vita Quinn, MBA Director of Management Services SCS Engineers Tim Flanagan Project Director SCS Engineers SCS Management Services Firm and Team Experience 2 Rate & Management Consulting Expertise Rate studies, billing/policy reviews, and efficiency improvements for local governments are at the core of our Management Services practice. We also possess comprehensive knowledge covering the entire spectrum of utility industry issues. The professionals on SCS’s project team for this assignment have completed similar rate studies, financial assessments, capital plans, strategic plans, program assessments, system evaluations, privatization evaluations and/or other financial evaluations and modeling efforts. Other Selected SMM & Management Services Capabilities Strategic & Financial Advisory  Zero Waste Plans  Business Advisory Services  Feasibility Analysis  Waste Generation Studies  Cost-Benefit Analysis  Affordability Analysis Organizational Assessments  Organizational Structure  Labor/Operational Benchmarking  Customer Billing & Service Reviews  Operational/Process Improvements  Benchmarking of Services & Fees  Performance Reviews Financial & Economic Analysis  Rate/Cost of Service Studies  Indirect Cost Apportionment  Public/Private Partnerships  Hauler Audits  Development Impact Fees  Non-Ad Valorem Assessments Program Planning & Development  Collection Assessments  Diversion Program Development  Evaluation of Plan Alternatives  Public-Private Partnership Planning  Sustainability Plans  CIP/Asset Management Plans Other Consulting Services  Expert Witness Testimony  Public Education Programs  Regulatory Reporting  Workshops and Seminars  Contract Management Solutions  Policy/Ordinance Review Our Team of Experts Our team members, highlighted on the following pages, combine technical expertise and knowledge of the political environment with the ability to meet your greatest challenges. All members of our project team are experienced leaders on similar projects and are available and ready to perform the work you require. FIRM AND TEAM EXPERIENCE 3 VITA QUINN, MBA | Project Manager EDUCATION MBA – Finance/Real Estate Development, Nova Southeastern University, Florida BS – International Economics, Florida Atlantic University, Florida RELEVANT PROFESSIONAL AFFILIATIONS Solid Waste Association of North America – Board of Directors, American Public Works Association SELECTED RATE & COST OF SERVICE STUDIES  Village of New Lothrop, MI – Wastewater/Stormwater Asset Management Plan  City of Myrtle Beach, SC – Collections Rate & Transfer Fee Study / Billing Analysis  City of Brownsville, TX – 5-Year Financial Services/Rate Studies  Stanford University, CA – Annual Rate Studies  City of Anaheim, CA – Resort Assessment District Revenue Sufficiency Analysis / Solid Waste Revenue Sufficiency Analysis and Updates  City of Council Bluffs, IA – Landfill and Recycling Center Revenue Sufficiency Analysis  City of Monrovia, CA – Hauler Rate Analysis  Reno County, KS – Annual Rate Model Updates/Reserve Calculation  Broward County, FL – Revenue Development & Benchmarking for Proposed Independent Authority  City of Bristol, VA – Solid Waste Collection Rate Study  City of Wauchula, FL – Solid Waste Rate Study  City of Grand Island, NE – Landfill Tipping Fee Study and Capital Feasibility Analysis  City of Dothan, AL – Environmental Svcs Rate Study  City of New Braunfels, TX – Solid Waste Management Plan Update and Rate Study  City of West Palm Bch, FL – Solid Waste Rate Study  City of Odessa, TX – Solid Waste Management Plan  City of Sheridan, WY – Tipping Fee Study and Financial Assurance Estimates  City of Port Orange, FL – Water & Sewer Rate Study  Okaloosa County, FL – Water & Wastewater Revenue Sufficiency Analyses  City of Galveston, TX – Water and Sewer Rate Study and Benchmarking Analysis  Clay County Utility Authority, FL – Water & Sewer Revenue Sufficiency, Lakes Replenishment Program Funding Analysis, and Comparative Impact Fee Study  City of Neptune Beach, FL – Water & Sewer Revenue Sufficiency Analysis  City of Temple Terrace, FL – Solid Waste and General Fund Integrated Analysis  Indian Creek Village, FL – General Government Financial Sustainability Analysis  City of Davis, CA – Solid Waste Rate Study  Greenville County, SC – Solid Waste Tipping Fee Study  City of Cocoa, FL – Integrated Utility Analysis, Regional Water Rate Development  City of Atlanta, GA – Solid Waste Rate & Utility Billing Study  Ft Lauderdale, FL – General Fund, Water, Sewer, Stormwater, Sanitation, Spec Rev Funds Analysis  City of Sheridan, WY – Water, Sewer, & Solid Waste Rate and Financial Plan Updates  Junction City, OR – Water, Sewer, and Sanitation Cost of Service Study  Nassau County, FL – Rate Study, Customer Deposit Review, Miscellaneous Fee Development  City of Tempe, AZ – Solid Waste Rate Design  City of Denton, TX – Rate Study and Benchmarking  Culver City, CA – Solid Waste Rate Study  City of Virginia Beach, VA – Solid Waste Revenue Sufficiency Analysis  Yakima County, WA – Solid Waste Management Plan and Rate Study  City of Killeen, TX – Solid Waste Rate Study  City of St. Cloud, FL – General Fund & Utility Integrated Analysis (Water, Sewer, Bulk Water)  Indian Creek Village, FL –Water and Stormwater Revenue Sufficiency Analysis  Village of Pinecrest, FL – Stormwater Fee Study  Cass County, IA – Landfill Revenue Sufficiency  City of Coconut Creek, FL – Water/Wastewater Utility Rate Study  City of Cape Coral, FL – Water & Sewer Rate Study  City of Alliance, NE – Landfill Revenue Sufficiency  Town of Mount Dora, FL – Stormwater Rate Study  City of Clearwater, FL – Water, Sewer, and Solid Waste Revenue Sufficiency Analysis  City of Zephyrhills, FL – General Fund Financial Sustainability Analysis  City of Fort Myers, FL – General Fund Financial Sustainability Analysis  City of New Port Richey, FL – General Fund and Utility Integrated Financial Sustainability Analysis 4 TIM FLANAGAN | Outreach & Prop 218 Compliance EDUCATION BA – Public Policy and Economics, University of California, Santa Barbara RELEVANT PROFESSIONAL AFFILIATIONS Solid Waste Association of North America – President; Executive Board California Resource Recovery Association National Recycling Coalition National Legislative Committee – National “Buy Recycle” Alliance U.S. Conference of Mayors Advisory Committee for Solid Waste Mgmt and Resource Recovery – Devt Committee Leadership Monterey County – Member, Board of Directors Chaired/Appointed to Various County and State Elected Offices and Committees Chambers of Commerce (Southern California) – Former Board Member PROFESSIONAL EXPERIENCE Mr. Flanagan is a professional executive with 40 years of extensive expertise developed within various levels of private and governmental entities or sectors. He has championed and established cutting-edge waste reduction and recycling programs as a skilled communicator and team leader, and has directed multi-state domestic and export recycling tonnage marketing and sales efforts through key strategic industry partnerships. In his previous positions, he successfully managed multi-million-dollar capital improvement projects for construction of new recycling and materials processing facilities, restoration projects, and key public works projects, from project design through California Environmental Quality Act (CEQA), permitting, and construction processes. Additionally, he has familiarity and practical knowledge of “Green Building” practices. STACEY TYLER DEMERS, LEED® AP| Operational & Data Analysis EDUCATION BS – Statistics, Virginia Polytechnic and State University PROFESSIONAL EXPERIENCE Stacey has 30 years of experience in the solid waste field focusing on developing, evaluating and improving programs that reduce waste, increase recycling, and divert organics. As SCS’s national expert in waste characterization, she has a strong working knowledge of the types and quantities of materials in various waste streams and customizes zero waste strategies by material and generator type. She has strong analytical skills in planning, statistics, program/operational benchmarking, and cost modeling. Her role includes analysis of user characteristics, operational evaluation, and data analysis. Our Management Services group has financial analysts, data analysts, and management analysts ready to perform the services you require. Kellyn and Sher will be lead analysts for this project team. Their experience working with large data sets, managing databases, and creating financial models for forecasting and cost saving for local government clients make them ideal for this project. Their experience with financial modeling and visualization along with rate and fee development helps provide clients with an accurate and proficient analysis. KELLYN MODLIN & SHER CARROLL | Financial & Management Analysts Our financial sustainability solutions include revenue sufficiency analysis, cost of service studies, and rate design. Our references, process, and proposed work plan are in the following sections. Understanding the Need 5 Background The Sanitation Services Users Charge (Charge or Fee) of $5.35 per month, is paid by approximately 89,000 customers on a bimonthly basis. The Environmental Sanitation Program enforces municipal codes for right-of-way obstructions, illegal advertising, weed/rubbish abatement, and refuse violations. Among the services provided are street sweeping, abandoned item collection, sidewalk cleaning and power washing, cleaning services for illegal dumping areas, sidewalk and alley cleaning, right-of-way inspection and enforcement, and weed abatement. The program also coordinates with neighborhood associations to assist in beautifying their properties and neighborhoods. Let’s Consider the Issues the City is Facing Increased Cost The City has operated without a Fee increase since 1996, allowing your businesses and residents to be the beneficiary of low-cost services for nearly 30 years. However, salaries, contractual costs, and other operational costs increase over time, despite receiving a tremendous amount of scrutiny by public officials and community stakeholders. For FY 2023, the Fee is budgeted to generate about $6.3 million in annual revenues, but incur about $7.3 million in expenses, a significant increase over prior years. The increased cost of Street Sweeping due to prevailing wage regulation is partly responsible for this increased cost. As a result, the City is considering changing its level of service in terms of linear miles or frequency to accommodate these cost increases. Additionally, inflation due to economic pressures and supply chain issues has dramatically increased costs of everything from technology to fuel, further putting pressure on the City’s revenue sufficiency. Increased Service Level Demand As the City of Santa Ana has grown to be the center of Orange County for many events and services, so has the need to handle the increased influx of both daytime and night time populations. Streets sweeping, sidewalk and alley cleaning, and illegal deposits/rubbish removal, have all seen a rise in service demands. How do these issues affect financial sustainability? Your financial health as a utility is dependent on how many paying customers the City has, as well as how much waste is disposed. Regardless of the number of customers or containers tipped in a year, your costs continue to increase, and most of those costs are fixed. Disposal costs, although variable based upon the amount of waste disposed, can be subject to tipping fee increases. Likewise, increasing costs of supplies, salaries, and routine capital cause your expenses to increase annually. And operational inefficiencies can further add to ongoing expense. Recognizing that current revenues are insufficient to fund ongoing costs of operations and capital, the City has chosen to engage a qualified firm to provide an analysis and to develop a financial management plan and rate structure to generate the required revenue while minimizing the impact on the City’s residents. Now that we understand your problems, we want you to understand our solutions… Our approach and experience on similar projects, performed by experts we have identified as key personnel, demonstrate that SCS is the right choice. UNDERSTANDING OF THE NEED While our financial models support decision-making, our added value is our client focus, industry experience, and technical ability that we leverage to identify innovative solutions to your problems. 6 Our Approach Updating your rates begins with our suite of utility rate and financial planning models that we customize to reflect the City’s available funds, budgeting and actual spending, customer information, and capital program. The models are designed to:  Identify assumptions and variables  Examine historical trends and performance  Forecast financial requirements  Test alternative what-if scenarios  Calculate cost of services for each rate/service component  Determine the sufficiency of current rates to recover the cost of services  Design updated rates based on cost to provide services and influence behavior Our detailed approach and planning tools will allow our project team to work closely with City utility staff, finance staff, and City Administration to develop and get support for a long-term financial plan. We will utilize our models in interactive work sessions with City staff to review what-if scenarios and develop strategies to implement a sustainable rate and financial plan. Steps to a Successful Rate Study There are several steps to calculating cost-of-service based rates. This section describes the ratemaking process and how we will work with the City to develop rates tailored to your system dynamics, diversion initiatives, and service levels. The steps also detail interaction with City staff, administration, elected officials, and the public that are required to facilitate the desired outcomes for your study. Compile and Review Existing Information We will begin our study by scheduling a kickoff meeting with our team and City staff to discuss key issues, near and long-term goals, and metrics that you consider to be most important to your financial performance. At this meeting we will also distribute our data request, discuss the items required for our analysis, and the platform we will use for data transfer. We will establish who will be involved in the process, the key members of our team and your key staff, and discuss the project schedule for interactive work sessions with your staff, meetings with your Council, and final deliverables. We will work with you to obtain all information relevant to understanding your existing operations and costs for provision of service to customers. Once we start to receive the data, we will begin an in-depth review. We will also review any other data provided and remain in contact if we need clarification prior to our first interactive work session. Revenue Sufficiency (Existing Cost of Service) SCS uses an interactive modeling approach that allows input from you as we develop customized financial solutions. We will perform a revenue sufficiency analysis to determine the long-term sustainability of your solid waste system revenues, including a 10-year financial management plan and associated plan of rate adjustments. During meetings with your staff, we display the models and work with you to test multiple “what if” scenarios that consider your financial sensitivity to changes in various variables. For example, we can test the impact of changes to your vehicle program costs and timing, and the associated impact on operating expenses and staffing requirements. For each scenario considered, we will identify the necessary revenue adjustments, including any borrowing that may be required, and the associated financial, fund balance, and customer impacts. We will also evaluate capital funding alternatives, including cash funding, debt funding, grants, or any other financing alternatives the City is considering. The results are displayed in a simple, graphical format that allows for easy comparison of scenarios. Some of the steps in this process are detailed in the following sections. Expense Projection To project your revenue requirements, we review your historical budgeted and executed operating expenses, all planned capital improvements and associated funding sources, existing debt service and coverage ratios, available 7 and recommended operating, capital, and debt service reserves, and any financial policies and reserve requirements dictated by policies of the City. We will also consider your goals to address during the study, such as cash reserve targets, operational changes, or hiring needs. We study changes in capital and labor costs and how this will affect your expenses. Using cost escalators, we estimate your future expense increases and the nature of any expenses that may be contractual or one- time/temporary. As we tailor our model to your operations, we identify any other issues or questions affecting financial performance to discuss with you during our first interactive meeting. Capital Program Review One of the largest expenditures driving the need for rate increases is the cost of capital outlay required to meet current and future service needs and regulatory requirements. In addition, there are significant renewal and replacement cost requirements to preserve the reliability and useful life of your equipment and other assets. The City must consistently fund vehicle replacements or incur increases in repair and maintenance costs. And implementing new programs often requires additional carts, routes/vehicles, or other capital expense. We will perform a detailed review of your current capital program, including vehicle/equipment replacements and the anticipated sources of funds available to pay for these projects. This discussion of funding is important to reducing the impact of capital on rates. Recognizing this, we will:  Review the level of your budgeted capital spending vs needed capital investment,  Consider the priority of individual items within your capital plan,  Review all restricted and unrestricted funds available for projects,  Discuss timing of project expenditures, and  Consider external funding sources, such as grants or loans, that may mitigate rate impacts. In meetings with City staff, we will review the level of capital or types of projects the City historically cash funds from rate revenues. We will evaluate the pros and cons of alternative capital funding practices, and financial considerations associated with leveraging debt financing. We will consider whether the City could adapt its use of cash and debt funding to maximize available cash reserves and limit risk. Working with you, we will develop a recommended capital spending and funding plan for the identified capital and future capital needs. Financial Management Plan Based on our analysis and interactions with staff, we now have a forecast of your system growth and anticipated revenues under your current rates. We also have a projection of operations and maintenance expenses, capital investment, debt service payments, and the resulting fund balances in each year of the projection period. The final step is to review the scenarios the City may wish to consider for project timing and funding, policy changes, or sensitivity to changes in any of the assumptions used in the analysis and then develop a long-term plan of rate adjustments for each scenario. Working with you, we identify the scenario that best reflects your anticipated and desired outcomes while minimizing rate impacts to your customers. This plan will provide the revenue requirements used as the basis for updating the structure of your rates. It is important to note that the City/SCS will update this analysis at the time of the midterm review. At that time, we will compare the anticipated outcomes from the rate/rate structure updates to the actual revenues and financial outcomes the City is experiencing. Cost of Services Once the above is complete, we will analyze the City’s costs to provide various services to its customers by examining each line item in the budget. Our Cost Allocation Model takes the revenue requirement from and equitably allocates costs to each Fee component (street sweeping, illegal dumping, right of way maintenance, etc.) according to number of instances, how services are provided, and the City’s current customer profile. We will prepare a detailed statistical analysis of the City’s recent service levels, population growth, and tonnage/service level trends. By looking at several years of data, we can consider factors important to serving your customers and evaluating your costs of service and potential rate structure changes:  What services are provided? 8  How does the nature of providing those services differ? Are there varying times to respond, staffing, equipment, etc. for each service?  What customer classes do you serve in addition to residential?  What other services are included in the Fee, if any? This process allows you to see the revenue generated for various services/customer classes versus the expenses incurred in providing those services to your customers. The outcome of this analysis then becomes the basis for the net revenue requirement used in the rate structure analysis. Rate Benchmarking To assist in the next step of rate structure analysis, we will conduct a survey of nearby comparable entities to determine the City’s current and proposed charges for the average customer relative to these other entities. Rate Structure Analysis Once the cost of services analysis is complete, we will use our Rate and Fee Model to examine the City’s current Fee and identify any structural adjustments to consider in developing your new user fee. We will obtain historical billing data and/or property data and analyze current billing practices. We will identify the revenue requirement based on the results of the revenue sufficiency analysis and cost of service analysis, and use this revenue requirement and the results of the billing data analysis in considering alternative rate structures. We will analyze the City’s current rate structure and projected changes in customer characteristics. We examine many factors important to potential rate structure changes, such as: historical and current fee structure and billing, franchise fees and agreements, miscellaneous or one-time service fees, customer sensitivity to fee changes, projected changes in population/service levels, tonnage/volume data, and City ordinances and policies relevant to the analysis. In developing recommendations, we will also consider your desire to encourage diversion and implement new programs. Our project team will develop rate structure recommendations that comply with best practices for ratemaking and relevant legislation. During meetings with staff, we will discuss rate recommendations for your user fee and other miscellaneous fees based on the current structure and suggested adjustments. We will discuss the basis of the recommendation and test the sensitivity of the rate changes to various customer classes and demand characteristics. The goal is to develop a structure that will be easily understandable and easy to administer and that will accurately reflect the dynamics of your solid waste system while equitably distributing costs. Lifeline Rates & Policy Review As part of the rate study, we will discuss with City staff any policies/ordinances/resolutions concerning solid waste that may be out of date or no longer reflect the services you provide to your customers and additional items that could be included in your ordinances/resolutions in the future. This is an appropriate time to also discuss other City policies that can be updated or have been analyzed during the rate study process, such as lifeline rates for elderly or low-income residents, working capital reserve targets, capital/rate stabilization reserve funding, indirect administrative cost allocation to departments/funds, etc. Presentation of Results & Implementation Assistance Customer Impacts & Plan for Public Meetings A well-designed rate structure only benefits you if it is adopted and implemented. With this outcome in mind, it is important to consider the impact of recommended changes on the average customer. It is also helpful at this point to include the City Manager or other officials in City Administration in a conversation of the key issues and the basis for the recommendations prior to public meetings. This conversation allows us to get support and direction regarding key items of interest to the public and/or elected officials that may be important to gaining support. Once we have agreed on the rate/policy recommendations to be presented to the public and Council, we will begin the presentation of results. Written Narrative We will develop outputs of the assumptions and projected revenues, expenses, rate adjustments, and rate structure changes used in developing the analysis. These will be included in our draft and final technical memorandums for 9 your review and feedback. We will create a memorandum detailing the analysis performed, comparable entities identified, performance metrics considered and how the City compares, and recommendations for the City to consider. The draft memorandum will be distributed to City staff for review and comment. Upon receiving comments from City staff, we will adjust our analysis and/or narrative as required and distribute the final memorandum. Once all of the analyses are complete, we will provide the City with detailed schedules containing all of the assumptions and detailed projections used in developing the analysis. The detailed schedules will also be included in the draft report then be distributed to the City for thorough review and comment. Implementation/Prop 218 Support The rates that SCS will calculate will support the requirements of Prop 218. Additionally, we will assist the City in preparing a notice that will need to be mailed to all property owners/customers at least 45 days prior to a public meeting. At the meeting, residents can protest. If there is no majority protest, fees can be adopted. Based on the cost to provide services and rate structure analysis described above, the rates SCS will develop with the City will meet all of the Proposition 218 requirements. Public Meetings In addition to the written report, we will develop a PowerPoint presentation summarizing the findings. Then we will also attend a meeting with the City Council and/or the public where we will present the results of our analysis. As earlier discussed, it is important to have early interaction with key stakeholders, but this is the first time many of the residents will hear the details of the rate study performed. It is important to convey that the City is acting in the best interests of the residents. We will communicate:  The responsibility of a sanitation utility to provide an essential service and protect the environment  The key issues you are facing and the associated costs driving the need for additional revenue  The basis for calculating rates, including the equitable distribution of costs and desire to encourage diversion  Sensitivity in customer demand or satisfaction as a response to rate changes  Miscellaneous or one-time services that could be charged fees and not included in the base rates What Makes Our Project Approach Different? Project success couples experience in political decision making with input from you and your staff, and the technical ability to plan for your future success. We understand that an effective financial plan does not look to simply “balance the budget”. Rather, it should be a long-term forecast that helps guide future decision-making, identifying trends and vulnerabilities that affect long-term financial sustainability. An effective plan should account for known costs (capital, operations, etc.), while also testing the sensitivity of the outcomes to changes in variables. Our strategic approach combined with effective communication demonstrates to you, your Council, and your residents how today’s decisions will affect future outcomes. Sanitation Cost of Service Study Project Schedule Week1234567891011121314151617181920 Project Initiation Revenue Sufficiency Analysis Cost to Provide Services Rate Benchmarking Rate Structure Analysis Ordinance/Policy Review Presentation of Results Relevant Project Experience 10 Similar Project Experience Over the years, SCS has literally completed hundreds of studies. Your Project Manager, Vita Quinn, has completed revenue sufficiency and/or cost-benefit analysis studies for the City of San Antonio, Texas; City of Myrtle Beach, South Carolina; and City of Atlanta, Georgia, just to name a few, in the last several years. References are provided on Attachment A. The map visually illustrates the locations of key offices and recent projects in this practice. WE ENCOURAGE YOU TO REACH OUT TO ANY OF OUR CLIENTS TO DISCUSS THEIR SATISFACTION WITH OUR SERVICES. Other Recent/Current SCS Financial and Rate Study Projects Name Location Key Facets Revenue Sufficiency and Rate Analysis City of Glendale, California Evaluate options for franchising commercial collection, develop revenue sufficiency model to evaluate rates and service option, assess regulatory environment and provide recommendations on changes necessary to franchise in Counties. Revenue Development for Solid Waste Authority Broward County, Florida Developing the anticipated capital and operational expense for an authority to build and operate waste-to energy, yard waste, MRF, and several transfer facilities. Also developing the level of processing fee, transfer fee, and special assessment revenue required to support this investment of approximately $1.5 in capital and the cost of operations. Comprehensive Solid Waste Management Plan Yakima County, Washington Prepared a SWMP Update, including a detailed waste flow analysis, evaluation of the recycling potential of materials, and a financial model of the options under consideration, which was used to develop a 5-year plan costs and revenues, presented to the County and Solid Waste Advisory Commission. Solid Waste Management Plan & Fleet Rental Rate Analysis City of Odessa, Texas Analysis of operations, projected services, waste stream, and demographic changes, and financial recommendations for the City’s collections. Included long-term plan of financial/rate increases. Also performing annual analysis of entire City’s fleet age, costs, repairs and reimbursements to the City’s Fleet Maintenance Department. Operational Analysis Baltimore County, Maryland Analysis of operations and administration of billing at County’s transfer stations, landfill, and administration/billing department office. Recommendations presented to County Administrator; implementation underway. REFERENCES FOR THE ABOVE CAN BE FURNISHED UPON REQUEST. We have a qualified team of professionals with the experience and resources to perform this rate study for the City. RELEVANT PROJECT EXPERIENCE