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