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HomeMy WebLinkAboutReso - CC - 090-2014RESOLUTION NO.90-2014 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BURLINGAME AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND EXECUTE CONTRACTS WITH WOHLFORD CONSULTING FOR A COST ALLOCATION PLAN AND USER FEE STUDY, AND COLGAN CONSULTING FOR A DEVELOPMENT IMPACT FEE STUDY WHEREAS, the City Council has previously emphasized the desire for cost - control measures and the recovery of more costs for certain City services; and WHEREAS, City staff issued a Request for Proposals (RFP) for consultant services for the development of a cost allocation plan, user fee study and development fee study; and WHEREAS, the City received proposals from six (6) firms meeting minimum qualifications, and evaluated them initially on the basis of the written proposals and then through follow-up questions, interviews and reference checks; and WHEREAS, Wohlford Consulting was selected as the best qualified to provide the needed services for a cost allocation plan and user fee study, and Colgan Consulting was selected as the best qualified to provide a development fee study for the City; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BURLINGAME DOES HEREBY RESOLVE AND ORDER AS FOLLOWS: The City Manager is hereby authorized to negotiate and execute agreements with Wohlford Consulting for a Cost Allocation Plan and User Fee Study,.and Colgan Consulting for a Development Impact Fee Study, substantially consistent with the sample professional services contract attached to the Request For Proposals (attached hereto as Exhibit A) and reflecting the terms in the written proposals submitted by Wohlford Consulting and Colgan Consulting (attached hereto as Exhibits B and C). I, Mary Ellen Kearney, City Clerk of tt the foregoing Resolution was introduced at a regular meeting of the Burlingame City Council held on the 20th day of October, 2014, and was adopted thereafter by the following vote: AYES: Councilmembers: BROWNRIGG, KEIGHRAN, NAGEL,ORTIZ NOES: Councilmembers: NONE ABSENT: Councilmembers: NONE v4t-'.Iq Mary Ellen earney, ity Clerk Proposal for an Overhead Cost Allocation Study .,1 User Fee Study for the City of Burlingame September 26, 2014 WOHLFO" CONSULTING Chad Woldford, Principal Consultant 372 Florin Road, 9293 Sacramento, CA 95831 (916) 205-7050 chad@wohlfordconsu1ting.co September 26, 2014 Carol Augustine Finance Director City of Burlingame Finance Department 501 Primrose Road Burlingame, CA 94010 Diana Truong Narahara Financial Services Manager City of Burlingame Finance Department 501 Primrose Road Burlingame, CA 94010 WOHLFO" CONSULTING 411 Re: Proposal for an Overhead Cost Allocation Study and User Fee Study Dear Ms. Augustine and Ms. Truong Narahara: I am very pleased to provide you with this proposal to partner with the City of Burlingame to perform an Overhead Cost Allocation Study, including Full and Federal Cost Allocation Plans, and a User Fee Study. My business is dedicated to helping cities improve their understanding and recovery of costs, and I sincerely believe that my superior study approach and consultant experience will best help you achieve your goals. The fact that you requested a proposal is a clear indication that you already appreciate the benefits of these studies. Consequently, I wrote this proposal with a focus on the true advantages of having your study done by Wohlford Consulting. Advantages of Wohlford Consulting Wohlford Consulting brings tremendous skill and experience to this engagement, including significant experience serving the City of Burlingame. More importantly, though, my approach ensures a clear focus on the needs of each City department and the City as a whole. You can rest assured that I will accomplish your goals in a professional manner --with quality always as a top priority. The advantages of working with Wohlford Consulting include: Partnership: The City will experience a real partnership with Wohlford consulting. I focus on your needs and ensure that it is easy to work with us, with painless contracting, consistent staffing, easy communication, no bureaucracy, and a friendly approach. Experience: The right kind of experience is critical. The consultant who will perform all of your study has over 27 years of relevant experience, including direct employment as a government employee. Speed: The longer it takes to complete your study, the later you can start collecting new revenue. "Slow" will cost you money. I am set up to work quickly, with no extra decision layers, bureaucratic limitations, or unmanageable workloads to affect your study. 372 Florin Road, #293 (916) 205-7050 Sacramento, CA 95831 Fax: (916) 393-6801 City of Burlingame Proposal for Cost Allocation Services Integrity: The credibility that comes from an honest and transparent study will help you implement the results, weather criticism, and protect your reputation (and ours). As basic personal and professional values, Wohlford Consulting has an absolute commitment to honesty and integrity. Value: Cost Allocation and User Fee studies can bring the City's General Fund significantly more cost recovery than the cost of the study. I help you maximize the value of the study by performing superior work with a robust scope of services and by taking advantage of my lower cost structure that does not need to recover the excessive overhead or profit margins of the larger firms. My project fees include more service and higher quality than comparable fees from other ferns. Support: My contribution to your success.does not end when the report is bound and delivered. I use my experience and communication skills to help you understand, predict, and address the questions and concerns of your City Council, City staff, interest groups, and the public --even after the project is done. Quality: None of the other advantages matter if the overall quality of the project experience is inadequate. Wohlford Consulting, above all else, is extraordinarily devoted to quality. My Commitment Since I specialize in cost studies, I fully understand what is necessary to complete the requested study to the City's satisfaction. The City of Burlingame will experience an effective professional approach and receive high-quality results from this study and from Wohlford Consulting. I firmly commit to complete the proposed study in the most timely and efficient manner possible at the proposed cost. No subcontractors are being proposed. Thank You Thank you for the opportunity to propose my services to you once again. I look forward to talking with you more about how Wohlford Consulting can help you achieve the City's goals through this project. Please feel free to contact me at any time if you have questions or need clarification of the proposal. SinciWohlfor Cha, Principal Consultant - chad@wohlfordconsulting.com WOHLFORD CONSULTING 2 September 26, 2014 City of Burlingame for an Overhead Cost Allocation Study and User Fee Study Table of Contents COVER LETTER / INTRODUCTION (PRECEDES THE T.O.C.) EXECUTIVE SUMMARY Cooperative Project with Colgan Consulting......................................................1 PROJECT INTRODUCTION AND APPROACH PROJECT UNDERSTANDING STUDY APPROACH AND FEATURES 4 Partnership with the City of Burlingame............................................................4 QualityControl......................................................................................................5 CommunicationPlan.............................................................................................6 CONTACT INFORMATION FOR WOHLFORD CONSULTING AUTHORIZATION TO BIND WOHLFORD CONSULTING COOPERATIVE PROJECT WITH COLGAN CONSULTING 8 ADVANTAGES AND VALUES OF WOHLFORD CONSULTING Values and Commitment (Founding Principles)...............................................10 FirmExperience...................................................................................................11 Methodologiesand Work Plans..........................................................................11 Industryand Subject Knowledge.......................................................................11 SpecialExpertise in Building Fees.....................................................................13 Credibilityand Stability ......................................................................................13 SoftwareResources..............................................................................................14 Strict Ethical Consistency...................................................................................14 WOHLFORD CONSULTING i September 26, 2014 City of Burlingame for an Overhead Cost Allocation Study and User Fee Study Table of Contents Continued C. QUALIFICATIONS AND EXPERIENCE OF PROPOSED PROJECT TEAM PROJECT STAFFING AND RESOURCE PLAN OneProject — One Consultant............................................................................15 NoAnticipated Subcontractors..........................................................................15 CONSULTANT EXPERIENCE AND QUALIFICATIONS 16 Chad Wohlford, MPPA: Your Consultant and Project Manager .................16 PAST SUCCESSFUL PROJECTS 17 METHODOLOGIES AND WORK PLANS CostAllocation Plan Approach..........................................................................21 Cost Allocation Study Work Plan Outline...................................22 UserFee Study Approach...................................................................................23 User Fee Study Work Plan Outline..............................................24 SCOPE OF SERVICES Specific Project Deliverables...............................................................................25 Summary List of Project Deliverables..........................................25 Departments and Functions Included in the Cost Allocation Plans ...............37 Departments and Functions Included in the User Fee Study ..........................37 OtherScope Considerations................................................................................40 Cost -Based Building Fees: CABS Approach.....................................................42 OtherServices Available.....................................................................................43 ExpectedCity Staff Involvement........................................................................43 WHY CHOOSE WOHLFORD CONSULTING? 24 45 WOHLFORD CONSULTING ii September 26, 2014 City of Burlingame for an Overhead Cost Allocation Study and User Fee Study Table of Contents Continued Cost Summary F. REFERENCES CLIENT REFERENCES G. IMPLEMENTATION SCHEDULE PROJECT SCHEDULE ..46 ProjectSchedule Summary.................................................................................49 Schedule Issues.....................................................................................................49 Other Assumptions..............................................................................................50 M 47 49 H. CERTIFICATES OF INSURANCE INSURANCE REQUIREMENTS 51 CONCLUSION OTHER PROPOSAL INFORMATION 52 CONCLUDING COMMENTS ThankYoa............................................................................................................52 APPENDICES A. Specific Work Plan for the Cost Allocation Plans B. Specific Work Plan for the User Fee Study C. Potential Project Schedules 611 WOHLFORD CONSULTING iii September 26, 2014 City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study EXECuTlvE Sum mfARY Wohlford Consulting proposes to partner with the City of Burlingame to complete three valuable cost studies: Full Cost Allocation Plan: A robust and inclusive cost analysis to identify the fair and appropriate distribution of citywide administrative services (e.g., Finance) to the operating departments (e.g., Police) and other funds. Results are intended for use in cost of service (user fee) analysis, charges to other funds, and other internal purposes. Federal Cost Allocation Plan: A more restrictive cost analysis to identify the fair and appropriate distribution of citywide administrative services that fully complies with 2 CFR Part 200, 225, et al (formerly OMB Circular A-87) for use in charging federal, state, county, and other external funding sources. User Fee Study: To determine the total cost of individual department services (e.g., Building permits) in order to set fees that recover the City's desired portion of that cost (0-100%). The results of these studies will help the City to appropriately and effectively allocate administrative (City overhead) costs and set fees to meet City policies and objectives for cost -recovery. The overall impact of these efforts will likely be the City's ability to increase revenue to the General Fund through greater administrative recover from other funds and by reducing subsidies provided to fee payers. Wohlford Consulting is a top quality and responsive consulting practice dedicated to local government. Our analytical approaches, communication strategies, and service levels are robust and designed to maximize thoroughness, quality, and defensibility. The City of Burlingame will completely understand and appreciate the processes and results from this project. The proposed consultant and project manager, Chad Wohlford, is a highly experienced government cost expert with an extreme focus on technical quality and customer service. Since 1998,1& Wohlford has personally engaged in over 100 cost analysis studies with at least 70 different clients (many of them for multiple projects) in California and six other Western states. WOHLFORD CONSULTING Page 1 of 52 September 26, 2014 City of Burlingame -= Proposal for an Overhead Cost Allocation Study and User Fee Study Wohlford Consulting's combination of experience, technical expertise, client devotion, and an effective project approach will ensure the success of your project and the accomplishment of your goals, while enjoying a positive and pleasant study process and consultant interactions. Cooperative Project with Colgan Consulting Wohlford Consulting and Colgan Consulting are submitting a joint proposal package that includes separate proposals for the cost plan / user fee study and the development impact fee study. Each proposal is complete in itself, and the two proposals should be evaluated independently. However, if both funis are selected by the City, we will work cooperatively to ensure that the City receives the benefits of a coordinated approach. The principals of Colgan Consulting and Wohlford Consulting have a long- standing professional association and respect for one another. We are continuing this relationship through our proposals to -the City of Burlingame that express our intention to work together to accomplish the City's needs in the most effective and efficient manner possible. WOHLFORD CONSULTING Page 2 of 52 September 26, 2014 Wn4^�E City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study PROJECT UNDERSTANDING In your never-ending quest to manage resources wisely and keep up with service demands, the City of Burlingame needs a variety of tools to make sure that you have the best information and the best resources to make good decisions, fairly and legitimately maximize revenues, maintain compliance with state law and local policies, and meet the needs of the departments, the City, and the public. You already recognize that a Cost Allocation and User Fee Studies are very cost-effective ways to understand your costs and identify potential areas for changes that affect revenue fairness and enhancement by recovering more general fund costs or enhancing user fees. This combined study is a comprehensive Cost of Service Study that consists of distinct, but complementary, analyses: Two Citywide Cost Allocation Plans (CAPs) to distribute overhead costs, and a User Fee Study to determine the full cost of individual services. Wohlford Consulting provides these studies under the single title to reflect the comprehensive nature of this proposal and the The City's needs are paramount to Wohlford Consulting. We first seek to fully understand your goals before we initiate the project tasks. interrelatedness of the studies. My proposed approach will more than meet the needs and requirements I have come to understand from our emails and discussions over the past months. Often, a cost study is thought to be simply a tool to raise revenues from fees, enterprise funds, or outside funding sources (e.g, grants). This is, of course, the most common perception of the public and external groups; and revenue enhancement is often the primary goal of our clients. However, a full cost of service study is truly much more than just a revenue tool. This type of cost study can also become a management tool, with a variety of information and perspectives that will help you better understand your financial circumstances. The study process, consultant input, and results have a variety of important other outcomes, since it can also: • Calculate specific fee subsidies and overall revenue impacts of current and potential fees; • Identify new fees, cost recovery strategies, and other revenue opportunities for the City; • Fairly and appropriately distribute indirect and overhead costs; • Clearly identify the cost of administrative activities to customer departments and programs; WOHLFORD CONSULTING Page 3 of 52 September 26, 2014 wnyE City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study • Create an enhanced internal understanding of administrative programs and support activities; • Foster a better understanding of administrative support provided to other departments; • Allow the City to compare its costs with neighboring jurisdictions; • Quantify productivity and staffing shortages; • Measure the distribution of staff effort of specific positions to individual tasks and service areas, which can help managers more effectively prioritize work tasks; • Ensure that the City's fees are consistent with state laws and interpretations; • Make your fees strongly defensible to challenges from the public, special interest groups, your Council, and the courts; and • Foster a better understanding of workflow and staff involvement in specific services and activities. The City likely has a variety of motivations for considering a Cost Study, and the top priority may change regularly. The special experience of Wohlford Consulting affords us a unique perspective that helps us know your general environment well. Nevertheless, I will work closely with the City to achieve a better understanding of your specific circumstances and adapt my approach and tools to best meet your needs and expectations. Because of my flexibility and commitment to your goals, the City of Burlingame will have a superior study experience and receive results of exceptional quality. My proposed approach will more than meet the needs and requirements expressed by the City. STuDy APPROACH AND FEATURES The City will benefit from the proven approach and quality -based methodologies employed by Wohlford Consulting to perform my studies. The professional analysis of costs and related data, along with a serious attention to detail, results in a top quality product and results that you can be proud to share with your City Council, other Departments, the public, and your neighboring counties and cities. The key features of my approach are described below: Partnership with the City of Burlingame One word summarizes my overall approach: PARTNERSHIP. The City of Burlingame can engage a consultant with over 27 years of experience in government cost and operations and many dozens of client organizations. This consultant is a solid expert in the field of government cost with a strong perspective backed by years of professional work. Nevertheless, I never let my experience or expertise get in the way of making sure that your study fits you. I WOHLFORD CONSULTING Page 4 of 52 September 26, 2014 City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study understand that the best techniques are insufficient, maybe even counterproductive, if they are not adapted to the individual circumstances of each client. I will not apply a cookie -cutter approach or assume that I Wohlford Consulting goes Beyond the standard and employs industry -exceeding approaches and techniques. already know "what is best" for you. I will listen to you and work with you in a close partnership to ensure that I understand your goals and the unique circumstances in the City. Nobody knows more about Burlingame than City staff, and I will take full advantage of your knowledge and perspective. Together we will make a great team. This partnership forces us to focus each step in the study process to the ultimate goal of meeting the needs of the City. With your constant involvement, I will be continually reminded of my commitment to you, and you will form a better understanding of your study. Quality Control A cost analysis study is a GIGO` process. All study components are interrelated, so bad data at any step in the process will cause the ultimate results to be flawed. A flawed study will be embarrassing to us both and may not be implemented. A flawed study will cause us to do unnecessary additional work. We want to avoid all of these situations and the resultant damage to our reputations. To avoid accuracy problems and other quality flaws, Wohlford Consulting employs a rigorous Quality Control process. My Quality Control measures are designed to ensure that we have covered all of the issues, appropriately accounted for positions and resources in the models, and factored all other data fairly and accurately in the study. The elements of my Quality Control processes include: ✓ Clear Instructions ✓ Process Checklists ✓ Reasonableness Tests and Validation ✓ Challenge and Questioning ✓ FTE Balancing ✓ Revenue Balancing ✓ Internal and External Reviews ✓ Comparative Analysis ✓ Cross -Checking Every critical step in my study process includes a Quality Control check. Garbage in, garbage out (bad inputs equal bad outputs) WOELFORD CONSULTING Page 5 of 52 September 26, 2014 ON, City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study Communication Plan In some ways, effective communication of the results and methods is as critical as the cost calculations themselves. Fortunately, I have tremendous experience that enables us to know how to talk with department staff and management, councilmembers, interest groups, and the public, as well as understand their different (and sometimes contradictory) issues, concerns, and questions. Beginning with this proposal, Wohlford Consulting consistently strives to provide the most meaningful and accurate information to you as possible. My proven communication techniques and skills will help the study to be successful. Without a clear understanding of the study, it is unlikely that staff, management, or the City Council will support. and adopt the study. Consequently, I have proposed formal presentations as part of our study. In addition, I will conduct working meetings, briefings, and regular discussions with key contacts to ensure that good information flows regularly. You will find that my communication abilities and commitment are key components of this study that will help us achieve your goals. WOHLFORD CONSULTING Page 6 of 52 September 26, 2014 r City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study CONTACT INFORMATION FOR WOHLFORD CONSULTING Wohlford Consulting consists entirely of Chad Wohlford, so the firm and Burlingame's proposed consultant are one in the same, which keeps the contact information simple and ensures certainty about whom to contact for any question or issue. Chad Wohlford can be reached at the following: Chad Wohlford Owner and Principal Consultant 372 Florin Road, #293 Sacramento, CA 95831 (916) 205-7050 — Telephone (916) 393-6801— Fax chad@woblfordconsulting.com AUTHORIZATION TO BIND WOHLFORD CONSULTING As Sole Proprietor of Wohlford Consulting, I will serve as the City's contact person, project manager, and on-site consultant; and I am authorized to bind Wohlford Consulting to a contract to execute the proposed work. This proposal is a firm offer that is valid for at least 90 days from the date of submittal. All services described herein will be performed at the not -to -exceed agreement price also described herein. I have read and will comply with all terms and conditions of the RFP, as interpreted and clarified in this proposal: September 26, 2014 date Chad Wohlford Sole Proprietor 372 Florin Road, 4293 Sacramento, CA 95831 Phone: (916) 205-7050 Fax: (916) 393-6801 chad@wohlfordconsulting.com WOHLFORD CONSULTING Page 7 of 52 September 26, 2014 2.0'k City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study COOPERATIVE PROTECT WrM COLGAN CONSULTING Wohlford Consulting and Colgan Consulting are submitting a joint proposal package that includes separate proposals for the cost plan / user fee study and the development impact fee study. Each proposal is complete in itself, and the two proposals should be evaluated independently. However, if both funis are selected by the City, we will work cooperatively to ensure that the City receives the benefits of a coordinated approach. The principals of Colgan Consulting and Wohlford Consulting have a long- standing professional association and respect for one another. We are continuing this relationship through our proposals to the City of Burlingame that express our intention to work together to accomplish the City's needs in the most effective and efficient manner possible. Benefits of the Wohlford-Colgan Approach The features and benefits of our coordinated approach include the following: • Unique proposals will allow you to review each service independently and clearly identify the distinct features, deliverables, and costs of each study. • Separate completion schedules will allow the City flexibility in its project management, staffing, and other resource assignment to the studies. Individual study reports will allow the City to separately consider the impacts, approval process, and implementation of each. Since impact fees are often more controversial, we believe that separating the documentation that is often used for the review process will allow City staff and the City Council to focus more effectively on each of them at the appropriate time. • The City will receive the time, attention, and focus of two senior experienced consultants (and business owners), rather than a mixed team of senior and junior consultants. • We will coordinate our data collection efforts to ensure that only a single request is necessary when multiple studies require the same data. This approach will minimize the effort required of City staff. • We will consult with each other to determine the best approaches to assist the City with analysis, recommendations, and implementation advice. • The respective consultants will shift resources and assist each other, whenever necessary, to complete the project tasks in a timely manner. WOHLFORD CONSULTING Page 8 of 52 September 26, 2014 "'^"^`^"` City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study Potential for a Split Decision by Burlingame Colgan Consulting and Wohlford Consulting are fully aware that the City may determine that only one (or part) of our proposals is the most responsive and advantageous to the City. If that occurs, we would understand and respect the City's decision and accept a partial award that excludes one of our funis. WOHLFORD CONSULTING Page 9 of 52 September 26, 2014 .w„ ,ME City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study ADVANTAGES AND VALUES OF WOHI.FORD CONSULTING Wohlford Consulting has exceptional technical qualifications to provide these services to the City, but other cost consulting firms can also meet the basic qualifications. For the City of Burlingame, I will exceed the typical service, quality, experience, and commitment standards and make you glad you selected Wohlford Consulting for your studies. Values and Commitment (Founding Principles) Chad Wohlford founded Wohlford Consulting in early 2005 when I left a key position in a national government consulting corporation to start an independent consulting practice (sole proprietorship) focused on the needs of local government agencies. The practice, based in Sacramento, California, is entirely owned by me, which ensures that all actions of the practice adhere to my standards of excellence. I founded Wohlford Consulting in order to provide high quality, responsive, and client -centered consulting services to local government agencies. As a smaller practice, I focus on the needs of my clients --without external pressures to achieve specified financial results or other objectives contrary to the best interests of my clients At the same time, I enjoy the stability that comes from Customer Service = Quality Timeliness Communication Integrity a long-term focus on quality and service, rather than quarterly corporate profits. I maintain a core belief that democracy is most effective and responsive at the local level. Citizens have individual access and influence at the local level that is not present at other levels of government. While sometimes problematic for officials that must respond to unreasonable (and sometimes downright strange) inputs from the public, the process works best at the local level. In whatever way possible, Wohlford Consulting is committed to serving my clients well, and by extension the citizens my clients represent. I am proud of my contributions. WOHLFORD CONSULTING Page 10 of 52 September 26, 2014 Son City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study In all aspects of my day-to-day work practices, I adhere to principles of Quality and Ethical consulting: Personal and Professional Integrity and Honesty Fairness and Propriety Technical and Procedural Accuracy Workload Control Client -Centric Focus Customer Service Firm Experience The experience of the firm is the experience of Chad Wohlford, which is detailed in the next section of this proposal ("C. Qualifications and Experience of Proposed Project Team"). In summary, the proposed firm and consultant have over 27 years of experience evaluating government costs. Methodologies and Work Plans The City of Burlingame deserves a study that is objective, efficient, effective, quality -driven, goal -oriented, and understandable. Most importantly, however, it should be defensible. None of the positive attribute of this study will matter if the City and its critics cannot be satisfied with the accuracy and integrity of the study. To ensure the best possible outcomes for the City of Burlingame, Wohlford Consulting starts with the "industry standard" approach and methods, but I enhance them with superior techniques, skill, research, and perspective. Later sections of this proposal and Appendices A and B provide more detailed descriptions of the specific work plans and methodologies to be used for this study. Industry and Subject Knowledge Woblford Consulting is very knowledgeable about the cost of service industry and the issues facing government agencies that attempt to address their fees. My understanding comes from a variety of experiences and initiatives, as described further in this section. "Inside" Government Experience The principal consultant for Wohlford Consulting was a dedicated government employee for 12 years before becoming a private consultant serving government agencies. This experience established an "insider's" perspective on government services and a sincere respect for the employees and the services they perform. I oppose the gross misconception that government and its employees are inherently inefficient, ineffective, unconcerned, or incompetent. At the same time, I have WOHLFORD CONSULTING Page I1 of 52 September 26, 2014 01-51 City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study also dealt with the challenges and obstacles often found in government agencies. This reality -based perspective permits us to recognize and work effectively within the unique circumstances and environment found in government agencies. Current Technical Knowledge — Cost Plans I know which costs can be included in cost allocation plans and which costs must be excluded. I also know precisely how the allocation software functions, because I wrote the software. This knowledge will ensure that your study is correct and defensible. This technical knowledge will help the City of Burlingame maximize its cost -recovery performance, while avoiding successful challenges to its study. In addition, the federal guidelines ("Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards") for indirect cost allocation were updated with a final rule in December 2013. These new guidelines supersede the requirement from OMB Circular A-87. I have been reviewing these changes and will ensure that your new federal plan is in compliance. Current Technical Knowledge — User Fees I know which costs can be included in user fees and which costs must be excluded. Different fee areas have different restrictions. I know how to recover Code Enforcement and General Plan Update costs in fees. I know how to establish surcharges for technology upgrades and fund reserves. I know when only federal (A-87) Cost Allocation Plan costs are allowed rather than the Full Cost. Allocation Plan costs, as well as when neither is allowed. Some fees can include only specific categories of cost, and others have specific exclusions. This technical knowledge will help the City of Burlingame maximize its cost - recovery performance, while avoiding successful challenges to its study. Industry Advancement As an established private cost analyst and practice leader, the principal consultant advanced the field of user fee analysis. Through creativity, continual research, and testing, he established new standards and tactics for cost of service analysis. He also institutionalized the inclusion of other allowable costs into user fees to enhance the cost recovery performance of local government. My influence is indicated by my work cited in the second edition of the seminal building fee text, Establishing Building Permit Fees (Bouse, 2005), published by the International Codes Council. WOHLFORD CONSULTING Page 12 of 52 September 26, 2014 City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study Continuing Research I conduct frequent research into the legal basis and limitations for user fees. We understand the underlying authority (e.g. California Government Code) and various interpretations (e.g., Attorney General's Opinions) of that authority, including judicial determinations. This knowledge is particularly important for building fee studies, where litigation over the past few years has influenced the industry. In some instances, a study or input by our principal consultant has prevented lawsuits from occurring or progressing. Knowledge of Critics Wohlford Consulting has sought to understand the potential criticisms of cost studies. With this information, we can develop studies that are, in some ways, "inoculated" from challenge. From years of participation in City Council, Board of Supervisors, and other public meetings where others are encouraged to question the studies, I have gained insight into the areas of potential challenge. I also review documentation and have conducted frequent discussions with fee critics and plaintiffs, such as the Paladin Group, to understand the principles and concerns of the most frequent and virulent opponents. Special Expertise in Building Fees The cost -based (non -valuation) analysis of building and safety fees is a specialty practice with few highly qualified practitioners. The principal consultant of Wohlford Consulting may be the most experienced expert on these fees in the Western U.S. I have significantly advanced this category of analysis, with unique techniques, software, and approaches, and has been designated an expert witness for trial. He is also familiar with current litigation and other issues in this area. I can help you select the best approach for your City to take in this controversial area. Credibility and Stability As an independent consulting practice, Wohlford Consulting is over nine years old. While the practice is not as old as some, the proposed consultant is an established presence in the cost analysis industry. Furthermore, we have never had a gap in contracts or engagements since its founding in 2005. In fact, almost all of our work now is sole -source from referrals and/or repeat business. The practice is successful, well -funded, and maintains a full complement of professional insurance, including General/Business Liability and Professional Liability (errors and omission) at levels that equal corporate firms and will meet or exceed the City's requirements. WOHLFOR.D CONSULTING Page 13 of 52 September 26, 2014 4a .0.1 City of Burlingame -' Proposal for an Overhead Cost Allocation Study and User Fee Study In addition, the smaller size of Wohlford Consulting actually lends greater stability to individual projects, since the common practice of larger firms to "reassign" consultants due to workload or project profitability will not happen with Wohlford Consulting. Software Resources Wohlford Consulting developed robust cost analysis models (software) to perform cost studies. These models are very sophisticated, yet flexible, and they utilize common commercially available software packages, such as Microsoft Excel. The overall models are comprised of worksheets that usually address a small number of component analyses. Often, these worksheets are provided to client staff for input or review, in order to involve them in the study to a greater extent, if desired. This approach allows my clients to more readily understand the processes we follow, participate more fully in the development of results, and have a higher level of confidence in the technical outcomes and results. This approach also enhances simplicity and flexibility, and it facilitates the ease of future updates and training. Should the City request the actual full technical models (proprietary) for future use by City staff, the requirements (and cost) for software training, new software products, updates and licensing, or other extra support, would be minimized. Strict Ethical Consistency Wohlford Consulting has always been extremely committed to ethical and legal standards, as well as quality performance and service. As a result, Wohlford Consulting has never had a contract terminated for default or any other reason. Wohlford Consulting has no conflicts of interest and has never been involved in any litigation, investigations, or violations of law. WOHLFORD CONSULTING Page 14 of 52 September 26, 2014 SM City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study PROJECT STAFFING AND RESOURCE PLAN Wohlford Consulting is exceptionally qualified to serve the City of Burlingame, and I look forward to the chance to demonstrate my service ethic and commitment to quality work. This section of the proposal describes my intended approach to staff the project with a highly experienced and effective consultant. One Project — One Consultant The only consultant assigned to this project will be Chad Wohlford, MPPA. Mr. Wohlford will personally complete all technical and project management tasks related to this study. The assignment of a single consultant to conduct all project activities is a great advantage to the City. This will ensure a consistent and stable approach, methodology, and style across all departments, divisions, tasks, and other aspects of the study. The City does not need to worry about communication breakdowns, inefficiencies, time delays, "trainee" errors, consultant "reassignment," or other problems that arise when multiple consultants of varying experience and skill work on the same project, which is often the case with larger firms. In addition, the person who presents the results to the departments, City Council, or the public, will be the same person who conducted the analysis, thus enhancing the credibility of the study and the quality of the presentations. Ultimately, Burlingame can rest assured that you will have only the highest quality and most experienced consultant working on everything. No Anticipated Subcontractors Wohlford Consulting does not expect to utilize any subcontractors or outside resources for this project. In the event that unique and unanticipated technical demands or resource issues arise during the course of this study. Wohlford Consulting has associations with a variety of other expert consultants and firms that can provide the necessary information or assistance to the City or Wohlford Consulting. Should it become necessary to use outside consultants for direct involvement in this project, Wohlford Consulting will provide the City with the opportunity to review their qualifications and status before their involvement is established. WOHLFORD CONSULTING Page 15 of 52 September 26, 2014 a�f=.ME City of Burlingame „ Proposal for an Overhead Cost Allocation Study and User Fee Study CONSULTANT EXPERIENCE & QUALIFICATIONS Chad Wohlford, MPPA: Your Consultant and Project Manager Every consulting firm, large or small, is simply a collection of the staff consultants who work for it. The key to determining the potential success of a project is to understand the quality of the consultant that will work directly on your project. The years of experience of the consultant matters far more than the years the firm has been in business. The consultant assigned to this project will be Chad Wohlford. Mr. Wohlford will personally complete all technical and project management tasks related to this study, including the interviews, meetings, data collection, analytical work, documentation, and presentations. The single consultant arrangement is important for your study, since even the most basic incoming data often tells a story to the experienced consultant, who can redirect the effort or adjust the analysis to accommodate the nuances of the circumstances. As a cost-saving measure to offset high overhead and enhance profit margins, large and medium consulting firms typically assign junior level staff to perform most tasks—sometimes under the supervision of a senior consultant, and sometimes not. This situation may seem to indicate a higher level of resources, but it is really just a matter of quantity over quality. Chad Wohlford has evaluated government costs and operations for over 27 years, and he specializes in cost analysis, with particular expertise in the cost -based analysis of building fees. His work has been cited in the second edition of the seminal building fee text, Establishing Building Permit Fees (Bouse, 2005), published by the International Codes Council. In addition, he has evaluated at least 30 functional areas for over 70 cities, counties, districts, and states. Mr. Wohlford's experience and background is described in greater detail below: Consulting Experience Mr. Wohlford is the founder and principal consultant for Wohlford Consulting (est. 2005). He specializes in cost of service analysis, user fee development, cost allocation, and operations improvement and other management studies. In addition to a general expertise in cost analysis, he has developed a particular expertise and reputation in the critical area of cost -based analysis of building and safety fees, including designation as an "expert witness" in the field and case studies of his work in a published building fee text. WOHLFORD CONSULTING Page 16 of 52 September 26, 2014 0City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study Prior to founding Wohlford Consulting, Mr. Wohlford worked for seven years as a consultant, project manager, and state director for Maximus, a large, national, publicly traded, consulting firm. At Maximus, Mr. Wohlford was the Director of Cost Services for California/Nevada, where he performed a variety of cost and management studies and managed all aspects of the practice. He developed or enhanced the primary cost of service analysis techniques, processes, tools, protocols, and software used by the firm in the West and propagated to other states. He also trained and mentored many of the remaining fee study consultants. It is important to note that, even as management responsibilities increased, Mr. Wohlford continued to maintain a high workload of direct project services for clients. Mr. Wohlford's contribution to each consulting engagement is a rare combination of significant technical experience, effective project management, and strong communication skills. He has managed and conducted a wide variety of cost analysis studies for government clients. He is a detail -oriented and hands-on consultant and project manager who excels in communicating with clients. A subsequent section of this proposal provides a more detailed listing of clients and functional areas served. Experience: 27 years 100 cost studies 70 unique clients 30 service areas WOHLFORD CONSULTING Page 17 of 52 September 26, 2014 SMY, Cityof Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study Direct Government Experience Mr. Wohlford has worked or consulted for government agencies since 1986. In particular, his experience from the "inside" of government operations has allowed him to become very knowledgeable in the functions, environment, and financing of various local government disciplines. His 12 years of internal government employment (and general roles) included: • Sacramento County Department of Health and Human Services • Department Budget Officer ($200M+) • Department Contracts Officer (500+) • Senior Administrative Analyst • Sacramento County Parking Enterprise • County Parking Manager • Sacramento County Department of General Services • Department Consulting Analyst • Sacramento County Department of Health • Indigent Health Services Liaison and Analyst • City of San Luis Obispo • Staff Assistant, Human Relations & Rent Control Commission • State of California— California Conservation Corps • Director, Human Development Coordinator Program • U.S. Department of Commerce — International Trade Administration • Management Analyst Education and Trainin¢ Mr. Wohlford received a Master of Public Policy and Administration degree from California State University, Sacramento, and a Bachelor's Degree in Political Science / Public Administration / Psychology at California Polytechnic State University, San Luis Obispo. In addition, he has completed a variety of government management and technical training programs. WOHLFORD CONSULTING Page 18 of 52 September 26, 2014 a . City of Burlingame -_' Proposal for an Overhead Cost Allocation Study and User Fee Study PAST SUCCESSFUL PROJECTS Chad Wohlford has worked on over 100 user fee, cost allocation, operational analysis, and other cost of service analysis studies—primarily in California. Some of the past clients he has personally served include: Chad Wohlford's Sample Client List Cities: Cities: Counties: • Alameda • Oceanside • Alameda County • Arroyo Grande • Pasadena • Butte County • Banning • Paso Robles • El Dorado County • Benicia • Pleasanton • Imperial County • Chico • Rancho Cucamonga Merced County • Citrus Heights • Red Blu, ff Napa County • Clovis • San Diego Orange County • Coronado • San Francisco Placer County • Covina • San Leandro Sacramento County • Glendale • Santa Barbara San Diego County • El Cerrito • Santa Maria San Mateo County • El Segundo • Santa Rosa Santa Barbara County • Half Moon Bay • St. Helena Yolo County • Hawthorne • Temecula Yuba County • Hercules Thousand Oaks Irvine Carson City, NV States/Special Districts/Other: • La Palma Henderson, NV • Livermore Las Vegas, NV 0State of California • Livingston • Los Alamos, NM • California State University • Martinez Missoula, MT • Menlo Park Fire PD • Menlo Park • Spokane, WA • Rincon Valley Fire PD • Montclair Trophy Club, TX • South Bay Regional Consortia • Morgan Hill West Jordan, UT • Livermore Area Recreation • Novato and Parks District Bold = Clients served in the past five years. Italics = Multiple studies The bold clients represent at least 10 cost allocation plans and 18 user fee studies, inclucimg multiple studies for the same client. Most cost allocation plans include both full cost and A -87 -type plans. The impressions of past clients of the proposed consultant are the best indicator of what you can expect from us for your study. I encourage you to contact any of our past clients, so I would be pleased to provide you with more comprehensive contact information at your request. WOHLFORD CONSULTING Page 19 of 52 September 26, 2014 City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study Mr. Wohlford has conducted studies in the following areas of government: WOHLFORD CONSULTING Page 20 of 52 September 26, 2014 Areas of Experience ✓ Administration ✓ Library ✓ Agriculture Commissioner ✓ Mental Health ✓ Animal Control ✓ Parking ✓ Building and Safety ✓ Planning ✓ Cemetery ✓ Police/Sheriff/Jails ✓ Child Support ✓ Port Operations ✓ Clerk ✓ Probation ✓ Code Enforcement ✓ Public Health ✓ Dispatch ✓ Public Works ✓ Engineering ✓ Records ✓ Environmental Health ✓ Recreation and Parks ✓ Facility Rentals ✓ Revenue Recovery ✓ Fire ✓ Support Services ✓ Human/Social Services ✓ Transportation WOHLFORD CONSULTING Page 20 of 52 September 26, 2014 City of Burlingame C IML M' Proposal for an Overhead Cost Allocation Study and User Fee Study To ensure the best possible outcomes for the City of Burlingame, Wohlford Consulting uses a detailed, but flexible, approach and work plan to perform each study. The methods are the result of years of experience that taught me the way to achieve success in the most efficient manner. The remainder of this section describes the approaches used for the studies. METHODOLOGIES AND WORK PLANS The City of Burlingame deserves a study that is objective, efficient, effective, quality -driven, goal -oriented, and understandable. Most importantly, however, it should be defensible. None of the positive attribute of this study will matter if the City and its critics cannot be satisfied with the accuracy and integrity of the study. To maximize success for the City of Burlingame, Wohlford Consulting starts with the "industry standard" approach and methods, but I enhance them with superior techniques, skill, research, and perspective. Appendix A and B and the sections below of this proposal provide more detailed descriptions of the specific work plans and methodologies to be used for this study. In summary, Wohlford Consulting provides a hands-on leadership approach to the design of the cost plans, requests to City staff, data collection, data analysis and entry, and all other direct aspects of the study. The level of City staff involvement in the management of the project is dependent upon the desires of the City for centralized contact and involvement. The important thing to keep in mind about my study approach is that Wohlford Consulting will be readily available to City staff for consultation and assistance. I will not simply assign tasks and walk away while you struggle to understand and complete those tasks. I will be there to help whenever needed. Cost Allocation Plan Approach The simple purpose of a Cost Allocation Plan is to accurately, fairly, and reasonably distribute the City's central administrative costs (e.g., City Clerk, Human Resources, City Attorney, etc.) to the operating departments in the City. To complement my experience in this area, I work with key representatives from each contributing department to determine the best structure, approach, and relevant details used for the study. The complexity of the study will be determined by the needs and structure of the City. WOHLFORD CONSULTING Page 21 of 52 September 26, 2014 .„ q. City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study The general method for allocating costs from each administrative department to the other departments is to identify an "allocation basis" and distribute the costs proportionately. These allocation bases consist of various available data/statistics that best reflect the workload related to the recipient of the service. For example, the allocation basis for Human Resources may be the number of employees per department. Dozens of allocation bases are potentially available, and the selection of the most appropriate measure will follow a discussion with key department staff. Other than the normal quality of my work, the best way to ensure accuracy and fairness is to separate the distinct "functions" of each central service department and allocate them individually whenever feasible. The following table illustrates this potential: Sample Allocation Structure: Adminictrntive Rervice,s - FINANCE Function Optimal Allocation Basis * Alternate Allocation Basis Payroll FTE's Personnel Cost Accounts Payable AP Transactions Selected Expenditures Purchasing Purchase Orders Selected Expenditures Budget Budget $$ FTE * Per Department , rer Leparrmem The normal steps to accomplish this study are reasonably well defined, and include: Cost Allocation Study Work Plan Outline 1. Meet with City staff to customize the structure of the analysis and the model; 2. Identify and classify the Central Service (administrative) Departments; 3. Determine whether other departments or the User Fee Study would benefit from designation of other departments as "central service;" 4. Classify the "functions" of each allocated department: 5. Determine the optimal allocation basis for each function; 6. Identify the source and collect allocation bases data/statistics; 7. Populate analytical model and calculate results; 8. Employ quality control processes; 9. Review results with the City; 10. Revise and finalize; 11. Discuss strategic approaches; and 12. Document and communicate results. Certain "industry standards" exist for the development of Cost Allocation Plans, including the guidelines presented by the federal government (2 .CFR Part 200, WOEILFORD CONSULTING Page 22 of 52 September 26, 2014 nom.+E City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study 225, et al — formerly OMB Circular A-87) and adopted by the State of California. I initially follow these guidelines to set the minimum level of quality, but Wohlford Consulting goes beyond these standards to ensure the best quality study for Burlingame. As with all of my studies, I will work closely with the Finance Department to ensure that the study addresses the City's unique circumstances and critical needs. As you can imagine, "the devil is in the details" of a Cost Allocation Study. The specific work plan for this project represents a detailed expansion of the summary methodology described above. Each of these steps is a significant undertaking with many potential delays, inefficiencies, errors, annoyances, sidetracks, and other serious pitfalls. My job as the consultant is to facilitate the entire process to your success. I will employ my experience and expertise to identify, prevent, and resolve problems and process issues; collect data efficiently and devise alternative techniques when needed; foster communication and decision-making; and keep the study progressing. Appendix A provides a more complete description of the proposed steps and individual tasks of the Cost Allocation Plan study. In summary, the City can expect an expert, highest quality, and top -tier work approach and process. User Fee Study Approach The methodology to evaluate user fees or service costs is deceptively simple in concept. I utilize a `unit cost build-up" approach that seeks to identify the "fully loaded" cost for each unit of service (fee activity). This approach is superior (more accurate and defensible) to the "top down approach" used by many other fines (divide the total cost of services by the number of fees); since it is not dependent upon fluctuating activity levels or other unrelated factors to calculate a unit fee. As a further enhancement, my approach is also a clarified form of Activity -Based Costing that has been simplified and customized for fee study purposes, which helps to avoid the confusion, project delays, and other common problems with the unnecessarily complex industrial ABC systems available. As a "full cost" analysis, Wohlford Consulting will attempt to incorporate all legitimate costs into the study, including Citywide overhead or contributions of effort between departments and divisions. In addition to the cost analysis outcomes, and as desired by the City, the detailed ABC approach utilized by Wohlford Consulting can identify workload patterns and help to highlight targets of opportunity for improvement or further investigation. I constantly seek to improve my processes to enhance efficiency, timeliness, cost- effectiveness, and quality outcomes. Through the years of performing and WORLFORD CONSULTING Page 23 of 52 September 26, 2014 MF City of Burlingame J� „ Proposal for an Overhead Cost Allocation Study and User Fee Study continuously improving these types of studies, Wohlford Consulting has developed an approach and work plan that facilitates a successful study. Part of this approach is to customize each baseline project step and subtask to best fit your individual circumstances, priorities, and needs. Furthermore, I will identify new and unique issues in Burlingame that will warrant special attention. In that light, the City should consider the following list simply as a general outline that addresses the basic elements of the study: User Fee Study Work Plan Outline 1. Meet with City staff to customize the analytical approach and base models 2. Establish and/or restructure the inventory of fee services (current and potential) 3. Identify the staff positions that work on each fee service 4. Calculate the direct productive hourly rate for each position 5. Determine the time for each position to perform fee tasks 6. Calculate the direct cost of the staff time for each fee 7. Distribute indirect -and overhead costs to each fee 8. Sub -allocate supporting activities to fee services 9. Perform quality control processes (constant) 10. Calculate revenue impacts 11. Perform the "gap analysis" (unit and total subsidies) 12. Perform review processes 13. Consider Recommendations 14. Document and present results The specific work plan for this project represents a detailed expansion of the summary methodology described above. Each of these steps is a significant undertaking with many potential delays, inefficiencies, errors, annoyances, sidetracks, and other serious pitfalls. My job as the consultant is to facilitate the entire process to your success. I will employ my experience and expertise to identify, prevent, and resolve problems and process issues; facilitate data collection and devise alternative techniques when needed; foster communication and decision-making; and keep the study progressing. Appendix B provides a more complete description of the proposed steps and individual tasks of the study. In summary, the City can expect an expert, highest quality, and top -tier work approach and process for its study. SCOPE OF SERVICES The City of Burlingame would most benefit from a project "scope of services" that addresses the basic needs of the City, plus something extra to ensure success. From my experience, I generally know the tasks and deliverables that are WOHLFORD CONSULTING Page 24 of 52 September 26, 2014 W City of Burlingame =' Proposal for an Overhead Cost Allocation Study and User Fee Study necessary to achieve your goals in an efficient and effective fashion. At the same time, I understand that City funds to pay for consultants are limited. Consequently, I devised a scope of services that will accomplish your goals in the most cost-effective manner. This balance is important for the City to realize the full value of the study. The proposed scope of services reflects my current understanding of the needs of the City and the availability of necessary data. At the beginning of the project, I will work with the City to refine this scope of services to best meet your objectives. To ensure success, we will adapt the "scope of services" to match the needs and objectives of Burlingame. Specific Project Deliverables The general scope of services for this project includes a Full Cost Allocation Plan, a Federal (A-87) Cost Allocation Plan, and Cost of Service Study for each user fee department. All of these studies involve the determination and distribution of costs for services performed by the City. However, I included several other "deliverables" to ensure that the City's needs are fully met. For this proposed study, Wohlford Consulting will complete and deliver the following items and information to the City of Burlingame: Summary List ofProiect Deliverables Cost Allocation Plan: User Fee Study: ✓ Full Cost Allocation Plan ✓ User Fee Analysis ✓ Federal (A-87) Cost Allocation ✓ Reasonableness Review Plan ✓ Fee Comparison ✓ CAP Narratives ✓ Fee Study Summary Report ✓ CAP Summary Report ✓ Electronic Copies of Fee Study ✓ Electronic CAP Results Results ✓ On -Site CAP Meetings ✓ On -Site Fee Study Meetings ✓ CAP Presentations ✓ Fee Study Presentations Common Elements: ✓ General Orientation and Training ✓ Electronic Models ✓ Policy Consultation ✓ Intangibles ✓ Post -Project Support ✓ Annual Updates WOHLFORD CONSULTING Page 25 of 52 September 26, 2014 2,9ic City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study These deliverables are described below: Full Cost Allocation Plan and Federal Cost Allocation Plan (Overview) Wohlford Consulting will gather relevant data and use proprietary analytical model(s) to identify the fair allocation of citywide central services costs to the operating departments. We will complete two Cost Allocation Plans: • Full Cost Plan: For cost of service analysis, charges to other funds, and other internal uses. • Federal Cost Plan: Complies with federal guidelines for use in charging federal, state, county, and other external funding sources. The Federal Cost Plan will be fully compliant with federal guidelines. The Full Cost CAP will follow the federal guidelines, in general, but it will include some legitimate central service costs that are specifically disallowed for federal reimbursement. The ultimate product of a Cost Allocation Plan is a summary worksheet that illustrates the final distribution of costs to each of the receiving departments. The specific deliverable products will include this summary worksheet for each plan, as well as the supporting documentation that detail all of the distributions and their bases and provide historical documentation of the allocation processes. Wohlford Consulting will provide an electronic file of each entire CAP (pdf format), which the City can use to review and distribute the document as needed within the city and/or to produce paper copies at its discretion. (In an effort to reduce paper consumption, Wohlford Consulting does not automatically provide a "hard copy" printed version of the CAP, but if required by the City, we will provide up to six paper copies of the final plan.) The deliverables will also include an Excel file of the summary worksheet to allow the City to conduct further evaluation and analysis at its discretion. The first year of the study will involve a "from the ground up" analysis of the structures, staffing, expenditures, allocation bases, and other relevant data to determine the appropriate allocations. In future year updates, the analysis would likely entail a smaller range of analyses and data, as we will rely upon existing information and structures to ensure consistent comparisons and reduce volatility of the allocations. The updates generally involve the expenditures, some allocation bases, carry -forwards, WOULFORD CONSULTING Page 26 of 52 September 26, 2014 ``w:n. City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study and direct charges. If necessary, the updates will also include redistribution of staff workloads. CAP Narratives Wohlford Consulting will produce summary narratives to describe and document the key elements of the Cost Allocation Plan. The City will have the opportunity to influence the content of these narratives, in order to ensure that they will meet your needs. The narratives are "imbedded" into the Cost Allocation Plans. CAP Summary Report If desired by the City, Wohlford Consulting will produce a separate project summary / briefing report to document the general approach used for the Cost Allocation Plan. I will provide an electronic copy (pdf format) of the document to allow the City to review and distribute it internally as needed. Electronic Copies of CAP Results Wohlford Consulting will provide electronic copies (pdf and/or Excel) of the summary results for the Cost Allocation Plans to the City. On -Site CAP Meetings Communication between City management/staff and the consultant is critical to success of the study. Consequently, Wohlford Consulting will conduct multiple meetings during one to two on-site visits (1-2 days, as necessary). During the on-site and subsequent web -based or phone meetings, Burlingame representatives and the consultant will discuss expectations and City issues, assign data collection tasks, review work in progress, examine results, plan strategy for analysis and implementation, and address other issues and tasks as necessary. In order to minimize disruptions and the impact on staff workload, I will conduct the remainder of the work with the City through web meetings, email, phone, fax, mail, and other media. CAP Presentations As part of the "Communication Plan," Wohlford Consulting will conduct a series of meetings with Burlingame staff and managers from the central service departments. In addition, Wohlford Consulting will also produce WOHLFORD CONSULTING Page 27 of 52 September 26, 2014 d*, S City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study two formal presentations, in order to explain the process, potential outcomes, or results of the study. The purpose of these presentations is to help the potential recipients of overhead charges and others to understand how the numbers are derived and to build confidence and acceptance of the results. The presentations are further outlined below: • Kick-off and Orientation: The consultant will meet with all managers and staff involved in the study, as well as interested "customers" impacted by the study, in order to explain the project approach, processes, expectations, and potential outcomes. This is an opportunity for all of us to start the project with a mutual understanding and commitment. • City Management Group Presentation: The consultant will attend a meeting at the end of the study to explain the process and results, as well as answer questions about the Cost Allocation Plans. I will work with the City to determine the best approach for this presentation. I also recognize that the City may decide that an alternate audience is preferred, and I will work with the City to accommodate such a change. To give the City of Burlingame greater flexibility and cost -control, and to minimus the baseline fixed project fee, I limited the number of formal on- site presentations in this proposal. Depending on the outcomes of the study, the relative involvement of critics and other interested parties in your community, and other factors, the City may recognize the need for additional presentations, such as: • Results Workshops: I can conduct formal presentations of the study to the City Council, a subcommittee, city management, and/or key staff to ensure that they fully understand the methodology, philosophy, findings, and/or recommendations that the City may consider and approve. The City can designate the point in the project when other presentations might occur (e.g., mid -study, draft, final results, etc.), as well as the audience (e.g., full Council, subcommittee, special public meeting, normal Council meeting). City staff will help us focus presentations appropriately to best conform to the nature of the audience and the objectives of the City. In addition to the factual findings of the study, this presentation can include a discussion of general issues, acknowledgement and defense of potential challenges, discussion of comparative factors, future considerations, and a number of WOHLFORD CONSULTING Page 28 of 52 September 26, 2014 Mitt City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study other factors that are known to the consultant from my professional experience. Potential audiences for other presentations include: ✓ City Council Subcommittee or Follow-up Meetings ✓ Citizens Ad Hoc Committees ✓ Chamber of Commerce ✓ Local Industry Groups Wohlford Consulting would be pleased discuss the addition of these meetings. I can use my experience from other jurisdictions to help you determine the most effective approaches and understand the potential issues that may arise during these meetings. Generally, the "formal" presentations involve a projected PowerPoint display concurrent with prepared comments and discussion from the consultant at an organized meeting. Questions and challenges are always welcomed and addressed fully. I can use my experience from other jurisdictions to help you determine the most effective approaches and understand the potential issues that may arise during these meetings. User Fee Analysis (Overview) Wohlford Consulting will work closely and collaboratively with department staff and management to set up the study and gather relevant data. I will use my proprietary analytical model(s) to calculate the full unit cost of user fee services and activities that are potentially viable new fees. In addition to the individual cost of fee services, the Cost of Service Study will identify subsidy levels and potential fee adjustments. As part of the larger study in each department/division, the analysis will include a determination of the cost -recovery (fully burdened) hourly rates for each staff member. If unit data is not available or feasible, we will determine the cost -recovery performance of program areas and identify potential fee changes accordingly. If activity volume data is available, we will also determine the potential revenue impacts of current and recoramended fees. If desired, I will work with the City to establish recommended fees. Wohlford Consulting will work directly with department management to reorganize and restructure the fees to best fit your current (or desired) operating practices, policy goals, customer service objectives, and administrative needs. A fee study is often the opportunity the departments have been "waiting for" in order to solve ongoing problems and make the fee schedule more appropriate for the department's business. WOHLFORD CONSULTING Page 29 of 52 September 26, 2014 a: .. City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study I will deliver a package of detailed worksheets that demonstrate the cost components for each fee calculation, as well as summary documentation of the unit costs and overall results. These worksheets also contain subsidy analyses for unit costs and annual performance, percentage results, change calculations, revenue impacts, and other metrics. These worksheets can be customized to meet the formatting needs of the City. The City will receive pdf copies of the final results worksheets, as well as electronic versions (e.g., Excel worksheets) of the final fee results to facilitate future analysis and distribution. In addition, the City will receive a pdf version of the entire final model for each department studied. The first year of the study will involve a "from the ground up" analysis of the fee structures, staffing, expenditures, staff workload data and time estimates), and other relevant data to determine the unit costs, subsidies, and revenue impacts. In future year updates, the analysis would likely entail a smaller range of analyses and data, as we will rely upon existing information and structures to ensure consistent comparisons and reduce volatility of the fees. The updates generally involve the expenditures inputs, inflation, or other cost -based issues. Reasonableness Review It is my firm belief that honesty from your consultant is important at all stages of the project—especially in the proposal. Furthermore, facilitating clear and realistic expectations is a critical part of this honesty. Some clients seek an evaluation of fee `reasonableness," based upon a notion of "best practices." Through my QC processes, Wohlford Consulting will help you achieve a level of confidence in the reasonableness of the City's fees and enhance your existing understanding of the related concepts, including what is realistic, meaningful, and specific to the City of Burlingame. My intention in this section is to summarize to the City the realistic possibilities and limitations of this type of analysis, in order to ensure that you have the best available information. In my experience, the notion of "reasonableness" is a function of many different definitions and assumptions. The most basic consideration is whether the reasonableness standard applies to the cost of the service or to the fee charged --which can be two entirely different issues. The reasonableness of a fee is largely a policy matter after cost has been established, since each individual's perspective influences his definition of "reasonableness." For example, whether a particular fee is considered reasonable certainly depends on if you are the person paying the fee or a disinterested party. Concepts of subsidization are also important to consider—particularly when the potential fee payer is making a personal profit off of the actions of the City (e.g., private developers). Political WOHLFORD CONSULTING Page 30 of 52 September 26, 2014 ayw OS City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study considerations, jurisdictional comparisons, economic sympathy, desired incentives and disincentives, and historical trends may also play a part in the determination of fee reasonableness. Wohlford Consulting can outline these issues with City leadership and the Council. A cost of service study is initially intended to establish the true cost of providing individual services. In fact, the most common standard for this analysis, if one follows the California Government Code, is that the fees should be no greater than the cost of providing the service for which a fee is charged (no profit). Unfortunately, there is no such thing as a "best practice" or specific "reasonableness" definition or standard for providing individual services—and, by extension, knowing the best universal cost level. In my experience with dozens. of jurisdictions, the only commonality is difference. Despite some claims, attempts to create a standard through rough statistical analysis of past data are problematic, at best, and imply a level of accuracy and meaningfulness that just does not exist. The cost components, service structures, staffing arrangements, services levels, overhead levels, and many other factors vary widely (and legitimately) among even neighboring jurisdictions. A high-quality cost of service study will employ quality control measures to ensure that the analysis identifies the most accurate and reasonable costs for the City's current operations. Such a study may also incorporate various operational and staffing changes into the analysis, in order to develop the costs for planned or alternate scenarios. However, to the extent that the City defines `reasonableness" as including an evaluation of the most efficient and effective operational practices, a cost of service study is not sufficient. A true "best practices" evaluation and determination of cost "reasonableness" based upon an idealized approach almost always requires a more robust management study, including meaningful observations of those practices, operational reviews, comprehensive line staff interviews, concept definition processes, and a wider scope of investigation and analysis. This type of analysis is really not feasible or economical given the time requirements and other indications typically expected by a city for a cost study. Anything short of this full analysis would lack credibility, utility, and relevance. Conclusions based upon an insufficient study would be irresponsible and contrary to the interests of the City. Fee Comparison The City has requested comparisons of Burlingame's fees with other cities and counties. First, I will spend the necessary time to discuss the conceptual and practical issues related to fee comparisons with the City, in WOHLFORD CONSULTING Page 31 of 52 September 26, 2014 d� „aME City of Burlingame ` Proposal for an Overhead Cost Allocation Study and User Fee Study order to ensure that the City has a complete understanding about the utility and validity of these types of comparisons. The meaningfulness of comparisons depends greatly on the ability of the City and the consultant to select the sample of appropriate target cities, as well as selecting the most important fees to compare. Wohlford Consulting will work closely with the City to select the 5-7 candidates for comparison, as well as the targeted fees. We will conduct our solicitation of fee data from other jurisdictions through website research, phone calls, email, and other approaches necessary to accomplish this task. Following the collection of the data, we will document the results, which normally consists of a matrix of fees with side-by-side comparisons. The City will have the opportunity to review the draft results and influence the final format of the documentation, including whether it is incorporated in to the final report or delivered separately. Fee Study Summary Report Wohlford Consulting will produce a report (draft and final versions) to describe and document my general approach, methodologies, related issues, and study results for the User Fee Study. Wohlford Consulting will provide an electronic file of the report and appendices (pdf format), which the City can use to review and distribute the document as needed within the city and/or to produce paper copies at its discretion. (In an effort to reduce paper consumption, Wohlford Consulting does not automatically provide a "hard copy" printed version of the report, but if required by the City, we will provide up to six paper copies of the final plan.) The deliverables will also include an Excel file of the summary results worksheets to allow the City to conduct further evaluation and analysis at its discretion. Electronic Copies of Fee Study Results Wohlford Consulting will provide electronic copies (pdf and/or Excel) of the summary results for the Cost of Service Study to the City. The Excel worksheets will have the capability for the City to update the fees regularly for inflation or other factors. On -Site Fee Study Meetines Communication between City management/staff and the consultant is critical to success of the study. Consequently, Wohlford Consulting assumes that two multi -day site visits will be necessary for the Cost of Service Study, with multiple meetings during each visit. WOB LFORD CONSULTING Page 32 of 52 September 26, 2014 City of Burlingame -MLp ` Proposal for an Overhead Cost Allocation Study and User Fee Study During these on-site meetings, the City and the consultant will discuss expectations and City issues, interview staff, assign data collection tasks, collect data, review work in progress, examine results, plan strategy for analysis and implementation, and address other issues and tasks as necessary. In order to minimize disruptions and the impact on staff workload, I will conduct the remainder of the work with the City through webmeetings, email, phone, fax, mail, and other media. Fee Study Presentations As part of my "Communication Plan," Wohlford Consulting will produce two formal presentations, following discussions with the City to determine the most appropriate audiences and best timing. These presentations include: 1. Kick-off and Orientation: I will meet with all managers and staff involved in the study to explain the project approach, processes, expectations, and potential outcomes. This is an opportunity for all of us to start the project with a mutual understanding and commitment. And, 2. City Council Workshop: I will conduct a presentation of the study(ies) to the City Council, a subcommittee, city management, and/or key staff to ensure that they fully understand the methodology, philosophy, findings, and/or recommendations that the City may ask them to consider and approve. Or, 3. Development Community Workshop (optional / additional): We can present the Cost of Service Study methodology and approach (and results) to representatives from the potential fee payers (e.g., BIA, developers, etc.). This presentation will allow the participants to better understand and challenge the study before it gets to the City Council or otherwise becomes final. The City can designate the point in the project when the second presentation should occur (e.g., draft, final results, recommendations, etc.), as well as the audience (e.g., full Council, subcommittee, special public meeting, normal Council meeting). City staff will help us focus this presentation appropriately to best conform to the nature of the audience and the objectives of the City. In addition to the factual findings of the study, this presentation can include a discussion of general fee issues, acknowledgement and defense of potential challenges, discussion WOIILFORD CONSULTING Page 33 of 52 September 26, 2014 0..City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study of comparative factors, future considerations, and a number of other factors that are known to the consultant from my professional experience. To give the City of Burlingame greater flexibility and cost -control, and to minimize the baseline fixed project fee, I limited the number of presentations in this proposal. Depending on the outcomes of the study, the relative involvement of critics and other interested parties in your community, and other factors, the City may recognize the need for additional presentations. Potential audiences for other presentations include: ✓ Chamber of Commerce ✓ Building Industry Association ✓ Local Development Community ✓ Citizens Ad Hoc Committees ✓ City Council Subcommittee or Follow-up Meetings Wohlford Consulting would be pleased discuss the addition of these meetings. I can use my experience from other jurisdictions to help you determine the most effective approaches and understand the potential issues that may arise during these meetings. Generally, the "formal' presentations involve a projected PowerPoint display concurrent with prepared comments and discussion from the consultant at an organized meeting. Questions and challenges are always welcomed and addressed fully. I can use my experience from other jurisdictions to help you determine the most effective approaches and understand the potential issues that may arise during these meetings. In general, I recommend that the City provide at least one presentation, and ideally two, to the local development community prior to the development of final results. These presentations give the interested parties opportunities to understand the study concepts and methodologies, have input into the process, and see the results before approval. By giving your constituencies these opportunities, it allows the City and the consultant to address questions and criticisms before the Council hearing. It also builds credibility with potential critics and often garners support from them ---or at least eliminates opposition. General Orientation & Training Wohlford Consulting will ensure that the City of Burlingame receives a quality product. However, the long-term success of the project also depends upon the ability of City staff to continue to understand, use, and WOHLFORD CONSULTING Page 34 of 52 September 26, 2014 20W City of Burlingame =' Proposal for an Overhead Cost Allocation Study and User Fee Study explain the study methodologies and results after I am gone. Consequently, as part of my study process, I spend a considerable amount of time working with City staff to explain what I am doing and how the analysis works. I am committed to helping everyone involved to fully understand the study and its surrounding issues. Oftentimes, it almost seems as if certain client staff members become trained fee analysts. This training process not only ensures the future success of the project, but it also facilitates effective data collection and the City's internal review of the results. It is important to note, however, that this training is not a substitute for my continual support and involvement with the City. Therefore, even long after the study is completed and the invoice paid, Wohlford Consulting will remain available to you for questions about the study. Electronic Models Wohlford Consulting will provide a series of models in Excel worksheet format to allow the City to simply adjust fees, rates, and charges to reflect future inflationary cost increases in accordance with the recommended update approach(es) provided by the consultant. The consultant will provide initial training to selected City staff during one of the proposed on-site visits (meetings and/or presentations) or during a special webmeeting, as well as maintain availability for staff questions in future years. The worksheets are self-explanatory and/or annotated with embedded comments to facilitate continual competence with the worksheets. The proposed deliverables do not include the full -featured proprietary cost analysis software used by the consultant to prepare the study. At the risk of irritating you, I intend always to be honest and frank with the City. It is my considerable experience that the provision of cost analysis software to clients is problematic—for the clients. The production of these studies requires significant initial and refresher training and continued application to maintain competence. Fee consultants endure many months of training and project application bef---re gaining the ability to independently conduct the studies. Given the normal workloads of City staff and the infrequency of fee study development, it is most common for client staff to lose proficiency by the very fust time they try to complete a study internally— thus necessitating involvement with a consultant again (either for study correction or additional training). In most cases, it would be more cost- effective to engage the consultant for periodic full-scale updates (perhaps every three to five years) with internal inflationary updates on an annual basis. Updates by Wohlford Consulting (and probably most firms) are normally significantly less costly than the original studies. WOHLFORD CONSULTING Page 35 of 52 September 26, 2014 w„ E City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study Policy Consultation Wohlford consulting endeavors to provide the City with more than just a series of worksheets and a report at the end of the study. With this partnership, my goal is to help you through the myriad issues that come to light during the course of this type of study (and afterwards). I want to encourage you to mine my experience to help you reach solutions that benefit your City and your public. Discussion of significant issues will occur on a regular basis during the course of the study, but I can also schedule more focused discussions on topics such as: • Fee recommendations • Public policy and impact • Implementation strategies • Communication approaches • Common criticisms and challenges • Conceptual background and history • Existing litigation and challenges • Future fee and study updates intangibles The true value of a cost consultant is not in my ability to perform mathematics, develop spreadsheets, or gather data. I am most helpful when I can use my experience, expertise, and perspective to help you solve problems and accomplish your objectives. To this end, my studies include more than just the documents and calculated results that I provide as deliverables. During the course of this study, I will provide the appropriate City representatives with advice intended to help you best achieve your current and future objectives. As desired by the City, I can . discuss implementation strategies and alternatives, future steps, common questions and complaints, public policy considerations, economic considerations, legal considerations, how to address criticism and support the study, other analysis needed, and update techniques. A study from Wohlford Consulting also includes a communication plan, quality control process, and other project management tools and practices to ensure the quality and success of our project. These measures may be completely invisible to the City of Burlingame, but they are a large part of my commitment to the City's success. Post -Project Support Wohlford Consulting believes in long-term relationships with my clients. After the project is complete, I will remain available to the City for questions and information about the study and related issues. I want to be your first resource for cost -related information. (I still advise and answer questions from clients I served with my previous firm over 10 years ago.) WOULFORD CONSULTING Page 36 of 52 September 26, 2014 a„ .E City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study Annual Updates The analysis to be conducted for the annual updates will consist of appropriate revisions to the cost inputs for each study to reflect the new target fiscal year. These inputs include salaries and benefits, services and supplies expenditures, citywide and department overhead, and other incoming costs provided by the City. The updates will continue to rely upon the organizational structures, staffing, allocation data, time estimates, workload estimates, and other non -cost data used for the final results of the year 1 studies. The deliverables will include the same results worksheets and printouts as the original studies. As a multi-year project, it will most likely be unnecessary to complete all of the original deliverables that were important for the first year of the study. For example, the summary report, all of the on-site meetings, and the presentation may not be helpful in subsequent years, as the methodology, techniques, and much of the core data will likely remain the same. Wohlford Consulting will work with the City each year to determine which of the specified deliverables are necessary for the successful completion of the updated studies in years 2-5. Departments and Functions Included in the Cost Allocation Plan The Cost Allocation Plan will include every relevant and appropriate General Fund department that serves a central service function or is necessary to facilitate a future User Fee Study. To maintain consistency over the years, the departments included in the City's existing Cost Allocation Plan will form the starting point for the design of the analysis. If an existing CAP is not available, we will develop an initial structure for this study in partnership with the Finance Department. At the beginning of the study, we may also identify other departments or functions to allocate to best serve the City. Every legitimate receiving department and fund will be represented in the study. The study will calculate the allocations to all appropriate recipients of assigned costs. Departments and Service Areas Included in the User Fee Study As an advantage to the City of Burlingame, Woblford Consulting proposes to focus this study on the City departments and divisions that have the most cost- effective opportunities for revenue enhancement. From my review of the City's existing Master Fee Schedule, and a review of the current City organizational structure, I have identified the most likely candidates for a meaningful analysis. These include: • Building • Code Enforcement • Engineering • Planning • Parks and Recreation • Police WOFILFORD CONSULTING Page 37 of 52 September 26, 2014 ,T;q0C City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study The remainder of this section describes the scope of services and approach for each of these service areas. Building The City of Burlingame has a choice for the analysis of Building fees. Wohlford Consulting recommends a unit -cost -based analysis of Building fees (which is a particular expertise of my practice). This approach identifies the full cost (plan check and inspection) for various occupancies (at various sizes and construction types), miscellaneous items, and MPE's. As an alternate choice, if the City prefers to maintain a "valuation -based" approach, I will establish the overall cost recovery performance of the City's current fee schedule applied to building values and calculate potential modifications to the fees. At the City's discretion, I would be pleased to provide either approach. I would also be glad to discuss the pros and cons of each approach in great detail with you. Some of this information is presented in a later section of this proposal entitled: "Cost -Based Building Fees: CABS Approach." Code Enforcement While the Code Enforcement section was not included in the previous study, Wohlford Consulting believes it is an important area to evaluate also, since some of the cost for Code Enforcement can be allocated to Planning and Building Fees, thereby enhancing overall cost recovery for the City. Consequently, we included at least a basic analysis of Code Enforcement into the proposed study. For general code enforcement -type activities, we may establish cost factors if they do not conflict with administrative penalties or other charges. However, even if the City does not list or wish to charge individual code enforcement fees, the cost of code enforcement is an important element in the cost -recovery efforts of cities. Following my initial project discussions with City staff, I will be able to specify the cost - recovery approach we will use for code enforcement, if any. If the unit operates as a traditional code enforcement organization, it is most likely that we will distribute certain costs to other divisions (e.g., Building). We may also identify specific fees, if appropriate. The final alternative we select will depend on the operating nature of the division, other funding sources, fine activity, organizational structure, and the input of division staff. Wo FORD CONSULTING Page 38 of 52 September zb, 2u14 ""°°"` City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study Engineering The Engineering user fees typically include review of private development and improvements, encroachment permits, street use and closure permits, and other miscellaneous items. The analysis of Engineering user fee services will follow the standard approach, which is to calculate the unit cost of each fee service. For deposit -based fees (i.e., direct time charges), I will establish productive hourly rates and potential changes to deposit levels. For valuation -based fees, I will establish the cost recovery performance within the particular fee area and calculate potential charges to the percentages applied to calculate the fees. We will also calculate the cost of most non -fee services, in order to distribute those costs as necessary to help other services and functions better understand their overall costs. Planning The analysis of Planning fees will follow the standard approach, which is to calculate the unit cost of each fee service. For deposit -based fees (i.e., direct time charges), we will establish productive hourly rates and potential changes to deposit levels. We will also calculate the cost of most non -fee services, in order to distribute those costs as necessary to help other services and functions better understand their overall costs. Parks and Recreation In my experience, City Councils and staff seldom demonstrate any desire to increase Parks and Recreation fees, so the time and effort to produce any cost results is seldom rewarded with any meaningful fee changes and is usually considered to not be worth the effort. Therefore, my recommendation is to exclude these programs from the analysis. In lieu of actual cost determination, Wohlford Consulting can advise the City regarding other legitimate approaches to fee determination for recreation programs. If a cost analysis is desired, the normal approach does not apply to these programs. Our standard unit cost approach relies upon the detailed analysis of specific time estimates, salaries and benefits, expenditures, and overhead costs. For most recreation programs and facility rentals, the underlying data are not available or vary widely, leaving the unit cost build-up approach impractical. In addition, market factors and policy concerns (as opposed to actual costs) tend to influence recreation fee levels more than other types of services. With these general constraints, and in order to maximize the utility of this analysis, we adapt different methodologies for recreation fee calculations. For recreation and park WOHLFORD CONSULTING Page 39 of 52 September 26, 2014 N.,„O City of Burlingame IJ- Proposal for an Overhead Cost Allocation Study and User Fee Study services, programs, and activities, we utilize a cost -revenue analysis approach that establishes the cost recovery performance of the department at various sub -levels (e.g., divisions, programs). By developing results at this level, we can identify program -wide potential fee changes that will satisfy the cost -recovery goals of the department. For facility rentals, we would be glad to discuss the potential for establishing specific use rates and costs in order to determine the hourly cost of using (renting) facility space—by a variety of unit measures. The value to the City of this more detailed approach would depend on a number of factors we can discuss, and this type of study is not included in the base proposal. Police The analysis of Police fees will follow the standard approach, which is to calculate the unit cost of each fee service. We will also calculate the cost of some non -fee administrative services, in order to distribute those costs as necessary to help other services and functions better understand their overall costs. Miscellaneous Service Fees Wohlford Consulting will work with the City to identify other potential fee services and determine if a unit fee analysis is appropriate and cost- effective. For those areas that are not subject to cost analysis, the consultant will discuss with the City alternative approaches and related issues. Other Scope Considerations Excluded Fee Areas The fee -related service areas included in the study are described above. Nevertheless, additional clarification may also be helpful to manage expectations and avoid surprises. Certain categories of charges levied by cities are not truly user fees, since they are taxes, not cost -based, governed by market forces, restricted or charged by external agencies, or otherwise not based on any nexus between the fee and the cost of the service. These charges are excluded from the proposed analysis of cost in this study. Typical examples of these types of charges include the following: Business License/Pennit — These are business license taxes not subject to a cost -based analysis. "Processing" fees are not generally allowable in California. W OHLFORD CONSULTING Page 40 of 52 September 26, 2014 r City of Burlingame :. Proposal for an Overhead Cost Allocation Study and User Fee Study • Public Records Request and Copies — These fees are governed by the California Public Records Act and are not subject to a cost - based analysis. • Photography / Filming Permit Fees — These are market-based fees not subject to cost -based analysis. • Facility Use — These fees are not based upon staff time or operational costs and are normally set via community standards and comparative market rates. • Parking Permits, Fines/Bail, and Meters — These fees are not dictated by cost concerns. • In Lieu and Impact Fees — These fees are not user fees based upon staff and operational costs, but are associated with future infrastructure needs. This limitation is not intended to preclude the analysis of impact fees by Colgan Consulting. • Library — The Peninsula Library System controls most library fees. The fees controlled by the City of Burlingame are governed primarily by market concerns or are not cost-effective to review. • Animal Control — The City of Burlingame utilizes an external agency for these services: San Mateo County. • Fire — The Central County Fire Department provides fire services to the City of Burlingame and establishes fees for those services. • Utilities — The evaluation of utility rates and charges requires a unique study that focuses on other data elements. For those items that are excluded from the cost analysis, the consultant will provide general advice and information regarding potential approaches and other related issues. Modification of Scope I recognize that the City may alter its preferred scope of services following initial discussions with Wohlford Consulting, where we will have a chance to clarify the likely staff involvement and potential outcomes. The City may decide that it would not be worth the effort to review every department / division, due to the workload involved, cost-effectiveness of the analysis, or the existence of another recent study. In such a case, I will work with the City to identify potential alternative analyses (e.g., validation or update strategies) or revisions to the proposed project scope and price. Project Limitations To maintain the focus of the study, enhance the City's understanding, and provide a reasonable fixed fee proposal, it is obviously necessary for us to define the general limits to the scope of the study. WOHLFORD CONSULTING Page 41 of 52 September 26, 2014 SCity of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study This proposal describes the deliverables and service areas I intend to cover. I am flexible in my approach and will modify the study as much as possible to meet the needs of the City. However, to avoid confusion and conflicting expectations, it is important to note the key exclusions of this study, which include: taxes, levies, fines, and punitive charges; utility rates and service charges; impact fees; public transit fares; parking rates; tolls; internal service rates, allocations, and charges not included in the CAPS; public records fees; fees set by external authorities (e.g., state law/regulation, other agencies); ambulance/EMS rates (unless specified herein), fees set by contract; equipment, facility, and infrastructure use (rental) or impact rates; contract charges to other agencies; services without discernible time data or cost factors; negotiations with cognizant agency(ies); audit and/or litigation support (beyond general questions); and/or on-site visits following the conclusion of the study. These limitations indicate areas that are not included in the proposed analysis or deliverables. However, I am always available as a resource to discuss alternatives and provide suggestions regarding these issues in a less formal manner. As a "full cost' analysis, Wohlford Consulting will attempt to incorporate all City costs into the study, including Citywide overhead or contributions of effort from other departments and divisions. In some cases, the City will need to provide this secondary cost information to us, since my cost analysis is limited to the City Departments described in this proposal. Cost -Based Building Fees: CABS Approach Over the past decade or so, building plan check and inspection fees have been the most controversial category of local government fees in California and some other Western states, with several lawsuits against cities and counties by developers and builders. The crux of the California lawsuits (one of which was recently heard by the California Supreme Court) is that the current valuation -based building fee approach creates overcharges and is not in compliance with California law. The basis for this argument is Government Code Section 66014, which states that "...fees may not exceed the estimated reasonable cost of providing the service for which the fee is charged..." The California Attorney General and an appellate judge opined that the valuation approach does not comply with the standard created by the law. Given this standard, Wohlford Consulting has developed a cost analysis approach that calculates building fees at a unit cost level. My Cost Analysis of Building Services (CABS) approach determines the estimated reasonable cost to provide individual services to fee -payers. To ease the transition to a new approach, we normally maintain the occupancy structure and nomenclature used by ICC, but we WOHLFORD CONSULTING Page 42 of 52 September 26, 2014 City of Burlingame a Proposal for an Overhead Cost Allocation Study and User Fee Study can structure the cost analysis to separately consider plan checks and inspection services for construction of new occupancies, miscellaneous structures and features, and mechanical, plumbing, and electrical items. The cost is established for units of square footage, individual items, or size ranges—depending on available data and the most appropriate and effective structure to meet the needs of the City. We can also account for variances in type of construction (fire rating) for new occupancies. The CABS method differs from the other analytical methods primarily in its structure and format. CABS employs the same level of quality control, conceptual defensibility, and professional rigor as the other methods. The analysis factors the time necessary for staff to complete the services and their productive hourly rates. All legitimate and reasonable costs are included in the analysis to ensure that we capture the full cost for the services. The CABS approach is very flexible, and we will customize it to match the business practices and other needs of the City. You will have significant and meaningful input into the structure of the analysis and, by extension, the resultant cost (potential fee) schedules. The conceptual basis behind CABS is extremely defensible and has proved convincing to existing and potential critics of building fees. Other Services Available At the request of the City, I would be pleased to provide optional additional services and products, such as: • Scenario Analysis • Activity -Based Costing • Performance Measures • Process Improvement and Reengineering • Additional Meetings or Presentations • Additional Analytical Models (more than one per division) • Analysis of Other Departments/Divisions/Programs Expected City Staff Involvement From my experience, the success of these types of studies depends on the sincere interest and active involvement of City staff and management in the set-up, processes, and review of the analyses. Although the consultant will expect to perform the bulk of the project tasks, these studies will work best as operational partnerships, whereby the City is a contributing member of the project team. As part of the process, I will solicit and evaluate a variety of data from City staff, as well as request a series of review steps from them. In anticipation of contract approval, in order to enhance timeliness, I will also submit an advance data request list. The anticipated contributions by City staff include: WOHLFORD CONSULTING Page 43 of 52 September 26, 2014 a4 ME City of Burlingame 1 Proposal for an Overhead Cost Allocation Study and User Fee Study • Budget and other cost data and details • Staffing structures and cost details • Past user fee and cost allocation studies • Direct and indirect work hours (billable/non-billable) • Time data and/or estimates to complete work tasks • Activity statistics (fee volumes) and current fee levels • Review of draft results and other documentation • Information and characterizations of existing internal issues, personalities, and policies The precise amount of time required of City staff is impossible to know in advance, since it depends on the availability of the data to be collected, individual approaches, the final structure and allocation bases selected, and other components of the study. City staff will have some flexibility and control over the time required, as they will have input into the structure of the study, allocation bases, and delivery methods. Staff may desire greater involvement (resulting in more time committed to the study), in order to improve training and retention for future internal updates. Overall, Wohlford Consulting realizes that the purpose of engaging a consultant for cost services is often intended to reduce workload for staff, and we will endeavor to minimize staff involvement according to the City's goals and intent. WOHLFORD CONSULTING Page 44 of 52 September 26, 2014 ........., City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study WHY CHOOSE WOHLFORD CONSULTING? It would be difficult for you to go wrong. The City of Burlingame will receive other proposals from competent, even excellent, consulting firms. In addition, it is highly likely that I trained some of the proposed consultants, so their approaches and methodologies may even be similar. Furthermore, your selection process will ensure that you do not select a "bad" consultant to conduct your studies. But, there are significant differences between us. Consequently, the entirety of this proposal is designed to convince you that your best choice for your Cost Allocation Study and your User Fee Study is Wohlford Consulting. Nevertheless, please allow me now to point out the most important reasons for choosing Wohlford Consulting: ✓ Personal and responsive service is my passion. (To meet your needs) ✓ Extreme devotion to quality and accuracy (My reputation is my business.) ✓ Ready to provide extra service and assistance (No corporate pressures) ✓ Ability to communicate all aspects of the studies to all audiences with accuracy, credibility, and sincerity (= Success for You!) Choosing Wohlford Consulting will ensure that you will have more than a good project... You'll have a great project. WOHLFORD CONSULTING Page 45 of 52 September 26, 2014 401 City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study COST PROPOSAL Wohlford Consulting endeavors to provide value to the City of Burlingame, as I set rates and task fees to ensure the cost -benefit ratio is disproportionately skewed toward the benefit the City will receive. My cost structure reflects my senior - level experience and skill, quality of the work I provide, my ability to work quickly, and the lower overhead structure that a smaller practice permits. The blend of all of these factors allows us a competitive fee that still addresses all of the needs of the City. Given my lower cost structure, my rates are designed to provide for greater service and quality, and a more robust scope of services with fewer "add-ons," often for the same project fees as competing firms. Cost Summary Wohlford Consulting proposes to provide this study for a fixed professional fee that represent all of the deliverables and work tasks described in the proposal, and they are "total, not to exceed" project fees for this scope of service. The City of Burlingame will not incur any additional charges (e.g., overhead, printing, travel) unless they are related to additional services or uncommon expenditures requested by the City outside the contracted scope of service. The specific cost proposal from Wohlford Consulting is included under separate cover, per the directions contained in the City's RFP. WOBLFORD CONSULTING Page 46 of 52 September 26, 2014 Nit City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study C'T.TENT REFERENCES The impressions of past clients of the proposed consultant are the best indicator of what you can expect from us for your study. Chad Wohlford has personally served over 70 different jurisdictions (see page 19 for a list of past clients). The contact information for each one would be too unwieldy to present here. However, I encourage you to contact any past clients, so I would be pleased to provide you with more comprehensive contact information at your request. The following list of references comprises a representative sample of recent project types for Chad Wohlford: lient Contact T e of Stud • Cost Allocation Plan essy, Finance Director • Development Services Cost Director of Temecula) rMain of Services Study Street, Temecula, CA 92590 30Jenner.ennessy@cityoftemecula.org or Mark Wolfe, AICP Planning Services Director 411 Main Street, Chico, CA 95927 (530) 879-6801 MWWolfe@)ci.chico.ca.us City of Morgan Hill • Cost Allocation Plan (0) Chu Thai (now Fin. Dir. of So. Pasadena) 1414 Mission St, So. Pasadena, CA 91030 (626)403-7252 CThai@ci.south-pasadena.ca.us or Monica Delgado, Budget Manager 17575 Peak Ave., Morgan Hill, CA 95037 (408)310-4178 Monica.Delgado@morganhill.ca.gov WOULFORD CONSULTING Page 47 of 52 September 26, 2014 City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study Client Contact Type of Stud City of Coronado • Cost Allocation Plan Jerome Torres, Senior Mgt. Analyst . Citywide User Fee Study 1825 Strand Way, Coronado, CA 92118 (619)522-7305 jtorres@coronado.ca.us City of Santa Rosa • Development Services Cost Chuck Regalia, Community Dev. Director of Services Study 100 Santa Rosa Ave., Santa Rosa, CA 95403 • Cost Allocation Plans (707) 543-3189 • Utilities Overhead and Staff cregalia@srcity.org Rates Stud City of Novato • Cost Allocation Plan Deborah Lauchner, Finance Manager s RDA Cost Allocation Study (now Finance Dir. of Santa Rosa) a Citywide Cost of Service 100 Santa Rosa Ave., Santa Rosa, CA 95403 Study (707)543-3089 dlauchner@sreity.org City of Las Vegas • Building Fee Study Chris Knight, Dir. of Building and Safety 731 S. 4a' Street, Las Vegas, NV 89101 (702)229-6257 chknight@.LasVegasNevada.gov Alameda County • Environmental Health Fee Ariu Levi, Environmental Health Director Study 1131 Harbor Bay Parkway Alameda, CA 94502 (510) 567-6777 ariu.1evi@)acgov.org Imperial County Env. Health Dept. • Department Cost of Service Jeff Lamoure, Deputy Director Study 797 Main St., Ste. B, El Centro, CA 92243 (760)336-8530 jefflamoure@co.imperial.ca.us Many more references are available at you request to help the City of Burlingame ascertain the breadth and depth of my experience, devotion to customer service, and technical skills. WOBLFORD CONSULTING Page 48 of 52 September 2e, 2014 ,aME City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study PROJECT SCHEDULE Project Schedule Summary Wohlford Consulting is committed to timely completion of the study to meet the objectives of the City. Based on my experience, cost studies have been taking longer to complete in recent years, due to client staffing shortages and staff workload increases related to the financial strains of the recent past. Realistically, the City can probably expect results from the Cost Allocation Plan in approximately three to four months, with subsequent finalization of the documentation and implementation at the City's pace. Assuming an ideal timeline for completion of the analysis within three months, I prepared a sample schedule to accomplish this goal (Appendix Q. Given the same conditions described above, the City can probably expect the results from the User Fee Study in four to six months, which includes sufficient time for internal department review and revisions. The timeline to bring the results to the City Council is highly dependent on the City's typical review, recommendation, and approval processes, which I cannot predict before consulting with the City. A fee study project schedule is included in Appendix C. Note that the User Fee Study can be started, but not concluded, until the Cost Allocation Plan is completed, due to the contribution of CAP results to the fee study. The timing for either project, of course, depends on the City's commitment to timely completion and staff responsiveness, as well as the availability of useable data. Wohlford Consulting will work to complete the project within a reasonable timeframe. The billing structure based upon completion of specific milestones, creates an incentive for regular progress and faster completion. Specific task schedules and hours estimates are not practical until the City and the consultant have had the opportunity to discuss the process, data availability, staff commitments, and other related issues specific to Burlingame. Schedule Issues The City's RFP specifies a vendor selection date of October 15, 2014, and a completion date of "by February 2015." Assuming an immediate project kick-off following selection, which is likely not practical, this schedule allows WOHLFORD CONSULTING Page 49 of 52 September 26, 2014 M4M^E City of Burlingame ` M' Proposal for an Overhead Cost Allocation Study and User Fee Study approximately 3.5 months to complete the studies. Given my experience, a 3-4 month completion schedule is not realistic, particularly considering the upcoming holiday season, which tends to manifest reduced staff availability and responsiveness. Although possible, such a timeline would require a very aggressive project schedule that requires high prioritization of staff effort towards the project and very fast tum -around by City staff at the various review stages. In my opinion, such hurried review efforts will not provide sufficient quality control and internal consideration to assure the accuracy and internal acceptance of the results. A more aggressive timeline is possible, however, if current City staff are well versed in the fee study and cost allocation process and will respond quickly to requests for information and review. At the outset of the project, I would discuss the schedule with the City representatives, including feasibility, alternatives, and initiatives to improve the velocity of project progress. Other Assumptions This successful performance of this project also relies upon the following assumptions: • The City will provide requested data in electronic and paper format whenever available. • The City will provide all necessary data in a timely fashion and in a format that is reasonably accessible and usable by the consultant. • The City will conduct requested reviews in a timely manner and with a level of rigor sufficient to accomplish our goals for accuracy and completeness. lved in the study process to ensure Department management will be invo timely completion of City tasks and rapid decisions regarding project direction and policy resolution. The City will provide a project coordinator to serve as the consultant's primary project contact and to assist with the collection of data, scheduling of meetings and space, marshaling of City resources, and other project administrative tasks. WOHLFORD CONSULTING Page 50 of 52 September 26, 2014 City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study INSURANCE REQUIREMENTS Wohlford Consulting maintains General Liability insurance and Non -Owned and Hired Auto insurance, at coverage levels sufficient to meet the City's requirements. I do not maintain Commercial Auto coverage, since I have no businesss-owned vehicles, but my personal automotive insurance coverage exceeds state of California requirements. As a Sole Proprietor, I am exempt from Workers Compensation requirements. My current Professional (Errors and Omissions) Liability insurance coverage includes $1 million per occurrence and $1 million aggregate. I have never experienced a requirement for greater than $1 million aggregate for a cost of service study, including during my tenure with a large national consulting corporation, and I would encourage the City to revisit this requirement in light of the minimal risk for this type of study. Nevertheless, in anticipation that the City may retain this coverage requirement, my insurance broker has inquired with her underwriter as to the potential availability and cost for this increased level of coverage. This information may not be available to me in advance of my proposal submission, but I will follow up as necessary during the course of my proposal evaluation. Upon project award, I will direct my insurer to send the City the appropriate insurance certificates and other required coverage information. WOHLFORD CONSULTING Page 51 of 52 September 26, 2014 City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study OTAF,R PROPOSAL INFORMATION City of Burlingame Contract Wohlford Consulting has successfully contracted with dozens of government entities, with no failures to date, so we are certain that we can reach amicable agreement with the City on contract terms. The most common objection Wohlford Consulting has to standard city contracts relates to the ownership of materials. Many city contracts attempt to establish broad and sole ownership of all study materials, which is not appropriate for this type of consulting project. I would simply ask for modifications to the contract language to ensure that I retain ownership of my proprietary work tools, documents, software, and other materials that are not unique to the Burlingame project. CONCLUDING COMMENTS I appreciate this opportunity to propose my services to the City of Burlingame. I hope that you can easily recognize the pride in my accomplishments on behalf of my clients and ongoing work in this proposal. I also hope you are able to call all of my references to get an enhanced picture of the skills, approach, and personal nature that makes a project with Wohlford Consulting a pleasant and rewarding experience. Thank You Thank you again for reviewing my proposal. Please contact me at your conve,ience if you have any questions about Wohlford Consulting, this proposal, or this type of study in general. I would be glad to help, and I sincerely look forward to serving you. Chad Wohlford Sole Proprietor and Principal Consultant (916)205-7050 chad wohlfordconsulting.com WOHLFORD CONSULTING Page 52 of 52 September 26, 2014 City of Burlingame _ Proposal for an Overhead Cost Allocation Study and User Fee Study APPENDIX A: SPECIFIC WORK PLAN for the COST ALLOCATION PLANS I constantly seek to improve my processes to enhance efficiency, timeliness, cost- effectiveness, and quality outcomes. Through the years of performing and continuously improving these types of studies, Wohlford Consulting has developed an approach and work plan that facilitates a successful study. Part of this approach is to customize each baseline project step and subtask to best fit your individual circumstances, priorities, and needs. Furthermore, we will identify new and unique issues in Burlingame that will warrant special attention. In that light, the City should consider the following discussion simply as a general outline that addresses the basic elements of the study. COST ALLOCATION STUDY PROJECT TASKS Task 1: Project Preparation In advance of our first on-site meetings or individual discussions with City departments, Wohlford Consulting will take steps to prepare adequately for the upcoming study. These steps include: • Identify the City's central "project manager" for the study. • Distribute an "Initial Data Request" letter to the City's project manager that lists the documents and materials needed in advance, as well as documentation and data anticipated during the course of the study. This request will give the City more time to collect the information and reduce the overall workload and pressure of last- minute requests. • Review existing cost allocation plans, schedules, budget materials, organization charts, personnel lists, and other relevant Burlingame documents to gain an understanding of the City's structure and financial environment. • Schedule the Irick -off meeting and initial individual interviews. • Establish the initial customized design of the analytical models and supporting data collection worksheets. WOIILFORD CONSULTING Appendix A - Page l of 7 September 26, 2014 Mks City of Burlingame Q Proposal for an Overhead Cost Allocation Study and User Fee Study • Finalize a contract with Burlingame to ensure clear mutual expectations and project parameters. Task 2: Project Initiation and Re -Focus First impressions are lasting, so we want to make sure your project starts out right. At the outset, we will start the communication process to establish a clear mutual understanding of the project and its expected outcomes, benefits, and limitations. The specific steps in this task include: • Clarify the scope of services, focus, and goals of the study with the primary City representative(s). • Refine and finalize the study features to fit revised expectations or other factors revealed since the proposal. • Identify key department/division contacts. • Determine relevant primary and secondary issues (litigation, internal politics, historical, personnel, etc.) that may affect the processes or outcomes of the study or its acceptance. • Conduct the "kick off' meeting with key managers and staff who will be involved or make decisions related to the Cost Allocation Study. This meeting will allow the consultant to present the overall picture of the study, with its conceptual and practical basis, as well as describe the expectations for the consultant and Burlingame staff. Task 3: Establish Central Service Department Function Structure The first direct project task is to establish the structure (classification) of the allocated and receiving departments that will be subject to this analysis. This task forms the skeleton for all future data collection efforts and calculations, as it creates the list of service areas (functions) for which we will develop the costs and allocations. The specific steps in this task include: Review existing cost allocation plans. Meet with the Finance Director or designated staff to: o Provide an overview of the project; o Discuss their individual goals and objectives for the study; o Review the conceptual, legal, practical, and technical bases for the study; o Gather staff ideas, wish lists, problems, and other feedback related to the structures; and o Discuss potential alternative structures/approaches. Meet with each central service department, as necessary, to identify operational structures, functions, and related details. WOHLFORD CONSULTING Appendix A - Page 2 of 7 September 26, 2014 MOM City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study • Exclude (or direct to non -allocating areas) functions and departments that are not allowed under federal guidelines (for federal plan). Task 4: Identify and Collect Elemental Cost and Supporting Data As part of our initial interviews with central service department representatives, the consultant will begin to gather the data necessary to populate our analytical models and conduct the analysis of the costs to be allocated. First, we will need to identify the types of data needed, the source of each data type, and the need for alternate arrangements (in the event that a traditional data resource is unavailable/impractical). The types of data necessary for this study may include: • Budgeted expenditures • Actual expenditures • Staffing levels and assignments • Salaries and benefits • Workload/effort estimates • Asset inventories, depreciation, annual use costs Most of this information will come from City documents, as confirmed by City staff. City staff will be the source of almost all base data included in this study—either by providing the documentation or by directly indicating estimates or first-hand knowledge. Task 5: Identify Allocation Bases and Collect Data The basic concept of this Cost Allocation Study is to establish the benefit received from each central service department to the recipients. Various allocation "bases" are selected to relate this benefit to the receiving departments. These bases take the form of staffing, use, or workload statistics, existing financial figures, or other useable "counts." In order to accomplish this simple task, there are a series of complex subtasks that the consultant and City staff need to perform to capture the appropriate data, including: • Determine the most appropriate allocation basis for each department function; • Identify the source for the allocation statistics/data • Collect appropriate data • Evaluate data for further adjustments • Develop data collection worksheets to gather data from City staff For almost all of these subtasks, the consultant will work closely with department staff. It is critical for all involved parties to understand the WOHLFORD CONSULTING Appendix A - Page 3 of 7 September 26, 2014 .MF City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study data and its purposes, be confident in the accuracy of the data, and have enough "ownership" in the data to support and defend the results. Task 6: Conduct Secondary Analysis The cost allocation plan may be incomplete without some secondary or supplemental analysis. In order to ensure the maximum usefulness of the study, we will conduct the necessary steps to complete the additional essential tasks, such as: • Prior -year Carryover • Sub -allocations • Cost adjustments Task 7: Populate Analytical Models and Develop Draft Results Once the basic cost and allocation bases data elements are available, Wohlford Consulting will incorporate this data into our analytical models to calculate the preliminary results. The consultant and the computer models will perform the following steps: • Populate (data entry) all of the collected data elements into the models; • Run the models to calculate the total costs to be allocated; • Run the models to allocate the costs to the functions; • Run the models to allocate the function costs to the recipient departments; • Author narratives to describe the allocated departments and functions; • Review results and correct all possible initial problems; and • Document remaining deficiencies and establish the plan for correction. Task 8: Quality Control Process: Validate Draft Results Although the Quality Control Process is presented as a single task in the middle of this work plan, the steps in this process are actually continually applied throughout all of the tasks in this study to ensure the highest level or accuracy and understanding as possible. Our QC steps include: • Clear and comprehensive initial and ongoing instructions to staff; • Constant availability for staff to review instructions with the consultant; • Reasonableness reviews; • Experiential checks and comparisons; WOHLFORD CONSULTING Appendix A - Page 4 of 7 September 26, 2014 µ ME City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study • Data and results cross-checks and balancing • Critical review by City staff and management; and • Consultant challenge and questioning. Task 9: Communicate and Review Draft Results with the City Once the draft results are available and Wohlford Consulting is satisfied that they are reasonably valid (or at least the problems are known quantities), we will deliver and review the detailed results with the designated City project representatives. This review has two primary purposes: 1. Give Burlingame an initial understanding of the magnitude of the results to spur discussion of future implementation and necessary revision; and 2. Identify remaining issues and task assignments to encourage and facilitate project completion. Task 10: Conduct Quality Loop (Review Iterations) Once the City has had an opportunity to review the draft results, we will enter the iterative review phase of the study. After each review, the consultant and/or the City will identify necessary changes (data or format) and provide other feedback. The consultant will make the changes and re- submit the results for review again. Each iteration is expected to advance the progress of the study towards completion, enhance mutual trust in the study and its results, and perfect the quality of the analysis. After a couple of these feedback -revision loops, we will establish the final results. Task 11: Finalize Cost Allocation Study Results and City Approval After completing the full review process, Wohlford Consulting will finalize the allocation results for the Cost Plan and deliver the resultant documentation to the City. At this point, we will solicit final official approval/sign-off from the City. This step is necessary to satisfy a deliverable and milestone requirement, as well as to allow us to progress to the ICRP stage of the study. Task 12: Indirect Cost Rate Proposal Once the Cost Allocation Plan results are available, Wohlford Consulting will incorporate the ICRP baseline data into the analytical model to calculate the preliminary ICRP results. The consultant and the computer models will perform the following steps: • Consult with Burlingame to determine the desired direct cost basis; WOHLFORD CONSULTING Appendix A - Page 5 of 7 September 26, 2014 a„,ow City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study • Populate (data entry) all of the necessary ICRP data elements into the models; • Review results with the City; • Make any necessary changes to finalize the ICRP results; and • Provide ICRP documentation to the City. Task 13: Discuss Burlingame Strategic Approaches Wohlford consulting endeavors to provide the City with more than just a series of worksheets and a report at the end of the study. With this partnership, our goal is to help you through the myriad issues that come to light during the course of this type of study (and afterwards). We want to encourage you to mine our experience to help you reach solutions that benefit your city and your public. To this end, we would be glad to discuss any and all related issues with you. Some suggestions include: • Implementation strategies • Communication approaches • Common criticisms and challenges • Conceptual background and history • Future updates Discussion of these and other issues will likely occur on a regular basis during the course of the study, but we can also schedule more focused discussions, as needed. Task 14: Communicate Final Results with Burlingame As a true partnership, we will have frequent contact and discussions throughout the project. As a result, the City will have intimate knowledge of its allocation results well prior to the study's ultimate conclusion. Nevertheless, in order to formalize the study itself and the results, Wohlford Consulting must deliver the final product in a professional package. We will communicate the process and results of the study via the principal deliverables described in the scope of services. Task 15: Project Closeout and the Future The end of the project (and even the final invoice payment) is not the end of our partnership. First of all, Wohlford Consulting will fulfill any outstanding responsibilities to ensure the City's continued success, such as answering your remaining questions and providing critical files and documentation to support your ongoing efforts. Most importantly, we will remain a resource for you to contact in the future with questions or research needs. WOHLFORD CONSULTING Appendix A - Page 6 of 7 September 26, 2014 City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study FEDERAL COST PLAN (FORMERLY A-87) APPROACH: The work plan for the Federal Cost Allocation Plan is the generally the same as the work plan for the Full Cost study. The primary differences are the following: • Certain central service functions (such as most of all of the City Council and Treasury) are excluded from allocation in a federal plan. • Actual expenditures from the target year are included in the analysis, instead of budgeted figures in the full cost plan. WOHLFORD CONSULTING Appendix A - Page 7 of 7 September 26, 2014 aTO..; City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study APPENDIX B: SPECIFIC WORK PLAN for the USER FEE STUDY I constantly seek to improve my processes to enhance efficiency, timeliness, cost- effectiveness, and quality outcomes. Through the years of performing and continuously improving these types of studies, Wohlford Consulting has developed an approach and work plan that facilitates a successful study. Part of this approach is to customize each baseline project step and subtask to best fit your individual circumstances, priorities, and needs. Furthermore, we will identify new and unique issues in Burlingame that will warrant special attention. In that light, the City should consider the following discussion simply as a general outline that addresses the basic elements of the study. USER FEE STUDY PROJECT TASKS Task 1: Project Preparation In advance of the first on-site meetings or individual discussions with City departments, Wohlford Consulting will take steps to prepare adequately for the upcoming study. These steps include: • Identify the City's central "project manager" for the study. • Distribute an "Initial Data Request" letter to the City's project manager that lists the documents and materials needed in advance, as well as documentation and data anticipated during the course of the study. This request will give the City more time to collect the information and reduce the overall workload and pressure of last- minute requests. • Review existing fee schedules, budget materials, organization charts, personnel lists, and other relevant City documents to gain an understanding of the City's structure and financial environment. • Schedule the kick-off meeting and initial individual interviews. • Establish the initial customized design of the analytical models and supporting data collection worksheets. WOHLFORD CONSULTING Appendix B - Page 1 of 7 September 26, 2014 IMF., •e City of Burlingame —•° Proposal for an Overhead Cost Allocation Study and User Fee Study Finalize a contract with the City to ensure clear mutual expectations and project parameters. Task 2: Project Initiation and Re -Focus First impressions are lasting, so I want to make sure your project starts out right. At the outset, we will start the communication process to establish a clear mutual understanding of the project and its expected outcomes, benefits, and limitations. The specific steps in this task include: • Clarify the scope of services, focus, and goals of the study with the primary City representative(s). • Refine and finalize the study features to fit revised expectations or other factors revealed since the proposal. • Identify key department/division contacts. • Determine relevant primary and secondary issues (litigation, internal politics, historical, personnel, etc.) that may affect the processes or outcomes of the study or its acceptance. • Conduct the formal "Kick Off' meeting with all involved managers and staff who will be involved or make decisions related to the Cost of Service Study. This meeting will allow the consultant to present the overall picture of the study, with its conceptual and practical basis, as well as describe the expectations for the consultant and City staff. Task 3: Establish Service/Fee List Structure and Contents The first direct project task is to establish the fee services that will be subject to this analysis. This task forms the skeleton for all future data collection efforts and calculations, as it creates the list of fees for which we will develop the costs. The specific steps in this task include: • Review existing fee schedules for each department. • Meet with representatives of each department to: o Provide an overview of the project; o Discuss their individual goals and objectives for the study; o Review the conceptual, legal, practical, and technical bases for the study; o Gather staff ideas, wish lists, problems, and other feedback related to their fee structures; o Better understand the business processes of each department; o Suggest other potential fee opportunities; and o Discuss potential alternative fee structures/approaches. • Identify gaps in the current fee schedule to ensure that the City has the opportunity to select fees for each eligible service. WOHLFORD CONSULTING Appendix B - Page 2 of 7 September 26, 2014 augyxcnnc City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study • Revise the structure of existing and/or new fees to best reflect the operating environment, customer needs, and business processes of the City. • Identify opportunities to simplify the structures and administration of fees to improve efficiency and customer relations. Task 4: Identify and Collect Elemental Cost and Supporting Data As part of the initial interviews with department representatives, the consultant will begin to gather the data necessary to populate my analytical models and conduct the cost analysis. First, we will need to identify the types of data needed, the source of each data type, and the need for alternate arrangements (in the event that a traditional data resource is unavailable/impractical). The types of data necessary for this study may include: • Budgeted expenditures • Actual expenditures • Staffing levels and assignments • Salaries and benefits • Overhead costs and allocations (e.g., CAP distributions) • Shared vs. direct cost distributions • Unbudgeted, but anticipated, costs • Current fees and rates • Annual volumes / activity levels • Overtime cost and patterns Most of this information will come from City documents, as confirmed by City staff. City staff will be the source of almost all base data included in this study --either by providing the documentation or by directly indicating estimates or first-hand knowledge. Task 5: Collect Time and Other Cost Distribution Data The basic concept of this Cost of Service Study is to establisn the time necessary to perform each service and calculate the cost of that time. In order to accomplish this simple task, there are a series of complex subtasks that the consultant and City staff need to perform to capture the appropriate time data, including: • Identify the individual staff positions that work on each fee service; • Review existing time studies or data for accuracy and utility; • Develop data collection worksheets to gather time data from City staff relevant to their efforts on individual fee services, as well as administrative and non -fee activities; WOHLFORD CONSULTING Appendix B - Page 3 of 7 September 26, 2014 SUM City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study • Train staff on the appropriate and accurate estimation of time for inclusion in the study; • Determine (estimate) the time necessary to perform each fee -related service; • Work with staff to develop categories and levels of direct and indirect work hours; and • Establish available work hours to facilitate the calculation of "productive hourly rates." For almost all of these subtasks, the consultant will work closely with department staff. It is critical for all involved parties to understand the data and its purposes, be confident in the accuracy of the data, and have enough "ownership" in the data to support and defend the results. Task 6: Populate Analytical Models and Develop Draft Results Once the basic cost and time data elements are available, Wohlford Consulting will incorporate this data into my analytical models to calculate the preliminary results. The consultant and the computer models will perform the following steps: • Populate (data entry) all of the collected data elements into the models; • Run the models to calculate the direct productive hourly rates for each position and the total direct labor cost for each fee; • Distribute indirect and overhead costs to each fee; • Sub -allocate supporting activities to fee services; • Activate indicators of common data problems; • Review results and correct all possible initial problems; and • Document remaining deficiencies and establish the plan for correction. Task 7: Quality Control Process: Validate Draft Results Although the Quality Control Process is presented as a single task in the middle of this work plan, the steps in this process are actually continually applied throughout all of the tasks in this study to ensure the highest level or accuracy and understanding as possible. The QC steps include: • Clear and comprehensive initial and ongoing instructions to staff, • Constant availability for staff to review instructions with the consultant; • Reasonableness reviews; • Experiential checks and comparisons; • Data and results cross-checks and balancing: WOHLFORD CONSULTING Appendix B - Page 4 of 7 September 26, 2014 w�+nvnnE City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study o FTE/productive hours, o Revenues, o Expenditures, • Critical review by City staff and management; and • Consultant challenge and questioning. Task 8: Conduct Revenue and "Gap" (Subsidy) Analyses Using the calculated costs for each service and the activity volumes provided by the City, we can estimate the potential annual revenue impacts of the City's current fee levels vs. the full cost of services or recommended fee levels. In effect, we can show the difference between what you would collect under your current fee structure/levels, versus what you could collect under a new fee structure/levels following the analysis. If desired by the City, our analytical models will automatically calculate these differences for the individual unit fees and the annual revenues. Task 9: Communicate and Review Draft Results with the City Once the draft results are available and Wohlford Consulting is satisfied that they are reasonably valid (or at least the problems are known quantities), we will deliver and review the detailed results with City project representatives (department and project manager). This review has two primary purposes: 3. Give department managers and the City an initial understanding of the magnitude of the results to spur discussion of future implementation and necessary revision; and 4. Identify remaining issues and task assignments to encourage and facilitate project completion. Task 10: Conduct Quality Loop (Review Iterations) Once the City has had an opportunity to review the draft results, we will enter the iterative review phase of the study. After each review, the consultant and/or the City will identify necessary changes (data or format) and provide other feedback. The consultant will make the changes and re- submit the results for review again. Each iteration is expected to advance the progress of the study towards completion, enhance mutual trust in the study and its results, and perfect the quality of the analysis. After a couple of these feedback -revision loops, we will establish the final results. WOHLFORD CONSULTING Appendix B - Page 5 of 7 September 26, 2014 City of Burlingame Proposal for an Overhead Cost Allocation Study and User Fee Study Task 11: Finalize Fee Study Results and City Approval After completing the full review process, Wohlford Consulting will finalize the fee results and deliver the resultant documentation to the City. At this point, we will solicit final official approval/sign-off from the City. This step is necessary to satisfy a deliverable and milestone requirement, as well as to allow us to progress to the final documentation and presentation stages of the study. Task 12: Administer Fee Comparisons (if included in scope of services) We will work with the City to select the candidates for comparison, as well as the targeted fees. We will conduct our solicitation of fee data from other jurisdictions through website research, phone calls, email, and other approaches necessary to accomplish this task. If responsiveness is inadequate, we may request assistance from the City to contact colleague staff to encourage participation. Following the collection of the data, we will document the results, which normally consists of a matrix of fees with side-by-side comparisons. The City will have the opportunity to review the draft results and influence the final format of the documentation, including whether it is incorporated in to the final report. Task 13: Discuss City Strategic Approaches Wohlford consulting endeavors to provide the City with more than just a series of worksheets and a report at the end of the study. With this partnership, our goal is to help you through the myriad issues that come to light during the course of this type of study (and afterwards). We want to encourage you to mine our experience to help you reach solutions that benefit your City and your public. To this end, we would be glad to discuss any and all related issues with you. Some suggestions include: • Fee recommendations • Implementation strategies • Communication approaches • Common criticisms and challenges • Conceptual background and history • Existing litigation and challenges • Future fee updates • Future study updates Discussion of these and other issues will likely occur on a regular basis during the course of the study, but we can also schedule more focused discussions, as needed. WOHLFORD CONSULTING Appendix B - Page 6 of 7 September 26, 2014 City of Burlingame ti- Proposal for an Overhead Cost Allocation Study and User Fee Study Task 14: Communicate Final Results with the City As a true partnership, we will have frequent contact and discussions throughout the project. As a result, the City will have intimate knowledge of its fee service costs well prior to the study's ultimate conclusion. Nevertheless, in order to formalize the study itself and the results, Wohlford Consulting must deliver the final product in a professional package. We will communicate the process and results of the, study in two principal deliverables: 1. Written Report: This report will document the approach, methodologies, and findings of the study in a format, style, and level of detail that will be suitable for sharing with your City Council and the public. We will provide drafts for review and comment by the City prior to finalization and delivery. 2. Presentation: We will prepare and deliver a formal PowerPoint presentation to the City Council, and other presentations as specified in the scope of services. The purpose of the presentation is to help the Council and the public understand the context and details of the study and its results, in order to make informed decisions. This presentation will include the conceptual background for user fees, other related issues, our methodologies, study limits, and the results in various arrays. The City will have an opportunity to influence the scope, format, content, and direction of the presentation. Task 15: Project Closeout and the Future The end of the project (and even the final invoice payment) is not the end of our partnership. First of all, Woblford Consulting will fulfill any outstanding responsibilities to ensure the City's continued success, such as answering your remaining questions and providing critical files and documentation to support your ongoing efforts. Most importantly, we will remain a resource for you to contact in the future with questions or research needs. WORLFORD CONSULTING Appendix B - Page 7 of 7 September 26, 2014 r 8 WIL Will. m N O rn N - v _ O .y U w C Ute^ L.i _ Y ryrUi�� W y � O ��'^�• C a O U '� U E- Y Q U- 0 •U Q C.' O O N Q N >' 7 m pj ai N �i W h O ' q" �Ui Fa 0A � y . y A N 7 Fri 'Y+ � rn 'O P s.. '.N y y '� 0 U N Q ❑ d o U 0 b U Z C4 w 4 [� .�, �„ (� o y❑ 0 6 N v 3 m� U �� m� k 3Q. C v0i U o >u o 6� d 4' d d b o rl 0 0> c aa.. ami 0 Q i> c o U U U U U U U U w w U Q d u: i �. d rx w w a r 8 us U M vi cr M N 0 o, v M N 3 ti T U v aDi m E O to E U 0 w' .� aoi T T T T T T 0. U iVi b b b b b b O N o'er O N^ tea.] a aww GJ 4J N 4J w wwwwda.UV N a,ww Glv a.wUV'z Vo. M COST PROPOSAL for an Overhead Cost Allocation Study and User Fee Study for the City of Burlingame September 26, 2014 WOHLFORD CONSULTING Chad Wohlford, Principal Consultant 372 Florin Road, #293 Sacramento, CA 95831 (916)205-7050 chadgwohlfordeonsultin@ com City of Burlingame COST PROPOSAL ` Overhead Cost Allocation Study and User Fee Study Table of Contents COST SUPPLEMENT TO THE STUDY PROPOSAL COST PROPOSAL Cost Summary ...................................................2 Cost Allocation Plan Project Budget and Cost Detail........................................2 Table I: Cost Allocation Study Project Fee Details......................3 Table 2: Billing Milestones —Cost Allocation Plans....................3 User Fee Project Budget and Cost Detail............................................................4 Table 3: User Fee Study Project Fee Details................................4 Table 4: User Fee Study Billing Milestones.................................5 CostFlexibility and Control..................................................................................5 Table 5: Cost of Additional Services.............................................6 ANoteon Cost Comparisons................................................................................7 1 WOHLFORD CONSULTING i September 26, 2014 City of Burlingame a„ COST PROPOSAL �. Overhead Cost Allocation Study and User Fee Study COST SUPPLEMENT TO THE STUDY PROPOSAL The City of Burlingame's Request for Proposals for an Overhead Cost Allocation Study, User Fee Study, and Development Impact Fee Study specified that the proposed project fees should be submitted in a separate envelope from the service proposal. This document comprises the cost proposal from Woblford Consulting for the Cost allocation Study and the User Fee Study. The cost proposal for the Development Impact Fee Study is contained in a separate document from Colgan Consulting. Both cost proposals are included in the same package, since Wohlford Consulting and Colgan Consulting are proposing jointly and intend to work cooperatively on these projects. COST PROPOSAL Wohlford Consulting endeavors to provide value to the City of Burlingame, as I set rates and task fees to ensure the cost -benefit ratio is disproportionately skewed toward the benefit the City will receive. My cost structure reflects my senior - level experience and skill, quality of the work I provide, my ability to work quickly, and the lower overhead structure that a smaller practice permits. The blend of all of these factors allows us a competitive fee that still addresses all of the needs of the City. Given my lower cost structure, my rates are designed to provide for greater service and quality, and a more robust scope of services with fewer necessary "add-ons," often for the same project fees as competing funis. A cost of service study is not a "commodity" that can be readily compared on the basis of price, since the assigned consultant makes a tremendous difference. A cost analysis can vary by many thousands of dollars, depending on the skill and experience of the consultant. Consequently, decisions based on an unbalanced focus on the consultant fee can directly affect the quality of the study, resulting in errors or missed opportunities that can ultimately cost the City revenue equal to many multiples of the overall project cost—not just the price difference between two competing proposals. WOHLFORD CONSULTING Page 1 of 7 September 26, 2014 City of Burlingame COST PROPOSAL Overhead Cost Allocation Study and User Fee Study Cost Summary Wohlford Consulting proposes to provide the entire Cost Allocation study for the fixed professional fee of $13,975 for Year 1. The proposed cost for years 2-5 total $17,600. Both fee totals include all labor and expenses. (Details are available in Table 1 below.) Wohlford Consulting proposes to provide the entire User Fee study for the fixed professional fee of $30,900 for Year 1. The proposed cost for years 2-5 total $16,500. Both fee totals include all labor and expenses. (Details are available in Table 3 below.) These fees represent all of the deliverables and work tasks described in the proposal, and they are "total, not to exceed" project fees for this scope of service. The City of Burlingame will not incur any additional charges (e.g., overhead, printing, travel) unless they are related to additional services or uncommon expenditures requested by the City outside the contracted scope of service. Cost Allocation Plan Project Budget and Cost Detail Task Cost Detail The following table shows the fee for each component of the proposed Cost Allocation Plan project. If the City wishes to remove specific tasks from the study, I can adjust the cost accordingly, but the various permutations of these costs are too numerous to display here. In addition, there are various "fixed" costs that are distributed through the other tasks and need to be accounted for in the final project fees. WOHLFORD CONSULTING Page 2 of 7 September 26, 2014 City of Burlingame COST PROPOSAL L-' Overhead Cost Allocation Study and User Fee Study Table l: Cost Allocation Study Project Fee Details Project Component Estimated Hours Hourly Rate Component Fixed Fee Project Management: 20% 2 CAP Structure Developed; Design of Analytical Model; elivery of Data Collection Worksheets 25% Project Planning and Control Monthly Progress Payments (3 total)of 3 15% 6 Included * Quality Assurance Processes 7 Second Draft of Full Cost Plan Delivered 5% Included * On-site Visits / Interviews 5% 9 Initial Draft of Federal Cost Plan Delivered Included * Communication Plan/Presentations Final Federal Cost Plan Delivered 2.5% 11 Included * Cost Allocation Plans: 12 Final Summary Report Delivered 5% 13 Year 1 Full Cost Plan 88 $ 125 $ 11,000 Year 1 Federal Cost Plan 16 $ 125 $ 2,000 Year 1 Expenses $ 975 Year 1 Subtotal: 104 $ 13,975 Year 2 Update, including expenses 32 $ 130 $ 4,160 Year 3 Update, including expenses 32 $ 135 $ 4,320 Year 4 Update, including expenses 32 $ 140 $ 4,480 Year 5 Update, including expenses 1 32 $145 $ 4,460 Total s-YearProject Fee: 232 $ 31,575 * The cost for Project Management tasks has been factored into the individual project components. Billing Milestones — Cost Allocation Plans Wohlford Consulting will invoice the City based upon a series of "billing milestones" that represent the completion of significant drafts, tasks, deliverables, or other project components. I propose payment at the following "billing milestones:" Table 2: Billing Milestones —Cost Allocation Plans # MilestoneDescription Project% 1 Project Kick-off and Completion of Initial Interviews 20% 2 CAP Structure Developed; Design of Analytical Model; elivery of Data Collection Worksheets 25% 3-5 Monthly Progress Payments (3 total)of 3 15% 6 Initial Draft of Full Cost Plan Delivered 12.5% 7 Second Draft of Full Cost Plan Delivered 5% 8 Final Full Cost Plan Delivered 5% 9 Initial Draft of Federal Cost Plan Delivered 2.5% 10 Final Federal Cost Plan Delivered 2.5% 11 Draft of Suuunary Report Delivered 2.5% 12 Final Summary Report Delivered 5% 13 Presentation Developed 2.5% 14 Final Presentation Delivered and/or City's Acceptance of Project Completion 2.5% Total: 100% WOI3LFORD CONSULTING Page 3 of 7 September 26, 2014 City of Burlingame COST PROPOSAL SOverhead Cost Allocation Study and User Fee Study As the customization and the flow of the project warrants, we may complete certain elements of the study in a different order than the billing milestones may indicate. These billing milestones reflect the Year 1 scope of services. If the scope of services for subsequent years is similar, these milestones would again apply. If the scope varies slightly, we would pro -rate the non -applicable milestones across the remaining milestones. User Fee Project Budget and Cost Detail Task Cost Details The following table shows the fee for each component of the proposed User Fee Study project. If the City wishes to remove specific tasks from the study, I can adjust the cost accordingly, but the various permutations of these costs are too numerous to display here. In addition, there are various "fixed" costs that are distributed through the other tasks and need to be accounted for in the final project fees. Table 3: User Fee Study Project Fee Details 'ect Com onent Hours R Ho4Included na ement: KPro'2tPlanninand Control ssurance Processesication Plan/Presentations Sutra a Re ort. Full Cost Analysis. Building 58 $ 125 $ 7,250 Code Enforcement 8 $ 125 _5 $ 1,000 Engineering 50 $_l 2 $ 6,250 Planning 50 $ 125 $ 6,250 Recreation 50 $ 125 $ 1,750 Police 44 $ 125 $ 5,500 Fee Comparison Survey 12 $ 125 $ 1,500 Expenses $ 1,400 Year 1 Subtotal: 236 $ 30,900 Year 2 Update, including expenses 30 $ 130 $ 3,900 Year 3 Update, includinexpenses 30 $ 135 $ 4,050 Year 4 Update, including expenses 30 $ 140 $ 4,200 Year 5 Update, incl ding expenses 30 $ 145 $ 4,350 Total 5 -Year Project Fee: 356 $ 47,400 * The cost Ioi Yroject Management tasxs uns uccu iac�wcu uuv the individual project components. WOHLFORD CONSULTING Page 4 of 7 September 26, 2014 City of Burlingame a COST PROPOSAL , ' Overhead Cost Allocation Study and User Fee Study Billing Milestones–User Fee Study Wohlford Consulting will invoice the City based upon a series of "billing milestones" that represent the completion of significant drafts, tasks, deliverables, or other project components. The proposed "billing milestones" are: Table 4: User Fee Study Billing Milestones 4 Cost of Service Milestone Description Project % 1 Project Kick-off Presentation, Initial Interviews 15% 2 Fee Inventory Developed; Design of Analytical Model; Delivery of Data Collection Worksheets 15% 3-5 Monthly Progress Payments– each @ 5% (max. 3) 15% 6 Initial Review Drafts of Fee Study Results Delivered 15% 7 Final Review Draft of Fee Study Results Delivered 10% 8 Final Fee Study Results Delivered 5% 9 Comparison Survey Developed and Data Collected 3.0% 10 Comparison Survey Draft Delivered 2.0% 11 Draft Report Delivered 10% 12 Final Report Delivered 5% 13 Presentation Developed 2.00% 14 Final Presentation of Results (or City acceptance of project finalization) 3.00% Total: 100.0% As the customization and flow of the project warrants, we may complete certain elements of the study in a different order than the billing milestones may indicate. In addition, if progress lags for certain departments/fee areas, we may fractionate and prorate the milestones to allow billing for the work completed. These billing milestones reflect the Year 1 scope of services. If the scope of services for subsequent years is similar, these milestones would again apply. If the scope varies slightly, we would pro -rate the non -applicable milestones across the remaining milestones. Cost Flexibility and Control Cost and Scope Adjustments at the City's Request The proposed cost reflects my expectations of the work necessary to complete the proposed scope of services to the satisfaction of the City—at the highest level of quality and service. I would be pleased to revise the project price and scope to better reflect the needs and/or resource availability of the City, as well as to WORLFORD CONSULTING Page 5 of 7 September 26, 2014 City of Burlingame 2„.ME COST PROPOSAL -- Overhead Cost Allocation Study and User Fee Study foster enhanced comparisons ('apples to apples” quality) with competing proposals. If you find this proposal to be the most responsive and qualified, but price remains an obstacle to the selection of Wohlford Consulting, please contact me to discuss alternatives and potential adjustments to the scope and price that can help you accomplish your goals, yet retain the overall advantages of this proposal. As sole proprietor of Wohlford Consulting, I have the authority to decisively and significantly alter the proposal scope and price to best fit the needs of the City. If the City wishes to engage Wohlford Consulting for services not included in the proposed scope of services, we can normally establish mutually agreeable fixed fees or use the standard hourly add-on rate of $150, plus expenses. The following table identifies the cost of certain potential "add-on" services at the City's request: Table 5: Cost of Additional Services Project Component Fee Presentations and Meetings: On -Site $1,900 / day + expenses Virtual (web/phone/video conference) $150 /hour * New Presentation Development $150 / hour * Audit or Litigation Support (per hour) $ 305 / hour + expenses * Expenses are included in these fees. Other Cost Issues Wohlford Consulting almost always establishes project fees on a fixed -fee basis. The use of flat fees creates cost certainty for my clients and reduces administrative burdens for tracking and reporting. Wohlford Consulting will provide the proposed services for the proposed fixed price—regardless of my operating costs increase in the first phase. The only cause for increasing fees in the current year, in my opinion, is if the City requests additional services (or creates unreasonable project demands) and agrees to the additional cost in advance of the services. It is in the best interests of the City of Burlingame and Wohlford Consulting to manage this project within the proposed budget. As a fixed fee project, we must maintain the scope of service, expected level of responsiveness, and assumed tasks at the proposed level to ensure a fair deal. Wohlford Consulting does not "nickel and dime" my clients with supplemental fees and hidden costs. In fact, extra service is the norm. At the same time, we need to protect the integrity of the fixed fee structure and maintain some limits. WOHLFORD CONSULTING Page 6 of 7 September 26, 2014 City of Burlingame COST PROPOSAL — ` Overhead Cost Allocation Study and User Fee Study Should the City enact significant delays (one month cumulative), require excessive on-site meetings, require excessive drafts of documentation, or otherwise consume disproportionate resources from us, I will quantify the additional cost and request additional compensation from the City. Of course, I will not hold the City responsible for delays or additional work caused by Wohlford Consulting. Furthermore, whenever practical, I will give the City advance notice of the potential for additional cost, in order for the City to make an informed decision whether to proceed with its request. A request for additional compensation is very rare, but may be necessary to protect my ability to provide the necessary services to the City. It is important to note that the City has primary control over most potential project overages. For example, the most common causes for additional on-site visits are the inability of the client to stay within agreed-upon timeframes (excessive delays cause people to forget their tasks), lack of participation by key staff in earlier meetings, client staffing changes in the middle of the study, and lack of management involvement. Whatever the outcome of our financial agreements, I believe that you will find tremendous value in the work that you receive. A Note on Cost Comparisons A cost of services (user fee) study, done well, requires significant time and professional -level effort. An especially low proposal price may indicate a lack of understanding of the true tasks and effort necessary to accomplish the job. Or it may reflect a deliberate under -bid that will result in either mid -project demands for additional compensation or reduced services/effort in order to restrain costs and ensure profitability. After 16 years of proposals and project management and tracking, I fully understand the project requirements and the project fee level necessary to fund the cost structure of Wohlford Consulting. I will not ask for additional project fees unless the City requires services beyond our original agreement and we reach mutual agreement on the services and related costs. WOHLFORD CONSULTING Page 7 of 7 September 26, 2014