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23-0717_CLEARSOURCE FINANCIAL CONSULTING_Professional Services Agreement61147.00000\41426671.1 1 CITY OF SAN JUAN CAPISTRANO PROFESSIONAL SERVICES AGREEMENT This Agreement is made and entered into as of the last date signed between the City of San Juan Capistrano, a municipal corporation organized and operating under the laws of the State of California with its principal place of business at 32400 Paseo Adelanto, San Juan Capistrano, CA 92675 (“City”), and ClearSource Financial Consulting, a California Subchapter S corporation with its principal place of business at 7960 B Soquel Drive, Suite 363, Aptos, California 95003 ( “Consultant”). City and Consultant are sometimes individually referred to as a “Party” and collectively as the “Parties” in this Agreement. RECITALS A. City is a municipal corporation of the State of California and is in need of professional services for the following project: cost allocation plan and citywide fee and rate study (the “Project”). B. Consultant is duly licensed and has the necessary qualifications to provide such services. C. The Parties desire by this Agreement to establish the terms for City to retain Consultant to provide the services described herein. AGREEMENT NOW, THEREFORE, IT IS AGREED AS FOLLOWS: 1. Services. Consultant shall provide the City with the services described in the Scope of Services attached hereto as Exhibit “A.” 2. Compensation. a. Subject to paragraph 2(b) below, the City shall pay for such services in accordance with the Schedule of Charges set forth in Exhibit “B.” b. In no event shall the total amount paid for services rendered by Consultant under this Agreement exceed the sum of Thirty Five Thousand Six Hundred Forty Dollars and Zero Cents ($35,640.00). Any annual updates of the cost allocation plan will be addressed by separate agreements, if so elected. This amount is to cover all printing and related costs, and the City will not pay any additional fees for printing expenses. Periodic payments shall be made within thirty (30) days of receipt of an invoice which includes a detailed description of the work performed. Payments to Consultant for work performed will be made on a monthly billing basis. 3. Additional Work. If changes in the work seem merited by Consultant or the City, and informal consultations with the other Party indicate that a change is warranted, it shall be processed in the following manner: a letter outlining the changes shall be forwarded to the City by Consultant with a statement of estimated changes in fee or time schedule. An amendment to this Agreement shall 61147.00000\41426671.1 2 be prepared by the City and executed by both Parties before performance of such services, or the City will not be required to pay for the changes in the scope of work. Such amendment shall not render ineffective or invalidate unaffected portions of this Agreement. 4. Maintenance of Records. Books, documents, papers, accounting records, and other evidence pertaining to costs incurred shall be maintained by Consultant and made available at all reasonable times during the contract period and for four (4) years from the date of final payment under the contract for inspection by City. 5. Time of Performance Consultant shall perform its services in a prompt and timely manner and shall commence performance upon execution of this Agreement. 6. Delays in Performance. a. Neither City nor Consultant shall be considered in default of this Agreement for delays in performance caused by circumstances beyond the reasonable control of the non- performing party. For purposes of this Agreement, such circumstances include but are not limited to, abnormal weather conditions; floods; earthquakes; fire; epidemics; war; riots and other civil disturbances; strikes, lockouts, work slowdowns, and other labor disturbances; sabotage or judicial restraint. b. Should such circumstances occur, the non-performing Party shall, within a reasonable time of being prevented from performing, give written notice to the other Party describing the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement. 7. Compliance with Law. a. Consultant shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local government, including Cal/OSHA requirements. b. If required, Consultant shall assist the City, as requested, in obtaining and maintaining all permits required of Consultant by federal, state and local regulatory agencies. c. If applicable, Consultant is responsible for all costs of clean up and/ or removal of hazardous and toxic substances spilled as a result of his or her services or operations performed under this Agreement. 8. Standard of Care Consultant’s services will be performed in accordance with generally accepted professional practices and principles and in a manner consistent with the level of care and skill ordinarily exercised by members of the profession currently practicing under similar conditions. 9. Assignment and Subconsultant 61147.00000\41426671.1 3 Consultant shall not assign, sublet, or transfer this Agreement or any rights under or interest in this Agreement without the written consent of the City, which may be withheld for any reason. Any attempt to so assign or so transfer without such consent shall be void and without legal effect and shall constitute grounds for termination. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. Nothing contained herein shall prevent Consultant from employing independent associates, and subconsultants as Consultant may deem appropriate to assist in the performance of services hereunder. 10. Independent Contractor Consultant is retained as an independent contractor and is not an employee of City. No employee or agent of Consultant shall become an employee of City. The work to be performed shall be in accordance with the work described in this Agreement, subject to such directions and amendments from City as herein provided. 11. Insurance. Consultant shall not commence work for the City until it has provided evidence satisfactory to the City it has secured all insurance required under this section. In addition, Consultant shall not allow any subcontractor to commence work on any subcontract until it has secured all insurance required under this section. a. Commercial General Liability (i) The Consultant shall take out and maintain, during the performance of all work under this Agreement, in amounts not less than specified herein, Commercial General Liability Insurance, in a form and with insurance companies acceptable to the City. (ii) Coverage for Commercial General Liability insurance shall be at least as broad as the following: (1) Insurance Services Office Commercial General Liability coverage (Occurrence Form CG 00 01) or exact equivalent. (iii) Commercial General Liability Insurance must include coverage for the following: (1) Bodily Injury and Property Damage (2) Personal Injury/Advertising Injury (3) Premises/Operations Liability (4) Products/Completed Operations Liability (5) Aggregate Limits that Apply per Project (6) Explosion, Collapse and Underground (UCX) exclusion deleted (7) Contractual Liability with respect to this Agreement (8) Property Damage (9) Independent Consultants Coverage (iv) The policy shall contain no endorsements or provisions limiting coverage for (1) contractual liability; (2) cross liability exclusion for claims or suits by one insured against another; (3) products/completed operations liability; or (4) contain any other exclusion contrary to the Agreement. 61147.00000\41426671.1 4 (v) The policy shall give City, its officials, officers, employees, agents and City designated volunteers additional insured status using ISO endorsement forms CG 20 10 10 01 and 20 37 10 01, or endorsements providing the exact same coverage. (vi) The general liability program may utilize either deductibles or provide coverage excess of a self-insured retention, subject to written approval by the City, and provided that such deductibles shall not apply to the City as an additional insured. b. Automobile Liability (i) At all times during the performance of the work under this Agreement, the Consultant shall maintain Automobile Liability Insurance for bodily injury and property damage including coverage for owned, non-owned and hired vehicles, in a form and with insurance companies acceptable to the City. (ii) Coverage for automobile liability insurance shall be at least as broad as Insurance Services Office Form Number CA 00 01 covering automobile liability (Coverage Symbol 1, any auto). (iii) The policy shall give City, its officials, officers, employees, agents and City designated volunteers additional insured status. (iv) Subject to written approval by the City, the automobile liability program may utilize deductibles, provided that such deductibles shall not apply to the City as an additional insured, but not a self-insured retention. c. Workers’ Compensation/Employer’s Liability (i) Consultant certifies that he/she is aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and he/she will comply with such provisions before commencing work under this Agreement. (ii) To the extent Consultant has employees at any time during the term of this Agreement, at all times during the performance of the work under this Agreement, the Consultant shall maintain full compensation insurance for all persons employed directly by him/her to carry out the work contemplated under this Agreement, all in accordance with the “Workers’ Compensation and Insurance Act,” Division IV of the Labor Code of the State of California and any acts amendatory thereof, and Employer’s Liability Coverage in amounts indicated herein. Consultant shall require all subconsultants to obtain and maintain, for the period required by this Agreement, workers’ compensation coverage of the same type and limits as specified in this section. d. Professional Liability (Errors and Omissions) At all times during the performance of the work under this Agreement the Consultant shall maintain professional liability or Errors and Omissions insurance appropriate to its profession, in a form and with insurance companies acceptable to the City and in an amount indicated herein. This insurance shall be endorsed to include contractual liability applicable to this Agreement and shall be written on a policy form coverage specifically designed to protect against acts, errors or 61147.00000\41426671.1 5 omissions of the Consultant. “Covered Professional Services” as designated in the policy must specifically include work performed under this Agreement. The policy must “pay on behalf of” the insured and must include a provision establishing the insurer's duty to defend. e. Minimum Policy Limits Required (i) The following insurance limits are required for the Agreement: Combined Single Limit Commercial General Liability $1,000,000 per occurrence/ $2,000,000 aggregate for bodily injury, personal injury, and property damage Automobile Liability $1,000,000 combined single limit Employer’s Liability $1,000,000 per accident or disease Professional Liability $1,000,000 per claim and aggregate (errors and omissions) (ii) Defense costs shall be payable in addition to the limits. (iii) Requirements of specific coverage or limits contained in this section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance. Any available coverage shall be provided to the parties required to be named as Additional Insured pursuant to this Agreement. f. Evidence Required Prior to execution of the Agreement, the Consultant shall file with the City evidence of insurance from an insurer or insurers certifying to the coverage of all insurance required herein. Such evidence shall include original copies of the ISO CG 00 01 (or insurer’s equivalent) signed by the insurer’s representative and Certificate of Insurance (Acord Form 25-S or equivalent), together with required endorsements. All evidence of insurance shall be signed by a properly authorized officer, agent, or qualified representative of the insurer and shall certify the names of the insured, any additional insureds, where appropriate, the type and amount of the insurance, the location and operations to which the insurance applies, and the expiration date of such insurance. g. Policy Provisions Required (i) Consultant shall provide the City at least thirty (30) days prior written notice of cancellation of any policy required by this Agreement, except that the Consultant shall provide at least ten (10) days prior written notice of cancellation of any such policy due to non-payment of premium. If any of the required coverage is cancelled or expires during the term of this Agreement, the Consultant shall deliver renewal certificate(s) including the General Liability Additional Insured Endorsement to the City at least ten (10) days prior to the effective date of cancellation or expiration. 61147.00000\41426671.1 6 (ii) The Commercial General Liability Policy and Automobile Policy shall each contain a provision stating that Consultant’s policy is primary insurance and that any insurance, self-insurance or other coverage maintained by the City or any named insureds shall not be called upon to contribute to any loss. (iii) The retroactive date (if any) of each policy is to be no later than the effective date of this Agreement. Consultant shall maintain such coverage continuously for a period of at least three years after the completion of the work under this Agreement. Consultant shall purchase a one (1) year extended reporting period A) if the retroactive date is advanced past the effective date of this Agreement; B) if the policy is cancelled or not renewed; or C) if the policy is replaced by another claims-made policy with a retroactive date subsequent to the effective date of this Agreement. (iv) All required insurance coverages, except for the professional liability coverage, shall contain or be endorsed to provide a waiver of subrogation in favor of the City, its officials, officers, employees, agents, and volunteers or shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subconsultants. (v) The limits set forth herein shall apply separately to each insured against whom claims are made or suits are brought, except with respect to the limits of liability. Further the limits set forth herein shall not be construed to relieve the Consultant from liability in excess of such coverage, nor shall it limit the Consultant’s indemnification obligations to the City and shall not preclude the City from taking such other actions available to the City under other provisions of the Agreement or law. h. Qualifying Insurers (i) All policies required shall be issued by acceptable insurance companies, as determined by the City, which satisfy the following minimum requirements: (1) Each such policy shall be from a company or companies with a current A.M. Best's rating of no less than A:VII and admitted to transact in the business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law. i. Additional Insurance Provisions (i) The foregoing requirements as to the types and limits of insurance coverage to be maintained by Consultant, and any approval of said insurance by the City, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Consultant pursuant to this Agreement, including but not limited to, the provisions concerning indemnification. (ii) If at any time during the life of the Agreement, any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, City has the right but not the duty to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Consultant or City will 61147.00000\41426671.1 7 withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City may cancel this Agreement. (iii) The City may require the Consultant to provide complete copies of all insurance policies in effect for the duration of the Project. (iv) Neither the City nor any of its officials, officers, employees, agents or volunteers shall be personally responsible for any liability arising under or by virtue of this Agreement. j. Subconsultant Insurance Requirements. Consultant shall not allow any subcontractors or subconsultants to commence work on any subcontract until they have provided evidence satisfactory to the City that they have secured all insurance required under this section. Policies of commercial general liability insurance provided by such subcontractors or subconsultants shall be endorsed to name the City as an additional insured using ISO form CG 20 38 04 13 or an endorsement providing the exact same coverage. If requested by Consultant, City may approve different scopes or minimum limits of insurance for particular subcontractors or subconsultants. 12. Indemnification. a. To the fullest extent permitted by law, Consultant shall defend (with counsel of City’s choosing), indemnify and hold the City, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’s services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by Consultant, the City, its officials, officers, employees, agents, or volunteers. b. If Consultant’s obligation to defend, indemnify, and/or hold harmless arises out of Consultant’s performance of “design professional” services (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, Consultant’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the Consultant’s proportionate percentage of fault. 13. California Labor Code Requirements. a. Consultant is aware of the requirements of California Labor Code Sections 1720 et seq. and 1770 et seq., which require the payment of prevailing wage rates and the performance of other requirements on certain “public works” and “maintenance” projects (“Prevailing Wage Laws”). If the services are being performed as part of an applicable “public works” or “maintenance” project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, Consultant agrees to fully comply with such Prevailing Wage Laws. Consultant shall defend, indemnify and hold the City, its officials, officers, employees and 61147.00000\41426671.1 8 agents free and harmless from any claims, liabilities, costs, penalties or interest arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. It shall be mandatory upon the Consultant and all subconsultants to comply with all California Labor Code provisions, which include but are not limited to prevailing wages (Labor Code Sections 1771, 1774 and 1775), employment of apprentices (Labor Code Section 1777.5), certified payroll records (Labor Code Sections 1771.4 and 1776), hours of labor (Labor Code Sections 1813 and 1815) and debarment of contractors and subcontractors (Labor Code Section 1777.1). The requirement to submit certified payroll records directly to the Labor Commissioner under Labor Code section 1771.4 shall not apply to work performed on a public works project that is exempt pursuant to the small project exemption specified in Labor Code Section 1771.4. b. If the services are being performed as part of an applicable “public works” or “maintenance” project, then pursuant to Labor Code Sections 1725.5 and 1771.1, the Consultant and all subconsultants performing such services must be registered with the Department of Industrial Relations. Consultant shall maintain registration for the duration of the Project and require the same of any subconsultants, as applicable. Notwithstanding the foregoing, the contractor registration requirements mandated by Labor Code Sections 1725.5 and 1771.1 shall not apply to work performed on a public works project that is exempt pursuant to the small project exemption specified in Labor Code Sections 1725.5 and 1771.1. c. This Agreement may also be subject to compliance monitoring and enforcement by the Department of Industrial Relations. It shall be Consultant’s sole responsibility to comply with all applicable registration and labor compliance requirements. Any stop orders issued by the Department of Industrial Relations against Consultant or any subcontractor that affect Consultant’s performance of services, including any delay, shall be Consultant’s sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Consultant caused delay and shall not be compensable by the City. Consultant shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claim or liability arising out of stop orders issued by the Department of Industrial Relations against Consultant or any subcontractor. 14. Verification of Employment Eligibility. By executing this Agreement, Consultant verifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time, and shall require all subconsultants and sub-subconsultants to comply with the same. 15. Laws and Venue. This Agreement shall be interpreted in accordance with the laws of the State of California. If any action is brought to interpret or enforce any term of this Agreement, the action shall be brought in a state or federal court situated in the County of Orange, State of California. 16. Termination or Abandonment a. City has the right to terminate or abandon any portion or all of the work under this Agreement by giving ten (10) calendar days written notice to Consultant. In such event, City shall be immediately given title and possession to all original field notes, drawings and specifications, written reports and other documents produced or developed for that portion of the 61147.00000\41426671.1 9 work completed and/or being abandoned. City shall pay Consultant the reasonable value of services rendered for any portion of the work completed prior to termination. If said termination occurs prior to completion of any task for the Project for which a payment request has not been received, the charge for services performed during such task shall be the reasonable value of such services, based on an amount mutually agreed to by City and Consultant of the portion of such task completed but not paid prior to said termination. City shall not be liable for any costs other than the charges or portions thereof which are specified herein. Consultant shall not be entitled to payment for unperformed services, and shall not be entitled to damages or compensation for termination of work. b. Consultant may terminate its obligation to provide further services under this Agreement upon thirty (30) calendar days’ written notice to City only in the event of substantial failure by City to perform in accordance with the terms of this Agreement through no fault of Consultant. 17 Documents. Except as otherwise provided in “Termination or Abandonment,” above, all original field notes, written reports, Drawings and Specifications and other documents, produced or developed for the Project shall, upon payment in full for the services described in this Agreement, be furnished to and become the property of the City. 18. Organization Consultant shall assign Terry Madsen as Project Manager. The Project Manager shall not be removed from the Project or reassigned without the prior written consent of the City. 19. Limitation of Agreement. This Agreement is limited to and includes only the work included in the Project described above. 20. Notice Any notice or instrument required to be given or delivered by this Agreement may be given or delivered by depositing the same in any United States Post Office, certified mail, return receipt requested, postage prepaid, addressed to: CITY: City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Attn: Benjamin Siegel, City Manager CONSULTANT: ClearSource Financial Consulting 7960 B Soquel Drive, Suite 363 Aptos, California 95003 Attn: Terry Madsen, President and shall be effective upon receipt thereof. 21. Third Party Rights Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than the City and the Consultant. 61147.00000\41426671.1 10 22. Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and that it shall not discriminate against any employee or applicant for employment because of race, religion, color, national origin, ancestry, sex, age or other interests protected by the State or Federal Constitutions. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. 23. Entire Agreement This Agreement, with its exhibits, represents the entire understanding of City and Consultant as to those matters contained herein, and supersedes and cancels any prior or contemporaneous oral or written understanding, promises or representations with respect to those matters covered hereunder. Each Party acknowledges that no representations, inducements, promises or agreements have been made by any person which are not incorporated herein, and that any other agreements shall be void. This Agreement may not be modified or altered except in writing signed by both Parties hereto. This is an integrated Agreement. 24. Severability The unenforceability, invalidity or illegality of any provision(s) of this Agreement shall not render the remaining provisions unenforceable, invalid or illegal. 25. Successors and Assigns This Agreement shall be binding upon and shall inure to the benefit of the successors in interest, executors, administrators and assigns of each Party to this Agreement. However, Consultant shall not assign or transfer by operation of law or otherwise any or all of its rights, burdens, duties or obligations without the prior written consent of City. Any attempted assignment without such consent shall be invalid and void. 26. Non-Waiver None of the provisions of this Agreement shall be considered waived by either Party, unless such waiver is specifically specified in writing. 27. Time of Essence Time is of the essence for each and every provision of this Agreement. 28. City’s Right to Employ Other Consultants City reserves its right to employ other consultants, including engineers, in connection with this Project or other projects. 29. Prohibited Interests Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, 61147.00000\41426671.1 11 commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no director, official, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. [SIGNATURES ON FOLLOWING PAGE] 61147.00000\41426671.1 12 SIGNATURE PAGE FOR PROFESSIONAL SERVICES AGREEMENT BETWEEN CITY OF SAN JUAN CAPISTRANO AND CLEARSOURCE FINANCIAL CONSULTING IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. CITY OF SAN JUAN CAPISTRANO CLEARSOURCE FINANCIAL CONSULTING By: By: Benjamin Siegel City Manager Its: President Printed Name: Terry Madsen ATTEST: By: City Clerk APPROVED AS TO FORM: By: City Attorney 61147.00000\41426671.1 12 SIGNATURE PAGE FOR PROFESSIONAL SERVICES AGREEMENT BETWEEN CITY OF SAN JUAN CAPISTRANO AND CLEARSOURCE FINANCIAL CONSULTING IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. CITY OF SAN JUAN CAPISTRANO CLEARSOURCE FINANCIAL CONSULTING By: By: Benjamin Siegel City Manager Its: President Printed Name: Terry Madsen ATTEST: By: City Clerk APPROVED AS TO FORM: By: City Attorney sAN C le ar S o ur c e F i n anc ia l C o n sult i n g 7 9 6 0 B S o q u e l D r iv e , S u i t e 3 6 3 A p t o s , C ali f o r n i a 9 5 0 0 3 TE RR Y M A DS EN | P R ES I D EN T t m ad s e n @ c l e a r s o u r ce f i n a n c ia l .c o m 8 3 1.2 8 8 .0 6 0 8 EXHIBIT A - Page 1 of 28 September 15, 2022 Attention: Amy Massey, Senior Accountant | Finance Department 32400 Paseo Adelanto San Juan Capistrano, California 92675 DIGITAL TRANSMISSION TO: AMASSEY@SANJUANCAPISTRANO.ORG To Ms. Massey and Other Members of the City’s Proposal Evaluation Team: Thank you for the opportunity to provide cost allocation, cost of service, and fee consulting for the City of San Juan Capistrano. ClearSource Financial Consulting is well-qualified, available in the City’s current timeframe, and fully resourced to complete the scope of work envisioned by the City. We bring an open mind for change and exhibit the energy to do the heavy lifting it takes for a fresh look on the wide- ranging cost recovery topics. We commit to the City of San Juan Capistrano to provide premier service, on time, and within budget: We routinely demonstrate care about the details and the rightful influence of local conditions. We do the hard work to achieve modern and meaningful outcomes that reflect the way our clients serve their communities today. We know time is of the essence in this work: a key determination of success and satisfaction for many of our city clients. All project reporting will be ready 120 days from project start, ready then for a thoughtful pace for approval. We will finish the scope of services without change orders, which is our standard practice. We do not ask our clients to bear the risk in estimating what it takes to do this work thoroughly and with successful enactment. I founded ClearSource Financial Consulting in 2011 to focus on these principles in service solely to California public agencies. As President, I am authorized to negotiate and bind ClearSource contractually under the City’s terms. I also affirm that ClearSource has no conflict of interest with regard to any of the work to be performed by our firm for the City. Finally, my signature obligates ClearSource to the commitments in this proposal and confirms that it shall remain valid for a period of 180 calendar days from submittal. Sincerely, EXHIBIT A - Page 2 of 28 TABLE OF CONTENTS EXHIBIT A - Page 3 of 28 BACKGROUND & PROJECT SUMMARY The City of San Juan Capistrano is engaging a consultant to conduct a Cost Allocation Plan and Citywide User Fee and Rate Study. This type of study is focused on the ethic of “the costs to serve” as the essential justification for fees in California to be enacted through action by the local governing body. Broadly speaking, the cost of service-based fee study answers: "What are the costs of indirect services supporting service provision to the community which may be reasonably recovered across various available mechanisms, including fees and other charges/direct billing? (This is the chief purpose of the Cost Allocation Plan element of study.) "What are the full costs of direct services provided to the community, which currently have or may be eligible for a user or regulatory fee? "What are the cost recovery targets or policies of the agency as to the amounts that should be paid for those who request or cause these services? "What structure of fee ensures a reasonable relationship between a fee amount paid and the underlying costs to serve? "What is the impact to the source funds of changes to user/regulatory fees? The most recently available master fee schedule for the City is dated 2011. In that time, not only will underlying cost drivers have changed, but the way in which service is provided will have changed: by revised practices, technology availability, the regulatory environment, and customer expectations, to name only a few. Furthermore, the fiscal realities of the City will have shifted, undoubtedly to a position where many services will be expected to fully recover costs to avoid subsidy by typically constrained general resources needed for uses of broader public benefit. The City expects its selected consultant to deliver a comprehensive review of the City’s fee and rate structure with the goal of establishing a consistent and objectively based fee and rate structure meeting the needs of the City and residents. The resulting fee and rate system must comply with all applicable laws and regulations and be compatible with the City’s financial system. The City has emphasized that the project must facilitate a “turn key” approach that minimizes the amount of City staff time required. ClearSource expects that the fee-related services under review in this study will focus on direct services eligible for user fee methodology, as well as identification during this study of any relevant additions for services performed without a fee or for under-quantified or ineffectively structured fees. Within the participating departments, this can encompass activities that generally may include: "Regulatory activities, such as review, approval, and inspection of land development, construction/building, and improvements to infrastructure, and other areas of code review, compliance, and enforcement "Permitting, such as special events and use of public facilities, infrastructure, and services "Facility rentals and use of public spaces "Program participation "Operations and services of individual benefit/request or in response to individual action "Licensing, billing, records management, and administrative service "Hourly rates for direct-billing City staff time ClearSource has reviewed the document . From this document, we expect the following broad EXHIBIT A - Page 4 of 28 BACKGROUND & PROJECT SUMMARY fee categories and/or City divisions named therein to be included in the Citywide User Fee and Rate Study: "Miscellaneous "Business License and Filming Permits (non-tax) "Parking "Duplication "Community Services "Utilities (non-rate, City-controlled) "Community Development – Planning "Public Works – Engineering "Community Development – Building (Revenue streams excluded from this study due to differing authority, implementation and analytical methods, and approval procedures are: utility rates and other property-related fees subject to Proposition 218 proceedings, assessments, development impact fees, in-lieu fees, fees intended and codified more as “taxes,” punitive fines/penalties, and general taxes.) While cost recovery for the above listed direct services are the focus of the Citywide User Fee and Rate Study, the Cost Allocation Plan focuses on potential cost recovery for the “indirect” services of the municipal organization. Indirect services represent City budget units commonly found in (but not necessarily exclusive to) the General Fund that might include, as allowed: "Legislative and general governmental activities "Organization-wide management and administration "Central services outside of internal service funds ClearSource follows several guiding principles as we approach this subject matter for our clients: "Create cost allocation outcomes, user/regulatory fees, and associated practices that are understandable, implementable, and maintainable. "Care about the details. Documentation matters. Communication with internal and external stakeholders matters. "Identify estimated reasonable costs of service and use this information to set a coordinated and mutually consistent system of fees, internal charges, and associated policies. "Balance the additional effort required for ongoing administration and maintenance when attempting to achieve a greater degree of accuracy. "Consider legality, existing systems, resource capacity, and staff and community preferences when determining the best course of action. The following fundamental components are embedded in the ClearSource approach to a cost allocation and user fee study for California municipalities: "Adherence to the state’s legal boundaries: Article XIIIC of the California Constitution, Proposition 218, and Proposition 26, which direct fees be set according to the estimated reasonable cost of service and bear a fair and reasonable relationship to the payer’s burdens on or benefits received from agency service. "Development of a dynamic indirect cost allocation model, capable of iterations based on cost recovery venue: either a “full cost plan” .for application in locally-controlled revenues versus a more constrained “federal” plan (OMB 2 CFR Part 200). "Development of a functionally layered “full cost of service” to represent the maximum limit for fees and cost recovery, inclusive of direct and indirect costs of service from participating agency divisions and centralized agency services. "Valuation of agency time in providing direct services, serving as the basis for fee structures or for direct billing. "Development of cost recovery policy and practices, which optimize the agency’s array of funding sources considering public and private benefits, market sensitivity, compliance and behavior modification, and fiscal constraints. EXHIBIT A - Page 5 of 28 BACKGROUND & PROJECT SUMMARY "Remodeling of fee structures where cost profiles or agency operations necessitate change for improved recovery or more efficient or accurate collections. "Full support and flexibility to complete the administrative record and pursue successful adoption/implementation of fee proposals. "Identification of interfund charges for service important to budget development and indirect cost rates useful in ongoing program/project cost accounting. "Reflection of local values, including internal perspectives and practices and existing legislative policy or common direction. "Adherence to committed schedule as a critical factor in supporting City priorities and fostering broad satisfaction with the project. "No limit on number and format of events needed to bring the project within this identified Scope of Services to successful completion. "Delivery of tools designed to be used actively and essential to the City’s ongoing successful update and maintenance of user fee and indirect cost outcomes. During the comprehensive project conducted in 2022-2023, ClearSource expects to spend nearly 200 hours over a 120-day timeframe performing service for the City of San Juan Capistrano. Our efforts across both elements – the Full Cost Allocation Study and the Comprehensive User Fee and Rate Study – will focus in the following key areas: "Remodeled Fee Structures and Service Categories (as merited) "Financial Foundation for the Costs of Service: revenues, personnel costs and organization, operating costs, and allocated administration/central services "Annual Service Time "Individual Unit Service Time "Volume of Applications, Permits, and Service Population (as feasible) "Cost Allocation Plan: full cost iteration for internal uses, such as interfund charges for service and indirect cost rates for direct billing scenarios "Fully Burdened Hourly Rates: by department/division, by functional classification, by staffing classification, and/or by individual "Activity Costs of Service: by individual fee-related service, by broad service category, and/or by functional program "Cost Recovery Policy: how much of the costs of service should be recovered by a fee? "Regional Fee Comparison: does the market influence the City’s decision-making? "Master Fee Schedule for 2023-24 fiscal year, including tools for annual updates "Project Fee and Revenue Impacts "Departmental Interaction: project commencement, onsite data development, and interim review points "Stakeholder Interaction (as necessary) "City Council Interaction: presentation of findings and public hearing "Project Owner Interaction: training for future upkeep of project outcomes and delivered tools "Reporting: draft report, summary presentation, staff report, and final report "Tools: cost allocation model, fully-burdened hourly rate models, activity costs of service models, master fee schedule, and reporting EXHIBIT A - Page 6 of 28 METHODOLOGY ClearSource presents the following work plan to complete the scope of services envisioned by the City of San Juan Capistrano for the Full Cost Allocation Study element of the overall Project. The City’s required services and deliverables are included in task descriptions. ClearSource will generate common understanding of objectives, known issues to be addressed by study end, participant roles, expected procedural requirements, schedule and pre-established dates, and data collection and development measures. We will assess prevailing cost allocation models, methods, and applications, including annual procedures, internal opinions, impacts, and workload balance contrasted with the requirements of the City’s varying uses for overhead reimbursement. We will review readily available budgetary documents to gain a working knowledge of City structure and accounting practices. We will determine a plan for generating current indirect cost allocations for the host of uses identified by the City. This will likely include development of a new Excel-based model in alignment with current needs but may include modification of existing tools if City personnel prefer to sustain existing tools. Meeting with City project management team; meeting with any applicable stakeholders ClearSource will develop the necessary foundation for quantitative analysis, with focus on necessary data and documentation of assumptions as required by the application of plan outcomes (e.g., 2 CFR 200) We will access organizational and line-item detail to support costs, allocation factors, workload metrics, and accounting structure in the cost allocation model. We will acquire and parse statistics useful as bases for distributing costs and, where necessary, develop and document alternate data sets. We will conduct targeted engagement with representatives from support services departments to influence data accessibility and relevance in the plan, such as labor time, work order records, inventories, and other volumetric or organizational tools. Meetings, as needed, with City support services personnel ClearSource will generate the quantitative model in Microsoft Excel to allocate indirect costs Citywide. The model will be built to accommodate change in the organization: the ability to add or remove direct and indirect costs and to adapt to a range of activities, from simple to complex. The model is expected to identify: Citywide fund and accounting structure and fiscal year data for allocation outcomes, allocable indirect service centers, allocation bases and related distribution factors for indirect service centers, direct service centers, primary and secondary allocations, resulting annual cost allocations, resulting Citywide and departmental indirect cost rates, and resulting interfund transfers. The model will provide for future in-house or consultant updates by accommodating any “true-up” adjustment, utilizing annual inflators, or revising underlying assumptions for fiscal year basis and/or allocation metrics. ClearSource will generate a comparison of outcomes under the updated Cost Allocation Plan to prior year outcomes, including explanation for substantive differences. Editable Microsoft Excel spreadsheet-based model EXHIBIT A - Page 7 of 28 METHODOLOGY ClearSource will provide the formal documentation of the Cost Allocation Plan, as well as deliver the editable tools developed throughout the study for the City’s ownership and future use. We will include a narrative description of the Plan, describing key data and assumptions, and impacts; summary infographics; and the complete quantitative analysis as the justification for resulting Citywide and departmental indirect cost rates and interfund transfers. In compliance with OMB 2 CFR Part 200, reporting will include a description of each allocated service, identification of the units rendering services and the units receiving services, items of expense included in allocated costs, method used to distribute costs to benefitted units, schedule showing the allocation of each service to the specific benefitting units, and organizational charts. Draft reporting issued will be revised and reissued as final upon City review and input. ClearSource will provide a training session and appropriate documentation for the City’s future maintenance of the Plan. Microsoft Excel-based and editable analytical model to allocate costs; comprehensive report identifying detailed cost allocations, interfund transfers, indirect cost rates for direct billing, impact on revenues in total and by fund/department/division, and comparative outcomes; training for City staff in future management of fees and deliverable models Throughout the study and its concluding stages, ClearSource will facilitate a meaningful level of interaction between consultants, City personnel, and if needed, City Councilmembers, to ensure applicable and sustainable outcomes and wide understanding of impacts. ClearSource does not impose limits on number of engagements within our defined work plan and to usher study outcomes to successful implementation. Meetings with City project management team; meeting with any applicable stakeholders; meeting with City management; meeting with City Council and/or subcommittee, as necessary ClearSource presents the following work plan to complete the scope of services envisioned by the City of San Juan Capistrano for the Cost of Services and User Fee Study phase of the overall Project. The City’s required services and deliverables are included in task descriptions. ClearSource will generate common understanding of objectives, known issues that must be addressed by study end, participant roles, expected procedural requirements, schedule and pre- established dates, and data collection and development processes. Most significantly, we will examine prevailing fees for known issues and to discuss initial and potential modifications to fee structures, practices, and policies. We will assess prevailing fees and methods to understand effectiveness of current structures, including perceived cost recovery, perceived equity, alignment of fee categories with the manner in which work is performed, perceived competitiveness in the region, and feasibility or accuracy of billing within current capabilities. We will draft initial user/regulatory fee structures, where remodeling is predicted, to direct down- stream data development steps. Meeting with City project management team; meeting(s) with individual direct service departments overseeing fee categories under review EXHIBIT A - Page 8 of 28 METHODOLOGY ClearSource will develop the necessary foundation for subsequent quantitative analysis, with focus on preparing the body of data that will inform every downstream element of the fee study. To develop financial inputs, we will gather and model financial data including: current and historical fee revenues, personnel and contractor costs and organization, adopted line-item expenditures, forecasted periodic outlays, and allocated indirect costs via new or existing plan. To develop and test labor time inputs, based on prevailing and future business processes, we will gather and develop expressions of time by utilizing any existing labor time-tracking data; conducting interviews to estimate a distribution of annual time across core functions of service; developing service time questionnaires linked to remodeled fee structures to estimate average or range of service times for fee-based services; applying industry experience to populate under- developed or unavailable time estimates; analyzing any existing data sets that inform workload/activity/use levels and project profiles; and reconciling annual time, service time estimates, and service volumes to test reasonableness of critical assumptions. Meetings with individual direct service departments to develop critical inputs ClearSource will develop fully burdened hourly labor rates in each department/division participating directly in the provision of services associated with a fee under review. Rates will be built to encompass labor costs, non-labor operating costs, departmental and/or divisional administration, Citywide central services/general administration, and periodic investments. Rates will be expressed by function of direct and indirect service within each department/division, where applicable and to enable cost recovery considerations for certain fee categories. Rates may be expressed as composite for the department/division, for the position class, and/or by individual position. ClearSource will apply the outcomes from Tasks 1 and 2 – an assessment of existing fees and interaction with City staff to understanding current practices and work flow – to ensure cost of service analysis aligns with the fee structures recommended from that work, which may include elements of prevailing fees, recommendations based on prevailing business processes, system capabilities, and relevant market or industry practices applicable to City work flow. We will prepare a working model of a master fee schedule to guide subsequent analysis. ClearSource will prepare a cost of service model to join fully burdened hourly labor rates, time estimates associated with current work flow and business processes, and existing or any redesigned fee structures, in order to calculate the full unit cost of service associated with each fee category and layers within them. The full cost of service informs the maximum fee amount allowed under California framework for establishing user/regulatory fees by City Council action. The full cost of service at the fee or programmatic level is composed of direct labor and non-labor costs, indirect labor and non-labor costs, periodic outlays of direct or indirect benefit, departmental overhead, and Citywide overhead. Analysis will include modeling of activities with under-developed or no fee imposed but where one is warranted and practical to improve the City’s cost recovery from private benefit activities. EXHIBIT A - Page 9 of 28 METHODOLOGY ClearSource will recommend cost recovery targets for fee-based services or work with City staff in developing cost recovery policy to inform final fee amounts, particularly where full cost recovery is deemed unfeasible. Development of cost recovery policy and practices will optimize the City’s array of funding sources considering public/private benefits, market sensitivity, compliance and behavior modification, and fiscal constraints. We will review and recommend where warranted associated fee practices, including waivers, discounts, deposit amounts, fee/deposit collection practices, and economic incentive practices. ClearSource will develop a publishable master fee schedule for the City, useful in presenting proposals, as well as communicating fee descriptions, fee amounts, and charge bases to the public and to other City departments, who may have responsibility for maintaining Citywide schedules of fees. The master fee schedule developed can also include a tool for subsequent annual inflationary adjustments to the established fee structures between comprehensive cost of service studies. To the extent existing data systems enable it, revenue estimates from proposed fees based on historical or projected performance will be attempted, and we will compare prior fees in targeted service categories to assist in explaining impacts of notable changes. ClearSource will prepare a comparison of fees to other municipalities in targeted service categories as needed, likely by creating profiles for an array of “typical” uses in addition to one- for-one comparisons. ClearSource will prepare the administrative record for pursuing implementation of revised fees. This focuses on the draft and final reports of cost of service findings, including assumptions, critical data, and discussion of expected impacts. Analytical detail will be included, as well as executive summary and infographics useful in public presentation and legislative processes. We will deliver the editable analytical models used to develop fees, including the detailed working master fee schedule and its streamlined, user-friendly publishable version. ClearSource will also provide presentation/summary materials for communicating proposals and assistance with both the staff report and public hearing noticing. ClearSource will provide a training session and appropriate documentation for the City’s future maintenance of master fee schedule. Citywide Master Schedule; Microsoft Excel-based and editable analytical models to calculate cost of service based fees; comprehensive report identifying detailed full costs of service (direct and indirect), current and recommended cost recovery, revenue impacts of recommended fees, and comparison of fees to other cities; report in bound paper copies and digital file; training for City staff in future management of fees and deliverable models Throughout the study and at its concluding stages, ClearSource will facilitate a meaningful level of interaction between consultants, City personnel, and City Councilmembers or other City Commission(s) to ensure applicable and sustainable outcomes and wide understanding of impacts. ClearSource does not impose limits on number of engagements within our defined work plan and to usher study outcomes to successful implementation. Meetings with City project management team; meetings with individual direct service departments with fees under review, meeting with any applicable stakeholders; meetings with City Council and/or other City commission or committee); public hearing(s) EXHIBIT A - Page 10 of 28 METHODOLOGY As an optional element, proceeding only at the City’s clear direction, ClearSource will perform an update of the Cost Allocation Plan in the year following the comprehensive study outlined in the previous Work Plans. Working from the foundation provided by the delivered Cost Allocation Plan – the model and its administrative record – ClearSource will follow an abbreviated version of our Work Plan presented above for the Full Cost Allocation Study. This update will deliver all identified outcomes, analysis, reporting, and events necessary to present a Cost Allocation Plan under conditions available at the time of service, including updated expenditure basis, reflection of organization at the time, and updated allocation metrics. ClearSource forecasts to deliver final draft reporting for the Cost Allocation Plan and Citywide User Fee and Rate Study 120 days from project commencement. These reporting documents will enable final presentation, final edits based on management and/or legislative review and input, and any necessary public procedure thereafter along the City’s timeline and legislative priorities. Exhibit 1 on Page 10 at the end of this section illustrates a timeline for consulting task completion, delivery of reports, and approval procedures. As a sample timeline, if efforts begin by November 2022, reports will be ready for approval stages by the end of February 2023. Outcomes can then inform the City’s budget development process through the winter and spring, follow a thoughtful pace of legislative review and approval, and upon completion of a public hearing along the City’s agenda at the time, approved user fees can become effective by July 1, 2023, in time for the new Fiscal Year 2023- 2024, if not earlier. For the optional task of a ClearSource-led update of the Cost Allocation Plan in the following year, we expect to deliver final outcomes and reporting within 60 days of project commencement. The Scope of Work described by the City in its Request for Proposals represents tasks to be performed and completed by ClearSource and which are delivered by the previously detailed ClearSource Work Plans. ClearSource absolutely commits to do the heavy lifting in this project, and we do not reverse delegate to City staff. That said, these types of projects are collaborative efforts. ClearSource identifies the following key ways in which City staff are involved in the completion of the Cost Allocation Plan and Citywide User Fee and Rate Study: "Provide institutional knowledge and expertise and requested background documents, such as financial data, staffing information, fee schedules, and relevant policies. ClearSource asks City staff only for reports already in existence for other City purposes and readily available to share. "Provide overview of current fee schedules, fee collection practices, system capabilities for managing fee amounts and structures, and data tracking systems. ClearSource accomplishes this with staff in meeting format, and does not ask staff to create responses outside efficiently schedule meeting time. "Respond to consultant questionnaires or interviews to develop staff time profiles. Again, ClearSource achieves this in conscientiously scheduled meeting format without subsequent “homework” for participating staff. "Attend meetings to provide direction based on consultant-generated analysis, findings, and recommendations. "Notice public meetings. EXHIBIT A - Page 11 of 28 METHODOLOGY "Prepare agenda items for proposed fees and other outcomes brought forward for legislative and public review. The following list provides an estimate of time that may be invested by City staff during the project, depending on role: "City’s Project Manager: 20 to 40 hours, varying by degree to which this individual attends all engagement with participating departments and divisions with ClearSource. "Departmental/divisional key contacts: 2 to 8 hours, varying by complexity of fees managed or indirect service provided. "Selected direct service personnel representatives: 30 minutes to 2 hours. During this project, the City will provide ClearSource readily available documents and data sets already tracked and exportable from its existing systems. (ClearSource will not require the City to manipulate or parse data sets from their original form; our efforts to work with data sets in the forms delivered by the City is built into our presumed labor effort and consulting fee.) In a typical user and regulatory fee study and cost allocation plan, the following general information will be requested of the City: "Actual and budgeted revenue and expenditure detail by fund, organization, and object across multiple fiscal years. "Budgeted personnel costs by fund and organization. "To be determined during study orientation based on need and availability: specific data sets tracked which might describe activity workload, such as service volumes and time. "To be determined during fee design based on need: documentation of any specific formalized practices and policies associated with fee application and collection. Additionally, ClearSource independently will access the City’s publicly available documents, such as budget documents, annual financial reports, relevant planning documents, existing fee schedules, existing fee/cost recovery policies, organizational information, and other available material. ClearSource will also tap external/industry data sets as needed and conduct comparative fee research relevant to the City of San Juan Capistrano. Finally, ClearSource will use our experience in the immediate region and with comparable communities across California to fill gaps, springboard conversations with City staff, and generally ensure that overwhelming burdens are not placed on City personnel to accomplish a successful and meaningful study. Our team expects to spend nearly 200 hours during the study period fully delivering the City’s scope of services and ushering the findings of the study to successful enactment. Exhibit 5 on Page 23 lists a breakdown of our team’s hours by team member and task from the previously described Work Plans. While we have emphasized the collaborative roles of our ClearSource and City staff in the successful completion of this comprehensive study, we also commit to ensuring that: "ClearSource performs all heavy data analysis for this project and does not reverse delegate to City staff. "ClearSource works within existing data systems used by the City and does not ask City staff to create customized responses. "ClearSource reframes and redesigns questions we ask of City staff or intended approaches to solutions in order to fit the capabilities and availability of participating departments. "ClearSource devises engagement with City personnel to fit the needs and interests of individual participants. "ClearSource communicates regularly with the City’s designated project manager to ensure the study is progressing along the expected timeline. EXHIBIT A - Page 12 of 28 METHODOLOGY EXHIBIT A - Page 13 of 28 STAFFING In our work with the City of San Juan Capistrano, the Cost Allocation Plan and Citywide User Fee and Rate Study will be led start-to- finish by Terry Madsen. As our Project Manager, he will conduct all meetings, present all reports, and oversee development of all analysis and outcomes. Analytical and strategic support will be provided only by skillful, senior-level professionals: Jeanette Hahn and David Schroeder, as described by Exhibit 2. No individual on our team will be replaced without the express approval of the City prior to beginning work. All services identified in the RFP under the City’s Scope of Work for the Cost Allocation Plan Citywide User Fee and Rate Study will be completed by ClearSource personnel. We are entirely qualified and fully resourced to complete the studies within our existing firm organization. No services will be subcontracted to other firms, nor will any subconsultants or subcontractors be used to supplement ClearSource staff and capabilities. We introduce Terry Madsen as our Project Manager and primary contact person for the City of San Juan Capistrano. Terry is highly regarded by his clients. Please reach the following agency leaders to discuss their experience working with him: "Stone James, Economic Development Director Phone: 760.770.0336 Email: sjames@cathedralcity.gov "Amy Cunningham, Finance Director Phone: 415.899.8918 Email: acunningham@novato.org "Monika Radeva, City Clerk Phone: 760.777.7035 Email: mradeva@laquintaca.gov "Derek Tisinger, Division Chief (Fire Dept.) Phone: 661.330.0218 Email: dtisinger@kerncountyfire.org Phone Terry at 831.288.0608 or email to tmadsen@clearsourcefinancial.com. 40% of Total Project Hours Terry Madsen is the President of ClearSource Financial Consulting. For over 21 years, he has provided financial consulting services to local government agencies. In October 2011, Terry founded ClearSource Financial Consulting, a firm dedicated to providing local government agencies with premier financial consulting services. From October 2001 to October 2011 Terry was employed by a competing California firm, NBS. Terry’s depth of knowledge includes numerous service areas including user fee studies, indirect cost allocation studies, internal service fund rate studies, water and wastewater rate studies, and special financing district administration. During his career, Terry has served the following diverse sampling of California agencies, among many others: the Cities of Costa Mesa, Huntington Beach, La Quinta, Laguna Woods, Larkspur, Long Beach, EXHIBIT A - Page 14 of 28 STAFFING Milpitas, Palos Verdes Estates, Rancho Mirage, Roseville, San Leandro, Santa Ana, Santa Clara, Sebastopol, Shafter, Torrance, and Ventura; the Counties of El Dorado and Kern; and special districts such as Sacramento Regional Transit and Rancho Simi Recreation and Parks. Within the past several years, Terry has supported cost allocation, cost of service, and user/regulatory fee studies for the following sampling of California public agencies: "County of Kern, CA | Project Manager – Fire prevention fees, fire department indirect cost rates "City of Lake Forest, CA | Project Manager – Citywide user and regulatory fees, formal cost recovery policy, Citywide indirect cost allocation "City of La Quinta, CA | Project Manager – Citywide user and regulatory fees "City of Long Beach, CA | Project Manager – Engineering development review fees "City of Roseville, CA | Project Manager – Citywide user and regulatory fees, internal service fund rates "City of Ventura, CA | Project Manager – Citywide user and regulatory fees, Citywide indirect cost allocation, internal service fund rates Terry has worked closely with every level of the public body including property owners, community organizations, City Council/Board members, special commissions, agency managers, all members of the agency finance team, directors of every agency department, management analysts, and the direct service staff that are the primary contact points for members of the community, such as inspectors, plan reviewers, operators, maintenance personnel, and records staff. Terry’s experience in performing fee studies includes all phases of the work, from project initiation to completion and presentation of final findings. His efforts include data gathering, conducting interviews with agency staff, model development, report preparation, and presentation and delivery of study narratives. He has analyzed fees for a comprehensive array of municipal services, such as planning, land development, building, fire protection, code enforcement, community services, parks, recreation, administration, general governmental, public infrastructure, utilities, and others. Terry is a member of the California Society of Municipal Finance Officers. He received his undergraduate degree (Cum Laude) from Cal Poly, San Luis Obispo. He was awarded a Bachelor of Science in Business Administration with a Finance Concentration and an Economics Minor. He received his graduate degree from California State University, San Bernardino. He was awarded a Master of Business Administration with an Entrepreneurship Concentration. Terry is based in Santa Cruz County and serves ClearSource clientele across California. Terry will serve as our Project Manager, responsible for the performance of all study elements and fulfillment of our agreement with the City. He will also be the Principal Consultant for the studies, directing analysis for our staff, performing targeted analysis, troubleshooting, providing quality assurance, facilitating onsite and remote interaction with City staff and leadership, and representing our work in public procedures. As an intentionally structured small firm that believes our size is integral to the way we provide personalized and high quality service to our client communities, ClearSource nonetheless is asked by agencies about our plans for ensuring continuity of service if a team member faces personal emergency disruptive to the project. In fact, this is essential to our business and reputation. In addition to our collegiality and cross-discipline synergy, this is one of the key reasons our staff is comprised only of seasoned professionals in this area of expertise. Our consultants are each two or more decades into consulting careers rich with successful project management, direct project performance, and accomplished public engagement for successful implementation of outcomes. For the City of San Juan Capistrano, in the unlikely event our Project Manager Terry Madsen became unable to complete these services, fellow team member Jeanette Hahn will step into his place, able to perform at equal level, effectiveness, and achievement to Terry. EXHIBIT A - Page 15 of 28 STAFFING We introduce the following professionals who will be assigned to the City of San Juan Capistrano for specific elements within the overall project. 20% of Total Project Hours Jeanette Hahn is a Senior Consultant for ClearSource Financial Consulting. She has over 21 years of experience advising municipal agencies on equitable and effective costs of service, cost recovery, and strategic financial planning. Jeanette has analytical and policy expertise in the following subject matter: "Cost of service analysis and cost allocation for cost recovery opportunities, including user fees, regulatory fees, and contracts/partnerships "Water, wastewater, reclaimed water, and storm water/drainage utility rates and fees "Development impact fees and capacity charge nexus analysis/justification "Economic feasibility/decision analysis "Long-range financial planning "Benchmarking Prior to becoming part of the ClearSource team in 2017, Jeanette succeeded at competing consulting firms. She was Director of Financial Consulting for California-based NBS from 2007 to 2011 and served progressive roles at FCS GROUP from 1997 to 2007, including California Regional Manager from 2004 to 2007. Jeanette stepped down from these executive roles in 2011 to balance family needs. Jeanette has performed over 250 separate engagements for public agencies of diverse size and situation throughout the Western United States, including in California, Washington, Oregon, Idaho, Nevada, Utah, Montana, and Alaska. She is articulate and agile when working within the legal framework of rate and fee-setting across these states, with particular emphasis on California’s Proposition 218 and the state’s Mitigation Fee Act. As an accomplished and highly regarded speaker, Jeanette has earned a reputation for crafting effective and persuasive messages for attaining legislative and public approval of financial plans and accompanying rates and fees. Her skills have been deployed frequently in municipal work to defuse contentious or actively contested matters. Furthermore, she has been repeatedly invited to present in educational and industry forums, such as the California Society of Municipal Finance Officers, League of California Cities, Association of California Water Agencies, and California Special Districts Association, among many others. Within the past several years with ClearSource, Jeanette has support cost allocation, cost of service, and user/regulatory fee studies for the following sampling of California public agencies: "City of Milpitas, CA | Senior Consultant – Citywide indirect cost allocation plan, Citywide fully burdened hourly labor rates "County of Kern, CA | Senior Consultant – Fire department indirect cost rates "City of Santa Clara, CA | Senior Consultant – Citywide indirect cost allocation plan, parks and recreation cost recovery public outreach "Rancho Murieta Community Services District, CA | Senior Consultant – recycled and raw water rates, indirect cost allocation plan "City of Huntington Beach, CA | Senior Consultant – Citywide user and regulatory fees, indirect cost allocation plan "City of Ventura, CA | Senior Consultant – Citywide indirect cost allocation plan Jeanette holds a Bachelor of Arts in Economics with a Public Finance concentration from the University of Washington, Seattle. Jeanette will provide senior level analysis, including framework of quantitative models, strategic positioning in targeted subjects, and quality assurance/quality control. Jeanette is also well able to ensure our team’s continuity of service commitments for overall project management. EXHIBIT A - Page 16 of 28 STAFFING 40% of Total Project Hours David Schroeder is a Senior Consultant for ClearSource Financial Consulting. He has served the public sector for more than 16 years, focusing on recovery of municipal service costs, particularly within the varied structures of California special financing districts used by cities, counties, and special purpose districts across the state. David’s technical expertise is centered on large- scale and complex database analysis on multiple platforms, geographic information systems and science (GIS), and auditing of records and systems. Project areas in which David applies these skills for public sector clients have included: "Special financing district administration, formation, annexation, auditing, and continuing disclosure reporting. "Advanced GIS, including design and analysis to support district formation, annexation, Proposition 218 procedures, rate studies, and development impact fee analysis. "Solutions generation for complex issues facing municipal clients, including fund close-outs, independent auditing of special financing districts, design and administration of refund programs, and data-driven public outreach. David’s expertise has supported a variety of public services including: lighting and landscaping, public safety, public facilities and maintenance services, and other municipal activities spanning general and special benefit. He is conversant in and has trained client agencies on GIS, including systems such as ESRI ArcGIS and the creation and usage of GIS web applications on the platform. Within the past several years with ClearSource, David has support cost allocation, cost of service, and user/regulatory fee studies for the following sampling of California public agencies: "City of Santa Ana, CA | Senior Consultant – Citywide indirect cost rates and charges, internal service fund rates "City of Lincoln, CA | Senior Consultant – Citywide user/regulatory fees, indirect cost allocation "City of Placentia, CA | Senior Consultant – Citywide user/regulatory fees, indirect cost allocation "City of Solvang, CA | Senior Consultant – Citywide user/regulatory fees, indirect cost allocation "City of Hemet, CA | Senior Consultant – Citywide user/regulatory fees, indirect cost allocation "City of Seal Beach, CA | Senior Consultant – Citywide user/regulatory fees, indirect cost allocation, budget analysis of labor allocations David earned a Bachelor of Science in Business Administration, concentrating in Accounting Information Systems, from California State University San Bernardino. He is also certified from the University of West Florida’s Graduate Geographic Information Science program. David will provide large scale data analysis, financial modeling, and research in support of analytical tasks in both cost allocation and fee-oriented cost of service efforts. EXHIBIT A - Page 17 of 28 QUALIFICATIONS We introduce the City of San Juan Capistrano to ClearSource Financial Consulting for performance of its Cost Allocation Plan and Citywide User Fee and Rate Study. We look forward to this opportunity to serve the City’s leaders, service providers, and constituents. ClearSource is a privately owned California-based boutique consulting firm intentionally sized and structured to emphasize a highly tailored, high quality study experience for our public sector clients. ClearSource is staffed by a four-person team of seasoned individuals with decades of combined experience in local government financial analysis. We are particularly focused on equitable forms of locally controlled cost recovery within the challenges and constraints of the ever-evolving California statutory and legal environment, informed respectfully and strategically by the voter driven principles embedded in Propositions 218 and 26. Our firm is centered on the philosophy and principles of ClearSource founder and President, Terry Madsen, who will lead this project from start-to-finish. For over 21 years, Terry has provided financial consulting services exclusively to local government agencies. In October 2011, he founded ClearSource, a firm dedicated to providing local government agencies with premier financial consulting, serving with the: "Energy and enthusiasm to dive deep into the details; "Willingness to do the heavy lifting necessary to implement modernization and lasting change; "Exclusive staffing on projects of only tenured professionals able to enact both the science and art in these studies; and "Commitment to on-time delivery and not-to- exceed consulting fees. ClearSource provides professional services to California municipal agencies, consulting on topics focused on revenue management through cost of service- based resources. We specialize in conducting the following common areas of study and consultation on a wide cross-section of governmental services and funds: "User and regulatory fee studies "Master fee schedule development and ongoing management "Comparative/market analysis "Cost allocation plans "Internal service fund rate studies Our primary focus is on revenue streams linked to cost of service principles, equity, and local- government control. Throughout these areas of expertise, we often work in harmony with internal and external stakeholders to achieve successful implementation of the necessary solutions. As with every study of this type, the successful completion of this project for the City will require positive, professional relationships with agency staff, contract service providers, stakeholders, and the City Council and/or subcommittees. ClearSource clientele can attest to our ability to successfully navigate timing, competing values, and other challenges that arise when completing multi-faceted projects. During his career, Terry Madsen has been commended repeatedly for his integrity, client service, dedication, and perseverance. His treatment of agency staff and respect for the both the challenges they face and the results they require to successfully accomplish their goals, results in working relationships that span multiple years and varied projects. EXHIBIT A - Page 18 of 28 QUALIFICATIONS ClearSource has performed consulting services within the past 24 months comparable to the City of San Juan Capistrano’s scope of work for its Cost Allocation Plan and Cost of Services and User Fee Study for the sample of California cities and their specific fee/cost recovery-based programs listed in Exhibit 3.This includes identification of trending topics in California fee design, such as short term vacation rentals, retail cannabis, electric vehicle charging, stormwater management and inspections, and technology enhancement cost recovery. Within the past three years, ClearSource has served and is serving the following clients near to the City of San Juan Capistrano in Orange County on topics comparable to the City’s forthcoming cost of service and cost allocation studies and deliverables, including for: " Citywide user/regulatory fees and overhead cost allocation " Citywide user/regulatory fees and overhead cost allocation " Citywide user/regulatory fees and overhead cost allocation "Citywide user/regulatory fees, formal cost recovery policy, and overhead cost allocation "Citywide user/regulatory fees, overhead cost allocation, and tidelands cost allocation (newly commenced contract) " Overhead cost allocation, indirect cost rates, and internal service fund rates " Overhead cost allocation, indirect cost rates, and internal service fund rates " Citywide user/regulatory fees and overhead cost allocation ClearSource works with agencies of diverse size and service population across the entire state of California. Providing premiere consulting services to communities comparable in size to the City of San Juan Capistrano (pop. 34,798) is a normal part of our practice. Within the past three years, ClearSource has served the following clients of comparable population (30-60,000) to San Juan Capistrano and service scale: " | Citywide user/regulatory fees " | Citywide user/regulatory fees and overhead cost allocation " | Citywide user/regulatory fees and overhead cost allocation " | Overhead cost allocation " Citywide user/regulatory fees "Citywide user/regulatory fees and overhead cost allocation "Citywide user/regulatory fees and overhead cost allocation "Citywide user/regulatory fees and overhead cost allocation "Community development fees EXHIBIT A - Page 19 of 28 QUALIFICATIONS EXHIBIT A - Page 20 of 28 QUALIFICATIONS ClearSource submits the following references for our recent service to these California public agencies comparable in region (Orange County) and scope to the City of San Juan Capistrano. Contract: 2019-20 | Update: 2022 Carol Molina, Finance Director Phone: 714.754.5036 Email: carol.molina@costamesaca.gov Full cost allocation plan and user/regulatory fees, including: building, planning, land development engineering and encroachment, fire, police, recreation, facility rentals, City Clerk, administration, finance, self-haul permitting, and film permitting Contract: 2019 | Update: 2022 Sunny Rief, Assistant Chief Financial Officer Phone: 714.536.5907 Email: sunny.rief@surfcity-hb.org Full cost allocation plan and Citywide Master Fee Schedule, including: City Clerk, Finance, Community Development (planning, building, and code enforcement), information services, office of business development, public works (engineering, operations, and public services), police, fire (prevention, operations, and marine safety), library, and community services Contract: 2015 | Update: 2021 Chris Macon, City Manager Phone: 949.639.0500 Email: cmacon@cityoflagunawoods.org Cost recovery and fees for: Building, Planning, Engineering, and Central Services Contract: 2019 | Update: 2021 Brett Channing, Director of Management Services Phone: 949.461.3419 Email: bchanning@lakeforestca.gov Full cost allocation plan, formal User Fee Policy, and City Master Fee Schedule, including: building, planning, public works, recreation, community center, performing arts hall, clubhouse, filming, electric vehicle charging stations, parking, administration, finance, and business regulation Contract: 2019 | Update: 2022 Barbara Arenado, Finance Director Phone: 562.431.2527 Email: barenado@sealbeachca.gov Full cost allocation plan and and Citywide Master Fee Schedule, including: administration, building, planning, engineering and encroachment, utilities (non-rate), police, animal control, parking, recreation, lifeguards and aquatics, special events, filming, business licensing, miscellaneous, and direct billing ClearSource has enthusiastic references from other public agencies in the region surrounding the City of San Juan Capistrano and across California. Should additional references or sample reports be desired, we will furnish them immediately upon the City’s request. EXHIBIT A - Page 21 of 28 MUNICIPAL CLIENTS IN CALIFORNIA ClearSource is a California-based consulting firm working exclusively for a diverse array of California-based public agencies on varied topics within the overall question of locally controlled cost recovery of public services. A listing of our clients, past, present, and ongoing within the past five years is as follows, noting original contract date through most recent date of service. ClearSource emphasizes our long-standing, repeat service to many of these agencies. Azusa (2015-2022) Bell (2014-2022) Bell Gardens (2020-2021) Campbell (2018-2022) Cathedral City (2020-2022) Costa Mesa (2019-2022) Elk Grove (2019) Escalon (2017-2022) Grover Beach (2021) Gustine (2013-2022) Hemet (2021-2022) Huntington Beach (2018-2022) Kerman (2022) La Quinta (2012-2022) Laguna Woods (2013-2022) Lake Forest (2019-2022) Larkspur (2016-2022) Lawndale (2020-2021) Lincoln (2019-2022) Long Beach (2017-2020) McFarland (2020) Milpitas (2018-2022) Monte Sereno (2018-2020) Moorpark (2022) Newport Beach (2022) Novato (2019-2022) Oakdale (2020-2021) Ojai (2016-2019) Oroville (2021-2022) Oxnard (2018-2019) Palos Verdes Estates (2018-2021) Pinole (2022) Placentia (2021-2022) Rancho Mirage (2019-2021) Roseville (2015-2022) San Leandro (2016-2022) Santa Ana (2019-2022) Santa Clara (2020-2022) Seal Beach (2019-2022) Sebastopol (2019-2022) Shafter (2017-2022) Solvang (2021) Taft (2021-2022) Torrance (2017-2022) Ventura (2012-2022) Wasco (2020-2021) Watsonville (2022) Wheatland (2018-2020) Woodside (2019-2022) El Dorado County (2018) Kern County (2019-2022) Santa Clara County (2021-2022) Pleasant Valley PRD (2021-2022) Rancho Murietta CSD (2019-2020) Rancho Simi PRD (2019-2022) Sacramento RTD (2012-2020) EXHIBIT A - Page 22 of 28 FINANCIAL CAPACITY ClearSource is a privately owned, debt-free California corporation and does not publish financial statements publicly. Our aforementioned references and demonstrated repeat service to our public agency clientele attest to our strongly resourced and full capability to complete our contractual obligations to the satisfaction of the public entities we engage. In the history of ClearSource Financial Consulting, we have not undergone any administrative proceedings, claims, lawsuits, or exposures, nor do we have any such actions pending. EXHIBIT A - Page 23 of 28 FEE PROPOSAL In response to the Request for Proposals, ClearSource has developed the work plans and schedule described earlier and designed to deliver a successful Cost Allocation Plan and Citywide User Fee and Rate Study to the City of San Juan Capistrano. To complete that project, including optional task, ClearSource proposes a total maximum cost for this contract at $39,895. Excluding the optional second-year update to the Cost Allocation Plan, the maximum cost can be reduced to $35,640. This maximum consulting fee is distributed to each element of the overall project as summarized in Exhibit 4. ClearSource commits to finish the project as described in our Work Plans without change orders. This is our standard practice. We do not request contract amendments for additional meetings, extra analytical scenarios, or any extended work to aid City staff or Council consideration. These are occurrences in these types of studies and part of the standard effort required to usher study findings to successful conclusion. Our proposed price is set to accomplish the work thoroughly without upward risk to the City. The maximum consulting fee presented here is based on the ClearSource team’s experience with other similarly scoped and scaled California cities in past studies: careful review of the City of San Juan Capistrano’s existing fee schedules, service provisions, organizational structure, and apparent financial performance, noting the breadth of City services that will fall under review in this effort. Our proposal ensures that all user/regulatory fees eligible for the prescribed methodologies can be analyzed without shortcuts or explanations for non-analysis and that the process is carried through to successful implementation of feasible outcomes. Exhibit 5 on the following page illustrates the detail behind our presented maximum price for the Cost Allocation Plan and Citywide User Fee and Rate Study. This includes our estimated consultant labor time paired with hourly billing rates by task described in the ClearSource Work Plans. The proposed consulting fee presented is based on assumed time to complete the scope of services paired with hourly billing rates for ClearSource consultants. The schedule of hourly billing rates for all positions contemplated in this project is as follows: "Rates fixed through June 30, 2023: -Project Manager: $180 per hour -Principal Consultant: $180 per hour -Senior Consultant: $180 per hour "Rates as of July 1, 2023, applied only for the optional Cost Allocation Plan update task, to be linked to actual rate published at the time but not to exceed: -Project Manager: $185 per hour -Principal Consultant: $185 per hour -Senior Consultant: $185 per hour EXHIBIT A - Page 24 of 28 FEE PROPOSAL ClearSource does not bill clients for ordinary direct expenses, such as travel and document production. All costs incurred by ClearSource to complete the City’s project as currently scoped are embedded in our professional rates. The City’s project does not contemplate and include extraordinary expenses such as mailing or polling as part of the consultant’s required deliverables; therefore, no cost above the billed time of our professionals is proposed in our consulting fee. Should the City seek an amendment to the contract to add consulting services it did not contemplate in its original scope of services as of this submittal date, ClearSource will estimate an additional consulting fee using the professional rates listed above. As emphasized earlier, ClearSource will not request contract amendments to compensation to handle normal fluctuations in the scope of services already defined, such as unplanned meetings, scenarios, or elongated review processes. An example of a situation when “added services” would apply is adding an internal service fund rate study to the project. ClearSource will issue monthly progress reports to the City. Accompanying monthly invoices will be based on progress recorded to the project following the major tasks described in the Work Plans. We will not invoice for tasks not yet completed, and we will not submit a final invoice for the study until work is completed. Total invoices issued over the course the study will not exceed the maximum price presented here. (This section continues on the following page.) EXHIBIT A - Page 25 of 28 FEE PROPOSAL EXHIBIT A - Page 26 of 28 DISCLOSURE ClearSource has no past or current business and personal relationships with any current San Juan Capistrano elected official, appointed official, City employee, or family member of any current San Juan Capistrano elected official, appointed official, or City employee. EXHIBIT A - Page 27 of 28 CONFLICT OF INTEREST ClearSource Financial Consulting has no conflict of interest with regard to any of the work to be performed by ClearSource for the City of San Juan Capistrano. We have also included this statement in the Cover Letter to this Proposal, as required by the RFP. EXHIBIT A - Page 28 of 28 FEE PROPOSAL EXHIBIT B