23-0717_CLEARSOURCE FINANCIAL CONSULTING_Professional Services Agreement61147.00000\41426671.1
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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
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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
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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.
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(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
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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.
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(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
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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
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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
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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.
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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,
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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]
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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
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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